##### Table of Contents



United States Securities and Exchange Commission
 Washington, DC 20549
 FORM 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended November 1, 2008.
 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number 0-23874
 Jos. A. Bank Clothiers, Inc.
  Delaware
    
    36-3189198(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. EmployerIdentificationNumber)500 Hanover Pike, Hampstead, MD
    
    21074-2095(Address of Principal Executive Offices)
    
    (Zip Code)
 410-239-2700
 None
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if smaller reporting company)
  o þ
  Class
    
    Outstanding as of November 25, 2008Common Stock, $.01 par value
    
    18,250,617




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##### 



JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 Index
 Page No.Part I. Financial Information
    
    
    3Item 1. Unaudited Condensed Consolidated Financial Statements
    
    
    3Condensed Consolidated Statements of Income  Three and Nine Months ended
November 3, 2007 and November 1, 2008
    
    
    3Condensed Consolidated Balance Sheets  as of February 2, 2008 and November 1, 2008
    
    
    4Condensed Consolidated Statements of Cash Flows  Nine Months ended
November 3, 2007 and November 1, 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4. Controls and Procedures
    
    
    20Part II. Other Information
    
    
    21Item 1. Legal Proceedings
    
    
    21Item 1A. Risk Factors
    
    
    22Item 6. Exhibits
    
    
    24Signature
    
    
    24Exhibit Index
    
    
    25Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Unaudited Condensed Consolidated Financial Statements
 JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Income
 Three Months Ended
    
    
    Nine Months EndedNovember 3,
    
    
    November 1,
    
    
    November 3,
    
    
    November 1,2007
    
    
    2008
    
    
    2007
    
    
    2008Net sales
    
    $
    131,304
    
    
    $
    149,274
    
    
    $
    395,115
    
    
    $
    447,412Cost of goods sold
    
    
    47,679
    
    
    
    54,980
    
    
    
    146,663
    
    
    
    166,900Gross Profit
    
    
    83,625
    
    
    
    94,294
    
    
    
    248,452
    
    
    
    280,512Operating expenses:Sales and
marketing, including occupancy
costs
    
    
    59,017
    
    
    
    66,209
    
    
    
    170,570
    
    
    
    193,773General and administrative
    
    
    13,111
    
    
    
    14,231
    
    
    
    39,067
    
    
    
    41,269Total operating expenses
    
    
    72,128
    
    
    
    80,440
    
    
    
    209,637
    
    
    
    235,042Operating income
    
    
    11,497
    
    
    
    13,854
    
    
    
    38,815
    
    
    
    45,470Other income (expense):Interest income
    
    
    396
    
    
    
    169
    
    
    
    1,374
    
    
    
    793Interest expense
    
    
    (92
    )
    
    
    (103
    )
    
    
    (285
    )
    
    
    (289
    )Total other income
    
    
    304
    
    
    
    66
    
    
    
    1,089
    
    
    
    504Income before provision for income taxes
    
    
    11,801
    
    
    
    13,920
    
    
    
    39,904
    
    
    
    45,974Provision for income taxes
    
    
    4,705
    
    
    
    4,621
    
    
    
    16,244
    
    
    
    17,975Net income
    
    $
    7,096
    
    
    $
    9,299
    
    
    $
    23,660
    
    
    $
    27,999Earnings per share:Net income per share:Basic
    
    $
    0.39
    
    
    $
    0.51
    
    
    $
    1.31
    
    
    $
    1.54Diluted
    
    $
    0.38
    
    
    $
    0.50
    
    
    $
    1.28
    
    
    $
    1.52Weighted average shares outstanding:Basic
    
    
    18,165
    
    
    
    18,215
    
    
    
    18,111
    
    
    
    18,194Diluted
    
    
    18,439
    
    
    
    18,461
    
    
    
    18,419
    
    
    
    18,433
   3




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JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
 February 2, 2008
    
    
    November 1, 2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    82,082
    
    
    $
    44,452Accounts receivable, net
    
    
    5,855
    
    
    
    16,127Inventories:Finished goods
    
    
    196,547
    
    
    
    230,491Raw materials
    
    
    10,278
    
    
    
    11,109Total inventories
    
    
    206,825
    
    
    
    241,600Prepaid expenses and other current assets
    
    
    18,593
    
    
    
    21,019Total current assets
    
    
    313,355
    
    
    
    323,198NONCURRENT ASSETS:Property, plant and equipment, net
    
    
    126,235
    
    
    
    138,523Other noncurrent assets
    
    
    508
    
    
    
    478Total assets
    
    $
    440,098
    
    
    $
    462,199LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    47,383
    
    
    $
    43,965Accrued expenses
    
    
    72,150
    
    
    
    61,658Deferred tax liability  current
    
    
    6,688
    
    
    
    6,652Total current liabilities
    
    
    126,221
    
    
    
    112,275NONCURRENT LIABILITIES:Deferred rent
    
    
    50,185
    
    
    
    55,267Deferred tax liability  noncurrent
    
    
    1,210
    
    
    
    2,456Other noncurrent liabilities
    
    
    1,317
    
    
    
    1,372Total liabilities
    
    
    178,933
    
    
    
    171,370COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Common stock
    
    
    181
    
    
    
    181Additional paid-in capital
    
    
    80,791
    
    
    
    82,456Retained earnings
    
    
    180,260
    
    
    
    208,259Accumulated other comprehensive losses
    
    
    (67
    )
    
    
    (67
    )Total stockholders equity
    
    
    261,165
    
    
    
    290,829Total liabilities and stockholders equity
    
    $
    440,098
    
    
    $
    462,199
   4




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JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows
 Nine Months EndedNovember 3, 2007
    
    
    November 1, 2008Cash flows from operating activities:Net income
    
    $
    23,660
    
    
    $
    27,999Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    13,753
    
    
    
    15,394Loss on disposals of property, plant and equipment
    
    
    121
    
    
    
    227(Decrease) increase in deferred taxes
    
    
    (996
    )
    
    
    1,210Net increase in operating working capital and other components
    
    
    (36,465
    )
    
    
    (57,434
    )Net cash provided by (used in) operating activities
    
    
    73
    
    
    
    (12,604
    )Cash flows from investing activities:Capital expenditures
    
    
    (19,511
    )
    
    
    (26,888
    )Proceeds from disposal of fixed assets
    
    
    290
    
    
    
    197Net cash used in investing activities
    
    
    (19,221
    )
    
    
    (26,691
    )Cash flows from financing activities:Income tax benefit from exercise of stock options
    
    
    807
    
    
    
    528Net proceeds from exercise of stock options
    
    
    1,869
    
    
    
    1,137Net cash provided by financing activities
    
    
    2,676
    
    
    
    1,665Net decrease in cash and cash equivalents
    
    
    (16,472
    )
    
    
    (37,630
    )Cash and cash equivalents  beginning of period
    
    
    43,080
    
    
    
    82,082Cash and cash equivalents  end of period
    
    $
    26,608
    
    
    $
    44,452
   5




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JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  1. BASIS OF PRESENTATION
    Fiscal year 2002
    
    February 1, 2003Fiscal year 2003
    
    January 31, 2004Fiscal year 2004
    
    January 29, 2005Fiscal year 2005
    
    January 28, 2006Fiscal year 2006
    
    February 3, 2007Fiscal year 2007
    
    February 2, 2008Fiscal year 2008
    
    January 31, 2009Fiscal year 2009
    
    January 30, 2010
  Reclassifications
 2. SIGNIFICANT ACCOUNTING POLICIES
 Inventories
  6




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Vendor Rebates
 Landlord Contributions
 Recently Issued Accounting Standards
     7




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3. SUPPLEMENTAL CASH FLOW DISCLOSURE
  Nine Months EndedNovember 3, 2007
    
    
    November 1, 2008Increase in accounts receivable
    
    $
    (5,210
    )
    
    $
    (10,272
    )Increase in inventories
    
    
    (41,576
    )
    
    
    (34,775
    )Increase in prepaids and other assets
    
    
    (2,181
    )
    
    
    (2,396
    )Increase (decrease) in accounts payable
    
    
    14,545
    
    
    
    (3,418
    )Decrease in accrued expenses and other liabilities
    
    
    (7,272
    )
    
    
    (11,710
    )Increase in deferred rent and other noncurrent liabilities
    
    
    5,229
    
    
    
    5,137Net increase in operating working capital and other components
    
    $
    (36,465
    )
    
    $
    (57,434
    )
  Nine Months EndedNovember 3, 2007
    
    
    November 1, 2008Interest paid
    
    $
    200
    
    
    $
    203Income taxes paid
    
    $
    30,505
    
    
    $
    32,269
 4. EARNINGS PER SHARE
  Three Months Ended
    
    
    Nine Months EndedNovember 3,
    
    
    November 1,
    
    
    November 3,
    
    
    November 1,2007
    
    
    2008
    
    
    2007
    
    
    2008Weighted average shares
outstanding for basic EPS
    
    
    18,165
    
    
    
    18,215
    
    
    
    18,111
    
    
    
    18,194Dilutive effect of common stock
equivalents
    
    
    274
    
    
    
    246
    
    
    
    308
    
    
    
    239Weighted average shares
outstanding for diluted EPS
    
    
    18,439
    
    
    
    18,461
    
    
    
    18,419
    
    
    
    18,433
   8




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5. INCOME TAXES
      6. SEGMENT REPORTING
     9




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Three months ended November 1, 2008
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    136,084
    
    
    $
    10,408
    
    
    $
    2,782
    
    
    $
    149,274Depreciation and amortization
    
    
    4,723
    
    
    
    17
    
    
    
    605
    
    
    
    5,345Operating income (loss)(b)
    
    
    24,183
    
    
    
    3,989
    
    
    
    (14,318
    )
    
    
    13,854Capital expenditures (d)
    
    
    8,419
    
    
    
    
    
    
    
    333
    
    
    
    8,752
 Three months ended November 3, 2007
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    116,586
    
    
    $
    11,751
    
    
    $
    2,967
    
    
    $
    131,304Depreciation and amortization
    
    
    4,069
    
    
    
    22
    
    
    
    619
    
    
    
    4,710Operating income (loss) (b)
    
    
    19,486
    
    
    
    4,687
    
    
    
    (12,676
    )
    
    
    11,497Capital expenditures (d)
    
    
    7,748
    
    
    
    3
    
    
    
    234
    
    
    
    7,985
 Nine months ended November 1, 2008
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    400,288
    
    
    $
    39,084
    
    
    $
    8,040
    
    
    $
    447,412Depreciation and amortization
    
    
    13,517
    
    
    
    57
    
    
    
    1,820
    
    
    
    15,394Operating income (loss) (b)
    
    
    71,997
    
    
    
    15,640
    
    
    
    (42,167
    )
    
    
    45,470Identifiable assets (c)
    
    
    413,165
    
    
    
    35,126
    
    
    
    13,908
    
    
    
    462,199Capital expenditures (d)
    
    
    26,075
    
    
    
    5
    
    
    
    808
    
    
    
    26,888
 Nine months ended November 3, 2007
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    347,582
    
    
    $
    39,240
    
    
    $
    8,293
    
    
    $
    395,115Depreciation and amortization
    
    
    11,846
    
    
    
    60
    
    
    
    1,847
    
    
    
    13,753Operating income (loss) (b)
    
    
    63,376
    
    
    
    15,334
    
    
    
    (39,895
    )
    
    
    38,815Identifiable assets (c)
    
    
    349,015
    
    
    
    44,923
    
    
    
    14,889
    
    
    
    408,827Capital expenditures (d)
    
    
    18,805
    
    
    
    24
    
    
    
    682
    
    
    
    19,511
 
 (a)
    
    Direct Marketing net sales represent catalog and Internet sales. Net sales from segments
below the quantitative thresholds are attributable primarily to three operating segments of
the Company. Those segments are outlet stores, franchise stores and regional tailor shops.
None of these segments have ever met any of the quantitative thresholds for determining
reportable segments and are included in Other.  10




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(b)
    
    Operating income (loss) for the Stores and Direct Marketing segments represents profit
before allocations of overhead from the corporate office and the distribution centers,
interest and income taxes. Operating income (loss) for Other consists primarily of costs
included in general and administrative costs. Total operating income represents profit
before interest and income taxes.(c)
    
    Identifiable assets include cash and cash equivalents, accounts receivable, inventories,
prepaid expenses and other current assets and property, plant and equipment residing in or
related to the reportable segment. Assets included in Other are primarily cash and cash
equivalents, property, plant and equipment associated with the corporate office and
distribution centers, other noncurrent assets and inventories which have not been assigned
to one of the reportable segments.(d)
    
    Capital expenditures include purchases of property, plant and equipment made for the
reportable segment. 7. LEGAL MATTERS
      11




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12




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
 
    
    13.7% increase in net sales, generated primarily by the 16.7% increase in the
Stores segment, partially offset by the 11.4% decrease in the Direct Marketing segment,
with gross profit margins decreasing by 50 basis points;
    
    7.0% increase in comparable store sales;
    
    a 50 basis point decrease in sales and marketing costs as a percentage of sales
driven primarily by the leveraging of advertising and marketing costs, partially offset by higher other variable selling costs (largely shipping costs
to customers) and higher store payroll costs;
    
    a 50 basis point decrease in general and administrative costs as a percentage
of sales as the Company was able to leverage its costs during the
quarter; and
    
    tax benefits realized during the quarter of approximately $0.9 million or $0.05 per diluted
share due to the Companys ability to fully deduct employee compensation which was
previously limited under IRC 162(m) and a decrease in the liability for unrecognized
tax benefits and related penalties and interest.
    Critical Accounting Policies and Estimates
  13




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Inventory.
   Asset Valuation.
 Lease Accounting.
  Recently
Issued Accounting Standards 
  14




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Results of Operations
  Percentage of Net Sales
    
    
    Percentage of Net SalesThree Months Ended
    
    
    Nine Months EndedNovember 3,
    
    
    November 1,
    
    
    November 3,
    
    
    November 1,2007
    
    
    2008
    
    
    2007
    
    
    2008Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold
    
    
    36.3
    
    
    
    36.8
    
    
    
    37.1
    
    
    
    37.3Gross profit
    
    
    63.7
    
    
    
    63.2
    
    
    
    62.9
    
    
    
    62.7Sales and marketing expenses
    
    
    44.9
    
    
    
    44.4
    
    
    
    43.2
    
    
    
    43.3General and administrative
expenses
    
    
    10.0
    
    
    
    9.5
    
    
    
    9.9
    
    
    
    9.2Total operating expenses
    
    
    54.9
    
    
    
    53.9
    
    
    
    53.1
    
    
    
    52.5Operating income
    
    
    8.8
    
    
    
    9.3
    
    
    
    9.8
    
    
    
    10.2Total other income
    
    
    0.2
    
    
    
    
    
    
    
    0.3
    
    
    
    0.1Income before provision for
income taxes
    
    
    9.0
    
    
    
    9.3
    
    
    
    10.1
    
    
    
    10.3Provision for income taxes
    
    
    3.6
    
    
    
    3.1
    
    
    
    4.1
    
    
    
    4.0Net income
    
    
    5.4
    
    
    
    6.2
    
    
    
    6.0
    
    
    
    6.3
 Net Sales
  15




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Three Months Ended
    
    
    Nine Months EndedNovember 3, 2007
    
    
    November 1, 2008
    
    
    November 3, 2007
    
    
    November 1, 2008Square
    
    
    
    
    
    
    Square
    
    
    
    
    
    
    Square
    
    
    
    
    
    
    SquareStores
    
    
    Feet*
    
    
    Stores
    
    
    Feet*
    
    
    Stores
    
    
    Feet*
    
    
    Stores
    
    
    Feet*Stores open at the
beginning of the period
    
    
    391
    
    
    
    1,804
    
    
    
    444
    
    
    
    2,024
    
    
    
    376
    
    
    
    1,745
    
    
    
    422
    
    
    
    1,935Stores opened
    
    
    16
    
    
    
    68
    
    
    
    16
    
    
    
    68
    
    
    
    32
    
    
    
    135
    
    
    
    38
    
    
    
    157Stores closed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (8
    )
    
    
    
    
    
    
    Stores open at the
end of the period
    
    
    407
    
    
    
    1,872
    
    
    
    460
    
    
    
    2,092
    
    
    
    407
    
    
    
    1,872
    
    
    
    460
    
    
    
    2,092
 
 *
    
    Square feet is presented in thousands and excludes the square footage of the Companys
franchise stores. Square feet amounts reflect reductions to square footage due to renovations
or relocations. Gross profit
  Sales
and Marketing Expenses
  16




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General and Administrative Expenses
 Other Income (Expense)
 Income
Taxes
 Seasonality
 Liquidity and Capital Resources
  17




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Nine Months EndedNovember 3, 2007
    
    
    November 1, 2008Cash provided by (used in):Operating activities
    
    $
    73
    
    
    $
    (12,604
    )Investing activities
    
    
    (19,221
    )
    
    
    (26,691
    )Financing activities
    
    
    2,676
    
    
    
    1,665Net increase (decrease) in cash and cash equivalents
    
    $
    (16,472
    )
    
    $
    (37,630
    )
       18




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Off-Balance
Sheet Arrangements
 Disclosures about Contractual Obligations and Commercial Commitments
   Payments Due by Fiscal Year(in thousands)Beyond2008
    
    
    2009-2011
    
    
    2012-2013
    
    
    2013
    
    
    Total(d)Operating leases (a) (b)
    
    $
    50,680
    
    
    $
    154,647
    
    
    $
    90,490
    
    
    $
    98,967
    
    
    $
    394,784Stand-by letter-of-credit (c)
    
    
    
    
    
    
    400
    
    
    
    
    
    
    
    
    
    
    
    400License agreement
    
    
    165
    
    
    
    330
    
    
    
    
    
    
    
    
    
    
    
    495
 
 (a)
    
    Includes various lease agreements for stores to be opened and equipment placed in
service subsequent to November 1, 2008. See Note 9 to the Consolidated Financial Statements in the Companys
Annual Report on Form 10-K for fiscal year 2007.(b)
    
    Excludes contingent rent and other lease costs.(c)
    
    To secure the payment of rent at one leased location included in Operating Leases
above and is renewable each year through the end of the lease term (2009).(d)
    
    Obligations related to unrecognized tax benefits and related
penalties and interest of $0.7 million have been excluded
from the above table as the amount to be settled in cash and the specific payment dates
are not known. Cautionary Statement
   19




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 4. Controls and Procedures
 Limitations on Control Systems.
 Disclosure Controls and Procedures.
  20




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Changes in Internal Control over Financial Reporting
 
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
        21




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Item 1A. Risk Factors
  If we are not able to continue profitably opening new stores, our growth may be adversely
affected.
   22




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Our business is tied to consumer spending for discretionary items and the negative changes to
consumer confidence and other recessionary pressures could have an adverse affect on our
business.
   We rely heavily on a limited number of key suppliers, the loss of any of which could cause a
significant disruption to our business and negatively affect our business.
  Our success depends, in part, on the volume of retail traffic in our geographic locations and
the availability of suitable lease space.
    23




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Our business has become increasingly dependent on a strong holiday season.
  
 Item 6. Exhibits
  31.1
    
    
    Certification of Principal Executive Officer pursuant to Rule 13a-14 or 15d-14(a).31.2
    
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14 or 15d-14(a).32.1
    
    
    Certification by Principal Executive Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification by Principal Financial Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 SIGNATURE
  Dated:  December 3, 2008
    Jos. A. Bank Clothiers, Inc.
(Registrant)/s/ David E. UllmanDavid E. UllmanExecutive Vice President,
Chief Financial Officer
(Principal Financial and Accounting Officer and
 Duly Authorized Officer)  24




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##### Table of Contents



Exhibit Index
  31.1
    
    
    Certification of Principal Executive Officer pursuant to Rule 13a-14 or 15d-14(a).31.2
    
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14 or 15d-14(a).32.1
    
    
    Certification by Principal Executive Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    
    Certification by Principal Financial Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  25