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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 May 3, 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 May 29, 2008Common Stock, $.01 par value
    
    18,184,371




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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 Months ended
May 5, 2007 and May 3, 2008
    
    
    3Condensed Consolidated Balance Sheets  as of February 2, 2008 and May 3, 2008
    
    
    4Condensed Consolidated Statements of Cash Flows  Three Months ended
May 5, 2007 and May 3, 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
    
    
    20Item 1. Legal Proceedings
    
    
    20Item 1A. Risk Factors
    
    
    22Item 6. Exhibits
    
    
    22Signature
    
    
    22Exhibit Index
    
    
    23Exhibit 10.11Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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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 EndedMay 5, 2007
    
    
    May 3, 2008Net sales
    
    $
    129,533
    
    
    $
    145,404Cost of goods sold
    
    
    48,453
    
    
    
    54,424Gross Profit
    
    
    81,080
    
    
    
    90,980Operating expenses:Sales and marketing
    
    
    54,059
    
    
    
    60,935General and administrative
    
    
    13,219
    
    
    
    13,207Total operating expenses
    
    
    67,278
    
    
    
    74,142Operating income
    
    
    13,802
    
    
    
    16,838Other income (expense):Interest income
    
    
    438
    
    
    
    303Interest expense
    
    
    (101
    )
    
    
    (94
    )Total other income
    
    
    337
    
    
    
    209Income before provision for income taxes
    
    
    14,139
    
    
    
    17,047Provision for income taxes
    
    
    5,781
    
    
    
    7,216Net income
    
    $
    8,358
    
    
    $
    9,831Earnings per share:Net income per share:Basic
    
    $
    0.46
    
    
    $
    0.54Diluted
    
    $
    0.45
    
    
    $
    0.53Weighted average shares outstanding:Basic
    
    
    18,042
    
    
    
    18,184Diluted
    
    
    18,376
    
    
    
    18,412
   3




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JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Balance Sheets
   February 2, 2008
    
    
    May 3, 2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    82,082
    
    
    $
    53,559Accounts receivable, net
    
    
    5,855
    
    
    
    12,912Inventories:Finished goods
    
    
    196,547
    
    
    
    200,190Raw materials
    
    
    10,278
    
    
    
    10,120Total inventories
    
    
    206,825
    
    
    
    210,310Prepaid expenses and other current assets
    
    
    18,593
    
    
    
    19,945Total current assets
    
    
    313,355
    
    
    
    296,726NONCURRENT ASSETS:Property, plant and equipment, net
    
    
    126,235
    
    
    
    129,334Other noncurrent assets
    
    
    508
    
    
    
    502Total assets
    
    $
    440,098
    
    
    $
    426,562LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    47,383
    
    
    $
    38,146Accrued expenses
    
    
    72,150
    
    
    
    56,113Deferred tax liability  current
    
    
    6,688
    
    
    
    7,194Total current liabilities
    
    
    126,221
    
    
    
    101,453NONCURRENT LIABILITIES:Long-term debt
    
    
    
    
    
    
    Noncurrent lease obligations
    
    
    50,185
    
    
    
    51,124Deferred tax liability  noncurrent
    
    
    1,210
    
    
    
    1,244Other noncurrent liabilities
    
    
    1,317
    
    
    
    1,626Total liabilities
    
    
    178,933
    
    
    
    155,447COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Common stock
    
    
    181
    
    
    
    181Additional paid-in capital
    
    
    80,791
    
    
    
    80,910Retained earnings
    
    
    180,260
    
    
    
    190,091Accumulated other comprehensive losses
    
    
    (67
    )
    
    
    (67
    )Total stockholders equity
    
    
    261,165
    
    
    
    271,115Total liabilities and stockholders equity
    
    $
    440,098
    
    
    $
    426,562
   4




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JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 
 Condensed Consolidated Statements of Cash Flows
   Three Months EndedMay 5, 2007
    
    
    May 3, 2008Cash flows from operating activities:Net income
    
    $
    8,358
    
    
    $
    9,831Adjustments to reconcile net income to net cash used in
operating activities:Depreciation and amortization
    
    
    4,480
    
    
    
    4,910Loss on disposals of property, plant and equipment
    
    
    69
    
    
    
    36(Decrease) increase in deferred taxes
    
    
    (404
    )
    
    
    540Net increase in operating working capital and other components
    
    
    (22,751
    )
    
    
    (36,010
    )Net cash used in operating activities
    
    
    (10,248
    )
    
    
    (20,693
    )Cash flows from investing activities:Capital expenditures
    
    
    (7,338
    )
    
    
    (7,949
    )Net cash used in investing activities
    
    
    (7,338
    )
    
    
    (7,949
    )Cash flows from financing activities:Income tax benefit from exercise of stock options
    
    
    227
    
    
    
    Net proceeds from exercise of stock options
    
    
    753
    
    
    
    119Net cash provided by financing activities
    
    
    980
    
    
    
    119Net decrease in cash and cash equivalents
    
    
    (16,606
    )
    
    
    (28,523
    )Cash and cash equivalents  beginning of period
    
    
    43,080
    
    
    
    82,082Cash and cash equivalents  end of period
    
    $
    26,474
    
    
    $
    53,559
   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
 Vendor Rebates
  6




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Landlord Contributions
 Recently Issued Accounting Standards
    7




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3.
    
    SUPPLEMENTAL CASH FLOW DISCLOSURE
  Three Months EndedMay 5, 2007
    
    
    May 3, 2008Increase in accounts receivable
    
    $
    (2,056
    )
    
    $
    (7,057
    )Decrease (increase) in inventories
    
    
    3,208
    
    
    
    (3,485
    )Increase in prepaids and other assets
    
    
    (3,539
    )
    
    
    (1,346
    )Decrease in accounts payable
    
    
    (11,199
    )
    
    
    (9,237
    )Decrease in accrued expenses and other liabilities
    
    
    (11,225
    )
    
    
    (16,133
    )Increase in noncurrent lease liabilities and other noncurrent
liabilities
    
    
    2,060
    
    
    
    1,248Net increase in operating working capital and other components
    
    $
    (22,751
    )
    
    $
    (36,010
    )
  Three Months EndedMay 5, 2007
    
    
    May 3, 2008Interest paid
    
    $
    99
    
    
    $
    63Income taxes paid
    
    $
    18,884
    
    
    $
    22,889
 4.
    
    EARNINGS PER SHARE
  Three Months EndedMay 5, 2007
    
    
    May 3, 2008Weighted average shares
outstanding for basic EPS
    
    
    18,042
    
    
    
    18,184Dilutive effect of common stock
equivalents
    
    
    334
    
    
    
    228Weighted average shares
outstanding for diluted EPS
    
    
    18,376
    
    
    
    18,412
   8




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5.
    
    INCOME TAXES
      6.
    
    SEGMENT REPORTING
     9




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Three months ended May 3, 2008
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    128,616
    
    
    $
    14,193
    
    
    $
    2,595
    
    
    $
    145,404Depreciation and amortization
    
    
    4,282
    
    
    
    20
    
    
    
    608
    
    
    
    4,910Operating income (loss) (b)
    
    
    24,859
    
    
    
    5,957
    
    
    
    (13,978
    )
    
    
    16,838Identifiable assets (c)
    
    
    372,486
    
    
    
    40,550
    
    
    
    13,526
    
    
    
    426,562Capital expenditures (d)
    
    
    7,707
    
    
    
    3
    
    
    
    239
    
    
    
    7,949
 Three months ended May 5, 2007
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    112,878
    
    
    $
    14,157
    
    
    $
    2,498
    
    
    $
    129,533Depreciation and amortization
    
    
    3,846
    
    
    
    20
    
    
    
    614
    
    
    
    4,480Operating income (loss) (b)
    
    
    22,493
    
    
    
    5,510
    
    
    
    (14,201
    )
    
    
    13,802Identifiable assets (c)
    
    
    301,635
    
    
    
    38,346
    
    
    
    14,380
    
    
    
    354,361Capital expenditures (d)
    
    
    7,125
    
    
    
    13
    
    
    
    200
    
    
    
    7,338
 
 (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.(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.  10




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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
 
    
    12.3% increase in net sales, generated primarily by the Stores segment, while
maintaining gross profit margins;
    
    6.4% increase in comparable store sales;
    
    a 20 basis point increase in sales and marketing costs as a percentage of
sales, as compared to the prior year, driven primarily by additional occupancy costs,
offset by the leveraging of advertising and marketing costs; and
    
    a 110 basis point decrease in general and administrative costs as a percentage
of sales, as compared to the prior year, as the Company was able to leverage its costs
during the quarter.
   Critical Accounting Policies and Estimates
 Inventory.
  13




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




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Liabilities  including
  Results of Operations
  Percentage of Net SalesThree Months EndedMay 5, 2007
    
    
    May 3, 2008Net sales
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold
    
    
    37.4
    
    
    
    37.4Gross profit
    
    
    62.6
    
    
    
    62.6Sales and marketing expenses
    
    
    41.7
    
    
    
    41.9General and administrative expenses
    
    
    10.2
    
    
    
    9.1Total operating expenses
    
    
    51.9
    
    
    
    51.0Operating income
    
    
    10.7
    
    
    
    11.6Total other income
    
    
    0.3
    
    
    
    0.1Income before provision for income
taxes
    
    
    10.9
    
    
    
    11.7Provision for income taxes
    
    
    4.5
    
    
    
    5.0Net income
    
    
    6.5
    
    
    
    6.8
 Net Sales
  15




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Three Months EndedMay 5, 2007
    
    
    May 3, 2008Square
    
    
    
    
    
    
    SquareStores
    
    
    Feet*
    
    
    Stores
    
    
    Feet*Stores open at the
beginning of the period
    
    
    376
    
    
    
    1,745
    
    
    
    422
    
    
    
    1,935Stores opened
    
    
    10
    
    
    
    42
    
    
    
    6
    
    
    
    26Stores closed
    
    
    (1
    )
    
    
    (8
    )
    
    
    
    
    
    
    Stores open at the
end of the period
    
    
    385
    
    
    
    1,779
    
    
    
    428
    
    
    
    1,961
 
 *
    
    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
   Three Months EndedMay 5, 2007
    
    
    May 3, 2008Cash provided by (used in):Operating activities
    
    $
    (10,248
    )
    
    $
    (20,693
    )Investing activities
    
    
    (7,338
    )
    
    
    (7,949
    )Financing activities
    
    
    980
    
    
    
    119Net decrease in cash and cash
equivalents
    
    $
    (16,606
    )
    
    $
    (28,523
    )
  17




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Off-Balance Sheet Arrangements
 Disclosures about Contractual Obligations and Commercial Commitments
   18




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Payments Due by Fiscal Year(in thousands)Beyond2008
    
    
    2009-2011
    
    
    2012-2013
    
    
    2013
    
    
    Total
(d)Long-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating leases (a) (b)
    
    
    50,705
    
    
    
    144,866
    
    
    
    84,120
    
    
    
    85,161
    
    
    
    364,852Stand-by letter-of-credit (c)
    
    
    
    
    
    
    400
    
    
    
    
    
    
    
    
    
    
    
    400License agreement
    
    
    165
    
    
    
    330
    
    
    
    
    
    
    
    
    
    
    
    495Property, plant and equipment
commitments (e)
    
    
    2,100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,100
 
 (a)
    
    Includes various lease agreements for stores to be opened and equipment placed in
service subsequent to
May 3, 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 of $0.3 million have been excluded
from the above table as the amount to be settled in cash and the specific payment dates
are not known.(e)
    
    The Company entered into an agreement to purchase a retail location. Closing under
the agreement occurred early in the second quarter of fiscal year 2008. Cautionary Statement
 Form 10-Q,
   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.
  Changes in Internal Control over Financial Reporting
 
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
    20




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21




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Item 1A. Risk Factors
  
 Item 6. Exhibits
  10.11
    
    
    Employment Agreement, dated as of June 3, 2008, by and between Gary Merry and
Jos. A. Bank Clothiers, Inc.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.
 
    
    Exhibit represents a management contract or compensatory plan or arrangement. 
 SIGNATURE
  Dated:  June 4, 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)  22




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Exhibit Index
  10.11
    
    
    Employment Agreement, dated as of June 3, 2008, by and between Gary Merry and
Jos. A. Bank Clothiers, Inc.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.
 
    
    Exhibit represents a management contract or compensatory plan or arrangement.  23