##### 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 3, 2007.
 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 incorporation)
    
    (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
  o þ
  Class
    
    Outstanding as of December 5, 2007Common Stock, $.01 par value
    
    18,179,371




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##### 



JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
 Index
 Page No.Part I. Financial InformationItem 1. Unaudited Condensed Consolidated Financial Statements
    
    
    3Condensed Consolidated Statements of Income  Three and Nine Months ended October 28, 2006 and November 3, 2007
    
    
    3Condensed Consolidated Balance Sheets  as of February 3, 2007 and November 3, 2007
    
    
    4Condensed Consolidated Statements of Cash Flows  Nine Months ended October 28, 2006 and November 3, 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22Part II. Other Information
    
    
    22Item 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    24Item 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 EndedOctober 28, 2006
    
    
    November 3, 2007
    
    
    October 28, 2006
    
    
    November 3, 2007Net sales
    
    $
    119,511
    
    
    $
    131,304
    
    
    $
    352,274
    
    
    $
    395,115Cost of goods sold
    
    
    47,057
    
    
    
    47,679
    
    
    
    135,770
    
    
    
    146,663Gross Profit
    
    
    72,454
    
    
    
    83,625
    
    
    
    216,504
    
    
    
    248,452Operating expenses:Sales and marketing
    
    
    50,796
    
    
    
    59,094
    
    
    
    147,457
    
    
    
    170,015General and administrative
    
    
    12,599
    
    
    
    13,034
    
    
    
    37,254
    
    
    
    39,622Total operating expenses
    
    
    63,395
    
    
    
    72,128
    
    
    
    184,711
    
    
    
    209,637Operating income
    
    
    9,059
    
    
    
    11,497
    
    
    
    31,793
    
    
    
    38,815Other income (expense):Interest income
    
    
    29
    
    
    
    396
    
    
    
    82
    
    
    
    1,374Interest expense
    
    
    (447
    )
    
    
    (92
    )
    
    
    (1,068
    )
    
    
    (285
    )Total other income (expense)
    
    
    (418
    )
    
    
    304
    
    
    
    (986
    )
    
    
    1,089Income before provision for income taxes
    
    
    8,641
    
    
    
    11,801
    
    
    
    30,807
    
    
    
    39,904Provision for income taxes
    
    
    3,133
    
    
    
    4,705
    
    
    
    12,465
    
    
    
    16,244Net income
    
    $
    5,508
    
    
    $
    7,096
    
    
    $
    18,342
    
    
    $
    23,660Earnings per share:Net income per share:Basic
    
    $
    0.31
    
    
    $
    0.39
    
    
    $
    1.02
    
    
    $
    1.31Diluted
    
    $
    0.30
    
    
    $
    0.38
    
    
    $
    1.00
    
    
    $
    1.28Weighted average shares outstanding:Basic
    
    
    18,016
    
    
    
    18,165
    
    
    
    17,967
    
    
    
    18,111Diluted
    
    
    18,330
    
    
    
    18,439
    
    
    
    18,339
    
    
    
    18,419
   3




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##### Table of Contents



JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
 February 3, 2007
    
    
    November 3, 2007ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    43,080
    
    
    $
    26,608Accounts receivable, net
    
    
    5,193
    
    
    
    10,403Inventories:Finished goods
    
    
    175,690
    
    
    
    214,948Raw materials
    
    
    7,781
    
    
    
    10,099Total inventories
    
    
    183,471
    
    
    
    225,047Prepaid expenses and other current assets
    
    
    18,560
    
    
    
    20,766Total current assets
    
    
    250,304
    
    
    
    282,824NONCURRENT ASSETS:Property, plant and equipment, net
    
    
    117,553
    
    
    
    125,493Other noncurrent assets
    
    
    535
    
    
    
    510Total assets
    
    $
    368,392
    
    
    $
    408,827LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable
    
    $
    41,683
    
    
    $
    56,228Accrued expenses
    
    
    63,606
    
    
    
    58,927Deferred tax liability  current
    
    
    8,453
    
    
    
    8,179Total current liabilities
    
    
    113,742
    
    
    
    123,334NONCURRENT LIABILITIES:Long-term debt
    
    
    412
    
    
    
    421Noncurrent lease obligations
    
    
    42,053
    
    
    
    46,939Deferred tax liability  noncurrent
    
    
    2,595
    
    
    
    1,873Other noncurrent liabilities
    
    
    1,356
    
    
    
    1,690Total liabilities
    
    
    160,158
    
    
    
    174,257COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Common stock
    
    
    180
    
    
    
    181Additional paid-in capital
    
    
    78,101
    
    
    
    80,776Retained earnings
    
    
    130,092
    
    
    
    153,752Accumulated other comprehensive losses
    
    
    (139
    )
    
    
    (139
    )Total stockholders equity
    
    
    208,234
    
    
    
    234,570Total liabilities and stockholders equity
    
    $
    368,392
    
    
    $
    408,827
   4




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JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
 Nine Months EndedOctober 28, 2006
    
    
    November 3, 2007Cash flows from operating activities:Net income
    
    $
    18,342
    
    
    $
    23,660Adjustments to reconcile net income to net cash provided by (used in)
operating activities:Depreciation and amortization
    
    
    11,603
    
    
    
    13,753Loss on disposals of property, plant and equipment
    
    
    30
    
    
    
    121Decrease in deferred taxes
    
    
    (1,530
    )
    
    
    (996
    )Net increase in operating working capital and other components
    
    
    (41,710
    )
    
    
    (36,465
    )Net cash provided by (used in) operating activities
    
    
    (13,265
    )
    
    
    73Cash flows from investing activities:Capital expenditures
    
    
    (20,322
    )
    
    
    (19,511
    )Proceeds from disposal of fixed assets
    
    
    
    
    
    
    290Net cash used in investing activities
    
    
    (20,322
    )
    
    
    (19,221
    )Cash flows from financing activities:Borrowings under long-term Credit Agreement
    
    
    85,253
    
    
    
    Repayments under long-term Credit Agreement
    
    
    (68,595
    )
    
    
    Proceeds from issuance of long-term debt
    
    
    400
    
    
    
    Repayment of other long-term debt
    
    
    (718
    )
    
    
    Income tax benefit from exercise of stock options
    
    
    4,371
    
    
    
    807Net proceeds from exercise of stock options
    
    
    7,086
    
    
    
    1,869Net cash provided by financing activities
    
    
    27,797
    
    
    
    2,676Net decrease in cash and cash equivalents
    
    
    (5,790
    )
    
    
    (16,472
    )Cash and cash equivalents  beginning of period
    
    
    7,344
    
    
    
    43,080Cash and cash equivalents  end of period
    
    $
    1,554
    
    
    $
    26,608
   5




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JOS. A. BANK CLOTHIERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    BASIS OF PRESENTATION
    Reclassifications -
 2.
    
    SIGNIFICANT ACCOUNTING POLICIES
 Inventories
 Vendor Rebates
  6




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Landlord Contributions
 Stock Options - 
 Recently Issued Accounting Standards
    7




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3.
    
    SUPPLEMENTAL CASH FLOW DISCLOSURE
  Nine Months EndedOctober 28, 2006
    
    
    November 3, 2007Increase in accounts receivable
    
    $
    (2,601
    )
    
    $
    (5,210
    )Increase in inventories
    
    
    (25,995
    )
    
    
    (41,576
    )Increase in prepaids and other assets
    
    
    (3,587
    )
    
    
    (2,181
    )Increase (decrease) in accounts payable
    
    
    (8,389
    )
    
    
    14,545Decrease in accrued expenses and other liabilities
    
    
    (5,302
    )
    
    
    (7,272
    )Increase in noncurrent lease liabilities and other noncurrent
liabilities
    
    
    4,164
    
    
    
    5,229Net increase in operating working capital and other components
    
    $
    (41,710
    )
    
    $
    (36,465
    )
  Nine Months EndedOctober 28, 2006
    
    
    November 3, 2007Interest paid
    
    $
    876
    
    
    $
    200Income taxes paid
    
    $
    21,225
    
    
    $
    30,505
 4.
    
    EARNINGS PER SHARE
  Three Months Ended
    
    
    Nine Months EndedOctober 28, 2006
    
    
    November 3, 2007
    
    
    October 28, 2006
    
    
    November 3, 2007Weighted average shares
outstanding for basic EPS
    
    
    18,016
    
    
    
    18,165
    
    
    
    17,967
    
    
    
    18,111Dilutive effect of common stock
equivalents
    
    
    314
    
    
    
    274
    
    
    
    372
    
    
    
    308Weighted average shares
outstanding for diluted EPS
    
    
    18,330
    
    
    
    18,439
    
    
    
    18,339
    
    
    
    18,419
   8




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5.
    
    INCOME TAXES
     6.
    
    SEGMENT REPORTING
    9




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##### Table of Contents



Three months ended November 3, 2007
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    116,398
    
    
    $
    11,939
    
    
    $
    2,967
    
    
    $
    131,304Depreciation and amortization
    
    
    4,069
    
    
    
    22
    
    
    
    619
    
    
    
    4,710Operating income (loss)(b)
    
    
    19,318
    
    
    
    4,778
    
    
    
    (12,599
    )
    
    
    11,497Capital expenditures (d)
    
    
    7,748
    
    
    
    3
    
    
    
    234
    
    
    
    7,985
 Three months ended October 28, 2006
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    104,870
    
    
    $
    11,726
    
    
    $
    2,915
    
    
    $
    119,511Depreciation and amortization
    
    
    3,436
    
    
    
    18
    
    
    
    607
    
    
    
    4,061Operating income (loss)
(b)
    
    
    17,203
    
    
    
    4,453
    
    
    
    (12,597
    )
    
    
    9,059Capital expenditures (d)
    
    
    6,735
    
    
    
    22
    
    
    
    665
    
    
    
    7,422
 Nine months ended November 3, 2007
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    346,727
    
    
    $
    40,095
    
    
    $
    8,293
    
    
    $
    395,115Depreciation and amortization
    
    
    11,846
    
    
    
    60
    
    
    
    1,847
    
    
    
    13,753Operating income (loss)
(b)
    
    
    63,837
    
    
    
    15,428
    
    
    
    (40,450
    )
    
    
    38,815Identifiable assets (c)
    
    
    349,015
    
    
    
    44,923
    
    
    
    14,889
    
    
    
    408,827Capital expenditures (d)
    
    
    18,805
    
    
    
    24
    
    
    
    682
    
    
    
    19,511
 Nine months ended October 28, 2006
 Stores
    
    
    Direct Marketing
    
    
    Other
    
    
    TotalNet sales (a)
    
    $
    309,079
    
    
    $
    35,078
    
    
    $
    8,117
    
    
    $
    352,274Depreciation and amortization
    
    
    9,796
    
    
    
    54
    
    
    
    1,753
    
    
    
    11,603Operating income (loss)
(b)
    
    
    56,419
    
    
    
    13,702
    
    
    
    (38,328
    )
    
    
    31,793Identifiable assets (c)
    
    
    289,149
    
    
    
    37,645
    
    
    
    17,009
    
    
    
    343,803Capital expenditures (d)
    
    
    18,657
    
    
    
    41
    
    
    
    1,624
    
    
    
    20,322
  10




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##### Table of Contents



(a)
    
    Direct Marketing net sales represent catalog and Internet sales including catalog orders
placed in new stores. Net sales from segments below the quantitative thresholds are
attributable primarily to three operating segments of the Company. Those segments are
factory 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 for the Stores and Direct Marketing segments represents profit before
allocations of overhead from the corporate office and the distribution center, 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 center, deferred tax assets, 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
     In re Jos. A. Bank
Clothiers, Inc. Derivative Litigation
  11




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8.
    
    RIGHTS AGREEMENT
     12




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13




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14




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Overview
 
    
    9.9% increase in net sales over the third quarter of fiscal 2006, with increases
in both the Stores and Direct Marketing segments;
 
    
    Gross profit margin increase of 310 basis points over the third quarter of fiscal
2006;
 
    
    As a percentage of net sales, a 60 basis point decrease in general and
administrative expenses over the third quarter of fiscal 2006, primarily in corporate
payroll and benefits costs;
 
    
    As a percentage of net sales, a 250 basis point increase in sales and marketing
costs over the third quarter of fiscal 2006, primarily in store selling, advertising and
occupancy costs; and
 
    
    The opening of 48 new stores, net of closing one store, since the end of the third
quarter of fiscal 2006.
    Critical Accounting Policies and Estimates
 Inventory.
  15




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Asset Valuation.
 Lease Accounting.
  Recently Issued Accounting Standards
  16




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Results of Operations
  Percentage of Net Sales
    
    
    Percentage of Net SalesThree Months Ended
    
    
    Nine Months EndedOctober 28, 2006
    
    
    November 3, 2007
    
    
    October 28, 2006
    
    
    November 3, 2007Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold
    
    
    39.4
    
    
    
    36.3
    
    
    
    38.5
    
    
    
    37.1Gross profit
    
    
    60.6
    
    
    
    63.7
    
    
    
    61.5
    
    
    
    62.9General and administrative
expenses
    
    
    10.5
    
    
    
    9.9
    
    
    
    10.6
    
    
    
    10.0Sales and marketing
expenses
    
    
    42.5
    
    
    
    45.0
    
    
    
    41.9
    
    
    
    43.0Operating income
    
    
    7.6
    
    
    
    8.8
    
    
    
    9.0
    
    
    
    9.8Interest income
(expense), net
    
    
    (0.3
    )
    
    
    0.2
    
    
    
    (0.3
    )
    
    
    0.3Income before provision
for income taxes
    
    
    7.2
    
    
    
    9.0
    
    
    
    8.7
    
    
    
    10.1Provision for income taxes
    
    
    2.6
    
    
    
    3.6
    
    
    
    3.5
    
    
    
    4.1Net income
    
    
    4.6
    
    
    
    5.4
    
    
    
    5.2
    
    
    
    6.0
 Net Sales
   17




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Three Months Ended
    
    
    Nine Months EndedOctober 28, 2006
    
    
    November 3, 2007
    
    
    October 28, 2006
    
    
    November 3, 2007Square
    
    
    
    
    
    
    Square
    
    
    
    
    
    
    Square
    
    
    
    
    
    
    SquareStores
    
    
    Feet*
    
    
    Stores
    
    
    Feet*
    
    
    Stores
    
    
    Feet*
    
    
    Stores
    
    
    Feet*Stores open at the
beginning of the period
    
    
    340
    
    
    
    1,603
    
    
    
    391
    
    
    
    1,804
    
    
    
    324
    
    
    
    1,543
    
    
    
    376
    
    
    
    1,745Stores opened
    
    
    19
    
    
    
    80
    
    
    
    16
    
    
    
    68
    
    
    
    35
    
    
    
    140
    
    
    
    32
    
    
    
    135Stores closed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (8
    )Stores open at the
end of the period
    
    
    359
    
    
    
    1,683
    
    
    
    407
    
    
    
    1,872
    
    
    
    359
    
    
    
    1,683
    
    
    
    407
    
    
    
    1,872
 
 *
    
    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
  General and Administrative Expenses
  18




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Other Income (Expense)
 Income Taxes
 Seasonality
 Liquidity and Capital Resources
    Nine Months EndedOctober 28, 2006
    
    
    November 3, 2007Cash provided by (used in):Operating activities
    
    $
    (13,265
    )
    
    $
    73Investing activities
    
    
    (20,322
    )
    
    
    (19,221
    )Financing activities
    
    
    27,797
    
    
    
    2,676Net decrease in cash and cash equivalents
    
    $
    (5,790
    )
    
    $
    (16,472
    )
  19




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Rights Agreement
 Off-Balance Sheet Arrangements
 Disclosures about Contractual Obligations and Commercial Commitments
   20




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Payments Due by Fiscal Year(in thousands)Beyond2007
    
    
    2008-2010
    
    
    2011-2012
    
    
    2012
    
    
    Total (d)Long-term debt
    
    $
    
    
    
    $
    421
    
    
    $
    
    
    
    $
    
    
    
    $
    421Operating leases (a) (b)
    
    
    45,922
    
    
    
    140,172
    
    
    
    82,568
    
    
    
    105,625
    
    
    
    374,287Stand-by letter-of-credit
(c)
    
    
    
    
    
    
    400
    
    
    
    
    
    
    
    
    
    
    
    400License agreement
    
    
    165
    
    
    
    495
    
    
    
    
    
    
    
    
    
    
    
    660
 
 (a)
    
    Includes various lease agreements for stores to be opened and equipment placed in
service subsequent to
November 3, 2007. See Note 9 to the Consolidated Financial Statements in the Companys
Annual Report on Form 10-K for fiscal 2006.(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 $0.8 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
    21




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Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
 Limitations on Controls and Procedures and Changes in Internal Control Over Financial
Reporting.
 Disclosure Controls and Procedures.
  Changes in Internal Control over Financial Reporting
 
 PART II.
    
    OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
   22




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In re Jos. A. Bank
Clothiers, Inc. Derivative Litigation
     23




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Item 1A.
    
    Risk Factors
  
 Item 6.
    
    Exhibits
  4.1
    
    Rights Agreement dated as of September 6, 2007 between Jos. A. Bank Clothiers,
Inc. and Continental Stock Transfer & Trust Company.*(1)4.2
    
    Form of Right Certificate.*(1)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.
 
 *(1)
    
    Incorporated by reference to the Companys Current Report on Form 8-K, dated
September 7, 2007.
 
 SIGNATURE
  Dated: December 13, 2007
    
    Jos. A. Bank Clothiers, Inc.(Registrant)/s/ David E. UllmanDavid E. UllmanExecutive Vice President,Chief Financial Officer(Principal Financial and Accounting Officerand Duly Authorized Officer)
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##### Table of Contents



Exhibit Index
  4.1
    
    Rights Agreement dated as of September 6, 2007 between Jos. A. Bank Clothiers, Inc.
and Continental Stock Transfer & Trust Company.*(1)4.2
    
    Form of Right Certificate.*(1)31.1
    
    Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a).31.2
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14(a) 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.
 
 *(1)
    
    Incorporated by reference to the Companys Current Report on Form 8-K, dated
September 7, 2007.
  25