Casual Male Retail 2008 sales decline by 4.3%

20 Mar '09

3 min read

Casual Male Retail Group Inc, retail brand operator of Casual Male XL, Rochester Clothing, B&T Factory Direct, Living XL and Shoes XL, announced its sales and operating results for the fourth quarter and fiscal year ended January 31, 2009 ("fiscal 2008").

Overall, total sales for the fourth quarter of fiscal 2008 decreased 8.1% to $123.1 million, and for fiscal 2008, total sales decreased 4.3% to $444.2 million. Comparable sales for the fourth quarter and fiscal year 2008 decreased 9.3% and 4.3%, respectively.

Our net loss for the fourth quarter of fiscal 2008 was $108.0 million, or $(2.61) per diluted share, and for the fiscal year 2008, our net loss was $109.3 million, or $(2.64) per diluted share. In the fourth quarter of fiscal 2008, the Company recorded total non-cash impairment-related charges of approximately $100.0 million, consisting of an aggregate write-down of $71.4 million for the impairment of goodwill, intangibles and long-lived assets, and a charge of $28.6 million for the establishment of a full valuation allowance against our deferred tax assets.

In addition, results for fiscal 2008 also include approximately $2.0 million, or $(0.05) per diluted share, of non-recurring charges relating primarily to accelerated stock option expense. These charges have no impact on the Company's future business operations, its credit facilities which contain no financial covenants, or the liquidity available to the business. The Company's credit facility matures October 29, 2011 and provides for a total commitment of up to $110 million, limited by the underlying collateral asset value, with interest rates currently averaging LIBOR plus 166 basis points.

Excluding the impact of the aggregate $102.0 million of charges, the non-GAAP adjusted net loss for the fourth quarter of fiscal 2008 was $6.0 million, or $(0.14) per diluted share, as compared to net income of $0.6 million, or $0.02 per diluted share, for the fourth quarter of fiscal 2007. For fiscal 2008, the non-GAAP adjusted net loss, excluding the charges of $102.0 million, was $7.3 million, or $(0.18) per diluted share, as compared to net income of $0.4 million, or $0.01 per diluted share, for fiscal 2007.

David Levin, President and CEO, stated, "Last year was the most challenging retail environment in my more than 30 years as a retailer. However, CMRG has a dominant market position in its retail sector and the Company's long-term prospects for growth and profitability remain promising. The Company's primary focus has been to maintain a strong liquidity position by generating free cash flow and managing inventory levels.

Despite missing our sales plan by $40 million, we were still able to generate $10.6 million in free cash flow and reduce inventory by $19 million. We have analyzed our business model and have made significant changes that we believe will allow CMRG to withstand the current economic environment. In light of these changes, we expect to continue to generate free cash flow and again reduce inventory, without compromising our market position."

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