Casual Male Sales, Profits Up

"We are very pleased about the accomplishments of 2006 and enthusiastic about the prospects for 2006," executive vice president Dennis Hernreich, the company's chief operating officer and chief financial officer said in a conference call with investors Thursday.

Hernreich said the company's sale and leaseback of its 755,000 sf headquarters and distribution center in Canton, MA to Phoenix-based Spirit Financial for $57 million helped reduce its long-term debt of $44 million, added $12 million in cash to the firm's coffers, and gave it a $29-million gain in in amortization costs over the term of its long-term lease. Now, Hernreich said, the only sizable debt remaining is the company's $5 million in outstanding notes.

A number of initiatives, among them the introduction of specialized brands, sizing and fabric styles, helped drive up sales and profitability for the specialty retailer, he added, with profits rising about 71% during the first quarter, increasing to $13.5 million, or 38 cents per share, from $7.9 million, or 22 cents per share, in the fourth quarter a year earlier.

The Canton, MA–based firm, which operates more than 496 Casual Male Big & Tall specialty and outlet stores in 44 states, said the latest results include a gain from the repurchase of $5.3 million of convertible notes and a $2.8 million benefit from the reversal of tax allowances along with a $1 million net charge associated with the prepayment of its mortgage note.

For the year, sales for fiscal 2005 were $421.4 million, about 15% more than fiscal 2004 when sales were $365 million. Earnings for the year also jumped to $10.8 million, or 30 cents per share, an increase from 2004 when earnings were $1.5 million, or 4 cents per share.