Oxford Industries Reports First Quarter Results
"During the quarter we made steady progress with respect to
Operating Results
As of quarter end on
In the first quarter of fiscal 2013,
Operating income was flat with last year at
Lanier Clothes Net sales in the first quarter of fiscal 2013 decreased to
Ben Sherman As planned, Ben Sherman reported net sales of
Gross margin at Ben Sherman decreased due to heavy promotions and higher off-price sales, which were necessary measures to manage inventory levels appropriately. The factors that negatively impacted operating income were partially offset by reductions in SG&A.
Corporate and Other The Corporate and Other operating loss for the first quarter of fiscal 2013 was
Consolidated Operating Results
Net Sales For the first quarter of fiscal 2013, consolidated net sales were
Gross Profit and Margins For the first quarter of fiscal 2013, consolidated gross margins increased 130 basis points to 57.2%, primarily due to the change in sales mix towards direct to consumer sales. Gross profit for the first quarter of fiscal 2013 increased to
SG&A For the first quarter of fiscal 2013, SG&A was
Change in Fair Value of Contingent Consideration The first quarter of fiscal 2013 included
Royalties and Other Income Royalties and other income were
Operating Income For the first quarter of fiscal 2013, consolidated operating income was
Interest Expense For the first quarter of fiscal 2013, interest expense declined 74% to
Income Taxes The effective tax rate for the first quarter was 45.8% compared to 38.3% in the first quarter of fiscal 2012. The rate in the first quarter of fiscal 2013 was unfavorably impacted by the Company's inability to recognize a tax benefit for losses in foreign jurisdictions.
Balance Sheet & Liquidity
As of
Inventory increased to
As of
The Company's anticipated capital expenditures for fiscal 2013, including
Outlook for Fiscal 2013
For the second quarter, ending on
For fiscal 2013, the Company continues to expect earnings per share in a range of
The effective tax rate is expected to be approximately 39.5% and 41% for the second quarter and fiscal year, respectively.
For reference, tables reconciling GAAP to adjusted measures are included at the end of this release.
Conference Call
The Company will hold a conference call with senior management to discuss its financial results at
About Oxford
Comparable Store Sales
The Company's disclosures about comparable store sales include sales from its full-price stores and e-commerce sites, excluding sales associated with e-commerce flash clearance sales and sales from the Company's restaurants. Definitions and calculations of comparable store sales differ among companies in the retail industry, and therefore comparable store metrics disclosed by the Company may not be comparable to the metrics disclosed by other companies.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This press release may include statements that are forward-looking statements within the meaning of the federal securities laws. Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature. We intend for all forward-looking statements contained herein or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995).
Important assumptions relating to these forward‑looking statements include, among others, assumptions regarding the impact of economic conditions on consumer demand and spending, particularly in light of general economic uncertainty that continues to prevail, demand for our products, timing of shipments requested by our wholesale customers, expected pricing levels, competitive conditions, retention of and disciplined execution by key management, the timing and cost of store openings and of planned capital expenditures, costs of products as well as the raw materials used in those products, costs of labor, acquisition and disposition activities, expected outcomes of pending or potential litigation and regulatory actions, access to capital and/or credit markets and the impact of foreign losses on our effective tax rate. Forward-looking statements reflect our current expectations,
based on currently available information, and are not guarantees of performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. contained in our Annual Report on Form 10-K for the period ended
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except par amounts)
| ||
2013 |
2012 | |
ASSETS |
||
Current Assets: |
||
Cash and cash equivalents |
$ 28,325 |
$ 5,679 |
Receivables, net |
82,196 |
86,705 |
Inventories, net |
95,798 |
85,996 |
Prepaid expenses, net |
21,508 |
15,530 |
Deferred tax assets |
20,686 |
19,339 |
Total current assets |
248,513 |
213,249 |
Property and equipment, net |
135,613 |
97,270 |
Intangible assets, net |
163,813 |
165,673 |
Goodwill |
17,267 |
16,495 |
Other non-current assets, net |
23,209 |
22,302 |
Total Assets |
$ 588,415 |
$ 514,989 |
LIABILITIES AND SHAREHOLDERS' EQUITY |
||
Current Liabilities: |
||
Accounts payable and other accrued expenses |
$ 77,783 |
$ 76,377 |
Accrued compensation |
14,651 |
16,703 |
Contingent consideration current liability |
- |
2,500 |
Short-term debt |
5,825 |
6,023 |
Total current liabilities |
98,259 |
101,603 |
Long-term debt |
159,294 |
106,991 |
Non-current contingent consideration |
14,519 |
11,245 |
Other non-current liabilities |
46,340 |
39,446 |
Non-current deferred income taxes |
35,498 |
33,614 |
Commitments and contingencies |
||
Shareholders' Equity: |
||
Common stock, |
16,387 |
16,541 |
Additional paid-in capital |
111,882 |
101,090 |
Retained earnings |
131,120 |
127,079 |
Accumulated other comprehensive loss |
(24,884) |
(22,620) |
Total shareholders' equity |
234,505 |
222,090 |
Total Liabilities and Shareholders' Equity |
$ 588,415 |
$ 514,989 |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (in thousands, except per share amounts)
| |||
First Quarter Fiscal 2013 |
First Quarter Fiscal 2012 | ||
Net sales |
$ 234,203 |
$ 230,953 | |
Cost of goods sold |
100,128 |
101,739 | |
Gross profit |
134,075 |
129,214 | |
SG&A |
113,025 |
100,808 | |
Change in fair value of contingent consideration |
69 |
600 | |
Royalties and other operating income |
5,080 |
4,982 | |
Operating income |
26,061 |
32,788 | |
Interest expense, net |
936 |
3,603 | |
Net earnings before income taxes |
25,125 |
29,185 | |
Income taxes |
11,502 |
11,183 | |
Net earnings |
$ 13,623 |
$ 18,002 | |
Net earnings per share: |
|||
Basic |
$ 0.82 |
$ 1.09 | |
Diluted |
$ 0.82 |
$ 1.09 | |
Weighted average common shares outstanding: |
|||
Basic |
16,586 |
16,531 | |
Diluted |
16,611 |
16,552 | |
Dividends declared per common share |
$ 0.18 |
$ 0.15 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
| |||
First Quarter Fiscal 2013 |
First Quarter Fiscal 2012 | ||
Cash Flows From Operating Activities: |
|||
Net earnings |
$ 13,623 |
$ 18,002 | |
Adjustments to reconcile net earnings to net cash used in operating activities: |
|||
Depreciation |
7,015 |
5,772 | |
Amortization of intangible assets |
211 |
256 | |
Change in fair value of contingent consideration |
69 |
600 | |
Amortization of deferred financing costs and bond discount |
108 |
376 | |
Stock compensation expense |
782 |
761 | |
Deferred income taxes |
3,443 |
(1,050) | |
Changes in working capital, net of acquisitions and dispositions: |
|||
Receivables |
(19,707) |
(26,638) | |
Inventories |
13,600 |
17,889 | |
Prepaid expenses |
(2,002) |
2,263 | |
Current liabilities |
(17,376) |
(19,798) | |
Other non-current assets |
(124) |
(2,326) | |
Other non-current liabilities |
1,772 |
781 | |
Excess tax benefits related to stock-based compensation |
(5,994) |
- | |
Net cash used in operating activities |
(4,580) |
(3,112) | |
Cash Flows From Investing Activities: |
|||
Purchases of property and equipment |
(13,860) |
(9,633) | |
Net cash used in investing activities |
(13,860) |
(9,633) | |
Cash Flows From Financing Activities: |
|||
Repayment of revolving credit arrangements |
(67,428) |
(64,886) | |
Proceeds from revolving credit arrangements |
116,171 |
71,670 | |
Proceeds from issuance of common stock, including excess tax benefits |
6,214 |
680 | |
Repurchase of restricted stock for employee tax withholding liabilities |
(12,637) |
- | |
Dividends on common stock |
(3,024) |
(2,475) | |
Net cash provided by financing activities |
39,296 |
4,989 | |
Net change in cash and cash equivalents |
20,856 |
(7,756) | |
Effect of foreign currency translation on cash and cash equivalents |
(48) |
62 | |
Cash and cash equivalents at the beginning of year |
7,517 |
13,373 | |
Cash and cash equivalents at the end of the period |
$ 28,325 |
$ 5,679 | |
Supplemental disclosure of cash flow information: |
|||
Cash paid for interest, net |
$ 860 |
$ 82 | |
Cash paid (refunded) for income taxes |
$ 1,113 |
$ (351) |
OPERATING GROUP INFORMATION (UNAUDITED) (in thousands)
| |||
First Quarter Fiscal 2013 |
First Quarter Fiscal 2012 | ||
Net Sales |
|||
|
|
| |
|
39,449 |
35,633 | |
Lanier Clothes |
27,260 |
33,007 | |
Ben Sherman |
12,236 |
17,352 | |
Corporate and Other |
4,832 |
3,827 | |
Total |
|
| |
Operating Income (Loss) |
|||
|
|
| |
|
11,033 |
11,012 | |
Lanier Clothes |
2,461 |
4,046 | |
Ben Sherman |
(4,824) |
(2,740) | |
Corporate and Other |
(3,990) |
(5,094) | |
Total Operating Income |
|
|
RECONCILIATION OF CERTAIN OPERATING RESULTS INFORMATION PRESENTED IN ACCORDANCE WITH GAAP TO CERTAIN OPERATING RESULTS INFORMATION, AS ADJUSTED (UNAUDITED)
| |||
Set forth below is the reconciliation, in thousands except per share amounts, of certain operating results information, presented in accordance with generally accepted accounting principles, or GAAP, to the operating results information, as adjusted, for certain historical periods. The Company believes that investors often look at ongoing operations as a measure of assessing performance and as a basis for comparing past results against future results. Therefore, the Company believes that presenting operating results, as adjusted, provides useful information to investors because this allows investors to make decisions based on ongoing operations. The Company uses the operating results, as adjusted, to discuss its business with investment institutions, its board of directors and others. Further, the Company believes that presenting operating results, as adjusted, provides useful information to investors because this allows investors to compare the Company's operating results for the periods presented to other periods. | |||
First Quarter Fiscal 2013 |
First Quarter Fiscal 2012 | ||
As reported |
|||
Net sales |
$ 234,203 |
$ 230,953 | |
Gross profit |
$ 134,075 |
$ 129,214 | |
Gross margin (1) |
57.2% |
55.9% | |
Operating income |
$ 26,061 |
$ 32,788 | |
Operating margin (2) |
11.1% |
14.2% | |
Net earnings before income taxes |
$ 25,125 |
$ 29,185 | |
Net earnings |
$ 13,623 |
$ 18,002 | |
Diluted net earnings per share |
$ 0.82 |
$ 1.09 | |
Weighted average shares outstanding — diluted |
16,611 |
16,552 | |
Increase (decrease) in net earnings |
|||
LIFO accounting adjustment (3) |
$ 28 |
$ 223 | |
Change in fair value of contingent consideration (4) |
$ 69 |
$ 600 | |
Impact of income taxes on adjustments above (5) |
$ (45) |
$ (313) | |
Adjustment to earnings from continuing operations |
$ 52 |
$ 510 | |
As adjusted |
|||
Gross profit |
$ 134,103 |
$ 129,437 | |
Gross margin (1) |
57.3% |
56.0% | |
Operating income |
$ 26,158 |
$ 33,611 | |
Operating margin (2) |
11.2% |
14.6% | |
Net earnings before income taxes |
$ 25,222 |
$ 30,008 | |
Net earnings |
$ 13,675 |
$ 18,512 | |
Diluted net earnings per share |
$ 0.82 |
$ 1.12 |
(1) Gross margin reflects gross profit divided by net sales. (2) Operating margin reflects operating income divided by net sales. (3) LIFO accounting adjustment reflects the impact on cost of goods sold in our consolidated statements of earnings resulting from LIFO accounting adjustments in each period. LIFO accounting adjustments are included in Corporate and Other for operating group reporting purposes. (4) Change in fair value of contingent consideration reflects the statement of earnings impact resulting from the change in fair value of contingent consideration pursuant to the earnout agreement with the sellers of the Lilly Pulitzer brand and operations. The change in fair value of contingent consideration is reflected in the (5) Impact of income taxes reflects the estimated net earnings tax impact of the above adjustments based on the applicable estimated effective tax rate on current year earnings, before any discrete items. |
RECONCILIATION OF OPERATING INCOME (LOSS) IN ACCORDANCE WITH GAAP TO OPERATING INCOME (LOSS), AS ADJUSTED (UNAUDITED) | ||||
Set forth below is the reconciliation, in thousands, of operating income (loss) for each operating group and in total, calculated in accordance with GAAP, to operating income (loss), as adjusted, for certain historical periods. The Company believes that investors often look at ongoing operating group operating results as a measure of assessing performance and as a basis for comparing past results against future results. Therefore, the Company believes that presenting our operating income (loss), as adjusted, provides useful information to investors because this allows investors to make decisions based on ongoing operating group results. The Company uses the operating income (loss), as adjusted, to discuss its operating groups with investment institutions, its board of directors and others. Further, the Company believes that presenting its operating results, as adjusted, provides useful information to investors because this allows investors to compare the Company's operating group operating income (loss) for the periods presented to other periods. | ||||
First Quarter of Fiscal 2013 | ||||
Operating income (loss), as reported |
LIFO accounting adjustment |
Change in fair value of contingent consideration |
Operating income (loss), as adjusted | |
|
|
$ - |
$ - |
|
|
11,033 |
- |
69 |
11,102 |
Lanier Clothes |
2,461 |
- |
- |
2,461 |
Ben Sherman |
(4,824) |
- |
- |
(4,824) |
Corporate and Other (2) |
(3,990) |
28 |
- |
(3,962) |
Total |
|
|
|
|
First Quarter of Fiscal 2012 | ||||
Operating income (loss), as reported |
LIFO accounting adjustment |
Change in fair value of contingent consideration |
Operating income (loss), as adjusted | |
|
$ 25,564 |
$ - |
$ - |
$ 25,564 |
|
11,012 |
- |
600 |
11,612 |
Lanier Clothes |
4,046 |
- |
- |
4,046 |
Ben Sherman |
(2,740) |
- |
- |
(2,740) |
Corporate and Other (2) |
(5,094) |
223 |
- |
(4,871) |
Total |
$ 32,788 |
$ 223 |
$ 600 |
$ 33,611 |
(1) Change in fair value of contingent consideration reflects the statement of earnings impact resulting from the change in fair value of contingent consideration pursuant to the earnout agreement with the sellers of the Lilly Pulitzer brand and operations. (2) LIFO accounting adjustment reflects the impact on cost of goods sold in our consolidated statements of earnings resulting from LIFO accounting adjustments in each period. |
RECONCILIATION OF NET EARNINGS PER DILUTED SHARE PRESENTED IN ACCORDANCE WITH GAAP TO NET EARNINGS PER DILUTED SHARE, AS ADJUSTED (UNAUDITED)
| |||||
Set forth below is the reconciliation of reported or reportable earnings per diluted share for certain historical and future periods, each presented in accordance with GAAP, to the earnings per diluted share, as adjusted, for each respective period. The Company believes that investors often look at ongoing operations as a measure of assessing performance and as a basis for comparing past results against future results. Therefore, the Company believes that presenting its earnings per diluted share, as adjusted, provides useful information to investors because this allows investors to make decisions based on ongoing operations. The Company uses the earnings per diluted share, as adjusted, to discuss its business with investment institutions, its board of directors and others. Further, the Company believes that presenting earnings per diluted share, as adjusted, provides useful information to investors because this allows investors to compare the Company's results for the periods presented to other periods. Note that columns may not add due to rounding. | |||||
First Quarter Fiscal 2013 |
First Quarter Fiscal 2013 |
First Quarter Fiscal 2012 | |||
Actual |
Guidance (1) |
Actual | |||
Net earnings per diluted share: |
|||||
GAAP basis |
|
|
| ||
LIFO accounting adjustment (2) |
- |
- |
| ||
Change in fair value of contingent consideration (3) |
- |
- |
| ||
As adjusted |
|
|
|
Second Quarter Fiscal 2013 |
Second Quarter Fiscal 2012 |
Full Year Fiscal 2013 |
Full Year Fiscal 2012 | ||||
Guidance (5) |
Actual |
Guidance (5) |
Actual | ||||
Net earnings per diluted share: |
|||||||
GAAP basis |
|
|
|
| |||
LIFO accounting adjustment (2) |
- |
( |
- |
| |||
Change in fair value of contingent consideration (3) |
- |
|
- |
| |||
Loss on repurchase of senior secured notes (4) |
- |
|
- |
| |||
As adjusted |
|
|
|
|
(1) Guidance as issued on |
SOURCE
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