OXFORD INDUSTRIES, INC.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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Quarterly Report Pursuant To Section 13 or 15(d) of The Securities Exchange Act of 1934 |
For
the quarterly period ended SEPTEMBER 2, 2005
OR
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o |
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Transition Report Pursuant To Section 13 or 15(d) of
The Securities Exchange Act of 1934 |
For
the transition period
from
to
Commission
File Number 1-4365
OXFORD INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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Georgia
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58-0831862 |
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification number) |
222 Piedmont Avenue, N.E., Atlanta, Georgia 30308
(Address of principal executive offices, including zip code)
(404) 659-2424
(Registrants telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of
the Exchange Act. Yes þ No o
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the
Exchange Act. Yes o No þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
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Number of shares outstanding |
Title of each class
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as of October 5, 2005 |
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Common Stock, $1 par value
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17,060,701 |
OXFORD INDUSTRIES, INC.
INDEX TO FORM 10-Q
For quarter ended September 2, 2005
2
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
Our Securities and Exchange Commission filings and public announcements often include
forward-looking statements about future events. We intend for all such forward-looking statements
to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Important
assumptions relating to these forward-looking statements include, among others, assumptions
regarding demand for our products, expected pricing levels, raw material costs, the timing and cost
of planned capital expenditures, expected outcomes of pending litigation, competitive conditions,
general economic conditions and expected synergies in connection with acquisitions and joint
ventures. Forward-looking statements reflect our current expectations and are not guarantees of
performance. These statements are based on our managements beliefs and assumptions, which in turn
are based on currently available information. These beliefs and assumptions could prove inaccurate.
Forward-looking statements involve risks and uncertainties. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, actual results may
vary materially from those anticipated, estimated or projected. Many of these risks and
uncertainties are beyond our ability to control or predict. Such risks and uncertainties include,
but are not limited to:
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general economic cycles; |
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competitive conditions in our industry; |
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price deflation in the worldwide apparel industry; |
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our ability to identify and respond to rapidly changing
fashion trends and to offer innovative and upgraded products; |
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changes in trade quotas or other trade regulations, including safeguard quotas; |
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our ability to continue to finance our working capital and growth on acceptable terms; |
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significant changes in weather patterns (e.g., an
unseasonably warm autumn) or natural disasters such as hurricanes, fires or flooding; |
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the price and availability of raw materials and finished goods; |
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the impact of rising energy costs on our costs and consumer spending; |
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our dependence on and relationships with key customers; |
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consolidation among our customer base; |
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the ability of our third party producers to deliver quality products in a timely manner; |
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potential disruptions in the operation of our distribution facilities; |
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any disruption or failure of our computer systems or data network; |
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the integration of our acquired businesses; |
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our ability to successfully implement our growth plans, including growth by acquisition; |
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unforeseen liabilities associated with our acquisitions; |
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economic and political conditions in the foreign countries in which we operate or source our products; |
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increased competition from direct sourcing; |
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our ability to maintain our licenses; |
3
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our ability to protect our intellectual property and prevent
our trademarks, service marks and goodwill from being harmed by competitors products; |
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our reliance on key management and our ability to develop effective succession plans; |
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our ability to develop and maintain an effective organizational structure; |
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risks associated with changes in global currency exchange rates; |
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changes in interest rates on our variable rate debt; |
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the impact of labor disputes, wars or acts of terrorism on our business; |
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the effectiveness of our disclosure controls and procedures related to financial reporting; |
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our ability to maintain current pricing on our products given competitive or other factors; and |
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our ability to expand our retail operations. |
You are cautioned not to place undue reliance on forward-looking statements, which speak only as of
the date this report is filed with the Securities and Exchange Commission. We disclaim any
intention, obligation or duty to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by law. Other risks or
uncertainties may be detailed from time to time in our future Securities and Exchange Commission
filings.
4
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(in thousands, except per share amounts)
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Quarter Ended |
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September 2, 2005 |
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August 27, 2004 |
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Net sales |
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$ |
336,478 |
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$ |
264,822 |
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Cost of goods sold |
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220,446 |
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179,126 |
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Gross profit |
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116,032 |
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85,696 |
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Selling, general and administrative |
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88,736 |
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68,328 |
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Amortization of intangible assets |
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1,853 |
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1,712 |
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90,589 |
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70,040 |
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Royalties and other operating income |
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3,261 |
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1,753 |
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Operating income |
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28,704 |
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17,409 |
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Interest expense, net |
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6,883 |
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7,921 |
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Earnings before income taxes |
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21,821 |
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9,488 |
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Income taxes |
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7,938 |
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3,320 |
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Net earnings |
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$ |
13,883 |
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$ |
6,168 |
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Earnings per common share: |
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Basic |
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$ |
0.80 |
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$ |
0.37 |
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Diluted |
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$ |
0.79 |
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$ |
0.36 |
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Weighted average common shares outstanding: |
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Basic |
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17,391 |
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16,713 |
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Dilutive impact of options, earn-out shares and restricted shares |
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275 |
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490 |
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Diluted |
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17,666 |
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17,203 |
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Dividends per common share |
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$ |
0.135 |
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$ |
0.120 |
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See accompanying notes.
5
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED EXCEPT FOR JUNE 3, 2005)
(in thousands, except per share amounts)
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September 2, 2005 |
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June 3, 2005 |
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August 27, 2004 |
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Assets |
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Current Assets: |
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Cash and cash equivalents |
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$ |
7,024 |
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$ |
6,499 |
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$ |
11,526 |
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Receivables, net |
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200,357 |
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197,094 |
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160,485 |
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Inventories |
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168,558 |
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169,296 |
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143,142 |
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Prepaid expenses |
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24,210 |
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20,506 |
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19,093 |
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Total current assets |
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400,149 |
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393,395 |
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334,246 |
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Property, plant and equipment, net |
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64,903 |
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65,051 |
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54,745 |
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Goodwill, net |
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190,751 |
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188,563 |
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158,304 |
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Intangible assets, net |
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234,283 |
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234,854 |
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242,120 |
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Other non-current assets, net |
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22,789 |
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24,014 |
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24,845 |
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Total Assets |
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$ |
912,875 |
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$ |
905,877 |
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$ |
814,260 |
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Liabilities and Shareholders Equity |
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Current Liabilities: |
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Trade accounts payable |
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$ |
85,221 |
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$ |
105,992 |
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$ |
84,811 |
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Accrued compensation |
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21,079 |
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31,043 |
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18,787 |
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Additional acquisition cost payable |
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20,465 |
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25,754 |
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Other accrued expenses |
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31,022 |
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30,890 |
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37,646 |
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Dividends payable |
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2,301 |
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2,278 |
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1,950 |
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Income taxes payable |
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10,103 |
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13,085 |
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5,318 |
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Short-term debt and current maturities of
long-term debt |
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4,624 |
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3,407 |
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112,050 |
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Total current liabilities |
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174,815 |
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212,449 |
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260,562 |
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Long-term debt, less current maturities |
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315,958 |
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289,123 |
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198,895 |
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Other non-current liabilities |
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25,737 |
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23,562 |
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12,798 |
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Deferred income taxes |
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76,494 |
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77,242 |
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80,663 |
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Commitments and contingencies |
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Shareholders Equity: |
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Preferred Stock, $1.00 par value; 30,000
authorized and none issued and outstanding
at September 2, 2005, June 3, 2005 and
August 27, 2005 |
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Common stock, $1.00 par value, 60,000
authorized and 17,049 issued and
outstanding at September 2, 2005; 60,000
authorized and 16,884 issued and
outstanding at June 3, 2005; and 60,000
authorized and 16,756 issued and
outstanding at August 27, 2004 |
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17,049 |
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16,884 |
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16,756 |
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Additional paid-in capital |
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48,931 |
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45,918 |
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42,266 |
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Retained earnings |
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252,281 |
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240,401 |
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203,308 |
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Accumulated other comprehensive income |
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1,610 |
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298 |
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(988 |
) |
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Total shareholders equity |
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319,871 |
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303,501 |
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261,342 |
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Total Liabilities and Shareholders Equity |
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$ |
912,875 |
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$ |
905,877 |
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$ |
814,260 |
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See accompanying notes.
6
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
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Quarter Ended |
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September 2, 2005 |
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August 27, 2004 |
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Cash Flows from Operating Activities |
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Net earnings |
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$ |
13,883 |
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$ |
6,168 |
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Adjustments to reconcile net earnings to
net cash provided by operating activities: |
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Depreciation |
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3,537 |
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3,037 |
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Amortization of intangible assets |
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1,853 |
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1,712 |
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Amortization of deferred financing costs and bond discount |
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616 |
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2,459 |
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Loss (gain) on the sale of assets |
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7 |
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348 |
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Equity income |
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(164 |
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(323 |
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Deferred income taxes |
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(1,820 |
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(2,175 |
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Changes in working capital: |
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Receivables |
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(2,983 |
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40,659 |
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Inventories |
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945 |
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(823 |
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Prepaid expenses |
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(2,860 |
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1,669 |
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Trade accounts payable |
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(20,789 |
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(21,022 |
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Accrued expenses and other current liabilities |
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(10,091 |
) |
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(21,488 |
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Stock options income tax benefit |
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1,128 |
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587 |
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Income taxes payable |
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(3,010 |
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1,020 |
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Other non-current assets |
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(996 |
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(1,410 |
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Other non-current liabilities |
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2,168 |
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1,674 |
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Net cash (used in) provided by operating activities |
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(18,576 |
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12,092 |
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Cash Flows from Investing Activities |
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Acquisition, net of cash acquired |
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(6,569 |
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(139,626 |
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Distribution from joint venture investment |
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1,856 |
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Investment in deferred compensation plan |
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(330 |
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391 |
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Purchases of property, plant and equipment |
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(3,473 |
) |
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(2,488 |
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Proceeds from sale of property, plant and equipment |
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6 |
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10 |
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Net cash used in investing activities |
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(8,510 |
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(141,713 |
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Cash Flows from Financing Activities |
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Repayment of financing arrangements |
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(73,971 |
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(58,482 |
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Proceeds from financing arrangements |
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101,920 |
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156,139 |
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Payments of debt issuance costs |
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(2,766 |
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Proceeds from issuance of common shares |
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2,049 |
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666 |
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Dividends on common shares |
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(2,278 |
) |
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(1,946 |
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Net cash provided by financing activities |
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27,720 |
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93,611 |
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Net change in cash and cash equivalents |
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634 |
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(36,010 |
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Effect of foreign currency translation on cash and cash equivalents |
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(109 |
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(33 |
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Cash and cash equivalents at the beginning of period |
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6,499 |
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47,569 |
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Cash and cash equivalents at the end of period |
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$ |
7,024 |
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$ |
11,526 |
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Supplemental Cash Flow Information: |
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Cash paid for: |
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Interest, net |
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$ |
2,574 |
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$ |
9,844 |
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Income taxes |
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$ |
11,466 |
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$ |
4,321 |
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See accompanying notes.
7
OXFORD INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
QUARTER ENDED SEPTEMBER 2, 2005
1. |
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Basis of Presentation: We prepared the accompanying unaudited condensed consolidated
financial statements in accordance with the rules and regulations of the Securities and
Exchange Commission including the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Such rules and regulations allow us to condense and omit certain information and
footnote disclosures normally included in audited financial statements prepared in
accordance with accounting principles generally accepted in the United States. We
believe these condensed consolidated financial statements reflect all normal, recurring
adjustments that are necessary for a fair presentation of our financial position and
results of operations for the periods presented. Results of operations for the interim
periods presented are not necessarily indicative of results to be expected for the year
primarily due to the impact of seasonality on our business. The information included in
this Form 10-Q should be read in conjunction with Managements Discussion and Analysis of
Financial Condition and Results of Operations and financial statements and notes thereto
included in our fiscal 2005 Form 10-K. As used in this report, our, us, we and
similar phrases refer to Oxford Industries, Inc. and its consolidated subsidiaries; and
fiscal 2005, fiscal 2006 and fiscal 2007 refer to our fiscal years ended or ending
on June 3, 2005, June 2, 2006 and June 1, 2007, respectively. |
The accounting policies applied during the interim periods presented are consistent with the
accounting policies as described in our fiscal 2005 Form 10-K.
Certain amounts in the prior periods financial statements, as previously reported, have been
reclassified to conform to the current years presentation. These reclassifications primarily
relate to certain costs of our Ben Sherman Limited (Ben Sherman) operations to provide
consistency in classification between net sales, cost of goods sold and selling general and
administrative expenses. These reclassifications have no impact on net earnings as previously
reported.
2. |
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Inventories: The components of inventories are summarized as follows (in thousands): |
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September 2, 2005 |
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June 3, 2005 |
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August 27, 2004 |
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Finished goods |
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$ |
143,282 |
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$ |
136,686 |
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$ |
116,108 |
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Work in process |
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8,915 |
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9,238 |
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7,690 |
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Fabric, trim and supplies |
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16,361 |
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23,372 |
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19,344 |
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Total |
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$ |
168,558 |
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$ |
169,296 |
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$ |
143,142 |
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3. |
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Significant Acquisitions: On July 30, 2004, we acquired 100% of the capital stock of Ben
Sherman, which we operate as part of our Menswear Group. Ben Sherman is a London-based
designer, distributor and marketer of branded sportswear, accessories, and footwear. The
purchase price for Ben Sherman was £80 million, or approximately $145 million, plus associated
expenses of approximately $3.3 million. The transaction was financed with cash on hand,
borrowings from our senior revolving credit facility and unsecured notes payable to the
management shareholders of Ben Sherman, both as described in Note 4. |
This acquisition, along with the acquisition of Tommy Bahama Group on June 13, 2003, is consistent
with one of our key strategic objectives to own major lifestyle brands. The acquisitions provide
strategic benefits through growth opportunities and further diversification of our business over
distribution channels, price points, product categories and target customers. The results of
operations of Ben Sherman are included in our consolidated statements of earnings from the date of
the acquisition.
The following table summarizes the fair values of the assets acquired and liabilities assumed at
the date of acquisition for Ben Sherman (in thousands).
8
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Total purchase price |
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$ |
149,157 |
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Cash |
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$ |
7,656 |
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Accounts receivable |
|
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25,637 |
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Inventories |
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24,288 |
|
Prepaid expenses |
|
|
2,841 |
|
Goodwill |
|
|
47,243 |
|
Intangible assets |
|
|
96,500 |
|
Property, plant and equipment |
|
|
3,765 |
|
Current liabilities |
|
|
(29,823 |
) |
Deferred taxes |
|
|
(28,950 |
) |
|
|
|
|
|
|
|
|
|
Fair value of net assets acquired |
|
$ |
149,157 |
|
|
|
|
|
The pro forma financial information presented below (in thousands) gives effect to the Ben Sherman
acquisition (July 30, 2004) as if the acquisition had occurred as of the beginning of fiscal 2005.
The information presented below is for illustrative purposes only and is not indicative of results
that would have been achieved if the acquisition had occurred as of the beginning of fiscal 2005 or
results which may be achieved in the future.
|
|
|
|
|
|
|
Quarter Ended August 27, 2004 |
Net sales |
|
$ |
295,302 |
|
Net earnings |
|
$ |
8,952 |
|
Net earnings per share |
|
|
|
|
Basic |
|
$ |
0.54 |
|
Diluted |
|
$ |
0.52 |
|
4. |
|
Debt: The following table details our debt as of the dates specified (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 2, |
|
|
June 3, |
|
|
August 27, |
|
|
|
2005 |
|
|
2005 |
|
|
2004 |
|
|
$280 million U.S.
Senior Secured
Revolving Credit
Facility (U.S.
Revolver), which
accrues interest,
unused line fees
and letter of
credit fees based
upon a pricing grid
which is tied to
certain financial
ratios (6.02% at
September 2, 2005),
requires interest
payments monthly
with principal due
at maturity (July
2009), and is
collateralized by
substantially all
the assets of the
company and its
domestic
subsidiaries |
|
$ |
116,900 |
|
|
$ |
90,100 |
|
|
$ |
98,300 |
|
|
£12 million Senior
Secured Revolving
Credit Facility
(U.K. Revolver),
which accrues
interest at the
banks base rate
plus 1.2% (5.70% at
September 2, 2005),
requires interest
payments monthly
with principal
payable on demand
or at maturity
(July 2006), and is
collateralized by
substantially all
the United Kingdom
assets of Ben
Sherman |
|
|
1,192 |
|
|
|
|
|
|
|
7,312 |
|
|
$200 million Senior
Unsecured Notes
(Senior Unsecured
Notes), which
accrue interest at
8.875% (effective
interest rate of
9.0%) and require
interest payments
semiannually on
June 1 and December
1 of each year,
with principal due
at maturity (June
2011), are subject
to certain
prepayment
penalties and are
guaranteed by our
domestic
subsidiaries |
|
|
198,982 |
|
|
|
198,938 |
|
|
|
198,804 |
|
|
Unsecured Seller
Notes (Seller
Notes), which
accrue interest at
LIBOR plus 1.2%
(5.73% at September
2, 2005), and
require interest
payments quarterly
with principal
payable on demand |
|
|
3,378 |
|
|
|
3,342 |
|
|
|
6,312 |
|
|
Other debt,
including capital
lease obligations
with varying terms
and conditions,
collateralized by
the respective
assets |
|
|
130 |
|
|
|
150 |
|
|
|
217 |
|
|
Total Debt |
|
|
320,582 |
|
|
|
292,530 |
|
|
|
310,945 |
|
|
Short-term Debt |
|
|
4,624 |
|
|
|
3,407 |
|
|
|
112,050 |
|
|
Long-term Debt |
|
|
315,958 |
|
|
|
289,123 |
|
|
|
198,895 |
|
|
9
On July 28, 2004, the U.S. Revolver was amended to increase the line of credit from $275 million to
$280 million, to eliminate the asset borrowing base calculation to determine availability and to
adjust the amount that certain lenders were committed to loan among other changes. Approximately
$1.8 million of unamortized deferred financing costs were expensed as a result of the amendment,
which were included in interest expense in the consolidated statement of earnings during the
quarter ended August 27, 2004. Additionally, the terms and conditions of certain related
agreements were modified in November 2004, including a change to a springing lock-box agreement,
which resulted in amounts outstanding under the facility requiring classification as long-term debt
subsequent to the modification. In September 2005, we amended the U.S. Revolver to remove certain
items from the definition of Restricted Payments, as defined.
The U.S. Revolver, the U.K. Revolver and the Senior Unsecured Notes each include certain debt
covenant restrictions that require us or our subsidiaries to maintain certain financial ratios that
are customary for similar facilities. The U.S. Revolver also includes limitations on certain
restricted payments such as earn-outs and, prior to the amendment in September 2005, included
certain restrictions on payment of dividends and prepayment of debt. As of September 2, 2005, we
were compliant with all financial covenants and restricted payment clauses related to our debt
agreements.
As of September 2, 2005, approximately $109.4 million and $2.5 million of trade letters of credit
and other limitations on availability were outstanding against the U.S. Revolver and the U.K.
Revolver, respectively. The net availability under our U.S. Revolver and U.K. Revolver was
approximately $53.7 million and $18.4 million, respectively as of September 2, 2005.
5. |
|
Shareholders Equity: We have chosen to account for stock-based compensation to employees
using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25,
Accounting for Stock-Based Compensation. Certain pro forma and other disclosures related
to stock-based compensation plans are presented below as if compensation cost of options
granted had been determined in accordance with the fair value provisions of the Statement of
Financial Accounting Standards Board Statement No. 123, Accounting for Stock-Based
Compensation. |
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
September 2, |
|
|
August 27, |
|
|
|
2005 |
|
|
2004 |
|
|
|
(in thousands) |
|
|
|
|
Net earnings as reported |
|
$ |
13,883 |
|
|
$ |
6,168 |
|
|
|
|
Add: Stock-based employee compensation recognized in reported net
income, net of related tax effects |
|
|
376 |
|
|
|
|
|
Deduct: Employee compensation expense, net of related tax effects |
|
|
(568 |
) |
|
|
(209 |
) |
|
|
|
Pro forma net earnings |
|
$ |
13,691 |
|
|
$ |
5,959 |
|
Basic earnings per share as reported |
|
$ |
0.80 |
|
|
$ |
0.37 |
|
Basic earnings per share pro forma |
|
$ |
0.79 |
|
|
$ |
0.36 |
|
Diluted earnings per share as reported |
|
$ |
0.79 |
|
|
$ |
0.36 |
|
Diluted earnings per share pro forma |
|
$ |
0.78 |
|
|
$ |
0.35 |
|
|
|
|
During the quarter ended September 2, 2005, we issued 0.2 million shares related to the exercise
of stock options by employees and the issuance of certain restricted shares to employees for the
fiscal 2005 performance awards. Additionally, during the quarter ended September 2, 2005, 0.1
million performance based shares were granted to certain employees subject to certain operating
performance measures being met for the fiscal year ending June 2, 2006 and the employee being
employed by us on June 2, 2009. We did not repurchase any shares during the quarter ended
September 2, 2005.
Other comprehensive income (loss) which is comprised of the effects of foreign currency translation
adjustments for the quarters ended September 2, 2005 and August 27, 2004 was $1.3 million and ($1.0
million), respectively, net of income taxes of $0.7 million and ($0.3 million), respectively. For
the quarters ended September 2, 2005 and August 27, 2004, total comprehensive income consisting of
net earnings as reported in our statement of earnings and the effect of foreign currency
translation adjustments was $15.2 million and $5.2 million, respectively, net of income taxes.
10
6. |
|
Segment Information: We have three operating segments for purposes of allocating resources
and assessing performance which are based on products distributed. The Menswear Group
produces branded and private label dress shirts, sport shirts, dress slacks, casual slacks,
suits, sport coats, suit separates, walk shorts, golf apparel, outerwear, sweaters, jeans,
swimwear, footwear and headwear, licenses its brands for accessories and other products and
operates retail stores. The Womenswear Group produces private label womens sportswear
separates, coordinated sportswear, outerwear, dresses and swimwear. The Tommy Bahama Group
produces lifestyle branded casual apparel, operates retail stores and restaurants, and
licenses its brands for accessories, footwear, furniture and other products. The head of each
operating segment reports to the chief operating decision maker. |
|
|
|
Corporate and Other is a reconciling category for reporting purposes and includes our corporate
offices, substantially all financing activities, LIFO inventory accounting adjustments, certain
revenue reserves and costs that are not allocated to the operating groups. LIFO inventory
calculations are made on a legal entity basis which does not correspond to our segment definitions.
Therefore, LIFO inventory accounting adjustments are not allocated to the operating segments. Total
assets for corporate and other includes the LIFO inventory reserve of $37.3 million, $37.3 million
and $35.5 million at September 2, 2005, June 3, 2005 and August 27, 2004, respectively. The
information below presents certain information about our segments: |
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
September 2, 2005 |
|
|
August 27, 2004 |
|
|
|
(in thousands) |
|
Net Sales |
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
177,076 |
|
|
$ |
118,737 |
|
Womenswear Group |
|
|
68,003 |
|
|
|
52,458 |
|
Tommy Bahama Group |
|
|
91,544 |
|
|
|
93,462 |
|
Corporate and Other |
|
|
(145 |
) |
|
|
165 |
|
|
|
|
Total |
|
$ |
336,478 |
|
|
$ |
264,822 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
944 |
|
|
$ |
835 |
|
Womenswear Group |
|
|
36 |
|
|
|
56 |
|
Tommy Bahama Group |
|
|
2,456 |
|
|
|
2,055 |
|
Corporate and Other |
|
|
101 |
|
|
|
91 |
|
|
|
|
Total |
|
$ |
3,537 |
|
|
$ |
3,037 |
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
811 |
|
|
$ |
312 |
|
Womenswear Group |
|
|
|
|
|
|
9 |
|
Tommy Bahama Group |
|
|
1,042 |
|
|
|
1,391 |
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
1,853 |
|
|
$ |
1,712 |
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
15,004 |
|
|
$ |
8,921 |
|
Womenswear Group |
|
|
3,905 |
|
|
|
(966 |
) |
Tommy Bahama Group |
|
|
14,357 |
|
|
|
11,916 |
|
Corporate and Other |
|
|
(4,562 |
) |
|
|
(2,462 |
) |
|
|
|
Total |
|
$ |
28,704 |
|
|
$ |
17,409 |
|
Interest expense, net |
|
|
6,883 |
|
|
|
7,921 |
|
|
|
|
Earnings before taxes |
|
$ |
21,821 |
|
|
$ |
9,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 2, 2005 |
|
|
June 3, 2005 |
|
|
August 27, 2004 |
|
|
|
(in thousands) |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
452,694 |
|
|
$ |
412,461 |
|
|
$ |
380,858 |
|
Womenswear Group |
|
|
72,898 |
|
|
|
79,678 |
|
|
|
63,632 |
|
Tommy Bahama Group |
|
|
386,977 |
|
|
|
412,441 |
|
|
|
376,254 |
|
Corporate and Other |
|
|
306 |
|
|
|
1,297 |
|
|
|
(6,484 |
) |
|
|
|
Total |
|
$ |
912,875 |
|
|
$ |
905,877 |
|
|
$ |
814,260 |
|
11
7. |
|
Consolidating Financial Data of Subsidiary Guarantors: Our Senior Unsecured Notes are
guaranteed by our wholly owned domestic subsidiaries (Subsidiary Guarantors). All
guarantees are full and unconditional. Non-guarantors consist of our subsidiaries which are
organized outside the United States. Set forth below are our condensed consolidating balance
sheets as of September 2, 2005, June 3, 2005 and August 27, 2004 as well as our condensed
consolidating statements of earnings and statements of cash flows for the quarters ended
September 2, 2005 and August 27, 2004 (in thousands). |
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
September 2, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
|
|
|
Industries |
|
|
Subsidiary |
|
|
Non- |
|
|
Consolidating |
|
|
Consolidated |
|
|
|
(Parent) |
|
|
Guarantors |
|
|
Guarantors |
|
|
Adjustments |
|
|
Total |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,317 |
|
|
$ |
938 |
|
|
$ |
1,768 |
|
|
$ |
1 |
|
|
$ |
7,024 |
|
Receivables, net |
|
|
120,316 |
|
|
|
61,338 |
|
|
|
66,097 |
|
|
|
(47,394 |
) |
|
|
200,357 |
|
Inventories |
|
|
106,813 |
|
|
|
42,427 |
|
|
|
19,961 |
|
|
|
(643 |
) |
|
|
168,558 |
|
Prepaid expenses |
|
|
11,742 |
|
|
|
6,170 |
|
|
|
6,298 |
|
|
|
|
|
|
|
24,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
243,188 |
|
|
|
110,873 |
|
|
|
94,124 |
|
|
|
(48,036 |
) |
|
|
400,149 |
|
Property, plant and
equipment, net |
|
|
12,037 |
|
|
|
44,237 |
|
|
|
8,629 |
|
|
|
|
|
|
|
64,903 |
|
Goodwill, net |
|
|
1,847 |
|
|
|
139,910 |
|
|
|
48,994 |
|
|
|
|
|
|
|
190,751 |
|
Intangible assets, net |
|
|
1,480 |
|
|
|
140,123 |
|
|
|
92,680 |
|
|
|
|
|
|
|
234,283 |
|
Other non-current assets net |
|
|
647,654 |
|
|
|
148,327 |
|
|
|
1,774 |
|
|
|
(774,966 |
) |
|
|
22,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
906,206 |
|
|
$ |
583,470 |
|
|
$ |
246,201 |
|
|
$ |
(823,002 |
) |
|
$ |
912,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
118,172 |
|
|
|
54,595 |
|
|
|
49,205 |
|
|
|
(47,157 |
) |
|
|
174,815 |
|
Long term debt, less
current portion |
|
|
315,939 |
|
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
315,958 |
|
Non-current liabilities |
|
|
148,122 |
|
|
|
(120,709 |
) |
|
|
107,619 |
|
|
|
(109,295 |
) |
|
|
25,737 |
|
Deferred income taxes |
|
|
4,102 |
|
|
|
43,428 |
|
|
|
28,964 |
|
|
|
|
|
|
|
76,494 |
|
Total
Shareholders/invested
equity |
|
|
319,871 |
|
|
|
606,137 |
|
|
|
60,413 |
|
|
|
(666,550 |
) |
|
|
319,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders Equity |
|
$ |
906,206 |
|
|
$ |
583,470 |
|
|
$ |
246,201 |
|
|
$ |
(823,002 |
) |
|
$ |
912,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATING BALANCE SHEETS
June 3, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
|
|
|
Industries |
|
|
Subsidiary |
|
|
Non- |
|
|
Consolidating |
|
|
Consolidated |
|
|
|
(Parent) |
|
|
Guarantors |
|
|
Guarantors |
|
|
Adjustments |
|
|
Total |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,713 |
|
|
$ |
1,859 |
|
|
$ |
1,900 |
|
|
$ |
27 |
|
|
$ |
6,499 |
|
Receivables, net |
|
|
114,832 |
|
|
|
61,635 |
|
|
|
61,942 |
|
|
|
(41,315 |
) |
|
|
197,094 |
|
Inventories |
|
|
97,398 |
|
|
|
51,836 |
|
|
|
20,522 |
|
|
|
(460 |
) |
|
|
169,296 |
|
Prepaid expenses |
|
|
10,895 |
|
|
|
5,748 |
|
|
|
3,863 |
|
|
|
|
|
|
|
20,506 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
225,838 |
|
|
|
121,078 |
|
|
|
88,227 |
|
|
|
(41,748 |
) |
|
|
393,395 |
|
Property, plant and
equipment, net |
|
|
11,896 |
|
|
|
44,844 |
|
|
|
8,311 |
|
|
|
|
|
|
|
65,051 |
|
Goodwill, net |
|
|
1,847 |
|
|
|
139,910 |
|
|
|
46,806 |
|
|
|
|
|
|
|
188,563 |
|
Intangible assets, net |
|
|
210 |
|
|
|
141,165 |
|
|
|
93,479 |
|
|
|
|
|
|
|
234,854 |
|
Other non-current assets net |
|
|
631,205 |
|
|
|
149,640 |
|
|
|
1,406 |
|
|
|
(758,237 |
) |
|
|
24,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
870,996 |
|
|
$ |
596,637 |
|
|
$ |
238,229 |
|
|
$ |
(799,985 |
) |
|
$ |
905,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
127,435 |
|
|
|
76,847 |
|
|
|
49,198 |
|
|
|
(41,031 |
) |
|
|
212,449 |
|
Long term debt, less
current portion |
|
|
289,100 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
289,123 |
|
Non-current liabilities |
|
|
146,922 |
|
|
|
(118,451 |
) |
|
|
104,288 |
|
|
|
(109,197 |
) |
|
|
23,562 |
|
Deferred income taxes |
|
|
4,038 |
|
|
|
44,239 |
|
|
|
28,965 |
|
|
|
|
|
|
|
77,242 |
|
Total
Shareholders/invested
equity |
|
|
303,501 |
|
|
|
593,979 |
|
|
|
55,778 |
|
|
|
(649,757 |
) |
|
|
303,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders Equity |
|
$ |
870,996 |
|
|
$ |
596,637 |
|
|
$ |
238,229 |
|
|
$ |
(799,985 |
) |
|
$ |
905,877 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATING BALANCE SHEETS
August 27, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
|
|
|
Industries |
|
|
Subsidiary |
|
|
Non- |
|
|
Consolidating |
|
|
Consolidated |
|
|
|
(Parent) |
|
|
Guarantors |
|
|
Guarantors |
|
|
Adjustments |
|
|
Total |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,926 |
|
|
$ |
1,976 |
|
|
$ |
4,597 |
|
|
$ |
27 |
|
|
$ |
11,526 |
|
Receivables, net |
|
|
92,992 |
|
|
|
47,290 |
|
|
|
61,524 |
|
|
|
(41,321 |
) |
|
|
160,485 |
|
Inventories |
|
|
72,682 |
|
|
|
48,933 |
|
|
|
21,669 |
|
|
|
(142 |
) |
|
|
143,142 |
|
Prepaid expenses |
|
|
8,176 |
|
|
|
7,360 |
|
|
|
3,557 |
|
|
|
|
|
|
|
19,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
178,776 |
|
|
|
105,559 |
|
|
|
91,347 |
|
|
|
(41,436 |
) |
|
|
334,246 |
|
Property, plant and
equipment, net |
|
|
13,403 |
|
|
|
33,441 |
|
|
|
7,901 |
|
|
|
|
|
|
|
54,745 |
|
Goodwill, net |
|
|
1,847 |
|
|
|
114,156 |
|
|
|
42,301 |
|
|
|
|
|
|
|
158,304 |
|
Intangible assets, net |
|
|
239 |
|
|
|
145,683 |
|
|
|
96,198 |
|
|
|
|
|
|
|
242,120 |
|
Other non-current assets net |
|
|
562,015 |
|
|
|
150,148 |
|
|
|
1,590 |
|
|
|
(688,908 |
) |
|
|
24,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
$ |
756,280 |
|
|
$ |
548,987 |
|
|
$ |
239,337 |
|
|
$ |
(730,344 |
) |
|
$ |
814,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
190,541 |
|
|
|
65,218 |
|
|
|
46,844 |
|
|
|
(42,041 |
) |
|
|
260,562 |
|
Long term debt, less
current portion |
|
|
198,841 |
|
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
198,895 |
|
Non-current liabilities |
|
|
101,640 |
|
|
|
(84,403 |
) |
|
|
112,703 |
|
|
|
(117,142 |
) |
|
|
12,798 |
|
Deferred income taxes |
|
|
3,916 |
|
|
|
47,766 |
|
|
|
28,991 |
|
|
|
(10 |
) |
|
|
80,663 |
|
Total
Shareholders/invested
equity |
|
|
261,342 |
|
|
|
520,352 |
|
|
|
50,799 |
|
|
|
(571,151 |
) |
|
|
261,342 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders Equity |
|
$ |
756,280 |
|
|
$ |
548,987 |
|
|
$ |
239,337 |
|
|
$ |
(730,344 |
) |
|
$ |
814,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
Quarter Ended September 2, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
|
|
|
Industries |
|
|
Subsidiary |
|
|
Non- |
|
|
Consolidating |
|
|
Consolidated |
|
|
|
(Parent) |
|
|
Guarantors |
|
|
Guarantors |
|
|
Adjustments |
|
|
Total |
|
Net Sales |
|
$ |
187,312 |
|
|
$ |
121,121 |
|
|
$ |
46,596 |
|
|
$ |
(18,551 |
) |
|
$ |
336,478 |
|
Cost of goods sold |
|
|
146,877 |
|
|
|
58,051 |
|
|
|
21,191 |
|
|
|
(5,673 |
) |
|
|
220,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
40,435 |
|
|
|
63,070 |
|
|
|
25,405 |
|
|
|
(12,878 |
) |
|
|
116,032 |
|
Selling, general and administrative |
|
|
34,253 |
|
|
|
49,075 |
|
|
|
20,570 |
|
|
|
(13,309 |
) |
|
|
90,589 |
|
Royalties and other income |
|
|
(150 |
) |
|
|
1,930 |
|
|
|
1,481 |
|
|
|
|
|
|
|
3,261 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
6,032 |
|
|
|
15,925 |
|
|
|
6,316 |
|
|
|
431 |
|
|
|
28,704 |
|
Interest (income) expense, net |
|
|
6,754 |
|
|
|
(2,475 |
) |
|
|
1,990 |
|
|
|
614 |
|
|
|
6,883 |
|
Income from equity investment |
|
|
15,468 |
|
|
|
79 |
|
|
|
|
|
|
|
(15,547 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Income Taxes |
|
|
14,746 |
|
|
|
18,479 |
|
|
|
4,326 |
|
|
|
(15,730 |
) |
|
|
21,821 |
|
Income Taxes |
|
|
693 |
|
|
|
6,154 |
|
|
|
1,105 |
|
|
|
(14 |
) |
|
|
7,938 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings |
|
$ |
14,053 |
|
|
$ |
12,325 |
|
|
$ |
3,221 |
|
|
$ |
(15,716 |
) |
|
$ |
13,883 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOW
Quarter Ended September 2, 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
|
|
|
Industries |
|
|
Subsidiary |
|
|
Non- |
|
|
Consolidating |
|
|
Consolidated |
|
|
|
(Parent) |
|
|
Guarantors |
|
|
Guarantors |
|
|
Adjustments |
|
|
Total |
|
Cash Flows From Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating
activities |
|
$ |
(17,597 |
) |
|
$ |
2,886 |
|
|
$ |
(3,941 |
) |
|
$ |
76 |
|
|
$ |
(18,576 |
) |
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions |
|
|
(6,569 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,569 |
) |
Distribution from joint venture investment |
|
|
|
|
|
|
1,856 |
|
|
|
|
|
|
|
|
|
|
|
1,856 |
|
Investment in deferred compensation
Plan |
|
|
|
|
|
|
(330 |
) |
|
|
|
|
|
|
|
|
|
|
(330 |
) |
Purchases of property, plant and equipment |
|
|
(946 |
) |
|
|
(1,936 |
) |
|
|
(591 |
) |
|
|
|
|
|
|
(3,473 |
) |
Proceeds from sale of property, plant
and equipment |
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) investing activities |
|
|
(7,509 |
) |
|
|
(410 |
) |
|
|
(591 |
) |
|
|
|
|
|
|
(8,510 |
) |
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in debt |
|
|
26,790 |
|
|
|
(9 |
) |
|
|
1,168 |
|
|
|
|
|
|
|
27,949 |
|
Proceeds from issuance of common stock |
|
|
2,049 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,049 |
|
Change in intercompany payable |
|
|
149 |
|
|
|
(3,388 |
) |
|
|
3,341 |
|
|
|
(102 |
) |
|
|
|
|
Dividends on common stock |
|
|
(2,278 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,278 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
financing activities |
|
|
26,710 |
|
|
|
(3,397 |
) |
|
|
4,509 |
|
|
|
(102 |
) |
|
|
27,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in Cash and Cash Equivalents |
|
|
1,604 |
|
|
|
(921 |
) |
|
|
(23 |
) |
|
|
(26 |
) |
|
|
634 |
|
Effect of foreign currency translation |
|
|
|
|
|
|
|
|
|
|
(109 |
) |
|
|
|
|
|
|
(109 |
) |
Cash and Cash Equivalents at the
Beginning of Period |
|
|
2,713 |
|
|
|
1,859 |
|
|
|
1,900 |
|
|
|
27 |
|
|
|
6,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at the
End of Period |
|
$ |
4,317 |
|
|
$ |
938 |
|
|
$ |
1,768 |
|
|
$ |
1 |
|
|
$ |
7,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
Quarter Ended August 27, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
|
|
|
Industries |
|
|
Subsidiary |
|
|
Non- |
|
|
Consolidating |
|
|
Consolidated |
|
|
|
(Parent) |
|
|
Guarantors |
|
|
Guarantors |
|
|
Adjustments |
|
|
Total |
|
Net Sales |
|
$ |
146,978 |
|
|
$ |
108,735 |
|
|
$ |
24,513 |
|
|
$ |
(15,404 |
) |
|
$ |
264,822 |
|
Cost of goods sold |
|
|
117,795 |
|
|
|
54,316 |
|
|
|
9,387 |
|
|
|
(2,372 |
) |
|
|
179,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
29,183 |
|
|
|
54,419 |
|
|
|
15,126 |
|
|
|
(13,032 |
) |
|
|
85,696 |
|
Selling, general and administrative |
|
|
28,385 |
|
|
|
42,480 |
|
|
|
11,811 |
|
|
|
(12,636 |
) |
|
|
70,040 |
|
Royalties and other income |
|
|
|
|
|
|
1,369 |
|
|
|
384 |
|
|
|
|
|
|
|
1,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
798 |
|
|
|
13,308 |
|
|
|
3,699 |
|
|
|
(396 |
) |
|
|
17,409 |
|
Interest (income) expense, net |
|
|
8,522 |
|
|
|
(1,087 |
) |
|
|
737 |
|
|
|
(251 |
) |
|
|
7,921 |
|
Income from equity investment |
|
|
12,773 |
|
|
|
44 |
|
|
|
|
|
|
|
(12,817 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before Income Taxes |
|
|
5,049 |
|
|
|
14,439 |
|
|
|
2,962 |
|
|
|
(12,962 |
) |
|
|
9,488 |
|
Income Taxes |
|
|
(1,264 |
) |
|
|
3,810 |
|
|
|
774 |
|
|
|
|
|
|
|
3,320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings |
|
$ |
6,313 |
|
|
$ |
10,629 |
|
|
$ |
2,188 |
|
|
$ |
(12,962 |
) |
|
$ |
6,168 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOW
Quarter Ended August 27, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
|
|
|
Industries |
|
|
Subsidiary |
|
|
Non- |
|
|
Consolidating |
|
|
Consolidated |
|
|
|
(Parent) |
|
|
Guarantors |
|
|
Guarantors |
|
|
Adjustments |
|
|
Total |
|
Cash Flows From Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
operating activities |
|
$ |
(4,744 |
) |
|
$ |
12,575 |
|
|
$ |
(3,558 |
) |
|
$ |
7,819 |
|
|
$ |
12,092 |
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, net of cash acquired |
|
|
(147,282 |
) |
|
|
(32,612 |
) |
|
|
(134,155 |
) |
|
|
174,423 |
|
|
|
(139,626 |
) |
Investment in deferred compensation
Plan |
|
|
|
|
|
|
391 |
|
|
|
|
|
|
|
|
|
|
|
391 |
|
Purchases of property, plant and
equipment |
|
|
(304 |
) |
|
|
(2,158 |
) |
|
|
(27 |
) |
|
|
1 |
|
|
|
(2,488 |
) |
Proceeds from sale of property, plant
and equipment |
|
|
5 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
investing activities |
|
|
(147,581 |
) |
|
|
(34,374 |
) |
|
|
(134,182 |
) |
|
|
174,424 |
|
|
|
(141,713 |
) |
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in debt |
|
|
98,364 |
|
|
|
(109,192 |
) |
|
|
108,483 |
|
|
|
2 |
|
|
|
97,657 |
|
Proceeds from issuance of common stock |
|
|
666 |
|
|
|
141,807 |
|
|
|
32,616 |
|
|
|
(174,423 |
) |
|
|
666 |
|
Deferred financing costs |
|
|
(2,766 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,766 |
) |
Change in intercompany payable |
|
|
9,508 |
|
|
|
(10,278 |
) |
|
|
8,540 |
|
|
|
(7,770 |
) |
|
|
|
|
Dividends on common stock |
|
|
6,074 |
|
|
|
|
|
|
|
(7,993 |
) |
|
|
(27 |
) |
|
|
(1,946 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by
financing activities |
|
|
111,846 |
|
|
|
22,337 |
|
|
|
141,646 |
|
|
|
(182,218 |
) |
|
|
93,611 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in Cash and Cash Equivalents |
|
|
(40,479 |
) |
|
|
538 |
|
|
|
3,906 |
|
|
|
25 |
|
|
|
(36,010 |
) |
Effect of foreign currency translation |
|
|
|
|
|
|
|
|
|
|
(33 |
) |
|
|
|
|
|
|
(33 |
) |
Cash and Cash Equivalents at the
Beginning of Period |
|
|
45,405 |
|
|
|
1,438 |
|
|
|
724 |
|
|
|
2 |
|
|
|
47,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at the
End of Period |
|
$ |
4,926 |
|
|
$ |
1,976 |
|
|
$ |
4,597 |
|
|
$ |
27 |
|
|
$ |
11,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction with our Unaudited Condensed
Consolidated Financial Statements and the Notes to Unaudited Condensed Consolidated Financial
Statements contained in this report and the Consolidated Financial Statements, Notes to
Consolidated Financial Statements and Managements Discussion and Analysis of Financial Condition
and Results of Operations contained in our fiscal 2005 Form 10-K.
OVERVIEW
We generate revenues and cash flow through the design, production, distribution and sale of branded
and private label consumer apparel for men, women, and children and the licensing of company owned
trademarks. Our principal markets and customers are located primarily in the United States. We
source more than 95% of our products through third party producers, but also manufacture certain of
our products in manufacturing facilities owned directly by us and through joint venture
arrangements. We primarily distribute our products through our wholesale customers including chain
stores, department stores, specialty stores, mail order, mass merchants and also through our own
retail stores for some brands.
We operate in an industry that is highly competitive. Our ability to continuously evaluate and
respond to changing consumer demands and tastes, across multiple market segments, distribution
channels and geographic regions is critical to our success. Although our approach is aimed at
diversifying our risks, misjudging shifts in consumer preferences could have a negative effect on
future operating results. Other key aspects of competition include quality, brand image,
distribution methods, price, customer service and intellectual property protection. Our size and
global operating strategies help us to successfully compete by positioning us to take advantage of
synergies in product design, development, sourcing and distribution of our products. Our success in
the future will depend on our ability to continue to design products that are acceptable to the
markets that we serve and to source our products on a competitive basis while still earning
appropriate margins.
The most significant event impacting our results for the quarter ended September 2, 2005 as
compared to the quarter ended August 27, 2004 is the inclusion of the operations of Ben Sherman,
which we operate as part of our Menswear Group, for the entire quarter ended September 2, 2005.
Ben Sherman was included in the results of operations from the date of acquisition, July 30, 2004,
through the end of the quarter ended August 27, 2004 (one month). We acquired Ben Sherman for
approximately $145 million, plus associated expenses, as discussed in Note 3 of our condensed
consolidated financial statements contained in this report. Ben Sherman is a London-based
designer, distributor and marketer of branded sportswear, accessories, and footwear. The
transaction was financed with cash on hand, borrowings under our U.S. Revolver and certain Seller
Notes (each described in Note 4 of our condensed consolidated financial statements contained in
this report). In connection with this acquisition, our U.S. Revolver was amended and restated to
provide the necessary flexibility to finance the acquisition. This acquisition has had and is
expected to continue to have a positive impact on the amount of cash flows generated from operating
activities.
During fiscal 2006, we have continued to see increases in net sales and operating results. We
generated diluted earnings per share of $0.79 and $0.36 during the quarters ended September 2, 2005
and August 27, 2004, respectively. The increases in net sales and earnings per share were
primarily a result of the ownership of Ben Sherman for the entire quarter in fiscal 2006 compared
to only one month in fiscal 2005, increased operating margins in the Tommy Bahama Group, growth in
the historical Menswear business, growth in the Womenswear segment and a higher percentage of our
sales being branded rather than private label.
RESULTS OF OPERATIONS
The following tables set forth the line items in the consolidated statements of earnings data both
in dollars and as a percentage of net sales. The tables also set forth the percentage change of the
data as compared to the prior year. We have calculated all percentages based on actual data, but
percentage columns may not add due to rounding. Individual line items of our consolidated
statements of earnings may not be directly comparable to those of our competitors, as statement of
earnings classification of certain revenues and expenses may vary by company. The results of
operations of Ben Sherman are included in our consolidated statements of earnings from the date of
acquisition.
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
September 2, 2005 |
|
|
August 27, 2004 |
|
|
% Change |
|
|
|
(in thousands) |
|
Net sales |
|
$ |
336,478 |
|
|
$ |
264,822 |
|
|
|
27.1 |
% |
Cost of goods sold |
|
|
220,446 |
|
|
|
179,126 |
|
|
|
23.1 |
% |
|
|
|
Gross profit |
|
|
116,032 |
|
|
|
85,696 |
|
|
|
35.4 |
% |
Selling, general and administrative |
|
|
88,736 |
|
|
|
68,328 |
|
|
|
29.9 |
% |
Amortization of intangible assets |
|
|
1,853 |
|
|
|
1,712 |
|
|
|
8.2 |
% |
Royalties and other operating income |
|
|
3,261 |
|
|
|
1,753 |
|
|
|
86.0 |
% |
|
|
|
Operating income |
|
|
28,704 |
|
|
|
17,409 |
|
|
|
64.9 |
% |
Interest expense, net |
|
|
6,883 |
|
|
|
7,921 |
|
|
|
(13.1 |
%) |
|
|
|
Earnings before income taxes |
|
|
21,821 |
|
|
|
9,488 |
|
|
|
130.0 |
% |
Income taxes |
|
|
7,938 |
|
|
|
3,320 |
|
|
|
139.1 |
% |
|
|
|
Net earnings |
|
$ |
13,883 |
|
|
$ |
6,168 |
|
|
|
125.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
September 2, 2005 |
|
August 27, 2004 |
|
|
(as a percentage of net sales) |
Net sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of goods sold |
|
|
65.5 |
% |
|
|
67.6 |
% |
|
|
|
Gross profit |
|
|
34.5 |
% |
|
|
32.4 |
% |
Selling, general and administrative |
|
|
26.4 |
% |
|
|
25.8 |
% |
Amortization of intangibles |
|
|
0.6 |
% |
|
|
0.6 |
% |
Royalties and other operating income |
|
|
1.0 |
% |
|
|
0.7 |
% |
|
|
|
Operating income |
|
|
8.5 |
% |
|
|
6.6 |
% |
Interest expense, net |
|
|
2.0 |
% |
|
|
3.0 |
% |
|
|
|
Earnings before income taxes |
|
|
6.5 |
% |
|
|
3.6 |
% |
Income taxes |
|
|
2.4 |
% |
|
|
1.3 |
% |
|
|
|
Net earnings |
|
|
4.1 |
% |
|
|
2.3 |
% |
|
|
|
TOTAL COMPANY
The discussion below compares our results of operations for the quarter ended September 2, 2005
(the first quarter of fiscal 2006) to the quarter ended August 27, 2004 (the first quarter of
fiscal 2005). Each percentage change provided below reflects the change between these periods
unless indicated otherwise.
Net sales increased by $71.7 million, or 27.1%, in the first quarter of fiscal 2006. The increase
was primarily due to:
|
|
|
Ben Sherman, which provided approximately $44.2 million of net sales in fiscal 2006
compared to $16.6 million during the month of August in fiscal 2005. |
|
|
|
|
The unit sales increase of 32.1%, primarily attributable to the increases in dress, knit
and woven shirts, new initiatives in the Menswear Group, increases in the Womenswear Group
and the inclusion of Ben Sherman for the full quarter. |
These increases were offset in part by an average selling price per unit decline of 3.7%, primarily
attributable to the shift in product mix due to the increase in Womenswear sales and lower priced
Menswear products (primarily dress shirts sold to the discount channel) and a decrease in wholesale
branded sales by the Tommy Bahama Group, which was partially offset by the increase in Ben Sherman
sales and the increase in Tommy Bahama retail sales.
Gross profit increased 35.4% in the first quarter of fiscal 2006. The increase was due to higher
sales and higher gross margins. Gross margins increased from 32.4% during the first quarter of
fiscal 2005 to 34.5% during the first quarter of fiscal 2006. The increase was primarily due to:
|
|
|
The increased retail sales of the Tommy Bahama Group, which has higher gross margins. |
|
|
|
|
The benefit of the operations of Ben Sherman, which has higher gross margins, for the
entire quarter in fiscal 2006. |
|
|
|
|
Improved product sourcing. |
These increases were partially offset by an increase in certain lower margin businesses in the
Menswear Group related to new replenishment programs (primarily dress shirts sold to the discount
channel).
17
Gross profit and gross margins for the current period will not necessarily be indicative of future
periods as the mix between branded and private label products may vary as a result of recent
acquisitions and due to the impact of seasonality on our sales during the year, among other
factors.
Selling, general and administrative expenses, or SG&A, increased 29.9% during the first quarter of
fiscal 2006. SG&A was 26.4% of net sales in the first quarter of fiscal 2006 compared to 25.8% of
net sales in the first quarter of fiscal 2005. The increase in SG&A was primarily due to the higher
SG&A expense structure associated with our recently acquired Ben Sherman branded business,
additional Tommy Bahama retail stores and expenses associated with the start-up of new marketing
initiatives in the Menswear Group.
SG&A and SG&A as a percentage of sales for the current period will not necessarily be indicative of
future periods as the mix between branded and private label products may vary and due to the impact
of seasonality, among other factors.
Amortization of intangible assets increased 8.2% in the first quarter of fiscal 2006. The increase
was due to $0.8 million of amortization of intangible assets in fiscal 2006 compared to $0.3
million in fiscal 2005 related to the Ben Sherman acquisition, partially offset by $0.3 million
less amortization expense related our 2003 acquisition of the Tommy Bahama Group. We expect that
amortization of intangible assets will decrease slightly in future periods as some shorter lived
intangible assets related to our acquisitions become fully amortized.
Royalties and other operating income increased 86.0% in the first quarter of fiscal 2006. We derive
licensing income through licensing our trademarks across a range of categories that complement our
current product offerings. The increase was primarily due to the benefit of licensing related to
our Ben Sherman brand for an entire quarter in fiscal 2006 as well as higher licensing income from
existing and additional licenses for the Tommy Bahama brand. Additionally, during fiscal 2006, we
recognized a gain of approximately $0.3 million related to the sale of substantially all the assets
of Paradise Shoe, a 50% owned joint venture which was the licensee of Tommy Bahama shoes. We
anticipate that royalties income will increase in future years as the number of licenses increases,
but will be subject to the impact of seasonality as it relates to the licensed products
specifically.
Interest expense, net decreased 13.1% in the first quarter of fiscal 2006. The decrease in interest
expense was primarily due to the non-recurring $1.8 million charge recognized in the first quarter
of fiscal 2005 related to the refinancing of our U.S. Revolver in July 2004, partially offset by
the higher debt levels outstanding during fiscal 2006. Interest expense in future periods will
depend upon the interest rate during the period as well as the total amount of debt outstanding
during the period.
Income taxes were at an effective tax rate of 36.4% for the first quarter of fiscal 2006 compared
to 35.0% for the first quarter of fiscal 2005. Variations in the effective tax rate were primarily
attributable to refunds of prior year taxes and a decrease in certain contingent tax liabilities
during fiscal 2005. The effective tax rate for the first quarter of fiscal 2006 is not necessarily
indicative of the effective tax rate that would be expected in future periods.
SEGMENT RESULTS OF OPERATIONS
We have three operating segments for purposes of allocating resources and assessing performance
which are based on products distributed. The Menswear Group produces branded and private label
dress shirts, sport shirts, dress slacks, casual slacks, suits, sport coats, suit separates, walk
shorts, golf apparel, outerwear, sweaters, jeans, swimwear, footwear and headwear, licenses its
brands for accessories and other products and operates retail stores. The Womenswear Group produces
private label womens sportswear separates, coordinated sportswear, outerwear, dresses and
swimwear. The Tommy Bahama Group produces lifestyle branded casual attire, operates retail stores
and restaurants, and licenses its brands for accessories, footwear, furniture, and other products.
The head of each operating segment reports to the chief operating decision maker.
Corporate and Other is a reconciling category for reporting purposes and includes our corporate
offices, substantially all financing activities, LIFO inventory accounting adjustments, certain
revenue reserves and other costs that are not allocated to the operating groups. LIFO inventory
calculations are made on a legal entity basis which do not correspond to our segment definitions.
The information below presents certain information about our segments:
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
September 2, 2005 |
|
|
August 27, 2004 |
|
|
% Change |
|
|
|
(in thousands) |
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
177,076 |
|
|
$ |
118,737 |
|
|
|
49.1 |
% |
Womenswear Group |
|
|
68,003 |
|
|
|
52,458 |
|
|
|
29.6 |
% |
Tommy Bahama Group |
|
|
91,544 |
|
|
|
93,462 |
|
|
|
(2.1 |
%) |
Corporate and Other |
|
|
(145 |
) |
|
|
165 |
|
|
|
N/A |
|
|
|
|
Total Net Sales |
|
$ |
336,478 |
|
|
$ |
264,822 |
|
|
|
27.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
September 2, 2005 |
|
|
August 27, 2004 |
|
|
% Change |
|
|
|
(in thousands) |
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
15,004 |
|
|
$ |
8,921 |
|
|
|
68.2 |
% |
Womenswear Group |
|
|
3,905 |
|
|
|
(966 |
) |
|
|
N/A |
|
Tommy Bahama Group |
|
|
14,357 |
|
|
|
11,916 |
|
|
|
20.5 |
% |
Corporate and Other |
|
|
(4,562 |
) |
|
|
(2,462 |
) |
|
|
(85.3 |
%) |
|
|
|
Total Operating Income |
|
$ |
28,704 |
|
|
$ |
17,409 |
|
|
|
64.9 |
% |
|
|
|
For further information regarding our segments, see Note 6 to our unaudited condensed consolidated
financial statements included in this report.
The discussion below compares our results of operations for the first quarter of fiscal 2006
compared to our results of operations for the first quarter of fiscal 2005. Each percentage change
provided below reflects the change for the quarter between these periods unless indicated
otherwise.
Menswear Group
The Menswear Group reported a 49.1% increase in net sales in the first quarter of fiscal 2006. The
increase was primarily due to:
|
|
|
Ben Sherman, which provided approximately $44.2 million of net sales in fiscal 2006
compared to $16.6 million during the month of August in fiscal 2005. |
|
|
|
|
The unit sales increase of 39.6% for the group, without considering the Ben Sherman
operations, from new marketing initiatives in dress, knit and woven shirts. |
These increases were offset in part by an average selling price per unit decline of 5.8% including
Ben Sherman and 7.0% excluding Ben Sherman, primarily as a result of a change in product mix to
lower priced dress shirt products.
The Menswear Group reported a 68.2% increase in operating income in the first quarter of fiscal
2006. The increase in operating income was primarily due to the benefit of the operations of Ben
Sherman, which has higher operating profit margins, for the entire quarter in fiscal 2006 and the
increase in sales volume in our historical menswear business.
Womenswear Group
The Womenswear Group, which primarily operates in the discount distribution channel, reported a
29.6% increase in net sales in the first quarter of fiscal 2006. The change was primarily due to:
|
|
|
The unit sales increase of 23.2%. |
|
|
|
|
The average selling price per unit increase of 9.2% primarily due to a change in product mix. |
The Womenswear Group reported an increase in operating income of $4.9 million in the first quarter
of fiscal 2006. The change was primarily due to a greater focus on improved product sourcing,
leveraging of SG&A over a higher sales base and only accepting programs that meet certain
profitability hurdles.
19
Tommy Bahama Group
The Tommy Bahama Group reported a 2.1% decline in net sales in the first quarter of fiscal 2006.
The decline was due to:
|
|
|
A decrease in dollar and unit sales in the wholesale branded business. |
|
|
|
|
Exiting the private label business in fiscal 2005. |
These declines were partially offset by:
|
|
|
The average selling price per unit increase of 0.8% excluding the private label
business, primarily due to increased retail sales. |
|
|
|
|
An increase in the number of retail stores from 45 at the end of the first quarter of
fiscal 2005 to 55 at the end of the first quarter of fiscal 2006. |
The Tommy Bahama Group reported an increase of 20.5% in operating income in the first quarter of
fiscal 2006. The increase in operating income was primarily due to:
|
|
|
Improvements in gross margins due to higher retail sales and improved inventory
management and product sourcing. |
|
|
|
|
Exiting the private label business which provides lower margins. |
|
|
|
|
Reduced amortization expense related to intangible assets. |
|
|
|
|
Increased royalty and other income from existing licenses and the gain from the
disposition of assets of Paradise Shoe. |
Corporate and Other
The Corporate and Other operating loss increased $2.1 million in the first quarter of fiscal 2006.
The increase in the operating loss was primarily due to increased parent company costs and
increased bad debt expense partially offset by LIFO inventory accounting.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our primary source of revenue and cash flow is our operating activities in the United States and to
some extent the United Kingdom. Additionally, subject to the terms thereof, we also have access to
amounts under our U.S. Revolver and U.K. Revolver, each of which are described below, when cash
inflows are less than cash outflows. We may seek to finance future capital investment programs
through various methods, including, but not limited to, cash flow from operations, borrowings under
our current credit facilities, issuance of additional long-term debt and sales of equity
securities.
Our liquidity requirements arise from the funding of our working capital needs, which include
inventory, other operating expenses and accounts receivable, funding of capital expenditures,
payment of quarterly dividends, repayment of our indebtedness and acquisitions, if any. Generally,
our product purchases are acquired through trade letters of credit which are drawn against our
lines of credit at the time of shipment of the products and reduce the amounts available under our
lines of credit when issued.
Cash and cash equivalents on hand was $7.0 million at September 2, 2005 compared to $11.5 million
at August 27, 2004.
Operating Activities
Quarter ended September 2, 2005
During the quarter ended September 2, 2005, our operations used $18.6 million of cash compared to
generating $12.1 million of cash during the quarter ended August 27, 2004. The decrease in
operating cash flows was primarily a result of the changes in working capital accounts including
trade accounts payable, accrued expenses, prepaid expenses, receivables and income taxes payable
from the balances at June 3, 2005. These changes were partially offset by receiving a full
quarters benefit of Ben Sherman during the quarter ended September 2, 2005 compared to one month
during the quarter ended August 27, 2004.
20
Receivables were $200.4 million and $160.5 million at September 2, 2005 and August 27, 2004,
respectively, representing an increase of 25%. The increase in receivables was primarily a result
of the 27% increase in net sales during the quarter ended September 2, 2005 compared to the quarter
ended August 27, 2004. Days sales outstanding for our accounts receivable balances, excluding
retail receivables, was 59 days at September 2, 2005 and August 27, 2004.
Inventories were $168.6 million and $143.1 million at September 2, 2005 and August 27, 2004,
respectively. The increase in inventories was primarily a result of an increase in inventories on
hand in our Menswear Group to support certain replenishment programs and higher anticipated sales
in the near term. Our replenishment program inventory in the Menswear Group is higher than our
optimal level, however, we anticipate this excess to decrease in the future as the programs
stabilize. These increases were partially offset by a reduction of inventory in our Womenswear
Group and Tommy Bahama Group as we have lower levels of excess inventories on hand at September 2,
2005 compared to August 27, 2004 and generally purchased inventory later in fiscal 2006. Our days
supply of inventory on hand, calculated on a trailing twelve month average using a FIFO basis, was
82 days at September 2, 2005 compared to 74 days at August 27, 2004.
Current liabilities, which primarily consist of payables arising out of our operating activities,
were $174.8 million and $260.6 million at September 2, 2005 and August 27, 2004, respectively. The
decrease was primarily due to the classification of our U.S. Revolver, which had a balance of $98.3
million at August 27, 2004, as non-current in fiscal 2006 as a result of an amendment to the
agreement during the second quarter of fiscal 2005 and an approximately $9.0 million decrease in
debt levels related to our U.K. Revolver and Seller Notes in fiscal 2006. These decreases in
current liabilities were partially offset by the additional acquisition cost payable of $20.5
million at September 2, 2005 as only a portion of the fiscal 2005 earn-out payment related to the
Tommy Bahama Group acquisition was paid during the first quarter of fiscal 2006. However, the
entire payment for the fiscal 2004 earn-out payment was made during the quarter ended August 27,
2004. Substantially all the remaining liability at September 2, 2005 will be settled through the
issuance of shares of our common stock. Also, income taxes payable is higher due to the higher
earnings in fiscal 2006.
Deferred income tax liabilities were $76.5 million and $80.7 million at September 2, 2005 and
August 27, 2004, respectively. The decrease was primarily a result of changes in property, plant
and equipment basis differences, amortization of acquired intangibles, deferred rent and deferred
compensation balances.
Other non-current liabilities, which primarily consist of deferred rent and deferred compensation
amounts, were $25.7 million and $12.8 million at September 2, 2005 and August 27, 2004,
respectively. The increase was primarily due to the recognition of deferred rent, for existing and
new lease agreements, during the last three quarters of fiscal 2005 and the first quarter of fiscal
2006 as well as the deferral of certain compensation payments to our executives in accordance with
our deferred compensation plans.
Quarter ended August 27, 2004
During the quarter ended August 27, 2004, we generated cash flows from operations of $12.1 million.
This cash was generated primarily from the sale of our products net of cash paid for the cost of
goods sold, general and administrative operating expenses, interest expense and inventory. Working
capital changes included increased inventories, decreased trade payables and decreased accrued
expenses offset by decreased accounts receivable. The inventory increase occurred in our Tommy
Bahama businesses to support increased sales. Trade payables decreased primarily due to the timing
of inventory purchases. The decline in accrued expenses was primarily due to incentive
compensation accrued at the end of fiscal 2004 and paid in the first quarter of fiscal 2005. The
accounts receivable decline was due to the decline in sales in the last two months of the first
quarter of fiscal 2005 compared to the last two months of the fourth quarter of fiscal 2004. The
inventory decline occurred in our pre-acquisition businesses. Trade payables increased primarily
due to extended payment terms on letter of credit purchasing commitments with suppliers of finished
goods. The increase in accrued expenses was primarily due to accrued interest on the senior notes.
The accounts receivable increase was due to the increase in sales in the fourth quarter.
Our working capital ratio, which is calculated by dividing total current assets by total current
liabilities, was 2.29:1 and 1.28:1 at September 2, 2005 and August 27, 2004, respectively. The
improvement was due to the changes in the individual asset and liability categories, with the most
significant factors being the different classification of our U.S. Revolver between the two periods
and the significant increase in accounts receivable and inventory, which were partially offset by
the increase in the acquisition payable, each as discussed above.
21
Investing Activities
During the quarter ended September 2, 2005, investing activities used $8.5 million in cash,
consisting of approximately $5.3 million of earn-out payments in the first quarter of fiscal 2006
related to the fiscal 2004 Tommy Bahama Group acquisition and approximately $1.3 million for the
acquisition of Solitude, a California lifestyle trademark. Additionally, approximately $3.5 million
of capital expenditures were incurred primarily related to new Tommy Bahama and Ben Sherman retail
stores. These investments were partially offset by $1.9 million of proceeds received from our
Paradise Shoe equity investment as a result of Paradise Shoe selling its assets.
During the quarter ended August 27, 2004, investing activities used $141.7 million in cash,
consisting of approximately $134.2 million (net of cash acquired) for the acquisition of Ben
Sherman as well as payments in the first quarter of fiscal 2005 of approximately $5.5 million
related to the Tommy Bahama Group acquisition. Additionally, we incurred capital expenditures of
$2.5 million primarily related to new Tommy Bahama retail stores and capital expenditures for
computer equipment and software.
Non-current assets including property, plant and equipment, goodwill, intangible assets and other
non-current assets increased primarily as a result of the fiscal 2005 earn-out related to the Tommy
Bahama acquisition, additional consideration and transaction costs associated with the Ben Sherman
acquisition and capital expenditures for our retail stores, which were partially offset by
depreciation and amortization of our fixed assets and intangible assets.
Financing Activities
During the quarter ended September 2, 2005, financing activities provided approximately $27.7
million in cash, primarily from additional borrowings, net of repayments, under our U.S. Revolver
in fiscal 2006 to fund our investments and working capital needs during the period. Additionally,
$2.0 million of cash was provided by the issuance of common stock upon the exercise of employee
stock options, and cash was used for the payment of $2.3 million of quarterly dividends on our
common shares.
During the quarter ended August 27, 2004, financing activities generated $93.6 million in cash.
Substantially all of these proceeds represent the funding from the U.S. Revolver to finance the Ben
Sherman acquisition on July 30, 2004, partially offset by the $2.8 million paid in the quarter
ended August 27, 2004 related to the refinancing of the U.S. Revolver. Additionally, $0.7 million
of cash were provided by the issuance of common stock upon the exercise of employee stock options.
These cash proceeds were partially offset by the use of cash to pay $1.9 million of dividends on
our common stock.
On September 5, 2005, we paid a cash dividend of $0.135 per share to shareholders of record as of
August 22, 2005. We expect to pay dividends in future quarters. However, we may decide to
discontinue or modify the dividend payment at any time if we determine that other uses of our
capital, including, but not limited to, payment of debt outstanding or funding of future
acquisitions, may be in our best interest or if our expectations of future cash flows and future
cash needs outweigh the ability to pay a dividend. Additionally, we may borrow to fund dividends
in the short term based on our expectations of operating cash flows in future periods. All cash
flow from operations will not necessarily be paid out as dividends in all periods.
Debt was $320.6 million and $310.9 million at September 2, 2005 and August 27, 2004, respectively.
The increase was primarily due to the funding of higher inventory levels at September 2, 2005 and
higher sales in the quarter ended September 2, 2005 compared to the same quarter in the prior year.
22
Liquidity and Capital Resources
The table below provides a description of our significant financing arrangements (in thousands):
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September 2, 2005 |
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$280 million U.S. Senior Secured Revolving Credit
Facility (U.S. Revolver), which accrues interest,
unused line fees and letter of credit fees based upon a
pricing grid which is tied to certain financial ratios
(6.02% at September 2, 2005), requires interest payments
monthly with principal due at maturity (July 2009), and
is collateralized by substantially all the assets of the
company and its domestic subsidiaries |
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$ |
116,900 |
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£12 million Senior Secured Revolving Credit Facility
(U.K. Revolver), which accrues interest at the banks
base rate plus 1.2% (5.70% at September 2, 2005),
requires interest payments monthly with principal
payable on demand or at maturity (July 2006), and is
collateralized by substantially all the United Kingdom
assets of Ben Sherman |
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1,192 |
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$200 million Senior Unsecured Notes (Senior Unsecured
Notes), which accrue interest at 8.875% (effective
interest rate of 9.0%) and require interest payments
semiannually on June 1 and December 1 of each year, with
principal due at maturity (June 2011), are subject to
certain prepayment penalties and are guaranteed by our
domestic subsidiaries |
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198,982 |
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Unsecured Seller Notes (Seller Notes), which accrue
interest at LIBOR plus 1.2% (5.73% at September 2,
2005), and require interest payments quarterly with
principal payable on demand |
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3,378 |
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Other debt, including capital lease obligations with
varying terms and conditions, collateralized by the
respective assets |
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130 |
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Total Debt |
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320,582 |
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Short-term Debt |
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4,624 |
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Long-term Debt |
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315,958 |
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On July 28, 2004, the U.S. Revolver was amended to increase the line of credit from $275 million to
$280 million, to eliminate the asset borrowing base calculation to determine availability and to
adjust the amount that certain lenders were committed to loan among other changes. Additionally,
the terms and conditions of certain related agreements were modified in November 2004, including a
change to a springing lock-box agreement, which resulted in amounts outstanding under the facility
requiring classification as long-term debt subsequent to the modification. In September 2005, we
amended the U.S. Revolver to remove certain items from the definition of Restricted Payments, as
defined.
Our lines of credit under the U.S. Revolver and U.K. Revolver are used to finance trade letters
of credit and standby letters of credit as well as provide funding for other operating activities
and acquisitions. As of September 2, 2005, approximately $109.4 million and $2.5 million of
trade letters of credit and other limitations were outstanding against the U.S. Revolver and the
U.K. Revolver, respectively. The net availability under our U.S. Revolver and U.K. Revolver was
approximately $53.7 million and $18.4 million, respectively, as of September 2, 2005.
The U.S. Revolver, the U.K. Revolver and the Senior Unsecured Notes each include certain debt
covenant restrictions that require us or our subsidiaries to maintain certain financial ratios that
are customary for similar facilities. The U.S. Revolver also includes limitations on certain
restricted payments such as earn-outs, and prior to amendment in September 2005, included certain
restrictions on payment of dividends and prepayment of debt as well. As of September 2, 2005, we
were compliant with all financial covenants and restricted payment clauses related to our debt
agreements.
We expect to fund the payment of the Seller Notes, which are due upon demand and expected to be
redeemed for payment during fiscal 2006, with borrowings from the U.K. Revolver. Additionally, the
U.K. Revolver is also due upon demand and expires in July 2006. At expiration, we anticipate that
we will be able to refinance the U.K. Revolver either with the same lender, other lenders or under
our U.S. Revolver.
We anticipate that we will be able to satisfy our ongoing cash requirements, which generally
consists of working capital needs, capital expenditures (primarily for the opening of Tommy Bahama
and Ben Sherman retail stores) and interest and principal payments on our debt during the remainder
of fiscal 2006, primarily from cash on hand and cash flow from operations supplemented by
borrowings under our lines of credit, as necessary. Our need for working capital is typically
seasonal with the greatest requirements generally existing from the late second quarter to early
fourth quarter of each year as we build inventory for the spring/summer season. Our capital needs
will depend on many factors including our growth rate, the need to finance increased inventory
levels and the success of our various
23
products. Our debt to total capitalization ratio was 50% and 54% at September 2, 2005 and August
27, 2004, respectively.
If appropriate investment opportunities arise that exceed the availability under our existing
credit facilities, we believe that we will be able to fund such acquisitions through additional or
refinanced debt facilities or the issuance of additional equity. However, our ability to obtain
additional borrowings or refinance our credit facilities will depend on many factors, including the
prevailing market conditions, our financial condition and our ability to negotiate favorable terms
and conditions. There is no assurance that financing would be available on terms that are
acceptable or favorable to us, if at all.
Our contractual obligations as of September 2, 2005 have not changed significantly from the
contractual obligations outstanding at June 3, 2005 other than changes in the amounts outstanding
under the U.S. Revolver and U.K. Revolver, amounts outstanding pursuant to letters of credit (both
as discussed above) and leases for our recently opened retail stores, none of which occurred
outside the ordinary course of business.
We anticipate our capital expenditures for fiscal 2006 to be approximately $30 million, including
$3.5 million incurred in the first quarter of fiscal 2006. These expenditures will consist
primarily of the continued expansion of our retail operations of the Tommy Bahama Group and Ben
Sherman brand, including the opening of additional retail stores.
Off Balance Sheet Arrangements
We have not entered into agreements which meet the definition of an off balance sheet financing
arrangement, other than operating leases, and have made no financial commitments to or guarantees
with any unconsolidated subsidiaries or special purpose entities.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations are based upon our
condensed consolidated financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues, and expenses and related disclosures of contingent assets and liabilities.
On an ongoing basis, we evaluate our estimates, including those related to bad debts, inventories,
intangible assets, income taxes, contingencies and litigation and certain other accrued expenses.
We base our estimates on historical experience and on various other assumptions that are believed
to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different assumptions or conditions.
See the Summary of Critical Accounting Policies contained in our fiscal 2005 Form 10-K for a
summary of our critical accounting policies. During fiscal 2006, there have been no significant
changes in our critical accounting policies as disclosed in our fiscal 2005 Form 10-K.
SEASONALITY
Although our various product lines are sold on a year-round basis, the demand for specific products
or styles may be highly seasonal. For example, the demand for golf and Tommy Bahama products is
higher in the spring and summer seasons. Products are sold prior to each of our retail selling
seasons, including spring, summer, fall and holiday. As the timing of product shipments and other
events affecting the retail business may vary, results for any particular quarter may not be
indicative of results for the full year. The percentage of net sales distribution by quarter for
fiscal 2005 was 20%, 24%, 27% and 29%, respectively, and the net earnings by quarter for fiscal
2005 were 13%, 18%, 28% and 41%, respectively, which may not be indicative of the distribution in
fiscal 2006 or future years.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
We are exposed to market risk from changes in interest rates on our indebtedness, which could
impact our financial condition and results of operations in future periods. Our objective is to
limit the impact of interest rate changes on earnings and cash flow, primarily through a mix of
fixed and variable rate debt. This assessment also considers our need for flexibility in our
borrowing arrangements resulting from the seasonality of our business, among other factors. We
continuously monitor interest rates to consider the sources and terms of our borrowing facilities
in order to determine whether we have achieved our interest rate management objectives.
24
As of September 2, 2005, approximately $121.5 million of debt outstanding (or 38% of our total
debt) was subject to variable interest rates, with a weighted average rate of approximately 6.0%.
Our average variable rate borrowings for the quarter ended September 2, 2005 were $100.0 million,
with an average interest rate of 5.8% during the period. Our lines of credit are based on variable
interest rates in order to take advantage of the lower rates available in the current interest rate
environment and to provide the necessary borrowing flexibility required. To the extent that the
amounts outstanding under our variable rate lines of credit change, our exposure to changes in
interest rates would also change. If the average interest rate for the quarter ended September 2,
2005 increased by 100 basis points, our interest expense would have been approximately $0.1 million
higher during the period.
At September 2, 2005, we had approximately $199.1 million of fixed rate debt and capital lease
obligations outstanding with substantially all the debt having an effective interest rate of 9.0%
and maturing in June 2011. Such agreements may result in higher interest expense than could be
obtained under variable interest rate arrangements in certain periods, but are primarily intended
to provide long-term financing of our capital structure and minimize our exposure to increases in
interest rates. A change in the market interest rate impacts the fair value of our fixed rate debt
but has no impact on interest incurred or cash flows.
None of our debt was entered into for speculative purposes. We generally do not engage in hedging
activities with respect to our interest rate risk and do not enter into such transactions on a
speculative basis.
FOREIGN CURRENCY RISK
To the extent that we have assets and liabilities, as well as operations, denominated in foreign
currencies that are not hedged, we are subject to foreign currency transaction gains and losses.
We do not hold or issue any derivative financial instruments related to foreign currency exposure
for speculative purposes.
We receive United States dollars for substantially all of our product sales except for Ben Sherman
sales in the United Kingdom and Europe and certain licensing fees earned in other foreign
countries. We view our net investment in the Ben Sherman United Kingdom subsidiary, which has a
functional currency of pounds sterling, as long-term. As a result, we generally do not hedge our
investment. Ben Sherman net sales that were not denominated in United States dollars totaled $32.5
million during the quarter ended September 2, 2005 and $13.6 million for the period from
acquisition (July 30, 2004) through August 27, 2004. The foreign denominated sales during the
quarter ended September 2, 2005 represented approximately 10% of our net sales for the period. With
the dollar trading at a weaker position than it has historically traded (average rate of 1.80 for
the quarter ended September 2, 2005), a strengthening United States dollar could result in lower
levels of sales in our consolidated statements of earnings in future periods, although the sales in
pounds sterling could be equal to or greater than amounts as previously reported.
Substantially all inventory purchases from contract manufacturers throughout the world are
denominated in United States dollars. Purchase prices for our products may be impacted by
fluctuations in the exchange rate between the United States dollar and the local currencies, such
as the Chinese Yuan, of the contract manufacturers, which may have the effect of increasing our
cost of goods sold in the future. Due to the number of currencies involved and the fact that not
all foreign currencies react in the same manner against the United States dollar, we cannot
quantify in any meaningful way the potential effect of such fluctuations on future income.
However, we do not believe that exchange rate fluctuations will have a material impact on our
inventory costs in future periods.
We may from time to time purchase foreign currency forward exchange contracts to hedge against
changes in foreign currency exchange rates. During the quarter ended September 2, 2005, we entered
into foreign currency exchange contracts which have not been settled with maturities of less than
twelve months totaling approximately $19.0 million at September 2, 2005. Such contracts are marked
to market with the offset being recognized in our consolidated statement of earnings as the
criteria for hedge accounting has not been met. The impact on our consolidated statements of
earnings for these contracts is not material.
TRADE POLICY RISK
Pursuant to the 1994 Agreement on Textiles and Clothing, quotas among World Trade Organization, or
WTO, member countries, including the United States, were eliminated on January 1, 2005. As a
result, the international textile and apparel trade is undergoing a significant realignment which
is changing our sourcing patterns, could disrupt our supply chain and could put us at a
disadvantage to our competitors.
In addition, notwithstanding quota elimination, under the terms of Chinas WTO accession agreement,
the United States and other WTO members may re-impose quotas on specific categories of products in
the event it is determined that imports from China have surged or may surge and are threatening to
create a market disruption for such categories of products (so called safeguard quota). Pursuant
to this authority, both the United States and the European Union
25
have re-imposed quotas on several important product categories from China and may re-impose quotas
on additional categories in the future. The imposition of these safeguard quotas could cause
disruption in our supply chain.
Furthermore, under long-standing statutory authority applicable to imported goods in general, the
United States may unilaterally impose additional duties: (i) when imported merchandise is sold at
less than fair value and causes material injury, or threatens to cause material injury, to the
domestic industry producing a comparable product (generally known as anti-dumping duties); or
(ii) when foreign producers receive certain types of governmental subsidies, and when the
importation of their subsidized goods causes material injury, or threatens to cause material
injury, to the domestic industry producing a comparable product (generally known as
countervailing duties). The imposition of anti-dumping or countervailing duties on products we
import would increase the cost of those products to us. We may not be able to pass on any such cost
increase to our customers. The recently adopted Central American-Dominican Republic Free Trade
Agreement as well as several other pending free trade agreements could put us at a disadvantage to
some of our competitors.
COMMODITY AND INFLATION RISK
We are affected by inflation and changing prices primarily through the purchase of raw materials
and finished goods and increased operating costs to the extent that any such fluctuations are not
reflected by adjustments in the selling prices of our products, timely, or at all. Also, in recent
years, there has been deflationary pressure on selling prices in our private label businesses.
While we have been successful to some extent in offsetting such deflationary pressures through
product improvements and lower costs, if deflationary price trends outpace our ability to obtain
further price reductions, our profitability may be affected. Inflation/deflation risks are managed
by each business unit through selective price increases when possible, productivity improvements
and cost containment initiatives. We do not enter into significant long-term sales or purchase
contracts and we do not engage in hedging activities with respect to such risk.
ITEM 4. CONTROLS AND PROCEDURES
Our Principal Executive Officer and Principal Financial Officer have evaluated the effectiveness of
the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act) as of the end of the period covered by this
report. Based upon that evaluation, our Principal Executive Officer and the Principal Financial
Officer concluded that, as of the end of the period covered by this report, our disclosure controls
and procedures were effective in ensuring that information required to be disclosed by us in our
Securities Exchange Act reports is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules and forms, and that such
information is accumulated and communicated to our management, including our Principal Executive
Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure.
There have not been any significant changes in our internal controls over financial reporting (as
such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act) during the
fiscal quarter ended September 2, 2005 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
26
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the ordinary course of business, we may become subject to litigation or claims. There are no
material pending legal proceedings, proceedings known to be contemplated by governmental
authorities or changes in items previously disclosed involving us during the quarter ended
September 2, 2005, requiring disclosure under Item 103 of Regulation S-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
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3(a)
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Bylaws of the Company, as amended.* |
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10.1
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First Amendment to the Oxford Industries, Inc. Employee Stock Purchase Plan.* |
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10.2
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Second Amendment to Amended and Restated Credit Agreement dated July 28, 2004. Incorporated
by reference to Exhibit 10.1 from the Companys Form 8-K filed on September 26, 2005. |
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31.1
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Section 302 Certification by Principal Executive Officer.* |
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31.2
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Section 302 Certification by Principal Financial Officer.* |
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32
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Section 906 Certification by Principal Executive Officer and Principal Financial Officer.* |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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October 5, 2005
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OXFORD INDUSTRIES, INC.
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(Registrant) |
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/s/ Thomas Caldecot Chubb III |
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Thomas Caldecot Chubb III |
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Executive Vice President |
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(Principal Financial Officer) |
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27
EX-3(A) BYLAWS OF THE COMPANY, AS AMENDED
EXHIBIT 3(a)
As Amended
Through July 11, 2005
BYLAWS
OF
OXFORD INDUSTRIES, INC.
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meetings. The Annual Meeting of the stockholders for the election of
Directors and for the transaction of such other business as may properly come before the meeting
shall be held at such place, either within or without the State of Georgia, on such date, and at
such time, as the Board of Directors may by resolution provide, or if the Board of Directors fails
to provide for such meeting by action by November 1 of any year, then such meeting shall be held at
the principal office of the Company in Atlanta, Georgia, at 11 a.m. on the third Wednesday in
November of each year, if not a legal holiday under the laws of the State of Georgia, and if a
legal holiday, on the next succeeding business day.
Section 2. Special Meetings. Special meetings of the stockholders may be called by the
persons specified in the Companys Articles of Incorporation. Such meetings may be held at such
place, either within or without the State of Georgia, as is stated in the call and notice thereof.
Section 3. Notice of Meeting. A written or printed notice stating the place, day and hour
of the meeting, and in case of a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered or mailed by the Secretary of the Company to each holder of record of
stock of the Company at the time entitled to vote, at his address as appears upon the record of the
Company, not less than 10 nor more than 50 days prior to such meeting. If the Secretary fails to
give such notice within 20 days after the call of a meeting the person or persons calling such
meeting, or any person designated by them, may give such notice. Notice of such meeting may be
waived in writing by any stockholder. Attendance at any meeting, in person or by proxy, shall
constitute a waiver of notice of such meeting. Notice of any adjourned meeting of the stockholders
shall not be required.
Section 4. Quorum. A majority in interest of the outstanding capital stock of the Company
represented either in person or by proxy shall constitute a quorum for the transaction of business
at any annual or special meeting of the stockholders. If a quorum shall not be present, the
holders of a majority of the stock represented may adjourn the meeting to some later time. When a
quorum is present, a vote of a majority of the stock represented in person or by proxy shall
determine any question, except as otherwise provided by the Articles of Incorporation, these
Bylaws, or by law.
Section 5. Proxies. A stockholder may vote, either in person or by proxy duly executed in
writing by the stockholder. A proxy for any meeting shall be valid for any adjournment of such
meeting.
Section 6. Record Date. The Board of Directors shall have power to close the stock
transfer books of the Company for a period not exceeding seventy days preceding the date of any
meeting of stockholders or the date for payment of any dividend or the date for allotment of rights
or the date when any change or conversion or exchange of capital stock shall go into effect;
provided, however, that in lieu of closing the stock transfer books as aforesaid, the Board of
Directors may fix in advance a date, not exceeding seventy days preceding the date of any meeting
of stockholders or the date for the payment of any dividend, or the date for allotment of rights,
or the date when any change or conversion or exchange of capital stock shall go into effect, as a
record date for the determination of the stockholders entitled to such notice of, and to vote at,
any such meeting, or entitled to receive payment of any such dividend or to any such allotment of
rights, or to exercise the rights in respect of any such change, conversion or exchange of capital
stock, and in such case only such stockholders as shall be stockholders of record on the date so
fixed shall be entitled to such notice of, and to vote at, such meeting, or to receive payment of
such dividend, or to receive such allotment of rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any stock on the books of the Company after any such record
date fixed as aforesaid.
ARTICLE II
DIRECTORS
Section 1. Powers of Directors. The Board of Directors shall have the management of
business of the Company, and, subject to any restriction imposed by law, by the charter, or by
these Bylaws, may exercise all the powers of the corporation.
Section 2. Number of Directors. Effective October 10, 2005, the Board of Directors shall
consist of 10 members.
Section 3. Meeting of Directors. The Board may by resolution provide for the time and
place of regular meetings, and no notice need be given of such regular meetings. Special Meetings
of the Directors may be called by the Chairman of the Board or by the President or by at least 30
percent of the Directors.
Section 4. Notice of Meeting. Notice of each meeting of the Directors shall be given by
the Secretary mailing the same at least five days before the meeting or by telephone or telegraph
or in person at least three days before the meeting, to each Director, except that no notice need
be given of regular meetings fixed by the resolution of the Board or of the meeting of the Board
held at the place of and immediately following the Annual Meeting of the stockholders.
Section 5. Executive Committee. The Board may by resolution provide for an Executive
Committee consisting of such Directors as are designated by the Board. Any vacancy in such
Committee may be filled by the Board. Except as otherwise provided by the law, by these Bylaws, or
by resolution of the full Board, such Executive Committee shall have and may exercise the full
powers of the Board of Directors during the interval between the meetings of the Board and wherever
by these Bylaws, or by resolution of the stockholders, the Board of Directors is authorized to take
action or to make a determination, such action or determination may be taken or made by such
Executive Committee, unless these Bylaws or such resolution expressly require that such action or
determination be taken or made by the full Board of Directors. The Executive Committee shall by
resolution fix its own rules of procedure, and the time and place of its meetings, and the person
or persons who may call, and the method of call, of its meetings. The Chairman of the Board of
Directors shall be a member of the Executive Committee and shall act as Chairman thereof.
Section 6. Compensation. A fee and reimbursement for expenses for attendance at meetings
of the Board of Directors or any Committee thereof may be fixed by resolution of the full Board.
Section 7. Retirement of Directors. Any Director who is also an employee of the Company,
or other than the Chief Executive Officer, shall be ineligible for election or appointment as a
Director after his retirement as an employee or after reaching sixty-five (65) years of age,
whichever occurs first. Any person who has served as Chief Executive Officer of the Company shall
be ineligible for election or appointment as a Director after reaching seventy-two (72) years of
age. Any Director who is not an employee of the Company and who is not actively employed by a
company in which such Director does not beneficially own a controlling interest shall be ineligible
for election or appointment as a Director after reaching seventy-two (72) years of age. Any
Director who is not an employee of the Company and who is actively employed by a company in which
such Director does not beneficially own a controlling interest shall be ineligible for election or
appointment as a Director after reaching seventy-five (75) years of age.
ARTICLE III
OFFICERS
Section 1. Officers. The officers of the Company shall consist of a Chairman of the Board
of Directors, a Chief Executive Officer, a President, one or more Vice Presidents, a Secretary and
Treasurer, and such other officers or assistant officers as may be elected by the Board of
Directors. Any two offices may be held by the same person, except that the same person shall not
be Chief Executive Officer or President and Secretary. The Board may designate a Vice President as
an Executive Vice President, and may designate the order in which the other Vice Presidents may
act.
Section 2. Chairman of the Board of Directors. The Chairman of the Board of Directors
shall preside at all meetings of the stockholders, of the Board of Directors and of the Executive
Committee, unless he designates another officer to preside. He shall act in a consultative
capacity and perform such other duties as the Board of Directors may from time to time direct.
Section 3. Chief Executive Officer. Subject to the directions of the Board of Directors,
the Chief Executive Officer shall give general supervision and direction to the affairs of the
Company. The Chief Executive Officer shall have authority to conduct all ordinary business on
behalf of the Company and may execute and deliver on behalf of the company any contract,
conveyance, or similar document not requiring approval by the Board of Directors or stockholders.
The Chief Executive Officer shall preside at meetings in case of the absence or disability of the
Chairman of the Board.
Section 4. President. Subject to the directions of the Chief Executive Officer, the
President shall assist the Chief Executive Officer in giving general supervision and direction to
the affairs of the Company.
Section 5. Vice President. The Vice President shall act in case of the absence or
disability of the Chairman of the Board and the Chief Executive Officer. If there is more than one
Vice President such Vice Presidents shall act in the order of precedence as set out by the Board of
Directors, or in the absence of such designation, the Executive Vice President shall be first in
order of precedence.
Section 6. Treasurer. The Treasurer shall be responsible for the maintenance of proper
financial books and records of the Company.
Section 7. Secretary. The Secretary shall keep the minutes of the meetings of the
stockholders, the Directors, and the Executive Committee and shall have custody of the seal of the
corporation.
Section 8. Other Duties and Authorities. Each officer, employee, and agent shall have
such other duties and authorities as may be conferred on him by the Board of Directors and, subject
to any directions of the Board, by the Chairman of the Board.
Section 9. Removal. Any officer may be removed at any time by the Board of Directors. A
contract of employment for a definite term shall not prevent the removal of any officer; but this
provision shall not prevent the making of a contract of employment with any officer and any officer
removed in breach of his contract of employment shall have cause of action therefor.
ARTICLE IV
DEPOSITORIES, SIGNATURES AND SEAL
Section 1. Form and Execution of Certificates. The certificates of shares of capital
stock of the Company shall be in such form as may be approved by the Board of Directors and shall
be signed by the Chief Executive Officer, the President, or Vice President and by the Secretary or
any Assistant Secretary or the Treasurer or any Assistant Treasurer, provided that any such
certificate may be signed by the facsimile of the signature of either or both of such officers
imprinted thereon if the same is countersigned by a transfer agent of the Company, and provided
further that certificates bearing a facsimile of the signature of such officers imprinted thereon
shall be valid in all respects as if such
person or persons were still in office, even though such officer or officers shall have died or
otherwise ceased to be officers.
Section 2. Contracts. All contracts and other instruments shall be signed on behalf of
the Company by such officer, officers, agent or agents, as the Board may from time to time by
resolution provide.
Section 3. Seal. The corporate seal of the Company shall be as follows:
(Imprint Seal)
The seal may be affixed to any instrument by any officer of the Company and may be
lithographed or otherwise printed on any document with the same force and effect as if it had been
imprinted manually.
ARTICLE V
STOCK TRANSFERS
Section 1. Form and Execution of Certificates. The certificates of shares of capital
stock of the Company shall be in such form as may be approved by the Board of Directors and shall
be signed by the Chief Executive Officer, the President or a Vice President and by the Secretary
or any Assistant Secretary or the Treasurer or any Assistant Treasurer, provided that any such
certificate may be signed by the facsimile of the signature of either or both of such officers
imprinted thereon if the same is countersigned by a transfer agent of the Company, and provided
further that certificates bearing a facsimile of the signature of such officers imprinted thereon
shall be valid in all respects as if such person or persons were still in office, even though such
officer or officers shall have died or otherwise ceased to be officers.
Section 2. Transfer of Shares. Shares of stock in the Corporation shall be transferable
only on the books of the Company by proper transfer signed by the holder of record thereof or by a
person duly authorized to sign for such holder of record. The Company or its transfer agent shall
be authorized to refuse any transfer unless and until it is furnished such evidence as it may
reasonable require showing that the requested transfer is proper.
Section 3. Lost, Destroyed or Mutilated Certificates. The Board may by resolution provide
for the issuance of certificates in lieu of lost, destroyed or mutilated certificates and may
authorize such officer or agent as it may designate to determine the sufficiency of the evidence of
such loss, destruction or mutilation and the sufficiency of any security furnished to the Company
and to determine whether such duplicate certificate should be issued.
Section 4. Transfer Agent and Registrar. The Board may appoint a transfer agent or agents
and a registrar or registrars of transfer, and may require that all stock certificates bear the
signature of such transfer agent or such transfer agent and registrar.
ARTICLE VI
INDEMNITY
Section 1. Indemnity. Each person who is now, has been, or who shall hereafter become a
Director or officer of the Corporation, whether or not then in office, shall be indemnified by the
Corporation against all costs and expenses reasonably incurred by or imposed upon him in connection
with or resulting from any demand, action, suit or proceedings or threat thereof, to which he may
be made a party as a result or by reason of his being or having been a Director or officer of the
Corporation or of any other corporation which he serves as a Director or officer at the request of
the Corporation, except in relation to matters as to which a recovery shall be had against him or
penalty imposed upon him by reason of his having been finally adjudged in such action, suit or
proceedings to have been derelict in the performance of his duties as such Director or officer.
The foregoing right to indemnify shall include reimbursement of the amounts and expenses paid in
settling any such demand, suit or proceedings or threat thereof when settling the same appears to
the Board of Directors or the Executive Committee to be in the best interest of the Corporation,
and shall not be exclusive of other rights to which such Director or officer may be entitled as a
matter of law.
ARTICLE VII
AMENDMENTS
Section 1. Amendments. Except as otherwise provided in the Articles of Incorporation or
in resolutions of the Board of Directors pursuant to which preferred stock is issued, the Board of
Directors or the stockholders shall have the power to alter, amend or repeal the Bylaws or to adopt
new Bylaws. The stockholders may prescribe that any Bylaw or Bylaws adopted by them shall not be
altered, amended or repealed by the Board of Directors. Except as otherwise provided in the
Articles of Incorporation or in resolutions of the Board of Directors pursuant to which preferred
stock is issued, action by the Board of Directors with respect to the Bylaws shall be taken by the
affirmative vote of a majority of all Directors then holding office, and action by the stockholders
with respect to the Bylaws shall be taken by the affirmative vote of the holders of a majority of
all shares of common stock.
ARTICLE VIII
BUSINESS COMBINATIONS
Section 1. Business Combinations. All the requirements of Article 11A of the Georgia
Business Corporation Code (the Code), which includes Sections 14-2-1131, 14-2-1132 and 14-2-1133
of the Code, shall be applicable to the Company.
EX-10.1 1ST AMEND. TO EMPLOYEE STOCK PURCHASE PLAN
Exhibit 10.1
FIRST AMENDMENT TO
THE OXFORD INDUSTRIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
As Amended and Restated Effective January 1, 2005
Pursuant to Sections 10(a) and 13 of the Oxford Industries, Inc. Employee Stock Purchase Plan
(the Plan) and at the direction of the Nominating, Compensation and Governance Committee of the
Board of Directors, Oxford Industries, Inc. (the Company) hereby amends the Plan as follows:
1.
Effective as of July 1, 2005, Section 4(a) of the Plan shall be amended to read as follows:
(a) Eligible Employees. Any person who, as of an Offering Date in a given Purchase Period,
has been an Employee for a period of at least 90 days will be eligible to participate in the
Plan for that Purchase Period, subject to the requirements of Section 5 and the limitations
imposed by Code Section 423(b).
2.
Effective as of January 1, 2005, Section 4(b) of the Plan shall be amended to clarify such
provision as follows:
(b) Five Percent Shareholders. Notwithstanding any other provision of the Plan, no
Employee will be eligible to participate in the Plan if, immediately after the Offering
Date, the Employee (or any other persons whose stock would be attributed to the Employee
pursuant to Code Section 424(d)) owns capital stock of the Company and/or holds outstanding
options to purchase stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or any Subsidiary.
3.
Except as specifically set forth herein, the terms of the Plan shall remain in full force and
effect.
IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed on the date set
forth below.
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OXFORD INDUSTRIES, INC. |
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By:
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Date:
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EX-31.1 SECTION 302 CERTIFICATION OF THE PEO
Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, J. Hicks Lanier, certify that:
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I have reviewed this report on Form 10-Q of Oxford Industries, Inc.; |
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Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report; |
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Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report; |
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The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
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designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared; |
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designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
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c) |
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evaluated the effectiveness of the registrants disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and |
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disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants
most recent fiscal quarter (the registrants fourth quarter in the
case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
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The registrants other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent
functions): |
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all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and |
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any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
control over financial reporting. |
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Date: October 5, 2005
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/s/ J. Hicks Lanier |
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J. Hicks Lanier |
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Chairman and Chief Executive Officer |
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(Principal Executive Officer) |
EX-31.2 SECTION 302 CERTIFICATION OF THE PFO
Exhibit 31.2
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Thomas Caldecot Chubb III, certify that:
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I have reviewed this report on Form 10-Q of Oxford Industries, Inc.; |
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Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report; |
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Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report; |
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The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
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designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared; |
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designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
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evaluated the effectiveness of the registrants disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and |
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disclosed in this report any change in the registrants internal
control over financial reporting that occurred during the registrants
most recent fiscal quarter (the registrants fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
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The registrants other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrants auditors and the audit committee of
registrants board of directors (or persons performing the equivalent
functions): |
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all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and |
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b) |
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any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
control over financial reporting. |
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Date: October 5, 2005
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/s/ Thomas Caldecot Chubb III |
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Thomas Caldecot Chubb III |
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Executive Vice President |
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(Principal Financial Officer) |
EX-32 SECTION 906 CERTIFICATION OF THE PEO & PFO
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Oxford Industries, Inc. (the Company) on Form 10-Q
(Form 10-Q) for the quarter ended September 2, 2005 as filed with the Securities and Exchange
Commission on the date hereof, I, J. Hicks Lanier, Chairman and Chief Executive Officer of the
Company and I, Thomas Caldecot Chubb III, Executive Vice President of the Company, each certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
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To my knowledge the Form 10-Q fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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The information contained in the Form 10-Q fairly presents, in all
material respects, the financial condition and results of operations
of the Company. |
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/s/ J. Hicks Lanier
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J. Hicks Lanier |
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Chairman and Chief Executive Officer |
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(Principal Executive Officer) |
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October 5, 2005 |
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/s/ Thomas Caldecot Chubb III
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Thomas Caldecot Chubb III |
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Executive Vice President |
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(Principal Financial Officer) |
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October 5, 2005 |
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