SECURITIES AND EXCHANGE COMMISSION
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
| Georgia | 001-04365 | 58-0831862 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) |
(Address of principal executive offices) (Zip Code)
EXHIBIT |
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NUMBER |
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99.1
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Press Release of Oxford Industries, Inc., dated August 8, 2006. |
August 8, 2006
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By: | /s/ Thomas Caldecot Chubb III | ||
| Thomas Caldecot Chubb III | ||||
| Executive Vice President |
EXHIBIT 99.1 OXFORD INDUSTRIES, INC. PRESS RELEASE 222 PIEDMONT AVENUE, N.E. - ATLANTA, GEORGIA 30308 Contact: J. Reese Lanier, Jr. Telephone: (404) 653-1446 Fax: (404) 653-1545 E-Mail: rlanier@oxfordinc.com FOR IMMEDIATE RELEASE August 8, 2006 OXFORD INDUSTRIES ANNOUNCES FOURTH QUARTER AND FISCAL 2006 RESULTS --FY06 EPS OF $3.96 INCLUDING GAIN ON SALE OF WOMENSWEAR GROUP-- -- FY06 EPS FROM CONTINUING OPERATIONS INCREASED 14% TO $2.88 -- ATLANTA, GA. -- Oxford Industries, Inc. (NYSE:OXM) today announced financial results for the 13-week fiscal fourth quarter and 52-week fiscal year ended June 2, 2006. The Company noted that last year's fourth quarter and fiscal year contained 14 weeks and 53 weeks, respectively. Fiscal 2006 diluted earnings per common share were $3.96 compared to $2.87 in fiscal 2005. The Company completed the sale of its Womenswear Group on June 2, 2006, the last day of the fourth quarter and fiscal year. The divestiture resulted in an after tax gain on the sale of $0.58 per common share realized during the fourth quarter of fiscal 2006. For comparative purposes, financial results for the Womenswear Group for current and prior periods are classified as discontinued operations. Fourth quarter net sales from continuing operations declined 6% to $287.6 million from $306.2 million in the fourth quarter last year. Earnings from continuing operations increased 7% to $18.1 million from $16.9 million in last year's fourth quarter. Diluted earnings from continuing operations per common share increased 6% to $1.02 from $0.96 in the fourth quarter of fiscal 2005. Fiscal 2006 net sales from continuing operations increased 5% to $1,109.1 million from $1,056.8 million in fiscal 2005. Earnings from continuing operations increased 16% to $51.2 million from $44.0 million last year. Diluted earnings from continuing operations per common share increased 14% to $2.88 in fiscal 2006 from $2.53 in fiscal 2005. The Company noted that fiscal 2006 included the financial results of Ben Sherman for twelve months and fiscal 2005 included the financial results of Ben Sherman for ten months following its acquisition in July, 2004. "We are very pleased with the strategic progress that we made during fiscal 2006," commented J. Hicks Lanier, Chairman and CEO of Oxford Industries, Inc. "We continued to see outstanding performance from the Tommy Bahama Group which generated an operating margin increase of four percentage points to 17.5% of net sales from 13.5% of net sales last year. We have taken aggressive steps to address the merchandising and operational problems in Ben Sherman's U.S. business that we experienced in fiscal 2006. We also completed the sale of our Womenswear Group and look forward to redeploying our capital resources to grow our branded lifestyle positioning." Gross margins for the fourth quarter were 39.4% compared to 39.6% in the fourth quarter of last year. For the full year, gross margins increased to 38.9% from 38.2% last year. The margin expansion in fiscal 2006 was driven primarily by the strong annual performance in the Tommy Bahama Group and the mix shift toward company-owned retail stores. Selling, general and administrative expenses for the fourth quarter declined 7% to $85.1 million, or 29.6% of net sales, from $91.2 million, or 29.8% of net sales, in the fourth quarter of last year. For the full year, selling, general and administrative expenses increased 8% to $339.1 million, or 30.6% of net sales, from $314.4 million, or 29.8% of net sales, in fiscal 2005. The increase in SG&A expenses for fiscal 2006 was due primarily to the inclusion of Ben Sherman for twelve months, additional Tommy Bahama and Ben Sherman retail stores and expenses associated with the start-up of new marketing initiatives in the Menswear Group.
The Company also noted that costs associated with the closing of four manufacturing plants and the consolidation of related U.S.-based support functions amounted to approximately $3.4 million before tax, or $0.12 per common share after tax, in the second half of fiscal 2006. Royalties and other operating income for the fourth quarter were up slightly over last year to $3.1 million. For the full year, royalty and other operating income rose 9% over last year to $13.1 million. The increase in royalties and other operating income was driven by higher sales of Tommy Bahama licensed products and the inclusion of Ben Sherman for twelve full months in fiscal 2006. Intangible assets amortization expense declined to $2.1 million in the fourth quarter of fiscal 2006 from $2.3 million in the same period last year. For fiscal 2006, intangible asset amortization expense declined to $7.6 million from $8.6 million in fiscal 2005. These non-cash expenses reduced diluted earnings from continuing operations per common share by $0.27 in fiscal 2006. In the fourth quarter of fiscal 2006, the Company repatriated approximately $23 million of undistributed earnings of certain foreign subsidiaries under provisions of the American Jobs Creation Act of 2004. This repatriation resulted in a reduction of $2.9 million in the Company's tax expense or a $0.17 addition to diluted earnings from continuing operations per common share for the fourth quarter. The Tommy Bahama Group reported net sales of $118.6 million in the fourth quarter compared to $118.3 million in the same period last year, despite one less week of sales in the current year's quarter. Operating income for the segment increased 20% to $27.3 million in the fourth quarter from $22.8 million last year. The improvement in profitability continued to be driven by a more disciplined approach to planning and inventory control which resulted in lower inventories and higher full-price sales. Fiscal 2006 net sales for the Tommy Bahama Group increased 2.4% over last year to $409.1 million despite one additional week and $10 million of private label sales in fiscal 2005. Fiscal 2006 operating income increased 32% to $71.5 million from $54.1 million in fiscal 2005. The Menswear Group reported a fourth quarter sales decrease of 10% to $169.4 million from $187.7 million last year. Ben Sherman contributed approximately $40 million in sales for the fourth quarter compared to approximately $43 million in net sales in the same period last year. Fourth quarter operating income for the Menswear Group declined to $4.9 million from $17.2 million in last year's fourth quarter. For the full year, net sales for the Menswear Group increased 7% to $699.9 million and operating income decreased 27% to $42.3 million compared to fiscal 2005. Inventories at the close of fiscal 2006 declined 15% to $123.6 million from $145.9 million at the close of fiscal 2005. The reduction in inventories from last year reflects the Company's conservative inventory positions in each of its major lines of business. Accounts receivable declined 2% to $142.3 million at the close of fiscal 2006 from $145.9 million at the end of last year. The Company reiterated its guidance previously initiated on June 1, 2006. Fiscal 2007 net sales are projected to be within a range of $1,160 million and $1,180 million. Fiscal 2007 diluted earnings from continuing operations per common share are projected to be within a range of $3.25 and $3.40. For the first quarter of fiscal 2007, net sales are expected to be between $280 million and $290 million and diluted earnings from continuing operations per common share are expected to be between $0.60 and $0.65. The guidance reflects the adoption of FAS 123R, expensing of stock options and employee stock purchases, which is expected to reduce diluted earnings from continuing operations per common share by approximately $0.01 per quarter or $0.04 in fiscal 2007. The Company noted that its Board of Directors had approved a stock repurchase authorization for up to 1,000,000 shares of the Company's common shares. In accordance with the authorization, the Company expects to repurchase its common shares from time to time in privately negotiated or open market transactions. The Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. ET today. A live web cast of the conference call will be available on the Company's web site at www.oxfordinc.com. Please visit the web site at least 15 minutes before the call to register for the teleconference web cast and download any necessary software. A replay of the call will be available through August 15, 2006. To access the telephone replay, participants should dial (719) 457-0820. The access code for the replay is 6902194. A replay of the web cast will also be available following the conference call on Oxford Industries' corporate web site at www.oxfordinc.com. Oxford Industries, Inc. is a producer and marketer of branded and private label apparel for men, women and children. Oxford provides retailers and consumers with a wide variety of apparel products and services to suit their individual needs. Oxford's brands include Tommy Bahama(R), Indigo Palms(R), Island Soft(R), Ben Sherman(R),
Arnold Brant(R), Ely & Walker(R) and Oxford Golf(R). The Company also holds exclusive licenses to produce and sell certain product categories under the Tommy Hilfiger(R), Nautica(R), Geoffrey Beene(R), Dockers(R) and Oscar de la Renta(R) labels. Oxford's wholesale customers are found in every major channel of distribution, including national chains, specialty catalogs, mass merchants, department stores, specialty stores and Internet retailers. Oxford's stock has traded on the NYSE since 1964 under the symbol OXM. For more information, please visit our website at www.oxfordinc.com. CAUTIONARY STATEMENT FOR THE PURPOSE OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This press release contains 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 within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Important assumptions relating to these forward-looking statements include, among others, assumptions regarding demand for our products, expected pricing levels, raw material costs, the timing and cost of planned capital expenditures, expected outcomes of pending litigation or regulatory actions, 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 management's 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: (1) general economic cycles; (2) competitive conditions in our industry; (3) price deflation in the worldwide apparel industry; (4) our ability to identify and respond to rapidly changing fashion trends and to offer innovative and distinctive products; (5) changes in trade quotas or other trade regulations; (6) our ability to continue to finance our working capital and growth on acceptable terms; (7) unseasonable weather or natural disasters; (8) the price and availability of raw materials and finished goods; (9) the impact of rising energy costs on our costs and consumer spending; (10) our dependence on and relationships with key customers; (11) consolidation among our customer base; (12) the ability of our third party producers to deliver quality products in a timely manner; (13) potential disruptions in the operation of our distribution facilities; (14) any disruption or failure of our computer systems or data networks; (15) the integration of our acquired businesses; (16) our ability to successfully implement our growth plans, including growth by acquisition; (17) unforeseen liabilities associated with our acquisitions; (18) unforeseen costs associated with entry into and exit from certain lines of business; (19) economic and political conditions in the foreign countries in which we operate or source our products; (20) increased competition from direct sourcing; (21) our ability to maintain our licenses; (22) our ability to protect and exploit our intellectual property and prevent our trademarks, service marks and goodwill from being harmed by competitors' products; (23) our reliance on key management and our ability to develop effective succession plans; (24) our ability to develop and maintain an effective organization structure; (25) risks associated with changes in global currency exchange rates; (26) changes in interest rates on our variable rate debt; (27) the impact of labor disputes, wars or acts of terrorism on our business; (28) the effectiveness of our internal controls and disclosure controls related to financial reporting; (29) our ability to maintain current pricing on our products given competitive or other factors; and (30) our ability to expand our retail operations. You are cautioned not to place undue reliance on forward-looking statements, which are current as of the date of this press release. 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.
OXFORD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) FOURTH QUARTER FULL YEAR -------------- --------- FISCAL 2006 FISCAL 2005 2006 2005 ----------- ----------- ---- ---- Net sales $ 287,578 $ 306,169 $1,109,116 $ 1,056,787 Cost of goods sold 174,278 184,815 677,429 653,538 --------------------------------------------------------------- Gross profit 113,300 121,354 431,687 403,249 Selling, general and administrative 85,136 91,160 339,073 314,413 Amortization of intangible assets 2,085 2,250 7,642 8,622 --------------------------------------------------------------- 87,221 93,410 346,715 323,035 Royalties and other operating income 3,113 3,097 13,144 12,060 --------------------------------------------------------------- Operating income 29,192 31,041 98,116 92,274 Interest expense, net 5,883 6,663 23,971 26,146 --------------------------------------------------------------- Earnings before income taxes 23,309 24,378 74,145 66,128 Income taxes 5,211 7,525 22,944 22,177 --------------------------------------------------------------- EARNINGS FROM CONTINUING OPERATIONS 18,098 16,853 51,201 43,951 --------------------------------------------------------------- Gain on sale of discontinued operations, net of taxes 10,378 - 10,378 - Earnings from discontinued operations, net of taxes 2,502 3,746 8,892 5,876 --------------------------------------------------------------- Earnings from gain on sale and discontinued 12,880 3,746 19,270 5,876 operations, net of taxes --------------------------------------------------------------- NET EARNINGS $ 30,978 $ 20,599 $ 70,471 $ 49,827 =============================================================== Earnings from continuing operations per common share: Basic $ 1.03 $ 1.00 $ 2.93 $ 2.62 Diluted $ 1.02 $ 0.96 $ 2.88 $ 2.53 Earnings from discontinued operations per common share: Basic $ 0.73 $ 0.22 $ 1.10 $ 0.35 Diluted $ 0.72 $ 0.21 $ 1.08 $ 0.34 Net earnings per common share: Basic $ 1.76 $ 1.22 $ 4.03 $ 2.97 Diluted $ 1.74 $ 1.17 $ 3.96 $ 2.87 Weighted average common shares outstanding: Basic 17,554 16,856 17,492 16,788 Dilutive impact of options, earn-out shares and restricted shares 243 717 289 562 --------------------------------------------------------------- Diluted 17,797 17,573 17,781 17,350 =============================================================== Dividends per common share $ 0.15 $ 0.135 $ 0.57 $ 0.51
OXFORD INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) JUNE 2, 2006 JUNE 3, 2005 ------------ ------------ ASSETS Current Assets: Cash and cash equivalents $ 10,479 $ 6,499 Receivables, net 142,297 145,897 Inventories 123,594 145,869 Prepaid expenses 21,996 20,403 Current assets related to discontinued operations, net 59,215 74,727 ----------------------------------------------------- Total current assets 357,581 393,395 Property, plant and equipment, net 73,663 64,194 Goodwill, net 199,232 184,571 Intangible assets, net 234,453 234,854 Other non-current assets, net 20,666 24,010 Non-current assets related to discontinued operations, net - 4,853 ----------------------------------------------------- TOTAL ASSETS $ 885,595 $ 905,877 ===================================================== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Trade accounts payable and other accrued expenses $ 105,038 $ 122,339 Accrued compensation 26,754 29,758 Additional acquisition cost payable 11,897 25,754 Dividends payable 2,646 2,278 Income taxes payable 3,138 13,053 Short-term debt and current maturities of long-term debt 130 3,394 Current liabilities related to discontinued operations 30,716 15,873 ----------------------------------------------------- Total current liabilities 180,319 212,449 Long-term debt, less current maturities 200,023 289,076 Other non-current liabilities 29,979 23,562 Deferred income taxes 76,573 77,242 Non-current liabilities related to discontinued operations - 47 Commitments and contingencies Shareholders' Equity: Preferred Stock, $1.00 par value; 30,000 authorized and none issued and outstanding at June 2, 2006 and June 3, 2005 - - Common stock, $1.00 par value, 60,000 authorized and 17,646 issued and outstanding at June 2, 2006 and 60,000 authorized and 16,884 issued and outstanding at June 3, 2005 17,646 16,884 Additional paid-in capital 74,812 45,918 Retained earnings 300,973 240,401 Accumulated other comprehensive income 5,270 298 ----------------------------------------------------- Total shareholders' equity 398,701 303,501 ----------------------------------------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 885,595 $ 905,877 =====================================================
OXFORD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS) FULL YEAR --------- FISCAL 2006 FISCAL 2005 -------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings from continuing operations $ 51,201 $ 43,951 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation 15,092 13,321 Amortization of intangible assets 7,642 8,622 Amortization of deferred financing costs and bond discount 2,462 4,439 Loss (gain) on the sale of assets 248 (95) Stock compensation expense 1,292 907 Loss (income) from equity method investments 475 (479) Deferred income taxes (1,925) (4,014) Stock option income tax benefit 2,189 1,566 Changes in working capital: Receivables 3,689 (5,412) Inventories 22,751 (32,025) Prepaid expenses (119) (1,487) Current liabilities (28,638) 4,104 Investment in deferred compensation plan (654) (1,004) Other non-current assets (1,147) (3,606) Other non-current liabilities 6,397 12,455 ------------------------ NET CASH PROVIDED BY OPERATING ACTIVITIES 80,955 41,243 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net of cash acquired (11,501) (143,727) Contribution to joint venture investment (431) -- Distribution from joint venture investment 2,026 -- Purchases of property, plant and equipment (24,953) (23,407) Proceeds from sale of property, plant and equipment 265 430 ------------------------ NET CASH USED IN INVESTING ACTIVITIES (34,594) (166,704) CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of financing arrangements (461,326) (542,473) Proceeds from financing arrangements 368,883 624,921 Deferred financing costs paid -- (2,766) Proceeds from issuance of common shares 3,976 2,501 Dividends on common shares (9,531) (8,184) ------------------------ NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (97,998) 73,999 CASH FLOWS FROM DISCONTINUED OPERATIONS: Net operating cash flows provided by discontinued operations 20,417 10,360 Net cash flows provided by (used in) investing activities of discontinued 35,403 (71) operations Net cash flows used in financing activities of discontinued operations -- (60) ------------------------ NET CASH PROVIDED BY DISCONTINUED OPERATIONS 55,820 10,229 Net change in cash and cash equivalents 4,183 (41,233) Effect of foreign currency translation on cash and cash equivalents (203) 163 Cash and cash equivalents at the beginning of period 6,499 47,569 ------------------------ Cash and cash equivalents at the end of period $ 10,479 $ 6,499 ======================== SUPPLEMENTAL CASH FLOW INFORMATION: Accrual for additional acquisition cost $ 11,897 $ 25,754 Cash paid for interest, net $ 26,250 $ 33,531 Cash paid for income taxes $ 38,509 $ 21,196
OXFORD INDUSTRIES, INC. SEGMENT INFORMATION (UNAUDITED) (IN THOUSANDS) FOURTH QUARTER FULL YEAR -------------------------------------------------------------- FISCAL 2006 FISCAL 2005 FISCAL 2006 FISCAL 2005 -------------------------------------------------------------- NET SALES Menswear Group $ 169,432 $ 187,725 $ 699,949 $ 656,606 Tommy Bahama Group 118,619 118,307 409,141 399,658 Corporate and Other (473) 137 26 523 -------------------------------------------------------------- NET SALES FROM CONTINUING OPERATIONS 287,578 306,169 1,109,116 1,056,787 -------------------------------------------------------------- OPERATING INCOME Menswear Group 4,925 17,154 42,307 58,237 Tommy Bahama Group 27,309 22,793 71,522 54,128 Corporate and Other (3,042) (8,906) (15,713) (20,091) -------------------------------------------------------------- OPERATING INCOME 29,192 31,041 98,116 92,274 Interest expense, net 5,883 6,663 23,971 26,146 -------------------------------------------------------------- Earnings before income taxes 23,309 24,378 74,145 66,128 Income taxes 5,211 7,525 22,944 22,177 -------------------------------------------------------------- EARNINGS FROM CONTINUING OPERATIONS 18,098 16,853 51,201 43,951 -------------------------------------------------------------- Gain on sale of discontinued operations, net of taxes 10,378 -- 10,378 -- Earnings from discontinued operations, net of taxes 2,502 3,746 8,892 5,876 -------------------------------------------------------------- EARNINGS FROM GAIN ON SALE AND DISCONTINUED OPERATIONS, NET OF TAXES 12,880 3,746 19,270 5,876 -------------------------------------------------------------- NET EARNINGS $ 30,978 $ 20,599 $ 70,471 $ 49,827 ==============================================================