þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Georgia | 58-0831862 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
222 Piedmont Avenue, N.E., Atlanta, Georgia | 30308 | |
(Address of principal executive offices) | (Zip Code) |
Number of shares outstanding | ||
Title of each class | as of January 5, 2007 | |
Common Stock, $1 par value | 17,779,481 |
Page | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
17 | ||||||||
26 | ||||||||
26 | ||||||||
27 | ||||||||
27 | ||||||||
27 | ||||||||
27 | ||||||||
27 | ||||||||
28 | ||||||||
28 | ||||||||
28 | ||||||||
EX-31.1 SECTION 302 CERTIFICATION OF PEO | ||||||||
EX-31.2 SECTION 302 CERTIFICATION OF PFO | ||||||||
EX-32 SECTION 906 CERTIFICATIONS OF THE PEO/PFO |
2
Fiscal 2007
|
52 weeks ending June 1, 2007 | |
Fiscal 2006
|
52 weeks ended June 2, 2006 | |
First half fiscal 2007
|
26 weeks ended December 1, 2006 | |
First half fiscal 2006
|
26 weeks ended December 2, 2005 | |
Second half of fiscal 2006
|
26 weeks ended June 2, 2006 | |
Fourth quarter fiscal 2007
|
13 weeks ending June 1, 2007 | |
Third quarter fiscal 2007
|
13 weeks ending March 2, 2007 | |
Second quarter fiscal 2007
|
13 weeks ended December 1, 2006 | |
First quarter fiscal 2007
|
13 weeks ended September 1, 2006 | |
Fourth quarter fiscal 2006
|
13 weeks ended June 2, 2006 | |
Third quarter fiscal 2006
|
13 weeks ended March 3, 2006 | |
Second quarter fiscal 2006
|
13 weeks ended December 2, 2005 | |
First quarter fiscal 2006
|
13 weeks ended September 2, 2005 |
3
Second Quarter | First Half | |||||||||||||||
Fiscal 2007 | Fiscal 2006 | Fiscal 2007 | Fiscal 2006 | |||||||||||||
Net sales |
$ | 290,987 | $ | 277,903 | $ | 575,065 | $ | 546,378 | ||||||||
Cost of goods sold |
179,187 | 175,097 | 355,154 | 337,857 | ||||||||||||
Gross profit |
111,800 | 102,806 | 219,911 | 208,521 | ||||||||||||
Selling, general and administrative expenses |
89,124 | 82,416 | 175,570 | 165,204 | ||||||||||||
Amortization of intangible assets |
1,550 | 1,851 | 3,097 | 3,704 | ||||||||||||
90,674 | 84,267 | 178,667 | 168,908 | |||||||||||||
Royalties and other operating income |
3,894 | 3,653 | 6,786 | 6,914 | ||||||||||||
Operating income |
25,020 | 22,192 | 48,030 | 46,527 | ||||||||||||
Interest expense, net |
5,951 | 6,272 | 11,443 | 12,105 | ||||||||||||
Earnings before income taxes |
19,069 | 15,920 | 36,587 | 34,422 | ||||||||||||
Income taxes |
6,924 | 5,743 | 13,287 | 12,425 | ||||||||||||
Earnings from continuing operations |
12,145 | 10,177 | 23,300 | 21,997 | ||||||||||||
Earnings (loss) from discontinued operations, net of taxes |
8 | 831 | (197 | ) | 2,895 | |||||||||||
Net earnings |
$ | 12,153 | $ | 11,008 | $ | 23,103 | $ | 24,892 | ||||||||
Earnings from continuing operations per common share: |
||||||||||||||||
Basic |
$ | 0.69 | $ | 0.58 | $ | 1.32 | $ | 1.26 | ||||||||
Diluted |
$ | 0.68 | $ | 0.57 | $ | 1.31 | $ | 1.24 | ||||||||
Earnings (loss) from discontinued operations per common
share: |
||||||||||||||||
Basic |
$ | 0.00 | $ | 0.05 | $ | (0.01 | ) | $ | 0.17 | |||||||
Diluted |
$ | 0.00 | $ | 0.05 | $ | (0.01 | ) | $ | 0.16 | |||||||
Net earnings per common share: |
||||||||||||||||
Basic |
$ | 0.69 | $ | 0.63 | $ | 1.31 | $ | 1.43 | ||||||||
Diluted |
$ | 0.68 | $ | 0.62 | $ | 1.30 | $ | 1.40 | ||||||||
Weighted average common shares outstanding: |
||||||||||||||||
Basic |
17,654 | 17,490 | 17,624 | 17,440 | ||||||||||||
Dilutive impact of options and restricted shares |
209 | 257 | 204 | 295 | ||||||||||||
Diluted |
17,863 | 17,747 | 17,828 | 17,735 | ||||||||||||
Dividends per common share |
$ | 0.15 | $ | 0.135 | $ | 0.30 | $ | 0.270 |
4
December 1, | June 2, | December 2, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
ASSETS |
||||||||||||
Current Assets: |
||||||||||||
Cash and cash equivalents |
$ | 8,794 | $ | 10,479 | $ | 6,848 | ||||||
Receivables, net |
166,680 | 144,079 | 149,194 | |||||||||
Inventories |
138,990 | 123,594 | 136,102 | |||||||||
Prepaid expenses |
19,618 | 20,214 | 24,739 | |||||||||
Current assets related to discontinued operations, net |
| 59,215 | 69,779 | |||||||||
Total current assets |
334,082 | 357,581 | 386,662 | |||||||||
Property, plant and equipment, net |
81,021 | 73,663 | 65,236 | |||||||||
Goodwill, net |
202,054 | 199,232 | 180,152 | |||||||||
Intangible assets, net |
236,261 | 234,453 | 234,812 | |||||||||
Other non-current assets, net |
29,990 | 20,666 | 22,945 | |||||||||
Non-current assets related to discontinued operations, net |
| | 4,810 | |||||||||
Total Assets |
$ | 883,408 | $ | 885,595 | $ | 894,617 | ||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||
Current Liabilities: |
||||||||||||
Trade accounts payable and other accrued expenses |
$ | 98,538 | $ | 105,038 | $ | 97,901 | ||||||
Accrued compensation |
19,788 | 26,754 | 24,155 | |||||||||
Additional acquisition cost payable |
| 11,897 | | |||||||||
Dividends payable |
| 2,646 | 2,310 | |||||||||
Income taxes payable |
1,200 | 3,138 | 3,334 | |||||||||
Short-term debt and current maturities of long-term debt |
90 | 130 | 4,879 | |||||||||
Current liabilities related to discontinued operations |
5,452 | 30,716 | 17,646 | |||||||||
Total current liabilities |
125,068 | 180,319 | 150,225 | |||||||||
Long-term debt, less current maturities |
217,005 | 200,023 | 298,942 | |||||||||
Other non-current liabilities |
35,082 | 29,979 | 27,503 | |||||||||
Deferred income taxes |
81,075 | 76,573 | 75,254 | |||||||||
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 December 1, 2006; June 2,
2006; and December 2, 2005 |
| | | |||||||||
Common stock, $1.00 par value; 60,000 authorized and
17,775 issued and outstanding at December 1, 2006; 17,646
issued and outstanding at June 2, 2006; and 17,602 issued
and outstanding at December 2, 2005 |
17,775 | 17,646 | 17,602 | |||||||||
Additional paid-in capital |
78,625 | 74,812 | 71,164 | |||||||||
Retained earnings |
318,749 | 300,973 | 260,979 | |||||||||
Accumulated other comprehensive income (loss) |
10,029 | 5,270 | (7,099 | ) | ||||||||
Total shareholders equity |
425,178 | 398,701 | 342,646 | |||||||||
Total Liabilities and Shareholders Equity |
$ | 883,408 | $ | 885,595 | $ | 894,617 | ||||||
5
First Half | ||||||||
Fiscal 2007 | Fiscal 2006 | |||||||
Cash Flows From Operating Activities: |
||||||||
Earnings from continuing operations |
$ | 23,300 | $ | 21,997 | ||||
Adjustments to reconcile earnings from continuing operations to net cash
provided by (used in) operating activities: |
||||||||
Depreciation |
7,642 | 7,183 | ||||||
Amortization of intangible assets |
3,097 | 3,704 | ||||||
Amortization of deferred financing costs and bond discount |
1,232 | 1,232 | ||||||
Stock compensation expense |
1,702 | 1,149 | ||||||
Loss (gain) on sale of property, plant and equipment |
476 | (83 | ) | |||||
Equity loss (income) from unconsolidated entities |
(604 | ) | (39 | ) | ||||
Deferred income taxes |
785 | (1,353 | ) | |||||
Changes in working capital: |
||||||||
Receivables |
(21,273 | ) | (1,651 | ) | ||||
Inventories |
(14,676 | ) | 10,190 | |||||
Prepaid expenses |
(170 | ) | (5,493 | ) | ||||
Current liabilities |
(16,371 | ) | (35,798 | ) | ||||
Other non-current assets |
(905 | ) | (3,966 | ) | ||||
Other non-current liabilities |
5,067 | 4,446 | ||||||
Net cash provided by (used in) operating activities |
(10,698 | ) | 1,518 | |||||
Cash Flows From Investing Activities: |
||||||||
Acquisitions, net of cash acquired |
(12,111 | ) | (11,501 | ) | ||||
Investment in unconsolidated entity |
(9,090 | ) | | |||||
Distribution from unconsolidated entity |
| 1,856 | ||||||
Purchases of property, plant and equipment |
(15,268 | ) | (8,471 | ) | ||||
Proceeds from sale of property, plant and equipment |
32 | 6 | ||||||
Net cash provided by (used in) investing activities |
(36,437 | ) | (18,110 | ) | ||||
Cash Flows From Financing Activities: |
||||||||
Repayment of financing arrangements |
(123,676 | ) | (179,591 | ) | ||||
Proceeds from financing arrangements |
140,526 | 191,059 | ||||||
Proceeds from issuance of common stock |
2,240 | 4,556 | ||||||
Dividends on common stock |
(7,970 | ) | (4,579 | ) | ||||
Net cash provided by (used in) financing activities |
11,120 | 11,445 | ||||||
Cash Flows From Discontinued Operations: |
||||||||
Net operating cash flows provided by (used in) discontinued operations |
33,746 | 6,137 | ||||||
Net investing cash flows provided by (used in) discontinued operations |
| (25 | ) | |||||
Net cash provided by (used in) discontinued operations |
33,746 | 6,112 | ||||||
Net change in cash and cash equivalents |
(2,269 | ) | 965 | |||||
Effect of foreign currency translation on cash and cash equivalents |
584 | (616 | ) | |||||
Cash and cash equivalents at the beginning of period |
10,479 | 6,499 | ||||||
Cash and cash equivalents at the end of period |
$ | 8,794 | $ | 6,848 | ||||
Supplemental disclosure of cash flow information: |
||||||||
Cash paid for interest, net |
$ | 10,682 | $ | 13,659 | ||||
Cash paid for income taxes |
$ | 19,538 | $ | 24,499 |
6
1. | Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States. We believe our 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 our fiscal year primarily due to the impact of seasonality on our business. The accounting policies applied during the interim periods presented are consistent with the significant and critical accounting policies as described in our fiscal 2006 Form 10-K. 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 the financial statements and notes thereto included in our fiscal 2006 Form 10-K. | |
As disclosed in our fiscal 2006 Form 10-K, we sold substantially all of the assets of our Womenswear Group on June 2, 2006. Therefore, the results of operations of the Womenswear Group have been reported as discontinued operations in our consolidated statements of earnings. The assets and liabilities related to the Womenswear Group for all periods presented have been reclassified to current assets, non-current assets, current liabilities and non-current liabilities related to discontinued operations, as applicable. | ||
Certain amounts in our prior year consolidated financial statements have been reclassified to conform to the current years presentation. | ||
2. | Inventories: The components of inventories as of the dates specified are summarized as follows (in thousands): |
December 1, 2006 | June 2, 2006 | December 2, 2005 | ||||||||||
Finished goods |
$ | 112,637 | $ | 99,576 | $ | 107,238 | ||||||
Work in process |
7,676 | 6,388 | 10,116 | |||||||||
Fabric, trim and supplies |
18,677 | 17,630 | 18,748 | |||||||||
Total |
$ | 138,990 | $ | 123,594 | $ | 136,102 | ||||||
3. | Debt: The following table details our debt as of the dates specified (in thousands): |
December 1, 2006 | June 2, 2006 | December 2, 2005 | ||||||||||
$280 million U.S. Secured Revolving Credit Facility
(U.S. Revolver), which accrues interest (8.25% at
December 1, 2006), unused line fees and letter of
credit fees based upon a pricing grid which is tied to
certain debt ratios, requires interest payments monthly
with principal due at maturity (July 2009), and is
collateralized by substantially all the assets of
Oxford Industries, Inc. and our consolidated domestic
subsidiaries |
$ | 17,800 | $ | 900 | $ | 99,900 | ||||||
£12 million Senior Secured Revolving Credit Facility
(U.K. Revolver), which accrues interest at the banks
base rate plus 1.0% (6.0% at December 1, 2006),
requires interest payments monthly with principal
payable on demand or at maturity (July 2007), and is
collateralized by substantially all the United Kingdom
assets of Ben Sherman |
75 | 102 | 4,835 | |||||||||
$200 million Senior Unsecured Notes (Senior Unsecured
Notes), which accrue interest at 8.875% (effective
interest rate of 9.0%) and require interest payments
semi-annually on June 1 and December 1 of each year,
require payment of principal at maturity (June 2011),
are subject to certain prepayment penalties and are
guaranteed by our consolidated domestic subsidiaries |
200,000 | 200,000 | 200,000 | |||||||||
Other debt, including capital lease obligations with
varying terms and conditions, collateralized by the
respective assets |
15 | 35 | 59 | |||||||||
Total debt |
217,890 | 201,037 | 304,794 | |||||||||
Unamortized discount on Senior Unsecured Notes |
(795 | ) | (884 | ) | (973 | ) | ||||||
Short-term debt and current maturities of long-term debt |
(90 | ) | (130 | ) | (4,879 | ) | ||||||
Long-term debt, less current maturities |
$ | 217,005 | $ | 200,023 | $ | 298,942 | ||||||
7
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 we believe are customary for similar facilities. The U.S. Revolver also includes limitations on certain restricted payments such as earn-outs, payment of dividends and prepayment of debt. As of December 1, 2006, we were compliant with all financial covenants and restricted payment clauses related to our debt agreements. | ||
Our 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, if any. As of December 1, 2006, approximately $53.6 million of trade letters of credit and other limitations on availability were outstanding against our U.S. Revolver and our U.K. Revolver. The combined net availability under our U.S. Revolver and U.K. Revolver agreements was approximately $232.3 million as of December 1, 2006. | ||
4. | Comprehensive Income: Comprehensive income, which reflects the effects of foreign currency translation adjustments, is calculated as follows for the periods presented (in thousands): |
Second Quarter | First Half | |||||||||||||||
Fiscal 2007 | Fiscal 2006 | Fiscal 2007 | Fiscal 2006 | |||||||||||||
Net earnings |
$ | 12,153 | $ | 11,008 | $ | 23,103 | $ | 24,892 | ||||||||
Gain (loss) on foreign currency translation, net of tax |
4,240 | (8,709 | ) | 4,759 | (7,397 | ) | ||||||||||
Comprehensive income |
$ | 16,393 | $ | 2,299 | $ | 27,862 | $ | 17,495 | ||||||||
5. | Stock Compensation: In December 2004, the FASB issued FASB Statement No. 123 (revised 2004), Share-Based Payment (FAS 123R), which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation (FAS 123). FAS 123R supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees (APB 25), and amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in FAS 123R is similar to the approach described in FAS 123. However, FAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the consolidated statements of earnings based on their fair values. Pro forma disclosure is no longer an alternative. | |
We adopted FAS 123R on June 3, 2006 and applied the modified prospective transition method. Under this transition method, we (1) did not restate any prior periods and (2) are recognizing compensation expense for all share-based payment awards that were outstanding, but not yet vested, as of June 3, 2006, based upon the same estimated grant-date fair values and service periods used to prepare our FAS 123 pro forma disclosures. | ||
At December 1, 2006, we have options or awards outstanding under certain plans as further described in our fiscal 2006 Form 10-K. As permitted by FAS 123, we had previously accounted for share-based payments to employees using APB 25s intrinsic value method. Accordingly, no stock-based employee compensation costs for any options were reflected in net earnings unless the options were modified, as all options granted under our plans had an exercise price equal to the market value of the underlying common stock on the date of grant. In fiscal 2005, we transitioned from the use of options to performance and service based restricted stock awards as the primary vehicle in our stock-based compensation strategy. | ||
During the second quarter and first half of fiscal 2007, we recognized stock compensation expense of approximately $0.9 million and $1.7 million, respectively, in earnings from continuing operations. During the second quarter of fiscal 2007, this expense consists of approximately $0.6 million related to restricted stock awards, which would have been recognized under FAS 123R or APB 25, and approximately $0.3 million (or $0.2 million after tax and $0.01 per common share after tax) related to stock options and our employee stock purchase plan which would not have been expensed under APB 25. During the first half of fiscal 2007, this expense consists of approximately $1.1 million related to restricted stock awards, which would have been recognized under FAS 123R or APB 25, and approximately $0.6 million (or $0.4 million after tax and $0.02 per common share after tax) related to stock options and our employee stock purchase plan which would not have been expensed under APB 25. The income tax benefit related to the compensation cost was approximately $0.3 million and $0.2 million during the second quarter of fiscal 2007 and fiscal 2006, respectively, and $0.6 million and $0.4 million during the first half of fiscal 2007 and fiscal 2006, respectively. The adoption of FAS 123R resulted in an increase in cash flow from operations and a decrease in cash flow from financing activities of approximately $0.5 million during the first half of fiscal 2007. |
8
Second | First | |||||||
Quarter | Half | |||||||
Fiscal 2006 | Fiscal 2006 | |||||||
Earnings from continuing operations, as reported |
$ | 10,177 | $ | 21,997 | ||||
Add: Total stock-based employee compensation expense recognized in
continuing operations as determined under intrinsic value method for
all awards, net of related tax effects |
315 | 643 | ||||||
Deduct: Total stock-based employee compensation expense to be
recognized in continuing operations determined under fair value based
method for all awards, net of related tax effects |
(482 | ) | (977 | ) | ||||
Pro forma earnings from continuing operations |
$ | 10,010 | $ | 21,663 | ||||
Basic earnings from continuing operations per common share as reported |
$ | 0.58 | $ | 1.26 | ||||
Pro forma basic earnings from continuing operations per common share |
$ | 0.57 | $ | 1.24 | ||||
Diluted earnings from continuing operations per common share as reported |
$ | 0.57 | $ | 1.24 | ||||
Pro forma diluted earnings from continuing operations per common share |
$ | 0.57 | $ | 1.22 | ||||
Net earnings as reported |
$ | 11,008 | $ | 24,892 | ||||
Add: Total stock-based employee compensation expense recognized in net
earnings as determined under intrinsic value method for all awards, net
of related tax effects |
357 | 733 | ||||||
Deduct: Total stock-based employee compensation expense to be
recognized in net earnings determined under fair value based method for
all awards, net of related tax effects |
(549 | ) | (1,117 | ) | ||||
Pro forma net earnings |
$ | 10,816 | $ | 24,508 | ||||
Basic net earnings per common share as reported |
$ | 0.63 | $ | 1.43 | ||||
Pro forma basic net earnings per common share |
$ | 0.62 | $ | 1.41 | ||||
Diluted net earnings per common share as reported |
$ | 0.62 | $ | 1.40 | ||||
Pro forma diluted net earnings per common share |
$ | 0.61 | $ | 1.39 |
Number of | Exercise | Grant Date | Number | |||||||||||||||||
Date of Option Grant | Shares | Price | Fair Value | Exercisable | Expiration Date | |||||||||||||||
July 1998 |
24,000 | $ | 17.83 | $ | 5.16 | 24,000 | July 2008 |
|||||||||||||
July 1999 |
27,100 | 13.94 | 4.70 | 27,100 | July 2009 |
|||||||||||||||
July 2000 |
26,920 | 8.63 | 2.03 | 26,920 | July 2010 |
|||||||||||||||
July 2001 |
35,170 | 10.73 | 3.18 | 35,170 | July 2011 |
|||||||||||||||
July 2002 |
76,920 | 11.73 | 3.25 | 42,640 | August 2012 |
|||||||||||||||
August 2003 |
125,680 | 26.44 | 11.57 | 48,760 | August 2013 |
|||||||||||||||
November 2003 |
40,000 | 32.15 | 14.81 | 24,000 | November 2013 |
|||||||||||||||
December 2003 |
96,700 | 32.75 | 14.17 | 28,900 | December 2013 |
|||||||||||||||
452,490 | 257,490 | |||||||||||||||||||
Weighted | ||||||||
Average | ||||||||
Exercise | ||||||||
Shares | Price | |||||||
Outstanding at June 2, 2006 |
533,180 | $ | 22 | |||||
Granted |
| | ||||||
Exercised |
(73,850 | ) | 17 | |||||
Forfeited |
(6,840 | ) | 26 | |||||
Outstanding at December 1, 2006 |
452,490 | $ | 22 | |||||
Exercisable at December 1, 2006 |
257,490 | $ | 19 | |||||
9
The total intrinsic value for options exercised during the first half of fiscal 2007 and the first half of fiscal 2006 was approximately $1.9 million and $4.5 million, respectively. The total fair value for options that vested during the first half of fiscal 2007 and the first half of fiscal 2006 was approximately $1.2 million and $1.3 million, respectively. The aggregate intrinsic value for all options outstanding and exercisable at December 1, 2006 was approximately $12.8 million and $8.1 million, respectively. | ||
As of December 1, 2006, there was approximately $2.0 million of unrecognized compensation cost related to unvested share-based compensation awards which have been made. That cost is expected to be recognized over the next three years. Additionally, approximately $1.7 million of compensation cost related to unvested stock options will be recognized during the next two years. | ||
Grants of restricted stock and restricted share units are made to certain officers, key employees and members of our Board of Directors under our Long-Term Stock Incentive Plan. The following table summarizes information about the unvested stock as of December 1, 2006. |
Market Price on Date of | ||||||||||||
Restricted Stock Grant | Number of Shares | Grant | Vesting Date | |||||||||
Grants Based on
Fiscal 2005
Performance Awards |
59,700 | $ | 42 | June 2008 |
||||||||
Grants Based on
Fiscal 2006
Performance Awards |
39,105 | $ | 42 | June 2009 |
||||||||
98,805 | ||||||||||||
The table below summarizes the restricted stock award activity during the first half of fiscal 2007: |
Shares | ||||
Outstanding at June 2, 2006 |
67,125 | |||
Issued |
40,440 | |||
Vested |
(4,976 | ) | ||
Forfeited |
(3,784 | ) | ||
Outstanding at December 1, 2006 |
98,805 | |||
Additionally, during the first quarter of fiscal 2007, we awarded performance share awards and restricted share unit awards to certain officers, key employees and members of our Board of Directors, pursuant to which a maximum total of approximately 0.1 million shares of our common stock may be granted (initially in the form of restricted shares and restricted share units) subject to specified operating performance measures being met for fiscal 2007 and the vesting conditions with respect to the restricted shares and restricted share units being satisfied, which generally will not occur prior to June 1, 2010. | ||
6. | Segment Information: In our continuing operations, we have two operating segments for purposes of allocating resources and assessing performance. The Menswear Group produces branded and private label dress shirts, sport shirts, dress slacks, casual slacks, suits, sportcoats, suit separates, walkshorts, golf apparel, outerwear, sweaters, jeans, swimwear, footwear and headwear, licenses its brands for accessories and other products and operates retail stores. 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. | |
Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, LIFO inventory accounting adjustments and other costs that are not allocated to the operating groups. Total assets for Corporate and Other includes the LIFO inventory reserve of $38.3 million, $38.0 million and $37.7 million at December 1, 2006, June 2, 2006 and December 2, 2005, respectively. | ||
As discussed in note 3 in our consolidated financial statements included in our fiscal 2006 Form 10-K, we sold substantially all of the assets of our Womenswear Group operations at the end of fiscal 2006. The Womenswear Group produced private label womens sportswear separates, coordinated sportswear, outerwear, dresses and swimwear. The operating results of the Womenswear Group have not been included in segment information as all amounts were reclassified to discontinued operations. The information below presents certain information about our segments for the periods or as of the dates specified (in thousands). |
10
Second Quarter | First Half | |||||||||||||||
Fiscal 2007 | Fiscal 2006 | Fiscal 2007 | Fiscal 2006 | |||||||||||||
Net Sales |
||||||||||||||||
Menswear Group |
$ | 183,067 | $ | 187,332 | $ | 361,878 | $ | 364,408 | ||||||||
Tommy Bahama Group |
107,807 | 90,388 | 211,955 | 181,932 | ||||||||||||
Corporate and Other |
113 | 183 | 1,232 | 38 | ||||||||||||
Total |
$ | 290,987 | $ | 277,903 | $ | 575,065 | $ | 546,378 | ||||||||
Second Quarter | First Half | |||||||||||||||
Fiscal 2007 | Fiscal 2006 | Fiscal 2007 | Fiscal 2006 | |||||||||||||
Depreciation |
||||||||||||||||
Menswear Group |
$ | 1,026 | $ | 982 | $ | 1,999 | $ | 1,927 | ||||||||
Tommy Bahama Group |
2,762 | 2,604 | 5,434 | 5,060 | ||||||||||||
Corporate and Other |
107 | 95 | 209 | 196 | ||||||||||||
Total |
$ | 3,895 | $ | 3,681 | $ | 7,642 | $ | 7,183 | ||||||||
Second Quarter | First Half | |||||||||||||||
Fiscal 2007 | Fiscal 2006 | Fiscal 2007 | Fiscal 2006 | |||||||||||||
Amortization of Intangible Assets |
||||||||||||||||
Menswear Group |
$ | 807 | $ | 809 | $ | 1,610 | $ | 1,620 | ||||||||
Tommy Bahama Group |
743 | 1,042 | 1,487 | 2,084 | ||||||||||||
Total |
$ | 1,550 | $ | 1,851 | $ | 3,097 | $ | 3,704 | ||||||||
Second Quarter | First Half | |||||||||||||||
Fiscal 2007 | Fiscal 2006 | Fiscal 2007 | Fiscal 2006 | |||||||||||||
Operating Income |
||||||||||||||||
Menswear Group |
$ | 13,690 | $ | 15,968 | $ | 24,301 | $ | 30,972 | ||||||||
Tommy Bahama Group |
13,927 | 10,109 | 30,762 | 24,466 | ||||||||||||
Corporate and Other |
(2,597 | ) | (3,885 | ) | (7,033 | ) | (8,911 | ) | ||||||||
Total Operating Income |
25,020 | 22,192 | 48,030 | 46,527 | ||||||||||||
Interest Expense, net |
5,951 | 6,272 | 11,443 | 12,105 | ||||||||||||
Earnings before income taxes |
$ | 19,069 | $ | 15,920 | $ | 36,587 | $ | 34,422 | ||||||||
December 1, | June 2, | December 2, | ||||||||||
2006 | 2006 | 2005 | ||||||||||
Assets |
||||||||||||
Menswear Group |
$ | 434,142 | $ | 398,930 | $ | 419,188 | ||||||
Tommy Bahama Group |
448,087 | 423,376 | 401,890 | |||||||||
Womenswear Group (discontinued) |
| 59,215 | 74,589 | |||||||||
Corporate and Other |
1,179 | 4,074 | (1,050 | ) | ||||||||
Total |
$ | 883,408 | $ | 885,595 | $ | 894,617 | ||||||
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 of the United States and any subsidiaries which are not wholly-owned. We use the equity method with respect to investment in subsidiaries included in other non-current assets in our condensed consolidating financial statements. Set forth below are our unaudited condensed consolidating balance sheets as of December 1, 2006, June 2, 2006 and December 2, 2005, our unaudited condensed consolidating statements of earnings for the second quarter and first half of fiscal 2007 and fiscal 2006 and our unaudited condensed consolidating statements of cash flows for the first half of fiscal 2007 and fiscal 2006 (in thousands). |
11
Oxford | Subsidiary | |||||||||||||||||||
Industries | Subsidiary | Non- | Consolidating | Consolidated | ||||||||||||||||
(Parent) | Guarantors | Guarantors | Adjustments | Total | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Current Assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 1,548 | $ | 1,016 | $ | 6,230 | $ | | $ | 8,794 | ||||||||||
Receivables, net |
75,096 | 62,401 | 36,801 | (7,618 | ) | 166,680 | ||||||||||||||
Inventories |
61,908 | 61,877 | 15,809 | (604 | ) | 138,990 | ||||||||||||||
Prepaid expenses |
8,219 | 7,880 | 3,519 | | 19,618 | |||||||||||||||
Total current assets |
146,771 | 133,174 | 62,359 | (8,222 | ) | 334,082 | ||||||||||||||
Property, plant and equipment, net |
10,256 | 61,811 | 8,954 | | 81,021 | |||||||||||||||
Goodwill, net |
1,847 | 148,556 | 51,651 | | 202,054 | |||||||||||||||
Intangible assets, net |
1,432 | 137,918 | 96,911 | | 236,261 | |||||||||||||||
Other non-current assets, net |
709,426 | 150,214 | 1,391 | (831,041 | ) | 29,990 | ||||||||||||||
Total Assets |
$ | 869,732 | $ | 631,673 | $ | 221,266 | $ | (839,263 | ) | $ | 883,408 | |||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||||||
Current liabilities related to continuing
operations |
$ | 48,479 | $ | 45,900 | $ | 32,224 | $ | (6,987 | ) | $ | 119,616 | |||||||||
Current liabilities related to discontinued
operations |
5,192 | 276 | (16 | ) | | 5,452 | ||||||||||||||
Long-term debt, less current portion |
217,005 | | | | 217,005 | |||||||||||||||
Non-current liabilities |
174,733 | (137,718 | ) | 107,217 | (109,150 | ) | 35,082 | |||||||||||||
Deferred income taxes |
(855 | ) | 47,245 | 34,685 | | 81,075 | ||||||||||||||
Total shareholders/invested equity |
425,178 | 675,970 | 47,156 | (723,126 | ) | 425,178 | ||||||||||||||
Total Liabilities and Shareholders/Invested
Equity |
$ | 869,732 | $ | 631,673 | $ | 221,266 | $ | (839,263 | ) | $ | 883,408 | |||||||||
Oxford | Subsidiary | |||||||||||||||||||
Industries | Subsidiary | Non- | Consolidating | Consolidated | ||||||||||||||||
(Parent) | Guarantors | Guarantors | Adjustments | Total | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Current Assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 5,175 | $ | 1,134 | $ | 4,181 | $ | (11 | ) | $ | 10,479 | |||||||||
Receivables, net |
61,428 | 57,785 | 39,009 | (14,143 | ) | 144,079 | ||||||||||||||
Inventories |
58,924 | 50,880 | 14,546 | (756 | ) | 123,594 | ||||||||||||||
Prepaid expenses |
8,959 | 7,321 | 3,934 | | 20,214 | |||||||||||||||
Current assets related to discontinued
operations, net |
52,065 | 7,150 | | | 59,215 | |||||||||||||||
Total current assets |
186,551 | 124,270 | 61,670 | (14,910 | ) | 357,581 | ||||||||||||||
Property, plant and equipment, net |
11,122 | 53,648 | 8,893 | | 73,663 | |||||||||||||||
Goodwill, net |
1,847 | 148,342 | 49,043 | | 199,232 | |||||||||||||||
Intangible assets, net |
1,451 | 139,406 | 93,596 | | 234,453 | |||||||||||||||
Other non-current assets, net |
677,414 | 143,790 | 1,436 | (801,974 | ) | 20,666 | ||||||||||||||
Total Assets |
$ | 878,385 | $ | 609,456 | $ | 214,638 | $ | (816,884 | ) | $ | 885,595 | |||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||||||
Current liabilities related to continuing
operations |
$ | 70,262 | $ | 57,872 | $ | 35,026 | $ | (13,557 | ) | $ | 149,603 | |||||||||
Current liabilities related to discontinued
operations |
27,813 | 2,903 | | | 30,716 | |||||||||||||||
Long-term debt, less current portion |
200,016 | 7 | | | 200,023 | |||||||||||||||
Non-current liabilities |
181,845 | (154,586 | ) | 111,878 | (109,158 | ) | 29,979 | |||||||||||||
Deferred income taxes |
(252 | ) | 46,795 | 30,030 | | 76,573 | ||||||||||||||
Total shareholders/invested equity |
398,701 | 656,465 | 37,704 | (694,169 | ) | 398,701 | ||||||||||||||
Total Liabilities and Shareholders/Invested
Equity |
$ | 878,385 | $ | 609,456 | $ | 214,638 | $ | (816,884 | ) | $ | 885,595 | |||||||||
12
Oxford | Subsidiary | |||||||||||||||||||
Industries | Subsidiary | Non- | Consolidating | Consolidated | ||||||||||||||||
(Parent) | Guarantors | Guarantors | Adjustments | Total | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Current Assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 3,304 | $ | 1,411 | $ | 2,115 | $ | 18 | $ | 6,848 | ||||||||||
Receivables, net |
68,760 | 54,250 | 63,987 | (37,803 | ) | 149,194 | ||||||||||||||
Inventories |
79,903 | 40,852 | 16,165 | (818 | ) | 136,102 | ||||||||||||||
Prepaid expenses |
11,382 | 8,293 | 5,064 | | 24,739 | |||||||||||||||
Current assets related to discontinued
operations, net |
62,450 | 7,697 | (368 | ) | | 69,779 | ||||||||||||||
Total current assets |
225,799 | 112,503 | 86,963 | (38,603 | ) | 386,662 | ||||||||||||||
Property, plant and equipment, net |
11,390 | 45,258 | 8,588 | | 65,236 | |||||||||||||||
Goodwill, net |
1,847 | 136,278 | 42,027 | | 180,152 | |||||||||||||||
Intangible assets, net |
1,470 | 141,462 | 91,880 | | 234,812 | |||||||||||||||
Other non-current assets, net |
650,998 | 148,565 | 1,927 | (778,545 | ) | 22,945 | ||||||||||||||
Other assets related to discontinued
operations, net |
818 | 3,992 | | | 4,810 | |||||||||||||||
Total Assets |
$ | 892,322 | $ | 588,058 | $ | 231,385 | $ | (817,148 | ) | $ | 894,617 | |||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||||||
Current liabilities related to continuing
operations |
$ | 71,593 | $ | 59,097 | $ | 39,563 | $ | (37,674 | ) | $ | 132,579 | |||||||||
Current liabilities related to discontinued
operations |
16,752 | 882 | 12 | | 17,646 | |||||||||||||||
Long-term debt, less current portion |
298,927 | 15 | | | 298,942 | |||||||||||||||
Non-current liabilities |
158,840 | (131,188 | ) | 109,131 | (109,280 | ) | 27,503 | |||||||||||||
Deferred income taxes |
3,517 | 42,773 | 28,964 | | 75,254 | |||||||||||||||
Non-current liabilities related to
discontinued operations |
47 | | | | 47 | |||||||||||||||
Total shareholders/invested equity |
342,646 | 616,479 | 53,715 | (670,194 | ) | 342,646 | ||||||||||||||
Total Liabilities and Shareholders/Invested
Equity |
$ | 892,322 | $ | 588,058 | $ | 231,385 | $ | (817,148 | ) | $ | 894,617 | |||||||||
Oxford | Subsidiary | |||||||||||||||||||
Industries | Subsidiary | Non- | Consolidating | Consolidated | ||||||||||||||||
(Parent) | Guarantors | Guarantors | Adjustments | Total | ||||||||||||||||
Net sales |
$ | 131,654 | $ | 124,995 | $ | 44,248 | $ | (9,910 | ) | $ | 290,987 | |||||||||
Cost of goods sold |
101,326 | 60,456 | 19,102 | (1,697 | ) | 179,187 | ||||||||||||||
Gross profit |
30,328 | 64,539 | 25,146 | (8,213 | ) | 111,800 | ||||||||||||||
Selling, general and administrative |
27,049 | 55,899 | 19,903 | (12,177 | ) | 90,674 | ||||||||||||||
Royalties and other income |
44 | 2,580 | 1,835 | (565 | ) | 3,894 | ||||||||||||||
Operating income |
3,323 | 11,220 | 7,078 | 3,399 | 25,020 | |||||||||||||||
Interest (income) expense, net |
3,556 | (2,912 | ) | 2,027 | 3,280 | 5,951 | ||||||||||||||
Income from equity investment |
12,125 | | | (12,125 | ) | | ||||||||||||||
Earnings before income taxes |
11,892 | 14,132 | 5,051 | (12,006 | ) | 19,069 | ||||||||||||||
Income taxes |
(178 | ) | 5,608 | 1,451 | 43 | 6,924 | ||||||||||||||
Earnings from continuing operations |
12,070 | 8,524 | 3,600 | (12,049 | ) | 12,145 | ||||||||||||||
Earnings from discontinued
operations, net of tax |
8 | (28 | ) | | 28 | 8 | ||||||||||||||
Net earnings |
$ | 12,078 | $ | 8,496 | $ | 3,600 | $ | (12,021 | ) | $ | 12,153 | |||||||||
13
Oxford | Subsidiary | |||||||||||||||||||
Industries | Subsidiary | Non- | Consolidating | Consolidated | ||||||||||||||||
(Parent) | Guarantors | Guarantors | Adjustments | Total | ||||||||||||||||
Net sales |
$ | 267,524 | $ | 245,617 | $ | 82,901 | $ | (20,977 | ) | $ | 575,065 | |||||||||
Cost of goods sold |
207,311 | 115,042 | 37,706 | (4,905 | ) | 355,154 | ||||||||||||||
Gross profit |
60,213 | 130,575 | 45,195 | (16,072 | ) | 219,911 | ||||||||||||||
Selling, general and administrative |
53,914 | 109,379 | 38,101 | (22,727 | ) | 178,667 | ||||||||||||||
Royalties and other income |
44 | 4,075 | 3,309 | (642 | ) | 6,786 | ||||||||||||||
Operating income |
6,343 | 25,271 | 10,403 | 6,013 | 48,030 | |||||||||||||||
Interest (income) expense, net |
7,396 | (5,755 | ) | 3,939 | 5,863 | 11,443 | ||||||||||||||
Income from equity investment |
24,049 | 3 | | (24,052 | ) | | ||||||||||||||
Earnings before income taxes |
22,996 | 31,029 | 6,464 | (23,902 | ) | 36,587 | ||||||||||||||
Income taxes |
(206 | ) | 11,674 | 1,766 | 53 | 13,287 | ||||||||||||||
Earnings from continuing operations |
23,202 | 19,355 | 4,698 | (23,955 | ) | 23,300 | ||||||||||||||
Earnings from discontinued
operations, net of tax |
(197 | ) | (64 | ) | | 64 | (197 | ) | ||||||||||||
Net earnings |
$ | 23,005 | $ | 19,291 | $ | 4,698 | $ | (23,891 | ) | $ | 23,103 | |||||||||
Oxford | Subsidiary | |||||||||||||||||||
Industries | Subsidiary | Non- | Consolidating | Consolidated | ||||||||||||||||
(Parent) | Guarantors | Guarantors | Adjustments | Total | ||||||||||||||||
Net sales |
$ | 135,525 | $ | 112,526 | $ | 46,630 | $ | (16,778 | ) | $ | 277,903 | |||||||||
Cost of goods sold |
104,997 | 53,405 | 20,216 | (3,521 | ) | 175,097 | ||||||||||||||
Gross profit |
30,528 | 59,121 | 26,414 | (13,257 | ) | 102,806 | ||||||||||||||
Selling, general and administrative |
26,960 | 50,171 | 20,270 | (13,134 | ) | 84,267 | ||||||||||||||
Royalties and other income |
(126 | ) | 1,865 | 2,053 | (139 | ) | 3,653 | |||||||||||||
Operating income |
3,442 | 10,815 | 8,197 | (262 | ) | 22,192 | ||||||||||||||
Interest (income) expense, net |
7,604 | (3,143 | ) | 1,896 | (85 | ) | 6,272 | |||||||||||||
Income from equity investment |
11,961 | 29 | | (11,990 | ) | | ||||||||||||||
Earnings before income taxes |
7,799 | 13,987 | 6,301 | (12,167 | ) | 15,920 | ||||||||||||||
Income taxes |
(1,640 | ) | 4,785 | 2,709 | (111 | ) | 5,743 | |||||||||||||
Earnings from continuing operations |
9,439 | 9,202 | 3,592 | (12,056 | ) | 10,177 | ||||||||||||||
Earnings from discontinued
operations, net of tax |
1,634 | 776 | (1,579 | ) | | 831 | ||||||||||||||
Net earnings |
$ | 11,073 | $ | 9,978 | $ | 2,013 | $ | (12,056 | ) | $ | 11,008 | |||||||||
Oxford | Subsidiary | |||||||||||||||||||
Industries | Subsidiary | Non- | Consolidating | Consolidated | ||||||||||||||||
(Parent) | Guarantors | Guarantors | Adjustments | Total | ||||||||||||||||
Net sales |
$ | 267,954 | $ | 220,527 | $ | 93,226 | $ | (35,329 | ) | $ | 546,378 | |||||||||
Cost of goods sold |
205,981 | 100,656 | 41,407 | (10,187 | ) | 337,857 | ||||||||||||||
Gross profit |
61,973 | 119,871 | 51,819 | (25,142 | ) | 208,521 | ||||||||||||||
Selling, general and administrative |
54,358 | 97,862 | 40,730 | (24,042 | ) | 168,908 | ||||||||||||||
Royalties and other income |
(276 | ) | 3,795 | 3,534 | (139 | ) | 6,914 | |||||||||||||
Operating income |
7,339 | 25,804 | 14,623 | (1,239 | ) | 46,527 | ||||||||||||||
Interest (income) expense, net |
14,774 | (5,676 | ) | 3,886 | (879 | ) | 12,105 | |||||||||||||
Income from equity investment |
27,429 | 108 | | (27,537 | ) | | ||||||||||||||
Earnings before income taxes |
19,994 | 31,588 | 10,737 | (27,897 | ) | 34,422 | ||||||||||||||
Income taxes |
(2,203 | ) | 10,939 | 3,814 | (125 | ) | 12,425 | |||||||||||||
Earnings from continuing operations |
22,197 | 20,649 | 6,923 | (27,772 | ) | 21,997 | ||||||||||||||
Earnings from discontinued
operations, net of tax |
2,930 | 1,654 | (1,689 | ) | | 2,895 | ||||||||||||||
Net earnings |
$ | 25,127 | $ | 22,303 | $ | 5,234 | $ | (27,772 | ) | $ | 24,892 | |||||||||
14
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 |
$ | (16,665 | ) | $ | (813 | ) | $ | 6,769 | $ | 11 | $ | (10,698 | ) | |||||||
Cash Flows from Investing Activities |
||||||||||||||||||||
Acquisitions |
(12,111 | ) | | | | (12,111 | ) | |||||||||||||
Investment in unconsolidated entity |
| (9,090 | ) | | | (9,090 | ) | |||||||||||||
Purchases of property, plant and equipment |
(193 | ) | (14,460 | ) | (615 | ) | | (15,268 | ) | |||||||||||
Proceeds from sale of property, plant and equipment |
16 | 16 | | | 32 | |||||||||||||||
Net cash (used in) provided by investing activities |
(12,288 | ) | (23,534 | ) | (615 | ) | | (36,437 | ) | |||||||||||
Cash Flows from Financing Activities |
||||||||||||||||||||
Change in debt |
16,888 | (8 | ) | (30 | ) | | 16,850 | |||||||||||||
Proceeds from issuance of common stock |
2,240 | | | | 2,240 | |||||||||||||||
Change in inter-company payable |
(8,615 | ) | 13,274 | (4,659 | ) | | | |||||||||||||
Dividends on common stock |
(7,970 | ) | | | | (7,970 | ) | |||||||||||||
Net cash (used in) provided by financing activities |
2,543 | 13,266 | (4,689 | ) | | 11,120 | ||||||||||||||
Cash Flows from Discontinued Operations |
||||||||||||||||||||
Net cash flows provided by discontinued operations |
22,783 | 10,963 | | | 33,746 | |||||||||||||||
Net change in Cash and Cash Equivalents |
(3,627 | ) | (118 | ) | 1,465 | 11 | (2,269 | ) | ||||||||||||
Effect of foreign currency translation |
| | 584 | | 584 | |||||||||||||||
Cash and Cash Equivalents at the Beginning of Period |
5,175 | 1,134 | 4,181 | (11 | ) | 10,479 | ||||||||||||||
Cash and Cash Equivalents at the End of Period |
$ | 1,548 | $ | 1,016 | $ | 6,230 | $ | | $ | 8,794 | ||||||||||
15
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 |
$ | (12,086 | ) | $ | 14,554 | $ | (1,073 | ) | $ | 123 | $ | 1,518 | ||||||||
Cash Flows from Investing Activities |
||||||||||||||||||||
Acquisitions |
(11,501 | ) | | | | (11,501 | ) | |||||||||||||
Distribution from joint venture |
| 1,856 | | | 1,856 | |||||||||||||||
Purchases of property, plant and equipment |
(1,767 | ) | (5,589 | ) | (1,115 | ) | | (8,471 | ) | |||||||||||
Proceeds from sale of property, plant and equipment |
6 | | | | 6 | |||||||||||||||
Net cash (used in) provided by investing activities |
(13,262 | ) | (3,733 | ) | (1,115 | ) | | (18,110 | ) | |||||||||||
Cash Flows from Financing Activities |
||||||||||||||||||||
Change in debt |
9,778 | (14 | ) | 1,704 | | 11,468 | ||||||||||||||
Proceeds from issuance of common stock |
4,556 | | | | 4,556 | |||||||||||||||
Change in inter-company payable |
9,998 | (14,761 | ) | 4,894 | (131 | ) | | |||||||||||||
Dividends on common stock |
(4,579 | ) | | | | (4,579 | ) | |||||||||||||
Net cash (used in) provided by financing activities |
19,753 | (14,775 | ) | 6,598 | (131 | ) | 11,445 | |||||||||||||
Cash Flows from Discontinued Operations
|
||||||||||||||||||||
Net cash flows provided by discontinued operations |
6,186 | 3,506 | (3,580 | ) | | 6,112 | ||||||||||||||
Net change in Cash and Cash Equivalents |
591 | (448 | ) | 830 | (8 | ) | 965 | |||||||||||||
Effect of foreign currency translation |
| | (616 | ) | | (616 | ) | |||||||||||||
Cash and Cash Equivalents at the Beginning of Period |
2,713 | 1,859 | 1,901 | 26 | 6,499 | |||||||||||||||
Cash and Cash Equivalents at the End of Period |
$ | 3,304 | $ | 1,411 | $ | 2,115 | $ | 18 | $ | 6,848 | ||||||||||
16
| the Tommy Bahama Groups 19% increase in net sales and 38% increase in operating income, primarily due to product line expansion including Tommy Bahama Relaxtm, Tommy Bahama Golf 18tm and Tommy Bahama Swim tm, continuing strength in existing product lines and retail store expansion; | ||
| a 2.3% decrease in sales and a 14.3% decrease in operating income in the Menswear Group, primarily due to the decreased sales and operating margins for Ben Sherman and margin pressures in our tailored clothing business; and | ||
| the disposition of substantially all of the assets of our Womenswear Group on June 2, 2006, resulting in all Womenswear Group operations for all periods presented being reclassified to discontinued operations. |
| the Tommy Bahama Groups 17% increase in net sales and 26% increase in operating income, primarily due to product line expansion including Tommy Bahama Relax, Tommy Bahama Golf 18 and Tommy Bahama Swim, continuing strength in existing product lines and retail store expansion; | ||
| relatively flat sales and a 22% decrease in operating income in the Menswear Group, primarily due to the decreased sales and operating margins for Ben Sherman and margin pressures in our tailored clothing business; and | ||
| the disposition of substantially all of the assets of our Womenswear Group on June 2, 2006, resulting in all Womenswear Group operations for all periods presented being reclassified to discontinued operations. |
17
Second Quarter | Percent | First Half | Percent | |||||||||||||||||||||
Fiscal 2007 | Fiscal 2006 | Change | Fiscal 2007 | Fiscal 2006 | Change | |||||||||||||||||||
Net sales |
$ | 290,987 | $ | 277,903 | 4.7 | % | $ | 575,065 | $ | 546,378 | 5.3 | % | ||||||||||||
Cost of goods sold |
179,187 | 175,097 | 2.3 | % | 355,154 | 337,857 | 5.1 | % | ||||||||||||||||
Gross profit |
111,800 | 102,806 | 8.7 | % | 219,911 | 208,521 | 5.5 | % | ||||||||||||||||
Selling, general and
administrative expenses |
89,124 | 82,416 | 8.1 | % | 175,570 | 165,204 | 6.3 | % | ||||||||||||||||
Amortization of intangible
assets |
1,550 | 1,851 | (16.3 | %) | 3,097 | 3,704 | (16.4 | %) | ||||||||||||||||
Royalties and other
operating income |
3,894 | 3,653 | 6.6 | % | 6,786 | 6,914 | (1.9 | %) | ||||||||||||||||
Operating income |
25,020 | 22,192 | 12.7 | % | 48,030 | 46,527 | 3.2 | % | ||||||||||||||||
Interest expense, net |
5,951 | 6,272 | (5.1 | %) | 11,443 | 12,105 | (5.5 | %) | ||||||||||||||||
Earnings before income taxes |
19,069 | 15,920 | 19.8 | % | 36,587 | 34,422 | 6.3 | % | ||||||||||||||||
Income taxes |
6,924 | 5,743 | 20.6 | % | 13,287 | 12,425 | 6.9 | % | ||||||||||||||||
Earnings from continuing
operations |
12,145 | 10,177 | 19.3 | % | 23,300 | 21,997 | 5.9 | % | ||||||||||||||||
Earnings (loss) from
discontinued operations |
8 | 831 | (99.0 | %) | (197 | ) | 2,895 | (106.8 | %) | |||||||||||||||
Net earnings |
$ | 12,153 | $ | 11,008 | 10.4 | % | $ | 23,103 | $ | 24,892 | (7.2 | %) | ||||||||||||
The following table sets forth the line items in our consolidated statements of earnings as a percentage of net sales. We have calculated all percentages based on actual data, but columns may not add due to rounding. | ||||||||||||||||||||||||
Percent of Net Sales | ||||||||||||||||||||||||
Second Quarter | First Half | |||||||||||||||||||||||
Fiscal 2007 | Fiscal 2006 | Fiscal 2007 | Fiscal 2006 | |||||||||||||||||||||
Net sales |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||
Cost of goods sold |
61.6 | % | 63.0 | % | 61.8 | % | 61.8 | % | ||||||||||||||||
Gross profit |
38.4 | % | 37.0 | % | 38.2 | % | 38.2 | % | ||||||||||||||||
Selling, general and administrative expenses |
30.6 | % | 29.7 | % | 30.5 | % | 30.2 | % | ||||||||||||||||
Amortization of intangible assets, net |
0.5 | % | 0.7 | % | 0.5 | % | 0.7 | % | ||||||||||||||||
Royalties and other operating income |
1.3 | % | 1.3 | % | 1.2 | % | 1.3 | % | ||||||||||||||||
Operating income |
8.6 | % | 8.0 | % | 8.4 | % | 8.5 | % | ||||||||||||||||
Interest expense, net |
2.0 | % | 2.3 | % | 2.0 | % | 2.2 | % | ||||||||||||||||
Earnings before income taxes |
6.6 | % | 5.7 | % | 6.4 | % | 6.3 | % | ||||||||||||||||
Income taxes |
2.4 | % | 2.1 | % | 2.3 | % | 2.3 | % | ||||||||||||||||
Earnings from continuing operations |
4.2 | % | 3.7 | % | 4.1 | % | 4.0 | % | ||||||||||||||||
Earnings (loss) from discontinued operations |
0.0 | % | 0.3 | % | 0.0 | % | 0.5 | % | ||||||||||||||||
Net earnings |
4.2 | % | 4.0 | % | 4.0 | % | 4.6 | % | ||||||||||||||||
18
Second Quarter | Percent | First Half | Percent | |||||||||||||||||||||
Fiscal 2007 | Fiscal 2006 | Change | Fiscal 2007 | Fiscal 2006 | Change | |||||||||||||||||||
Net Sales |
||||||||||||||||||||||||
Menswear Group |
$ | 183,067 | $ | 187,332 | (2.3 | %) | $ | 361,878 | $ | 364,408 | (0.7 | %) | ||||||||||||
Tommy Bahama Group |
107,807 | 90,388 | 19.3 | % | 211,955 | 181,932 | 16.5 | % | ||||||||||||||||
Corporate and Other |
113 | 183 | (38.3 | %) | 1,232 | 38 | N/M | |||||||||||||||||
Total Net Sales |
$ | 290,987 | $ | 277,903 | 4.7 | % | $ | 575,065 | $ | 546,378 | 5.3 | % | ||||||||||||
Operating Income |
||||||||||||||||||||||||
Menswear Group |
$ | 13,690 | $ | 15,968 | (14.3 | %) | $ | 24,301 | $ | 30,972 | (21.5 | %) | ||||||||||||
Tommy Bahama Group |
13,927 | 10,109 | 37.8 | % | 30,762 | 24,466 | 25.7 | % | ||||||||||||||||
Corporate and Other |
(2,597 | ) | (3,885 | ) | (33.2 | %) | (7,033 | ) | (8,911 | ) | (21.1 | %) | ||||||||||||
Total Operating Income |
$ | 25,020 | $ | 22,192 | 12.7 | % | $ | 48,030 | $ | 46,527 | 3.2 | % | ||||||||||||
19
20
21
22
23
Balance | ||||
$280 million U.S. Secured Revolving Credit Facility (U.S.
Revolver), which accrues interest (8.25% at December 1,
2006), unused line fees and letter of credit fees based
upon a pricing grid tied to certain debt ratios, requires
interest payments monthly with principal due at maturity
(July 2009), and is collateralized by substantially all the
assets of Oxford Industries, Inc. and our consolidated
domestic subsidiaries |
$ | 17,800 | ||
£12 million Senior Secured Revolving Credit Facility (U.K.
Revolver), which accrues interest at the banks base rate
plus 1.0% (6.00% at December 1, 2006), requires interest
payments monthly with principal payable on demand or at
maturity (July 2007), and is collateralized by
substantially all the United Kingdom assets of Ben Sherman |
75 | |||
$200 million Senior Unsecured Notes (Senior Unsecured
Notes), which accrue interest at 8.875% (effective rate of
9.0%), require interest payments semi-annually on June 1
and December 1 of each year, require payment of principal
at maturity (June 2011), are subject to certain prepayment
penalties and are guaranteed by our consolidated domestic
subsidiaries |
200,000 | |||
Other debt, including capital lease obligations with
varying terms and conditions, collateralized by the
respective assets |
15 | |||
Total debt |
217,890 | |||
Unamortized discount on Senior Unsecured Notes |
(795 | ) | ||
Short-term debt and current maturities of long-term debt |
(90 | ) | ||
Total long-term debt, less current maturities |
$ | 217,005 | ||
24
25
26
a. | The shareholders elected J. Hicks Lanier, Thomas C. Gallagher and Clarence H. Smith as Class II Directors for three-year terms, to hold office until our annual meeting of shareholders in 2009 or until their respective successors are elected and qualified. The vote tabulation for individual directors was as follows: |
Director | For | Withheld | ||||||
J. Hicks Lanier |
16,072,825 | 385,954 | ||||||
Thomas C. Gallagher |
15,074,130 | 1,382,649 | ||||||
Clarence H. Smith |
16,267,753 | 189,026 |
In addition to the Class II Directors noted above, S. Anthony Margolis, James A. Rubright, Helen B. Weeks and E. Jenner Wood III will continue as Class III Directors who will hold office until our annual meeting of shareholders in 2007 or until their respective successors are elected and qualified and J. Reese Lanier, Sr., Cecil D. Conlee and Robert E. Shaw will continue as Class I Directors who will hold office until our annual meeting of shareholders in 2008 or until their respective successors are elected and qualified. |
27
b. | The shareholders approved an amendment to the Oxford Industries, Inc. Long-Term Stock Incentive Plan and approved the ratification of Ernst & Young LLP as our independent auditors. The vote tabulation for each of these proposals was as follows: |
Broker | ||||||||||||||||||
Proposal | For | Against | Abstain | Non-Vote | ||||||||||||||
2
|
Amendment to Oxford Industries, Inc. Long-Term Stock Incentive Plan | 13,859,436 | 550,524 | 17,168 | 2,029,651 | |||||||||||||
3
|
Ratification of Independent Auditors | 16,412,145 | 38,454 | 6,180 | N/A |
The text of the above proposals are incorporated by reference to Proposals 2 and 3, respectively, of our definitive proxy statement, dated September 1, 2006, filed with the SEC on September 8, 2006. |
3(a)
|
Articles of Incorporation of Oxford Industries, Inc. Incorporated by reference to Exhibit 3.1 from the Oxford Industries, Inc. Form 10-Q for the fiscal quarter ended August 29, 2003. | |
3(b)
|
Bylaws of Oxford Industries, Inc., as amended. Incorporated by reference to Exhibit 3.1 from the Oxford Industries, Inc. Form 8-K filed on January 9, 2007. | |
10.1
|
Amendment to the Oxford Industries, Inc. Long-Term Stock Incentive Plan, dated as of September 26, 2006. Incorporated by reference to Exhibit 99.1 from the Oxford Industries, Inc. Form 8-K filed on September 28, 2006.+ | |
31.1
|
Section 302 Certification by Principal Executive Officer.* | |
31.2
|
Section 302 Certification by Principal Financial Officer.* | |
32
|
Section 906 Certification by Principal Executive Officer and Principal Financial Officer.* |
* | Filed herewith. | |
+ | Exhibit is a management contract or compensatory plan or arrangement. |
January 10, 2007
|
OXFORD INDUSTRIES, INC. | |||
(Registrant) | ||||
/s/ Thomas Caldecot Chubb III | ||||
Thomas Caldecot Chubb III | ||||
Executive Vice President | ||||
(Authorized Signatory and Principal Financial Officer) |
28
1. | I have reviewed this report on Form 10-Q of Oxford Industries, Inc.; | |
2. | Based on my knowledge, this 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; | |
3. | 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; | |
4. | 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: |
a) | 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; | ||
b) | 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; | ||
c) | 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 | ||
d) | 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 |
5. | 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 the registrants board of directors (or persons performing the equivalent functions): |
a) | 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 | ||
b) | 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. |
Date: January 10, 2007 | /s/ J. Hicks Lanier | |||
J. Hicks Lanier | ||||
Chairman and Chief Executive Officer (Principal Executive Officer) |
29
1. | I have reviewed this report on Form 10-Q of Oxford Industries, Inc.; | |
2. | Based on my knowledge, this 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; | |
3. | 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; | |
4. | 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: |
a) | 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; | ||
b) | 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; | ||
c) | 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 | ||
d) | 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 |
5. | 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 the registrants board of directors (or persons performing the equivalent functions): |
a) | 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 | ||
b) | 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. |
Date: January 10, 2007 | /s/ Thomas Caldecot Chubb III | |||
Thomas Caldecot Chubb III | ||||
Executive Vice President (Principal Financial Officer) |
30
(1) | The Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
(2) | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ J. Hicks Lanier |
||
J. Hicks Lanier |
||
Chairman and Chief Executive Officer |
||
(Principal Executive Officer) |
||
January 10, 2007 |
||
/s/ Thomas Caldecot Chubb III |
||
Thomas Caldecot Chubb III |
||
Executive Vice President |
||
(Principal Financial Officer) |
||
January 10, 2007 |
31