UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 31, 2011
Oxford Industries, Inc.
(Exact name of registrant as specified in its charter)
Georgia |
|
001-04365 |
|
58-0831862 |
(State or other jurisdiction of incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification No.) |
222 Piedmont Avenue, N.E., Atlanta, GA |
|
30308 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrants telephone number, including area code (404) 659-2424
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 |
Results of Operations and Financial Condition. |
On August 31, 2011, Oxford Industries, Inc. issued a press release announcing, among other things, its financial results for the second quarter of fiscal 2011, which ended on July 30, 2011. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information contained in this Form 8-K (including Exhibit 99.1) shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise be subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit |
|
|
99.1 |
|
Press Release of Oxford Industries, Inc., dated August 31, 2011. |
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.
|
OXFORD INDUSTRIES, INC. | |
|
| |
|
| |
August 31, 2011 |
/s/ Thomas C. Chubb III | |
|
Name: |
Thomas C. Chubb III |
|
Title: |
President |
Exhibit 99.1
Oxford Industries, Inc. Press Release
222 Piedmont Avenue, N.E. · Atlanta, Georgia 30308
Contact: |
Anne M. Shoemaker |
Telephone: |
(404) 653-1455 |
Fax: |
(404) 653-1545 |
E-Mail: |
ashoemaker@oxfordinc.com |
|
FOR IMMEDIATE RELEASE |
|
August 31, 2011 |
Oxford Industries Reports Second Quarter Results
Sales increase 26% on inclusion of Lilly Pulitzer, growth in Tommy Bahama
Adjusted operating margin improves 190 basis points on improved sales mix and leverage
Adjusted EPS of $0.57 stronger than expected, Company increases full year guidance
ATLANTA, GA Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its fiscal 2011 second quarter, which ended July 30, 2011. Consolidated net sales were $180.6 million in the second quarter of fiscal 2011 compared to $143.0 million in the second quarter of fiscal 2010. On an adjusted basis, earnings from continuing operations per diluted share were $0.57 compared to $0.32 in the second quarter of fiscal 2010. The adjusted earnings per share exclude the impact of the repurchase of a portion of the Companys senior secured notes, purchase accounting charges and LIFO accounting adjustments. The Company noted that operating results for Lilly Pulitzer, which was acquired in December 2010, were not included in the Companys prior year results.
On a U.S. GAAP basis, earnings from continuing operations per diluted share were $0.21 in the second quarter of fiscal 2011 compared to $0.28 in the same period of the prior year. For reference, tables reconciling U.S. GAAP to adjusted measures are included at the end of this release.
J. Hicks Lanier, Chairman and Chief Executive Officer, commented, We are very pleased with the outstanding results we achieved during the second quarter which were driven by especially strong performances from our Tommy Bahama and Lilly Pulitzer businesses. Our direct to consumer business continued to deliver growth in both top-line revenue and margins. We were also pleased to have used excess cash to significantly reduce our outstanding debt and interest expense while maintaining a high level of liquidity which ensures that we will have ample financial flexibility going forward.
Mr. Lanier concluded, As we enter the second half of the year we are mindful of the macroeconomic uncertainty, but we are confident in the strength of our brands and the capability of our management team.
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Operating Results
Tommy Bahama reported strong results with increases in both sales and operating income. Net sales for the second quarter of fiscal 2011 were $109.1 million compared to $99.3 million in the second quarter of fiscal 2010. The increase in net sales was attributable to higher retail sales, including improved comparable store sales and revenues associated with four additional retail stores, as well as growth in e-commerce sales. At the end of the second quarter, Tommy Bahama operated 90 retail stores compared to 86 on July 31, 2010.
Tommy Bahamas operating income for the second quarter was $17.0 million compared to $14.2 million in the second quarter of fiscal 2010. The increase in operating income was due to higher sales and higher gross margins associated with an increased proportion of direct to consumer sales. These increases were partially offset by increased SG&A associated with the costs of operating the four additional retail stores and higher compensation costs.
Lilly Pulitzer continued its outstanding Spring/Summer season with increased sales in all channels of distribution including wholesale, retail and e-commerce. Lilly Pulitzer reported net sales of $24.8 million and operating income of $5.6 million for the second quarter of fiscal 2011. The Company noted that operating income was negatively impacted by a $0.6 million charge related to the change in the fair value of contingent consideration.
Ben Sherman reported net sales of $20.9 million for the second quarter of fiscal 2011 compared to $18.3 million in the second quarter of fiscal 2010. The increase was primarily due to the impact of currency exchange rate changes between the United States dollar and the British pound sterling. Ben Sherman reported an operating loss of $1.8 million in the second quarter of fiscal 2011 compared to an operating loss of $0.6 million in the second quarter of fiscal 2010. The lower operating results were primarily due to increased product sourcing costs.
Net sales for Lanier Clothes were $22.9 million in the second quarter of fiscal 2011, slightly ahead of the $22.7 million reported in the second quarter of fiscal 2010. Operating income in the second quarter of fiscal 2011 was $2.3 million compared to operating income of $2.8 million in the second quarter of fiscal 2010, with the decrease primarily due to higher SG&A.
Corporate and Other reported an operating loss of $5.4 million for the second quarter of fiscal 2011 compared to an operating loss of $5.2 million in the second quarter of fiscal 2010. Decreases in LIFO accounting charges were offset by higher incentive compensation costs.
Consolidated gross margins for the second quarter of fiscal 2011 increased by 170 basis points to 57.0% compared to 55.3% in the second quarter of fiscal 2010. Gross margins improved as a result of changes in the sales mix with the inclusion of the Lilly Pulitzer
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operating results, the increased proportion of direct to consumer sales at Tommy Bahama and the net impact of LIFO accounting. These increases were partially offset by lower gross margins in Ben Sherman due to increased product sourcing costs.
SG&A for the second quarter of fiscal 2011 was $88.3 million, or 48.9% of net sales, compared to $71.3 million, or 49.9% of net sales, in the second quarter of fiscal 2010. The improvement in SG&A as a percentage of sales was primarily due to operating leverage gained on the higher sales base. The increase in total SG&A was primarily due to expenses associated with the inclusion of the Lilly Pulitzer business, higher incentive compensation costs and expenses associated with operating additional Tommy Bahama retail stores.
Royalties and other operating income for the second quarter of fiscal 2011 were $4.0 million compared to $3.7 million in the second quarter of fiscal 2010. The increase in royalties and other operating income was primarily due to royalty income associated with Lilly Pulitzer.
In May 2011, the Company repurchased, in a privately negotiated transaction, $40.0 million in aggregate principal amount of its 11.375% Senior Secured Notes due 2015 for $46.6 million, plus accrued interest, using cash on hand. The repurchase of the 11.375% Senior Secured Notes and related non-cash write-off of approximately $1.6 million of unamortized deferred financing costs and discount resulted in a loss of approximately $8.2 million.
Interest expense for the second quarter of fiscal 2011 was $4.3 million compared to $5.1 million in the second quarter of fiscal 2010. The decrease in interest expense was primarily due to the repurchase of the $40.0 million in aggregate principal amount of the Companys 11.375% Senior Secured Notes.
For the first half of fiscal 2011, consolidated net sales grew 26.9% to $389.0 million compared to $306.6 million in the first half of fiscal 2010. Adjusted earnings per share from continuing operations almost doubled to $1.64 compared to $0.87 in the first half of fiscal 2010. On a U.S. GAAP basis, diluted net earnings per share from continuing operations were $1.25 compared to $0.80 in the first half of fiscal 2010.
Balance Sheet and Liquidity
Total inventories at the close of the second quarter of fiscal 2011 were $77.7 million, compared to $57.2 million at the close of the second quarter of fiscal 2010. The increase in inventory levels was primarily due to the addition of Lilly Pulitzer inventory and an increase at Tommy Bahama to support anticipated sales and additional retail stores. Receivables increased to $53.9 million at quarter end compared to $45.5 million at the end of last years second quarter primarily due to the addition of Lilly Pulitzer receivables.
After completion of the repurchase of notes described above, $110.0 million aggregate principal amount of 11.375% Senior Secured Notes remain outstanding. As of July 30,
(More)
2011, the Company had no borrowings outstanding under its U.S. revolving credit facility and $37.8 million of cash and cash equivalents.
The Companys capital expenditures for fiscal 2011, including $12.7 million incurred during the first half of fiscal 2011, are expected to be approximately $35 million. These expenditures will consist primarily of additional retail stores, retail store remodeling, information technology investments and distribution center enhancements.
Fiscal 2011 Outlook
For fiscal 2011, the Company now expects adjusted earnings from continuing operations per diluted share in a range of $2.20 to $2.30 and net sales of $735 to $750 million. This compares to the Companys prior guidance of $2.15 to $2.25 in adjusted earnings from continuing operations per diluted share and net sales of $730 to $745 million.
For the third quarter, ending on October 29, 2011, the Company anticipates net sales in a range from $160 to $170 million and adjusted earnings from continuing operations per diluted share of $0.10 to $0.15. Because of the impact of seasonality to the Companys business, sales and earnings in the third quarter are lower than other quarters.
Dividend
The Company also announced that its Board of Directors has approved a cash dividend of $0.13 per share payable on October 28, 2011 to shareholders of record as of the close of business on October 14, 2011. The Company has paid dividends every quarter since it became publicly owned in 1960.
Conference Call
The Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. EDT today. A live web cast of the conference call will be available on the Companys website at www.oxfordinc.com. Please visit the website 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 September 14, 2011. To access the telephone replay, participants should dial (858) 384-5517. The access code for the replay is 4786833. A replay of the web cast will also be available following the teleconference on the Companys website at www.oxfordinc.com.
About Oxford
Oxford Industries, Inc. is an international apparel design, sourcing and marketing company featuring a diverse portfolio of owned and licensed brands. Oxfords brands include Tommy Bahama®, Lilly Pulitzer®, Ben Sherman®, Oxford Golf®, Arnold Brant® and Billy London®. The Company also holds exclusive licenses to produce and sell
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certain product categories under the Kenneth Cole®, Geoffrey Beene®, Dockers® and Ike Behar® labels. The Company operates retail stores, restaurants and Internet websites. The Company also has license arrangements with select third parties to produce and sell certain product categories under its Tommy Bahama, Lilly Pulitzer and Ben Sherman brands. Oxfords wholesale customers include department stores, specialty stores, national chains, specialty catalogs and Internet retailers. Oxfords stock has traded on the New York Stock Exchange since 1964 under the symbol OXM. For more information, please visit Oxfords website at www.oxfordinc.com.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
This press release may include statements that are forward-looking statements within the meaning of the federal securities laws. Generally, the words believe, expect, intend, estimate, anticipate, project, will and similar expressions identify forward-looking statements, which generally are not historical in nature. We intend for all forward-looking statements contained herein or on our website, and all subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf, to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Important assumptions relating to these forward-looking statements include, among others, assumptions regarding the impact of economic conditions on consumer demand and spending, particularly in light of general economic uncertainty that continues to prevail, demand for our products, timing of shipments requested by our wholesale customers, expected pricing levels, competitive conditions, the timing and cost of planned capital expenditures, costs of products and raw materials we purchase, costs of labor, access to capital and/or credit markets, acquisition and disposition activities, expected outcomes of pending or potential litigation and regulatory actions and disciplined execution by key management. Forward-looking statements reflect our current expectations, based on currently available information, and are not guarantees of performance. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these expectations could prove inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability to control or predict. Should one or more of these risks or uncertainties, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors relating to these risks and uncertainties include, but are not limited to, those described in Part I, Item 1A. contained in our Annual Report on Form 10-K for the period ended January 29, 2011 under the heading Risk Factors and those described from time to time in our future reports filed with the SEC.
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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
|
|
Second |
|
Second |
|
First |
|
First |
| ||||
Net sales |
|
$ |
180,646 |
|
$ |
142,981 |
|
$ |
388,954 |
|
$ |
306,606 |
|
Cost of goods sold |
|
77,709 |
|
63,963 |
|
168,357 |
|
137,881 |
| ||||
Gross profit |
|
102,937 |
|
79,018 |
|
220,597 |
|
168,725 |
| ||||
SG&A |
|
88,348 |
|
71,324 |
|
179,188 |
|
149,333 |
| ||||
Amortization of intangible assets |
|
300 |
|
238 |
|
598 |
|
478 |
| ||||
Change in fair value of contingent consideration |
|
600 |
|
|
|
1,200 |
|
|
| ||||
|
|
89,248 |
|
71,562 |
|
180,986 |
|
149,811 |
| ||||
Royalties and other operating income |
|
4,022 |
|
3,723 |
|
8,813 |
|
7,236 |
| ||||
Operating income |
|
17,711 |
|
11,179 |
|
48,424 |
|
26,150 |
| ||||
Interest expense, net |
|
4,268 |
|
5,053 |
|
9,072 |
|
10,020 |
| ||||
Loss on repurchase of 11.375% Senior Secured Notes |
|
8,248 |
|
|
|
8,248 |
|
|
| ||||
Earnings from continuing operations before income taxes |
|
5,195 |
|
6,126 |
|
31,104 |
|
16,130 |
| ||||
Income taxes |
|
1,675 |
|
1,447 |
|
10,524 |
|
2,927 |
| ||||
Earnings from continuing operations |
|
3,520 |
|
4,679 |
|
20,580 |
|
13,203 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Earnings from discontinued operations, net of taxes |
|
(916 |
) |
2,540 |
|
124 |
|
6,513 |
| ||||
Net earnings |
|
$ |
2,604 |
|
$ |
7,219 |
|
$ |
20,704 |
|
$ |
19,716 |
|
Earnings from continuing operations, net of taxes per common share: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
$ |
0.21 |
|
$ |
0.28 |
|
$ |
1.25 |
|
$ |
0.80 |
|
Diluted |
|
$ |
0.21 |
|
$ |
0.28 |
|
$ |
1.25 |
|
$ |
0.80 |
|
Earnings from discontinued operations, net of taxes per common share: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
$ |
(0.06 |
) |
$ |
0.15 |
|
$ |
0.01 |
|
$ |
0.39 |
|
Diluted |
|
$ |
(0.06 |
) |
$ |
0.15 |
|
$ |
0.01 |
|
$ |
0.39 |
|
Net earnings per common share: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
$ |
0.16 |
|
$ |
0.44 |
|
$ |
1.25 |
|
$ |
1.19 |
|
Diluted |
|
$ |
0.16 |
|
$ |
0.44 |
|
$ |
1.25 |
|
$ |
1.19 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
|
16,514 |
|
16,540 |
|
16,514 |
|
16,515 |
| ||||
Dilution |
|
17 |
|
12 |
|
15 |
|
12 |
| ||||
Diluted |
|
16,531 |
|
16,552 |
|
16,529 |
|
16,527 |
| ||||
Dividends declared per common share |
|
$ |
0.13 |
|
$ |
0.11 |
|
$ |
0.26 |
|
$ |
0.22 |
|
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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except par amounts)
|
|
July 30, |
|
January 29, |
|
July 31, |
| |||
ASSETS |
|
|
|
|
|
|
| |||
Current Assets: |
|
|
|
|
|
|
| |||
Cash and cash equivalents |
|
$ |
37,775 |
|
$ |
44,094 |
|
$ |
28,171 |
|
Receivables, net |
|
53,902 |
|
50,177 |
|
45,545 |
| |||
Inventories, net |
|
77,731 |
|
85,338 |
|
57,227 |
| |||
Prepaid expenses, net |
|
16,337 |
|
12,554 |
|
15,213 |
| |||
Deferred tax assets |
|
17,258 |
|
19,005 |
|
15,384 |
| |||
Assets related to discontinued operations, net |
|
508 |
|
57,745 |
|
55,853 |
| |||
Total current assets |
|
203,511 |
|
268,913 |
|
217,393 |
| |||
Property and equipment, net |
|
86,889 |
|
83,895 |
|
72,923 |
| |||
Intangible assets, net |
|
166,826 |
|
166,680 |
|
136,226 |
| |||
Goodwill |
|
16,555 |
|
16,866 |
|
|
| |||
Other non-current assets, net |
|
19,790 |
|
22,117 |
|
16,213 |
| |||
Total Assets |
|
$ |
493,571 |
|
$ |
558,471 |
|
$ |
442,755 |
|
LIABILITIES AND SHAREHOLDERS EQUITY |
|
|
|
|
|
|
| |||
Current Liabilities: |
|
|
|
|
|
|
| |||
Trade accounts payable and other accrued expenses |
|
$ |
76,877 |
|
$ |
83,211 |
|
$ |
63,467 |
|
Accrued compensation |
|
19,740 |
|
23,095 |
|
15,775 |
| |||
Short-term debt and current maturities of long-term debt |
|
4,406 |
|
|
|
1,195 |
| |||
Liabilities related to discontinued operations |
|
1,362 |
|
40,785 |
|
19,272 |
| |||
Total current liabilities |
|
102,385 |
|
147,091 |
|
99,709 |
| |||
Long-term debt, less current maturities |
|
108,088 |
|
147,065 |
|
146,736 |
| |||
Other non-current liabilities |
|
54,169 |
|
55,441 |
|
46,400 |
| |||
Non-current deferred income taxes |
|
30,322 |
|
28,846 |
|
28,143 |
| |||
Commitments and contingencies |
|
|
|
|
|
|
| |||
Shareholders Equity: |
|
|
|
|
|
|
| |||
Common stock, $1.00 par value per common share |
|
16,529 |
|
16,511 |
|
16,561 |
| |||
Additional paid-in capital |
|
97,641 |
|
96,597 |
|
94,442 |
| |||
Retained earnings |
|
107,160 |
|
90,739 |
|
35,437 |
| |||
Accumulated other comprehensive loss |
|
(22,723 |
) |
(23,819 |
) |
(24,673 |
) | |||
Total shareholders equity |
|
198,607 |
|
180,028 |
|
121,767 |
| |||
Total Liabilities and Shareholders Equity |
|
$ |
493,571 |
|
$ |
558,471 |
|
$ |
442,755 |
|
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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
|
|
First Half |
|
First Half |
| ||
Cash Flows From Operating Activities: |
|
|
|
|
| ||
Earnings from continuing operations |
|
$ |
20,580 |
|
$ |
13,203 |
|
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities: |
|
|
|
|
| ||
Depreciation |
|
9,838 |
|
8,624 |
| ||
Amortization of intangible assets |
|
598 |
|
478 |
| ||
Change in fair value of contingent consideration |
|
1,200 |
|
|
| ||
Amortization of deferred financing costs and bond discount |
|
906 |
|
977 |
| ||
Loss on repurchase of 11.375% Senior Secured Notes |
|
8,248 |
|
|
| ||
Stock compensation expense |
|
1,476 |
|
2,584 |
| ||
Loss on sale of property and equipment |
|
22 |
|
(13 |
) | ||
Deferred income taxes |
|
3,040 |
|
(1,587 |
) | ||
Changes in working capital, net of acquisitions and dispositions: |
|
|
|
|
| ||
Receivables |
|
(3,394 |
) |
(1,272 |
) | ||
Inventories |
|
8,042 |
|
611 |
| ||
Prepaid expenses |
|
(3,696 |
) |
(4,758 |
) | ||
Current liabilities |
|
(12,215 |
) |
1,665 |
| ||
Other non-current assets |
|
1,502 |
|
519 |
| ||
Other non-current liabilities |
|
(2,487 |
) |
(3,054 |
) | ||
Net cash provided by operating activities |
|
33,660 |
|
17,977 |
| ||
Cash Flows From Investing Activities: |
|
|
|
|
| ||
Purchases of property and equipment |
|
(12,726 |
) |
(3,370 |
) | ||
Other |
|
(398 |
) |
99 |
| ||
Net cash used in investing activities |
|
(13,124 |
) |
(3,271 |
) | ||
Cash Flows From Financing Activities: |
|
|
|
|
| ||
Repayment of revolving credit arrangements |
|
(18,309 |
) |
(33,925 |
) | ||
Proceeds from revolving credit arrangements |
|
22,670 |
|
35,097 |
| ||
Repurchase of 11.375% Senior Secured Notes |
|
(46,600 |
) |
|
| ||
Proceeds from issuance of common stock |
|
1,413 |
|
230 |
| ||
Dividends on common stock |
|
(4,285 |
) |
(3,638 |
) | ||
Net cash used in financing activities |
|
(45,111 |
) |
(2,236 |
) | ||
Cash Flows from Discontinued Operations: |
|
|
|
|
| ||
Net operating cash flows provided by discontinued operations |
|
14,313 |
|
7,559 |
| ||
Net investing cash flows provided by (used in) discontinued operations |
|
3,744 |
|
(21 |
) | ||
Net cash provided by discontinued operations |
|
18,057 |
|
7,538 |
| ||
|
|
|
|
|
| ||
Net change in cash and cash equivalents |
|
(6,518 |
) |
20,008 |
| ||
Effect of foreign currency translation on cash and cash equivalents |
|
199 |
|
(125 |
) | ||
Cash and cash equivalents at the beginning of year |
|
44,094 |
|
8,288 |
| ||
Cash and cash equivalents at the end of the period |
|
$ |
37,775 |
|
$ |
28,171 |
|
|
|
|
|
|
| ||
Supplemental disclosure of cash flow information: |
|
|
|
|
| ||
Cash paid for interest, net, including interest paid for discontinued operations |
|
$ |
8,534 |
|
$ |
9,114 |
|
Cash paid for income taxes, including income taxes paid for discontinued operations |
|
$ |
38,103 |
|
$ |
14,762 |
|
(More)
OXFORD INDUSTRIES, INC.
OPERATING GROUP INFORMATION
(UNAUDITED)
(in thousands)
|
|
Second |
|
Second |
|
First |
|
First |
| ||||
Net Sales |
|
|
|
|
|
|
|
|
| ||||
Tommy Bahama |
|
$ |
109,143 |
|
$ |
99,349 |
|
$ |
232,046 |
|
$ |
208,454 |
|
Lilly Pulitzer |
|
24,823 |
|
|
|
54,696 |
|
|
| ||||
Ben Sherman |
|
20,893 |
|
18,346 |
|
40,314 |
|
40,500 |
| ||||
Lanier Clothes |
|
22,942 |
|
22,736 |
|
55,915 |
|
53,164 |
| ||||
Corporate and Other |
|
2,845 |
|
2,550 |
|
5,983 |
|
4,488 |
| ||||
Total |
|
$ |
180,646 |
|
$ |
142,981 |
|
$ |
388,954 |
|
$ |
306,606 |
|
Operating Income |
|
|
|
|
|
|
|
|
| ||||
Tommy Bahama |
|
$ |
16,987 |
|
$ |
14,172 |
|
$ |
40,757 |
|
$ |
32,033 |
|
Lilly Pulitzer |
|
5,612 |
|
|
|
12,627 |
|
|
| ||||
Ben Sherman |
|
(1,756 |
) |
(598 |
) |
(2,582 |
) |
(76 |
) | ||||
Lanier Clothes |
|
2,263 |
|
2,809 |
|
6,988 |
|
7,168 |
| ||||
Corporate and Other |
|
(5,395 |
) |
(5,204 |
) |
(9,366 |
) |
(12,975 |
) | ||||
Total Operating Income |
|
$ |
17,711 |
|
$ |
11,179 |
|
$ |
48,424 |
|
$ |
26,150 |
|
(More)
RECONCILIATION OF CERTAIN OPERATING RESULTS INFORMATION PRESENTED IN ACCORDANCE WITH U.S. GAAP TO CERTAIN OPERATING RESULTS INFORMATION,
AS ADJUSTED
Set forth below is our reconciliation of certain operating results information, presented in accordance with generally accepted accounting principles, or U.S. GAAP, to the operating results information, as adjusted, for certain historical periods. We believe that investors often look at ongoing operations as a measure of assessing performance and as a basis for comparing past results against future results. Therefore, we believe that presenting our operating results, as adjusted, provides useful information to investors because this allows investors to make decisions based on our ongoing operations. We use the operating results, as adjusted, to discuss our business with investment institutions, our board of directors and others. Further, we believe that presenting our results, as adjusted, provides useful information to investors because this allows investors to compare our results for the periods presented to other periods.
|
|
Second |
|
Second |
|
First |
|
First |
| ||||
|
|
(in thousands, except per share amounts) |
| ||||||||||
As reported |
|
|
|
|
|
|
|
|
| ||||
Net sales |
|
$ |
180,646 |
|
$ |
142,981 |
|
$ |
388,954 |
|
$ |
306,606 |
|
Gross profit |
|
$ |
102,937 |
|
$ |
79,018 |
|
$ |
220,597 |
|
$ |
168,725 |
|
Gross margin (1) |
|
57.0 |
% |
55.3 |
% |
56.7 |
% |
55.0 |
% | ||||
Operating income |
|
$ |
17,711 |
|
$ |
11,179 |
|
$ |
48,424 |
|
$ |
26,150 |
|
Operating margin (2) |
|
9.8 |
% |
7.8 |
% |
12.4 |
% |
8.5 |
% | ||||
Earnings from continuing operations before income taxes |
|
$ |
5,195 |
|
$ |
6,126 |
|
$ |
31,104 |
|
$ |
16,130 |
|
Earnings from continuing operations |
|
$ |
3,520 |
|
$ |
4,679 |
|
$ |
20,580 |
|
$ |
13,203 |
|
Diluted earnings from continuing operations per common share |
|
$ |
0.21 |
|
$ |
0.28 |
|
$ |
1.25 |
|
$ |
0.80 |
|
Weighted average common shares outstanding diluted |
|
16,531 |
|
16,552 |
|
16,529 |
|
16,527 |
| ||||
Increase/(decrease) in earnings from continuing operations |
|
|
|
|
|
|
|
|
| ||||
LIFO accounting impact on gross profit (3) |
|
$ |
388 |
|
$ |
976 |
|
$ |
(214 |
) |
$ |
1,627 |
|
Purchase accounting charges: |
|
|
|
|
|
|
|
|
| ||||
Inventory write-up cost impacting gross profit (4) |
|
$ |
|
|
$ |
|
|
$ |
996 |
|
$ |
|
|
Change in fair value of contingent consideration impacting operating income (5) |
|
$ |
600 |
|
$ |
|
|
$ |
1,200 |
|
$ |
|
|
Loss on repurchase of 11.375% Senior Secured Notes (6) |
|
$ |
8,248 |
|
$ |
|
|
$ |
8,248 |
|
$ |
|
|
Impact of income taxes (7) |
|
$ |
(3,348 |
) |
$ |
(312 |
) |
$ |
(3,686 |
) |
$ |
(520 |
) |
Adjustment to earnings from continuing operations |
|
$ |
5,888 |
|
$ |
664 |
|
$ |
6,544 |
|
$ |
1,107 |
|
As adjusted |
|
|
|
|
|
|
|
|
| ||||
Gross profit |
|
$ |
103,325 |
|
$ |
79,994 |
|
$ |
221,379 |
|
$ |
170,352 |
|
Gross margin (1) |
|
57.2 |
% |
55.9 |
% |
56.9 |
% |
55.6 |
% | ||||
Operating income |
|
$ |
18,699 |
|
$ |
12,155 |
|
$ |
50,406 |
|
$ |
27,777 |
|
Operating margin (2) |
|
10.4 |
% |
8.5 |
% |
13.0 |
% |
9.1 |
% | ||||
Earnings from continuing operations before income taxes |
|
$ |
14,431 |
|
$ |
7,102 |
|
$ |
41,334 |
|
$ |
17,757 |
|
Earnings from continuing operations |
|
$ |
9,408 |
|
$ |
5,343 |
|
$ |
27,124 |
|
$ |
14,310 |
|
Diluted earnings from continuing operations per common share |
|
$ |
0.57 |
|
$ |
0.32 |
|
$ |
1.64 |
|
$ |
0.87 |
|
(More)
NOTES TO RECONCILIATION OF CERTAIN OPERATING RESULTS INFORMATION PRESENTED IN ACCORDANCE WITH U.S. GAAP TO CERTAIN OPERATING RESULTS INFORMATION, AS ADJUSTED
(1) |
Gross margin is calculated as gross profit, as a percentage of net sales. |
(2) |
Operating margin is calculated as operating income, as a percentage of net sales. |
(3) |
LIFO accounting reflects the net impact on cost of goods sold in Corporate and Other resulting from LIFO accounting in each period. |
(4) |
Inventory write-up cost included in cost of goods sold includes the impact of purchase accounting adjustments resulting from the write-up of inventory at acquisition related to the December 2010 acquisition of Lilly Pulitzer, which is recognized in our statement of operations as the acquired inventory is sold. No additional amounts related to the inventory write-up are expected to be incurred in periods subsequent to the first quarter of fiscal 2011 as the entire $1.8 million recognized at acquisition has been expensed during the fourth quarter of fiscal 2010 and the first quarter of fiscal 2011. These charges were reflected in the Lilly Pulitzer operating group results of operations. |
(5) |
Change in fair value of contingent consideration reflects the statement of operations impact resulting from the change in fair value of contingent consideration pursuant to the earnout agreement with the sellers of Lilly Pulitzer. Pursuant to the purchase method of accounting, the fair value of contingent consideration, if any, is reflected in the opening balance sheet of the acquired company. This amount must be reassessed periodically and recorded at fair value. Changes in the estimated fair value of the contingent consideration, if any, is recognized in the statement of operations. The fair value is based on assumptions regarding the probability of the payment of the $20 million of contingent consideration, cash flows of the Lilly Pulitzer operations and discount rates, among other factors. Change in fair value of contingent consideration is expected to be recorded with the passage of time as the payment date of the contingent consideration approaches. Additionally, change in the fair value of contingent consideration will be recognized periodically as an increase or decrease in the expense as more information about certain assumptions included in the fair value calculation is obtained. |
(6) |
Loss on repurchase of 11.375% Senior Secured Notes reflects the loss attributable to the repurchase of $40.0 million aggregate principal amount of 11.375% Senior Secured Notes, including a $6.6 million premium on repurchase and a $1.6 million write-off of unamortized deferred financing costs and discount. |
(7) |
Impact of income taxes reflects the estimated net income tax impact of the adjustments above. |
(More)
RECONCILIATION OF OPERATING INCOME (LOSS), IN ACCORDANCE WITH U.S. GAAP TO OPERATING INCOME (LOSS), AS ADJUSTED
Set forth below are our reconciliations, in thousands, of operating income (loss) for each operating group and in total, calculated in accordance with U.S. GAAP, to operating income (loss), as adjusted for certain historical periods. We believe that investors often look at ongoing operating group operating income (loss) as a measure of assessing performance and as a basis for comparing past results against future results. Therefore, we believe that presenting our operating income (loss), as adjusted, provides useful information to investors because this allows investors to make decisions based on our ongoing operating group results. We use the operating income (loss), as adjusted, to discuss our operating groups with investment institutions, our board of directors and others. Further, we believe that presenting our operating results, as adjusted, provides useful information to investors because this allows investors to compare our operating group operating income (loss) for the periods presented to other periods.
|
|
Second Quarter of Fiscal 2011 |
| ||||||||||
|
|
(in thousands) |
| ||||||||||
|
|
Operating income |
|
LIFO accounting |
|
Purchase |
|
Operating income |
| ||||
|
|
|
|
(1) |
|
(2) |
|
|
| ||||
Tommy Bahama |
|
$ |
16,987 |
|
$ |
|
|
$ |
|
|
$ |
16,987 |
|
Lilly Pulitzer |
|
5,612 |
|
|
|
600 |
|
6,212 |
| ||||
Ben Sherman |
|
(1,756 |
) |
|
|
|
|
(1,756 |
) | ||||
Lanier Clothes |
|
2,263 |
|
|
|
|
|
2,263 |
| ||||
Corporate and Other |
|
(5,395 |
) |
388 |
|
|
|
(5,007 |
) | ||||
Total |
|
$ |
17,711 |
|
$ |
388 |
|
$ |
600 |
|
$ |
18,699 |
|
|
|
Second Quarter of Fiscal 2010 |
| |||||||
|
|
(in thousands) |
| |||||||
|
|
Operating income |
|
LIFO accounting |
|
Operating income |
| |||
|
|
|
|
(1) |
|
|
| |||
Tommy Bahama |
|
$ |
14,172 |
|
$ |
|
|
$ |
14,172 |
|
Lilly Pulitzer |
|
|
|
|
|
|
| |||
Ben Sherman |
|
(598 |
) |
|
|
(598 |
) | |||
Lanier Clothes |
|
2,809 |
|
|
|
2,809 |
| |||
Corporate and Other |
|
(5,204 |
) |
976 |
|
(4,228 |
) | |||
Total |
|
$ |
11,179 |
|
$ |
976 |
|
$ |
12,155 |
|
(More)
|
|
First Half of Fiscal 2011 |
| ||||||||||
|
|
(in thousands) |
| ||||||||||
|
|
Operating income |
|
LIFO accounting |
|
Purchase |
|
Operating income |
| ||||
|
|
|
|
(1) |
|
(2) |
|
|
| ||||
Tommy Bahama |
|
$ |
40,757 |
|
$ |
|
|
$ |
|
|
$ |
40,757 |
|
Lilly Pulitzer |
|
12,627 |
|
|
|
2,196 |
|
14,823 |
| ||||
Ben Sherman |
|
(2,582 |
) |
|
|
|
|
(2,582 |
) | ||||
Lanier Clothes |
|
6,988 |
|
|
|
|
|
6,988 |
| ||||
Corporate and Other |
|
(9,366 |
) |
(214 |
) |
|
|
(9,580 |
) | ||||
Total |
|
$ |
48,424 |
|
$ |
(214 |
) |
$ |
2,196 |
|
$ |
50,406 |
|
|
|
First Half of Fiscal 2010 |
| |||||||
|
|
(in thousands) |
| |||||||
|
|
Operating income |
|
LIFO accounting |
|
Operating income |
| |||
|
|
|
|
(1) |
|
|
| |||
Tommy Bahama |
|
$ |
32,033 |
|
$ |
|
|
$ |
32,033 |
|
Lilly Pulitzer |
|
|
|
|
|
|
| |||
Ben Sherman |
|
(76 |
) |
|
|
(76 |
) | |||
Lanier Clothes |
|
7,168 |
|
|
|
7,168 |
| |||
Corporate and Other |
|
(12,975 |
) |
1,627 |
|
(11,348 |
) | |||
Total |
|
$ |
26,150 |
|
$ |
1,627 |
|
$ |
27,777 |
|
(1) |
LIFO accounting adjustments reflect the impact of all LIFO accounting adjustments recorded during the period. |
(2) |
Purchase accounting adjustments consist of the $1.0 million cost of goods sold charge related to the write-up of inventory and $1.2 million of change in fair value of contingent consideration, both of which are included in Lilly Pulitzer. Both of these charges resulted from the application of the purchase method of accounting to the Lilly Pulitzer acquisition on December 21, 2010. |
(More)
RECONCILIATION OF EARNINGS FROM CONTINUING OPERATIONS PER SHARE PRESENTED IN ACCORDANCE WITH U.S. GAAP TO EARNINGS FROM CONTINUING OPERATIONS PER SHARE, AS ADJUSTED
Set forth below is our reconciliation of reported earnings from continuing operations per diluted share for certain historical and future periods, each presented in accordance with generally accepted accounting principles, or U.S. GAAP, to the earnings per diluted share, as adjusted, for each respective period. We believe that investors often look at ongoing operations as a measure of assessing performance and as a basis for comparing past results against future results. Therefore, we believe that presenting our earnings per diluted share, as adjusted, provides useful information to investors because this allows investors to make decisions based on our ongoing operations. We use the earnings per diluted share, as adjusted, to discuss our business with investment institutions, our board of directors and others. Further, we believe that presenting earnings per diluted share, as adjusted, provides useful information to investors because this allows investors to compare our results for the periods presented to other periods. Note that columns may not add due to rounding.
|
|
Second |
|
Second |
|
Second |
|
First |
|
First |
|
|
|
Actual |
|
Guidance(1) |
|
Actual |
|
Actual |
|
Actual |
|
Earnings from continuing operations per diluted share: |
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP basis |
|
$0.21 |
|
$0.14 - $0.19 |
|
$0.28 |
|
$1.25 |
|
$0.80 |
|
Impact of purchase accounting (2) |
|
$0.02 |
|
$0.02 |
|
|
|
$0.09 |
|
|
|
LIFO accounting adjustments (3) |
|
$0.02 |
|
|
|
$0.04 |
|
($0.01) |
|
$0.07 |
|
Loss on repurchase of 113/8% Senior Secured Notes (4) |
|
$0.32 |
|
$0.32 |
|
|
|
$0.32 |
|
|
|
As adjusted |
|
$0.57 |
|
$0.48 - $0.53 |
|
$0.32 |
|
$1.64 |
|
$0.87 |
|
|
|
Third |
|
Third |
|
Full |
|
Full |
|
|
|
Guidance (5) |
|
Actual |
|
Guidance (5) |
|
Actual |
|
Earnings from continuing operations per diluted share: |
|
|
|
|
|
|
|
|
|
U.S. GAAP basis |
|
$0.08 - $0.13 |
|
$0.08 |
|
$1.76 - $1.86 |
|
$0.98 |
|
Impact of purchase accounting (2) |
|
$0.02 |
|
|
|
$0.13 |
|
$0.08 |
|
LIFO accounting adjustments (3) |
|
|
|
($0.01) |
|
($0.01) |
|
$0.16 |
|
Loss on repurchase of 113/8% Senior Secured Notes (4) |
|
|
|
|
|
$0.32 |
|
|
|
Restructuring and other charges (6) |
|
|
|
|
|
|
|
$0.13 |
|
Change in estimate related to environmental reserve (7) |
|
|
|
|
|
|
|
($0.09) |
|
As adjusted |
|
$0.10 - $0.15 |
|
$0.07 |
|
$2.20 - $2.30 |
|
$1.26 |
|
(More)
NOTES TO RECONCILIATION OF EARNINGS FROM CONTINUING OPERATIONS PER SHARE PRESENTED IN ACCORDANCE WITH U.S. GAAP TO EARNINGS FROM CONTINUING OPERATIONS PER SHARE, AS ADJUSTED
(1) |
Second quarter fiscal 2011 guidance as issued on June 7, 2011. |
(2) |
Impact of purchase accounting reflects the impact, net of income taxes, on earnings from continuing operations per diluted share related to purchase accounting during each respective period. The purchase accounting adjustments reflect (a) a $0.6 million charge in each quarter of fiscal 2011 and $0.2 million in the fourth quarter of fiscal 2010, each related to the change in the fair value of contingent consideration, (b) additional cost of goods sold related to the purchase accounting write-up of acquired inventory of $1.0 million in the first quarter of fiscal 2011 and $0.8 million in the fourth quarter of fiscal 2010 and (c) $0.8 million of acquisition costs in the fourth quarter of fiscal 2010. The amounts ultimately recognized in the third quarter and fourth quarter of fiscal 2011 related to the change in fair value of contingent consideration may be materially different than these estimates depending upon our periodic assessment of the fair value of the contingent consideration. |
(3) |
LIFO accounting adjustments reflect the impact, net of income taxes, on earnings from continuing operations per diluted share related to LIFO accounting adjustments recorded during the historical periods. No estimate for future LIFO accounting adjustments are reflected in the guidance for any period presented. |
(4) |
The loss reflects the impact, net of income taxes, on earnings from continuing operations per diluted share related to the repurchase of $40 million aggregate principal amount of 11.375% Senior Secured Notes. The loss reflects payment of a $6.6 million premium on the repurchase and $1.6 million write-off of unamortized deferred financing costs and bond discount. The total loss from the repurchase of the 11.375% Senior Secured Notes was $8.2 million. |
(5) |
Third quarter fiscal 2011 and full year fiscal 2011 guidance as issued on August 31, 2011. |
(6) |
Restructuring and other charges reflects the impact, net of income taxes, on earnings from continuing operations per diluted share primarily related to Ben Shermans termination of certain retail store leases totaling $2.8 million and impairment of certain assets of $0.4 million each in fiscal 2010. |
(7) |
Change in estimate related to environmental reserve reflects the impact, net of income taxes, on earnings from continuing operations per diluted share related to a reduction in estimated costs to remediate a property with an existing environmental reserve liability. |
(XXXX)