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): January 4, 2005
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, NE, Atlanta, GA. | 30308 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (404) 659-2424
(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 (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 2.02. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On January 4, 2005, Oxford Industries, Inc., (the “Company”) issued a press release announcing, among other things, its financial results for the quarter ended November 26, 2004. The press release is incorporated herein to this Form 8-K by reference and a copy of this press release is attached hereto as Exhibit 99.1.
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, or otherwise be subject to the liabilities of that section.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
| EXHIBIT NUMBER |
||
| 99.1 | Press Release of Oxford Industries, Inc., dated January 4, 2005. |
SIGNATURE
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, thereunto duly authorized.
| OXFORD INDUSTRIES, INC. | ||||
| January 4, 2005 |
By: | /s/ J. Hicks Lanier | ||
| J. Hicks Lanier | ||||
| Chairman and | ||||
| Chief Executive Officer | ||||
Exhibit 99.1
Oxford Industries, Inc. Press Release
222 Piedmont Avenue, N.E. · Atlanta, Georgia 30308
| Contact: | J. Reese Lanier, Jr. | |
| Telephone: | (404) 653-1446 | |
| Fax: | (404) 653-1545 | |
| E-Mail: | rlanier@oxfordinc.com |
FOR IMMEDIATE RELEASE
January 4, 2005
Oxford Industries Announces Record Second Quarter Results
— 2Q05 EPS of $0.53 Exceed Expectations, rise 29% Versus Last Year —
— Record Sales of $313 million, up 23% Versus Last Year —
— Moderates Second Half Guidance to Reflect Challenging Retail Environment —
ATLANTA, GA. – Oxford Industries, Inc. (NYSE:OXM) announced today financial results for the second quarter ended November 26, 2004. The Company reported that, for the quarter, net sales increased approximately 23% to $313 million versus $254 million during the second quarter of fiscal 2004.
Fully diluted earnings per share for the quarter increased 29% to $0.53 versus $0.41 in the second quarter fiscal 2004. The Company noted that earnings per share were above its previously issued guidance range of $0.48 to $0.52 and the current First Call consensus estimate of $0.51. Additionally, the Company noted that consolidated gross margins increased 170 basis points to 32.0%, driven primarily by an increasing mix of Company-owned brands as a percentage of total.
J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford, Inc., commented, “We are pleased with the second quarter results, particularly the strong performance of our Tommy Bahama and Ben Sherman brands. These brands, which represent an increasing share of our operating profitability, continue to perform very well at retail despite a challenging market environment. Significantly, our licensing income in the second quarter was sharply higher than last year as a result of new licenses under the Tommy Bahama brand, increasing sales of existing Tommy Bahama licensees and the inclusion of a strong licensing stream for the Ben Sherman business.”
The Tommy Bahama Group contributed $86 million in sales in the second quarter, an increase of 13% over the second quarter of last year. Sales growth resulted from increased wholesale penetration and revenues from nine more retail stores than were open during the year-ago quarter, partially offset by a planned reduction in private label sales. Operating income for this segment was $5.9 million during the quarter, a decrease of 25% versus the same quarter last year. The decline in operating income was due primarily to $2.2 million in marketing expenses associated with the Tommy Bahama Challenge, a PGA sanctioned tournament broadcasted New Year’s Day on CBS.
The Menswear Group, which includes results for Ben Sherman, reported a second quarter sales increase of 57% to $181 million compared to sales of $115 million in the same period last year. Ben Sherman had a very strong quarter, contributing $53 million in sales. This quarter was Ben Sherman’s first full quarter of operations with Oxford Industries. The Company noted that
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excluding Ben Sherman, the historical Menswear Group performed well and increased sales by approximately 11%. Operating income in this segment for the second quarter was $18 million, an increase of 77% versus the same period last year. The increase in profitability resulted from the addition of the Ben Sherman business.
Second quarter sales for the Womenswear Group declined 27% to $45 million from $62 million last year. Much of the sales decline was attributed to Wal-Mart which has narrowed its womenswear assortment, reduced rack space devoted to women’s apparel and placed greater emphasis on direct sourcing. The Company noted that as a result of the lower sales and margins, second quarter operating income for the Womenswear Group was $0.2 million versus $1.9 million last year.
Total inventories at the close of the second quarter were up 27% over last year to $162 million. The increase in inventory was driven by the addition of Ben Sherman as well as higher inventory levels at Tommy Bahama to support retail store growth. The company believes inventories are properly valued and appropriate to support the business going forward. Receivables totaled $175 million at quarter-end, up 29% over last year’s second quarter. The increase was attributable primarily to the inclusion of Ben Sherman.
The Company believes it prudent to revise its guidance for the second half of the fiscal year to reflect increasingly challenging market conditions and somewhat softer Spring bookings in certain sectors of the business. The Company now projects full year diluted earnings per share of $2.60 to $2.75 on sales of approximately $1.285 billion to $1.310 billion.
For the third quarter, ending on February 25, 2005, the Company currently anticipates sales in a range of $350 million to $365 million and earnings per share of $0.65 to $0.71. For the fourth quarter, they are estimating sales of $355 million to $370 million and diluted earnings per share of $1.06 to $1.15.
Mr. Lanier concluded, “We are very pleased with the direction of the Company and our continued ability to execute consistently. While we are not without challenges in this very competitive industry, we will continue to build our capabilities in the branded apparel business and push forward where we have the best opportunities for growth.”
The Company will hold a conference call with senior management to discuss the financial results at 4:30 p.m. ET today. A live Webcast of the conference call will be available on the Company’s Web site at www.oxfordinc.com. Please visit the Web site at least 15 minutes early to register for the teleconference Web cast and download any necessary software.
A replay of the call will be available through January 18, 2005. To access the telephone replay, participants should dial (719) 457-0820. The access code for the replay is 324077. A replay of the Webcast will also be available following the conference call on Oxford Industries’ corporate Website.
Oxford Industries, Inc. is a producer and marketer of branded and private label apparel for men, women and children. Oxford provides retailers and consumers with a wide variety of apparel products and services to suit their individual needs. Oxford’s brands include Tommy Bahama®, Indigo Palms®, Island Soft®, Ben Sherman®, Ely & Walker® and Oxford Golf®. The Company also holds exclusive licenses to produce and sell certain product categories under the Tommy Hilfiger®, Nautica®, Geoffrey Beene®, Slates®, Dockers® and Oscar de la Renta® labels. Oxford’s customers are found in every major channel of distribution including national chains, specialty catalogs, mass merchants, department stores, specialty stores and Internet retailers.
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Oxford’s stock has traded on the NYSE since 1964 under the symbol OXM. For more information, please visit our website at www.oxfordinc.com.
CAUTIONARY STATEMENT FOR THE PURPOSE OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The matters in this press release that are forward-looking statements, including but not limited to statements about our expected business outlook, anticipated financial and operating results, the anticipated benefits of the Viewpoint acquisition, growth of particular product lines, strategies, contingencies, financing plans, working capital needs, sources of liquidity, estimated amounts and timing of capital expenditures and other expenditures, are based on current management expectations that involve certain risks which if realized, in whole or in part, could have a material adverse effect on Oxford’s business, financial condition and results of operations, including, without limitation: (1) general economic cycles; (2) competitive conditions in our industry; (3) price deflation in the worldwide apparel industry; (4) our ability to identify and respond to rapidly changing fashion trends and to offer innovative and upgraded products; (5) changes in trade quotas or other trade regulations; (6) our ability to continue to finance our working capital and growth on acceptable terms; (7) significant changes in weather patterns (e.g., an unseasonably warm autumn) or natural disasters such as hurricanes, fires or flooding; (8) the price and availability of raw materials; (9) our dependence on and relationships with key customers; (10) the ability of our third party producers to deliver quality products in a timely manner; (11) potential disruptions in the operation of our distribution facilities; (12) any disruption or failure of our computer systems or data network; (13) the integration of Ben Sherman into our company; (14) our ability to successfully implement our growth plans for the acquired businesses; (15) unforeseen liabilities associated with our acquisitions of the Tommy Bahama Group and Ben Sherman; (16) economic and political conditions in the foreign countries in which we operate or source our products; (17) increased competition from direct sourcing; (18) our ability to maintain our licenses; (19) our ability to protect our intellectual property and prevent our trademarks, service marks and goodwill from being harmed by competitors’ products; (20) our reliance on key management; (21) risks associated with changes in global currency exchange rates; (22) the impact of labor disputes and wars or acts of terrorism on our business; (23) the effectiveness of our disclosure controls and procedures related to financial reporting; (24) our inability to retain current pricing on our products due to competitive or other factors; (25) the expansion of our business through the acquisition of new businesses; and (26) our ability to open new retail stores.
For a further discussion of significant factors to consider in connection with forward-looking statements concerning Oxford, reference is made to Oxford’s Form S-3 dated September 24, 2004; other risks or uncertainties may be detailed from time to time in Oxford’s future SEC filings. Oxford disclaims any duty to update any forward-looking statements.
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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
| Quarters Ended |
Six Months Ended | |||||||||||
| ($ in thousands except per share amounts) | ||||||||||||
| November 26, 2004 |
November 28, 2003 |
November 26, 2004 |
November 28, 2003 | |||||||||
| Net Sales |
$ | 312,869 | $ | 253,883 | $ | 577,659 | $ | 495,988 | ||||
| Cost of goods sold |
212,766 | 177,051 | 392,634 | 348,265 | ||||||||
| Gross Profit |
100,103 | 76,832 | 185,025 | 147,723 | ||||||||
| Selling, general and administrative |
80,169 | 59,249 | 147,723 | 112,861 | ||||||||
| Amortization of intangibles |
2,424 | 1,677 | 4,136 | 3,355 | ||||||||
| 82,593 | 60,926 | 151,859 | 116,216 | |||||||||
| Royalties and other operating income |
3,301 | 1,140 | 5,054 | 2,320 | ||||||||
| Operating Income |
20,811 | 17,046 | 38,220 | 33,827 | ||||||||
| Interest expense, net |
6,855 | 6,098 | 14,776 | 11,844 | ||||||||
| Earnings Before Income Taxes |
13,956 | 10,948 | 23,444 | 21,983 | ||||||||
| Income taxes |
4,884 | 4,108 | 8,204 | 8,301 | ||||||||
| Net Earnings |
$ | 9,072 | $ | 6,840 | $ | 15,240 | $ | 13,682 | ||||
| Basic Earnings Per Share |
$ | 0.54 | $ | 0.43 | $ | 0.91 | $ | 0.86 | ||||
| Diluted Earnings Per Share |
$ | 0.53 | $ | 0.41 | $ | 0.89 | $ | 0.83 | ||||
| Basic Weighted Average Shares Outstanding |
16,761,159 | 16,170,814 | 16,736,873 | 15,994,443 | ||||||||
| Diluted Weighted Average Shares Outstanding |
17,215,771 | 16,605,400 | 17,216,546 | 16,452,738 | ||||||||
| Dividends Declared Per Share |
$ | 0.12 | $ | 0.105 | $ | 0.24 | $ | 0.21 | ||||
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OXFORD INDUSTRIES, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
NOVEMBER 26, 2004 AND NOVEMBER 28, 2003
(UNAUDITED)
| November 26, 2004 |
November 28, 2003 | |||||
| ($ in thousands) | ||||||
| Assets |
||||||
| Current Assets |
||||||
| Cash and cash equivalents |
$ | 19,414 | $ | 5,499 | ||
| Receivables |
175,053 | 135,794 | ||||
| Inventories |
161,832 | 127,437 | ||||
| Prepaid expenses |
17,817 | 19,978 | ||||
| Total Current Assets |
374,116 | 288,708 | ||||
| Property, plant and equipment, net |
55,431 | 51,421 | ||||
| Goodwill |
165,650 | 92,761 | ||||
| Intangibles, net |
239,698 | 150,687 | ||||
| Other noncurrent assets, net |
24,657 | 22,025 | ||||
| Total Assets |
$ | 859,552 | $ | 605,602 | ||
| Liabilities and Shareholders’ Equity |
||||||
| Current Liabilities |
||||||
| Trade accounts payable |
$ | 96,595 | $ | 72,184 | ||
| Accrued compensation |
22,027 | 19,648 | ||||
| Other accrued expenses |
45,495 | 34,007 | ||||
| Dividends payable |
2,013 | 1,700 | ||||
| Income taxes payable |
1,555 | 99 | ||||
| Short term debt |
6,973 | 97 | ||||
| Total Current Liabilities |
174,658 | 127,735 | ||||
| Long term debt, less current maturities |
315,608 | 198,764 | ||||
| Other noncurrent liabilities |
13,665 | 10,177 | ||||
| Deferred income taxes |
79,754 | 52,676 | ||||
| Shareholders’ equity: |
||||||
| Common stock |
16,778 | 16,190 | ||||
| Additional paid in capital |
42,709 | 23,115 | ||||
| Retained earnings |
216,380 | 176,945 | ||||
| Total Shareholders’ equity |
275,867 | 216,250 | ||||
| Total Liabilities and Shareholders’ Equity |
$ | 859,552 | $ | 605,602 | ||
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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED NOVEMBER 26, 2004 AND NOVEMBER 28, 2003
(UNAUDITED)
| Six Months Ended |
||||||||
| November 26, 2004 |
November 28, 2003 |
|||||||
| ($ in thousands) | ||||||||
| Cash Flows From Operating Activities |
||||||||
| Net earnings |
$ | 15,240 | $ | 13,682 | ||||
| Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |
||||||||
| Depreciation |
6,305 | 5,183 | ||||||
| Amortization of intangible assets |
4,136 | 3,355 | ||||||
| Amortization of deferred financing costs and bond discount |
3,118 | 1,289 | ||||||
| Gain on sale of assets |
(106 | ) | (207 | ) | ||||
| Equity income |
(323 | ) | (105 | ) | ||||
| Deferred income taxes |
(3,333 | ) | (964 | ) | ||||
| Changes in working capital: |
||||||||
| Receivables |
25,241 | 4,105 | ||||||
| Inventories |
(18,703 | ) | 5,266 | |||||
| Prepaid expenses |
1,900 | (2,091 | ) | |||||
| Trade accounts payable |
(9,352 | ) | (10,401 | ) | ||||
| Accrued expenses and other current liabilities |
(8,888 | ) | (5,487 | ) | ||||
| Stock options tax benefit |
965 | 1,641 | ||||||
| Income taxes payable |
(2,852 | ) | (3,316 | ) | ||||
| Other noncurrent assets |
(1,181 | ) | (3,215 | ) | ||||
| Other noncurrent liabilities |
2,541 | 4,553 | ||||||
| Net cash provided by operating activities |
14,708 | 13,288 | ||||||
| Cash Flows from Investing Activities |
||||||||
| Acquisition, net of cash acquired |
(139,814 | ) | (222,370 | ) | ||||
| Decrease in restricted cash |
— | 204,986 | ||||||
| Investment in deferred compensation plan |
(593 | ) | (1,439 | ) | ||||
| Purchases of property, plant and equipment |
(6,508 | ) | (7,266 | ) | ||||
| Proceeds from sale of property, plant and equipment |
413 | 72 | ||||||
| Net cash used in investing activities |
(146,502 | ) | (26,017 | ) | ||||
| Cash Flows from Financing Activities |
||||||||
| Payments of short-term debt |
(7,555 | ) | — | |||||
| Proceeds from (payments of) long-term debt |
116,693 | (172 | ) | |||||
| Payments of debt issuance costs |
(2,766 | ) | (7,374 | ) | ||||
| Proceeds from issuance of common shares |
752 | 4,956 | ||||||
| Dividends on common shares |
(3,896 | ) | (3,273 | ) | ||||
| Net cash provided by (used in) financing activities |
103,228 | (5,863 | ) | |||||
| Net change in cash and cash equivalents |
(28,566 | ) | (18,592 | ) | ||||
| Effect of foreign currency translation on cash and cash equivalents |
411 | — | ||||||
| Cash and cash equivalents at the beginning of year |
47,569 | 24,091 | ||||||
| Cash and cash equivalents at the end of period |
$ | 19,414 | $ | 5,499 | ||||
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OXFORD INDUSTRIES, INC
SEGMENT INFORMATION
(UNAUDITED)
| Quarters Ended |
Six Months Ended |
|||||||||||||||
| (in thousands) |
||||||||||||||||
| Nov. 26, 2004 |
Nov. 28, 2003 |
Nov. 26, 2004 |
Nov. 28, 2003 |
|||||||||||||
| Net Sales |
||||||||||||||||
| Menswear Group |
$ | 181,088 | $ | 115,353 | $ | 299,793 | $ | 231,107 | ||||||||
| Womenswear Group |
45,097 | 61,841 | 97,555 | 124,794 | ||||||||||||
| Tommy Bahama Group |
86,490 | 76,389 | 179,952 | 139,667 | ||||||||||||
| Corporate and other |
194 | 300 | 359 | 420 | ||||||||||||
| Net Sales |
$ | 312,869 | $ | 253,883 | $ | 577,659 | $ | 495,988 | ||||||||
| Operating Income |
||||||||||||||||
| Menswear Group |
$ | 18,048 | $ | 10,221 | $ | 26,969 | $ | 19,696 | ||||||||
| Womenswear Group |
208 | 1,893 | (758 | ) | 5,117 | |||||||||||
| Tommy Bahama Group |
5,895 | 7,550 | 17,811 | 14,509 | ||||||||||||
| Corporate and other |
(3,340 | ) | (2,618 | ) | (5,802 | ) | (5,495 | ) | ||||||||
| Operating income |
20,811 | 17,046 | 38,220 | 33,827 | ||||||||||||
| Interest expense, net |
6,855 | 6,098 | 14,776 | 11,844 | ||||||||||||
| Earnings before taxes |
$ | 13,956 | $ | 10,948 | $ | 23,444 | $ | 21,983 | ||||||||
(End)