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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant To Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the quarterly period ended September 2, 1994
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OR
[ ] Transition Report Pursuant To Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the transition period from to
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Commission File Number 1-4365
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OXFORD INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Georgia 58-0831862
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
222 Piedmont Avenue, N.E., Atlanta, Georgia 30308
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(Address of principal executive offices)
(Zip Code)
(404) 659-2424
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Number of shares outstanding
Title of each class as of October 7, 1994
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Common Stock, $1 par value 8,670,211
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
QUARTERS ENDED SEPTEMBER 2, 1994 AND AUGUST 27, 1993
(UNAUDITED)
Quarter Ended
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$ in thousands except per September 2, August 27,
share amounts 1994 1993
- ------------------------- ---------- ----------
Net Sales $165,304 $148,711
-------- --------
Costs and Expenses:
Cost of goods sold 133,432 119,374
Selling, general
and administrative 23,048 22,113
Interest 664 532
-------- --------
157,144 142,019
-------- --------
Earnings Before Income Taxes 8,160 6,692
Income Taxes 3,304 2,710
-------- --------
Net Earnings $ 4,856 $ 3,982
======== ========
Net Earnings Per Common Share $.56 $.46
======== ========
Average Number of Shares
Outstanding 8,645,562 8,603,332
========= =========
Dividends Per Share $0.18 $0.165
====== ======
- -------------------------
See notes to consolidated financial statements.
OXFORD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 2, 1994, JUNE 3, 1994 AND AUGUST 27, 1993
(UNAUDITED EXCEPT FOR JUNE 3, 1994)
September 2, June 3, August 27,
$ in thousands 1994 1994 1993
- -------------- ------------ -------- -----------
Assets
- ------
Current Assets:
Cash $ 2,275 $ 3,227 $ 1,830
Receivables 109,036 75,165 92,232
Inventories:
Finished goods 65,704 59,783 63,404
Work in process 29,001 22,549 22,283
Fabric, trim & supplies 32,148 32,133 26,205
-------- -------- --------
126,853 114,465 111,892
Prepaid expenses 11,557 12,402 10,246
-------- -------- --------
Total Current Assets 249,721 205,259 216,200
Property, Plant and Equipment 33,754 33,217 31,735
Other Assets 1,346 1,471 1,485
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$284,821 $239,947 $249,420
======== ======== ========
Liabilities and Stockholders' Equity
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Current Liabilities:
Notes payable $ 65,500 $ 19,500 $ 50,000
Trade accounts payable 39,699 45,023 33,700
Accrued compensation 9,516 11,687 8,144
Other accrued expenses 14,119 12,977 12,431
Dividends payable 1,557 1,555 1,415
Income taxes 2,311 - 1,757
Current maturities of
long-term debt 4,932 5,352 4,864
-------- -------- --------
Total Current Liabilities 137,634 96,094 112,311
Long-Term Debt,
less current maturities 12,189 12,388 17,532
Deferred Income Taxes 3,724 3,730 3,440
Stockholders' Equity:
Common stock 8,650 8,638 8,578
Additional paid-in capital 6,401 6,153 5,240
Retained earnings 116,223 112,944 102,319
-------- -------- --------
Total Stockholders' Equity 131,274 127,735 116,137
-------- -------- --------
Total Liabilities and Stockholders'
Equity $284,821 $239,947 $249,420
======== ======== ========
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See notes to consolidated financial statements.
OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
QUARTERS ENDED SEPTEMBER 2, 1994 AND AUGUST 27, 1993
(UNAUDITED)
Quarter Ended
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September 2, August 27,
$ in thousands 1994 1993
- -------------- ------------ ------------
Cash Flows from Operating Activities:
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Net earnings $ 4,856 $ 3,982
Adjustments to reconcile net earnings to
net cash provided by (used in) operating activities:
Depreciation and amortization 1,790 1,600
(Gain) on sale of property, plant
and equipment (26) (18)
Changes in working capital:
Receivables (33,871) (24,139)
Inventories (12,388) (9,299)
Prepaid expenses 845 1,452
Trade accounts payable (5,324) (929)
Accrued expenses and other current liabilities (1,027) (1,801)
Income taxes payable 2,311 1,757
Deferred income taxes (6) 136
Other noncurrent assets 125 68
Net cash flows (used in) -------- --------
operating activities (42,715) (27,191)
Cash Flows from Investing Activities:
- -------------------------------------
Purchase of property, plant and equipment (2,344) (2,310)
Proceeds from sale of property, plant and
and equipment 45 30
-------- --------
Net cash (used in) investing activities (2,299) (2,280)
Cash Flows from Financing Activities:
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Short-term borrowings 46,000 31,500
Payments on long-term debt (619) (257)
Proceeds from exercise of stock options 238 123
Purchase and retirement of common stock - (1,886)
Dividends on common stock (1,557) (1,433)
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Net cash provided by financing activities 44,062 28,047
Net Change in Cash and Cash Equivalents (952) (1,424)
Cash and Cash Equivalents at Beginning of Period 3,277 3,254
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Cash and Cash Equivalents at End of Period $ 2,275 $ 1,830
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Supplemental Disclosure of Cash Flow Information
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Cash paid (received) for:
Interest, net $ 420 $ 461
Income taxes 316 (618)
See notes to consolidated financial statements.
OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTERS ENDED SEPTEMBER 2, 1994 AND AUGUST 27, 1993
(UNAUDITED)
1. The foregoing unaudited consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods. All such
adjustments are of a normal recurring nature. The results for interim
periods are not necessarily indicative of results to be expected for
the year.
2. The financial information presented herein should be read in
conjunction with the consolidated financial statements included in the
Registrant's Annual Report on Form 10-K for the fiscal year ended June
3, 1994.
3. The Company is involved in certain legal matters primarily arising in
the normal course of business. In the opinion of management, the
Company's liability under any of these matters would not materially
affect its financial condition or results of operations.
Item 2. Management's Discussion and Analysis of Financial
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Condition and Results of Operations.
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Results of Operations
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NET SALES
Net sales for the first quarter of the 1995 fiscal year, which
ended September 2, 1994, increased by 11.2% from net sales for the
first quarter of the previous year. The sales increase was broad
based and included almost all divisions of the Company. The
Company's Oxford Slacks division experienced heavy initial
shipments of its Everpress wrinkle-resistant 100% cotton slacks.
The Company's Oxford Shirtings division increased volume with its
initial shipments of the new Tommy Hilfiger dress shirt line. The
Company's Oxford Shirtings division experienced delays in the
initial shipments of the Savane and other wrinkle-resistant shirt
lines due to the unexpected complexity of the start-up for this
product category. The Company considers the resolution of the
difficulties associated with this new product category a top
priority.
COST OF GOODS SOLD
Cost of goods sold as a percentage of net sales was 80.7% in
the first quarter of the current year as compared to 80.3% in the
first quarter of the prior year. During the first quarter of the
current year, the sale of a domestic manufacturing facility was
announced and the impending closing of two additional domestic
manufacturing facilities was announced. A provision of $1,000,000
is included in the current year's first quarter operations to
provide for these facility closings.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased by 4.2%
to $23,048,000 in the first quarter of fiscal 1995 from $22,113,000
in the same period of fiscal 1994. Combined with the increase in
net sales, the percentage of selling, general and administrative
expenses to net sales declined to 13.9% in the first quarter of
fiscal 1995 from 14.9% in fiscal 1994.
In early August, 1993, one of the Company's retail catalog
customers, New Hampton, Inc., filed for bankruptcy. A provision
of $1,000,000 for bad debts was included in the first quarter
operations of fiscal 1994 to provide for this bankruptcy.
INTEREST EXPENSE
Net interest expense as a percentage of net sales was 0.4% in
the first quarter of both fiscal 1995 and 1994. Average short-
term borrowings and the weighted average interest rate increased
over the prior year.
INCOME TAXES
The Company's effective tax rate was 40.5% for the first
quarters of both fiscal 1995 and fiscal 1994.
FUTURE OPERATING RESULTS
The Company expects sales gains in the second fiscal quarter
to be in the single digit range. Earnings gains should continue to
outpace sales gains.
After the end of the first quarter of the current fiscal year,
the Company announced that it had formed a venture with Tommy
Hilfiger Licensing, Inc. giving the Company exclusive distribution
for golf apparel. This new business, known as Tommy Hilfiger Golf,
will be designed and manufactured by Tommy Hilfiger and distributed
by a newly formed division within the Company. The collection
will premiere in May, 1995 and be available within a limited tier
of distribution which includes resort and pro shops in the U.S.A.,
Bermuda and the U.S. Virgin Islands by October, 1995.
The Company has been the exclusive licensee of Jhane Barnes
men's sportswear in the United States over the past twelve years.
Effective with the Fall 1995 season, the Company and Jhane Barnes
have mutually agreed to terminate that relationship. In recent
years sales volume with Jhane Barnes has been approximately
$12,000,000 annually. The Company will continue to ship Jhane
Barnes sportswear through May 1995 or the conclusion of Spring
1995.
Liquidity and Capital Resources
--------------------------------
OPERATING ACTIVITIES
During the first quarter of the current year, operating
activities used $42,715,000 as compared to $27,191,000 used in the
first quarter of the prior year. The primary factors contributing
to this increase were increased net earnings offset by increased
receivables and inventories and reduced trade payables. The
increased receivables reflect the increase in sales over the last
two months in the same period of the prior year. The increase in
inventory is primarily to support the increased sales volume and
seasonal fluctuations. The decrease in trade payables is due to
seasonal fluctuation.
INVESTING ACTIVITIES
Investing activities used $2,299,000 in the first quarter of
the current year and $2,280,000 in the same period of the prior
year. Purchases consisted primarily of replacement of worn or
obsolete machinery and equipment.
FINANCING ACTIVITIES
Financing activities generated $44,062,000 in the first
quarter of the current year and $28,047,000 in the prior year. The
primary differences were increased short-term borrowings in the
current year and the purchase and retirement of 125,700 shares of
the Company's common stock in the first quarter of the prior year.
The Company has not purchased or retired any of its common
stock in the first quarter of the current year, or in the period
after the end of the first quarter of the current year. Due to the
exercise of employee stock options, a net of 13,650 shares of the
Company's common stock have been issued during the three months
ended September 2, 1994, and 19,820 shares have been issued since
the end of the first quarter.
On October 3, 1994, the Company's Board of Directors declared
a cash dividend of $.18 per share, payable December 3, 1994 to
shareholders of record on November 14, 1994.
WORKING CAPITAL
Working capital increased from $103,889,000 at the end of the
first quarter of the previous year to $109,165,000 at the end of
the 1994 fiscal year, and increased to $112,087,000 at the end of
the first quarter of the current year. The ratio of current assets
to current liabilities was 1.9 at the end of the first quarter of
the previous year, 2.1 at the end of the previous fiscal year and
1.8 at the end of the first quarter of the current year. The major
differences relate to changes in receivables, inventories, trade
payables and short-term borrowings as discussed above.
FUTURE LIQUIDITY AND CAPITAL RESOURCES
The Company believes it has the ability to generate cash to
meet its foreseeable needs. The sources of funds primarily include
funds provided by operations and short-term borrowings. The uses
of funds primarily include working capital requirements, capital
expenditures, dividends and repayment of long-term debt. The
Company regularly utilizes committed bank lines of credit and other
uncommitted bank resources to meet working capital requirements.
On September 2, 1994, the Company has available for its use lines
of credit with several lenders aggregating $20,000,000 at September
2, 1994. The Company has agreed to pay commitment fees for these
available lines of credit. At September 2, 1994 $20,000,000 was in
use under these lines. In addition, the Company has $122,000,000
in uncommitted lines of credit, of which $47,000,000 is reserved
exclusively for letters of credit. The Company pays no commitment
fees for these available lines of credit. At September 2, 1994,
$45,500,000 was in use under these lines of credit. Maximum
short-term borrowings from all sources during the first quarter
were $65,500,000. The Company anticipates continued use and
availability of both committed and uncommitted short-term borrowing
resources as working capital needs may require.
The Company will consider possible acquisitions of apparel-
related businesses that are compatible with its long-term
strategies. There are no present plans to borrow additional
long-term funds, sell securities, or enter into off-balance sheet
financing arrangements.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
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(a) Exhibits.
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11 Statement re computation of per share
earnings.
(b) Reports on Form 8-K.
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The Registrant did not file any reports on Form 8-K during
the quarter ended September 2, 1994.
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 thereunto duly authorized.
OXFORD INDUSTRIES, INC.
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(Registrant)
/s/R. William Lee, Jr.
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Date: October 17, 1994 R. William Lee, Jr.
--------------- Executive Vice President
/s/Debra A. Pauli
--------------------------
Date: October 17, 1994 Debra A. Pauli
--------------- Controller
(Chief Accounting Officer)
EXHIBIT 11 OXFORD INDUSTRIES, INC. STATEMENT RE COMPUTATION OF PER SHARE EARNINGS QUARTERS ENDED SEPTEMBER 2, 1994 AND AUGUST 27, 1993 (UNAUDITED) Quarter Ended ----------------------------------- September 2, 1994 August 27, 1993 ----------------- --------------- Net earnings $4,856,000 $3,982,000 Average Number of Shares Outstanding Primary 8,838,142 8,751,428 Fully diluted 8,838,142 8,786,922 As reported 8,645,562 8,603,332 Net Earnings per Common Share Primary $0.55 $0.46 Fully diluted $0.55 $0.45 As reported* $0.56 $0.46 - ----------------------- * Common stock equivalents (which arise solely from outstanding stock options) are not materially dilutive and, accordingly, have not been considered in the computation of reported net earnings per common share.
EXHIBIT 99 INDEX OF EXHIBITS INCLUDED HERIN, FORM 10-Q SEPTEMBER 2, 1994 SEQUENTIAL EXHIBIT PAGE NUMBER DESCRIPTION NUMBER - ------------------------------------------------------------------- 11 Statement re computation of per share earnings 12 27 Financial Data Schedule 13