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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 December 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
OXFORD INDUSTRIES, INC.
(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
------- -------
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 January 6, 1995
- -------------------------- ----------------------------
Common Stock, $1 par value 8,673,818
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF EARNINGS
SIX MONTHS AND QUARTERS ENDED DECEMBER 2, 1994 AND NOVEMBER 26, 1993
Six Months Ended Quarter Ended
------------------------- ----------------------------
$ in thousands except December 2, November 26, December 2, November 26,
per share amounts 1994 1993 1994 1993
- --------------------- ----------- ------------ ------------ ------------
Net Sales $357,471 $327,448 $192,167 $178,737
Costs and Expenses:
Cost of Goods Sold 288,490 263,045 155,058 143,671
Selling, General and
Administrative 48,918 46,685 25,870 24,572
Interest 1,705 1,229 1,041 697
------ ------ ------ ------
Total Costs and Expenses 339,113 310,959 181,969 168,940
------- ------- ------- -------
Earnings Before
Income Taxes 18,358 16,489 10,198 9,797
Income Taxes 7,435 6,678 4,131 3,968
------ ------ ----- -----
Net Earnings $10,923 $9,811 $6,067 $5,829
======= ====== ====== ======
Net Earnings
Per Common Share $1.26 $1.14 $0.70 $0.68
===== ===== ===== =====
Average Number of Shares
Outstanding 8,655,613 8,592,722 8,665,610 8,581,949
========= ========= ========= =========
Dividends Per Share $0.360 $0.330 $0.180 $0.165
====== ====== ====== ======
See notes to consolidated financial statements.
OXFORD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 2, 1994, JUNE 3, 1994 AND NOVEMBER 26, 1993
(UNAUDITED EXCEPT FOR JUNE 3, 1994)
December 2, June 3, November 26,
$ in thousands 1994 1994 1993
- -------------- -----------------------------------------
Assets
Current Assets:
Cash $ 5,278 $ 3,227 $ 5,295
Receivables 107,226 75,165 91,724
Inventories:
Finished Goods 57,308 59,783 51,399
Work in Process 28,003 22,549 19,783
Fabric, Trim & Supplies 31,405 32,133 24,494
------ ------ ------
116,716 114,465 95,676
Prepaid expenses 10,627 12,402 11,871
------- ------- -------
Total Current Assets 239,847 205,259 204,566
Property, Plant & Equipment 33,212 33,217 31,618
Other Assets 1,375 1,471 1,614
-------- -------- --------
$274,434 $239,947 $237,798
======== ======== ========
Liabilities and Stockholders' Equity
- -------------------------------------
Current Liabilities:
Notes Payable $ 46,500 $ 19,500 $ 28,000
Trade Accounts Payable 44,586 45,023 31,781
Accrued Compensation 10,137 11,687 11,810
Other Accrued Expenses 14,796 12,977 15,811
Dividends Payable 1,561 1,555 1,417
Income Taxes 793 - 2,429
Current maturities of
long-term debt 4,855 5,352 4,864
------- ------ ------
Total Current Liabilities 123,228 96,094 96,112
======= ====== ======
Long-Term Debt,
less current maturities 11,185 12,388 17,341
Deferred Income Taxes 3,878 3,730 3,620
Stockholders' Equity:
Common Stock 8,672 8,638 8,586
Additional paid-in capital 6,746 6,153 5,408
Retained Earnings 120,725 112,944 106,731
------- ------- -------
Total Stockholders' Equity 136,143 127,735 120,725
------- -------- --------
$274,434 $239,947 $237,798
======== ======== ========
See notes to consolidated financial statements.
OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 2, 1994 AND NOVEMBER 26, 1993
(UNAUDITED)
Six Months Ended
----------------
December 2, November 26,
$ in thousands 1994 1993
- -------------- -------------------------
Cash Flows From Operating Activities
- ------------------------------------
Net earnings $ 10,923 $ 9,811
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 3,683 3,309
Gain on sale of property, plant and equipment (177) (37)
Changes in working capital:
Receivables (32,061) (23,631)
Inventories (2,251) 6,917
Prepaid expenses 1,775 (173)
Trade accounts payable (437) (2,848)
Accrued expenses and other current liabilities 275 5,247
Income taxes payable 793 2,429
Deferred income taxes 148 316
Other noncurrent assets 96 (70)
Net cash flows provided by (used in) -------- -------
operating activities (17,233) 1,270
Cash Flows From Investing Activities
- ------------------------------------
Purchase of property, plant and equipment (4,161) (3,931)
Proceeds from sale of property, plant and
and equipment 659 87
------ -------
Net cash used in investing activities (3,502) (3,844)
Cash Flows From Financing Activities
- ------------------------------------
Short-term borrowings 27,000 9,500
Payments on long-term debt (1,700) (447)
Proceeds from exercise of stock options 598 298
Purchase and retirement of common stock 0 (1,886)
Dividends on common stock (3,112) (2,850)
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Net cash provided by financing activities 22,786 4,615
Net change in Cash and Cash Equivalents 2,051 2,041
Cash and Cash equivalents at Beginning of Period 3,227 3,254
-------- ---------
Cash and Cash Equivalents at End of Period $ 5,278 $ 5,295
======== =========
Supplemental Disclosure of Cash Flow Information
- ------------------------------------------------
Cash paid for:
Interest $ 1,676 $ 1,135
Income taxes 5,710 4,336
See notes to consolidated financial statements.
OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS AND QUARTERS ENDED DECEMBER 2, 1994
AND NOVEMBER 26, 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
Condition and Results of Operations.
Results of Operations
NET SALES
Net sales for the second quarter of the 1995 fiscal year, which ended
December 2, 1994, increased by 7.5% from net sales for the second quarter
of the previous year. Net sales for the first six months of the current
year increased by 9.2% from net sales for the comparable period of the
prior year. This increase resulted in record sales for both the second
quarter and the first half. The Oxford Slacks division contributed with
heavy shipments of its Everpress wrinkle-resistant 100% cotton slacks.
The Lanier Clothes division also contributed significantly to the second
quarter sales gain. Our women's sportswear group also experienced a strong
percentage net sales increase from net sales for the comparable period of
the prior year. The Oxford Shirting division contributed with continued
shipments of its Tommy Hilfiger dress shirt line, Savane and other
wrinkle-resistant shirt lines. Although the division had an increase in
sales, sales could have been greater had the division been able to ship
all of its orders. The Company expects these difficulties to continue into
the third quarter. The division has experienced extremely rapid sales
growth over the past few years. Along with the expanded production
requirements, the division continued pursuing its goal of obtaining more
cost effective sources of production. In addition, the division
experienced increased costs and capacity requirements due to the
introduction of the wrinkle-resistant product lines. During the past
quarter several new foreign contractors were unable to deliver acceptable
goods on time. The division is working to correct the sourcing
difficulties. However, it will take time for the production problems to
clear. The Tommy Hilfiger dress shirt line was not impacted by these
problems.
COST OF GOODS SOLD
Cost of goods sold as a percentage of net sales was 80.7% for the
second quarter of the current year and 80.4% for the second quarter of the
previous year. For the first six months of the current year, cost of goods
sold as a percentage of net sales was 80.7% compared to 80.3% for the same
period in the previous year. The Company's cost of goods sold was
negatively affected in each period of the current year by increased cost
related to utilizing new manufacturing resources and the continuing costs
of expanding capacity to meet the growing demands for wrinkle-resistant
products.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased by 5.3% to
$25,870,000 in the second quarter of fiscal 1995 from $24,572,000 in the
same period of fiscal 1994. Selling, general and administrative expenses
increased by 4.8% to $48,918,000 in the first half of fiscal 1995 from
$46,685,000 in the same period of fiscal 1994. A very significant portion
of the increase in these expenses are related to the start up of Savane
wrinkle-resistant shirts and Tommy Hilfiger dress and golf shirts. As a
percentage of net sales, selling, general and administrative expenses
declined to 13.5% for the second quarter of fiscal 1995 from 13.7% for the
second quarter of the prior year, and to 13.7% for the first six months of
fiscal 1995 from 14.3% for the first six months of the previous year.
INTEREST EXPENSE
Net interest expense as a percentage of net sales increased to 0.5% in
each of the second quarter and the first half of fiscal 1995 from 0.4% for
the second quarter and the first half of fiscal 1994. Average short-term
borrowings and the weighted average interest rate increased over the prior
year.
INCOME TAXES
The Company's effective income tax rate was 40.5% in both fiscal 1995
and fiscal 1994 for both the second quarter and the first half.
FUTURE OPERATING RESULTS
The Company expects the first half sales momentum to continue through
the second half. Last year's second half earnings of $1.09 per share
included an earnings credit of $.18 per share from LIFO inventory
accounting which the Company does not expect to repeat this year. As a
result, in spite of expected increases in sales, the Company expects second
half earnings to be relatively flat when compared to last year's second
half.
Liquidity and Capital Resources
OPERATING ACTIVITIES
Operating activities used $17,233,000 during the first six months of
the current year and provided $1,270,000 in the first six months of the
prior year. The primary factors contributing to this increased use of cash
were increased receivables and increased inventory. The increased
receivables represent increased sales in the last two months of the
quarter. Inventory levels have increased to support anticipated sales.
INVESTING ACTIVITIES
Investing activities used $3,502,000 in the first six months of the
current year and $3,844,000 in the same period of the prior year.
Purchases consisted primarily of modernizing machinery and equipment, and
initial expenditures for renovating and expanding a distribution facility.
FINANCING ACTIVITIES
Financing activities generated $22,786,000 in the first six months of
the current year and $4,615,000 in the first six months of the prior year.
The primary factors contributing to this increase were increased short-term
borrowings in the current year to support the increased receivables and
inventory.
The Company has not purchased any of its common stock in the first
half of the current year, or in the period after the end of the first half
of the current year. Due to the exercise of employee stock options, a net
of 34,770 shares of the Company's common stock have been issued during the
six months ended December 2, 1994, and 3,200 shares have been issued since
December 2, 1994 through January 6, 1995.
On January 9, 1995, the Company's Board of Directors declared a cash
dividend of $.20 per share, payable March 4, 1995, to shareholders of
record on February 15, 1995. This is an increase of $.02 per share, or 11%
per share from prior quarterly dividends.
WORKING CAPITAL
Working capital increased from $108,454,000 at the end of the second
quarter of the previous year to $109,165,000 at the end of the 1994 fiscal
year, and increased to $116,619,000 at the end of the second quarter of the
current year. The ratio of current assets to current liabilities was 2.1
at the end of the second quarter of the previous year, 2.1 at the end of
the previous fiscal year and 1.9 at the end of the second quarter of the
current year. The major differences related to changes in the receivables,
inventories 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 December 2, 1994, the Company had available for
its use lines of credit with several lenders aggregating $20,000,000. The
Company has agreed to pay commitment fees for these available lines of
credit. At December 2, 1994, $15,000,000 was in use under these lines. In
addition, the Company has $132,000,000 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
December 2, 1994, $31,500,000 was in use under these lines of credit.
Maximum short-term borrowings from all sources during the first six months
of the current year were $66,500,000. The Company anticipates continued
use and availability of both committed and uncommitted short-term borrowing
resources as working capital needs may require.
The Company considers 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.
(a) Exhibits.
11 Statement re computation of per share earnings.
(b) Reports on Form 8-K.
The Registrant did not file any reports on Form 8-K during the
quarter ended December 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.
(Registrant)
/s/R. William Lee, Jr.
Date: January 17, 1995 R. William Lee, Jr.
Executive Vice President
/s/Debra A. Pauli
Date: January 17, 1995 Debra A. Pauli
Controller
(Chief Accounting Officer)
EXHIBIT 11
OXFORD INDUSTRIES, INC.
COMPUTATION OF PER SHARE EARNINGS
SIX MONTHS AND QUARTERS ENDED DECEMBER 2, 1994
AND NOVEMBER 26, 1993
(UNAUDITED)
Six Months Ended Quarter Ended
December 2, November 26, December 2, November 26,
1994 1993 1994 1993
Net Earnings $10,923,000 $9,811,000 $6,067,000 $5,829,000
Average Number of Shares
Outstanding:
Primary 8,842,996 8,763,105 8,834,288 8,775,967
Fully diluted 8,847,507 8,784,420 8,842,878 8,783,006
As reported* 8,655,613 8,592,722 8,665,610 8,581,494
Net Earnings per Common Share:
Primary $1.24 $1.12 $0.69 $0.66
Fully diluted $1.23 $1.12 $0.69 $0.66
As reported* $1.26 $1.14 $0.70 $0.68
* 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
DECEMBER 2, 1994
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
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11 Statement re computation of per share earnings 11
27 Financial Data Schedule 12