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): June 5, 2012
 
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)	
 
Registrant’s 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 June 5, 2012, Oxford Industries, Inc. issued a press release announcing, among other things, its financial results for the first quarter of fiscal 2012, which ended on April 28, 2012. 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
Number	 	 	
99.1	 	Press Release of Oxford Industries, Inc., dated June 5, 2012.	
 
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.	

June 5, 2012	 	/s/ Thomas C. Chubb III	
 	 	Name:	Thomas C. Chubb III	
 	 	Title:	President	
 
2

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:	InvestorRelations@oxfordinc.com	 	
 	 	 	
 	 	FOR IMMEDIATE RELEASE	
 	 	  June 5, 2012	
 
Oxford Industries Reports First Quarter Results
 
— Continued Strength at Tommy Bahama and Lilly Pulitzer —
 
— First Quarter Adjusted EPS of $1.12 Exceeds Guidance and Prior Year —
 
— Full Year Adjusted EPS Guidance Increased to $2.85 - $2.95 —
 
ATLANTA, GA — Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its fiscal 2012 first quarter ended April 28, 2012. Consolidated net sales rose 11% to $231.0 million compared to $208.3 million in the first quarter of fiscal 2011. On an adjusted basis, earnings per diluted share from continuing operations increased 5% to $1.12 from $1.07 in the first quarter of fiscal 2011. On a U.S. GAAP basis, earnings per diluted share from continuing operations were $1.09 in the first quarter of fiscal 2012 compared to $1.03 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.
 
“We are pleased to report excellent first quarter results driven, in particular, by strength in our direct to consumer businesses at Tommy Bahama and Lilly Pulitzer. Perhaps even more significant to our long-term growth strategy were some key store openings that happened during the first quarter. Notably, Lilly Pulitzer opened its first new company-owned store since we acquired them with a store in Charlotte and Tommy Bahama opened its first company-owned international store with an opening in Macau,” commented J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford Industries, Inc.
 
“Our retail expansion has continued in May with the opening of a Lilly Pulitzer store in Atlanta and a Tommy Bahama store in Singapore.  In the next twelve months, Tommy Bahama expects to open, among other locations, high profile stores in New York on Fifth Avenue, Chicago on Michigan Avenue, Hong Kong and the Ginza district of Tokyo. Lilly Pulitzer is slated to open one more store this year and is working on securing leases for additional retail locations.”
 
Mr. Lanier continued, “Continued growth in our direct to consumer business and development of an international business are two critical elements of our strategy to drive
 
(More)

 
long term profitable growth.  We are delighted with the progress we are making on both fronts and believe it bodes well for our future prospects.”
 
Operating Results
 
Tommy Bahama reported a 15% increase in net sales to $141.1 million for the first quarter of fiscal 2012. The increase in sales was driven by strength in the direct to consumer business, including high single-digit comparable store sales increases in full-price stores, the contribution from additional retail stores and significantly higher e-commerce sales. Increases in wholesale sales also contributed to the solid first quarter performance. Tommy Bahama’s operating income rose 8% to $25.6 million, driven by higher sales, but also reflecting the planned increase in SG&A from expenses associated with the Tommy Bahama international roll-out and the pre-opening costs for the New York store, and costs associated with operating additional retail stores. As of April 28, 2012, Tommy Bahama operated 96 retail stores compared to 89 stores at the end of the first quarter of fiscal 2011.
 
Lilly Pulitzer’s sales in the first quarter of fiscal 2012 rose 19% to $35.6 million reflecting increases in comparable store sales in the upper teens, the addition of one retail store and continued dramatic growth in e-commerce sales. Wholesale sales also increased year over year. The sales strength at Lilly Pulitzer, as well as higher gross margins, resulted in a 35% increase in adjusted operating income to $11.6 million for the first quarter of fiscal 2012. On a U.S. GAAP basis, operating income increased 57% to $11.0 million from $7.0 million in the first quarter of fiscal 2011.
 
Ben Sherman reported net sales of $17.4 million for the first quarter of fiscal 2012 compared to $19.4 million in the first quarter of 2011. The operating loss for the first quarter was $2.7 million compared to an operating loss of $0.8 million in the first quarter of fiscal 2011. Ben Sherman sales and gross margins continued to be impacted by the economic conditions in the U.K. and Europe, which accounted for approximately 70% of its sales during the first quarter. Gross margins were also negatively impacted by higher product costs.
 
Net sales for Lanier Clothes were flat at $33.0 million in the first quarter of fiscal 2012 with operating income declining to $4.0 million from $4.7 million in the first quarter of fiscal 2011. The decrease in operating income was primarily due to continued gross margin pressures.
 
The Corporate and Other operating loss for the first quarter of fiscal 2012 was $5.1 million compared to an operating loss of $4.0 million in the first quarter of fiscal 2011, with the difference primarily due to the impact of LIFO accounting. The first quarter of fiscal 2012 included a LIFO charge of $0.2 million compared to a $0.6 million LIFO credit in the first quarter of fiscal 2011.
 
(More)

 
Consolidated Results
 
Consolidated gross margins for the first quarter of fiscal 2012 decreased slightly to 55.9% from 56.5% in the first quarter of fiscal 2011. The year over year comparison reflected higher product costs and the impact of the depressed economic conditions that Ben Sherman faced in its U.K. and European businesses. The Company expects consolidated gross margins to improve in the second half of fiscal 2012 as input cost pressure eases versus the prior year. This easing of cost pressures, along with the anticipated increasing proportion of the higher gross margin Tommy Bahama and Lilly Pulitzer businesses relative to the prior year, is expected to result in expansion of its consolidated gross margin percentage for the year.
 
SG&A for the first quarter of fiscal 2012 was $100.8 million, or 43.6% of net sales, compared to $91.1 million, or 43.8% of net sales in the first quarter of fiscal 2011. Some leveraging of SG&A was achieved despite $2.4 million of costs in the first quarter associated with the Tommy Bahama international roll-out and the New York store, which is planned to open later this year.
 
Interest expense for the first quarter of fiscal 2012 decreased 25% to $3.6 million as a result of the Company’s repurchase of $45 million of its 11.375% Senior Secured Notes in fiscal 2011. As previously announced, the Company intends to redeem the remaining $105 million of notes in July 2012. To finance the redemption of the notes and ensure adequate liquidity, the Company expects to amend and restate its existing $175 million U.S. revolving credit facility to, among other things, increase the size of the facility and extend the maturity date. As a result of the expected refinancing, the Company expects interest expense for fiscal 2012 to be approximately $9.5 million.
 
The effective tax rate for the first quarter of fiscal 2012 was 38.3% compared to 34.2% in the prior year. The effective tax rate for the first quarter of fiscal 2012 is more indicative of the anticipated effective tax rate for future periods.
 
Balance Sheet & Liquidity
 
Inventory increased to $86.0 million at April 28, 2012 from $62.8 million at the end of the first quarter of fiscal 2011. The increase was primarily due to anticipated sales growth across all channels of distribution, the operation of additional retail stores, the timing of shipments from vendors and the impact of increased product costs.
 
As of April 28, 2012, the Company had $3.5 million of borrowings outstanding under its U.S. revolving credit facility and $6.0 million of borrowings outstanding under its U.K. revolving credit facility. Availability under the U.S. revolving credit facility was approximately $159 million at the end of the first quarter of fiscal 2012. The Company’s anticipated capital expenditures for fiscal 2012, including $9.6 million incurred during the first quarter, are expected to approach $60 million. These expenditures are expected to consist primarily of costs associated with additional retail stores, information technology investments, retail store remodeling and distribution center enhancements.
 
(More)

 
Outlook for Fiscal 2012
 
Due to better than anticipated first quarter results, continued momentum at Tommy Bahama and Lilly Pulitzer, and the Company’s assumptions regarding its refinancing terms, the Company increased its full year outlook for net sales and adjusted earnings per share. For fiscal 2012, the Company expects adjusted earnings per diluted share in a range of $2.85 to $2.95 and net sales of $850 to $865 million. This compares to the Company’s prior guidance of $2.70 to $2.80 in adjusted earnings per diluted share and net sales of $840 to $855 million. The adjusted earnings per share guidance excludes the impact of approximately $9 million in charges associated with the expected refinancing of the senior secured notes and approximately $2.4 million associated with a change in the fair value of contingent consideration. On a U.S. GAAP basis, earnings per diluted share for fiscal 2012 are now expected to be between $2.40 and $2.50.
 
For the second quarter, ending on July 28, 2012, the Company anticipates net sales in a range from $200 to $210 million compared to net sales of $180.6 million in the second quarter of fiscal 2011. Adjusted earnings per diluted share are expected to be $0.60 to $0.65 compared to adjusted earnings per diluted share of $0.57 in the second quarter of fiscal 2011. On a U.S. GAAP basis, earnings per diluted share for the second quarter are expected to be between $0.23 and $0.28, which includes the impact of approximately $9 million in charges associated with the expected refinancing of the senior secured notes in July 2012 and a $0.6 million charge associated with a change in the fair value of contingent consideration.
 
The earnings estimates for the year include the impact of approximately $12 million of expenses associated with the Tommy Bahama international rollout and the New York store, with approximately $3.1 million of these costs expected to occur in the second quarter.
 
Conference Call
 
The Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. ET today. A live web cast of the conference call will be available on the Company’s 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 June 19, 2012. To access the telephone replay, participants should dial 858-384-5517. The access code for the replay is 8086485. A replay of the web cast will also be available following the teleconference on the Company’s website at www.oxfordinc.com.
 
About Oxford
 
Oxford Industries, Inc. is a global apparel company which designs, sources, markets and distributes products bearing the trademarks of its owned and licensed brands. Oxford’s brands include Tommy Bahama ® , Lilly Pulitzer ® , Ben Sherman ® , Oxford Golf ® , Arnold Brant ® and Billy London ® . The Company also holds exclusive licenses to produce and
 
(More)

 
sell 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. Oxford’s wholesale customers include department stores, specialty stores, national chains, specialty catalogs and Internet retailers. Oxford’s stock has traded on the New York Stock Exchange since 1964 under the symbol OXM. For more information, please visit Oxford’s 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, access to capital and/or credit markets on satisfactory terms, 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, 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 28, 2012 under the heading “Risk Factors” and those described from time to time in our future reports filed with the SEC.
 
(More)

 
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except par amounts)
 
 	 	April 28,
2012	 	January 28,
2012	 	April 30,
2011	 	
ASSETS	 	 	 	 	 	 	 	
Current Assets:	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	5,679	 	$	13,373	 	$	47,033	 	
Receivables, net	 	86,705	 	59,706	 	72,263	 	
Inventories, net	 	85,996	 	103,420	 	62,843	 	
Prepaid expenses, net	 	16,725	 	19,041	 	10,912	 	
Deferred tax assets	 	19,339	 	19,733	 	16,266	 	
Assets related to discontinued operations, net	 	—	 	—	 	33,409	 	
Total current assets	 	214,444	 	215,273	 	242,726	 	
Property and equipment, net	 	97,270	 	93,206	 	82,899	 	
Intangible assets, net	 	165,673	 	165,193	 	167,573	 	
Goodwill	 	16,495	 	16,495	 	16,185	 	
Other non-current assets, net	 	21,107	 	19,040	 	21,716	 	
Total Assets	 	$	514,989	 	$	509,207	 	$	531,099	 	
LIABILITIES AND SHAREHOLDERS’ EQUITY	 	 	 	 	 	 	 	
Current Liabilities:	 	 	 	 	 	 	 	
Trade accounts payable and other accrued expenses	 	$	67,165	 	$	89,149	 	$	73,746	 	
Accrued compensation	 	16,703	 	23,334	 	15,558	 	
Income taxes payable	 	9,212	 	—	 	6,289	 	
Contingent consideration earned and payable	 	2,500	 	2,500	 	—	 	
Short-term debt and current maturities of long-term debt	 	6,023	 	2,571	 	716	 	
Liabilities related to discontinued operations	 	—	 	—	 	4,949	 	
Total current liabilities	 	101,603	 	117,554	 	101,258	 	
Long-term debt, less current maturities	 	106,991	 	103,405	 	147,228	 	
Non-current contingent consideration	 	11,245	 	10,645	 	11,345	 	
Other non-current liabilities	 	39,446	 	38,652	 	43,703	 	
Non-current deferred income taxes	 	33,614	 	34,882	 	30,231	 	
Commitments and contingencies	 	 	 	 	 	 	 	
Shareholders’ Equity:	 	 	 	 	 	 	 	
Common stock, $1.00 par value per common share	 	16,541	 	16,522	 	16,511	 	
Additional paid-in capital	 	101,090	 	99,670	 	96,679	 	
Retained earnings	 	127,079	 	111,551	 	106,700	 	
Accumulated other comprehensive loss	 	(22,620	)	(23,674	)	(22,556	)	
Total shareholders’ equity	 	222,090	 	204,069	 	197,334	 	
Total Liabilities and Shareholders’ Equity	 	$	514,989	 	$	509,207	 	$	531,099	 	
 
(More)

 
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(in thousands, except per share amounts)
 
 	 	First
Quarter
Fiscal
2012	 	First
Quarter
Fiscal
2011	 	
Net sales	 	$	230,953	 	$	208,308	 	
Cost of goods sold	 	101,739	 	90,648	 	
Gross profit	 	129,214	 	117,660	 	
SG&A	 	100,808	 	91,138	 	
Change in fair value of contingent consideration	 	600	 	600	 	
Royalties and other operating income	 	4,982	 	4,791	 	
Operating income	 	32,788	 	30,713	 	
Interest expense, net	 	3,603	 	4,804	 	
Earnings from continuing operations before income taxes	 	29,185	 	25,909	 	
Income taxes	 	11,183	 	8,849	 	
Earnings from continuing operations	 	18,002	 	17,060	 	
 	 	 	 	 	 	
Earnings from discontinued operations, net of taxes	 	—	 	1,040	 	
Net earnings	 	$	18,002	 	$	18,100	 	
 	 	 	 	 	 	
Earnings from continuing operations per common share:	 	 	 	 	 	
Basic	 	$	1.09	 	$	1.03	 	
Diluted	 	$	1.09	 	$	1.03	 	
Earnings from discontinued operations, net of taxes, per common share:	 	 	 	 	 	
Basic	 	$	0.00	 	$	0.06	 	
Diluted	 	$	0.00	 	$	0.06	 	
Net earnings per common share:	 	 	 	 	 	
Basic	 	$	1.09	 	$	1.10	 	
Diluted	 	$	1.09	 	$	1.10	 	
Weighted average common shares outstanding:	 	 	 	 	 	
Basic	 	16,531	 	16,515	 	
Diluted	 	16,552	 	16,525	 	
Dividends declared per common share	 	$	0.15	 	$	0.13	 	
 
(More)

 
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 
 	 	First Quarter
Fiscal 2012	 	First Quarter
Fiscal 2011	 	
Cash Flows From Operating Activities:	 	 	 	 	 	
Earnings from continuing operations	 	$	18,002	 	$	17,060	 	
Adjustments to reconcile earnings from continuing operations to net cash provided by (used in) operating activities:	 	 	 	 	 	
Depreciation	 	5,772	 	4,821	 	
Amortization of intangible assets	 	256	 	298	 	
Change in fair value of contingent consideration	 	600	 	600	 	
Amortization of deferred financing costs and bond discount	 	376	 	487	 	
Stock compensation expense	 	761	 	864	 	
Deferred income taxes	 	(1,050	)	3,819	 	
Changes in working capital, net of acquisitions and dispositions:	 	 	 	 	 	
Receivables	 	(26,638	)	(20,962	)	
Inventories	 	17,889	 	23,003	 	
Prepaid expenses	 	2,263	 	1,110	 	
Current liabilities	 	(19,798	)	(13,631	)	
Other non-current assets	 	(2,326	)	756	 	
Other non-current liabilities	 	781	 	(1,009	)	
Net cash provided by (used in) operating activities	 	(3,112	)	17,216	 	
Cash Flows From Investing Activities:	 	 	 	 	 	
Purchases of property and equipment	 	(9,633	)	(3,634	)	
Net cash used in investing activities	 	(9,633	)	(3,634	)	
Cash Flows From Financing Activities:	 	 	 	 	 	
Repayment of revolving credit arrangements	 	(64,886	)	(12,283	)	
Proceeds from revolving credit arrangements	 	71,670	 	12,978	 	
Proceeds from issuance of common stock	 	680	 	939	 	
Dividends on common stock	 	(2,475	)	(2,142	)	
Net cash provided by (used in) financing activities	 	4,989	 	(508	)	
Cash Flows from Discontinued Operations:	 	 	 	 	 	
Net cash used in discontinued operations	 	—	 	(10,413	)	
 	 	 	 	 	 	
Net change in cash and cash equivalents	 	(7,756	)	2,661	 	
Effect of foreign currency translation on cash and cash equivalents	 	62	 	278	 	
Cash and cash equivalents at the beginning of year	 	13,373	 	44,094	 	
Cash and cash equivalents at the end of period	 	$	5,679	 	$	47,033	 	
 	 	 	 	 	 	
Supplemental disclosure of cash flow information:	 	 	 	 	 	
Cash paid for interest, net, including interest paid for discontinued operations	 	$	82	 	$	306	 	
Cash paid for income taxes, including income taxes paid for discontinued operations	 	$	(351	)	$	27,344	 	
 
(More)

 
OXFORD INDUSTRIES, INC.
OPERATING GROUP INFORMATION
(UNAUDITED)
(in thousands)
 
 	 	First Quarter
Fiscal 2012	 	First Quarter
Fiscal 2011	 	
Net Sales	 	 	 	 	 	
Tommy Bahama	 	$	141,134	 	$	122,903	 	
Lilly Pulitzer	 	35,633	 	29,873	 	
Ben Sherman	 	17,352	 	19,421	 	
Lanier Clothes	 	33,007	 	32,973	 	
Corporate and Other	 	3,827	 	3,138	 	
Total Net Sales	 	$	230,953	 	$	208,308	 	
Operating Income	 	 	 	 	 	
Tommy Bahama	 	$	25,564	 	$	23,770	 	
Lilly Pulitzer	 	11,012	 	7,015	 	
Ben Sherman	 	(2,740	)	(826	)	
Lanier Clothes	 	4,046	 	4,725	 	
Corporate and Other	 	(5,094	)	(3,971	)	
Total Operating Income	 	$	32,788	 	$	30,713	 	
 
(More)

 
RECONCILIATION OF CERTAIN OPERATING RESULTS INFORMATION PRESENTED IN ACCORDANCE WITH U.S. GAAP TO CERTAIN OPERATING RESULTS INFORMATION, AS ADJUSTED (UNAUDITED)
 
Set forth below is our reconciliation, in thousands except per share amounts, 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.
 
 	 	First Quarter
Fiscal 2012	 	First Quarter
Fiscal 2011	 	
As reported	 	 	 	 	 	
Net sales	 	$	230,953	 	$	208,308	 	
Gross profit	 	$	129,214	 	$	117,660	 	
Gross margin (gross profit as percentage of net sales)	 	55.9	%	56.5	%	
SG&A	 	$	100,808	 	$	91,138	 	
SG&A as percentage of net sales	 	43.6	%	43.8	%	
Operating income	 	$	32,788	 	$	30,713	 	
Operating margin (operating income as percentage of net sales)	 	14.2	%	14.7	%	
Earnings from continuing operations before income taxes	 	$	29,185	 	$	25,909	 	
Earnings from continuing operations	 	$	18,002	 	$	17,060	 	
Diluted earnings from continuing operations per common share	 	$	1.09	 	$	1.03	 	
Weighted average common shares outstanding — diluted	 	16,552	 	16,525	 	
Increase(decrease) in earnings from continuing operations	 	 	 	 	 	
LIFO accounting adjustment (1)	 	$	223	 	$	(602	)	
Purchase accounting adjustments (2)	 	$	—	 	$	996	 	
Change in fair value of contingent consideration (3)	 	$	600	 	$	600	 	
Impact of income taxes on adjustments above (4)	 	$	(313	)	$	(338	)	
Adjustment to earnings from continuing operations	 	$	510	 	$	656	 	
As adjusted	 	 	 	 	 	
Gross profit	 	$	129,437	 	$	118,054	 	
Gross margin (gross profit as percentage of net sales)	 	56.0	%	56.7	%	
SG&A	 	$	100,808	 	$	91,138	 	
SG&A as a percentage of net sales	 	43.6	%	43.8	%	
Operating income	 	$	33,611	 	$	31,707	 	
Operating margin (operating income as percentage of net sales)	 	14.6	%	15.2	%	
Earnings from continuing operations before income taxes	 	$	30,008	 	$	26,903	 	
Earnings from continuing operations	 	$	18,512	 	$	17,716	 	
Diluted earnings from continuing operations per common share	 	$	1.12	 	$	1.07	 	
 
(More)

 
NOTES TO RECONCILIATION OF CERTAIN OPERATING RESULTS INFORMATION PRESENTED IN ACCORDANCE WITH U.S. GAAP TO CERTAIN OPERATING RESULTS INFORMATION, AS ADJUSTED (UNAUDITED)

(1)        LIFO accounting adjustment reflects the impact on cost of goods sold in our consolidated statements of earnings resulting from LIFO accounting adjustments in each period. LIFO accounting adjustments are included in Corporate and Other for operating group reporting purposes.
(2)        Inventory write-up costs, which are included in cost of goods sold in our consolidated statements of earnings, reflect the impact of purchase accounting adjustments resulting from the write-up of inventory at acquisition related to the December 2010 acquisition of the Lilly Pulitzer brand and operations. These charges were included in cost of goods sold in the Lilly Pulitzer operating group results of operations. We do not anticipate any purchase accounting adjustments for inventory write-up costs in future periods.
(3)        Change in fair value of contingent consideration reflects the statement of earnings impact resulting from the change in fair value of contingent consideration pursuant to the earnout agreement with the sellers of the Lilly Pulitzer brand and operations. The periodic assessment of fair value is based on assumptions regarding the probability of the payment of all or part of the contingent consideration, cash flows of the Lilly Pulitzer operations and discount rates, among other factors. The change in fair value of contingent consideration is recorded quarterly with the passage of time as the payment date of the contingent consideration approaches and additional amounts may also be recognized as an increase or decrease in the expense as a result of the periodic assessment of fair value. A change in assumptions could result in a material change to the fair value of the contingent consideration. The change in fair value of contingent consideration is reflected in the Lilly Pulitzer operating group results of operations.
(4)        Impact of income taxes reflects the estimated earnings from continuing operations tax impact of the above adjustments based on the estimated effective tax rate on current year earnings, before any discrete items.
 
(More)

 
RECONCILIATION OF OPERATING INCOME (LOSS) IN ACCORDANCE WITH U.S. GAAP TO OPERATING INCOME (LOSS), AS ADJUSTED (UNAUDITED)
 
Set forth below is our reconciliation, 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.
 
 	 	First Quarter of Fiscal 2012	 	
 	 	Operating
income (loss),
as reported	 	LIFO
accounting
adjustment	 	Purchase
accounting
charges	 	Change in
fair value of
contingent
consideration	 	Operating
income (loss),
as adjusted	 	
Tommy Bahama	 	$	25,564	 	$	—	 	$	—	 	$	—	 	$	25,564	 	
Lilly Pulitzer (1)	 	11,012	 	—	 	—	 	600	 	11,612	 	
Ben Sherman	 	(2,740	)	—	 	—	 	—	 	(2,740	)	
Lanier Clothes	 	4,046	 	—	 	—	 	—	 	4,046	 	
Corporate and Other (2)	 	(5,094	)	223	 	—	 	—	 	(4,871	)	
Total	 	$	32,788	 	$	223	 	$	—	 	$	600	 	$	33,611	 	
 
 	 	First Quarter of Fiscal 2011	 	
 	 	Operating
income (loss),
as reported	 	LIFO
accounting
adjustment	 	Purchase
accounting
charges	 	Change in
fair value of
contingent
consideration	 	Operating
income (loss),
as adjusted	 	
Tommy Bahama	 	$	23,770	 	$	—	 	$	—	 	$	—	 	$	23,770	 	
Lilly Pulitzer (1)(3)	 	7,015	 	—	 	996	 	600	 	8,611	 	
Ben Sherman	 	(826	)	—	 	—	 	—	 	(826	)	
Lanier Clothes	 	4,725	 	—	 	—	 	—	 	4,725	 	
Corporate and Other (2)	 	(3,971	)	(602	)	—	 	—	 	(4,573	)	
Total	 	$	30,713	 	$	(602	)	$	996	 	$	600	 	$	31,707	 	
 
(More)

 
NOTES TO RECONCILIATION OF OPERATING INCOME (LOSS) IN ACCORDANCE WITH U.S. GAAP TO OPERATING INCOME (LOSS), AS ADJUSTED (UNAUDITED)

(1)        Change in fair value of contingent consideration reflects the statement of earnings impact resulting from the change in fair value of contingent consideration pursuant to the earnout agreement with the sellers of the Lilly Pulitzer brand and operations. The periodic assessment of fair value is based on assumptions regarding the probability of the payment of all or part of the contingent consideration, cash flows of the Lilly Pulitzer operations and discount rates, among other factors. The change in fair value of contingent consideration is recorded quarterly with the passage of time as the payment date of the contingent consideration approaches and additional amounts may also be recognized as an increase or decrease in the expense as a result of the periodic assessment of fair value. A change in assumptions could result in a material change to the fair value of the contingent consideration.
(2)        LIFO accounting reflects the impact on cost of goods sold in our consolidated statements of earnings resulting from LIFO accounting adjustments in each period.
(3)        Purchase accounting adjustments reflect the impact of purchase accounting adjustments resulting from the write-up of inventory at acquisition related to the December 2010 acquisition of the Lilly Pulitzer brand and operations. These charges were included in cost of goods sold in the Lilly Pulitzer operating group results of operations. We do not anticipate any purchase accounting adjustments for inventory write-up costs in future periods.
 
(More)

 
RECONCILIATION OF EARNINGS FROM CONTINUING OPERATIONS PER DILUTED SHARE PRESENTED IN ACCORDANCE WITH U.S. GAAP TO EARNINGS FROM CONTINUING OPERATIONS PER DILUTED SHARE, AS ADJUSTED (UNAUDITED)
 
Set forth below is our reconciliation of reported or reportable earnings from continuing operations per diluted share for certain historical and future periods, each presented in accordance with 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.
 
 	 	First Quarter
Fiscal 2012	 	First Quarter
Fiscal 2012	 	First Quarter
Fiscal 2011	 	
 	 	Actual	 	Guidance (1)	 	Actual	 	
Earnings from continuing operations per diluted share:	 	 	 	 	 	 	 	
U.S. GAAP basis	 	$	1.09	 	$1.03 - $1.08	 	$	1.03	 	
LIFO accounting adjustment (2)	 	$	0.01	 	—	 	$	(0.02	)	
Purchase accounting adjustments (3)	 	—	 	—	 	$	0.04	 	
Change in fair value of contingent consideration (4)	 	$	0.02	 	$0.02	 	$	0.02	 	
As adjusted	 	$	1.12	 	$1.05 - $1.10	 	$	1.07	 	
 
 	 	Second
Quarter
Fiscal 2012	 	Second
Quarter
Fiscal 2011	 	Full Year
Fiscal 2012	 	Full Year
Fiscal 2011	 	
 	 	Guidance (5)	 	Actual	 	Guidance (5)	 	Actual	 	
Earnings from continuing operations per diluted share:	 	 	 	 	 	 	 	 	 	
U.S. GAAP basis	 	$0.23 - $0.28	 	$	0.21	 	$2.40 - $2.50	 	$	1.77	 	
LIFO accounting adjustment (2)	 	—	 	$	0.02	 	$0.01	 	$	0.23	 	
Purchase accounting adjustments (3)	 	—	 	—	 	—	 	$	0.04	 	
Change in fair value of contingent consideration (4)	 	$0.02	 	$	0.02	 	$0.09	 	$	0.09	 	
Life insurance death benefit gain (6)	 	—	 	—	 	—	 	$	(0.07	)	
Loss on repurchase of senior notes (7)(8)	 	$0.35	 	$	0.32	 	$0.35	 	$	0.35	 	
As adjusted	 	$0.60 - $0.65	 	$	0.57	 	$2.85 - $2.95	 	$	2.41	 	
 
(More)

 
NOTES TO RECONCILIATIONS OF EARNINGS FROM CONTINUING OPERATIONS PER  DILUTED SHARE PRESENTED IN ACCORDANCE WITH U.S. GAAP TO EARNINGS FROM CONTINUING OPERATIONS PER DILUTED SHARE, AS ADJUSTED (UNAUDITED)

(1)        Guidance as issued on March 27, 2012.
(2)        LIFO accounting reflects the impact, net of income taxes, on earnings from continuing operations per diluted share resulting from LIFO accounting adjustments in each period. No estimate for future LIFO accounting adjustments are reflected in the guidance for any period presented.
(3)        Purchase accounting adjustments reflect the impact, net of income taxes, on earnings from continuing operations per diluted share resulting from the inventory write-up costs, which are included in cost of goods sold in Lilly Pulitzer. The inventory write-up costs reflect the purchase accounting adjustments resulting from the write-up of inventory at acquisition related to the December 2010 acquisition of the Lilly Pulitzer brand and operations. We do not anticipate any purchase accounting adjustments for inventory write-up costs in future periods.
(4)        Change in fair value of contingent consideration reflects the impact, net of income taxes, on earnings from continuing operations per diluted share resulting from the change in fair value of contingent consideration pursuant to the earnout agreement with the sellers of the Lilly Pulitzer brand and operations. The periodic assessment of fair value is based on assumptions regarding the probability of the payment of all or part of the contingent consideration, cash flows of the Lilly Pulitzer operations and discount rates, among other factors. The change in fair value of contingent consideration is recorded quarterly with the passage of time as the payment date of the contingent consideration approaches and additional amounts may also be recognized as an increase or decrease in the expense as a result of the periodic assessment of fair value. A change in assumptions could result in a material change to the fair value of the contingent consideration.
(5)        Guidance as issued on June 5, 2012.
(6)        Life insurance death benefit gain reflects the impact on earnings from continuing operations per diluted share from the proceeds received related to a corporate owned life insurance policy less the cash surrender value of the policy. The death benefit is non-taxable income.
(7)        Loss on repurchase of senior notes for fiscal 2012 reflects our estimate of the expected charge, net of income taxes, to continuing operations per diluted share associated with the anticipated redemption of our 11.375% Senior Secured Notes in July 2012. These costs include payment of the 5.688% premium, as well as the write-off of applicable deferred financing costs. The actual loss could differ from this estimate depending on various factors.
(8)        Loss on repurchase of senior notes for fiscal 2011 reflects the impact, net of income taxes, on earnings from continuing operations per diluted share resulting from the loss attributable to the repurchase of a portion of our 11.375% Senior Secured Notes.
 
(XXXX)