-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZrH+y0N3GS3CvrRTUfx2I5yLPeto6rvn90I29EeeP34L73D/AdipJu+vUeQLG/7D SVthRR9pUYeice26evi40Q== 0000075288-95-000004.txt : 19950417 0000075288-95-000004.hdr.sgml : 19950417 ACCESSION NUMBER: 0000075288-95-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950303 FILED AS OF DATE: 19950414 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OXFORD INDUSTRIES INC CENTRAL INDEX KEY: 0000075288 STANDARD INDUSTRIAL CLASSIFICATION: MEN'S & BOYS' FURNISHINGS, WORK CLOTHING, AND ALLIED GARMENTS [2320] IRS NUMBER: 580831862 STATE OF INCORPORATION: GA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04365 FILM NUMBER: 95528949 BUSINESS ADDRESS: STREET 1: 222 PIEDMONT AVE NE CITY: ATLANTA STATE: GA ZIP: 30308 BUSINESS PHONE: 4046592424 10-Q 1 FORM 10-Q 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 March 3, 1995 OR [ ] Transition Report Pursuant To Section 13 or 15(d) of The Securities Exchange Act of 1934 For the transition period from to Commission File Number 1-4365 OXFORD INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Georgia 58-0831862 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 222 Piedmont Avenue, N.E., Atlanta, Georgia 30308 (Address of principal executive offices) (Zip Code) (404) 659-2424 (Registrant's telephone number, including area code) Not Applicable (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 April 7, 1995 Common Stock, $1 par value 8,689,265 PART I. FINANCIAL INFORMATION Item 1. Financial Statements. - ------------------------------ OXFORD INDUSTRIES, INC. CONSOLIDATED STATEMENT OF EARNINGS NINE MONTHS AND QUARTERS ENDED MARCH 3, 1995 AND FEBRUARY 25, 1994 Nine Months Ended Quarter Ended --------------------------- -------------------------- $ in thousands except March 3, February 25, March 3, February 25, per share amounts 1995 1994 1995 1994 - --------------------- ------------ ------------ ------------ ------------ Net Sales $510,572 $470,589 $153,101 $143,141 -------- -------- -------- -------- Costs and Expenses: Cost of goods sold 416,442 376,957 127,952 113,912 Selling, general and administrative 70,016 67,885 21,098 21,200 Interest 2,715 1,739 1,010 510 -------- -------- -------- -------- Total Costs and Expenses 489,173 446,581 150,060 135,622 -------- -------- -------- -------- Earnings Before Income Taxes 21,399 24,008 3,041 7,519 Income Taxes 8,652 9,723 1,217 3,045 -------- -------- -------- -------- Net Earnings $12,747 $14,285 $1,824 $4,474 ======== ======== ======== ======== Net Earnings Per Common Share $1.47 $1.66 $0.21 $0.52 ===== ===== ===== ===== Average Number of Shares Outstanding 8,663,153 8,596,912 8,678,243 8,605,122 ========= ========= ========= ========= Dividends Per Share $0.560 $0.510 $0.200 $0.180 ====== ====== ====== ====== - ------------------------- See notes to consolidated financial statements. OXFORD INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS MARCH 3, 1995, JUNE 3, 1994 AND FEBRUARY 25, 1994 (UNAUDITED EXCEPT FOR JUNE 3, 1994) March 3, June 3, February 25, $ in thousands 1995 1994 1994 - -------------- ------------ ------------ ------------ Assets - ------ Current Assets: Cash $ 3,851 $ 3,227 $ 1,057 Receivables 104,079 75,165 89,494 Inventories: Finished goods 73,018 59,783 53,820 Work in process 29,706 22,549 17,375 Fabric, trim & supplies 34,748 32,133 23,284 -------- -------- -------- 137,472 114,465 94,479 Prepaid expenses 9,493 12,402 12,903 -------- -------- -------- Total Current Assets 254,895 205,259 197,933 Property, Plant & Equipment 35,203 33,217 31,445 Other Assets 1,262 1,471 1,558 -------- -------- -------- $291,360 $239,947 $230,936 ======== ======== ======== Liabilities and Stockholders' Equity - ------------------------------------ Current Liabilities: Notes payable $ 67,000 $ 19,500 $ 25,500 Trade accounts payable 43,743 45,023 29,740 Accrued compensation 10,042 11,687 9,710 Other accrued expenses 12,387 12,977 14,832 Dividends payable 1,737 1,555 1,552 Income taxes - - - Current maturities of long-term debt 4,932 5,352 4,864 -------- -------- -------- Total Current Liabilities 139,841 96,094 86,198 -------- -------- -------- Long-Term Debt, less current maturities 10,996 12,388 16,882 -------- -------- -------- Deferred Income Taxes 4,134 3,730 3,702 -------- -------- -------- Stockholders' Equity: Common stock 8,686 8,638 8,625 Additional paid-in capital 6,928 6,153 5,944 Retained earnings 120,775 112,944 109,585 -------- -------- -------- 136,389 127,735 124,154 -------- -------- -------- $291,360 $239,947 $230,936 ======== ======== ======== - ------------------------- See notes to consolidated financial statements. OXFORD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED MARCH 3, 1995 AND FEBRUARY 25, 1994 (UNAUDITED) Nine Months Ended ------------------------------ March 3, February 25, $ in thousands 1995 1994 - -------------- ------------ ------------ Cash Flows From Operating Activities - ------------------------------------ Net earnings $ 12,747 $ 14,285 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 5,644 5,122 (Gain) on sale of property, plant and equipment (1,065) (102) Changes in working capital: Receivables (28,914) (21,401) Inventories (23,007) 8,114 Prepaid expenses 2,909 (1,205) Trade accounts payable (1,280) (4,889) Accrued expenses and other current liabilities (2,235) 2,303 Income taxes payable - - Deferred income taxes 404 398 Other noncurrent assets 207 (26) Net cash flows (used in) provided by -------- -------- operating activities (34,590) 2,599 Cash Flows From Investing Activities - ------------------------------------ Purchase of property, plant and equipment (8,569) (5,610) Proceeds from sale of property, plant and and equipment 2,008 204 -------- -------- Net cash used in investing activities (6,561) (5,406) Cash Flows From Financing Activities - ------------------------------------ Short-term borrowings 47,500 7,000 Payments on long-term debt (1,812) (907) Proceeds from exercise of stock options 760 805 Purchase and retirement of common stock - (1,886) Dividends on common stock (4,673) (4,402) -------- -------- Net cash provided by financing activities 41,775 610 Net change in Cash and Cash Equivalents 624 (2,197) Cash and Cash equivalents at Beginning of Period 3,227 3,254 -------- -------- Cash and Cash Equivalents at End of Period $ 3,851 $ 1,057 ======== ======== Supplemental Disclosure of Cash Flow Information - ------------------------------------------------ Cash paid for: Interest $ 2,635 $ 1,639 Income taxes 10,378 10,599 See notes to consolidated financial statements. OXFORD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS AND QUARTERS ENDED FEBRUARY 25, 1994 AND FEBRUARY 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 third quarter of the 1995 fiscal year, which ended March 3, 1995, increased by 7.0% from net sales for the third quarter of the previous year. Net sales for the first nine months of the current year increased by 8.5% from net sales for the comparable period of the prior year. The Oxford Slacks division repeated its contribution of the second quarter with heavy shipments of its Everpress wrinkle-free 100% cotton slacks and shorts. The Company's women's sportswear group again experienced a strong percentage increase from net sales for the comparable period of the prior year. The Company's largest division, Oxford Shirtings, contributed to the increase with continued shipments of its Tommy Hilfiger dress shirt line and Savane wrinkle-free shirt lines. While the Oxford Shirtings division produced a respectable sales increase for the quarter, the division did experience order cancellations and returns due to late deliveries which were in turn caused by production capacity being inadequate for the greatly increased demand. COST OF GOODS SOLD Cost of goods sold as a percentage of net sales was 83.6% for the third quarter of the current year and 79.6% in the same period of the previous year. For the first nine months of the current year, cost of goods sold as a percentage of net sales was 81.6% compared to 80.1% for the same period in the previous year. The Company's increased cost of goods sold was primarily the result of problems in the Oxford Shirtings division. The division's plan for this fiscal year called for simultaneously increasing production, and increasing capacity of the wrinkle-free processing, and launching two new major product lines (Tommy Hilfiger dress and Savane wrinkle-free). The division was not successful at increasing production capacity to planned levels while maintaining its quality standards. Nor was the division successful at synchronizing the increased production requirements with the new wet processing capacity and maintaining "on time" delivery. As a result, the division incurred unexpectedly high levels of irregular production and significant processing cost overruns. The diminished actual capacity compared to plan led to late deliveries, order cancellations and returns as well as a build up of in- process inventories. The combination of these factors adversely affected the division's gross profit margins and the profit margins of the company as a whole. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses decreased by 0.5% to $21,098,000 in the third quarter of fiscal 1995 from $21,200,000 in the same period of fiscal 1994. Selling, general and administrative expenses increased by 3.1% to $70,016,000 in the first nine months of fiscal 1995 from $67,885,000 for the same period of fiscal 1994. Selling, general and administrative expenses for the third fiscal quarter included a gain on the sale of a previously idled distribution center (Atlanta) of approximately $818,000. This gain accounts for the decrease in selling, general and administrative expenses for the quarter. The increase for the nine months primarily relates to the start up of Savane wrinkle-free shirts and Tommy Hilfiger dress and golf shirts. As a percentage of net sales, selling, general and administrative expenses declined to 13.8% for the third quarter of fiscal 1995 from 14.8% for the third quarter of the prior year, and to 13.7% for the first nine months of fiscal 1995 from 14.4% for the first nine months of the previous year. INTEREST EXPENSE Net interest expense as a percentage of net sales increased to 0.7% in the third quarter of fiscal 1995 from 0.4% for the third quarter of the previous year. Net interest expense as a percentage of net sales for the first nine months of fiscal 1995 increased to 0.5% from 0.4% for the comparable period of the prior year. 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 40.0% for the third quarter of fiscal 1995 and 40.5% for the third quarter of the prior year. The effective income tax rate was 40.4% for the first nine months of fiscal 1995 and 40.5% for the first nine months of the previous year. FUTURE OPERATING RESULTS The Oxford Shirtings division has taken a number of steps to improve its future operating results. The division has more conservatively aligned its fall plan with its proven capacity. The division has opened a second wet processing facility in Juarez, Mexico and expanded shift production at its wet processing facility in Vidalia, Georgia. In addition, the division has obtained contract production for its wet processing lines. The division has also expanded its foreign contract sourcing to include regions and contractors not previously engaged in order to provide the required capacity while maintaining its quality standards. While these steps should set the stage for entering fiscal 1996 in a position to meet the greatly increased demand for its products, the fourth quarter will involve continuation of the problems experienced in the third quarter. During the third quarter, the company announced the closing of three domestic manufacturing facilities associated with the womenswear group (Belton, SC; Royston, GA; and Hamlet, NC). After the end of the third quarter, the womenswear group announced the future closing of its Hickory Grove, SC manufacturing facility. These closings are the direct result of the intense competitive pressures that require the Company to utilize the most cost effective sources. The Company does not anticipate any material costs associated with these closings. The Company expects the level of sales and earnings in this year's fourth quarter to be similar to the just completed third quarter. The Company does expect to enter fiscal 1996 in a position to resume growth in both sales and earnings. Liquidity and Capital Resources -------------------------------- OPERATING ACTIVITIES Operating activities used $34,590,000 during the first nine months of the current year and provided $2,599,000 in the first nine 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. The increased inventory levels were in part due to support for increased sales and in part due to the problems in the Oxford Shirtings division. INVESTING ACTIVITIES Investing activities used $6,561,000 in the first nine months of the current year and $5,406,000 in the same period of the prior year. Purchases in the current year consisted primarily of modernizing machinery and equipment, expenditures for renovating and expanding a distribution facility (scheduled to be completed in August, 1995), and completion of a wet processing facility in Juarez, Mexico. These expenditures were somewhat offset by the sale of a previously idled distribution center in Atlanta in the third quarter. FINANCING ACTIVITIES Financing activities provided $41,775,000 in the first nine months of the current year and $610,000 in the first nine months of the prior year. The primary factor contributing to this increase was 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 nine months of the current year, or in the period after the end of the third quarter of the current year. Due to the exercise of employee stock options, a net of 51,250 shares of the Company's common stock have been issued during the nine months ended March 3, 1995, and 3,020 shares have been issued since March 3, 1995 through April 7, 1995. WORKING CAPITAL Working capital decreased from $111,735,000 at the end of the third quarter of the previous year to $109,165,000 at the end of the 1994 fiscal year, and increased to $115,054,000 at the end of the third quarter of the current year. The ratio of current assets to current liabilities was 2.3 at the end of the third quarter of the previous year, 2.1 at the end of the previous fiscal year and 1.8 at the end of the of the third 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 March 3, 1995, 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 March 3, 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 March 3, 1995, $52,000,000 was in use under these lines of credit. Maximum short-term borrowings from all sources during the first nine months of the current year were $67,000,000. 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 March 3, 1995. 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: April 14, 1995 R. William Lee, Jr. --------------- Executive Vice President /s/Debra A. Pauli -------------------------- Date: April 14, 1995 Debra A. Pauli --------------- Controller (Chief Accounting Officer) EX-11 2 EARNINGS PER SHARE EXHIBIT 11 OXFORD INDUSTRIES, INC. COMPUTATION OF PER SHARE EARNINGS NINE MONTHS AND QUARTERS ENDED MARCH 3, 1995 AND FEBRUARY 25, 1994 (UNAUDITED) Nine Months Ended Quarter Ended ---------------------------- -------------------------- March 3, February 25, March 3, February 25, 1995 1994 1995 1994 ------------ ------------ ------------ ------------ Net Earnings $12,747,000 $14,285,000 $1,824,000 $4,474,000 Average Number of Shares Outstanding: Primary 8,838,854 8,791,693 8,808,590 8,806,881 Fully Diluted 8,842,178 8,815,537 8,809,466 8,832,192 As Reported* 8,663,153 8,596,912 8,678,243 8,605,122 Net Earnings per Common Share: Primary $1.44 $1.62 $0.21 $0.50 Fully Diluted $1.44 $1.62 $0.21 $0.50 As Reported* $1.47 $1.66 $0.21 $0.52 - ----------------------------- * Common stock equivalents (which arise solely from outstanding stock options) are not materially dilutive and, accordingly, have not been considered in the computation of net earnings per common share. EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from SEC form 10-Q and is qualified in its entirety by reference to such financial statements. 1,000 9-MOS JUN-02-1995 MAR-03-1995 3,851 0 106,835 2,756 137,472 254,895 106,324 71,121 291,360 139,841 0 8,686 0 0 127,703 291,360 510,572 510,572 416,442 416,442 70,016 0 2,715 21,399 8,652 12,747 0 0 0 12,747 1.44 1.44
EX-99 4 INDEX OF EXHIBITS EXHIBIT 99 INDEX OF EXHIBITS INCLUDED HERIN, FORM 10-Q March 3, 1995 SEQUENTIAL EXHIBIT PAGE NUMBER DESCRIPTION NUMBER - ------------------------------------------------------------------- 11 Statement re computation of per share earnings 11 27 Financial Data Schedule 12 -----END PRIVACY-ENHANCED MESSAGE-----