-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GRgD1jkJivtJ7V1UwgcKboovBLEvSDZbtWbEvi7TpzSzaG5zi45wmwupArGNL27/ 9exWOyLpf+1T/vReWhz+zg== 0000075288-95-000008.txt : 19951016 0000075288-95-000008.hdr.sgml : 19951016 ACCESSION NUMBER: 0000075288-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19950901 FILED AS OF DATE: 19951013 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: 95580318 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 September 1, 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 October 6, 1995 - --------------------------- ---------------------------- Common Stock, $1 par value 8,705,079 PART I. FINANCIAL INFORMATION Item 1. Financial Statements. - ------------------------------ OXFORD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF EARNINGS QUARTERS ENDED SEPTEMBER 1, 1995 AND SEPTEMBER 2, 1994 (UNAUDITED) Quarter Ended -------------------------- $ in thousands except per September 1, September 2, share amounts 1995 1994 - ------------------------- ---------- ------------ Net Sales $189,254 $165,304 -------- -------- Costs and Expenses: Cost of goods sold 157,131 133,432 Selling, general and administrative 25,318 23,048 Provision for environmental remediation 4,500 - Interest 1,841 664 -------- -------- 188,790 157,144 -------- -------- Earnings Before Income Taxes 464 8,160 Income Taxes 186 3,304 -------- -------- Net Earnings $ 278 $ 4,856 ======== ======== Net Earnings Per Common Share $.03 $.56 ======== ======== Average Number of Shares Outstanding 8,700,450 8,645,562 ========= ========= Dividends Per Share $0.20 $0.18 ====== ====== - ------------------------- See notes to consolidated financial statements. OXFORD INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS SEPTEMBER 1, 1995, JUNE 2, 1995 AND SEPTEMBER 2, 1994 (UNAUDITED EXCEPT FOR JUNE 2, 1995) September 1, June 2, September 2, $ in thousands 1995 1995 1994 - -------------- ------------ -------- ----------- Assets - ------ Current Assets: Cash $ 10,274 $ 2,225 $ 2,275 Receivables 109,459 83,962 109,036 Inventories: Finished goods 94,973 96,013 65,704 Work in process 29,209 31,014 29,001 Fabric, trim & supplies 35,325 42,951 32,148 -------- -------- -------- 159,507 169,978 126,853 Prepaid expenses 14,355 13,023 11,557 -------- -------- -------- Total Current Assets 293,595 269,188 249,721 Property, Plant and Equipment 40,004 38,650 33,754 Other Assets 5,171 1,190 1,346 -------- -------- -------- $338,770 $309,028 $284,821 ======== ======== ======== Liabilities and Stockholders' Equity - ------------------------------------ Current Liabilities: Notes payable $ 82,500 $ 43,500 $ 65,500 Trade accounts payable 40,517 54,331 39,699 Accrued compensation 8,390 8,235 9,516 Other accrued expenses 14,489 13,039 14,119 Dividends payable 1,741 1,739 1,557 Income taxes - - 2,311 Current maturities of long-term debt 4,732 4,732 4,932 -------- -------- -------- Total Current Liabilities 152,369 125,576 137,634 Long-Term Debt, less current maturities 46,830 47,011 12,189 Non-Current Liabilities 4,500 - - Deferred Income Taxes 3,825 3,862 3,724 Stockholders' Equity: Common stock 8,705 8,694 8,650 Additional paid-in capital 7,145 7,020 6,401 Retained earnings 115,396 116,865 116,223 -------- -------- -------- Total Stockholders' Equity 131,246 132,579 131,274 -------- -------- -------- Total Liabilities and Stockholders' Equity $338,770 $309,028 $284,821 ======== ======== ======== - ------------------- See notes to consolidated financial statements. OXFORD INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS QUARTERS ENDED SEPTEMBER 1, 1995 AND SEPTEMBER 2, 1994 (UNAUDITED) Quarter Ended ----------------------------- September 1, September 2, $ in thousands 1995 1994 - -------------- ------------ ------------ Cash Flows from Operating Activities: - ------------------------------------- Net earnings $ 278 $ 4,856 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 1,939 1,790 (Gain) on sale of property, plant and equipment (6) (26) Changes in working capital: Receivables (24,448) (33,871) Inventories 13,631 (12,388) Prepaid expenses (1,325) 845 Trade accounts payable (14,640) (5,324) Accrued expenses and other current liabilities 1,605 (1,027) Income taxes payable - 2,311 Non-Current Liabilities 4,500 - Deferred income taxes (37) (6) Other noncurrent assets 1,331 125 Net cash flows (used in) -------- -------- operating activities (17,172) (42,715) Cash Flows from Investing Activities: - ------------------------------------- Acquisitions (8,763) - Purchase of property, plant and equipment (3,334) (2,344) Proceeds from sale of property, plant and and equipment 109 45 -------- -------- Net cash (used in) investing activities (11,988) (2,299) Cash Flows from Financing Activities: - ------------------------------------- Short-term borrowings 39,000 46,000 Payments on long-term debt (181) (619) Proceeds from exercise of stock options 129 238 Dividends on common stock (1,739) (1,557) -------- -------- Net cash provided by financing activities 37,209 44,062 Net Change in Cash and Cash Equivalents 8,049 (952) Cash and Cash Equivalents at Beginning of Period 2,225 3,227 -------- -------- Cash and Cash Equivalents at End of Period $ 10,274 $ 2,275 ======== ======== Supplemental Disclosure of Cash Flow Information - ------------------------------------------------ Cash paid (received) for: Interest, net $ 1,798 $ 420 Income taxes (2,934) 316 See notes to consolidated financial statements. OXFORD INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS QUARTERS ENDED SEPTEMBER 1, 1995 AND SEPTEMBER 2, 1994 (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 2, 1995. 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. 4. The Company discovered a past unauthorized disposal of a substance believed to be dry cleaning fluid on one of its properties. The Company is currently conducting an investigation of the property. The Company believes that remedial action will be required, including continued investigation, monitoring and treatment of ground water and soil. Based on advice from its environmental experts, the Company has provided $4,500,000 for this remediation. Item 2. Management's Discussion and Analysis of Financial - ---------------------------------------------------------- Condition and Results of Operations. - ------------------------------------ Results of Operations ----------------------- NET SALES Net sales for the first quarter of the 1996 fiscal year, which ended September 1, 1995, increased by 14.5% from net sales for the first quarter of the previous year. The Company's Mens Shirt Group posted a sales increase of $20,630,000 with increases in every sector-private label, Savane Tommy Hilfiger Dress, Polo for Boys, and the Company's newly acquired Ely & Walker division(Ely & Walker markets western wear). The Company's Mens Slacks Group had a $7,509,000 increase fueled by its Everpress proprietary wrinkle- free process. Tailored Clothing sales were up $1,285,000 with increases in Oscar de la Renta and department stores being offset by a decline in chain stores. Overall sales in the Company's Womenswear Group were down $2,178,000 with a strong increase at Wal-Mart being offset by a decline in the restructured RENNY division. The Company continued to strengthen strategic alliances with its larger more financially stable customers. Sales to the Company's fifty largest customers increased by 19.9% while sales to all remaining customers declined 40.6%. The Company experienced an overall net sales unit volume increase of approximately 19.4% while experiencing an overall 4.2% reduction in average sales price per unit. The reduction in the average sales price per unit was the result of product mix and reduced selling prices in response to an intensely competitive business environment. COST OF GOODS SOLD Cost of goods sold, as a percentage of net sales, was 83.0% in the first quarter of the current year as compared to 80.7% in the first quarter of the prior year. This increase was primarily the result of the 4.2% reduction in the average sales price per unit mentioned above. The Company's largest division, Oxford Shirtings experienced depressed gross margins from the same period in the prior year, but showed improvement over results in the second half of the last fiscal year. During the first quarter, the Company announced the impending closing of two domestic manufacturing facilities (Alamo, GA; and Decherd, TN). These closings are a direct result of the intensely competitive pressures that require the Company to utilize more cost effective offshore production sources. A provision of $700,000 was included in the current year's first quarter operations to provide for these facility closings. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES The Company has discovered a past unauthorized disposal of a substance believed to be dry cleaning fluid on one of its properties. The Company is currently conducting an investigation of the property. The Company believes that remedial action will be required, including continued investigation, monitoring and treatment of ground water and soil. Based on advice from its environmental experts, the Company expects the maximum expenditures for remediation to be approximately $4,500,000 over the next thirty years. In the first quarter of fiscal 1996, the Company recorded a provision of $4,500,000 in connection with this matter. Management believes that any required additional expenses, if any, will not have a material adverse effect on the Company's results of operations or financial position. Selling, general and administrative expenses (excluding the environmental charge) increased by 9.8% to $25,318,000 in the first quarter of fiscal 1996 from $23,048,000 in the first quarter of the previous year. As a percentage of net sales, selling, general and administrative expenses (excluding the environmental charge) decreased to 13.4% in the first quarter of the current year from 13.9% in the first quarter of the prior year. Also included in selling general and administrative expenses are start-up costs for the new Tommy Hilfiger Golf line which will begin shipments in the second fiscal quarter. INTEREST EXPENSE Net interest expense as a percentage of net sales increased to 1.0% in the first quarter of fiscal 1996 from 0.4% in the first quarter of the prior year due to an increase in average short-term borrowing and long-term debt from the prior year. INCOME TAXES The Company's effective income tax rate was 40.1% for the first quarter of fiscal 1996 and 40.5 for the first quarter of the prior year. FUTURE OPERATING RESULTS The Company does not expect the widely publicized weaknesses in apparel retailing to improve dramatically in the near term. August sales were disappointing for most retailers and initial fall and back-to-school sales at retail have not been good. At this time, the Company does not expect to match last year's record second quarter sales or last year's second quarter earnings. The Company does, however, expect second half results to improve over that of last year. LIQUIDITY AND CAPITAL RESOURCES ------------------------------- OPERATING ACTIVITIES Operating Activities used $17,172,000 during the first quarter of the current year and used $42,715,000 in the first quarter of the prior year. The primary factors contributing to this decreased use of cash were a smaller increase in receivables and a decrease in inventory offset by a larger decrease in trade payables as compared to the first quarter of the previous year. Receivables increased for the quarter slightly faster than sales due principally to the timing of shipments. The inventory reduction came as a result of shipments to some of the Company's larger customers who had deferred shipments in the fourth quarter of the last fiscal year. The decrease in trade payables were due to seasonal fluctuation. INVESTING ACTIVITIES Investing activities used $11,988,000 in the first quarter of the current year and $2,299,000 in the same period of the prior year. During the first quarter of the current year the Company completed the purchase of assets of Ely & Walker. The Company also continued the enlargement and renovation of the distribution center in Lyons, GA. FINANCING ACTIVITIES Financing activities provided $37,209,000 in the first quarter of the current year and $44,062,000 in the same period of the prior year. The primary factor contributing to this change was decreased short-term borrowing activity, due to the operating and investing activities described above. Due to the exercise of employee stock options a net of 10,760 shares of the Company's common stock have been issued during the three months ended September 1,1995 and 280 shares have been issued since September 1, 1995 through October 6, 1995. WORKING CAPITAL Working capital increased from $112,087,000 at the end of the first quarter of the previous year to $143,612,000 at the end of the 1995 fiscal year, and decreased to $141,226,000 at the end of the first quarter of the current year. The ratio of current assets to current liabilities was 1.8 at the end of the first quarter of the prior fiscal year, 2.1 at the end of the prior fiscal year and 1.9 at the end of the first quarter of the current year. FUTURE LIQUIDITY AND CAPITAL RESOURCES The Company believes it has the ability to generate cash or has available borrowing capacity 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 1, 1995, the Company had available for its use lines of credit with several lenders aggregating $50,000,000. The Company has agreed to pay commitment fees for these available lines of credit. At September, 1, 1995, $50,000,000 was in use under these lines. Of the $50,000,000, $40,000,000 is long-term. In addition, the Company has $193,000,000 in uncommitted lines of credit, of which $98,000,000 is reserved exclusively for letters of credit. The Company pays no commitment fees for these available lines of credit. At September 1, 1995, $72,500,000 was in use under these lines of credit. Maximum short-term borrowings from all sources during the first three months of the current year were $125,500,000. 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 sell securities or enter into off-balance sheet financing arrangements. ADDITIONAL INFORMATION For additional information concerning the Company's operations, cash flows, liquidity and capital resources, this analysis should be read in conjunction with the Consolidated Financial statements and the Notes to Consolidated Financial statements contained in the Company's Annual Report for fiscal 1995. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. - ------------------------------------------ (a) Exhibits. --------- 4(e) Amendment dated June 1, 1995 to Note Agreement between the Company and The Prudential Insurance Company of America dated May 26, 1988 covering the Company's 8.62% promissory note due May 24, 1996. 11 Statement re computation of per share earnings. 27 Financial Data Schedule. (b) Reports on Form 8-K. -------------------- The Registrant did not file any reports on Form 8-K during the quarter ended September 1, 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/Ben B. Blount, Jr. -------------------------- Date: October 13, 1995 Ben B. Blount, Jr. --------------- Chief Financial Officer EX-4 2 EXHIBIT 4(e) THE PRUDENTIAL INSURANCE COMPANY OF AMERICA c/o Prudential Capital Group Four Gateway Center 100 Mulberry Street Newark, New Jersey 07102 October 3, 1995 Oxford Industries, Inc. 222 Piedmont Avenue, N.E. Atlanta, Georgia 30308 Attention: Chief Financial Officer Gentlemen: This letter is to amend that certain Note Agreement between Oxford Industries, Inc. (the "Company") and the Prudential Insurance Company of America ("Prudential"), dated May 26, 1988, as amended previously the ("Note Agreement") pursuant to which the Company issued and sold and Prudential purchased the Company's 8.62% promissory note due May 26, 1996, in the original principal amount of $30,000,000. Pursuant to Paragraph 11C of the Note Agreement, and subject to the written acceptance of the Company as hereinafter provided, Prudential and the Company hereby agree to amend the Note Agreement as follows: 1. Paragraph 6C(2)(a) is hereby amended and restated in its entirety as follows: " (a) the sum of (1) the aggregate amount of all outstanding Debt (including Secured Debt) of the Company and its Subsidiaries determined on a consolidated basis, plus (2) the aggregate amount of all outstanding unsecured Current Debt of the Company permitted by clause (v) of this paragraph 6C(2), to exceed an amount equal to 110% of Consolidated Tangible Net Worth, or " Except as modified hereby, the terms and conditions of the Note Agreement remain in full force and effect. If you are in agreement with the foregoing, please sign the enclosed counterparts of this letter and return them to Prudential, whereupon this letter shall become a binding agreement between the Company and Prudential as of June 1, 1995. Very Truly yours, THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By:/S/ Thomas Cecka Vice President The foregoing amendment is agreed to and accepted this 6 day of October, 1995 OXFORD INDUSTRIES, INC. By:/S/ James W. Wold Title: Treasurer EX-11 3 EXHIBIT 11 OXFORD INDUSTRIES, INC. STATEMENT RE COMPUTATION OF PER SHARE EARNINGS QUARTERS ENDED SEPTEMBER 1, 1995 AND SEPTEMBER 2, 1994 (UNAUDITED) Quarter Ended ----------------------------------- September 1, 1995 September 2, 1994 ----------------- --------------- Net earnings $278,000 $4,856,000 Average Number of Shares Outstanding Primary 8,795,999 8,838,142 Fully diluted 8,795,999 8,838,142 As reported 8,700,450 8,645,562 Net Earnings per Common Share Primary $0.03 $0.55 Fully diluted $0.03 $0.55 As reported* $0.03 $0.56 - ----------------------- * 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. EX-27 4
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 3-MOS MAY-31-1996 SEP-01-1995 10,274 0 112,342 2,883 159,507 293,595 112,911 72,907 338,770 152,369 0 8,705 0 0 122,541 338,770 189,254 189,254 157,131 157,131 29,818 0 1,841 464 186 278 0 0 0 278 .03 .03
EX-99 5 EXHIBIT 99 INDEX OF EXHIBITS INCLUDED HERIN, FORM 10-Q SEPTEMBER 1, 1995 SEQUENTIAL EXHIBIT PAGE NUMBER DESCRIPTION NUMBER - ------------------------------------------------------------------- 4(e) Amendment dated June 1, 1995 to Note Agreement between the Company and The Prudential Insurance Company of America dated May 26, 1988 covering the Company's 8.62% promissory note due May 24, 1996. 12-13 11 Statement re computation of per share earnings 14 27 Financial Data Schedule 15 -----END PRIVACY-ENHANCED MESSAGE-----