EX-99.1 2 a10-16742_1ex99d1.htm EX-99.1

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:

ashoemaker@oxfordinc.com

 

 

 

 

FOR IMMEDIATE RELEASE

 

 

September 1, 2010

 

Oxford Industries Reports Second Quarter Results

 

Earnings of $0.44 per Share Exceed Previously Issued Guidance —

 

Raises Estimates for Fiscal 2010 —

 

ATLANTA, GA — Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its fiscal 2010 second quarter, which ended July 31, 2010.  Consolidated net sales were $186.5 million in the second quarter of fiscal 2010 compared to $192.9 million in the second quarter of fiscal 2009.  Last year’s sales included $13.4 million of sales from businesses the Company has exited.  Diluted net earnings per share were $0.44, exceeding both the Company’s previously issued guidance of $0.30-$0.35 and a loss of $0.01 per share in the second quarter of fiscal 2009.

 

The Company noted that the second quarter of fiscal 2010 included $1.0 million, or $0.04 per share, of LIFO accounting charges compared to $4.0 million, or $0.17 per share, of LIFO accounting charges in the second quarter of fiscal 2009.  In the second quarter of fiscal 2009, the Company also incurred $1.4 million, or $0.06 per share, of restructuring charges at Ben Sherman and $1.8 million, or $0.07 per share, related to the write off of unamortized deferred financing costs associated with the retirement of its senior unsecured notes in June 2009.

 

J. Hicks Lanier, Chairman and Chief Executive Officer, commented, “We were pleased that demand for our Tommy Bahama product remained strong in the second quarter.  Both comparable store sales and e-commerce sales delivered healthy increases over the prior year and our wholesale order bookings for the second half of fiscal 2010 are strong.  Our efforts to refocus the Ben Sherman business continue to pay off as we saw a significant improvement in its operating performance.  Our heritage groups, Lanier Clothes and Oxford Apparel, both posted gratifying results once again.  We’re pleased that this translated into earnings per share of $0.44 in the quarter.”

 

Mr. Lanier concluded, “We will continue to focus on the efficiency of our operations and on carefully selected sales growth opportunities.  We are also committed to maintaining a strong balance sheet and preserving the full range of our strategic alternatives as we position our business to capture additional value for our shareholders.”

 

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Operating Results

 

Tommy Bahama reported net sales of $99.3 million for the second quarter of fiscal 2010 compared to $94.4 million in the second quarter of fiscal 2009.  The increase in net sales for Tommy Bahama was primarily due to increases in comparable store sales and higher e-commerce sales.  Tommy Bahama’s operating income for the second quarter was $14.2 million compared to $13.4 million in the second quarter of fiscal 2009.  The increase in operating income was primarily due to the increased net sales, improved gross margins due to a greater proportion of direct to consumer sales as a percentage of total Tommy Bahama sales and higher royalty income.  These increases were partially offset by increased SG&A.  At the end of the second quarter, Tommy Bahama operated 86 retail stores compared to 84 on August 1, 2009.

 

Ben Sherman reported net sales of $18.3 million for the second quarter of fiscal 2010 compared to $23.6 million in the second quarter of fiscal 2009.  For the quarter, Ben Sherman benefited from an increase in comparable store sales in its retail business and increases in wholesale sales of its men’s sportswear business.  These increases were offset by a $5.4 million reduction in sales in kids’, footwear and women’s, all of which Ben Sherman decided to exit last year.  Kids’ and footwear were subsequently licensed to third parties.  Reported sales at Ben Sherman reflect a 6.3% decrease in the average exchange rate of the British pound sterling versus the United States dollar, which had a $1.2 million negative impact.

 

Ben Sherman reported an operating loss of $0.6 million in the second quarter of fiscal 2010 compared to an operating loss of $6.3 million in the second quarter of fiscal 2009.  The dramatic increase in operating performance for Ben Sherman was due to improved gross margins, reduced SG&A and higher royalty income.  The second quarter of fiscal 2009 also included $1.4 million of restructuring charges related to Ben Sherman’s exit from and subsequent licensing of its footwear and kids’ businesses and other streamlining initiatives.

 

Net sales for Lanier Clothes were $22.7 million in the second quarter of fiscal 2010 compared to $25.2 million in the second quarter of fiscal 2009.  Most of the decline was attributable to underperforming businesses that the Company has exited.  Operating income in the second quarter of fiscal 2010 was $2.8 million compared to an operating income of $2.7 million in the second quarter of fiscal 2009.  Gross margins improved due to branded sales representing a greater proportion of Lanier Clothes’ sales in the second quarter of fiscal 2010 and close-out sales associated with exited businesses included in the prior year.

 

Oxford Apparel reported net sales of $45.6 million for the second quarter of fiscal 2010 compared to $49.5 million in the second quarter of fiscal 2009.  Last year’s sales included $6.2 million of sales from businesses Oxford Apparel has exited.  Operating income for Oxford Apparel was $3.4 million for the second quarter of fiscal 2010 compared to $4.1 million in the second quarter of fiscal 2009.  The decrease in operating income was primarily due to decreased sales and increased SG&A, which were partially offset by higher gross margins.

 

Corporate and Other reported an operating loss of $4.4 million for the second quarter of fiscal 2010 compared to an operating loss of $7.6 million in the second quarter of fiscal 2009.  The decrease in the operating loss was primarily due to LIFO accounting charges of $1.0 million in the second quarter of fiscal 2010 compared to $4.0 million in the second quarter of fiscal 2009.

 

Consolidated gross margins for the second quarter of fiscal 2010 were 47.1% compared to 40.1% in the second quarter of fiscal 2009.  Gross margins improved as a result of changes in product mix in each operating group and the increase in Tommy Bahama sales, both in total and as a proportion of

 

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consolidated net sales.  Gross profit included LIFO accounting charges of $1.0 million in the second quarter of fiscal 2010 and $4.0 million in the second quarter of fiscal 2009.  The Company anticipates that consolidated gross margins in fiscal 2010 will continue to increase compared to the prior year as its consolidated sales mix is more heavily weighted towards Tommy Bahama.

 

SG&A for the second quarter of fiscal 2010 was $76.2 million, or 40.9% of net sales, compared to $73.6 million, or 38.2% of net sales, in the second quarter of fiscal 2009.  The increase in SG&A was primarily due to costs associated with the resumption of the Company’s incentive compensation program, which is tied to the Company’s financial performance.  The second quarter of fiscal 2009 also included $1.4 million of restructuring charges at Ben Sherman as mentioned above.

 

Royalties and other operating income for the second quarter of fiscal 2010 were $4.0 million compared to $2.9 million in the second quarter of fiscal 2009.  The increase in royalties and other operating income was primarily due to increased royalty income in both Tommy Bahama and Ben Sherman as sales reported by certain licensees increased and new licensees were added.

 

Interest expense for the second quarter of fiscal 2010 was $5.1 million compared to $6.2 million in the second quarter of fiscal 2009.  The decrease in interest expense was primarily due to the $1.8 million write off of unamortized deferred financing costs associated with the retirement of the Company’s 87/8% senior unsecured notes in June 2009 and a lower level of borrowing during the second quarter of fiscal 2010, partially offset by the higher interest rate associated with the 113/8% senior secured notes issued in June 2009.

 

For the first half of fiscal 2010, consolidated net sales were $404.3 million compared to $409.6 million in the first half of fiscal 2009.  Last year’s sales included $26.4 million of sales from businesses the Company has exited.  Diluted net earnings per share were $1.19 compared to $0.40 in the first half of fiscal 2009.

 

The Company noted that the first half of fiscal 2010 included $1.6 million, or $0.07 per share, of LIFO accounting charges compared to $5.5 million, or $0.23 per share, of LIFO accounting charges in the first half of fiscal 2009.  In the first half of fiscal 2009, the Company also incurred $1.4 million, or $0.06 per share, of restructuring charges at Ben Sherman and $1.8 million, or $0.07 per share, related to the write off of unamortized deferred financing costs associated with the retirement of its senior unsecured notes in June 2009.

 

Balance Sheet and Liquidity

 

Total inventories at the close of the second quarter of fiscal 2010 were $76.3 million, down 12% from the close of the second quarter of fiscal 2009.  Inventory levels at Ben Sherman decreased significantly primarily as a result of the exit from and subsequent licensing of the footwear and kids’ businesses and the exit from the Ben Sherman women’s operations.  Receivables totaled $74.6 million at quarter end, down 5% from the end of last year’s second quarter.  The decrease was attributable to lower wholesale sales.

 

As of July 31, 2010, the Company had no borrowings outstanding under its U.S. revolving credit facility and $28.2 million of cash.  The Company’s capital expenditures for fiscal 2010, including $3.4 million incurred during the first half of fiscal 2010, are expected to be approximately $13 million.  These expenditures will consist primarily of additional retail stores and the costs associated with investment in certain technology initiatives.

 

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Fiscal 2010 Guidance

 

While the Company is mindful of macroeconomic issues, it has increased its full year outlook for sales and EPS due to the continued positive momentum in its own business.  For fiscal 2010, it expects diluted earnings per share in a range of $1.82 to $1.92 and net sales of $800 to $815 million.  This compares to the Company’s prior guidance of $1.70 to $1.80 in diluted earnings per share and net sales of $790 to $805 million.

 

For the third quarter, ending on October 30, 2010, the Company anticipates sales in a range from $195 to $205 million and diluted earnings per share of $0.25 to $0.30.

 

Dividend

 

The Company also announced that its Board of Directors has approved a cash dividend of $0.11 per share payable on October 29, 2010 to shareholders of record as of the close of business on October 15, 2010.  The Company has paid dividends every quarter since it became publicly owned in 1960.

 

Conference Call

 

The Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. EDT 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 September 19, 2010.  To access the telephone replay, participants should dial (719) 457-0820.  The access code for the replay is 7460955.  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 an international apparel design, sourcing and marketing company featuring a diverse portfolio of owned and licensed brands and a collection of private label apparel businesses.  Oxford’s brands include Tommy Bahama®, Ben Sherman®, Ely®, Oxford Golf®, Arnold Brant® and Billy London®.  The Company also holds exclusive licenses to produce and sell certain product categories under the Kenneth Cole®, Geoffrey Beene® and Dockers® labels.  Oxford’s wholesale customers are found in every major channel of distribution, including national chains, specialty catalogs, mass merchants, department stores, specialty stores and Internet retailers.  The Company operates retail stores, restaurants and Internet websites for some of its brands.  The Company also has license arrangements with select third parties to produce and sell certain product categories under its Tommy Bahama and/or Ben Sherman brands.  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

 

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of economic conditions on consumer demand and spending, demand for our products, timing and cost 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, access to capital and/or credit markets, costs of labor, 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 30, 2010 under the heading “Risk Factors” and those described from time to time in our future reports filed with the SEC.

 

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

 

 

 

Second
Quarter

Fiscal 2010

 

Second
Quarter

Fiscal 2009

 

First
Half
Fiscal 2010

 

First
Half
Fiscal 2009

 

Net sales

 

$

186,531

 

$

192,887

 

$

404,281

 

$

409,618

 

Cost of goods sold

 

98,701

 

115,514

 

214,869

 

242,311

 

Gross profit

 

87,830

 

77,373

 

189,412

 

167,307

 

SG&A

 

76,246

 

73,637

 

159,998

 

152,320

 

Amortization of intangible assets

 

249

 

315

 

499

 

623

 

 

 

76,495

 

73,952

 

160,497

 

152,943

 

Royalties and other operating income

 

4,031

 

2,916

 

7,872

 

5,385

 

Operating income

 

15,366

 

6,337

 

36,787

 

19,749

 

Interest expense, net

 

5,143

 

6,245

 

10,152

 

10,810

 

Earnings before income taxes

 

10,223

 

92

 

26,635

 

8,939

 

Income taxes

 

3,004

 

272

 

6,919

 

2,508

 

Net earnings (loss)

 

$

7,219

 

$

(180

)

$

19,716

 

$

6,431

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.44

 

$

(0.01

)

$

1.19

 

$

0.40

 

Diluted

 

$

0.44

 

$

(0.01

)

$

1.19

 

$

0.40

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

16,540

 

16,288

 

16,515

 

16,083

 

Dilution

 

12

 

 

12

 

 

Diluted

 

16,552

 

16,288

 

16,527

 

16,083

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.11

 

$

0.09

 

$

0.22

 

$

0.18

 

 

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par amounts)

 

 

 

July 31,
2010

 

January 30,
2010

 

August 1,
2009

 

ASSETS

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

28,171

 

$

8,288

 

$

5,461

 

Receivables, net

 

74,611

 

74,398

 

78,467

 

Inventories, net

 

76,330

 

77,029

 

86,828

 

Prepaid expenses, net

 

15,484

 

10,713

 

13,312

 

Deferred tax assets

 

15,384

 

13,875

 

10,208

 

Total current assets

 

209,980

 

184,303

 

194,276

 

Property, plant and equipment, net

 

73,919

 

79,540

 

86,365

 

Intangible assets, net

 

136,233

 

137,490

 

138,880

 

Other non-current assets, net

 

22,623

 

23,841

 

22,932

 

Total Assets

 

$

442,755

 

$

425,174

 

$

442,453

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Trade accounts payable and other accrued expenses

 

$

79,105

 

$

81,831

 

$

75,827

 

Accrued compensation

 

18,844

 

11,514

 

11,132

 

Income taxes payable

 

 

2,517

 

 

Short-term debt and current maturities of long-term debt

 

1,195

 

 

20,417

 

Total current liabilities

 

99,144

 

95,862

 

107,376

 

Long-term debt, less current maturities

 

146,736

 

146,408

 

160,357

 

Other non-current liabilities

 

46,965

 

50,066

 

46,804

 

Non-current deferred income taxes

 

28,143

 

28,421

 

30,013

 

Commitments and contingencies

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

Common stock, $1.00 par value per common share

 

16,561

 

16,461

 

16,520

 

Additional paid-in capital

 

94,442

 

91,840

 

89,253

 

Retained earnings

 

35,437

 

19,356

 

14,136

 

Accumulated other comprehensive loss

 

(24,673

)

(23,240

)

(22,006

)

Total shareholders’ equity

 

121,767

 

104,417

 

97,903

 

Total Liabilities and Shareholders’ Equity

 

$

442,755

 

$

425,174

 

$

442,453

 

 

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

 

First Half
Fiscal 2010

 

First Half
Fiscal 2009

 

Cash Flows From Operating Activities:

 

 

 

 

 

Net earnings

 

$

19,716

 

$

6,431

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

Depreciation

 

8,754

 

9,259

 

Amortization of intangible assets

 

499

 

623

 

Amortization/write-off of deferred financing costs and bond discount

 

977

 

2,392

 

Stock compensation expense

 

2,767

 

1,637

 

(Gain) loss on sale of property, plant and equipment

 

(3

)

42

 

Deferred income taxes

 

(1,587

)

(3,043

)

Changes in working capital:

 

 

 

 

 

Receivables

 

(630

)

2,574

 

Inventories

 

357

 

35,396

 

Prepaid expenses

 

(4,824

)

(2,255

)

Current liabilities

 

2,018

 

(17,601

)

Other non-current assets

 

570

 

157

 

Other non-current liabilities

 

(3,078

)

(506

)

Net cash provided by operating activities

 

25,536

 

35,106

 

Cash Flows From Investing Activities:

 

 

 

 

 

Purchases of property, plant and equipment

 

(3,370

)

(5,840

)

Proceeds from sale of property, plant and equipment

 

78

 

 

Net cash used in investing activities

 

(3,292

)

(5,840

)

Cash Flows From Financing Activities:

 

 

 

 

 

Repayment of revolving credit arrangements

 

(33,925

)

(138,135

)

Proceeds from revolving credit arrangements

 

35,097

 

138,859

 

Repurchase of 8 7/8% Senior Unsecured Notes

 

 

(166,805

)

Proceeds from the issuance of 11 3/8% Senior Secured Notes

 

 

146,029

 

Deferred financing costs paid

 

 

(4,878

)

Proceeds from issuance of common stock

 

230

 

193

 

Dividends on common stock

 

(3,638

)

(2,919

)

Net cash used in financing activities

 

(2,236

)

(27,656

)

Net change in cash and cash equivalents

 

20,008

 

1,610

 

Effect of foreign currency translation on cash and cash equivalents

 

(125

)

561

 

Cash and cash equivalents at the beginning of year

 

8,288

 

3,290

 

Cash and cash equivalents at the end of period

 

$

28,171

 

$

5,461

 

 

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OXFORD INDUSTRIES, INC.

OPERATING GROUP INFORMATION

(UNAUDITED)

(in thousands)

 

 

 

Second
Quarter

Fiscal 2010

 

Second
Quarter

Fiscal 2009

 

First Half
Fiscal 2010

 

First Half
Fiscal 2009

 

Net Sales

 

 

 

 

 

 

 

 

 

Tommy Bahama

 

$

99,349

 

$

94,439

 

$

208,454

 

$

192,859

 

Ben Sherman

 

18,346

 

23,627

 

40,500

 

47,846

 

Lanier Clothes

 

22,736

 

25,204

 

53,164

 

56,711

 

Oxford Apparel

 

45,551

 

49,464

 

101,893

 

112,668

 

Corporate and Other

 

549

 

153

 

270

 

(466

)

Total Net Sales

 

$

186,531

 

$

192,887

 

$

404,281

 

$

409,618

 

 

 

 

 

 

 

 

 

 

 

Operating Income (loss)

 

 

 

 

 

 

 

 

 

Tommy Bahama

 

$

14,172

 

$

13,379

 

$

32,033

 

$

25,629

 

Ben Sherman

 

(598

)

(6,308

)

(76

)

(8,284

)

Lanier Clothes

 

2,809

 

2,701

 

7,168

 

5,438

 

Oxford Apparel

 

3,358

 

4,129

 

9,329

 

9,322

 

Corporate and Other

 

(4,375

)

(7,564

)

(11,667

)

(12,356

)

Total Operating Income (loss)

 

$

15,366

 

$

6,337

 

$

36,787

 

$

19,749

 

Interest Expense, net

 

5,143

 

6,245

 

10,152

 

10,810

 

Earnings Before Income Taxes

 

$

10,223

 

$

92

 

$

26,635

 

$

8,939