Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended OCTOBER 30, 2010

 

 

or

 

 

o

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 incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

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)

 

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 þ No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer £

Accelerated filer þ

Non-accelerated filer £

Smaller reporting company £

 

 

(Do not check if a smaller reporting company)

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No þ

 

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 December 3, 2010

Common Stock, $1 par value

 

15,569,208

 

 


Table of Contents

OXFORD INDUSTRIES, INC.

INDEX TO FORM 10-Q

For the third quarter of fiscal 2010

 

 

Page

PART I. FINANCIAL INFORMATION

 

 

 

Item 1. Financial Statements

 

Condensed Consolidated Statements of Operations (Unaudited)

4

Condensed Consolidated Balance Sheets (Unaudited)

5

Condensed Consolidated Statements of Cash Flows (Unaudited)

6

Notes to Unaudited Condensed Consolidated Financial Statements

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

Item 3. Quantitative and Qualitative Disclosures About Market Risk

34

Item 4. Controls and Procedures

34

 

 

PART II. OTHER INFORMATION

 

 

 

Item 1. Legal Proceedings

34

Item 1A. Risk Factors

34

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

35

Item 3. Defaults Upon Senior Securities

35

Item 4. Reserved

35

Item 5. Other Information

35

Item 6. Exhibits

36

Signatures

36

 

2



Table of Contents

 

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

 

Our SEC filings and public announcements may include forward-looking statements about future events. 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, in our press releases 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 consummation and impact of potential acquisition or disposition activities, including the announced sale of substantially all of Oxford Apparel, the impact 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. Risk Factors contained in our Annual Report on Form 10-K for fiscal 2009, as updated by Part II, Item 1A. Risk Factors in this report and those described from time to time in our future reports filed with the SEC.

 

We caution that one should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. We disclaim any intention, obligation or duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

DEFINITIONS

 

Unless the context requires otherwise, the following terms, or words of similar import, have the following meanings:

 

Our, us or we: Oxford Industries, Inc. and its consolidated subsidiaries

 

SG&A: Selling, general and administrative expenses

 

11 3/8% Senior Secured Notes: Our 11.375% senior secured notes due 2015

 

8 7/8% Senior Unsecured Notes: Our 8.875% senior unsecured notes due 2011, which were satisfied and discharged in June 2009

 

SEC: U.S. Securities and Exchange Commission

 

Securities Exchange Act: the Securities Exchange Act of 1934, as amended

 

FASB: Financial Accounting Standards Board

 

U.S. GAAP: Generally accepted accounting principles in the United States

 

ASC: FASB Accounting Standards Codification

 

Fiscal 2010

 

52 weeks ending January 29, 2011

Fiscal 2009

 

52 weeks ended January 30, 2010

First nine months fiscal 2010

 

39 weeks ended July 31, 2010

First nine months fiscal 2009

 

39 weeks ended August 1, 2009

Fourth quarter fiscal 2010

 

13 weeks ending January 29, 2011

Third quarter fiscal 2010

 

13 weeks ended October 30, 2010

Second quarter fiscal 2010

 

13 weeks ended July 31, 2010

First quarter fiscal 2010

 

13 weeks ended May 1, 2010

Fourth quarter fiscal 2009

 

13 weeks ended January 30, 2010

Third quarter fiscal 2009

 

13 weeks ended October 31, 2009

Second quarter fiscal 2009

 

13 weeks ended August 1, 2009

First quarter fiscal 2009

 

13 weeks ended May 2, 2009

 

3


 


Table of Contents

 

PART I.  FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

 

 

 

Third
Quarter
Fiscal 2010

 

Third
Quarter
Fiscal 2009

 

First
Nine Months
Fiscal 2010

 

First
Nine Months
Fiscal 2009

 

Net sales

 

$139,627

 

 

$142,274

 

 

$446,233

 

 

$ 441,907

 

 

Cost of goods sold

 

65,942

 

 

74,163

 

 

203,823

 

 

227,876

 

 

Gross profit

 

73,685

 

 

68,111

 

 

242,410

 

 

214,031

 

 

SG&A

 

70,995

 

 

66,896

 

 

220,328

 

 

207,827

 

 

Amortization of intangible assets

 

241

 

 

307

 

 

719

 

 

911

 

 

 

 

71,236

 

 

67,203

 

 

221,047

 

 

208,738

 

 

Royalties and other operating income

 

3,982

 

 

3,266

 

 

11,218

 

 

8,038

 

 

Operating income

 

6,431

 

 

4,174

 

 

32,581

 

 

13,331

 

 

Interest expense, net

 

5,095

 

 

5,079

 

 

15,115

 

 

15,346

 

 

Earnings (loss) from continuing operations before income taxes

 

1,336

 

 

(905

)

 

17,466

 

 

(2,015

)

 

Income taxes (benefit)

 

17

 

 

(982

)

 

2,944

 

 

(2,293

)

 

Earnings from continuing operations

 

1,319

 

 

77

 

 

14,522

 

 

278

 

 

Earnings from discontinued operations, net of taxes

 

4,231

 

 

4,228

 

 

10,744

 

 

10,458

 

 

Net earnings

 

$    5,550

 

 

$    4,305

 

 

$   25,266

 

 

$   10,736

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings from continuing operations per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$      0.08

 

 

$      0.00

 

 

$       0.88

 

 

$       0.02

 

 

Diluted

 

$      0.08

 

 

$      0.00

 

 

$       0.88

 

 

$       0.02

 

 

Earnings from discontinued operations per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$      0.26

 

 

$      0.26

 

 

$       0.65

 

 

$       0.64

 

 

Diluted

 

$      0.26

 

 

$      0.26

 

 

$       0.65

 

 

$       0.64

 

 

Net earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$      0.34

 

 

$      0.26

 

 

$       1.53

 

 

$       0.66

 

 

Diluted

 

$      0.33

 

 

$      0.26

 

 

$       1.53

 

 

$       0.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

16,564

 

 

16,522

 

 

16,532

 

 

16,229

 

 

Dilution

 

12

 

 

11

 

 

13

 

 

4

 

 

Diluted

 

16,576

 

 

16,533

 

 

16,545

 

 

16,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$      0.11

 

 

$      0.09

 

 

$       0.33

 

 

$       0.27

 

 

 

See accompanying notes.

 

4



Table of Contents

 

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par amounts)

 

 

 

October 30,
2010

 

January 30,
2010

 

October 31,
2009

 

ASSETS

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$    4,376

 

 

$    8,288

 

 

$    5,995

 

 

Receivables, net

 

58,900

 

 

44,690

 

 

57,440

 

 

Inventories, net

 

63,484

 

 

58,180

 

 

54,483

 

 

Prepaid expenses, net

 

14,663

 

 

10,508

 

 

13,818

 

 

Deferred tax assets

 

15,624

 

 

13,875

 

 

9,885

 

 

Assets related to discontinued operations, net

 

84,936

 

 

56,365

 

 

63,579

 

 

Total current assets

 

241,983

 

 

191,906

 

 

205,200

 

 

Property, plant and equipment, net

 

74,721

 

 

78,425

 

 

82,843

 

 

Intangible assets, net

 

136,584

 

 

137,462

 

 

138,372

 

 

Other non-current assets, net

 

21,181

 

 

17,381

 

 

17,216

 

 

Total Assets

 

$474,469

 

 

$425,174

 

 

$443,631

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

Trade accounts payable and other accrued expenses

 

$  63,308

 

 

$  68,249

 

 

$  64,564

 

 

Accrued compensation

 

19,000

 

 

9,259

 

 

9,337

 

 

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

 

20,924

 

 

 

 

17,479

 

 

Liabilities related to discontinued operations

 

21,542

 

 

18,942

 

 

12,969

 

 

Total current liabilities

 

124,774

 

 

96,450

 

 

104,349

 

 

Long-term debt, less current maturities

 

146,900

 

 

146,408

 

 

161,244

 

 

Other non-current liabilities

 

47,351

 

 

49,478

 

 

46,832

 

 

Non-current deferred income taxes

 

27,753

 

 

28,421

 

 

29,444

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

 

 

 

Common stock, $1.00 par value per common share

 

16,570

 

 

16,461

 

 

16,528

 

 

Additional paid-in capital

 

95,660

 

 

91,840

 

 

90,511

 

 

Retained earnings

 

39,165

 

 

19,356

 

 

16,955

 

 

Accumulated other comprehensive loss

 

(23,704

)

 

(23,240

)

 

(22,232

)

 

Total shareholders’ equity

 

127,691

 

 

104,417

 

 

101,762

 

 

Total Liabilities and Shareholders’ Equity

 

$474,469

 

 

$425,174

 

 

$443,631

 

 

 

See accompanying notes.

 

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

 

First Nine
Months

Fiscal 2010

 

First Nine
Months
Fiscal 2009

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

Earnings from continuing operations

 

$ 14,522

 

 

$       278

 

 

Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation

 

13,005

 

 

13,856

 

 

Amortization of intangible assets

 

719

 

 

911

 

 

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

 

1,464

 

 

2,881

 

 

Stock compensation expense

 

3,563

 

 

2,731

 

 

Loss on sale of property, plant and equipment

 

10

 

 

339

 

 

Deferred income taxes

 

(2,337

)

 

(3,271

)

 

Changes in working capital:

 

 

 

 

 

 

 

Receivables

 

(14,258

)

 

(11,160

)

 

Inventories

 

(5,549

)

 

39,613

 

 

Prepaid expenses

 

(4,154

)

 

(2,769

)

 

Current liabilities

 

4,535

 

 

(5,548

)

 

Other non-current assets

 

(644

)

 

(904

)

 

Other non-current liabilities

 

(2,119

)

 

712

 

 

Net cash provided by operating activities

 

8,757

 

 

37,669

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(9,435

)

 

(8,406

)

 

Proceeds from sale of property, plant and equipment

 

78

 

 

 

 

Net cash used in investing activities

 

(9,357

)

 

(8,406

)

 

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

Repayment of revolving credit arrangements

 

(64,514

)

 

(188,575

)

 

Proceeds from revolving credit arrangements

 

85,415

 

 

187,477

 

 

Repayment of company-owned life insurance policy loans

 

(4,125

)

 

 

 

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

 

 

 

(5,043

)

 

Proceeds from issuance of common stock

 

362

 

 

316

 

 

Dividends on common stock

 

(5,460

)

 

(4,406

)

 

Net cash provided by (used in) financing activities

 

11,678

 

 

(31,007

)

 

Cash Flows from Discontinued Operations:

 

 

 

 

 

 

 

Net operating cash flows provided by (used in) discontinued operations

 

(14,939

)

 

4,319

 

 

Net investing cash flows used in discontinued operations

 

(33

)

 

(13

)

 

Net cash provided by (used in) discontinued operations

 

(14,972

)

 

4,306

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

(3,894

)

 

2,562

 

 

Effect of foreign currency translation on cash and cash equivalents

 

(18

)

 

143

 

 

Cash and cash equivalents at the beginning of year

 

8,288

 

 

3,290

 

 

Cash and cash equivalents at the end of period

 

$    4,376

 

 

$     5,995

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

Cash paid for interest, net

 

$    9,658

 

 

$   10,220

 

 

Cash paid for income taxes

 

$  19,071

 

 

$     9,493

 

 

 

See accompanying notes.

 

6



Table of Contents

 

OXFORD INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THIRD QUARTER OF FISCAL 2010

 

1.                                      Basis of Presentation:  The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial reporting and the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP.  We believe the accompanying unaudited condensed consolidated financial statements reflect all normal, recurring adjustments that are necessary for a fair presentation of our financial position and results of operations as of the dates and for the periods presented.  Results of operations for the interim periods presented are not necessarily indicative of results to be expected for our full fiscal year.  The accounting policies applied during the interim periods presented are consistent with the significant accounting policies described in our Annual Report on Form 10-K for fiscal 2009.

 

2.                                      Discontinued Operations:  On November 22, 2010, we entered into a purchase agreement with LF USA Inc. (“LF”), a subsidiary of Li & Fung Limited, pursuant to which we will sell to LF substantially all of the assets of Oxford Apparel (other than accounts receivable associated with the businesses which are being sold and all assets and operations relating to our Oxford Golf business and our distribution center in Lyons, Georgia).  The purchase price to be paid by LF is equal to approximately $121.7 million, subject to adjustment based on net working capital on the closing date of the transaction.  LF also agreed to purchase our goods in transit relating to Oxford Apparel following the closing of the transaction.

 

In connection with the consummation of the transaction described above, we will, among other things, enter into (1) license agreements with LF to grant licenses (subject to the limitations set forth in the applicable license agreements) to LF to use the trade name “Oxford Apparel” perpetually in connection with its business, as well as to use certain other trademarks in connection with the manufacture, sale and distribution of men’s dress shirts for certain periods of time in the applicable territory; (2) a services agreement with LF pursuant to which, in exchange for various fees, we will following the closing of the transaction, provide certain transitional support services to LF in its operation of the transferred assets; and (3) a limited non-competition agreement with LF pursuant to which we will agree (subject to the exceptions set forth in the non-competition agreement) not to engage in certain activities for a period of three years following the completion of the transaction. The closing of the transaction is subject to customary closing conditions and is expected to occur by the end of calendar year 2010.

 

As a result of the planned disposal of substantially all of the assets and operations of Oxford Apparel, the results of operations for Oxford Apparel, other than the operations relating to our Oxford Golf business and our Lyons, Georgia distribution center, have been classified as discontinued operations in our consolidated statements of operations and our consolidated statements of cash flows for all periods presented. The assets and liabilities related to the discontinued operations have been reclassified to assets and liabilities related to discontinued operations, as applicable.

 

The results of operations classified as discontinued operations are consistent with the net sales, operating expenses and operating income for Oxford Apparel, except that (1) the operations of our Oxford Golf business and the operations of our Lyons, Georgia distribution center are reported within Oxford Apparel continuing operations as those operations are not being sold and (2) certain corporate service costs which were previously allocated to Oxford Apparel are reported as corporate service costs included in Corporate and Other as we are not certain that such corporate service costs will not continue.

 

With respect to interest expense, we have allocated all interest expense related to our U.S. Revolving Credit Agreement to earnings from discontinued operations as the estimated net proceeds from the transaction and the proceeds from the settlement of the retained assets and liabilities related to the discontinued operations, substantially all of which are expected to be converted into cash before the end of the first quarter of fiscal 2011, exceed the amounts outstanding under our U.S. Revolving Credit Agreement during the periods presented. Proceeds from the transaction and the retained assets are expected to be used to repay any debt outstanding under our U.S. Revolving Credit Agreement; fund general corporate operating activities, including further development of our existing operations; fund future acquisitions, if any; and opportunistically enhance our capital structure. We did not allocate any interest related to our 11 3/8% Senior Secured Notes to discontinued operations. The income tax rate used for the tax effect of the discontinued operations is based on the domestic effective tax rate of Oxford Industries, Inc. as the assets and operations that were disposed of were primarily domestic operations of that entity and should not be impacted by rates in foreign jurisdictions or other subsidiaries.

 

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Table of Contents

 

The following represents the major classes of assets and liabilities related to the discontinued operations included in our consolidated balance sheets as of the following dates (in thousands):

 

 

 

October 30,
2010

 

January 30,
2010

 

October 31,
2009

 

Receivables, net

 

$50,816

 

 

$29,708

 

 

$37,063

 

 

Inventories, net

 

26,723

 

 

18,849

 

 

18,750

 

 

Other current assets, net

 

225

 

 

205

 

 

278

 

 

Property, plant and equipment, net

 

939

 

 

1,115

 

 

926

 

 

Other assets, net

 

6,233

 

 

6,488

 

 

6,562

 

 

Total assets

 

84,936

 

 

56,365

 

 

63,579

 

 

Trade accounts payable, other accrued expenses and accrued compensation

 

20,974

 

 

18,354

 

 

12,369

 

 

Other liabilities

 

568

 

 

588

 

 

600

 

 

Total liabilities

 

21,542

 

 

18,942

 

 

12,969

 

 

Net assets

 

$63,394

 

 

$37,423

 

 

$50,610

 

 

 

Operating results of the discontinued operations are shown below (in thousands):

 

 

 

Third
 Quarter
Fiscal 2010

 

Third
 Quarter
 Fiscal 2009

 

First
Nine Months
Fiscal 2010

 

First
Nine Months
Fiscal 2009

 

Net sales

 

$64,889

 

 

$58,264

 

 

$162,564

 

 

$168,249

 

 

Cost of goods sold

 

52,330

 

 

46,012

 

 

129,318

 

 

134,610

 

 

Gross profit

 

12,559

 

 

12,252

 

 

33,246

 

 

33,639

 

 

SG&A, including amortization of intangible assets

 

5,884

 

 

5,540

 

 

16,570

 

 

16,948

 

 

Royalties and other operating income

 

262

 

 

330

 

 

898

 

 

943

 

 

Operating income

 

6,937

 

 

7,042

 

 

17,574

 

 

17,634

 

 

Interest expense, net

 

112

 

 

223

 

 

244

 

 

766

 

 

Earnings from discontinued operations before income taxes

 

6,825

 

 

6,819

 

 

17,330

 

 

16,868

 

 

Income taxes

 

2,594

 

 

2,591

 

 

6,586

 

 

6,410

 

 

Earnings from discontinued operations, net of taxes

 

$  4,231

 

 

$  4,228

 

 

$  10,744

 

 

$  10,458

 

 

 

3.                                      Inventories:  The components of inventories related to continuing operations as of the dates specified are summarized as follows (in thousands):

 

 

 

October 30,
2010

 

January 30,
2010

 

October 31,
2009

 

Finished goods

 

$100,901

 

 

$ 89,980

 

 

$ 90,683

 

 

Work in process

 

4,010

 

 

6,971

 

 

5,269

 

 

Fabric, trim and supplies

 

3,011

 

 

5,667

 

 

5,255

 

 

LIFO reserve

 

(44,438

)

 

(44,438

)

 

(46,724

)

 

Total

 

$  63,484

 

 

$ 58,180

 

 

$ 54,483

 

 

 

8



Table of Contents

 

4.                                      Comprehensive Income:  Comprehensive income is calculated as follows for the periods presented (in thousands):

 

 

 

Third Quarter
Fiscal 2010

 

Third Quarter
Fiscal 2009

 

First Nine 
Months
Fiscal 2010

 

First Nine 
Months
Fiscal 2009

 

Net earnings

 

$5,550

 

 

$4,305

 

 

$25,266

 

 

$10,736

 

 

Gain (loss) on foreign currency translation, net of tax

 

994

 

 

(226

)

 

(247

)

 

5,373

 

 

Net unrealized loss on forward foreign exchange contracts, net of tax

 

(25

)

 

 

 

(217

)

 

 

 

Comprehensive income

 

$6,519

 

 

$4,079

 

 

$24,802

 

 

$16,109

 

 

 

5.                                      Operating Group Information:  Our business is operated through our four operating groups: Tommy Bahama, Ben Sherman, Lanier Clothes and Oxford Apparel. Oxford Apparel operating results included in continuing operations only reflect the operations for our Oxford Golf business and the Lyons, Georgia distribution center. All other operations of Oxford Apparel are included in discontinued operations as we have entered into a definitive agreement to sell these assets and operations, as discussed in Note 2. We identify our operating groups based on the way our management organizes the components of our business for purposes of allocating resources and assessing performance. Corporate and Other is a reconciling category for reporting purposes and includes our corporate offices, substantially all financing activities, elimination of inter-group sales,  LIFO inventory accounting adjustments and other costs that are not allocated to the operating groups.

 

The table below presents certain information about the continuing operations of our operating groups (in thousands).

 

 

 

Third
Quarter
Fiscal 2010

 

Third 
Quarter
Fiscal 2009

 

First
Nine 
Months
Fiscal 2010

 

First
Nine
Months
Fiscal 2009

 

Net Sales

 

 

 

 

 

 

 

 

 

Tommy Bahama

 

$  81,131

 

$  75,403

 

$289,585

 

$268,262

 

Ben Sherman

 

25,528

 

29,844

 

66,028

 

77,690

 

Lanier Clothes

 

30,820

 

35,555

 

83,984

 

92,266

 

Oxford Apparel

 

2,097

 

1,891

 

6,315

 

4,574

 

Corporate and Other

 

51

 

(419)

 

321

 

(885)

 

Total

 

$139,627

 

$142,274

 

$446,233

 

$441,907

 

Depreciation

 

 

 

 

 

 

 

 

 

Tommy Bahama

 

$    3,285

 

$    3,663

 

$    9,848

 

$  10,968

 

Ben Sherman

 

566

 

640

 

1,626

 

1,801

 

Lanier Clothes

 

113

 

125

 

350

 

405

 

Oxford Apparel

 

94

 

102

 

339

 

343

 

Corporate and Other

 

314

 

225

 

842

 

339

 

Total

 

$    4,372

 

$    4,755

 

$  13,005

 

$  13,856

 

Amortization of Intangible Assets

 

 

 

 

 

 

 

 

 

Tommy Bahama

 

$       174

 

$       222

 

$       520

 

$       666

 

Ben Sherman

 

67

 

85

 

199

 

245

 

Lanier Clothes

 

 

 

 

 

Oxford Apparel

 

 

 

 

 

Corporate and Other

 

 

 

 

 

Total

 

$       241

 

$       307

 

$       719

 

$       911

 

 

9



Table of Contents

 

 

 

Third
Quarter
Fiscal 2010

 

Third 
Quarter
Fiscal 2009

 

First
Nine 
Months
Fiscal 2010

 

First
Nine 
Months
Fiscal 2009

 

Operating Income (Loss)

 

 

 

 

 

 

 

 

 

Tommy Bahama

 

$ 3,440

 

$ 2,143

 

$ 35,473

 

$ 27,772

 

Ben Sherman

 

1,684

 

2,323

 

1,608

 

(5,961

)

Lanier Clothes

 

5,345

 

5,243

 

12,513

 

10,681

 

Oxford Apparel

 

(316

)

(308

)

(983

)

(819

)

Corporate and Other

 

(3,722

)

(5,227

)

(16,030

)

(18,342

)

Total Operating Income

 

$ 6,431

 

$ 4,174

 

$ 32,581

 

$ 13,331

 

Interest Expense, net

 

5,095

 

5,079

 

15,115

 

15,346

 

Earnings (Loss) Before Income Taxes

 

$ 1,336

 

$   (905

)

$ 17,466

 

$  (2,015

)

 

6.                                      Consolidating Financial Data of Subsidiary Guarantors:  Our 11 3/8% Senior Secured Notes due 2015 are guaranteed by substantially all of our wholly owned domestic subsidiaries (“Subsidiary Guarantors”). All guarantees are full and unconditional. For consolidated financial reporting purposes, non-guarantors consist of our subsidiaries which are organized outside the United States and certain domestic subsidiaries. We use the equity method with respect to our investment in subsidiaries included in other non-current assets in our condensed consolidating financial statements. Set forth below are our condensed consolidating balance sheets as of October 30, 2010, January 30, 2010 and October 31, 2009 (in thousands) as well as our condensed consolidating statements of operations for the third quarter and first nine months of each of fiscal 2010 and fiscal 2009 (in thousands) and our condensed consolidating statements of cash flows for the first nine months of fiscal 2010 and fiscal 2009 (in thousands).

 

OXFORD INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS

October 30, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oxford
Industries
(Parent)

 

Subsidiary
Guarantors

 

Subsidiary
Non-
Guarantors

 

Consolidating
Adjustments

 

Consolidated
Total

 

ASSETS

Cash and cash equivalents

 

$    1,273

 

$       563

 

$  2,540

 

$          —

 

 

$    4,376

 

Receivables, net

 

18,396

 

9,399

 

39,823

 

(8,718

)

 

58,900

 

Inventories, net

 

(15,529

)

71,186

 

8,463

 

(636

)

 

63,484

 

Prepaid expenses and deferred tax assets, net

 

17,589

 

10,291

 

3,559

 

(1,152

)

 

30,287

 

Assets related to discontinued operations, net

 

69,200

 

6,859

 

8,877

 

 

 

84,936

 

Total current assets

 

90,929

 

98,298

 

63,262

 

(10,506

)

 

241,983

 

Property, plant and equipment, net

 

7,531

 

62,147

 

5,043

 

 

 

74,721

 

Intangible assets, net

 

 

112,653

 

23,931

 

 

 

136,584

 

Other non-current assets, net

 

517,873

 

142,457

 

3,882

 

(643,031

)

 

21,181

 

Total Assets

 

$616,333

 

$415,555

 

$96,118

 

$(653,537

)

 

$474,469

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities related to continuing operations

 

$  32,905

 

$  50,229

 

$25,815

 

$    (5,717

)

 

$103,232

 

Current liabilities related to discontinued operations

 

11,570

 

 

9,972

 

 

 

21,542

 

Long-term debt, less current maturities

 

146,900

 

 

 

 

 

146,900

 

Other non-current liabilities

 

301,217

 

(289,059

)

143,790

 

(108,597

)

 

47,351

 

Non-current deferred income taxes

 

(3,950

)

25,233

 

6,455

 

15

 

 

27,753

 

Total shareholders’/invested equity

 

127,691

 

629,152

 

(89,914

)

(539,238

)

 

127,691

 

Total Liabilities and Shareholders’ Equity

 

$616,333

 

$415,555

 

$96,118

 

$(653,537

)

 

$474,469

 

 

10



Table of Contents

 

OXFORD INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS

January 30, 2010

 

 

 

Oxford
Industries
(Parent)

 

Subsidiary
Guarantors

 

Subsidiary
Non-
Guarantors

 

Consolidating
Adjustments

 

Consolidated
Total

 

ASSETS

Cash and cash equivalents

 

$    5,933

 

$       803

 

$  1,552

 

$           —

 

 

$    8,288

 

Receivables, net

 

11,251

 

2,868

 

40,486

 

(9,915

)

 

44,690

 

Inventories, net

 

(9,896

)

57,217

 

11,856

 

(997

)

 

58,180

 

Prepaid expenses and deferred tax assets, net

 

16,347

 

8,851

 

3,103

 

(3,918

)

 

24,383

 

Assets related to discontinued operations, net

 

43,805

 

6,631

 

5,929

 

 

 

56,365

 

Total current assets

 

67,440

 

76,370

 

62,926

 

(14,830

)

 

191,906

 

Property, plant and equipment, net

 

8,398

 

64,442

 

5,585

 

 

 

78,425

 

Intangible assets, net

 

 

113,173

 

24,289

 

 

 

137,462

 

Other non-current assets, net

 

490,554

 

142,827

 

3,819

 

(619,819

)

 

17,381

 

Total Assets

 

$566,392

 

$396,812

 

$96,619

 

$(634,649

)

 

$425,174

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities related to continuing operations

 

$  27,108

 

$  27,974

 

$32,076

 

$    (9,650

)

 

$  77,508

 

Current liabilities related to discontinued operations

 

12,332

 

 

6,610

 

 

 

18,942

 

Long-term debt, less current maturities

 

146,408

 

 

 

 

 

146,408

 

Other non-current liabilities

 

280,138

 

(268,060

)

145,195

 

(107,795

)

 

49,478

 

Non-current deferred income taxes

 

(4,011

)

26,605

 

6,794

 

(967

)

 

28,421

 

Total shareholders’/invested equity

 

104,417

 

610,293

 

(94,056

)

(516,237

)

 

104,417

 

Total Liabilities and Shareholders’ Equity

 

$566,392

 

$396,812

 

$96,619

 

$(634,649

)

 

$425,174

 

 

11



Table of Contents

 

OXFORD INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS

October 31, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oxford
Industries
(Parent)

 

Subsidiary
Guarantors

 

Subsidiary
Non-
Guarantors

 

Consolidating
Adjustments

 

Consolidated
Total

ASSETS

Cash and cash equivalents

 

$    1,466

 

$        493

 

$    4,036

 

$          —

 

 

$    5,995

 

Receivables, net

 

15,435

 

13,504

 

37,353

 

(8,852

)

 

57,440

 

Inventories, net

 

(18,127

)

61,916

 

11,934

 

(1,240

)

 

54,483

 

Prepaid expenses and deferred tax assets, net

 

9,213

 

9,716

 

4,138

 

636

 

 

23,703

 

Assets related to discontinued operations, net

 

54,230

 

6,483

 

2,866

 

 

 

63,579

 

Total current assets

 

62,217

 

92,112

 

60,327

 

(9,456

)

 

205,200

 

Property, plant and equipment, net

 

8,743

 

68,063

 

6,037

 

 

 

82,843

 

Intangible assets, net

 

 

113,394

 

24,978

 

 

 

138,372

 

Other non-current assets, net

 

478,741

 

142,881

 

35,038

 

(639,444

)

 

17,216

 

Total Assets

 

$549,701

 

$ 416,450

 

$126,380

 

$(648,900

)

 

$443,631

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities related to continuing operations

 

$  39,269

 

$   30,792

 

$  28,908

 

$    (7,589

)

 

$  91,380

 

Current liabilities related to discontinued operations

 

8,156

 

 

4,813

 

 

 

12,969

 

Long-term debt, less current maturities

 

161,244

 

 

 

 

 

161,244

 

Other non-current liabilities

 

243,461

 

(199,005

)

111,526

 

(109,150

)

 

46,832

 

Non-current deferred income taxes

 

(4,191

)

26,812

 

6,823

 

 

 

29,444

 

Total shareholders’/invested equity

 

101,762

 

557,851

 

(25,690

)

(532,161

)

 

101,762

 

Total Liabilities and Shareholders’ Equity

 

$549,701

 

$ 416,450

 

$126,380

 

$(648,900

)

 

$443,631

 

 

12



Table of Contents

 

OXFORD INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Third Quarter Fiscal 2010

 

 

 

Oxford
Industries
(Parent)

 

Subsidiary
Guarantors

 

Subsidiary
Non-
Guarantors

 

Consolidating
Adjustments

 

Consolidated
Total

 

Net sales

 

$

32,966

 

$

90,608

 

$

24,155

 

$

(8,102

)

$

139,627

 

Cost of goods sold

 

21,980

 

38,236

 

10,156

 

(4,430

)

65,942

 

Gross profit

 

10,986

 

52,372

 

13,999

 

(3,672

)

73,685

 

SG&A including amortization of intangible assets

 

7,633

 

54,030

 

12,483

 

(2,910

)

71,236

 

Royalties and other operating income (loss)

 

(7

)

1,886

 

2,244

 

(141

)

3,982

 

Operating income (loss)

 

3,346

 

228

 

3,760

 

(903

)

6,431

 

Interest (income) expense, net

 

6,390

 

(1,115

)

774

 

(954

)

5,095

 

Income (loss) from equity investment

 

5,149

 

 

 

(5,149

)

 

Earnings (loss) from continuing operations before income taxes

 

2,105

 

1,343

 

2,986

 

(5,098

)

1,336

 

Income taxes (benefit)

 

(1,287

)

517

 

770

 

17

 

17

 

Earnings from continuing operations

 

3,392

 

826

 

2,216

 

(5,115

)

1,319

 

Earnings from discontinued operations, net of taxes

 

3,034

 

333

 

864

 

 

4,231

 

Net earnings (loss)

 

$

6,426

 

$

1,159

 

$

3,080

 

$

(5,115

)

$

5,550

 

 

OXFORD INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

First Nine Months Fiscal 2010

 

 

 

Oxford
Industries
(Parent)

 

Subsidiary
Guarantors

 

Subsidiary
Non-
Guarantors

 

Consolidating
Adjustments

 

Consolidated
Total

 

Net sales

 

$

90,765

 

$

313,831

 

$

63,512

 

$

(21,875

)

$

446,233

 

Cost of goods sold

 

61,945

 

126,688

 

27,063

 

(11,873

)

203,823

 

Gross profit

 

28,820

 

187,143

 

36,449

 

(10,002

)

242,410

 

SG&A including amortization of intangible assets

 

28,340

 

168,336

 

35,019

 

(10,648

)

221,047

 

Royalties and other operating income (loss)

 

21

 

6,048

 

5,612

 

(463

)

11,218

 

Operating income (loss)

 

501

 

24,855

 

7,042

 

183

 

32,581

 

Interest (income) expense, net

 

16,319

 

(3,233

)

2,173

 

(144

)

15,115

 

Income (loss) from equity investment

 

23,407

 

 

 

(23,407

)

 

Earnings (loss) from continuing operations before income taxes

 

7,589

 

28,088

 

4,869

 

(23,080

)

17,466

 

Income taxes (benefit)

 

(8,828

)

10,399

 

1,259

 

114

 

2,944

 

Earnings from continuing operations

 

16,417

 

17,689

 

3,610

 

(23,194

)

14,522

 

Earnings from discontinued operations, net of taxes

 

8,638

 

1,113

 

993

 

 

10,744

 

Net earnings (loss)

 

$

25,055

 

$

18,802

 

$

4,603

 

$

(23,194

)

$

25,266

 

 

13



Table of Contents

 

OXFORD INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Third Quarter Fiscal 2009

 

 

 

Oxford
Industries
(Parent)

 

Subsidiary
Guarantors

 

Subsidiary
Non-Guarantors

 

Consolidating
Adjustments

 

Consolidated
Total

 

Net sales

 

$

36,093

 

$

86,334

 

$

27,826

 

$

(7,979

)

$

142,274

 

Cost of goods sold

 

28,448

 

37,205

 

13,393

 

(4,883

)

74,163

 

Gross profit

 

7,645

 

49,129

 

14,433

 

(3,096

)

68,111

 

SG&A including amortization of intangible assets

 

6,644

 

51,876

 

12,437

 

(3,754

)

67,203

 

Royalties and other operating income (loss)

 

3

 

1,241

 

2,179

 

(157

)

3,266

 

Operating income (loss)

 

1,004

 

(1,506

)

4,175

 

501

 

4,174

 

Interest (income) expense, net

 

5,475

 

(1,218

)

822

 

 

5,079

 

Income (loss) from equity investment

 

4,074

 

 

 

(4,074

)

 

Earnings (loss) from continuing operations before income taxes

 

(397

)

(288

)

3,353

 

(3,573

)

(905

)

Income taxes (benefit)

 

(632

)

(1,385

)

860

 

175

 

(982

)

Earnings from continuing operations

 

235

 

1,097

 

2,493

 

(3,748

)

77

 

Earnings from discontinued operations, net of taxes

 

3,742

 

(192

)

678

 

 

4,228

 

Net earnings (loss)

 

$

3,977

 

$

905

 

$

3,171

 

$

(3,748

)

$

4,305

 

 

OXFORD INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

First Nine Months Fiscal 2009

 

 

 

Oxford
Industries
(Parent)

 

Subsidiary
Guarantors

 

Subsidiary
Non-Guarantors

 

Consolidating
Adjustments

 

Consolidated
Total

 

Net sales

 

$

92,982

 

$

296,638

 

$

74,855

 

$

(22,568

)

$

441,907

 

Cost of goods sold

 

75,857

 

126,134

 

38,777

 

(12,892

)

227,876

 

Gross profit

 

17,125

 

170,504

 

36,078

 

(9,676

)

214,031

 

SG&A including amortization of intangible assets

 

19,476

 

161,084

 

38,903

 

(10,725

)

208,738

 

Royalties and other operating income (loss)

 

14

 

3,993

 

4,363

 

(332

)

8,038

 

Operating income (loss)

 

(2,337

)

13,413

 

1,538

 

717

 

13,331

 

Interest (income) expense, net

 

16,571

 

(3,935

)

2,710

 

 

15,346

 

Income (loss) from equity investment

 

15,624

 

 

 

(15,624

)

 

Earnings (loss) from continuing operations before income taxes

 

(3,284

)

17,348

 

(1,172

)

(14,907

)

(2,015

)

Income taxes (benefit)

 

(5,724

)

3,699

 

(519

)

251

 

(2,293

)

Earnings from continuing operations

 

2,440

 

13,649

 

(653

)

(15,158

)

278

 

Earnings from discontinued operations, net of taxes

 

7,830

 

1,319

 

1,309

 

 

10,458

 

Net earnings (loss)

 

$

10,270

 

$

14,968

 

$

656

 

$

(15,158

)

$

10,736

 

 

14



Table of Contents

 

OXFORD INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

First Nine Months Fiscal 2010

 

 

 

Oxford
Industries
(Parent)

 

Subsidiary
Guarantors

 

Subsidiary
Non-
Guarantors

 

Consolidating
Adjustments