•

our reliance on key management;



•

risks associated with changes in global currency exchange rates;



•

changes in interest rates on our variable rate debt;



•

the impact of labor disputes, wars or acts of terrorism on our business;



•

the effectiveness of our disclosure controls and procedures related to financial reporting;



•

our inability to retain current pricing on our products due to competitive or other factors;



•

the expansion of our business through the acquisition of new businesses; and



•

our ability to open new retail stores.

        Other risks or uncertainties may be detailed from time to time in our future Securities and Exchange Commission filings.

        Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date this report is filed with the Securities and Exchange Commission. 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.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)

(UNAUDITED)

See notes to consolidated financial statements.accompanying notes.

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED EXCEPT FOR MAY 28, 2004)

See accompanying notes.

See notes to consolidated financial statements.

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

(UNAUDITED)

Supplemental schedule of noncashnon-cash investing and financing activities:

As of November 26, 2004,February 25, 2005, approximately $6.9$4.2 million of the Ben Sherman acquisition has been financed through the Seller Notes, as discussed in Note 5.

See notes to consolidated financial statements.accompanying notes.

OXFORD INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

QUARTER ENDED NOVEMBER 26,FEBRUARY 25, 2005

1.

Basis of Presentation: We prepared the accompanying unaudited condensed consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Such rules and regulations allow us to condense and omit certain information and footnote disclosures normally included in audited financial statements prepared in accordance with accounting principles generally accepted in the United States. We believe these consolidated financial statements reflect all normal, recurring adjustments that are necessary for a fair presentation of our financial position and results of operations for the periods presented. Results of operations for the interim periods presented are not necessarily indicative of results to be expected for the year primarily due to the impact of seasonality on our business. The information included in this Form 10-Q should be read in conjunction with Management's Discussion and Analysis and financial statements and notes thereto included in our fiscal 2004 Form 10-K. As used in this report, "our," "us," "we" and similar phrases refer to Oxford Industries, Inc. and its consolidated subsidiaries; and "fiscal 2004," "fiscal 2005" and "fiscal 2006" refer to our fiscal years ended or ending on May 28, 2004, June 3, 2005 and June 2, 2006, respectively.

1.

Basis of Presentation: We prepared the accompanying unaudited, consolidated financial statements in accordance with the rules and regulations of the Securities and Exchange Commission including the instructions to Form 10-Q and Article 10 of Regulation S-X. Such rules and regulations allow us to condense and omit certain information and footnote disclosures normally included in audited financial statements prepared in accordance with accounting principles generally accepted in the United States. We believe these consolidated financial statements reflect all normal, recurring adjustments that are necessary for a fair presentation of our financial position and results of operations for the periods presented. Results of operations for the interim periods presented are not necessarily indicative of results to be expected for the year. For more information regarding our results of operations and financial position, refer to the notes accompanying our audited financial statements contained in our Annual Report on Form 10-K. For the fiscal year ended May 28, 2004. As used in this report, “our,” “us,” “we” and similar phrases refer to Oxford Industries, Inc. and its consolidated subsidiaries; and “fiscal 2004,” “fiscal 2005” and “fiscal 2006” refer to our fiscal years ended or ending on May 28, 2004, June 3, 2005 and June 2, 2006, respectively.

OurThe accounting policies applied during the interim periods presented are consistent with the accounting policies as described in our Fiscalfiscal 2004 Form 10-K.

Certain amounts in the prior periods’periods' financial statements have been reclassified to conform to the current year’syear's presentation. These reclassifications have no impact on net earnings as previously reported.

2.

Inventories: The components of inventories are summarized as follows:

3.

Intangible Assets: Intangible assets by category at February 25, 2005 are summarized below:

4.

Acquisitions: On July 30, 2004, we acquired 100% of the capital stock of Ben Sherman Limited ("Ben Sherman"), which we operate as part of our Menswear Group. Ben Sherman is a London-based designer, distributor and marketer of branded sportswear, accessories, and footwear. The purchase price for Ben Sherman was £80 million, or approximately $145 million, plus associated expenses of approximately $3.1 million. The transaction was financed with cash on hand,

borrowings from our senior revolving credit facility and unsecured notes payable to the management shareholders of Ben Sherman, both as described in Note 5.

2.	Inventories:The components of inventories are summarized as follows:

		Nov. 26, 2004			May 28, 2004			Nov. 28, 2003
		($ in thousands)
Finished goods		$	128,680		$	85,492		$	91,979
Work in process			9,539			9,925			11,645
Fabric, trim and supplies			23,613			20,993			23,813
				��
Total		$	161,832		$	116,410		$	127,437

3.	Intangible Assets:Intangible assets by category at November 26, 2004 are summarized below:

		Intangibles at cost			Accumulated amortization			Intangibles, net
		($ in thousands)
Trademarks		$	210,378		$	349		$	210,029
License agreements			20,683			5,092			15,591
Customer relationships			19,500			5,708			13,792
Covenant not to compete			460			174			286
Total		$	251,021		$	11,323		$	239,698

OXFORD INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

QUARTER ENDED NOVEMBER 26, 2004

4.

Acquisitions:On July 30, 2004, we acquired 100% of the capital stock of Ben Sherman Limited (“Ben Sherman”), which we operate as part of our Menswear Group. Ben Sherman is a London-based designer, distributor and marketer of branded sportswear, accessories, and footwear. The purchase price for Ben Sherman was £80 million, or approximately $145 million, plus associated expenses of approximately $3.0 million. The transaction was financed with cash on hand and borrowings under our senior revolving credit facility and unsecured notes payable to the management shareholders of Ben Sherman, both as described in Note 5.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the date of acquisition for Ben Sherman. The purchase price allocation will be finalized uponis subject to finalization of certain preliminary estimates.

		($ in thousands)
Total purchase price		$	148,882
Cash		$	7,656
Accounts receivable			25,637
Inventories			26,053
Other current assets			2,841
Goodwill			44,982
Intangibles			96,500
Property, plant and equipment			3,765
Current liabilities			(29,602	)
Deferred taxes			(28,950	)
Fair value of net assets acquired		$	148,882

The components of the Intangibles listed in the above table are as follows:

		Amount			Life
		($ in thousands)
Trademarks		$	82,000		Indefinite
License agreements			11,700		4-8 years
Customer relationships			2,800		15 years
Total		$	96,500

OXFORD INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

QUARTER ENDED NOVEMBER 26, 2004

4.	Acquisitions (continued):

On June 13, 2003, we acquired all of the capital stock of Viewpoint International, Inc., which we operate as the Tommy Bahama Group. The purchase price for the Tommy Bahama Group could be up to $325 million, consisting of $240 million in cash at closing, $10 million in our common stock (776,400 shares), approximately $3.4 million in transaction costs, and up to $75 million in contingent payments, subject to the Tommy Bahama Group achieving certain performance targets. Such performance targets are based on earnings before interest and taxes after deduction of a capital charge based on net tangible assets.

For each of the four years following the acquisition, the selling stockholders of the Tommy Bahama Group will receive an annual basic contingent payment if the Tommy Bahama Group’sGroup's earnings are greater than 90% of the applicable target and will receive the maximum annual basic contingent payment of $12.5 million if the Tommy Bahama Group’sGroup's earnings are 100% or greater than the applicable target. If the Tommy Bahama Group’sGroup's earnings are between 90% and 100% of the applicable target, the annual basic contingent payment will be calculated on a straight line basis from $0 to $12.5 million. Up to 50% of any annual basic contingent payment may be paid in shares of our common stock at our option, and in the case of payments in the first two years, at the option of the selling stockholders of the Tommy Bahama Group. Shares of our common stock issued at our option will be valued at the average price on the New York Stock Exchange (or other applicable exchange) for the ten full trading days prior to the applicable payment date. Shares of our common stock issued at the option of the selling stockholders will be valued at $12.88 per share.

All earnoutcontingent payments to be paid to selling stockholders will be treated as additional purchase price and recorded as goodwill. Approximately 5% of the total value of all consideration that becomes due and payable under the earnout agreement has been designated to be paid toward an Employee Cash Bonus Plan to be distributed to employees of the Tommy Bahama Group under the terms of the plan. The earnoutcontingent payments designated toward the Employee Cash Bonus Plan are charged to selling, general and administrative expense.

Additionally, if, at the end of the four year period, cumulative earnings exceed the cumulative targets, the selling stockholders will receive 33.33% of the cumulative excess up to a maximum cumulative additional contingent payment of $25.0 million. Any cumulative additional contingent payment will be paid in cash.

The Year 1 contingent payment was earned in full and was paid during the first quarter of fiscal 2005 in the form of approximately $6.2 million in cash and the remainder in our common stock valued at $12.88 per share for total consideration of approximately $24.6 million. Of this amount approximately $23.4 million was recognized as goodwill with the remainder recognized as selling, general and administrative expense.

OXFORD INDUSTRIES, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

QUARTER ENDED NOVEMBER 26, 2004

4.	Acquisitions (continued):

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition for the Tommy Bahama Group.Group including any contingent payments made to date.

		($ in thousands)
Total purchase price		$	278,419
Cash		$	22,145
Accounts receivable			29,521
Inventories			27,697
Other current assets			6,015
Goodwill			110,164
Intangibles			153,360
Property, plant and equipment			28,087
Other assets			2,470
Current liabilities			(45,626	)
Noncurrent liabilities			(1,253	)
Deferred taxes			(54,161	)
Fair value of net assets acquired		$	278,419

These acquisitions helped us achieve one of our key strategic objectives of owning major lifestyle brands. The acquisitions provide strategic benefits through growth opportunities and further diversification of our business over distribution channels, price points, product categories and target customers. The results of operations of Ben Sherman and the Tommy Bahama Group are included in our consolidated statements of earnings from the respective dates of the acquisition.

Pro-Forma financial information:

The pro forma financial information presented below gives effect to the Ben Sherman acquisition (July 30, 2004) and the Tommy Bahama Group acquisition (June 13, 2003) as if itthe acquisitions had occurred as of the beginning of fiscal 2005 and fiscal 2004 and the Tommy Bahama acquisition as if it had occurred as of the beginning of fiscal 2004.respective periods. The information presented below is for illustrative purposes only and is not indicative of results that would have been achieved if the

acquisitions had occurred as of the beginning of fiscal 2005 and 2004 or results which may be achieved in the future.

5.

Debt: The following table details our debt as of the dates specified:

(1)

On July 28, 2004, the U.S. Revolver was amended to increase the line of credit from $275 million to $280 million, to eliminate the asset borrowing base calculation to determine availability and to adjust the amount that certain lenders were committed to loan among other changes. Approximately $1.8 million of unamortized deferred financing costs were expensed as a result of the amendment, which were included in interest expense in the consolidated statement of earnings. Additionally, the terms and conditions of certain related agreements were modified in November 2004, including a change to a springing lock-box agreement, which results in amounts

outstanding under the facility requiring classification as long-term debt subsequent to the modification.

		Quarters Ended						Six Months Ended
		Nov. 26, 2004			Nov. 28, 2003			Nov. 26, 2004			Nov. 28, 2003
		($ in thousands except per share amounts)
Net sales		$	312,869		$	297,161		$	608,139		$	587,881
Net earnings		$	9,072		$	9,267		$	18,024		$	18,687
Net earnings per share
Basic		$	0.54		$	0.58		$	1.08		$	1.16
Diluted		$	0.53		$	0.56		$	1.05		$	1.13

OXFORD INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

QUARTER ENDED NOVEMBER 26, 2004

5.	Debt:The following table details our debt as of the dates specified:

		November 26, 2004			May 28, 2004			November 28, 2003
		($ in thousands)
$280 million U.S. Secured Revolving Credit Facility (“U.S. Revolver”), which accrues interest and letter of credit fees based upon a pricing grid which is tied to certain debt ratios (4.27% at November 26, 2004), requires interest payments monthly with principal due at maturity (July 2009), and is collateralized by substantially all the assets of the Company and Guarantor Subsidiaries (1)		$	116,700		$	—		$	—
12 million Pounds Sterling Senior Secured Revolving Credit Facility (“U.K. Revolver”), which accrues interest at the lender’s prime rate plus 1.2%, requires interest payments monthly with principal payable on demand, and is collateralized by substantially all the United Kingdom assets of Ben Sherman (2)			—			—			—
$200 million Senior Unsecured Notes (“Senior Unsecured Notes”), which accrue interest at 8.875% and require interest payments semiannually with principal due at maturity (June 2011) (3)			198,849			198,760			198,671
Unsecured Seller Notes (“Seller Notes”), which accrue interest at LIBOR plus 1.2% (6.55% at November 26, 2004), and require interest payments quarterly with principal payable on demand after January 30, 2005 (2)			6,887			—			—
Other debt, including capital lease obligations with varying terms and conditions, collateralized by the respective assets			145			152			190
Total Debt			322,581			198,912			198,861
Short-term Debt			6,973			98			97
Total Long-term Debt			315,608			198,814			198,764

---

(1)

On July 28, 2004, the U.S. Revolver was amended to increase the amount of the line of credit from $275 million to $280 million and to adjust the amounts that certain lenders were committed to loan along with other changes. At the time of this amendment, approximately $1.8 million of unamortized deferred financing costs were expensed, which have been included in interest expense in the consolidated statement of earnings. Additionally, the terms and conditions of certain related agreements were modified in November 2004, including a change to a springing lock-box agreement, which results in amounts outstanding under the facility requiring classification as long-term debt subsequent to the modification.

(2)	The U.K. Revolver and Seller Notes, both denominated in pounds sterling, were entered into on July 30, 2004, in conjunction with the Ben Sherman acquisition.

(3)	The Senior Unsecured Notes were sold on May 16, 2003 at a discount of 0.713% ($1.4 million) in connection with the acquisition of the Tommy Bahama Group to yield an effective interest rate of 9.0%.

(2)

The U.K. Revolver and Seller Notes, both denominated in pounds sterling, were entered into in connection with the Ben Sherman acquisition.

(3)

The Senior Unsecured Notes were sold on May 16, 2003 at a discount of 0.713% ($1.4 million) in connection with the acquisition of the Tommy Bahama Group to yield an effective interest rate of 9.0%.

The U.S. Revolver, the U.K. Revolver and the Senior Unsecured Notes each include certain debt covenant restrictions that require us or our subsidiaries to maintain certain financial ratios that are customary for similar facilities. OnThe facilities also include limitations on certain restricted payments such as dividends, earn-out payments, and asprepayment of November 26, 2004debt. To ensure compliance with the minimum availability requirement of our U.S. Revolver, we sought and obtained the consent of our U.S. Revolver bank group to pay our third and fourth quarter fiscal 2005 dividends without regard to the availability requirement. We currently do not anticipate the need for a consent to pay dividends in subsequent quarters. As of February 25, 2005, we were compliant with all debt covenant restrictionsrestrictive financial covenants related to allour debt agreements.

OXFORD INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

QUARTER ENDED NOVEMBER 26, 2004

6.

Shareholders’ Equity:We have chosen to account for stock-based compensation to employees using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock-Based Compensation.” Certain pro forma and other disclosures related to stock-based compensation plans are presented below as if compensation cost of options granted had been determined in accordance with the fair value provisions of the Statement of Financial Accounting Standards Board Statement No. 123, “Accounting for Stock-Based Compensation.”

		Quarters Ended								Six Months Ended
		Nov. 26, 2004				Nov. 28, 2003				Nov. 26, 2004				Nov 28. 2003
		($ in thousands)
Net earnings as reported		$	9,072			$	6,840			$	15,240			$	13,682
Deduct: Employee compensation expense, net of related tax effects			(209	)			(137	)			(418	)			(228	)
Pro forma net earnings		$	8,863			$	6,703			$	14,822			$	13,454
Basic earnings per share as reported		$	0.54			$	0.43			$	0.91			$	0.86
Pro forma basic earnings per share		$	0.53			$	0.41			$	0.89			$	0.84
Diluted earnings per share as reported		$	0.53			$	0.41			$	0.89			$	0.83
Pro forma diluted earnings per share		$	0.51			$	0.40			$	0.86			$	0.82

		Quarters Ended						Six Months Ended
		Nov. 26, 2004			Nov. 28, 2003			Nov. 26, 2004			Nov. 28, 2003
		($ in thousands)
Basic and diluted earnings available to shareholders (numerator):		$	9,072		$	6,840		$	15,240		$	13,682
Shares (denominator):
Weighted average shares outstanding			16,761,159			16,170,814			16,736,873			15,994,443
Dilutive securities:
Options			454,612			434,586			479,673			458,295
Total assuming conversion			17,215,771			16,605,400			17,216,546			16,452,738
Per share amounts:
Basic earnings per common share		$	0.54		$	0.43		$	0.91		$	0.86
Diluted earnings per common share		$	0.53		$	0.41		$	0.89		$	0.83

DuringAs of February 25, 2005, approximately $100.5 million and $2.2 million of trade letters of credit were outstanding against the first six monthsU.S. Revolver and the second quarterU.K. Revolver, respectively. The net availability under our U.S. Revolver and U.K. Revolver was approximately $42.2 million and $20.2 million, respectively as of fiscal 2005February 25, 2005.

6.

Shareholders' Equity: We have chosen to account for stock-based compensation to employees using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock-Based Compensation." Certain pro forma and fiscal 2004, allother disclosures related to stock-based compensation plans are presented below as if compensation cost of options granted had been determined in accordance with the fair value provisions of the Statement of Financial Accounting Standards Board Statement No. 123, "Accounting for Stock-Based Compensation."

(1)

Stock-based compensation recognized in reported net income relates to purchase sharesacceleration of our common stock were includedvesting for certain options granted to employees who retired in the computation of diluted earnings per share.

current period.

We effected a two-for-one share split in the form of a 100% stock dividend, payable December 1, 2003, to shareholders of record on November 17, 2003. All share and per share data appearing in the consolidated financial statements and related notes reflect this stock split.

During the nine months ended February 25, 2005, we issued 0.6 million shares with respect to the acquisition of the Tommy Bahama Group and the exercise of stock options by employees. We have not repurchased any shares during the current year.

OXFORD INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

QUARTER ENDED NOVEMBER 26, 2004

6.	Shareholders’ Equity (continued):

Accumulated otherOther comprehensive income of $7.0 million and $6.0 million for the quarter and six months ended November 26, 2004which is comprised of the effects of foreign currency translation gains (loss),adjustments for the quarter and nine months ended February 25, 2005 was $1.9 million and $7.9 million, respectively, net of income taxes of $2.1$1.0 million and $1.8$4.3 million, respectively which is included as a component of retained earnings in the condensed consolidated balance sheet. Comprehensive income forrespectively. For the quarter and sixnine months ended November 26, 2004February 25, 2005, total comprehensive income consisting of net earnings as reported in our statement of earnings and the effect of foreign currency translation adjustments was $16.1$15.9 million and $21.3$37.2 million, respectively.respectively, net of income taxes. Net earnings and comprehensive income were equivalent for all prior periods. Accumulated other periods.comprehensive income was $7.9 million as of February 25, 2005, which is included in retained earnings in the condensed consolidated balance sheet.

7.

Segment Information: We organize the components of our business into operating segments for purposes of allocating resources and assessing performance. Our reportable segments are the Menswear Group, the Womenswear Group and the Tommy Bahama Group. The Menswear Group produces a variety of branded and private label sportswear, tailored clothing, dress shirts and golf apparel. The Womenswear Group produces private label women's sportswear separates, coordinated sportswear, outerwear, dresses and swimwear. The Tommy Bahama Group produces lifestyle branded casual attire, operates retail stores and restaurants, and licenses the Tommy Bahama brand for other product categories.

The business segments results exclude corporate overhead costs, LIFO inventory accounting adjustments and other costs which are not allocated to the operating groups. LIFO inventory calculations are made on a legal entity basis, which do not necessarily correspond to our segment definitions. Therefore, LIFO inventory accounting adjustments are not allocated to the operating segments. Total assets for Corporate and Other include the LIFO inventory reserve of $37.1 million, $35.5 million and $35.5 million at February 25, 2005, May 28, 2004 and February 27, 2004, respectively. Segment results are as follows:

		February 25, 2005			May 28, 2004			February 27, 2004
		(in thousands)
Assets
Menswear Group		$	427,209		$	171,718		$	174,607
Womenswear Group			89,656			95,866			94,364
Tommy Bahama Group			397,059			390,961			365,807
Corporate and Other			4,092			36,272			8,139
Total		$	918,016		$	694,817		$	642,917

OXFORD INDUSTRIES, INC.8.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)New Accounting Standards:

QUARTER ENDED NOVEMBER 26, In November 2004, the Financial Accounting Standards Board, or FASB issued FASB Statement No. 151 "Inventory Costs, an Amendment of ARB No. 43 Chapter 4" ("FAS 151"). FAS 151 is applicable for inventory costs incurred during fiscal years beginning after June 15, 2005. FAS 151 requires that items such as idle facility expense, excessive spoilage, double freight, and re-handling be recognized as current-period charges rather than being included in inventory regardless of whether the costs meet the criterion of abnormal as defined in ARB 43. We do not believe the adoption of FAS 151 will have a material impact on us upon adoption in fiscal 2006 as we have historically expensed such costs as incurred.

7.	Segment Information (continued):

		Quarters Ended								Six Months Ended
		($ in thousands)
		November 26, 2004				November 28, 2003				November 26, 2004				November 28, 2003
Depreciation and amortization
Menswear Group		$	1,892			$	899			$	3,029			$	1,811
Womenswear Group			65				83				130				282
Tommy Bahama Group			3,646				3,402				7,090				6,180
Corporate and Other			90				789				192				265
Total		$	5,693			$	5,173			$	10,441			$	8,538
Operating Income
Menswear Group		$	18,048			$	10,221			$	26,969			$	19,696
Womenswear Group			208				1,893				(758	)			5,117
Tommy Bahama Group			5,895				7,550				17,811				14,509
Corporate and Other			(3,340	)			(2,618	)			(5,802	)			(5,495	)
Total		$	20,811			$	17,046			$	38,220			$	33,827
Interest expense, net			6,855				6,098				14,776				11,844
Earnings before taxes		$	13,956			$	10,948			$	23,444			$	21,983
						November 26, 2004				May 28, 2004				November 28, 2003
						($ in thousands)
Assets
Menswear Group						$	405,010			$	171,718			$	177,109
Womenswear Group							71,170				95,866				73,072
Tommy Bahama Group							386,396				390,961				349,293
Corporate and Other							(3,024	)			36,272				6,128
Total						$	859,552			$	694,817			$	605,602

OXFORD INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

QUARTER ENDED NOVEMBER 26, 2004

8.

New Accounting Standards:In November 2004, the Financial Accounting Standards Board, or FASB issued FASB Statement No. 151 “Inventory Costs, an Amendment of ARB No. 43 Chapter 4” (“FAS 151”). FAS 151 is applicable for inventory costs incurred during fiscal years beginning after June 15, 2005. FAS 151 requires that items such as idle facility expense, excessive spoilage, double freight, and rehandling be recognized as current-period charges rather than being included in inventory regardless of whether the costs meet the criterion of abnormal as defined in ARB 43. We do not believe the adoption of the standard will have a material impact on us upon adoption in fiscal 2006 as we have historically expensed such costs as incurred.