OXFORD INDUSTRIES, INC. PRESS RELEASE
222 PIEDMONT AVENUE, N.E. O ATLANTA, GEORGIA 30308
Contact: J. Reese Lanier, Jr.
Telephone: (404) 653-1446
Fax: (404) 653-1545
E-Mail: rlanier@oxfordinc.com
FOR IMMEDIATE RELEASE
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September 30, 2004
OXFORD INDUSTRIES ANNOUNCES FIRST QUARTER FISCAL 2005 RESULTS
REITERATES COMFORT WITH FULL-YEAR EARNINGS GUIDANCE OF $2.70 TO $2.85
FIRST QUARTER EPS OF $0.36 INCLUDES $0.13 OF NON-CASH CHARGES
TOMMY BAHAMA AND BEN SHERMAN SEE CONTINUED STRONG RESULTS
ATLANTA, GA. - Oxford Industries, Inc. (NYSE:OXM) announced today financial
results for the first quarter ended August 27, 2004. The Company reported that,
for the quarter, net sales increased 9% to $265 million from $242 million in the
first quarter of fiscal 2004.
Diluted earnings per share for the first quarter decreased to $0.36 from $0.42
in the first quarter of fiscal 2004. The Company noted that earnings per share
were affected by the write-off of $1.8 million, or $0.07 per diluted share, in
deferred financing fees to amend its revolving credit agreement. The Company's
most recent guidance assumed this charge would be approximately $0.05 per share.
Additionally, the Company noted that $0.06 per share of non-cash intangible
asset amortization costs associated with the Tommy Bahama and Ben Sherman
acquisitions were included in operating expenses in the first quarter.
J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford Industries,
Inc., commented, "While the challenging retail environment had an impact on
results in our historical businesses, we were very pleased with the performance
of our branded businesses and continue to be optimistic with respect to our
full-year outlook. Tommy Bahama continues to be very well received by the
markets and to have excellent opportunities for continued growth. The Ben
Sherman business, which was added to our Menswear Group following its
acquisition on July 30th, delivered strong results for the quarter, particularly
in its US operations. We believe that Ben Sherman, along with Tommy Bahama, will
continue to fuel our results as we go forward."
The Tommy Bahama Group contributed $93.5 million in sales in the first quarter,
an increase of 48% over last year when results from its operations were included
for an eleven week period. Sales growth resulted from increased wholesale
penetration and revenues from eleven more retail stores than were open during
the year-ago quarter. Operating income for this segment was $11.9 million for
the quarter, an increase of 71% over the eleven-week first quarter last year.
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The Menswear Group reported first quarter sales of $118.7 million compared to
sales of $115.8 million last year. Ben Sherman, which was included for only one
month during the first quarter following its July 30th acquisition, contributed
approximately $17 million in sales. The Company noted that last year's first
quarter included the last of the initial fixture fill of Lands' End product for
Sears retail stores and the last remnants of the discontinued Izod Club Golf
business, neither of which anniversaried this year. First quarter operating
income in this segment was $8.9 million, a decrease of 6% from the same period
last year. The decline in profitability was the result of de-leveraging on a
sales decline in its historical business, which was partially offset by higher
operating profitability in the recently acquired Ben Sherman business.
First quarter sales for the Womenswear Group declined to $52.5 million from
$63.0 million last year. The Company attributed the sales decline to continued
lower shipments of women's apparel to WalMart, whose sales in this product
category have been sluggish for the past several months. Lower than expected
comparable store sales trends at several major customers led to the deferral of
some orders from the first quarter. Continuing margin pressure and the sales
shortfall resulted in an operating loss of $1.0 million for the first quarter
compared to operating income of $3.2 million in the year ago quarter.
The Company commented that, despite some near term challenges in its historical
business, it continues to be comfortable with a full year range of diluted
earnings per share of $2.70 to $2.85 on sales of approximately $1.285 billion to
$1.325 billion.
For the second quarter, ending on November 26, 2004, the Company continues to
anticipate sales in a range from $305 million to $315 million and earnings per
share of $0.48 to $0.52.
Mr. Lanier continued, "We have a variety of strong opportunities for growth
during the remainder of the year and believe that we are positioned for a strong
second half. We expect to deliver record financial results for the year driven
by the contributions of Tommy Bahama and Ben Sherman and supported by new
initiatives in a number of our historical businesses. We look forward to
continuing to deliver superior returns and drive value to our shareholders."
The Company will hold a conference call with senior management to discuss the
financial results at 4:30 p.m. ET today. A live Webcast of the conference call
will be available on the Company's Web site at www.oxfordinc.com. Please visit
the Web site at least 15 minutes early to register for the teleconference Web
cast and download any necessary software.
A replay of the call will be available through October 14, 2004. To access the
telephone replay, domestic participants should dial (877) 519-4471.and
international participants should dial (973) 341-3080. The access code for the
replay is 5215497. A replay of the Webcast will also be available following the
conference call on Oxford Industries' corporate Website.
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Oxford Industries, Inc. is a producer and marketer of branded and private label
apparel for men, women and children. Oxford provides retailers and consumers
with a wide variety of apparel products and services to suit their individual
needs. Oxford's brands include Tommy Bahama(R), Indigo Palms(R), Island Soft(R),
Ben Sherman(R), Ely & Walker(R) and Oxford Golf(R). The Company also holds
exclusive licenses to produce and sell certain product categories under the
Tommy Hilfiger(R), Nautica(R), Geoffrey Beene(R), Slates(R), Dockers(R) and
Oscar de la Renta(R) labels. Oxford's customers are found in every major channel
of distribution including national chains, specialty catalogs, mass merchants,
department stores, specialty stores and Internet retailers.
Oxford's stock has traded on the NYSE since 1964 under the symbol OXM. For more
information, please visit our website at www.oxfordinc.com.
CAUTIONARY STATEMENT FOR THE PURPOSE OF THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The matters in this press release that are forward-looking statements, including
but not limited to statements about our expected business outlook, anticipated
financial and operating results, the anticipated benefits of the Viewpoint
acquisition, growth of particular product lines, strategies, contingencies,
financing plans, working capital needs, sources of liquidity, estimated amounts
and timing of capital expenditures and other expenditures, are based on current
management expectations that involve certain risks which if realized, in whole
or in part, could have a material adverse effect on Oxford's business, financial
condition and results of operations, including, without limitation: (1)general
economic cycles; (2) competitive conditions in our industry; (3) price deflation
in the worldwide apparel industry; (4) our ability to identify and respond to
rapidly changing fashion trends and to offer innovative and upgraded products;
(5) the integration of Ben Sherman into our company; (6) significant changes in
expected weather patterns (e.g., an unseasonably warm autumn) or natural
disasters such as hurricanes, fires or flooding; (7) the price and availability
of raw materials; (8) our dependence on and relationships with key customers;
(9) the ability of our third party producers to deliver quality products in a
timely manner; (10) potential disruptions in the operation of our distribution
facilities; (11) changes in trade quotas or other trade regulations; (12)
economic and political conditions in the foreign countries in which we operate
or source our products; (13) increased competition from direct sourcing; (14)
our ability to maintain our licenses; (15) our ability to protect our
intellectual property and prevent our trademarks, service marks and goodwill
from being harmed by competitors' products; (16) our ability to successfully
implement our growth plans for the acquired businesses; (17) our reliance on key
management; (18) regulatory risks associated with importing products; (19) risks
associated with changes in global currency exchange rates; (20) the impact of
labor disputes and wars or acts of terrorism on our business; (21) our inability
to retain current pricing on our products due to competitive or other factors;
(22) the impact of reduced travel to resort locations on our sales; (23) risks
related to our operation of restaurants under the Tommy Bahama name; (24) the
expansion of our business through the acquisition of new businesses; (25) our
ability to open new retail stores; and unforeseen liabilities associated with
our acquisitions of the Tommy Bahama Group and Ben Sherman Group Limited.
For a further discussion of significant factors to consider in connection with
forward-looking statements concerning Oxford, reference is made to Oxford's Form
S-3 dated September 24, 2004; other risks or uncertainties may be detailed from
time to time in Oxford's future SEC filings. Oxford disclaims any duty to update
any forward-looking statements.
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF EARNINGS
QUARTERS ENDED AUGUST 27, 2004 AND AUGUST 29, 2003
(UNAUDITED)
Quarters Ended
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August 27, 2004 August 29, 2003
(in thousands except per share amount)
Net sales $ 264,790 $ 242,105
Cost of goods sold 179,868 171,214
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GROSS PROFIT 84,922 70,891
Selling, general and administrative 67,554 53,612
Amortization of intangibles 1,712 1,678
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69,266 55,290
Royalty and other operating income 1,753 1,180
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Operating income 17,409 16,781
Interest expense, net 7,921 5,746
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Earnings before income taxes 9,488 11,035
Income taxes 3,320 4,193
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NET EARNINGS $ 6,168 $ 6,842
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Basic earnings per common share $ 0.37 $ 0.44
Diluted earnings per common share $ 0.36 $ 0.42
Basic weighted average shares outstanding 16,712,800 15,819,780
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Diluted weighted average shares outstanding 17,203,323 16,219,846
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Dividends per share $ 0.12 $ 0.105
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OXFORD INDUSTRIES, INC
CONSOLIDATED BALANCE SHEETS
AUGUST 27, 2004 AND AUGUST 29, 2003
(UNAUDITED)
August 27, 2004 August 29, 2003
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($ in thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 11,526 $ 17,370
Receivables 160,485 134,445
Inventories 143,142 117,846
Prepaid expenses and other current assets 19,093 19,346
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Total Current Assets 334,246 289,007
Property, plant and equipment, net 54,745 50,677
Goodwill 158,304 88,095
Intangibles, net 242,120 152,365
Other assets, net 24,845 21,940
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TOTAL ASSETS $814,260 $602,084
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable $111,924 $ 10,000
Trade accounts payable 84,811 66,265
Accrued compensation 18,787 15,182
Other accrued expenses 37,646 31,234
Dividends payable 1,950 1,694
Income taxes payable 5,318 5,181
Current maturities of long-term debt 126 214
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Total Current Liabilities 260,562 129,770
Notes payable 198,804 198,626
Other long term debt, less current maturities 91 117
Noncurrent liabilities 12,798 9,573
Deferred income taxes 80,663 53,680
Stockholders' equity:
Common stock 16,756 16,152
Additional paid in capital 42,266 22,360
Retained earnings 202,320 171,806
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Total Stockholders' equity 261,342 210,318
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $814,260 $602,084
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
QUARTERS ENDED AUGUST 27, 2004 AND AUGUST 29, 2003
(UNAUDITED)
Quarters Ended
Quarters Ended
---------------------------------
August 27, 2004 August 29, 2003
($ in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 6,168 $ 6,842
Adjustments to reconcile net earnings to
Net cash used in operating activities:
Depreciation 3,037 2,357
Amortization of intangible assets 1,712 1,678
Amortization of deferred financing costs and bond discount 2,459 619
Loss (gain) on sale of assets 348 (115)
Equity income (323) (105)
Deferred income taxes (2,175) (843)
Changes in working capital:
Receivables 40,659 5,453
Inventories (823) 14,857
Prepaid expenses 1,669 (777)
Trade accounts payable (21,022) (16,320)
Accrued expenses and other current liabilities (21,488) (12,726)
Stock option tax benefit 587 1,328
Income taxes payable 1,020 1,766
Other noncurrent assets (1,410) (2,351)
Other noncurrent liabilities 1,674 3,949
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NET CASH PROVIDED BY OPERATING ACTIVITIES 12,092 5,612
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition, net of cash acquired (139,626) (218,429)
Decrease in restricted cash -- 204,986
Investment in deferred compensation plan 391 (1,356)
Purchases of property, plant and equipment (2,488) (3,171)
Proceeds from sale of property, plant and equipment 10 105
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NET CASH USED IN INVESTING ACTIVITIES (141,713) (17,865)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term debt 97,592 10,000
Payments of long-term debt 65 (31)
Payments of debt issuance costs (2,766) (7,335)
Proceeds from issuance of common stock 666 4,477
Dividends on common stock (1,946) (1,579)
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NET CASH PROVIDED BY FINANCING ACTIVITIES 93,611 5,532
Effect of foreign currency translation on cash and cash equivalents (33) --
Net change in cash and cash equivalents (36,010) (6,721)
Cash and cash equivalents at the beginning of year 47,569 24,091
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Cash and cash equivalents at the end of period $ 11,526 $ 17,370
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OXFORD INDUSTRIES, INC.
SEGMENT INFORMATION
QUARTERS ENDED AUGUST 27, 2004 AND AUGUST 29, 2003
(UNAUDITED)
August 27, 2004 August 29, 2003
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($ in thousands)
NET SALES
Oxford Menswear Group $ 118,705 $ 115,754
Oxford Womenswear Group 52,458 62,953
Tommy Bahama Group 93,462 63,278
Corporate and Other 165 120
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Total $ 264,790 $ 242,105
OPERATING INCOME
Oxford Menswear Group $ 8,921 $ 9,475
Oxford Womenswear Group (966) 3,224
Tommy Bahama Group 11,916 6,959
Corporate and Other (2,462) (2,877)
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Operating income 17,409 16,781
Interest expense, net 7,921 5,746
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Earnings before taxes $ 9,488 $ 11,035
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