EXHIBIT 99.1
OXFORD INDUSTRIES, INC. PRESS RELEASE
222 PIEDMONT AVENUE, N.E. - ATLANTA, GEORGIA 30308
Contact: J. Reese Lanier, Jr.
Telephone: (404) 653-1446
Fax: (404) 653-1545
E-Mail: rlanier@oxfordinc.com
FOR IMMEDIATE RELEASE
---------------------
August 4, 2005
OXFORD INDUSTRIES ANNOUNCES RECORD FOURTH QUARTER RESULTS
-- NET INCOME RISES 25% TO $21 MILLION --
-- RECORD SALES OF $387 MILLION, UP 14% FROM LAST YEAR -
-- EPS GUIDANCE FOR FISCAL 2006 INCREASED TO RANGE OF $3.25 TO $3.35 --
ATLANTA, GA. - Oxford Industries, Inc. (NYSE:OXM) announced today financial
results for the 14-week quarter and 53-week fiscal year ended June 3, 2005. The
Company noted that last year's fourth quarter and fiscal year contained 13 weeks
and 52 weeks, respectively.
Fiscal 2005 net sales increased 18% to $1,313.6 million from $1,116.6 million
last year. Net earnings rose 25% to $49.8 million from $39.7 million last year
and diluted earnings per share increased 21% to $2.87 from $2.38 in the prior
period.
Fourth quarter net sales rose 14% to $386.6 million from $339.1 million in last
year's fourth quarter. Net income increased 25% to $20.6 million from $16.5
million last year. Diluted earnings per share for the quarter increased to $1.17
from $0.97 in the fourth quarter of fiscal 2004. The Company noted that earnings
per share were above its previously issued guidance range of $1.00 to $1.10 and
the current First Call consensus estimate of $1.11.
J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford Industries,
Inc., commented, "We are pleased to deliver another quarter of strong financial
results and bring to a close a record year for Oxford. The Tommy Bahama and Ben
Sherman lifestyle brands were the driving force behind our growth and
profitability, generating more than 40% of total sales and 70% of total
operating earnings in fiscal 2005. We continue to make significant progress in
the strategic repositioning of our business and look forward to another strong
performance in the year ahead."
The Tommy Bahama Group reported fourth quarter sales of $118 million compared to
$126 million in the year ago quarter. Sales growth in the branded business was
offset by the previously announced exit from this segment's private label
business which declined to less than $0.5 million in the fourth quarter from
approximately $15 million in the same period last year. The Tommy Bahama Group's
branded business increased 6% in the fourth quarter to $118 million from $111
million in the year ago period. Operating income for this segment increased to
$22.8 million from $21.3 million last year. The improvement in profitability was
due primarily to a greater percentage of both higher margin branded sales and
company-owned retail sales.
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The Menswear Group, which includes results for Ben Sherman in the current period
but not in the prior period, reported a fourth quarter sales increase of 59% to
$188 million compared to sales of $118 million in the same period last year. The
Ben Sherman business performed exceptionally well during the quarter,
contributing $43 million in sales. Excluding the impact of Ben Sherman, the
Menswear Group's historical businesses recorded a 23% sales increase over last
year to $145 million, with broad-based growth across most major product
categories. Fourth quarter operating earnings for the Menswear Group increased
13% over last year to $17.2 million. This increase was due to the significant
contribution from Ben Sherman, partially offset by start up expenses for new
marketing initiatives and a decline in profitability in private label sportswear
and casual pants.
Fourth quarter sales for the Womenswear Group declined 15% to $80 million from
$95 million last year. A more efficient sourcing structure and expense
reductions resulted in a significant improvement in profitability. Operating
earnings for the Womenswear Group increased 98% over last year to $6.2 million.
The Company believes that this business has stabilized at the current revenue
level and the recent improvement in profitability will continue into fiscal
2006.
Consolidated gross margins for the fourth quarter increased 360 basis points to
34.8% from 31.2% last year due to the increasing contribution of the Ben Sherman
and Tommy Bahama brands. Royalty income rose 66% to $3.1 million for the fourth
quarter from $1.9 million last year. The higher sales volume of Tommy Bahama
licensees and the inclusion of Ben Sherman's licensing income generated the
increase in royalty income. Fourth quarter operating margin increased to 9.8%
from 9.3% last year.
Total inventories at quarter-end increased 45% to $169 million from $116 million
last year. The increase was driven by additional inventory to support growth in
the Menswear and Tommy Bahama Groups and the inclusion of $26 million in Ben
Sherman inventory. The Company believes inventories are properly valued and
appropriate to support the business going forward. Total accounts receivable
increased 12% over last year to $197 million which was consistent with the
fourth quarter sales increase of 14%.
The Company updated its previously issued guidance for the first quarter and
full year to reflect favorable market conditions and developing opportunities.
For the first quarter of fiscal 2006, the Company continues to project total
sales of between $325 and $335 million and raised diluted earnings per share
guidance to a range of $0.57 to $0.62. For the full year, the Company continues
to project total sales of $1.37 and $1.39 billion and raised diluted earnings
per share guidance to a range of $3.25 to $3.35.
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 August 11, 2005. To access the
telephone replay, participants should dial (719) 457-0820. The access code for
the replay is 3298141. 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 acquisition of the Tommy Bahama Group and Ben Sherman,
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) changes in trade quotas or
other trade regulations, including "safeguard" quotas; (6) our ability to
continue to finance our working capital and growth on acceptable terms; (7)
significant changes in weather patterns (e.g., an unseasonably warm autumn)
or natural disasters such as hurricanes, fires or flooding; (8) the price
and availability of raw materials; (9) our dependence on and relationships
with key customers; (10) the ability of our third party producers to
deliver quality products in a timely manner; (11) potential disruptions in
the operation of our distribution facilities; (12) any disruption or
failure of our computer systems or data network; (13) the integration of
Ben Sherman into our company; (14) our ability to successfully implement
our growth plans for the acquired businesses; (15) unforeseen liabilities
associated with our acquisitions of the Tommy Bahama Group and Ben Sherman;
(16) economic and political conditions in the foreign countries in which we
operate or source our products; (17) increased competition from direct
sourcing; (18) our ability to maintain our licenses; (19) our ability to
protect our intellectual property and prevent our trademarks, service marks
and goodwill from being harmed by competitors' products; (20) our reliance
on key management; (21) risks associated with changes in global currency
exchange rates; (22) changes in interest rates on our variable rate debt;
(23) the impact of labor disputes and wars or acts of terrorism on our
business; (24) the effectiveness of our disclosure controls and procedures
related to financial reporting; (25) our inability to retain current
pricing on our products due to competitive or other factors; (26) the
expansion of our business through the acquisition of new businesses; and
(27) our ability to open new retail stores.
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 STATEMENTS OF EARNINGS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
QUARTER ENDED YEAR ENDED
JUNE 3, 2005 MAY 28, 2004 JUNE 3, 2005 MAY 28, 2004
------------ ------------ ------------ ------------
Net sales ........................................................ $386,583 $339,146 $1,313,609 $1,116,552
Cost of goods sold ............................................... 251,913 233,493 875,355 776,108
-----------------------------------------------------------
Gross profit ..................................................... 134,670 105,653 438,254 340,444
Selling, general and administrative .............................. 97,421 74,173 336,608 251,836
Amortization of intangible assets ................................ 2,577 1,676 8,978 6,709
-----------------------------------------------------------
99,998 75,849 345,586 258,545
Royalties and other operating income ............................. 3,096 1,863 12,059 5,114
-----------------------------------------------------------
Operating income ................................................. 37,768 31,667 104,727 87,013
Interest expense, net ............................................ 7,364 5,814 29,147 23,913
-----------------------------------------------------------
Earnings before income taxes ..................................... 30,404 25,853 75,580 63,100
Income taxes ..................................................... 9,805 9,359 25,753 23,384
-----------------------------------------------------------
NET EARNINGS ..................................................... $ 20,599 $ 16,494 $ 49,827 $ 39,716
===========================================================
Earnings per common share:
Basic ........................................................ $ 1.22 $ 1.02 $ 2.97 $ 2.47
Diluted ...................................................... 1.17 $ 0.97 $ 2.87 $ 2.38
Weighted average common shares outstanding:
Basic ........................................................ 16,856 16,214 16,788 16,100
Dilutive impact of options and restricted stock .............. 717 1,022 562 599
-----------------------------------------------------------
Diluted ...................................................... 17,573 17,236 17,350 16,699
Dividends per common share ....................................... $ 0.135 $ 0.12 $ 0.51 $ 0.45
===========================================================
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OXFORD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
YEAR ENDED
JUNE 3, 2005 MAY 28, 2004
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents .................................................... $ 6,499 $ 47,569
Receivables, net ............................................................. 197,094 176,367
Inventories .................................................................. 169,296 116,410
Prepaid expenses ............................................................. 20,506 16,475
-----------------------
Total current assets ..................................................... 393,395 356,821
Property, plant and equipment, net ............................................. 65,051 51,826
Goodwill, net .................................................................. 188,563 115,426
Intangible assets, net ......................................................... 234,854 147,333
Other non-current assets, net .................................................. 24,014 23,411
-----------------------
TOTAL ASSETS ................................................................... $905,877 $694,817
=======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable ....................................................... $105,992 $100,813
Accrued compensation ......................................................... 31,043 33,113
Other accrued expenses ....................................................... 30,890 30,440
Additional acquisition cost payable .......................................... 25,754 22,779
Dividends payable ............................................................ 2,278 1,946
Income taxes payable ......................................................... 13,085 4,294
Short-term debt and current maturities of long-term debt ..................... 3,407 98
-----------------------
Total current liabilities ................................................ 212,449 193,483
Long-term debt, less current maturities ........................................ 289,123 198,814
Other non-current liabilities .................................................. 23,562 11,124
Deferred income taxes .......................................................... 77,242 52,419
Commitments and contingencies .................................................. -- --
Shareholders' Equity:
Preferred stock, $1.00 par value; 30,000 authorized and none issued and
outstanding at June 3, 2005 and May 28, 2005 ............................... -- --
Common stock, $1.00 par value; 60,000 authorized and 16,884 issued and
outstanding at June 3, 2005; and 60,000 authorized and 16,215 issued and
outstanding at May 28, 2004 ................................................ 16,884 16,215
Additional paid-in capital ................................................... 45,918 23,673
Retained earnings ............................................................ 240,401 199,089
Accumulated other comprehensive income ....................................... 298 --
-----------------------
Total Shareholders' Equity ..................................................... 303,501 238,977
-----------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ..................................... $905,877 $694,817
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
YEAR ENDED
JUNE 3, 2005 MAY 28, 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings ................................................................... $ 49,827 $ 39,716
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation ................................................................ 13,499 11,702
Amortization of intangible assets ........................................... 8,978 6,709
Amortization of deferred financing costs and bond discount .................. 4,439 2,654
(Gain) loss on sale of property, plant and equipment ........................ (181) (637)
Equity income ............................................................... (479) (321)
Deferred income taxes ....................................................... (5,608) (2,379)
Changes in working capital:
Receivables ................................................................. 4,994 (36,354)
Inventories ................................................................. (26,682) 15,992
Prepaid expenses ............................................................ 171 1,973
Trade accounts payable ...................................................... 54 18,228
Accrued expenses and other current liabilities .............................. (16,677) 4,411
Stock option income tax benefit ............................................. 1,566 1,895
Income taxes payable ........................................................ 8,857 879
Other non-current assets ....................................................... (3,576) (5,272)
Other non current liabilities .................................................. 12,455 5,500
--------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES .................................. 51,637 64,797
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition - net of cash acquired .......................................... (143,727) (222,737)
Decrease (increase) in restricted cash in escrow ............................ -- 204,986
Investment in deferred compensation plan .................................... (1,004) (1,842)
Purchases of property, plant and equipment .................................. (23,544) (14,143)
Proceeds from sale of property, plant and equipment ......................... 496 1,675
--------------------------
NET CASH USED IN INVESTING ACTIVITIES ...................................... (167,779) (32,061)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of financing arrangements ......................................... (542,473) (135,555)
Proceeds from financing arrangements ........................................ 624,861 135,345
Deferred financing costs paid ............................................... (2,766) (7,416)
Proceeds from issuance of common stock ...................................... 3,471 5,286
Dividends on common stock ................................................... (8,184) (6,918)
--------------------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES ........................ 74,909 (9,258)
Net change in cash and cash equivalents ........................................ (41,233) 23,478
Effect of foreign currency translation on cash and cash equivalents ............ 163 --
Cash and cash equivalents at the beginning of year ............................. 47,569 24,091
--------------------------
Cash and cash equivalents at the end of year ................................... $ 6,499 $ 47,569
==========================
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accrual for additional acquisition cost ..................................... $ 25,754 $ 22,779
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OXFORD INDUSTRIES, INC.
SEGMENT INFORMATION
(UNAUDITED)
(IN THOUSANDS)
QUARTER ENDED YEAR ENDED
JUNE 3, 2005 MAY 28, 2004 JUNE 3, 2005 MAY 28, 2004
------------ ------------ ------------ ------------
Net Sales
Menswear Group ............ $ 187,725 $ 117,865 $ 656,606 $ 448,800
Womenswear Group .......... 80,414 95,019 256,822 297,865
Tommy Bahama Group ........ 118,307 126,043 399,658 369,148
Corporate and other ....... 137 219 523 739
-------------------------- ------------------------------
Net Sales ................. $ 386,583 $ 339,146 $ 1,313,609 $ 1,116,552
-------------------------- ------------------------------
Operating Income
Menswear Group ............ $ 17,154 $ 15,203 $ 58,237 $ 41,915
Womenswear Group .......... 6,188 3,125 10,648 11,583
Tommy Bahama Group ........ 22,793 21,313 54,128 50,644
Corporate and other ....... (8,367) (7,974) (18,286) (17,129)
-------------------------- ------------------------------
Operating income .......... 37,768 31,667 104,727 87,013
Interest expense, net ..... 7,364 5,814 29,147 23,913
-------------------------- ------------------------------
Earnings before taxes ..... $ 30,404 $ 25,853 $ 75,580 $ 63,100
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