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
---------------------
October 6, 2005
OXFORD INDUSTRIES ANNOUNCES RECORD FIRST QUARTER FISCAL 2006 RESULTS
-- REPORTS FIRST QUARTER EARNINGS INCREASE 119% TO $0.79 --
-- IMPROVED PROFITABILITY IN TOMMY BAHAMA GROUP DRIVES OUT-PERFORMANCE
VERSUS GUIDANCE --
ATLANTA, GA. - Oxford Industries, Inc. (NYSE:OXM) announced today financial
results for the first quarter ended September 2, 2005. Consolidated net sales
for the quarter increased 27% to $336 million from $265 million in the first
quarter of fiscal 2005.
Diluted earnings per share for the quarter increased 119% to $0.79 versus $0.36
in the first quarter of fiscal 2005. While each of the Company's segments showed
strong results, strategies to enhance the profitability of the Tommy Bahama
Group took hold earlier than expected and resulted in significantly higher
profitability than projected. Diluted earnings per share in the year-ago quarter
were affected by the write-off of deferred financing fees of $1.8 million, or
$0.07 per share on a tax-effected basis, in connection with the acquisition of
Ben Sherman. Additionally, the Company noted that included in SG&A expenses for
the quarter were $0.07 per share of non-cash intangible asset amortization costs
associated with the Tommy Bahama and Ben Sherman acquisitions.
J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford, Inc. commented,
"We are very pleased to be off to a strong start for fiscal 2006, with each of
our operating segments reporting positive results for the first quarter. Not
only do our branded businesses remain very strong, but our legacy business
continues to improve. We have continued to reach new levels of efficiency in our
operations and, despite a challenging retail and macro-economic environment, we
are positioned to continue to perform well."
The Tommy Bahama Group reported net sales of $92 million in the first quarter
compared to $93 million in the same period last year. An increase in retail
sales was offset by a decline in wholesale revenues and the discontinuation of
the private label business. Operating income for this segment was $14.4 million
during the quarter, an increase of 21% over the same quarter last year. This
increase was the result of a focus on improving the procurement and flow of
inventory and the utilization of more effective sourcing strategies. The Company
had originally anticipated that the benefits of this renewed focus would not
occur until the second quarter.
The Menswear Group reported first quarter sales of $177 million compared to
sales of $119 million last year. Ben Sherman contributed approximately $44
million for the quarter, versus only $17 million for a partial quarter's
contribution in the year-ago period. Excluding the impact of Ben Sherman, the
Menswear Group's historical businesses generated a sales increase of 30% for the
quarter on continuing strength in tailored clothing, dress shirts and sportswear
as well as the addition of the Orvis Signature and Nick(it) brands. Operating
income in this segment for the first quarter was $15.0 million, an increase of
68% versus the same period last year.
First quarter sales for the Womenswear Group increased 30% to $68 million from
$52 million last year. The Company noted that increased shipments to Wal-Mart
and Target represented the bulk of the sales increase. Operating earnings for
the Womenswear Group increased to $3.9 million from a loss in the year-ago
period of $1.0 million.
Inventory at the close of the first quarter increased 18% to $169 million from
$143 million at the end of the prior year's first quarter. The increase was
driven by additional inventory to support new replenishment programs and growth
in the Menswear Group, offset by declines in the Womenswear and Tommy Bahama
Groups. Accounts Receivable rose 25% against a 27% increase in first quarter
sales.
The company commented that despite some near term challenges that may result
from a challenging economic climate and an increasingly competitive retail
environment, it is now comfortable with a full year range of diluted earnings
per share of $3.42 to $3.52 on sales of approximately $1.38 billion to $1.40
billion. This compares to the Company's prior guidance of $3.25 to $3.35 in
earnings per share on sales of approximately $1.37 to $1.39 billion.
For the second quarter, ending on December 2, 2005, the company anticipates
sales in a range from $320 million to $330 million and earnings per share of
$0.55 to $0.60.
Mr. Lanier continued, "While the trends in our business are strong and our
near-term outlook remains favorable, a combination of low visibility in the
private label business and the uncertain nature of the current retail
environment are prompting us to remain somewhat cautious with respect to our
full-year guidance. Even so, we believe that we have excellent opportunities and
good momentum in each of our individual businesses that, if sustained, will
result in strong returns for the remainder of the fiscal year."
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 13, 2005. To access the
telephone replay, Participants should dial (719) 457-0820. The access code for
the replay is 4262582. A replay of the Webcast will also be available following
the conference call on Oxford Industries' corporate Website.
Oxford Industries, Inc. is a leading 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), 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.
The Company's common 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
This press release contains forward-looking statements about future events. We
intend for all such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Important assumptions relating to these forward-looking statements include,
among others, assumptions regarding demand for our products, expected pricing
levels, raw material costs, the timing and cost of planned capital expenditures,
expected outcomes of pending litigation, competitive conditions, general
economic conditions and expected synergies in connection with acquisitions and
joint ventures. Forward-looking statements reflect our current expectations and
are not guarantees of performance. These statements are based on our
management's beliefs and assumptions, which in turn are based on currently
available information. These beliefs and assumptions could prove inaccurate.
Forward-looking statements involve risks and uncertainties. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those anticipated,
estimated or projected. Many of these risks and uncertainties are beyond our
ability to control or predict.
Such risks and uncertainties include, but are not limited to: (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 and finished goods;
(9) the impact of rising energy costs on our costs and consumer spending; (10)
our dependence on and relationships with key customers; (11) consolidation among
our customer base; (12) the ability of our third party producers to deliver
quality products in a timely manner; (13) potential disruptions in the operation
of our distribution facilities; (14) any disruption or failure of our computer
systems or data network; (15) the integration of our acquired businesses; (16)
our ability to successfully implement our growth plans, including growth by
acquisition; (17) unforeseen liabilities associated with our acquisitions; (18)
economic and political conditions in the foreign countries in which we operate
or source our products; (19) increased competition from direct sourcing; (20)
our ability to maintain our licenses; (21) our ability to protect our
intellectual property and prevent our trademarks, service marks and goodwill
from being harmed by competitors' products; (22) our reliance on key management
and our ability to develop effective succession plans; (23) our ability to
develop and maintain an effective organizational structure; (24) risks
associated with changes in global currency exchange rates; (25) changes in
interest rates on our variable rate debt; (26) the impact of labor disputes,
wars or acts of terrorism on our business; (27) the effectiveness of our
disclosure controls and procedures related to financial reporting; (28) our
ability to maintain current pricing on our products given competitive or other
factors; and (29) our ability to expand our retail operations.
You are cautioned not to place undue reliance on forward-looking statements,
which speak only as of the date of this press release. 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. Other risks or uncertainties may be detailed from
time to time in our future Securities and Exchange Commission filings.
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(In thousands except per share amounts)
<Table>
<Caption>
Quarters Ended
------------------------------
September 2, August 27,
2005 2004
------------ ------------
Net sales $ 336,478 $ 264,822
Cost of goods sold 220,446 179,126
------------ ------------
GROSS PROFIT 116,032 85,696
Selling, general and administrative 88,736 68,328
Amortization of intangible assets 1,853 1,712
------------ ------------
90,589 70,040
Royalties and other operating income 3,261 1,753
------------ ------------
Operating income 28,704 17,409
Interest expense, net 6,883 7,921
------------ ------------
Earnings before income taxes 21,821 9,488
Income taxes 7,938 3,320
------------ ------------
NET EARNINGS $ 13,883 $ 6,168
============ ============
Earnings per common share:
Basic $ 0.80 $ 0.37
Diluted $ 0.79 $ 0.36
Weighted average common shares outstanding:
Basic 17,391 16,713
Dilutive impact of options, earn-out shares and
restricted shares 275 490
------------ ------------
Diluted 17,666 17,203
Dividends per common share $ 0.135 $ 0.120
</Table>
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands except per share amounts)
<Table>
<Caption>
September 2, August 27,
2005 2004
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 7,024 $ 11,526
Receivables, net 200,357 160,485
Inventories 168,558 143,142
Prepaid expenses and other current assets 24,210 19,093
------------------------------
Total Current Assets 400,149 334,246
Property, plant and equipment, net 64,903 54,745
Goodwill, net 190,751 158,304
Intangible assets, net 234,283 242,120
Other non-current assets, net 22,789 24,845
------------------------------
TOTAL ASSETS $ 912,875 $ 814,260
==============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 85,221 $ 84,811
Accrued compensation 21,079 18,787
Additional acquisition cost payable 20,465 --
Other accrued expenses 31,022 37,646
Dividends payable 2,301 1,950
Income taxes payable 10,103 5,318
Short-term debt and current maturities of
long-term debt 4,624 112,050
------------------------------
Total Current Liabilities 174,815 260,562
Long term debt, less current maturities 315,958 198,895
Other non-current liabilities 25,737 12,798
Deferred income taxes 76,494 80,663
Commitments and contingencies
Shareholders' equity:
Preferred Stock, $1.00 par value; 30,000
authorized and none issued and outstanding at
September 2, 2005 and August 27, 2005 -- --
Common stock, $1.00 par value, 60,000
authorized and 17,049 issued and outstanding
at September 2, 2005; and 60,000 authorized
and 16,756 issued and outstanding at August
27, 2004 17,049 16,756
Additional paid in capital 48,931 42,266
Retained earnings 252,281 203,308
Accumulated other comprehensive income 1,610 (988)
------------------------------
Total Shareholders' equity 319,871 261,342
------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 912,875 $ 814,260
==============================
</Table>
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
<Table>
<Caption>
Quarters Ended
------------------------------
September 2, August 27,
2005 2004
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 13,883 $ 6,168
Adjustments to reconcile net earnings to
Net cash provided by operating activities:
Depreciation 3,537 3,037
Amortization of intangible assets 1,853 1,712
Amortization of deferred financing costs and bond discount 616 2,459
Loss (gain) on sale of assets 7 347
Equity income (164) (323)
Deferred income taxes (1,820) (2,175)
Changes in working capital:
Receivables (2,983) 40,659
Inventories 945 (823)
Prepaid expenses (2,860) 1,669
Trade accounts payable (20,789) (21,021)
Accrued expenses and other current liabilities (10,091) (21,488)
Stock option income tax benefit 1,128 587
Income taxes payable (3,010) 1,020
Other non-current assets (996) (1,410)
Other non-current liabilities 2,168 1,674
-------------------------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (18,576) 12,092
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition, net of cash acquired (6,569) (139,626)
Distribution from joint venture investment 1,856 --
Investment in deferred compensation plan (330) 391
Purchases of property, plant and equipment (3,473) (2,488)
Proceeds from sale of property, plant and equipment 6 10
-------------------------------
NET CASH USED IN INVESTING ACTIVITIES (8,510) (141,713)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of financing arrangements (73,971) (58,482)
Proceeds from financing arrangements 101,920 156,139
Payments of debt issuance costs -- (2,766)
Proceeds from issuance of common shares 2,049 666
Dividends on common shares (2,278) (1,946)
-------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 27,720 93,611
Net change in cash and cash equivalents 634 (36,010)
Effect of foreign currency translation on cash and cash equivalents (109) (33)
Cash and cash equivalents at the beginning of year 6,499 47,569
-------------------------------
Cash and cash equivalents at the end of period $ 7,024 $ 11,526
===============================
</Table>
OXFORD INDUSTRIES, INC.
SEGMENT INFORMATION
(UNAUDITED)
(In thousands)
<Table>
<Caption>
Quarters Ended
-------------------------------
September 2, August 27,
2005 2004
------------ ------------
NET SALES
Menswear Group $ 177,076 $ 118,737
Womenswear Group 68,003 52,458
Tommy Bahama Group 91,544 93,462
Corporate and Other (145) 165
------------ ------------
Total $ 336,478 $ 264,822
OPERATING INCOME
Menswear Group $ 15,004 $ 8,921
Womenswear Group 3,905 (966)
Tommy Bahama Group 14,357 11,916
Corporate and Other (4,562) (2,462)
------------ ------------
Operating income 28,704 17,409
Interest expense, net 6,883 7,921
------------ ------------
Earnings before taxes $ 21,821 $ 9,488
</Table>