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
---------------------
January 10, 2006
OXFORD INDUSTRIES ANNOUNCES RECORD SECOND QUARTER FISCAL 2006 RESULTS
-- SECOND QUARTER EPS INCREASE 17% TO $0.62 --
-- RAISES QUARTERLY CASH DIVIDEND BY 11% TO $0.15 PER SHARE--
ATLANTA, GA. -- Oxford Industries, Inc. (NYSE:OXM) announced today financial
results for the second quarter and first half ended December 2, 2005.
Consolidated net sales for the quarter increased 7% to $335 million from $313
million in the second quarter of fiscal 2005. Net earnings for the second
quarter increased 21% to $11.0 million from $9.1 million in the same period last
year. Diluted earnings per common share for the quarter increased 17% to $0.62
from $0.53 in the second quarter of fiscal 2005.
For the first half of fiscal 2006, net sales increased 16% to $671 million from
$578 million in the same period last year. First half diluted earnings per
common share increased 57% to $1.40 from $0.89 in the same period last year.
First half results include Ben Sherman for a full six months compared to four
months in the same period last year.
Consolidated gross margins for the second quarter increased 60 basis points to
33.3% from 32.7% in last year's second quarter, reflecting margin expansion in
the Tommy Bahama Group's wholesale business and an increasing mix of sales
through company-owned retail stores. Selling, general and administrative expense
as a percentage of net sales increased 20 basis points to 26.5% from 26.3% in
last year's second quarter due to additional Tommy Bahama retail stores,
start-up expenses for new marketing initiatives in the Menswear Group and
slightly higher compensation costs. Royalties and other operating income
increased 11% over the same quarter last year to $3.7 million driven by
increased sales of licensed products.
The Company noted that included in operating 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.
"We are very pleased to continue our strong performance for the first half of
fiscal 2006," commented J. Hicks Lanier, Chairman and Chief Executive Officer of
Oxford. "All three operating segments contributed to the sales growth. Our focus
this year on operating discipline and better execution has led to enhanced
profitability through higher margins. The impact has been most notable in the
Tommy Bahama Group where we saw a 72% increase in second quarter operating
income compared to last year."
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The Tommy Bahama Group reported net sales of $90 million in the second quarter
of fiscal 2006 compared to $86 million in the same period last year. Net sales
in Tommy Bahama's core branded business, which excludes private label sales of
$2.8 million in last year's second quarter, increased 8% to $90 million from $84
million in the same period last year. Operating income for the segment increased
72% to $10.1 million in the second quarter from $5.9 million last year. The
improvement in profitability was driven by increased sales volume and a more
disciplined approach to planning and inventory control which resulted in lower
inventories and lower off-price sales.
The Menswear Group reported a second quarter net sales increase of 3% to $187
million from $181 million in the same period last year. Ben Sherman contributed
net sales of approximately $48 million for the second quarter compared to
approximately $53 million in the year-ago period. The UK business, which
accounts for more than 70% of Ben Sherman's net sales, was responsible for the
net sales decline. In the UK and continental Europe, where Ben Sherman has
implemented a program to pursue higher quality distribution, the retail
environment has remained very challenging. Excluding Ben Sherman, the Menswear
Group's historical businesses generated a net sales increase of approximately 8%
for the quarter on modest growth in tailored clothing, dress shirts and
sportswear. The Menswear Group also benefited from new marketing initiatives
including Orvis Signature, Solitude, Ben Sherman dress shirts and suits and the
recently acquired Arnold Brant tailored clothing line. Second quarter operating
income for this segment declined to $16.0 million from $18.0 million in last
year's second quarter. The decline in operating income was primarily
attributable to lower sales volume in the Ben Sherman business, less favorable
currency exchange rates and start up expenses for new marketing initiatives.
Second quarter net sales for the Womenswear Group increased 26% to $57 million
from $45 million in the second quarter of last year. The Company noted that
increased shipments to the segment's two largest customers, Wal-Mart and Target,
were responsible for the net sales increase. Second quarter operating income for
the Womenswear Group increased to $2.0 million from $0.2 million in the year-ago
period. The improvement in profitability was driven by economies of scale on the
increased sales volume and improved product sourcing.
Inventories at the close of the second quarter increased 3% to $167 million from
$162 million at the end of the prior year's second quarter. Accounts receivable
rose 6% over last year to $186 million which is consistent with the second
quarter sales increase of 7%.
Oxford's board of directors declared an 11% increase in the quarterly cash
dividend to $0.15 from $0.135 per share of common stock payable March 6, 2006 to
shareholders of record on February 15, 2006.
The Company maintained its previously issued guidance for the full fiscal year
and initiated guidance for the third and fourth quarters. The Company continues
to project full year diluted earnings per common share of $3.42 to $3.52 on net
sales of approximately $1.38 billion to $1.40 billion. For the third quarter,
ending March 3, 2006, the Company expects net sales in a range of $355 million
to $365 million and diluted earnings per common share of $0.80 to $0.85. For the
fourth quarter, ending June 2, 2006, the Company expects sales in a range of
$360 million to $370 million and diluted earnings per common share of $1.21 to
$1.26.
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Mr. Lanier continued, "We believe that we are succeeding in our mission to
reposition our company. We have invested in strong lifestyle brands and used our
operating capabilities and back-office platforms to help make those businesses
more efficient. We've been very careful to treat our intellectual property in a
manner that will generate sustainable and profitable growth. At the same time,
we are taking important steps to enhance the capabilities and performance of our
historical businesses. We still have a great deal of work to do but we are
confident that there are opportunities for additional improvement ahead of us."
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 before the call to register for the
teleconference webcast and download any necessary software.
A replay of the call will be available through January 17, 2006. To access the
telephone replay, Participants should dial (719) 457-0820. The access code for
the replay is 4670477. 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.
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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 distinctive
products; (5) changes in trade quotas or other trade regulations; (6) our
ability to continue to finance our working capital and growth on acceptable
terms; (7) unseasonable weather or natural disasters; (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) unforeseen costs
associated with entry into and exit from certain lines of business; (19)
economic and political conditions in the foreign countries in which we operate
or source our products; (20) increased competition from direct sourcing; (21)
our ability to maintain our licenses; (22) our ability to protect our
intellectual property and prevent our trademarks, service marks and goodwill
from being harmed by competitors' products; (23) our reliance on key management
and our ability to develop effective succession plans; (24) our ability to
develop and maintain an effective organization structure; (25) risks associated
with changes in global currency exchange rates; (26) changes in interest rates
on our variable rate debt; (27) the impact of labor disputes, wars or acts of
terrorism on our business; (28) the effectiveness of our disclosure controls and
procedures related to financial reporting; (29) our ability to maintain current
pricing on our products given competitive or other factors; and (30) our ability
to expand our retail operations.
You are cautioned not to place undue reliance on forward-looking statements,
which are current 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.
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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SECOND QUARTER OF FIRST HALF OF
-------------------------- --------------------------
FISCAL 2006 FISCAL 2005 FISCAL 2006 FISCAL 2005
----------- ----------- ----------- -----------
Net sales $334,652 $312,988 $671,130 $577,810
Cost of goods sold 223,223 210,647 443,669 389,773
-------- -------- -------- --------
Gross profit 111,429 102,341 227,461 188,037
Selling, general and administrative 88,653 82,407 177,389 150,735
Amortization of intangible assets 1,851 2,424 3,704 4,136
-------- -------- -------- --------
90,504 84,831 181,093 154,871
Royalties and other operating income 3,653 3,301 6,914 5,054
-------- -------- -------- --------
Operating income 24,578 20,811 53,282 38,220
Interest expense, net 7,322 6,855 14,205 14,776
-------- -------- -------- --------
Earnings before income taxes 17,256 13,956 39,077 23,444
Income taxes 6,248 4,884 14,186 8,204
-------- -------- -------- --------
NET EARNINGS $ 11,008 $ 9,072 $ 24,891 $ 15,240
======== ======== ======== ========
Earnings per common share:
Basic $ 0.63 $ 0.54 $ 1.43 $ 0.91
Diluted $ 0.62 $ 0.53 $ 1.40 $ 0.89
Weighted average common shares outstanding:
Basic 17,490 16,761 17,440 16,737
Dilutive impact of options, earn-out shares and
restricted shares 257 455 295 480
======== ======== ======== ========
Diluted 17,747 17,216 17,735 17,217
Dividends per common share $ 0.135 $ 0.120 $ 0.270 $ 0.240
======== ======== ======== ========
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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
DECEMBER 2, 2005 NOVEMBER 26, 2004
---------------- -----------------
ASSETS
Current Assets:
Cash and cash equivalents $ 6,848 $ 19,414
Receivables, net 185,581 175,053
Inventories 166,776 161,832
Prepaid expenses 27,457 17,817
-------- --------
Total current assets 386,662 374,116
Property, plant and equipment, net 66,050 55,431
Goodwill, net 184,144 165,650
Intangible assets, net 234,812 239,698
Other non-current assets, net 22,949 24,657
-------- --------
TOTAL ASSETS $894,617 $859,552
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 91,220 $96,595
Accrued compensation 25,378 22,027
Other accrued expenses 23,097 45,495
Dividends payable 2,310 2,013
Income taxes payable 3,334 1,555
Short-term debt and current maturities of long-term debt 4,886 6,973
-------- --------
Total current liabilities 150,225 174,658
Long-term debt, less current maturities 298,989 315,608
Other non-current liabilities 27,503 13,665
Deferred income taxes 75,254 79,754
Commitments and contingencies
Shareholders' Equity:
Preferred Stock, $1.00 par value; 30,000 authorized and
none issued and outstanding at December 2, 2005
and November 26, 2004 - -
Common stock, $1.00 par value, 60,000 authorized and 17,602
issued and outstanding at December 2, 2005 and 60,000
authorized and 16,778 issued and outstanding at
November 26, 2004 17,602 16,778
Additional paid-in capital 71,166 42,709
Retained earnings 260,977 210,367
Accumulated other comprehensive (loss) income (7,099) 6,013
-------- --------
Total shareholders' equity 342,646 275,867
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $894,617 $859,552
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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
FIRST HALF OF
----------------------------
FISCAL 2006 FISCAL 2005
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 24,891 $ 15,240
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 7,254 6,305
Amortization of intangible assets 3,704 4,136
Amortization of deferred financing costs and bond discount 1,232 3,118
(Gain) on the sale of assets (87) (106)
Equity income (39) (323)
Deferred income taxes (1,353) (3,333)
Changes in working capital:
Receivables 10,505 25,241
Inventories 2,943 (18,703)
Prepaid expenses (5,454) 1,900
Trade accounts payable (14,627) (9,352)
Accrued expenses and other current liabilities (13,409) (8,888)
Stock options income tax benefit 1,843 965
Income taxes payable (9,535) (2,852)
Other non-current assets (3,378) (1,181)
Other non-current liabilities 4,446 2,541
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,936 14,708
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions, net of cash acquired (11,501) (139,814)
Distribution from joint venture investment 1,856 --
Investment in deferred compensation plan (587) (593)
Purchases of property, plant and equipment (8,496) (6,508)
Proceeds from sale of property, plant and equipment 6 413
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (18,722) (146,502)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of financing arrangements (179,591) (154,694)
Proceeds from financing arrangements 191,059 263,832
Payments of debt issuance costs -- (2,766)
Proceeds from issuance of common shares 3,862 752
Dividends on common shares (4,579) (3,896)
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 10,751 103,228
--------- ---------
Net change in cash and cash equivalents 965 (28,566)
Effect of foreign currency translation on cash and cash equivalents (616) 411
Cash and cash equivalents at the beginning of period 6,499 47,569
--------- ---------
Cash and cash equivalents at the end of period $ 6,848 $ 19,414
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OXFORD INDUSTRIES, INC.
SEGMENT INFORMATION
(UNAUDITED)
(IN THOUSANDS)
SECOND QUARTER OF FIRST HALF OF
-------------------------------- --------------------------------
FISCAL 2006 FISCAL 2005 FISCAL 2006 FISCAL 2005
----------- ----------- ----------- -----------
NET SALES
Menswear Group $187,332 $181,207 $364,408 $ 299,944
Womenswear Group 56,749 45,097 124,752 97,555
Tommy Bahama Group 90,388 86,490 181,932 179,952
Corporate and Other 183 194 38 359
-------- --------- -------- ---------
TOTAL NET SALES $334,652 $312,988 $671,130 $577,810
-------- --------- -------- ---------
OPERATING INCOME
Menswear Group $ 15,968 $ 18,048 $ 30,972 $26,969
Womenswear Group 1,983 208 5,888 (758)
Tommy Bahama Group 10,109 5,895 24,466 17,811
Corporate and Other (3,482) (3,340) (8,044) (5,802)
-------- --------- -------- ---------
TOTAL OPERATING INCOME $ 24,578 $ 20,811 $ 53,282 $ 38,220
-------- --------- -------- ---------
Interest expense, net 7,322 6,855 14,205 14,776
-------- --------- -------- ---------
Earnings before taxes $ 17,256 $ 13,956 $ 39,077 $ 23,444
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