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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant To Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the quarterly period ended February 25, 1994
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OR
[ ] Transition Report Pursuant To Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the transition period from to
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Commission File Number 1-4365
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OXFORD INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Georgia 58-0831862
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
222 Piedmont Avenue, N.E., Atlanta, Georgia 30308
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(Address of principal executive offices)
(Zip Code)
(404) 659-2424
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Number of shares outstanding
Title of each class as of April 4, 1994
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Common Stock, $1 par value 8,635,245
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OXFORD INDUSTRIES, INC.
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INDEX
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PAGE NO.
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PART I. FINANCIAL INFORMATION
Consolidated Statements of Earnings 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-9
PART II. OTHER INFORMATION 10
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF EARNINGS
NINE MONTHS AND QUARTERS ENDED FEBRUARY 25, 1994 AND FEBRUARY 26, 1993
Nine Months Ended Quarter Ended
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$ in thousands except February 25, February 26, February 25, February 26,
per share amounts 1994 1993 1994 1993
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Net Sales $470,589 $438,516 $143,141 $140,651
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Costs and Expenses:
Cost of goods sold 376,957 352,675 113,912 113,049
Selling, general and
administrative 67,885 65,638 21,200 21,337
Interest 1,739 1,707 510 547
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Total Costs and Expenses 446,581 420,020 135,622 134,933
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Earnings Before
Income Taxes 24,008 18,496 7,519 5,718
Income Taxes 9,723 7,306 3,045 2,259
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Net Earnings $14,285 $11,190 $4,474 $3,459
======== ======== ======== ========
Net Earnings
Per Common Share $1.66 $1.29 $0.52 $0.40
===== ===== ===== =====
Average Number of Shares
Outstanding 8,596,912 8,689,263 8,605,122 8,672,059
========= ========= ========= =========
Dividends Per Share $0.510 $0.465 $0.180 $0.165
====== ====== ====== ======
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See notes to consolidated financial statements.
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OXFORD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
FEBRUARY 25, 1994, MAY 28, 1993 AND FEBRUARY 26, 1993
(UNAUDITED EXCEPT FOR MAY 28, 1993)
February 25, May 28, February 26,
$ in thousands 1994 1993 1993
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Assets
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Current Assets:
Cash $ 1,057 $ 3,254 $ 2,584
Receivables 89,494 68,093 80,624
Inventories:
Finished goods 53,820 55,733 45,749
Work in process 17,375 19,931 17,498
Fabric, trim & supplies 23,284 26,929 21,672
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94,479 102,593 84,919
Prepaid expenses 12,903 11,698 10,675
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Total Current Assets 197,933 185,638 178,802
Property, Plant & Equipment 31,445 31,027 30,258
Other Assets 1,558 1,562 1,709
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$230,936 $218,227 $210,769
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Liabilities and Stockholders' Equity
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Current Liabilities:
Notes payable $ 25,500 $ 18,500 $ 13,000
Trade accounts payable 29,740 34,629 31,591
Accrued compensation 9,710 11,304 8,863
Other accrued expenses 14,832 11,072 13,643
Dividends payable 1,552 1,433 1,432
Income taxes - - 25
Current maturities of
long-term debt 4,864 4,865 4,690
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Total Current Liabilities 86,198 81,803 73,244
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Long-Term Debt,
less current maturities 16,882 17,788 21,777
Deferred Income Taxes 3,702 3,304 2,595
Stockholders' Equity:
Common stock 8,625 8,685 8,683
Additional paid-in capital 5,944 5,193 5,179
Retained earnings 109,585 101,454 99,291
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124,154 115,332 113,153
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$230,936 $218,227 $210,769
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See notes to consolidated financial statements.
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OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED FEBRUARY 25, 1994 AND FEBRUARY 26, 1993
(UNAUDITED)
Nine Months Ended
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February 25, February 26,
$ in thousands 1994 1993
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Cash Flows From Operating Activities
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Net earnings $ 14,285 $ 11,190
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 5,122 4,683
Gain on sale of property, plant and equipment (102) (292)
Changes in working capital:
Receivables (21,401) (13,466)
Inventories 8,114 (2,898)
Prepaid expenses (1,205) (828)
Trade accounts payable (4,889) (6,772)
Accrued expenses and other current liabilities 2,303 1,207
Income taxes payable - (377)
Deferred income taxes 398 453
Other noncurrent assets (26) (656)
Net cash flows provided by (used in) -------- --------
operating activities 2,599 (7,756)
Cash Flows From Investing Activities
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Purchase of property, plant and equipment (5,610) (5,284)
Proceeds from sale of property, plant and
and equipment 204 1,400
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Net cash used in investing activities (5,406) (3,884)
Cash Flows From Financing Activities
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Short-term borrowings 7,000 13,000
Payments on long-term debt (907) (919)
Proceeds from exercise of stock options 805 236
Purchase and retirement of common stock (1,886) (2,449)
Dividends on common stock (4,402) (4,053)
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Net cash provided by financing activities 610 5,815
Net change in Cash and Cash Equivalents (2,197) (5,825)
Cash and Cash equivalents at Beginning of Period 3,254 8,409
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Cash and Cash Equivalents at End of Period $ 1,057 $ 2,584
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Supplemental Disclosure of Cash Flow Information
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Cash paid (received) for:
Interest $ 1,639 $ 1,647
Income taxes 10,599 8,671
See notes to consolidated financial statements.
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OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS AND QUARTERS ENDED FEBRUARY 25, 1994
AND FEBRUARY 26, 1993
(UNAUDITED)
1. The foregoing unaudited consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods. All such adjustments
are of a normal recurring nature. The results for interim periods are
not necessarily indicative of results to be expected for the year.
2. The financial information presented herein should be read in conjunction
with the consolidated financial statements included in the Registrant's
Annual Report on Form 10-K for the fiscal year ended May 28, 1993.
3. The Company is involved in certain legal matters primarily arising in
the normal course of business. In the opinion of management, the
Company's liability under any of these matters would not materially
affect its financial condition or results of operations.
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Item 2. Management's Discussion and Analysis of Financial
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Condition and Results of Operations.
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Results of Operations
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NET SALES
Net sales for the third quarter of the 1994 fiscal year, which ended
February 25, 1994, increased by 1.8% from net sales for the third quarter of
the previous year. Net sales for the first nine months of the current year
increased by 7.3% from net sales for the comparable period of the prior year.
In the third quarter, there was a general slowing of retail activity as
retailers were battered by winter storms and the California earthquake. The
Company also experienced a general slowing in sales, but was more directly
affected in the third quarter by replacing the loss of approximately
$5,000,000 in sales to the now discontinued Sears Roebuck catalog operation,
and an $8,000,000 decrease in shipments to JCPenny. The Company believes
that last year's third quarter shipments to JCPenny were somewhat
artificially large due to "pipeline filling." The Company overcame this
combined $13,000,000 shortfall with substantial gains in the better catalog
tier and the discounter tier.
COST OF GOODS SOLD
Cost of goods sold as a percentage of net sales was 79.6% for the third
quarter of the current year and 80.4% for the third quarter of the previous
year. For the first nine months of the current year, cost of goods sold as
a percentage of net sales was 80.1% compared to 80.4% for the same period in
the previous year. These continued consistent results represents stabilizing
gross margins as a result of more favorable sourcing.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses decreased by 0.6% to
$21,200,000 in the third quarter of fiscal 1994 from $21,337,000 in the same
period of fiscal 1993. Selling, general and administrative expenses
increased by 3.4% to $67,885,000 in the first nine months of fiscal 1994 from
$65,638,000 for the same period of fiscal 1993.
Selling, general and administrative expenses as a percentage of net
sales declined to 14.8% for the third quarter of fiscal 1994 from 15.2% for
the third quarter of the prior year, and to 14.4% for the first nine months
of fiscal 1994 from 14.9% for the first nine months of the previous year.
These results represent strenuous efforts to contain costs in light of the
competitive environment in which the Company operates.
INTEREST EXPENSE
Net interest expense as a percentage of net sales was 0.4% in both
fiscal 1994 and fiscal 1993 for both the third quarter and the first nine
months of the respective fiscal years. Average short-term borrowings and
weighted average interest rates have remained relatively unchanged.
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INCOME TAXES
The Company's effective income tax rate was 40.5% for the third quarter
of the current year and 39.5% for the third quarter of the previous year.
For the first nine months of the current and previous years, the Company's
effective income tax rate was 40.5% and 39.5%, respectively. The income tax
rate has been increased to reflect enacted tax rates. In the first quarter
of fiscal 1994, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." The effect of this
adoption was not material.
FUTURE OPERATING RESULTS
The Company is optimistic about the fourth quarter of fiscal 1994.
While the fourth quarter percentage sales gains will be improved over those
of the third quarter, they will not be as robust as those recorded in the
first half. The Company expects that increased sales, improving gross
margins and continued expense control will continue double-digit percentage
increases in earnings per share in the fourth quarter.
The Oxford Shirtings division of the Company has been licensed to
produce and market dress shirts under the Tommy Hilfiger label. The first
line will be fall 1994 and will afford the Company the opportunity to expand
in the better branded dress shirt market. While the Company has and will
continue to incur in fiscal 1994 expenses related to the start-up of this
line, it will not realize revenues until fiscal 1995.
The Company has also entered into license agreements with Farah,
Incorporated (Farah), allowing the Company to license the Savane and PROCESS
2000 names for the sale of shirts. Under the terms of the agreement, Farah
will furnish the Company with its proprietary PROCESS 2000 no wrinkle
technology for use on shirts. Current plans call for the introduction of a
small number of shirts for the Father's Day selling period, to be followed by
a larger volume in the second half of calendar 1994.
Liquidity and Capital Resources
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OPERATING ACTIVITIES
During the first nine months of the current year, operating activities
generated $2,599,000 in cash as compared to $7,756,000 of cash used in the
first nine months of the prior year. The primary factors contributing to
this increase were increased net earnings and decreased inventories offset by
increased receivables. The decreased inventories is a return to a more
normal level necessary to support anticipated sales. The increased
receivables represent the increase in sales during the last two months of the
third quarter of the current year. A number of the Company's menswear
products have moved to automatic replenishment, which means the Company's
shipping pattern has changed to one closer to the consumer selling cycle.
The increased receivables also reflect this changed shipping pattern.
INVESTING ACTIVITIES
Investing activities used $5,406,000 in the first nine months of the
current year and $3,884,000 in the same period of the prior year. Purchases
consisted primarily of replacement of worn or obsolete machinery and
equipment and upgrading management information systems. Proceeds from the
sale of property, plant and equipment for the first nine months of the prior
year of $1,400,000 were generated primarily from the sale of two previously
idled facilities.
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FINANCING ACTIVITIES
Financing activities generated $610,000 in the first nine months of the
current year and $5,815,000 in the first nine months of the prior year. The
primary difference was decreased short-term borrowings in fiscal 1994.
The Company purchased and retired 125,700 shares of its common stock
during the nine months ended February 25, 1994. During the period after the
end of the third quarter through April 4, 1994, no shares have been purchased
and retired. Due to the exercise of employee stock options, a net of 65,404
shares of the Company's common stock have been issued during the nine months
ended February 25, 1994, and 10,613 shares have been issued during the period
after the end of the third quarter through April 4, 1994.
On April 4, 1994, the Company's Board of Directors declared a cash
dividend of $.18 per share payable June 4, 1994 to shareholders of record on
May 16, 1994.
WORKING CAPITAL
Working capital decreased from $105,558,000 at the end of the third
quarter of the previous year to $103,835,000 at the end of the 1993 fiscal
year, and increased to $111,735,000 at the end of the third quarter of the
current year. The ratio of current assets to current liabilities was 2.4 at
the end of the third quarter of the previous year, and was 2.3 at the end of
both the previous fiscal year and the third quarter of the current year.
FUTURE LIQUIDITY AND CAPITAL RESOURCES
The Company believes it has the ability to generate cash to meet its
foreseeable needs. The sources of funds primarily include funds provided by
operations and short-term borrowings. The uses of funds primarily include
working capital requirements, capital expenditures, dividends and repayment
of long-term debt. The Company regularly utilizes committed bank lines of
credit and other uncommitted bank resources to meet working capital
requirements. On February 25, 1994, the Company had lines of credit of
$20,000,000 for which it pays commitment fees, and lines totalling
$75,000,000 for which it does not pay commitment fees. Of the committed
lines, $20,000,000 was in use at February 25, 1994, and of the uncommitted
lines, $5,500,000 was in use at that date. Maximum short-term borrowings
from all sources during the first nine months of the current year were
$50,000,000. The Company anticipates continued use and availability of both
committed and uncommitted short-term borrowing resources as working capital
needs may require.
The Company expects to continue to purchase shares of its common stock
on the open market and in negotiated trades as conditions and opportunities
warrant. The Company will also consider possible acquisitions of apparel-
related businesses that are compatible with its long-term strategies. There
are no present plans to borrow additional long-term funds, sell securities,
or enter into off-balance sheet financing arrangements.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
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(a) Exhibits.
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11 Statement re computation of per share earnings.
(b) Reports on Form 8-K.
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The Registrant did not file any reports on Form 8-K during the
quarter ended February 25, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OXFORD INDUSTRIES, INC.
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(Registrant)
/s/R. William Lee, Jr.
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Date: April 11, 1994 R. William Lee, Jr.
--------------- Executive Vice President
/s/Debra A. Pauli
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Date: April 11, 1994 Debra A. Pauli
--------------- Controller
(Chief Accounting Officer)
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INDEX OF EXHIBITS
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBER
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11 Statement re computation of per share earnings 13
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EXHIBIT 11
OXFORD INDUSTRIES, INC.
COMPUTATION OF PER SHARE EARNINGS
NINE MONTHS AND QUARTERS ENDED FEBRUARY 25, 1994
AND FEBRUARY 26, 1993
(UNAUDITED)
Nine Months Ended Quarter Ended
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February 25, February 26, February 25, February 26,
1994 1993 1994 1993
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Net Earnings $14,285,000 $11,190,000 $4,474,000 $3,459,000
Average Number of Shares
Outstanding:
Primary 8,791,693 8,878,100 8,806,881 8,874,627
Fully Diluted 8,815,537 8,888,380 8,832,192 8,874,627
As Reported* 8,596,912 8,689,263 8,605,122 8,672,059
Net Earnings per Common Share:
Primary $1.62 $1.26 $0.50 $0.39
Fully Diluted $1.62 $1.26 $0.50 $0.39
As Reported* $1.66 $1.29 $0.52 $0.40
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* Common stock equivalents (which arise solely from outstanding stock
options) are not materially dilutive and, accordingly, have not been
considered in the computation of net earnings per common share.
