FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended May 31, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-4365
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 No.)
222 Piedmont Avenue, N.E., Atlanta, Georgia 30308
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 659-2424
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on
which registered
Common Stock, $1 par value New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
NONE
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(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form
10-K. [ ]
<page 1>
State the aggregate market value of the voting stock held by
non-affiliates of the Registrant: As of August 16, 1996, the aggregate
market value of the voting stock held by non-affiliates of the
Registrant (based upon the closing price for the common stock on the New
York Stock Exchange on that date) was approximately $99,368,719.
Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the last practicable date.
Number of shares outstanding
Title of each class as of August 16, 1996
Common Stock, $1 par value 8,704,721
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Documents Incorporated by Reference
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(1) Sections of 1996 Annual Report to Stockholders (Incorporated in
Parts II and IV of this Report).
(2) Sections of Proxy Statement, which will be filed with the
Securities and Exchange Commission not later than 120 days after
May 31, 1996. (Incorporated in Part III of this Report).
<page 2>
PART I
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Item 1. Business.
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BUSINESS AND PRODUCTS
Introduction and Background
Oxford Industries, Inc. (the "Company") was incorporated under
the laws of the State of Georgia as Oxford Manufacturing Company,
Inc. on April 27, 1960. In 1967, its name was changed to Oxford
Industries, Inc. Its principal office is in Atlanta, Georgia.
The Company's primary business, which comprises a single
industry segment, is the design, manufacture, marketing and sale of
consumer apparel products in the popular to better price range.
Substantially all of the Company's distribution facilities, offices
and customers are located in the United States. Company-owned
manufacturing facilities are located primarily in the southeastern
United States and Central America.
The Company is in a single line of business with two classes
of similar products, menswear and womenswear. The table below sets
forth, for each of the last three fiscal years, the percentage of
net sales attributable to each such class of similar products:
Fiscal Year Ended:
May 31, June 2, June 3,
1996 1995 1994
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Menswear 78% 74% 73%
Womenswear 22% 26% 27%
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100% 100% 100%
====== ======= =======
Menswear
Primary menswear products sold include men's suits, vests,
dress slacks and golfwear and men's and boys' sportswear,
sportscoats, dress shirts, woven and knitted sport shirts,
sweaters, slacks, shorts and jeans.
Womenswear
Primary womenswear products sold include women's and girls'
sportswear, dresses, suits, sweaters, shirts, blouses, t-shirts,
sweatshirts, vests, jackets, skirts, shorts and pants. Sportswear
products are marketed as coordinates, which include wardrobe items
in styles and colors designed to be worn together, or as separates.
<page 3>
DISTRIBUTION
The Company's customers include national and regional chain stores,
mail order and catalog firms, discount stores, department stores
and chain and independent specialty stores. Net sales to the
Company's fifty largest customers increased by 1.9% while net sales
to all other customers declined 23.5%. This is due to the
Company's continuing focus on large, financially stable retailers.
Customer Distribution Analysis
May 31, 1996 June 2, 1995
Total Sales % Total Sales %
Customers Customers
--------- -------- --------- -------
Top 50 50 92.37% 50 91.46%
All Other 3,146 7.63% 3,431 8.54%
--------- -------- --------- -------
Total 3,196 100% 3,481 100%
Several product lines are designed and manufactured in
anticipation of orders for sale to department and specialty stores
and certain specialty chain and mail order customers. The Company
must make commitments for fabric and production in connection with
these lines. In the case of imports, these commitments can be up
to several months prior to the receipt of firm orders from
customers. These lines include both popular and better price
merchandise sold under brand and designer names or customers'
private labels.
The Company works closely with many customers to develop
large-volume product programs prior to commencement of production,
enabling the Company to take advantage of relative efficiencies in
planning, raw materials purchasing and utilization of production
facilities. Products sold under these programs are in the popular
price range and usually carry the customers' trademarks, although
the Company offers some branded and designer programs for this
customer market.
The Company employs a sales force consisting of salaried and
commissioned sales employees and independent commissioned sales
representatives. Apparel sales offices and showrooms are
maintained by the Company in Atlanta, Chicago, New York and in both
Dallas and Plano, Texas. Other showrooms are maintained by
independent commissioned sales representatives. A majority of the
Company's business is conducted by direct contacts between the
Company's divisional management and buyers and other executives of
the Company's customers.
<page 4>
MANUFACTURING, RAW MATERIALS AND SOURCES OF SUPPLY
Manufacturing and Raw Materials
Apparel products are manufactured from cotton, linen, wool,
silk, other natural fibers, synthetics and blends of these
materials. Materials used by the Company in its manufacturing
operations are purchased from numerous domestic and foreign textile
mills and converters in the form of woven or knitted finished
fabrics. Buttons, zippers, thread and other trim items are
purchased from both domestic and foreign suppliers. The Company's
manufacturing facilities perform cutting, sewing and related
operations to produce finished apparel products from these
materials. At the end of the 1996 fiscal year, domestic production
for the Company accounted for 31% of the Company's business, of
which approximately 22% came from the Company's United States
manufacturing facilities, and approximately 9% came from United
States contractors.
The Company also purchases fabric and places it with domestic
and foreign independent contractors for production of goods
conforming to the Company's patterns, specifications and quality
standards. The Company also performs independent contracting
services for other companies to ensure maximum utilization of its
production facilities.
The Company imports finished apparel products meeting its
quality standards from suppliers in Central America, the Far East
and other areas. Imported goods are generally manufactured
according to designs and specifications furnished or approved in
advance of production by the Company. In order to place orders and
monitor production, the Company maintains buying offices in Hong
Kong and Singapore. The Company also retains unaffiliated buying
agents in several other countries.
The Company also uses its own facilities in Mexico, the
Dominican Republic, Costa Rica and Honduras. These facilities
generally assemble apparel products from components made primarily
in the United States.
Sources of Supply
The Company regards its domestic and foreign sources of raw
materials, finished goods and outside production as adequate, and
is not dependent on any single source or contractor. No single
supplier or contractor accounts for a material portion of the
Company's purchases or business. Alternative competitive sources
are available, and the Company does not anticipate significant
difficulty in meeting its supply and outside production
requirements. There are occasions, however, where the Company is
unable to take customer orders on short notice because of the
minimum lead time required to produce a garment that is acceptable
to the customer in regards to cost, quantity, quality and service.
The Company's import business could be adversely affected by
currency exchange fluctuations, changes in United States import
duties and trade restraints, political unrest in exporting
countries, and other factors normally associated with imports. The
Company believes it has diminished potential risks in its import
business by placing import programs with suppliers in many
different countries. The Company continues to expand assembly
<page 5>
operations in the Caribbean Basin to take greater advantage of
incentives implicit in United States trade policy.
TRADEMARKS, LICENSES AND PATENTS
Trademarks
Principal menswear trademarks owned by the Company are "Lanier
Clothes" for men's suits and sportcoats; "Oxford Shirtings" for
men's shirts; "Travelers Worsted" for mens suits; "Everpress" for
men's slacks; "928" for young men's suited separates; and "Ely
Cattleman" and "Plains" for men's western wear.
The Company licenses its trademark "Merona" to the Target
Stores and Mervyn's divisions of the Dayton Hudson Corporation.
The license agreement calls for these divisions to pay minimum
royalties and additional royalties for sales above certain levels.
The minimum royalties due in the future have been reduced by actual
royalties paid in preceding years. If certain levels of royalty
payments have been made and renewal options exercised, Target
Stores will have the option to purchase the trademark in 1999.
Although the Company is not dependent on any single trademark,
it believes its trademarks in the aggregate are of significant
value to its business. If an attractive opportunity were to
present itself the Company would seriously consider the acquisition
of significant brands and related businesses.
Licenses
The Company also has the right to use trademarks under license
and design agreements with the trademarks' owners. Principal
menswear trademarks the Company has the right to use are "Polo by
Ralph Lauren" for boy's shirts, suits, shorts, sweat suits, woven
and knitted sportswear, pants, sweaters, outerwear, jackets, denim
jeans and caps; "Robert Stock" for men's suits, sportcoats and
dress slacks; "Oscar de la Renta" for men's suits, sportcoats,
vests, and dress slacks; and "Tommy Hilfiger" for men's dress
shirts and golf apparel. Additionally, the Company entered into a
new license agreement which will allow the Company to use
"Nautica" for men's tailored suits, sports coats and dress slacks.
The above mentioned license and design agreements will expire
at various dates through 2000. Many of the Company's licensing
agreements are eligible for renewal to extend the licenses through
various dates from 1997 through 2006.
Although the Company is not dependent on any single license
and design agreement, it believes its license and design agreements
in the aggregate are of significant value to its business.
Patents
The Company owns several patents covering apparel manufacturing
processes and devices, but competitive processes and devices are
available to others, and these are not material to the Company's
business.
<page 6>
SEASONAL ASPECTS OF BUSINESS AND ORDER BACKLOG
Seasonal Aspects of Business
The Company's business is generally divided among four retail
selling seasons: Spring, Summer, Fall and Holiday. Seasonal
factors can cause some variance in production and sales levels
among fiscal quarters in any fiscal year, but the Company does not
regard its overall business as highly seasonal.
Order Backlog
A large portion of sales are booked in advance of each season,
and it is therefore normal for the Company to maintain a
significant order backlog. As of May 31, 1996 and June 2, 1995,
the Company had booked orders amounting to approximately
$163,047,000 and $165,276,000, respectively, all of which will be
shipped within six months after each such date. These numbers
represent only store orders on hand and do not include private-
label contract balances. The Company is experiencing a greater
percentage of at-once EDI "Quick response" programs with large
retailers. Replenishment shipments under these programs generally
possess such an abbreviated order life as to exclude them from the
order backlog completely. The Company does not believe that this
backlog information is indicative of sales to be expected for the
following year, because order backlog at the end of May primarily
represents only Fall season business.
WORKING CAPITAL
Working capital needs are affected primarily by inventory
levels, outstanding receivables and trade payables. The Company
had available for its use committed lines of credit with several
lenders aggregating $50,000,000 at May 31, 1996. These lines of
credit are used by the Company to cover fluctuations in working
capital needs. The Company had $45,000,000 outstanding under these
lines of credit at the end of the 1996 fiscal year, and $50,000,000
outstanding at the end of the 1995 fiscal year. In addition, at
the end of fiscal 1996, the Company had $188,000,000 in uncommitted
lines of credit of which $98,000,000 was reserved for the issuance
of letters of credit. At May 31, 1996 $20,500,000 was outstanding
under these lines of credit. At the end of fiscal 1995 the
Company had $173,000,000 in uncommitted lines of credit of which
$98,000,000 was reserved for the issuance of letters of credit. At
June 2, 1995 $33,500,000 was outstanding under these uncommitted
lines of credit. The total amount of letters of credit outstanding
totaled approximately $66,000,000 at the end of fiscal 1996, and
approximately $50,100,000 at the end of fiscal 1995. The Company
had cash of $1,015,000 and $2,225,000 at the end of the 1996 and
1995 fiscal years. The average interest rate on all short-term
borrowings for the fiscal year was 6.1%. The Company anticipates
continued use and availability of short-term borrowings as working
capital needs may require.
Inventory levels are affected by order backlog and anticipated
sales. It is general practice of the Company to offer payment
terms of net 30 to the majority of its customers, from date of
shipment.
<page 7>
The Company believes that its working capital requirements and
financing resources are comparable with those of other major,
financially sound apparel manufacturers.
MAJOR CUSTOMERS
The Company's ten largest customers accounted for
approximately 70 percent of the Company's net sales in fiscal 1996
and approximately 69 percent in fiscal 1995. JCPenney Company,
Inc. accounted for 22 percent and 20 percent of net sales in the
1996 and 1995 fiscal years, respectively. Lands' End, Inc.
accounted for 9 percent and 10 percent of net sales in the 1996 and
1995 fiscal years, respectively. The Company believes that its
relationships with all of its major customers, including JCPenney
Company, Inc., and Lands' End, Inc., are excellent.
COMPETITION
The Company's products are sold in a highly competitive
domestic market in which numerous domestic and foreign
manufacturers compete. No single manufacturer or small group of
manufacturers dominates the apparel industry. The Company believes
it is a major apparel manufacturing and marketing company, but
there are other apparel firms with greater sales and financial
resources.
Competition within the apparel industry is based upon styling,
marketing, price, quality, customer service and, with respect to
branded and designer product lines, consumer recognition and
preference. The Company believes it competes effectively with
other members of its industry with regard to all of these factors.
Successful competition in styling and marketing is related to the
Company's ability to foresee changes and trends in fashion and
consumer preference and to present appealing product programs to
its customers. Successful competition in price, quality and
customer service is related to its ability to maintain efficiency
in production, sourcing and distribution.
Growth in apparel imports and direct importing by retailers
present competitive risks to domestic apparel manufacturers. The
United States has implemented restrictive quotas on the importation
of many classifications of textiles and textile products from
certain countries and has adopted restrictive regulations governing
textile and apparel imports. Through December of 1994, these
restraints were permitted pursuant to the Multi-Fiber Arrangement
(MFA), an international textile trade agreement to which the United
States was a party. During the Uruguay Round of the General
Agreement on Tariffs and Trade, the United States and other
countries negotiated a successor agreement to the MFA known as the
Agreement on Textiles and Clothing (ATC). The ATC became effective
on January 1, 1995.
The ATC requires that importing countries remove product
classifications comprising approximately half of their 1990 imports
of textile and apparel products from coverage under their quota
systems in three stages over a ten year period. The remaining
classification are to be removed from coverage under the importing
countries' quota systems on January 1, 2005. However, the ATC
<page 8>
allows importing countries such as the United States significant
discretion in determining when during the ten year period
particular product classifications are removed from quota coverage.
The United States has announced a plan that will keep quotas on the
products deemed most sensitive to import competition in place until
the latter stages of the ten year period. In addition, the ATC
requires importing countries to increase the rate of growth of
existing quota levels by a specified amount each year. Finally,
the ATC permits importing countries, under certain conditions, to
impose new quotas on the importation of textile and apparel
products during the ten year phase out period. Thus, the extent to
which the ATC will liberalize trade in textile and apparel products
over the next ten years is unclear. Reduced restrictions on the
importation of textiles and textile products could increase
competitive import pressure on the Company's domestic manufacturing
operations, but could also positively affect its sourcing
activities in some countries.
Another source of competition is the increasing use of
buying offices by certain of the Company's customers and other
retailers. These buying offices permit the retailer to source
directly from (primarily) foreign manufacturers, by-passing
intermediate apparel manufacturing companies. The Company is
unable to quantify the effect of this trend on its sales and
profits but believes that the use of buying offices adversely
affects both. The Company believes that the relative price
advantage to retailers of direct sourcing is offset to an extent by
the Company's ownership of or long term relationships with foreign
facilities and by services provided to its customers such as
delivery flexibility and manufacturing expertise.
EMPLOYEES
As of May 31, 1996, the Company employed 7,043 persons,
approximately 84% of whom were hourly and incentive paid production
workers. The Company believes its employee relations are
excellent.
Item 2. Properties.
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At May 31, 1996 the Company operated a total of 21 production
plants. Domestic plants, of which nine plants are owned and three
plants are leased, are located in Alabama, Georgia, Mississippi,
North Carolina, South Carolina and Virginia. Foreign plants, of
which three are owned and six are leased, are located in Mexico,
Dominican Republic, Costa Rica and Honduras. In the fiscal year
ended May 31, 1996 the Company closed six domestic manufacturing
facilitates(Alamo, GA; Dechard, TN; Bowman, GA; Monticello, GA;
Lyons, GA; and Burgaw, NC). These closings are a direct result of
the intense competitive pressures that require the Company to
utilize the most cost effective sources. The production output for
the closed plants has been or will be replaced with more cost
effective off-shore sources. Additionally, the company has
completed plans for expansions in Mexico and the Philippines.
The Company also maintains separate warehousing and
distribution facilities (in addition to space allocated for these
purposes in or adjacent to manufacturing plants) in Arizona,
<page 9>
Georgia, Mississippi, Tennessee and South Carolina.
Certain of the manufacturing, warehousing and distribution
facilities deemed owned by the Company are held pursuant to
long-term capital leases or lease purchase agreements, some of
which have been entered into by the Company in connection with
industrial revenue bond financing arrangements. Under this type of
financing, the facilities are subject to trust indentures or
security agreements securing the interests of the bondholders. See
Notes C and D in the Notes to Consolidated Financial Statements
forming a part of the financial statements included under Item 8 of
this Report.
General offices are maintained in a facility owned by the
Company in Atlanta, GA. The Company leases sales, purchasing and
administrative offices in Atlanta, Chicago, Hong Kong, New York,
Singapore, Bangladesh, Philippines, Sri Lanka, and in both Dallas
and Plano, Texas.
The Company owns substantially all of its machinery and
equipment. Current facilities are adequately covered by insurance,
generally well maintained and provide adequate production capacity
for current and anticipated future operations.
Item 3. Legal Proceedings.
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Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
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Not applicable.
<page 10>
Item 4A. Executive Officers of the Registrant.
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Name Age Office Held
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J. Hicks Lanier 56 Chairman of the Board,
President and Chief
Executive Officer
Ben B. Blount, Jr 57 Executive Vice President --
Finance, Planning and
Development and Chief
Financial Officer
Knowlton J. O'Reilly 56 Group Vice President
Messrs. J. Hicks Lanier, Ben B. Blount, Jr. and Knowlton J.
O'Reilly are also directors of the Company. The Board of Directors
of the Company elects executive officers annually.
Mr. J. Hicks Lanier has served as President of the Company
since 1977. In 1981 he was elected as Chairman of the Board.
Mr. Ben B. Blount, Jr. was Executive Vice President --
Planning and Development from 1986 - 1995. Mr. Blount was
President of Kayser Roth Apparel, an apparel manufacturer and
marketer, from 1982 to 1986. Prior to 1982 he was Group Vice
President of the Company. In 1995 he was elected to serve in his
present position as Executive Vice President of Finance, Planning
and Administration and Chief Financial Officer.
Mr. Knowlton J. O'Reilly has served as Group Vice President
of the Company since 1978.
PART II
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Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
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Incorporated by reference to the table presented under the
heading "Common Stock Information" on page 23 of the Company's 1996
Annual Report to Stockholders (Exhibit 13 hereto). On August 16,
1996, there were 866 holders of record of the Company's common
stock.
Item 6. Selected Financial Data.
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Incorporated by reference to page 12 of the Company's 1996
Annual Report to Stockholders (Exhibit 13 hereto).
<page 11>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
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Incorporated by reference to page 13 through 15 of the
Company's 1996 Annual Report to Stockholders (Exhibit 13 hereto).
On August 19, 1996, the Company authorized the purchase of up to 500,000
shares of its common stock in privatley negotiated and open market purchases.
8. Financial Statements and Supplementary Data.
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Financial statements, including selected quarterly financial
data, are incorporated by reference to pages 16 through 23 of the
Company's 1996 Annual Report to Stockholders (Exhibit 13 hereto).
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
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Not applicable.
PART III
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Item 10. Directors and Executive Officers of the Registrant.
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Information required by this item covering directors of the
Company is incorporated by reference to the information presented
under the heading "Election of Directors - Directors and Nominees"
in the Company's Proxy Statement, which will be filed with the
Securities and Exchange Commission not later than 120 days after
May 31, 1996. Information required by this Item covering executive
officers of the Company is set forth under Item 4A of this Report.
Item 11. Executive Compensation.
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Incorporated by reference to the information presented under
the heading "Executive Compensation and Other Information" in the
Company's Proxy Statement, which will be filed with the Securities
and Exchange Commission not later than 120 days after May 31, 1996.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
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Incorporated by reference to the information presented under
the heading "Beneficial Ownership of Common Stock" in the Company's
Proxy Statement, which will be filed with the Securities and
Exchange Commission not later than 120 days after May 31, 1996.
<page 12>
Item 13. Certain Relationships and Related Transactions.
- - ---------------------------------------------------------
Incorporated by reference to the information presented under
the heading "Executive Compensation and Other Information -
Compensation Committee Interlocks and Insider Participation" in the
Company's Proxy Statement, which will be filed with the Securities
and Exchange Commission not later than 120 days after May 31, 1996.
PART IV
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Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
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(a) 1. Financial Statements
--------------------
Included on pages 16 through 23 of the 1996 Annual Report to
Stockholders (Exhibit 13 hereto) and incorporated by reference in
this Form 10-K:
Report of Independent Public Accountants.
Consolidated Balance Sheets at May 31, 1996 and
June 2, 1995
Consolidated Statements of Earnings for years ended
May 31, 1996, June 2, 1995 and June 3, 1994.
Consolidated Statements of Stockholders' Equity for
years ended May 31, 1996, June 2, 1995 and June 3,
1994.
Consolidated Statements of Cash Flows for years ended
May 31, 1996, June 2, 1995 and June 3, 1994.
Notes to Consolidated Financial Statements for years
ended May 31, 1996, June 2, 1995 and June 3, 1994.
2. Financial Statement Schedules
-----------------------------
Included herein:
Report of Independent Public Accountants on
Financial Statement Schedule.
Schedule II - Valuation and Qualifying Accounts.
<page 13>
3. Exhibits
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3(a) Articles of Incorporation of the Company. Incorporated by
reference to Exhibit 3(a) to the Company's Form 10-Q for the
fiscal quarter ended August 28, 1992.
3(b) Bylaws of the Company. Incorporated by reference to Exhibit
3(b) to the Company's Form 10-K for fiscal year ended June
3, 1994.
10(a) Split-Dollar Life Insurance Agreement. Incorporated by
reference to Exhibit 10(a) to the Company's Form 10-K for
the fiscal year ended May 29, 1992.
10(b) Group Life Insurance Plan, effective January 1, 1993.
Incorporated by reference to Exhibit 10(b) to the Company's
Form 10-K for the fiscal year ended May 28, 1993.
10(c) 1984 Stock Option Plan. Incorporated by reference to
Exhibit 28 to the Company's Form 8-K filed January 17, 1991.
10(d) Long Range Incentive Plan, as amended through July 31, 1992.
Incorporated by reference to Exhibit 10(d) to the Company's
Form 10-K for the fiscal year ended May 28, 1993.
10(e) Summary of Executive Medical Reimbursement Plan.
Incorporated by reference to Exhibit 10(e) to the Company's
Form 10-K for the fiscal year ended June 3, 1994.
10(f) Management Incentive Bonus Program, as amended through June
1, 1991.
10(g) Executive Officers' Long Range Incentive Plan. Incorporated
by reference to Exhibit 10(g) to the Company's Form 10-K
for the fiscal year ended May 28, 1993.
10(h) 1992 Stock Option Plan. Incorporated by reference to
Exhibit A, "1992 Stock Option Plan", to the Company's Proxy
Statement dated August 28, 1992. The 1992 Stock Option Plan
was approved on October 5, 1992 by the Company's
shareholders.
10(j) Note Agreement between the Company and SunTrust Bank dated
December 1, 1995 covering the Company's long term note due
June 30, 1997. Incorporated by reference to Exhibit 10(j)
to the Company's Form 10-Q for the fiscal quarter ended
March 1, 1996.
11 Statement re computation of per share earnings.
13 1996 Annual Report to Stockholders (furnished for the
information of the Commission and not deemed "filed" or part
of this Form 10-K except for those portions expressly
incorporated herein by reference).
24 Consent of Arthur Andersen LLP
<page 14>
25 Powers of Attorney.
27 Financial Data Schedule.
The Company agrees to file upon request of the Securities
and Exchange Commission a copy of all agreements evidencing
long-term debt of the Company and its subsidiaries omitted
from this report pursuant to Item 601(b)(4)(iii) of
Regulation S-K.
Shareholders may obtain copies of Exhibits without charge
upon written request to the Corporate Secretary, Oxford
Industries, Inc., 222 Piedmont Avenue, N.E., Atlanta,
Georgia 30308.
(b) No reports on Form 8-K were filed during the last quarter of
the period covered by this report.
<page 15>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Oxford Industries, Inc.
/s/J. Hicks Lanier
------------------
Chairman and President
Date: August 22, 1996
---------------
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons
on behalf of the Company in the capacities and on the dates
indicated.
Signature Capacity Date
- - -------------------------- ----------------- ---------
/s/J. Hicks Lanier Chairman and 08/22/96
- - -------------------------- President, Chief --------
J. Hicks Lanier Executive Officer
and Director
/s/Ben B. Blount Jr. Executive 08/22/96
- - -------------------------- Vice President, --------
Ben B. Blount Jr. Chief Financial
Officer and
Director
/s/Debra A. Pauli Controller and 08/22/96
- - -------------------------- Chief Accounting --------
Debra A. Pauli Officer
<page 16>
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
Cecil D. Conlee*
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
John B. Ellis*
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
Thomas Gallagher*
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
Clifford M Kirtland, Jr.*
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
J. Reese Lanier*
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
R. William Lee, Jr.*
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
Knowlton J. O'Reilly*
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
Clarence B. Rogers, Jr.*
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
Robert E. Shaw*
/s/David K. Ginn Director 08/22/96
- - -------------------------- --------
E. Jenner Wood*
*by power of attorney
<page 17>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To Oxford Industries, Inc.:
We have audited, in accordance with generally accepted
auditing standards, the consolidated financial statements included
in Oxford Industries, Inc.'s 1996 Annual Report to Stockholders
incorporated by reference in this Form 10-K, and have issued our
report thereon, dated July 12, 1996. Our audits were made for the
purpose of forming an opinion on the basic financial statements
taken as a whole. The schedule listed in Item 14(a)2 is the
responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's
rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion,
fairly states in all material respects the financial data required
to be set forth therein in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
July 12, 1996
<page 18>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
OXFORD INDUSTRIES, INC. AND SUBSIDIARIES
----------------------------------------
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
-------------------------------------------------
Column A Column B Column C Column D Column E
- - ---------------------- ---------- -------------------- ---------- --------
Additions Deductions
---------- --------------------- ----------
Balance at Charged Balance
Beginning to at End
Description of Period Income Recoveries Write-Offs of Period
- - ---------------------- ---------- ---------- ---------- ---------- ----------
Reserves for losses
from accounts receivable:
Year ended June 3, 1994 $1,993,000 $1,793,000 $73,000 $1,559,000 $2,300,000
========== ========== ======= ========== ==========
Year ended June 2, 1995 $2,300,000 $326,000 $367,000 $293,000 $2,700,000
========== ========== ======== ========== ==========
Year ended May 31, 1996 $2,700,000 $234,000 $199,000 $333,000 $2,800,000
=========== =========== ======== ======== ==========
</TABLE>
<page 19>
EXHIBIT 10(f)
Personnel Policy
Incentive Bonus Program
A. Policy
1. The philosophy of the company's compensation program is "Pay for
Performance". The purpose of our Incentive Bonus Program is to provide
compensation in addition to and separate from base salary for members of
management, in relation to this overall objective. The bonus program is
based on profit-center results and the employee's individual
contribution.
2. Our Company can meet profit objectives only if our managers
fulfill the responsibilities of planning, goal setting, measurement of
results, thorough follow-up, and an abundance of hard work. These
activities must be accomplished with bottom-line result in perspective.
This will ensure that our customers, stockholders, and employees share
in the success of the Company.
3. The Management Bonus Program is divided into two portions as
follows:
a. The Profit Center Performance Plan provides financial
rewards to managers in pro-rata amount based on (a) the attainment
of pre-set profit objectives, which identify the profit level at
which bonus payment begins and the level necessary for maximum
bonus payments; and (b) the maximum bonus level for each job
grade.
b. The Discretionary Award Plan is based on the attainment of
pre-set profit objectives as in (a) above, and individual
achievement.
B. Procedure
1. The principles upon which the bonus plan profit objectives are
established are as follows:
a. Two profit objectives for each Profit Center are selected
within the Company. These are:
1. The profit level at which bonuses begin. (Bonus Base
or Minimum Profit)
2. The profit level at which maximum bonuses will be
paid. (Bonus Maximum)
The profit levels defined are Net Before Income Taxes but after
provision for bonuses earned.
b. Theses profit objectives are set at the beginning of each
fiscal year, and will be based upon return on investment
objectives.
c. Bonus Profit objectives are set independently of the
Budget process, with final approval by the Chairman of Oxford
Industries.
<page 20>
d. The Chairman of Oxford Industries will determine
participation for managers serving more than one operational area
of the company.
2. Management Incentive Bonus payment is based on the following
criteria:
a. Bonus payment under the Profit Center performance plan is in
relation to the maximum bonus potential level assigned to each
job grade as well as the pre-set profit goals.
b. The reward under the Discretionary Award Plan, is based on
attainment of pre-set objectives (and other conditions outlined
in this policy). Based on individual performance, the discretionary
award may be up to 100% of the guaranteed award. If a profit center
earns no guaranteed award bonus, there will be no discretionary bonus.
c. Employees who begin participation during the fiscal year
will receive a pro-rata bonus for the period during which they
have participated, calculated to the nearest month. An employee
beginning work by the 15th of any month will be eligible for
bonus proration including that month; employees not beginning
until the 16th will not be eligible for proration until the next
month. Pro-rata participation does not apply to employees
leaving the company (see paragraph 3f).
3. Additional factors related to the Management Incentive Program are
as follows:
a. Bonuses for employees included in the Program who change job
grades, or transfer between Profit Centers during a fiscal
year will be prorated to the nearest month, as noted in 2c
above.
b. Provided that the profit performance of a Profit Center has
reached the level necessary for bonuses to be earned on a
cumulative basis at the end of a fiscal year, participating
members of Management in that Profit Center will receive
their bonuses, irrespective of the performance of other
Profit Centers in the Company, or of the Company as a whole.
c. Newly acquired companies or additions to a Profit Center may
be excluded from consideration in setting Profit objectives
for bonus proposes until they have been absorbed into our
organization, at the discretion of the Chairman of Oxford
Industries.
d. Profit Center Bonus projections will be calculated and
reported to all participants not less than quarterly.
e. Employees do not accrue bonus for periods of unpaid leave of
absence. However, employees on leave of absence as of the
end of the fiscal year will be eligible for pro-rata bonus
payment for periods of paid leave.
f. Bonuses will be paid in full in August of each year
<page 21>
following the end of the fiscal year to participating
members of management who were employed before May 15th of
the same fiscal year and who remain employed on the earlier
of, the last day of the fiscal year, or the last day of May,
provided the right to such bonus has not been forfeited as
provided for in Sections g and h below. Any exception to
this will be subject to the approval of the Chairman of
Oxford Industries.
g. Prior to distribution of bonus checks, if an employee
entitled to receive a bonus is found guilty of committing
acts which are detrimental to the best interests of the
Company (such as misconduct) he will automatically forfeit
all rights to receive his bonus.
h. Any employee leaving the Company prior to fiscal year end,
will forfeit eligibility for bonus participation. An
exception would be an employee otherwise eligible for bonus
who retires or dies during the same bonus year. (An
employee is considered retired if he leaves the Company with
the length of service and age that is required for 100%
vesting eligibility under the terms of any of Oxford's
qualified Retirement Plans regardless of whether or not the
employee is participating in any of those plans.) A
prorated bonus payment would be issued in relation to months
worked before retirement or death.
i. The Bonus Program will be reviewed each year, and will be
subject to change as necessary or desirable to ensure that
it remains equitable and effective as incentive compensation
for improved results.
c. Exceptions
Exceptions to this policy may be made only with the prior approval of the
Chairman of Oxford Industries, Inc.
<page 22>
EXHIBIT-11
OXFORD INDUSTRIES, INC.
COMPUTATION OF PER SHARE EARNINGS
---------------------------------
Year Ended
-------------------------------
May 31, 1996 June 2, 1995
------------ ------------
Net earnings $2,194,000 $10,575,000
Average number of shares
outstanding:
Primary 8,838,438 8,832,960
Fully diluted 8,841,730 8,835,452
As reported (1) 8,748,625 8,669,888
Net earnings per
common share:
Primary $.25 $1.20
Fully Diluted $.25 $1.20
As Reported (1) $.25 $1.22
- - -------------------
(1) Common stock equivalents (which arise solely from outstanding
stock options) are not materially dilutive and, accordingly, have not
been considered in the computation of reported net earnings per common
share.
Weighted Average Shares O/S 8,700,450
Weighted Average Shares O/S 8,714,170
Weighted Average Shares O/S 8,779,344
Weighted Average Shares O/S 8,801,343
- - --------------------------- ---------
12 Months Average 8,748,625
=========
<page 23>
EXHIBIT 13
Financial Highlights
Year Ended:
$ in thousands,
except per share amounts May 31, June 2, June 3,
1996 1995 1994
------- -------- --------
Net sales $664,443 $656,987 $624,568
Net earnings 2,194 10,575 19,201
Earnings per share 0.25 1.22 2.23
Dividends per share 0.80 0.76 0.69
Stockholders' equity 128,959 132,579 127,735
Book value per share at year-end 14.65 15.25 14.79
Return on average stockholders 1.7% 8.1% 15.8%
The $.20 per share dividend paid on June 1, 1996 was the 144th consecutive
quarterly dividend paid by the Company since it became publicly owned in July
1960.
<page 24>
To Our Shareholders:
Fiscal 1996 was an eventful, although disappointing, year for your Company.
Sales increased by 1.1% to a record $664,443,000 from $656,987,000 in fiscal
1995. Net earnings before a nonrecurring one-time charge were $4,894,000 or
$.56 per share, a decrease of 53.7% from $10,575,000 or $1.22 per share in
fiscal 1995. As a result of the one-time charge, net earnings declined 79.2%
to $2,194,000 or $.25 per share. Return on equity fell to 1.7% from last
year's 8.1%. Our year-end book value was $14.65 compared to $15.25 in fiscal
1995.
The dividend declared in July was our 145th consecutive quarterly cash
dividend since the Company became publicly owned in 1960. We are very proud
of this record.
Several events and accomplishments during fiscal 1996 have put us in a
position to anticipate improved results for fiscal 1997. We reduced our
inventory levels by $33 million during this year. The production curtailments
associated with this inventory reduction sharply reduced operating profits
this year, but allowed us to decrease short-term borrowing by $18 million. We
believe our inventories are conservatively valued and represent no unusual
potential markdown problems.
During the first quarter of the year we provided $4,500,000 for environmental
remediation due to the discovery of a past unauthorized disposal of a
substance believed to be dry cleaning fluid at one of our facilities.
We do not expect any additional charges to earnings going forward on this
issue.
Throughout the year we closed six domestic sewing facilities and one cutting
facility. These closings are a direct result of the intense, globally
competitive pressures requiring us to shift a higher percentage of our
production offshore.
The Oxford Shirt Group had a 16.9% sales increase, due to the successful
start-up of the Tommy Hilfiger Golf division and the newly acquired Ely and
Walker division. Tommy Hilfiger dress shirts and Polo for Boys also had
sales gains. Sales in the private label Oxford Shirtings division were even
with last year. The profits of the Shirt Group were negatively affected by
our continued struggle with wet processing of wrinkle-free shirts. During the
third quarter, we decided to abandon wet processing along with the marketing
of Savane wrinkle-free shirts upon completion of Fall 1996 production. In
the quarter we provided for all anticipated write-downs and expenses to
complete the exit. Although this exit was costly, it will eliminate our
largest profit drain of the past two years.
In our continuing shift to globally competitive production sources, we
purchased a large established plant for our Shirt Group in Tegucigalpa,
Honduras and began work on a new plant in the Philippines. During the year
we also completed the expansion and automation of our Lyons distribution
center. With the profit drain of wet processing behind us and continued good
results from our licensed divisions, we expect the Shirt Group to have
significantly improved performance in fiscal 1997.
Lanier Clothes had a disappointing year. Sales decreased by approximately
4.8% and profits declined from the prior year. Gains in our Oscar de la
Renta division were offset by a decline in the private label sector. During
the third quarter we signed a licensing agreement with Nautica Apparel Inc. to
<page 25>
manufacture and sell Nautica men's tailored clothing. Our first line has been
enthusiastically received by the targeted retailers. Shipments will begin with
the Spring 1997 season. To increase its globally competitive production base,
Lanier Clothes completed an expansion of its production facility in Merida,
Mexico that will allow us to double this plant's production capacity.
In the Oxford Slacks Group, sales increased by 14.9% and operating profits
increased by an even greater amount. These increases were fueled primarily by
increasing sales of our Everpress wrinkle-resistant 100% cotton slacks to
mass merchants. Sales also increased in the chain and department stores
distribution channels. Given the current business environment this sales
increase was a great accomplishment. During the year, we made the decision to
construct a new slacks plant in Moctezuma, Mexico, which will begin production
in the coming year.
Our Womenswear Group's sales declined 16.7% due to the shutdown of the RENNY
division and the sale of our B.J. Design Concepts division. Since neither
division was profitable, a positive impact on earnings from these exits will
be realized next year. Sales in continuing Womenswear divisions increased
slightly and operating profits more than doubled.
Our backlog of unshipped orders at year-end was $163 million compared to
$165.3 million a year ago. These numbers include only store orders on hand
and do not include private-label contract balances. As a progressively
greater percentage of our orders are at-once EDI "Quick Response" programs
with our customers, the unshipped order backlog position is becoming a less
reliable indicator of future shipments.
The consumer continues to benefit from a highly competitive apparel market
environment at wholesale and retail. We expect this environment to continue
during the coming year. To compete successfully in this environment, we have
developed a five-point strategy. First, we will intensify our focus on
meeting or exceeding our customers' expectations. Second, we will continue to
reduce our cost of goods through globally competitive sourcing. Third, we
will continue our focus on the progressive reduction of expenses as a
percentage of sales. Fourth, we will continue to pursue higher profit margin
opportunities through licensing or acquisition of important brand or designer
names. Finally, we will continuously focus on asset management. We are
confident this five-point strategy will allow us to compete successfully in
any business environment, take advantage of future opportunities and lead to
improved results.
To our customers, we thank you for your business during these difficult
economic times. We will continue to focus on your satisfaction as our number
one priority. To our suppliers, we thank you for your assistance in providing
our customers with excellent service. To our Oxford associates, we
appreciate all of your efforts to exceed customers' expectations and control
costs. Finally, we thank you, our shareholders, for your understanding during
this difficult business environment and look forward to improved results in
fiscal 1997.
Respectfully submitted,
J. Hicks Lanier
Chairman and President
<page 26>
SELECTED FINANCIAL DATA FOR ANNUAL REPORT
OXFORD INDUSTRIES, INC.
Selected Financial Data
$ and shares in thousands
except per share amounts Year Ended:
May 31, June 2, June 3, May 28, May 29
1996 1995 1994 1993 1992
Net sales $664,443 $656,987 $624,568 $572,869 $527,673
Cost of goods sold 548,612 543,624 498,790 459,968 420,960
Selling, general
and administrative
expenses 101,617 91,601 91,209 86,098 84,466
Provision for
environmental
remediation 4,500 - - - -
Interest 6,057 4,136 2,297 2,263 1,703
Earnings before income
taxes 3,657 17,626 32,272 24,540 20,544
Income taxes 1,463 7,051 13,071 9,754 8,012
Net earnings 2,194 10,575 19,201 14,786 12,532
Net earnings per common
share .25 1.22 2.23 1.70 1.42
Average number of shares
outstanding 8,749 8,670 8,607 8,688 8,802
Dividends 7,007 6,594 5,938 5,470 4,840
Dividends per share 0.80 0.76 0.69 0.63 0.55
Total assets 279,103 309,028 239,947 218,227 199,254
Long-term obligations 45,051 47,011 12,388 17,788 22,693
Stockholders' equity 128,959 132,579 127,735 115,332 108,214
Capital expenditures 8,192 14,790 9,395 8,050 5,439
Book value per share at
year-end 14.65 15.25 14.79 13.28 12.28
Return on average
stockholders' equity 1.7% 8.1% 15.8% 13.2% 12.0%
Return on average total
assets 0.7% 3.9% 8.4% 7.1% 6.5%
<page 27>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND OPERATIONS
RESULTS OF OPERATIONS
FISCAL 1996
Net sales increased 1.1% from fiscal 1995. The Men's Shirt Group posted a
sales increase of 16.9% due to increased sales in Polo for Boys, and Tommy
Hilfiger dress shirts. Also contributing to the Men's Shirt Group sales
increase were the introduction of the Tommy Hilfiger Golf line which began
initial shipments in the second quarter and the acquisition of Ely & Walker
(Ely & Walker markets western wear) completed in the first quarter. The Men's
Slacks Group posted a sales increase of 14.9% primarily due to the continued
success of Everpress wrinkle-resistant 100% cotton slacks. The Men's Tailored
Clothing Group experienced a decline of 4.8%. Increased sales in Oscar de la
Renta did not offset decreased sales in the private label sector. The
Womenswear Group experienced a sales decline of 16.7% due to the closure of
the RENNY division and the divestiture of the B.J. Design Concepts division.
The Company experienced an overall unit sales volume decrease of approximately
2.7% while experiencing an overall 3.7% increase in average sales price per
unit. The change in the average sales price per unit was primarily due to
product mix.
The Company continued to strengthen strategic alliances with its largest
customers. Sales to the Company's 50 largest customers increased 1.9%, and
now represents approximately 92.4% of total sales, while sales to all other
customers declined by 23.5%.
Cost of goods sold as a percentage of net sales decreased to 82.6% in fiscal
1996 from 82.7% in fiscal 1995. The decline in gross margins from historical
percentages continued from 1995, and again the primary reason for this
increase was in the Men's Shirt Group. The most significant event of the year
was the Company's decision to end its Savane brand and Process 2000 licensing
agreements with Farah and to discontinue the wet processing of wrinkle-free
shirts. The difficulties associated with wet processing wrinkle-free shirts
were never resolved sufficiently to warrant continuation of this product line.
The Company will complete its obligations to Farah when it completes shipping
the fall 1996 season. The Company closed the Vidalia, Georgia wet processing
facility in the third quarter and will close the Juarez, Mexico facility upon
completion of production in September 1996. Future wrinkle-free shirts will
be made from precured or postcured fabrics treated at the fabric mill. In the
current year, the Company provided amounts for the anticipated costs and
expenses associated with this exit.
The Company succeeded in reducing its inventory by $33,000,000 in the current
year. The production curtailment associated with this inventory reduction
negatively impacted manufacturing efficiencies and overhead absorption.
During the fiscal year, the Company closed or announced the forthcoming
closure of six domestic sewing facilities (Alamo, GA; Decherd, TN; Bowman, GA;
Monticello, GA; Burgaw, NC; Lyons, GA), and one cutting facility (Decherd,
TN). These closings are the direct result of the continuing intense
competitive pressures that require the Company to utilize the most cost-
effective production resources.
<page 28>
During the current year, the Company continued expansion of its off-shore
manufacturing capacity with the purchase of Confecciones Monzini, S.A.,
located in Tegucigalpa, Honduras. Monzini produces dress shirts and became a
part of the Men's Shirt Group. The Men's Shirt Group also began work on a new
sewing facility in the Philippines. The Company's Men's Tailored Clothing
Group completed the expansion of its Merida, Mexico, sewing facility. The
Company's Men's Slacks Group completed plans for its new plant in Moctezuma,
Mexico.
Selling, general, and administrative expenses (excluding the environmental
charge described below) increased by 10.9% to $101,617,000 in the current year
from $91,601,000 in the prior year. As a percentage of net sales, selling,
general and administrative expenses increased to 15.3% in fiscal 1996 from
13.9% in fiscal 1995. Included in selling, general and administrative
expenses are start-up costs for the Tommy Hilfiger Golf line, which began
shipments in the second quarter; costs associated with the completed expansion
and reengineering of two distribution centers; and amounts provided for
exiting the merchandising of wrinkle-free wet processing.
During the first quarter, the Company reported that it had discovered a past
unauthorized disposal of a substance believed to be dry cleaning fluid on one
of its properties. The Company believes that remedial action will be
required, including continued investigation, monitoring, and treatment of
ground water and soil. Based on advice from its environmental experts, the
Company expects the maximum expenditures for remediation to be approximately
$4,500,000 over the next 30 years. In the first quarter of fiscal 1996, the
Company recorded a provision of $4,500,000 in connection with this matter.
Management believes that any required additional expenses, if any, will not
have a material adverse effect on the Company's results of operations or
financial position.
Net interest expense as a percentage of net sales increased to 0.9% in fiscal
1996 from 0.6% in fiscal 1995. This increase was due to an increase in
average short-term borrowing and long-term debt and higher weighted average
interest rates.
The Company's effective tax rate was 40.0% in fiscal 1996 and fiscal 1995 and
does not differ significantly from the Company's combined statutory rate.
FISCAL 1995
Net sales increased 5.2% from fiscal 1994. The Oxford Slacks division
recorded a sales increase of 16.2% primarily due to its Everpress wrinkle-
resistant 100% cotton slacks. The Oxford Shirtings division recorded a sales
increase of 9.5% due primarily to the introduction of two new product lines,
Tommy Hilfiger dress shirts and Savane wrinkle-free branded shirt products.
While the Tommy Hilfiger launch was successful, the Oxford Shirtings division
encountered problems with capacity expansion for the wet-processed, wrinkle-
free dress shirt product.
The Company experienced an overall unit sales volume increase of approximately
17.1% while experiencing an overall 10.2% reduction in average sales price per
unit. The reduction in the average sales price per unit was primarily product
mix combined with reduced selling prices in response to the demand of the
consumer and retailer. The Company addresses this challenge by using its
global sourcing capability to lower costs.
<page 29>
The Company continued to strengthen strategic alliances with its largest
customers. Sales to the Company's 50 largest customers increased by 8.3%,
while sales to all other customers declined 12.8%.
Cost of goods sold as a percentage of net sales increased to 82.7% in fiscal
1995 from 79.9% in fiscal 1994. The primary reason for this increase is
reflected in the results of the Company's largest division, the Oxford
Shirtings division. The Oxford Shirtings division was not successful at
increasing production capacity to planned levels while maintaining the
division's quality standards. The division did not meet its production or
cost targets in wet processing. The division generated unexpectedly high
levels of irregulars. With capacities falling far short of plan, the division
could not maintain "on time" delivery. This led to order cancellations,
returns, and additional markdowns.
During the fiscal year the Company closed six domestic manufacturing
facilities (Belton, SC; Dawson, GA; Hamlet, NC; Hickory Grove, SC; Royston, GA
and Unadilla, GA). These closings are a direct result of the intense
competitive pressures that require the Company to utilize the most cost-
effective production sources.
Selling, general, and administrative expenses increased by 0.4% to $91,601,000
in fiscal 1995 from $91,209,000 in fiscal 1994. As a percentage of net sales,
selling, general, and administrative expenses declined to 13.9% in fiscal 1995
from 14.6% in fiscal 1994. Excluding the Tommy Hilfiger dress shirt line and
Savane sport shirt lines, selling, general, and administrative expenses
decreased in fiscal 1995.
Net interest expense as a percentage of net sales increased to 0.6% in fiscal
1995 from 0.4% in fiscal 1994. Average short-term borrowings and the weighted
average interest rate increased from the prior year.
The Company's effective tax rate decreased to 40.0% in fiscal 1995 from 40.5%
in fiscal 1994.
FUTURE OPERATING RESULTS
The Company expects no material changes to the current business environment.
The long-term economic environment remains less predictable due to increased
globalization, while the near-term economic environment has stabilized yet
remains very sluggish. Current uncertainties regarding the future economic
environment that may affect the Company include the results of the upcoming
national elections, the federal budget deficit, future developments in the
area of international trade agreements (bilateral and multilateral free trade
agreements), the phaseout of textile quotas pursuant to the Agreement on
Textiles and Clothing, other changes in country-of-origin rules, and retail
entities expanding vertically to establish their own buying/sourcing offices
to source directly with foreign manufacturers. Uncertainties regarding the
future retail environment that may affect the Company include excessive retail
floor space per consumer, constant heavy discounting at the retail level,
continuing consolidation of retailers, and the resulting deflationary prices
of apparel at retail.
The Company's backlog of unshipped orders at the end of fiscal 1996 was
$163,047,000, a 1.3% decrease from $165,276,000 at the end of fiscal 1995.
These numbers represent store orders on hand and do not include private-label
contract balances. The Company is experiencing a greater percentage of at-
<page 30>
once EDI "Quick Response" programs with large retailers. Replenishment
shipments under these programs generally possess such an abbreviated order
life as to exclude them from the order backlog completely. During the year,
the Company signed a licensing agreement with Nautica Apparel, Inc. The
agreement is for the manufacture and sale of the Nautica men's tailored
clothing collection to be launched in the spring 1997 season. The Company
expects sales to be flat or slightly higher in fiscal 1997.
The exit from wet-processing should allow the Men's Shirt Group to achieve
improved profitability in fiscal 1997. Strict adherence to sourcing
effectiveness and expense control should generate improved earnings from the
fiscal 1996 results.
LIQUIDITY AND CAPITAL RESOURCES
Fiscal 1996
Operating activities generated $43,273,000 in fiscal 1996 and used $41,387,000
in fiscal 1995. While net income adjusted for the non-cash environmental
charge decreased by $5,681,000, the primary factors contributing to the
increase in cash from operations were decreases in receivables and the
significant reduction in inventory.
Investing activities used $15,631,000 in fiscal 1996 and $12,069,000 in fiscal
1995. The primary factors contributing to this change were the acquisitions
of Ely & Walker and Confecciones Monzini, S.A. and reduced expenditures for
property, plant and equipment. The majority of the property, plant, and
equipment change was due to the expansion and reengineering of two
distribution centers. Most of the investment for these expansions occurred in
fiscal 1995.
Financing activities used $28,852,000 in fiscal 1996 and generated $52,454,000
in fiscal 1995. The primary differences were reduced short-term borrowings
and scheduled reductions of long-term debt.
The majority of the Company's foreign-sourced production is supplied by the
use of contractors. The Company owns foreign manufacturing facilities, and
may acquire or build others in the future. The functional currency for these
facilities is generally the U.S. dollar, as all production is exported to the
Company for domestic resale. Consequently, the amount of monetary assets and
liabilities subjected to exchange rate risk is immaterial.
FISCAL 1995
Fiscal 1995 operating activities used $41,387,000 as compared to fiscal 1994
when these activities generated $19,683,000. The primary factors contributing
to this change were decreased net earnings and increased inventories. The
increased inventory is due in part to the problems in the Oxford Shirtings
division described previously. There was some increase in inventory related
to new products, Tommy Hilfiger and Savane, and there was some increase in
inventory due to the slowdown in consumer apparel purchases, which caused some
of the Company's larger customers to defer shipment of fourth quarter
programs. There was also some increase in inventory levels associated with
the expanded number of chain and department store customers for whom the
Company has "Quick Response" and EDI programs.
<page 31>
Investing activities used $12,069,000 as compared to $8,981,000 in fiscal
1994. The primary differences resulted from increased capital expenditures
for the expansion of the Oxford Shirtings distribution center in Lyons,
Georgia. A similar project is in process at the Lanier Clothes division
distribution center in Toccoa, Georgia. Proceeds from the sale of previously
idled facilities helped offset some of the capital expenditures. These
facilities included a distribution center in Atlanta, Georgia, and
manufacturing facilities in Royston, Georgia, and Hamlet, North Carolina. The
projects completed in fiscal 1995 related to facilities supporting the
"wrinkle-free" wet processing for the Slacks and Shirtings divisions.
Net financing activities generated $52,454,000 in fiscal 1995 as compared to
$10,729,000 used in fiscal 1994. The increase results from both short-term and
long-term borrowings. In May 1995, the Company negotiated a $40,000,000 long-
term note.
FUTURE LIQUIDITY AND CAPITAL RESOURCES
The Company believes it has the ability to generate cash and/or has available
borrowing capacity to meet its foreseeable needs. The sources of funds
primarily include funds provided by operations and both short and long-term
borrowings. The uses of funds primarily include working capital requirements,
capital expenditures, acquisitions, 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 May 31,
1996, the Company had available for its use lines of credit with several
lenders aggregating $50,000,000. The Company has agreed to pay commitment
fees for these available lines of credit. At May 31, 1996, $45,000,000 was in
use under these lines. Of the $45,000,000, $40,000,000 is long-term. In
addition, the Company has $188,000,000 in uncommitted lines of credit, of
which $98,000,000 is reserved exclusively for letters of credit. The Company
pays no commitment fees for these available lines of credit. At May 31, 1996,
$20,500,000 was in use under these lines of credit. Maximum short-term
borrowings from all sources during the current year were $125,500,000. The
Company anticipates continued use and availability of both committed and
uncommitted short-term borrowing resources as working capital needs may
require.
The Company considers possible acquisitions of apparel-related businesses that
are compatible with its long-term strategies. There are no present plans to
sell securities or enter into off-balance sheet financing arrangements.
ADDITIONAL INFORMATION
For additional information concerning the Company's operations, cash flows,
liquidity and capital resources, this analysis should be read in conjunction
with the Consolidated Financial statements and the Notes to Consolidated
Financial statements of this Annual Report.
<page 32>
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
AND REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
The management of Oxford Industries, Inc. is responsible for the
integrity and objectivity of the consolidated financial statements and other
financial information presented in this report. These statements have been
prepared in conformity with generally accepted accounting principles
consistently applied and include amounts based on the best estimates and
judgements of management.
Oxford maintains a system of internal accounting controls designed to
provide reasonable assurance, at a reasonable cost, that assets are
safeguarded against loss or unauthorized use and that the financial records
are adequate and can be relied upon to produce financial statements in
accordance with generally accepted accounting principles. The internal
control system is augmented by written policies and procedures, an internal
audit program and the selection and training of qualified personnel. This
system includes policies that require adherence to ethical business standards
and compliance with all applicable laws and regulations.
The consolidated financial statements for the years ended May 31, 1996,
June 2, 1995 and June 3, 1994 have been audited by Arthur Andersen LLP,
independent public accountants. In connection with its audits, Arthur
Andersen LLP, develops and maintains an understanding of Oxford's accounting
and financial controls and conducts tests of Oxford's accounting systems and
other related procedures as it considers necessary to render an opinion on the
financial statements.
The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with Oxford's management, internal auditors and
independent public accountants to review matters relating to the quality of
financial reporting and internal accounting controls, and the independent
nature, extent and results of the audit effort. The Committee recommends to
the Board appointment of the independent public accountants. Both the
internal auditors and the independent public accountants have access to the
Audit Committee, with or without the presence of management.
Ben B. Blount, Jr.
Executive Vice President-
Finance, Planning and Administration
and Chief Financial Officer
<page 33>
To the Board of Directors
and the Stockholders of
Oxford Industries, Inc.
We have audited the accompanying consolidated balance sheets of Oxford
Industries, Inc. (a Georgia corporation) and Subsidiaries as of May 31, 1996
and June 2, 1995 and the related consolidated statements of earnings,
stockholders' equity, and cash flows for each of the three years in the period
ended May 31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oxford Industries, Inc. and
subsidiaries as of May 31, 1996 and June 2, 1995 and the results of their
operations and their cash flows for each of the three years in the period
ended May 31, 1996 in conformity with generally accepted accounting
principles.
Atlanta, Georgia
July 12, 1996
<page 34>
Oxford Industries, Inc. and Subsidiaries
Consolidated Balance Sheets
$ in thousands, except per share amounts May 31, 1996 June 2, 1995
Assets
Current Assets:
Cash and cash equivalents $ 1,015 $ 2,225
Receivables, less allowance for
doubtful accounts of $2,800 and $2,700
in 1996 and 1995, respectively 84,593 83,962
Inventories 136,789 169,978
Prepaid expenses 13,747 13,023
-------- --------
Total Current Assets 236,144 269,188
Property, Plant and
Equipment, Net 36,659 38,650
Other Assets, Net 6,300 1,190
-------- --------
Total Assets $279,103 $309,028
======== ========
Liabilities and Stockholders' Equity
Current Liabilities:
Notes payable $25,500 $43,500
Trade accounts payable 49,676 54,331
Accrued compensation 7,225 8,235
Other accrued expenses 13,014 13,039
Dividends payable 1,760 1,739
Current maturities of long-term debt 1,632 4,732
------- --------
Total Current Liabilities 98,807 125,576
Long-Term Debt, less current
maturities 45,051 47,011
Noncurrent Liabilities 4,500 -
Deferred Income Taxes 1,786 3,862
Commitments and Contingencies (Note E)
Stockholders' Equity:
Common stock* 8,803 8,694
Additional paid-in capital 8,211 7,020
Retained earnings 111,945 116,865
-------- --------
Total Stockholders' Equity 128,959 132,579
-------- --------
Total Liabilities and Stockholders'
Equity $279,103 $309,028
======== ========
* Par value $1 per share; authorized 30,000,000 shares; issued and
outstanding shares: 8,803,321 in 1996 and 8,694,385 in 1995.
See notes to consolidated financial statements.
<page 35>
Oxford Industries, Inc. and Subsidiaries
Consolidated Statements of Earnings
Year Ended:
$ in thousands, except May 31, 1996 June 2, 1995 June 3, 1994
per share amounts ----------- ------------ ------------
Net Sales $664,443 $656,987 $624,568
Costs and Expenses:
Cost of goods sold 548,612 543,624 498,790
Selling, general and administrative 101,617 91,601 91,209
Provision for environmental
remediation 4,500 - -
Interest, net 6,057 4,136 2,297
-------- -------- --------
660,786 639,361 592,296
Earnings Before Income Taxes 3,657 17,626 32,272
Income Taxes 1,463 7,051 13,071
-------- -------- --------
Net Earnings $ 2,194 $ 10,575 $ 19,201
======== ======== ========
Net Earnings Per Common Share $0.25 $1.22 $2.23
======== ======== ========
See notes to consolidated financial statements.
<page 36>
Oxford Industries, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
Additional
$ in thousands, Common Paid-In Retained
except per share amounts Stock Capital Earnings Total
- - -----------------------------------------------------------------------
Balance, May 28, 1993 $8,685 $5,193 $101,454 $115,332
Net earnings - - 19,201 19,201
Purchase and retirement
of common stock (125) (75) (1,685) (1,885)
Exercise of stock options 78 1,035 (88) 1,025
Cash dividends, $.69
per share - - (5,938) (5,938)
--------- --------- --------- ---------
Balance, June 3, 1994 $8,638 $6,153 $112,944 $127,735
Net earnings - - 10,575 10,575
Exercise of stock options 56 867 (60) 863
Cash dividends, $.76
per share - - (6,594) (6,594)
--------- --------- --------- ---------
Balance, June 2, 1995 $ 8,694 $ 7,020 $116,865 $132,579
Net earnings - - 2,194 2,194
Exercise of stock options 109 1,191 (107) 1,193
Cash dividends, $.80
per share - - (7,007) (7,007)
--------- --------- --------- ---------
Balance, May 31, 1996 $8,803 $8,211 $111,945 $128,959
========= ========= ========= =========
See notes to consolidated financial statements.
<page 37>
Oxford Industries, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
May 31, June 2, June 3,
$ in thousands Year ended: 1996 1995 1994
------- ------- -------
Cash Flows from Operating Activities:
Net earnings $2,194 $10,575 $19,201
Adjustments to reconcile net earnings
to net cash provided by (used in) operating
activities
Depreciation and amortization 8,851 7,804 7,041
Provision for environmental
remediation 4,500 - -
Gain on sale of property, plant
and equipment (108) (1,169) (211)
Loss on sale of business 338 - -
Changes in working capital:
Receivables 476 (8,797) (7,072)
Inventories 35,556 (55,513) (11,872)
Prepaid expenses 911 (621) (704)
Trade accounts payable (4,797) 9,308 10,394
Accrued expenses and other
current liabilities (1,050) (3,390) 2,428
Deferred income taxes (2,076) 132 426
Other noncurrent assets (1,522) 284 52
------- ------- -------
Net cash flows provided by (used in)
operating activities 43,273 (41,387) 19,683
Cash Flows from Investing Activities:
Acquisitions (11,644) - -
Proceeds from sale of business 1,991 - -
Purchase of property, plant
and equipment (7,582) (14,790) (9,395)
Proceeds from sale of property,
plant and equipment 1,604 2,721 414
------- ------- -------
Net cash (used in) investing
activities (15,631) (12,069) (8,981)
Cash Flows from Financing Activities:
Short-term borrowings (18,000) 24,000 1,000
Long-term debt (5,060) 34,003 (4,913)
Proceeds from exercise of stock
options 1,193 861 1,025
Purchase and retirement of
common stock - - (1,885)
Dividends on common stock (6,985) (6,410) (5,956)
------- ------- -------
Net cash (used in) provided by
financing activities (28,852) 52,454 (10,729)
Net change in cash and cash equivalents (1,210) (1,002) (27)
Cash and cash equivalents at beginning
of period 2,225 3,227 3,254
------- ------- -------
Cash and cash equivalents at end
of period $ 1,015 $ 2,225 $ 3,227
======= ======= =======
<page 38>
Supplemental Disclosures of Cash Flow Information
Cash Paid For:
Interest $ 5,883 $ 4,103 $ 2,315
Income taxes 1,879 10,397 11,443
======= ======= =======
See notes to consolidated financial statements.
<page 39>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OXFORD INDUSTRIES, INC. AND SUBSIDIARIES
Years Ended May 31, 1996, June 2, 1995 and June 3, 1994
A. Summary of Significant Accounting Policies:
1. Principal Business Activity--Oxford Industries, Inc. (the "Company") is
engaged in the design, manufacture and sale of consumer apparel for men,women
and children. Principal markets for the Company are customers located
primarily in the United States. Company owned manufacturing facilities are
located primarily in the southeastern United States and Central America. In
addition the Company uses foreign contractors for other sources of production.
2. Principles of Consolidation--The consolidated financial statements include
the accounts of the Company and all of its subsidiaries. All material
intercompany balances, transactions and profits have been eliminated.
3. Fiscal Period--The Company's fiscal closing date is the Friday nearest May
31. The fiscal year includes operations for a 52-week period in 1996, a 52-
week period in 1995 and a 53-week period in 1994.
4. Revenue Recognition--Revenue is recognized when goods are shipped.
5. Statement of Cash Flows--The Company considers cash equivalents to be
short-term investments with original maturities of three months or less.
6. Inventories--Inventories are principally stated at the lower of cost
(last-in, first-out method, "LIFO") or market.
7. Property, Plant and Equipment--Depreciation and amortization of property,
plant and equipment are provided on both straight-line (primarily buildings)
and accelerated methods over the estimated useful lives of the assets as
follows:
- - ------------------------------------------------------------------------------
Buildings and improvements 7-40 years
Machinery and equipment 3-15 years
Office fixtures and equipment 3-10 years
Autos and trucks 2-6 years
Leasehold improvements Lesser of remaining life of the asset or
life of lease
- - ------------------------------------------------------------------------------
8. Income Taxes--Effective May 29, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109(SFAS 109), "Accounting for Income
Taxes" in which deferred tax liabilities and assets are determined based on
the difference between financial and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse.
9. Financial Instruments--The fair values of financial instruments closely
approximate their carrying values.
10. Use of Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions. These estimates and assumptions affect the
<page 40>
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements as well as reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from these estimates.
11. Changes in Accounting Principles--In 1995, the Financial Accounting
Standards Board(FASB) issued Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of"(SFAS 121). The Company's required adoption date is
June 1, 1996. SFAS 121 standardizes the accounting practices for the
recognition and measurement of impairment losses on certain long-lived assets.
The Company anticipates the adoption of SFAS 121 will not have a material
impact on its results of operations or financial position.
B. Inventories:
The components of inventories are summarized as follows:
$ in thousands May 31, 1996 June 2, 1995
----------- ------------
Finished goods $ 75,787 $96,013
Work in process 24,717 31,014
Fabric 29,889 34,670
Trim and supplies 6,396 8,281
-------- --------
$136,789 $169,978
======== =======
The excess of replacement cost over the value of inventories based upon
the LIFO method was $38,899,000 at May 31, 1996 and $37,242,000 at June 2,
1995.
C. Property, Plant and Equipment:
Property, plant and equipment, carried at cost, is summarized as follows:
$ in thousands May 31, 1996 June 2, 1995
- - -------------- ------------ ------------
Land $ 1,231 $ 1,271
Buildings 33,617 34,660
Machinery and equipment 72,117 70,349
Leasehold improvements 3,844 4,063
-------- --------
110,809 110,343
Less accumulated depreciation
and amortization 74,150 71,693
-------- -------
$ 36,659 $38,650
======== =======
<page 41>
D. Notes Payable and Long-Term Debt:
The Company had available for its use lines of credit with several lenders
aggregating $50,000,000 at May 31, 1996. The Company has agreed to pay
commitment fees for these available lines of credit. At May 31, 1996,
$45,000,000 was borrowed under these lines at various rates ranging from
5.69% to 5.89%. Of the $45,000,000, $40,000,000 is long-term debt, as is
disclosed in the summary of long-term debt which follows. In addition, the
Company has $188,000,000 in uncommitted lines of credit, of which $98,000,000
is reserved exclusively for letters of credit. The Company pays no commitment
fees for these available lines of credit. At May 31, 1996, $20,500,000 was
borrowed under these lines of credit at various rates ranging from 5.69% to
5.81%. The weighted average interest rate on short term borrowings during
fiscal 1996 was 6.1%.
A summary of long-term debt is as follows:
$ in thousands May 31, 1996 June 2, 1995
Note payable to bank, the rate is a
margin above bank's cost of funds,
which may fluctuate during the life
of the loan (at May 31, 1996 the
rate was 5.6875%); due in June 1997 $ 40,000 $ 40,000
Note payable to insurance company,
8.62%; repaid in May 1996 - 3,750
Industrial revenue bonds and mortgage
notes at fixed rates of 6.1% to 7.5%
and varying rates of 73% to 86% of
prime rate (prime was 8.25% at
May 31, 1996); due in varying
installments to 2006 6,683 7,993
------- -------
46,683 51,743
Less current maturities 1,632 4,732
------- -------
$45,051 $47,011
======= =======
Property, plant and equipment with an aggregate carrying amount at May
31, 1996 of approximately $4,333,000 is pledged as collateral on the
industrial revenue bonds. The aggregate maturities of long-term debt are as
follows:
$ in thousands
- - --------------------------------------------------------------------------
Fiscal year
1997 $ 1,632
1998 42,834
1999 497
2000 495
2001 335
Thereafter 890
- - --------------------------------------------------------------------------
$46,683
=======
<page 42>
E. Commitments and Contingencies:
The Company has operating lease agreements for buildings, sales offices and
equipment with varying terms to 2006. The total rent expense under all leases
was approximately $4,455,000 in 1996, $4,787,000 in 1995 and $4,883,000 in
1994.
The aggregate minimum rental commitments for all noncancellable
operating leases with terms of more than one year are as follows:
$ in thousands
Fiscal year
1997 $ 3,038
1998 2,119
1999 1,220
2000 971
2001 446
Thereafter 1,118
-------
$ 8,912
=======
The Company is also obligated under certain apparel license and design
agreements to make future minimum payments as follows:
$ in thousands
Fiscal Year
1997 $ 3,974
1998 4,258
1999 4,313
2000 1,455
-------
$14,000
=======
The Company uses letters of credit to facilitate certain apparel
purchases. The total amount of letters of credit outstanding at May 31, 1996
was approximately $66,000,000.
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.
The Company discovered a past unauthorized disposal of a substance
believed to be dry cleaning fluid on one of its properties. The Company
believes that remedial action will be required, including continued
investigation, monitoring and treatment of groundwater and soil. Based on
advice from its environmental experts, the Company has provided $4,500,000 for
this remediation.
<page 43>
F. Stock Options:
A summary of changes in stock options is as follows:
Number of Shares
----------------
1996 1995 1994
Outstanding, beginning of year 467,110 329,580 407,740
Granted 5,000 204,000 6,500
Cancelled (28,680) (7,080) (2,280)
Exercised (115,690) (59,390) (82,380)
Outstanding, end of year 327,740 467,110 329,580
===============================
Options have been granted at prices equal to 100% of the market price of the
Company's common stock at dates of grant. Stock options outstanding as of May
31, 1996 are as follows:
Date of Number of Price Expiration
Option Grant Shares Per Share Date
- - -------------------------------------------------------------------------
Jul. 13, 1992 131,540 $15.38 Jul. 13, 1997
Jul. 12, 1993 5,000 $15.94 Jul. 12, 1998
Sep. 9, 1993 500 $20.38 Sep. 9, 1998
Nov. 10, 1993 1,000 $22.88 Nov. 10, 1998
Aug. 4, 1994 184,700 $27.56 Aug. 4, 1999
Jul. 17, 1995 5,000 $17.94 Jul. 17, 2000
-------
327,740
=======
As of May 31, 1996, 136 employees held stock options. At May 31, 1996,
options for 178,140 shares were exercisable and an additional 310,300 shares
were reserved for issuance pursuant to options that could be granted in the
future.
G. Significant Customers:
Approximately 22% in 1996, 20% in 1995 and 24% in 1994 of the Company's
revenues were derived from sales to a national retail chain. Approximately
9% in 1996, 10% in 1995 and 10% in 1994 of the Company's revenues were derived
from sales to another national retail chain.
The Company provides credit, in the normal course of business, to a large
number of retailers in the apparel industry. The Company's ten largest
customers accounted for approximately 70% of net sales in fiscal 1996 and 69%
in fiscal 1995. Approximately 60% of gross accounts receivable at May 31,
1996 and June 2, 1995 were attributed to the Company's ten largest customers.
The Company performs ongoing credit evaluations of its customers and maintains
allowances for potential credit losses.
H. Retirement Programs:
The Company has retirement savings programs covering substantially all
full-time U.S. employees. If a participant decides to contribute, a portion
of the contribution is matched by the Company. Total expense under these
programs was $1,326,000 in 1996, $1,488,000 in 1995 and $1,412,000 in 1994.
<page 44>
I. Income Taxes:
The provision (benefit) for income taxes includes the following:
$ in thousands 1996 1995 1994
Current: -----------------------------------
Federal $3,258 $6,613 $11,164
State 520 1,134 1,938
-----------------------------------
3,778 7,747 13,102
Deferred (2,315) (696) (31)
-----------------------------------
$1,463 $7,051 $13,071
===================================
Reconciliations of the U.S. federal statutory income tax rates and the
Company's effective tax rates are summarized as follows:
1996 1995 1994
----------------------------------
Statutory rate 35.0% 35.0% 35.0%
State income taxes - net of
federal income tax benefit 3.9 3.9 3.9
Tax credits (4.2) (0.4) (0.1)
Nondeductible expenses and other, net 5.3 1.5 1.7
--------------------------------
Effective rate 40.0% 40.0% 40.5%
==================================
Deferred tax assets and liabilities as of May 31, 1996 and June 2, 1995,
computed under SFAS 109, are comprised of the following ($ in thousands):
Deferred Tax Assets: May 31, 1996 June 2, 1995
------------ ------------
Inventory $ 3,189 $ 2,997
Compensation 1,128 1,409
Group insurance 517 170
Allowance for bad debts 1,100 1,064
Environmental 1,751 -
Other, net 2,153 2,293
------- -------
Deferred Tax Assets 9,838 7,933
Deferred Tax Liabilities:
Depreciation - property, plant and equipment 1,308 1,633
Foreign 913 775
Other, net 987 1,210
-------- -------
Deferred Tax Liabilities 3,208 3,618
Net Deferred Tax Asset $ 6,630 $ 4,315
====== ======
<page 45>
J. Equity and Earnings Per Share:
Earnings per share is computed based on the weighted average number of
shares of common stock outstanding of 8,748,625 in 1996; 8,669,888 in 1995 and
8,606,843 in 1994. The dilutive effect of stock options outstanding in 1996,
1995 and 1994 was not material for purposes of this calculation.
K. Summarized Quarterly Data (Unaudited):
Following is a summary of the quarterly results of operations for the years
ended May 31, 1996, June 2, 1995 and June 3, 1994:
Fiscal Quarter
$ in thousands, except
per share amounts First Second Third Fourth Total
- - ---------------------------------------------------------------------------
1996**
Net sales $189,254 $187,066 $138,600 $149,523 $664,443
Gross profit 32,123 31,844 22,465 29,399 115,831
Net earnings (loss) 278 2,623 (2,020) 1,313 2,194
Earnings (loss) per share 0.03 0.30 (0.23) 0.15 0.25
1995*
Net sales $165,304 $192,167 $153,101 $146,415 $656,987
Gross profit 31,872 37,109 25,149 19,233 113,363
Net earnings (loss) 4,856 6,067 1,824 (2,172) 10,575
Earnings (loss) per share 0.56 0.70 0.21 (0.25) 1.22
1994*
Net sales $148,711 $178,737 $143,141 $153,979 $624,568
Gross profit 29,337 35,066 29,229 32,146 125,778
Net earnings 3,982 5,829 4,474 4,916 19,201
Earnings per share 0.46 0.68 0.52 0.57 2.23
* Includes an after-tax LIFO adjustment in the fourth quarter of $419,000, or
$.05 per share unfavorable in 1995, $1,769,000, or $.21 per share favorable in
1994.
** Includes an after-tax adjustment in the first quarter of $2,700,000 or $.31
per share for a provision for environmental remediation.
<page 46>
- - ------------------------------------------------------------------------------
Net Sales by Product Class
The following table sets forth separately in percentages net sales by class of
similar products for each of the last three fiscal years:
1996 1995 1994
Net Sales: -------------------------------
Menswear 78% 74% 73%
Womenswear 22% 26% 27%
-------------------------------
100% 100% 100%
===============================
Common Stock Information:
Market Price on the Quarterly Cash Dividend
New York Stock Exchange Per Share
Fiscal 1996 Fiscal 1995 Fiscal 1996 Fiscal 1995
High Low High Low
1st Quarter 19 1/8 17 1/4 34 1/8 26 3/4 .20 .18
2nd Quarter 18 7/8 16 28 5/8 24 3/8 .20 .18
3rd Quarter 19 1/4 16 1/8 27 5/8 18 .20 .20
4th Quarter 19 1/4 16 1/2 21 3/4 18 .20 .20
At the close of fiscal 1996, there were 879 stockholders of record.
<page 47>
EXHIBIT-24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in Oxford Industries, Inc.'s previously
filed Registration Statements No. 2-76870, No. 33-7231 and No. 33-
64097 of (1) our report dated July 12, 1996 appearing on page 16 of
the Corporation's 1996 Annual Report to Stockholders which is
incorporated by reference in the Corporation's Annual Report on
Form 10-K for the year ended May 31, 1996, and (2) the inclusion of
our report on the schedule dated July 12, 1996 appearing on page 18
of the Corporation's Annual Report on Form 10-K for the year ended
May 31, 1996.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
August 22, 1996
<page 48>
EXHIBIT 25
ELECTRONIC SUMMARY - POWER OF ATTORNEY
Each of the undersigned, a director of Oxford Industries, Inc.
(the "Company"), does hereby constitute and appoint David K. Ginn
and Thomas Caldecort Chubb, III, his true and lawful attorney-in-
fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, to sign
the Company's Form 10-K Annual Report pursuant to Section 13 of the
Securities Exchange Act of 1934 for the fiscal year ended May 31,
1996 and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorneys-in-fact full power and
authority to sign such documents on behalf of the undersigned and
to make such filing, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and
confirming all that the attorneys-in-fact, or his substitutes, may
lawfully do or cause to be done by virtue hereof.
Dated: July 15, 1996
Oxford Industries, Inc.
CECIL D. CONLEE CLARANCE B. ROGERS, JR.
- - ------------------------------ ------------------------------
Cecil D. Conlee Clarance B. Rogers, Jr.
Director Director
TOM GALLAGHER R. WILLIAM LEE, JR.
- - ------------------------------ ------------------------------
Tom Gallagher R. William Lee, Jr.
Director Director
CLIFFORD M. KIRTLAND, JR. E. JENNER WOOD
- - ------------------------------ ------------------------------
Clifford M. Kirtland, Jr. E. Jenner Wood
Director Director
J. REESE LANIER KNOWLTON J. O'REILLY
- - ------------------------- ------------------------------
J. Reese Lanier Knowlton J. O'Reilly
Director Director
ROBERT E. SHAW JOHN B. ELLIS
- - ------------------------- ------------------------------
Robert E. Shaw John B. Ellis
Director Director
<page 49>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial infromation extracted from SEC Form
10-K and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> MAY-31-1996
<CASH> 1,015
<SECURITIES> 0
<RECEIVABLES> 87,393
<ALLOWANCES> 2,800
<INVENTORY> 136,789
<CURRENT-ASSETS> 236,144
<PP&E> 110,809
<DEPRECIATION> 74,150
<TOTAL-ASSETS> 279,103
<CURRENT-LIABILITIES> 98,807
<BONDS> 0
0
0
<COMMON> 8,803
<OTHER-SE> 120,156
<TOTAL-LIABILITY-AND-EQUITY> 279,103
<SALES> 664,443
<TOTAL-REVENUES> 664,443
<CGS> 548,612
<TOTAL-COSTS> 548,612
<OTHER-EXPENSES> 106,117
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,057
<INCOME-PRETAX> 3,657
<INCOME-TAX> 1,463
<INCOME-CONTINUING> 2,194
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,194
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
EXHIBIT 99
INDEX OF EXHIBITS
INCLUDED HERIN, FORM 10-K
May 31, 1996
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- - -------------------------------------------------------------------
10(f) Management Incentive Bonus Program, as amended
through June 1, 1991. 20-22
11 Statement re computation of per share earnings 23
13 1996 Annual Report to stockholders (furnished
for the information of the Commission and not
deemed "filed" or part of this Form 10-K except
for those portions expressly incorporated herein
by reference). 24-47
24 Consent of Arthur Andersen LLP 48
25 Powers of Attorney 49
27 Statement of Financial Data 50
