SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant To Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the quarterly period ended September 1, 2000
-----------------
OR
[ ] Transition Report Pursuant To Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the transition period from to
---------------- ----------------
Commission File Number 1-4365
------
OXFORD INDUSTRIES, INC.
------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-0831862
------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
222 Piedmont Avenue, N.E., Atlanta, Georgia 30308
--------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(404) 659-2424
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Number of shares outstanding
Title of each class as of October 9, 2000
--------------------------- ----------------------------
Common Stock, $1 par value 7,469,715
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
------------------------------
OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
QUARTERS ENDED SEPTEMBER 1, 2000 AND AUGUST 27, 1999
(UNAUDITED)
Quarter Ended
--------------------------
$ in thousands except share and per September 1, August 27,
share amounts 2000 1999
------------------------- ---------- ------------
Net Sales $204,368 $185,737
-------- --------
Cost of goods sold 167,024 152,037
------- -------
Gross Profit 37,344 33,700
Selling, general and administrative 30,628 25,168
------ -------
Earnings Before Interest and Taxes 6,716 8,532
Interest 1,108 880
-------- -------
Earnings Before Income Taxes 5,608 7,652
-------- -------
Income Taxes 2,131 2,908
-------- -------
Net Earnings $ 3,477 $ 4,744
======== ========
Basic Earnings Per Common Share $0.46 $0.60
======== =======
Diluted Earnings Per Common Share $0.45 $0.60
======== =======
Basic Number of Shares Outstanding 7,637,385 7,860,757
========= =========
Diluted Numbers of Shares Outstanding 7,654,425 7,938,368
========= =========
Dividends Per Share $0.21 $0.21
====== ======
-------------------------
See notes to consolidated financial statements.
OXFORD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 1, 2000, JUNE 2, 2000 AND AUGUST 27, 1999
(UNAUDITED EXCEPT FOR JUNE 2, 2000)
September 1, June 2, August 27,
$ in thousands 2000 2000 1999
-------------- ------------ -------- -----------
Assets
------
Current Assets:
Cash $ 7,690 $ 8,625 $ 9,949
Receivables 130,434 112,867 118,425
Inventories:
Finished goods 96,428 90,961 92,234
Work in process 22,468 25,903 23,983
Fabric, trim & supplies 29,166 36,373 22,602
-------- -------- --------
148,062 153,237 138,819
Prepaid expenses 14,060 12,826 13,466
-------- -------- --------
Total Current Assets 300,246 287,555 280,659
Property, Plant and Equipment 36,780 37,107 37,012
Other Assets 11,358 11,904 11,289
-------- -------- --------
Total Assets $348,384 $336,566 $328,960
======== ======== ========
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities:
Notes payable $ 34,500 $ 18,500 $ 42,500
Trade accounts payable 63,548 68,421 47,099
Accrued compensation 9,199 12,026 9,350
Other accrued expenses 23,724 22,713 25,785
Dividends payable 1,601 1,607 1,630
Income taxes 3,435 1,148 4,043
Current maturities of
long-term debt 200 205 271
-------- -------- --------
Total Current Liabilities 136,207 124,620 130,678
Long-Term Debt,
less current maturities 40,513 40,513 40,689
Non-Current Liabilities 4,500 4,500 4,500
Deferred Income Taxes 2,401 2,619 1,282
Stockholders' Equity:
Common stock 7,583 7,651 7,715
Additional paid-in capital 11,258 11,309 11,121
Retained earnings 145,922 145,354 132,975
-------- -------- --------
Total Stockholders' Equity 164,763 164,314 151,811
-------- -------- --------
Total Liabilities and Stockholders'
Equity $348,384 $336,566 $328,960
======== ======== ========
-------------------
See notes to consolidated financial statements.
OXFORD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
QUARTERS ENDED SEPTEMBER 1, 2000 AND AUGUST 27, 1999
(UNAUDITED)
Quarter Ended
-----------------------------
September 1, August 27,
$ in thousands 2000 1999
-------------- ------------ ------------
Cash Flows from Operating Activities:
-------------------------------------
Net earnings $ 3,477 $ 4,744
Adjustments to reconcile net earnings to
net cash used in operating activities:
Depreciation and amortization 2,202 2,064
(Gain) loss on sale of property, plant
and equipment (31) (56)
Changes in working capital:
Receivables (17,567) (3,719)
Inventories 5,175 8,109
Prepaid expenses (1,234) 325
Trade accounts payable (4,873) (14,298)
Accrued expenses and other current liabilities (1,816) (191)
Income taxes payable 2,287 4,043
Deferred income taxes (218) (2,732)
Other noncurrent assets 22 (221)
Net cash flows used in -------- --------
operating activities (12,576) (1,932)
Cash Flows from Investing Activities:
-------------------------------------
Purchase of property, plant and equipment (1,265) (1,327)
Proceeds from sale of property, plant and
and equipment (54) 59
-------- --------
Net cash used in investing activities (1,319) (1,268)
Cash Flows from Financing Activities:
-------------------------------------
Short-term borrowings 16,000 9,500
Payments on long-term debt (5) (80)
Proceeds from exercise of stock options 57 179
Purchase and retirement of common stock (1,485) (5,853)
Dividends on common stock (1,607) (1,674)
-------- --------
Net cash provided by financing activities 12,960 2,072
Net Change in Cash and Cash Equivalents (935) (1,128)
Cash and Cash Equivalents at Beginning of Period 8,625 11,077
-------- --------
Cash and Cash Equivalents at End of Period $ 7,690 $ 9,949
======== ========
Supplemental Disclosure of Cash Flow Information
------------------------------------------------
Cash paid for:
Interest, net $1,340 $ 933
Income taxes 502 33
See notes to consolidated financial statements.
OXFORD INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTERS ENDED SEPTEMBER 1, 2000 AND AUGUST 27, 1999
(UNAUDITED)
1. The foregoing unaudited consolidated financial statements reflect all
adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods. All such
adjustments are of a normal recurring nature. The results for
interim periods are not necessarily indicative of results
to be expected for the year.
2. The financial information presented herein should be read in
conjunction with the consolidated financial statements included in
the Registrant's Annual Report on Form 10-K for the fiscal year
ended June 2, 2000.
3. The Company is involved in certain legal matters primarily
arising in the normal course of business. In the opinion of
management, the Company's liability under any of these matters
would not materially affect its financial condition or
results of operations.
4. The Company's business segments, are the Oxford Shirt Group,
Lanier Clothes, Oxford Slacks, the Oxford Womenswear Group and
corporate and other.
The Shirt Group operations encompass dress and sport shirts, golf
apparel and childrenswear. Lanier Clothes produces suits,
sportcoats, suit separates and dress slacks. Oxford Slacks is a
producer of private label dress and casual slacks and shorts. The
Oxford Womenswear Group is a producer of budget and moderate
priced private label women's apparel. Corporate and other
includes the Company's corporate offices, transportation and
logistics and other costs and services that are not allocated to
operating groups.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Oxford Industries, Inc
Segment Information
Quarters ended September 1, 2000 and August 27, 1999
(unaudited)
Oxford Oxford
Shirt Lanier Oxford Womenswear Corporate
$ in thousands Group Clothes Slacks Group and other Total
------ -------- ------- ------- ---------- -----
2001
----
Sales $61,566 $43,377 $26,734 $72,627 $64 $204,368
Depreciation and amortization 593 415 263 680 251 2,202
EBIT 933 2,981 1,740 4,014 (2,952) 6,716
Interest expense, net 1,108
Earnings before taxes 5,608
Assets 122,494 107,200 47,630 87,737 (16,677) 348,384
Purchase of property, plant and
equipment 362 483 207 137 76 1,265
2000
----
Sales $61,305 $35,949 $23,327 $65,117 $39 $185,737
Depreciation and amortization 579 439 264 547 235 2,064
EBIT 4,768 2,451 1,253 2,650 (2,590) 8,532
Interest expense, net 880
Earnings before taxes 7,652
Assets 108,348 102,017 39,863 88,594 (9,862) 328,960
Purchase of property, plant and
equipment 672 191 248 88 128 1,327
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth items in the Consolidated
Statements of Earnings as a percent of net sales and the percentage
change of those items as compared to the prior year. ($ in thousands;
Percentages are calculated based on actual data, but columns may not
add due to rounding.)
FIRST QUARTER FIRST QUARTER
FY 2001 FY 2000 CHANGE
$000'S % $000'S % $000'S %
------------- ------------- --------------
Net Sales 204,368 100.0 185,737 100.0 18,631 10.0
Cost of goods sold 167,024 81.7 152,037 81.9 14,987 9.9
Gross Profit 37,344 18.3 33,700 18.1 3,644 10.8
S, G and A 30,628 15.0 25,168 13.6 5,460 21.7
EBIT 6,716 3.3 8,532 4.6 (1,816) -21.3
Interest, net 1,108 0.5 880 0.5 228 25.9
Earnings Before Taxes 5,608 2.7 7,652 4.1 (2,044) -26.7
Income taxes 2,131 1.0 2,908 1.6 (777) -26.7
Net Earnings 3,477 1.7 4,744 2.6 (1,267) -26.7
Total Company
Net sales increased 10.0% from the first quarter of the prior
year. The unit sales increase of 13.6% was slightly offset by a 3.1%
decline in the average selling price per unit. The decline in the
average selling price per unit was due to product mix.
Cost of goods sold declined to 81.7% of net sales in the current
quarter from 81.9% in the same period of the prior year. The improved
gross margin was due to higher initial margins and improvements in
manufacturing operations.
Selling, general and administrative (S, G and A) increased to
15.00% of net sales in the current year from 13.6% for the comparable
period last year. The additional expenses of four new marketing
divisions initiated last year, Tommy Hilfiger Women's Golf, Izod Club
Golf, Slates Tailored Clothing and DKNY Kids, were primarily
responsible for the increased S, G and A expense.
Interest expense was 0.5% of net sales in the prior year and in
the current year.
The Company's effective tax rate was 38.0% in the prior year and
in the current year and does not differ significantly from the
Company's statutory rates.
Segment Results
All data with respect to the Company's specific segments included
within "Management Discussion and Analysis" is presented before
applicable intercompany eliminations. Certain prior year information
has been restated to be consistent with the current presentation. ($
in thousands; percentages are calculated based on actual data, but
columns may not add due to rounding.)
FIRST QUARTER FIRST QUARTER
FY 2001 FY 2000 CHANGE
Net Sales
($ In thousands) $000 % $000 % $000 %
------------ ------------- ------------
Oxford Shirt Group 61,566 30.1 61,305 33.0 261 0.4
Lanier Clothes 43,377 21.2 35,949 19.4 7,428 20.7
Oxford Slacks 26,734 13.1 23,327 12.6 3,407 14.6
Womenswear Group 72,627 35.5 65,117 35.1 7,510 11.5
Corporate and Other 64 0.0 39 0.0 25 64.1
-------------- -------------- ------------
Total Net Sales 204,638 100.0 185,737 100.0 18,631 10.0
============== ============== =============
FIRST QUARTER FIRST QUARTER
FY 2001 FY 2000 CHANGE
EBIT
($ In thousands) $000'S % $000'S % $000'S %
----------- ---------- -------------
Oxford Shirt Group 933 1.5 4,768 7.8 (3,835) -80.4
Lanier Clothes 2,981 6.9 2,451 6.8 530 21.6
Oxford Slacks 1,740 6.5 1,253 5.4 487 38.9
Womenswear Group 4,014 5.5 2,650 4.1 1,364 51.5
Corporate and Other (2,952) na (2,590) na (362) 14.0
------------ ----------- -------------
Total EBIT 6,716 3.3 8,532 4.6 (1,816) -21.3
============ ========== =============
Oxford Shirt Group
Sales for the Oxford Shirt Group increased 0.4% to $61,566,000 in
the current year from $61,305,000 in the prior year. The unit sales
volume increase of 4.5% was offset by a 3.9% decline in the average
sales price per unit. Three of the four new marketing divisions
established last year are housed in the Shirt Group. Additional sales
from the new marketing divisions offset declines in existing
divisions, primarily private label dress shirts and sportshirts.
Increased expenses associated with the new marketing divisions,
however, resulted in an 80.4% decline in Earnings Before Interest and
Taxes (EBIT) to $933,000 and were responsible for the Company's
overall earnings decline.
Lanier Clothes
Lanier Clothes reported first quarter sales of $43,377,000, up
20.7% from last year's total of $35,949,000. For the group, the unit
sales increase of 39.8% was offset by a 13.7% decline in the average
selling price per unit. The decline in selling price per unit was due
to product mix. Increases in sales were achieved in branded and
private label divisions with continued strong growth in Nautica and
Geoffrey Beene. EBIT for the group increased 21.6% to $2,981,000.
Pricing pressures resulting from the competitive environment at retail
were offset by diligent attention to expense control.
Oxford Slacks Group
Oxford Slacks posted a first quarter sales increase of 14.6% to
$26,734,000 in the current year from $23,327,000 in the first quarter
of the prior year. The increase in the average unit selling price of
15.9% was slightly offset by a 1.1% decline in the number of units
shipped. The increase was driven by growth in the specialty catalog
and mass merchant areas. Higher gross margins and the leveraging of
operating expenses resulted in a 38.9% increase in EBIT to $1,740,000.
Oxford Womenswear Group
First quarter net sales for the Oxford Womenswear Group increased
11.5% to $72,627,000 in the current year from $65,117,000 in the prior
year. The unit volume increase of 18.7% was partially offset by a
6.1% decline in the average selling price per unit. The decline in
average selling price per unit was due to product mix. The sales
gains were achieved with mass merchants and direct mail retailers.
Higher initial gross margins and improved manufacturing performance
resulted in a 51.5% increase in first quarter EBIT to $4,014,000.
FUTURE OPERATING RESULTS
In light of the difficult retail environment, the Company was
pleased with the first quarter results of three of the operating
groups. However, the Company was disappointed with the results in the
Shirt Group and has taken action to address the situation. Subsequent
to quarter-end, the Company announced a reconfiguration for the
operating divisions that make up the Oxford Shirt Group and made a
number of management changes designed to make the group more
responsive and focused. The expenditures on new marketing initiatives
remain an important part of the Company's strategic plan to increase
the branded component of the business.
The recent under-plan performance of many of the Company's retail
customers will impact most areas of business in the second quarter.
The Company entered the year with the expectation that first half
sales would be flat and that continues to be the case. The second
quarter is expected to produce an earnings decline comparable to the
decline experienced in the first quarter. As was the case last year,
second half results are expected to improve over the first half,
resulting in relatively flat sales and earnings for the full year.
LIQUIDITY AND CAPITAL RESOURCES
Operating Activities
Operating activities used $12,576,000 in the first quarter of the
current year and $1,932,000 in the first quarter of the prior year.
The increase in the usage was primarily due to the sum of decreased
earnings, a larger increase in receivables and a smaller decrease in
inventory, offset by a smaller decrease in trade payables than in the
comparable period of the prior year.
Investing Activities
Investing Activities used $1,319,000 in the first quarter of this
year and $1,268,000 in the same period last year.
Financing Activities
Financing activities generated $12,960,000 in the first quarter
of the current year and $2,072,000 in the first quarter of the prior
year. The increase in generated funds was primarily due to increased
short terms borrowings and a decrease in the purchase and retirement
of the Company's common stock.
On October 2, 2000 the Company's Board of Directors declared a
cash dividend of $0.21 per share, payable on December 2, 2000 to
shareholders of record on November 15, 2000.
During the quarter, the Company purchased and retired 71,400
shares of the Company's common stock acquired in the open market.
Working Capital
Working capital increased from $149,981,000 at the end of the
first quarter of the prior year to $162,935,000 at the end of the 2000
fiscal year and increased to $164,039,000 at the end of the first
quarter of the current year. The ratio of current assets to current
liabilities was 2.1 at the end of the first quarter of the prior year,
2.3 at the end of the 2000 fiscal year and 2.2 at the end of the first
quarter of the current year.
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-term and long-term borrowings. The uses of funds primarily
include working capital requirements, capital expenditures,
acquisitions, stock repurchases, dividends and repayment of short-term
and long-term debt. The Company regularly utilizes committed bank
lines of credit and other uncommitted bank resources to meet working
capital requirements. On September 1, 2000 the Company had available
for its use lines of credit with several lenders aggregating
$52,000,000. The Company has agreed to pay commitment fees for these
available lines of credit. On September 1, 2000, $52,000,000 was in
use under these lines, of which $40,000,000 was long-term. In
addition, the Company has $231,500,000 in uncommitted lines of credit,
of which $143,500,000 is reserved exclusively for letters of credit.
The Company pays no commitment fees for these available lines of
credit. On September 1, 2000, $22,500,000 was in use under these
lines of credit. Maximum borrowings from all these sources during the
current year were $74,500,000 of which $40,000,000 was long-term. The
Company anticipates continued use and availability of both committed
and uncommitted resources as working capital needs may require.
The Company considers possible acquisitions of apparel-related
businesses that are compatible with its long-term strategies. The
Company's Board of Directors has authorized the Company to purchase
shares of the Company's common stock on the open market and in
negotiated trades as conditions and opportunities warrant. There are
no present plans to sell securities (other than through employee stock
option plans and other employee benefits) or enter into off-balance
sheet financing arrangements.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
Certain statements included herein contain forward-looking
statements with respect to anticipated future results, which are
subject to risks and uncertainties that could cause actual results to
differ materially from anticipated results. These risks and
uncertainties include, but are not limited to, general economic and
apparel business conditions, continued retailer and consumer
acceptance of Company products, and global manufacturing costs.
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 contained in the Company's
Annual Report for the fiscal year ended June 2, 2000.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
------------------------------------------
(a) Exhibits.
---------
10(h) 1992 Stock Option Plan.
10(i) Note Agreement between the Company and SunTrust of Georgia
dated August 18, 2000 covering the Company's long term note due
February 18, 2002.
27 Financial Data Schedule.
(b) Reports on Form 8-K.
--------------------
The Registrant did not file any reports on Form 8-K during the
quarter ended September 1, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
OXFORD INDUSTRIES, INC.
-----------------------
(Registrant)
/s/Ben B. Blount, Jr.
--------------------------
Date: October 12, 2000 Ben B. Blount, Jr.
--------------- Chief Financial Officer
