OXFORD INDUSTRIES, INC.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended MARCH 2, 2007
or
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o |
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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)
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Georgia
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58-0831862 |
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.) |
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222 Piedmont Avenue, N.E., Atlanta, Georgia
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30308 |
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(Address of principal executive offices)
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(Zip Code) |
(404) 659-2424
(Registrants 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 þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of accelerated filer and large
accelerated filer in Rule 12b-2 of the Exchange Act.
Large accelerated filer þ Accelerated filer o Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
Yes o No þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as
of the latest practicable date.
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Number of shares outstanding |
Title of each class
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as of April 2, 2007 |
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Common Stock, $1 par value
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17,833,058 |
OXFORD INDUSTRIES, INC.
INDEX TO FORM 10-Q
For the third quarter of fiscal 2007
2
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
Our U.S. Securities and Exchange Commission filings and public announcements often include
forward-looking statements about future events. Generally, the words believe, expect, intend,
estimate, anticipate, project, will and similar expressions identify forward-looking
statements, which generally are not historical in nature. We intend for all such forward-looking
statements contained herein, the entire contents of our website, and all subsequent written and
oral forward-looking statements attributable to us or persons acting on our behalf, to be covered
by the safe harbor provisions for forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934 (which Sections were adopted as part of
the Private Securities Litigation Reform Act of 1995). Important assumptions relating to these
forward-looking statements include, among others, assumptions regarding demand for our products,
expected pricing levels, raw material costs, the timing and cost of planned capital expenditures,
expected outcomes of pending litigation and regulatory actions, competitive conditions, general
economic conditions and expected synergies in connection with acquisitions and joint ventures.
Forward-looking statements reflect our current expectations, based on currently available
information, and are not guarantees of performance. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, these expectations could prove
inaccurate as such statements involve risks and uncertainties, many of which are beyond our ability
to control or predict. Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from those anticipated,
estimated or projected. Important factors relating to these risks and uncertainties include, but
are not limited to, those described in Part I, Item 1A. Risk Factors contained in our fiscal 2006
Form 10-K, as updated by Part II, Item 1A. Risk Factors in this report, and those described from
time to time in our future reports filed with the U.S. Securities and Exchange Commission.
We caution that one should not place undue reliance on forward-looking statements, which are
current only as of the date this report is filed with the U.S. Securities and Exchange Commission.
We disclaim any intention, obligation or duty to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as required by law.
DEFINITIONS
As used in this report, unless the context requires otherwise, our, us and we mean Oxford
Industries, Inc. and its consolidated subsidiaries. Also, the terms FASB, SFAS and SEC mean
the Financial Accounting Standards Board, Statement of Financial Accounting Standards and the U.S.
Securities and Exchange Commission, respectively. Additionally, the terms listed below (or words of
similar import) reflect the respective period noted:
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Fiscal 2009
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52 weeks ending May 29, 2009 |
Fiscal 2008
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52 weeks ending May 30, 2008 |
Fiscal 2007
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52 weeks ending June 1, 2007 |
Fiscal 2006
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52 weeks ended June 2, 2006 |
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Nine months fiscal 2007
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39 weeks ended March 2, 2007 |
Nine months fiscal 2006
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39 weeks ended March 3, 2006 |
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Fourth quarter fiscal 2007
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13 weeks ending June 1, 2007 |
Third quarter fiscal 2007
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13 weeks ended March 2, 2007 |
Second quarter fiscal 2007
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13 weeks ended December 1, 2006 |
First quarter fiscal 2007
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13 weeks ended September 1, 2006 |
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Fourth quarter fiscal 2006
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13 weeks ended June 2, 2006 |
Third quarter fiscal 2006
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13 weeks ended March 3, 2006 |
Second quarter fiscal 2006
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13 weeks ended December 2, 2005 |
First quarter fiscal 2006
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13 weeks ended September 2, 2005 |
3
PART I. FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(in thousands, except per share amounts)
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Third Quarter |
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Nine Months |
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Fiscal 2007 |
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Fiscal 2006 |
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Fiscal 2007 |
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Fiscal 2006 |
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Net sales |
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$ |
266,595 |
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$ |
275,160 |
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$ |
841,660 |
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$ |
821,538 |
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Cost of goods sold |
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158,329 |
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165,294 |
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513,483 |
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503,151 |
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Gross profit |
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108,266 |
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109,866 |
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328,177 |
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318,387 |
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Selling, general and administrative expenses |
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90,393 |
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88,733 |
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265,963 |
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253,937 |
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Amortization of intangible assets |
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1,649 |
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1,853 |
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4,746 |
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5,557 |
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92,042 |
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90,586 |
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270,709 |
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259,494 |
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Royalties and other operating income |
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3,448 |
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3,117 |
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10,234 |
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10,031 |
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Operating income |
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19,672 |
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22,397 |
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67,702 |
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68,924 |
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Interest expense, net |
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5,393 |
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5,983 |
|
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16,836 |
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18,088 |
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Earnings before income taxes |
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14,279 |
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16,414 |
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50,866 |
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50,836 |
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Income taxes |
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4,553 |
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5,308 |
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17,840 |
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17,733 |
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Earnings from continuing operations |
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9,726 |
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11,106 |
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33,026 |
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33,103 |
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Earnings (loss) from discontinued operations, net of taxes |
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14 |
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3,496 |
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(183 |
) |
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6,390 |
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Net earnings |
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$ |
9,740 |
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$ |
14,602 |
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$ |
32,843 |
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$ |
39,493 |
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Earnings from continuing operations per common share: |
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Basic |
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$ |
0.55 |
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$ |
0.63 |
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$ |
1.87 |
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$ |
1.89 |
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Diluted |
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$ |
0.54 |
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$ |
0.63 |
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$ |
1.85 |
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$ |
1.86 |
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Earnings (loss) from discontinued operations per common
share: |
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Basic |
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$ |
0.00 |
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$ |
0.20 |
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$ |
(0.01 |
) |
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$ |
0.37 |
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Diluted |
|
$ |
0.00 |
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$ |
0.20 |
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$ |
(0.01 |
) |
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$ |
0.36 |
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Net earnings per common share: |
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Basic |
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$ |
0.55 |
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$ |
0.83 |
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$ |
1.86 |
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$ |
2.26 |
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Diluted |
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$ |
0.54 |
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$ |
0.82 |
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$ |
1.84 |
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$ |
2.22 |
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Weighted average common shares outstanding: |
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Basic |
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17,695 |
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17,533 |
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17,647 |
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17,471 |
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Dilutive impact of options and restricted shares |
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202 |
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235 |
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219 |
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280 |
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Diluted |
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17,897 |
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17,768 |
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17,866 |
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17,751 |
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Dividends per common share |
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$ |
0.18 |
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$ |
0.15 |
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$ |
0.48 |
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$ |
0.42 |
|
See accompanying notes.
4
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except per share amounts)
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March 2, |
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June 2, |
|
March 3, |
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2007 |
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2006 |
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2006 |
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ASSETS
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Current Assets: |
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|
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Cash and cash equivalents |
|
$ |
15,808 |
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|
$ |
10,479 |
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$ |
10,004 |
|
Receivables, net |
|
|
141,267 |
|
|
|
144,079 |
|
|
|
153,549 |
|
Inventories |
|
|
160,845 |
|
|
|
123,594 |
|
|
|
133,388 |
|
Prepaid expenses |
|
|
19,328 |
|
|
|
20,214 |
|
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|
21,351 |
|
Current assets related to discontinued operations, net |
|
|
|
|
|
|
59,215 |
|
|
|
88,281 |
|
|
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|
Total current assets |
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337,248 |
|
|
|
357,581 |
|
|
|
406,573 |
|
Property, plant and equipment, net |
|
|
84,212 |
|
|
|
73,663 |
|
|
|
68,910 |
|
Goodwill, net |
|
|
201,010 |
|
|
|
199,232 |
|
|
|
181,419 |
|
Intangible assets, net |
|
|
233,779 |
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|
|
234,453 |
|
|
|
232,960 |
|
Other non-current assets, net |
|
|
30,208 |
|
|
|
20,666 |
|
|
|
21,175 |
|
Non-current assets related to discontinued operations, net |
|
|
|
|
|
|
|
|
|
|
4,784 |
|
|
|
|
Total Assets |
|
$ |
886,457 |
|
|
$ |
885,595 |
|
|
$ |
915,821 |
|
|
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|
|
|
|
|
|
|
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LIABILITIES AND SHAREHOLDERS EQUITY
|
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
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Trade accounts payable and other accrued expenses |
|
$ |
105,800 |
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$ |
105,038 |
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$ |
94,175 |
|
Accrued compensation |
|
|
23,612 |
|
|
|
26,754 |
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|
|
24,344 |
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Additional acquisition cost payable |
|
|
|
|
|
|
11,897 |
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|
|
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Dividends payable |
|
|
|
|
|
|
2,646 |
|
|
|
2,643 |
|
Income taxes payable |
|
|
1,697 |
|
|
|
3,138 |
|
|
|
5,668 |
|
Short-term debt and current maturities of long-term debt |
|
|
399 |
|
|
|
130 |
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|
1,492 |
|
Current liabilities related to discontinued operations |
|
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|
|
|
|
30,716 |
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|
|
17,678 |
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Total current liabilities |
|
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131,508 |
|
|
|
180,319 |
|
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|
146,000 |
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Long-term debt, less current maturities |
|
|
208,550 |
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|
200,023 |
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|
|
309,483 |
|
Other non-current liabilities |
|
|
36,149 |
|
|
|
29,979 |
|
|
|
28,440 |
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Deferred income taxes |
|
|
78,654 |
|
|
|
76,573 |
|
|
|
74,579 |
|
Non-current liabilities related to discontinued operations |
|
|
|
|
|
|
|
|
|
|
47 |
|
Commitments and contingencies |
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Shareholders Equity: |
|
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|
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|
|
|
|
|
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Preferred stock, $1.00 par value; 30,000 authorized and
none issued and outstanding at March 2, 2007; June 2,
2006; and March 3, 2006 |
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Common stock, $1.00 par value; 60,000 authorized and
17,833 issued and outstanding at March 2, 2007; 17,646
issued and outstanding at June 2, 2006; and 17,613 issued
and outstanding at March 3, 2006 |
|
|
17,833 |
|
|
|
17,646 |
|
|
|
17,613 |
|
Additional paid-in capital |
|
|
80,865 |
|
|
|
74,812 |
|
|
|
72,232 |
|
Retained earnings |
|
|
325,286 |
|
|
|
300,973 |
|
|
|
272,938 |
|
Accumulated other comprehensive income (loss) |
|
|
7,612 |
|
|
|
5,270 |
|
|
|
(5,511 |
) |
|
|
|
Total shareholders equity |
|
|
431,596 |
|
|
|
398,701 |
|
|
|
357,272 |
|
|
|
|
Total Liabilities and Shareholders Equity |
|
$ |
886,457 |
|
|
$ |
885,595 |
|
|
$ |
915,821 |
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|
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|
See accompanying notes.
5
OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
|
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|
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|
Nine Months |
|
|
Fiscal 2007 |
|
Fiscal 2006 |
|
|
|
Cash Flows From Operating Activities: |
|
|
|
|
|
|
|
|
Earnings from continuing operations |
|
$ |
33,026 |
|
|
$ |
33,103 |
|
Adjustments to reconcile earnings from continuing operations to net cash
provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
12,104 |
|
|
|
11,046 |
|
Amortization of intangible assets |
|
|
4,746 |
|
|
|
5,557 |
|
Amortization of deferred financing costs and bond discount |
|
|
1,849 |
|
|
|
1,939 |
|
Stock compensation expense |
|
|
2,028 |
|
|
|
1,732 |
|
Loss on sale of property, plant and equipment |
|
|
419 |
|
|
|
243 |
|
Equity loss (income) from unconsolidated entities |
|
|
(1,499 |
) |
|
|
340 |
|
Deferred income taxes |
|
|
(347 |
) |
|
|
(2,324 |
) |
Changes in working capital: |
|
|
|
|
|
|
|
|
Receivables |
|
|
4,335 |
|
|
|
(6,150 |
) |
Inventories |
|
|
(36,552 |
) |
|
|
13,038 |
|
Prepaid expenses |
|
|
145 |
|
|
|
(1,562 |
) |
Current liabilities |
|
|
(5,004 |
) |
|
|
(36,682 |
) |
Other non-current assets |
|
|
(795 |
) |
|
|
(2,953 |
) |
Other non-current liabilities |
|
|
6,145 |
|
|
|
4,904 |
|
|
|
|
Net cash provided by (used in) operating activities |
|
|
20,600 |
|
|
|
22,231 |
|
Cash Flows From Investing Activities: |
|
|
|
|
|
|
|
|
Acquisitions, net of cash acquired |
|
|
(13,260 |
) |
|
|
(11,501 |
) |
Investment in unconsolidated entity |
|
|
(9,090 |
) |
|
|
|
|
Distribution from unconsolidated entity |
|
|
|
|
|
|
2,026 |
|
Purchases of property, plant and equipment |
|
|
(23,072 |
) |
|
|
(16,554 |
) |
Proceeds from sale of property, plant and equipment |
|
|
130 |
|
|
|
184 |
|
|
|
|
Net cash provided by (used in) investing activities |
|
|
(45,292 |
) |
|
|
(25,845 |
) |
Cash Flows From Financing Activities: |
|
|
|
|
|
|
|
|
Repayment of financing arrangements |
|
|
(160,921 |
) |
|
|
(269,910 |
) |
Proceeds from financing arrangements |
|
|
169,194 |
|
|
|
288,382 |
|
Proceeds from issuance of common stock including tax benefits |
|
|
4,212 |
|
|
|
5,052 |
|
Dividends on common stock |
|
|
(11,175 |
) |
|
|
(6,889 |
) |
|
|
|
Net cash provided by (used in) financing activities |
|
|
1,310 |
|
|
|
16,635 |
|
Cash Flows From Discontinued Operations: |
|
|
|
|
|
|
|
|
Net operating cash flows provided by (used in) discontinued operations |
|
|
28,316 |
|
|
|
(8,864 |
) |
Net investing cash flows provided by (used in) discontinued operations |
|
|
|
|
|
|
(37 |
) |
|
|
|
Net cash provided by (used in) discontinued operations |
|
|
28,316 |
|
|
|
(8,901 |
) |
|
|
|
Net change in cash and cash equivalents |
|
|
4,934 |
|
|
|
4,120 |
|
Effect of foreign currency translation on cash and cash equivalents |
|
|
395 |
|
|
|
(615 |
) |
Cash and cash equivalents at the beginning of period |
|
|
10,479 |
|
|
|
6,499 |
|
|
|
|
Cash and cash equivalents at the end of period |
|
$ |
15,808 |
|
|
$ |
10,004 |
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest, net |
|
$ |
11,689 |
|
|
$ |
15,145 |
|
Cash paid for income taxes |
|
$ |
24,334 |
|
|
$ |
29,443 |
|
See accompanying notes.
6
OXFORD INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THIRD QUARTER FISCAL 2007
1. |
|
Basis of Presentation: The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in
the United States for interim financial reporting and the instructions of Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United States. We
believe the accompanying unaudited condensed consolidated financial statements reflect all
normal, recurring adjustments that are necessary for a fair presentation of our financial
position and results of operations for the periods presented. Results of operations for the
interim periods presented are not necessarily indicative of results to be expected for our
fiscal year primarily due to the impact of seasonality on our business. The accounting
policies applied during the interim periods presented are consistent with the significant and
critical accounting policies as described in our fiscal 2006 Form 10-K. The information
included in this Form 10-Q should be read in conjunction with Managements Discussion and
Analysis of Financial Condition and Results of Operations and the financial statements and
notes thereto included in our fiscal 2006 Form 10-K. |
|
|
|
As disclosed in our fiscal 2006 Form 10-K, we sold substantially all of the assets of our
Womenswear Group on June 2, 2006. Therefore, the results of operations of the Womenswear Group
have been reported as discontinued operations in our consolidated statements of earnings. The
assets and liabilities related to the Womenswear Group for all periods presented have been
reclassified to current assets, non-current assets, current liabilities and non-current
liabilities related to discontinued operations, as applicable. |
|
|
|
Certain amounts in our prior year consolidated financial statements have been reclassified to
conform to the current years presentation. |
|
2. |
|
Inventories: The components of inventories as of the dates specified are summarized as
follows (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 2, 2007 |
|
|
June 2, 2006 |
|
|
March 3, 2006 |
|
|
|
|
Finished goods |
|
$ |
160,452 |
|
|
$ |
125,466 |
|
|
$ |
141,040 |
|
Work in process |
|
|
14,594 |
|
|
|
9,774 |
|
|
|
7,820 |
|
Fabric, trim and supplies |
|
|
24,144 |
|
|
|
26,308 |
|
|
|
22,367 |
|
LIFO reserve |
|
|
(38,345 |
) |
|
|
(37,954 |
) |
|
|
(37,839 |
) |
|
|
|
Total |
|
$ |
160,845 |
|
|
$ |
123,594 |
|
|
$ |
133,388 |
|
|
|
|
3. |
|
Debt: The following table details our debt as of the dates specified (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 2, |
|
June 2, |
|
March 3, |
|
|
2007 |
|
2006 |
|
2006 |
|
$280 million U.S. Secured Revolving Credit Facility
(U.S. Revolver), which accrues interest, unused line
fees and letter of credit fees based upon a pricing
grid which is tied to certain debt ratios, requires
interest payments monthly with principal due at
maturity (July 2009), and is collateralized by
substantially all the assets of Oxford Industries, Inc.
and our consolidated domestic subsidiaries |
|
$ |
9,300 |
|
|
$ |
900 |
|
|
$ |
110,400 |
|
|
£12 million Senior Secured Revolving Credit Facility
(U.K. Revolver), which accrues interest at the banks
base rate plus 1.0%, requires interest payments monthly
with principal payable on demand or at maturity (July
2007), and is collateralized by substantially all the
United Kingdom assets of Ben Sherman |
|
|
|
|
|
|
102 |
|
|
|
1,456 |
|
|
$200 million Senior Unsecured Notes (Senior Unsecured
Notes), which accrue interest at 8.875% (effective
interest rate of 9.0%) and require interest payments
semi-annually on June 1 and December 1 of each year,
require payment of principal at maturity (June 2011),
are subject to certain prepayment penalties and are
guaranteed by our consolidated domestic subsidiaries |
|
|
200,000 |
|
|
|
200,000 |
|
|
|
200,000 |
|
|
Other debt |
|
|
399 |
|
|
|
35 |
|
|
|
47 |
|
|
Total debt |
|
|
209,699 |
|
|
|
201,037 |
|
|
|
311,903 |
|
|
Unamortized discount on Senior Unsecured Notes |
|
|
(750 |
) |
|
|
(884 |
) |
|
|
(928 |
) |
|
Short-term debt and current maturities of long-term debt |
|
|
(399 |
) |
|
|
(130 |
) |
|
|
(1,492 |
) |
|
Long-term debt, less current maturities |
|
$ |
208,550 |
|
|
$ |
200,023 |
|
|
$ |
309,483 |
|
|
7
|
|
The U.S. Revolver, the U.K. Revolver and the Senior Unsecured Notes each include certain debt
covenant restrictions that require us or our subsidiaries to maintain certain financial ratios that
we believe are customary for similar facilities. The U.S. Revolver also includes limitations on
certain restricted payments such as earn-outs, payment of dividends and prepayment of debt. As of
March 2, 2007, we were compliant with all financial covenants and restricted payment clauses
related to our debt agreements. |
|
|
|
Our U.S. Revolver and U.K. Revolver are used to finance trade letters of credit and standby letters
of credit, as well as provide funding for other operating activities and acquisitions, if any. As
of March 2, 2007, approximately $58.3 million of trade letters of credit and other limitations on
availability were outstanding against our U.S. Revolver and our U.K. Revolver. The combined net
availability under our U.S. Revolver and U.K. Revolver agreements was approximately $235.7 million
as of March 2, 2007. |
|
4. |
|
Restructuring Charges: During the third quarter of fiscal 2007 and the third and fourth
quarters of fiscal 2006, we incurred certain charges related to restructuring in our
Menswear Group as discussed below. |
|
|
|
Fiscal 2007 Restructuring Charges |
|
|
|
During the third quarter of fiscal 2007, we incurred severance charges of $1.4 million and $0.5
million in Corporate and Other and our Menswear Group, respectively. The impact of these severance
payments in the third quarter of fiscal 2007 was included in selling, general and administrative
expenses. Approximately $0.4 million of the amount in Corporate and Other was related to the
acceleration of unvested restricted stock awards which would have otherwise been forfeited by the
employees. |
|
|
|
Fiscal 2006 Restructuring and Asset Impairment Charges |
|
|
|
During the third quarter of fiscal 2006, we decided to close certain of our manufacturing plants in
the Dominican Republic and Honduras, all of which were leased from third parties and to shut down
our support functions at our Monroe, Georgia facility. The facilities in the Dominican Republic
were closed during the third quarter of fiscal 2006 and the facility in Honduras was closed in the
fourth quarter of fiscal 2006. The support functions at our Monroe, Georgia facility ceased and
were consolidated with the support functions of our Lyons, Georgia facility during the fourth
quarter of fiscal 2006. |
|
|
|
As a result of these decisions, we wrote down the value of certain machinery, equipment and other
assets, sold certain equipment, and incurred certain severance costs during the third quarter of
fiscal 2006. The total charge for these items in the third quarter of fiscal 2006 was $1.0 million,
substantially all of which was recognized in cost of goods sold. Fair value of the machinery and
equipment was determined for the assets based on the proceeds expected to be received upon the
disposition of the machinery and equipment. Additionally, operating losses at these facilities that
were closed during fiscal 2006 totaled approximately $0.6 million during the third quarter of
fiscal 2006. An additional charge of approximately $1.8 million related to these decisions was
recognized in the fourth quarter of fiscal 2006. |
|
5. |
|
Comprehensive Income: Comprehensive income, which reflects the effects of foreign currency
translation adjustments, is calculated as follows for the periods presented (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Nine Months |
|
|
Fiscal 2007 |
|
Fiscal 2006 |
|
Fiscal 2007 |
|
Fiscal 2006 |
|
|
|
Net earnings |
|
$ |
9,740 |
|
|
$ |
14,602 |
|
|
$ |
32,843 |
|
|
$ |
39,493 |
|
Gain (loss) on foreign currency translation, net of tax |
|
|
(1,900 |
) |
|
|
1,588 |
|
|
|
2,342 |
|
|
|
(5,809 |
) |
|
|
|
Comprehensive income |
|
$ |
7,840 |
|
|
$ |
16,190 |
|
|
$ |
35,185 |
|
|
$ |
33,684 |
|
|
|
|
6. |
|
Stock Compensation: In December 2004, the FASB issued FASB Statement No. 123 (revised
2004), Share-Based Payment (FAS 123R), which is a revision of FASB Statement No. 123,
Accounting for Stock-Based Compensation (FAS 123). FAS 123R supersedes APB Opinion No. 25,
Accounting for Stock Issued to Employees (APB 25), and amends FASB Statement No. 95,
Statement of Cash Flows. Generally, the approach in FAS 123R is similar to the approach
described in FAS 123. However, FAS 123R requires all share-based payments to employees,
including grants of employee stock options, to be recognized in the consolidated statements
of earnings based on their fair values. Pro forma disclosure is no longer an alternative. |
|
|
|
We adopted FAS 123R on June 3, 2006 and applied the modified prospective transition method. Under
this transition method, we (1) did not restate any prior periods and (2) are recognizing
compensation expense for all share-based payment awards that were outstanding, but not yet
vested, as of June 3, 2006, based upon the same estimated grant-date fair values and service
periods used to prepare our FAS 123 pro forma disclosures. |
8
At March 2, 2007, we had options or awards outstanding under certain plans as further described
in our fiscal 2006 Form 10-K. As permitted by FAS 123, we had previously accounted for
share-based payments to employees using APB 25s intrinsic value method. Accordingly, no
stock-based employee compensation costs for any options were reflected in net earnings unless the
options were modified, as all options granted under our plans had an exercise price equal to the
market value of the underlying common stock on the date of grant. In fiscal 2005, we transitioned
from the use of options to performance and service based restricted stock awards as the primary
form of stock-based compensation granted to employees and members of our Board of Directors.
During the third quarter and nine months of fiscal 2007, we recognized stock compensation expense
of approximately $0.4 million and $2.0 million, respectively, in earnings from continuing
operations. During the third quarter of fiscal 2007, this expense consists of approximately $0.1
million related to restricted stock awards, which would have been recognized under FAS 123R or
APB 25, and approximately $0.3 million (or $0.2 million after tax and $0.01 per common share
after tax) related to stock options and our employee stock purchase plan, which would not have
been expensed under APB 25. During the nine months of fiscal 2007, this expense consists of
approximately $1.2 million related to restricted stock awards, which would have been recognized
under FAS 123R or APB 25, and approximately $0.8 million (or $0.5 million after tax and $0.03 per
common share after tax) related to stock options and our employee stock purchase plan, which
would not have been expensed under APB 25. The income tax benefit related to the compensation
cost was approximately $0.1 million and $0.3 million during the third quarter of fiscal 2007 and
fiscal 2006, respectively, and $0.7 million and $0.8 million during the nine months of fiscal
2007 and fiscal 2006, respectively. The adoption of FAS 123R resulted in an increase in cash flow
from operations and a decrease in cash flow from financing activities of approximately $1.0
million during the nine months of fiscal 2007.
The following table illustrates the effect on earnings from continuing operations and net
earnings in the third quarter and nine months of fiscal 2006, if we had applied the fair value
recognition provisions of FAS 123R to stock-based employee compensation (in thousands, except per
share amounts). For purposes of this pro forma disclosure, the value of the options is estimated
using a Black-Scholes option-pricing model and amortized over the option vesting period.
|
|
|
|
|
|
|
|
|
|
|
Third |
|
Nine |
|
|
Quarter |
|
Months |
|
|
Fiscal 2006 |
|
Fiscal 2006 |
|
|
|
Earnings from continuing operations, as reported |
|
$ |
11,106 |
|
|
$ |
33,103 |
|
Add: Total stock-based employee compensation expense recognized in
continuing operations as determined under intrinsic value method for
all awards, net of related tax effects |
|
|
356 |
|
|
|
999 |
|
Deduct: Total stock-based employee compensation expense to be
recognized in continuing operations determined under fair value based
method for all awards, net of related tax effects |
|
|
(531 |
) |
|
|
(1,508 |
) |
|
|
|
Pro forma earnings from continuing operations |
|
$ |
10,931 |
|
|
$ |
32,594 |
|
|
|
|
Basic earnings from continuing operations per common share as reported |
|
$ |
0.63 |
|
|
$ |
1.89 |
|
Pro forma basic earnings from continuing operations per common share |
|
$ |
0.62 |
|
|
$ |
1.87 |
|
Diluted earnings from continuing operations per common share as reported |
|
$ |
0.63 |
|
|
$ |
1.86 |
|
Pro forma diluted earnings from continuing operations per common share |
|
$ |
0.62 |
|
|
$ |
1.84 |
|
9
|
|
|
|
|
|
|
|
|
|
|
Third |
|
Nine |
|
|
Quarter |
|
Months |
|
|
Fiscal 2006 |
|
Fiscal 2006 |
Net earnings as reported |
|
$ |
14,602 |
|
|
$ |
39,493 |
|
Add: Total stock-based employee compensation
expense recognized in net earnings as determined
under intrinsic value method for all awards, net
of related tax effects |
|
|
398 |
|
|
|
1,131 |
|
Deduct: Total stock-based employee compensation
expense to be recognized in net earnings
determined under fair value based method for all
awards, net of related tax effects |
|
|
(598 |
) |
|
|
(1,715 |
) |
|
|
|
Pro forma net earnings |
|
$ |
14,402 |
|
|
$ |
38,909 |
|
|
|
|
Basic net earnings per common share as reported |
|
$ |
0.83 |
|
|
$ |
2.26 |
|
Pro forma basic net earnings per common share |
|
$ |
0.82 |
|
|
$ |
2.23 |
|
Diluted net earnings per common share as reported |
|
$ |
0.82 |
|
|
$ |
2.22 |
|
Pro forma diluted net earnings per common share |
|
$ |
0.81 |
|
|
$ |
2.20 |
|
The following table summarizes information about the outstanding stock options as of March 2,
2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Exercise |
|
Grant Date |
|
Number |
|
|
Date of Option Grant |
|
Shares |
|
Price |
|
Fair Value |
|
Exercisable |
|
Expiration Date |
|
July 1998 |
|
|
21,000 |
|
|
$ |
17.83 |
|
|
$ |
5.16 |
|
|
|
21,000 |
|
|
July 2008 |
July 1999 |
|
|
24,100 |
|
|
|
13.94 |
|
|
|
4.70 |
|
|
|
24,100 |
|
|
July 2009 |
July 2000 |
|
|
23,920 |
|
|
|
8.63 |
|
|
|
2.03 |
|
|
|
23,920 |
|
|
July 2010 |
July 2001 |
|
|
26,750 |
|
|
|
10.73 |
|
|
|
3.18 |
|
|
|
26,750 |
|
|
July 2011 |
July 2002 |
|
|
70,640 |
|
|
|
11.73 |
|
|
|
3.25 |
|
|
|
37,360 |
|
|
July 2012 |
August 2003 |
|
|
119,040 |
|
|
|
26.44 |
|
|
|
11.57 |
|
|
|
44,120 |
|
|
August 2013 |
December 2003 |
|
|
89,050 |
|
|
|
32.75 |
|
|
|
14.17 |
|
|
|
44,450 |
|
|
December 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
374,500 |
|
|
|
|
|
|
|
|
|
|
|
221,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below summarizes options activity during the nine months of fiscal 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
Average |
|
|
|
|
|
|
Exercise |
|
|
Shares |
|
Price |
|
|
|
Outstanding at June 2, 2006 |
|
|
533,180 |
|
|
$ |
22 |
|
Granted |
|
|
|
|
|
|
|
|
Exercised |
|
|
(131,940 |
) |
|
|
20 |
|
Forfeited |
|
|
(26,740 |
) |
|
|
29 |
|
|
|
|
|
|
|
|
|
|
Outstanding at March 2, 2007 |
|
|
374,500 |
|
|
$ |
22 |
|
|
|
|
|
|
|
|
|
|
Exercisable at March 2, 2007 |
|
|
221,700 |
|
|
$ |
19 |
|
|
|
|
|
|
|
|
|
|
The total intrinsic value for options exercised during the nine months of fiscal 2007 and the
nine months of fiscal 2006 was approximately $3.3 million and $4.8 million, respectively. The
total fair value for options that vested during the nine months of fiscal 2007 and the nine
months of fiscal 2006 was approximately $1.8 million and $1.8 million, respectively. The
aggregate intrinsic value for all options outstanding and exercisable at March 2, 2007 was
approximately $9.6 million and $6.2 million, respectively.
As of March 2, 2007, there was approximately $1.6 million of unrecognized compensation cost
related to unvested share-based compensation awards which have been made. That cost is expected
to be recognized over fiscal 2008 and fiscal 2009. Additionally, approximately $1.5 million of
compensation cost related to unvested stock options will be recognized over fiscal 2008 and
fiscal 2009.
Grants of restricted stock and restricted share units are made to certain officers, key employees
and members of our Board of Directors under our Long-Term Stock Incentive Plan. The following
table summarizes information about the unvested stock as of March 2, 2007.
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Price on Date of |
|
|
Restricted Stock Grant |
|
Number of Shares |
|
Grant |
|
Vesting Date |
|
Grants Based on
Fiscal 2005
Performance Awards |
|
|
55,200 |
|
|
$ |
42 |
|
|
June 2008 |
Grants Based on
Fiscal 2006
Performance Awards |
|
|
35,435 |
|
|
$ |
42 |
|
|
June 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below summarizes the restricted stock award activity during the nine months of fiscal
2007:
|
|
|
|
|
|
|
Shares |
Outstanding at June 2, 2006 |
|
|
67,125 |
|
Issued |
|
|
40,440 |
|
Vested |
|
|
(11,811 |
) |
Forfeited |
|
|
(5,119 |
) |
|
|
|
|
|
Outstanding at March 2, 2007 |
|
|
90,635 |
|
|
|
|
|
|
|
|
Additionally, during the first quarter of fiscal 2007, we awarded performance share awards and
restricted share unit awards to certain officers, key employees and members of our Board of
Directors, pursuant to which a maximum total of approximately 0.1 million shares of our common
stock may be granted (initially in the form of restricted shares and restricted share units)
subject to specified operating performance measures being met for fiscal 2007 and the vesting
conditions with respect to the restricted shares and restricted share units being satisfied,
which generally will not occur prior to June 1, 2010. |
|
7. |
|
Segment Information: In our continuing operations, we have two operating segments for
purposes of allocating resources and assessing performance. The Menswear Group produces
branded, including Ben Sherman, and private label dress shirts, sport shirts, dress slacks,
casual slacks, suits, sportcoats, suit separates, walkshorts, golf apparel, outerwear,
sweaters, jeans, swimwear, footwear and headwear, licenses its brands for accessories and
other products, and operates retail stores. The Tommy Bahama Group produces lifestyle branded
casual attire, operates retail stores and restaurants and licenses its brands for accessories,
footwear, furniture and other products. |
|
|
|
Corporate and Other is a reconciling category for reporting purposes and includes our corporate
offices, substantially all financing activities, LIFO inventory accounting adjustments and other
costs that are not allocated to the operating groups. Total assets for Corporate and Other includes
the LIFO inventory reserve of $38.3 million, $38.0 million and $37.8 million at March 2, 2007, June
2, 2006 and March 3, 2006, respectively. |
|
|
|
As discussed in note 3 in our consolidated financial statements included in our fiscal 2006 Form
10-K, we sold substantially all of the assets of our Womenswear Group operations at the end of
fiscal 2006. The Womenswear Group produced private label womens sportswear separates, coordinated
sportswear, outerwear, dresses and swimwear. The operating results of the Womenswear Group have not
been included in segment information as all amounts were reclassified to discontinued operations.
The information below presents certain information about our segments for the periods or as of the
dates specified (in thousands). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Nine Months |
|
|
Fiscal 2007 |
|
Fiscal 2006 |
|
Fiscal 2007 |
|
Fiscal 2006 |
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
147,006 |
|
|
$ |
166,109 |
|
|
$ |
508,884 |
|
|
$ |
530,517 |
|
Tommy Bahama Group |
|
|
119,215 |
|
|
|
108,590 |
|
|
|
331,170 |
|
|
|
290,522 |
|
Corporate and Other |
|
|
374 |
|
|
|
461 |
|
|
|
1,606 |
|
|
|
499 |
|
|
|
|
Total |
|
$ |
266,595 |
|
|
$ |
275,160 |
|
|
$ |
841,660 |
|
|
$ |
821,538 |
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Nine Months |
|
|
Fiscal 2007 |
|
Fiscal 2006 |
|
Fiscal 2007 |
|
Fiscal 2006 |
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
1,112 |
|
|
$ |
1,013 |
|
|
$ |
3,111 |
|
|
$ |
2,939 |
|
Tommy Bahama Group |
|
|
3,245 |
|
|
|
2,752 |
|
|
|
8,679 |
|
|
|
7,812 |
|
Corporate and Other |
|
|
105 |
|
|
|
99 |
|
|
|
314 |
|
|
|
295 |
|
|
|
|
Total |
|
$ |
4,462 |
|
|
$ |
3,864 |
|
|
$ |
12,104 |
|
|
$ |
11,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of Intangible Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
905 |
|
|
$ |
812 |
|
|
$ |
2,515 |
|
|
$ |
2,432 |
|
Tommy Bahama Group |
|
|
744 |
|
|
|
1,041 |
|
|
|
2,231 |
|
|
|
3,125 |
|
|
|
|
Total |
|
$ |
1,649 |
|
|
$ |
1,853 |
|
|
$ |
4,746 |
|
|
$ |
5,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
2,662 |
|
|
$ |
6,410 |
|
|
$ |
26,963 |
|
|
$ |
37,382 |
|
Tommy Bahama Group |
|
|
22,234 |
|
|
|
19,747 |
|
|
|
52,996 |
|
|
|
44,213 |
|
Corporate and Other |
|
|
(5,224 |
) |
|
|
(3,760 |
) |
|
|
(12,257 |
) |
|
|
(12,671 |
) |
|
|
|
Total Operating Income |
|
|
19,672 |
|
|
|
22,397 |
|
|
|
67,702 |
|
|
|
68,924 |
|
Interest Expense, net |
|
|
5,393 |
|
|
|
5,983 |
|
|
|
16,836 |
|
|
|
18,088 |
|
|
|
|
Earnings before income taxes |
|
$ |
14,279 |
|
|
$ |
16,414 |
|
|
$ |
50,866 |
|
|
$ |
50,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 2, |
|
June 2, |
|
March 3, |
|
|
2007 |
|
2006 |
|
2006 |
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
432,137 |
|
|
$ |
398,930 |
|
|
$ |
406,640 |
|
Tommy Bahama Group |
|
|
456,612 |
|
|
|
423,376 |
|
|
|
409,719 |
|
Womenswear Group (discontinued) |
|
|
|
|
|
|
59,215 |
|
|
|
93,065 |
|
Corporate and Other |
|
|
(2,292 |
) |
|
|
4,074 |
|
|
|
6,397 |
|
|
|
|
Total |
|
$ |
886,457 |
|
|
$ |
885,595 |
|
|
$ |
915,821 |
|
|
|
|
8. |
|
Consolidating Financial Data of Subsidiary Guarantors: Our Senior Unsecured Notes are
guaranteed by our wholly owned domestic subsidiaries (Subsidiary Guarantors). All
guarantees are full and unconditional. Non-guarantors consist of our subsidiaries which are
organized outside of the United States and any subsidiaries which are not wholly-owned. We
use the equity method with respect to investment in subsidiaries included in other non-current
assets in our condensed consolidating financial statements. Set forth below are our unaudited
condensed consolidating balance sheets as of March 2, 2007, June 2, 2006 and March 3, 2006,
our unaudited condensed consolidating statements of earnings for the third quarter and nine
months of fiscal 2007 and fiscal 2006 and our unaudited condensed consolidating statements of
cash flows for the nine months of fiscal 2007 and fiscal 2006 (in thousands). |
12
OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
March 2, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
Industries |
|
Subsidiary |
|
Non- |
|
Consolidating |
|
Consolidated |
|
|
(Parent) |
|
Guarantors |
|
Guarantors |
|
Adjustments |
|
Total |
|
|
|
ASSETS
|
Cash and cash equivalents |
|
$ |
1,354 |
|
|
$ |
966 |
|
|
$ |
13,488 |
|
|
$ |
|
|
|
$ |
15,808 |
|
Receivables, net |
|
|
60,906 |
|
|
|
55,933 |
|
|
|
28,536 |
|
|
|
(4,108 |
) |
|
|
141,267 |
|
Inventories |
|
|
72,412 |
|
|
|
70,820 |
|
|
|
18,244 |
|
|
|
(631 |
) |
|
|
160,845 |
|
Prepaid expenses |
|
|
8,725 |
|
|
|
7,642 |
|
|
|
2,961 |
|
|
|
|
|
|
|
19,328 |
|
|
|
|
Total current assets |
|
|
143,397 |
|
|
|
135,361 |
|
|
|
63,229 |
|
|
|
(4,739 |
) |
|
|
337,248 |
|
Property, plant and equipment, net |
|
|
9,855 |
|
|
|
65,399 |
|
|
|
8,958 |
|
|
|
|
|
|
|
84,212 |
|
Goodwill, net |
|
|
1,847 |
|
|
|
148,556 |
|
|
|
50,607 |
|
|
|
|
|
|
|
201,010 |
|
Intangible assets, net |
|
|
1,390 |
|
|
|
137,144 |
|
|
|
95,245 |
|
|
|
|
|
|
|
233,779 |
|
Other non-current assets, net |
|
|
719,706 |
|
|
|
150,244 |
|
|
|
1,335 |
|
|
|
(841,077 |
) |
|
|
30,208 |
|
|
|
|
Total Assets |
|
$ |
876,195 |
|
|
$ |
636,704 |
|
|
$ |
219,374 |
|
|
$ |
(845,816 |
) |
|
$ |
886,457 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
Current liabilities |
|
$ |
43,741 |
|
|
$ |
61,016 |
|
|
$ |
30,239 |
|
|
$ |
(3,488 |
) |
|
$ |
131,508 |
|
Long-term debt, less current portion |
|
|
208,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
208,550 |
|
Non-current liabilities |
|
|
193,627 |
|
|
|
(160,231 |
) |
|
|
111,902 |
|
|
|
(109,149 |
) |
|
|
36,149 |
|
Deferred income taxes |
|
|
(1,319 |
) |
|
|
46,666 |
|
|
|
33,307 |
|
|
|
|
|
|
|
78,654 |
|
Total shareholders/invested equity |
|
|
431,596 |
|
|
|
689,253 |
|
|
|
43,926 |
|
|
|
(733,179 |
) |
|
|
431,596 |
|
|
|
|
Total Liabilities and Shareholders/Invested
Equity |
|
$ |
876,195 |
|
|
$ |
636,704 |
|
|
$ |
219,374 |
|
|
$ |
(845,816 |
) |
|
$ |
886,457 |
|
|
|
|
June 2, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
Industries |
|
Subsidiary |
|
Non- |
|
Consolidating |
|
Consolidated |
|
|
(Parent) |
|
Guarantors |
|
Guarantors |
|
Adjustments |
|
Total |
|
|
|
ASSETS
|
Cash and cash equivalents |
|
$ |
5,175 |
|
|
$ |
1,134 |
|
|
$ |
4,181 |
|
|
$ |
(11 |
) |
|
$ |
10,479 |
|
Receivables, net |
|
|
61,428 |
|
|
|
57,785 |
|
|
|
39,009 |
|
|
|
(14,143 |
) |
|
|
144,079 |
|
Inventories |
|
|
58,924 |
|
|
|
50,880 |
|
|
|
14,546 |
|
|
|
(756 |
) |
|
|
123,594 |
|
Prepaid expenses |
|
|
8,959 |
|
|
|
7,321 |
|
|
|
3,934 |
|
|
|
|
|
|
|
20,214 |
|
Current assets related to discontinued
operations, net |
|
|
52,065 |
|
|
|
7,150 |
|
|
|
|
|
|
|
|
|
|
|
59,215 |
|
|
|
|
Total current assets |
|
|
186,551 |
|
|
|
124,270 |
|
|
|
61,670 |
|
|
|
(14,910 |
) |
|
|
357,581 |
|
Property, plant and equipment, net |
|
|
11,122 |
|
|
|
53,648 |
|
|
|
8,893 |
|
|
|
|
|
|
|
73,663 |
|
Goodwill, net |
|
|
1,847 |
|
|
|
148,342 |
|
|
|
49,043 |
|
|
|
|
|
|
|
199,232 |
|
Intangible assets, net |
|
|
1,451 |
|
|
|
139,406 |
|
|
|
93,596 |
|
|
|
|
|
|
|
234,453 |
|
Other non-current assets, net |
|
|
677,414 |
|
|
|
143,790 |
|
|
|
1,436 |
|
|
|
(801,974 |
) |
|
|
20,666 |
|
|
|
|
Total Assets |
|
$ |
878,385 |
|
|
$ |
609,456 |
|
|
$ |
214,638 |
|
|
$ |
(816,884 |
) |
|
$ |
885,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
Current liabilities related to continuing
operations |
|
$ |
70,262 |
|
|
$ |
57,872 |
|
|
$ |
35,026 |
|
|
$ |
(13,557 |
) |
|
$ |
149,603 |
|
Current liabilities related to discontinued
operations |
|
|
27,813 |
|
|
|
2,903 |
|
|
|
|
|
|
|
|
|
|
|
30,716 |
|
Long-term debt, less current portion |
|
|
200,016 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
200,023 |
|
Non-current liabilities |
|
|
181,845 |
|
|
|
(154,586 |
) |
|
|
111,878 |
|
|
|
(109,158 |
) |
|
|
29,979 |
|
Deferred income taxes |
|
|
(252 |
) |
|
|
46,795 |
|
|
|
30,030 |
|
|
|
|
|
|
|
76,573 |
|
Total shareholders/invested equity |
|
|
398,701 |
|
|
|
656,465 |
|
|
|
37,704 |
|
|
|
(694,169 |
) |
|
|
398,701 |
|
|
|
|
Total Liabilities and Shareholders/Invested
Equity |
|
$ |
878,385 |
|
|
$ |
609,456 |
|
|
$ |
214,638 |
|
|
$ |
(816,884 |
) |
|
$ |
885,595 |
|
|
|
|
13
OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
March 3, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
Industries |
|
Subsidiary |
|
Non- |
|
Consolidating |
|
Consolidated |
|
|
(Parent) |
|
Guarantors |
|
Guarantors |
|
Adjustments |
|
Total |
|
|
|
ASSETS
|
Cash and cash equivalents |
|
$ |
6,754 |
|
|
$ |
936 |
|
|
$ |
2,314 |
|
|
$ |
|
|
|
$ |
10,004 |
|
Receivables, net |
|
|
74,206 |
|
|
|
57,804 |
|
|
|
63,171 |
|
|
|
(41,632 |
) |
|
|
153,549 |
|
Inventories |
|
|
68,878 |
|
|
|
49,867 |
|
|
|
15,661 |
|
|
|
(1,018 |
) |
|
|
133,388 |
|
Prepaid expenses |
|
|
10,601 |
|
|
|
7,162 |
|
|
|
3,588 |
|
|
|
|
|
|
|
21,351 |
|
Current assets related to discontinued
operations, net |
|
|
81,360 |
|
|
|
7,292 |
|
|
|
(371 |
) |
|
|
|
|
|
|
88,281 |
|
|
|
|
Total current assets |
|
|
241,799 |
|
|
|
123,061 |
|
|
|
84,363 |
|
|
|
(42,650 |
) |
|
|
406,573 |
|
Property, plant and equipment, net |
|
|
11,802 |
|
|
|
48,489 |
|
|
|
8,619 |
|
|
|
|
|
|
|
68,910 |
|
Goodwill, net |
|
|
1,847 |
|
|
|
136,278 |
|
|
|
43,294 |
|
|
|
|
|
|
|
181,419 |
|
Intangible assets, net |
|
|
1,461 |
|
|
|
140,420 |
|
|
|
91,079 |
|
|
|
|
|
|
|
232,960 |
|
Other non-current assets, net |
|
|
668,020 |
|
|
|
143,879 |
|
|
|
1,572 |
|
|
|
(792,296 |
) |
|
|
21,175 |
|
Non-current assets related to discontinued
operations, net |
|
|
790 |
|
|
|
3,994 |
|
|
|
|
|
|
|
|
|
|
|
4,784 |
|
|
|
|
Total Assets |
|
$ |
925,719 |
|
|
$ |
596,121 |
|
|
$ |
228,927 |
|
|
$ |
(834,946 |
) |
|
$ |
915,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
Current liabilities related to continuing
operations |
|
$ |
76,062 |
|
|
$ |
58,495 |
|
|
$ |
35,513 |
|
|
$ |
(41,748 |
) |
|
$ |
128,322 |
|
Current liabilities related to discontinued
operations |
|
|
16,296 |
|
|
|
1,374 |
|
|
|
8 |
|
|
|
|
|
|
|
17,678 |
|
Long-term debt, less current portion |
|
|
309,472 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
309,483 |
|
Non-current liabilities |
|
|
163,325 |
|
|
|
(134,226 |
) |
|
|
108,507 |
|
|
|
(109,119 |
) |
|
|
28,487 |
|
Deferred income taxes |
|
|
3,293 |
|
|
|
42,321 |
|
|
|
28,965 |
|
|
|
|
|
|
|
74,579 |
|
Total shareholders/invested equity |
|
|
357,271 |
|
|
|
628,146 |
|
|
|
55,934 |
|
|
|
(684,079 |
) |
|
|
357,272 |
|
|
|
|
Total Liabilities and Shareholders/Invested
Equity |
|
$ |
925,719 |
|
|
$ |
596,121 |
|
|
$ |
228,927 |
|
|
$ |
(834,946 |
) |
|
$ |
915,821 |
|
|
|
|
OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
Third Quarter of Fiscal 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
Industries |
|
Subsidiary |
|
Non- |
|
Consolidating |
|
Consolidated |
|
|
(Parent) |
|
Guarantors |
|
Guarantors |
|
Adjustments |
|
Total |
|
|
|
Net sales |
|
$ |
112,234 |
|
|
$ |
131,145 |
|
|
$ |
32,448 |
|
|
$ |
(9,232 |
) |
|
$ |
266,595 |
|
Cost of goods sold |
|
|
87,850 |
|
|
|
57,796 |
|
|
|
14,621 |
|
|
|
(1,938 |
) |
|
|
158,329 |
|
|
|
|
Gross profit |
|
|
24,384 |
|
|
|
73,349 |
|
|
|
17,827 |
|
|
|
(7,294 |
) |
|
|
108,266 |
|
Selling, general and administrative |
|
|
26,695 |
|
|
|
57,640 |
|
|
|
18,118 |
|
|
|
(10,411 |
) |
|
|
92,042 |
|
Royalties and other income |
|
|
31 |
|
|
|
1,273 |
|
|
|
1,752 |
|
|
|
392 |
|
|
|
3,448 |
|
|
|
|
Operating income |
|
|
(2,280 |
) |
|
|
16,982 |
|
|
|
1,461 |
|
|
|
3,509 |
|
|
|
19,672 |
|
Interest (income) expense, net |
|
|
2,815 |
|
|
|
(3,075 |
) |
|
|
2,119 |
|
|
|
3,534 |
|
|
|
5,393 |
|
Income from equity investment |
|
|
12,466 |
|
|
|
|
|
|
|
|
|
|
|
(12,466 |
) |
|
|
|
|
|
|
|
Earnings before income taxes |
|
|
7,371 |
|
|
|
20,057 |
|
|
|
(658 |
) |
|
|
(12,491 |
) |
|
|
14,279 |
|
Income taxes |
|
|
(2,372 |
) |
|
|
6,776 |
|
|
|
159 |
|
|
|
(10 |
) |
|
|
4,553 |
|
|
|
|
Earnings from continuing operations |
|
|
9,743 |
|
|
|
13,281 |
|
|
|
(817 |
) |
|
|
(12,481 |
) |
|
|
9,726 |
|
Earnings from discontinued
operations, net of tax |
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14 |
|
|
|
|
Net earnings |
|
$ |
9,757 |
|
|
$ |
13,281 |
|
|
$ |
(817 |
) |
|
$ |
(12,481 |
) |
|
$ |
9,740 |
|
|
|
|
14
OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
Nine Months of Fiscal 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
Industries |
|
Subsidiary |
|
Non- |
|
Consolidating |
|
Consolidated |
|
|
(Parent) |
|
Guarantors |
|
Guarantors |
|
Adjustments |
|
Total |
|
|
|
Net sales |
|
$ |
379,758 |
|
|
$ |
376,762 |
|
|
$ |
115,349 |
|
|
$ |
(30,209 |
) |
|
$ |
841,660 |
|
Cost of goods sold |
|
|
295,161 |
|
|
|
172,838 |
|
|
|
52,327 |
|
|
|
(6,843 |
) |
|
|
513,483 |
|
|
|
|
Gross profit |
|
|
84,597 |
|
|
|
203,924 |
|
|
|
63,022 |
|
|
|
(23,366 |
) |
|
|
328,177 |
|
Selling, general and administrative |
|
|
80,609 |
|
|
|
167,019 |
|
|
|
56,219 |
|
|
|
(33,138 |
) |
|
|
270,709 |
|
Royalties and other income |
|
|
76 |
|
|
|
5,348 |
|
|
|
5,061 |
|
|
|
(251 |
) |
|
|
10,234 |
|
|
|
|
Operating income |
|
|
4,064 |
|
|
|
42,253 |
|
|
|
11,864 |
|
|
|
9,521 |
|
|
|
67,702 |
|
Interest (income) expense, net |
|
|
10,211 |
|
|
|
(8,830 |
) |
|
|
6,058 |
|
|
|
9,397 |
|
|
|
16,836 |
|
Income from equity investment |
|
|
36,515 |
|
|
|
3 |
|
|
|
|
|
|
|
(36,518 |
) |
|
|
|
|
|
|
|
Earnings before income taxes |
|
|
30,368 |
|
|
|
51,086 |
|
|
|
5,806 |
|
|
|
(36,394 |
) |
|
|
50,866 |
|
Income taxes |
|
|
(2,578 |
) |
|
|
18,450 |
|
|
|
1,925 |
|
|
|
43 |
|
|
|
17,840 |
|
|
|
|
Earnings from continuing operations |
|
|
32,946 |
|
|
|
32,636 |
|
|
|
3,881 |
|
|
|
(36,437 |
) |
|
|
33,026 |
|
Earnings from discontinued operations, net |
|
|
(183 |
) |
|
|
(64 |
) |
|
|
|
|
|
|
64 |
|
|
|
(183 |
) |
|
|
|
Net earnings |
|
$ |
32,763 |
|
|
$ |
32,572 |
|
|
$ |
3,881 |
|
|
$ |
(36,373 |
) |
|
$ |
32,843 |
|
|
|
|
Third Quarter of Fiscal 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
Industries |
|
Subsidiary |
|
Non- |
|
Consolidating |
|
Consolidated |
|
|
(Parent) |
|
Guarantors |
|
Guarantors |
|
Adjustments |
|
Total |
|
|
|
Net sales |
|
$ |
128,210 |
|
|
$ |
124,826 |
|
|
$ |
38,465 |
|
|
$ |
(16,341 |
) |
|
$ |
275,160 |
|
Cost of goods sold |
|
|
98,042 |
|
|
|
55,213 |
|
|
|
16,749 |
|
|
|
(4,710 |
) |
|
|
165,294 |
|
|
|
|
Gross profit |
|
|
30,168 |
|
|
|
69,613 |
|
|
|
21,716 |
|
|
|
(11,631 |
) |
|
|
109,866 |
|
Selling, general and administrative |
|
|
27,425 |
|
|
|
53,945 |
|
|
|
19,282 |
|
|
|
(10,066 |
) |
|
|
90,586 |
|
Royalties and other income |
|
|
457 |
|
|
|
1,618 |
|
|
|
1,122 |
|
|
|
(80 |
) |
|
|
3,117 |
|
|
|
|
Operating income |
|
|
3,200 |
|
|
|
17,286 |
|
|
|
3,556 |
|
|
|
(1,645 |
) |
|
|
22,397 |
|
Interest (income) expense, net |
|
|
7,597 |
|
|
|
(1,965 |
) |
|
|
1,791 |
|
|
|
(1,440 |
) |
|
|
5,983 |
|
Income from equity investment |
|
|
12,382 |
|
|
|
(84 |
) |
|
|
|
|
|
|
(12,298 |
) |
|
|
|
|
|
|
|
Earnings before income taxes |
|
|
7,985 |
|
|
|
19,167 |
|
|
|
1,765 |
|
|
|
(12,503 |
) |
|
|
16,414 |
|
Income taxes |
|
|
(2,488 |
) |
|
|
6,731 |
|
|
|
1,137 |
|
|
|
(72 |
) |
|
|
5,308 |
|
|
|
|
Earnings from continuing operations |
|
|
10,473 |
|
|
|
12,436 |
|
|
|
628 |
|
|
|
(12,431 |
) |
|
|
11,106 |
|
Earnings from discontinued operations, net |
|
|
4,261 |
|
|
|
(765 |
) |
|
|
|
|
|
|
|
|
|
|
3,496 |
|
|
|
|
Net earnings |
|
$ |
14,734 |
|
|
$ |
11,671 |
|
|
$ |
628 |
|
|
$ |
(12,431 |
) |
|
$ |
14,602 |
|
|
|
|
Nine Months of Fiscal 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
Industries |
|
Subsidiary |
|
Non- |
|
Consolidating |
|
Consolidated |
|
|
(Parent) |
|
Guarantors |
|
Guarantors |
|
Adjustments |
|
Total |
|
|
|
Net sales |
|
$ |
396,164 |
|
|
$ |
345,353 |
|
|
$ |
131,691 |
|
|
$ |
(51,670 |
) |
|
$ |
821,538 |
|
Cost of goods sold |
|
|
304,023 |
|
|
|
155,869 |
|
|
|
58,156 |
|
|
|
(14,897 |
) |
|
|
503,151 |
|
|
|
|
Gross profit |
|
|
92,141 |
|
|
|
189,484 |
|
|
|
73,535 |
|
|
|
(36,773 |
) |
|
|
318,387 |
|
Selling, general and administrative |
|
|
81,783 |
|
|
|
151,807 |
|
|
|
60,012 |
|
|
|
(34,108 |
) |
|
|
259,494 |
|
Royalties and other income |
|
|
181 |
|
|
|
5,413 |
|
|
|
4,656 |
|
|
|
(219 |
) |
|
|
10,031 |
|
|
|
|
Operating income |
|
|
10,539 |
|
|
|
43,090 |
|
|
|
18,179 |
|
|
|
(2,884 |
) |
|
|
68,924 |
|
Interest (income) expense, net |
|
|
22,371 |
|
|
|
(7,641 |
) |
|
|
5,677 |
|
|
|
(2,319 |
) |
|
|
18,088 |
|
Income from equity investment |
|
|
39,811 |
|
|
|
24 |
|
|
|
|
|
|
|
(39,835 |
) |
|
|
|
|
|
|
|
Earnings before income taxes |
|
|
27,979 |
|
|
|
50,755 |
|
|
|
12,502 |
|
|
|
(40,400 |
) |
|
|
50,836 |
|
Income taxes |
|
|
(4,691 |
) |
|
|
17,670 |
|
|
|
4,951 |
|
|
|
(197 |
) |
|
|
17,733 |
|
|
|
|
Earnings from continuing operations |
|
|
32,670 |
|
|
|
33,085 |
|
|
|
7,551 |
|
|
|
(40,203 |
) |
|
|
33,103 |
|
Earnings from discontinued operations, net |
|
|
7,190 |
|
|
|
889 |
|
|
|
(1,689 |
) |
|
|
|
|
|
|
6,390 |
|
|
|
|
Net earnings |
|
$ |
39,860 |
|
|
$ |
33,974 |
|
|
$ |
5,862 |
|
|
$ |
(40,203 |
) |
|
$ |
39,493 |
|
|
|
|
15
OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Nine Months of Fiscal 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
Industries |
|
Subsidiary |
|
Non- |
|
Consolidating |
|
Consolidated |
|
|
(Parent) |
|
Guarantors |
|
Guarantors |
|
Adjustments |
|
Total |
|
|
|
Cash Flows From Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating
activities |
|
$ |
(22,086 |
) |
|
$ |
31,389 |
|
|
$ |
11,286 |
|
|
$ |
11 |
|
|
$ |
20,600 |
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions |
|
|
(12,111 |
) |
|
|
|
|
|
|
(1,149 |
) |
|
|
|
|
|
|
(13,260 |
) |
Investment in unconsolidated entity |
|
|
|
|
|
|
(9,090 |
) |
|
|
|
|
|
|
|
|
|
|
(9,090 |
) |
Purchases of property, plant and equipment |
|
|
(355 |
) |
|
|
(21,535 |
) |
|
|
(1,182 |
) |
|
|
|
|
|
|
(23,072 |
) |
Proceeds from sale of property, plant and
equipment |
|
|
114 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
130 |
|
|
|
|
Net cash (used in) provided by investing
activities |
|
|
(12,352 |
) |
|
|
(30,609 |
) |
|
|
(2,331 |
) |
|
|
|
|
|
|
(45,292 |
) |
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in debt |
|
|
8,388 |
|
|
|
(12 |
) |
|
|
(103 |
) |
|
|
|
|
|
|
8,273 |
|
Proceeds from issuance of common stock |
|
|
4,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,212 |
|
Change in inter-company payable |
|
|
10,779 |
|
|
|
(10,839 |
) |
|
|
60 |
|
|
|
|
|
|
|
|
|
Dividends on common stock |
|
|
(11,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,175 |
) |
|
|
|
Net cash (used in) provided by financing
activities |
|
|
12,204 |
|
|
|
(10,851 |
) |
|
|
(43 |
) |
|
|
|
|
|
|
1,310 |
|
Cash Flows from Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows provided by discontinued
operations |
|
|
18,413 |
|
|
|
9,903 |
|
|
|
|
|
|
|
|
|
|
|
28,316 |
|
|
|
|
Net change in Cash and Cash Equivalents |
|
|
(3,821 |
) |
|
|
(168 |
) |
|
|
8,912 |
|
|
|
11 |
|
|
|
4,934 |
|
Effect of foreign currency translation |
|
|
|
|
|
|
|
|
|
|
395 |
|
|
|
|
|
|
|
395 |
|
Cash and Cash Equivalents at the
Beginning of Period |
|
|
5,175 |
|
|
|
1,134 |
|
|
|
4,181 |
|
|
|
(11 |
) |
|
|
10,479 |
|
|
|
|
Cash and Cash Equivalents at the End of
Period |
|
$ |
1,354 |
|
|
$ |
966 |
|
|
$ |
13,488 |
|
|
$ |
|
|
|
$ |
15,808 |
|
|
|
|
16
OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Nine Months of Fiscal 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oxford |
|
|
|
|
|
Subsidiary |
|
|
|
|
|
|
Industries |
|
Subsidiary |
|
Non- |
|
Consolidating |
|
Consolidated |
|
|
(Parent) |
|
Guarantors |
|
Guarantors |
|
Adjustments |
|
Total |
|
|
|
Cash Flows From Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating
activities |
|
$ |
(533 |
) |
|
$ |
25,218 |
|
|
$ |
(2,356 |
) |
|
$ |
(98 |
) |
|
$ |
22,231 |
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions |
|
|
(11,501 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11,501 |
) |
Distribution from joint venture |
|
|
|
|
|
|
2,026 |
|
|
|
|
|
|
|
|
|
|
|
2,026 |
|
Purchases of property, plant and equipment |
|
|
(3,338 |
) |
|
|
(11,752 |
) |
|
|
(1,464 |
) |
|
|
|
|
|
|
(16,554 |
) |
Proceeds from sale of property, plant and
equipment |
|
|
13 |
|
|
|
171 |
|
|
|
|
|
|
|
|
|
|
|
184 |
|
|
|
|
Net cash (used in) provided by investing
activities |
|
|
(14,826 |
) |
|
|
(9,555 |
) |
|
|
(1,464 |
) |
|
|
|
|
|
|
(25,845 |
) |
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in debt |
|
|
20,263 |
|
|
|
(16 |
) |
|
|
(1,775 |
) |
|
|
|
|
|
|
18,472 |
|
Proceeds from issuance of common stock |
|
|
5,052 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,052 |
|
Change in inter-company payable |
|
|
10,985 |
|
|
|
(15,337 |
) |
|
|
4,280 |
|
|
|
72 |
|
|
|
|
|
Dividends on common stock |
|
|
(6,889 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,889 |
) |
|
|
|
Net cash (used in) provided by financing
activities |
|
|
29,411 |
|
|
|
(15,353 |
) |
|
|
2,505 |
|
|
|
72 |
|
|
|
16,635 |
|
Cash Flows from Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows provided by discontinued
operations |
|
|
(10,011 |
) |
|
|
(1,233 |
) |
|
|
2,343 |
|
|
|
|
|
|
|
(8,901 |
) |
|
|
|
Net change in Cash and Cash Equivalents |
|
|
4,041 |
|
|
|
(923 |
) |
|
|
1,028 |
|
|
|
(26 |
) |
|
|
4,120 |
|
Effect of foreign currency translation |
|
|
|
|
|
|
|
|
|
|
(615 |
) |
|
|
|
|
|
|
(615 |
) |
Cash and Cash Equivalents at the
Beginning of Period |
|
|
2,713 |
|
|
|
1,859 |
|
|
|
1,901 |
|
|
|
26 |
|
|
|
6,499 |
|
|
|
|
Cash and Cash Equivalents at the End of
Period |
|
$ |
6,754 |
|
|
$ |
936 |
|
|
$ |
2,314 |
|
|
$ |
|
|
|
$ |
10,004 |
|
|
|
|
17
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our unaudited condensed
consolidated financial statements and the notes to unaudited condensed consolidated financial
statements contained in this report and the consolidated financial statements, notes to
consolidated financial statements and Managements Discussion and Analysis of Financial Condition
and Results of Operations contained in our fiscal 2006 Form 10-K.
OVERVIEW
We generate revenues and cash flow through the design, sale, production, sourcing and distribution
of branded and private label consumer apparel and footwear for men, women and children and the
licensing of company-owned trademarks. Our markets and customers are located primarily in the
United States. We source more than 95% of our products through third-party producers. We primarily
distribute our products through our wholesale customers, which include chain stores, department
stores, specialty stores, specialty catalogs and mass merchants. We also sell our products for some
brands in our own retail stores.
We operate in an industry that is highly competitive. Our ability to continuously evaluate and
respond to changing consumer demands and tastes across multiple market segments, distribution
channels and geographic regions is critical to our success. Although our approach is aimed at
diversifying our risks, misjudging shifts in consumer preferences could have a negative effect on
future operating results. Other key aspects of competition include quality, brand image,
distribution methods, price, customer service and intellectual property protection. Our size and
global operating strategies help us to successfully compete by providing opportunities for
operating synergies. Our success in the future will depend on our ability to design products that
are acceptable to the markets we serve and to source our products on a competitive basis while
still earning appropriate margins.
The most significant factors impacting our results and contributing to the decrease in diluted
earnings from continuing operations per common share to $0.54 in the third quarter of fiscal 2007
from $0.63 in the third quarter of fiscal 2006 and the decrease in diluted net earnings per common
share to $0.54 in the third quarter of fiscal 2007 from $0.82 in the third quarter of fiscal 2006
were:
|
|
|
the Menswear Groups 11.5% decrease in net sales and 58.5% decrease in operating
income, primarily due to the decreased sales and operating margins in our tailored
clothing business; |
|
|
|
|
the Tommy Bahama Groups 9.8% increase in net sales and 12.6% increase in operating
income, primarily due to product line expansion including Tommy Bahama
Relaxtm, Tommy Bahama Golf 18tm and Tommy Bahama
Swimtm, continuing strength in existing product lines and retail store
expansion; and |
|
|
|
|
the disposition of substantially all of the assets of our Womenswear Group on June 2,
2006, resulting in all Womenswear Group operations for all periods presented being
reclassified to discontinued operations. |
The most significant factors impacting our results and contributing to the decrease in diluted
earnings from continuing operations per common share to $1.85 in the nine months of fiscal 2007
from $1.86 in the nine months of fiscal 2006 and the decrease in diluted net earnings per common
share to $1.84 in the nine months of fiscal 2007 from $2.22 in the nine months of fiscal 2006 were:
|
|
|
the Menswear Groups 4.1% decrease in net sales and 27.9% decrease in operating income,
primarily due to the decreased sales and operating margins for Ben Sherman and our tailored
clothing business partially offset by improved performance in our sportswear operations; |
|
|
|
|
the Tommy Bahama Groups 14.0% increase in net sales and 19.9% increase in operating
income, primarily due to product line expansion including Tommy Bahama Relax, Tommy Bahama
Golf 18 and Tommy Bahama Swim, continuing strength in existing product
lines and retail store expansion; and |
|
|
|
|
the disposition of substantially all of the assets of our Womenswear Group on June 2,
2006, resulting in all Womenswear Group operations for all periods presented being
reclassified to discontinued operations. |
18
RESULTS OF OPERATIONS
The following table sets forth the line items in our consolidated statements of earnings both in
dollars (in thousands) and the percentage change as compared to the comparable period in the prior
year. Individual line items of our consolidated statements of earnings may not be directly
comparable to those of our competitors, as statement of earnings classification of certain expenses
may vary by company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Percent |
|
Nine Months |
|
Percent |
|
|
Fiscal 2007 |
|
Fiscal 2006 |
|
Change |
|
Fiscal 2007 |
|
Fiscal 2006 |
|
Change |
|
|
|
Net sales |
|
$ |
266,595 |
|
|
$ |
275,160 |
|
|
|
(3.1 |
%) |
|
$ |
841,660 |
|
|
$ |
821,538 |
|
|
|
2.4 |
% |
Cost of goods sold |
|
|
158,329 |
|
|
|
165,294 |
|
|
|
(4.2 |
%) |
|
|
513,483 |
|
|
|
503,151 |
|
|
|
2.1 |
% |
|
|
|
Gross profit |
|
|
108,266 |
|
|
|
109,866 |
|
|
|
(1.5 |
%) |
|
|
328,177 |
|
|
|
318,387 |
|
|
|
3.1 |
% |
Selling, general and
administrative expenses |
|
|
90,393 |
|
|
|
88,733 |
|
|
|
1.9 |
% |
|
|
265,963 |
|
|
|
253,937 |
|
|
|
4.7 |
% |
Amortization of intangible
assets |
|
|
1,649 |
|
|
|
1,853 |
|
|
|
(11.0 |
%) |
|
|
4,746 |
|
|
|
5,557 |
|
|
|
(14.6 |
%) |
Royalties and other
operating income |
|
|
3,448 |
|
|
|
3,117 |
|
|
|
10.6 |
% |
|
|
10,234 |
|
|
|
10,031 |
|
|
|
2.0 |
% |
|
|
|
Operating income |
|
|
19,672 |
|
|
|
22,397 |
|
|
|
(12.2 |
%) |
|
|
67,702 |
|
|
|
68,924 |
|
|
|
(1.8 |
%) |
Interest expense, net |
|
|
5,393 |
|
|
|
5,983 |
|
|
|
(9.9 |
%) |
|
|
16,836 |
|
|
|
18,088 |
|
|
|
(6.9 |
%) |
|
|
|
Earnings before income taxes |
|
|
14,279 |
|
|
|
16,414 |
|
|
|
(13.0 |
%) |
|
|
50,866 |
|
|
|
50,836 |
|
|
|
0.1 |
% |
Income taxes |
|
|
4,553 |
|
|
|
5,308 |
|
|
|
(14.2 |
%) |
|
|
17,840 |
|
|
|
17,733 |
|
|
|
0.6 |
% |
|
|
|
Earnings from continuing
operations |
|
|
9,726 |
|
|
|
11,106 |
|
|
|
(12.4 |
%) |
|
|
33,026 |
|
|
|
33,103 |
|
|
|
(0.2 |
%) |
Earnings (loss) from
discontinued operations,
net of taxes |
|
|
14 |
|
|
|
3,496 |
|
|
|
(99.6 |
%) |
|
|
(183 |
) |
|
|
6,390 |
|
|
|
(102.9 |
%) |
|
|
|
|
Net earnings |
|
$ |
9,740 |
|
|
$ |
14,602 |
|
|
|
(33.3 |
%) |
|
$ |
32,843 |
|
|
$ |
39,493 |
|
|
|
(16.8 |
%) |
|
|
|
The following table sets forth the line items in our consolidated statements of earnings as a
percentage of net sales. We have calculated all percentages based on actual data, but columns may
not add due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of Net Sales |
|
|
Third Quarter |
|
Nine Months |
|
|
Fiscal 2007 |
|
Fiscal 2006 |
|
Fiscal 2007 |
|
Fiscal 2006 |
|
|
|
Net sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of goods sold |
|
|
59.4 |
% |
|
|
60.1 |
% |
|
|
61.0 |
% |
|
|
61.2 |
% |
|
|
|
|
|
Gross profit |
|
|
40.6 |
% |
|
|
39.9 |
% |
|
|
39.0 |
% |
|
|
38.8 |
% |
Selling, general and
administrative expenses |
|
|
33.9 |
% |
|
|
32.2 |
% |
|
|
31.6 |
% |
|
|
30.9 |
% |
Amortization of intangible
assets, net |
|
|
0.6 |
% |
|
|
0.7 |
% |
|
|
0.6 |
% |
|
|
0.7 |
% |
Royalties and other
operating income |
|
|
1.3 |
% |
|
|
1.1 |
% |
|
|
1.2 |
% |
|
|
1.2 |
% |
|
|
|
|
|
Operating income |
|
|
7.4 |
% |
|
|
8.1 |
% |
|
|
8.0 |
% |
|
|
8.4 |
% |
Interest expense, net |
|
|
2.0 |
% |
|
|
2.2 |
% |
|
|
2.0 |
% |
|
|
2.2 |
% |
|
|
|
|
|
Earnings before income taxes |
|
|
5.4 |
% |
|
|
6.0 |
% |
|
|
6.0 |
% |
|
|
6.2 |
% |
Income taxes |
|
|
1.7 |
% |
|
|
1.9 |
% |
|
|
2.1 |
% |
|
|
2.2 |
% |
|
|
|
|
|
Earnings from continuing
operations |
|
|
3.6 |
% |
|
|
4.0 |
% |
|
|
3.9 |
% |
|
|
4.0 |
% |
|
|
|
|
|
Earnings (loss) from
discontinued operations |
|
|
0.0 |
% |
|
|
1.3 |
% |
|
|
0.0 |
% |
|
|
0.8 |
% |
|
|
|
|
|
Net earnings |
|
|
3.7 |
% |
|
|
5.3 |
% |
|
|
3.9 |
% |
|
|
4.8 |
% |
|
|
|
|
|
19
SEGMENT DEFINITION
In our continuing operations, we have two operating segments for purposes of allocating resources
and assessing performance. The Menswear Group produces branded, including Ben Sherman, and private
label dress shirts, sport shirts, dress slacks, casual slacks, suits, sportcoats, suit separates,
walkshorts, golf apparel, outerwear, sweaters, jeans, swimwear, footwear and headwear, licenses its
brands for accessories and other products and operates retail stores. The Tommy Bahama Group
produces lifestyle branded casual attire, operates retail stores and restaurants, and licenses its
brands for accessories, footwear, furniture and other products.
Corporate and Other is a reconciling category for reporting purposes and includes our corporate
offices, substantially all financing activities, LIFO inventory accounting adjustments and other
costs that are not allocated to the operating groups.
As discussed in note 3 in our consolidated financial statements included in our fiscal 2006 Form
10-K, we sold substantially all of the assets of our Womenswear Group at the end of fiscal 2006.
The Womenswear Group produced private label womens sportswear separates, coordinated sportswear,
outerwear, dresses and swimwear. The operating results of the Womenswear Group have not been
included in segment information as all amounts were reclassified to discontinued operations. The
information below presents certain information about our segments (in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Percent |
|
Nine Months |
|
Percent |
|
|
Fiscal 2007 |
|
Fiscal 2006 |
|
Change |
|
Fiscal 2007 |
|
Fiscal 2006 |
|
Change |
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
147,006 |
|
|
$ |
166,109 |
|
|
|
(11.5 |
%) |
|
$ |
508,884 |
|
|
$ |
530,517 |
|
|
|
(4.1 |
%) |
Tommy Bahama Group |
|
|
119,215 |
|
|
|
108,590 |
|
|
|
9.8 |
% |
|
|
331,170 |
|
|
|
290,522 |
|
|
|
14.0 |
% |
Corporate and Other |
|
|
374 |
|
|
|
461 |
|
|
|
(18.9 |
%) |
|
|
1,606 |
|
|
|
499 |
|
|
|
N/M |
|
|
|
|
Total Net Sales |
|
$ |
266,595 |
|
|
$ |
275,160 |
|
|
|
(3.1 |
%) |
|
$ |
841,660 |
|
|
$ |
821,538 |
|
|
|
2.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Menswear Group |
|
$ |
2,662 |
|
|
$ |
6,410 |
|
|
|
(58.5 |
%) |
|
$ |
26,963 |
|
|
$ |
37,382 |
|
|
|
(27.9 |
%) |
Tommy Bahama Group |
|
|
22,234 |
|
|
|
19,747 |
|
|
|
12.6 |
% |
|
|
52,996 |
|
|
|
44,213 |
|
|
|
19.9 |
% |
Corporate and Other |
|
|
(5,224 |
) |
|
|
(3,760 |
) |
|
|
(38.9 |
%) |
|
|
(12,257 |
) |
|
|
(12,671 |
) |
|
|
(3.3 |
%) |
|
|
|
Total Operating
Income |
|
$ |
19,672 |
|
|
$ |
22,397 |
|
|
|
(12.2 |
%) |
|
$ |
67,702 |
|
|
$ |
68,924 |
|
|
|
(1.8 |
%) |
|
|
|
For further information regarding our segments, see Note 7 to our unaudited condensed consolidated
financial statements included in this report.
THIRD QUARTER OF FISCAL 2007 COMPARED TO THIRD QUARTER OF FISCAL 2006
The discussion below compares our operating results for the third quarter of fiscal 2007 to the
third quarter of fiscal 2006. Each percentage change provided below reflects the change between
these periods unless indicated otherwise.
Net sales decreased by $8.6 million, or 3.1%. The decrease was primarily due to a decrease in the
average selling price per unit of 8.4% partially offset by an increase in unit sales of 4.6% due to
the changes discussed below.
The Menswear Group reported an 11.5% decline in net sales. The decline was due to a decrease in the
average selling price per unit of 13.5% partially offset by a unit sales increase of 2.4%. The
decline in the average selling price per unit resulted from decreases in the average selling price
per unit in mens sportswear and the decreased ratio of Ben Sherman and mens tailored clothing
sales to total menswear sales. Ben Sherman and mens tailored clothing generally have a higher
average selling price per unit than mens sportswear. The decline in the average selling price per
unit was partially offset by increases in the average selling price per unit for Ben Sherman. The
increase in unit sales resulted from an increase in unit sales in mens sportswear partially offset
by declines in unit sales in Ben Sherman and mens tailored clothing.
20
The Tommy Bahama Group reported a 9.8% increase in net sales as a result of growth in wholesale and
retail sales. The increase was due to an increase in unit sales of 14.4% partially offset by a
decline in the average selling price per unit of 5.4%. The decline in the average selling price per
unit was primarily due to product mix with a greater proportion of sales being comprised of the
Tommy Bahama Relax, Tommy Bahama Golf 18 and Tommy Bahama Swim products which
generally sell at lower price points. The increase in retail sales was primarily due to an increase
in the number of retail stores to 66 at the end of the third quarter of fiscal 2007 compared to 58
at the end of third quarter of fiscal 2006.
Gross profit decreased 1.5%. The decrease was due to the decrease in net sales partially offset by
higher gross margins. Gross margins increased from 39.9% of net sales in the third quarter of
fiscal 2006 to 40.6% of net sales in the third quarter of fiscal 2007. The increase in gross margin
was primarily due to the increased proportion of Tommy Bahama sales to total sales and the
inclusion of restructuring and asset impairment charges in cost of goods sold in the third quarter
of fiscal 2006. Tommy Bahama sales generally carry a higher gross margin than sales in our other
product lines.
Our gross profit may not be directly comparable to those of our competitors, as income statement
classifications of certain expenses may vary by company.
Selling, general and administrative expenses, or SG&A, increased 1.9%. The increase in SG&A was
primarily due to expenses associated with additional retail stores, new product offerings
(including Tommy Bahama Relax, Tommy Bahama Golf 18 and Tommy Bahama Swim) in
the Tommy Bahama Group and $1.9 million of severance costs in the third quarter of fiscal 2007 as
discussed in note 4 of our unaudited condensed consolidated financial statements contained in this
report. SG&A was 32.2% of net sales in the third quarter of fiscal 2006 compared to 33.9% of net
sales in the third quarter of fiscal 2007. This increase in SG&A as a percentage of net sales was
primarily due to the decrease in sales and a higher proportion of sales of Tommy Bahama products,
which generally carry a higher SG&A structure than our mens sportswear and tailored clothing
businesses.
Amortization of intangible assets decreased 11.0%. The decrease was due to certain intangible
assets acquired as part of our previous acquisitions, which generally have a greater amount of
amortization in the earlier periods following the acquisition than later periods. We expect that
amortization expense will decrease in future years unless we acquire additional intangible assets.
Royalties and other operating income increased 10.6%. The increase was primarily due to an increase
in our share of equity income received from an unconsolidated entity that owns the Hathaway®
trademark, which was acquired in the first quarter of fiscal 2007.
Operating income decreased 12.2% due to the changes discussed below.
The Menswear Group reported a 58.5% decrease in operating income. The decrease in operating income
was primarily due to the lower sales and operating margins in our mens tailored clothing business.
Our tailored clothing business has continued to encounter sluggish demand at retail and downward
pressure on our margins. Additionally, the third quarter of fiscal 2006 included $1.6 million of
restructuring, plant shut-down and asset impairment charges.
The Tommy Bahama Group reported a 12.6% increase in operating income. The increase in operating
income was primarily due to increased sales volume in existing and new product lines partially
offset by increased operating expenses. The increased operating expenses were primarily due to the
opening of additional retail stores and additional infrastructure to support our new product lines,
including Tommy Bahama Relax, Tommy Bahama Golf 18 and Tommy Bahama Swim.
The Corporate and Other operating loss increased $1.5 million, or 38.9%. The increase in operating
loss was primarily due to the $1.9 million of severance costs discussed in note 4 of our unaudited
condensed consolidated financial statements contained in this report partially offset by payments
we received for certain corporate administrative services we provided to the purchaser of the
assets of the Womenswear Group pursuant to a transition services agreement.
Interest expense, net decreased 9.9%. The decrease in interest expense was primarily due to the
lower debt levels in the third quarter of fiscal 2007.
21
Income taxes were at an effective tax rate of 31.9% for the third quarter of fiscal 2007 compared
to 32.3% for the third quarter of fiscal 2006. The rate for the third quarter of fiscal 2007 is
lower than in other quarters during our fiscal year due to the release of certain contingency
reserves during the quarter. The effective tax rate for the third quarter of fiscal 2007 is not
indicative of the rate for future periods.
Discontinued operations resulted from the disposition of our Womenswear Group on June 2, 2006,
leading to all Womenswear Group operations being reclassified to discontinued operations for all
periods presented. The decrease in earnings from discontinued operations was primarily due to the
inclusion of the full operations of the Womenswear Group in the third quarter of fiscal 2006, but
only incidental items related to the Womenswear Group in the third quarter of fiscal 2007.
NINE MONTHS OF FISCAL 2007 COMPARED TO NINE MONTHS OF FISCAL 2006
The discussion below compares our operating results for the nine months of fiscal 2007 to the nine
months of fiscal 2006. Each percentage change provided below reflects the change between these
periods unless indicated otherwise.
Net sales increased by $20.1 million, or 2.4%. The increase was primarily due to an increase in
unit sales of 4.5% partially offset by a decrease in the average selling price per unit of 2.6% due
to the changes discussed below.
The Menswear Group reported a 4.1% decrease in net sales. The decrease was due to a decline in the
average selling price per unit of 5.7% partially offset by an increase in the number of units sold
of 1.7%. The decline in the average selling price per unit was primarily due to a decrease in the
average selling price per unit in our mens sportswear business and the decreased ratio of Ben
Sherman and mens tailored clothing sales to total menswear sales. Ben Sherman and mens tailored
clothing generally have a higher average selling price per unit than mens sportswear. The decline
in the average selling price per unit was partially offset by increases in the average selling
price per unit for our Ben Sherman and tailored clothing businesses. The increase in unit sales was
a result of an increase in unit sales in the mens sportswear business partially offset by
decreases in unit sales in the Ben Sherman and mens tailored clothing businesses.
The Tommy Bahama Group reported a 14.0% increase in net sales as a result of growth in wholesale
and retail sales. The increase was due to an increase in unit sales of 18.9% partially offset by a
decline in the average selling price per unit of 4.7%. The decline in the average selling price per
unit was primarily due to an increase in the ratio of wholesale to retail sales, with wholesale
sales having lower average selling prices, and more sales of our new product offerings including
Tommy Bahama Relax, Tommy Bahama Golf 18 and Tommy Bahama Swim, which generally
are sold at lower price points. Retail sales increased due to an increase in the number of retail
stores to 66 at the end of the nine months of fiscal 2007 compared to 58 at the end of the nine
months of fiscal 2006.
Gross profit increased 3.1%. The increase was due to higher net sales and higher gross margins.
Gross margins increased from 38.8% in the nine months of fiscal 2006 to 39.0% in the nine months of
fiscal 2007. This increase in gross margin was the result of increased Tommy Bahama sales as a
percentage of total sales and the inclusion of restructuring and asset impairment charges in cost
of goods sold in the third quarter of fiscal 2006, partially offset by lower gross margins in mens
tailored clothing.
Our gross profit may not be directly comparable to those of our competitors, as income statement
classifications of certain expenses may vary by company.
Selling, general and administrative expenses, or SG&A, increased 4.7%. The increase in SG&A was
primarily due to expenses associated with additional retail stores, new product offerings including
Tommy Bahama Relax, Tommy Bahama Golf 18 and Tommy Bahama Swim in the Tommy
Bahama Group and $1.9 million of severance costs discussed in note 4 of our unaudited condensed
consolidated financial statements contained in this report. SG&A was 30.9% of net sales for the
nine months of fiscal 2006 compared to 31.6% of net sales for the nine months of fiscal 2007. This
increase in SG&A as a percentage of net sales was primarily due to a higher proportion of sales of
Tommy Bahama products, which generally carry a higher SG&A structure than our mens sportswear and
tailored clothing businesses.
Amortization of intangible assets decreased 14.6%. The decrease was due to certain intangible
assets acquired as part of our previous acquisitions, which generally have a greater amount of
amortization in the earlier periods following the acquisition than later periods.
22
Royalties and other operating income increased 2.0%. The increase was primarily due to an increase
in our share of equity income received from an unconsolidated entity that owns the Hathaway
trademark which was partially offset by a decline in our Tommy Bahama royalty income. In the first
quarter of fiscal 2006, we recognized a gain of approximately $0.5 million related to the sale of
substantially all of the assets of Paradise Shoe, the licensee of Tommy Bahama footwear in which we
held a 50% interest.
Operating income decreased 1.8% due to the changes discussed below.
The Menswear Group reported a 27.9% decrease in operating income. The decrease in operating income
was primarily due to lower sales and lower margins in our mens tailored clothing and Ben Sherman
businesses. Our tailored clothing business has continued to encounter sluggish demand at retail and
downward pressure on our margins. These items were partially offset by increased operating income
in mens sportswear. Additionally, the third quarter of fiscal 2006 included $1.6 million of
restructuring, plant shut-down and asset impairment charges.
The Tommy Bahama Group reported a 19.9% increase in operating income. The increase in operating
income was primarily due to increased sales volume in existing and new product lines partially
offset by increased operating expenses and reduced royalty income. The increased operating expenses
were primarily due to the opening of additional retail stores and additional infrastructure to
support our new product lines, including Tommy Bahama Relax, Tommy
Bahama Golf 18 and Tommy Bahama Swim.
The Corporate and Other operating loss decreased $0.4 million, or 3.3%. The decrease in the
operating loss was primarily due to payments we received for certain corporate administrative
services we provided to the purchaser of the assets of the Womenswear Group pursuant to a
transition services agreement partially offset by certain severance costs in the third quarter of
fiscal 2007.
Interest expense, net decreased 6.9%. The decrease in interest expense was primarily due to the
lower debt levels in the nine months of fiscal 2007, partially offset by higher interest rates
during the nine months of fiscal 2007.
Income taxes were at an effective tax rate of 35.1% for the nine months of fiscal 2007 compared to
34.9% for the nine months of fiscal 2006. The effective tax rate for the nine months of fiscal
2007 may not be indicative of the rate in future periods.
Discontinued operations resulted from the disposition of our Womenswear Group operations on June 2,
2006, leading to all Womenswear Group operations being reclassified to discontinued operations for
all periods presented. The decrease in earnings from discontinued operations was primarily due to
the inclusion of the full operations of the Womenswear Group in the nine months of fiscal 2006, but
only incidental items related to the Womenswear Group in the nine months of fiscal 2007.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our primary source of revenue and cash flow is our operating activities in the United States and to
some extent the United Kingdom. When cash inflows are less than cash outflows, we also have access
to amounts under our U.S. Revolver and U.K. Revolver, each of which are described below, subject to
their terms. We may seek to finance future capital investment programs through various methods,
including, but not limited to, cash flow from operations, borrowings under our current or
additional credit facilities and sales of equity securities.
Our liquidity requirements arise from the funding of our working capital needs, which include
inventory, other operating expenses and accounts receivable, funding of capital expenditures,
payment of quarterly dividends, repayment of our indebtedness, payment of interest on outstanding
indebtedness and acquisitions, if any. Generally, our product purchases are accomplished through
trade letters of credit which are drawn against our lines of credit at the time of shipment of the
products and reduce the amounts available under our lines of credit when issued. We also purchase
some of our products on terms from vendors.
Cash and cash equivalents on hand was $15.8 million at March 2, 2007 and $10.0 million at March 3,
2006, respectively.
23
Operating Activities
During the nine months of fiscal 2007, our continuing operations provided $20.6 million of cash
compared to $22.2 million of cash during the nine months of fiscal 2006. Operating cash flows from
continuing operations was primarily a result of the earnings from continuing operations for the
period adjusted for non-cash activities such as depreciation, amortization and stock compensation
for restricted stock awards and changes in working capital accounts. During the nine months of
fiscal 2007, the net cash proceeds primarily resulted from the earnings for the period partially
offset by a significant investment in inventories during the period as discussed below. During the
nine months of fiscal 2006, the net cash proceeds primarily resulted from earnings for the period
and a reduction in inventory partially offset by a significant reduction in current liabilities.
Our working capital ratio, which is calculated by dividing total current assets by total current
liabilities, was 2.56:1 and 2.78:1 at March 2, 2007 and March 3, 2006, respectively. The change was
due to the 17% reduction of current assets partially offset by the 10% decrease in current
liabilities primarily related to discontinued operations, as discussed below.
Receivables, net were $141.3 million and $153.5 million at March 2, 2007 and March 3, 2006,
respectively, a decrease of 8%. The decrease was primarily due to the lower sales in the third
quarter of fiscal 2007. Days sales outstanding for our accounts receivable, excluding retail
sales, was 49 days and 53 days at March 2, 2007 and March 3, 2006, respectively.
Inventories were $160.8 million and $133.4 million at March 2, 2007 and March 3, 2006,
respectively, an increase of 21%. Inventory for the Tommy Bahama Group increased to support
additional retail stores and due to inventory related to our Tommy Bahama Relax, Tommy Bahama Golf
18 and Tommy Bahama Swim product lines which we began in late fiscal 2006. Inventory for our
tailored clothing business increased due to lower than planned sales which resulted in higher than
optimal levels in our replenishment programs seasonal inventories. We expect the inventory levels
in our tailored clothing business to stabilize within the next twelve months. These increases were
partially offset by a reduction of inventory in our mens sportswear inventory. Our days supply of
inventory on hand related to continuing operations, calculated on a trailing twelve month average
using a FIFO basis, was 100 days and 98 days at March 2, 2007 and March 3, 2006, respectively.
Prepaid expenses were $19.3 million and $21.4 million at March 2, 2007 and March 3, 2006,
respectively. The decrease in prepaid expenses was primarily due to a decrease in prepaid royalties
due to the timing of certain royalty payments.
Current assets related to discontinued operations were $0.0 million and $88.3 million at March 2,
2007 and March 3, 2006, respectively. The decrease in current assets related to discontinued
operations resulted from the disposition of the Womenswear Group on June 2, 2006.
Current liabilities, which primarily consist of payables arising out of our operating activities,
were $131.5 million and $146.0 million at March 2, 2007 and March 3, 2006, respectively. Current
liabilities include current liabilities related to discontinued operations of $0.0 million and
$17.7 million at March 2, 2007 and March 3, 2006, respectively. The current liabilities related to
discontinued operations at March 3, 2006 reflected all operations of the Womenswear Group. The
increase in current liabilities related to continuing operations was primarily due to the
outstanding accounts payable related to the increase in inventory at March 2, 2007 partially offset
by the reduction in our short term debt levels under our U.K. Revolver and the payment of our
quarterly dividend prior to the end of the third quarter in fiscal 2007 but subsequent to the end
of the third quarter in fiscal 2006.
Deferred income taxes were $78.7 million and $74.6 million at March 2, 2007 and March 3, 2006,
respectively. The change resulted primarily from the change in foreign currency exchange rates.
Other non-current liabilities, which primarily consist of deferred rent and deferred compensation
amounts, were $36.1 million and $28.4 million at March 2, 2007 and March 3, 2006, respectively. The
increase was primarily due to the recognition of additional deferred rent and deferred compensation
during the twelve months subsequent to March 3, 2006.
24
Investing Activities
During the nine months of fiscal 2007, investing activities used $45.3 million in cash. We paid
approximately $22.4 million related to acquisitions, consisting of the fiscal 2006 Tommy Bahama
earn-out payment and the acquisition of an ownership interest in an unconsolidated entity that owns
the Hathaway trademark in the United States and certain other countries. Additionally, we incurred
$23.1 million of capital expenditures, primarily related to new Tommy Bahama retail stores.
During the nine months of fiscal 2006, investing activities used $25.8 million in cash. We paid
approximately $11.5 million related to acquisitions, consisting of the fiscal 2005 Tommy Bahama
earn-out payment and the acquisition of the Solitude® and Arnold Brant ® businesses. Additionally,
we incurred capital expenditures of $16.6 million, primarily related to new Tommy Bahama and Ben
Sherman retail stores. These investments were partially offset by $2.0 million of proceeds received
from our Paradise Shoe equity investment as a result of Paradise Shoe selling substantially all of
its assets during the first quarter of fiscal 2006.
Non-current assets, including property, plant and equipment, goodwill, intangible assets and other
non-current assets, increased primarily as a result of the fiscal 2006 earn-out related to the
Tommy Bahama acquisition, the acquisition of the ownership interest in an unconsolidated entity
that owns the Hathaway trademark and other related trademarks in the United States and certain
other countries, capital expenditures for our retail stores and the impact of changes in foreign
currency exchange rates. These increases were partially offset by depreciation related to our
property, plant and equipment and amortization of our intangible assets.
Financing Activities
During the nine months of fiscal 2007, financing activities provided $1.3 million in cash. The cash
flow used in our investing activities and to pay dividends on our common shares, partially offset
by the cash flow provided by our operating activities and discontinued operations, resulted in the
need to borrow additional amounts under our U.S. Revolver during the nine months of fiscal 2007. We
also received $4.2 million of cash from the exercise of employee stock options. We paid an
aggregate of $11.2 million during the nine months of fiscal 2007 for dividends on our common shares
declared for the fourth quarter of fiscal 2006 and the first three quarters of fiscal 2007.
During the nine months of fiscal 2006, financing activities provided $16.6 million in cash,
primarily from additional borrowings, net of repayments, under our U.S. Revolver to fund our
investments and working capital needs during the period. We also received $5.1 million of cash from
the exercise of employee stock options. These cash proceeds were partially offset by the use of
cash to pay $6.9 million of dividends on our common shares declared in the fourth quarter of fiscal
2005 and first two quarters of fiscal 2006. The dividend declared in the third quarter of fiscal
2006 was paid in the fourth quarter of fiscal 2006.
On March 2, 2007, we paid a cash dividend of $0.18 per share to shareholders of record as of
February 15, 2007. That dividend is the 187th consecutive quarterly dividend we have paid since we
became a public company in July 1960. Additionally, on April 2, 2007, our board of directors
declared a cash dividend of $0.18 per share to shareholders of record as of May 15, 2007, payable
on June 1, 2007. We expect to pay dividends in future quarters. However, we may decide to
discontinue or modify the dividend payment at any time if we determine that other uses of our
capital, including, but not limited to, payment of debt outstanding or funding of future
acquisitions, may be in our best interest; if our expectations of future cash flows and future cash
needs outweigh the ability to pay a dividend; or if the terms of our credit facilities or
indentures limit our ability to pay dividends. We may borrow to fund dividends in the short term
based on our expectations of operating cash flows in future periods. All cash flow from operations
will not necessarily be paid out as dividends in all periods.
Debt, including short term debt, was $208.9 million and $311.0 million as of March 2, 2007 and
March 3, 2006, respectively. The decrease resulted primarily from the proceeds from our disposition
of substantially all of the assets of our Womenswear Group operations on June 2, 2006, which were
used to reduce outstanding debt.
Cash Flows from Discontinued Operations
Our Womenswear Group generated cash flow of $28.3 million and used cash flow of $8.9 million during
the nine months of fiscal 2007 and the nine months of fiscal 2006, respectively. The cash flows
from discontinued operations for the nine months of fiscal 2006 reflect the operating results of
the Womenswear Group, whereas the nine months of fiscal 2007 reflects the realization and
disposition of retained assets and liabilities after the date of the transaction. Cash flows from
discontinued operations during fiscal 2006 and the nine months of fiscal 2007 are not indicative of
cash flows from discontinued operations anticipated in future periods. We do not anticipate
significant cash flows from discontinued operations in future periods.
25
Liquidity and Capital Resources
The table below provides a description of our significant financing arrangements (in thousands) at
March 2, 2007:
|
|
|
|
|
|
|
Balance |
|
$280 million U.S. Secured Revolving Credit Facility (U.S.
Revolver), which accrues interest, unused line fees and
letter of credit fees based upon a pricing grid tied to
certain debt ratios, requires interest payments monthly
with principal due at maturity (July 2009), and is
collateralized by substantially all the assets of Oxford
Industries, Inc. and our consolidated domestic
subsidiaries |
|
$ |
9,300 |
|
|
£12 million Senior Secured Revolving Credit Facility
(U.K. Revolver), which accrues interest at the banks
base rate plus 1.0%, requires interest payments monthly
with principal payable on demand or at maturity (July
2007), and is collateralized by substantially all the
United Kingdom assets of Ben Sherman |
|
|
|
|
- |
$200 million Senior Unsecured Notes (Senior Unsecured
Notes), which accrue interest at 8.875% (effective rate
of 9.0%), require interest payments semi-annually on June
1 and December 1 of each year, require payment of
principal at maturity (June 2011), are subject to certain
prepayment penalties and are guaranteed by our
consolidated domestic subsidiaries |
|
|
200,000 |
|
|
Other debt |
|
|
399 |
|
|
Total debt |
|
|
209,699 |
|
|
Unamortized discount on Senior Unsecured Notes |
|
|
(750 |
) |
|
Short-term debt and current maturities of long-term debt |
|
|
(399 |
) |
|
Total long-term debt, less current maturities |
|
$ |
208,550 |
|
|
Our U.S. Revolver, U.K. Revolver and Senior Unsecured Notes each include certain debt covenant
restrictions that require us or our subsidiaries to maintain certain financial ratios that we
believe are customary for similar facilities. Our U.S. Revolver also includes limitations on
certain restricted payments such as earn-outs, payment of dividends and prepayment of debt. As of
March 2, 2007, we were compliant with all financial covenants and restricted payment provisions
related to our debt agreements.
Our U.S. Revolver and U.K. Revolver are used to finance trade letters of credit and standby letters
of credit, as well as provide funding for other operating activities and acquisitions. As of March
2, 2007, approximately $58.3 million of trade letters of credit and other limitations on
availability were outstanding against our U.S. Revolver and the U.K. Revolver. The aggregate net
availability under our U.S. Revolver and U.K. Revolver agreements was approximately $235.7 million
as of March 2, 2007.
Our debt to total capitalization ratio was 33%, 33% and 47% at March 2, 2007, June 2, 2006 and
March 3, 2006, respectively. The change in this ratio from March 3, 2006 was primarily a result of
the disposition of substantially all of the assets of our Womenswear Group on June 2, 2006, the
proceeds of which were used to reduce outstanding debt.
We anticipate that we will be able to satisfy our ongoing cash requirements, which generally
consist of working capital needs, capital expenditures (primarily for the opening of retail stores)
and interest payments on our debt during fiscal 2007, primarily from cash on hand and cash flow
from operations supplemented by borrowings under our lines of credit, as necessary. Our capital
needs will depend on many factors, including our growth rate, the need to finance increased
inventory levels and the success of our various products.
If appropriate investment opportunities arise that exceed the availability under our existing
credit facilities, we believe that we will be able to fund such acquisitions through additional or
refinanced debt facilities or the issuance of additional equity. However, our ability to obtain
additional borrowings or refinance our credit facilities will depend on many factors, including the
prevailing market conditions, our financial condition and our ability to negotiate favorable terms
and conditions. There is no assurance that financing would be available on terms that are
acceptable or favorable to us, if at all. At maturity of our U.K. Revolver, U.S. Revolver and
Senior Unsecured Notes, we anticipate that we will be able to refinance the facilities and debt
with terms available in the market at that time.
Our contractual obligations as of March 2, 2007 have not changed significantly from the contractual
obligations outstanding at June 2, 2006 other than changes in the amounts outstanding under the
U.S. Revolver and U.K. Revolver, amounts outstanding pursuant to letters of credit (both as
discussed above) and new leases for our recently opened retail stores, none of which occurred
outside the ordinary course of business.
Our anticipated capital expenditures for fiscal 2007 are expected to approximate $30 million,
including $23.1 million incurred during the nine months of fiscal 2007. These expenditures
primarily consist of the continued expansion of our retail operations.
26
Off Balance Sheet Arrangements
We have not entered into agreements which meet the definition of an off balance sheet financing
arrangement, other than operating leases, and have made no financial commitments to or guarantees
with respect to any unconsolidated subsidiaries or special purpose entities.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations are based upon our
unaudited condensed consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues, and expenses and related disclosures of contingent assets and liabilities.
On an ongoing basis, we evaluate our estimates, including those related to bad debts, inventories,
intangible assets, income taxes, stock compensation expense, contingencies and litigation and
certain other accrued expenses. We base our estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these estimates under different
assumptions or conditions. See Managements Discussion and Analysis of Financial Condition and
Results of Operations in our fiscal 2006 Form 10-K for a summary of our critical accounting
policies.
SEASONALITY
Although our various product lines are sold on a year-round basis, the demand for specific products
or styles may be highly seasonal. For example, the demand for golf and Tommy Bahama products is
higher in the spring and summer seasons. Products are sold prior to each of the retail selling
seasons, including spring, summer, fall and holiday. As the timing of product shipments and other
events affecting the retail business may vary, results for any particular quarter may not be
indicative of results for the full year. The percentage of our net sales by quarter for fiscal 2006
was 24%, 25%, 25% and 26%, respectively, and the percentage of our operating income by quarter for
fiscal 2006 was 25%, 22%, 23% and 30%, respectively, which may not be indicative of the
distribution in fiscal 2007 or future years.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to certain interest rate, trade policy, commodity and inflation risks as discussed
in Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our fiscal 2006
Form 10-K. There have not been any significant changes in our exposure to these risks during the
nine months of fiscal 2007.
FOREIGN CURRENCY RISK
To the extent that we have assets and liabilities, as well as operations, denominated in foreign
currencies that are not hedged, we are subject to foreign currency transaction gains and losses. We
view our foreign investments as long-term and as a result we generally do not hedge such foreign
investments. We do not hold or issue any derivative financial instruments related to foreign
currency exposure for speculative purposes.
We receive United States dollars for most of our product sales. We anticipate that less than 15% of
our net sales during fiscal 2007 will be denominated in currencies other than the United States
dollar. These sales primarily relate to Ben Sherman sales in the United Kingdom and Europe and
sales of certain products in Canada. With the United States dollar trading at a weaker position
than it has historically traded versus the pound sterling and the Canadian dollar, a strengthening
United States dollar could result in lower levels of sales and earnings in our consolidated
statements of earnings in future periods, although the sales in foreign currencies could be equal
to or greater than amounts as previously reported. Based on our fiscal 2006 sales denominated in
foreign currencies, if the dollar had strengthened by 5% in fiscal 2006, we would have experienced
a decrease in net sales of approximately $6.5 million.
Substantially all of our inventory purchases from contract manufacturers throughout the world are
denominated in United States dollars. Purchase prices for our products may be impacted by
fluctuations in the exchange rate between the United States dollar and the local currencies, such
as the Chinese Yuan, of the contract manufacturers, which may have the effect of increasing our
cost of goods sold in the future. Due to the number of currencies involved and the fact that not
all foreign currencies react in the same manner against the United States dollar, we cannot
quantify
in any meaningful way the potential effect of such fluctuations on future costs. However, we do not
believe that exchange rate fluctuations will have a material impact on our inventory costs in
future periods.
27
We may from time to time purchase short-term foreign currency forward exchange contracts to hedge
against changes in foreign currency exchange rates. As of March 2, 2007, we had entered into such
contracts which have not been settled, in notional amounts totaling approximately $7.5 million, all
with settlement dates before the end of our fiscal year. When such contracts are outstanding, the
contracts are marked to market with the offset being recognized in our consolidated statement of
earnings or other comprehensive income if the transaction does not or does, respectively, qualify
as a hedge in accordance with accounting principles generally accepted in the United States. During
fiscal 2006 and the nine months of fiscal 2007 none of the contracts that we entered into qualified
for hedge accounting. As of March 2, 2007, June 2, 2006 and March 3, 2006, we had recognized a
liability of $0.4 million, no asset or liability, and an asset of $0.2 million, respectively,
related to these contracts.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls are procedures that are designed to ensure that information required to be
disclosed in our reports under the Securities Exchange Act of 1934, such as this quarterly report
on Form 10-Q, is reported in accordance with the rules of the SEC. Disclosure controls are also
designed to ensure that such information is accumulated and communicated to management, including
our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure.
Our Principal Executive Officer and Principal Financial Officer have evaluated the effectiveness of
the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act) as of the end of the period covered by this
report. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer
concluded that, as of the end of the period covered by this report, our disclosure controls and
procedures were effective in ensuring that information required to be disclosed by us in our
Securities Exchange Act reports is recorded, processed, summarized and reported within the time
periods specified in the SECs rules and forms, and that such information is accumulated and
communicated to our management, including our Principal Executive Officer and Principal Financial
Officer, as appropriate, to allow timely decisions regarding required disclosure.
There have not been any changes in our internal control over financial reporting (as such term is
defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act) during the third quarter
of fiscal 2007 that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the ordinary course of business, we may become subject to litigation or claims. We are not
currently a party to any litigation or regulatory actions that we believe could reasonably be
expected to have a material adverse effect on our financial position, results of operations or cash
flows.
ITEM 1A. RISK FACTORS
We believe that an investor should carefully consider the factors discussed in Part I. Item 1A.
Risk Factors in our fiscal 2006 Form 10-K. There have been no material changes to the risk factors
described in our fiscal 2006 Form 10-K. The risks described in our Form 10-K are not the only risks
facing our company. If any of the risks described in our Form 10-K, or other risks or uncertainties
not currently known to us or that we currently deem to be immaterial, actually occur, our business,
financial condition or operating results could suffer.
28
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The table below summarizes our stock repurchases during the third quarter of fiscal 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Number of |
|
Maximum |
|
|
|
|
|
|
|
|
|
|
Shares Purchased |
|
Number of Shares |
|
|
|
|
|
|
Average |
|
as Part of |
|
That May Yet be |
|
|
Total Number |
|
Price |
|
Publicly |
|
Purchased Under |
|
|
of Shares |
|
Paid per |
|
Announced Plans |
|
the Plans or |
Fiscal Month |
|
Purchased (1) |
|
Share |
|
or Programs (2) |
|
Programs (2) |
|
December (12/2/06-12/29/06) |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
January (12/30/06-2/2/07) |
|
|
2,848 |
|
|
|
48.06 |
|
|
|
|
|
|
|
|
|
February (2/3/07-3/2/07) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
2,848 |
|
|
$ |
48.06 |
|
|
|
|
|
|
|
1,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents shares purchased from employees to pay taxes related to the vesting of
restricted shares. |
|
(2) |
|
On August 3, 2006, our board of directors approved a stock repurchase authorization for up
to one million shares of our common stock. As of March 2, 2007, no shares have been
repurchased by us pursuant to this authorization. |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
On April 2, 2007, our Board of Directors amended the Bylaws of Oxford Industries, Inc. to (i)
specify the date and process by which shareholders must give notice of a shareholder proposal or
director nomination in order for such proposal or nomination to be timely and acceptable for
consideration at any annual meeting of the shareholders, and (ii) provide that, except in certain
specified circumstances, any nominee for director will be elected by a majority of the votes cast
at the meeting of the shareholders at which a quorum is present and any continuing director not so
elected will offer to tender his or her resignation (which resignation our Board of Directors will
determine whether to accept or reject and make public its decision within 90 days of the
certification of election results). The amendments became effective as of April 2, 2007. Prior to
the amendments, the Bylaws of Oxford Industries, Inc. did not specify the date or process by which
a shareholder could give notice of a shareholder proposal or director nomination and provided for
the election of directors in accordance with the laws of the State of Georgia, except as specified
in our charter with respect to filling vacancies on our Board of Directors and for rights expressly
granted to certain holders of our capital stock in accordance with our charter.
Pursuant to the Bylaws of Oxford Industries, Inc., as now in effect, to be timely, a shareholder
proposal (other than a director nomination) must be delivered to our Secretary within the time
period specified in SEC Rule 14a-8(e)(2) (or any successor rule). Pursuant to SEC Rule 14a-8(e)(2),
as currently in effect, a shareholder proposal must be received by us not less than 120 calendar
days before the date of our proxy statement to shareholders in connection with our annual meeting
during the preceding year, provided that if the date of the annual meeting changes by more than 30
days from the date of the previous years meeting, then the deadline is a reasonable time before we
begin to print and send proxy materials. Accordingly, in order for a shareholder proposal (other
than a director nomination) to be presented at our 2007 annual meeting of shareholders, we must
receive the proposal on or before May 4, 2007, provided that in the event the date of our 2007
annual meeting of shareholders is advanced more than 30 days prior to or delayed more than 30 days
after October 10, 2007, a proposal by a shareholder (other than a director nomination) to be timely
must be delivered a reasonable time before we begin to print and send proxy materials in connection
with such annual meeting.
29
In addition, a shareholder proposal (other than a director nomination) should include the
following: (i) the names and business addresses of the shareholder proponent and all persons acting
in concert with the proponent (including the names and addresses as set forth in our books); (ii)
the class and number of shares of our capital stock beneficially owned by the proponent and the
other persons identified in clause (i); (iii) a description of the proposal, containing all
material information relating thereto; and (iv) other information our Board of Directors reasonably
determines is necessary or appropriate to enable it and our shareholders to consider the proposal.
Pursuant to the Bylaws of Oxford Industries, Inc., as now in effect, to be timely, a director
nomination by a shareholder must be delivered to our Secretary not less than 90 nor more than 120
days prior to the first anniversary of the date on which we first mailed proxy materials for the
preceding years annual meeting, provided that in the event that the annual meeting of shareholders
is advanced more than 30 days prior to or delayed more than 30 days after the first anniversary of
the preceding years annual meeting, a director nomination submitted by a shareholder to be timely
must be delivered not later than the close of business on the later of (i) the 90th day prior to
the annual meeting and (ii) the 10th day following the date on which public announcement of the
date of such annual meeting is first made. Accordingly, in order for a shareholder to nominate a
director for consideration at our 2007 annual meeting of shareholders, unless our 2007 annual
meeting of shareholders is advanced more than 30 days prior to or delayed more than 30 days after
October 10, 2007, we must receive the nomination not prior to May 14, 2007 and not later than June
13, 2007.
In addition, notice of a director nomination by a shareholder should include the following: (i) the
name and address of record of the shareholder who intends to make the nomination; (ii) a
representation that the shareholder is a holder of record of shares of our capital stock entitled
to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (iii) the class and number of shares of capital stock
held of record, owned beneficially, and represented by proxy, by the shareholder and each proposed
nominee, as of the date of the notice; (iv) the name, age, business and residence addresses, and
principal occupation or employment of each proposed nominee; (v) a description of all arrangements
or understandings between the shareholder and each proposed nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; (vi) such other information regarding each proposed nominee as would be required
to be included in a proxy statement filed pursuant to the proxy rules of the SEC; and (vii) the
written consent of each proposed nominee to serve as a director if so elected.
The Bylaws of Oxford Industries, Inc., as amended by our Board of Directors on April 2, 2007, are
filed with this report on Form 10-Q as Exhibit 3(b) and are incorporated in this Item 5 by
reference.
ITEM 6. EXHIBITS
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3(a)
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Articles of Incorporation of Oxford Industries, Inc. Incorporated by reference to Exhibit 3.1
from the Oxford Industries, Inc.
Form 10-Q for the fiscal quarter ended August 29, 2003. |
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3(b)
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Bylaws of Oxford Industries, Inc., as amended.* |
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10.1
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Release and Non-Solicitation Agreement, dated February 2, 2007. Incorporated by reference to
Exhibit 10.1 from the Oxford Industries, Inc. Form 8-K
filed on February 7, 2007. |
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10.2
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Amendment to the Oxford Industries, Inc. Long-Term Stock Incentive Plan, dated as of
April 2, 2007. * |
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31.1
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Section 302 Certification by Principal Executive Officer.* |
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31.2
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Section 302 Certification by Principal Financial Officer.* |
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Section 906 Certification by Principal Executive Officer and Principal Financial Officer.* |
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* |
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Filed herewith. |
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Exhibit is a management contract or compensatory plan or arrangement. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
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April 4, 2007
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OXFORD INDUSTRIES, INC. |
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(Registrant) |
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/s/ Thomas Caldecot Chubb III
Thomas Caldecot Chubb III
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Executive Vice President |
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(Authorized Signatory and Principal Financial Officer) |
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