OXFORD INDUSTRIES INC - Quarter Report: 2008 November (Form 10-Q)

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended NOVEMBER 1, 2008

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

OXFORD INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Georgia		58-0831862
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

222 Piedmont Avenue, N.E., Atlanta, Georgia 30308

(404) 659-2424

Not Applicable

     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, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

     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 issuer’s classes of common stock, as of the latest practicable date.

		Number of shares outstanding
Title of each class		as of December 5, 2008
Common Stock, $1 par value		15,848,216

 

 

OXFORD INDUSTRIES, INC.
INDEX TO FORM 10-Q
For the third quarter of fiscal 2008

		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Earnings (Unaudited)			5
Condensed Consolidated Balance Sheets (Unaudited)			6
Condensed Consolidated Statements of Cash Flows (Unaudited)			7
Notes to Unaudited Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3. Quantitative and Qualitative Disclosures About Market Risk			37
Item 4. Controls and Procedures			37
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			38
Item 1A. Risk Factors			38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			38
Item 3. Defaults Upon Senior Securities			39
Item 4. Submission of Matters to a Vote of Security Holders			39
Item 5. Other Information			39
Item 6. Exhibits			40
Signatures			41
EX-3.(B)
EX-31.1
EX-31.2
EX-32

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

     Our Securities and Exchange Commission filings and public announcements may 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 forward-looking statements contained herein, in our press releases or on 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 the duration and severity of the current economic conditions and the impact on consumer demand and spending, demand for our products, timing of shipments requested by our wholesale customers, expected pricing levels, competitive conditions, the timing and cost of planned capital expenditures, expected synergies in connection with acquisitions and joint ventures, costs of products and raw materials we purchase, expected outcomes of pending or potential litigation and regulatory actions, and disciplined execution by key management. 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, or other risks or uncertainties not currently known to us or that we currently deem to be immaterial, 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 Form 10-KT for the eight-month transition period ended February 2, 2008, 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 Securities and Exchange Commission.

     We caution that one should not place undue reliance on forward-looking statements, which speak only as of the date on which they are made. 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,” “EITF” and “SEC” mean the Financial Accounting Standards Board, Statement of Financial Accounting Standards, Emerging Issues Task Force and the U.S. Securities and Exchange Commission, respectively.

     On October 8, 2007, our Board of Directors approved a change to our fiscal year-end. Effective with our fiscal year which commenced on June 2, 2007, our fiscal year ends at the end of the Saturday closest to January 31 and will, in each case, begin at the beginning of the day next following the last day of the preceding fiscal year. Accordingly, there was a transition period from June 2, 2007 through February 2, 2008, and we filed a transition report on Form 10-KT for that period. Accordingly, some of the periods presented in this report for comparative purposes have not previously been publicly reported. The terms listed below (or words of similar import) reflect the respective period noted:

Fiscal 2009		52 weeks ending January 30, 2010
Fiscal 2008		52 weeks ending January 31, 2009
Eight-month transition period ended February 2, 2008		35 weeks and one day ended February 2, 2008
12 months ended February 2, 2008		52 weeks and one day ended February 2, 2008
Fiscal 2007		52 weeks ended June 1, 2007
Fourth quarter of fiscal 2008		13 weeks ending January 31, 2009
Third quarter of fiscal 2008		13 weeks ended November 1, 2008
Second quarter of fiscal 2008		13 weeks ended August 2, 2008
First quarter of fiscal 2008		13 weeks ended May 3, 2008
Three months ended February 2, 2008		13 weeks and one day ended February 2, 2008
Three months ended November 2, 2007		13 weeks ended November 2, 2007
Three months ended August 3, 2007		13 weeks ended August 3, 2007
Three months ended May 4, 2007		13 weeks ended May 4, 2007
First nine months of fiscal 2008		39 weeks ended November 1, 2008
Nine months ended November 2, 2007		39 weeks ended November 2, 2007

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OXFORD INDUSTRIES, INC.

		Third				Three Months				First Nine				Nine Months
		Quarter				Ended				Months				Ended
		Fiscal 2008				November 2,				Fiscal 2008				November 2,
						2007								2007
Net sales		$	244,186			$	286,325			$	747,648			$	823,332
Cost of goods sold			150,557				174,078				441,039				487,514
Gross profit			93,629				112,247				306,609				335,818
Selling, general and administrative expenses			84,637				92,843				273,243				275,340
Amortization of intangible assets			692				1,227				5,538				4,240
			85,329				94,070				278,781				279,580
Royalties and other operating income			4,584				4,999				13,123				14,476
Operating income			12,884				23,176				40,951				70,714
Interest expense, net			6,437				5,521				18,754				15,997
Earnings before income taxes			6,447				17,655				22,197				54,717
Income taxes			1,672				3,984				6,432				15,215
Net earnings		$	4,775			$	13,671			$	15,765			$	39,502
Net earnings per common share:
Basic		$	0.31			$	0.77			$	1.01			$	2.22
Diluted		$	0.31			$	0.76			$	1.00			$	2.20
Weighted average common shares outstanding:
Basic			15,489				17,820				15,682				17,777
Dilutive impact of options and restricted shares			92				125				91				182
Diluted			15,581				17,945				15,773				17,959
Dividends declared per common share		$	0.18			$	0.18			$	0.54			$	0.54

See accompanying notes.

OXFORD INDUSTRIES, INC.

		November 1,				February 2,				November 2,
		2008				2008				2007
ASSETS
Current Assets:
Cash and cash equivalents		$	8,034			$	14,912			$	11,959
Receivables, net			119,960				105,561				156,424
Inventories, net			108,622				158,925				155,762
Prepaid expenses			21,120				18,701				21,979
Total current assets			257,736				298,099				346,124
Property, plant and equipment, net			93,348				92,502				90,190
Goodwill, net			248,569				257,921				225,039
Intangible assets, net			208,315				230,933				236,932
Other non-current assets, net			26,928				30,817				32,004
Total Assets		$	834,896			$	910,272			$	930,289
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable and other accrued expenses		$	89,242			$	101,123			$	95,357
Accrued compensation			14,972				14,485				16,359
Income taxes payable			—				20				2,656
Dividends payable			—				2,889				3,236
Short-term debt and current maturities of long-term debt			16,038				37,900				416
Total current liabilities			120,252				156,417				118,024
Long-term debt, less current maturities			219,548				234,414				221,570
Other non-current liabilities			50,562				50,909				51,671
Non-current deferred income taxes			54,416				60,984				66,699
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, $1.00 par value; 30,000 authorized and none issued and outstanding at November 1, 2008; February 2, 2008; and November 2, 2007			—				—				—
Common stock, $1.00 par value; 60,000 authorized and 15,866 issued and outstanding at November 1, 2008; 16,049 issued and outstanding at February 2, 2008; and 17,978 issued and outstanding at November 2, 2007			15,866				16,049				17,978
Additional paid-in capital			87,465				85,224				84,651
Retained earnings			300,867				293,212				348,311
Accumulated other comprehensive (loss) income			(14,080	)			13,063				21,385
Total shareholders’ equity			390,118				407,548				472,325
Total Liabilities and Shareholders’ Equity		$	834,896			$	910,272			$	930,289

See accompanying notes.

OXFORD INDUSTRIES, INC.

						Nine Months
		First Nine				Ended
		Months				November 2,
		Fiscal 2008				2007
Cash Flows From Operating Activities:
Net earnings		$	15,765			$	39,502
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation			15,006				13,322
Amortization of intangible assets			5,538				4,240
Amortization of deferred financing costs and bond discount			2,572				1,859
Stock compensation expense			2,629				1,212
Loss on sale of property, plant and equipment			416				701
Equity income from unconsolidated entities			(875	)			(476	)
Deferred income taxes			(1,556	)			(6,548	)
Changes in working capital:
Receivables			(17,779	)			(47,633	)
Inventories			47,086				11,355
Prepaid expenses			(3,490	)			1,459
Current liabilities			(7,781	)			(17,132	)
Other non-current assets			3,997				(1,933	)
Other non-current liabilities			(242	)			9,272
Net cash provided by (used in) operating activities			61,286				9,200
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired, and investment in unconsolidated entity			(666	)			(22,081	)
Purchases of property, plant and equipment			(17,280	)			(25,378	)
Proceeds from sale of property, plant and equipment			16				2,956
Net cash provided by (used in) investing activities			(17,930	)			(44,503	)
Cash Flows From Financing Activities:
Repayment of financing arrangements			(266,952	)			(71,997	)
Proceeds from financing arrangements			230,430				94,185
Deferred financing costs paid			(1,665	)			—
Proceeds from issuance of common stock including tax benefits			264				3,924
Dividends on common stock			(11,557	)			(9,632	)
Net cash provided by (used in) financing activities			(49,480	)			16,480
Net change in cash and cash equivalents			(6,124	)			(18,823	)
Effect of foreign currency translation on cash and cash equivalents			(754	)			320
Cash and cash equivalents at the beginning of period			14,912				30,462
Cash and cash equivalents at the end of period		$	8,034			$	11,959

See accompanying notes.

OXFORD INDUSTRIES, INC.

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 as of the date and 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 the restructuring charges and other unusual items described in note 6 which do not occur evenly throughout the year and the seasonality of our business. The accounting policies applied during the interim periods presented are consistent with the significant accounting policies described in our Form 10-KT for the eight-month transition period ended February 2, 2008. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in our Form 10-KT for the eight-month transition period ended February 2, 2008.
		Recently Adopted Standards
		In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). In February 2008, the FASB released FASB Staff Position 157-2 “Effective Date of FASB Statement No. 157”, which delayed the effective date of SFAS 157 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). We adopted SFAS 157 for financial assets and liabilities during the first quarter of fiscal 2008. SFAS 157 provides enhanced guidance for using fair value measurements for assets and liabilities which are required or permitted to be recorded at fair value under another standard and does not extend the use of fair value beyond what is currently required or permitted by other standards. SFAS 157 also requires additional disclosures about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. The adoption of SFAS 157 for our financial assets and liabilities in fiscal 2008 did not have a material impact on our consolidated financial statements. We are still in the process of evaluating the impact that SFAS 157 will have on our non-financial assets and non-financial liabilities upon adoption in fiscal 2009.
		SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. SFAS 157 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires that we maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

	•		Level 1 — Quoted prices in active markets for identical assets or liabilities.
	•		Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
	•		Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, which includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

		We have determined that certain foreign currency exchange contracts are the only financial assets and liabilities measured at fair value on a recurring basis (at least annually) within the scope of SFAS 157 that are included in our consolidated financial statements. Although we have had forward foreign currency exchange contracts outstanding at certain times during fiscal 2008, as of November 1, 2008 we had no forward foreign currency exchange contracts outstanding. Refer to Note 1 included in our Form 10-KT for the eight-month transition period ended February 2, 2008 for additional information about our practices relating to forward foreign currency exchange contracts.
		In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115” (“SFAS 159”). We adopted SFAS 159 in the first quarter of fiscal 2008. SFAS 159 permits entities to choose to measure eligible items in the balance sheet at fair value at specified election dates with the unrealized gains and losses recognized in net earnings. We did not elect to change the measurement of any items in our balance sheet to fair value upon adoption; therefore the adoption of SFAS 159 did not have an impact on our financial statements.
2.		Inventories: The components of inventories as of the dates specified are summarized as follows (in thousands):

		November 1,				February 2,				November 2,
		2008				2008				2007
Finished goods		$	129,339			$	171,685			$	168,868
Work in process			7,187				10,142				7,268
Fabric, trim and supplies			11,146				16,912				18,910
LIFO reserve			(39,050	)			(39,814	)			(39,284	)
Total		$	108,622			$	158,925			$	155,762

3.

Comprehensive Income: Comprehensive income, which reflects the effects of foreign currency translation adjustments, is calculated as follows for the periods presented (in thousands):

						Three Months								Nine Months
						Ended				First Nine				Ended
		Third Quarter				November 2,				Months Fiscal				November 2,
		Fiscal 2008				2007				2008				2007
Net earnings		$	4,775			$	13,671			$	15,765			$	39,502
Gain (loss) on foreign currency translation, net of tax			(26,418	)			3,306				(27,143	)			11,961
Comprehensive income		$	(21,643	)		$	16,977			$	(11,378	)		$	51,463

4.

Operating Group Information: Our business is operated through our four operating groups: Tommy Bahama, Ben Sherman, Lanier Clothes and Oxford Apparel. We identify our operating groups based on the way our management organizes the components of our business for purposes of allocating resources and assessing performance. The leader of each operating group reports directly to our Chief Executive Officer. 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. Corporate and Other includes a LIFO reserve of $39.1 million, $39.8 million and $39.3 million as of November 1, 2008, February 2, 2008 and November 2, 2007, respectively. For further information on our operating groups, see Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report and Part I, Item 1. Business in our Form 10-KT for the eight-month transition period ended February 2, 2008.

The table below presents certain information about our operating groups (in thousands).

						Three Months				First				Nine Months
		Third Quarter				Ended				Nine Months				Ended
		Fiscal 2008				November 2,				Fiscal 2008				November 2,
						2007								2007
Net Sales
Tommy Bahama		$	83,726			$	102,960			$	324,991			$	349,086
Ben Sherman			38,235				46,668				107,317				122,418
Lanier Clothes			44,314				52,861				111,185				127,079
Oxford Apparel			78,082				83,348				204,790				222,801
Corporate and Other			(171	)			488				(635	)			1,948
Total		$	244,186			$	286,325			$	747,648			$	823,332
Depreciation
Tommy Bahama		$	4,009			$	3,181			$	11,677			$	9,686
Ben Sherman			584				664				1,760				1,902
Lanier Clothes			138				200				712				627
Oxford Apparel			226				255				682				816
Corporate and Other			66				89				175				291
Total		$	5,023			$	4,389			$	15,006			$	13,322
Amortization of Intangible Assets
Tommy Bahama		$	355			$	542			$	1,064			$	1,895
Ben Sherman			327				614				1,047				2,130
Lanier Clothes			—				30				2,267				90
Oxford Apparel			10				41				1,160				125
Total		$	692			$	1,227			$	5,538			$	4,240
Operating Income
Tommy Bahama		$	689			$	11,310			$	38,315			$	58,750
Ben Sherman			3,242				5,595				1,495				5,825
Lanier Clothes			4,482				2,618				(6,894	)			1,865
Oxford Apparel			7,346				7,376				16,409				17,710
Corporate and Other			(2,875	)			(3,723	)			(8,374	)			(13,436	)
Total Operating Income		$	12,884			$	23,176			$	40,951			$	70,714
Interest Expense, net			6,437				5,521				18,754				15,997
Earnings Before Income Taxes		$	6,447			$	17,655			$	22,197			$	54,717

		November 1,				February 2,				November 2,
		2008				2008				2007
Assets
Tommy Bahama		$	509,769			$	519,291			$	483,631
Ben Sherman			172,765				208,829				226,076
Lanier Clothes			70,750				83,208				101,514
Oxford Apparel			86,916				102,253				112,390
Corporate and Other			(5,304	)			(3,309	)			6,678
Total		$	834,896			$	910,272			$	930,289

5.		Accelerated Share Repurchase Program: As discussed in our Form 10-KT for the eight-month transition period ended February 2, 2008 and our Form 10-Q’s for the first and second quarters of fiscal 2008, on November 8, 2007, we entered into a $60 million accelerated share repurchase agreement with Bank of America, N.A. On November 8, 2007, we made a payment of $60 million to Bank of America that was funded by borrowings under our Prior Credit Agreement (as defined in Note 7 below). Bank of America made an initial delivery to us of approximately 1.9 million shares during November 2007 and a final delivery during May 2008 of approximately 0.6 million shares upon completion of the program. We acquired approximately 2.5 million shares at a price of $24.03 per share.
6.		Restructuring Charges and Other Unusual Items: During the second quarter of fiscal 2008, we incurred approximately $8.9 million of charges related to the impact of restructuring in our Lanier Clothes and Oxford Apparel operating groups. In addition to these restructuring charges recognized in the second quarter of fiscal 2008, we recognized other unusual items totaling a charge of $0.3 million in Lanier Clothes and a net benefit of $1.2 million in Oxford Apparel, substantially all of which charge and benefit is reflected in selling, general and administrative expenses, or SG&A.
		Lanier Clothes incurred restructuring charges totaling approximately $9.2 million primarily associated with our decision to exit from certain license agreements relating to the Nautica® and O OscarTM brands and the restructuring of our Arnold Brant® business. These charges include costs associated with the disposal of the inventory, payments related to license termination, the impairment of intangible assets associated with the Arnold Brant business, severance costs and the impairment of certain property, plant and equipment. Approximately $2.5 million and $2.2 million of these charges were recorded in SG&A and amortization of intangible assets, respectively, with the remaining charges being recognized in net sales and cost of goods sold. Substantially all cash charges are anticipated to be paid prior to the end of fiscal 2008. Approximately $1.9 million of the $9.2 million of charges for Lanier Clothes were reversed in cost of goods sold in Corporate & Other as part of LIFO.
		Additionally, our Oxford Apparel operating group incurred certain restructuring charges totaling approximately $1.6 million during the second quarter of fiscal 2008 associated with the decision to exit the Solitude business. These charges include costs associated with the disposal of inventory which are classified as a reduction to net sales and the impairment of intangible assets of $1.1 million associated with the Solitude business which is included in amortization of intangible assets.
		The net benefit of $1.2 million in Oxford Apparel was primarily related to the resolution of a contingent liability and the sale of a trademark partially offset by an increase in our bad debt reserve due to certain customers’ bankruptcy filings.
		During the third quarter of fiscal 2008, we incurred an additional $0.6 million of restructuring charges, primarily consisting of severance costs as we continue to focus on reducing overhead within all operating groups and a write-off of approximately $0.9 million of unamortized financing costs as discussed in Note 7 below. We anticipate incurring approximately $1.0 million of additional restructuring charges in the fourth quarter of fiscal 2008.
7.		U.S. Revolving Credit Agreement: On August 15, 2008, we entered into a Second Amended and Restated Credit Agreement (the “U.S. Revolving Credit Agreement”). The parties to the U.S. Revolving Credit Agreement are Oxford Industries, Inc. and Tommy Bahama Group, Inc., as the borrowers (the “Borrowers”), certain of our subsidiaries as guarantors (the “Guarantors”), the financial institutions party thereto as lenders, the financial institutions party thereto as issuing banks, and SunTrust Bank as administrative agent (the “Administrative Agent”). The U.S. Revolving Credit Agreement amended and restated our Amended and Restated Credit Agreement dated as of July 28, 2004, as previously amended (the “Prior Credit Agreement”), among Oxford Industries, Inc., certain of our domestic subsidiaries as borrowers or guarantors, certain financial institutions party thereto as lenders, certain financial institutions party thereto as the issuing banks and SunTrust Bank, as administrative agent.
		The U.S. Revolving Credit Agreement provides for a revolving credit facility which may be used to refinance existing funded debt, to fund working capital, to fund future acquisitions and for general corporate purposes. The material terms of the U.S. Revolving Credit Agreement are as follows:

•

The U.S. Revolving Credit Agreement provides for a revolving credit facility of up to $175 million, which may be increased by up to $100 million by us subject to certain conditions. The Prior Credit Agreement provided for a revolving credit facility of up to $280 million.

	•		The total amount of availability under the U.S. Revolving Credit Agreement is limited to a borrowing base consisting of specified percentages of eligible categories of assets. The Administrative Agent has certain discretion to determine eligibility and to establish reserves with respect to the calculation of borrowing base availability.
	•		We may request base rate advances or LIBOR advances. Base rate advances accrue interest at floating rates equal to the higher of (i) SunTrust Bank’s prime lending rate or (ii) the federal funds rate plus 50 basis points. LIBOR advances accrue interest at LIBOR plus an applicable margin. We are also charged fees for letters of credit which are issued under the U.S. Revolving Credit Agreement. The applicable margin on LIBOR advances and the letter of credit fees are determined from a pricing grid which is based on the average unused availability under the U.S. Revolving Credit Agreement. Interest rate margins on LIBOR advances and standby letter of credit fees range from 175 basis points to 225 basis points, while the letter of credit fees for trade letters of credit range from 100 basis points to 150 basis points. Unused line fees are calculated at a per annum rate of 30 basis points.
	•		Our obligations under the U.S. Revolving Credit Agreement are secured by a first priority security interest in the Borrowers’ and the Guarantors’ accounts receivable (other than royalty payments in respect of trademark licenses), inventory, investment property (including the equity interests of certain subsidiaries), general intangibles (other than trademarks, trade names and related rights), deposit accounts, inter-company obligations, equipment, goods, documents, contracts, books and records and other personal property.
	•		The U.S. Revolving Credit Facility contains a financial covenant that applies only if unused availability under the U.S. Revolving Credit Agreement is less than the greater of (i) $26.25 million or (ii) 15% of the total revolving commitments for three consecutive business days. In such case, our fixed charge coverage ratio must not be less than 1.0 to 1.0 for the immediately preceding 12 fiscal months for which financial statements have been delivered. This financial covenant continues to apply until we have maintained unused availability under the U.S. Revolving Credit Agreement of more than the greater of (i) $26.25 million or (ii) 15% of the total revolving commitments for thirty consecutive days.
	•		The U.S. Revolving Credit Agreement contains a number of customary affirmative covenants regarding, among other things, the delivery of financial and other information to the Administrative Agent and other lenders, maintenance of records, compliance with law, maintenance of property, insurance and conduct of business.
	•		The U.S. Revolving Credit Agreement also contains certain negative covenants, including, among other things, covenants that limit our ability to (i) incur debt, (ii) guaranty certain obligations, (iii) incur liens, (iv) pay dividends to shareholders or repurchase shares of our common stock, (v) make investments, (vi) sell assets or stock of subsidiaries, (vii) acquire assets or businesses, (viii) merge or consolidate with other companies, or (ix) prepay, retire, repurchase or redeem debt.
	•		The U.S. Revolving Credit Agreement generally is scheduled to mature on August 15, 2013 as compared to the Prior Credit Agreement which had a maturity date of July 28, 2009.

		The above description of the U.S. Revolving Credit Agreement is not complete and is qualified in its entirety by the actual terms of the U.S. Revolving Credit Agreement and the related Amended and Restated Pledge and Security Agreement, attached as Exhibits 10.1 and 10.2, respectively, to our Form 8-K filed with the SEC on August 19, 2008.
		As a result of amending and restating the U.S. Revolving Credit Agreement during the third quarter of fiscal 2008, we wrote off approximately $0.9 million of unamortized financing costs incurred in connection with the Prior Credit Agreement.

8.

Consolidating Financial Data of Subsidiary Guarantors: Our $200 million Senior Unsecured Notes (“Senior Unsecured Notes”) are guaranteed by our wholly owned domestic subsidiaries (“Subsidiary Guarantors”). All guarantees are full and unconditional. For consolidated financial reporting purposes, non-guarantors consist of our subsidiaries which are organized outside of the United States. We use the equity method with respect to investments 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 November 1, 2008, February 2, 2008, and November 2, 2007; our unaudited condensed consolidating statements of earnings for the third quarter of fiscal 2008, the first nine months of fiscal 2008, the three months ended November 2, 2007 and the nine months ended November 2, 2007; and our unaudited condensed consolidating statements of cash flows for the first nine months of fiscal 2008 and the nine months ended November 2, 2007 (in thousands).

OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
November 1, 2008

		Oxford								Subsidiary
		Industries				Subsidiary				Non-				Consolidating				Consolidated
		(Parent)				Guarantors				Guarantors				Adjustments				Total
ASSETS
Cash and cash equivalents		$	6,400			$	892			$	742			$	—			$	8,034
Receivables, net			60,813				38,009				30,315				(9,177	)			119,960
Inventories			33,432				62,812				14,097				(1,719	)			108,622
Prepaid expenses			8,195				8,844				4,081				—				21,120
Total current assets			108,840				110,557				49,235				(10,896	)			257,736
Property, plant and equipment, net			9,181				78,640				5,527				—				93,348
Goodwill, net			1,847				168,932				77,790				—				248,569
Intangible assets, net			76				131,515				76,724				—				208,315
Other non-current assets, net			813,500				150,406				35,277				(972,255	)			26,928
Total Assets		$	933,444			$	640,050			$	244,553			$	(983,151	)		$	834,896
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities		$	52,041			$	46,357			$	30,793			$	(8,939	)		$	120,252
Long-term debt, less current portion			219,548				—				—				—				219,548
Non-current liabilities			275,153				(223,522	)			108,077				(109,146	)			50,562
Non-current deferred income taxes			(3,416	)			36,411				21,421				—				54,416
Total shareholders’/invested equity			390,118				780,804				84,262				(865,066	)			390,118
Total Liabilities and Shareholders’ Equity		$	933,444			$	640,050			$	244,553			$	(983,151	)		$	834,896

OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
February 2, 2008

		Oxford								Subsidiary
		Industries				Subsidiary				Non-				Consolidating				Consolidated
		(Parent)				Guarantors				Guarantors				Adjustments				Total
ASSETS
Cash and cash equivalents		$	2,100			$	1,050			$	11,762			$	—			$	14,912
Receivables, net			52,599				38,244				20,763				(6,045	)			105,561
Inventories			64,896				76,462				18,826				(1,259	)			158,925
Prepaid expenses			6,595				8,475				3,631				—				18,701
Total current assets			126,190				124,231				54,982				(7,304	)			298,099
Property, plant and equipment, net			7,933				77,652				6,917				—				92,502
Goodwill, net			1,847				168,932				87,142				—				257,921
Intangible assets, net			1,235				134,846				94,852				—				230,933
Other non-current assets, net			825,252				150,142				70,673				(1,015,250	)			30,817
Total Assets		$	962,457			$	655,803			$	314,566			$	(1,022,554	)		$	910,272
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities		$	78,518			$	54,268			$	29,066			$	(5,435	)		$	156,417
Long-term debt, less current portion			234,414				—				—				—				234,414
Non-current liabilities			246,261				(197,557	)			111,564				(109,359	)			50,909
Non-current deferred income taxes			(4,284	)			38,910				26,358				—				60,984
Total shareholders’/invested equity			407,548				760,182				147,578				(907,760	)			407,548
Total Liabilities and Shareholders’ Equity		$	962,457			$	655,803			$	314,566			$	(1,022,554	)		$	910,272

OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
November 2, 2007

		Oxford								Subsidiary
		Industries				Subsidiary				Non-				Consolidating				Consolidated
		(Parent)				Guarantors				Guarantors				Adjustments				Total
ASSETS
Cash and cash equivalents		$	3,718			$	1,145			$	7,096			$	—			$	11,959
Receivables, net			78,309				50,791				33,395				(6,071	)			156,424
Inventories			68,503				71,222				17,378				(1,341	)			155,762
Prepaid expenses			7,492				9,299				5,188				—				21,979
Total current assets			158,022				132,457				63,057				(7,412	)			346,124
Property, plant and equipment, net			8,592				74,655				6,943				—				90,190
Goodwill, net			1,847				168,932				54,260				—				225,039
Intangible assets, net			1,278				135,417				100,237				—				236,932
Other non-current assets, net			795,589				149,981				1,355				(914,921	)			32,004
Total Assets		$	965,328			$	661,442			$	225,852			$	(922,333	)		$	930,289
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities		$	41,053			$	55,471			$	27,201			$	(5,701	)		$	118,024
Long-term debt, less current portion			221,570				—				—				—				221,570
Non-current liabilities			234,554				(182,186	)			108,451				(109,148	)			51,671
Non-current deferred income taxes			(4,174	)			43,104				27,769				—				66,699
Total shareholders’/invested equity			472,325				745,053				62,431				(807,484	)			472,325
Total Liabilities and Shareholders’ Equity		$	965,328			$	661,442			$	225,852			$	(922,333	)		$	930,289

OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
Third Quarter Fiscal 2008

		Oxford								Subsidiary
		Industries				Subsidiary				Non-				Consolidating				Consolidated
		(Parent)				Guarantors				Guarantors				Adjustments				Total
Net sales		$	120,087			$	96,584			$	42,153			$	(14,638	)		$	244,186
Cost of goods sold			94,253				46,819				18,117				(8,632	)			150,557
Gross profit			25,834				49,765				24,036				(6,006	)			93,629
Selling, general and administrative			16,590				56,607				18,224				(6,092	)			85,329
Royalties and other income			2				3,119				1,723				(260	)			4,584
Operating income			9,246				(3,723	)			7,535				(174	)			12,884
Interest (income) expense, net			6,935				(2,814	)			2,316				—				6,437
Income from equity investment			4,494				—				—				(4,494	)			—
Earnings before income taxes			6,805				(909	)			5,219				(4,668	)			6,447
Income taxes (benefit)			1,917				(1,131	)			947				(61	)			1,672
Net earnings		$	4,888			$	222			$	4,272			$	(4,607	)		$	4,775
First Nine Months Fiscal 2008
		Oxford								Subsidiary
		Industries				Subsidiary				Non-				Consolidating				Consolidated
		(Parent)				Guarantors				Guarantors				Adjustments				Total
Net sales		$	310,481			$	355,692			$	116,406			$	(34,931	)		$	747,648
Cost of goods sold			245,934				161,670				50,226				(16,791	)			441,039
Gross profit			64,547				194,022				66,180				(18,140	)			306,609
Selling, general and administrative			55,266				184,449				58,128				(19,062	)			278,781
Royalties and other income			539				9,053				4,912				(1,381	)			13,123
Operating income			9,820				18,626				12,964				(459	)			40,951
Interest (income) expense, net			20,453				(8,875	)			7,176				—				18,754
Income from equity investment			25,015				—				—				(25,015	)			—
Earnings before income taxes			14,382				27,501				5,788				(25,474	)			22,197
Income taxes (benefit)			(1,681	)			6,862				1,412				(161	)			6,432
Net earnings		$	16,063			$	20,639			$	4,376			$	(25,313	)		$	15,765

OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
Three Months Ended November 2, 2007

		Oxford								Subsidiary
		Industries				Subsidiary				Non-				Consolidating				Consolidated
		(Parent)				Guarantors				Guarantors				Adjustments				Total
Net sales		$	132,930			$	115,548			$	48,968			$	(11,121	)		$	286,325
Cost of goods sold			102,081				53,346				21,743				(3,092	)			174,078
Gross profit			30,849				62,202				27,225				(8,029	)			112,247
Selling, general and administrative			23,785				56,370				22,228				(8,313	)			94,070
Royalties and other income			—				2,788				2,727				(516	)			4,999
Operating income			7,064				8,620				7,724				(232	)			23,176
Interest (income) expense, net			6,640				(3,574	)			2,433				22				5,521
Income from equity investment			14,647				1				—				(14,648	)			—
Earnings before income taxes			15,071				12,195				5,291				(14,902	)			17,655
Income taxes (benefit)			1,238				2,890				(53	)			(91	)			3,984
Net earnings		$	13,833			$	9,305			$	5,344			$	(14,811	)		$	13,671
Nine Months Ended November 2, 2007
		Oxford								Subsidiary
		Industries				Subsidiary				Non-				Consolidating				Consolidated
		(Parent)				Guarantors				Guarantors				Adjustments				Total
Net sales		$	342,212			$	386,707			$	124,854			$	(30,441	)		$	823,332
Cost of goods sold			264,247				175,375				55,222				(7,330	)			487,514
Gross profit			77,965				211,332				69,632				(23,111	)			335,818
Selling, general and administrative			68,819				170,620				63,952				(23,811	)			279,580
Royalties and other income			2,148				8,452				5,237				(1,361	)			14,476
Operating income			11,294				49,164				10,917				(661	)			70,714
Interest (income) expense, net			19,085				(10,039	)			6,883				68				15,997
Income from equity investment			47,819				(1	)			—				(47,818	)			—
Earnings before income taxes			40,028				59,202				4,034				(48,547	)			54,717
Income taxes (benefit)			49				17,435				(2,017	)			(252	)			15,215
Net earnings		$	39,979			$	41,767			$	6,051			$	(48,295	)		$	39,502

OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
First Nine Months Fiscal 2008

		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		$	20,801			$	42,844			$	(2,144	)		$	(215	)		$	61,286
Cash Flows from Investing Activities:
Investment in unconsolidated entity			—				(628	)			(38	)			—				(666	)
Purchases of property, plant and equipment			(2,656	)			(13,680	)			(944	)			—				(17,280	)
Proceeds from sale of property, plant and equipment			16				—				—				—				16
Net cash (used in) provided by investing activities			(2,640	)			(14,308	)			(982	)			—				(17,930	)
Cash Flows from Financing Activities:
Change in debt			(38,762	)			(1	)			2,241				—				(36,522	)
Deferred financing costs paid			(1,665	)			—				—				—				(1,665	)
Proceeds from issuance of common stock			281				(17	)			—				—				264
Change in inter-company payable			31,884				(28,676	)			(3,423	)			215				—
Dividends on common stock			(5,599	)			—				(5,958	)			—				(11,557	)
Net cash (used in) provided by financing activities			(13,861	)			(28,694	)			(7,140	)			215				(49,480	)
Net change in Cash and Cash Equivalents			4,300				(158	)			(10,266	)			—				(6,124	)
Effect of foreign currency translation			—				—				(754	)			—				(754	)
Cash and Cash Equivalents at the Beginning of Period			2,100				1,050				11,762				—				14,912
Cash and Cash Equivalents at the End of Period		$	6,400			$	892			$	742			$	—			$	8,034

OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Nine Months Ended November 2, 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		$	(34,217	)		$	47,002			$	(2,704	)		$	(881	)		$	9,200
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired, and investment in unconsolidated entity			(21,562	)			(519	)			—				—				(22,081	)
Purchases of property, plant and equipment			(590	)			(23,032	)			(1,756	)			—				(25,378	)
Proceeds from sale of property, plant and equipment			2,956				—				—				—				2,956
Net cash (used in) provided by investing activities			(19,196	)			(23,551	)			(1,756	)			—				(44,503	)
Cash Flows from Financing Activities:
Change in debt			22,200				(12	)			—				—				22,188
Proceeds from issuance of common stock			3,924				—				(613	)			613				3,924
Change in inter-company payable			15,957				(22,992	)			4,678				2,357				—
Dividends on common stock			(9,632	)			—				—				—				(9,632	)
Net cash (used in) provided by financing activities			32,449				(23,004	)			4,065				2,970				16,480
Net change in Cash and Cash Equivalents			(20,964	)			447				(395	)			2,089				(18,823	)
Effect of foreign currency translation			—				—				320				—				320
Cash and Cash Equivalents at the Beginning of Period			24,682				698				7,171				(2,089	)			30,462
Cash and Cash Equivalents at the End of Period		$	3,718			$	1,145			$	7,096			$	—			$	11,959

ITEM 2. MANAGEMENT’S 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 the unaudited condensed consolidated financial statements contained in this report and the consolidated financial statements, notes to consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Form 10-KT for the eight-month transition period ended February 2, 2008.

OVERVIEW

     We generate revenues and cash flow through the design, production, sale and distribution of branded and private label consumer apparel and footwear for men, women and children and the licensing of company-owned trademarks. Our principal markets and customers are located in the United States and, to a lesser extent, the United Kingdom. We source substantially all of our products through third-party producers located outside the United States and United Kingdom. We distribute the majority of our products through our wholesale customers, which include chain stores, department stores, specialty stores, specialty catalog retailers, mass merchants and Internet retailers. We also sell products of certain owned brands through our owned and licensed retail stores and e-commerce websites.

     Fiscal 2008 has been a challenging time for the retail and apparel industry as a result of the weak economic conditions which began in the second half of calendar year 2007 and significantly deteriorated further in the third quarter of fiscal 2008. These conditions impacted each of our operating groups, and we expect that challenging economic conditions will continue into fiscal 2009. Therefore, we have continued to plan inventory purchases conservatively, which will limit our sales growth opportunities for the remainder of fiscal 2008 and fiscal 2009. This strategy, however, will also mitigate inventory markdown risk and promotional pressures, while also protecting the integrity of our brands. In the current economic environment, it is important that we continue to focus on maintaining our balance sheet and liquidity by reducing working capital requirements, moderating our capital expenditures for future retail stores and reducing our overhead.

     Diluted net earnings per common share were $0.31 in the third quarter of fiscal 2008 and $0.76 in the three months ended November 2, 2007. The most significant factors impacting our results during the third quarter of fiscal 2008 are discussed below:

	•		Tommy Bahama’s operating income decreased $10.6 million, or 93.9%, during the third quarter of fiscal 2008 compared to the three months ended November 2, 2007. The decrease was primarily due to the impact of the current economic environment on sales at our owned retail stores and in our wholesale business and higher SG&A expenses associated with operating additional retail stores. These factors were partially offset by reductions in overhead during the third quarter of fiscal 2008. The third quarter historically has been Tommy Bahama’s weakest quarter at our owned retail stores, but the third quarter of fiscal 2008 was particularly weak as a result of significantly diminished traffic during September and October.
	•		Ben Sherman’s operating income decreased $2.4 million, or 42.1%, during the third quarter of fiscal 2008 compared to the three months ended November 2, 2007. The decrease in operating income was primarily due to lower sales in our United Kingdom business as we exited certain lower tier customer accounts that were still active in the three months ended November 2, 2007 as part of our efforts to reposition the brand, the current economic conditions and the impact of the weaker British pound versus the U.S. dollar during the third quarter of fiscal 2008. The impact of the sales decrease in the United Kingdom was partially offset by increased sales in other markets and reductions in overhead.
	•		Lanier Clothes’ operating income increased $1.9 million, or 71.2%, during the third quarter of fiscal 2008 compared to the three months ended November 2, 2007. This increase in operating income was primarily attributable to reductions in SG&A. Net sales declined during the third quarter of fiscal 2008 compared to the three months ended November 2, 2007 primarily due to the winding down of the Oscar de la Renta and Nautica licensed businesses, the restructuring of the Arnold Brant business and the impact of the weak demand in the tailored clothing market. The sales decline resulted in a decline in gross profit which was more than offset by the reductions in overhead.

	•		Oxford Apparel’s operating income was flat during the third quarter of fiscal 2008 compared to the three months ended November 2, 2007. The third quarter of fiscal 2008 provided lower sales levels due to the current economic conditions and our continued focus on key product categories and lines of business. The impact of the lower sales was offset by a significant reduction in SG&A in the third quarter of fiscal 2008. Also, the same period of the prior year included charges totaling $1.0 million associated with the sale of Oxford Apparel’s last owned manufacturing facility.
	•		Corporate and Other’s operating loss decreased $0.8 million, or 22.8%, in the third quarter of fiscal 2008 compared to the three months ended November 2, 2007. This decrease in operating loss was primarily due to the impact of lower corporate SG&A.

ACCELERATED SHARE REPURCHASE PROGRAM

     On May 22, 2008, at the conclusion of our accelerated share repurchase program which we entered into in November 2007, we received an additional 0.6 million shares of our common stock, bringing the total number of shares received pursuant to the program to 2.5 million. This accelerated share repurchase program is complete and we will not receive any additional shares in the future pursuant to this program. For further information regarding our $60 million accelerated share repurchase program, see Note 5 to our unaudited condensed consolidated financial statements included in this report.

U.S. REVOLVING CREDIT AGREEMENT

     On August 15, 2008, we amended and restated the Prior Credit Agreement. The U.S. Revolving Credit Agreement provides for a revolving credit facility which may be used to refinance existing funded debt, to fund working capital, to fund future acquisitions and for general corporate purposes. The U.S. Revolving Credit Agreement provides for a revolving credit facility of up to $175 million, which may be increased by up to $100 million by us subject to certain conditions, and is scheduled to mature August 15, 2013. The Prior Credit Agreement provided for a revolving credit facility of up to $280 million and was scheduled to mature in July 2009. See Note 7 to our unaudited condensed consolidated financial statements included in this report for further information regarding our U.S. Revolving Credit Agreement including limitations on the borrowing base, interest rates on advances, security for the facility, and financial, affirmative and negative covenants. As a result of amending and restating the U.S. Revolving Credit Agreement during the third quarter of fiscal 2008 we wrote off approximately $0.9 million of unamortized financing costs incurred in connection with the Prior Credit Agreement.

RESULTS OF OPERATIONS

     The following table sets forth the line items in our consolidated statements of earnings (in thousands) and the percentage change during the third quarter of fiscal 2008 as compared to the three months ended November 2, 2007 and the first nine months of fiscal 2008 compared to the nine months ended November 2, 2007. 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.

						Three												Nine
						Months												Months
		Third				Ended								First Nine				Ended
		Quarter				November 2,				Percent				Months				November 2,				Percent
		Fiscal 2008				2007				Change				Fiscal 2008				2007				Change
Net sales		$	244,186			$	286,325				(14.7	%)		$	747,648			$	823,332				(9.2	%)
Cost of goods sold			150,557				174,078				(13.5	%)			441,039				487,514				(9.5	%)
Gross profit			93,629				112,247				(16.6	%)			306,609				335,818				(8.7	%)
Selling, general and administrative expenses			84,637				92,843				(8.8	%)			273,243				275,340				(0.8	%)
Amortization of intangible assets			692				1,227				(43.6	%)			5,538				4,240				30.6	%
Royalties and other operating income			4,584				4,999				(8.3	%)			13,123				14,476				(9.3	%)
Operating income			12,884				23,176				(44.4	%)			40,951				70,714				(42.1	%)
Interest expense, net			6,437				5,521				16.6	%			18,754				15,997				17.2	%
Earnings before income taxes			6,447				17,655				(63.5	%)			22,197				54,717				(59.4	%)
Income taxes			1,672				3,984				(58.0	%)			6,432				15,215				(57.7	%)
Net earnings		$	4,775			$	13,671				(65.1	%)		$	15,765			$	39,502				(60.1	%)
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
						Three												Nine
						Months												Months
		Third				Ended								First Nine				Ended
		Quarter				November 2,								Months				November 2,
		Fiscal 2008				2007								Fiscal 2008				2007
Net sales			100.0	%			100.0	%							100.0	%			100.0	%
Cost of goods sold			61.7	%			60.8	%							59.0	%			59.2	%
Gross profit			38.3	%			39.2	%							41.0	%			40.8	%
Selling, general and administrative expenses			34.7	%			32.4	%							36.5	%			33.4	%
Amortization of intangible assets			0.3	%			0.4	%							0.7	%			0.5	%
Royalties and other operating income			1.9	%			1.7	%							1.8	%			1.8	%
Operating income			5.3	%			8.1	%							5.5	%			8.6	%
Interest expense, net			2.6	%			1.9	%							2.5	%			1.9	%
Earnings before income taxes			2.6	%			6.2	%							3.0	%			6.6	%
Income taxes			0.7	%			1.4	%							0.9	%			1.8	%
Net earnings			2.0	%			4.8	%							2.1	%			4.8	%