OXFORD INDUSTRIES INC - Quarter Report: 2008 August (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 AUGUST 2, 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
(Address of principal executive offices) (Zip Code)

(404) 659-2424
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes 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):

     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 September 5, 2008
Common Stock, $1 par value		15,857,049

 

 

OXFORD INDUSTRIES, INC.
INDEX TO FORM 10-Q
For the second 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			34
Item 4. Controls and Procedures			34
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35
Item 3. Defaults Upon Senior Securities			35
Item 4. Submission of Matters to a Vote of Security Holders			36
Item 5. Other Information			36
Item 6. Exhibits			37
Signatures			37
EX-10(A) EMPLOYMENT OFFER LETTER
EX-31.1 SECTION 302 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER
EX-31.2 SECTION 302 CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
EX-32 SECTION 906 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

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 general and regional economic conditions, including those that affect 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
Twelve 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 ending 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 six months of fiscal 2008		26 weeks ended August 2, 2008
Six months ended August 3, 2007		26 weeks ended August 3, 2007

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(in thousands, except per share amounts)

		Second Quarter				Three Months Ended				First Six Months				Six Months Ended
		Fiscal 2008				August 3, 2007				Fiscal 2008				August 3, 2007
Net sales		$	230,520			$	244,610			$	503,462			$	537,007
Cost of goods sold			133,849				141,565				290,482				313,436
Gross profit			96,671				103,045				212,980				223,571
Selling, general and administrative expenses			88,972				88,959				188,606				182,497
Amortization of intangible assets			4,058				1,318				4,846				3,013
			93,030				90,277				193,452				185,510
Royalties and other operating income			4,351				3,829				8,539				9,477
Operating income			7,992				16,597				28,067				47,538
Interest expense, net			5,985				5,078				12,317				10,476
Earnings before income taxes			2,007				11,519				15,750				37,062
Income taxes			534				2,781				4,760				11,231
Net earnings		$	1,473			$	8,738			$	10,990			$	25,831
Net earnings per common share:
Basic		$	0.09			$	0.49			$	0.70			$	1.45
Diluted		$	0.09			$	0.49			$	0.69			$	1.44
Weighted average common shares outstanding:
Basic			15,578				17,772				15,778				17,756
Dilutive impact of options and restricted shares			75				163				90				175
Diluted			15,653				17,935				15,868				17,931
Dividends declared per common share		$	0.18			$	0.18			$	0.36			$	0.36

See accompanying notes.

OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except par amounts)

		August 2,				February 2,				August 3,
		2008				2008				2007
ASSETS
Current Assets:
Cash and cash equivalents		$	5,243			$	14,912			$	57,012
Receivables, net			96,463				105,561				99,203
Inventories, net			129,904				158,925				156,858
Prepaid expenses			22,026				18,701				24,282
Total current assets			253,636				298,099				337,355
Property, plant and equipment, net			94,471				92,502				89,094
Goodwill, net			257,699				257,921				223,996
Intangible assets, net			225,612				230,933				236,231
Other non-current assets, net			27,866				30,817				29,898
Total Assets		$	859,284			$	910,272			$	916,574
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable and other accrued expenses		$	97,638			$	101,123			$	91,858
Accrued compensation			14,802				14,485				18,807
Income taxes payable			—				20				5,571
Additional acquisition cost payable			—				—				22,424
Dividends payable			—				2,889				3,216
Short-term debt and current maturities of long-term debt			3,027				37,900				412
Total current liabilities			115,467				156,417				142,288
Long-term debt, less current maturities			218,604				234,414				199,325
Other non-current liabilities			52,724				50,909				49,716
Non-current deferred income taxes			59,046				60,984				68,776
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, $1.00 par value; 30,000 authorized and none issued and outstanding at August 2, 2008; February 2, 2008; and August 3, 2007			—				—				—
Common stock, $1.00 par value; 60,000 authorized and 15,858 issued and outstanding at August 2, 2008; 16,049 issued and outstanding at February 2, 2008; and 17,867 issued and outstanding at August 3, 2007			15,858				16,049				17,867
Additional paid-in capital			86,300				85,224				82,644
Retained earnings			298,947				293,212				337,879
Accumulated other comprehensive income			12,338				13,063				18,079
Total shareholders’ equity			413,443				407,548				456,469
Total Liabilities and Shareholders’ Equity		$	859,284			$	910,272			$	916,574

See accompanying notes.

OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

		First Six Months				Six Months Ended
		Fiscal 2008				August 3, 2007
Cash Flows From Operating Activities:
Net earnings		$	10,990			$	25,831
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation			9,983				8,933
Amortization of intangible assets			4,846				3,013
Amortization of deferred financing costs and bond discount			1,307				1,232
Stock compensation expense			1,667				410
Loss (gain) on sale of property, plant and equipment			294				(2,118	)
Equity loss (income) from unconsolidated entities			(329	)			(83	)
Deferred income taxes			(1,596	)			(4,255	)
Changes in working capital:
Receivables			8,983				8,962
Inventories			28,907				9,901
Prepaid expenses			(3,555	)			(667	)
Current liabilities			(3,246	)			(15,318	)
Other non-current assets			2,070				1,302
Other non-current liabilities			1,823				7,337
Net cash provided by (used in) operating activities			62,144				44,480
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired, and investment in unconsolidated entity			(446	)			(356	)
Purchases of property, plant and equipment			(12,280	)			(17,129	)
Proceeds from sale of property, plant and equipment			4				2,906
Net cash provided by (used in) investing activities			(12,722	)			(14,579	)
Cash Flows From Financing Activities:
Repayment of financing arrangements			(161,870	)			(32,966	)
Proceeds from financing arrangements			111,115				32,958
Proceeds from issuance of common stock including tax benefits			53				2,609
Dividends on common stock			(8,701	)			(6,416	)
Net cash provided by (used in) financing activities			(59,403	)			(3,815	)
Net change in cash and cash equivalents			(9,981	)			26,086
Effect of foreign currency translation on cash and cash equivalents			312				464
Cash and cash equivalents at the beginning of period			14,912				30,462
Cash and cash equivalents at the end of period		$	5,243			$	57,012

See accompanying notes.

OXFORD INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SECOND QUARTER OF FISCAL 2008

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 and the seasonality of our business. The accounting policies applied during the interim periods presented are consistent with the significant accounting policies as 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 approximately $3.0 million of forward foreign currency exchange contracts are the only financial assets and liabilities measured at fair value within the scope of SFAS 157 that are included in our consolidated financial statements as of August 2, 2008. The fair value of the forward foreign exchange contracts, which is included in prepaid expenses in our consolidated financial statements, is based on dealer quotes of market forward rates and reflects the amount that we would receive or pay at the short-term maturity dates for contracts involving the same currencies and maturity dates. Based on these circumstances, we believe that these forward foreign currency exchange contracts are most appropriately included within level 2 of the fair value hierarchy. 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 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):

		August 2,				February 2,				August 3,
		2008				2008				2007
Finished goods		$	145,453			$	171,685			$	159,937
Work in process			11,126				10,142				9,742
Fabric, trim and supplies			13,139				16,912				26,463
LIFO reserve			(39,814	)			(39,814	)			(39,284	)
Total		$	129,904			$	158,925			$	156,858

3.

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

		Second				Three Months				First Six				Six Months
		Quarter Fiscal				Ended August				Months Fiscal				Ended August
		2008				3, 2007				2008				3, 2007
Net earnings		$	1,473			$	8,738			$	10,990			$	25,831
Gain (loss) on foreign currency translation, net of tax			(743	)			7,441				(725	)			8,655
Comprehensive income		$	730			$	16,179			$	10,265			$	34,486

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 $39.8 million, $39.8 million and $39.3 million as of August 2, 2008, February 2, 2008 and August 3, 2007, respectively. The decrease in total assets for Corporate and Other from August 3, 2007 is primarily due to the cash on-hand at August 3, 2007, which was primarily included in the balance sheet of Corporate and Other. 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				Six Months
		Second Quarter				Ended				Six Months				Ended
		Fiscal 2008				August 3, 2007				Fiscal 2008				August 3, 2007
Net Sales
Tommy Bahama		$	112,007			$	114,361			$	241,265			$	246,126
Ben Sherman			32,495				36,493				69,082				75,750
Lanier Clothes			28,184				31,558				66,871				74,218
Oxford Apparel			58,024				61,047				126,708				139,453
Corporate and Other			(190	)			1,151				(464	)			1,460
Total		$	230,520			$	244,610			$	503,462			$	537,007
Depreciation
Tommy Bahama		$	3,944			$	3,090			$	7,668			$	6,505
Ben Sherman			584				640				1,176				1,238
Lanier Clothes			385				210				574				427
Oxford Apparel			229				267				456				561
Corporate and Other			55				74				109				202
Total		$	5,197			$	4,281			$	9,983			$	8,933
Amortization of Intangible Assets
Tommy Bahama		$	354			$	609			$	709			$	1,353
Ben Sherman			359				637				720				1,516
Lanier Clothes			2,237				30				2,267				60
Oxford Apparel			1,108				42				1,150				84
Total		$	4,058			$	1,318			$	4,846			$	3,013
Operating Income
Tommy Bahama		$	18,143			$	20,945			$	37,626			$	47,440
Ben Sherman			(2,002	)			(1,452	)			(1,747	)			230
Lanier Clothes			(11,355	)			(2,190	)			(11,376	)			(753	)
Oxford Apparel			3,738				3,072				9,063				10,334
Corporate and Other			(532	)			(3,778	)			(5,499	)			(9,713	)
Total Operating Income		$	7,992			$	16,597			$	28,067			$	47,538
Interest Expense, net			5,985				5,078				12,317				10,476
Earnings Before Income Taxes		$	2,007			$	11,519			$	15,750			$	37,062

		August 2,				February 2,				August 3,
		2008				2008				2007
Assets
Tommy Bahama		$	497,042			$	519,291			$	459,876
Ben Sherman			210,019				208,829				224,340
Lanier Clothes			69,324				83,208				100,363
Oxford Apparel			91,093				102,253				96,219
Corporate and Other			(8,194	)			(3,309	)			35,776
Total		$	859,284			$	910,272			$	916,574

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 for the first quarter of fiscal 2008, on November 8, 2007, we entered into a $60 million capped accelerated share repurchase agreement with Bank of America, N.A., an unrelated third party. 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 on May 22, 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. We anticipate an additional $0.6 million of restructuring charges in the third quarter of fiscal 2008. In addition to these restructuring charges, we recognized other unusual items totaling a charge of $0.3 million and a net benefit of $1.2 million in Lanier Clothes and Oxford Apparel respectively substantially all of which is reflected in selling, general and administrative expenses or SG&A.
		Lanier Clothes incurred restructuring charges totaling approximately $9.2 million associated with the decision to exit 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 accounting.
		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.
7.		Subsequent Event: Subsequent to the end of the second quarter of fiscal 2008, 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 amends and restates our Amended and Restated Credit Agreement, dated as of July 28, 2004, as 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 for the immediately preceding twelve fiscal months for which financial statements have been delivered may not be less than 1.0 to 1.0. 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 and 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 Prior Credit Agreement, during the third quarter of fiscal 2008 we anticipate writing 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 August 2, 2008, February 2, 2008, and August 3, 2007; our unaudited condensed consolidating statements of earnings for the second quarter of fiscal 2008, the first six months of fiscal 2008, the three months ended August 3, 2007 and the six months ended August 3, 2007; and our unaudited condensed consolidating statements of cash flows for the first six months of fiscal 2008 and the six months ended August 3, 2007 (in thousands).

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

		Oxford
		Industries				Subsidiary				Subsidiary				Consolidating				Consolidated
		(Parent)				Guarantors				Non-Guarantors				Adjustments				Total
ASSETS
Cash and cash equivalents		$	2,640			$	1,373			$	1,230			$	—			$	5,243
Receivables, net			39,955				31,826				33,262				(8,580	)			96,463
Inventories			56,114				54,002				21,333				(1,545	)			129,904
Prepaid expenses			9,185				8,560				4,281				—				22,026
Total current assets			107,894				95,761				60,106				(10,125	)			253,636
Property, plant and equipment, net			8,580				79,579				6,312				—				94,471
Goodwill, net			1,847				168,932				86,920				—				257,699
Intangible assets, net			85				131,869				93,658				—				225,612
Other non-current assets, net			836,301				150,366				35,507				(994,308	)			27,866
Total Assets		$	954,707			$	626,507			$	282,503			$	(1,004,433	)		$	859,284
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities		$	41,424			$	43,492			$	38,843			$	(8,292	)		$	115,467
Long-term debt, less current portion			218,604				—				—				—				218,604
Non-current liabilities			285,500				(233,353	)			110,001				(109,424	)			52,724
Non-current deferred income taxes			(4,264	)			37,010				26,012				288				59,046
Total shareholders’/invested equity			413,443				779,358				107,647				(887,005	)			413,443
Total Liabilities and Shareholders’ Equity		$	954,707			$	626,507			$	282,503			$	(1,004,433	)		$	859,284

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

		Oxford
		Industries				Subsidiary				Subsidiary				Consolidating				Consolidated
		(Parent)				Guarantors				Non-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
August 3, 2007

		Oxford
		Industries				Subsidiary				Subsidiary				Consolidating				Consolidated
		(Parent)				Guarantors				Non-Guarantors				Adjustments				Total
ASSETS
Cash and cash equivalents		$	37,016			$	1,077			$	18,920			$	(1	)		$	57,012
Receivables, net			42,071				38,263				25,596				(6,727	)			99,203
Inventories			81,210				59,449				17,282				(1,083	)			156,858
Prepaid expenses			10,107				9,559				4,616				—				24,282
Total current assets			170,404				108,348				66,414				(7,811	)			337,355
Property, plant and equipment, net			9,040				70,873				9,181				—				89,094
Goodwill, net			1,847				168,932				53,217				—				223,996
Intangible assets, net			1,320				135,989				98,922				—				236,231
Other non-current assets, net			775,808				150,463				1,374				(897,747	)			29,898
Total Assets		$	958,419			$	634,605			$	229,108			$	(905,558	)		$	916,574
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities		$	59,854			$	56,770			$	31,933			$	(6,269	)		$	142,288
Long-term debt, less current portion			199,325				—				—				—				199,325
Non-current liabilities			246,970				(201,516	)			113,410				(109,148	)			49,716
Non-current deferred income taxes			(4,199	)			43,604				29,371				—				68,776
Total shareholders’/invested equity			456,469				735,747				54,394				(790,141	)			456,469
Total Liabilities and Shareholders’ Equity		$	958,419			$	634,605			$	229,108			$	(905,558	)		$	916,574

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

		Oxford
		Industries				Subsidiary				Subsidiary				Consolidating				Consolidated
		(Parent)				Guarantors				Non-Guarantors				Adjustments				Total
Net sales		$	85,018			$	120,331			$	33,847			$	(8,676	)		$	230,520
Cost of goods sold			68,419				52,921				15,559				(3,050	)			133,849
Gross profit			16,599				67,410				18,288				(5,626	)			96,671
Selling, general and administrative			18,677				61,102				19,319				(6,068	)			93,030
Royalties and other income			508				3,023				1,479				(659	)			4,351
Operating income			(1,570	)			9,331				448				(217	)			7,992
Interest (income) expense, net			6,502				(3,052	)			2,535				—				5,985
Income from equity investment			7,395				—				—				(7,395	)			—
Earnings before income taxes			(677	)			12,383				(2,087	)			(7,612	)			2,007
Income taxes (benefit)			(2,292	)			3,010				(108	)			(76	)			534
Net earnings		$	1,615			$	9,373			$	(1,979	)		$	(7,536	)		$	1,473

First Six Months Fiscal 2008

		Oxford
		Industries				Subsidiary				Subsidiary				Consolidating				Consolidated
		(Parent)				Guarantors				Non-Guarantors				Adjustments				Total
Net sales		$	190,394			$	259,108			$	74,253			$	(20,293	)		$	503,462
Cost of goods sold			151,681				114,851				32,109				(8,159	)			290,482
Gross profit			38,713				144,257				42,144				(12,134	)			212,980
Selling, general and administrative			38,676				127,842				39,904				(12,970	)			193,452
Royalties and other income			537				5,934				3,189				(1,121	)			8,539
Operating income			574				22,349				5,429				(285	)			28,067
Interest (income) expense, net			13,518				(6,061	)			4,860				—				12,317
Income from equity investment			20,521				—				—				(20,521	)			—
Earnings before income taxes			7,577				28,410				569				(20,806	)			15,750
Income taxes (benefit)			(3,598	)			7,993				465				(100	)			4,760
Net earnings		$	11,175			$	20,417			$	104			$	(20,706	)		$	10,990

OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
Three Months Ended August 3, 2007

		Oxford
		Industries				Subsidiary				Subsidiary				Consolidating				Consolidated
		(Parent)				Guarantors				Non-Guarantors				Adjustments				Total
Net sales		$	91,734			$	126,021			$	37,077			$	(10,222	)		$	244,610
Cost of goods sold			71,082				57,051				15,845				(2,413	)			141,565
Gross profit			20,652				68,970				21,232				(7,809	)			103,045
Selling, general and administrative			21,549				54,244				22,254				(7,770	)			90,277
Royalties and other income			38				2,970				1,239				(418	)			3,829
Operating income			(859	)			17,696				217				(457	)			16,597
Interest (income) expense, net			6,098				(3,320	)			2,277				23				5,078
Income from equity investment			15,304				(2	)			—				(15,302	)			—
Earnings before income taxes			8,347				21,014				(2,060	)			(15,782	)			11,519
Income taxes (benefit)			(707	)			6,153				(2,500	)			(165	)			2,781
Net earnings		$	9,054			$	14,861			$	440			$	(15,617	)		$	8,738

Six Months Ended August 3, 2007

		Oxford
		Industries				Subsidiary				Subsidiary				Consolidating				Consolidated
		(Parent)				Guarantors				Non-Guarantors				Adjustments				Total
Net sales		$	209,282			$	271,159			$	75,886			$	(19,320	)		$	537,007
Cost of goods sold			162,166				122,029				33,479				(4,238	)			313,436
Gross profit			47,116				149,130				42,407				(15,082	)			223,571
Selling, general and administrative			45,034				114,250				41,724				(15,498	)			185,510
Royalties and other income			2,147				5,664				2,510				(844	)			9,477
Operating income			4,229				40,544				3,193				(428	)			47,538
Interest (income) expense, net			12,445				(6,465	)			4,450				46				10,476
Income from equity investment			33,172				(2	)			—				(33,170	)			—
Earnings before income taxes			24,956				47,007				(1,257	)			(33,644	)			37,062
Income taxes (benefit)			(1,189	)			14,545				(1,964	)			(161	)			11,231
Net earnings		$	26,145			$	32,462			$	707			$	(33,483	)		$	25,831

First Six Months Fiscal 2008

		Oxford
		Industries				Subsidiary				Subsidiary				Consolidating				Consolidated
		(Parent)				Guarantors				Non-Guarantors				Adjustments				Total
Cash Flows From Operating Activities:
Net cash (used in) provided by operating activities		$	18,446			$	49,576			$	(5,942	)		$	64			$	62,144
Cash Flows from Investing Activities:
Investment in unconsolidated entity			—				(408	)			(38	)			—				(446	)
Purchases of property, plant and equipment			(1,658	)			(10,297	)			(325	)			—				(12,280	)
Proceeds from sale of property, plant and equipment			4				—				—				—				4
Net cash (used in) provided by investing activities			(1,654	)			(10,705	)			(363	)			—				(12,722	)
Cash Flows from Financing Activities:
Change in debt			(53,799	)			(1	)			3,045				—				(50,755	)
Proceeds from issuance of common stock			53				—				—				—				53
Change in inter-company payable			40,237				(38,547	)			(1,626	)			(64	)			—
Dividends on common stock			(2,743	)			—				(5,958	)			—				(8,701	)
Net cash (used in) provided by financing activities			(16,252	)			(38,548	)			(4,539	)			(64	)			(59,403	)
Net change in Cash and Cash Equivalents			540				323				(10,844	)			—				(9,981	)
Effect of foreign currency translation			—				—				312				—				312
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		$	2,640			$	1,373			$	1,230			$	—			$	5,243

Six Months Ended August 3, 2007

		Oxford
		Industries				Subsidiary				Subsidiary				Consolidating				Consolidated
		(Parent)				Guarantors				Non-Guarantors				Adjustments				Total
Cash Flows From Operating Activities:
Net cash (used in) provided by operating activities		$	(12,574	)		$	54,799			$	2,521			$	(266	)		$	44,480
Cash Flows from Investing Activities:
Investment in unconsolidated entity			—				(356	)			—				—				(356	)
Purchases of property, plant and equipment			(471	)			(15,798	)			(860	)			—				(17,129	)
Proceeds from sale of property, plant and equipment			2,906				—				—				—				2,906
Net cash (used in) provided by investing activities			2,435				(16,154	)			(860	)			—				(14,579	)
Cash Flows from Financing Activities:
Change in debt			—				(8	)			—				—				(8	)
Proceeds from issuance of common stock			2,609				—				—				—				2,609
Change in inter-company payable			26,280				(38,258	)			9,624				2,354				—
Dividends on common stock			(6,416	)			—				—				—				(6,416	)
Net cash (used in) provided by financing activities			22,473				(38,266	)			9,624				2,354				(3,815	)
Net change in Cash and Cash Equivalents			12,334				379				11,285				2,088				26,086
Effect of foreign currency translation			—				—				464				—				464
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		$	37,016			$	1,077			$	18,920			$	(1	)		$	57,012

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.

     The first six months of fiscal 2008 was a challenging time for the retail and apparel industry as a result of the weak economic conditions which began in the second half of the 2007 calendar year and have continued through the second quarter of fiscal 2008. These conditions impacted each of our operating groups, and we expect that these challenging economic conditions will continue in the near-term. Therefore, we have continued to plan inventory purchases conservatively, which will limit our sales growth opportunities for the remainder of fiscal 2008. This strategy, however, will also mitigate inventory markdown risk and promotional pressures. At the same time, we continue to invest in our Tommy Bahama^® and Ben Sherman^® brands through store openings and new marketing initiatives and focus our Lanier Clothes and Oxford Apparel businesses on key product categories and lines of business.

     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, as discussed below. We anticipate an additional $0.6 million of restructuring charges in the third quarter of fiscal 2008. Diluted net earnings per common share were $0.09 in the second quarter of fiscal 2008 and $0.49 in the three months ended August 3, 2007. The most significant factors impacting our results during the second quarter of fiscal 2008 were the restructuring charges and other items discussed below:

	•		Tommy Bahama reported a $2.8 million, or 13.4%, decrease in operating income during the second quarter of fiscal 2008, compared to the three months ended August 3, 2007. The decrease was primarily due to higher selling, general and administrative expenses associated with operating additional retail stores as well as the impact of the current economic conditions on sales at our existing retail stores and in our wholesale business, which was partially offset by the sales at the 11 retail stores opened on or after May 5, 2007, which was the first day of the three months ended August 3, 2007.
	•		Ben Sherman reported a $0.6 million, or 37.9%, increase in operating loss during the second quarter of fiscal 2008, compared to the three months ended August 3, 2007. The increase in operating loss was primarily due to lower sales in our United Kingdom wholesale business as we continued our efforts to reposition the brand and our United States wholesale business as the three months ended August 3, 2007 included higher levels of off-price sales. These planned decreases were partially offset by increased sales at our retail stores, which are located in the United Kingdom and United States, and in wholesale operations in markets outside of the United Kingdom and United States.
	•		Lanier Clothes reported a $9.2 million, or 418.5%, increase in operating loss during the second quarter of fiscal 2008, compared to the three months ended August 3, 2007. This increase in operating loss is primarily attributable to approximately $9.2 million of restructuring charges associated with our decision to exit the Nautica and O Oscar licensed businesses and the restructuring of our Arnold Brant business. The restructuring charges included costs associated with the disposal of inventory, payments related to license termination, impairment of intangible assets associated with the Arnold Brant business, severance costs and the impairment of certain fixed assets. Lanier Clothes continued to feel

the impact of weak demand in the branded tailored clothing market during the second quarter of fiscal 2008.

	•		Oxford Apparel reported a $0.7 million, or 21.7%, increase in operating income during the second quarter of fiscal 2008, compared to the three months ended August 3, 2007. As we continue to focus on key product categories and lines of business, net sales decreased during the quarter. However, SG&A declined by an amount greater than the decrease in gross profit caused by the lower sales. During the second quarter of fiscal 2008, we recognized approximately $1.6 million of charges associated with our decision to exit the Solitude business. The operating results for the quarter also included the benefit of approximately $1.2 million attributable to the resolution of a contingent liability and the sale of a trademark, which were partially offset by an increase in our bad debt reserve due to certain customers’ bankruptcy filings.
	•		Corporate and Other reported a $3.2 million, or 85.9%, decrease in operating loss in the second quarter of fiscal 2008, compared to the three months ended August 3, 2007. This decrease in operating loss was primarily due to the impact of LIFO accounting, including a $1.9 million reversal of certain restructuring charges recognized in Lanier Clothes, and lower SG&A during the second quarter of fiscal 2008.

     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.

     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 second quarter of fiscal 2008 as compared to the three months ended August 3, 2007 and the first six months of fiscal 2008 compared to the six months ended August 3, 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
						Months												Six Months
		Second				Ended								First Six				Ended
		Quarter				August 3,				Percent				Months				August 3,				Percent
		Fiscal 2008				2007				Change				Fiscal 2008				2007				Change
Net sales		$	230,520			$	244,610				(5.8	%)		$	503,462			$	537,007				(6.2	%)
Cost of goods sold			133,849				141,565				(5.5	%)			290,482				313,436				(7.3	%)
Gross profit			96,671				103,045				(6.2	%)			212,980				223,571				(4.7	%)
Selling, general and administrative expenses			88,972				88,959				0.0	%			188,606				182,497				3.3	%
Amortization of intangible assets			4,058				1,318				207.9	%			4,846				3,013				60.8	%
Royalties and other operating income			4,351				3,829				13.6	%			8,539				9,477				(9.9	%)
Operating income			7,992				16,597				(51.8	%)			28,067				47,538				(41.0	%)
Interest expense, net			5,985				5,078				17.9	%			12,317				10,476				17.6	%
Earnings before income taxes			2,007				11,519				(82.6	%)			15,750				37,062				(57.5	%)
Income taxes			534				2,781				(80.8	%)			4,760				11,231				(57.6	%)
Net earnings		$	1,473			$	8,738				(83.1	%)		$	10,990			$	25,831				(57.5	%)

     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
						Months								Six Months
		Second				Ended				First Six				Ended
		Quarter				August 3,				Months				August 3,
		Fiscal 2008				2007				Fiscal 2008				2007
Net sales			100.0	%			100.0	%			100.0	%			100.0	%
Cost of goods sold			58.1	%			57.9	%			57.7	%			58.4	%
Gross profit			41.9	%			42.1	%			42.3	%			41.6	%
Selling, general and administrative expenses			38.6	%			36.4	%			37.5	%			34.0	%
Amortization of intangible assets			1.8	%			0.5	%			1.0	%			0.6	%
Royalties and other operating income			1.9	%			1.6	%			1.7	%			1.8	%
Operating income			3.5	%			6.8	%			5.6	%			8.9	%
Interest expense, net			2.6	%			2.1	%			2.4	%			2.0	%
Earnings before income taxes			0.9	%			4.7	%			3.1	%			6.9	%
Income taxes			0.2	%			1.1	%			0.9	%			2.1	%
Net earnings			0.6	%			3.6	%			2.2	%			4.8	%