OXFORD INDUSTRIES INC - Quarter Report: 2011 July (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

 

Commission File Number: 1-4365

 

OXFORD INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

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)

 

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 ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

 

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.

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ¨ No þ

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

 

 

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OXFORD INDUSTRIES, INC.

INDEX TO FORM 10-Q

For the second quarter of fiscal 2011

 

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations (Unaudited)	4
Condensed Consolidated Balance Sheets (Unaudited)	5
Condensed Consolidated Statements of Cash Flows (Unaudited)	6
Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	37
Item 4. Controls and Procedures	38
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. Reserved	39
Item 5. Other Information	39
Item 6. Exhibits	39
Signatures	40

 

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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

 

Our SEC 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 impact of economic conditions on consumer demand and spending, particularly in light of general economic uncertainty that continues to prevail, 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, costs of products and raw materials we purchase, costs of labor, access to capital and/or credit markets, acquisition and disposition activities, 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 Annual Report on Form 10-K for fiscal 2010, 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 SEC. 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

 

Unless the context requires otherwise, the following terms, or words of similar import, have the following meanings:

 

Our, us or we: Oxford Industries, Inc. and its consolidated subsidiaries

 

SG&A: Selling, general and administrative expenses

 

Discontinued operations: The assets and operations of our former Oxford Apparel operating group which we sold in the fourth quarter of fiscal 2010, as discussed in our Annual Report on Form 10-K for fiscal 2010

 

113/8% Senior Secured Notes: Our 11.375% senior secured notes due 2015, as described in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report

 

SEC: U.S. Securities and Exchange Commission

 

Securities Exchange Act: the Securities Exchange Act of 1934, as amended

 

FASB: Financial Accounting Standards Board

 

U.S. GAAP: Generally accepted accounting principles in the United States

 

Fiscal 2012		53 weeks ending February 2, 2013
Fiscal 2011		52 weeks ending January 28, 2012
First half fiscal 2011		26 weeks ended July 30, 2011
Fourth quarter fiscal 2011		13 weeks ending January 28, 2012
Third quarter fiscal 2011		13 weeks ending October 29, 2011
Second quarter fiscal 2011		13 weeks ended July 30, 2011
First quarter fiscal 2011		13 weeks ended April 30, 2011
Fiscal 2010		52 weeks ended January 29, 2011
First half fiscal 2010		26 weeks ended July 31, 2010
Fourth quarter fiscal 2010		13 weeks ended January 29, 2011
Third quarter fiscal 2010		13 weeks ended October 30, 2010
Second quarter fiscal 2010		13 weeks ended July 31, 2010
First quarter fiscal 2010		13 weeks ended May 1, 2010

 

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PART I.  FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

 

		Second Quarter Fiscal 2011			Second Quarter Fiscal 2010			First Half Fiscal 2011			First Half Fiscal 2010
Net sales		$180,646			$142,981			$388,954			$306,606
Cost of goods sold		77,709			63,963			168,357			137,881
Gross profit		102,937			79,018			220,597			168,725
SG&A		88,348			71,324			179,188			149,333
Amortization of intangible assets		300			238			598			478
Change in fair value of contingent consideration		600			—			1,200			—
		89,248			71,562			180,986			149,811
Royalties and other operating income		4,022			3,723			8,813			7,236
Operating income		17,711			11,179			48,424			26,150
Interest expense, net		4,268			5,053			9,072			10,020
Loss on repurchase of 113/8% Senior Secured Notes		8,248			—			8,248			—
Earnings from continuing operations before income taxes		5,195			6,126			31,104			16,130
Income taxes		1,675			1,447			10,524			2,927
Earnings from continuing operations		3,520			4,679			20,580			13,203
(Loss) earnings from discontinued operations, net of taxes		(916	)		2,540			124			6,513
Net earnings		$    2,604			$    7,219			$  20,704			$  19,716
Earnings from continuing operations, net of taxes per common share:
Basic		$      0.21			$      0.28			$      1.25			$      0.80
Diluted		$      0.21			$      0.28			$      1.25			$      0.80
(Loss) earnings from discontinued operations, net of taxes per common share:
Basic		$     (0.06	)		$      0.15			$      0.01			$      0.39
Diluted		$     (0.06	)		$      0.15			$      0.01			$      0.39
Net earnings per common share:
Basic		$      0.16			$      0.44			$      1.25			$      1.19
Diluted		$      0.16			$      0.44			$      1.25			$      1.19
Weighted average common shares outstanding:
Basic		16,514			16,540			16,514			16,515
Dilution		17			12			15			12
Diluted		16,531			16,552			16,529			16,527
Dividends declared per common share		$      0.13			$      0.11			$      0.26			$      0.22

 

See accompanying notes.

 

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par amounts)

 

		July 30, 2011			January 29, 2011			July 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents		$  37,775			$  44,094			$  28,171
Receivables, net		53,902			50,177			45,545
Inventories, net		77,731			85,338			57,227
Prepaid expenses, net		16,337			12,554			15,213
Deferred tax assets		17,258			19,005			15,384
Assets related to discontinued operations, net		508			57,745			55,853
Total current assets		203,511			268,913			217,393
Property and equipment, net		86,889			83,895			72,923
Intangible assets, net		166,826			166,680			136,226
Goodwill		16,555			16,866			—
Other non-current assets, net		19,790			22,117			16,213
Total Assets		$493,571			$558,471			$442,755
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Trade accounts payable and other accrued expenses		$  76,877			$  83,211			$  63,467
Accrued compensation		19,740			23,095			15,775
Short-term debt and current maturities of long-term debt		4,406			—			1,195
Liabilities related to discontinued operations		1,362			40,785			19,272
Total current liabilities		102,385			147,091			99,709
Long-term debt, less current maturities		108,088			147,065			146,736
Other non-current liabilities		54,169			55,441			46,400
Non-current deferred income taxes		30,322			28,846			28,143
Commitments and contingencies
Shareholders’ Equity:
Common stock, $1.00 par value per common share		16,529			16,511			16,561
Additional paid-in capital		97,641			96,597			94,442
Retained earnings		107,160			90,739			35,437
Accumulated other comprehensive loss		(22,723	)		(23,819	)		(24,673	)
Total shareholders’ equity		198,607			180,028			121,767
Total Liabilities and Shareholders’ Equity		$493,571			$558,471			$442,755

 

See accompanying notes.

 

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OXFORD INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

		First Half Fiscal 2011			First Half Fiscal 2010
Cash Flows From Operating Activities:
Earnings from continuing operations		$  20,580			$  13,203
Adjustments to reconcile earnings from continuing operations to net cash provided by operating activities:
Depreciation		9,838			8,624
Amortization of intangible assets		598			478
Change in fair value of contingent consideration		1,200			—
Amortization of deferred financing costs and bond discount		906			977
Loss on repurchase of 113/8% Senior Secured Notes		8,248			—
Stock compensation expense		1,476			2,584
Loss on sale of property and equipment		22			(13	)
Deferred income taxes		3,040			(1,587	)
Changes in working capital:
Receivables		(3,394	)		(1,272	)
Inventories		8,042			611
Prepaid expenses		(3,696	)		(4,758	)
Current liabilities		(12,215	)		1,665
Other non-current assets		1,502			519
Other non-current liabilities		(2,487	)		(3,054	)
Net cash provided by operating activities		33,660			17,977
Cash Flows From Investing Activities:
Purchases of property and equipment		(12,726	)		(3,370	)
Other		(398	)		99
Net cash used in investing activities		(13,124	)		(3,271	)
Cash Flows From Financing Activities:
Repayment of revolving credit arrangements		(18,309	)		(33,925	)
Proceeds from revolving credit arrangements		22,670			35,097
Repurchase of 113/8% Senior Secured Notes		(46,600	)		—
Proceeds from issuance of common stock		1,413			230
Dividends on common stock		(4,285	)		(3,638	)
Net cash used in financing activities		(45,111	)		(2,236	)
Cash Flows from Discontinued Operations:
Net operating cash flows used in discontinued operations		14,313			7,559
Net investing cash flows provided by (used in) discontinued operations		3,744			(21	)
Net cash provided by discontinued operations		18,057			7,538
Net change in cash and cash equivalents		(6,518	)		20,008
Effect of foreign currency translation on cash and cash equivalents		199			(125	)
Cash and cash equivalents at the beginning of year		44,094			8,288
Cash and cash equivalents at the end of period		$  37,775			$  28,171
Supplemental disclosure of cash flow information:
Cash paid for interest, net, including interest paid for discontinued operations		$    8,534			$    9,114
Cash paid for income taxes, including income taxes paid for discontinued operations		$  38,103			$  14,762

 

See accompanying notes.

 

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OXFORD INDUSTRIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SECOND QUARTER OF FISCAL 2011

 

1.                                      Basis of Presentation:  The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP 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 U.S. GAAP.  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 dates and for the periods presented.  Results of operations for the interim periods presented are not necessarily indicative of results to be expected for our full fiscal year.  The accounting policies applied during the interim periods presented are consistent with the significant accounting policies described in our Annual Report on Form 10-K for fiscal 2010.

 

Unless indicated otherwise, all references to assets, liabilities, revenues and expenses in this report reflect continuing operations and exclude any amounts related to the discontinued operations of our former Oxford Apparel operating group, as discussed in Note 7 to our unaudited condensed consolidated financial statements included in this report and Note 15 of our consolidated financial statements in our Annual Report on Form 10-K for fiscal 2010.

 

In May 2011, the FASB issued an update to their authoritative guidance regarding fair value measurements and related disclosures. Additional disclosure requirements in the update include: (1) for Level 3 fair value measurements, quantitative information about unobservable inputs used, a description of the valuation processes used, and a qualitative discussion about the sensitivity of the measurements to changes in the unobservable inputs; (2) for the use of a nonfinancial asset that is different from the asset’s highest and best use, the reason for the difference; (3) for financial instruments not measured at fair value but for which disclosure of fair value is required, the fair value hierarchy level in which the fair value measurements were determined; and (4) the disclosure of all transfers between Level 1 and Level 2 of the fair value hierarchy. This guidance will be effective in our first quarter of fiscal 2012 and will be applied on a prospective basis with any changes in measurements recognized in earnings in the period of adoption. We are currently assessing the impact of adopting the amendments to authoritative guidance regarding fair value measurements and related disclosures, but we do not anticipate a material impact on our financial statements upon adoption.

 

In June 2011, the FASB issued an update to their accounting guidance regarding other comprehensive income which requires that all non-owner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements of income and comprehensive income. The guidance provided by this update becomes effective in our first quarter of fiscal 2012, with early adoption permitted. We are currently assessing the impact of adopting the amendments to other comprehensive income, but we do not anticipate a material impact on our financial statements upon adoption.

 

2.                                      Inventories:  The components of inventories related to continuing operations as of the dates specified are summarized as follows (in thousands):

 

		July 30, 2011		January 29, 2011		July 31, 2010
Finished goods		$113,468		$122,159		$92,168
Work in process		4,903		5,744		6,466
Fabric, trim and supplies		5,314		3,389		3,031
LIFO reserve		(45,954	)	(45,954	)	(44,438	)
Total		$  77,731		$  85,338		$ 57,227

 

3.                                      Comprehensive Income:  Other comprehensive income includes all changes in equity from non-owner sources, such as foreign currency translation adjustments and the net unrealized gain (loss) associated with forward foreign currency exchange contracts which qualify for hedge accounting. Comprehensive income, net of income taxes, is calculated as follows for the periods presented (in thousands):

 

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		Second Quarter Fiscal 2011		Second Quarter Fiscal 2010		First Half Fiscal 2011		First Half Fiscal 2010
Net earnings		$2,604		$7,219		$20,704		$19,716
Gain (loss) on foreign currency translation		(642	)	686		1,126		(1,241	)
Net unrealized loss on forward foreign exchange contracts		475		(192	)	(30	)	(192	)
Comprehensive income		$2,437		$7,713		$21,800		$18,283

 

4.                                      Operating Group Information:  Our business is primarily operated through our four operating groups: Tommy Bahama, Lilly Pulitzer, Ben Sherman and Lanier Clothes. 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. All amounts included in this report reflect our changes in operating groups during fiscal 2010, as disclosed in our Annual Report on Form 10-K for fiscal 2010. The table below presents certain information about the continuing operations of our operating groups (in thousands).

 

		Second Quarter Fiscal 2011			Second Quarter Fiscal 2010			First Half Fiscal 2011			First Half Fiscal 2010
Net Sales
Tommy Bahama		$	109,143		$	99,349		$	232,046		$	208,454
Lilly Pulitzer		24,823			—			54,696			—
Ben Sherman		20,893			18,346			40,314			40,500
Lanier Clothes		22,942			22,736			55,915			53,164
Corporate and Other		2,845			2,550			5,983			4,488
Total Net Sales		$	180,646		$	142,981		$	388,954		$	306,606
Depreciation
Tommy Bahama		$	3,604		$	3,289		$	6,985		$	6,563
Lilly Pulitzer		345			—			699			—
Ben Sherman		518			524			1,043			1,060
Lanier Clothes		107			118			216			237
Corporate and Other		455			383			895			764
Total Depreciation		$	5,029		$	4,314		$	9,838		$	8,624
Amortization of Intangible Assets
Tommy Bahama		$	129		$	173		$	258		$	346
Lilly Pulitzer		116			—			230			—
Ben Sherman		55			65			110			132
Lanier Clothes		—			—			—			—
Corporate and Other		—			—			—			—
Total Amortization of Intangible Assets		$	300		$	238		$	598		$	478
Operating Income (Loss)
Tommy Bahama		$	16,987		$	14,172		$	40,757		$	32,033
Lilly Pulitzer		5,612			—			12,627			—
Ben Sherman		(1,756		)	(598		)	(2,582		)	(76		)
Lanier Clothes		2,263			2,809			6,988			7,168
Corporate and Other		(5,395		)	(5,204		)	(9,366		)	(12,975		)
Total Operating Income		17,711			11,179			48,424			26,150
Interest expense, net		4,268			5,053			9,072			10,020
Loss on repurchase of 113/8% Senior Secured Notes		8,248			—			8,248			—
Earnings from Continuing Operations Before Income Taxes		$	5,195		$	6,126		$	31,104		$	16,130

 

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5.             Debt: The following table details our debt (in thousands) as of the dates specified:

 

		July 30, 2011			January 29, 2011			July 31, 2010
$175 million U.S. Secured Revolving Credit Facility (“U.S. Revolving Credit Agreement”), which is limited to a borrowing base consisting of specified percentages of eligible categories of assets, accrues interest, unused line fees and letter of credit fees based upon a pricing grid which is tied to average unused availability, requires interest payments monthly with principal due at maturity (August 2013) and is secured by a first priority security interest in the 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, intercompany obligations, equipment, goods, documents, contracts, books and records and other personal property of Oxford Industries, Inc. and substantially all of its domestic subsidiaries and a second priority interest in those assets in which the holders of the 113/8% Senior Secured Notes have a first priority interest		$	—		$	—		$	—
£7 million Senior Secured Revolving Credit Facility (“U.K. Revolving Credit Agreement”), which accrues interest at the bank’s base rate plus as much as 3.5%, requires interest payments monthly with principal payable on demand and is collateralized by substantially all of the United Kingdom assets of Ben Sherman		4,406			—			1,195
11.375% Senior Secured Notes (“113/8% Senior Secured Notes”), which accrue interest at an annual rate of 11.375% (effective interest rate of 12%) and require interest payments semi-annually in January and July of each year, require payment of principal at maturity (July 2015), are subject to certain prepayment penalties, are secured by a first priority interest in all U.S. registered trademarks and certain related rights and certain future acquired real property owned in fee simple of Oxford Industries, Inc. and substantially all of its consolidated domestic subsidiaries and a second priority interest in those assets in which the lenders under the U.S. Revolving Credit Agreement have a first priority interest (1)		110,000			150,000			150,000
Unamortized discount		(1,912		)	(2,935		)	(3,264		)
Total debt		112,494			147,065			147,931
Short-term debt and current maturities of long-term debt		(4,406		)	—			(1,195		)
Long-term debt, less current maturities		$	108,088		$	147,065		$	146,736

 

(1)          In May 2011, we repurchased, in a privately negotiated transaction, $40.0 million in aggregate principal amount of our 113/8% Senior Secured Notes for $46.6 million, plus accrued interest, using cash on hand. The repurchase of the 113/8% Senior Secured Notes and related write-off of approximately $1.6 million of unamortized deferred financing costs and discount resulted in a loss of approximately $8.2 million, which was reflected in our consolidated financial statements for the second quarter of fiscal 2011. After completion of the transaction, $110.0 million aggregate principal amount of our 113/8% Senior Secured Notes remained outstanding.

 

6.                                      Business Combinations:  On December 21, 2010, we acquired the Lilly Pulitzer brand and operations, as described in Note 14 of our consolidated financial statements in our Annual Report on Form 10-K for fiscal 2010. As of July 30, 2011, we have not finalized our allocation of purchase price to the fair values of the acquired assets and liabilities, and we will revise our allocation through the one year period following the closing of the transaction, as appropriate, as we obtain new information about the fair values of these assets and liabilities as of the acquisition date, including the contingent consideration. During the first half of fiscal 2011, we did not record any significant adjustments to the initial purchase price allocation included in Note 14 of our consolidated financial statements in our Annual Report on Form 10-K for fiscal 2010.  As of July 30, 2011, the estimated fair value of the contingent consideration was approximately $11.9 million compared to $10.5 million as of the date of acquisition, with the change in fair value representing the passage of time from the date of acquisition as we approach the dates of the anticipated payments in the future.

 

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7.                                      Discontinued Operations:  On January 3, 2011, we sold substantially all of the assets and operations of our former Oxford Apparel operating group, as discussed in Note 15 of our consolidated financial statements in our Annual Report on Form 10-K for fiscal 2010. The results of operations and assets which were sold are reflected in discontinued operations in our consolidated financial statements. The total assets related to discontinued operations included in our consolidated balance sheets as of each balance sheet date presented primarily consisted of receivables, inventories and other assets, and the total liabilities related to discontinued operations included in our consolidated balance sheets as of each balance sheet date consisted of the related accounts payable, accrued expenses, accrued compensation and income taxes payable.

 

Net sales, earnings from discontinued operations before income taxes and earnings from discontinued operations, net of income taxes are shown in the table below (in thousands):

 

		Second Quarter Fiscal 2011		Second Quarter Fiscal 2010		First Half Fiscal 2011		First Half Fiscal 2010
Net sales		$    208		$43,550		$2,397		$97,675
Earnings from discontinued operations before income taxes (1)		$(1,500	)	$  4,097		$     77		$10,505
Earnings from discontinued operations, net of income taxes (1)		$   (916	)	$  2,540		$   124		$  6,513

 

(1)          During the second quarter of fiscal 2011, we finalized the working capital adjustment associated with the sold operations, which resulted in a change in estimate to the gain on sale recognized. The impact of this change in estimate, which was recorded in the second quarter of fiscal 2011, was a reduction to the gain on sale of approximately $1.0 million, after income taxes. This change in estimate resulted in a revised after-tax gain on the sale of the Oxford Apparel operations of approximately $48.5 million compared to $49.5 million as recorded in the fourth quarter of fiscal 2010.

 

8.                          Consolidating Financial Data of Subsidiary Guarantors:  Our 113/8% Senior Secured Notes are guaranteed by substantially all of 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 the United States and certain domestic subsidiaries. We use the equity method of accounting with respect to our investment in subsidiaries included in other non-current assets in our condensed consolidating financial statements. Set forth below are our condensed consolidating balance sheets as of July 30, 2011, January 29, 2011 and July 31, 2010 (in thousands) as well as our condensed consolidating statements of operations for the second quarter and first half of each of fiscal 2011 and fiscal 2010 (in thousands) and our condensed consolidating statements of cash flows for the first half of fiscal 2011 and fiscal 2010 (in thousands).

 

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Table of Contents

 

OXFORD INDUSTRIES, INC.

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS

July 30, 2011

 

		Oxford Industries (Parent)		Subsidiary Guarantors		Subsidiary Non- Guarantors		Consolidating Adjustments		Consolidated Total
ASSETS
Cash and cash equivalents		$  31,545		$    1,648		$    4,582		$         —		$   37,775
Receivables, net		19,606		9,253		48,613		(23,570	)	53,902
Inventories, net		(15,864	)	78,058		16,698		(1,161	)	77,731
Prepaid expenses and deferred tax assets		18,177		13,099		3,526		(1,207	)	33,595
Assets related to discontinued operations, net		508		—		—		—		508
Total current assets		53,972		102,058		73,419		(25,938	)	203,511
Property and equipment, net		6,712		75,685		4,492		—		86,889
Goodwill and intangible assets, net		—		158,744		24,637		—		183,381
Other non-current assets, net		613,037		142,834		4,553		(740,634	)	19,790
Total Assets		$673,721		$479,321		$107,101		$(766,572	)	$493,571
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities related to continuing operations		$    1,081		$  69,475		$  47,695		$  (17,228	)	$ 101,023
Current liabilities related to discontinued operations		1,362		—		—		—		1,362
Long-term debt, less current maturities		108,088		—		—		—		108,088
Other non-current liabilities		368,821		(346,937	)	144,517		(112,232	)	54,169
Non-current deferred income taxes		(4,238	)	28,582		5,978		—		30,322
Total shareholders’/invested equity		198,607		728,201		(91,089	)	(637,112	)	198,607
Total Liabilities and Shareholders’ Equity		$673,721		$479,321		$107,101		$(766,572	)	$493,571

 

January 29, 2011

 

		Oxford Industries (Parent)		Subsidiary Guarantors		Subsidiary Non- Guarantors		Consolidating Adjustments		Consolidated Total
ASSETS
Cash and cash equivalents		$  41,130		$       809		$    2,155		$          —		$  44,094
Receivables, net		10,969		3,431		44,897		(9,120	)	50,177
Inventories, net		(13,234	)	86,747		11,889		(64	)	85,338
Prepaid expenses and deferred tax assets		19,756		12,671		3,018		(3,886	)	31,559
Assets related to discontinued operations, net		46,418		324		11,003		—		57,745
Total current assets		105,039		103,982		72,962		(13,070	)	268,913
Property and equipment, net		7,182		72,323		4,390		—		83,895
Goodwill and intangible assets, net		—		159,543		24,003		—		183,546
Other non-current assets, net		579,130		143,459		4,101		(704,573	)	22,117
Total Assets		$691,351		$479,307		$105,456		$(717,643	)	$558,471
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities related to continuing operations		$  13,978		$  59,255		$  41,170		$  (8,097	)	$106,306
Current liabilities related to discontinued operations		32,379		—		8,406		—		40,785
Long-term debt, less current maturities		147,065		—		—		—		147,065
Other non-current liabilities		322,237		(301,271	)	143,113		(108,638	)	55,441
Non-current deferred income taxes		(4,336	)	26,944		6,332		(94	)	28,846
Total shareholders’/invested equity		180,028		694,379		(93,565	)	(600,814	)	180,028
Total Liabilities and Shareholders’ Equity		$691,351		$479,307		$105,456		$(717,643	)	$558,471

 

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