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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 endedAUGUST 2, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 1-4365
 OXFORD INDUSTRIES, INC.
  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
 þ o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ
  Number of shares outstandingTitle of each class
    
    as of September 5, 2008Common Stock, $1 par value
    
    15,857,049




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##### 



PagePART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Statements of Earnings (Unaudited)
    
    
    5Condensed Consolidated Balance Sheets (Unaudited)
    
    
    6Condensed Consolidated Statements of Cash Flows (Unaudited)
    
    
    7Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    20Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    34Item 4. Controls and Procedures
    
    
    34PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    35Item 1A. Risk Factors
    
    
    35Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 3. Defaults Upon Senior Securities
    
    
    35Item 4. Submission of Matters to a Vote of Security Holders
    
    
    36Item 5. Other Information
    
    
    36Item 6. Exhibits
    
    
    37Signatures
    
    
    37EX-10(A) EMPLOYMENT OFFER LETTEREX-31.1 SECTION 302 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICEREX-31.2 SECTION 302 CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICEREX-32 SECTION 906 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
  2




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CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
   3




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DEFINITIONS
   Fiscal 2009
    
    52 weeks ending January 30, 2010Fiscal 2008
    
    52 weeks ending January 31, 2009Eight-month transition period ended February 2, 2008
    
    35 weeks and one day ended February 2, 2008Twelve months ended February 2, 2008
    
    52 weeks and one day ended February 2, 2008Fiscal 2007
    
    52 weeks ended June 1, 2007Fourth quarter of fiscal 2008
    
    13 weeks ending January 31, 2009Third quarter of fiscal 2008
    
    13 weeks ending November 1, 2008Second quarter of fiscal 2008
    
    13 weeks ended August 2, 2008First quarter of fiscal 2008
    
    13 weeks ended May 3, 2008Three months ended February 2, 2008
    
    13 weeks and one day ended February 2, 2008Three months ended November 2, 2007
    
    13 weeks ended November 2, 2007Three months ended August 3, 2007
    
    13 weeks ended August 3, 2007Three months ended May 4, 2007
    
    13 weeks ended May 4, 2007First six months of fiscal 2008
    
    26 weeks ended August 2, 2008Six months ended August 3, 2007
    
    26 weeks ended August 3, 2007
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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 EndedFiscal 2008
    
    August 3, 2007
    
    Fiscal 2008
    
    August 3, 2007Net sales
    
    $
    230,520
    
    
    $
    244,610
    
    
    $
    503,462
    
    
    $
    537,007Cost of goods sold
    
    
    133,849
    
    
    
    141,565
    
    
    
    290,482
    
    
    
    313,436Gross profit
    
    
    96,671
    
    
    
    103,045
    
    
    
    212,980
    
    
    
    223,571Selling, general and administrative expenses
    
    
    88,972
    
    
    
    88,959
    
    
    
    188,606
    
    
    
    182,497Amortization of intangible assets
    
    
    4,058
    
    
    
    1,318
    
    
    
    4,846
    
    
    
    3,01393,030
    
    
    
    90,277
    
    
    
    193,452
    
    
    
    185,510Royalties and other operating income
    
    
    4,351
    
    
    
    3,829
    
    
    
    8,539
    
    
    
    9,477Operating income
    
    
    7,992
    
    
    
    16,597
    
    
    
    28,067
    
    
    
    47,538Interest expense, net
    
    
    5,985
    
    
    
    5,078
    
    
    
    12,317
    
    
    
    10,476Earnings before income taxes
    
    
    2,007
    
    
    
    11,519
    
    
    
    15,750
    
    
    
    37,062Income taxes
    
    
    534
    
    
    
    2,781
    
    
    
    4,760
    
    
    
    11,231Net earnings
    
    $
    1,473
    
    
    $
    8,738
    
    
    $
    10,990
    
    
    $
    25,831Net earnings per common share:Basic
    
    $
    0.09
    
    
    $
    0.49
    
    
    $
    0.70
    
    
    $
    1.45Diluted
    
    $
    0.09
    
    
    $
    0.49
    
    
    $
    0.69
    
    
    $
    1.44Weighted average common shares outstanding:Basic
    
    
    15,578
    
    
    
    17,772
    
    
    
    15,778
    
    
    
    17,756Dilutive impact of options and restricted
shares
    
    
    75
    
    
    
    163
    
    
    
    90
    
    
    
    175Diluted
    
    
    15,653
    
    
    
    17,935
    
    
    
    15,868
    
    
    
    17,931Dividends declared per common share
    
    $
    0.18
    
    
    $
    0.18
    
    
    $
    0.36
    
    
    $
    0.36
  5




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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except par amounts)
 August 2,
    
    February 2,
    
    August 3,2008
    
    2008
    
    2007ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    5,243
    
    
    $
    14,912
    
    
    $
    57,012Receivables, net
    
    
    96,463
    
    
    
    105,561
    
    
    
    99,203Inventories, net
    
    
    129,904
    
    
    
    158,925
    
    
    
    156,858Prepaid expenses
    
    
    22,026
    
    
    
    18,701
    
    
    
    24,282Total current assets
    
    
    253,636
    
    
    
    298,099
    
    
    
    337,355Property, plant and equipment, net
    
    
    94,471
    
    
    
    92,502
    
    
    
    89,094Goodwill, net
    
    
    257,699
    
    
    
    257,921
    
    
    
    223,996Intangible assets, net
    
    
    225,612
    
    
    
    230,933
    
    
    
    236,231Other non-current assets, net
    
    
    27,866
    
    
    
    30,817
    
    
    
    29,898Total Assets
    
    $
    859,284
    
    
    $
    910,272
    
    
    $
    916,574LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Trade accounts payable and other accrued expenses
    
    $
    97,638
    
    
    $
    101,123
    
    
    $
    91,858Accrued compensation
    
    
    14,802
    
    
    
    14,485
    
    
    
    18,807Income taxes payable
    
    
    
    
    
    
    20
    
    
    
    5,571Additional acquisition cost payable
    
    
    
    
    
    
    
    
    
    
    22,424Dividends payable
    
    
    
    
    
    
    2,889
    
    
    
    3,216Short-term debt and current maturities of long-term debt
    
    
    3,027
    
    
    
    37,900
    
    
    
    412Total current liabilities
    
    
    115,467
    
    
    
    156,417
    
    
    
    142,288Long-term debt, less current maturities
    
    
    218,604
    
    
    
    234,414
    
    
    
    199,325Other non-current liabilities
    
    
    52,724
    
    
    
    50,909
    
    
    
    49,716Non-current deferred income taxes
    
    
    59,046
    
    
    
    60,984
    
    
    
    68,776Commitments and contingenciesShareholders 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
    
    
    
    17,867Additional paid-in capital
    
    
    86,300
    
    
    
    85,224
    
    
    
    82,644Retained earnings
    
    
    298,947
    
    
    
    293,212
    
    
    
    337,879Accumulated other comprehensive income
    
    
    12,338
    
    
    
    13,063
    
    
    
    18,079Total shareholders equity
    
    
    413,443
    
    
    
    407,548
    
    
    
    456,469Total Liabilities and Shareholders Equity
    
    $
    859,284
    
    
    $
    910,272
    
    
    $
    916,574
  6




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OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
 First Six Months
    
    Six Months EndedFiscal 2008
    
    August 3, 2007Cash Flows From Operating Activities:Net earnings
    
    $
    10,990
    
    
    $
    25,831Adjustments to reconcile net earnings to net cash provided by (used in)
operating activities:Depreciation
    
    
    9,983
    
    
    
    8,933Amortization of intangible assets
    
    
    4,846
    
    
    
    3,013Amortization of deferred financing costs and bond discount
    
    
    1,307
    
    
    
    1,232Stock compensation expense
    
    
    1,667
    
    
    
    410Loss (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
    
    
    
    8,962Inventories
    
    
    28,907
    
    
    
    9,901Prepaid expenses
    
    
    (3,555
    )
    
    
    (667
    )Current liabilities
    
    
    (3,246
    )
    
    
    (15,318
    )Other non-current assets
    
    
    2,070
    
    
    
    1,302Other non-current liabilities
    
    
    1,823
    
    
    
    7,337Net cash provided by (used in) operating activities
    
    
    62,144
    
    
    
    44,480Cash 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
    
    
    
    2,906Net 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
    
    
    
    32,958Proceeds from issuance of common stock including tax benefits
    
    
    53
    
    
    
    2,609Dividends 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
    )
    
    
    26,086Effect of foreign currency translation on cash and cash equivalents
    
    
    312
    
    
    
    464Cash and cash equivalents at the beginning of period
    
    
    14,912
    
    
    
    30,462Cash and cash equivalents at the end of period
    
    $
    5,243
    
    
    $
    57,012
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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
   
    
    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.
 8




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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
    
    2007Finished goods
    
    $
    145,453
    
    
    $
    171,685
    
    
    $
    159,937Work in process
    
    
    11,126
    
    
    
    10,142
    
    
    
    9,742Fabric, trim and supplies
    
    
    13,139
    
    
    
    16,912
    
    
    
    26,463LIFO 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 MonthsQuarter Fiscal
    
    Ended August
    
    Months Fiscal
    
    Ended August2008
    
    3, 2007
    
    2008
    
    3, 2007Net earnings
    
    $
    1,473
    
    
    $
    8,738
    
    
    $
    10,990
    
    
    $
    25,831Gain (loss) on
foreign currency
translation, net of
tax
    
    
    (743
    )
    
    
    7,441
    
    
    
    (725
    )
    
    
    8,655Comprehensive 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.
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Three Months
    
    First
    
    Six MonthsSecond Quarter
    
    Ended
    
    Six Months
    
    EndedFiscal 2008
    
    August 3, 2007
    
    Fiscal 2008
    
    August 3, 2007Net SalesTommy Bahama
    
    $
    112,007
    
    
    $
    114,361
    
    
    $
    241,265
    
    
    $
    246,126Ben Sherman
    
    
    32,495
    
    
    
    36,493
    
    
    
    69,082
    
    
    
    75,750Lanier Clothes
    
    
    28,184
    
    
    
    31,558
    
    
    
    66,871
    
    
    
    74,218Oxford Apparel
    
    
    58,024
    
    
    
    61,047
    
    
    
    126,708
    
    
    
    139,453Corporate and Other
    
    
    (190
    )
    
    
    1,151
    
    
    
    (464
    )
    
    
    1,460Total
    
    $
    230,520
    
    
    $
    244,610
    
    
    $
    503,462
    
    
    $
    537,007DepreciationTommy Bahama
    
    $
    3,944
    
    
    $
    3,090
    
    
    $
    7,668
    
    
    $
    6,505Ben Sherman
    
    
    584
    
    
    
    640
    
    
    
    1,176
    
    
    
    1,238Lanier Clothes
    
    
    385
    
    
    
    210
    
    
    
    574
    
    
    
    427Oxford Apparel
    
    
    229
    
    
    
    267
    
    
    
    456
    
    
    
    561Corporate and Other
    
    
    55
    
    
    
    74
    
    
    
    109
    
    
    
    202Total
    
    $
    5,197
    
    
    $
    4,281
    
    
    $
    9,983
    
    
    $
    8,933Amortization of
Intangible AssetsTommy Bahama
    
    $
    354
    
    
    $
    609
    
    
    $
    709
    
    
    $
    1,353Ben Sherman
    
    
    359
    
    
    
    637
    
    
    
    720
    
    
    
    1,516Lanier Clothes
    
    
    2,237
    
    
    
    30
    
    
    
    2,267
    
    
    
    60Oxford Apparel
    
    
    1,108
    
    
    
    42
    
    
    
    1,150
    
    
    
    84Total
    
    $
    4,058
    
    
    $
    1,318
    
    
    $
    4,846
    
    
    $
    3,013Operating IncomeTommy Bahama
    
    $
    18,143
    
    
    $
    20,945
    
    
    $
    37,626
    
    
    $
    47,440Ben Sherman
    
    
    (2,002
    )
    
    
    (1,452
    )
    
    
    (1,747
    )
    
    
    230Lanier Clothes
    
    
    (11,355
    )
    
    
    (2,190
    )
    
    
    (11,376
    )
    
    
    (753
    )Oxford Apparel
    
    
    3,738
    
    
    
    3,072
    
    
    
    9,063
    
    
    
    10,334Corporate and Other
    
    
    (532
    )
    
    
    (3,778
    )
    
    
    (5,499
    )
    
    
    (9,713
    )Total Operating
Income
    
    $
    7,992
    
    
    $
    16,597
    
    
    $
    28,067
    
    
    $
    47,538Interest Expense, net
    
    
    5,985
    
    
    
    5,078
    
    
    
    12,317
    
    
    
    10,476Earnings Before
Income Taxes
    
    $
    2,007
    
    
    $
    11,519
    
    
    $
    15,750
    
    
    $
    37,062
 August 2,
    
    February 2,
    
    August 3,2008
    
    2008
    
    2007AssetsTommy Bahama
    
    $
    497,042
    
    
    $
    519,291
    
    
    $
    459,876Ben Sherman
    
    
    210,019
    
    
    
    208,829
    
    
    
    224,340Lanier Clothes
    
    
    69,324
    
    
    
    83,208
    
    
    
    100,363Oxford Apparel
    
    
    91,093
    
    
    
    102,253
    
    
    
    96,219Corporate and Other
    
    
    (8,194
    )
    
    
    (3,309
    )
    
    
    35,776Total
    
    $
    859,284
    
    
    $
    910,272
    
    
    $
    916,574
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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 OscarTMbrands 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.
 11




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##### Table of Contents




    
    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.
  12




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##### Table of Contents



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
 OxfordIndustries
    
    Subsidiary
    
    Subsidiary
    
    Consolidating
    
    Consolidated(Parent)
    
    Guarantors
    
    Non-Guarantors
    
    Adjustments
    
    TotalASSETSCash and cash equivalents
    
    $
    2,640
    
    
    $
    1,373
    
    
    $
    1,230
    
    
    $
    
    
    
    $
    5,243Receivables, net
    
    
    39,955
    
    
    
    31,826
    
    
    
    33,262
    
    
    
    (8,580
    )
    
    
    96,463Inventories
    
    
    56,114
    
    
    
    54,002
    
    
    
    21,333
    
    
    
    (1,545
    )
    
    
    129,904Prepaid expenses
    
    
    9,185
    
    
    
    8,560
    
    
    
    4,281
    
    
    
    
    
    
    
    22,026Total current assets
    
    
    107,894
    
    
    
    95,761
    
    
    
    60,106
    
    
    
    (10,125
    )
    
    
    253,636Property, plant and equipment, net
    
    
    8,580
    
    
    
    79,579
    
    
    
    6,312
    
    
    
    
    
    
    
    94,471Goodwill, net
    
    
    1,847
    
    
    
    168,932
    
    
    
    86,920
    
    
    
    
    
    
    
    257,699Intangible assets, net
    
    
    85
    
    
    
    131,869
    
    
    
    93,658
    
    
    
    
    
    
    
    225,612Other non-current assets, net
    
    
    836,301
    
    
    
    150,366
    
    
    
    35,507
    
    
    
    (994,308
    )
    
    
    27,866Total Assets
    
    $
    954,707
    
    
    $
    626,507
    
    
    $
    282,503
    
    
    $
    (1,004,433
    )
    
    $
    859,284LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities
    
    $
    41,424
    
    
    $
    43,492
    
    
    $
    38,843
    
    
    $
    (8,292
    )
    
    $
    115,467Long-term debt, less current portion
    
    
    218,604
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    218,604Non-current liabilities
    
    
    285,500
    
    
    
    (233,353
    )
    
    
    110,001
    
    
    
    (109,424
    )
    
    
    52,724Non-current deferred income taxes
    
    
    (4,264
    )
    
    
    37,010
    
    
    
    26,012
    
    
    
    288
    
    
    
    59,046Total shareholders/invested equity
    
    
    413,443
    
    
    
    779,358
    
    
    
    107,647
    
    
    
    (887,005
    )
    
    
    413,443Total Liabilities and Shareholders Equity
    
    $
    954,707
    
    
    $
    626,507
    
    
    $
    282,503
    
    
    $
    (1,004,433
    )
    
    $
    859,284
 13




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##### Table of Contents



OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
February 2, 2008
 OxfordIndustries
    
    Subsidiary
    
    Subsidiary
    
    Consolidating
    
    Consolidated(Parent)
    
    Guarantors
    
    Non-Guarantors
    
    Adjustments
    
    TotalASSETSCash and cash equivalents
    
    $
    2,100
    
    
    $
    1,050
    
    
    $
    11,762
    
    
    $
    
    
    
    $
    14,912Receivables, net
    
    
    52,599
    
    
    
    38,244
    
    
    
    20,763
    
    
    
    (6,045
    )
    
    
    105,561Inventories
    
    
    64,896
    
    
    
    76,462
    
    
    
    18,826
    
    
    
    (1,259
    )
    
    
    158,925Prepaid expenses
    
    
    6,595
    
    
    
    8,475
    
    
    
    3,631
    
    
    
    
    
    
    
    18,701Total current assets
    
    
    126,190
    
    
    
    124,231
    
    
    
    54,982
    
    
    
    (7,304
    )
    
    
    298,099Property, plant and equipment, net
    
    
    7,933
    
    
    
    77,652
    
    
    
    6,917
    
    
    
    
    
    
    
    92,502Goodwill, net
    
    
    1,847
    
    
    
    168,932
    
    
    
    87,142
    
    
    
    
    
    
    
    257,921Intangible assets, net
    
    
    1,235
    
    
    
    134,846
    
    
    
    94,852
    
    
    
    
    
    
    
    230,933Other non-current assets, net
    
    
    825,252
    
    
    
    150,142
    
    
    
    70,673
    
    
    
    (1,015,250
    )
    
    
    30,817Total Assets
    
    $
    962,457
    
    
    $
    655,803
    
    
    $
    314,566
    
    
    $
    (1,022,554
    )
    
    $
    910,272LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities
    
    $
    78,518
    
    
    $
    54,268
    
    
    $
    29,066
    
    
    $
    (5,435
    )
    
    $
    156,417Long-term debt, less current portion
    
    
    234,414
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    234,414Non-current liabilities
    
    
    246,261
    
    
    
    (197,557
    )
    
    
    111,564
    
    
    
    (109,359
    )
    
    
    50,909Non-current deferred income taxes
    
    
    (4,284
    )
    
    
    38,910
    
    
    
    26,358
    
    
    
    
    
    
    
    60,984Total shareholders/invested equity
    
    
    407,548
    
    
    
    760,182
    
    
    
    147,578
    
    
    
    (907,760
    )
    
    
    407,548Total Liabilities and Shareholders
Equity
    
    $
    962,457
    
    
    $
    655,803
    
    
    $
    314,566
    
    
    $
    (1,022,554
    )
    
    $
    910,272
 14




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##### Table of Contents



OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEETS
August 3, 2007
 OxfordIndustries
    
    Subsidiary
    
    Subsidiary
    
    Consolidating
    
    Consolidated(Parent)
    
    Guarantors
    
    Non-Guarantors
    
    Adjustments
    
    TotalASSETSCash and cash equivalents
    
    $
    37,016
    
    
    $
    1,077
    
    
    $
    18,920
    
    
    $
    (1
    )
    
    $
    57,012Receivables, net
    
    
    42,071
    
    
    
    38,263
    
    
    
    25,596
    
    
    
    (6,727
    )
    
    
    99,203Inventories
    
    
    81,210
    
    
    
    59,449
    
    
    
    17,282
    
    
    
    (1,083
    )
    
    
    156,858Prepaid expenses
    
    
    10,107
    
    
    
    9,559
    
    
    
    4,616
    
    
    
    
    
    
    
    24,282Total current assets
    
    
    170,404
    
    
    
    108,348
    
    
    
    66,414
    
    
    
    (7,811
    )
    
    
    337,355Property, plant and equipment, net
    
    
    9,040
    
    
    
    70,873
    
    
    
    9,181
    
    
    
    
    
    
    
    89,094Goodwill, net
    
    
    1,847
    
    
    
    168,932
    
    
    
    53,217
    
    
    
    
    
    
    
    223,996Intangible assets, net
    
    
    1,320
    
    
    
    135,989
    
    
    
    98,922
    
    
    
    
    
    
    
    236,231Other non-current assets, net
    
    
    775,808
    
    
    
    150,463
    
    
    
    1,374
    
    
    
    (897,747
    )
    
    
    29,898Total Assets
    
    $
    958,419
    
    
    $
    634,605
    
    
    $
    229,108
    
    
    $
    (905,558
    )
    
    $
    916,574LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities
    
    $
    59,854
    
    
    $
    56,770
    
    
    $
    31,933
    
    
    $
    (6,269
    )
    
    $
    142,288Long-term debt, less current portion
    
    
    199,325
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    199,325Non-current liabilities
    
    
    246,970
    
    
    
    (201,516
    )
    
    
    113,410
    
    
    
    (109,148
    )
    
    
    49,716Non-current deferred income taxes
    
    
    (4,199
    )
    
    
    43,604
    
    
    
    29,371
    
    
    
    
    
    
    
    68,776Total shareholders/invested equity
    
    
    456,469
    
    
    
    735,747
    
    
    
    54,394
    
    
    
    (790,141
    )
    
    
    456,469Total Liabilities and Shareholders Equity
    
    $
    958,419
    
    
    $
    634,605
    
    
    $
    229,108
    
    
    $
    (905,558
    )
    
    $
    916,574
 15




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##### Table of Contents



OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
Second Quarter Fiscal 2008
 OxfordIndustries
    
    Subsidiary
    
    Subsidiary
    
    Consolidating
    
    Consolidated(Parent)
    
    Guarantors
    
    Non-Guarantors
    
    Adjustments
    
    TotalNet sales
    
    $
    85,018
    
    
    $
    120,331
    
    
    $
    33,847
    
    
    $
    (8,676
    )
    
    $
    230,520Cost of goods sold
    
    
    68,419
    
    
    
    52,921
    
    
    
    15,559
    
    
    
    (3,050
    )
    
    
    133,849Gross profit
    
    
    16,599
    
    
    
    67,410
    
    
    
    18,288
    
    
    
    (5,626
    )
    
    
    96,671Selling, general and administrative
    
    
    18,677
    
    
    
    61,102
    
    
    
    19,319
    
    
    
    (6,068
    )
    
    
    93,030Royalties and other income
    
    
    508
    
    
    
    3,023
    
    
    
    1,479
    
    
    
    (659
    )
    
    
    4,351Operating income
    
    
    (1,570
    )
    
    
    9,331
    
    
    
    448
    
    
    
    (217
    )
    
    
    7,992Interest (income) expense, net
    
    
    6,502
    
    
    
    (3,052
    )
    
    
    2,535
    
    
    
    
    
    
    
    5,985Income from equity investment
    
    
    7,395
    
    
    
    
    
    
    
    
    
    
    
    (7,395
    )
    
    
    Earnings before income taxes
    
    
    (677
    )
    
    
    12,383
    
    
    
    (2,087
    )
    
    
    (7,612
    )
    
    
    2,007Income taxes (benefit)
    
    
    (2,292
    )
    
    
    3,010
    
    
    
    (108
    )
    
    
    (76
    )
    
    
    534Net earnings
    
    $
    1,615
    
    
    $
    9,373
    
    
    $
    (1,979
    )
    
    $
    (7,536
    )
    
    $
    1,473
 First Six Months Fiscal 2008
 OxfordIndustries
    
    Subsidiary
    
    Subsidiary
    
    Consolidating
    
    Consolidated(Parent)
    
    Guarantors
    
    Non-Guarantors
    
    Adjustments
    
    TotalNet sales
    
    $
    190,394
    
    
    $
    259,108
    
    
    $
    74,253
    
    
    $
    (20,293
    )
    
    $
    503,462Cost of goods sold
    
    
    151,681
    
    
    
    114,851
    
    
    
    32,109
    
    
    
    (8,159
    )
    
    
    290,482Gross profit
    
    
    38,713
    
    
    
    144,257
    
    
    
    42,144
    
    
    
    (12,134
    )
    
    
    212,980Selling, general and administrative
    
    
    38,676
    
    
    
    127,842
    
    
    
    39,904
    
    
    
    (12,970
    )
    
    
    193,452Royalties and other income
    
    
    537
    
    
    
    5,934
    
    
    
    3,189
    
    
    
    (1,121
    )
    
    
    8,539Operating income
    
    
    574
    
    
    
    22,349
    
    
    
    5,429
    
    
    
    (285
    )
    
    
    28,067Interest (income) expense, net
    
    
    13,518
    
    
    
    (6,061
    )
    
    
    4,860
    
    
    
    
    
    
    
    12,317Income from equity investment
    
    
    20,521
    
    
    
    
    
    
    
    
    
    
    
    (20,521
    )
    
    
    Earnings before income taxes
    
    
    7,577
    
    
    
    28,410
    
    
    
    569
    
    
    
    (20,806
    )
    
    
    15,750Income taxes (benefit)
    
    
    (3,598
    )
    
    
    7,993
    
    
    
    465
    
    
    
    (100
    )
    
    
    4,760Net earnings
    
    $
    11,175
    
    
    $
    20,417
    
    
    $
    104
    
    
    $
    (20,706
    )
    
    $
    10,990
 16




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##### Table of Contents



OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
Three Months Ended August 3, 2007
 OxfordIndustries
    
    Subsidiary
    
    Subsidiary
    
    Consolidating
    
    Consolidated(Parent)
    
    Guarantors
    
    Non-Guarantors
    
    Adjustments
    
    TotalNet sales
    
    $
    91,734
    
    
    $
    126,021
    
    
    $
    37,077
    
    
    $
    (10,222
    )
    
    $
    244,610Cost of goods sold
    
    
    71,082
    
    
    
    57,051
    
    
    
    15,845
    
    
    
    (2,413
    )
    
    
    141,565Gross profit
    
    
    20,652
    
    
    
    68,970
    
    
    
    21,232
    
    
    
    (7,809
    )
    
    
    103,045Selling, general and administrative
    
    
    21,549
    
    
    
    54,244
    
    
    
    22,254
    
    
    
    (7,770
    )
    
    
    90,277Royalties and other income
    
    
    38
    
    
    
    2,970
    
    
    
    1,239
    
    
    
    (418
    )
    
    
    3,829Operating income
    
    
    (859
    )
    
    
    17,696
    
    
    
    217
    
    
    
    (457
    )
    
    
    16,597Interest (income) expense, net
    
    
    6,098
    
    
    
    (3,320
    )
    
    
    2,277
    
    
    
    23
    
    
    
    5,078Income from equity investment
    
    
    15,304
    
    
    
    (2
    )
    
    
    
    
    
    
    (15,302
    )
    
    
    Earnings before income taxes
    
    
    8,347
    
    
    
    21,014
    
    
    
    (2,060
    )
    
    
    (15,782
    )
    
    
    11,519Income taxes (benefit)
    
    
    (707
    )
    
    
    6,153
    
    
    
    (2,500
    )
    
    
    (165
    )
    
    
    2,781Net earnings
    
    $
    9,054
    
    
    $
    14,861
    
    
    $
    440
    
    
    $
    (15,617
    )
    
    $
    8,738
 Six Months Ended August 3, 2007
 OxfordIndustries
    
    Subsidiary
    
    Subsidiary
    
    Consolidating
    
    Consolidated(Parent)
    
    Guarantors
    
    Non-Guarantors
    
    Adjustments
    
    TotalNet sales
    
    $
    209,282
    
    
    $
    271,159
    
    
    $
    75,886
    
    
    $
    (19,320
    )
    
    $
    537,007Cost of goods sold
    
    
    162,166
    
    
    
    122,029
    
    
    
    33,479
    
    
    
    (4,238
    )
    
    
    313,436Gross profit
    
    
    47,116
    
    
    
    149,130
    
    
    
    42,407
    
    
    
    (15,082
    )
    
    
    223,571Selling, general and administrative
    
    
    45,034
    
    
    
    114,250
    
    
    
    41,724
    
    
    
    (15,498
    )
    
    
    185,510Royalties and other income
    
    
    2,147
    
    
    
    5,664
    
    
    
    2,510
    
    
    
    (844
    )
    
    
    9,477Operating income
    
    
    4,229
    
    
    
    40,544
    
    
    
    3,193
    
    
    
    (428
    )
    
    
    47,538Interest (income) expense, net
    
    
    12,445
    
    
    
    (6,465
    )
    
    
    4,450
    
    
    
    46
    
    
    
    10,476Income from equity investment
    
    
    33,172
    
    
    
    (2
    )
    
    
    
    
    
    
    (33,170
    )
    
    
    Earnings before income taxes
    
    
    24,956
    
    
    
    47,007
    
    
    
    (1,257
    )
    
    
    (33,644
    )
    
    
    37,062Income taxes (benefit)
    
    
    (1,189
    )
    
    
    14,545
    
    
    
    (1,964
    )
    
    
    (161
    )
    
    
    11,231Net earnings
    
    $
    26,145
    
    
    $
    32,462
    
    
    $
    707
    
    
    $
    (33,483
    )
    
    $
    25,831
 17




---



##### Table of Contents



OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
 First Six Months Fiscal 2008
 OxfordIndustries
    
    Subsidiary
    
    Subsidiary
    
    Consolidating
    
    Consolidated(Parent)
    
    Guarantors
    
    Non-Guarantors
    
    Adjustments
    
    TotalCash Flows From Operating Activities:Net cash (used in) provided by
operating activities
    
    $
    18,446
    
    
    $
    49,576
    
    
    $
    (5,942
    )
    
    $
    64
    
    
    $
    62,144Cash 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Net 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53Change 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
    
    
    
    
    
    
    
    312Cash and Cash Equivalents at the
Beginning of Period
    
    
    2,100
    
    
    
    1,050
    
    
    
    11,762
    
    
    
    
    
    
    
    14,912Cash and Cash Equivalents at the End
of Period
    
    $
    2,640
    
    
    $
    1,373
    
    
    $
    1,230
    
    
    $
    
    
    
    $
    5,243
 18




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##### Table of Contents



OXFORD INDUSTRIES, INC.
UNAUDITED CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
 Six Months Ended August 3, 2007
 OxfordIndustries
    
    Subsidiary
    
    Subsidiary
    
    Consolidating
    
    Consolidated(Parent)
    
    Guarantors
    
    Non-Guarantors
    
    Adjustments
    
    TotalCash Flows From Operating Activities:Net cash (used in) provided by
operating activities
    
    $
    (12,574
    )
    
    $
    54,799
    
    
    $
    2,521
    
    
    $
    (266
    )
    
    $
    44,480Cash 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,906Net 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,609Change 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
    
    
    
    26,086Effect of foreign currency translation
    
    
    
    
    
    
    
    
    
    
    464
    
    
    
    
    
    
    
    464Cash and Cash Equivalents at the
Beginning of Period
    
    
    24,682
    
    
    
    698
    
    
    
    7,171
    
    
    
    (2,089
    )
    
    
    30,462Cash and Cash Equivalents at the End
of Period
    
    $
    37,016
    
    
    $
    1,077
    
    
    $
    18,920
    
    
    $
    (1
    )
    
    $
    57,012
 19




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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  OVERVIEW
  ® ®
  
    
    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
 20




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##### Table of Contents



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.
  RESULTS OF OPERATIONS
  ThreeMonths
    
    
    
    
    
    
    
    
    
    Six MonthsSecond
    
    Ended
    
    
    
    
    
    First Six
    
    EndedQuarter
    
    August 3,
    
    Percent
    
    Months
    
    August 3,
    
    PercentFiscal 2008
    
    2007
    
    Change
    
    Fiscal 2008
    
    2007
    
    ChangeNet 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
    %)
  21




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##### Table of Contents



Percent of Net SalesThreeMonths
    
    
    
    
    
    Six MonthsSecond
    
    Ended
    
    First Six
    
    EndedQuarter
    
    August 3,
    
    Months
    
    August 3,Fiscal 2008
    
    2007
    
    Fiscal 2008
    
    2007Net 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
    %
 OPERATING GROUP INFORMATION
    ® ® ® ® ® ® ® ® ®
 22




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##### Table of Contents



® ® ® ® ® ® ®
   ThreeMonths
    
    
    
    
    
    
    
    
    
    Six MonthsSecond
    
    Ended
    
    
    
    
    
    First
    
    EndedQuarter
    
    August 3,
    
    Percent
    
    Six Months
    
    August 3,
    
    PercentFiscal 2008
    
    2007
    
    Change
    
    Fiscal 2008
    
    2007
    
    ChangeNet SalesTommy Bahama
    
    $
    112,007
    
    
    $
    114,361
    
    
    
    (2.1
    %)
    
    $
    241,265
    
    
    $
    246,126
    
    
    
    (2.0
    %)Ben Sherman
    
    
    32,495
    
    
    
    36,493
    
    
    
    (11.0
    %)
    
    
    69,082
    
    
    
    75,750
    
    
    
    (8.8
    %)Lanier Clothes
    
    
    28,184
    
    
    
    31,558
    
    
    
    (10.7
    %)
    
    
    66,871
    
    
    
    74,218
    
    
    
    (9.9
    %)Oxford Apparel
    
    
    58,024
    
    
    
    61,047
    
    
    
    (5.0
    %)
    
    
    126,708
    
    
    
    139,453
    
    
    
    (9.1
    %)Corporate and Other
    
    
    (190
    )
    
    
    1,151
    
    
    
    (116.5
    %)
    
    
    (464
    )
    
    
    1,460
    
    
    
    (131.8
    %)Total
    
    $
    230,520
    
    
    $
    244,610
    
    
    
    (5.8
    %)
    
    $
    503,462
    
    
    $
    537,007
    
    
    
    (6.2
    %)Operating IncomeTommy Bahama
    
    $
    18,143
    
    
    $
    20,945
    
    
    
    (13.4
    %)
    
    $
    37,626
    
    
    $
    47,440
    
    
    
    (20.7
    %)Ben Sherman
    
    
    (2,002
    )
    
    
    (1,452
    )
    
    
    (37.9
    %)
    
    
    (1,747
    )
    
    
    230
    
    
    
    (859.6
    %)Lanier Clothes
    
    
    (11,355
    )
    
    
    (2,190
    )
    
    
    (418.5
    %)
    
    
    (11,376
    )
    
    
    (753
    )
    
    
    (1410.8
    %)Oxford Apparel
    
    
    3,738
    
    
    
    3,072
    
    
    
    21.7
    %
    
    
    9,063
    
    
    
    10,334
    
    
    
    (12.3
    %)Corporate and Other
    
    
    (532
    )
    
    
    (3,778
    )
    
    
    85.9
    %
    
    
    (5,499
    )
    
    
    (9,713
    )
    
    
    43.4
    %Total
    
    $
    7,992
    
    
    $
    16,597
    
    
    
    (51.8
    %)
    
    $
    28,067
    
    
    $
    47,538
    
    
    
    (41.0
    %)
  SECOND QUARTER OF FISCAL 2008 COMPARED TO THREE MONTHS ENDED AUGUST 3, 2007
  Net sales
 23




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##### Table of Contents



Gross profit
  SG&A,
 24




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##### Table of Contents



Amortization of intangible assets
 Royalties and other operating income
 Operating income
      Interest expense, net
 Income taxes
 25




---



##### Table of Contents



Diluted net earnings per common share
 FIRST SIX MONTHS OF FISCAL 2008 COMPARED TO SIX MONTHS ENDED AUGUST 3, 2007
  Net sales
     Gross profit
 26




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##### Table of Contents



SG&A,
 Amortization of intangible assets
 Royalties and other operating income
 Operating income
     27




---



##### Table of Contents



Interest expense, net
 Income taxes
 Diluted net earnings per common share
 FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
   Cash and cash equivalents
 Operating Activities
  28




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##### Table of Contents



Receivables
 Inventories
 Prepaid expenses
 Current liabilities
 Other non-current liabilities,
 Non-current deferred income taxes
 Investing Activities
  Non-current asset
 29




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##### Table of Contents



Financing Activities
    Debt,
 Liquidity and Capital Resources
  August 2, 2008$280 million U.S. Secured Revolving Credit Facility (Prior Credit
Agreement), which accrues interest (5.0% at August 2, 2008), unused line
fees and letter of credit fees based upon a pricing grid which is tied to
certain debt ratios, requires interest payments monthly with principal due
at maturity (July 2009) and is collateralized by substantially all of the
assets of Oxford Industries, Inc. and its consolidated domestic
subsidiaries(1)
    
    $
    19,100£12 million Senior Secured Revolving Credit Facility (U.K. Revolving Credit
Agreement), which accrues interest at the banks base rate plus 1.00%
(6.00% at August 2, 2008), requires interest payments monthly with principal
payable on demand or at maturity (July 2008) and is collateralized by
substantially all of the United Kingdom assets of Ben Sherman (2)
    
    
    3,027$200 million Senior Unsecured Notes (Senior Unsecured Notes), which accrue
interest at 8.875% (effective interest rate of 9.0%) and require interest
payments semi-annually on June 1 and December 1 of each year, require
payment of principal at maturity (June 2011), are subject to certain
prepayment penalties and are guaranteed by our consolidated domestic
subsidiaries
    
    
    200,000Unamortized discount on Senior Unsecured Notes
    
    
    (496
    )Total debt
    
    
    221,631Short-term debt and current maturities of long-term debt
    
    
    (3,027
    )Long-term debt, less short-term debt and current maturities of long-term debt
    
    $
    218,604
 
 (1)
    
    $19.1 million of the amount outstanding under the Prior Credit Agreement was classified
as long-term debt. The amount classified as long-term debt represents the minimum amount we
anticipate being 30




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##### Table of Contents



outstanding under the Prior Credit Agreement or subsequent to August 15, 2008 the U.S.
Revolving Credit Agreement during fiscal 2008.(2)
    
    In August 2008, the U.K. Revolving Credit Agreement was extended until August 2009,
which increased the interest rate to base rate plus 1.35% with all other terms remaining
consistent with the previous agreement. U.S. Revolving Credit Agreement
   
    
    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
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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.
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Off Balance Sheet Arrangements
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  SEASONALITY
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4. CONTROLS AND PROCEDURES
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PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 (a)
    
    During the second quarter of fiscal 2008, we did not make any unregistered sales of our
securities.(c)
    
    The table below summarizes our stock repurchases during the second quarter of fiscal
2008.
 Total Number of
    
    Maximum Number ofShares Purchased as
    
    Shares That May YetPart of Publicly
    
    be Purchased UnderTotal Number of
    
    Average Price
    
    Announced Plans or
    
    the Plans orFiscal Month
    
    Shares Purchased
    
    Paid per Share
    
    Programs
    
    ProgramsMay (5/4/08-5/31/08) (1)
    
    
    558,400
    
    
    $
    24.03
    
    
    
    
    
    
    
    June (6/1/08-7/5/08) (2)
    
    
    14,875
    
    
    $
    25.76
    
    
    
    
    
    
    
    July (7/6/08-8/2/08)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    573,275
    
    
    $
    24.07
    
    
    
    
    
    
    
    
 
 (1)
    
    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 U.S.
Revolver. We received an initial delivery of approximately 1.9 million shares in November
2007 pursuant to the repurchase agreement. We received an additional 558,000 shares in May
2007 pursuant to the repurchase agreement upon completion of the program. The average price
paid per shares for the 2.5 million shares purchased pursuant to the program was $24.03. We
will not receive any additional shares in the future pursuant to this share repurchase
program.(2)
    
    We have certain stock incentive plans as described in Note 7 to our consolidated financial
statements included Form 10-KT for the eight month transition period ended February 2, 2008,
all of which are publicly announced plans. Under the plans, we can repurchase shares from
employees to cover the employee tax liabilities related to the exercise of stock options or
the vesting of previously restricted shares. All shares repurchased in June 2008 were
purchased pursuant to these stock incentive plans.  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  a.
    
    The shareholders elected each of Cecil D. Conlee, J. Reese Lanier and Dennis M. Love as
a Class I director to hold office until the annual meeting of shareholders held in 2011 and
until his successor is elected and qualified. The vote tabulation for individual directors
was as follows:
 Director
    
    For
    
    
    Against
    
    
    AbstainCecil D. Conlee
    
    
    14,565,480
    
    
    
    314,400
    
    
    
    8,415J. Reese Lanier
    
    
    14,524,301
    
    
    
    357,789
    
    
    
    6,205Dennis M. Love
    
    
    14,654,040
    
    
    
    225,320
    
    
    
    8,935
 In addition to the Class I directors noted above, J. Hicks Lanier and Clarence H. Smith will
continue as Class II directors who will hold office until our annual meeting of shareholders
in 2009 and until their respective successors are elected and qualified and George C. Guynn,
Helen B. Weeks and E. Jenner Wood III will continue as Class III directors who will hold
office until our annual meeting of shareholders in 2010 and until their respective
successors are elected and qualified.b.
    
    The shareholders re-approved the Oxford Industries, Inc. Executive Performance
Incentive Plan and ratified the appointment of Ernst & Young LLP as our independent
registered public accounting firm. The vote tabulation for each of these proposals was as
follows:
 Proposal
    
    For
    
    Against
    
    Abstain
    
    Broker Non-Vote2
    
    Re-Approval of the
Oxford Industries,
Inc. Executive
Performance
Incentive Plan
    
    
    14,600,677
    
    
    
    259,906
    
    
    
    27,712
    
    
    N/A3
    
    Ratification of
Appointment of
Independent
Registered Public
Accounting Firm
    
    
    14,849,712
    
    
    
    21,070
    
    
    
    17,513
    
    
    N/A
  
 ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
 3(a)
    
    Restated Articles of Incorporation of Oxford Industries, Inc. Incorporated by reference
to Exhibit 3.1 to the Oxford Industries, Inc. Form 10-Q for the fiscal quarter ended August
29, 2003.3(b)
    
    Bylaws of Oxford Industries, Inc., as amended. Incorporated by reference to Exhibit
3(b) to the Oxford Industries, Inc. Form 10-KT filed on April 1, 2008.10(a)
    
    Employment Offer Letter to Terry R. Pillow.*+31.1
    
    Section 302 Certification by Principal Executive Officer.*31.2
    
    Section 302 Certification by Principal Financial Officer.*32
    
    Section 906 Certification by Principal Executive Officer and Principal Financial Officer.*
 
 *
    
    Filed herewith.+
    
    Exhibit is a management contract or compensatory plan or arrangement. 
 SIGNATURES
  September 10, 2008
    OXFORD INDUSTRIES, INC.
(Registrant)/s/ K. Scott GrassmyerK. Scott GrassmyerSenior Vice President, Chief Financial Officer and Controller
(Authorized Signatory and Principal Financial Officer) 37