OXFORD INDUSTRIES INC - FORM 8-K - EX-99.2 - EXHIBIT 99.2_PROFORMAS - July 22, 2015

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8-K - OXM 8-K 07.17.15 - OXFORD INDUSTRIES INCoxm8k07_17x15.htm
EX-10.1 - EXHIBIT 10.1 - OXFORD INDUSTRIES INCa101oxmspa07_17x15.htm
EX-99.1 - EXHIBIT 99.1_PRESS RELEASE - OXFORD INDUSTRIES INCa991oxmpressrelease07_20x15.htm


Exhibit 99.2
 
OXFORD INDUSTRIES, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
This unaudited pro forma financial information should be read in conjunction with our consolidated financial statements and notes included in our annual report filed on Form 10-K for the year ended January 31, 2015 (fiscal 2014) and our unaudited condensed consolidated financial statements and notes included in our quarterly report on Form 10-Q for the first quarter of fiscal 2015 (quarter ended May 2, 2015).
On July 17, 2015, we entered into and executed certain definitive agreements to sell our equity interests in Ben Sherman Limited and Ben Sherman Clothing LLC, which represent substantially all of the assets and operations of our Ben Sherman operating group, for £40.8 million.
The following unaudited pro forma condensed consolidated statements of operations for the full year of fiscal 2014 and the first quarter of fiscal 2015 have been prepared to give effect to the disposal of all of the assets and operations of our Ben Sherman operating group (which we refer to as the Discontinued Operations) as if the disposal had occurred on February 2, 2014 (the first day of fiscal 2014). The following unaudited pro forma condensed consolidated balance sheet as of May 2, 2015 has been prepared to give effect to the disposal of the Discontinued Operations as if the disposal had occurred on May 2, 2015.
These unaudited pro forma condensed consolidated financial statements are prepared based on currently available information and are intended for informational purposes only. These unaudited pro forma condensed consolidated financial statements are not necessarily indicative of actual results that would have been achieved had the disposal been completed as of the dates specified above. In addition, future results may vary significantly from the results reflected in these financial statements. For example this financial information does not reflect any potential impact from the use of the proceeds from the transaction other than the repayment of debt or cost reductions, if any, of previously allocated corporate overhead costs. The amount or timing of proceeds to be received and used to reduce debt as presented in the pro forma balance sheet as of May 2, 2015 is not necessarily reflective of the anticipated impact of the transaction at closing due to the impact of seasonal differences and foreign currency exchange rate changes between May 2, 2015 and the date of the transaction, as well as other factors that could impact proceeds realized.





OXFORD INDUSTRIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FISCAL 2014
(UNAUDITED)
(in thousands, except per share amounts)

 
As
Reported
Pro Forma Adjustments
 
Pro
Forma
 
(a)
(b)
 
 
Net sales
$
997,806

$
(77,481
)
 
$
920,325

Cost of goods sold
443,127

(40,751
)
 
402,376

Gross profit
554,679

(36,730
)
 
517,949

SG&A
488,924

(50,130
)
(c)
438,794

Change in fair value of contingent consideration
275

—

 
275

Royalties and other operating income
18,123

(4,184
)
 
13,939

Operating income
83,603

9,216

 
92,819

Interest expense, net
3,483

(1,563
)
(d)
1,920

Earnings from continuing operations before income taxes
80,120

10,779

 
90,899

Income taxes
34,362

1,932

(e)
36,294

Net earnings from continuing operations
$
45,758

$
8,847

 
$
54,605

 
 
 
 
 
Net earnings from continuing operations per share:
 
 
 
 
Basic
$
2.79

$
0.54

 
$
3.32

Diluted
$
2.78

$
0.54

 
$
3.32

 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
Basic
16,429

 
 
16,429

Diluted
16,471

 
 
16,471

 
 
 
 
 





OXFORD INDUSTRIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FIRST QUARTER FISCAL 2015
(UNAUDITED)
(in thousands, except per share amounts)

 
As
Reported
Pro Forma Adjustments
 
Pro
Forma
 
(f)
(g)
 
 
Net sales
$
260,394

$
—

 
$
260,394

Cost of goods sold
106,002

—

 
106,002

Gross profit
154,392

—

 
154,392

SG&A
122,680

—

 
122,680

Royalties and other operating income
3,770

—

 
3,770

Operating income
35,482

—

 
35,482

Interest expense, net
773

(222
)
(h)
551

Earnings from continuing operations before income taxes
34,709

222

 
34,931

Income taxes
13,385

85

(e)
13,470

Net earnings from continuing operations
$
21,324

$
137

 
$
21,461

 
 
 
 
 
Net earnings from continuing operations per share:
 
 
 
 
Basic
$
1.30

$
0.01

 
$
1.31

Diluted
$
1.29

$
0.01

 
$
1.30

 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
Basic
16,445

 
 
16,445

Diluted
16,525

 
 
16,525


 






OXFORD INDUSTRIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

(a)
Derived from our consolidated statement of operations included in our annual report on Form 10-K for fiscal 2014.
(b)
Represents the respective historical individual line items of the Discontinued Operations’ statements of operations, except as otherwise noted.
(c)
Represents SG&A of the Discontinued Operations, but excludes approximately $1.6 million in fiscal 2014 of corporate overhead and service costs that had previously been recognized in the Discontinued Operations. Such corporate overhead and service costs may not be eliminated as a result of the transaction, and therefore remain in continuing operations.
(d)
Represents the sum of (1) interest expense that would not have been incurred had the disposal of the Discontinued Operations occurred as of February 2, 2014 ($1.3 million) as proceeds from the transaction were assumed to reduce debt levels under the $235 million U.S. revolving credit agreement and (2) interest expense that has been reclassified to discontinued operations as the interest associated with the U.K. revolving credit agreement was determined to be directly attributable to the Discontinued Operations ($0.2 million).
(e)
Represents the residual income taxes attributable to the Pro Forma Adjustments after calculating income taxes for continuing operations excluding the Discontinued Operations. The income taxes associated with the Pro Forma Adjustments generally reflect an income tax deduction at the statutory rate for domestic losses and expenses but no income tax benefit for foreign losses reflecting the recent historical operating losses which generally require a valuation allowance be recognized for any such loss carryforward.
(f)
Derived from our consolidated statement of operations included in our quarterly report on Form 10-Q for the first quarter of fiscal 2015.
(g)
Individual line items of the Discontinued Operations had already been reported as discontinued operations in the first quarter of fiscal 2015, therefore no Pro Forma Adjustments for the Discontinued Operations are necessary, except as otherwise noted.
(h)
Represents interest expense that would not have been incurred had the disposal of the Discontinued Operations occurred as of February 2, 2014 as proceeds were assumed to reduce debt levels under the $235 million U.S. revolving credit agreement.
 





OXFORD INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MAY 2, 2015
(UNAUDITED)
(in thousands, except par amounts)

 
As
Reported
Pro Forma Adjustments
 
Pro
Forma
 
(a)
(b)
 
 
ASSETS
 
 
 
 
Current Assets:
 
 
 
 
Cash and cash equivalents
$
8,913

$
—

 
$
8,913

Receivables, net
82,338

—

 
82,338

Inventories, net
114,376

—

 
114,376

Prepaid expenses, net
20,774

—

 
20,774

Deferred tax assets
25,219

—

 
25,219

Assets related to discontinued operations, net
70,620

(70,620
)
 
—

Total current assets
322,240

(70,620
)
 
251,620

Property and equipment, net
149,279

—

 
149,279

Intangible assets, net
145,902

—

 
145,902

Goodwill
17,313

—

 
17,313

Other non-current assets, net
22,911

—

 
22,911

Total Assets
$
657,645

$
(70,620
)
 
$
587,025

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
Current Liabilities:
 
 
 
 
Accounts payable
$
50,945

$
—

 
$
50,945

Accrued compensation
22,449

—

 
22,449

Income taxes payable
14,697

—

 
14,697

Other accrued expenses and liabilities
29,170

—

 
29,170

Liabilities related to discontinued operations
18,208

(18,208
)
 
—

Total current liabilities
135,469

(18,208
)
 
117,261

Long-term debt
130,572

(57,716
)
(c)
72,856

Other non-current liabilities
56,154

—

 
56,154

Non-current deferred income taxes
29,451

—

 
29,451

Commitments and contingencies
 
 
 
 
Shareholders’ Equity:
 
 
 
 
Common stock, $1.00 par value per share
16,583

—

 
16,583

Additional paid-in capital
120,393

—

 
120,393

Retained earnings
198,333

(19,054
)
(d)
179,279

Accumulated other comprehensive loss
(29,310
)
24,358

 
(4,952
)
Total shareholders’ equity
305,999

5,304

 
311,303

Total Liabilities and Shareholders’ Equity
$
657,645

$
(70,620
)
 
$
587,025






OXFORD INDUSTRIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

(a)
Derived from Oxford Industries, Inc.’s quarterly report on Form 10-Q as of May 2, 2015.
(b)
Represents the elimination of the amounts included in the Discontinued Operations’ balance sheet as of May 2, 2015, unless otherwise noted.
(c)
Represents the estimated proceeds to be utilized as a reduction of debt under our U.S. revolving credit agreement resulting from the £40.8 million sales price of the transaction less a preliminary working capital adjustment, transaction costs and other associated expenses, as well as income taxes. The amount or timing of proceeds to be received and utilized to reduce debt as presented as of May 2, 2015 is not necessarily reflective of the anticipated impact of the transaction at closing due to the impact of seasonal differences and foreign currency exchange rate changes between May 2, 2015 and the date of the transaction as well as other factors that could impact proceeds realized.
(d)
Represents the estimated net loss on the transaction, assuming the transaction occurred on May 2, 2015, after considering the transaction costs and other associated expenses, as well as income taxes. The amount of the net loss as of May 2, 2015 is not necessarily reflective of the anticipated net loss of the transaction at closing due to the impact of seasonal differences and foreign currency exchange rate changes between May 2, 2015 and the date of the transaction, as well as other factors that could impact the loss realized.






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