Day: September 12, 2024

Highlights

• Revenues of $700.0 million for the quarter ended July 28, 2024; operating earnings of $69.2 million; and net earnings attributable to shareholders of the Corporation of $43.6 million ($0.50 per share).
• Adjusted operating earnings before depreciation and amortization⁽¹⁾ of $121.0 million for the quarter ended July 28, 2024; adjusted operating earnings⁽¹⁾ of $84.2 million; and adjusted net earnings attributable to shareholders of the Corporation⁽¹⁾ of $51.4 million ($0.60 per share).
• Growth in adjusted operating earnings before depreciation and amortization⁽¹⁾ of 12.1%, with an increase of 20.6% in the Packaging Sector and of 12.4% in the Retail Services and Printing Sector.
• Sale of a building for an amount of $7.1 million.
• Repurchase of 1.2 million shares during the quarter ended July 28, 2024, for a total consideration of $17.7 million.
• Appointment of Serge Boulanger to the Board of Directors of the Corporation.

^{(1) Please refer to the section entitled “Non-IFRS Financial Measures” in this press release for a definition of these measures.}

MONTRÉAL, Sept. 11, 2024 (GLOBE NEWSWIRE) — Transcontinental Inc. TCL announces its results for the third quarter of fiscal 2024, which ended July 28, 2024.

“I am satisfied with the increase in our results in both the Packaging Sector and the Retail Services and Printing Sector,” said Thomas Morin, President and Chief Executive Officer of TC Transcontinental. “This fourth consecutive quarter of improvement in our profitability is the results of our cost reduction initiatives, including the optimization of our manufacturing network, as well as our efforts to market higher value-added products.

“In our Packaging Sector, despite the ongoing pressure on our medical market activities, we experienced a modest increase in volume. Our cost reduction initiatives, combined with volume growth, contributed to a solid increase of 20.6% in adjusted operating earnings before depreciation and amortization.

“In our Retail Services and Printing Sector, we posted a 12.4% increase in adjusted operating earnings before depreciation and amortization. As in the previous quarter, the actions taken to improve our cost structure, a more favourable product mix, including the roll-out of raddar^TM, as well as growth in our in-store marketing activities, have shown results.”

“The implementation of our two-year program aimed at improving our profitability and our financial position is proceeding in accordance with the objectives announced in December 2023,” added Donald LeCavalier, Executive Vice President and Chief Financial Officer of TC Transcontinental. We remain on track to generate annual recurring savings of approximately $30 million by the end of fiscal 2024. Our ability to generate significant cash flows enables us to reduce our net indebtedness and improve our balance sheet while allocating capital to our share repurchase program.”

Financial Highlights

(in millions of dollars, except per share amounts)	Q3-2024	Q3-2023	Variation in %
Revenues	$700.0	$706.7	(0.9	) %
Operating earnings before depreciation and amortization	121.5	95.3	27.5
Adjusted operating earnings before depreciation and amortization (1)	121.0	107.9	12.1
Operating earnings	69.2	39.2	76.5
Adjusted operating earnings (1)	84.2	70.2	19.9
Net earnings attributable to shareholders of the Corporation	43.6	20.9	108.6
Net earnings attributable to shareholders of the Corporation per share	0.50	0.24	108.3
Adjusted net earnings attributable to shareholders of the Corporation (1)	51.4	44.0	16.8
Adjusted net earnings attributable to shareholders of the Corporation per share (1)	0.60	0.51	17.6
(1)  Please refer to the section entitled “Reconciliation of Non-IFRS Financial Measures” in this Press release for adjusted data presented above.

Results for the Third Quarter of Fiscal 2024

Revenues decreased by $6.7 million, or 0.9%, from $706.7 million in the third quarter of 2023 to $700.0 million in the corresponding period of 2024. This decrease is mainly due to lower volume in the Retail Services and Printing Sector, partially mitigated by the favourable effect of exchange rate fluctuations as well as higher volume in the Packaging Sector.

Operating earnings before depreciation and amortization increased by $26.2 million, or 27.5%, from $95.3 million in the third quarter of 2023 to $121.5 million in the third quarter of 2024. This increase in mainly attributable to our cost reduction initiatives, the decrease in restructuring and other costs, a more favourable product mix in the Retail Services and Printing Sector, the favourable effect of exchange rate fluctuations and higher volume in the Packaging Sector, partially offset by lower volume in the Retail Services and Printing Sector.

Adjusted operating earnings before depreciation and amortization increased by $13.1 million, or 12.1%, from $107.9 million in the third quarter of 2023 to $121.0 million in the third quarter of 2024. This increase is mainly attributable to our cost reduction initiatives, a more favourable product mix in the Retail Services and Printing Sector, the favourable effect of exchange rate fluctuations and higher volume in the Packaging Sector, partially offset by lower volume in the Retail Services and Printing Sector.

Net earnings attributable to shareholders of the Corporation increased by $22.7 million, or 108.6%, from $20.9 million in the third quarter of 2023 to $43.6 million in the third quarter of 2024. This increase is mainly due to the previously explained increase in operating earnings before depreciation and amortization, the decrease in depreciation and amortization, and lower financial expenses, partially offset by higher income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.24 to $0.50, respectively.

Adjusted net earnings attributable to shareholders of the Corporation increased by $7.4 million, or 16.8%, from $44.0 million in the third quarter of 2023 to $51.4 million in the third quarter of 2024. This increase is mainly attributable to the previously explained increase in adjusted operating earnings before depreciation and amortization, the decrease in depreciation and amortization, and lower financial expenses, partially offset by higher income taxes. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.51 to $0.60, respectively.

Results for the First Nine Months of Fiscal 2024

Revenues decreased by $97.3 million, or 4.5%, from $2,160.9 million in the first nine months of fiscal 2023 to $2,063.6 million in the corresponding period of 2024. This decrease is mainly due to lower volume in the two main operating sectors.

Operating earnings before depreciation and amortization increased by $16.5 million, or 6.0%, from $276.4 million in the first nine months of fiscal 2023 to $292.9 million in the corresponding period of 2024. This increase is mainly attributable to our cost reduction initiatives and a more favourable product mix, partially offset by lower volume and asset impairment charges.

Adjusted operating earnings before depreciation and amortization increased by $26.2 million, or 8.7%, from $301.0 million in the first nine months of fiscal 2023 to $327.2 million in the corresponding period of 2024. This increase is mainly attributable to our cost reduction initiatives and a more favourable product mix, partially offset by lower volume.

Net earnings attributable to shareholders of the Corporation increased by $29.3 million, or 66.4%, from $44.1 million in the first nine months of fiscal 2023 to $73.4 million in the corresponding period of 2024. This increase is mainly attributable to the previously explained increase in operating earnings before depreciation and amortization, the decrease in depreciation and amortization, and lower financial expenses, partially offset by higher income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.51 to $0.85, respectively.

Adjusted net earnings attributable to shareholders of the Corporation increased by $29.9 million, or 28.7%, from $104.2 million in the first nine months of fiscal 2023 to $134.1 million in the corresponding period of 2024. This increase is mostly attributable to the previously explained increase in adjusted operating earnings before depreciation and amortization, the decrease in depreciation and amortization, and lower financial expenses, partially offset by higher income taxes. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $1.20 to $1.55, respectively.

For more detailed financial information, please see the Management’s Discussion and Analysis for the third quarter ended July 28, 2024, as well as the financial statements in the “Investors” section of our website at www.tc.tc.

New Director

The Corporation announces the appointment of Serge Boulanger, CPA and corporate director, to its Board of Directors. Mr. Boulanger has worked for more than 25 years in the retail industry in the fields of food and pharmacies, where he held leadership positions in procurement, food manufacturing and private brand development. He also led all the activities of several major banners and, earlier in his career, the marketing of major brands. In 2023, he was awarded the Lifetime Achievement Award by the Retail Council of Canada.

“I am delighted to welcome Serge Boulanger to our Board of Directors,” said Isabelle Marcoux, Executive Chair of the Board of TC Transcontinental. “His vast experience and extensive professional background will be valuable assets for our two main sectors in pursuing their activities and developing products and services for retailers.”

Outlook

In the Packaging Sector, our investments, including those related to sustainable packaging solutions, position us well for the future and should be a key driver of our growth. The economic environment however had a negative impact on demand during the fiscal year. In terms of profitability, we expect an increase in adjusted operating earnings before depreciation and amortization for fiscal 2024 compared to fiscal 2023.

In the Retail Services and Printing Sector, we are encouraged by the roll-out of raddar^TM and growth opportunities in our in-store marketing activities. The decrease in volume in our traditional activities should be offset by our cost reduction initiatives, the favourable impact of the roll-out of raddar^TM and the growth in our in-store marketing activities. We therefore expect adjusted operating earnings before depreciation and amortization for fiscal 2024 to be stable compared to fiscal 2023.

Given the solid financial performance since the beginning of the fiscal year and the benefits of our profitability and financial position improvement program, we expect an increase in consolidated adjusted operating earnings before depreciation and amortization for fiscal 2024 compared to fiscal 2023.

For the fourth quarter of fiscal 2024, we expect adjusted operating earnings before depreciation and amortization for our two main operating sectors to remain relatively stable compared to the fourth quarter of fiscal 2023. However, as a result of an anticipated increase in the incentive compensation expense, including stock-based compensation, and the solid performance of the Media Sector in the fourth quarter of fiscal 2023, we expect a decrease in consolidated operating earnings before depreciation and amortization for the fourth quarter of fiscal 2024.

Lastly, we expect to continue generating significant cash flows from operating activities, which will enable us to reduce our net indebtedness while continuing to make strategic investments and return capital to our shareholders.

Non-IFRS Financial Measures

In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Accounting Standards (“IFRS”) and the term “dollar”, as well as the symbol “$” designate Canadian dollars.

In addition, in this press release, we also use certain non-IFRS financial measures for which a complete definition is presented below and for which a reconciliation to financial information in accordance with IFRS is presented in the section entitled “Reconciliation of Non-IFRS Financial Measures” and in Note 3, “Segmented Information”, to the condensed interim consolidated financial statements for the third quarter ended July 28, 2024.

Terms Used	Definitions
Adjusted operating earnings before depreciation and amortization	Operating earnings before depreciation and amortization as well as restructuring and other costs (revenues) and impairment of assets.
Adjusted operating earnings	Operating earnings before restructuring and other costs (revenues), amortization of intangible assets arising from business combinations and impairment of assets.
Adjusted income taxes	Income taxes before income taxes on restructuring and other costs (revenues), impairment of assets and amortization of intangible assets arising from business combinations as well as the recognition of previous years tax assets of an acquired company.
Adjusted net earnings attributable to shareholders of the Corporation	Net earnings attributable to shareholders of the Corporation before restructuring and other costs (revenues), amortization of intangible assets arising from business combinations and impairment of assets, net of related income taxes as well as the recognition of previous years tax assets of an acquired company.
Net indebtedness	Total of long-term debt, of current portion of long-term debt, of lease liabilities and of current portion of lease liabilities, less cash.
Net indebtedness ratio	Net indebtedness divided by the last 12 months’ adjusted operating earnings before depreciation and amortization.

Reconciliation of Non-IFRS Financial Measures

The financial information has been prepared in accordance with IFRS. However, financial measures used, namely adjusted operating earnings before depreciation and amortization, adjusted operating earnings, adjusted income taxes, adjusted net earnings attributable to shareholders of the Corporation, adjusted net earnings attributable to shareholders of the Corporation per share, net indebtedness and net indebtedness ratio, for which a reconciliation is presented in the following table, do not have any standardized meaning under IFRS and could be calculated differently by other companies. We believe that many of our readers analyze the financial performance of the Corporation’s activities based on these non-IFRS financial measures as such measures may allow for easier comparisons between periods. These measures should be considered as a complement to financial performance measures in accordance with IFRS. They do not substitute and are not superior to them.

The Corporation also believes that these measures are useful indicators of the performance of its operations and its ability to meet its financial obligations. Furthermore, management also uses some of these non-IFRS financial measures to assess the performance of its activities and managers.

Reconciliation of operating earnings – Third quarter and cumulative
	Three months ended			Nine months ended
(in millions of dollars)	July 28, 2024		July 30, 2023	July 28, 2024	July 30, 2023
Operating earnings	$69.2		$39.2	$130.2	$98.0
Restructuring and other costs (revenues)	(0.5	)	12.6	26.8	24.6
Amortization of intangible assets arising from business combinations (1)	15.5		18.4	51.0	55.6
Impairment of assets	—		—	7.5	—
Adjusted operating earnings	$84.2		$70.2	$215.5	$178.2
Depreciation and amortization (2)	36.8		37.7	111.7	122.8
Adjusted operating earnings before depreciation and amortization	$121.0		$107.9	$327.2	$301.0
(1) Amortization of intangible assets arising from business combinations includes our customer relationships, non-compete agreements, rights of first refusal and educational book titles. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.

Reconciliation of operating earnings – Third quarter and cumulative for the Packaging Sector
	Three months ended		Nine months ended
(in millions of dollars)	July 28, 2024	July 30, 2023	July 28, 2024	July 30, 2023
Operating earnings	$29.4	$17.7	$84.1	$48.4
Restructuring and other costs	2.4	1.5	9.7	7.4
Amortization of intangible assets arising from business combinations (1)	14.3	15.9	46.5	48.0
Impairment of assets	—	—	0.6	—
Adjusted operating earnings	$46.1	$35.1	$140.9	$103.8
Depreciation and amortization (2)	18.8	18.7	55.6	64.0
Adjusted operating earnings before depreciation and amortization	$64.9	$53.8	$196.5	$167.8
(1) Amortization of intangible assets arising from business combinations includes our customer relationships. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.

Reconciliation of operating earnings – Third quarter and cumulative for the Retail Services and Printing Sector
	Three months ended		Nine months ended
(in millions of dollars)	July 28, 2024	July 30, 2023	July 28, 2024	July 30, 2023
Operating earnings	$36.8	$27.3	$71.1	$82.8
Restructuring and other costs	1.7	2.7	19.6	7.2
Amortization of intangible assets arising from business combinations (1)	0.7	1.9	3.0	6.0
Impairment of assets	—	—	6.9	—
Adjusted operating earnings	$39.2	$31.9	$100.6	$96.0
Depreciation and amortization (2)	11.6	13.3	36.8	39.8
Adjusted operating earnings before depreciation and amortization	$50.8	$45.2	$137.4	$135.8
(1) Amortization of intangible assets arising from business combinations includes our customer relationships. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.

Reconciliation of operating earnings – Third quarter and cumulative for the Other Sector
	Three months ended				Nine months ended
(in millions of dollars)	July 28, 2024		July 30, 2023		July 28, 2024		July 30, 2023
Operating earnings	$3.0		($5.8	)	($25.0	)	($33.2	)
Restructuring and other costs (revenues)	(4.6	)	8.4		(2.5	)	10.0
Amortization of intangible assets arising from business combinations (1)	0.5		0.6		1.5		1.6
Adjusted operating earnings	($1.1	)	$3.2		($26.0	)	($21.6	)
Depreciation and amortization (2)	6.4		5.7		19.3		19.0
Adjusted operating earnings before depreciation and amortization	$5.3		$8.9		($6.7	)	($2.6	)
(1) Amortization of intangible assets arising from business combinations includes non-compete agreements, rights of first refusal and educational book titles. (2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.

Reconciliation of net earnings attributable to shareholders of the Corporation – Third quarter and cumulative
	Three months ended				Nine months ended
(in millions of dollars, except per share amounts)	July 28, 2024		July 30, 2023		July 28, 2024		July 30, 2023
Net earnings attributable to shareholders of the Corporation	$43.6		$20.9		$73.4		$44.1
Restructuring and other costs (revenues)	(0.5	)	12.6		26.8		24.6
Tax on restructuring and other costs	—		(3.3	)	(6.8	)	(6.3	)
Amortization of intangible assets arising from business combinations (1)	15.5		18.4		51.0		55.6
Tax on amortization of intangible assets arising from business combinations	(3.8	)	(4.6	)	(12.5	)	(13.8	)
Impairment of assets	—		—		7.5		—
Tax on impairment of assets	—		—		(1.9	)	—
Recognition of previous years tax assets of an acquired company	(3.4	)	—		(3.4	)	—
Adjusted net earnings attributable to shareholders of the Corporation	$51.4		$44.0		$134.1		$104.2
Net earnings attributable to shareholders of the Corporation per share	$0.50		$0.24		$0.85		$0.51
Adjusted net earnings attributable to shareholders of the Corporation per share	$0.60		$0.51		$1.55		$1.20
Weighted average number of shares outstanding	86.4		86.6		86.5		86.6
(1) Amortization of intangible assets arising from business combinations includes our customer relationships, non-compete agreements, rights of first refusal and educational book titles.

Reconciliation of net indebtedness
(in millions of dollars, except ratios)	As at July 28, 2024		As at October 29, 2023
Long-term debt	$667.1		$937.8
Current portion of long-term debt	199.8		2.1
Lease liabilities	93.5		94.6
Current portion of lease liabilities	22.8		23.5
Cash	(79.9	)	(137.0	)
Net indebtedness	$903.3		$921.0
Adjusted operating earnings before depreciation and amortization (last 12 months)	$472.7		$446.5
Net indebtedness ratio	1.91	x	2.06	x

Dividend

The Corporation’s Board of Directors declared a quarterly dividend of $0.225 per share on Class A Subordinate Voting Shares and Class B Shares. This dividend is payable on October 21, 2024, to shareholders of record at the close of business on October 3, 2024.

Normal Course Issuer Bid

On June 12, 2024, the Corporation has been authorized to repurchase, for cancellation on the open market, or subject to the approval of any securities authority by private agreements, between June 17, 2024 and June 16, 2025, or at an earlier date if the Corporation concludes or cancels the offer, up to 3,662,967 of its Class A Subordinate Voting Shares and up to 668,241 of its Class B Shares. The repurchases are made in the normal course of business at market prices through the Toronto Stock Exchange.

During the third quarter ended July 28, 2024, the Corporation repurchased and cancelled 1,159,758 Class A Subordinate Voting Shares at a weighted average price of $15.22 and 5,000 Class B Shares at a weighted average price of $15.37, for a total cash consideration of $17.7 million.

On July 26, 2024, the Corporation authorized its broker to repurchase shares between July 29, 2024, and September 13, 2024, inclusively, in accordance with parameters set by the Corporation. Subsequent to the end of the third quarter of fiscal 2024, the Corporation repurchased 773,797 Class A Subordinated Voting Shares and 2,000 Class B Shares for a total cash consideration of $12.5 million.

Additional information

Conference Call

Upon releasing its 2024 third quarter results, the Corporation will hold a conference call for the financial community on September 12, 2024, at 8:00 a.m. The dial-in numbers are 1-289-514-5100 or 1-800-717-1738. Media may hear the call in listen-only mode or tune in to the simultaneous audio broadcast on TC Transcontinental’s website, which will then be archived for 30 days. For media requests or interviews, please contact Nathalie St-Jean, Senior Advisor, Corporate Communications of TC Transcontinental, at 514-954-3581.

Profile

TC Transcontinental is a leader in flexible packaging in North America and in retail services in Canada and is Canada’s largest printer. The Corporation is also the leading Canadian French-language educational publishing group. Since 1976, TC Transcontinental’s mission has been to create quality products and services that allow businesses to attract, reach and retain their target customers.

Respect, teamwork, performance and innovation are the strong values held by the Corporation and its employees. TC Transcontinental’s commitment to its stakeholders is to pursue its business activities in a responsible manner.

Transcontinental Inc. TCL, known as TC Transcontinental, has approximately 7,600 employees, the majority of which are based in Canada, the United States and Latin America. TC Transcontinental generated revenues of $2.9 billion during the fiscal year ended October 29, 2023. For more information, visit TC Transcontinental’s website at www.tc.tc.

Forward-looking Statements

Our public communications often contain oral or written forward-looking statements which are based on the expectations of management and inherently subject to a certain number of risks and uncertainties, known and unknown. By their very nature, forward-looking statements are derived from both general and specific assumptions. The Corporation cautions against undue reliance on such statements since actual results or events may differ materially from the expectations expressed or implied in them. Forward-looking statements may include observations concerning the Corporation’s objectives, strategy, anticipated financial results and business outlook. The Corporation’s future performance may also be affected by a number of factors, many of which are beyond the Corporation’s will or control. These factors include, but are not limited to the impact of digital product development and adoption as well as regulations or legislation regarding door-to-door distribution on the printing of paper flyers or printed advertising materials, inflation and recession risks, economic conditions and geopolitical uncertainty, environmental risks as well as adoption of new regulations or amendments and changes to consumption habits, risk of an operational disruption that could be harmful to its ability to meet deadlines, the worldwide outbreak of a disease, a virus or any other contagious disease could have an adverse impact on the Corporation’s operations, the ability to generate organic long-term growth and face competition, a significant increase in the cost of raw materials, the availability of those materials and energy consumption could have an adverse impact on the Corporation’s activities, the ability to complete acquisitions and properly integrate them, cybersecurity, data protection, warehousing and usage, the impact of digital product development and adoption on the demand for printed products other than flyers, the failure of patents, trademarks and confidentiality agreements to protect intellectual property, a difficulty to attract and retain employees in the main operating sectors, the safety and quality of packaging products used in the food industry, bad debts from certain customers, import and export controls, duties, tariffs or taxes, exchange rate fluctuations, increase in market interest rates with respect to our financial instruments as well as availability of capital at a reasonable cost, the legal risks related to its activities and the compliance of its activities with applicable regulations, the impact of major market fluctuations on the solvency of defined benefit pensions plans, changes in tax legislation and disputes with tax authorities or amendments to statutory tax rates in force, the impact of impairment tests on the value of assets and a conflict of interest between the controlling shareholder and other shareholders. The main risks, uncertainties and factors that could influence actual results are described in the Management’s Discussion and Analysis for the year ended October 29, 2023 and in the latest Annual Information Form. 

Unless otherwise indicated by the Corporation, forward-looking statements do not take into account the potential impact of non-recurring or other unusual items, nor of disposals, business combinations, mergers or acquisitions which may be announced or entered into after the date of September 11, 2024. The forward-looking statements in this press release are made pursuant to the “safe harbour” provisions of applicable Canadian securities legislation. The forward-looking statements in this release are based on current expectations and information available as at September 11, 2024. Such forward-looking information may also be found in other documents filed with Canadian securities regulators or in other communications. The Corporation’s management disclaims any intention or obligation to update or revise these statements unless otherwise required by the securities authorities.

For information:

CONSOLIDATED STATEMENTS OF EARNINGS
Unaudited
(in millions of Canadian dollars, unless otherwise indicated and per share data)

	Three months ended					Nine months ended
		July 28,		July 30,		July 28,		July 30,
		2024			2023		2024		2023
Revenues	$	700.0		$	706.7	$	2,063.6	$	2,160.9
Operating expenses		579.0			598.8		1,736.4		1,859.9
Restructuring and other costs (revenues)		(0.5	)		12.6		26.8		24.6
Impairment of assets		—			—		7.5		—
Operating earnings before depreciation and amortization		121.5			95.3		292.9		276.4
Depreciation and amortization		52.3			56.1		162.7		178.4
Operating earnings		69.2			39.2		130.2		98.0
Net financial expenses		15.6			16.1		43.9		48.0
Earnings before income taxes		53.6			23.1		86.3		50.0
Income taxes		9.8			2.1		12.4		5.6
Net earnings		43.8			21.0		73.9		44.4
Non-controlling interests		0.2			0.1		0.5		0.3
Net earnings attributable to shareholders of the Corporation	$	43.6		$	20.9	$	73.4	$	44.1
Net earnings attributable to shareholders of the Corporation per share – basic and diluted	$	0.50		$	0.24	$	0.85	$	0.51
Weighted average number of shares outstanding – basic and diluted (in millions)		86.4			86.6		86.5		86.6

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
(in millions of Canadian dollars)

	Three months ended						Nine months ended
	July 28,			July 30,			July 28,			July 30,
		2024			2023			2024			2023
Net earnings	$	43.8		$	21.0		$	73.9		$	44.4
Other comprehensive income (loss)
Items that may be subsequently reclassified to net earnings
Net change related to cash flow hedges (1)
Net change in the fair value of designated derivatives – foreign exchange risk		(3.1	)		5.1			0.7			10.5
Net change in the fair value of designated derivatives – interest rate risk		(2.3	)		4.7			(1.1	)		4.8
Reclassification of the net change in the fair value of designated derivatives
recognized in net earnings during the period		0.2			0.5			1.8			1.0
Related income taxes (recovery)		(1.3	)		2.7			0.4			4.3
		(3.9	)		7.6			1.0			12.0
Cumulative translation differences
Net unrealized exchange gains (losses) on the translation of
the financial statements of foreign operations		22.9			(32.7	)		7.5			(30.0	)
Net (losses) gains on hedge of the net investment in foreign operations		(8.3	)		11.4			(1.1	)		8.6
Related income taxes (recovery)		(1.5	)		(1.4	)		(1.5	)		0.4
		16.1			(19.9	)		7.9			(21.8	)
Items that will not be reclassified to net earnings
Changes related to defined benefit plans
Actuarial gains (losses) on defined benefit plans		3.5			(3.8	)		(4.2	)		(6.4	)
Related income taxes (recovery)		0.9			(1.0	)		(1.2	)		(1.7	)
		2.6			(2.8	)		(3.0	)		(4.7	)
Other comprehensive income (loss)		14.8			(15.1	)		5.9			(14.5	)
Comprehensive income	$	58.6		$	5.9		$	79.8		$	29.9
(1) For the three-month and nine-month periods ended July 30, 2023, amounts of $0.9 million and $1.8 million, respectively, were reclassified to Net change in the fair value of designated derivatives – foreign exchange risk and Net change in the fair value of designated derivatives – interest rate risk. These amounts were previously reported under Reclassification of the net change in the fair value of designated derivatives recognized in net earnings during the period. These reclassifications had no impact on comprehensive income or net earnings

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Unaudited
(in millions of Canadian dollars)

									Accumulated
									other						Non-
	Share			Contributed		Retained			comprehensive						controlling		Total
	capital			surplus		earnings			income			Total			interests		equity
Balance as at October 29, 2023	$	636.6		$	0.9	$	1,226.8		$	37.0		$	1,901.3		$	4.9	$	1,906.2
Net earnings		—			—		73.4			—			73.4			0.5		73.9
Other comprehensive income		—			—		—			5.9			5.9			—		5.9
Shareholders’ contributions and
distributions to shareholders
Share redemptions		(9.8	)		—		(25.3	)		—			(35.1	)		—		(35.1	)
Dividends		—			—		(58.4	)		—			(58.4	)		—		(58.4	)
Balance as at July 28, 2024	$	626.8		$	0.9	$	1,216.5		$	42.9		$	1,887.1		$	5.4	$	1,892.5
Balance as at October 30, 2022	$	636.6		$	0.9	$	1,219.0		$	20.7		$	1,877.2		$	4.8	$	1,882.0
Net earnings		—			—		44.1			—			44.1			0.3		44.4
Other comprehensive loss		—			—		—			(14.5	)		(14.5	)		—		(14.5	)
Shareholders’ contributions and
distributions to shareholders
Dividends		—			—		(58.5	)		—			(58.5	)		—		(58.5	)
Balance as at July 30, 2023	$	636.6		$	0.9	$	1,204.6		$	6.2		$	1,848.3		$	5.1	$	1,853.4

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited
(in millions of Canadian dollars)

	As at		As at
	July 28,		October 29,
		2024		2023
Current assets
Cash	$	79.9	$	137.0
Accounts receivable		457.9		514.7
Income taxes receivable		33.6		37.0
Inventories		399.4		391.1
Prepaid expenses and other current assets		24.3		20.6
		995.1		1,100.4
Property, plant and equipment		774.3		796.5
Right-of-use assets		96.9		98.6
Intangible assets		397.4		447.1
Goodwill		1,195.6		1,194.9
Deferred taxes		30.1		30.4
Other assets		30.9		32.4
	$	3,520.3	$	3,700.3
Current liabilities
Accounts payable and accrued liabilities	$	415.5	$	465.5
Income taxes payable		19.3		24.8
Deferred revenues and deposits		11.7		10.4
Current portion of long-term debt		199.8		2.1
Current portion of lease liabilities		22.8		23.5
		669.1		526.3
Long-term debt		667.1		937.8
Lease liabilities		93.5		94.6
Deferred taxes		74.1		89.8
Other liabilities		124.0		145.6
		1,627.8		1,794.1
Equity
Share capital		626.8		636.6
Contributed surplus		0.9		0.9
Retained earnings		1,216.5		1,226.8
Accumulated other comprehensive income		42.9		37.0
Attributable to shareholders of the Corporation		1,887.1		1,901.3
Non-controlling interests		5.4		4.9
		1,892.5		1,906.2
	$	3,520.3	$	3,700.3

CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(in millions of Canadian dollars)

	Three months ended						Nine months ended
	July 28,			July 30,			July 28,			July 30,
		2024			2023			2024			2023
Operating activities
Net earnings	$	43.8		$	21.0		$	73.9		$	44.4
Adjustments to reconcile net earnings and cash flows from operating activities:
Impairment of assets		—			—			7.5			—
Depreciation and amortization		52.3			56.1			162.7			178.4
Financial expenses on long-term debt and lease liabilities		11.5			14.4			35.2			42.3
Net (gains) losses on disposal of assets		(5.3	)		0.4			(5.6	)		1.2
Income taxes		9.8			2.1			12.4			5.6
Net foreign exchange differences and other		0.5			(2.6	)		(1.4	)		(0.7	)
Cash flows generated by operating activities before changes in non-cash operating
items and income taxes paid		112.6			91.4			284.7			271.2
Changes in non-cash operating items		(7.3	)		26.0			(28.2	)		(2.4	)
Income taxes paid		(7.0	)		(8.3	)		(27.8	)		(42.7	)
Cash flows from operating activities		98.3			109.1			228.7			226.1
Investing activities
Business combinations, net of acquired cash		—			0.6			—			0.3
Acquisitions of property, plant and equipment		(23.8	)		(37.6	)		(75.9	)		(123.7	)
Disposals of property, plant and equipment and other		7.3			—			8.8			—
Increase in intangible assets		(6.8	)		(6.5	)		(21.4	)		(24.8	)
Cash flows from investing activities		(23.3	)		(43.5	)		(88.5	)		(148.2	)
Financing activities
Reimbursement of long-term debt		(0.2	)		(0.6	)		(2.2	)		(2.2	)
Net (decrease) increase in credit facilities		(1.3	)		(26.7	)		(75.4	)		30.6
Financial expenses paid on long-term debt and credit facilities		(6.1	)		(9.4	)		(27.7	)		(34.3	)
Repayment of principal on lease liabilities		(5.6	)		(6.3	)		(17.2	)		(18.6	)
Interest paid on lease liabilities		(0.8	)		(0.8	)		(2.5	)		(2.5	)
Dividends		(19.4	)		(19.5	)		(58.4	)		(58.5	)
Share redemptions		(17.7	)		—			(17.7	)		—
Cash flows from financing activities		(51.1	)		(63.3	)		(201.1	)		(85.5	)
Effect of exchange rate changes on cash denominated in foreign currencies		0.9			(0.2	)		3.8			0.4
Net change in cash		24.8			2.1			(57.1	)		(7.2	)
Cash at beginning of the period		55.1			36.4			137.0			45.7
Cash at end of period	$	79.9		$	38.5		$	79.9		$	38.5
Non-cash investing activities
Net change in capital asset acquisitions financed by accounts payable	$	(2.3	)	$	1.0		$	(11.6	)	$	1.9

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ATLANTA, Sept. 11, 2024 (GLOBE NEWSWIRE) — Oxford Industries, Inc. OXM today announced financial results for its second quarter of fiscal 2024 ended August 3, 2024.

Consolidated net sales in the second quarter of fiscal 2024 of $420 million were comparable to sales in the second quarter of fiscal 2023. EPS on a GAAP basis was $2.57 compared to $3.22 in the second quarter of fiscal 2023. On an adjusted basis, EPS was $2.77 compared to $3.45 in the second quarter of fiscal 2023.

Tom Chubb, Chairman and CEO, commented, “Consumer sentiment in the second quarter continued to decline from levels earlier in the year reaching an eight month low in July. The decline led to market conditions that were weaker than expected with more consumers looking for deals and promotions as evidenced by increased sales in our outlet locations and during promotional events. Despite the challenging consumer environment, our teams continue to focus on our strategy of delivering new and compelling products and experiences for our customers. The current macroeconomic environment does not diminish our enthusiasm or commitment to our strategy to drive long-term shareholder value. 

However, given the continued choppiness in the market and uncertain macroeconomic conditions, we have lowered our fiscal 2024 sales and EPS guidance to reflect current industry trends. Amidst this difficult environment, we are actively seeking opportunities to reduce SG&A spend without impairing our long-term growth prospects as our playbook to achieving forecasted results will be, as always, protecting the strength and integrity of our brands and avoiding short-sighted reactions to current market conditions. From a cash flow perspective, we expect strong 2024 cash flow from operations, as evidenced by the repayment of our outstanding debt balance at the end of the second quarter. Simultaneously, we continue to invest in supporting the future of our business to deliver profitable growth on a sustained basis.”

Mr. Chubb concluded, “Our teams have navigated challenging economic cycles before and I am confident that we have the right people and strategies in place to emerge on the other side of this difficult market with the health of our brands intact and our consumer connections as strong as ever.”

Second Quarter of Fiscal 2024 versus Fiscal 2023

Net Sales by Operating Group	Second Quarter
($ in millions)	2024	2023	% Change
Tommy Bahama	$245.1	$245.4	(0.1%)
Lilly Pulitzer	91.7	91.3	0.4%
Johnny Was	50.3	52.0	(3.4%)
Emerging Brands	32.9	31.6	4.3%
Other	(0.1)	(0.1)	NM
Total Company	$419.9	$420.3	(0.1%)

• Consolidated net sales of $420 million were comparable to sales of $420 million in the second quarter of fiscal 2023.
  • Full-price direct-to-consumer (DTC) sales increased 1% to $305 million versus the second quarter of fiscal 2023.
    • Full-price retail sales of $152 million were 1% higher than the prior-year period.
    • E-commerce sales of $153 million were comparable to last year.
  • Outlet sales were $21 million, a 4% increase versus prior-year results.
  • Food and beverage sales of $29 million were comparable to last year.
  • Wholesale sales of $65 million were 5% lower than the second quarter of fiscal 2023.
• Gross margin was 63.1% on a GAAP basis, compared to 63.9% in the second quarter of fiscal 2023. The decrease in gross margin was primarily due to full-price retail and e-commerce sales representing a lower proportion of net sales at Tommy Bahama, Lilly Pulitzer and Johnny Was with more sales occurring during promotional and clearance events. This decrease was partially offset by a $1 million lower LIFO accounting charge. Adjusted gross margin, which excludes the effect of LIFO accounting, decreased to 63.3% compared to 64.3% on an adjusted basis in the prior-year period.
• SG&A was $217 million compared to $205 million last year. This increase was primarily driven by expenses related to 30 new store openings since the second quarter of fiscal 2023, pre-opening expenses related to additional stores planned to open during the remainder of fiscal 2024, including 4 new Tommy Bahama Marlin Bars, and the addition of Jack Rogers. On an adjusted basis, SG&A was $213 million compared to $202 million in the prior-year period.
• Royalties and other operating income of $4 million were comparable to the second quarter of fiscal 2023.
• Operating income was $53 million, or 12.5% of net sales, compared to $68 million, or 16.1% of net sales, in the second quarter of fiscal 2023. On an adjusted basis, operating income decreased to $57 million, or 13.5% of net sales, compared to $73 million, or 17.3% of net sales, in the second quarter of fiscal 2023. The decreased operating income includes the impact of lower gross margin and higher SG&A as the Company continues to invest in the business.
• Interest expense was less than $1 million compared to $1 million in the prior year period. The decreased interest expense was primarily due to a lower average outstanding debt balance during the second quarter of fiscal 2024 than the second quarter of fiscal 2023. Strong cash flows allowed for the repayment of our long-term debt balance during the second quarter of fiscal 2024.
• The effective tax rate in the second quarter of fiscal 2024 of 22.5% was comparable to the second quarter of fiscal 2024. Both periods benefited primarily from discrete tax benefits for stock-based compensation.

Balance Sheet and Liquidity

Inventory decreased $22 million, or 14%, on a LIFO basis and $13 million, or 6%, on a FIFO basis compared to the end of the second quarter of fiscal 2023. Inventory decreased in all operating groups except Johnny Was primarily due to the continued initiatives to closely manage inventory purchases and reduce on-hand inventory levels.

During the first half of fiscal 2024 cash flow from operations was $122 million compared to $153 million in the first half of fiscal 2023. The cash flow from operations in the first half of fiscal 2024 provided sufficient cash to fund $54 million of capital expenditures, $22 million of dividends and $29 million of debt repayment.

During the second quarter of fiscal 2024, the Company repaid its remaining long-term debt and had no borrowings outstanding, compared to $48 million of borrowings outstanding at the end of the second quarter of fiscal 2023. The Company had $18 million of cash and cash equivalents versus $8 million of cash and cash equivalents at the end of the second quarter of fiscal 2023.

Dividend

The Board of Directors declared a quarterly cash dividend of $0.67 per share. The dividend is payable on November 1, 2024 to shareholders of record as of the close of business on October 18, 2024. The Company has paid dividends every quarter since it became publicly owned in 1960.

Outlook

For fiscal 2024 ending on February 1, 2025, the Company revised its sales and EPS guidance. The Company now expects net sales in a range of $1.51 billion to $1.54 billion as compared to net sales of $1.57 billion in fiscal 2023. In fiscal 2024, GAAP EPS is expected to be between $6.28 and $6.58 compared to fiscal 2023 GAAP EPS of $3.82. Adjusted EPS is expected to be between $7.00 and $7.30, compared to fiscal 2023 adjusted EPS of $10.15.

For the third quarter of fiscal 2024, the Company expects net sales to be between $310 million and $325 million compared to net sales of $327 million in the third quarter of fiscal 2023. Earnings on a GAAP basis per share are expected to be in a range of a loss of $0.16 to net earnings of $0.04 in the third quarter compared to GAAP net earnings per share of $0.68 in the third quarter of fiscal 2023. Adjusted EPS is expected to be between $0.00 and $0.20 compared to adjusted EPS of $1.01 in the third quarter of fiscal 2023.

The Company anticipates interest expense of $2 million in fiscal 2024, including the $1 million in the first half of fiscal 2024, with interest expense expected to be less than $1 million in each of the third and fourth quarters of fiscal 2024. The Company’s effective tax rate is expected to be approximately 24% for the full year of fiscal 2024.

Capital expenditures in fiscal 2024, including the $54 million in the first half of fiscal 2024, are expected to be approximately $150 million compared to $74 million in fiscal 2023. This is a reduction from the Company’s prior estimate due to the timing of cash flows related to investments for future growth, including the timing of spend associated with a multi-year project to build a new distribution center in Lyons, Georgia to ensure best-in-class direct to consumer throughput capabilities for our brands. The planned year-over-year increase in capital expenditures includes approximately $75 million now budgeted in fiscal 2024 for the distribution center project. Additionally, we will invest in new brick and mortar locations, relocations and remodels of existing locations resulting in a year-over-year net increase of full price stores of approximately 30 by the end of fiscal 2024, which includes an additional approximately 15 planned to open in the second half of the year. We will also continue with our investments in our various technology systems initiatives, including e-commerce and omnichannel capabilities, data management and analytics, customer data and insights, cybersecurity, automation including artificial intelligence and infrastructure.

Conference Call

The Company will hold a conference call with senior management to discuss its financial results at 4:30 p.m. ET today. A live web cast of the conference call will be available on the Company’s website at www.oxfordinc.com. A replay of the call will be available through September 25, 2024 by dialing (412) 317-6671 access code 13748517.

About Oxford

Oxford Industries, Inc., a leader in the apparel industry, owns and markets the distinctive Tommy Bahama^®, Lilly Pulitzer^®, Johnny Was®, Southern Tide^®, The Beaufort Bonnet Company^®, Duck Head^® and Jack Rogers^® lifestyle brands. Oxford’s stock has traded on the New York Stock Exchange since 1964 under the symbol OXM. For more information, please visit Oxford’s website at www.oxfordinc.com.

Basis of Presentation

All per share information is presented on a diluted basis.

Non-GAAP Financial Information

The Company reports its consolidated financial statements in accordance with generally accepted accounting principles (GAAP). To supplement these consolidated financial results, management believes that a presentation and discussion of certain financial measures on an adjusted basis, which exclude certain non-operating or discrete gains, charges or other items, may provide a more meaningful basis on which investors may compare the Company’s ongoing results of operations between periods. These measures include adjusted earnings, adjusted earnings per share, adjusted gross profit, adjusted gross margin, adjusted SG&A, and adjusted operating income, among others.

Management uses these non-GAAP financial measures in making financial, operational, and planning decisions to evaluate the Company’s ongoing performance. Management also uses these adjusted financial measures to discuss its business with investment and other financial institutions, its board of directors and others. Reconciliations of these adjusted measures to the most directly comparable financial measures calculated in accordance with GAAP are presented in tables included at the end of this release.

Safe Harbor

This press release includes statements that constitute forward-looking statements within the meaning of the federal securities laws. 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). Such statements are subject to a number of risks, uncertainties and assumptions including, without limitation, demand for our products, which may be impacted by macroeconomic factors that may impact consumer discretionary spending and pricing levels for apparel and related products, many of which may be impacted by inflationary pressures, elevated interest rates, concerns about the stability of the banking industry or general economic uncertainty, and the effectiveness of measures to mitigate the impact of these factors; possible changes in governmental monetary and fiscal policies, including, but not limited to, Federal Reserve policies in connection with continued inflationary pressures and the impact of the 2024 U.S presidential election; competitive conditions and/or evolving consumer shopping patterns, particularly in a highly promotional retail environment; acquisition activities (such as the acquisition of Johnny Was), including our ability to integrate key functions, recognize anticipated synergies and minimize related disruptions or distractions to our business as a result of these activities; supply chain disruptions; costs and availability of labor and freight deliveries, including our ability to appropriately staff our retail stores and food & beverage locations; costs of products as well as the raw materials used in those products, as well as our ability to pass along price increases to consumers; energy costs; our ability to respond to rapidly changing consumer expectations; unseasonal or extreme weather conditions or natural disasters; the ability of business partners, including suppliers, vendors, wholesale customers, licensees, logistics providers and landlords, to meet their obligations to us and/or continue our business relationship to the same degree as they have historically; retention of and disciplined execution by key management and other critical personnel; cybersecurity breaches and ransomware attacks, as well as our and our third party vendors’ ability to properly collect, use, manage and secure business, consumer and employee data and maintain continuity of our information technology systems; the effectiveness of our advertising initiatives in defining, launching and communicating brand-relevant customer experiences; the level of our indebtedness, including the risks associated with heightened interest rates on the debt and the potential impact on our ability to operate and expand our business; changes in international, federal or state tax, trade and other laws and regulations, including the potential for increases or changes in duties, tariffs or quotas; the timing of shipments requested by our wholesale customers; fluctuations and volatility in global financial and/or real estate markets; our ability to identify and secure suitable locations for new retail store and food & beverage openings; the timing and cost of retail store and food & beverage location openings and remodels, technology implementations and other capital expenditures; the timing, cost and successful implementation of changes to our distribution network; pandemics or other public health crises; expected outcomes of pending or potential litigation and regulatory actions; the increased consumer, employee and regulatory focus on sustainability issues and practices; the regulation or prohibition of goods sourced, or containing raw materials or components, from certain regions and our ability to evidence compliance; access to capital and/or credit markets; factors that could affect our consolidated effective tax rate; the risk of impairment to goodwill and other intangible assets such as the recent impairment charges incurred in our Johnny Was segment; and geopolitical risks, including ongoing challenges between the United States and China and those related to the ongoing war in Ukraine, the Israel-Hamas war and the conflict in the Red Sea region. Forward-looking statements reflect our expectations at the time such forward-looking statements are made, based on information available at such time, 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 2023, 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.

Contact:	Brian Smith
E-mail:	InvestorRelations@oxfordinc.com

Oxford Industries, Inc.
Consolidated Balance Sheets
(in thousands, except par amounts)
(unaudited)
	August 3,			July 29,
	2024			2023
ASSETS
Current Assets
Cash and cash equivalents	$	18,421		$	7,790
Receivables, net		63,542			55,583
Inventories, net		139,583			161,866
Income tax receivable		19,437			19,401
Prepaid expenses and other current assets		46,213			37,740
Total Current Assets	$	287,196		$	282,380
Property and equipment, net		219,606			188,004
Intangible assets, net		256,192			277,114
Goodwill		27,309			123,079
Operating lease assets		321,474			241,452
Other assets, net		41,874			34,336
Deferred income taxes		18,871			3,493
Total Assets	$	1,172,522		$	1,149,858
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	74,133		$	76,216
Accrued compensation		23,774			20,481
Current portion of operating lease liabilities		66,854			67,676
Accrued expenses and other liabilities		62,163			68,188
Total Current Liabilities	$	226,924		$	232,561
Long-term debt		—			48,472
Non-current portion of operating lease liabilities		298,704			219,207
Other non-current liabilities		25,338			20,402
Deferred income taxes		—			4,587
Shareholders’ Equity
Common stock, $1.00 par value per share		15,695			15,630
Additional paid-in capital		181,901			170,789
Retained earnings		426,867			440,319
Accumulated other comprehensive loss		(2,907	)		(2,109	)
Total Shareholders’ Equity	$	621,556		$	624,629
Total Liabilities and Shareholders’ Equity	$	1,172,522		$	1,149,858

Oxford Industries, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
	Second Quarter						First Half
	Fiscal 2024			Fiscal 2023			Fiscal 2024			Fiscal 2023
Net sales	$	419,886		$	420,319		$	818,070		$	840,416
Cost of goods sold		154,875			151,590			294,698			296,558
Gross profit	$	265,011		$	268,729		$	523,372		$	543,858
SG&A		216,851			205,231			429,954			408,380
Royalties and other operating income		4,350			4,176			11,543			12,497
Operating income (loss)	$	52,510		$	67,674		$	104,961		$	147,975
Interest expense, net		89			1,297			963			3,639
Earnings before income taxes	$	52,421		$	66,377		$	103,998		$	144,336
Income tax expense		11,779			14,924			24,983			34,345
Net earnings (loss)	$	40,642		$	51,453		$	79,015		$	109,991
Net earnings (loss) per share:
Basic	$	2.59		$	3.31		$	5.06		$	7.06
Diluted	$	2.57		$	3.22		$	4.99		$	6.86
Weighted average shares outstanding:
Basic		15,662			15,550			15,629			15,589
Diluted		15,830			15,979			15,838			16,025
Dividends declared per share	$	0.67		$	0.65		$	1.34		$	1.30

Oxford Industries, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	First Half
	Fiscal 2024			Fiscal 2023
Cash Flows From Operating Activities:
Net earnings	$	79,015		$	109,991
Adjustments to reconcile net earnings to cash flows from operating activities:
Depreciation		27,182			23,128
Amortization of intangible assets		5,909			7,331
Equity compensation expense		8,579			7,508
Gain on sale of property and equipment		—			(1,756	)
Amortization and write-off of deferred financing costs		193			368
Deferred income taxes		5,258			1,451
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables, net		94			(11,611	)
Inventories, net		19,774			57,947
Income tax receivable		112			39
Prepaid expenses and other current assets		(3,189	)		360
Current liabilities		(11,100	)		(39,471	)
Other balance sheet changes		(10,089	)		(2,785	)
Cash provided by operating activities	$	121,738		$	152,500
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired		(315	)		(3,320	)
Purchases of property and equipment		(53,528	)		(31,410	)
Proceeds from the sale of property, plant and equipment		—			2,125
Other investing activities		(304	)		(33	)
Cash used in investing activities	$	(54,147	)	$	(32,638	)
Cash Flows From Financing Activities:
Repayment of revolving credit arrangements		(193,096	)		(334,225	)
Proceeds from revolving credit arrangements		163,792			263,686
Deferred financing costs paid		—			(1,661	)
Repurchase of common stock		—			(18,987	)
Proceeds from issuance of common stock		1,020			1,090
Repurchase of equity awards for employee tax withholding liabilities		(6,199	)		(9,941	)
Cash dividends paid		(21,939	)		(20,843	)
Other financing activities		(300	)		—
Cash used in financing activities	$	(56,722	)	$	(120,881	)
Net change in cash and cash equivalents		10,869			(1,019	)
Effect of foreign currency translation on cash and cash equivalents		(52	)		(17	)
Cash and cash equivalents at the beginning of year		7,604			8,826
Cash and cash equivalents at the end of period	$	18,421		$	7,790

Oxford Industries, Inc.
Reconciliations of Certain Non-GAAP Financial Information
(in millions, except per share amounts)
(unaudited)
	Second Quarter								First Half
AS REPORTED	Fiscal 2024			Fiscal 2023			% Change		Fiscal 2024			Fiscal 2023			% Change
Tommy Bahama
Net sales	$	245.1		$	245.4		(0.1)%		$	470.7		$	484.9		(2.9)%
Gross profit	$	150.7		$	155.3		(3.0)%		$	299.0		$	313.5		(4.6)%
Gross margin		61.5%			63.3%					63.5%			64.7%
Operating income	$	40.9		$	51.0		(19.8)%		$	83.6		$	106.6		(21.6)%
Operating margin		16.7%			20.8%					17.8%			22.0%
Lilly Pulitzer
Net sales	$	91.7		$	91.3		0.4%		$	180.1		$	188.8		(4.6)%
Gross profit	$	62.1		$	63.1		(1.5)%		$	121.4		$	131.4		(7.6)%
Gross margin		67.8%			69.1%					67.4%			69.6%
Operating income	$	16.9		$	18.6		(8.8)%		$	32.5		$	43.1		(24.6)%
Operating margin		18.5%			20.3%					18.0%			22.8%
Johnny Was
Net sales	$	50.3		$	52.0		(3.4)%		$	101.5		$	101.5		0.0%
Gross profit	$	33.4		$	35.9		(6.9)%		$	66.7		$	69.5		(4.1)%
Gross margin		66.5%			69.1%					65.7%			68.5%
Operating income	$	(1.7	)	$	3.8		(143.0)%		$	(1.3	)	$	6.3		(120.9)%
Operating margin	(3.3)%				7.4%				(1.3)%				6.2%
Emerging Brands
Net sales	$	32.9		$	31.6		4.3%		$	65.9		$	65.6		0.5%
Gross profit	$	19.7		$	15.8		24.9%		$	39.3		$	31.4		24.9%
Gross margin		59.9%			50.0%					59.5%			47.9%
Operating income	$	2.8		$	3.0		(7.1)%		$	6.6		$	6.9		(4.8)%
Operating margin		8.5%			9.6%					10.0%			10.6%
Corporate and Other
Net sales	$	(0.1	)	$	(0.1	)	NM		$	(0.2	)	$	(0.3	)	NM
Gross profit	$	(1.0	)	$	(1.4	)	NM		$	(3.0	)	$	(2.0	)	NM
Operating loss	$	(6.5	)	$	(8.8	)	NM		$	(16.4	)	$	(14.9	)	NM
Consolidated
Net sales	$	419.9		$	420.3		(0.1)%		$	818.1		$	840.4		(2.7)%
Gross profit	$	265.0		$	268.7		(1.4)%		$	523.4		$	543.9		(3.8)%
Gross margin		63.1%			63.9%					64.0%			64.7%
SG&A	$	216.9		$	205.2		5.7%		$	430.0		$	408.4		5.3%
SG&A as % of net sales		51.6%			48.8%					52.6%			48.6%
Operating income	$	52.5		$	67.7		(22.4)%		$	105.0		$	148.0		(29.1)%
Operating margin		12.5%			16.1%					12.8%			17.6%
Earnings before income taxes	$	52.4		$	66.4		(21.0)%		$	104.0		$	144.3		(27.9)%
Net earnings	$	40.6		$	51.5		(21.0)%		$	79.0		$	110.0		(28.2)%
Net earnings per diluted share	$	2.57		$	3.22		(20.3)%		$	4.99		$	6.86		(27.3)%
Weighted average shares outstanding – diluted		15.8			16.0		(0.9)%			15.8			16.0		(1.2)%

	Second Quarter								First Half
ADJUSTMENTS	Fiscal 2024			Fiscal 2023			% Change		Fiscal 2024			Fiscal 2023			% Change
LIFO adjustments(1)	$	0.6		$	1.4				$	2.9		$	2.8
Amortization of Johnny Was intangible assets(2)	$	2.7		$	3.5				$	5.4		$	6.9
Gain on sale of Merida manufacturing facility(3)	$	0.0		$	0.0				$	0.0		$	(1.8	)
Johnny Was distribution center relocation costs(4)	$	0.9		$	0.0				$	0.9		$	0.0
Impact of income taxes(5)	$	(1.1	)	$	(1.3	)			$	(2.3	)	$	(2.1	)
Adjustment to net earnings(6)	$	3.2		$	3.6				$	6.9		$	5.9
AS ADJUSTED
Tommy Bahama
Net sales	$	245.1		$	245.4		(0.1)%		$	470.7		$	484.9		(2.9)%
Gross profit	$	150.7		$	155.3		(3.0)%		$	299.0		$	313.5		(4.6)%
Gross margin		61.5%			63.3%					63.5%			64.7%
Operating income	$	40.9		$	51.0		(19.8)%		$	83.6		$	106.6		(21.6)%
Operating margin		16.7%			20.8%					17.8%			22.0%
Lilly Pulitzer
Net sales	$	91.7		$	91.3		0.4%		$	180.1		$	188.8		(4.6)%
Gross profit	$	62.1		$	63.1		(1.5)%		$	121.4		$	131.4		(7.6)%
Gross margin		67.8%			69.1%					67.4%			69.6%
Operating income	$	16.9		$	18.6		(8.8)%		$	32.5		$	43.1		(24.6)%
Operating margin		18.5%			20.3%					18.0%			22.8%
Johnny Was
Net sales	$	50.3		$	52.0		(3.4)%		$	101.5		$	101.5		0.0%
Gross profit	$	33.4		$	35.9		(6.9)%		$	66.7		$	69.5		(4.1)%
Gross margin		66.5%			69.1%					65.7%			68.5%
Operating income	$	2.0		$	7.3		(73.0)%		$	5.0		$	13.3		(62.1)%
Operating margin		3.9%			14.1%					5.0%			13.1%
Emerging Brands
Net sales	$	32.9		$	31.6		4.3%		$	65.9		$	65.6		0.5%
Gross profit	$	19.7		$	15.8		24.9%		$	39.3		$	31.4		24.9%
Gross margin		59.9%			50.0%					59.5%			47.9%
Operating income	$	2.8		$	3.0		(7.1)%		$	6.6		$	6.9		(4.8)%
Operating margin		8.5%			9.6%					10.0%			10.6%
Corporate and Other
Net sales	$	(0.1	)	$	(0.1	)	NM		$	(0.2	)	$	(0.3	)	NM
Gross profit	$	(0.4	)	$	0.1		NM		$	(0.1	)	$	0.8		NM
Operating loss	$	(5.9	)	$	(7.4	)	NM		$	(13.5	)	$	(13.9	)	NM
Consolidated
Net sales	$	419.9		$	420.3		(0.1)%		$	818.1		$	840.4		(2.7)%
Gross profit	$	265.6		$	270.2		(1.7)%		$	526.2		$	546.6		(3.7)%
Gross margin		63.3%			64.3%					64.3%			65.0%
SG&A	$	213.2		$	201.8		5.7%		$	423.6		$	401.5		5.5%
SG&A as % of net sales		50.8%			48.0%					51.8%			47.8%
Operating income	$	56.8		$	72.6		(21.8)%		$	114.2		$	155.9		(26.8)%
Operating margin		13.5%			17.3%					14.0%			18.6%
Earnings before income taxes	$	56.7		$	71.3		(20.5)%		$	113.2		$	152.3		(25.6)%
Net earnings	$	43.8		$	55.1		(20.5)%		$	85.9		$	115.9		(25.9)%
Net earnings per diluted share	$	2.77		$	3.45		(19.7)%		$	5.42		$	7.23		(25.0)%

		Second Quarter		Second Quarter		Second Quarter		First Half		First Half
		Fiscal 2024		Fiscal 2024		Fiscal 2023		Fiscal 2024		Fiscal 2023
		Actual		Guidance(7)		Actual		Actual		Actual
Net earnings (loss) per diluted share:
GAAP basis	$	2.57	$	2.82 – 3.02	$	3.22	$	4.99	$	6.86
LIFO adjustments(1)(8)		0.03		0.00		0.07		0.13		0.13
Amortization of Johnny Was intangible assets(2)(8)		0.13		0.13		0.16		0.26		0.32
Gain on sale of Merida manufacturing facility(3)(8)		0.00		0.00		0.00		0.00		(0.08)
Johnny Was distribution center relocation costs(4)(8)		0.04		0.00		0.00		0.04		0.00
As adjusted(5)	$	2.77	$	2.95 – 3.15	$	3.45	$	5.42	$	7.23
		Third Quarter		Third Quarter
		Fiscal 2024		Fiscal 2023
		Guidance(10)		Actual
Net earnings per diluted share:
GAAP basis	$	(0.16) – 0.04	$	0.68
LIFO adjustments(9)		0.00		0.17
Amortization of Johnny Was intangible assets(2)		0.13		0.16
Johnny Was distribution center relocation costs(4)		0.03		0.00
As adjusted(5)	$	0.00 – 0.20	$	1.01
		Fiscal 2024		Fiscal 2023
		Guidance(10)		Actual
Net earnings per diluted share:
GAAP basis	$	6.28 – 6.58	$	3.82
Johnny Was impairment charges(11)		0.00		5.21
LIFO adjustments(1)(8)		0.11		0.45
Amortization of Johnny Was intangible assets(2)(8)		0.50		0.65
Gain on sale of Merida manufacturing facility(3)(8)		0.00		(0.08)
Johnny Was distribution center relocation costs(4)(8)		0.11		0.00
Impairment of investment in unconsolidated entity(12)		0.00		0.12
As adjusted(5)	$	7.00 – 7.30	$	10.15

⁽¹⁾ LIFO adjustments represents the impact of LIFO accounting adjustments. These adjustments are included in cost of goods sold in Corporate and Other.
⁽²⁾ Amortization of Johnny Was intangible assets represents the amortization related to intangible assets acquired as part of the Johnny Was acquisition. These charges are included in SG&A in Johnny Was.
⁽³⁾ Gain on sale of Merida manufacturing facility represents the gain on sale of Oxford’s last owned manufacturing facility, which was located in Merida, Mexico and previously operated by the Lanier Apparel operating group. The gain is included in royalties and other operating income in Corporate and Other in Fiscal 2023.
⁽⁴⁾ Johnny Was distribution center relocation costs relate to the transition of Johnny Was distribution center operations from Los Angeles, California to Lyons, Georgia including systems integrations, employee bonuses and severance agreements, moving costs and occupancy expenses related to the vacated distribution centers. These charges are included in SG&A in Johnny Was.
⁽⁵⁾ Impact of income taxes represents the estimated tax impact of the above adjustments based on the estimated applicable tax rate on current year earnings.
⁽⁶⁾ Amounts in columns may not add due to rounding.
⁽⁷⁾ Guidance as issued on June 12, 2024.
⁽⁸⁾ Adjustments shown net of income taxes.
⁽⁹⁾ No estimate for LIFO accounting adjustments is reflected in the guidance for any future periods.
⁽¹⁰⁾ Guidance as issued on September 11, 2024.
⁽¹¹⁾ Johnny Was impairment charges represent the impact of the impairment of the Johnny Was goodwill and intangible asset balances, net of income taxes, on net earnings per share in Fiscal 2023.
⁽¹²⁾ Impairment of investment in unconsolidated entity represents the impact, net of income taxes, on net earnings per share relating to the impairment of the ownership interest in an unconsolidated entity in Fiscal 2023.

	Direct to Consumer Location Count
	End of Q1	End of Q2	End of Q3	End of Q4
Fiscal 2023
Tommy Bahama
Full-price retail store	103	101	102	102
Retail-food & beverage	21	22	21	22
Outlet	33	33	34	34
Total Tommy Bahama	157	156	157	158
Lilly Pulitzer full-price retail store	59	59	61	60
Johnny Was
Full-price retail store	65	67	71	72
Outlet	2	2	2	3
Total Johnny Was	67	69	73	75
Emerging Brands
Southern Tide full-price retail store	9	13	15	19
TBBC full-price retail store	3	3	3	3
Total Oxford	295	300	309	315
Fiscal 2024
Tommy Bahama
Full-price retail store	102	103
Retail-food & beverage	23	23
Outlet	35	36
Total Tommy Bahama	160	162
Lilly Pulitzer full-price retail store	60	60
Johnny Was
Full-price retail store	75	76
Outlet	3	3
Total Johnny Was	78	79
Emerging Brands
Southern Tide full-price retail store	20	24
TBBC full-price retail store	4	5
Total Oxford	322	330

TORONTO, Sept. 11, 2024 (GLOBE NEWSWIRE) — Currency Exchange International, Corp. (the “Group” or “CXI”) CXICURN, today reported its financial results and Management’s Discussion and Analysis (“MD&A”) for the three and nine-month periods ended July 31, 2024 (all figures are in U.S. dollars except where otherwise indicated). The complete financial statements and MD&A can be found on the Company’s SEDAR profile at www.sedarplus.ca.

Randolph Pinna, CEO of the Group, stated, “CXI group delivered revenue growth over the prior period keeping our balance sheet strong while managing expenses. CXI’s business is very strong in the USA as its model is diverse with both its wholesale and direct-to-consumer customers. CXI remains committed to executing against our strategy of profitable growth while maintaining adequate capital levels. The management team and I are confident in our ability to continue to grow and become a global leader in the supply of foreign currency and payment services.”

Financial Highlights for the three-months ended July 31, 2024 compared to the three-months ended July 31, 2023:

• Revenue increased by 2% or $0.4 million to $24.0 million compared to $23.6 million. Payments revenue grew 5% or $0.2 million over the prior period and Banknotes revenue grew by 1% or $0.2 million;
• Net operating income increased by 5% or $0.3 million to $6.7 million from $6.4 million;  
• Net income decreased by 3% or $0.1 million to $3.9 million from $4.0 million;
• Earnings per share were $0.61 and $0.59 on a basic and fully diluted basis, respectively, compared to reported earnings per share of $0.63 and $0.60, respectively; and
• The Group had strong liquidity and capital positions of $74.9 million in net working capital and $83.1 million in total equity as at July 31, 2024.

Financial Highlights for the nine-months ended July 31, 2024 compared to the nine-months ended July 31, 2023:

• Revenue increased by 5% or $3.0 million to $62.2 million compared to $59.2 million. Banknotes revenue grew 4% or $2.0 million over the prior period and Payments revenue grew by 9% or $1.0 million;
• Net operating income decreased by 1% or $0.1 million to $12.8 million from $12.9 million;  
• Reported net income declined by 33% or $2.6 million to $5.3 million from $7.9 million primarily related to the deferred tax expense recorded in the second quarter;
• Reported earnings per share was $0.84 on a basic basis and $0.80 on a fully diluted basis (adjusted earnings per share¹ was $1.06 and $1.02 on a basic and a fully diluted basis, respectively) compared to reported earnings per share of $1.23 and $1.18, respectively; and
• Cash flows from operating activities, excluding the changes in working capital amounted to $13.9 million compared to $13.6 million.

________________________
_{¹ This is a non-GAAP measure. For further information, refer to the non-GAAP financial metrics and measures section on page 3 of this document}

Corporate Highlights for the three-months ended July 31, 2024:

• The Group continued to grow its Payments product line benefiting from the recent investments in core banking platform integration which enabled the Company to expand its reach and increase its volumes in the United States
• The Company maintained its strong volumes in the Banknotes product line as a result of the strong consumer demand for foreign currencies in the third quarter as international travel continued to strengthen in the United States. This is supported by the increased rate of travelers passing through TSA check points in United States airports;
• The financial institutions sector in the United States continued to grow with the addition of 98 new clients, representing 123 transacting locations;
• The Group continued expanding its OnlineFX platform, adding Maryland and Iowa to its network. The platform now provides its services in 43 states and the District of Columbia; and
• The Payments product line processed 39,779 payments transactions, representing $3.38 billion in volume compared to 32,675 transactions and $2.57 billion in volume in the prior period.

Selected Financial Data

The following table summarizes the performance of the Group over the last eight fiscal quarters²:

Three-month period ended	Revenue	Net operating income	Net income	Total assets	Total equity	Earnings per share (diluted)
	$	$	$	$	$	$
7/31/2024	23,993,252	6,747,390	3,935,350	163,224,374	83,103,393	0.59
4/30/2024	20,095,168	3,818,275	506,522	159,910,390	79,940,478	0.08
1/31/2024	18,106,918	2,247,267	849,874	133,780,438	80,520,993	0.13
10/31/2023	22,786,072	5,818,667	2,303,822	132,049,444	79,232,981	0.34
7/31/2023	23,587,589	6,438,354	4,056,478	129,643,409	77,590,126	0.60
4/30/2023	18,694,919	3,743,069	2,243,708	134,697,253	73,104,851	0.33
1/31/2023	16,886,189	2,734,159	1,589,499	133,072,968	71,448,732	0.24
10/31/2022	19,800,463	5,401,678	4,383,876	125,528,832	69,305,509	0.66

________________________
_{² Certain historical numbers in this table have been restated to conform with the numbers presented in the current period’s financial statements}

Earnings Conference Call Details

The Company plans to host a conference call on Thursday, September 12, 2024, at 8:30 AM EST.  

To participate in or listen to the call, please dial the appropriate number:

Toll Free – North America: (+1) 800 717 1738

Conference ID Number: 53171

About Currency Exchange International, Corp.

Currency Exchange International is in the business of providing comprehensive foreign exchange technology and processing services for banks, credit unions, businesses, and consumers in the United States and select clients globally. Primary products and services include the exchange of foreign currencies, wire transfer payments, Global EFTs, and foreign cheque clearing. Wholesale customers are served through its proprietary FX software applications delivered on its web-based interface, www.cxifx.com (“CXIFX”), its related APIs with core banking platforms, and through personal relationship managers. Consumers are served through Group-owned retail branches, agent retail branches, and its e-commerce platform, order.ceifx.com (“OnlineFX”).

The Group’s wholly-owned Canadian subsidiary, Exchange Bank of Canada, based in Toronto, Canada, provides foreign exchange and international payment services in Canada and select international foreign jurisdictions. Customers are served through the use of its proprietary software, www.ebcfx.com (“EBCFX”), related APIs to core banking platforms, and personal relationship managers.

Contact Information

For further information please contact:
Bill Mitoulas
Investor Relations
(416) 479-9547
Email: bill.mitoulas@cxifx.com
Website: www.cxifx.com

NON-GAAP FINANCIAL METRICS AND MEASURES

The Company measures and evaluates its performance in this document using a number of financial metrics and measures, such as adjusted net income, which do not have standardized meanings under generally accepted accounting principles (GAAP) and may not be comparable to other companies. The Company’s management believes that these measures are more reflective of its operating results and provide the readers of this document with a better understanding of management’s perspective on the performance. These measures enhance the comparability of our financial performance for the current period with the corresponding period in the prior year.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This press release includes forward-looking information within the meaning of applicable securities laws. This forward-looking information includes, or may be based upon, estimates, forecasts, and statements as to management’s expectations with respect to, among other things, demand and market outlook for wholesale and retail foreign currency exchange products and services, future growth, the timing and scale of future business plans, results of operations, performance, and business prospects and opportunities. Forward-looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “preliminary”, “project”, “will”, “would”, and similar terms and phrases, including references to assumptions.

Forward-looking information is based on the opinions and estimates of management at the date such information is provided, and on information available to management at such time. Forward-looking information involves significant risks, uncertainties and assumptions that could cause the Company’s actual results, performance, or achievements to differ materially from the results discussed or implied in such forward-looking information. Actual results may differ materially from results indicated in forward-looking information due to a number of factors including, without limitation, the competitive nature of the foreign exchange industry, the impact of COVID-19 or the evolving situation in Ukraine on factors relevant to the Company’s business, currency exchange risks, the need for the Company to manage its planned growth, the effects of product development and the need for continued technological change, protection of the Company’s proprietary rights, the effect of government regulation and compliance on the Company and the industry in which it operates, network security risks, the ability of the Company to maintain properly working systems, theft and risk of physical harm to personnel, reliance on key management personnel, global economic deterioration negatively impacting tourism, volatile securities markets impacting security pricing in a manner unrelated to operating performance and impeding access to capital or increasing the cost of capital as well as the factors identified throughout this press release and in the section entitled “Risks and Uncertainties” of the Company’s Management’s Discussion and Analysis for the three and nine-month periods ended July 31, 2024 and 2023. Forward-looking information contained in this press release represents management’s expectations as of the date hereof (or as of the date such information is otherwise stated to be presented) and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this press release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained in this press release.