GREENWICH, Conn., Dec. 4, 2003 (PRIMEZONE) -- Blyth, Inc. (NYSE:BTH), a leader in home decor and home fragrance products, reported today that third quarter Net Sales increased 19% to $431.9 million from $362.2 million for the third quarter of last year. Net Earnings for the third quarter were $34.8 million versus $30.5 million a year earlier, an increase of 14%. Diluted Net Earnings Per Share for the third quarter were $0.76 compared to $0.65 for the same period last year, an increase of 17%.
Net sales for the nine months ended October 31, 2003 increased 12% to $1,019.2 million from $908.1 million reported for the same period a year ago. Net earnings for the first nine months increased 6% to $65.6 million, compared to $62.1 million for the prior year period. Diluted Net Earnings Per Share were $1.43 compared to $1.33 for last year's first nine months. Excluding the impact of the goodwill impairment charge taken in the first quarter of fiscal year 2003 due to a change in accounting principle effected by SFAS 142, Diluted Net Earnings Per Share for the first nine months of fiscal year 2003 were $1.43.
Blyth's third quarter sales results were positively influenced by the inclusion of Miles Kimball and Kaemingk, seasonal businesses that the Company acquired earlier this year; by improvements in PartyLite Worldwide where sales increased 6% versus last year, with its U.S. market increasing 3% versus the same period a year ago; and, by the impact of foreign currency translation from international sales which, at 28% of Blyth's total third quarter sales, positively impacted the Company's sales by 2 percentage points. Partially offsetting these sales increases were third quarter sales declines in a number of the Company's existing consumer wholesale businesses.
The Company's third quarter results reflect restructuring charges of $0.8 million, negatively impacting earnings per share by $0.01. The charges relate to the planned closure early in calendar 2004 of Blyth's Hyannis, Massachusetts candle making factory, which is the Company's smallest manufacturing facility in North America. In the fourth quarter of fiscal year 2004, the Company expects additional restructuring charges related to the Hyannis facility that are expected to impact earnings per share by $0.04 to $0.06.
Robert B. Goergen, Blyth's Chairman of the Board and CEO, commented, "We are pleased that performance for PartyLite U.S., our largest direct selling market, has improved following a difficult second quarter. In combination with PartyLite's European markets and recent acquisitions, we remain on track to accomplish our annual sales growth goal of 10% or better in what has been a very challenging year. Our wholesale businesses, while negatively impacted by retailer caution all year, were able to avoid the more dramatic sales declines experienced by many of their competitors as this trend continued into the third quarter."
On a segment basis, Net Sales in the Candles and Home Fragrance segment were $267.3 million for the third quarter, compared to $267.9 million in the prior year period. Operating profit for this segment increased 3% for the third quarter to $33.1 million, compared to $32.0 million in last year's third quarter. Net sales in the Creative Expressions segment increased 75% for the third quarter to $164.7 million versus $94.3 million for the same period last year. Increases in this segment of Blyth's business were attributable to the inclusion of Miles Kimball and Kaemingk. Operating income in this segment was $26.7 million for the third quarter compared to $19.9 million in the prior year period, an increase of 34%. The sum of the segment amounts does not necessarily equal that reported for the quarter due to rounding.
The Company confirmed that its full year, fiscal 2004 earnings per share, excluding the expected charge of $0.05 to $0.07 per share related to the closure of the Hyannis manufacturing facility, are expected to be in excess of $2.10. Reflecting the expected earnings per share charge of $0.05 to $0.07, full year, fiscal 2004 earnings per share are expected to be in excess of $2.03. A cash flow from operations estimate of $135 million or better was also reiterated, as was capital spending of approximately $25 million.
Mr. Goergen continued, "Our third quarter results, which came in stronger than expected given the retail sector weakness, make us increasingly confident that we will reach or exceed our earnings per share goals. Nevertheless, uncertainty in the sustainability of recent positive economic news and the realization that the economic pick-up has not yet extended into our category as much as we had anticipated prompts us to maintain a conservative approach to our earnings forecast. The trend, however, is positive, and we remain well positioned to capitalize on improving conditions."
Management will conduct a conference call today at 10 a.m. (eastern), which will be broadcast live via the Internet, at www.blyth.com. The call will be archived on Blyth's website.
Blyth, Inc., headquartered in Greenwich, CT, USA, is a home decor and home fragrance company that sells its products through multiple channels of distribution throughout North America, Europe and Australia. Blyth reports its financial results in two segments: the Candles & Home Fragrance segment and the Creative Expressions segment. Within the Candles & Home Fragrance segment, the Company designs, manufactures and markets an extensive line of candles and home fragrance products, including scented candles, potpourri and other fragranced products, as well as tabletop illumination products and chafing fuel. Blyth also designs and markets a broad range of related candle accessories. Its products are sold direct to the consumer under the PartyLite(r) brand, to retailers in the premium and specialty retail channels under the Colonial Candle of Cape Cod(r), Colonial at HOME(r), Kate's(tm), Carolina(r) and Bloomin' Essence(tm) brands, in the mass retail channel under the Florasense(r), Ambria(r), FilterMate(r) and Sterno(r) brands and to the Foodservice industry under the Sterno(r), Ambria(r) and HandyFuel(r) brands. Within its Creative Expressions segment, Blyth also designs and markets a broad range of home decor, household convenience products and gifts under the CBK(r), Miles Kimball(r) and Exposures(r) brands, seasonal products under the Seasons of Cannon Falls(tm) and Impact(tm) brands, and decorative gift bags under the Jeanmarie(r) brand. In Europe, Blyth's products are also sold under the PartyLite, Colonial, Gies, Ambria, Carolina and Kaemingk brands.
Blyth, Inc. may be found on the Internet at www.blyth.com.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical facts. Actual results could differ materially due to various factors, including the slowing of the United States economy as a whole and the weakness of the retail environment, the effects of our restructuring, the risk that we will be unable to maintain the Company's historic growth rate, the Company's ability to respond appropriately to changes in product demand, the risks (including foreign currency fluctuations, economic and political instability, transportation delays, difficulty in maintaining quality control, trade and foreign tax laws and others) associated with international sales and foreign sourced products, risks associated with our ability to recruit new independent sales consultants, our dependence on key corporate management personnel, risks associated with the sourcing of raw materials for our products, competition in terms of price and new product introductions, risks associated with our information technology systems (including, susceptibility to outages due to fire, floods, power loss, telecommunications failures, computer viruses, break-ins and similar events) and other factors described in this press release, in the Company's Quarterly Report on Form 10-Q for the quarter ended July 31, 2003 and in the Company's Annual Report on Form 10-K for the year ended January 31, 2003.
BLYTH, INC.
Consolidated Statement of Earnings
(In thousands except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
Ended October 31, Ended October 31,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net sales $ 431,901 $ 362,181 $ 1,019,160 $ 908,098
Cost of goods
sold 234,963 189,694 526,274 453,271
----------- ----------- ----------- -----------
Gross profit 196,938 172,487 492,886 454,827
Selling 104,400 89,316 283,698 252,958
Administrative 32,003 31,197 93,676 85,330
Restructuring
and
impairment
charges 767 -- 767 --
----------- ----------- ----------- -----------
137,170 120,513 378,141 338,288
----------- ----------- ----------- -----------
Operating
profit 59,768 51,974 114,745 116,539
----------- ----------- ----------- -----------
Other expense
(income)
Interest
expense 4,693 3,576 11,795 11,146
Interest
income and
other 32 (58) (1,250) (753)
Equity in
earnings of
investee (58) (70) 141 120
----------- ----------- ----------- -----------
4,667 3,448 10,686 10,513
----------- ----------- ----------- -----------
Earnings
before
income
taxes,
minority
interest and
cumulative
effect of
change in
accounting
principle 55,101 48,526 104,059 106,026
Income tax
expense 20,278 18,052 38,292 39,442
----------- ----------- ----------- -----------
Earnings
before
minority
interest and
cumulative
effect
of change in
accounting
principle 34,823 30,474 65,767 66,584
Minority
interest 49 -- 120 --
----------- ----------- ----------- -----------
Earnings
before
cumulative
effect of
change in
accounting
principle 34,774 30,474 65,647 66,584
Cumulative
effect of
change in
accounting
principle,
net
of taxes of
$2,887 -- -- -- (4,515)
----------- ----------- ----------- -----------
Net earnings $ 34,774 $ 30,474 $ 65,647 $ 62,069
=========== =========== =========== ===========
Basic:
Earnings per
common share
before
cumulative
effect of
change in
accounting
principle $ 0.76 $ 0.66 $ 1.43 $ 1.44
Cumulative
effect of
change in
accounting
principle -- -- -- (0.10)
----------- ----------- ----------- -----------
$ 0.76 $ 0.66 $ 1.43 $ 1.34
=========== =========== =========== ===========
Weighted
average
number of
shares
outstanding 45,526 46,299 45,836 46,306
Diluted:
Earnings per
common share
before
cumulative
effect of
change in
accounting
principle $ 0.76 $ 0.65 $ 1.43 $ 1.43
Cumulative
effect of
change in
accounting
principle -- -- -- (0.10)
----------- ----------- ----------- -----------
$ 0.76 $ 0.65 $ 1.43 $ 1.33
=========== =========== =========== ===========
Weighted
average
number
of shares
outstanding 45,764 46,602 46,036 46,589
Consolidated Balance Sheets
(In thousands)
(Unaudited)
October 31, October 31,
2003 2002
---------- ----------
Assets
Cash and cash equivalents $ 165,851 $ 37,303
Accounts receivable, net 194,108 180,724
Inventories 246,078 214,127
Property, plant & equipment, net 270,905 245,262
Other assets 301,179 200,873
---------- ----------
$1,178,121 $ 878,289
========== ==========
Liabilities and Stockholders' Equity
Bank debt $ 105,011 $ 45,155
Senior notes 7,143 10,714
Bond debt 249,109 154,056
Other liabilities 227,900 155,324
Stockholders' equity 588,958 513,040
---------- ----------
$1,178,121 $ 878,289
========== ==========