RICHMOND, Va., July 28, 2000 (PRIMEZONE)-- Eskimo Pie Corporation (Nasdaq:EPIE) today reported that net income for the quarter ended June 30, 2000 was $1,403,000, or $0.40 per share as compared to $1,399,000, or $0.40 per share, for the quarter ended June 30, 1999. For the six-month period ended June 30, 2000 net income was $2,108,000, or $.61 per share, a 29% increase from $1,631,000, or $0.47 per share in the same period in 1999.
Sales for the six-month period ended June 30, 2000 were $36.7 million, as compared to $38.3 million in the same period in 1999. This 4% decline was primarily due to decreases of inventory levels at the Company's licensees, due to the pending sale of the Company to CoolBrands International Inc. (formerly Yogen Fruz World-Wide Incorporated). Gross margin for the six-month period increased by 70 basis points, from 45.1% in 1999 to 45.8% in 2000 as a result of continued cost controls and inventory management efforts.
The 2000 results include expenses of approximately $537,000 related to the Company's pursuit of a sale of the Company, the execution of a merger agreement with CoolBrands, and subsequent activities associated with removing conditions to close the sale.
Based on Neilson data, for the 3-month period ended June 24, 2000, consumption of the Company's branded products increased 16.2% as compared to the same period a year ago, despite an overall category increase of only 1.2%. This gain was primarily driven by an increase of 24.2% in Eskimo Pie brand product consumption, and increases of 14.6% and 13% respectively in Weight Watchers and Welch's product consumption. The Company's branded products are available in 94% of the total U.S. market.
David B. Kewer, the Company's President and Chief Executive Officer stated that "Our employees continue to remain focused on successfully managing the business despite the pending sale of the Company. We are particularly pleased with the increased consumer takeaway of our branded frozen novelty items."
Eskimo Pie Corporation, headquartered in Richmond, Virginia, created the frozen novelty industry in 1921 with the invention of the Eskimo Pie ice cream bar. Today, the Company markets a broad range of frozen novelties, ice cream and sorbet products under the Eskimo Pie, Real Fruit, Welch's, Weight Watchers Smart Ones, SnackWell's and OREO brand names. These nationally branded products are generally manufactured by a select group of licensed dairies who purchase the necessary flavors ingredients and packaging directly from the Company. Eskimo Pie Foodservice is a leading supplier of premium soft serve ice cream, frozen yogurt, custard and smoothies to the foodservice industry. The Company also sells a full line of quality flavors and ingredients for use in private label dairy products in addition to the brands it licenses.
ESKIMO PIE CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except share data)
Three months ended Six months ended
June 30, June 30,
2000 1999 2000 1999
------------------- -------------------
Net sales $ 20,311 $ 22,146 $ 36,697 $ 38,275
Cost of products
sold 10,931 11,715 19,905 20,998
-------- --------- -------- --------
Gross profit 9,380 10,431 16,792 17,277
Advertising and
sales promotion
expenses 4,902 5,827 9,267 9,708
Selling, general
and administrative
expenses 1,892 2,039 3,555 4,182
Expense from analysis
of strategic
alternatives and
related activities 337 172 537 381
Expense from
restructuring
activities -- 86 -- 191
-------- --------- -------- --------
Operating income 2,249 2,307 3,433 2,815
Interest income 63 31 84 50
Interest expense
and other - net 85 117 171 276
------- --------- -------- --------
Income before
income taxes 2,227 2,221 3,346 2,589
Income tax expense 824 822 1,238 958
-------- --------- -------- --------
Net income $ 1,403 $ 1,399 $ 2,108 $ 1,631
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Per Share Data
Basic:
Weighted average
number of
common shares
outstanding 3,484,849 3,462,824 3,482,406 3,462,810
Net income $ 0.40 $ 0.40 $ 0.61 $ 0.47
========== ========== ========== ==========
Assuming dilution:
Weighted average
number of common
shares outstanding 3,484,849 3,462,824 3,482,406 3,464,031
Net income $ 0.40 $ 0.40 $ 0.61 $ 0.47
========== ========== ========== ==========
Cash dividends $ 0.00 $ 0.05 $ 0.00 $ 0.10
========== ========== ========== ==========
ESKIMO PIE CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
June 30, Dec. 31, June 30,
As of 2000 1999 1999
------- ------- -------
Assets
Current assets:
Cash and cash equivalents $ 3,461 $ 1,751 $ 55
Receivables 9,539 6,057 12,073
Inventories 3,854 4,032 5,227
Prepaid expenses 778 557 287
------- ------- -------
Total current assets 17,632 12,397 17,642
Property, plant and equipment - net 6,160 6,578 6,839
Goodwill and other intangibles 16,168 16,598 17,142
Other assets 920 913 1,048
------- ------- -------
Total assets $40,880 $36,486 $42,671
======= ======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 4,604 $ 3,208 $ 3,496
Accrued advertising and promotion 3,851 2,217 4,562
Accrued compensation and related
amounts 261 1,033 386
Other accrued expenses 815 1,038 1,064
Income taxes 725 -- 250
Current portion of long term debt 857 972 1,202
------- ------- -------
Total current liabilities 11,113 8,468 10,960
Long term debt 2,500 2,929 5,033
Postretirement benefits
and other liabilities 2,151 2,293 3,108
Shareholders' equity:
Preferred stock, $1.00 par value;
1,000,000 shares authorized,
none issued and outstanding -- -- --
Common stock, $1.00 par value;
10,000,000 shares authorized,
3,485,757 issued and outstanding
in 2000, 3,464,050 at December 31,
1999 and 3,462,824 at June 30, 1999 3,487 3,464 3,463
Additional capital 4,658 4,468 4,448
Retained earnings 16,971 14,864 15,659
------- ------- -------
Total shareholders' equity 25,116 22,796 23,570
------- ------- -------
Total liabilities and
shareholders' equity $40,880 $36,486 $42,671
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