ONEIDA, NY, Aug. 16, 2000 (PRIMEZONE) -- Oneida Ltd. (NYSE:OCQ) today announced results for the second fiscal quarter ended July 29, 2000. For the quarter, earnings per share (before restructuring charges) were $0.20 per share, compared to $0.46 per share reported in the second quarter of 1999. Second quarter sales were $104 million, compared to $109 million in the year ago period (which excluded $3 million from discontinued product lines). For the first six months of 2000, operating earnings were $0.65 per share versus $0.86 for the same period a year ago. First-half sales of $222 million were equal to sales in the 1999 first half, which also totaled $222 million (excluding $8 million from discontinued product lines). In a separate news release today, the company announced a set of strategic actions designed to strengthen its business and financial performance.
Oneida recorded an after-tax restructuring charge of $20 million or $1.23 per share in the quarter, and anticipates additional after-tax charges of $5 million or $0.31 per share in the third quarter, all related to recent acquisitions and an inventory reduction program described below. Oneida completed the acquisitions of Delco International Ltd., Sakura Inc. and Viners of Sheffield Limited during the past two months for a total purchase price of approximately $135 million. The three companies are expected to have annualized aggregate sales of $140 million.
In addition, Oneida is undertaking a significant inventory reduction program which the company anticipates will result in over 10,000 stock keeping units (SKUs) being eliminated across all product lines. The after-tax inventory charges total $15 million, while other restructuring charges of $10 million were due to related asset impairments in production tooling as well as one-time charges for acquisition-related redundancies and warehouse consolidations. The company expects these initiatives will result in positive cash flow over the next twelve months of approximately $50 million. Part of the cash flow will be used to reduce debt and fund the company's stock repurchase program.
Peter J. Kallet, Oneida Chairman and Chief Executive Officer, noted, "Our results for the second quarter can be traced to lower than anticipated department store sales. While soft department store business is generally occurring throughout the tabletop industry, we have taken decisive actions to better position our products. These measures include appointing a new vice president for sales, aggressive new merchandising programs, vibrant new fixturing and point-of-purchase displays for early next year, and increased product design capacity in-house as well as externally. In regard to second quarter results for the other key components of our company, our foodservice division contributed a solid performance as did our international division, which continues its consistent growth."
Mr. Kallet continued, "Oneida's global profile is further strengthened with the recent completion of the Delco, Sakura, and Viners acquisitions. By bringing these well-known brands into the Oneida family of products, we enhance our strategy for increased market penetration and geographic expansion. Each acquired company adds its own distinct advantages to our organization. Delco raises our profile in foodservice and adds to our competitive edge in this key area of our business. Sakura provides us with a leading brand name in casual consumer dinnerware and some of the most respected designers in that field. Viners significantly broadens our international presence and positions us for further market growth worldwide. Equally important, all three acquisitions bring considerable managerial experience and expertise to our management team as well."
Balance Sheet/Cash Flow Highlights
Adjusted for restructuring charges, EBITDA totaled $13 million in the second quarter of fiscal 2000, as compared to $18.6 million in the prior year period. Total debt at the end of the fiscal second quarter amounted to $251 million, as compared to $146 million at January 29, 2000; a majority of the increase reflected the acquisitions of Sakura and Viners. Total debt/adjusted EBITDA for the twelve months ended July 29, 2000 was 3.2 as compared to 2.7 for the twelve months ended July 31, 1999. Adjusted for restructuring charges, interest coverage was 2.3 in the quarter as compared to 6.1 in the year ago period.
Oneida Ltd. is a leading manufacturer of stainless steel and silverplated flatware for both the consumer and foodservice industries, and a leading supplier of dinnerware to those industries as well. Oneida also is a leading supplier of a variety of crystal, glassware and metal serveware for the tabletop market.
Statements contained in this press release that state that certain results are "expected" or "anticipated" to occur, or otherwise state the company's predictions for the future, are forward looking statements. These particular forward-looking statements and all other statements that are not historical facts, are subject to a number of risks and uncertainties, and actual results may differ materially. Such factors include, but are not limited to: general economic conditions in the Company's markets; difficulties or delays in the development, production and marketing of new products; the impact of competitive products and pricing; unforeseen increases in the cost of raw materials or shortages of raw materials; significant increases in interest rates or the level of the Company's indebtedness; major slow downs in the retail, travel or entertainment industries; the loss of several of the Company's major customers; underutilization of the Company's plants and factories; and the amount and rate of growth of the Company's selling, general and administrative expenses.
ONEIDA LTD.
CONDENSED CONSOLIDATED INCOME STATEMENT
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
July 29, July 31, July 29, July 31,
2000 1999 2000 1999
------- ------- ------- -------
Net Sales $104.0 $112.1 $222.2 $230.1
Cost Of Sales
-Recurring 66.1 65.9 138.5 137.0
Cost Of Sales
-Restructuring
(Notes 1,2) 24.0 -- 24.0 3.0
------- ------- ------- -------
Total Cost Of Sales 90.1 65.9 162.5 140.0
------- ------- ------- -------
Gross Profit 13.90 46.20 59.70 90.10
Operating Revenues 1.3 0.1 1.5 0.4
Selling, Distribution
& Administrative
29.8 31.1 61.0 64.7
Restructuring Charges
(Notes 1,2) 8.0 -- 8.0 32.8
------- ------- ------- -------
Operating Income (Loss) (22.60) 15.20 (7.80) (7.00)
Other (Income) - Net 0.1 0.4 0.1 0.3
Interest Expense 4.1 2.4 7.0 5.1
------- ------- ------- -------
Income (Loss)
Before Income Taxes (26.80) 12.40 (14.90) (12.40)
Provision (Credit)
For Income Taxes (10.0) 4.7 (5.6) (1.7)
------- ------- -------- --------
Net Income (Loss)
(Note 1) $ (16.8) $7.7 $ (9.3) $ (10.7)
Net Income (Loss)
Per Share:
Basic:
Reported $ (1.04) $ 0.46 $(0.58) $(0.65)
Core Earnings
(Note 3) $ 0.20 $ 0.46 $ 0.65 $ 0.86
Diluted:
Reported $ (1.03) $ 0.46 $(0.57) $(0.65)
Core Earnings
(Note 3) $ 0.20 $ 0.46 $ 0.65 $ 0.86
Weighted Average Shares:
Outstanding 16,209 16,540 16,286 16,549
Diluted 16,339 16,785 16,404 16,702
1 The earnings for the quarter ended July 29, 2000 include the
impact of the following special charges: restructuring costs of
$8 million (principally impairment of assets related to
manufacturing tools and other product procurement assets) and an
inventory writedown of $24 million related to product
rationalization as a result of acquisitions, as well as
significant other stock keeping unit reductions.
2 The Company's earnings for the six months ended July 31, 1999
included the impact of the following special charges
restructuring costs of $11 million (principally termination
benefits), asset impairments of $12 million (principally due to
an investment in Italy and exit costs associated with
discontinued product lines), unusual charges of $9.8 million
(relating to expansion into glassware and an unsolicited takeover
proposal) and finally, a $3 million inventory writedown related
to costs associated with exiting certain product lines.
3 Core earnings represents earnings from operations, net of
restructuring and unusual charges.
ONEIDA LTD.
CONDENSED BALANCE SHEET
(Millions of dollars)
July 29, January 29,
ASSETS 2000 2000
------ --------- ----------
Cash $5.8 $3.9
Accounts Receivable-Net 86.5 84.4
Inventory 208.1 183.5
Other Current Assets 14.6 9.9
------ ------
Total Current Assets 315.0 281.7
Plant And Equipment - Net 106.0 106.3
Intangibles 72.1 28.2
Other Assets 36.9 33.0
------ ------
Total Assets $530.0 $449.2
LIABILITIES
Accounts Payable & Accrued Liabilities $78.7 $88.9
Short - Term Debt 7.7 31.7
Current Portion Of Long - Term Debt 9.4 16.0
------ ------
Total Current Liabilities 95.8 136.6
Long - Term Debt 234.1 98.5
Other Liabilities 84.6 80.8
Shareholder's Equity 115.0 133.3
------ ------
Total Liabilities & Equity $530.0 $449.2
CONDENSED CASH FLOW STATEMENT
JULY 2000/1999
(Millions of dollars)
Six months ended
July 2000 July 1999
--------- ---------
Core earnings,
before special charges $10.7 $14.5
Restructuring and unusual
charges - net of tax (20.0) (25.2)
------ -----
Net income (9.3) (10.7)
Add: depreciation & amortization 7.4 7.1
Net working capital changes (52.3) (15.7)
Investment in subsidiaries (60.5) --
Impairment of long term assets
and inventory 29.0 15.0
Capital expenditures (6.2) (11.1)
Stock sales and purchases - net (4.1) (1.4)
Proceeds/payments of debt 100.7 19.7
Dividends paid (3.3) (3.3)
Other - net 0.5 2.5
------ -----
INCREASE(DECREASE) IN CASH $1.9 $2.1
-0-
CONTACTS Oneida Ltd.
Investor Relations:
Gregg Denny, Chief Financial Officer, (315) 361-3138
Press Relations:
David Gymburch, Corporate Public Relations, (315) 361-3271
or
Morgen-Walke Associates, Inc.
Investor Relations:
Michele Katz/Stephanie Prince, (212) 850-5600
Press Relations:
Gregory Tiberend, (212) 850-5600