ONEIDA, N.Y., Oct. 24, 2001 (PRIMEZONE) -- Oneida Ltd. (NYSE:OCQ) announced today that it anticipates earnings for the third quarter ended October 27, 2001, will be approximately $.01 to $.03 per share on net revenues of approximately $125 million. The third quarter results will be lower than anticipated due to continued softness in product demand within U.S. markets, stemming largely from the impact of the September 11 terrorist attacks.
"In the aftermath of the September 11 tragedy, our Foodservice unit in particular experienced a significant decline in orders from the airline, restaurant and hotel industries due to the sharp reduction in travel," said Peter J. Kallet, Oneida Chairman and Chief Executive Officer. "In addition, our Consumer unit was affected by the dropoff in traffic at retail stores. While we do not believe that these effects will be long-term, they have been a major factor in the currently challenging business conditions that we face.
"Looking forward, we have striven to enhance Oneida's long-term position through a series of cost-reduction measures involving inventory and employment levels. These actions will help maximize the company's financial performance once the anticipated market recovery occurs."
COST-REDUCTION EFFORTS
"Even in this climate, we have continued to make progress with our ongoing reductions in inventory and debt levels," Mr. Kallet added. "Our inventory will be lowered by another $4 million by the end of the third quarter, following reductions that totaled $19 million over the first half of this year. Our debt is down by $26 million compared to the same period a year ago.
"Our cost-reduction efforts also included the recent elimination of more than 100 non-manufacturing positions at several company locations. In addition, we lowered the manufacturing rates at our factories in Sherrill, N.Y., and Buffalo, N.Y. through temporary reductions in work hours," Mr. Kallet noted. "We recognize the personal hardships caused by these employment adjustments, but they were essential for the overall good of the company by balancing our staffing levels with our rate of product orders.
"These cost-reduction measures are key elements in helping us execute our previously announced strategic initiatives to lower our inventory and improve our cash flow in order to further reduce debt," Mr. Kallet said. "We are strengthening our foundation for the long term."
FUTURE OUTLOOK
"While we anticipate the current conditions will be temporary, it is difficult to project with certainty in this volatile environment regarding when our business levels will improve substantially," Mr. Kallet noted. "We are addressing our Foodservice and Consumer units' operational details on a day-to-day basis as conditions evolve. We will continue to take necessary actions to maintain our profitability and provide a maximum value to shareholders."
CONFERENCE CALLS ON OCTOBER 23 AND NOVEMBER 15
Oneida's management will host a conference call with analysts and investors on Thursday, October 25, 2001 at 9 a.m. EST to discuss the company's upcoming third quarter results and operating performance. The results will be released after the stock market closes on Wednesday, November 14, 2001. Management also will host a conference call with analysts and investors on Thursday, November 15, 2001 at 9 a.m. EST to review the third quarter performance in full detail.
Both conference calls will be broadcast live over the Internet at www.oneida.com. To access each webcast, participants should visit the Investor Relations section of the website at least fifteen minutes prior to the start of the conference call to download and install any necessary audio software. A replay of the webcast can be accessed one hour after each conference call; the October 25 replay will be available through October 27, 2001, and the November 15 replay will be available through November 17, 2001.
Oneida Ltd. is a leading manufacturer and marketer of flatware and dinnerware for both the consumer and foodservice industries worldwide. Oneida also is a leading marketer of a variety of crystal, glassware and metal serveware for those industries.
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 slowdowns 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.