ONEIDA, N.Y., Nov. 9, 2000 (PRIMEZONE) -- Oneida Ltd. (NYSE:OCQ) today announced a 13% increase in sales for the third fiscal quarter ended October 28, 2000. Sales rose to $152 million, compared to $135 million in the year ago period, and included results from the recently acquired Delco International Ltd.; Sakura Inc.; and Viners of Sheffield Limited.
Third quarter earnings from operations (before restructuring and unusual charges) were $0.52 per share, compared to $0.60 per share in the 1999 third quarter. For the first nine months of 2000, sales increased to $374 million, up from $365 million for the same period a year ago. Nine-month operating earnings (before restructuring and unusual charges) were $1.17 per share versus $1.46 for the first nine months of 1999.
As previously announced, Oneida recorded an after-tax restructuring/unusual charge of $4.4 million or $.27 per share in the third quarter. This initiative was prompted by Oneida's ongoing efforts to streamline functions and reduce operating costs, including acquisition-related redundancies involving Delco, Sakura and Viners. As part of this process, the company plans to reduce worldwide employment levels by 8-10% by the end of 2001. The employment adjustment will reflect the consolidation of sales, marketing, logistics and administrative functions, along with the realignment of product lines, warehouses and "make versus buy" decisions.
EXISTING STRENGTHS, AND FOCUS ON IMPROVEMENT
Peter J. Kallet, Oneida Chairman and Chief Executive Officer, noted that "Our foodservice and international divisions each posted strong third quarter results, and we were very pleased with the contributions of our recent acquisitions - Delco in foodservice; Sakura in consumer dinnerware; and Viners in the international market. As we put the transitional costs of the acquisitions behind us, we look forward to steadily growing revenue streams from these companies, which are being consolidated ahead of schedule.
Our overall results were primarily affected by continued softness in our consumer division, along with excess and obsolete inventory in certain product lines contributing to higher operating costs. However, we are taking significant steps to address these issues, which are outlined as follows."
ACTING TO BUILD CONSUMER SALES
Mr. Kallet observed that "In our consumer division, soft sales in our product category are being felt throughout the retail industry. To stimulate consumer demand and better capitalize on Oneida's brand strength, we have worked closely with our retail partners to develop a fresh and comprehensive approach to satisfy the needs of today's customers. Beginning early next year, we are revamping our stainless steel flatware lines, including a unique program to provide lifetime availability of patterns; a new generation of point-of-purchase fixture displays designed to increase sales per linear foot; dynamic new gift packaging; and exciting new European style patterns, all of which will provide unparalleled value to our retail customers as well as the consumer."
INTERNAL STEPS REDUCE SKUS, STREAMLINE OPERATIONS
Mr. Kallet added, "We also are pleased to note that we are on schedule regarding a comprehensive stock keeping unit (SKU) reduction program that was announced in the second quarter. For the year to date, we have deleted 17,000 SKUs and are targeting a further reduction of at least 3,000 by the end of the current year, which is well ahead of our previously announced goals. In a related inventory reduction initiative, shipments have begun for the liquidation of excess and obsolete inventory. This elimination of lesser performing units will lead to significant increases in our cash flow, inventory turn and operating efficiencies. Those initiatives are in conjunction with a broader ongoing program to consolidate and streamline Oneida's worldwide operations, relating to the previously mentioned third quarter restructuring charge."
In summary, Mr. Kallet said, "We are confident that our combination of creative marketplace strategies and internal improvements will enable Oneida to maximize our strategic plan, and realize the potential of our unique position as the world's most complete tabletop company."
BALANCE SHEET/CASH FLOW HIGHLIGHTS
Adjusted for restructuring and unusual charges, EBITDA totaled $24 million in the third quarter of fiscal 2000, as compared to $22 million in the prior year period. Total debt at the end of the fiscal third quarter amounted to $322 million, as compared to $146 million at January 29, 2000; a majority of the increase reflected the acquisitions of Sakura, Delco and Viners. Total debt/adjusted EBITDA for the twelve months ended October 28, 2000 was 3.5 as compared to 2.6 for the twelve months ended October 30, 1999. Adjusted for restructuring and unusual charges, interest coverage was 2.9 in the third quarter as compared to 6.6 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 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.
ONEIDA LTD.
CONDENSED CONSOLIDATED INCOME STATEMENT
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
Oct. 28, Oct. 30, Oct. 28, Oct. 30,
2000 1999 2000 1999
------- ------- ------- -------
Net Sales $ 152.0 $ 134.5 $ 374.2 $ 364.6
Cost of Sales
- Recurring 98.3 82.8 236.8 219.8
Cost of Sales
- Restructuring
(Notes 1 & 2) -- -- 24.0 3.0
------- ------- ------- -------
Total Cost of sales 98.3 82.8 260.8 222.8
------- ------- ------- -------
Gross Profit 53.7 51.7 113.4 141.8
Operating Revenues 4.8 0.2 6.3 0.6
Selling, Distribution
& Administrative 37.6 32.9 98.6 97.5
Restructuring/Unusual
Charges
(Notes 1 & 2) 7.0 8.5 15.0 41.3
------- ------- ------- -------
Operating Income 13.9 10.5 6.1 3.6
Other (Income)
Expense - Net 0.3 (0.1) 0.4 0.2
Interest Expense 7.1 2.9 14.0 8.0
------- ------- ------- -------
Income (Loss) before
Income Taxes 6.5 7.7 (8.3) (4.6)
Provision (Credit)
for Income Taxes 2.4 2.9 (3.1) 1.3
------- ------- ------- -------
Net Income (Loss) $ 4.1 $ 4.8 $ (5.2) $ (5.9)
Net Income (loss)
per share:
Basic:
Reported $ 0.25 $ 0.29 $ (0.33) $ (0.36)
Core Earnings
(Note 3) $ 0.52 $ 0.61 $ 1.18 1.47
Diluted:
Reported $ 0.25 $ 0.29 $ (0.33) $ (0.36)
Core Earnings
(Note 3) $ 0.52 $ 0.60 $ 1.17 $ 1.46
Weighted Average
Shares:
Outstanding 16,273 16,523 16,281 16,541
Diluted 16,337 16,709 16,375 16,699
NOTE 1: The earnings for the nine months ended October 28, 2000
include the impact of the following special charges:
restructuring and unusual costs of $15 million (principally
severance and 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.
NOTE 2: The Company's earnings for the nine months ended October 30,
1999 included the impact of the following special charges:
restructuring costs of $11 million (principally termination
benefits), asset impairments of $12 million (due to the writedown
of manufacturing equipment for discontinued lines and intangible
assets), unusual charges totaling $18.3 million (that were
related 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.
NOTE 3: Core earnings represents earnings from operations, net of
restructuring and unusual charges.
ONEIDA LTD.
CONDENSED BALANCE SHEET
(Millions of dollars)
Oct. 28, 2000 Jan. 29, 2000
ASSETS ------------- -------------
Cash $ 3.5 $ 3.9
Accounts Receivable - Net 108.3 84.4
Inventory 232.2 183.5
Other Current Assets 11.7 9.9
------ ------
Total Current Assets 355.7 281.7
Plant and Equipment - Net 112.5 106.3
Intangibles 126.0 28.2
Other Assets 47.8 33.0
------ ------
Total Assets $642.0 $449.2
LIABILITIES
Accounts Payable & Accrued Liabilities $115.5 $ 88.9
Short-Term Debt 9.3 31.7
Current Portion of Long-Term Debt 9.3 16.0
------ ------
Total Current Liabilities 134.1 136.6
Long-Term Debt 303.7 98.5
Other Liabilities 86.1 80.8
Shareholders' Equity 118.1 133.3
------ ------
Total Liabilities & Equity $642.0 $449.2
CONDENSED CASH FLOW STATEMENT
OCTOBER 2000/1999
(Millions of dollars)
Nine months ended
October 2000 October 1999
------------ ------------
Core earnings, before
special charges $19.3 $24.9
Restructuring and unusual charges
- net of tax (24.5) (30.8)
------ -----
Net income (loss) (5.2) (5.9)
Add: depreciation & amortization 11.4 10.3
Net working capital charges (69.8) (18.7)
Investment in subsidiaries (118.0) ------
Impairment of long term assets
and inventory 29.0 15.0
Capital expenditures (7.9) (16.4)
Stock sales and purchases - net (3.0) (4.9)
Proceeds/payments of debt 162.4 25.1
Dividends paid (5.0) (4.9)
Other - net 5.7 2.8
----- -----
Increase (Decrease) in Cash ($0.4) $2.4