ONEIDA, N.Y., May 16, 2001 (PRIMEZONE) -- Oneida Ltd. (NYSE:OCQ) today announced results for the first fiscal quarter ended April 28, 2001. Net revenues rose 7% to $126.8 million, up from $118.2 million for the same period a year ago. Earnings were $.02 per share, compared to $.45 per share for the 2000 first fiscal quarter. The results are in line with Oneida's April 30, 2001 announcement of revised earnings expectations.
Oneida also reported significant progress on operational improvements in its balance sheet. Inventories at the end of the quarter were down by $9 million from the end of fiscal 2000, and the company is continuing several initiatives to significantly reduce debt levels by year end.
"As previously noted, earnings in the quarter were affected by challenging conditions in Oneida's consumer business, which resulted in a softening of incoming orders," said Peter J. Kallet, Oneida Chairman and Chief Executive Officer. "In response to the lesser demand, we decreased production throughout our facilities in proportion to the rate of customer orders. This resulted in lower inventory levels, but also created substantial short-term inefficiencies in overhead variances and plant utilization."
BUSINESS DIVERSITY AND INTERNAL EFFICIENCIES SPARK OPTIMISM FOR 2001
"We are cautiously optimistic that the consumer market is beginning to strengthen, based on numerous conversations with major retailers during the past few weeks and Oneida's excellent showing at the Tabletop and Giftware Show in New York on April 27 through May 1," Mr. Kallet continued. "In particular, we have received very favorable responses among our retail partners for Oneida's new products and our new stainless flatware fixture concept, both launched this spring. An improving consumer environment, combined with continued strong revenue performance from our foodservice and international business units as well as the cost savings generated by our inventory, SKU and debt reduction programs, will have a positive effect on the company's balance sheet and earnings during the remainder of 2001."
"Our foodservice unit ended the quarter with especially good results for March and April, while our international unit surpassed its first quarter goals," Mr. Kallet added. "Both units are generating larger revenue contributions within our company, providing us with broad and balanced coverage of the entire tabletop industry while helping to offset the softness experienced in the consumer market."
Mr. Kallet cited the following initiatives that are enhancing Oneida's cash flow and reducing its inventory, and will reduce debt levels by year end:
-- Stock keeping units (SKUs) have been reduced from 30,000 at the beginning of 2000 to approximately 8,000 at the end of the 2001 first quarter. This will result in lower inventory and operating costs going forward, and will increase efficiencies throughout Oneida's operations.
-- Worldwide manufacturing employment has been reduced by 450 positions since January, representing approximately $12 million in annual wages, as part of the effort to efficiently balance manufacturing output with incoming orders. The company anticipates the employment reduction will begin having a positive impact by the end of the second quarter of 2001.
-- Worldwide non-manufacturing employment has been reduced by another $4 million in annual wages. Together with the manufacturing adjustments, Oneida has completed its plan to reduce worldwide employment by approximately 10% in order to consolidate sales, marketing, logistics and administrative functions as well as realign product lines and distribution systems.
"All of the above measures, in concert with our increased market diversity and signs of an improving consumer business, are helping us continue with our strategic plan to become the world's most complete tabletop company and preferred source in all markets served." Mr. Kallet concluded, "We are maximizing our efficiencies and our performance during challenging conditions, and we are confident that our strategies will achieve improved results."
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.
ONEIDA LTD.
CONDENSED CONSOLIDATED INCOME STATEMENT
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
FOR THE
THREE MONTHS ENDED
April 28, 2001 April 29, 2000
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Net Sales $126.8 $118.2
Cost of Sales 85.3 72.4
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Gross Profit 41.5 45.8
Operating Revenues 0.4 0.2
Selling, Distribution & Administrative 34.0 31.2
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Operating Income 7.9 14.8
Other (Income) Expense - Net 0.1 --
Interest Expense 7.1 2.9
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Income before Income Taxes 0.7 11.9
Provision for Income Taxes 0.3 4.4
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Net Income $0.4 $7.5
Net Income per share:
Basic $0.02 $0.45
Diluted $0.02 $0.45
Weighted Average Shares:
Outstanding 16,411 16,357
Diluted 16,497 16,472
ONEIDA LTD.
CONDENSED BALANCE SHEET
(Millions of dollars)
April 28, January 27,
2001 2001
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ASSETS
Cash $ 4.4 $ 2.2
Accounts Receivable - Net 92.7 90.0
Inventory 207.0 215.9
Other Current Assets 17.8 16.7
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Total Current Assets 321.9 324.8
Plant and Equipment - Net 110.5 112.4
Intangibles 138.6 139.7
Other Assets 34.8 33.7
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Total Assets $ 605.8 $ 610.6
LIABILITIES
Accounts Payable & Accrued
Liabilities $ 85.2 $ 95.4
Short-Term Debt 12.2 8.0
Current Portion of Long-Term Debt 8.8 9.2
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Total Current Liabilities 106.2 112.6
Long-Term Debt 289.5 282.8
Other Liabilities 89.2 90.9
Shareholders' Equity 120.9 124.3
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Total Liabilities & Equity $ 605.8 $ 610.6
CONDENSED CASH FLOW STATEMENT
APRIL 2001/2000
(Millions of dollars)
Quarter ended
April 2001 April 2000
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Net income $ 0.4 $ 7.5
Add: depreciation & amortization 4.5 3.7
Net working capital changes (5.2) (22.3)
Capital expenditures (2.6) (5.1)
Stock sales and purchases - net 0.4 (4.6)
Proceeds/payments of debt 10.4 20.0
Dividends paid (0.9) (1.7)
Other - net (4.8) 1.8
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Increase (Decrease) in Cash $ 2.2 ($ 0.7)