GREENWICH, Conn., Dec. 4, 2002 (PRIMEZONE) -- Blyth, Inc. (NYSE:BTH), a leader in the candles, home fragrance and giftware industry, reported today that third quarter Net Sales increased 16% to $362.2 million from $313.3 million for the third quarter of last year. Operating Profit increased 16% to $52.0 million for the third quarter compared to $45.0 million in the prior year period. Net Earnings for the third quarter were $30.5 million versus $25.9 million a year earlier, an increase of 18%. Diluted Net Earnings Per Share for the third quarter were $0.65 compared to $0.55 for the same period last year, an increase of 18%.
Net sales for the nine months ended October 31, 2002 increased 11% to $908.1 million from $816.4 million reported for the same period a year ago. Operating profit for the first nine months was $116.5 million versus $94.6 million for the same period last year, an increase of 23%. Net earnings for the first nine months increased 14% to $62.1 million, compared to $54.4 million for the prior year period. Diluted Net Earnings Per Share were $1.33 compared to $1.15 for last year's first nine months. Excluding the impact of the goodwill impairment charge taken in the first quarter of fiscal year 2003 due to a change in accounting principle effected by SFAS 142, Diluted Net Earnings Per Share for the first nine months of fiscal year 2003 were $1.43.
Blyth's third quarter sales, which were up 8% before the inclusion of CBK, Ltd. LLC, a premium home decor company that Blyth acquired in May, were influenced by several factors. In the direct selling channel, PartyLite's worldwide sales increased 9% versus last year, building on the strength of new products and catalogs, as well as increases in independent sales consultants, which are at a worldwide record high. Second, Blyth's worldwide candle and home fragrance sales increased 7% on the strengths of the North American and European mass channel businesses, while flat sales were reported in the Company's North American and European premium channels. Also in the Candles and Home Fragrance segment, The Sterno Group had very strong third quarter sales, which increased 17% versus the same period last year. Lastly, in the Creative Expressions segment, solid organic sales growth was seen in the premium channel, which more than offset a slight sales decline at JMC Impact, Blyth's mass channel Creative Expressions business.
Robert B. Goergen, Blyth's Chairman of the Board and CEO, commented, "We are very pleased to report strong third quarter results even as retailers across Blyth's major markets remain very cautious in the face of unsettling world events and economic uncertainty. Across the board, Blyth's management teams remained focused on innovative new product development, as well as inventory and credit risk management. The current economic realities of the markets in which we compete have brought renewed importance to everyday blocking and tackling, and to our objective of making improvements in small, measurable steps."
On a segment basis, Net Sales in the Candles and Home Fragrance segment were $267.9 million for the third quarter, compared to $244.3 million in the prior year period, an increase of 10%. Operating profit for this segment increased 12% for the third quarter to $32.0 million, compared to $28.6 million in last year's third quarter. Net sales in the Creative Expressions segment increased 37% for the third quarter to $94.3 million versus $69.0 million for the same period last year, largely attributable to the inclusion of CBK. Operating income in this segment was $19.9 million for the third quarter compared to $16.5 million in the prior year period. The sum of the segment amounts does not necessarily equal that reported for the quarter due to rounding.
Management will conduct a conference call today at 11 a.m. (eastern), which will be broadcast live over the Internet, at www.blythinc.com. The call will be archived on Blyth's website.
Blyth, Inc., headquartered in Greenwich, CT, USA, designs, manufactures and markets an extensive line of candles and home fragrance products including scented candles, potpourri and other fragranced products, as well as tabletop illumination products and portable heating fuel, and markets a broad range of related candle accessories. Its products are sold direct to the consumer under the PartyLite(r) brand, to retailers in the premium and specialty retail channels under the Colonial Candle of Cape Cod(r), Colonial at HOME(r), Kate's(tm) and Carolina(r) brands, in the mass retail channel under the Florasense(r), Ambria(r) and FilterMate(r) brands and to the Foodservice industry under the Ambria(r), Sterno(r) and HandyFuel(r) brand names. In Europe, its products are also sold under the Gies, Ambria, Carolina, Colonial and Wax Lyrical brands. Blyth also markets a broad range of Creative Expressions products, including home decor and giftware products under the CBK(tm) brand, seasonal products under the Midwest of Cannon Falls(r) and JMC Impact(tm) brands, and paper-related products under the Jeanmarie(r) brand.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical facts. Actual results could differ materially due to various factors, including the current slowing of the United States economy as a whole and the continuing weakness of the retail environment, the effects of our restructuring, the risk that we will be unable to maintain the Company's historic growth rate, the Company's ability to respond appropriately to changes in product demand, the risks (including foreign currency fluctuations, economic and political instability, transportation delays, difficulty in maintaining quality control, trade and foreign tax laws and others) associated with international sales and foreign products, risks associated with our ability to recruit new independent sales consultants, our dependence on key management personnel, risks associated with the sourcing of raw materials for our products, competition in terms of price and new product introductions, and other factors described in this press release, in the Company's Quarterly Report on Form 10-Q for the quarter ended July 31, 2002 and in the Company's Annual Report on Form 10-K for the year ended January 31, 2002.
BLYTH, INC.
Consolidated Statement of Earnings
(In thousands except per share data)
(Unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
2002 2001 2002 2001
-------- -------- -------- --------
Net sales $362,181 $313,338 $908,098 $816,449
Cost of goods sold 189,694 160,498 453,271 412,136
-------- -------- -------- --------
Gross profit 172,487 152,840 454,827 404,313
Selling 89,316 81,739 252,958 233,763
Administrative 31,197 24,739 85,330 72,555
Amortization
of goodwill -- 1,345 -- 3,356
-------- -------- -------- --------
120,513 107,823 338,288 309,674
-------- -------- -------- --------
Operating profit 51,974 45,017 116,539 94,639
-------- -------- -------- --------
Other expense (income)
Interest expense 3,576 4,139 11,146 12,173
Interest income
and other (58) (585) (753) (4,640)
Equity in earnings
of investee (70) 268 120 443
-------- -------- -------- --------
3,448 3,822 10,513 7,976
-------- -------- -------- --------
Earnings before
income taxes and
cumulative effect
of change in
accounting
principle 48,526 41,195 106,026 86,663
Income tax expense 18,052 15,324 39,442 32,238
-------- -------- -------- --------
Earnings before
cumulative effect of
change in accounting
principle 30,474 25,871 66,584 54,425
Cumulative effect
of change in
accounting principle,
net of taxes of $2,887 -- -- (4,515) --
-------- -------- -------- --------
Net Earnings $ 30,474 $ 25,871 $ 62,069 $ 54,425
======== ======== ======== ========
Basic:
Earnings per
common share
before cumulative
effect of change
in accounting
principle $ 0.66 $ 0.55 $ 1.44 $ 1.16
Cumulative effect
of change in
accounting
principle -- -- (0.10) --
-------- -------- -------- --------
$ 0.66 $ 0.55 $ 1.34 $ 1.16
======== ======== ======== ========
Weighted average
number of shares
outstanding 46,299 47,060 46,306 47,071
Diluted:
Earnings per common
share before
cumulative effect of
change in accounting
principle $ 0.65 $ 0.55 $ 1.43 $ 1.15
Cumulative effect of
change in accounting
principle -- -- (0.10) --
-------- -------- -------- --------
$ 0.65 $ 0.55 $ 1.33 $ 1.15
======== ======== ======== ========
Weighted average
number of shares
outstanding 46,602 47,201 46,589 47,234
Consolidated Balance Sheets
(In thousands)
(Unaudited)
Oct. 31, Oct. 31,
2002 2001
-------- --------
Assets
Cash and Cash
Equivalents $ 37,303 $ 32,799
Accounts Receivable,
Net 180,724 170,380
Inventories 214,127 224,523
Property, Plant
& Equipment, Net 245,262 258,180
Other Assets 198,660 152,044
-------- --------
$876,076 $837,926
======== ========
Liabilities and Stockholders' Equity
Bank Debt $ 45,155 $ 82,034
Senior Notes 10,714 14,286
Bond Debt 154,056 150,000
Other Liabilities 153,111 131,978
Stockholders' Equity 513,040 459,628
-------- --------
$876,076 $837,926
======== ========