ONEIDA, N.Y., Feb. 28, 2001 (PRIMEZONE) -- Oneida Ltd. (NYSE:OCQ) today announced financial results for the fourth quarter and year ended January 27, 2001. Net income for the fourth quarter of fiscal 2000 was $3.9 million, or $0.24 per share, as compared to net income of $11.4 million, or $0.69 per share, in the fourth quarter last year. Net revenues during the quarter were $141.4 million, compared to $130.4 million reported in the same quarter last year. In addition, debt levels during the quarter were reduced by $22 million, principally as a result of inventory reductions.
For fiscal 2000, net income before restructuring and unusual charges was $23.2 million, or $1.41 per share, as compared to net income of $36 million or $2.15 per share in fiscal 1999. Net revenues were $516 million, compared to $495 million in the prior year. The year-end figures included six months of results for the three new acquisitions that Oneida completed in mid-year: Delco International Ltd.; Sakura Inc.; and Viners of Sheffield Limited.
Overall growth and operating results for the fourth quarter were affected by a number of factors: an erosion of consumer confidence; weak holiday sales, especially among the major department stores; loss of sales due to an aggressive SKU reduction program initiated during the year; and management's decision to significantly reduce production levels to bring manufacturing in line with incoming orders, which resulted in increased overhead costs and plant utilization inefficiencies. In addition, Oneida's foodservice operations - which performed well throughout the first nine months of fiscal 2000 - experienced softness in the fourth quarter compared to the same period in 1999, when business benefited from a surge in sales of millennium-related foodservice products.
Balance Sheet Emphasis Shows Positive Results
Peter J. Kallet, Oneida Chairman and Chief Executive Officer, commented, "Anticipating further economic slowing and reduced product demand going into the fourth quarter, we decided to accelerate our plan to scale back our manufacturing output, resulting in overhead variances which cost the company approximately $0.12 per share. This action should begin to show positive effects on the company's bottom line in the second quarter of fiscal 2001. If we had not elected to reduce production levels, fourth quarter operating results would have been more in line with expectations as discussed in the third quarter conference call."
Mr. Kallet added, "As noted above, we made substantial progress during the fourth quarter in reducing our debt levels by $22 million, in line with our plans entering that period. With the previously announced 8-10% worldwide workforce reductions - approximately half of which have already been completed, and the remainder scheduled to take effect by the end of the 2001 second quarter - we believe that our manufacturing output will be in sync with the incoming order flow. Additionally, we have successfully reduced our SKUs from 30,000 at the beginning of 2000 to 12,000 units by year end, and we will be making further reductions. All of the above measures will allow us to continue to improve cash flow, reduce debt and make ongoing progress with our inventory turns. We also will continue to focus on our 'make vs. buy' evaluation to enhance our profitability and better satisfy customer needs."
Outlook For 2001
"With larger revenue contributions now being achieved by our institutional foodservice business, Oneida is better balanced strategically to overcome volatile economic conditions," Mr. Kallet continued. "In addition, the acquisitions last year of Sakura, Delco and Viners have enabled the company to significantly broaden its tabletop portfolio for both the consumer and foodservice divisions, and has also helped expand our geographic reach as we enter a new era of global growth. In recent months we have also completed the realignment of the company's senior management team, which includes revamped sales force compensation programs geared to improve our sales performance throughout all divisions."
Commenting on fiscal 2001 overall, Mr. Kallet said, "Mindful that general economic uncertainties may continue well into the year, we are planning our business strategies accordingly. We have taken many positive steps, as outlined above, to maximize our performance and progress in this challenging environment. We are continuing on course with our strategic plan to strengthen our position as the world's most complete tabletop company and a preferred resource for customers in all markets served."
Balance Sheet/Cash Flow Highlights
EBITDA in the fourth quarter of fiscal 2000 was $17.3 million, as compared to $24.7 million in the prior year period. Debt at January 27, 2001 was $300 million, as compared to $146 million at January 29, 2000, of which the majority of the increase reflected the acquisitions of Sakura, Delco and Viners. Adjusted for restructuring and unusual charges, EBITDA for fiscal 2000 was $74 million as compared to $82 million for the prior fiscal year period.
Dividends Declared
In conjunction with the initiatives as outlined above, Oneida also announced today that its Board of Directors approved a reduction in the regular quarterly dividend to five cents per share on the common stock, compared to the previous level of 10 cents. The preferred stock rate of 37 1/2 cents per share remains unchanged. Both are payable April 30, 2001 to stockholders of record as of the close of business April 10, 2001. This will be the 261st consecutive quarterly cash dividend paid on the common shares, covering more than 65 years.
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 FOR THE THREE MONTHS ENDED TWELVE MONTHS ENDED January 27, January 29, January 27, January 29, 2001 2000 2001 2000 ---------- ---------- ---------- ---------- Net Sales $141.4 $130.4 $515.5 $495.1 Cost of Sales - Recurring 93.0 79.3 329.8 299.0 Cost of Sales - Restructuring (Notes 1 & 2) - - 24.0 3.0 ------- ------- ------- ------- Total Cost of sales 93.0 79.3 353.8 302.0 ------- ------- ------- ------- Gross Profit 48.4 51.1 161.7 193.1 Operating Revenues 0.1 0.3 6.5 0.8 Selling, Distribution & Administrative 34.5 30.5 133.1 128.1 Restructuring/Unusual Charges (Notes 1 & 2) - - 15.0 41.3 ------- ------- ------- ------- Operating Income 14.0 20.9 20.1 24.5 Other (Income) Expense - Net 0.2 (0.4) 0.6 (0.2) Interest Expense 7.6 2.9 21.6 10.9 ------- ------- ------- ------- Income (Loss) before Income Taxes 6.2 18.4 (2.1) 13.8 Provision (Credit) for Income Taxes 2.3 7.0 (0.8) 8.3 ------- ------- ------- ------- Net Income (Loss) $3.9 $11.4 ($1.3) $5.5 Net Income (loss) per share: Basic: Reported $0.24 $0.69 ($0.09) $0.33 Core Earnings (Note 3) $0.24 $0.69 $1.41 $2.15 Diluted: Reported $0.24 $0.69 ($0.09) $0.32 Core Earnings (Note 3) $0.24 $0.69 $1.41 $2.15 Weighted Average Shares: Outstanding 16,355 16,476 16,300 16,524 Diluted 16,417 16,620 16,386 16,673
NOTE 1: The earnings for the twelve months ended January 27, 2001 include the impact of the following special charges: restructuring 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 twelve months ended January 29, 2000 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) ASSETS January 27, 2001 January 29, 2000 ------ ---------------- ---------------- Cash $2.2 $3.9 Accounts Receivable - Net 90.0 84.4 Inventory 215.9 183.5 Other Current Assets 16.7 9.9 ------ ------ Total Current Assets 324.8 281.7 Plant and Equipment - Net 112.4 106.3 Intangibles 125.2 28.2 Other Assets 48.2 33.0 ------ ------ Total Assets $610.6 $449.2 LIABILITIES Accounts Payable & Accrued Liabilities $101.6 $88.9 Short-Term Debt 8.0 31.7 Current Portion of Long-Term Debt 9.2 16.0 ------ ------ Total Current Liabilities 118.8 136.6 Long-Term Debt 282.8 98.5 Other Liabilities 85.5 80.8 Shareholders' Equity 123.5 133.3 ------ ------ Total Liabilities & Equity $610.6 $449.2 CONDENSED CASH FLOW STATEMENT JANUARY 2001/2000 (Millions of dollars) Year ended Year ended January 2001 January 2000 ---------------- ---------------- Core earnings, before special charges $23.2 $36.0 Restructuring and unusual charges - net of tax (24.5) (30.5) ------ ------ Net income (loss) (1.3) 5.5 Add: depreciation & amortization 15.4 13.6 Net working capital charges (36.9) 10.1 Investment in subsidiaries (118.0) -- Impairment of long term assets and inventory 29.0 12.0 Capital expenditures (10.8) (22.2) Stock sales and purchases - net (2.2) (5.0) Proceeds/payments of debt 140.2 (4.3) Dividends paid (6.7) (6.7) Other - net (10.4) (1.0) ------ ------ Increase (Decrease) in Cash ($1.7) $2.0