GREENWICH, Conn., March 14, 2002 (PRIMEZONE) -- Blyth, Inc. (NYSE:BTH) today announced that, based on management's expectations at this time, first quarter, fiscal year 2003 Earnings Per Share are expected to be between $0.34 and $0.36, versus $0.33 in the prior year period. Full year fiscal 2003 Earnings Per Share are expected to be in excess of $1.88 on mid-single digit organic sales growth. Fiscal year 2002 Earnings Per Share were $1.44, which includes $0.27 in one-time and other unusual charges.
Management cited three main factors influencing comparative first quarter results. First, continued improvement at PartyLite, Blyth's direct selling unit, is anticipated following strong February sales and positive reception to PartyLite's Everyday 2002 product line and catalog by PartyLite's independent sales consultants, hostesses and guests. Secondly, Easter products in the Company's mass channel Creative Expressions business typically shipped during the first quarter were shipped in the fourth quarter of last year due to the early Easter holiday in 2002. This timing change shifts income to the fourth quarter of fiscal 2002 which typically would have been realized in the first quarter of fiscal 2003. Thirdly, the inclusion of Midwest of Cannon Falls, which Blyth acquired in April 2001, will also have a negative impact on Earnings Per Share as this business historically has experienced an operating loss in the first quarter.
Commenting on the earnings projections, Robert B. Goergen, Blyth's Chairman of the Board and CEO, said, "To date in the first quarter, we have repurchased 639,000 shares of Blyth common stock, bringing our share repurchase program calendar year to date to 777,000 shares in total. Approximately 700,000 shares remain in our current authorization of 4,000,000 shares."
Management also reviewed changes anticipated in the presentation of Blyth's financial statements for fiscal year 2003, including the cessation of goodwill amortization called for by FAS 141 and 142. In making its projections for fiscal year 2003, management assumed no amortization of goodwill. In fiscal year 2002, Blyth had $4.7 million of goodwill, which reduced Earnings Per Share by $.06. In addition, and related to the same financial pronouncements, the Company is reviewing goodwill on the balance sheet for possible impairment. Should there be any impairment, it would be reflected in the Company's first quarter results as an accounting change net of tax.
Blyth will adopt several Emerging Issues Task Force (EITF) rulings related to revenue recognition and financial statement classification in fiscal year 2003. Concurrently, the recording of distribution costs will be standardized across all of the Company's business units. While there will be no impact on Earnings Per Share, the approximate restatement effect of these reclassifications on fiscal year 2002 results will be the reduction, as a percentage of net sales, on fiscal year 2002 gross margin by 1.7 percentage points, selling expenses reduced by 2.0 percentage points and increased operating income of 0.2 percentage points.
Management also discussed a change in the Company's segment reporting structure, whereby the Foodservice business will be reported as part of the Candles and Home Fragrance segment, to which it is much more closely aligned, beginning in the first quarter. The Creative Expressions and Foodservice Segment will be renamed the Creative Expressions segment beginning in the first quarter. This change will not impact Earnings Per Share.
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 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 mid-tier and premium retail channels, under the Colonial Candle of Cape Cod(r), Kate's(tm) and Carolina(tm) brands and in the mass retail channel under the Florasense(r), Ambria(tm) and FilterMate(r) brands. In Europe, its products are also sold under the Gies, Colonial and Wax Lyrical brands. Blyth also markets a broad range of Creative Expressions and Foodservice products, including seasonal and home decor products under the Midwest of Cannon Falls(r) brand, decorative seasonal products under the Impact(tm) brand, paper-related products under the Jeanmarie(r) brand and tabletop illumination products and portable heating fuel for the hotel, restaurant and catering trade, under the Ambria(tm), Sterno(r) and HandyFuel(r) brand names. Net Sales for the twelve months ended January 31, 2002 totaled $1,199 million.
Blyth, Inc. can be found on the Internet at www.blythinc.com.
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, which are other than statements of historical facts. Actual results could differ materially due to various factors, including the risk of a continuing weakness of the retail environment, the effects of our restructuring, the risk of maintaining the Company's growth rate, the Company's ability to respond to increased product demand, the risks (including foreign currency fluctuations) associated with international sales and foreign products, the risks of being able to recruit new independent sales consultants, dependence on key management personnel, 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 October 31, 2001 and in the Company's Annual Report on Form 10-K for the year ended January 31, 2001.