ONEIDA, N.Y., June 9, 2005 (PRIMEZONE) -- Oneida Ltd. (OTCBB:ONEI) today announced operating and financial results for the first quarter ended April 30, 2005. Operating income for the first quarter was $5.5 million, or 6.1% of revenues, compared to an operating loss of $(1.9) million during the corresponding period last year. The $7.4 million improvement in operating income reflects the favorable impact of the Company's comprehensive restructuring program. Oneida's restructuring efforts are focused on returning Oneida to profitability by reducing the Company's cost structure and eliminating the substantial negative variances created by the Company's non-competitive manufacturing platform.
Revenues for the first quarter were $90.2 million, compared to $111.2 million in the first quarter of the previous fiscal year. The decline in revenues is partially attributed to the August 2004 sale of Encore Promotions, Inc., and the closure of 22 unprofitable Oneida Home Stores during the previous twelve months.
Gross margins improved from $31.0 million (27.8% of revenues) during the three month period ended May 1, 2004, to $31.7 million (35.1% of revenues) during the quarter ended April 30, 2005. The improvement during the current quarter was achieved as a result of the March 22, 2005 sale of the Sherrill, N.Y. manufacturing facility; complete outsourcing of the Company's manufacturing operations; reduction of LIFO valued inventory levels; and a $3.2 million reduction of excess and obsolete inventory write-downs. Operating income was also favorably impacted by the closure of unprofitable Oneida Home Stores; reductions in personnel, employee benefits, general & administrative expenses, and logistics costs.
Net loss for the first quarter ended April 30, 2005 was $(3.3) million, equal to $(0.07) per share, compared to year-ago net income of $54.4 million, or $3.25 per share. The prior period's net income included non-recurring items, totaling $60.7 million, attributed to the net effect of eliminating the Company's post-retirement medical liabilities, termination of the Company's long-term disability plan and freezing the Company's defined benefit pension plans. Oneida's prior year first quarter loss was $(6.3) million after factoring out the non-recurring items, which equates to a year-over-year quarterly improvement of $3.0 million during the period ended April 30, 2005.
Net cash flow provided by operating activities was $0.9 million during the first quarter ended April 30, 2005, versus net cash used by operating activities of $(16.0) million during the corresponding period last year. Liquidity under the Company's U.S. revolving credit agreement and available cash balances was $22.5 million at April 30, 2005, increased from $22.2 million and $12.2 million at January 29, 2005 and October 30, 2004, respectively.
RESTRUCTURING ACTIVITIES ARE CONTINUING
The following summarizes the major activities and milestones achieved during the first quarter ended April 30, 2005:
-- Appointed Terry G. Westbrook as Oneida's President & Chief
Executive Officer.
-- Appointed James E. Joseph as Executive Vice President of
Worldwide Sales & Marketing; and James Mylonas to the position of
Senior Vice President and General Manager of Oneida's Consumer
Division.
-- Completed the sale of the Sherrill, New York manufacturing
facility to Sherrill Manufacturing, Inc. on March 22, 2005.
-- Amended the Company's credit agreement, effective April 7, 2005,
providing less restrictive financial covenants, consenting to the
sale of certain non-core assets and authorizing the release of
certain proceeds from the assets sold.
-- Announced the planned closure of Oneida's foodservice
distribution facility located in Buffalo, NY. and consolidation
of the Company's east coast distribution operations into Oneida,
N.Y., which is expected to generate supply chain savings and
service level improvements.
"Oneida is entering an exciting new era as the Company's transformation from a manufacturer to a marketing and distribution company with a 100% outsourced manufacturing platform is now complete," said Terry Westbrook, President and Chief Executive Officer. "We are currently focusing our efforts on executing the Company's go-to-market strategy and exploiting our competitive advantages in design, product innovation, global sourcing, customer service, and logistics," said Westbrook.
Oneida is a leading source of flatware, dinnerware, crystal and metal serveware for both the consumer and food service industries worldwide.
Forward-Looking Information
With the exception of historical data, the information contained in this Press Release, as well as those other documents incorporated by reference herein, may constitute forward-looking statements, within the meaning of the Federal securities laws, including but not limited to the Private Securities Litigation Reform Act of 1995. As such, the Company cautions readers that changes in certain factors could affect the Company's future results and could cause the Company's future consolidated results to differ materially from those expressed or implied herein. Such factors include, but are not limited to: changes in national or international political conditions; civil unrest, war or terrorist attacks; general economic conditions in the Company's own markets and related markets; difficulties or delays in the development, production and marketing of new products; the impact of competitive products and pricing; certain assumptions related to consumer purchasing patterns; significant increases in interest rates or the level of the Company's indebtedness; inability of the Company to maintain sufficient levels of liquidity; failure of the Company to obtain needed waivers and/or amendments relative to its financing agreements; foreign currency fluctuations; major slowdowns in the retail, travel or entertainment industries; the loss of several of the Company's key executives, major customers or suppliers; underutilization of or negative variances at some or all of the Company's plants and factories; the Company's failure to achieve the savings and profit goals of any planned restructuring or reorganization programs; international health epidemics such as the SARS outbreak; the impact of changes in accounting standards; potential legal proceedings; changes in pension and medical benefit costs; and the amount and rate of growth of the Company's selling, general and administrative expenses.
ONEIDA LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars, except per share data)
(Unaudited)
For the Three Months Ended
April 30, May 1,
2005 2004
-------- --------
Revenues:
Net Sales $89,736 $110,645
License fees 486 581
------- --------
Total Revenues 90,222 111,226
------- --------
Cost of sales 58,521 80,254
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Gross margin 31,701 30,972
------- --------
Operating expenses:
Selling, distribution and
administrative expense 26,334 32,894
Restructuring expense
(Note 2) 341 --
(Gain) loss on the sale of
fixed assets (436) (14)
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Total 26,239 32,880
Operating income (loss) 5,462 (1,908)
Other income (558) (63,738)
Other expense 561 2,890
Interest expense including
amortization of deferred
financing costs 7,959 3,771
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(Loss) income before income
taxes (2,500) 55,169
Income tax expense (Note 3) 800 784
------- --------
Net (loss) income $(3,300) $ 54,385
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Preferred stock dividends (32) (32)
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Net (loss) income available
to common shareholders $(3,332) $ 54,353
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(Loss) income per share of
common stock Net loss:
Basic $ (0.07) $ 3.25
Diluted (0.07) 3.25
ONEIDA LTD.
CONSOLIDATED BALANCE SHEETS
(Thousand of Dollars)
Unaudited Audited
April 30, Jan. 29,
2005 2005
--------- --------
ASSETS
Current assets:
Cash $ 905 $ 2,064
Trade accounts receivables,
less allowance for doubtful
accounts of $3,546 and
$3,483, respectively 53,308 53,226
Other accounts and notes
receivable 2,690 1,398
Inventories, net of reserves
of $13,915 and
$22,405, respectively 98,734 106,951
Other current assets 3,935 3,789
--------- ---------
Total current assets 159,572 167,428
Property, plant and equipment,
net 17,824 23,149
Assets held for sale 5,587 1,263
Goodwill 120,972 121,103
Other assets 15,522 15,869
--------- ---------
Total assets $ 319,477 $ 328,812
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LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Short-term debt $ 8,299 $ 9,577
Accounts payable 12,341 14,735
Accrued liabilities 28,618 33,651
Accrued restructuring 719 524
Accrued pension
liabilities 15,106 17,667
Deferred income taxes 1,214 1,214
Long term debt classified
as current 640 2,572
--------- ---------
Total current
liabilities 66,937 79,940
Long term debt 207,649 204,344
Accrued postretirement
liability 2,646 2,633
Accrued pension liability 27,826 24,254
Deferred income taxes 9,498 9,087
Other liabilities 12,541 12,173
--------- ---------
Total liabilities 327,097 332,431
--------- ---------
Commitments and contingencies
Stockholders' (deficit):
Cumulative 6% preferred
stock--$25 par value;
authorized 95,660 shares,
issued 86,036 shares,
callable at $30 per share
respectively 2,151 2,151
Common stock--$l.00 par
value;
authorized 48,000,000 shares,
issued 47,781,288 shares
for both periods 47,781 47,781
Additional paid-in capital 84,719 84,719
Retained deficit (87,362) (84,062)
Accumulated other
comprehensive loss (33,340) (32,639)
Less cost of common stock
held in treasury;
1,149,364 shares for
both periods (21,569) (21,569)
--------- ---------
Total stockholders'
(deficit): (7,620) (3,619)
--------- ---------
Total liabilities and
stockholders' (deficit) $ 319,477 $ 328,812
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ONEIDA LTD
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED APRIL 30, 2005 AND MAY 1, 2004
(Unaudited)
(In Thousands)
Three months ended
April 30, May 1,
2005 2004
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CASH FLOW (USED) FROM OPERATING
ACTIVITIES:
Net income (loss) $(3,300) $54,385
Adjustments to reconcile net
(loss) income to net cash
provided by (used in)
operating activities:
Non-cash interest (Payment
in Kind) 3,382 --
(Gain) on disposal of fixed
assets (436) (14)
Depreciation and
amortization 609 2,217
Deferred income taxes 1,567 1,099
Pension plan amendment
(Note 7) -- 2,577
Post retirement health care
plan amendment (Note 7) -- (63,277)
(Increase) decrease in
operating assets:
Receivables (1,546) (5,623)
Inventories 7,921 11,907
Other current assets (166) 141
Other assets 438 (1,297)
Decrease in accounts
payable (2,184) (3,533)
Decrease in accrued
liabilities (4,059) (11,102)
Decrease in other
liabilities (1,307) (3,477)
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Net cash provided (used)
by operating activities 919 (15,997)
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CASH FLOW FROM INVESTING
ACTIVITIES:
Purchases of properties and
equipment (167) (1,279)
Proceeds from dispositions of
properties and equipment 1,402 5,517
------- -------
Net cash provided in
investing activities 1,235 4,238
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CASH FLOW FROM FINANCING
ACTIVITIES:
Proceeds from issuance of
common stock -- 43
Decrease in short-term debt (1,278) (980)
Payment of long-term debt (2,009) (769)
Proceeds from issuance of
long-term debt 0 9,000
------- -------
Net cash (used) provided
by financing activities (3,287) 7,294
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EFFECT OF EXCHANGE RATE CHANGES
ON CASH (26) (206)
------- -------
NET (DECREASE) IN CASH (1,159) (4,671)
CASH AT BEGINNING OF YEAR 2,064 9,886
------- -------
CASH AT END OF PERIOD $ 905 $ 5,215
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SUPPLEMENTAL CASH FLOW
DISCLOSURES:
Cash paid during the quarter for:
Interest $ 3,689 $ 3,571