GREENWICH, Conn., March 15, 2001 (PRIMEZONE) -- Blyth, Inc. (NYSE:BTH) reported today fourth quarter Net Sales of $332,711,000 compared with $344,635,000 a year earlier. Operating Profit was $23,939,000 compared to $49,167,000 in the prior year period. Net Earnings for the quarter were $11,187,000 versus $27,533,000 a year earlier. Diluted Net Earnings Per Share for the fourth quarter were $0.24 per share compared to $0.57 per share for the same period last year.
Net sales for the fiscal year ended January 31, 2001 totaled $1,197,197,000 versus $1,149,994,000 reported a year ago, an increase of 4%. Operating profit for the twelve month period was $145,244,000 compared to $164,001,000 a year earlier. Net earnings of $79,562,000 compared to $92,389,000 for the prior year period. Diluted Net Earnings Per Share were $1.66 versus $1.89 for last year.
Commenting on the fourth quarter sales and earnings results, Robert B. Goergen, Chairman of the Board and CEO, said, "As we anticipated last month, the unexpected speed at which the economy slowed late last year, in combination with the drop in consumer confidence at both the individual and retailer levels, negatively impacted Blyth's fourth quarter results. However, excluding the one-time costs and unusual charges, and the negative impact of weak European currencies, Blyth's fourth quarter Earnings Per Share would have equaled last year's results of $.57, and our full year results would have been $2.03, an increase of 7.4% over the prior year period."
As previously announced, the Company reported business restructurings and other one-time pre-tax costs, including unexpected bad debt expenses, of approximately $19 million in the fourth quarter. These largely reflect the results of initiatives undertaken by management to strengthen the long-term prospects of the business, including restructuring its European activities, exiting the religious and citronella candle product lines and restructuring the U.S. consumer wholesale organizations.
Pre-tax expenses associated with the restructuring of the Company's European activities, including asset write-offs, redundancy payments to employees and inventory write-downs were incurred in (a) its Fragrant Memories and Eclipse Candles units (part of the Colony Group), (b) its Nordic and Becker units (part of the Gies Group), and (c) Wax Lyrical, its U.K.-based specialty retailer. The Company had evaluated its European consumer activities and closed or vacated four production and warehousing facilities in order to reposition these units more effectively for growth and profitability in fiscal 2002. Fourth quarter Earnings Per Share were impacted by $.13.
As noted in prior quarterly teleconferences, Blyth, for strategic reasons, has chosen to exit certain lower margin product lines, including the religious and citronella candle product lines. Within its U.S. operations, one-time pre-tax costs associated with the exiting of these product lines impacted Earnings Per Share by $.03 in fiscal 2001.
The restructuring of the Company's U.S. consumer wholesale organizations, which has been underway since earlier this year, will be concluded in late Spring, 2001. This initiative, which includes the consolidation of several facilities, is expected to improve customer service, increase margins and enhance future profitability. The associated actions resulted in one-time charges, including the write-off of lease obligations, severance payments, equipment write-offs and adjustments to the carrying value of inventory. As discussed, the inventory write-down was further exacerbated by Wal-Mart's decision late in the year to accelerate the changeover to a custom label brand of candles. The pre-tax charges impacted Earnings Per Share by $.09.
Mr. Goergen continued to say, "Our decision to proceed with the restructuring of our European and U.S. consumer wholesale businesses, as announced last month, as well as the divestiture of certain product lines, further impacted earnings per share. However, we believe that difficult choices such as these position us more effectively for continued growth and profitability."
Fourth quarter results also included unexpected bad debt expenses associated with customer bankruptcy filings by Home Place (formerly Waccamaw Pottery), Bradlees, Montgomery Ward, Frank's Nursery and Spoils, a U.K. retailer. Potential losses, net of likely recovery assumptions, impacted Earnings Per Share by approximately $.03.
For the fiscal year ended January 31, 2001, the Company adopted the provisions of Emerging Issues Task Force ("EITF") 00-10, "Accounting for Shipping and Handling Fees and Costs" which requires that amounts billed to customers for shipping and handling fees be classified as revenues and shipping and handling costs be classified as cost of goods sold. All prior periods have been restated to reflect the reclassification of shipping and handling fees and costs previously reported in selling and shipping expense in the Consolidated Statements of Earnings.
In addition, on a full year basis, for the fiscal year ended January 31, 2001, the Company recorded a one-time effect equal to $.02 Diluted Earnings Per Share to reflect the adoption of the newly-effective Staff Accounting Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements". This is reflected as a cumulative effect of an accounting change in the Consolidated Statements of Earnings.
Management will conduct a conference call today at 10 a.m. (eastern), which will be broadcast live over the Internet, at www.blythinc.com. The call will be archived on Blyth's Web site.
Blyth, Inc., headquartered in Greenwich, Conn., USA, designs, manufactures and markets an extensive line of candles and home fragrance products including scented candles, potpourri and environmental fragrance 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 Original Recipe(tm) and Carolina Designs(r) brands and in the mass retail channel under the Ambria(tm), Florasense(r) and FilterMate(r) brands. In Europe, its products are also sold under the Gies, Colony and Wax Lyrical brands. Blyth also markets a broad range of non-fragranced products, including decorative seasonal products for the consumer market, under the Jeanmarie(r) and Impact(tm) brand names, and portable heating fuel and tabletop illumination products for the hotel, restaurant and catering trade, under the Sterno(r) and Handy Fuel(r) brand names.
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, 2000 and in the Company's Annual Report on Form 10-K for the year ended January 31, 2000.
BLYTH, INC.
Consolidated Statement of Earnings
(In thousands except per share data)
(Unaudited)
Three Months Twelve Months
Ended January 31 Ended January 31,
2001 2000 2001 2000
-------- -------- ---------- ----------
Net sales $332,711 $344,635 $1,197,197 $1,149,994
Cost of goods sold 155,573 170,963 562,471 552,384
Restructuring and
one-time charges 9,001 -- 9,001 --
-------- -------- ---------- ----------
Gross profit 168,137 173,672 625,725 597,610
Selling and shipping 106,819 98,426 371,156 341,924
Administrative 28,630 25,176 97,432 88,692
Amortization of
goodwill 1,047 903 4,191 2,993
Other one-time charges 7,702 -- 7,702 --
-------- -------- ---------- ----------
144,198 124,505 480,481 433,609
-------- -------- ---------- ----------
Operating profit 23,939 49,167 145,244 164,001
-------- -------- ---------- ----------
Other expense(income)
Interest expense 3,355 4,049 15,876 12,104
Interest income/other (849) 1,801 (1,988) 1,361
Equity in earnings of
investee (57) (1,393) 666 146
-------- -------- ---------- ----------
2,449 4,457 14,554 13,611
-------- -------- ---------- ----------
Earnings before income
taxes, minority interest
and cumulative effect
of accounting change 21,490 44,710 130,690 150,390
Income tax expense 9,219 17,147 49,975 57,543
-------- -------- ---------- ----------
Earnings before minority
interest and cumulative
effect of accounting
change 12,271 27,563 80,715 92,847
Minority interest 1,084 30 -- 458
-------- -------- ---------- ----------
Earnings before
cumulative effect of
accounting change 11,187 27,533 80,715 92,389
Cumulative effect of
accounting change
(SAB 101), net of
outstanding 47,293 48,383 47,902 48,819
-------- -------- ---------- ----------
Net earnings $ 11,187 $ 27,533 $ 79,562 $ 92,389
======== ======== ========== ==========
Basic:
Net earnings per common
share before cumulative
effect of accounting
change $ 0.24 $ 0.57 $ 1.69 $ 1.91
Cumulative effect of
accounting change
(SAB 101) -- -- (0.02) --
-------- -------- ---------- ----------
$ 0.24 $ 0.57 $ 1.67 $ 1.91
======== ======== ========== ==========
Weighted average
number of shares
outstanding 47,068 48,089 47,629 48,471
Diluted:
Net earnings per common
share before cumulative
effect of accounting
change $ 0.24 $ 0.57 $ 1.69 $ 1.89
Cumulative effect of
accounting change
(SAB 101) -- -- (0.02) --
-------- -------- ---------- ----------
$ 0.24 $ 0.57 $ 1.66 $ 1.89
======== ======== ========== ==========
Weighted average
number of shares
outstanding 47,293 48,383 47,902 48,818
Consolidated Balance Sheets
(In thousands)
(Unaudited)
January 31,
2001 2000
-------- --------
Assets
Cash and Cash Equivalents $ 93,036 $ 46,047
Accounts Receivable, Net 66,974 84,919
Inventories 201,086 186,696
Property, Plant & Equipment, Net 269,438 273,528
Other Assets 132,994 121,906
-------- --------
$763,528 $713,096
======== ========
Liabilities and Stockholders' Equity
Bank Debt $ 32,268 $ 24,710
Senior Notes 17,857 21,429
Bond Debt 150,000 150,000
Other Liabilities 141,551 136,743
Stockholders' Equity 421,852 380,214
-------- --------
$763,528 $713,096
======== ========
Note:
The Consolidated Statements of Earnings have been adjusted to
reclassify shipping and handling fees and costs in accordance with
EITF 00-10. The cumulative effect of accounting change equates to a
one-time effect of $0.02 diluted earnings per share resulting from
the Company's adoption of SAB 101 pertaining to revenue
recognition.The adoption of SAB 101 also affects certain Consolidated
Balance Sheet items in the current fiscal year.