SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 - For the quarter ended June 30, 1999.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission file number 333-07429
Remington Products Company, L.L.C.
---------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1451076
- -------------------------------- ------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
60 Main Street, Bridgeport, Connecticut 06604
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(203) 367-4400
--------------
Securities registered pursuant to Section 12(b) of the Act:
Title of Each class Name of each exchange on which registered
------------------- -----------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
11% Series B Senior Subordinated Notes due 2006
----------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x/ No _____
1
<PAGE>
REMINGTON PRODUCTS COMPANY, L.L.C.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1999
INDEX
<TABLE>
<CAPTION>
<S> <C>
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited):
Consolidated Balance Sheets -
June 30, 1999 and December 31, 1998 3
Consolidated Statements of Operations -
For the three and six months ended June 30, 1999 and 1998 4
Consolidated Statements of Cash Flows -
For the six months ended June 30, 1999 and 1998 5
Notes to Unaudited Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
Signature 13
</TABLE>
2
<PAGE>
Remington Products Company, L.L.C.
Consolidated Balance Sheets
(unaudited in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,436 $ 4,249
Accounts receivable, less allowance for doubtful accounts
of $2,336 in 1999 and $2,749 in 1998 40,420 59,998
Inventories 63,844 50,163
Prepaid and other current assets 3,782 1,879
--------- ----------
Total current assets 110,482 116,289
Property, plant and equipment, net 12,916 13,135
Intangibles, net 57,471 58,573
Other assets 7,399 7,730
--------- ----------
Total assets $ 188,268 $ 195,727
========= ==========
LIABILITIES AND MEMBERS' DEFICIT
Current Liabilities:
Accounts payable $ 10,493 $ 15,981
Short-term borrowings 5,302 5,192
Current portion of long-term debt 1,744 1,842
Accrued liabilities 16,516 24,980
--------- ----------
Total current liabilities 34,055 47,995
Long-term debt 195,613 180,634
Other liabilities 1,137 1,839
Members' deficit:
Members' deficit (39,259) (31,473)
Accumulated other comprehensive income (3,278) (3,268)
---------- ----------
Total members' deficit (42,537) (34,741)
---------- ----------
Total liabilities and members' deficit $ 188,268 $ 195,727
========== ==========
</TABLE>
See notes to unaudited consolidated financial statements.
3
<PAGE>
Remington Products Company, L.L.C.
Consolidated Statements of Operations
(unaudited in thousands)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 59,437 $ 52,981 $ 103,023 $ 91,885
Cost of sales 33,579 32,383 58,112 54,309
-------- --------- --------- ---------
Gross profit 25,858 20,598 44,911 37,576
Selling, general and administrative 23,757 20,527 42,055 37,687
Amortization of intangibles 505 479 990 963
Restructure and reorganization charge - 6,531 - 6,531
-------- --------- --------- ---------
Operating income (loss) 1,596 (6,939) 1,866 (7,605)
Interest expense 5,174 4,997 10,071 9,879
Other expense (income) 102 (112) (67) 123
-------- --------- --------- ---------
Income (loss) before income (3,680) (11,824) (8,138) (17,607)
taxes
Provision (benefit) for income taxes (27) (207) (352) (650)
-------- --------- --------- ---------
Net income (loss) $(3,653) $(11,617) $ (7,786) $(16,957)
======== ========= ========= =========
Net loss applicable to common units $(6,259) $(13,932) $(12,922) $(21,520)
======== ========= ========= =========
</TABLE>
See notes to unaudited consolidated financial statements.
4
<PAGE>
Remington Products Company, L.L.C.
Consolidated Statements of Cash Flows
(unaudited in thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------
1999 1998
--------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (7,786) $ (16,957)
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation 1,669 1,573
Amortization of intangibles 990 963
Amortization of deferred financing fees 602 532
Restructuring and reorganization charge - 6,531
Inventory markdown - 1,456
Deferred income taxes (326) (222)
Foreign currency forward (gain) loss (53) 275
--------- --------
(4,904) (5,849)
Changes in assets and liabilities:
Accounts receivable 19,578 22,224
Inventories (13,681) (1,135)
Accounts payable (5,488) (1,526)
Accrued liabilities (8,791) (12,952)
Other, net (1,653) (1,909)
--------- ---------
Cash used in operating activities (14,939) (1,147)
--------- ---------
Cash flows used in investing activities:
Capital expenditures (1,395) (1,942)
--------- ---------
Cash flows from financing activities:
Net borrowings (repayments) under term loan facilities 14,354 (882)
Net borrowings under credit facilities 1,006 818
Equity repurchases - (242)
Debt issuance costs and other, net (897) (43)
--------- ---------
Cash provided by(used in)financing activities 14,463 (349)
--------- ---------
Effect of exchange rate changes on cash 58 69
Decrease in cash and cash equivalents (1,813) (3,369)
Cash and cash equivalents, beginning of period 4,249 5,408
--------- ---------
Cash and cash equivalents, end of period $ 2,436 $ 2,039
========= =========
Supplemental cash flow information:
Interest paid $ 9,522 $ 9,365
Income taxes paid $ 187 $ 588
</TABLE>
See notes to unaudited consolidated financial statements.
5
<PAGE>
Remington Products Company, L.L.C.
Notes to Unaudited Consolidated Financial Statements
1. Basis of Presentation
The statements have been prepared by the Company without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission and
according to generally accepted accounting principles, and reflect all
adjustments consisting of normal recurring accruals which, in the opinion of
management, are necessary for a fair statement of the results of the interim
periods presented. These financial statements do not include all disclosures
associated with annual financial statements and, accordingly, should be read in
conjunction with the notes contained in the Company's audited consolidated
financial statements for the year ended December 31, 1998.
2. Inventories
Inventories were comprised of the following (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---------- --------
<S> <C> <C>
Finished goods $ 60,486 $ 46,454
Work in process and raw materials 3,358 3,709
-------- --------
$ 63,844 $ 50,163
======== ========
</TABLE>
3. Income Taxes
Federal income taxes on net earnings of the Company are payable directly
by the members pursuant to the Internal Revenue Code. Accordingly, no provision
has been made for Federal income taxes for the Company. However, certain state
and local jurisdictions do not recognize L.L.C. status for taxing purposes and
require taxes to be paid on net earnings. Furthermore, earnings of certain
foreign operations are taxable under local statutes. In jurisdictions where
L.L.C. status is not recognized or foreign corporate subsidiaries exist,
deferred taxes on income are provided for as temporary differences between the
financial and tax basis of assets and liabilities.
4. Commitments and Contingencies
The Company is involved in legal and administrative proceedings and claims
of various types. While any litigation contains an element of uncertainty,
management believes that the outcome of each such proceeding or claim which is
pending or known to be threatened, or all of them combined, will not have a
material adverse effect on the Company's consolidated financial position or
results of operations.
5. Debt
In June 1999, the Company amended the Senior Credit Agreement to allow for
supplemental term loan borrowings totalling $15.0 million. This additional
financing was used to reduce the Company's outstanding borrowings under the
Revolving Credit Facility.
6
<PAGE>
6. Restructure and Reorganization
In the second quarter of 1998, the Company announced a plan to restructure
its Connecticut shaver assembly and warehousing operations ("the Plan"). The
Plan consisted of relocating the shaver assembly operations to an existing
Remington partner-vendor located in Asia and relocating the warehousing function
to a third party provider in California. The Plan resulted in affecting the
employment of approximately 235 employees located at the Company's two
Connecticut facilities, the majority of which were factory employees. During
1998, the Company recorded total non-recurring charges of $9.6 million related
to the Plan, of which $6.8 million was charged to restructuring and
reorganization and $2.8 million was charged to cost of sales related to
inventory write-downs associated with the Plan.
In the fourth quarter of 1998, the Company substantially completed the
relocation of the Connecticut shaver assembly to Asia, and the relocation of the
Connecticut warehousing facility to a third party in California. In December
1998, the Company terminated substantially all of the affected employees, and
the remaining severance and other benefit costs continued to be paid out through
the end of the second quarter of 1999. As of December 31, 1998, the company
terminated its lease obligations with respect to certain equipment and machinery
utilized in the factory and warehouse, however, the Company must continue to pay
non-cancelable lease obligations for its Connecticut warehouse facility through
the end of third quarter 1999. Cash outlays in the first six months of 1999
totalled approximately $1.8 million and relate to severance and benefit costs
and lease obligations.There was no non cash activity in the first six months of
1999.
The following table summarizes the major components and activity related to
the restructuring and reorganization through June 30, 1999 (in thousands):
<TABLE>
<CAPTION>
Activity Through
June 30, 1999 Balance
1998 ------------------------------ June 30,
Provision Cash Non Cash 1999
-------- --------- ---------- --------
<S> <C> <C> <C> <C>
Severance and Benefit Costs $ 1,997 $ (1,932) - $ 65
Lease Obligations 871 (537) - 334
Equipment and Tooling Write-Down 3,534 - (3,534) -
Other Related Costs 404 (404) - -
------- --------- ---------- -------
Total Restructuring and Reorganization Charge 6,806 (2,873) (3,534) 399
Inventory Write-Downs 2,760 - (2,760) -
------- --------- ---------- -------
Total $ 9,566 $ (2,873) $ (6,294) $ 399
======= ========= ========== =======
</TABLE>
7. Comprehensive Income
Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources.
Comprehensive income consists of the following (in thousands):
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months ended June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Net income (loss) per consolidated
financial statements $(3,653) $(11,617) $(7,786) $(16,957)
Other comprehensive income:
Foreign currency translation adjustments (241) (747) (213) (280)
Net unrealized hedging gain(loss) (71) - 203
-------- --------- -------- ---------
Comprehensive income (loss) $(3,965) $(12,364) $(7,796) $(17,237)
======== ========= ======== =========
</TABLE>
7
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
The Company is a leading developer and marketer of men's and women's
electrical personal care appliances, including men's and women's electric
shavers and accessories, women's personal care appliances including hairsetters,
hair dryers and curling irons, men's electric grooming products, and other small
electric consumer appliances. The Company distributes its men's and women's
electrical personal care appliances through its three operating segments which
are comprised of 1) the United States segment, which sells product through
mass-merchant retailers, department stores and drug chains, 2) the International
segment, which sells product through an international network of subsidiaries
and distributors, and 3) the U.S. Service Stores segment comprised of more than
100 Company-owned and operated service stores.
Sales of the Company's products are highly seasonal, with a large percentage
of net sales occurring during the Christmas selling season. The Company
typically derives more than 40% of its annual net sales in the fourth quarter of
each year while the first quarter of each year is generally the Company's
weakest quarter. As a result of this seasonality, the Company's inventory and
working capital needs fluctuate substantially during the year.
Results of Operations
The following table sets forth the Company's unaudited consolidated
statements of operations, including net sales and operating income by its U.S.,
International and U.S. Service Stores operating segments, as well as the
Company's consolidated results of operations as a percentage of net sales for
the three months and six months ended June 30, 1999 and 1998.
8
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
-------------------------------------------- ----------------------------------------------
1999 1998 1999 1998
------------------- ------------------- --------------------- -------------------
$ % $ % $ % $ %
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales:
United States $28.9 48.7 $ 25.2 47.5 $ 46.5 45.1 $ 41.9 45.6
International 20.7 34.8 19.1 36.1 38.8 37.7 34.1 37.1
U.S. Service Stores 9.8 16.5 8.7 16.4 17.7 17.2 15.9 17.3
------- ------- ------- ------ ------ ----- ------- ------
59.4 100.0 53.0 100.0 103.0 100.0 91.9 100.0
Cost of sales 33.5 56.4 32.4 61.1 58.1 56.4 54.3 59.1
------- ------- ------- ------ ------ ----- ------- ------
Gross profit 25.9 43.6 20.6 38.9 44.9 43.6 37.6 40.9
Selling, general and
administrative 23.8 40.1 20.5 38.7 42.1 40.9 37.7 41.0
Amortization of intangibles 0.5 0.8 0.5 0.9 1.0 1.0 1.0 1.1
Restructure and Reorganization 6.5 12.3 - - 6.5 7.1
------- ------- ------- ------- ------ ----- ------- ------
Operating income (loss):
United States 1.3 2.2 (6.2) (11.7) 2.7 2.6 (5.3) (5.8)
International 1.5 2.5 0.2 0.4 1.7 1.6 (0.1) (0.1)
U.S. Service Stores 0.2 0.4 0.4 0.8 0.1 0.1 0.3 0.3
Depreciation and Amortization (1.4) (2.4) (1.3) (2.5) (2.7) (2.6) (2.5) (2.7)
------- -------- ------- ------- ------- ------ ------- ------
Total operating income (loss) 1.6 2.7 (6.9) (13.0) 1.8 1.7 (7.6) (8.3)
Interest expense 5.2 8.7 5.0 9.4 10.1 9.8 9.9 10.8
Other expense (income) 0.1 0.2 (0.1) ( 0.2) (0.2) (0.2) 0.1 0.1
------- -------- ------- ------- ------- ------ ------- ------
Income (loss) before income
taxes (3.7) (6.2) (11.8) (22.2) (8.1) (7.9) (17.6) (19.2)
Provision (benefit) for income
taxes - - (0.2) (0.4) (0.3) (0.3) (0.7) (0.8)
------- -------- -------- ------- ------- ----- ------- ------
Net income (loss) $(3.7) (6.2) $(11.6) (21.8) $ (7.8) (7.6) $(16.9) (18.4)
======= ======== ======== ======= ======= ===== ======= ======
</TABLE>
Second Quarter Ended June 1999 Versus June 1998
Net Sales. Net sales for the quarter ended June 30, 1999 were $59.4 million,
an increase of 12.1% compared to $53.0 million for the quarter ended June 30,
1998. Strong personal care and grooming sales, which benefited from new product
introductions, were the primary reasons for the sales increase in the quarter.
Worldwide shaver sales were also up over the prior year quarter.
Net sales in the United States were $28.9 million in the second quarter of
1999, an increase of 14.7% compared to $25.2 million in the second quarter of
1998. Sales of personal care products, particularly hair dryers and grooming
products, were the primary reasons for the U.S. sales increase in the quarter.
International net sales were $20.7 million in the second quarter of 1999, an
increase of 8.4% compared to $19.1 million in the second quarter of 1998. The
sales increase reflects good growth from all of the Company's major
international operations, particularly in the U.K. and Australia. These
increases were slightly offset by the continued weakness in the Asian export
markets.
Net sales through the Company's U.S. service stores increased 12.6% to $9.8
million in the second quarter of 1999 from $8.7 million in the second quarter of
1998. The increase is due to incremental sales from additional stores, as well
as same store sales increases of approximately 3.5%.
Gross Profit. Gross profit was $25.9 million, or 43.6% of net sales in the
second quarter of 1999, compared to $20.6 million, or 38.9% of net sales in the
second quarter of 1998. Included in cost of sales in 1998 is $1.5 million charge
for inventory markdowns in connection with the restructuring and reorganization.
Excluding this charge, the gross profit percentage in second quarter 1998 would
have been 41.5%. The increase in the percentage in 1999 is due to higher margins
on the newer products and cost savings from the restructuring and
reorganization.
Selling, General and Administrative. Selling, general and administrative
expenses increased to $23.8 million, or 40.1% of net sales in the second quarter
of 1999, as compared to $20.5 million or 38.7% of net sales in 1998, as a result
of higher distribution, selling and marketing expenses in 1999.
9
<PAGE>
Operating Income. The operating income in the second quarter of 1999 was
$1.6 million compared to operating income of $1.1 million in the second quarter
of 1998, before non-recurring charges of $8.0 million associated with the
restructure and reorganization. The increase in 1999 is a result of higher sales
in the second quarter 1999 offset by increased investments in operating
expenses.
Interest Expense. Interest expense of $5.2 million for the second quarter of
1999 was higher than second quarter of 1998 due to higher average outstanding
borrowings.
Income Tax (Benefit) Expense. The net benefit for income taxes for the
second quarter of 1999 was minimal compared to a net benefit of $0.2 million in
the second quarter of 1998, due to the increased profitability of the Company's
international business in 1999.
Six Months Ended June 1999 Versus June 1998
Net Sales. Net sales for the six months ended June 30, 1999 were $103.0
million, an increase of 12.1% compared to $91.9 million for the six months ended
June 30, 1998. Sales increased in all major business segments.
Net sales in the United States increased 11% to $46.5 million for the
first six months of 1999 compared to $41.9 million in the first six months of
1998. New product introductions in the second half of 1998 resulted in increased
demand primarily in personal care and grooming.
Net sales in the international business were $38.8 million in 1999, an
increase of 8% compared to $34.1 million in 1998. Strong personal care and
shaver sales were prevalent in the major international markets, offset somewhat
by declines in the Asian export markets.
Net sales through the Company's U.S. Service Stores increased 11% to $17.7
million in 1999. The increase is largely due to new store growth, while same
store sales increased 3.5% over 1998.
Gross Profit. Gross profit was $44.9 million, or 43.6% of sales for the
first six months of 1999 compared to $37.6 million or 40.9% of net sales in the
first six months of 1998. Included in 1998 cost of sales is $1.5 million
non-recurring charge for inventory markdowns in connection with the restructure
and reorganization of the Connecticut operations. Excluding this charge, the
gross profit percentage for the first six months of 1998 would have been 42.5%.
Higher margins on new product introductions and cost savings from the
restructuring and reorganiztion were the main reasons for the increased margin
percentage in 1999.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $42.1 million or 40.9% of net sales in 1999
compared to $37.7 million, or 41.0% of net sales in 1998. Although investments
in distribution as well as selling and marketing expenses were higher in 1999,
the total as a percentage of sales was slightly lower in 1999 due to the
incremental sales volume.
Operating Income (Loss). For the six months ended June 1999 operating
income was $1.8 million compared to $0.4 million before restructuring charges of
$8.0 million in the first six months of 1998. The increased operating income is
attributable to the increased sales, increased gross margin percentages, as well
as lower operating expenses as a percentage of sales in 1999.
Restructure and Reorganization Charge. In the second quarter of 1998, the
Company recorded an $8.0 million charge in connection with restructuring its
Connecticut operations, of which $1.5 million was charged to cost of sales and
$6.5 million was charged to restructure and reorganization. These restructurings
resulted in the shutdown of the assembly operations at its Bridgeport,
Connecticut facility. Additionally, the Company closed its Milford, Connecticut
warehouse and relocated this function to Southern California.
Interest Expense. Interest expense for the first six months of 1999 was
$10.1 million compared to $9.9 million in the first six months of 1998 due to
increased average outstanding borrowings in 1999.
10
<PAGE>
Income Tax Benefit. The benefit for income taxes in 1999 was reduced to
$0.3 million from $0.7 million in 1998 as a result of lower pre-tax losses in
the U.K.
Liquidity and Capital Resources
Net cash used in operating activities for the first six months of 1999 was
$15.1 million versus $1.1 million during the six months of 1998. The increase is
attributable to increased investments in inventories and somewhat slower
receivable collections.
The Company's operations are not capital intensive. During the first six
months of 1999 and 1998, the Company's capital expenditures totaled $1.4 million
and $1.9 million, respectively. Capital expenditures for 1999 are anticipated to
be approximately $4 million.
The Company borrowed approximately $1.0 million on various revolving credit
agreements and borrowed an additional $15.0 million under supplemental term
loans, net of repayment of $0.6 million during the second quarter of 1999.
The Company's primary sources of liquidity are funds generated from
operations and borrowings available pursuant to the Senior Credit Agreement. The
Senior Credit Agreement provides for $70 million in Revolving Credit Facilities
and $10 million in Term Loans that expire on June 30, 2002. The Revolving Credit
Facilities are subject to a borrowing base of 85% of eligible accounts
receivable and 60% of eligible inventory. The Revolving Credit Facilities'
borrowing base can be increased as needed up to $10 million over the applicable
percentage of eligible receivables and inventories (still limited to the $70
million total facilities). In June 1999, the Company amended the Senior Credit
Agreement to allow for supplemental term loan borrowings totalling $15.0
million, which were used to reduce outstanding revolver borrowings. As of June
30, 1999, the Company was in compliance with all covenants under the Senior
Credit Agreement and availability under the Revolving Credit Facilities was
approximately $12.8 million. The Company believes that cash generated from
operations and borrowing resources will be adequate to permit the Company to
meet both its debt service requirements and capital requirements for the next
twelve months, although no assurance can be given in this regard.
Restructure and Reorganization Charge
Year 2000 Compliance
The Company continues to assess its exposure related to the impact of the
Year 2000 date issue. The Year 2000 date issue arises from the fact that many
computer programs use only two digits to identify a year in a date field. The
Company's key financial and operational systems have been reviewed and the
majority of the systems did not require modifications. All required
modifications have been completed as of the end of the second quarter of 1999.
Costs incurred to date are not material and Management does not expect that any
potential future costs will have a material adverse impact on the Company's
financial position, results of operations or cash flows.
The Company could be adversely impacted by the Year 2000 date issue if
suppliers, customers and other businesses do not address this issue
successfully. The Company has a formalized comprehensive supplier compliance
program in place and responses from suppliers have been compiled and reviewed.
Based upon this analysis, Management does not believe that the Year 2000 date
issue will cause the Company to experience any significant difficulty in
obtaining products. The Company has also contacted its major customers and
financial institutions and has received assurances of Year 2000 date compliance
from a number of those contacted. Based upon these responses and other
inquiries, Management believes that its major customers will be Year 2000 date
compliant. Management continues to assess these risks in order to reduce the
impact on the Company.
There can be no guarantee that the Company, its suppliers and customers
will not experience Year 2000 difficulties. Management believes that the most
likely negative effects, should any occur, could include disruptions in receipts
of products, shipments to customers, and delays in the Company's receipt of
payments from customers and delays in the ability to pay certain suppliers.
11
<PAGE>
EURO Conversion
On January 1, 1999, eleven of fifteen member countries of the European Union
entered a three-year transition phase during which one common legal currency
(the "euro") was introduced. Beginning in January 2002, new euro-denominated
bills and coins will be issued, and local currencies will be removed from
circulation. Although the Company's international businesses affected by the
euro-conversion comprise less than 5% of the Company's annual net sales, the
Company has established various plans to address the issues raised by the euro
currency conversion. These issues include, among others, the need to adapt
computer and financial systems and business processes to accommodate
euro-denominated transactions and the impact of one common currency on pricing.
Based on its evaluation to date, Management believes that the introduction of
the euro, including total costs for the conversion, will not have a material
adverse impact on the Company's financial position, results of operations or
cash flows. The Company will continue to evaluate the impact of the euro
introduction.
Forward Looking Statements
This Management's Discussion and Analysis may contain forward-looking
statements which include assumptions about future market conditions, operations
and results. These statements are based on current expectations and are subject
to risks and uncertainties. They are made pursuant to safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Among the many factors
that could cause actual results to differ materially from any forward-looking
statements are the success of new product introductions and promotions, changes
in the competitive environment for the Company's product, changes in economic
conditions, foreign exchange risk and other factors discussed in prior
Securities and Exchange Commission filings by the Company. The Company assumes
no obligation to update these forward-looking statements or advise of changes in
the assumptions on which they were based.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
There are no material changes to the disclosure on this matter made in the
Company's report on Form 10-K for the year ended December 31, 1998.
PART II OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule.
(b) Reports on Form 8-K
(i) On June 11, 1999, the Company filed a Current Report on Form 8-K,
reporting under Item 2 the Sixth Amendment dated as of June 9, 1999,
to the Credit and Guarantee Agreement, dated as of May 23, 1998, among
Remington Products Company, L.L.C., certain of its subsidiaries and
various lending institutions.
12
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REMINGTON PRODUCTS COMPANY, L.L.C.
By: /s/ Kris J. Kelley
Kris J. Kelley, Vice President and Controller
Date: August 16, 1999
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001017710
<NAME> REMINGTON PRODUCTS COMPANY L.L.C.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
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0
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