- --------------------------------------------------------------------------------
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UNITED STATES
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 PERIOD ENDED JUNE 29, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______.
COMMISSION FILE NUMBER 1-52
[GRAPHIC OMITTED]
SUNBEAM CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 25-1638266
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1615 SOUTH CONGRESS AVENUE 33445
SUITE 200 (ZIP CODE)
DELRAY BEACH, FLORIDA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
(561) 243-2100
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)
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.
X --- Yes -- No
On July 18, 1997 there were 85,165,509 shares of the registrant's Common
Stock ($.01 par value) outstanding.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
QUARTERLY REPORT
ON FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations (Unaudited) for the three
and six months ended June 30, 1996 and June 29, 1997 ................... 3
Condensed Consolidated Balance Sheets as of December 29, 1996 and
June 29, 1997 (Unaudited) ................................................ 4
Condensed Consolidated Statements of Cash Flows (Unaudited) for the six
months ended June 30, 1996 and June 29, 1997 .............................. 5
Notes to Condensed Consolidated Financial Statements (Unaudited) ............. 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ............................................. 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders .................. 12
Item 6. Exhibits and Reports on Form 8-K .................................... 12
SIGNATURES ........................................................................... 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- --------------------------
JUNE 30, JUNE 29, JUNE 30, JUNE 29,
1996 1997 1996 1997
---------- ------------- ---------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales .......................................... $253,896 $ 287,609 $483,605 $ 541,059
Cost of goods sold ................................. 206,685 213,080 388,293 398,779
Selling, general and administrative expense ...... 38,054 31,559 70,639 64,567
--------- --------- --------- ----------
Operating earnings .............................. 9,157 42,970 24,673 77,713
Interest expense ................................. 3,410 2,973 6,445 4,966
Other (income) expense, net ........................ 917 (483) 2,254 (371)
--------- --------- --------- ----------
Earnings from continuing operations before
income taxes .................................... 4,830 40,480 15,974 73,118
Income taxes (benefit):
Current .......................................... 548 (4,655) 2,944 (5,706)
Deferred .......................................... 1,520 18,901 3,648 32,029
--------- --------- --------- ----------
2,068 14,246 6,592 26,323
--------- --------- --------- ----------
Earnings from continuing operations ............... 2,762 26,234 9,382 46,795
Earnings (loss) from discontinued operations,
net of taxes .................................... 4,443 -- 15,184 (13,713)
--------- --------- --------- ----------
Net earnings ....................................... $ 7,205 $ 26,234 $ 24,566 $ 33,082
========= ========= ========= ==========
Net earnings per share of common stock from
continuing operations ........................... $ .03 $ .30 $ .11 $ .54
========= ========= ========= ==========
Net earnings per share of common stock ............ $ .09 $ .30 $ .30 $ .38
========= ========= ========= ==========
Average number of common and common equivalent
shares outstanding .............................. 82,449 87,546 82,481 87,321
Dividends declared per share of common stock ...... $ .01 $ .01 $ .02 $ .02
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 29, JUNE 29,
1996 1997
-------------- ---------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .......................................... $ 11,526 $ 57,970
Receivables, net ................................................... 213,438 252,045
Inventories ......................................................... 162,252 208,374
Net assets of discontinued operations and other assets held for sale 102,847 5,549
Deferred income taxes ............................................. 93,689 58,582
Prepaid expenses and other current assets ........................... 40,411 52,328
----------- -----------
Total current assets ............................................. 624,163 634,848
Property, plant and equipment, net ................................. 220,088 229,339
Trademarks and trade names, net .................................... 200,262 197,651
Other assets ......................................................... 28,196 27,507
----------- -----------
$ 1,072,709 $ 1,089,345
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion of long-term debt ............... $ 921 $ 749
Accounts payable ................................................... 107,319 136,489
Restructuring accrual ............................................. 63,834 31,223
Other current liabilities .......................................... 99,509 89,688
----------- -----------
Total current liabilities ....................................... 271,583 258,149
Long-term debt ...................................................... 201,115 174,855
Non-operating and other long-term liabilities ........................ 152,451 144,738
Deferred income taxes ................................................ 52,308 55,894
Shareholders' equity:
Common stock (issued 88,441,479 and 89,631,483 shares) ............ 884 896
Other shareholders' equity .......................................... 457,756 518,057
Treasury stock, at cost (4,478,814 and 4,468,530) .................. (63,388) (63,244)
----------- -----------
Total shareholders' equity ....................................... 395,252 455,709
----------- -----------
$ 1,072,709 $ 1,089,345
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
------------------------------
JUNE 30, JUNE 29,
1996 1997
------------- --------------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings ......................................................... $ 24,566 $ 33,082
Adjustments to reconcile net earnings to net cash used in
operating activities:
Depreciation and amortization ....................................... 23,363 19,790
Loss on sale of discontinued operations, net of taxes ............... - 13,713
Deferred income taxes ................................................ 3,648 32,029
Changes in working capital and other, including restructuring spending (58,802) (102,792)
---------- -----------
Net cash used in operating activities .............................. (7,225) (4,178)
---------- -----------
INVESTING ACTIVITIES:
Capital expenditures ................................................ (34,923) (26,710)
Proceeds from sale of divested operations and other assets ............ -- 84,718
---------- -----------
Net cash provided by (used in) investing activities .................. (34,923) 58,008
---------- -----------
FINANCING ACTIVITIES:
Net borrowings (payments) under revolving credit facility ............ 45,000 (15,000)
Issuance of long-term debt ............................................. 6,500 -
Payments of debt obligations .......................................... (690) (11,810)
Proceeds from exercise of stock options .............................. 1,138 20,284
Other .................................................................. (2,279) (860)
---------- -----------
Net cash provided by (used in) financing activities .................. 49,669 (7,386)
---------- -----------
Net increase in cash and cash equivalents .............................. 7,521 46,444
Cash and cash equivalents at beginning of period ........................ 28,273 11,526
---------- -----------
Cash and cash equivalents at end of period .............................. $ 35,794 $ 57,970
========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. OPERATIONS AND BASIS OF PRESENTATION
Sunbeam Corporation (the "Company") is a leading designer, manufacturer,
and marketer of consumer branded products. The Sunbeam/registered trademark/
and Oster/registered trademark/ brands have been household names for
generations, and the Company is a market share leader in many of its product
categories.
The Company markets its products through virtually every category of
retailer including mass merchandisers, catalog showrooms, warehouse clubs,
department stores, catalogs, Company-owned outlet stores, television shopping
channels, hardware stores, home centers, drug and grocery stores, pet supply
retailers, as well as independent distributors and the military. The Company
also sells its products to commercial consumers such as hotels and other
institutions.
In the opinion of management, the unaudited condensed consolidated
financial statements furnished herein include all adjustments (consisting only
of normal recurring adjustments with the exception of the loss from
discontinued operations in the first quarter of 1997) necessary for a fair
presentation of the results of operations for the interim periods presented.
These interim results of operations are not necessarily indicative of results
for the entire year. Certain prior year amounts have been reclassified to
reflect discontinued operations as described in Note 4. The condensed
consolidated financial statements contained herein should be read in
conjunction with the consolidated financial statements and related notes
contained in the Company's 1996 Annual Report on Form 10-K ("Form 10-K").
2. SUPPLEMENTAL FINANCIAL STATEMENT DATA
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 29, JUNE 29,
1996 1997
-------------- --------------
<S> <C> <C>
Inventories:
Finished goods ................................. $ 84,813 $ 81,940
Work in process ................................. 25,167 55,435
Raw materials and supplies ..................... 52,272 70,999
----------- -----------
$ 162,252 $ 208,374
=========== ===========
Property, plant and equipment:
Land .......................................... $ 2,524 $ 1,994
Buildings and improvements ..................... 95,619 89,829
Machinery and equipment ........................ 258,199 274,145
----------- -----------
356,342 365,968
Accumulated depreciation and amortization ...... (136,254) (136,629)
----------- -----------
$ 220,088 $ 229,339
=========== ===========
Trademarks and trade names:
Gross .......................................... $ 237,054 $ 237,054
Accumulated amortization ........................ (36,792) (39,403)
----------- -----------
$ 200,262 $ 197,651
=========== ===========
</TABLE>
6
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)
2. SUPPLEMENTAL FINANCIAL STATEMENT DATA--(CONTINUED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------------
JUNE 30, JUNE 29,
1996 1997
---------- --------------
<S> <C> <C>
Cash paid during the period for:
Interest, net of $212 and $256 interest capitalized in
1996 and 1997, respectively ..................... $ 6,185 $ 7,276
======= ==========
Income tax refunds ................................. $ (656) $ (11,952)
======= ==========
</TABLE>
Non-Cash Transaction:
In connection with a warehouse expansion, the Company entered into a $5.0
million capital lease obligation in 1996.
3. RESTRUCTURING
During the fourth quarter of 1996, the Company initiated a restructuring
and growth plan. As a result, the Company recorded a pre-tax special charge to
earnings of approximately $337.6 million in the fourth quarter of 1996 of which
approximately 20% was for cash items.
During the first and second quarter of 1997, the restructuring accrual was
reduced by $32.6 million as a result of cash and non-cash charges. The
following table sets forth the details and the cumulative activity in the
restructuring accrual as of June 29, 1997 (in millions):
<TABLE>
<CAPTION>
ACCRUAL BALANCE CASH NON-CASH ACCRUAL BALANCE
AT DECEMBER 29, 1996 REDUCTIONS REDUCTIONS AT JUNE 29, 1997
---------------------- ------------ ------------ -----------------
<S> <C> <C> <C> <C>
Severance and other
employee costs ........................ $36.9 $ (13.9) $ (5.5) $17.5
Closure and consolidation of
facilities and related exit costs ...... 26.9 (13.2) -- 13.7
------ -------- ------- ------
Total .................................... $63.8 $ (27.1) $ (5.5) $31.2
====== ======== ======= ======
</TABLE>
4. DISCONTINUED OPERATIONS AND OTHER ASSETS HELD FOR SALE
In February 1997, the Company entered into an agreement to sell its
furniture business (by a sale of assets) to a subsidiary of U.S. Industries,
Inc. which sale was completed on March 17, 1997. The Company initially recorded
a provision for estimated losses to be incurred on the sale of the furniture
business of $32.4 million, net of applicable income tax benefits, for the
fiscal year ended December 29, 1996. During the first quarter of 1997, upon the
completion of the sale, the Company provided for additional losses on disposal
of the furniture business in the amount of $13.7 million, net of applicable
income tax benefits as a result of lower than anticipated sales proceeds.
In May 1997, the Company completed the sale of its Biddeford, Maine textile
facility to an employee led investment group for $10.5 million.
7
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)
5. CREDIT FACILITIES AND LONG-TERM DEBT
In July 1997, the Company reduced the amount of available borrowings under
its September 1996 unsecured five year revolving credit facility from $500
million to $250 million as a result of improved cash flow and lower future
anticipated borrowing needs. At June 29, 1997, the Company had $90 million of
borrowings outstanding under the revolving credit facility. During the first
half of 1997, the Company also repaid $11.8 million of other long-term
borrowings related to the divested furniture operations and other assets sold.
6. EARNINGS PER SHARE
During the first quarter of 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard ("SFAS") No. 128, Earnings
Per Share, which supersedes Accounting Principles Board Opinion No. 15,
EARNINGS PER SHARE. SFAS No. 128 is effective for financial statements for both
interim and annual periods after December 15, 1997. Early application is
prohibited; although, footnote disclosure of proforma earnings per share
("EPS") amounts computed under SFAS No. 128 is permitted, as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------- ----------------------
JUNE 30, JUNE 29, JUNE 30, JUNE 29,
1996 1997 1996 1997
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Primary EPS as reported ............ .09 .30 .30 .38
Effect of SFAS No. 128 ............ - .01 - .01
---- ---- ---- ----
Basic EPS as restated ............... .09 .31 .30 .39
==== ==== ==== ====
Fully diluted EPS as reported ...... .09 .30 .30 .38
Effect of SFAS No. 128 ............ -- -- -- --
---- ---- ---- ----
Diluted EPS as restated ............ .09 .30 .30 .38
==== ==== ==== ====
</TABLE>
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
accompanying condensed consolidated financial statements for the three and six
months ended June 30, 1996 and June 29, 1997 and the 1996 Form 10-K.
RESULTS OF OPERATIONS
The table below sets forth selected operating data of the Company for the
three and six months ended June 30, 1996 and June 29, 1997:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------- ----------------------
JUNE 30, JUNE 29, JUNE 30, JUNE 29,
1996 1997 1996 1997
------------ ---------- ---------- ---------
<S> <C> <C> <C> <C>
Net sales ....................................... 100.0% 100.0% 100.0% 100.0%
Cost of goods sold .............................. 81.4 74.1 80.3 73.7
------ ------ ------- ------
Gross margin .................................... 18.6 25.9 19.7 26.3
Selling, general and administrative expense ...... 15.0 11.0 14.6 11.9
------ ------ ------- ------
Operating earnings .............................. 3.6% 14.9% 5.1% 14.4%
========== ====== ======= ======
</TABLE>
Net sales from continuing operations for the three and six months ended
June 29, 1997, were $287.6 million and $541.1 million, respectively, an
increase of $33.7 million (13.3%) and an increase of $57.5 million (11.9%) over
the comparable periods in the prior year. Net sales on a normalized basis,
after excluding divested product lines which are not classified as discontinued
operations (time and temperature products, decorative bedding and
Counselor/registered trademark/ & Borg/registered trademark/ branded scales),
increased 16.6% and 14.7% for the three and six months ended June 29, 1997,
respectively.
Global sales, on a normalized basis, increased during the first half of
1997 in all five of the Company's global product categories - Appliances,
Health Care, Personal Care and Comfort, Outdoor Cooking and Away from Home.
Global sales growth exceeded 20% during the second quarter of 1997 in the
Appliances, Personal Care and Comfort, and Away from Home product categories
and sales grew over 11% in the Outdoor Cooking category. Also contributing to
the Company's sales growth in 1997 were its new retail outlet stores, of which
ten were open in the first half of the year. International sales grew over 25%
during the second quarter and almost 20% for the six months ended June 29,
1997, driven primarily by 42 new 220 volt product introductions and the
execution of 20 new international distribution and license agreements during
the past nine months. Domestic sales increased almost 11% during the second
quarter and 10% for the six months, primarily from improved distribution, new
product introductions and the first growth in the Outdoor Cooking category in
three years.
The gross margin percentage for the second quarter of 1997 increased 7.3
percentage points, to 25.9%, while the gross margin percentage for the first
half of 1997 increased 6.6 percentage points to 26.3%. These increases reflect
the results of many cost savings and margin enhancement initiatives undertaken
as part of the Company's restructuring plan announced in November 1996 coupled
with the incremental margin attributable to higher revenues associated with the
Company's growth plan. The Company's cost reduction initiatives included
reducing the number of manufacturing facilities from 26 to 9 currently (with
one additional manufacturing facility scheduled to be closed later in 1997) and
warehouses from 61 to 18. In addition, the Company has taken other actions to
enhance margins, including the elimination of low margin and/or unprofitable
products/stock keeping units (SKU'S) and the consolidation of the Company's
purchasing activities and re-negotiation of supply contracts resulting in
procurement savings for raw materials.
The Company has essentially completed its restructuring plan and has
recently initiated a refinement program targeted at aggressively improving
factory productivity at all of its remaining
9
<PAGE>
operations, and in particular at the Neosho, Missouri Outdoor Cooking Products
facility which suffered from poor productivity and operating inefficiencies
during the 1997 grill season. The refinement of the Neosho facility, which will
be completed prior to the initiation of production for the 1998 grill season in
the third quarter of 1997, includes a re-layout to improve material flow,
increased usage of common parts in the manufacturing process and modifications
to the paint system to increase capacity and throughput. These initiatives
coupled with the re-negotiation of customer contracts for the 1998 season are
expected to further improve Outdoor Cooking gross margins in 1998.
Operating earnings for the quarter ended June 29, 1997 increased $33.8
million over the prior year to $43.0 million, or 369%. For the first half of
1997, operating earnings were $77.7 million, an increase of $53.0 million over
the comparable prior year period. As a percentage of sales, operating margin of
14.9% increased 11.3 percentage points above last year's second quarter. For
the first six months of 1997, the operating margin was 14.4%, an increase of
9.3 percentage points over the comparable prior year period. The operating
margin improvements for 1997 were the result of the improved gross margin
discussed above and lower selling, general and administrative ("SG&A") costs in
1997 associated with the consolidation of six divisional and regional
headquarters into one, reduced staffing levels, the outsourcing of certain
back-office functions and the reduction in the number of warehouses. These cost
reduction initiatives coupled with increased sales resulted in SG&A decreasing
as a percentage of sales from 15.0% and 14.6% for the three month and six month
periods ended June 30, 1996 to 11.0% and 11.9% for the comparable periods of
1997, respectively.
Interest expense for the three and six months ended June 29, 1997
decreased $.4 million and $1.4 million, respectively, as a result of lower
borrowings levels in 1997. Other (income) expense changed from expense of
$.9 million and $2.3 million in the three and six months ended June 30, 1996,
respectively, to income of $.5 million and $.4 million in the comparable 1997
periods. This change is primarily attributable to higher foreign exchange
losses in 1996 associated with the April 1996 Venezuelan currency devaluation.
The overall effective income tax rate for earnings from continuing and
discontinued operations for the six months ended June 29, 1997 was 36.0%, a 1.0
percentage point decrease from the overall prior year effective tax rate. This
decrease reflects lower foreign taxes from the utilization of foreign tax
credits and loss carryforwards and lower state income taxes.
For the three months ended June 29, 1997, the Company's earnings from
continuing operations were $26.2 million, an increase of $23.4 million over
earnings from continuing operations of $2.8 million in 1996. For the first half
of 1997 earnings from continuing operations increased $37.4 million to $46.8
million. Earnings per share from continuing operations for the second quarter
of 1997 of $.30 per share was 900% better than the $.03 per share reported
during the second quarter of 1996. On a year to date basis, earnings per share
from continuing operations of $.54 per share increased nearly five times
greater than the $.11 per share reported in the first half of 1996. The
Company's share base utilized in the earnings per share calculation increased
approximately 6% for both the three and six month periods ended June 29, 1997
as a result of an increase in the number of shares of common stock and common
stock equivalents outstanding due to the exercise of stock options and a higher
market value of the Company's common stock in 1997.
The Company's discontinued furniture operations, which were sold in March
1997, broke-even in 1997 on revenues of $51.6 million. In 1996, net earnings of
the discontinued furniture operations were $4.4 million for the second quarter
and $15.2 million for the six months ended June 30, 1996, on revenues of $92.0
million and $202.2 million for the three and six months periods, respectively.
During the first quarter of 1997, upon completion of the sale of the furniture
business, the Company provided for additional losses on the disposal in the
amount of $13.7 million, net of applicable tax benefits, as a result of lower
than anticipated sales proceeds. As a result of the sale of the furniture
business and the additional loss provision recorded in the first quarter of
1997, the Company's net earnings for the six months ended June 29, 1997 were
$33.1 million, an increase of $8.5 million from the net earnings of $24.6
million in the first half of 1996.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At June 29, 1997, the Company had cash and cash equivalents of $58.0
million and total debt of $175.6 million. Cash used in operating activities for
the six months ended June 29, 1997 was $4.2 million compared to $7.2 million
for the comparable period of 1996. This decrease is primarily attributable to
the increases in earnings before non-cash charges in 1997, offset by higher
accounts receivable due to increased sales in 1997 and cash expenditures in
1997 under the Company's restructuring plan.
Capital spending totaled $26.7 million for the first half of 1997 and was
primarily made for new products, cost reduction and capacity expansion
initiatives. Cash provided by investing activities also reflects $84.7 million
in proceeds from sales of businesses, assets and product categories determined
to be non-core to the Company's ongoing operations in conjunction with the 1996
restructuring plan. Cash used in financing activities totaled $7.4 million in
1997 and reflects the repayment of $15.0 million in borrowings under the
Company's revolving credit facility and $11.8 million of debt related to the
divested furniture operations and other assets sold offset by $20.3 million in
cash proceeds from the exercise of stock options during the first half of 1997,
substantially all by former employees of the Company. In 1996, cash provided by
financing activities of $49.6 million was primarily from increased borrowings
to support working capital and capital spending requirements. In July 1997, the
Company reduced the amount of available borrowings under its September 1996
unsecured five year revolving credit facility from $500 million to $250 million
as a result of improved cash flow and lower future anticipated borrowing needs.
The Company believes that its cash flow from operations, existing cash and
cash equivalent balances as well as its revolving credit facility will be
sufficient to finance its requirements to support working capital needs,
capital expenditures, restructuring expenditures and debt service in the
foreseeable future.
CAUTIONARY STATEMENTS
Certain of the information contained herein may contain "forward-looking"
information, as such term is defined by the Private Securities Litigation
Reform Act of 1995 and in releases made by the Securities and Exchange
Commission ("SEC"). Actual results could differ materially from those
projected in the forward-looking statements as a result of various factors,
including those set forth in Part 1, Item 1 under the heading "Cautionary
Statements" in the 1996 Form 10-K, which cautionary statements are incorporated
herein by reference.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of Shareholders of the Company was held on June 11,
1997, for the purpose of considering and voting on the election of Directors.
The Company's Directors were elected by the following vote:
<TABLE>
<CAPTION>
NUMBER OF SHARES
TO ELECT THE FOLLOWING -------------------------
NOMINEES AS DIRECTORS
OF THE COMPANY FOR WITHHELD
- ----------------------- ------------ ----------
<S> <C> <C>
Albert J. Dunlap 70,436,644 1,309,962
Charles M. Elson 70,480,901 1,265,705
Russell A. Kersh 70,425,165 1,321,441
Howard G. Kristol 70,430,620 1,315,986
Peter A. Langerman 70,470,270 1,276,336
William T. Rutter 70,612,689 1,133,917
Faith Whittlesey 70,613,439 1,133,167
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
11. Calculation of Earnings Per Share of Common Stock.
27. Financial Data Schedule, submitted electronically to the Securities and
Exchange Commission for information only and not filed.
99.1 Press Release dated July 23, 1997, regarding second quarter 1997 earnings.
(b) Reports on Form 8-K
The Company has not filed any reports on Form 8-K during the second quarter of
1997.
12
<PAGE>
SIGNATURES
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.
SUNBEAM CORPORATION
Date: July 23, 1997 By: /s/ Russell A. Kersh
-----------------------------------
Russell A. Kersh
Executive Vice President,
Finance and Administration
(Principal Financial Officer
and duly authorized to sign
on behalf of the Registrant)
13
<PAGE>
EXHIBIT INDEX
EXHIBIT
- -------
11. Calculation of Earnings Per Share of Common Stock.
27. Financial Data Schedule, submitted electronically to the Securities and
Exchange Commission for information only and not filed.
99.1 Press Release dated July 23, 1997, regarding second quarter 1997
earnings.
EXHIBIT 11
SUNBEAM CORPORATION AND SUBSIDIARIES
CALCULATIONS OF EARNINGS
PER SHARE OF COMMON STOCK
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------- ----------------------
JUNE 30, JUNE 29, JUNE 30, JUNE 29,
1996 1997 1996 1997
---------- ---------- ---------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net earnings applicable to common shareholders ............ $ 7,205 $26,234 $24,566 $33,082
======== ======== ======== ========
Weighted average number of common shares outstanding ...... 82,069 84,815 82,026 84,501
Add:
Common shares issuable for exercise of options, net of
shares assumed to have been acquired with proceeds
therefrom ............................................. 380 2,731 455 2,820
-------- -------- -------- --------
Number of shares applicable to earnings per
share calculation ....................................... 82,449 87,546 82,481 87,321
======== ======== ======== ========
Earnings per share of common stock ........................ $ .09 $ .30 $ .30 $ .38
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SUNBEAM CORPORATION FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 29, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> JUN-29-1997
<CASH> 57,970
<SECURITIES> 0
<RECEIVABLES> 252,045
<ALLOWANCES> 0
<INVENTORY> 208,374
<CURRENT-ASSETS> 634,848
<PP&E> 365,968
<DEPRECIATION> 136,629
<TOTAL-ASSETS> 1,089,345
<CURRENT-LIABILITIES> 258,149
<BONDS> 174,855
0
0
<COMMON> 896
<OTHER-SE> 454,813
<TOTAL-LIABILITY-AND-EQUITY> 1,089,345
<SALES> 541,059
<TOTAL-REVENUES> 541,059
<CGS> 398,779
<TOTAL-COSTS> 398,779
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,966
<INCOME-PRETAX> 73,118
<INCOME-TAX> 26,323
<INCOME-CONTINUING> 46,795
<DISCONTINUED> (13,713)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,082
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
EXHIBIT 99.1
[GRAPHIC OMITTED]
FOR IMMEDIATE RELEASE:
SUNBEAM ANNOUNCES 16.6% ONGOING SALES GROWTH
EPS OF $0.30 CLIMBS 900% OVER PRIOR YEAR PERIOD
DELRAY BEACH, FLORIDA JULY 23, 1997 - Sunbeam Corporation (NYSE:SOC) announced
today its second quarter 1997 results. Sales for the quarter were $287.6
million, reflecting a 16.6% increase over the prior year period on a comparable
basis (excluding discontinued businesses and divested product lines). Earnings
per share from continuing operations of $0.30 were 900% ahead of the $0.03
reported in the second quarter of 1996. On a year to date basis, revenue of
$541.1 million was 14.7% above 1996, on a comparable basis, and earnings per
share from continuing operations of $0.54 were 391% above the $0.11 reported in
1996.
In making the announcement, Al Dunlap, Sunbeam's Chairman and Chief Executive
Officer, said, "These financial results show that we have accelerated the growth
experienced in the first quarter of 1997, and they validate our strategy to
divest non-core businesses, rationalize SKU's and focus like a laser on growing
core businesses." Mr. Dunlap, who took over Sunbeam on July 18, 1996, said,
"Contrary to views that this is a slow-growth industry, if you introduce
innovative products and get them to market on time, this can be an outstanding
business with great returns for shareholders."
Mr. Dunlap attributed the impressive second quarter sales results to strong
increases in the Company's global Appliance (up 24%) and Outdoor Cooking (up 11%
after three years of declines) categories which comprised approximately 80%
percent of Sunbeam's sales in the quarter. International sales were up 26%,
driven primarily by 42 new product introductions and the signing of 20 new
international distribution and license agreements during the past nine months.
Domestic sales growth of 14% was attributable to improved distribution, new
product introductions and the first sustained growth in the grill business in
over three years. "Sales to our top ten domestic customers were up over 20%
reflecting our strategic initiative to significantly improve shipping
performance," Mr. Dunlap said.
On a reported basis, Sunbeam's sales for the second quarter and first six months
of 1997 were up slightly less, 13.3% and 11.9%, respectively because of
accounting rules which require that certain divested businesses (time &
temperature products, decorative bedding and Counselor & Borg branded scales)
not be classified as discontinued operations.
"I believe that the toughest quarterly comparison is now behind us, and I look
forward to a continuation of these remarkable financial results, including
strong double digit sales growth, during the balance of the year as we
accelerate introduction of new products such as the soft serve ice cream maker,
a high-end gas grill line and some from our secret product room," Mr. Dunlap
said.
Sunbeam Corporation is a leading consumer products company that designs,
manufactures and markets, nationally and internationally, a diverse portfolio of
brand name products. The Company's Sunbeam(R) and Oster(R) brands have been
household names for generations, both domestically and abroad, and the Company
is a market leader in many of its product categories.
<PAGE>
CAUTIONARY STATEMENT: Statements contained in this press release, including
statements relating to the Company's expectations regarding anticipated
performance in the future, are all "forward looking statements" as such term is
defined in the Private Securities Litigation Reform Act of 1995. Actual results
could differ materially from the Company's statements regarding its
expectations, goals or projected results, due to various factors, including
those set forth in the Company's Cautionary Statements contained in its Form
10-K, filed with the Securities and Exchange Commission on March 31, 1997.
****************************************
Contact: Media: Investors:
Mari Hope Rich Goudis
(212)885-0339 (561)243-2142
<PAGE>
<TABLE>
<CAPTION>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except EPS)
SIX MONTHS ENDED THREE MONTHS ENDED
--------------------------------------- --------------------------------------
JUNE 29, JUNE 30, JUNE 29, JUNE 30,
1997 1996 1997 1996
------------------ ----------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Net sales $541.1 $483.6 $287.6 $253.9
Cost of goods paid 398.8 388.3 213.1 206.7
------------------ ----------------- ------------------ ------------------
Gross profit 142.3 95.3 74.5 47.2
% of sales 26.3% 19.7% 25.9% 18.6%
Selling, general & administrative expense 64.6 70.6 31.6 38.0
------------------ ----------------- ------------------ ------------------
Operating earnings 77.7 24.7 42.9 9.2
% of sales 14.4% 5.1% 14.9% 3.6%
Interest expense 5.0 6.4 3.0 3.4
Other (income) expense, net (0.4) 2.3 (0.5) 0.9
------------------ ----------------- ------------------ ------------------
Earnings from continuing operations before
income taxes 73.1 16.0 40.4 4.9
Income taxes 26.3 6.6 14.2 2.1
------------------ ----------------- ------------------ ------------------
Earnings from continuing operations 46.8 9.4 26.2 2.8
Earnings (loss) from discontinued operations,
net of taxes (13.7) 15.2 - 4.4
------------------ ----------------- ------------------ ------------------
Net earnings $33.1 $24.6 $26.2 $7.2
================== ================= ================== ==================
Earnings per share from continuing operations $0.54 $0.11 $0.30 $0.03
================== ================= ================== ==================
Earnings per share $0.38 $0.30 $0.30 $0.09
================== ================= ================== ==================
Average number of common shares outstanding 87.3 82.5 87.5 82.5
</TABLE>
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
<TABLE>
<CAPTION>
June 29, December 29,
1997 1996
-------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $58.0 $11.5
Receivables, net 252.0 213.4
Inventories 208.4 162.3
Net assets of discontinued operations and other assets
held for sale 5.5 102.8
Deferred income taxes 58.6 93.7
Prepaid expenses and other current assets 52.3 40.4
--------- ---------
Total current assets 634.8 624.1
Property, plant and equipment, net 229.3 220.1
Trademarks and trade names, net 197.7 200.3
Other assets 27.5 28.2
--------- ---------
$1,089.3 $1,072.7
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current portion
of long-term debt $0.7 $0.9
Accounts payable 136.5 107.3
Restructuring accrual 31.2 63.8
Other current liabilities 89.7 99.5
--------- ---------
Total current liabilities 258.1 271.5
Long-term debt 174.9 201.1
Deferred income taxes 55.9 52.3
Non-operating and other long-term liabilities 144.7 152.5
Shareholders' equity 455.7 395.3
--------- ---------
$1,089.3 $1,072.7
========= =========
</TABLE>
<PAGE>
SUNBEAM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in millions)
<TABLE>
<CAPTION>
Six Months Ended
---------------------------
June 29, June 30,
1997 1996
-------- ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $33.1 $24.6
Depreciation and amortization 19.8 23.3
Deferred income taxes 32.0 3.6
Loss on sale of discontinued operations, net of taxes 13.7 -
Changes in working capital and other, including
restructuring spending (102.8) (58.7)
--------- -------
(4.2) (7.2)
INVESTING ACTIVITIES
Capital expenditures (26.7) (34.9)
Proceeds from sale of divested operations and other assets 84.7 -
--------- -------
58.0 (34.9)
FINANCING ACTIVITIES
Net borrowings (payments) under revolving credit facility (15.0) 45.0
Issuance of long-term debt - 6.5
Payment of debt obligations (11.8) (0.7)
Proceeds from exercise of stock options 20.3 1.1
Other (0.8) (2.3)
--------- -------
(7.3) 49.6
--------- -------
Net increase in cash and cash equivalents 46.5 7.5
Cash and cash equivalents, beginning of period 11.5 28.3
--------- -------
Cash and cash equivalents, end of period $58.0 $35.8
========= =======
</TABLE>
