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 quarterly period ended October 25, 1997
Commission file number 1-5452
ONEIDA LTD.
(Exact name of Registrant as specified in its charter)
NEW YORK 15-0405700
(State or other jurisdiction of I.R.S. Employer Identification
incorporation or organization) Number
ONEIDA, NEW YORK 13421
(Address of principal executive offices) (Zip code)
(315) 361-3636
(Registrant's telephone number, including area code)
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of November 21, 1997: 11,179,854
<PAGE>
ONEIDA LTD.
FOR THE THREE MONTHS ENDED OCTOBER 25, 1997
FORM 10-Q
INDEX
PART I FINANCIAL INFORMATION
Consolidated Statement of Operations
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II OTHER INFORMATION
No other information required to be filed for this quarter.
ITEM 6 (b)
There were no reports filed under 8-K for this quarter.
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<TABLE>
ONEIDA LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
(Thousands except per OCT 25, OCT 26, OCT 25, OCT 26,
share amounts) 1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET SALES........................... $116,559 $101,378 $316,116 $270,839
COST OF SALES....................... 72,052 66,047 197,166 177,188
------- ------- ------- -------
GROSS MARGIN........................ 44,507 35,331 118,950 93,651
------- ------- ------- -------
OPERATING EXPENSES:
Selling, advertising and distrib... 19,681 17,098 55,910 49,764
General and administrative......... 10,636 7,659 28,762 20,559
------- ------- ------- -------
Total............................. 30,317 24,757 84,672 70,323
------- ------- ------- -------
INCOME FROM OPERATIONS.............. 14,190 10,574 34,278 23,328
OTHER EXPENSE....................... 190 244 672 667
INTEREST EXPENSE.................... 1,600 1,603 5,125 4,677
------- ------- ------- -------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES................ 12,400 8,727 28,481 17,984
PROVISION FOR INCOME TAXES.......... 4,743 3,421 10,894 7,055
------- ------- ------- -------
INCOME FROM CONTINUING OPERATIONS... 7,657 5,306 17,587 10,929
------- ------- ------ ------
LOSS FROM DISCONTINUED OPERATIONS... (105) (304)
GAIN ON DISPOSAL OF
DISCONTINUED OPERATIONS (NOTE 2:).. (900) 2,566 (900)
------- ------- ------- -------
Total.............................. (1,005) 2,566 (1,204)
------- ------- ------- -------
NET INCOME.......................... $ 7,657 $ 4,301 $ 20,153 $ 9,725
------- ------- ------- -------
PER SHARE OF COMMON STOCK: (1)
Continuing Operations.............. $.45 $.31 $1.05 $.65
Discontinued Operations............ (.06) .15 (.07)
Net Income......................... .45 .25 1.20 .58
Cash Dividends Declared............ .09 .09 .35 .26
Shares used in per share data....... 16,869 16,743 16,593 16,694
<FN>
(1): Amounts have been restated for the effect of the Company's three for two
common stock split, announced November 25, 1997. See Note 7 to these financial
statements.
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
OCTOBER 25, 1997 AND JANUARY 25, 1997
(Thousands)
OCT 25, JAN 25,
ASSETS 1997 1997
-------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash....................................... $ 3,946 $ 3,183
Accounts receivable........................ 67,138 47,384
Less allowance for doubtful accounts....... (1,740) (1,797)
Other accounts and notes receivable........ 3,474 3,122
Inventories:
Finished goods............................. 99,890 93,339
Goods in process........................... 15,765 14,798
Raw materials and supplies................. 16,945 16,156
Other current assets....................... 12,002 13,393
Net assets of discontinued operations...... 33,762
------- -------
Total current assets...................... 217,420 223,340
------- -------
PROPERTY, PLANT AND EQUIPMENT-At cost:
Land and buildings......................... 47,950 45,502
Machinery and equipment.................... 155,803 149,927
------- -------
Total..................................... 203,753 195,429
Less accumulated depreciation.............. 125,011 116,283
------- -------
Property, plant & equipment-net............ 78,742 79,146
------- -------
OTHER ASSETS:
Cost in excess of assets acquired-net...... 30,585 32,375
Other assets............................... 25,077 15,367
------- -------
TOTAL...................................... $351,824 $350,228
------- -------
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
OCTOBER 25, 1997 AND JANUARY 25, 1997
(Thousands)
OCT 25, JAN 25,
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1997
-------- --------
<S> <C> <C>
CURRENT LIABILITIES:
Short-term debt............................ $ 12,000 $ 15,593
Accounts payable........................... 20,647 14,176
Accrued liabilities........................ 48,893 37,082
Current installments of long-term debt..... 4,709 29,703
------- -------
Total current liabilities................. 86,249 96,554
------- -------
LONG-TERM DEBT............................. 67,736 68,126
------- -------
OTHER LIABILITIES:
Accrued postretirement liability........... 53,226 52,273
Other liabilities.......................... 12,261 14,957
------- -------
Total..................................... 65,487 67,230
------- -------
STOCKHOLDERS' EQUITY:
Cumulative 6% preferred stock; $25 par
value; authorized 95,660 shares, issued
88,051 and 88,624 shares, respectively,
callable at $30 per share................. 2,201 2,216
Common stock $1 par value; authorized
24,000,000 shares, issued 12,332,743
and 11,867,806 shares, respectively....... 12,333 11,868
Additional paid-in capital................. 90,708 83,103
Retained earnings.......................... 54,207 39,893
Equity adjustment from translation......... (8,693) (8,468)
Less cost of common stock held in
treasury; 1,141,904 and 766,241 shares,
respectively.............................. (17,542) (10,156)
Less unallocated ESOP shares of common
stock of 27,244 and 8,531, respectively... (862) (138)
------- -------
Stockholders' Equity....................... 132,352 118,318
------- -------
TOTAL...................................... $351,824 $350,228
------- -------
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED OCTOBER 25, 1997 and OCTOBER 26, 1996
(In Thousands)
FOR THE
NINE MONTHS ENDED
OCT 25, OCT 26,
1997 1996
-------- --------
CASH FLOW FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income......................................... $ 17,587 $ 9,725
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation...................................... 8,883 8,758
Amortization of intangibles....................... 1,902
Deferred taxes and other non-cash charges
and credits...................................... (1,267) 621
Decrease (increase) in operating assets:
Receivables...................................... (20,166) (14,622)
Inventories...................................... (8,320) 442
Other current assets............................. 1,391 (2,752)
Other assets..................................... (1,941) 324
Increase in accounts payable....................... 6,462 821
Increase in accrued liabilities.................... 11,795 3,632
Discontinued operations............................ 1,332
------- -------
Net cash provided by operating activities.......... 16,326 8,281
CASH FLOW FROM INVESTING ACTIVITIES: ------- -------
Property, plant and equipment expenditures......... (9,741) (8,388)
Retirement of property, plant and equipment........ 1,245 512
Proceeds from sale of discontinued operations...... 36,328
Investment in Schott-Zweisel....................... (8,604)
Other, net......................................... 218 (609)
Discontinued operations............................ (9,985)
------- -------
Net cash provided by (used in) investing activities 19,446 (18,470)
CASH FLOW FROM FINANCING ACTIVITIES: ------- -------
Proceeds from issuance of common stock............. 7,981 1,896
Issuance of restricted stock plan shares........... 82 (16)
Purchase/retirement of preferred stock............. (8) (5)
Allocation of ESOP shares, net..................... (724) (202)
Net proceeds (payments) under short-term debt...... (3,593) 8,330
Proceeds from issuance of long-term debt........... 388
Payment of long-term debt.......................... (25,384) (1,119)
Purchase of treasury stock,net..................... (7,386) (992)
Dividends paid..................................... (5,839) (4,539)
Discontinued operations............................ 6,500
------- -------
Net cash provided by (used in) financing activities (34,871) 10,241
------- -------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH........... (138) 71
------- -------
NET INCREASE IN CASH............................... 763 123
CASH AT BEGINNING OF YEAR.......................... 3,183 2,847
------- -------
CASH AT END OF YEAR................................ $ 3,946 $ 2,970
------- -------
Supplemental Cash Flow Disclosures:
Interest paid..................................... $ 6,075 $ 4,229
Income taxes...................................... 7,158 5,452
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
1. The statements for the nine months ended October 25, 1997 and October 26,
1996 are unaudited; in the opinion of the Company such unaudited statements
include all adjustments (which comprise only normal recurring accruals)
necessary for a fair presentation of the results of such periods. The
consolidated financial statements for the year ended January 31, 1998 are
subject to adjustment at the end of the year when they will be audited by
independent auditors. The results of operations for the nine months ended
October 25, 1997 are not necessarily indicative of the results of operations
to be expected for the year ending January 31, 1998. The consolidated
financial statements and notes thereto should be read in conjunction with
the financial statements and notes for the year ended in January 1997 and
1996 included in the Company's January 25, 1997 Annual Report to the
Securities and Exchange Commission on Form 10-K.
2. On February 12, 1997, the Company sold its Camden Wire Co., Inc. (Camden)
subsidiary to International Wire Group, Inc. for $43,500 in cash. The sale
resulted in an after tax gain of $2,566 (net of applicable income taxes of
$3,616) or $0.15 per share, on a post split basis. At the initiation of the
discontinuance in October of 1996, an anticipated loss on the sale of $900
was recorded. Operating losses for the fourth quarter of 1996 and the first
quarter of 1997 totalling $1,200 were deducted from the gain for financial
statement purposes. Camden's net sales were $35,231 for the third quarter
and $103,628 for the first nine months of 1996. Camden generated a net loss
of $105 for the third quarter and a net loss of $304 for the first three
quarters of 1996.
3. On November 4, 1996, the Company purchased the net assets of THC Systems,
Inc. (Rego China) a leading importer of institutional china for the
foodservice industry. The financial statements include the results of
operations of Rego China for the current quarter and year to date. On a
proforma basis, assuming the acquisition had occurred at the beginning of
fiscal 1996 and based on unaudited amounts for Rego China, the consolidated
results of operations for the Company for the quarter and nine months ended
October 26, 1996 would have been:
Quarter 9 Months
-------- --------
[S] [C] [C]
Net sales........................................ $110,485 $296,388
Net income....................................... 4,462 9,336
Net income per share of common stock, post split. 0.32 0.63
4. The provision for income taxes is based on pre-tax income for financial
statement purposes with an appropriate deferred tax provision to give effect
to changes in temporary differences between the financial statements and tax
basis of assets and liabilities. The temporary differences arise principally
from postretirement benefits, depreciation, and other employee benefits.
5. Earnings per share are based on the weighted average number of shares of
common stock outstanding. The weighted average number of shares for earnings
per share includes the potentially dilutive effect of shares issuable under
the employee stock purchase and stock option plans. The shares owned by the
Company's employee stock ownership plan are treated as outstanding for
purposes of the earnings per share calculation only to the extent they have
been allocated. No fully diluted earnings per share are presented as the
difference between primary and fully diluted earnings per share is not
significant. The earnings per share calculations, shown herein, have been
restated to reflect the three for two common stock split announced on
November 25, 1997. (See Note 7).
<PAGE>
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (cont'd)
(Thousands)
6. Included in the long-term debt caption on the balance sheet are various
senior notes. The note agreements relating thereto contain provisions which
restrict borrowings, business investments, acquisition of the Company's stock
and payment of cash dividends. At October 25, 1997, the maximum amount
available for payment of dividends was $13,426.
7. On November 25, 1997, the Company's Board of Directors announced a three for
two common stock split. In addition, a quarterly dividend of 10 cents per
share was declared on both the new and outstanding shares. This has the
effect of increasing the dividend by 15%. The new shares and dividend will
be distributed on December 30, 1997 to stockholders of record on December 10,
1997.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended October 25, 1997 compared with
the quarter ended October 26, 1996
(In Thousands)
Operations
Net Sales 1997 1996 % Change
-------- -------- --------
[S] [C] [C] [C]
North America - Consumer..................... $65,093 $63,745 2.1%
- Foodservice.................. 45,882 32,600 40.7%
Other Foreign Operations..................... 5,584 5,033 11.0%
-------- ------- --------
Total........................................ $116,559 $101,378 15.0%
-------- ------- --------
Consolidated net sales, for the quarter ended October 25, 1997 increased
$15,181, over the same quarter a year ago. Sales of product throughout North
America increased by $14,630 or 15.2%. The majority of the increase came from
sales of foodservice china products. This is primarily due to the acquisition
of Rego China in the fourth quarter of 1996. Sales of Buffalo China products
and foodservice tableware as well as international sales each increased by more
than 10% from the third quarter of last year.
Gross margin, as a percentage of net sales, was equal to 38.2% for the third
quarter of 1997 and 34.9% for the same period of 1996. Product mix was enhanced
by improved sales of higher margin consumer flatware and the addition of the
Rego product line. The Company's tableware factories benefitted from greater
volume and spending efficiencies.
Operating Expenses 1997 1996 % Change
-------- -------- --------
[S] [C] [C] [C]
Selling, advertising and distribution......... $19,681 $17,098 15.1%
General and administrative.................... 10,636 7,659 38.9%
------- -------- -------
Total......................................... $30,317 $24,757 22.5%
-------- -------- -------
Total operating expenses increased by $5,560 from the same quarter last year.
As a percent of total sales, total operating expenses were 26.0% in the third
quarter of 1997 and 24.4% in the third quarter of 1996. The increase in total
operating expenses is due primarily to the acquisition of Rego in the fourth
quarter of 1996 and of Encore in the second quarter of 1997. The remainder of
the administrative expense variance is due largely to higher employee profit
sharing expense (which is directly attributable to improved profitability).
Interest expense, prior to capitalized interest, was $1,706 for the quarter, an
increase of $28 from the same period last year. The Company's debt levels have
declined since the third quarter of 1996, but this is offset by slightly higher
average borrowing rates.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Nine month period ended October 25, 1997 compared with
the nine month period ended October 26, 1996
(In Thousands)
Operations
Net Sales 1997 1996 % Change
------- -------- --------
[S] [C] [C] [C]
North America - Consumer..................... $168,272 $158,704 6.0%
- Foodservice.................. 129,760 97,044 33.7%
Other Foreign Operations..................... 18,084 15,091 19.8%
-------- -------- --------
Total........................................ $316,116 $270,839 16.7%
-------- -------- --------
Consolidated net sales, for the nine month period ended October 25, 1997
increased $45,277, over the same period a year ago. The Company has had
improved sales in all consumer markets, both domestically and internationally.
Sales of foodservice china have doubled over the same period last year,
primarily due to the November 1996 acquisition of Rego China. Foodservice
tableware sales have also improved over the first nine months of 1996.
Gross margin, as a percentage of net sales, was equal to 37.6% for the first
nine months of 1997 and 34.6% for the same period of 1996, resulting from a
richer product mix and improved manufacturing efficiencies, as well as the
addition of the Rego product line.
Operating Expenses 1997 1996 % Change
-------- -------- --------
[S] [C] [C] [C]
Selling, advertising and distribution......... $55,910 $49,764 12.4%
General and administrative.................... 28,762 20,559 39.9%
-------- -------- --------
Total......................................... $84,672 $70,323 20.4%
-------- -------- --------
Total operating expenses increased by $14,349 from the same period last year.
As a percent of total sales, total operating expenses increased to 26.8% from
26.0% in the prior year. The increase in total operating expenses is due
primarily to the acquisition of Rego in the fourth quarter of 1996 and of Encore
in the second quarter of 1997. The remaining increase in general and
administrative expenses primarily relates to higher employee profit sharing
accruals.
Interest expense, prior to capitalized interest, was $5,332 for the nine months,
a decrease of $251 from the first nine months of 1996. The decrease is
attributable to a decrease in the Company's outstanding debt.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Nine month period ended October 25, 1997 compared with
the nine month period ended October 26, 1996
(In Thousands)
Liquidity & Financial Resources
During the first nine months of this year, approximately $9,700 was spent on
capital projects focused primarily on manufacturing facilities. The Company
expects to invest another $4,800 on similar projects during the remainder of the
current fiscal year. Recently the Company has announced that it will construct
an $8,000 china distribution facility in Buffalo, New York to centralize and
further enhance foodservice distribution. Construction will begin in the last
quarter of 1997 and this facility is expected to be operational in the first
quarter of 1999.
In the first quarter, the Company repurchased 380,342 shares of its common stock
at a cost of $7,400. The Board of Directors, at its May 28, 1997 meeting,
authorized the repurchase of an additional 500,000 shares. As described in Note
7 to the accompanying financial statements, a three for two common stock split
and an increased cash dividend was announced by the Company's Board of Directors
on November 25, 1997.
On September 30, 1997 the Company acquired a 25.1% interest in Schott-Zweisel
Glaswerke AG, a subsidiary of Schott Glaswerke, for a total cost of $8,604.
Schott-Zweisel, a German corporation, is a manufacturer of tabletop glassware.
Prior to this transaction, Oneida had become the North American distributor of
Schott-Zweisel products.
In February of this year, the Company completed the sale of its Camden Wire
subsidiary to the International Wire Group, Inc. The majority of the proceeds
were used to pay down outstanding debt and to provide a special one time
dividend of $0.09 per share of common stock, on a post split basis.
Cash flow from operations and issuance of the Company's stock has provided for
operating and capital needs as well as the investment in Schott-Zweisel.
Management believes there is sufficient liquidity to support the Company's
ongoing needs from future operations as well as from the availability of bank
lines of credit. At October 25, 1997, the Company had unused bank credit lines
equal to $74,000 and working capital of $131,171.
<PAGE>
ONEIDA LTD
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
OCTOBER 25, 1997
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.
ONEIDA LTD
(Registrant)
Date: December 9, 1997
Edward W. Thoma
Senior Vice President Finance
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> Jan-31-1998
<PERIOD-START> Jan-26-1997
<PERIOD-END> Oct-25-1997
<PERIOD-TYPE> 9-MOS
<CASH> 3,946
<SECURITIES> 0
<RECEIVABLES> 70,612
<ALLOWANCES> 1,740
<INVENTORY> 132,600
<CURRENT-ASSETS> 217,420
<PP&E> 203,753
<DEPRECIATION> 125,011
<TOTAL-ASSETS> 351,824
<CURRENT-LIABILITIES> 86,249
<BONDS> 67,736
0
2,201
<COMMON> 12,333
<OTHER-SE> 117,818
<TOTAL-LIABILITY-AND-EQUITY> 351,824
<SALES> 316,116
<TOTAL-REVENUES> 316,116
<CGS> 197,166
<TOTAL-COSTS> 197,166
<OTHER-EXPENSES> 85,344
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,125
<INCOME-PRETAX> 28,481
<INCOME-TAX> 10,894
<INCOME-CONTINUING> 17,587
<DISCONTINUED> 2,566
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,153
<EPS-PRIMARY> 1.20
<EPS-DILUTED> 1.20
</TABLE>
