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 May 2, 1998
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 June 10, 1998: 16,792,063
<PAGE>
ONEIDA LTD.
FOR THE THREE MONTHS ENDED MAY 2, 1998
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.
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE
THREE MONTHS ENDED
(Thousands except per share amounts) May 2, APR 26,
1998 1997
-------- -------
<S> <C> <C>
NET SALES........................................ $107,015 $96,977
COST OF SALES.................................... 65,436 61,581
------- -------
GROSS MARGIN..................................... 41,579 35,396
------- -------
OPERATING EXPENSES:
Selling, advertising and distribution.......... 20,926 17,604
General and administrative..................... 9,702 8,686
------- -------
Total........................................ 30,628 26,290
------- -------
INCOME FROM OPERATIONS........................... 10,951 9,106
OTHER EXPENSE.................................... 136 243
INTEREST EXPENSE................................. 1,820 1,718
INCOME FROM CONTINUING OPERATIONS ------- -------
BEFORE INCOME TAXES............................ 8,995 7,145
PROVISION FOR INCOME TAXES....................... 3,440 2,733
INCOME FROM CONTINUING OPERATIONS................ 5,555 4,412
GAIN ON DISPOSAL OF DISCONTINUED OPERATIONS...... 2,566
------- -------
NET INCOME....................................... $5,555 $6,978
======= =======
EARNINGS PER SHARE OF COMMON STOCK:
Continuing operations:
Basic ......................................... $.33 $.26
Diluted ....................................... .32 .26
Net income:
Basic ......................................... .33 .42
Diluted ....................................... .32 .42
SHARES USED IN PER SHARE DATA:
Basic ......................................... 16,657 16,410
Diluted ....................................... 17,097 16,584
CASH DIVIDENDS DECLARED.......................... $0.10 $0.17
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
MAY 2, 1998 AND JANUARY 31, 1998
(Thousands)
May 2, JAN 31,
1998 1998
------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash....................................... $ 6,085 $ 3,095
Accounts receivable........................ 67,812 61,788
Less allowance for doubtful accounts....... (2,097) (1,896)
Other accounts and notes receivable........ 3,537 4,030
Inventories:
Finished goods............................ 117,071 101,293
Goods in process.......................... 16,847 15,797
Raw materials and supplies................ 17,099 16,329
Other current assets....................... 10,586 9,408
-------- --------
Total current assets.................... 236,940 209,844
-------- --------
PROPERTY, PLANT AND EQUIPMENT-At cost:
Land and buildings......................... 49,049 49,505
Machinery and equipment.................... 160,699 156,767
-------- --------
Total................................... 209,748 206,272
Less accumulated depreciation.............. 125,130 121,460
-------- --------
Property, plant & equipment-net......... 84,618 84,812
-------- --------
OTHER ASSETS:
Cost in excess of assets acquired - net.... 37,875 38,453
Other assets............................... 11,861 11,657
Deferred income taxes...................... 18,820 18,820
-------- --------
TOTAL.................................. $390,114 $363,586
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
MAY 2, 1998 AND JANUARY 31, 1998
(Thousands)
May 2, JAN 31,
1998 1998
------- -------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt............................ $35,002 $12,717
Accounts payable........................... 23,230 21,735
Accrued liabilities........................ 35,367 41,686
Accrued Income Taxes....................... 12,461 7,966
Dividends Payable.......................... 1,710 1,695
Current installments of long-term debt..... 4,815 4,711
-------- --------
Total current liabilities............... 112,585 90,510
-------- --------
LONG-TERM DEBT.............................. 69,584 69,415
-------- --------
OTHER LIABILITIES:
Accrued postretirement liability........... 53,507 53,114
Accrued pension liability.................. 6,335 6,303
Other liabilities.......................... 9,225 8,987
-------- --------
Total................................... 69,067 68,404
-------- --------
STOCKHOLDERS' EQUITY:
Cumulative 6% preferred stock; $25 par
value; authorized 95,660 shares, issued
87,945 and 88,001 shares, respectively,
callable at $30 per share................. 2,199 2,200
Common stock $1 par value; authorized
24,000,000 shares, issued 17,242,858
and 17,091,509 shares, respectively....... 17,242 17,091
Additional paid-in capital................. 77,867 76,007
Retained earnings.......................... 58,459 54,620
Equity adjustment from translation......... (9,475) (8,669)
Less cost of 468,568 shares of common
stock held in treasury.................... (5,632) (5,632)
Less unallocated ESOP shares of common
stock of 60,240 and 13,866, respectively.. (1,782) (360)
-------- --------
Stockholders' Equity.................... 138,878 135,257
-------- --------
TOTAL.................................. $390,114 $363,586
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MAY 2, 1998 and APRIL 26, 1997
(In Thousands)
FOR THE
THREE MONTHS ENDED
May 2, APR 26,
1998 1997
------- -------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income .................................... $5,555 $6,978
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation.................................. 2,785 2,856
Amortization of intangibles................... 578 726
Deferred taxes and other non-cash
charges and credits......................... 1,038 (1,712)
Decrease (increase) in operating assets:
Receivables................................. (5,458) (5,094)
Inventories................................. (18,018) (6,516)
Other current assets........................ (1,205) (934)
Other assets................................ (669) (1,943)
Increase in accounts payable.................. 1,460 2,413
Increase (decrease) in accrued liabilities.... (1,852) 6,565
------- -------
Net cash provided by (used in)
operating activities..................... (15,786) 3,339
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and equipment expenditures..... (3,725) (3,559)
Retirement of property, plant and equipment.... 1,044 979
Proceeds from sale of discontinued operations.. 33,762
Other, net..................................... 33 50
------- -------
Net cash provided by (used in)
investing activities..................... (2,648) 31,232
------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock........ 1,833 532
Issuance of restricted stock plan shares...... 178 82
Purchase/retirement of preferred stock........ (1) (1)
Purchase of ESOP shares....................... (1,422) (608)
Net proceeds under short-term debt and
banker's acceptances......................... 22,285 466
Proceeds from issuance of long-term debt ..... 510
Payment of long-term debt..................... (237) (25,173)
Purchase of treasury stock.................... (7,458)
Dividends paid................................ (1,716) (2,857)
Net cash provided by (used in) financing ------- --------
activities................................. 21,430 (35,017)
------- -------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH........ (6) (116)
NET INCREASE (DECREASE) IN CASH................. 2,990 (562)
CASH AT BEGINNING OF YEAR....................... 3,095 3,183
------- -------
CASH AT END OF PERIOD........................... $6,085 $2,621
======= =======
Supplemental Cash Flow Disclosures:
Interest Paid................................. $1,715 $1,159
Income Taxes Paid............................. 1,364
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
1. The statements for the three months ended May 2, 1998 and April 26, 1997
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 30, 1999 are
subject to adjustment at the end of the year when they will be audited by
independent auditors. The results of operations for the three months ended
May 2, 1998 are not necessarily indicative of the results of operations to
be expected for the year ending January 30, 1999. The consolidated
financial statements and notes thereto should be read in conjunction with
the financial statements and notes for the year ended in January 1998 and
1997 included in the Company's January 31, 1998 Annual Report to the
Securities and Exchange Commission on Form 10-K.
2. On February 12, 1997, Camden Wire Company was sold to an unrelated
third party for $43,500 in cash. The sale resulted in an after tax gain of
$2,566 (net of applicable income taxes of $3,716) or $0.16 per share.
Operating losses of Camden for the fourth quarter of 1997 and the first
quarter of 1998 totaling $1,200 were deferred and deducted from the gain
for financial statement purposes.
3. 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.
4. The Company adopted SFAS No. 128, "Earnings Per Share," as of January
31, 1998. Under the new standard, basic and diluted earnings per share are
presented for each period in which a statement of operations is presented.
Basic earnings per share is computed by dividing income less preferred
stock dividends by the weighted average shares actually outstanding for the
period. Diluted earnings per share includes the potentially dilutive
effect of shares issued under the employee stock purchase and incentive
stock option plans.
The following is a reconciliation of basic earning per share to diluted
earnings per share for the first quarter of 1998 and 1997:
Net Preferred Adjusted Average Earnings
Income Dividends Income Shares Per Share
------- --------- -------- ------- ---------
[S] [C] [C] [C] [C] [C]
1998:
Basic earnings per share $5,555 $(33) $5,522 16,657 $.33
Effect of stock options 440
Diluted earnings per share 5,555 (33) 5,522 17,097 .32
- -------------------------------------------------------------------------------
1997:
Basic earnings per share 6,978 (33) 6,945 16,410 .42
Effect of stock options 174
Diluted earnings per share 6,978 (33) 6,945 16,584 .42
- -------------------------------------------------------------------------------
5. 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 May 2, 1998, the maximum
amount available for payment of dividends was $16,835.
<PAGE>
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
6. The Company adopted SFAS No. 130 "Reporting Comprehensive Income,"
as of February 1, 1998. This standard requires the reporting of all
changes in equity of a business enterprise during a period from
transactions and other events and circumstances stemming from nonowner
sources as comprehensive income. To comply with this, the Company will begin
reporting on comprehensive income and changes in Stockholders' Equity on a
quarterly basis. The following is a summary of the changes in Stockholders'
Equity, including comprehensive income, for the quarters ended May 2, 1998, and
April 26, 1997:
Equity
Adjustment
Compr. Retained from
Total Income Earnings Translation
- -------------------------------------------------------------------------
Balance at January 31, 1998 $135,257 $54,620 ($8,669)
Comprehensive income:
Net Income..................... 5,555 5,555 5,555
Other comprehensive income, net (806) (806) (806)
-----
Comprehensive income............. 4,749
=====
Stock Purchase Plan ............. 1,395
Stock Option Plan................ 174
Restricted Stock Plan/Bonus Plan. 455
Cancelled Stock.................. (14)
Stock Purchases.................. (1,422)
Cash dividends declared.......... (1,716) (1,716)
-------- --------------------
Balance at May 2, 1998 $138,878 $58,459 ($9,475)
======== ====================
continued Unall-
Capital Pfd. Paid-in Treasury ocated
Stock Stock Capital Stock ESOP
- ---------------------------------------------------------------------------
Balance at January 31, 1998 $17,091 $2,200 $76,007 ($5,632) ($360)
Stock Purchase Plan ............ 88 1,307
Stock Option Plan............... 61 113
Restricted Stock Plan/Bonus Plan 16 439
Cancelled Stock................. (14) (1) 1
Stock Purchases................. (1,422)
-----------------------------------------
Balance at May 2, 1998 $17,242 $2,199 $77,867 ($5,632)($1,782)
=========================================
<PAGE>
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
Equity
Adjustment
Compr. Retained from
Total Income Earnings Translation
---------------------------------------
Balance January 25, 1997 $118,317 $39,893 ($8,468)
Comprehensive income:
Net Income..................... 6,978 6,978 6,978
Other comprehensive income, net (321) (321) (321)
-----
Comprehensive income............. 6,657
=====
Stock Purchase Plan ............. 158
Stock Option Plan................ 289
Restricted Stock Plan/Bonus Plan 180
Dividend Reinvestment Plan....... 147
Cancelled Stock ................. (661)
Stock Purchases.................. (7,566)
Cash dividends declared ......... (2,857) (2,857)
-------- -------------------
Balance at April 26, 1997 $114,664 $44,014 ($8,789)
======== ===================
continued
Additional Unal-
Capital Preferred Paid-in Treasury located
Stock Stock Capital Stock ESOP
-------------------------------------------
Balance January 25, 1997 $11,868 $2,215 $83,103 ($10,156) ($138)
Stock Purchase Plan ............. 11 147
Stock Option Plan................ 93 196
Restricted Stock Plan/Bonus Plan 9 171
Dividend Reinvestment Plan....... 7 140
Cancelled Stock ................. (60) (101) 109 (608)
Stock Purchases.................. 1 (7,567)
--------------------------------------------
Balance at April 26, 1997 $11,928 $2,214 $83,657 ($17,614) ($746)
============================================
The following represents a reconciliation of other comprehensive income on
a before and after tax basis:
May 2, April 26,
1998 1997
------ ------
Foreign currency translation adjustments $1,305 $ 520
Tax effect of foreign currency translation adjustments (499) (199)
------ ------
Other comprehensive income $ 806 $ 321
====== ======
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended May 2, 1998 compared with
the quarter ended April 26, 1997
(In Thousands)
Operations
Consolidated net sales, for the three month period ended May 2, 1998
increased $10,038, over the same period a year ago.
[S]
Net Sales 1998 1997 % Change
-------- ------- --------
Consumer Products Markets ........ $ 52,341 $46,831 11.8%
Foodservice Markets .............. 54,674 50,146 9.0%
-------- -------
Total ...................... $107,015 96,977 10.4%
======== =======
The increase in consumer sales was primarily driven by the Company's entry
into the supermarket segment of consumer tableware sales. This occurred in
the second quarter of 1997 when the Company acquired the business of Encore
Promotions, Inc., a leading supplier in the grocery store promotion
business. Foodservice sales increased in all product categories, but
demand was especially strong for the Company's commercial dinnerware.
International sales were up slightly.
Gross margin, as a percentage of net sales, was equal to 38.9% for the
first quarter of 1998 and 36.5% for the same period of 1997. The increase
primarily reflects a richer mix of products sold in the first quarter of
this year. In addition, the Company's tableware and dinnerware factories
continued to perform with increased efficiency.
Operating Expenses 1998 1997 % Change
------- ------- --------
[S] [C] [C] [C]
Selling, advertising and
distribution.................... $20,926 $17,604 18.9%
General and administrative........ 9,702 8,686 11.7%
------- -------
Total....................... $30,628 $26,290 16.5%
======= =======
Total operating expenses increased by $4,338 from the same period last
year. While the majority of the selling expense increase was due to
incremental sales, some of the costs pertained to the Company's entry into the
consumer dinnerware and glassware markets. As a percent of total sales, selling
expenses increased to 19.6% from 18.2% in the prior year. The increase in
administrative costs is primarily attributable to higher employee profit sharing
accruals related to increased operating profits.
Interest expense, prior to capitalized interest, was $1,977 for the three
months, an increase of $209 from the first three months of 1997. This
increase is due to higher average borrowings in 1998. These short-term
borrowings were incurred to finance the inventories needed for expansion into
the glassware, consumer dinnerware and grocery store product categories.
Year 2000
As was detailed in the Company's Form 10-K filing for the year ended
January 31, 1998, the Company has put together a comprehensive plan for
dealing with computer issues related to the Year 2000. The Company is on
course with their plan and continues to believe that they are adequately
addressing any potential problems in a timely manner. The costs incurred to
date related to this process are not material.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended May 2, 1998 compared with
the quarter ended April 26, 1997
(In Thousands)
Liquidity & Financial Resources
During the first three months of this year, the Company spent approximately
$3,700 on capital projects focused primarily on it's manufacturing
facilities. The Company expects to invest another $21,300 on similar
projects during the remainder of the current fiscal year. Inventories
increased by $18,000 in the first quarter. The majority of this was a
build up of inventories to support new product categories. The Board of
Directors, at its May 27, 1998 meeting, authorized the payment of a special
one time dividend equal to ten cents per common share outstanding at June
10, 1998. The cost of this dividend is approximately $1,700.
Management believes there is sufficient liquidity to support the Company's
ongoing funding requirements from future operations as well as the
availability of bank lines of credit. At May 2, 1998, the company had
unused credit lines equal to $42,000 and working capital of $124,355.
<PAGE>
ONEIDA LTD
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
May 2, 1998
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: June 16, 1998
Edward W. Thoma
Senior Vice
President Finance
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ONEIDA LTD. FOR THE THREE MONTHS ENDED MAY 2, 1998 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CAPTION>
1999
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> FEB-01-1998
<PERIOD-END> MAY-02-1998
<CASH> 6,085
<SECURITIES> 0
<RECEIVABLES> 67,812
<ALLOWANCES> 2,097
<INVENTORY> 151,017
<CURRENT-ASSETS> 236,940
<PP&E> 209,748
<DEPRECIATION> 125,130
<TOTAL-ASSETS> 390,114
<CURRENT-LIABILITIES> 112,585
<BONDS> 69,584
0
2,199
<COMMON> 17,242
<OTHER-SE> 119,437
<TOTAL-LIABILITY-AND-EQUITY> 390,114
<SALES> 107,015
<TOTAL-REVENUES> 107,015
<CGS> 65,436
<TOTAL-COSTS> 65,436
<OTHER-EXPENSES> 30,764
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,820
<INCOME-PRETAX> 8,995
<INCOME-TAX> 3,440
<INCOME-CONTINUING> 5,555
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,555
<EPS-PRIMARY> .33<F1>
<EPS-DILUTED> .32
<FN>
<F1> The amount reported as EPS-PRIMARY is actually Earnings Per Share -
Basic, as the Corporation adopted SFAS 128 "Earnings Per Share" as of January
31, 1998.
</FN>
</TABLE>
