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 1, 1999
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
incorporation or organization) Identification 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 14, 1999: 16,701,633.
<PAGE>
ONEIDA LTD.
FORM 10-Q
FOR THE THREE MONTHS ENDED May 1, 1999
INDEX
PART I FINANCIAL INFORMATION
Consolidated Statement of Operations
Consolidated Balance Sheet
Consolidated Statement of Changes in Stockholders' Equity
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.
SIGNATURES
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE
THREE MONTHS ENDED
(Thousands except per MAY 1, MAY 2,
share amounts) 1999 1998
------- -------
<S> <C> <C>
NET SALES................................. $118,039 $107,015
COST OF SALES............................. 71,123 65,436
INVENTORY WRITEDOWN (Note 3).............. 3,000
------- ------
GROSS MARGIN.............................. 43,916 41,579
OPERATING REVENUES........................ 318
------- -------
44,234 41,579
------- -------
OPERATING EXPENSES:
Selling, advertising and
distribution.......................... 23,203 20,926
General and administrative.............. 10,381 9,702
Restructuring and unusual costs
(NOTE 3).............................. 32,800
------- --------
Total................................. 66,384 30,628
------- --------
INCOME (LOSS) FROM OPERATIONS ............ (22,150) 10,951
OTHER EXPENSE............................. 52 136
INTEREST EXPENSE.......................... 2,650 1,820
INCOME (LOSS) -------- --------
BEFORE INCOME TAXES..................... (24,852) 8,995
PROVISION (CREDIT) FOR INCOME TAXES....... (6,421) 3,440
-------- --------
NET INCOME (LOSS)......................... ($18,431) $5,555
======== ========
EARNINGS PER SHARE OF COMMON STOCK:
Net income:
Basic................................. ($1.11) $0.33
Diluted............................... (1.11) 0.32
SHARES USED IN PER SHARE DATA:
Basic................................. 16,560 16,657
Diluted............................... 16,686 17,097
CASH DIVIDENDS DECLARED................... $0.10 $0.10
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
MAY 1, 1999 AND JANUARY 30, 1999
(Thousands)
MAY 1, JAN 30,
1999 1999
------- -------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash............................................... $4,309 $1,913
Accounts receivable, net of allowance for
doubtful accounts of $1,655,000 and $1,520,000..... 79,758 72,919
Other accounts and notes receivable................ 2,078 2,777
Inventories:
Finished goods.................................... 170,528 160,888
Goods in process.................................. 13,742 14,339
Raw materials and supplies........................ 14,139 14,885
Other current assets............................... 11,071 8,217
------- -------
Total current assets............................ 295,625 275,938
------- -------
PROPERTY, PLANT AND EQUIPMENT-At cost:
Land and buildings................................. 55,998 56,378
Machinery and equipment............................ 162,517 161,660
------- -------
Total........................................... 218,515 218,038
Less accumulated depreciation...................... 125,634 123,010
------- -------
Property, plant and equipment-net............... 92,881 95,028
------- -------
OTHER ASSETS:
Intangible assets - net............................ 29,727 39,202
Other assets....................................... 34,383 31,900
------- -------
TOTAL............................................. $452,616 $442,068
======= =======
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
MAY 1, 1999 AND JANUARY 30, 1999
(Thousands)
MAY 1, JAN 30,
1999 1999
------- -------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt.................................... $77,305 $56,060
Accounts payable................................... 27,533 26,638
Accrued liabilities................................ 55,040 40,295
Accrued income taxes............................... 2,179 6,388
Dividends payable.................................. 1,688 1,701
Current installments of long-term debt............. 4,794 4,790
------- -------
Total current liabilities....................... 168,539 135,872
------- -------
LONG-TERM DEBT...................................... 89,481 89,605
------- -------
OTHER LIABILITIES:
Accrued postretirement liability................... 54,681 54,264
Accrued pension liability......................... 9,613 9,584
Other liabilities.................................. 11,479 12,495
------- -------
Total........................................... 75,773 76,343
------- -------
STOCKHOLDERS' EQUITY:
Cumulative 6% preferred stock; $25 par
value; authorized 95,660 shares, issued 87,013
and 87,411 shares, respectively;
callable at $30 per share......................... 2,175 2,185
Common stock $1 par value; authorized
48,000,000 shares, issued 17,500,230
and 17,423,478 shares, respectively............... 17,500 17,423
Additional paid-in capital......................... 80,530 79,737
Retained earnings.................................. 45,760 65,870
Accumulated other comprehensive income............. (11,115) (11,079)
Less cost of common stock held in
treasury; 868,084 and 816,284 shares,
respectively...................................... (14,593) (13,888)
Less unallocated ESOP shares of common
stock of 78,793 .................................. (1,434)
------- -------
Stockholders' Equity............................ 118,823 140,248
------- -------
TOTAL.......................................... $452,616 $442,068
======= =======
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
FOR THE QUARTERS ENDED MAY 1, 1999 AND MAY 2, 1998
Additional
Comp. Common Common Preferred Paid-in
Income Shares Stock Stock Capital
-------------------------------------------
Balance at January 31, 1998... 17,091 $17,091 $2,200 $76,007
Stock plan activity, net...... 151 151 1,859
Cancelled stock............... (1) 1
Net income.................... $5,555
Other comprehensive income.... (806)
------
Comprehensive income.......... $4,749
======
----------------------------------
Balance May 2, 1998........... 17,242 $17,242 $2,199 $77,867
==================================
Additional
Comp. Common Common Preferred Paid-in
Income Shares Stock Stock Capital
---------------------------------------------
Balance at January 30, 1999. 17,423 $17,423 $2,185 $79,737
Stock plan activity, net.... 82 82 788
Purchase/retirement of
treasury stock, net....... (10) 4
Cancelled stock............. (5) (5) 1
Net loss.................... ($18,431)
Other comprehensive income.. (36)
-------
Comprehensive income........ ($18,467)
=======
------------------------------------
Balance May 1, 1999......... 17,500 $17,500 $2,175 $80,530
====================================
continued
Accumulated
Retained Other Comp. Treasury Unallocated
Earnings Income Stock ESOP
-------------------------------------------
<S> <C> <C> <C> <C>
Balance at January 31, 1998.. $54,620 ($8,669) ($5,632) ($360)
Cash dividends declared
($.10 per share)........ (1,716)
Net income................... 5,555
Other comprehensive income... (806)
ESOP activity, net........... (1,422)
-------------------------------------------
Balance May 2, 1998.......... $58,459 ($9,475) ($5,632) ($1,782)
===========================================
<PAGE>
Accumulated
Retained Other Comp. Treasury Unallocated
Earnings Income Stock ESOP
-------------------------------------------
<S> <C> <C> <C>
Balance at January 30, 1999 $65,870 ($11,079) ($13,888) -
Purchase/retirement of
treasury stock, net.. (705)
Cash dividends declared
($.10 per share).... (1,679)
Net loss................. (18,431)
Other comprehensive income.. (36)
ESOP activity, net......... (1,434)
-------------------------------------------
Balance May 1, 1999 $45,760 ($11,115) ($14,593) ($1,434)
===========================================
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
MAY 1, 1999 and MAY 2, 1998
(In Thousands)
FOR THE
THREE MONTHS ENDED
MAY 1, MAY 2,
1999 1998
------- -------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income ....................................... ($18,431) $5,555
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation..................................... 2,645 3,681
Impairment of long-term assets................... 15,000
Amortization of intangibles...................... 721 783
Deferred taxes and other non-cash
charges and credits........................... 1,609 872
Increase in operating assets:
Receivables................................... (6,140) (5,331)
Inventories................................... (11,298) (17,598)
Other current assets.......................... (2,854) (1,177)
Other assets.................................. (1,100) (653)
Increase in accounts payable..................... 894 1,496
Increase (decrease) in accrued liabilities....... 9,734 (1,810)
------- -------
Net cash used in operating activities......... (9,220) (14,182)
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and equipment expenditures........ (4,344) (3,638)
Minority interest................................. (1,424) 18
Retirement of property, plant and equipment....... 736 151
Other, net........................................ (1,482) 16
------- -------
Net cash used in investing activities......... (6,514) (3,453)
------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock............ 868 1,834
Issuance of restricted stock plan shares.......... 178
Purchase of treasury stock........................ (715) (1)
Purchase/(allocation) of ESOP shares - net........ (1,434) (1,422)
Proceeds from short-term debt - net............... 21,245 22,285
Payment of long-term debt......................... (222) (237)
Proceeds from long-term debt...................... 102 510
Dividends paid.................................... (1,678) (1,716)
------- -------
Net cash provided by financing activity 18,166 21,431
------- -------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH............ (36) (806)
------- -------
NET INCREASE IN CASH................................ 2,396 2,990
CASH AT BEGINNING OF YEAR........................... 1,913 3,095
------- -------
CASH AT END OF PERIOD............................... $4,309 $6,085
======= =======
Supplemental Cash Flow Disclosures:
Interest paid ..................................... $2,179 $1,715
Income taxes paid.................................. 1,083 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 1, 1999 and May 2, 1998 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 results of
operations for the three months ended May 1, 1999 are not necessarily
indicative of the results of operations to be expected for the year ending
January 29, 2000. The consolidated financial statements and notes thereto
should be read in conjunction with the financial statements and notes for the
years ended in January 1999 and 1998 included in the Company's January 30,
1999 Annual Report to the Securities and Exchange Commission on Form 10-K.
2. 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
bases of assets and liabilities. The temporary differences arise principally
from restructuring charges, postretirement benefits, depreciation and other
employee benefits. The principal reason for the difference in income taxes
computed using the federal statutory rate and income taxes as recorded for
the quarter ended May 1, 1999 was non-deductibility of the foreign goodwill
writedown described below in Note 3.
3. In the quarter ended May 1, 1999, the Company recorded a $35,800 charge for
restructuring and other unusual items. This total includes $3,000 of
inventory writedowns due to discontinuing certain product lines, $11,000 of
charges related to operations restructuring, $12,000 of long-term asset
impairments, and $9,800 of other unusual charges.
In the first quarter, the Company broadened the restructuring program
initiated in late fiscal 1998. Key components of the restructuring are the
closure of the Company's flatware manufacturing facility in Niagara Falls,
Canada; consolidation of the Company's international operations; and further
elimination of positions and underperforming product lines.
The majority of the $11,000 restructuring charge made in the quarter ended
May 1, 1999 relates to early retirement benefits, severance and associated
employee benefit costs. The closure of the Canadian manufacturing facility,
which was substantially completed in the first quarter, resulted in the
reduction of approximately 150 jobs. The intent of the total strategic
restructuring plan is to reduce the Company's worldwide employment of 4,800
jobs by approximately 12%. This will be accomplished by means of the above
mentioned plant closure and further international and domestic job
consolidations, as well as through normal attrition and the extension of
early retirement and termination packages. In the first quarter, the Company
actually paid $400 of these restructuring costs.
The asset writedowns are related to goodwill associated with the purchase of
an Italian subsidiary and the writedown of manufacturing fixed assets that
will no longer be utilized due to the closing of the Oneida Canada plant and
the exiting of certain product lines. The full $12,000 of non-cash charges
were recorded against the respective assets to reduce them to net realizable
value in the first quarter. The Company recorded a $3,000 non-cash inventory
reserve charge as a component of cost of sales during the first quarter to
reduce discontinued product lines to net realizable value. $160 was written
off against the reserve in the first three months of the year.
During the first quarter, the Company expensed $9,800 of unusual items.
These were costs related to an unsolicited takeover attempt as well as costs
incurred to overcome unique market barriers in the foodservice glassware
market. Through the first quarter, approximately $3,100 of these unusual
expense payments were made.
<PAGE>
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
In January 1999, the Company initiated restructuring efforts by means of a
workforce reduction that was accomplished through job consolidations and
early retirements. The Company accrued $5,000 in fiscal year 1998 to account
for the severance and related employee benefits for this phase. There will be
no adjustments needed to the accrual. As of the end of the first quarter,
approximately $600 of benefits remain unpaid. The majority of these payments
will be completed by year-end.
4. 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 issuable under the
employee stock purchase and incentive stock option plans.
The following is a reconciliation of basic earnings per share to diluted
earnings per share for the three months ended May 1, 1999 and May 2, 1998:
Net Preferred Adjusted
Income Stock Net Income Average Earnings
(Loss) Dividends (Loss) Shares Per Share
- -------------------------------------------------------------------------------
[S] [C] [C] [C] [C] [C]
1999: Basic earnings
per share $(18,431) $(33) $(18,464) 16,560 $(1.11)
Effect of stock options 126
------
Diluted earnings
per share (18,431) (33) (18,464) 16,686 (1.11)
- -------------------------------------------------------------------------------
[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
- -------------------------------------------------------------------------------
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. Included in the debt covenants were
restrictions that the Company's ratio of total debt to tangible net worth not
exceed 1.75 and that the interest coverage ratio be at least 2.00. These
ratios were 2.00 and .81, respectively, at May 1, 1999 and accordingly, the
Company has received waivers from it's lenders. The Company expects to be in
compliance with it's debt covenants at year end. At May 1, 1999, the maximum
amount available for payment of dividends was $6,255.
6. Within the Statement of Changes in Stockholders' Equity, the Company reports
comprehensive income in accordance with the Statements of Financial
Accounting Standard No. 130, "Reporting Comprehensive Income." This
pronouncement requires the Company to report the effects of foreign currency
translation adjustments on comprehensive income.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended May 1, 1999 compared with
the quarter ended May 2, 1998
(In Thousands)
Operations
Net Sales by Product Line: 1999 1998 % Change
------- ------- -----
[S] [C] [C] [C]
Metal Products.............. 75,670 74,180 2.0%
Dinnerware Products......... 24,245 23,393 3.6%
Glass Products.............. 7,377 4,604 60.2%
Other Products.............. 10,747 4,838 122.1%
------- ------- -----
Total.................... $118,039 $107,015 10.3%
======= ======= =====
Consolidated net sales, for the quarter ended May 1, 1999 increased $11,024,
over the same period a year ago and set a record for the Company's first
quarter.
Significant sales increases were made in all major markets- consumer,
foodservice, and international. The Company added glass products to its
crystal offering in 1998, hence the growth in that product line. The
majority of the growth in sales of other products is attributable to sales
made to the grocery store market.
Gross margin, (excluding the special inventory restructuring charge of
$3,000), as a percentage of net sales, was 39.7% in the first quarter of 1999
as compared to 38.9% for the same period of 1998. The increase reflected
improved manufacturing efficiencies in 1999.
Operating Expenses (exclusive of restructuring and unusual charges)
1999 1998 % Change
------ ------ ----
[S] [C] [C] [C]
Selling, advertising
and distribution.............. $23,203 $20,926 10.9%
General and administrative...... 10,381 9,702 7.0%
------ ------ ----
Total......................... $33,584 $30,628 9.7%
====== ====== ====
Total recurring operating expenses increased by $2,956 from the same period
last year, but actually decreased slightly as a percentage of sales. The
increase in selling and distribution costs is attributable to higher sales
levels in the current year. The increase in general and administrative costs
is principally due to the operation of the Company's Australian subsidiary,
which was acquired in July 1998.
Interest expense, prior to capitalized interest, was $2,973 for the three
months ended May 1 1999, an increase of $996 from the first quarter of 1998.
This increase is due to higher average borrowings in 1999.
In the quarter ended May 1, 1999, the Company recorded a $35,800 charge for
restructuring and other unusual items. This total includes $3,000 of
inventory writedowns due to discontinuing certain product lines, $11,000 of
charges related to operation s restructuring, $12,000 of long-term asset
impairments, and $9,800 of other unusual charges.
In the first quarter, the Company broadened the restructuring program
initiated in late fiscal 1998. Key components of the restructuring are the
closure of the Company's flatware manufacturing facility in Niagara Falls,
Canada; consolidation of the Company's international operations; and further
elimination of positions and underperforming product lines.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended May 1, 1999 compared with
the quarter ended May 2, 1998
(In Thousands)
The majority of the $11,000 restructuring charge made in the quarter ended
May 1, 1999 relates to early retirement benefits, severance and associated
employee benefit costs. The closure of the Canadian manufacturing facility,
which was substantially completed in the first quarter, resulted in the
reduction of approximately 150 jobs. The intent of the total strategic
restructuring plan is to reduce the Company's worldwide employment of 4,800
jobs by approximately 12%. This will be accomplished by means of the above
mentioned plant closure and further international and domestic job
consolidations, as well as through normal attrition and the extension of
early retirement and termination packages. In the first quarter, the Company
actually paid $400 of these restructuring costs.
The asset writedowns are related to goodwill associated with the purchase of
an Italian subsidiary and the writedown of manufacturing fixed assets that
will no longer be utilized due to the closing of the Oneida Canada plant and
the exiting of certain product lines. The full $12,000 of non-cash charges
were recorded against the respective assets to reduce them to net realizable
value in the first quarter. The Company recorded a $3,000 non-cash inventory
reserve charge as a component of cost of sales during the first quarter to
reduce discontinued product lines to net realizable value. $160 was written
off against the reserve in the first three months of the year.
During the first quarter, the Company expensed $9,800 of unusual items. These
were costs related to an unsolicited takeover attempt as well as costs
incurred to overcome unique market barriers in the foodservice glassware
market. Through the first quarter, approximately $3,100 of these unusual
expense payments were made.
In January 1999, the Company initiated restructuring efforts by means of a
workforce reduction that was accomplished through job consolidations and early
retirements. The Company accrued $5,000 in fiscal year 1998 to account for
the severance and related employee benefits for this phase. There will be no
adjustments needed to the accrual. As of the end of the first quarter,
approximately $600 of benefits remain unpaid. The majority of the
restructuring and unusual expense payments will be completed by year-end. The
Company expects to reduce expenses by $12,000 in 1999 and by $20,000 per year
thereafter as a result of the restructuring plan.
Liquidity & Financial Resources
During the first quarter of this year, the Company spent approximately $4,300
on capital projects focused primarily on its distribution and manufacturing
facilities. The Company expects to invest another $21,000 on similar projects
during the remainder of the current fiscal year. The Company has commenced
construction of a 206,000 square foot warehouse at its main facility in
Sherrill, NY. This project, which should be completed in early 2000, will
cost approximately $10,000. By consolidating Northeast distribution in this
one facility, the Company expects to both lower costs and improve customer
service. In the first quarter, $2,149 was spent on purchasing common shares
either as treasury stock or as contributions to its ESOP plan.
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 1, 1999, the Company had unused
short-term credit lines equal to $20,500 as well as unused availability under
a long-term revolving line of credit totaling $4,000. Working capital as of
May 1, 1999 totaled $127,086.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended May 1, 1999 compared with
the quarter ended May 2, 1998
(In Thousands)
Year 2000 Compliance
Year 2000 issues relate to the ability of computer systems to distinguish data
which contains dates beyond December 31, 1999. The Company has created and
implemented a comprehensive Year 2000 compliance plan. The Company holds
regular compliance meetings to receive information and input from all of the
Company's main operating areas.
As part of its compliance plan, the Company has reviewed all of its software
and information processing systems and identified date sensitive functions.
The Company began testing those systems in the first quarter of 1999. Testing
is expected to be complete by mid-summer 1999. Any systems found to be
noncompliant will be modified to ensure that they operate properly prior to
the Year 2000. The Company's main accounting, logistics, warehouse management
and payroll systems are currently Year 2000 compliant. The Company
anticipates that its remaining systems will be Year 2000 compliant by year
end, and that its more minor computer systems will be Year 2000 compliant by
July 1999.
To date, the Company has identified and contacted its major customers,
suppliers, service providers and business partners. Each of these entities
received a letter informing them of the Company's plans and state of readiness
and asking that they in turn share their own Year 2000 plans by returning a
questionnaire to the Company. In addition to its compliance plan, the Company
is developing contingency plans based upon the outcomes of the systems tests
that are being conducted.
The Company believes it is devoting appropriate resources to resolve its Year
2000 issues in a timely manner and believes that its compliance program will
result in all internal systems being prepared for Year 2000 processing. The
compliance plan is proceeding on schedule and to date no unforeseen
difficulties have arisen. Based upon the work performed to date, the Company
presently believes that the likelihood of the Year 2000 having a material
result on its operations, liquidity or financial position is remote. The
Company estimates that its direct Year 2000 compliance costs will not exceed
$500, of which to date approximately $350 has been incurred and expensed.
Notwithstanding the foregoing, the Company could be adversely affected if its
customers, suppliers, service providers, business partners and/or governmental
agencies continue to utilize systems that are not Year 2000 compliant. This
failure could affect the Company's ability to purchase raw materials, receive
orders and transact business with its financial institutions among other
things, any of which could constitute a material and immeasurable financial
risk to the Company.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended May 1, 1999 compared with
the quarter ended May 2, 1998
(In Thousands)
Contingencies-Legal Proceedings
On December 8, 1998, the Oneida Indian Nation of New York, the Oneida Tribe of
Indians of Wisconsin and the Oneida of Thames, as Plaintiffs, along with the
United States of America, as Intervenor, moved to amend their Complaint filed
on May 3, 1974 in the United States District Court for the Northern District
of New York against the counties of Oneida and Madison, New York. The amended
Complaint seeks to add the State of New York, New York State Thruway
Authority, Utica-Rome Motorsports, Inc., Niagara Mohawk Power Corporation and
the Oneida Valley National Bank, individually and as representatives of the
class of similarly situated private landowners in Madison and Oneida counties.
The Complaint alleges that during the nineteenth century the Oneidas' lands
were improperly transferred. The Oneidas seek title to the property as well
as monetary damages. The Corporation's headquarters and main manufacturing
and distribution facilities are located within this land claim area. The
Corporation filed a motion to intervene with the United States District Court
for the Northern District of New York on February 26, 1999. The Judge's
decision on whether private landowners will be added as Defendants is expected
in 1999.
Forward Looking Information
With the exception of historical data, the information contained in this Form
10-Q, as well as those other documents incorporated by reference herein, is
forward-looking. For the purposes of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, the Company cautions
readers that changes in certain factors could affect the Company's future
results and could cause the Company's future consolidated results to differ
materially from those expressed herein. Such factor s include, but are not
limited to: general economic conditions in the Company's markets; difficulties
or delays in the development, production and marketing of new products; the
impact of competitive products and pricing; certain assumptions related to
consumer purchasing patterns; significant increases in interest rates or the
level of the Company's indebtedness; major slowdowns in the retail, travel or
entertainment industries; the loss of several of the Company's major
customers; underutilization of the Company's plants and factories; the amount
and rate of growth of the Company's selling, general and administrative
expenses; and the inability of the Company or its customers, suppliers,
service providers or business partners, as well as governmental agencies, to
resolve Year 2000 issues in a timely manner.
<PAGE>
ONEIDA LTD
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
May 1, 1999
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 15, 1999
Edward W. Thoma
Senior Vice President,
Finance
<TABLE> <S> <C>
<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 1, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CAPTION>
2000
<S> <C>
<FISCAL-YEAR-END> Jan-30-2000
<PERIOD-START> Jan-31-1999
<PERIOD-END> May-01-1999
<PERIOD-TYPE> 3-MOS
<CASH> 4,309
<SECURITIES> 0
<RECEIVABLES> 81,413
<ALLOWANCES> 1,655
<INVENTORY> 198,409
<CURRENT-ASSETS> 295,625
<PP&E> 218,515
<DEPRECIATION> 125,634
<TOTAL-ASSETS> 452,616
<CURRENT-LIABILITIES> 168,539
<BONDS> 89,481
0
2,175
<COMMON> 17,500
<OTHER-SE> 99,148
<TOTAL-LIABILITY-AND-EQUITY> 452,616
<SALES> 118,039
<TOTAL-REVENUES> 118,357
<CGS> 71,123
<TOTAL-COSTS> 74,123
<OTHER-EXPENSES> 66,436
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,650
<INCOME-PRETAX> (24,852)
<INCOME-TAX> (6,421)
<INCOME-CONTINUING> (18,431)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,431)
<EPS-BASIC> (1.11)<F1>
<EPS-DILUTED> (1.11)
<FN>
<F1> The amount reported as EPS-PRIMARY is actually Earnings Per Share-Basic,
as the Company adopted SFAS 128 "Earnings Per Share" as of January 31, 1998.
</TABLE>
