UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Period Ended March 27, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-17237
HOME PRODUCTS INTERNATIONAL, INC.
(Exact name of registrant as specified in its Charter)
Delaware 36-4147027
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
4501 West 47th Street
Chicago, Illinois 60632
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number including area code (773) 890-1010.
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
Common shares, par value $0.01, outstanding as of April 26, 1999 - 7,583,179
<PAGE>
HOME PRODUCTS INTERNATIONAL, INC
INDEX
Page
Number
------
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of
Operations and Retained Earnings 4
Condensed Consolidated Statements of
Cash Flows 5
Notes to Condensed Consolidated
Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Item 3. Quantitative and Qualitative
Disclosures About Market Risk 13
Part II. Other Information
Items 1 through 5 are not applicable
Item 6. Exhibits and Reports on Form 8-K. 15
Signature 15
<PAGE>
PART I Financial Information
ITEM 1. Financial Statements
<TABLE>
HOME PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
March 27, December 26,
1999 1998
(unaudited)
------- -------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents ............... $ 11,904 $ 4,986
Accounts receivable, net ................ 47,924 50,238
Inventories, net ........................ 26,891 25,296
Prepaid expenses and other current assets 1,240 6,880
------- -------
Total current assets .................. 87,959 87,400
Property, plant and equipment - at cost.... 84,268 87,854
Less accumulated depreciation and amortization (25,040) (27,654)
------- -------
Property, plant and equipment, net......... 59,228 60,200
Intangible and other assets................ 190,270 192,443
------- -------
Total assets............................... $337,457 $340,043
======= =======
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term obligations $ 3,549 $ 3,549
Accounts payable ........................ 23,166 20,510
Accrued liabilities ..................... 34,932 35,664
------- -------
Total current liabilities ............. 61,647 59,723
Long-term obligations - net of current
maturities................................ 214,679 219,536
Other liabilities.......................... 2,814 2,783
Stockholders' equity:
Preferred Stock - authorized, 500,000
shares, $.01 par value; - None issued.. - -
Common Stock - authorized 15,000,000 shares,
$.01 par value; 8,043,041 shares issued at
March 27, 1999 and 8,024,123 shares issued
at December 26, 1998 ................... 80 80
Additional paid-in capital .............. 48,529 48,455
Retained earnings ....................... 13,318 12,259
Common stock held in treasury - at cost
459,862 Shares at March 27, 1999
376,462 Shares at December 26, 1998 ..... (3,459) (2,642)
Currency translation adjustments ........ (151) (151)
------- -------
Total stockholders' equity ............ 58,317 58,001
------- -------
Total liabilities and stockholders' equity. $337,457 $340,043
======= =======
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
HOME PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Statements of Operations and Retained Earnings
(unaudited)
(in thousands, except per share amounts)
<CAPTION>
Thirteen Weeks Ended
March 27, March 28,
1999 1998
------ ------
<S> <C> <C>
Net sales............................. $ 67,799 $ 52,408
Cost of goods sold.................... 45,177 36,455
------ ------
Gross profit ...................... 22,622 15,953
Operating expenses
Selling ........................... 9,910 6,429
Administrative .................... 4,655 3,504
Amortization of intangible assets . 1,365 928
------ ------
15,930 10,861
------ ------
Operating profit .................. 6,692 5,092
------ ------
Other income (expense)
Interest income ................... 70 45
Interest (expense) ................ (4,954) (3,006)
Other, net ........................ 18 13
------ ------
(4,866) (2,948)
------ ------
Earnings before income taxes and extraordinary 1,826 2,144
charge...............................
Income tax (expense).................. (767) (898)
------ ------
Earnings before extraordinary charge. 1,059 1,246
Extraordinary charge for early retirement of
debt, net of tax benefit of $1,258... - (1,737)
------ ------
Net earnings (loss)................... 1,059 (491)
Retained earnings at beginning of period 12,259 8,616
------ ------
Retaining earnings at end of period... $ 13,318 $ 8,125
====== ======
<PAGE>
Earnings before extraordinary charge,
per common share - basic ............... $ 0.14 $ 0.16
Extraordinary charge for early retirement of
debt, net of tax...................... - (0.22)
------ ------
Net earnings (loss) per common share - basic $ 0.14 $ (0.06)
====== ======
Earnings before extraordinary charge, per
common share - diluted............... $ 0.13 $ 0.15
Extraordinary charge for early retirement of
debt, net of tax..................... - (0.21)
------ ------
Net earnings (loss) per common share -
diluted.............................. $ 0.13 $ (0.06)
====== ======
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
<TABLE>
HOME PRODUCTS INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(dollars in thousands)
Thirteen weeks Ended
March 27, March 28,
1999 1998
------- -------
<S> <C> <C>
Operating activities:
Net earnings (loss) ................... $ 1,059 $ (491)
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization ........ 4,210 2,929
Changes in assets and liabilities:
Decrease in accounts receivable .... 1,262 2,807
(Increase) in inventories .......... (2,435) (361)
Decrease (increase) in prepaid expenses
and other current assets .......... 5,604 (1,114)
Increase in accounts payable ....... 3,061 1,449
(Decrease) in accrued liabilities .. (205) (4,290)
Other operating activities, net ...... (381) 3,230
------- -------
Net cash provided by operating activities 12,175 4,159
------- -------
Investing activities:
Seymour acquisition, net of cash acquired - (14,882)
Proceeds on sale of business, net ..... 4,692 -
Proceeds from sale of building, net ... 977 -
Capital expenditures, net ............. (5,326) (4,034)
------- -------
Net cash used for investing activities.. 343 (18,916)
------- -------
Financing activities:
Payments on borrowings ................ (8,250) (99,218)
Net proceeds from borrowings and warrants 3,500 117,538
Payment of capital lease obligation ... (107) (42)
Purchase of treasury stock ............ (817) -
Exercise of stock options, issuance of common
stock under stock purchase plan and other 74 59
------- -------
Net cash provided by financing activities (5,600) 18,337
Net increase in cash and cash equivalents 6,918 3,580
Cash and cash equivalents at beginning of
period ................................ 4,986 583
------- -------
Cash and cash equivalents at end of period $ 11,904 $ 4,163
Supplemental disclosures: Cash paid in the
period for:
Interest .............................. $ 635 $ 2,686
------- -------
Income taxes, net ..................... $ 1,525 $ 905
------- -------
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
HOME PRODUCTS INTERNATIONAL, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(dollars in thousands, except share and per share amounts)
Note 1. Home Products International, Inc. (the "Company"), based in
Chicago, is a leading designer, manufacturer and marketer of a broad
range of value-priced, quality consumer houseware products. The
Company's products are marketed principally through mass-market trade
channels in the United States and internationally.
The condensed consolidated financial statements include the accounts
of the Company and its subsidiary companies. All significant
intercompany transactions and balances have been eliminated.
The unaudited condensed financial statements included herein as of
and for the thirteen weeks ended March 27, 1999 and for the thirteen
weeks ended March 28, 1998 reflect, in the opinion of the Company, all
adjustments (which include only normal recurring adjustments) necessary
for the fair presentation of the financial position, the results of
operations and cash flows. These unaudited financial statements should
be read in conjunction with the audited financial statements and related
notes thereto included in the Company's 1998 Annual Report on Form 10-K.
The results for the interim periods presented are not necessarily
indicative of results to be expected for the full year.
Note 2. Effective December 27, 1998 (fiscal 1999) the Company sold
Shutters, Inc. ("Shutters") its home improvement products division.
Proceeds from the sale were used to pay down debt. On a consolidated
basis, the gain on the sale was not material.
Note 3. Inventories are summarized as follows:
March 27, December 26,
1999 1998
------ ------
Finished goods ..................... $16,521 $15,771
Work-in-process .................... 3,875 3,487
Raw materials ...................... 6,495 6,038
------ ------
$26,891 $25,296
====== ======
<PAGE>
Note 4. The following information reconciles earnings per share - basic
and earnings per share - diluted:
<TABLE>
For the 13 Weeks Ended
March 27, March 28,
1999 1998
------ ------
<S> <C> <C>
Net income before extraordinary charge $ 1,059 $ (491)
====== ======
Weighted average common shares outstanding
- basic............................. 7,661 7,929
Stock options and warrants............ 221 387
------ ------
Weighted average common shares outstanding
- diluted........................... 7,882 8,316
====== ======
Net earnings (loss) per share - basic. $ 0.14 $ (0.06)
====== ======
Net earnings (loss) per share - diluted $ 0.13 $ (0.06)
====== ======
</TABLE>
Note 5. The provision for income taxes is determined by applying an
estimated annual effective tax rate (federal, state and foreign combined)
to income before taxes. The estimated annual effective income tax rate
is based upon the most recent annualized forecast of pretax income and
permanent book/tax differences.
ITEM 2.Management's Discussion and Analysis of Financial Condition and
Results of Operations
This commentary should be read in conjunction with the Company's
consolidated financial statements and related footnotes and management's
discussion and analysis of financial condition and results of operations
contained in the Company's Form 10-K for the year ended December 26,
1998.
<PAGE>
Third Quarter 1998 Acquisitions.
The Company made two acquisitions within its third quarter of 1998
(the "Third Quarter 1998 Acquisitions") and the actual results have been
combined with the Company's since the date of the respective acquisition.
The Third Quarter 1998 Acquisitions are as follows:
Entity Date Acquired
------ -------------
Tenex Corporation's consumer product
storage line.................... August 14, 1998
Prestige Plastics, Inc.*.......... September 8, 1998
* Prestige Plastics, Inc. is comprised of
two operating divisions; Anchor Hocking
Plastics ("AHP") and Plastics, Inc.
("PI").
<PAGE>
Thirteen weeks ended March 27, 1999 compared to the thirteen weeks ended
March 28, 1998.
In the discussion and analysis that follows, all references to the
first quarter of 1999 are to the thirteen week period ended March 27,
1999 and all references to the first quarter of 1998 are to the thirteen
week period ended March 28, 1998. The following discussion and analysis
compares the actual results for the first quarter of 1999 to the actual
results for the first quarter of 1998 with reference to the following (in
thousands, except per share amounts; unaudited):
<TABLE>
Thirteen weeks ended
March 27, 1999 March 28, 1998
------ ----- ------ -----
<S> <C> <C> <C> <C>
Net sales.................. $67,799 100.0% $52,408 100.0%
Cost of goods sold......... 45,177 66.6 36,455 69.6
------ ----- ------ -----
Gross profit............. 22,622 33.4 15,953 30.4
Operating expenses......... 15,930 23.5 10,861 20.7
------ ----- ------ -----
Operating profit......... 6,692 9.9 5,092 9.7
Interest expense........... (4,954) (7.2) (3,006) (5.7)
Other income............... 88 0.0 58 0.1
------ ----- ------ -----
Earnings before income taxes 1,826 2.7 2,144 4.1
Income tax expense......... (767) (1.1) (898) (1.7)
------ ----- ------ -----
Earnings before extraordinary
charge.................... 1,059 1.6 1,246 2.4
Extraordinary charge for early
retirement of debt, net of tax - - (1,737) (3.3)
------ ----- ------ -----
Net earnings (loss)........ $ 1,059 1.6% $ (491) (0.9)%
====== ===== ====== =====
Earnings before extraordinary
charge per common share
- basic................... $ 0.14 $ 0.16
====== ======
Earnings before extraordinary
charge per common share
- diluted................ $ 0.13 $ 0.15
====== ======
Net earnings (loss) per share
- basic.................. $ 0.14 $ (0.06)
====== ======
Net earnings (loss) per share
- diluted............... $ 0.13 $ (0.06)
====== ======
Weighted average common shares
outstanding - basic...... 7,661 7,929
Weighted average common shares
outstanding - diluted.... 7,882 8,316
</TABLE>
<PAGE>
Net sales. Net sales of $67.8 million in the first quarter of 1999
increased $15.4 million, or 29.4%, from net sales of $52.4 million in the
first quarter of 1998. The Third Quarter 1998 Acquisitions contributed
$18.6 million to the increase and internal growth, excluding the Third
Quarter 1998 Acquisitions, contributed $1.7 million, or 4.0%. The loss
of sales to Caldor, a regional retailer in the northeast, due to their
Chapter 7 bankruptcy filing and the divestiture of Shutters, Inc.
combined to generate a decrease in net sales of $4.9 million.
Net sales of storage products, including general storage, food
storage and closet storage increased $10.2 million from first quarter
1998 net sales of $20.8 million to $31.0 million for the first quarter of
1999. The primary contributor to the increase was the Third Quarter 1998
acquisitions. The Third Quarter 1998 Acquisitions significantly
increased the Company's presence in the general storage products
category, more specifically rolling carts, stacking drawer systems and
the food storage category. The food storage category was first added to
the Company as a result of the September 1998 acquisition of AHP.
Net sales of laundry and bathware products increased $.7 million
from $29.9 million in the first quarter of 1998 to $30.6 million in the
first quarter of 1999. The increase over the prior period is primarily
attributable to additional shelf space obtained for the Company's Suction
Lock bathware products. The increase was partially offset by a reduction
in sales of wood and metal indoor dryers and safety gates, as well as the
impact of 1998 sku rationalization efforts. Under performing and low
margin sku's were eliminated in 1998, which negatively impacted 1999 net
sales.
Net sales of servingware products were $6.4 million for the
first quarter of 1999. This product line was added to the Company's
portfolio of products in September 1998 as a part of the Third Quarter
1998 Acquisitions.
The divestiture of Shutters, Inc. in early 1999 generated a
decrease to first quarter 1999 net sales of $1.9 million as compared to
the first quarter of 1998.
Gross profit. Gross profit increased from $16.0 million in the
first quarter of 1998 to $22.6 million in the first quarter of 1999 while
gross profit margins increased from 30.4% in the first quarter of 1998 to
33.4% in the first quarter of 1999. The major contributor to the margin
improvement as compared to the prior year first quarter was a change in
mix of laundry/bathware products sold. A reduction in the sales of lower
margin dryers and safety gates and an increase in the sale of higher
margin Suction Lock bathware products generated the majority of the
improvement. Also contributing to the favorable margins was the prior
year elimination of under performing sku's within all of the Company's
product lines. The average cost of plastic resin, one of the company's
primary raw materials, decreased as compared to the prior year first
quarter; however, most of the savings have been passed along to customers
in response to competitive pressures.
<PAGE>
Operating expenses. Operating expenses of $15.9 million in the
first quarter of 1999 were up $5.0 million as compared to the first
quarter of 1998. The increase in operating expenses is entirely related
to the Third Quarter 1998 Acquisitions. Excluding the impact of
amortization, operating expenses as a percent of net sales increased to
21.5% in 1999 from 19.0% in 1998. The increase as a percentage of net
sales is primarily caused by the seasonality of the Third Quarter 1998
Acquisition's net sales. With net sales more heavily concentrated in the
second and third quarters, first quarter 1999 fixed expenses are
effectively leveraged over a smaller sales base. This trend should
reverse over the course of 1999, as the fixed expenses are leveraged over
a larger sales base. Amortization expense has increased from $0.9
million in 1998 to $1.4 million in 1999 as a result of goodwill created
from the Third Quarter 1998 Acquisitions.
Interest expense. Interest expense of $5.0 million for the first
quarter of 1999 increased $2.0 million from $3.0 million in the first
quarter of 1998. The issuance of approximately $95.0 million of debt in
connection with the Third Quarter 1998 Acquisitions generated the
majority of the increased interest expense between periods.
Income tax expense. Income tax expense decreased by $.1 million to
$.8 million for the first quarter of 1999 from $0.9 million in the first
quarter of 1998. The Company's combined effective federal, state and
foreign tax rate for both 1998 and 1999 was 42%, thus the decrease was
the direct result of a change in pre tax income.
Net earnings. The Company had net earnings of $1.1 million in
the first quarter of 1999, or $0.13 per common share - diluted, based on
7,882,232 weighted average common shares outstanding. This compares to a
net loss of $.5 million in the first quarter of 1998, or $0.06 per common
share - diluted, based on 8,316,182 weighted average common shares
outstanding. The decrease in weighted average common shares outstanding
was primarily the result of 401,100 shares of treasury stock repurchased
between October 1998 and the end of the first quarter of 1999. Also
contributing to the decrease in weighted average shares outstanding was
the impact of the decrease in the average price of the Company's common
stock as compared to the first quarter of 1998 which reduced the number
of equivalent shares from stock options.
The first quarter of 1998 included an extraordinary charge of
$1.7 million, net of tax, or $0.21 per share - diluted, related to the
early retirement of debt.
<PAGE>
Capital Resources and Liquidity
Cash on hand at March 27, 1999 was $11.9 million and cash
provided by operations for the 13 weeks was $12.2 million. The large
cash balance was primarily the result of three factors. First, the
Company sold Shutters, Inc. in early 1999 and the cash portion of the
proceeds received was $4.4 million. Secondly, HPI collected a receivable
in the amount of $3.2 million from Newell Co. in February 1999 for
reimbursement of costs incurred related to the closing of AHP's Ryan
Street facility. Finally, HPI has been able to defer cash interest
payments of $2.5 million for six months, from October and November 1998
until April and May 1999 because of the interest rate options selected
under the terms of the Chase Credit Facility.
HPI has paid down $4.9 million of debt in the 13 weeks ended March
27, 1999. Availability under the revolving credit facility at March 27,
1999 was $55.9 million. HPI was in compliance with all covenants as of
March 27, 1999.
HPI has spent a total of $0.8 million to purchase 83,400 shares of
common stock in the 13 weeks ended March 27, 1999. Since the beginning
of the stock repurchase plan, (October 1998) through April 21, 1999 HPI
purchased a total of 578,450 shares at a total cost of $4.7 million. The
average cost per share repurchased was $8.19/share.
The Company believes its financing facilities together with its cash
flow from operations will provide sufficient capital to fund operations,
make the required debt repayments and meet anticipated capital spending
needs.
Year 2000 Compliance
Many currently installed computer systems and software products are
coded to only accept two-digit entries in the date code field and can not
distinguish 21st century dates from 20th century dates and, as a result,
many companies' software and computer systems may need to be upgraded or
replaced in order to comply with such "Year 2000" requirements.
State of readiness. The Company has finalized its evaluation of the
Year 2000 readiness (the "Project") of its information technology systems
("IT") and its non IT Systems, ("Non IT") such as building security,
heating and cooling, telephones, voicemail, and other similar items. The
Project will cover the following phases: (i) identification of all IT and
non IT systems (completed), (ii) assessment of the repair or replacement
requirements (completed), (iii) repair or replacement, (iv) testing,
(v) implementation and (vi) creation of contingency plans in the event of
year 2000 failures. The Company is scheduled to have reached Year 2000
compliance for all IT and non IT Systems prior to December 1999.
<PAGE>
The Company is also working with its major suppliers and customers
to determine whether the year 2000 problem will have an adverse effect on
the Company's relationships with them. The Company does not control its
suppliers or customers, and relies on a variety of utilities,
telecommunication companies, banks and other suppliers in order to
continue its business. There is no assurance that such parties will not
suffer a year 2000 business interruption, which, could have a material
adverse effect on the Company's financial condition and its results of
operations.
Costs. To date, the Company has not incurred significant
expenditures in connection with Year 2000 compliance issues. Management
estimates that the Year 2000 compliance costs will be approximately
$.25 million to $.75 million. Funds for the Year 2000 compliance
will be obtained from current operations or the Company's revolving
credit facility.
Contingency plan. The Company has not yet finalized its Year
2000 contingency plan. The Company intends to finalize its contingency
plan prior to December 1999. In addition, if further year 2000
compliance issues are discovered, the Company will evaluate the need for
one or more contingency plans relating to such issues.
Management Outlook and Commentary
Some of the opportunities and strategic initiatives planned for the
remainder of 1999 and beyond are as follows:
* The Third Quarter 1998 Acquisitions have added significantly to the
first quarter 1999 net sales. Net sales in the second quarter of 1999
should continue to benefit from these acquisitions.
* Sales of laundry, bath and storage products have historically been
more heavily concentrated in the second and third quarters. This
corresponds to the spring/summer wedding season, new home
buying/building, consumer spring cleaning efforts and the back-to-
school season. This trend should continue in 1999.
* The Company has added 18 new injection molding machines at its Chicago
facility. The new machines will allow for currently out-sourced
production of certain storage products to be brought in-house. This
initiative to bring in house production of certain stacking drawer
systems is currently under way and should be completed by the end of
the second quarter or early into the third quarter of 1999.
* Construction of a new distribution center and warehouse space at the
Company's Chicago manufacturing facility was started in late 1998 and
is currently on schedule to be completed by the end of the second
quarter of 1999. The addition of 100,000 square feet will provide
additional square footage at favorable rates as compared to leasing.
* A component of the Company's acquisition strategy is to combine
acquired entities into existing operating platforms. The integration
of the Third Quarter 1998 Acquisitions is almost complete, and should
be finalized prior to the completion of the third quarter of 1999.
<PAGE>
* The cost of plastic resin, a significant raw material for the company,
remains at depressed levels as compared to prior years; however, the
Company has been forced to pass along a majority of the cost savings
to its customers due to competitive pressures. This trend is expected
to continue throughout 1999. If resin prices were to increase, there
can be no assurance that such increase could be successfully passed
along to the Company's customers.
* The Company continues to explore the possibilities of expanding its
manufacturing capabilities to the western region of the United States.
If implemented, such expansion should result in incremental sales to
the national mass market retailers.
* Throughout the remainder of 1999 the Company will allocate resources
to focus upon new product development (the Company's goal is 10%
annual growth from new products and product line improvements),
expansion of manufacturing capacity and organic sales growth.
* The Company will continue to explore acquisitions that will be
accretive to earnings. Management anticipates that the fragmented
nature of the housewares industry will continue to provide significant
opportunities for growth through strategic acquisitions of
complementary businesses. Management intends to acquire businesses at
attractive multiples of cash flow and achieve operational and
distribution efficiencies through integration of complementary
businesses.
<PAGE>
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
For the 13 week period ended March 27, 1999, the Company did
not experience any material changes in market risk exposure that affect
the quantitative and qualitative disclosures presented in the Company's
Annual Report on Form 10-K for the 52 week period ended December 26,
1998.
Forward Looking Statements
This quarterly report on Form 10-Q, including "Management's
Discussion and Analysis of Financial Condition and Results of
Operations", "Year 2000 Compliance", "Management Outlook and Commentary"
and "Quantitative and Qualitative Disclosures about Market Risk"
sections contain forward-looking statements within the meaning of the
"safe-harbor" provisions of the Private Securities Litigation Reform Act
of 1995. Such statements are based on management's current expectations
and are subject to a number of factors and uncertainties which could
cause actual results to differ materially from those described in the
forward-looking statements. Such factors and uncertainties include, but
are not limited to: (i) the anticipated effects of the Third Quarter 1998
Acquisitions on the Company's sales and earnings; (ii) the impact of the
level of the Company's indebtedness; (iii) restrictive covenants
contained in the Company's various debt documents; (iv) general economic
conditions and conditions in the retail environment; (v) the Company's
dependence on a few large customers; (vi) price fluctuations in the raw
materials used by the Company (vii) competitive conditions in the
Company's markets; (viii) the seasonal nature of the Company's business;
(ix) the Company's ability to execute its acquisition strategy; (x)
fluctuations in the stock market; (xi) the extent to which the Company is
able to retain and attract key personnel; (xii) relationships with
retailers; and (xiii) the impact of federal, state and local
environmental requirements (including the impact of current or future
environmental claims against the Company). As a result, the Company's
operating results may fluctuate, especially when measured on a quarterly
basis. The Company undertakes no obligation to republish revised
forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
Readers are also urged to carefully review and consider the various
disclosures made by the Company which attempt to advise interested
parties of the factors which affect the Company's business, in this
report, as well as the Company's periodic reports on Forms 10-K, 10-Q and
8-K filed with the Securities and Exchange Commission.
<PAGE>
PART II Other Information
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit 27 - Financial Data Schedule
b) Reports of Form 8-k. The Company issued one report on Form 8-k
within the 13 weeks ended March 27, 1999 related to a stock buy
back program authorized by the Board of Directors. The 8-k was
filed on January 11, 1999.
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 hereunto duly authorized.
Home Products International, Inc.
By: /s/ James E. Winslow
James E. Winslow
Executive Vice President and
Chief Financial Officer
Dated: May 11, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-25-1999
<PERIOD-START> DEC-27-1998
<PERIOD-END> MAR-27-1999
<CASH> 11,903
<SECURITIES> 1
<RECEIVABLES> 54,632
<ALLOWANCES> 6,708
<INVENTORY> 26,891
<CURRENT-ASSETS> 87,959
<PP&E> 84,268
<DEPRECIATION> 25,040
<TOTAL-ASSETS> 337,457
<CURRENT-LIABILITIES> 61,647
<BONDS> 214,679
0
0
<COMMON> 80
<OTHER-SE> 58,237
<TOTAL-LIABILITY-AND-EQUITY> 337,457
<SALES> 67,799
<TOTAL-REVENUES> 67,799
<CGS> 45,177
<TOTAL-COSTS> 45,177
<OTHER-EXPENSES> 0
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</TABLE>
