<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED OCTOBER 31, 1999
Commission file number 1-13026
BLYTH INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-2984916
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
100 FIELD POINT ROAD, GREENWICH, CONNECTICUT 06830
(Address of principal executive offices) (Zip Code)
(203) 661-1926
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
------ ------
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
48,075,460 COMMON SHARES AS OF NOVEMBER 30, 1999.
PAGE 1 OF 22
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BLYTH INDUSTRIES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Form 10-Q Cover Page.....................................................1
Form 10-Q Index..........................................................2
Part I. Financial Information:
Item 1. Financial Statements:
Consolidated Balance Sheets...........................3
Consolidated Statements of Earnings.................4-5
Consolidated Statements of Stockholders' Equity.......6
Consolidated Statements of Cash Flows.................7
Notes to Consolidated Financial Statements.........8-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.......11-17
Item 3. Quantitative and Qualitative Disclosures
about Market Risk......................................18
Part II. Other Information
Item 1. Legal Proceedings........................................19
Item 2. Changes in Securities....................................19
Item 3. Defaults upon Senior Securities..........................19
Item 4. Submission of Matters to a Vote of Security Holders......19
Item 5. Other Information.....................................19-21
Item 6. Exhibits and Reports on Form 8-K.........................21
Signatures..............................................................22
</TABLE>
PAGE 2 OF 22
<PAGE>
Part I. FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
OCTOBER 31, JANUARY 31,
(In thousands, except share data) 1999 1999
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 13,533 $ 18,571
Accounts receivable, less allowance for doubtful receivables
of $2,396 and $1,404, respectively 122,623 60,810
Inventories 231,333 169,749
Prepaid expenses 2,393 2,831
Deferred income taxes 830 600
- ----------------------------------------------------------------------------------------------------------------------------
Total current assets 370,712 252,561
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Less accumulated depreciation of $76,575 and $58,184, respectively 270,129 236,273
OTHER ASSETS:
Investments 8,920 18,914
Excess of cost over fair value of assets acquired, net of
accumulated amortization of $6,374 and $4,446, respectively 91,912 67,534
Deposits and other assets 6,140 1,501
- ----------------------------------------------------------------------------------------------------------------------------
Total assets $747,813 $576,783
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank lines of credit $ 41,069 $ 3,455
Current maturities of long-term debt 15,574 9,339
Accounts payable 51,877 51,336
Accrued expenses 52,309 44,074
Income taxes 10,253 1,197
- ----------------------------------------------------------------------------------------------------------------------------
Total current liabilities 171,082 109,401
DEFERRED INCOME TAXES 23,074 18,978
LONG-TERM DEBT, less current maturities 195,581 114,246
EXCESS OF FAIR VALUE OVER COST OF ASSETS ACQUIRED, net of
accumulated amortization of $901 and $811, respectively 503 593
MINORITY INTEREST 974 11,533
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Preferred stock - authorized 10,000,000 shares of $0.01
par value; no shares issued and outstanding - -
Common stock - authorized 100,000,000 shares of $0.02
par value; issued, 49,224,160 and 49,200,474, respectively 984 984
Additional contributed capital 93,605 93,281
Retained earnings 292,850 227,995
Treasury stock, at cost, 1,148,700 shares and 10,000 shares, respectively (28,790) (228)
Accumulated other comprehensive loss (2,050) -
- ----------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 356,599 322,032
- ----------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $747,813 $ 576,783
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 3 OF 22
<PAGE>
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED OCTOBER 31 (In thousands, except per share data)
1999 1998
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 768,577 $ 622,807
Cost of goods sold 332,994 265,234
- -----------------------------------------------------------------------------------------------------------------------------
Gross profit 435,583 357,573
Selling and shipping 252,781 209,281
Administrative 65,869 56,441
Amortization of goodwill 2,090 1,531
- -----------------------------------------------------------------------------------------------------------------------------
320,740 267,253
- -----------------------------------------------------------------------------------------------------------------------------
Operating profit 114,843 90,320
Other expense (income):
Interest expense 8,055 5,221
Interest income (440) (255)
Equity in earnings of investees 1,549 (106)
- -----------------------------------------------------------------------------------------------------------------------------
9,164 4,860
- -----------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes and minority interest 105,679 85,460
Income tax expense 40,396 33,546
- -----------------------------------------------------------------------------------------------------------------------------
Earnings before minority interest 65,283 51,914
Minority interest 428 (15)
- -----------------------------------------------------------------------------------------------------------------------------
Net earnings $ 64,855 $ 51,929
- -----------------------------------------------------------------------------------------------------------------------------
Basic: Net earnings per common share $ 1.34 $ 1.06
Weighted average number of shares outstanding 48,558 49,158
- -----------------------------------------------------------------------------------------------------------------------------
Diluted: Net earnings per common share $ 1.33 $ 1.05
Weighted average number of shares outstanding 48,925 49,652
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 4 OF 22
<PAGE>
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED OCTOBER 31, (In thousands, except per share data)
1999 1998
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 294,441 $ 240,766
Cost of goods sold 131,003 106,392
- --------------------------------------------------------------------------------------------------------------------------
Gross profit 163,438 134,374
Selling and shipping 88,991 74,149
Administrative 21,470 17,693
Amortization of goodwill 815 513
- --------------------------------------------------------------------------------------------------------------------------
111,276 92,355
- --------------------------------------------------------------------------------------------------------------------------
Operating profit 52,162 42,019
Other expense (income):
Interest expense 3,679 1,853
Interest income (256) (131)
Equity in earnings of investees 273 (308)
- --------------------------------------------------------------------------------------------------------------------------
3,696 1,414
- --------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes and minority interest 48,466 40,605
Income tax expense 18,426 15,923
- --------------------------------------------------------------------------------------------------------------------------
Earnings before minority interest 30,040 24,682
Minority interest 152 150
- --------------------------------------------------------------------------------------------------------------------------
Net earnings $ 29,888 $ 24,532
- --------------------------------------------------------------------------------------------------------------------------
Basic: Net earnings per common share $ 0.62 $ 0.50
Weighted average number of shares outstanding 48,365 49,186
- --------------------------------------------------------------------------------------------------------------------------
Diluted: Net earnings per common share $ 0.61 $ 0.49
Weighted average number of shares outstanding 48,748 49,610
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 5 OF 22
<PAGE>
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
OCTOBER 31, (In thousands, except share data)
- ---------------------------------------------------------------------------------------------------------------------------------
ACCUMULATED
COMMON STOCK ADDITIONAL OTHER
--------------------- CONTRIBUTED RETAINED TREASURY COMPREHENSIVE
SHARES AMOUNT CAPITAL EARNINGS STOCK LOSS TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE NINE MONTHS ENDED OCTOBER 31, 1998
Balance, January 31, 1998 49,100,953 $ 982 $ 92,357 $153,493 $ - $ - $ 246,832
Net earnings for the period - - - 51,929 - - 51,929
Common stock issued in connection with
exercise of stock options 87,423 2 623 - - - 625
Treasury stock purchase (10,000) (228) (228)
--------------------------------------------------------------------------------
Balance, October 31, 1998 49,178,376 $ 984 $ 92,980 $205,422 $ (228) $ - $ 299,158
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
FOR THE NINE MONTHS ENDED OCTOBER 31, 1999:
Balance, January 31, 1999 49,190,474 $ 984 $ 93,281 $227,995 $ (228) $ - $ 322,032
Net earnings for the period - - - 64,855 - - 64,855
Foreign currency translation adjustments - - - - - (2,050) (2,050)
-------------------------
Comprehensive income (2,050) 62,805
Common stock issued in connection with
exercise of stock options 23,686 - 324 - - - 324
Treasury stock purchase (1,138,700) - - - (28,562) - (28,562)
--------------------------------------------------------------------------------
Balance, October 31, 1999 48,075,460 $ 984 $ 93,605 $292,850 $(28,790) $(2,050) $ 356,599
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 6 OF 22
<PAGE>
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
NINE MONTHS ENDED OCTOBER 31, (In thousands) 1999 1998
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 64,855 $ 51,929
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 20,481 14,650
Deferred income taxes 838 2,429
Equity in earnings of investees 1,549 (106)
Minority interest 428 (15)
Changes in operating assets and liabilities, net of effect of business
acquisitions:
Accounts receivable (53,327) (34,347)
Inventories (44,865) (17,012)
Prepaid expenses 1,422 (755)
Other assets (2,742) (46)
Accounts payable 2,984 440
Accrued expenses (3,545) 3,189
Income taxes 8,989 5,095
- ----------------------------------------------------------------------------------------------------------------------
Total adjustments (67,788) (26,478)
- ----------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities (2,933) 25,451
Cash flows from investing activities:
Purchases of property, plant and equipment (35,618) (29,529)
Net long term investments 655 (6,434)
Purchase of businesses, net of cash acquired (38,967) (788)
- ----------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (73,930) (36,751)
Cash flows from financing activities:
Proceeds from issuance of common stock 324 625
Purchase of treasury stock (28,562) (228)
Borrowings from bank line of credit 385,902 374,643
Repayments on bank line of credit (365,000) (374,710)
Proceeds from issuance of long-term debt 150,000 -
Borrowings (payments) on long-term debt (70,839) 1,117
- ----------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 71,825 1,447
- ----------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (5,038) (9,853)
Cash and cash equivalents at beginning of period 18,571 21,273
- ----------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 13,533 $ 11,420
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE 7 OF 22
<PAGE>
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The Company, which operates in a single category, home fragrance
products, designs, manufactures, markets and distributes an
extensive line of home fragrance products including scented candles,
outdoor citronella candles, potpourri and environmental fragrance
products and markets a broad range of related candle accessories and
decorative gift bags and tags.
The consolidated financial statements include the accounts of the
Company, and its direct and indirect subsidiaries. All significant
intercompany accounts and transactions have been eliminated.
Investments in companies which are not majority owned or controlled
are reported using the equity method and are recorded in other
assets. European operations maintain a calendar year accounting
period which is consolidated with the Company's fiscal period. In
the opinion of management, the accompanying unaudited consolidated
financial statements include all accruals (consisting only of normal
recurring accruals) necessary for fair presentation of the Company's
consolidated financial position at October 31, 1999 and the
consolidated results of its operations and cash flows for the nine
month period ended October 31, 1999 and 1998. These interim
statements should be read in conjunction with the Company's
consolidated financial statements for the year ended January 31,
1999, as set forth in the Company's Annual Report on Form 10-K.
Operating results for the nine months ended October 31, 1999 are not
necessarily indicative of the results that may be expected for the
year ending January 31, 2000.
2. BUSINESS ACQUISITIONS
In May 1999, the Company acquired the remaining 50% of Colony Gift
Corporation Ltd. ("Colony"), a U.K. candle manufacturer, for
approximately $10.0 million in cash. The excess of the purchase
price over the estimated fair value of assets acquired approximated
$8.0 million and is being amortized over 15 years.
In June 1999, the Company acquired additional Class A and Class B
common shares of Liljeholmens Stearinfabriks AB ("Liljeholmens"),
through a tender offer for approximately $28.3 million in cash. As a
result, the Company has increased its economic ownership percentage
in Liljeholmens to approximately 99% from approximately 39%. The
Company is currently in the process of acquiring the remaining 1%
economic interest in Liljeholmens through a compulsory purchase
procedure pursuant to Swedish law. The excess of the purchase price
over the estimated fair value of assets acquired from this
additional investment approximated $15.9 million and is being
amortized over 40 years.
3. INVENTORIES
The components of inventory consist of the following (in thousands):
<TABLE>
<CAPTION>
OCTOBER 31, 1999 JANUARY 31, 1999
--------------------------------------------------------------
<S> <C> <C>
Raw materials $ 39,520 $ 34,807
Work in process 4,639 2,658
Finished goods 187,174 132,284
--------------------------------------------------------------
$ 231,333 $ 169,749
--------------------------------------------------------------
</TABLE>
The above amounts as of October 31, 1999 include, as a result of the
recent acquisitions, $50,971 of inventory of Liljeholmens and
Colony. The above amounts as of January 31, 1999 include $17,375 of
inventory of Liljeholmens.
PAGE 8 OF 22
<PAGE>
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. EARNINGS PER SHARE
The components of basic and diluted earnings per share are as follows
(in thousands):
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS THREE MONTHS NINE MONTHS
ENDED OCTOBER 31, ENDED OCTOBER 31, ENDED OCTOBER 31, ENDED OCTOBER 31,
1999 1999 1998 1998
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net earnings $ 29,888 $ 64,855 $ 24,532 $ 51,929
- ---------------------------------------------------------------------------------------------------------------------------------
Weighted average number of common shares outstanding:
Basic 48,365 48,558 49,186 49,158
Dilutive effect of stock options 383 367 424 494
- ---------------------------------------------------------------------------------------------------------------------------------
Weighted average number of common shares outstanding:
Diluted 48,748 48,925 49,610 49,652
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
5. STOCK REPURCHASE PLAN
On September 10, 1998, the Company's Board of Directors authorized
the Company to repurchase up to 1,000,000 shares of its common stock
and on June 8, 1999 it authorized the repurchase of up to an
additional 1,000,000 shares. During the three month period ended
October 31, 1999 the Company repurchased 414,000 of its common
shares. As of October 31, 1999, the Company had purchased on the
open market 1,148,700 common shares for a total cost of
approximately $28.8 million. The acquired shares are held as common
stock in treasury.
PAGE 9 OF 22
<PAGE>
BLYTH INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
6. SEGMENT INFORMATION
The Company operates in a single category, home fragrance products.
The Company designs, manufactures, markets and distributes an
extensive line of home fragrance products including scented candles,
outdoor citronella candles, potpourri and environmental fragrance
products. Closely complementing these products are a broad range of
candle accessories and decorative gift bags and tags. The Company
has operations outside of the United States and sells its products
worldwide.
The following geographic area data include trade net sales and net
earnings based on product shipment destination and long-lived assets
(which consist of fixed assets, goodwill and long term investments)
based on physical location. This data is presented in accordance
with FASB No. 131 "Disclosures about Segments of an Enterprise and
Related Information," which the Company has adopted for all periods
presented.
<TABLE>
<CAPTION>
THREE MONTHS ENDED OCTOBER 31, NINE MONTHS ENDED OCTOBER 31,
----------------------------------------- -----------------------------------------
(In thousands) 1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales:
United States $ 234,876 $ 209,434 $ 598,573 $ 523,482
International(1) 59,565 31,332 170,004 99,325
- --------------------------------------------------------------------------------------------------------------
Total $ 294,441 $ 240,766 $ 768,577 $ 622,807
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
THREE MONTHS ENDED OCTOBER 31, NINE MONTHS ENDED OCTOBER 31,
----------------------------------------- -----------------------------------------
(In thousands) 1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------
Net Earnings:
United States $ 28,159 $ 23,661 $ 57,722 $ 47,572
International(1) 1,729 871 7,133 4,357
- --------------------------------------------------------------------------------------------------------------
Total $ 29,888 $ 24,532 $ 64,855 $ 51,929
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
OCTOBER 31, JANUARY 31,
(In thousands) 1999 1999
- ---------------------------------------------------------------------
Long-Lived Assets:
United States $271,393 $240,251
International(1) 99,568 82,470
- ---------------------------------------------------------------------
Total $370,961 $322,721
- ---------------------------------------------------------------------
</TABLE>
(1) No individual country represents a material amount of net sales, net
earnings or long-lived assets.
PAGE 10 OF 22
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
NET SALES
Net sales increased $145.8 million, or 23.4%, to $768.6 million in
the first nine months of fiscal 2000 from $622.8 million in the
first nine months of fiscal 1999. Net sales in the third quarter
ended October 31, 1999, increased $53.6 million, or 22.3%, to $294.4
million compared with $240.8 million a year earlier. Most all of
this increase was attributable to unit sales growth in sales of the
Company's everyday products which was achieved through a combination
of new products, more customers and acquisitions. First, new
products, which typically account for approximately 20% of the
Company's total sales each year, have continued to be a key
contributor to the Company's sales growth. Secondly, all of the
Company's wholesale business units have continued to add new
customers or increase shelf space devoted to our product lines and
our direct selling channel increased the number of independent sales
consultants selling the PartyLite brand products worldwide by over
5,000 when compared to the prior year third quarter. Lastly, in the
quarter ended October 31, 1999, the Company's acquisitions of
Liljeholmens and Colony Gift have accounted for approximately half
of the sales growth, on a percentage basis, when compared to the
same period a year ago. International sales for the quarter ended
October 31, 1999 grew by approximately 90% when compared to the same
period last year. Within the International markets during the
quarter ended October 31, 1999, our direct selling channel in
Germany was adversely impacted by new tax legislation that affected
all independent contractors in that country. For the nine months
ended October 31, 1999, International sales increased by more than
70% when compared to the prior year.
GROSS PROFIT
Gross profit increased $78.0 million, or 21.8%, from $357.6 million
in the first nine months of fiscal 1999 to $435.6 million in the
first nine months of fiscal 2000. Gross profit margin decreased
slightly from 57.4% for the first nine months of fiscal 1999 to
56.7% for the first nine months of fiscal 2000. Gross profit in the
third quarter ended October 31, 1999 increased $29.0 million, or
21.6%, from $134.4 million for the quarter ended October 31, 1998 to
$163.4 million. Gross profit margin decreased slightly from 55.8%
for the quarter ended October 31, 1998 to 55.5% for the quarter
ended October 31, 1999. The gross profit as a percentage of net
sales was negatively impacted by the inclusion of Liljeholmens,
which has a lower gross profit percentage than the rest of the
Company. Before including Liljeholmens, gross profit as a percentage
of net sales in the three and nine month periods ended October 31,
1999 increased more than 1.5% when compared to the same period a
year ago. The increase in gross profits before the inclusion of
Liljeholmens in the three and nine month periods ended October 31,
1999 resulted from a relatively higher sales growth of premium
priced products. In addition, the Company continues to benefit from
the capital investments made over the last several years in
manufacturing and distribution, as well as cost savings in product
sourcing. The gross profit contribution of the International market
has grown consistent with the sales growth.
Operating profit grew at a higher rate than sales during the quarter
ended October 31, 1999 when compared to the same period last year.
This growth rate, which is a continuation of the trend of each of
the first two quarters of this year, is a result of the same key
factors driving the growth in gross profits. Operating profit as a
percentage of net sales for the three months ended October 31, 1999,
which includes the impact of Liljeholmens, was 17.7% compared to
17.5% for the same period last year. Operating profit as a
percentage of net sales for the nine months ended October 31, 1999,
which includes the impact of Liljeholmens, was 14.9% compared to
14.5% in the prior year period.
PAGE 11 OF 22
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS: (CONTINUED)
SELLING AND SHIPPING EXPENSE
Selling and shipping expense increased $43.5 million, or 20.8%, from
$209.3 million in the first nine months of fiscal 1999 (33.6% of net
sales), to $252.8 million in the first nine months of fiscal 2000
(32.9% of net sales). Selling and shipping expense increased $14.9
million, or 20.1%, from $74.1 million in the quarter ended October
31, 1998 (30.8% of net sales), to $89.0 million in the quarter ended
October 31, 1999 (30.2% of net sales). The decreases in selling and
shipping expense as a percentage of net sales were attributable to
the inclusion of Liljeholmens which incurs relatively lower selling
and shipping expenses as a percentage of net sales, and a decrease
in the rate of increase in shipping costs across the Company.
ADMINISTRATIVE EXPENSE
Administrative expense increased $9.5 million, or 16.8%, from $56.4
million in the first nine months of fiscal 1999 (9.1% of net sales)
to $65.9 million in the first nine months of fiscal 2000 (8.6% of
net sales). Administrative expense increased $3.8 million, or 21.5%,
from $17.7 million in the quarter ended October 31, 1998 (7.4% of
net sales) to $21.5 million in the quarter ended October 31, 1999
(7.3% of net sales). Administrative expenses as a percentage of
sales declined versus the same period last year for two main
reasons: the economies of scale (the ability to spread
administrative expense over a larger net sales base); and the
inclusion of Liljeholmens (which experiences relatively lower
administrative expense as a percentage of sales). The growth in
administrative expense continues to be lower than the growth in
sales when compared to the prior year.
INTEREST EXPENSE
Interest expense increased $2.9 million, or 55.8%, from $5.2 million
in the first nine months of fiscal 1999 to $8.1 million in the first
nine months of fiscal 2000. Interest expense increased $1.8 million,
or 94.7%, from $1.9 million in the quarter ended October 31, 1998 to
$3.7 million in the quarter ended October 31, 1999. The increase in
interest expense is primarily attributable to borrowings to fund the
acquisitions of Liljeholmens and Colony as well as debt assumed as
part of these acquired companies, and to a lesser extent the
Company's debt offering (as further described in "Liquidity and
Capital Resources").
INCOME TAXES
Income tax expense increased $6.9 million, or 20.6%, from $33.5
million in the first nine months of fiscal 1999 to $40.4 million in
the first nine months of fiscal 2000. Income tax expense increased
$2.5 million, or 15.7%, from $15.9 million in the quarter ended
October 31, 1998 to $18.4 million in the quarter ended October 31,
1999. The effective income tax rate decreased from approximately
39.3% for the nine months ended October 31, 1998 to approximately
38.2% for the same period this year due to the growth in sales in
countries with lower tax rates than the U.S.
PAGE 12 OF 22
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS: (CONTINUED)
NET EARNINGS
As a result of the foregoing, net earnings increased $13.0 million,
or 25.0%, from $51.9 million for the nine months ended October 31,
1998 to $64.9 million for the nine months ended October 31, 1999.
Net earnings increased $5.4 million, or 22.0%, from $24.5 million in
the quarter ended October 31, 1998 to $29.9 million in the quarter
ended October 31, 1999.
Basic earnings per share based upon the weighted average number of
shares outstanding for the nine months ended October 31, 1999
increased $0.28 or 26.4%, to $1.34 compared to $1.06 for the nine
months ended October 31, 1998. Basic earnings per share based upon
the weighted average number of shares outstanding for the quarter
ended October 31, 1999 increased $0.12, or 24.0%, to $0.62 compared
to $0.50 for the quarter ended October 31, 1998. Diluted earnings
per share based upon the potential dilution that could occur if
options to issue common stock were exercised or converted were $1.33
for the nine months ended October 31, 1999 compared to $1.05 for the
same period last year, an increase of $0.28, or 26.7%. Diluted
earnings per share based upon the potential dilution that could
occur if options to issue common stock were exercised or converted
were $0.61 for the quarter ended October 31, 1999 compared to $0.49
for the same period last year, an increase of $0.12 or 24.5%.
LIQUIDITY AND CAPITAL RESOURCES
Inventory increased $78.8 million from $152.5 million at October 31,
1998 to $231.3 million at October 31, 1999 an increase of 51.7%. The
Liljeholmens and Colony acquisitions did not exist in the prior year
period. Before including the $51.0 million of inventory of
Liljeholmens and Colony, inventory at October 31, 1999 increased
18.2% when compared to the prior year (while the base business
(before including Liljeholmens and Colony) experienced sales growth
of approximately 11%). Inventory as of October 31, 1999 included
product to meet early November 1999 shipments of existing customer
orders. Accounts receivable increased $36.3 million, or 42.1% from
$86.3 million at October 31, 1998 to $122.6 million at October 31,
1999. This increase in accounts receivable was due to the increase
in sales and the inclusion of the Liljeholmens and Colony balances
which were not in the prior year's accounts receivable. Accounts
payable and accrued expenses at October 31, 1999 increased $31.8
million ($3.9 million excluding Liljeholmens and Colony), when
compared to October 31, 1998. Such increase is attributable to the
greater operating expenses to support the increased sales.
Capital expenditures for property, plant and equipment were $35.6
million in the nine months ended October 31, 1999. This compares to
$29.5 million in the nine month period ended October 31, 1998. The
Company anticipates capital spending of approximately $55.0 million
for fiscal 2000. The remainder of the spending will be primarily for
increased manufacturing and distribution capacity, upgrades to
machinery and equipment in existing facilities, and computer
hardware and software.
The Company has grown in part through acquisitions and, as part of
its growth strategy, the Company expects to continue from time to
time in the ordinary course of its business to evaluate and pursue
acquisition opportunities as appropriate. This could be in the form
of acquiring other companies, selected assets and product lines,
long term investments, and/or joint ventures that either complement
or expand its existing business.
PAGE 13 OF 22
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS: (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Company's primary capital requirements are for working capital
to fund the increased inventory and accounts receivable required to
sustain the Company's sales growth and for capital expenditures. The
Company believes that cash on hand, cash from operations, the
Company's public debt offering and available borrowings under the
Credit Facility and lines of credit described below, will be
sufficient to fund its operating requirements, capital expenditures,
the Company's stock repurchase program and all other obligations for
the next twelve months.
Pursuant to the Company's revolving credit facility ("Credit
Facility") as amended on September 14, 1999, which matures on
October 17, 2002, the lending institutions have agreed, subject to
certain conditions, to provide an unsecured revolving credit
facility to the Company in an aggregate amount of up to $135.0
million and to provide, under certain circumstances, an additional
$33.8 million. Amounts outstanding under the Credit Facility bear
interest, at the Company's option, at Bank of America's prime rate
(8.25% at October 31, 1999) or at the Eurocurrency rate plus a
credit spread ranging from 0.25% to 0.50%, based on a pre-defined
financial ratio, for a weighted average interest rate of 5.76% at
October 31, 1999. At October 31, 1999, $5.5 million (including
outstanding letters of credit) was outstanding under the Credit
Facility.
In August 1999 and January 1999 the Company entered into agreements
with three banks to provide uncommitted one-year lines of credit
with total available borrowing of $70.0 million. Borrowings under
the agreements bear interest, at the Company's option, at short term
fixed rates, at the banks' prime rate (8.25% at October 31, 1999) or
at the Eurocurrency rate plus a credit spread. No amounts were
outstanding under the uncommitted lines of credit at October 31,
1999.
Liljeholmens has lines of credit which are renewed annually, with
available borrowing of approximately $31.0 million. As of September
30, 1999, Liljeholmens had borrowings under the lines of credit of
approximately $19.4 million. Amounts outstanding under the lines of
credit bear interest of 3.56% at September 30, 1999.
At September 30, 1999, Liljeholmens had various long-term debt
agreements in multiple European currencies maturing at different
dates over the next two to six years. The total amount outstanding
as of September 30, 1999 under the loan agreements was approximately
$31.4 million with interest rates ranging from 2.75% to 8.46%, of
which $14.7 million relates to the current maturities. The loans are
collateralized by certain of Liljeholmens' real estate and by a
pledge of Liljeholmens' shares in its subsidiaries.
Colony has a revolving credit facility with Barclays Bank
("Barclays"), which matures on May 20, 2000, pursuant to which
Barclays has agreed to provide a revolving credit facility in an
amount up to L16.0 million, secured by certain of Colony's assets.
As of September 30, 1999, Colony had borrowings under the credit
facility of L13.2 million ($21.7 million at the September 30, 1999
exchange rate), at a weighted average interest rate of 5.66%.
Net cash provided by operating activities for the quarter ended
October 31, 1999 was a strong $21.3 million, an increase of $7.4
million when compared to the same period a year ago. For the nine
months ended October 31, 1999 net cash used in operating activities
amounted to $2.9 million compared to $25.5 million provided by
operating activities in the same period last year. We expect on a
full year basis to generate significant cash flow from operations
based upon fourth quarter income levels, as well as the lowering of
accounts receivable and inventory, given the normal seasonal aspect
of our business.
PAGE 14 OF 22
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS: (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
In May 1999, the Company filed a shelf registration statement for up
to $250 million in debt securities with the Securities and Exchange
Commission. On September 24, 1999, the Company issued $150.0 million
of 7.9% Senior Notes due October 1, 2009. Interest is payable
semiannually on April 1 and October 1. The proceeds of the offering
were used to repay substantially all of the Company's outstanding
debt under its revolving and uncommitted lines of credit in the
United States.
On June 8, 1999, the Company's Board of Directors authorized the
Company to repurchase up to an additional 1,000,000 shares of its
common stock bringing the total authorization to 2,000,000 shares.
During the three month period ended October 31, 1999 the Company
repurchased 414,000 of its common shares. As of October 31, 1999,
the Company had purchased 1,148,700 shares for a total cost of
approximately $28.8 million.
IMPACT OF ADOPTION OF RECENTLY ISSUED ACCOUNTING STANDARDS
On June 15, 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities". FASB No. 133 (as
deferred by FASB No. 137) is effective for all fiscal years
beginning after June 15, 2000. FASB No. 133 requires that all
derivative instruments be recorded on the balance sheet at their
fair value. Changes in the fair value of derivatives are recorded
each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of transaction. The Company
anticipates that, due to its limited use of derivative instruments,
the adoption of FASB No. 133 will not have a significant effect on
the Company's results of operations or its financial position.
YEAR 2000 COMPLIANCE
The "Year 2000 Issue" is the result of computer programs that were
written using two digits rather than four digits to define the
applicable year. If the Company's computer programs with
date-sensitive functions are not Year 2000 compliant, they may
recognize a date using "00" as the Year 1900 rather than the Year
2000. This could result in miscalculations, malfunctions or
disruptions when attempting to process information containing dates
that fall after December 31, 1999 or other dates which could cause
computer malfunctions.
Recognizing the importance of the "Year 2000 Issue" the Company
began developing a Year 2000 compliance plan in fiscal 1997. The
Company's efforts have been focused on the elements that are
believed to be critical to business operations ("mission critical"),
which includes: (a) an assessment, and where needed, a remediation,
of both information technology ("IT") and non-IT elements of its
business information, computing, telecommunications, and process
control systems, (b) an assessment, and remediation, as necessary,
of equipment with embedded chips, and (c) an evaluation of the
Company's relationships with significant product and services
providers and major customers ("key business partners").
PAGE 15 OF 22
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
YEAR 2000 COMPLIANCE (CONTINUED)
The compliance plan contains five components as follows: (1)
Internal assessment - a detailed evaluation of the potential Year
2000 effects on the Company's IT and non-IT systems and on its
equipment with embedded computer chips, (2) Remediation - corrective
action including code enhancements, hardware and software upgrades,
system replacements, vendor certification, equipment repair or
replacement, and other associated changes to achieve Year 2000
compliance, (3) Testing - the verification that remediation actions
are effective and that systems currently deemed compliant in fact
are compliant, (4) Third party evaluation - an evaluation of the
Year 2000 readiness of key suppliers of goods and services and of
key customers, and (5) Contingency planning - the development of
detailed procedures to be put in place should the Company or key
business partners experience a significant Year 2000 problem.
Although we believe the above is a sound plan, there can be no
assurances that this process will identify or remediate all of the
existing Year 2000 exposures.
The assessment phase is complete on currently installed products.
The remediation process is complete on critical IT and non-IT
systems, and the Company presently believes that remediation and
testing of remaining systems is complete in all material respects.
The testing phase, which is done in most instances using simulated
data, was completed in all material respects on critical IT and
non-IT systems, as of August 31, 1999.
The third party evaluation phase entailed the Company identifying
its key business partners. The Company is continuing the process of
ascertaining their stage of Year 2000 readiness through
questionnaires, interviews, on-site visits, and other available
means. However, the actual readiness of these third parties is
beyond the Company's control; therefore, there can be no assurances
that significant deficiencies do not exist amongst such third
parties. This phase was completed in all material respects as of
September 30, 1999, but the Company anticipates having to follow-up
on non-compliant responses through December 31, 1999.
If needed modifications and conversions of computer systems are not
made on a timely basis by the Company or its key business partners,
the Company could be affected by business disruption, operational
problems, and financial loss, any of which could have a material
adverse effect on the Company's results of operations and
consolidated financial position.
Although not anticipated, the most reasonably likely worst case
scenario of failure by the Company or its key business partners to
resolve the Year 2000 issue would be a short-term slowdown or
cessation of manufacturing operations at one or more of the
Company's facilities, and a short-term inability on the part of the
Company to process orders and billings in a timely manner and to
deliver product to customers in a timely manner.
In addition to the readiness measures described above, the Company
intends to mitigate, through contingency plans that have been
developed, the possible disruption in business operations that may
result from the Year 2000 issue. Contingency plans include, but are
not limited to, expediting critical supplier orders for physical
receipt prior to December 31, 1999, securing alternate sources of
supply for certain key materials and services and updating and
testing disaster recovery plans for communications, technology,
materials and distribution both domestically and internationally.
Review and testing of the contingency plans will continue on an
on-going basis through year-end.
PAGE 16 OF 22
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
YEAR 2000 COMPLIANCE (CONTINUED)
It is currently estimated that the aggregate cost of the Company's
Year 2000 compliance efforts will be approximately $3.1 million, of
which approximately $3.0 million has been spent. These costs are
being expensed as they are incurred except for costs associated with
the replacement of computerized systems, hardware or equipment,
substantially all of which will be capitalized, and are being funded
through operating cash flow. These amounts do not include any costs
associated with the implementation of contingency plans, but such
contingency plan costs are not expected to be significant. The costs
associated with the Company's Year 2000 compliance efforts are not
expected to be material in relation to the Company's IT budget, and
such efforts are not expected to have a material effect upon the
Company's other IT projects.
While the Company does not expect that it will have any need to
obtain independent verification of its risk or cost estimates, it
should be recognized that the risk and cost estimates herein
constitute forward-looking statements and are based solely on
management's best estimates of future events. The Company's Year
2000 compliance plan is an ongoing process and the estimates of
costs and completion dates for various components of the Year 2000
compliance plan described above are subject to change; therefore
actual costs could vary significantly from those currently
anticipated and there can be no guarantees regarding the timing or
effectiveness of plan completion.
PAGE 17 OF 22
<PAGE>
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
MARKET RISK
The Company has operations outside of the United States and sells
its products worldwide. The Company's activities expose it to a
variety of market risks, including the effects of changes in
foreign-currency exchange rates, interest rates and commodity
prices. These financial exposures are actively monitored and managed
by the Company.
INTEREST RATE RISK
As of October 31, 1999, the Company is subject to interest rate risk
on approximately $59.1 million of variable rate debt, including
Liljeholmens and Colony. Each 1.00% increase in the interest rate
would impact pre-tax earnings by approximately $591,000 if applied
to the total.
FOREIGN CURRENCY RISK
The Company uses forward foreign exchange contracts to hedge the
impact of foreign currency fluctuations on certain committed capital
expenditures and Canadian intercompany payables. The Company does
not hold or issue derivative financial instruments for trading
purposes.
With regard to commitments for machinery and equipment in foreign
currencies, upon payment of each commitment the underlying forward
contract is closed and the corresponding gain or loss is included in
the measurement of the cost of the acquired asset. With regard to
forward exchange contracts used to hedge Canadian intercompany
purchases, gain or loss on such hedges is recognized in earnings in
the period in which the underlying hedged transaction occurs. If a
hedging instrument is sold or terminated prior to maturity, gains
and losses are deferred until the hedged item is settled.
However, if the hedged item is no longer likely to occur, the
resultant gain or loss on the terminated hedge is recognized into
earnings. For consolidated financial statement presentation, net
cash flows from such hedges are classified in the categories of the
cash flow with the items being hedged.
The following table provides information about the Company's foreign
exchange forward contracts at October 31, 1999.
<TABLE>
<CAPTION>
U.S. DOLLAR AVERAGE
(In thousands, except average contract rate) NOTIONAL CONTRACT ESTIMATED
AMOUNT RATE FAIR VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Canadian Dollar $ 8,704 1.47 $ (13)
Euro 1,502 1.05 4
- ----------------------------------------------------------------------------------------------
$10,206 $ (9)
- ----------------------------------------------------------------------------------------------
</TABLE>
The foreign exchange contracts outstanding as of October 31, 1999
have maturity dates ranging from November 1999 through February 2000.
PAGE 18 OF 22
<PAGE>
Part II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
The Company is including the following cautionary statement in this
Report to make applicable, and to take advantage of, the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
for any forward-looking statements made by, or on behalf of, the
Company. Forward-looking statements include statements concerning
plans, objectives, goals, strategies, future events or performance
and underlying assumptions and other statements which are other than
statements of historical facts. From time to time, the Company and
its representatives may publish or otherwise make available
forward-looking statements of this nature. All such forward-looking
statements, whether written or oral, and whether made by or on
behalf of the Company, are expressly qualified by the following
cautionary statements. Forward-looking statements involve risks and
uncertainties which could cause actual results or outcomes to differ
materially from those expressed in the forward-looking statements.
Such forward-looking statements are expected to be based on various
assumptions, many of which are based, in turn, upon further
assumptions.
There can be no assurance that management's expectations, beliefs or
projections will occur or be achieved or accomplished. In addition
to other factors and matters discussed elsewhere in this Report and
in the Company's other public filings and statements, the following
are important factors that, in the view of the Company, could cause
actual results to differ materially from those discussed in the
Company's forward-looking statements. The Company disclaims any
obligation to update any forward-looking statements, or the
following factors, to reflect events or circumstances after the date
of this Report.
PAGE 19 OF 22
<PAGE>
Part II. OTHER INFORMATION (CONTINUED)
ITEM 5. OTHER INFORMATION (CONTINUED)
Risk of Inability to Maintain Growth Rate
The Company has grown substantially in recent years. We expect that
our future growth will be generated by sales to the faster growing
worldwide consumer market for home fragrance products. The market
for our institutional products has grown, but more slowly, and we
expect it will continue to do so. Our ability to continue to grow
depends on the following: market acceptance of existing products,
the successful introduction of new products, and increases in
production and distribution capacity to meet demand. The home
fragrance products industry is driven by consumer tastes.
Accordingly, there can be no assurance that our existing or future
products will maintain or achieve market acceptance. We expect that,
as we grow, our rate of growth will be less than our historical
growth rate. In addition, we have grown in part through acquisitions
and there can be no assurance that we will be able to continue to
identify suitable acquisition candidates, to consummate acquisitions
on terms favorable to the Company, to finance acquisitions or to
successfully integrate acquired operations. In the future,
acquisitions may contribute more to the overall Company's sales
growth rate than historically.
Ability to Respond to Increased Product Demand
Our significant internal growth has required increases in personnel,
expansion of production and distribution facilities, and enhancement
of management information systems. Our ability to meet future demand
for products will be dependent upon success in (1) training,
motivating and managing new employees, (2) bringing new production
and distribution facilities on line in a timely manner, (3)
improving management information systems in order to respond
promptly to customer orders and (4) improving our ability to
forecast anticipated product demand in order to continue to fill
customer orders promptly. If we are unable to meet future demand for
products in a timely and efficient manner, our operating results
could be materially adversely affected.
Risks Associated with International Sales and Foreign-Sourced Products
Our international business has grown at a faster rate than sales in
the United States. In addition, we source a portion of our candle
accessories and decorative gift bags from independent manufacturers
in the Pacific Rim, Europe and Mexico. For these reasons we are
subject to the following risks inherent in foreign manufacturing and
sales: fluctuations in currency exchange rates, economic and
political instability, transportation delays, difficulty in
maintaining quality control, restrictive actions by foreign
governments, nationalizations, the laws and policies of the United
States affecting importation of goods (including duties, quotas and
taxes) and trade and foreign tax laws.
Raw Materials
For certain raw materials, there may be temporary shortages due to
weather or other factors, including disruptions in supply caused by
raw material transportation or production delays. Such raw material
shortages have not previously had, and are not expected to have, a
material adverse effect on the Company's operations.
Dependence on Key Management Personnel
Our success depends upon the contributions of key management
personnel, particularly our Chairman, Chief Executive Officer and
President, Robert B. Goergen. We do not have employment contracts
with any of our key management personnel, nor do we maintain any key
person life insurance policies. The loss of any of the key
management personnel could have a material adverse effect on the
Company.
PAGE 20 OF 22
<PAGE>
Part II. OTHER INFORMATION (CONTINUED)
ITEM 5. OTHER INFORMATION (CONTINUED)
Competition
Our business is highly competitive, both in terms of price and new
product introductions. The worldwide consumer market for home
fragrance products is highly fragmented, with numerous suppliers
serving one or more of the distribution channels served by the
Company. Because there are relatively low barriers to entry to the
home fragrance products industry, we may face increased future
competition from other companies, some of which may have
substantially greater financial and marketing resources than those
available to us. From time to time during the year-end holiday
season, we experience competition from candles manufactured in
foreign countries, particularly China. In addition, certain of our
competitors focus on a particular geographic or single-product
market and attempt to gain or maintain market share solely on the
basis of price.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
27. Financial data schedule
b) Reports on Form 8-K
During the fiscal quarter ended October 31, 1999, the Company
filed the following Current Reports on Form 8-K:
Current Report on Form 8-K on September 1, 1999 to file
as an exhibit the press release announcing the Company's
results of operations for the fiscal quarter ended July
31, 1999.
Current Report on Form 8-K on September 28, 1999 to file
certain exhibits related to its filing of a Prospectus
Supplement.
PAGE 21 OF 22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BLYTH INDUSTRIES, INC.
Date: December 15, 1999 By: /s/ Robert B. Goergen
---------------------- -----------------------
Robert B. Goergen
Chief Executive Officer
Date: December 15, 1999 By: /s/ Richard T. Browning
---------------------- -----------------------
Richard T. Browning
Chief Financial Officer
PAGE 22 OF 22
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE NO.
- ------- ----------- --------
<S> <C> <C>
27. Financial data schedule N/A
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT OCTOBER 31, 1999 AND THE CONSOLIDATED STATEMENT OF
EARNINGS, STOCKHOLDERS' EQUITY AND CASH FLOWS FOR THE NINE MONTHS ENDED OCTOBER
31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-START> FEB-01-1999
<PERIOD-END> OCT-31-1999
<CASH> 13,533
<SECURITIES> 0
<RECEIVABLES> 125,019
<ALLOWANCES> 2,396
<INVENTORY> 231,333
<CURRENT-ASSETS> 370,712
<PP&E> 346,704
<DEPRECIATION> 76,575
<TOTAL-ASSETS> 747,813
<CURRENT-LIABILITIES> 171,082
<BONDS> 0
0
0
<COMMON> 984
<OTHER-SE> 355,615
<TOTAL-LIABILITY-AND-EQUITY> 747,813
<SALES> 768,577
<TOTAL-REVENUES> 768,577
<CGS> 332,994
<TOTAL-COSTS> 332,994
<OTHER-EXPENSES> 319,224
<LOSS-PROVISION> 1,516
<INTEREST-EXPENSE> 8,055
<INCOME-PRETAX> 105,679
<INCOME-TAX> 40,396
<INCOME-CONTINUING> 64,855
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 64,855
<EPS-BASIC> 1.34
<EPS-DILUTED> 1.33
</TABLE>
