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EXHIBIT 99.1
CONTACT: FOR IMMEDIATE RELEASE
Richard T. Browning
Chief Financial Officer
(203) 661-1926, ext. 6628
Jane F. Casey
Vice President
(203) 661-1926, ext. 6619
BLYTH, INC. REPORTS CONTINUED SALES GROWTH IN 2ND QUARTER
EPS, AT $0.38, INCREASES 11.8%
GREENWICH, CT, August 30, 2000: Blyth, Inc. (NYSE:BTH) reported today that
second quarter Net Sales increased by 2.4% to $235,408,000 compared with
$229,863,000 a year earlier. Operating Profit rose 4.0% to $31,288,000 when
compared to $30,086,000 in the prior year period. Net Earnings for the quarter
increased 10.5% to $18,158,000 from $16,430,000 a year earlier. Diluted Net
Earnings Per Share for the first quarter were $0.38 per share, up 11.8% from
$0.34 per share during the same period last year.
Net sales for the six months ended July 31, 2000 totaled $510,288,000 a 7.6%
increase over the $474,136,000 reported a year ago. Operating profit for the six
months increased 9.8% from $62,681,000 to $68,821,000. Net earnings of
$39,179,000 increased 12.0% compared to $34,967,000 for the prior year period.
Diluted Net Earnings Per Share were $0.81, up 14.1% compared to $0.71 for last
year's first half.
Commenting on the second quarter results, Robert B. Goergen, Chairman of the
Board and CEO, said "We are pleased to report continued solid earnings growth
for the second quarter despite the slower than expected sales growth. The
fundamentals of our business are firmly in place. We look forward to returning
to stronger sales growth during the second half."
Several factors were noted with respect to sales growth in the second quarter.
On an annualized basis, approximately 26% of Blyth's sales are outside the U.S.
While Blyth has continued to experience double-digit sales growth as measured in
local European currencies, a significant portion of these sales were made in
euro-based countries where the average currency value during the second quarter
declined approximately 11% year-to-year versus the U.S. dollar.
Secondly, while the majority of productivity measures for the direct sales
channel were largely on target, the recruiting efforts for new independent sales
consultants in the United States fell below expectations during the first half.
This result may reflect the overall strength of the employment market, but, in
any event, led to lower sales in the United States in the second quarter. Based
on early indications from several recently implemented programs, management
believes that renewed growth in sales will occur in the second half.
Finally, Blyth has chosen to de-emphasize and, in some cases, exit low margin
product lines. Some of these product lines, such as citronella candles that were
down over 50% year-to-year, traditionally experience their strongest sales
levels in the second quarter. In addition, Blyth sold
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a significant portion of its Cultural Heritage business, resulting in a 28%
decline in that business' sales, year-to-year. Lastly, in Europe, the Company
also de-emphasized certain low margin product lines in its recently acquired
consumer retail businesses.
Higher EPS growth was achieved despite slower than anticipated sales for the
following reasons:
o investments in global sourcing and technology, as well as further
leveraging of administrative expenses, resulted in higher gross and
operating margins,
o the continued globalization of the business resulted in a decreased tax
rate from 38.4% to 37.2% in this year's second quarter, and
o the long-term growth strategy of de-emphasizing certain low margin product
lines does not adversely affect earnings in the same way that it does
sales.
Mr. Goergen also noted that, "We remain very encouraged about our growth
prospects worldwide. For example, despite the challenges of re-focusing the
German direct selling business, which was disrupted by legislative tax proposals
in calendar 1999, our European expansion continues to yield solid sales growth,
as measured in local currencies. We continue to outperform both the category and
our larger competitors in the U.S mass channel, as measured by IRI, and we
believe that our strategy to build the premium retail market while
de-emphasizing less profitable areas will result in increased shareholder value
over the intermediate term."
Blyth, Inc., headquartered in Greenwich, CT, designs, manufactures and
markets an extensive line of candles and home fragrance products including
scented candles, potpourri and environmental fragrance products, and markets
a broad range of related candle accessories and decorative seasonal products.
Its products are sold in the United States under various brand names,
including Colonial Candle of Cape Cod-Registered Trademark-, PartyLite
Gifts-Registered Trademark-, Kate's Original Recipe-TM-, CarolINA
Designs-Registered Trademark-, Ambria-TM-, Florasense-Registered Trademark-,
JeanMARIE-Registered Trademark- and FilterMate-Registered Trademark- and in
Europe under the Gies, Liljeholmens and Colony brands. It is also a leading
producer of portable heating fuel products sold under the Sterno-Registered
Trademark- and Handy Fuel-Registered Trademark- brand names. Net Sales for
the twelve months ended July 31, 2000 totaled $1,133,602,000.
Blyth, Inc. can be found on the Internet at www.blythinc.com.
This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. 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. Actual results could differ
materially due to various factors, including the risk of maintaining the
Company's growth rate, the Company's ability to respond to increased product
demand, the risks (including foreign currency fluctuations) associated with
international sales and foreign products, the risks of being able to recruit new
independent sales consultants in North America, dependence on key management
personnel, competition in terms of price and new product introductions, and
other factors described in this press release, and in the Company's Quarterly
Report on Form 10-Q for the quarter ended April 30, 2000, and in the Company's
Annual Report on Form 10-K for the year ended January 31, 2000.
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BLYTH, INC.
CONSOLIDATED STATEMENT OF EARNINGS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(Unaudited)
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<CAPTION>
Three Months Three Months Six Months Six Months
Ended July 31, Ended July 31, Ended July 31, Ended July 31,
2000 1999 2000 1999
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 235,408 $ 229,863 $ 510,288 $ 474,136
Cost of good sold 99,329 98,198 210,889 201,991
--------- --------- --------- ---------
Gross profit 136,079 131,665 299,399 272,145
Selling and shipping 81,108 78,405 181,777 163,790
Administrative 22,635 22,535 46,705 44,399
Amortization of goodwill 1,048 639 2,096 1,275
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104,791 101,579 230,578 209,464
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Operating profit 31,288 30,086 68,821 62,681
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Other expense (income)
Interest expense 4,188 2,492 8,341 4,376
Interest income/other (585) (64) (1,164) (184)
Equity in earnings of investees (64) 863 787 1,276
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3,539 3,291 7,964 5,468
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Earnings before income taxes
and minority interest 27,749 26,795 60,857 57,213
Income tax expense 10,323 10,287 22,762 21,970
--------- --------- --------- ---------
Earnings before minority interest 17,426 16,508 38,095 35,243
Minority interest (732) 78 (1,084) 276
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Net earnings $ 18,158 $ 16,430 $ 39,179 $ 34,967
========= ========= ========= =========
Basic:
Net earnings per common share $ 0.38 $ 0.34 $ 0.82 $ 0.72
Weighted average number of shares
outstanding 47,940 48,488 47,959 48,714
Diluted:
Net earnings per common share $ 0.38 $ 0.34 $ 0.81 $ 0.71
Weighted average number of shares
outstanding 48,317 48,893 48,288 49,076
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<CAPTION>
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(Unaudited)
July 31, 2000 July 31, 1999
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<S> <C> <C>
Assets
Cash and Cash Equivalents $ 35,302 $ 20,172
Accounts Receivable, Net 77,569 75,081
Inventories 236,782 234,093
Property, Plant & Equipment, Net 270,764 252,317
Other Assets 129,765 109,422
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$ 750,182 $ 691,085
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Liabilities and Stockholders' Equity
Bank Debt $ 49,371 $ 215,813
Senior Notes 17,857 21,429
Bond Debt 150,000 --
Other Liabilities 125,615 118,719
Stockholders' Equity 407,339 335,124
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$ 750,182 $ 691,085
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