UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 29, 2000
Commission file number 1-5452
ONEIDA LTD.
(Exact name of Registrant as specified in its charter)
NEW YORK 15-0405700
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification Number
ONEIDA, NEW YORK 13421
(Address of principal executive offices) (Zip code)
(315) 361-3636
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of September 8, 2000: 16,312,865.
ONEIDA LTD.
FORM 10-Q
FOR THE THREE AND SIX MONTHS ENDED JULY 29, 2000
INDEX
PART I FINANCIAL INFORMATION
Consolidated Statements of Operations
Consolidated Balance Sheet
Consolidated Statement of Changes in Stockholders' Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Management's Discussion and Analysis of Financial Condition and Results
of Operations
PART II OTHER INFORMATION
No other information required to be filed for this quarter.
Item 6 (b)
A Form 8-k was filed on August 23, 2000 relating to acquisitions.
SIGNATURES
ONEIDA LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
(Thousands except per JULY 29, JULY 31, JULY 29, JULY 31,
share amounts) 2000 1999 2000 1999
NET SALES....................... $104,010 $112,073 $222,211 $230,112
COST OF SALES-Recurring......... 66,090 65,887 138,536 137,009
COST OF SALES-Restructuring(NOTE 3) 24,000 24,000 3,000
------- ------- ------- -------
GROSS MARGIN.................... 13,920 46,186 59,675 90,103
OPERATING REVENUES.............. 1,270 99 1,532 416
------- ------- ------- -------
15,190 46,285 61,207 90,519
------- ------- ------- -------
OPERATING EXPENSES:
Selling, distribution and
administrative charges....... 29,777 31,096 61,026 64,680
Restructuring and unusual
charges (NOTE 3)............. 8,000 8,000 32,800
------- ------- ------- -------
Total....................... 37,777 31,096 69,026 97,480
------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS. (22,587) 15,189 (7,819) (6,961)
OTHER EXPENSE................... 114 331 133 383
INTEREST EXPENSE................ 4,089 2,419 6,948 5,069
------- ------- ------- -------
INCOME (LOSS)
BEFORE INCOME TAXES........... (26,790) 12,439 (14,900) (12,413)
PROVISION (CREDIT) FOR
INCOME TAXES................... (9,973) 4,733 (5,551) (1,688)
-------- ------- ------- --------
NET INCOME (LOSS)............... $(16,817) $7,706 $(9,349) $(10,725)
======== ====== ======== ========
EARNINGS PER SHARE OF COMMON STOCK:
Net income (loss):
Basic....................... $(1.04) $.46 $(.58) $(.65)
Diluted (NOTE 4)............ (1.04) .46 (.58) (.65)
SHARES USED IN PER SHARE DATA:
Basic....................... 16,209 16,541 16,286 16,549
Diluted(NOTE 4)............. 16,209 16,785 16,286 16,549
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
JULY 29, 2000 AND JANUARY 29, 2000
(Dollars in Thousands)
JULY 29, JAN 29,
2000 2000
------- -------
ASSETS
CURRENT ASSETS:
Cash............................................... $5,757 $3,899
Accounts receivable, net of allowance for doubtful.
accounts of $2,126 and $1,409..................... 83,324 82,587
Other accounts and notes receivable................ 3,182 1,799
Inventories:
Finished goods.................................... 183,153 158,260
Goods in process.................................. 10,859 10,885
Raw materials and supplies........................ 14,115 14,367
Other current assets............................... 18,734 9,946
-------- --------
Total current assets............................ 319,124 281,743
-------- --------
PROPERTY, PLANT AND EQUIPMENT-At cost:
Property, plant and equipment...................... 240,416 232,425
Less accumulated depreciation...................... 134,405 126,148
-------- --------
Property, plant and equipment-net............... 106,011 106,277
-------- --------
OTHER ASSETS:
Intangible assets - net............................ 69,765 28,197
Deferred income taxes.............................. 23,042 23,042
Other assets....................................... 12,020 9,979
-------- --------
TOTAL.......................................... $529,962 $449,238
======== ========
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
JULY 29, 2000 AND JANUARY 29, 2000
(Dollars in Thousands)
JULY 29, JAN 29,
2000 2000
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt............................... $ 7,664 $31,652
Accounts payable.............................. 33,735 31,585
Accrued liabilities........................... 39,284 45,145
Accrued income taxes.......................... 4,033 10,529
Dividends payable............................. 1,660 1,685
Current installments of long-term debt........ 9,377 16,010
------- -------
Total current liabilities.................. 95,753 136,606
------- -------
LONG-TERM DEBT................................. 234,046 98,495
------- -------
OTHER LIABILITIES:
Accrued postretirement liability.............. 57,984 57,000
Accrued pension liability..................... 16,282 16,032
Other liabilities............................. 10,353 7,798
------- -------
Total...................................... 84,619 80,830
------- -------
STOCKHOLDERS' EQUITY:
Cumulative 6% preferred stock; $25 par
value; authorized 95,660 shares, issued
86,859 and 87,009 shares,
callable at $30 per share.................... 2,171 2,175
Common stock $1 par value; authorized
48,000,000 shares, issued 17,663,753
and 17,602,808 shares........................ 17,664 17,603
Additional paid-in capital.................... 82,639 81,887
Retained earnings............................. 51,970 64,630
Other comprehensive loss...................... (12,736) (11,790)
Less cost of common stock held in
treasury; 1,384,060 and 1,068,949 shares..... (25,447) (19,712)
Less unallocated ESOP shares of common
stock of 33,221 and 68,877 .................. (717) (1,486)
------- -------
Stockholders' Equity........................ 115,544 133,307
-------- --------
TOTAL..................................... $529,962 $449,238
======== ========
<FN>
See notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JULY 29, 2000
Add'l
Comp. Common Common Pref'd Paid-in Retained
Income Shares Stock Stock Capital Earnings
-------------------------------------------------------
Balance at Jan 29, 2000.. 17,603 $17,603 $2,175 $81,887 $64,630
Stock plan activity, net. 61 61 752
Purchase/retirement of
Treasury stock, net...... (4)
Cash dividends declared
($.20 per share)...... (3,311)
Net loss.................$(9,349) (9,349)
Other comprehensive
loss.................. (946)
------
Comprehensive loss......$(10,295)
=======
---------------------------------------------
Balance July 29, 2000.... 17,664 $17,664 $2,171 $82,639 $51,970
=============================================
Accumulated
Other Comp Treasury Unallocated
Income Stock ESOP
-------------------------------------------------------
Balance at Jan 29, 2000.. ($11,790) ($19,712) $(1,486)
Stock plan activity, net.
Purchase/retirement of
Treasury stock, net...... (5,735)
Cash dividends declared
($.20 per share)......
Net loss.................
Other comprehensive
loss.................. (946)
Allocation of ESOP shares 769
-------------------------------------------------------
Balance July 29, 2000.... $(12,736) $(25,447) (717)
=======================================================
<FN>
See notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES
IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JULY 31, 1999
Add'l
Comp. Common Common Pref'd Paid-in Retained
Income Shares Stock Stock Capital Earnings
-------------------------------------------------------
Balance at January 30, 1999. 17,423 $17,423 $2,185 $79,737 $65,870
Stock plan activity, net.. 159 159 1,703
Cancelled stock........... (5) (5) 1
Purchase/retirement of
Treasury stock, net....... (10) 4
Cash dividends declared
($.20 per share)....... (3,322)
Net loss..................$(10,725) (10,725)
Other comprehensive loss.. (838)
-------
Comprehensive loss........$(11,563)
ESOP activity, net........ =======
---------------------------------------------
Balance July 31, 1999 17,577 $17,577 $2,175 $81,445 $51,823
=============================================
Accumulated
Other Comp Treasury Unallocated
Income Stock ESOP
-------------------------------------------------
Balance at January 30, 1999 $(11,079) $(13,888) $ -
Stock plan activity, net...
Cancelled stock............
Purchase/retirement of
Treasury stock, net........ (1,352)
Cash dividends declared
($.20 per share)........
Net loss...................
Other comprehensive loss... (838)
ESOP activity, net......... 262 (2,102)
--------------------------------------------------
Balance July 31, 1999 $(11,917) $(14,978) $(2,102)
==================================================
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 29, 2000 AND JULY 31, 1999
(In Thousands)
FOR THE
SIX MONTHS ENDED
JUL 29, JUL 31,
2000 1999
------- -------
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss............................................ $(9,349) $(10,725)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation....................................... 5,877 5,731
Provision for impairment of inventory
and long-term assets.............................. 29,000 15,000
Amortization of intangibles........................ 1,697 1,365
Deferred taxes and other non-cash
charges and credits............................. 1,476 5,927
Decrease (increase) in operating assets:
Receivables....................................... 6,150 (4,619)
Inventories....................................... (37,262) (12,695)
Other current assets.............................. (1,983) (4,614)
Other assets...................................... (1,517) (111)
Increase in accounts payable....................... 747 935
Increase (decrease) in accrued liabilities......... (18,379) 5,418
------- -------
Net cash provided (used) by operating activities (23,543) 1,612
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and equipment expenditure-net....... (6,215) (11,055)
Purchase of subsidiaries, net of cash acquired...... (60,496)
Minority interest................................... (205) (1,332)
Other, net.......................................... 14 (1,441)
------- -------
Net cash used in investing activities........... (66,902) (13,828)
------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock.............. 813 1,821
Purchase of treasury stock.......................... (5,739) (1,060)
Purchase (allocation) of ESOP shares - net.......... 769 (2,102)
Increase in short-term debt and bankers acceptances-net (28,201) (4,258)
Payment of long-term debt........................... (64,802) (275)
Proceeds from issuance of long-term debt............ 193 720 24,338
Dividends paid...................................... (3,311) (3,322)
------- -------
Net cash provided by financing activities....... 93,249 15,142
------- -------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH.............. (946) (838)
------- -------
NET INCREASE IN CASH.................................. 1,858 2,088
CASH AT BEGINNING OF YEAR............................. 3,899 1,913
------- -------
CASH AT END OF PERIOD................................. $5,757 $4,001
======= =======
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
1. The statements for the six months ended July 29, 2000 and July 31, 1999 are
unaudited; in the opinion of the Company such unaudited statements include all
adjustments (which comprise only normal recurring accruals) necessary for a fair
presentation of the results of such periods. The results of operations for the
six months ended July 29, 2000 are not necessarily indicative of the results of
operations to be expected for the year ending January 27, 2001. The
consolidated financial statements and notes thereto should be read in
conjunction with the financial statements and notes for the years ended in
January 2000 and 1999 included in the Company's January 29, 2000 Annual Report
to the Securities and Exchange Commission on Form 10-K.
2. The provision for income taxes is based on pre-tax income for financial
statement purposes with an appropriate deferred tax provision to give effect to
changes in temporary differences between the financial statements and tax bases
of assets and liabilities. The temporary differences arise principally from
restructuring charges, postretirement benefits, depreciation and other employee
benefits.
3. The earnings for the quarter and six months ended July 29, 2000 include the
impact of the following special charges; an inventory writedown of $24,000
related to a rationalization of existing product lines as a result of recent
acquisitions as well as significant other stock keeping unit reductions, and
restructuring costs of $8,000 (principally impairment of assets related to
manufacturing tools and other product procurement assets). A $24,000 inventory
reserve was established in the current quarter; $200 was written off against
this reserve. All assets identified as impaired were written down to their net
realizable value in the second quarter. No other significant restructuring
payments were made to date in 2000.
In the six month period ended July 31, 1999, the Company's financial statements
included the impact of the following special charges: $3,000 inventory
writedown related to costs associated with exiting certain product lines,
restructuring costs of $11,000 (principally termination benefits), asset
impairments of $12,000 (principally due to an investment in Italy and exit costs
associated with discontinued product lines), unusual charges of $9,800 (relating
to expansion into glassware and an unsolicited takeover proposal). The charge
for unusual expenses was later increased by $8,500 in the third quarter of 1999.
The restructuring and unusual charges were substantially paid out in 1999. At
present, there remains approximately $2,000 of charges to be paid in the
current year. No significant adjustments were required to the original accruals
for restructuring and unusual charges.
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
4. Basic and diluted earnings per share are presented for each period in which a
statement of operations is presented. Basic earnings per share is computed by
dividing income less preferred stock dividends by the weighted average shares
actually outstanding for the period. Diluted earnings per share includes
the potentially dilutive effect of shares issuable under the employee stock
purchase and incentive stock option plans.
The following is a reconciliation of basic earnings per share to diluted
earnings per share for the three months ended July 29, 2000 and July 31, 1999:
Net Preferred Adjusted Earnings
Income Stock Net Income Average Per
(Loss) Dividends (Loss) Shares Share
- --------------------------------------------------------------------------------
[S] [C] [C] [C] [C] [C]
2000:
Basic earnings
per share.............. $(16,817) $(33) $(16,850) 16,209 $(1.04)
Effect of stock options. 0
Diluted earnings
per share.............. (16,817) (33) (16,850) 16,209 (1.04)
- --------------------------------------------------------------------------------
1999:
Basic earnings
per share.............. 7,706 (33) 7,673 16,541 .46
Effect of stock options. 244
Diluted earnings
per share.............. 7,706 (33) 7,673 16,785 .46
- --------------------------------------------------------------------------------
The following is a reconciliation of basic earnings per share to diluted
earnings per share for the six months ended July 29, 2000 and July 31, 1999:
Net Preferred Adjusted Earnings
Income Stock Net Income Average Per
(Loss) Dividends (Loss) Shares Share
- --------------------------------------------------------------------------------
[S] [C] [C] [C] [C] [C]
2000:
Basic earnings
per share.............. $(9,349) $(65) $(9,414) 16,286 $(.58)
Effect of stock options. 0
Diluted earnings
per share.............. (9,349) (65) (9,414) 16,286 (.58)
- --------------------------------------------------------------------------------
1999:
Basic earnings
per share.............. (10,725) (65) (10,790) 16,549 (.65)
Effect of stock options. 0
Diluted earnings
per share.............. (10,725) (65) (10,790) 16,549 (.65)
- --------------------------------------------------------------------------------
In periods where a net loss is presented, the diluted earnings per share have
been replaced by the basic calculation as the inclusion of stock options and
dividends in the calculation would have an anti-dilutive effect on EPS.
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
5. Included in the long-term debt caption on the balance sheet are various
senior notes. The note agreements relating thereto contain provisions which
restrict borrowings, business investments, acquisition of the Company's stock
and payment of cash dividends. At July 29, 2000, the maximum amount available
for payment of dividends was $5,500. A portion of the long-term fixed rate debt
totaling $43,600 includes loan covenants for which the Company received a waiver
for the period ended July 29, 2000. The Company and respective lenders are now
completing an amendment to the loan agreement and this process is expected to be
completed by mid-October.
6. Acquisition of Assets
On May 23, 2000, the company announced it had signed a definitive agreement to
purchase substantially all of the assets of Sakura, Inc. for approximately
$40,000 in cash. Sakura, Inc., a privately held company based in New York City,
is a leading marketer of consumer dinnerware. The closing took place on June
30, 2000, hence the balance sheet reflects this acquisition and one month of
their operations and cash flows are included in the Consolidated Statement of
Operations and Consolidated Statement of Cash Flows for Oneida's six month
period ended July 29, 2000.
Oneida also completed its acquisition of Viners of Sheffield Limited during the
second quarter of 2000. On May 23, 2000 the company announced that its
subsidiary, Oneida U.K. Limited, had signed a definitive agreement to purchase
all of the stock of Viners of Sheffield Limited, a privately held company, for
approximately $25,000 in cash. London based Viners is a long established
marketer of flatware and cookware in the United Kingdom. This closing took
place on June 13, 2000, hence the balance sheet reflects this acquisition and a
partial month of their operations and cash flows are included in the
Consolidated Statement of Operations and Consolidated Statement of Cash Flows
for Oneida's six month period ended July 29, 2000.
On June 2, 2000, the Company entered into a new three year $275,000 bank
revolving credit agreement. This debt has a maturity date of May 31, 2003.
This facility is being utilized to fund the acquisitions described herein as
well as to refinance the majority of the Company's outstanding credit facilities
and term loans. At July 29, 2000, $189,000 of the credit facility had been
utilized by the Company. This debt carries a floating interest rate indexed to
the LIBOR. Interest is payable either at the earlier of quarterly or note
maturity.
7. Subsequent event
Oneida completed its previously announced acquisition of Delco International
Ltd. (including its wholly owned subsidiary, Delco Tableware, Inc. and its ABCO
International division) on August 9, 2000 for approximately $60 million in cash.
Delco International, headquartered in Long Island, N.Y. is a leading marketer
of tableware products for the foodservice industry. This closing took place
after the end of Oneida's six months ended July 29, 2000 and therefore the
acquisition has not been reflected in the balance sheet, statement of operations
or statement of cash flows presented for the three and six month periods ended
July 29, 2000.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended July 29, 2000 compared with
the quarter ended July 31, 1999
(In Thousands)
Operations
Net Sales by Product Line:
--- Three Months Ended-- ----Six Months Ended----
2000 1999 %Change 2000 1999 %Change
------- ------- ----- -------- -------- -------
[S] [C] [C] [C] [C] [C] [C]
Metal Products....... $ 64,800 $73,900 (12.3) $144,400 $154,200 (6.4)
Dinnerware Products.. 28,900 26,500 9.1 58,000 50,800 14.2
Glass products....... 8,000 8,500 (5.9) 16,300 16,000 1.9
Other Products....... 2,310 3,173 (27.2) 3,511 9,112 (61.5)
-------- -------- ----- -------- -------- -----
Total............... $104,010 $112,073 (7.2) $222,211 $230,112 (3.4)
======== ======== ===== ======== ======== =====
Operating Expenses-
Recurring............ $ 29,777 $ 31,096 (4.2) $ 61,026 $ 64,680 (5.6)
======== ======== ===== ======== ======== =====
Quarterly Review
Consolidated net sales for the quarter ended July 29, 2000 decreased $8,063 over
the same period a year ago, however, the prior year sales figure included $3,000
of sales of discontinued product lines. The decrease in metal products is
primarily attributable to softness in the consumer tableware market.
Dinnerware sales continued to increase over prior year levels due to foodservice
growth and the addition of the Sakura line late in the quarter, while glass
sales decreased slightly. The Company's international sales grew in all product
segments.
Gross margin, prior to the cost of sales restructuring charge, as a percentage
of net sales, was 36.5% in the second quarter of 2000 as compared to 41.2% for
the same period of 1999. The decrease in ongoing gross margin this quarter is
related to product mix, primarily as a result of lower consumer metal sales.
Included in the current quarter was a $24,000 non-cash restructuring charge
related to inventory writedown. This charge is necessitated by the Company's
plans to reduce its stock keeping units and rationalization of existing product
lines due to recent acquisitions.
Total recurring operating expenses decreased by $1,319, or 4.2% from the same
quarter last year. This decrease reflects the ongoing benefit of the Company's
1999 restructuring program. During the current quarter, the Company recorded a
restructuring charge of $8,000. The majority of this charge was non-cash in
nature and reduced certain impaired assets (principally manufacturing tools and
product procurement assets) to net realizable value.
Interest expense, prior to capitalized interest, was $4,350 for the quarter
ended July 29, 2000, an increase of $1,415 from the second quarter of 1999.
This increase is due to higher average borrowings and interest rates incurred in
the second quarter of 2000. The increase in debt levels was used to fund the
Company's recent acquisitions and for working capital needs.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months ended July 29, 2000 compared with
the Six Months ended July 31, 1999
(In Thousands)
Six-Month Review
Operations
Consolidated net sales for the six months ended July 29, 2000 decreased $7,901
over the same period a year ago, however, the prior year sales figure included
$7,700 of sales of discontinued product lines. Sales of ongoing product lines
were approximately equal to 1999 levels. Sales of metal products declined due
to lagging consumer tableware sales in the second quarter of 2000. Sales of
foodservice dinnerware products (both manufactured and procured) grew
over 1999 levels. The decrease in sales of other products is primarily due to
the discontinuance of a product line in 1999.
Gross margin, prior to restructuring, as a percentage of net sales, was 37.7% in
the first six months of 2000 as compared to 40.5% for the same period of 1999.
The decrease in ongoing gross margin this year is related to changes in product
mix. The Company recorded restructuring charges related to inventory disposals
in both the current and prior years. In the current year, a $24,000 inventory
writedown was expensed. This relates to inventory reductions that will be
necessitated by the Company's initiative undertaken to reduce stock keeping
units as well as rationalization of existing product lines due to recent
acquisitions. In 1999, the Company recorded a $3,000 inventory charge related
to the disposal of inventory of discontinued product lines. This disposal was
completed in 1999.
Total recurring operating expenses decreased by $3,654, or 5.6% from the same
period last year. As a percentage of sales, these expenses were 27.5% in the
current period versus 28.1% in the same period of 1999. This decrease reflects
the ongoing benefit of the Company's 1999 restructuring program. During the
current quarter, the Company recorded a restructuring charge of $8,000 related
to its recent acquisitions and a program to streamline stock keeping units. The
majority of this charge was non-cash in nature and reduced certain impaired
assets (principally manufacturing tools and product procurement assets) to net
realizable value. In the six month period ended July 31, 1999, the Company's
financial statements also included the impact of the following special charges:
restructuring costs of $11,000 (principally termination benefits), asset
impairments of $12,000 (principally due to an investment in Italy and exit costs
associated with discontinued product lines), unusual charges of $9,800 (relating
to expansion into glassware and an unsolicited takeover proposal). The charge
for unusual expenses was later increased by $8,500 in the third quarter of 1999.
The restructuring and unusual charges were substantially paid out in 1999. At
present, there remains approximately $2,000 of charges to be paid in the
current year. No significant adjustments were required to the original accruals
for restructuring and unusual charges.
Interest expense, prior to capitalized interest, was $7,425 for the six months
ended July 29, 2000, an increase of $1,629 from the same period of 1999. This
increase is due to higher average borrowings and interest rates incurred in the
first six months of 2000. Debt levels have increased to fund the Company's
recent acquisitions, as well as for working capital needs.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Ended July 29, 2000 compared with
the Six Months ended July 31, 1999
(In Thousands)
Liquidity & Financial Resources
During the second quarter of 2000, the Company completed its purchases of
Sakura, Inc. and Viners of Sheffield, Ltd. (See Note 6 of Notes to Consolidated
Financial Statements). These transactions resulted in second quarter cash
outlays of approximately $60,500.
During the first six months of this year, the Company spent approximately $7,800
on capital projects focused primarily on its distribution and manufacturing
facilities. The Company completed construction on a new 206,000 square foot
warehouse at its main facility in Sherrill, NY. This project cost approximately
$10,000. By consolidating Northeast distribution in this one facility, the
Company expects to both lower costs and strengthen customer service. Capital
spending for the remainder of 2000 is anticipated to be approximately $4,000.
On June 2, 2000, the Company entered into a new three year $275,000 bank
revolving credit agreement. This debt has a maturity date of May 31, 2003.
This facility is being utilized to fund the acquisitions described herein as
well as to refinance the majority of the Company's outstanding credit facilities
and term loans. At July 29, 2000, $189,000 of the credit facility had been
utilized by the Company. This debt carries a floating interest rate indexed to
the LIBOR. Interest is payable either at the earlier of quarterly or note
maturity.
Year to date, $5,700 was spent on purchasing common stock as treasury stock.
Management believes there is sufficient liquidity to support the Company's
ongoing funding requirements from future operations as well as the availability
of bank lines of credit. At July 29, 2000, the Company had unused short-term
credit lines equal to $90,000. Working capital as of July 29, 2000 totaled
$223,371.
Subsequent event
Oneida completed its previously announced acquisition of Delco International
Ltd. (including its wholly-owned subsidiary, Delco Tableware, Inc. and its ABCO
International division) on August 9, 2000 for approximately $60 million in cash.
Delco International, headquartered in Long Island, N.Y. is a leading marketer of
tableware products for the foodservice industry. This closing took place after
the end of Oneida's six months ended July 29, 2000 and therefore the acquisition
has not been reflected in the balance sheet, statement of operations or
statement of cash flows presented for the three and six month periods ended July
29, 2000.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months ended July 29, 2000 compared with
the Six Months ended July 31, 1999
(In Thousands)
Contingencies-Legal Proceedings
On December 8, 1998, the Oneida Indian Nation of New York, the Oneida Tribe of
Indians of Wisconsin and the Oneida of Thames, as Plaintiffs, along with the
United States of America, as Intervenor, moved to amend their Complaint filed on
May 3, 1974 in the United States District Court for the Northern District
of New York against the counties of Oneida and Madison, New York. The amended
Complaint seeks to add the State of New York, New York State Thruway Authority,
Utica-Rome Motorsports, Inc., Niagara Mohawk Power Corporation and the Oneida
Valley National Bank, individually and as representatives of the class of
similarly situated private landowners in Madison and Oneida counties. The
Complaint alleges that during the nineteenth century the Oneidas' lands were
improperly transferred. The Oneidas seek title to the property as well as
monetary damages. The Corporation's headquarters and main manufacturing
and distribution facilities are located within this land claim area. The
Corporation filed a motion to intervene with the United States District Court
for the Northern District of New York on February 26, 1999. The Judge's
decision on whether private landowners will be added as Defendants is pending.
Forward Looking Information
With the exception of historical data, the information contained in this Form
10-Q, as well as those other documents incorporated by reference herein, is
forward-looking. For the purposes of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, the Company cautions readers that
changes in certain factors could affect the Company's future results and could
cause the Company's future consolidated results to differ materially from those
expressed herein. Such factors include, but are not limited to: general
economic conditions in the Company's markets; difficulties or delays in the
development, production and marketing of new products; the impact of competitive
products and pricing; certain assumptions related to consumer purchasing
patterns; significant increases in interest rates or the level of the Company's
indebtedness; major slowdowns in the retail, travel or entertainment industries;
the loss of several of the Company's major customers; underutilization of the
Company's plants and factories; the amount and rate of growth of the Company's
selling, general and administrative expenses.
ONEIDA LTD
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
JULY 29, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ONEIDA LTD
(Registrant)
Date: September 12, 2000
Gregg R. Denny
Chief Financial Officer