123
EXHIBIT 13
CONSOLIDATED STATEMENT OF OPERATIONS
ONEIDA LTD.
For the years ended January 1995, 1994 and 1993
(Thousands except per share amounts)
Year ended in January 1995 1994 1993
NET SALES .............................. $492,954 $455,192 $479,442
COST OF SALES .......................... 360,098 328,623 356,150
GROSS MARGIN ........................... 132,856 126,569 123,292
OPERATING REVENUES ..................... 468 477 522
133,324 127,046 123,814
OPERATING EXPENSES:
Selling, advertising and
distribution ..................... 72,550 69,397 71,308
General and administrative ........ 29,397 30,677 32,945
Restructuring costs. .............. 2,386
Total ........................ 101,947 100,074 106,639
INCOME FROM OPERATIONS ................. 31,377 26,972 17,175
OTHER EXPENSE........................... 1,182 1,218 932
INTEREST EXPENSE ...................... 7,362 7,751 10,304
INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING
CHANGES............................. 22,833 18,003 5,939
PROVISION FOR INCOME TAXES ............. 9,340 7,341 2,227
INCOME BEFORE ACCOUNTING CHANGES........ 13,493 10,662 3,712
CUMULATIVE EFFECT ON PRIOR YEARS OF
ACCOUNTING CHANGES (NET OF
INCOME TAX BENEFIT $21,373) ........ (36,964)
NET INCOME (LOSS) ...................... $ 13,493 $ 10,662 $ (33,252)
EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
Income before accounting changes... $1.24 $1.01 ($.36)
Cumulative effect of accounting
changes .......................... (3.68)
Net income (loss)........... $1.24 $1.01 $(3.32)
See notes to consolidated financial statements.
124
CONSOLIDATED BALANCE SHEET
ONEIDA LTD.
(Thousands)
ASSETS January 28, 1995 January 29, 1994
CURRENT ASSETS:
Cash ....................... $ 2,207 $ 3,227
Receivables ................ 64,873 55,710
Inventories ................ 135,810 128,331
Other current assets ....... 9,234 9,478
Total current assets ...... 212,124 196,746
PROPERTY, PLANT AND EQUIPMENT:
Land and buildings ......... 57,566 56,929
Machinery and equipment .... 184,632 170,361
Total ..................... 242,198 227,290
Less accumulated
depreciation............... 129,906 116,496
Property, plant and
equipment - net..... 112,292 110,794
OTHER ASSETS:
Deferred income taxes ....... 7,055 6,254
Other ....................... 4,559 4,711
TOTAL .............. $336,030 $318,505
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt. ............. 27,555 28,186
Accounts payable.............. 27,625 27,773
Accrued liabilities........... 33,004 28,071
Current installments of
long-term debt... ............ 5,022 899
Total current liabilities.... 93,206 84,929
LONG -TERM DEBT............... 77,278 75,301
OTHER LIABILITIES:
Accrued postretirement
liability.................... 60,509 60,806
Accrued pension liability..... 4,618 5,511
Other liabilities............. 5,223 6,045
Total........................ 70,350 72,362
125
STOCKHOLDERS' EQUITY:
Cumulative 6% preferred stock
-$25 par value; authorized
95,660 shares, issued 89,202
and 89,433 shares, respectively;
callable at $30 per share .... 2,230 2,236
Common stock - $l .00 par
value; authorized 24,000,000
shares, issued 11,579,964 and
11,429,843 shares, respectively 11,580 11,430
Additional paid-in capital.... 79,740 78,423
Retained earnings............. 16,255 8,129
Equity adjustment from
translation.................. (6,035) (2,461)
Less cost of common stock held
in treasury; 678,298 and
720,340 shares, respectively. (8,574) (9,102)
Less unallocated ESOP shares
of common stock of 211,465 in
1994......................... (2,742)
Stockholders' equity........ 95,196 85,913
TOTAL.................... $336,030 $318,505
See notes to consolidated financial statements.
126
CONSOLIDATED STATEMENT OF CASH FLOWS
ONEIDA LTD.
for the years ended January 1995, 1994 and 1993
(Thousands)
Year ended in January 1995 1994 1993
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss)........................ $13,493 $10,662 $(33,252)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation........................... 14,345 14,079 13,428
ESOP shares allocated to participants.. 2,753 2,753 2,753
Deferred taxes and other non-cash
charges............................. (2,889) (1,707) 36,176
Decrease (increase) in operating
assets:
Receivables....................... (10,023) 1,130 4,743
Inventories....................... (8,181) (2,143) 9,917
Other current assets.............. 220 888 1,379
Other assets...................... (84) 249 207
Increase (decrease) in accounts
payable................ ........... (162) 4,161 (948)
Increase in accrued liabilities..... 4,658 4,165 2,532
Net cash provided by operating activities 14,130 34,237 36,935
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and equipment
expenditures......................... (18,532) (13,800) (16,330)
Retirement of property, plant and
equipment............................ 1,241 540 3,070
Other, net............................ 211 1,045 (4)
Net cash used in investing
activities............. ....... (17,080) (12,215) (13,264)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock. 1,982 910 1,375
Purchase of treasury stock, net........ (3) (19) (3)
Net payment under short -term debt and
banker's acceptances.............. (631) (6,981) (22,758)
Proceeds from issuance of long-term
debt................................. 7,000 33,000 41,400
Payment of long-term debt............. (899) (42,582) (36,892)
Dividends paid........................ (5,367) (5,264) (5,213)
Net cash provided by (used in)
financing activities............. 2,082 (20,936) (22,091)
EFFECT OF EXCHANGE RATE CHANGES
ON CASH.............................. (152) (62) (164)
NET INCREASE (DECREASE) IN CASH ...... (1,020) 1,024 1,416
CASH AT BEGINNING OF YEAR............. 3,227 2,203 787
CASH AT END OF YEAR................... $ 2,207 $ 3,227 $ 2,203
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid ................... $6,860 $8,272 $10,869
Income taxes paid................ 8,873 4,346 5,566
See notes to consolidated financial statements.
127
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its subsidiaries. The Company uses a 52-53 week fiscal year ending on the
last Saturday in January. Results of operations include 53 weeks in 1993.
The financial statements of certain foreign subsidiaries are consolidated
with those of the parent on the basis of years ending in December.
Foreign Currency Translation
Assets and liabilities of foreign subsidiaries are translated principally at
the year-end rates of exchange and revenue and expense accounts are translated
at average rates of exchange during the year. Net transaction gains and losses
reflected in the statement of operations were not material.
Earnings Per Share
Earnings per share are based on the weighted average number of shares of
common stock outstanding. The weighted average number of shares for
earnings per share includes the potentially dilutive effect of shares
issuable under the employee stock purchase, stock option and
dividend reinvestment plans. No fully diluted earnings per share are presented
as the difference between primary and fully diluted earnings per share is not
significant. The allocated shares owned by the Company's employee stock
ownership plan are treated as outstanding for purposes of the earnings per
share calculation.
Inventories
Inventories are valued at the lower of cost or market. Approximately
66% of inventories are valued under the last-in, first-out (LIFO) method, with
the remainder valued under the first-in, first -out (FIFO) method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is provided
over the estimated useful lives of the related assets, generally using the
straight-line method. Interest relating to the cost of acquiring certain
fixed assets is capitalized and amortized over the asset's estimated useful
life.
Fair Value of Financial Instruments
The estimated fair market values of the Company's financial instruments
approximate their recorded values.
2. INCOME TAXES
The Company accounts for taxes in accordance with Statement of Financial
Accounting Standards (FAS) No. 109, Accounting for Income Taxes, which
requires the use of the liability method of computing deferred income
taxes. Under the liability method, deferred income taxes are based on the
tax effect of temporary differences between the financial statement and tax
bases of assets and liabilities and are adjusted for tax rate changes as they
occur.
128
The components of the deferred tax assets and liabilities are
as follows:
(Thousands)
Net Assets (Liabilities)
1995 1994
Deferred Income Taxes:
Postretirement benefits.............. $24,004 $22,751
Employee benefits.................... 7,039 6,080
Total deferred tax assets........ 31,043 28,831
Depreciation......................... (17,951) (16,571)
Settlement of pension liability... (1,032)
Other................................ (2,437) (1,120)
Total deferred tax liabilities... (20,388) (18,723)
Total................................ 10,655 10,108
Current deferred................. 3,600 3,854
Non-current deferred............. $ 7,055 $ 6,254
The provision for income taxes consists of the following:
1995 1994 1993
Current tax expense:
U.S. Federal .................... $8,688 $7,599 $3,584
Foreign............................ 241 170 413
State.............................. 958 596 408
9,887 8,365 4,405
Deferred tax expense ................ (547) (1,024)(2,178)
Total................................ $9,340 $7,341 $2,227
The income tax provision differed from the total income tax expense as
computed by applying the statutory U.S. Federal income tax rate to income
before income taxes and cumulative effect of accounting changes. The reasons
for the differences are as follows:
1995 1994 1993
Statutory U.S. Federal taxes.......... $7,992 $6,301 $2,019
Difference due to:
Foreign taxes...................... 260 246 283
State taxes........................ 629 487 269
Other.............................. 459 307 (344)
Provision for taxes................ $9,340 $7,341 $2,227
The following presents the U.S. and non-U.S. components of income before
income taxes and cumulative effect of accounting changes:
1995 1994 1993
U.S. income......................... $21,202 $15,970 $ 3,944
Non-U.S. income..................... 1,631 2,033 1,995
Total......................... $22,833 $18,003 $ 5,939
129
3. RECEIVABLES
Receivables by major classification are as follows:
(Thousands)
1995 1994
Accounts receivable................... $63,875 $55,001
Other accounts and notes receivable... 2,663 2,775
Less allowance for doubtful accounts.. (1,665) (2,066)
Receivables......................... $64,873 $55,710
4. INVENTORIES
Inventories by major classification are as follows:
(Thousands)
1995 1994
Finished goods........................ $99,218 $ 97,469
Goods in process...................... 22,668 16,733
Raw materials and supplies........... 13,924 14,129
Total............................ $135,810 $128,331
Excess of replacement cost over LIFO
value of inventories................. $ 31,400 $ 23,400
5. LEASES
The Company leases many factory store and warehouse facilities. It
also leases transportation and manufacturing equipment under operating
leases. Lease expense charged to operations was $8,208,000, $8,010,000 and
$7,467,000, for 1995, 1994 and 1993, respectively.
Future minimum lease payments and related sublease income for all non-
cancelable operating leases having a remaining term in excess of one year at
January 1995 are as follows:
(Thousands)
Lease Sublease
Commitment Income
1996........................... $ 6,814 $ 1,161
1997........................... 6,201 836
1998........................... 5,618 723
1999........................... 5,194 672
2000........................... 3,951 57
Remainder through 2008......... 17,944
Total.......................... $45,722 $ 3,449
A number of these operating leases provide the Company with the option,
after a specified period, either to purchase the property at the then fair
value, or renew its lease at stipulated rates for various terms. Under the
provisions of some leases, the Company pays taxes, maintenance, insurance
and other operating expenses related to leased premises. Sublease income
relates to an office facility for which the Company has currently sublet
substantially all of the facility.
130
6. SHORT-TERM DEBT, COMPENSATING BALANCES AND BANKER'S ACCEPTANCES
The Company has been granted lines of credit to borrow at interest rates
up to the prime rate from various banks. Certain credit lines call for
the maintenance of compensating balances of up to 1.25% of the credit line or
fees in lieu thereof. At January 1995, the Company had lines of credit of
$85,000,000 of which $57,000,000 was available. Banker's acceptances
outstanding were $4,000,000.
The average balances of short-term debt for 1995 and 1994 were $38,148,000 and
$43,145,000, respectively, computed by using daily balances. The weighted
average interest rates were 5.0% in 1995 and 3.9% in 1994.
7. ACCRUED LIABILITIES
Accrued liabilities by major classification are as follows:
(Thousands)
1995 1994
Accrued vacation pay................ $ 6,441 $ 6,261
Accrued wage incentive.............. 6,456 5,430
Accrued workmen's compensation...... 6,252 3,488
Accrued wages and commissions....... 4,741 4,453
Accrued income taxes................ 1,882 1,828
Dividends payable................... 1,342 1,319
Other accruals...................... 5,890 5,292
Total.............................. $33,004 $28,071
8. LONG-TERM DEBT
Long-term debt at January 1995 and 1994 consisted of the following:
(Thousands)
1995 1994
Senior notes, 8.52% due
January 15, 2002, payable $4,285,710
annually beginning January 1996.......$30,000 $30,000
Notes payable at various interest
rates (6.44% -6.88%), due January 20,
1997.................................. 40,000 33,000
Industrial Revenue Bond, Chemical
Bank Tax Exempt Money Market Index
rate, due August 1,2005............... 9,000 9,000
Other debt at various interest
rates (5% -9.25%) due through 2000.... 3,300 4,200
Total............................. 82,300 76,200
Less amounts due currently............ 5,022 899
Long-term debt........................$77,278 $75,301
Certain note agreements restrict borrowings, business investments,
acquisition of the Company's stock and payment of cash dividends. The
Industrial Revenue Bonds are collateralized by the facilities acquired
through the proceeds of the related bond issuances and letters of credit.
131
The aggregate amounts of long -term maturities due each year are as follows:
1996.................... $ 5,022
1997.................... 44,950
1998.................... 4,989
1999.................... 4,831
2000.................... 4,752
After................... 17,756
Total................. $82,300
Total interest costs incurred by the Company are presented net of capitalized
interest of $354,000, $390,000 and $460,000 for 1995, 1994 and 1993,
respectively.
9. RETIREMENT BENEFIT AND EMPLOYEE SECURITY PLANS
Pension Plans
The Company maintains defined contribution and defined benefit plans covering
substantially all employees in the United States and Canada. Employees of
the Silversmiths Division are covered by both an Employee Stock Ownership Plan
(ESOP) and a defined benefit floor plan. ESOP shares are allocated to
employee accounts semiannually based upon each participant's wages and years
of service. The annual ESOP expense is based on the number of shares
allocated. Dividends on all shares are added to participant accounts. Future
contributions will be primarily in the form of cash.
The Company maintains salary deferral (401-K) plans covering substantially
all employees. Employees of the Company's industrial wire subsidiary
are covered under a defined contribution plan, for which contributions
are determined based on that subsidiary's operating income.
The net periodic pension cost for the Company's various defined benefit
plans for 1995, 1994 and 1993 were as follows:
(Thousands)
1995 1994 1993
Service cost-benefits earned during the year...$1,031 $1,028 $965
Interest cost on projected benefit obligation.. 1,501 1,569 1,405
Actual return on plan assets................... 278 (1,306) (1,303)
Net amortization and deferral..................(1,448) (24) 28
Net periodic pension cost....................$1,362 $1,267 $1,095
132
Plan assets consist primarily of stocks, bonds, and cash equivalents. The
following table presents a reconciliation of the funded status of the plans and
assumptions used at January 1995 and 1994.
(Thousands)
U.S. PLANS FOREIGN PLAN
1995 1994 1995 1994
Plan assets at fair value............ $11,508 $10,963 $ 5,346 $ 6,426
Actuarial present value of
benefit obligations:
Vested benefits.................. 12,568 16,249 4,198 4,509
Nonvested benefits................ 10,884 208 157 139
Accumulated benefit obligation.. .... 23,452 16,457 4,355 4,468
Projected future salary increases.... 524 533 921 910
Projected benefit obligation......... 23,976 16,990 5,276 5,558
Plan assets more (less) than
projected benefit obligation....... (12,468) (6,027) 70 868
Unrecognized net losses.............. 9,117 5,378 1,402 712
Unrecognized prior service cost...... 285 (3,159) 12 16
Unrecognized net asset............... (1,552) (1,703) (450) (577)
Accrued pension asset (liability).... $(4,618) $(5,511) $1,034 $1,019
Discount rate........................ 8.2% 6.8% 7.5% 7.5%
Expected long-term rate of
return on assets................... 8.5% 8.5% 8.5% 8.5%
Rate of increase in
compensation levels............... 4.5% 4.5% 5.0% 5.0%
The net pension cost associated with the Company's defined contribution
plans, including the cost of shares allocated to the ESOP, was $3,377,000,
$3,166,000, and $3,136,000 for 1995, 1994 and 1993, respectively.
Postretirement Health Care and Life Insurance Benefits
The Company reimburses a portion of the health care and life insurance
benefits for the majority of its retired employees who have attained
specified age and service requirements. During the year ended January 1993,
the Company adopted FAS No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions. The Company elected to immediately
recognize the cumulative effect of this change in accounting
of $35,400,000 ($55,800,000 before income tax benefit) which represented the
accumulated postretirement benefit obligation at January 1992.
Net periodic postretirement benefit cost for 1995, 1994 and 1993 included the
following components:
(Thousands)
1995 1994 1993
Service cost of benefits earned................... $1,290 $1,444 $1,754
Interest cost on accumulated postretirement
benefit obligation.............................. 3,735 4,291 4,472
Net amortization and deferral..................... (722) (596)
Net periodic postretirement benefit cost.......... $4,303 $5,139 $6,226
133
The following table sets forth the status of the Company's postretirement
plans, which are unfunded, at January 1995 and January 1994:
(Thousands)
1995 l994
Accumulated postretirement benefit obligation:
Retirees...................................... $27,168 $31,960
Fully eligible active plan participants....... 5,943 8,404
Other active plan participants................ 15,008 24,579
Accrued postretirement benefit cost............. 48,119 69,943
Unrecognized prior service cost................. 9,063 8,379
Unrecognized net gain (loss).................... 5,327 (12,516)
Accrued postretirement benefit cost............. $62,509 $60,806
Discount rate................................... 8.4% 7.3%
Health care inflation rate...................... 10.0% 12.0%
During 1994, plan amendments were adopted which related to future service
requirements and cost-sharing provisions. The 1995 health care inflation
rate is assumed to decrease gradually to 5% by the year 2003 and remain
at that level thereafter. An increase in the assumed health care inflation
rate by 1% per year would increase the accumulated postretirement
benefit obligation at January 1995 by $5,647,000 and the net periodic
postretirement benefit cost for 1995 by $647,000.
Postemployment Benefits
During the year ended January 1993, the Company adopted FAS No. 112,
Employers' Accounting for Postemployment Benefits. This statement requires
employers to recognize the obligation to provide postemployment benefits to
former or inactive employees prior to retirement. These benefits
include severance, disability related benefits and continuation of benefits
such as health care and life insurance coverage. The cumulative effect of
adopting this standard at January 1992 resulted in a charge to income of
$1,564,000 ($2,537,000 before income tax benefit). Amounts charged to
operations for postemployment benefits are not material.
Employee Security Plan
The Company maintains an employee security plan which provides severance
benefits for all eligible employees of the Company and its subsidiaries who
lose their jobs in the event of a change in control as defined by the
plan. Employees are eligible if they have one year or more of service and are
not covered by a collective bargaining agreement. The plan provides two
and one half months of pay for each year of service, up to twenty-four
months maximum, and a continuation of health care and life insurance benefits on
the same basis.
10. STOCK PURCHASE PLAN
At January 1995, under the terms of a stock purchase plan, the Company has
reserved 610,900 shares of common stock for issuance to its employees. The
purchase price of the stock is the lower of 90% of the market price at the
time of grant or at the time of exercise.
1995 1994 1993
Outstanding at beginning of year........... 426,770 422,073 379,022
Exercised during the year.................. (110,175) (21,797) (49,867)
Expired during the year.................... (322,712)(423,891) (343,095)
Granted during the year.................... 459,127 450,385 436,013
Outstanding at end of year................. 453,010 26,770 422,073
Average per share price of rights exercised. $11.00 $10.68 $11.54
134
Rights to purchase are exercisable on date of grant. Unexercised
rights expire on June 30 of each year and become available for future
grants. Employees are entitled to purchase one share of common stock for
each $250 of their earnings for the calendar year preceding July 1.
The consolidated statement of operations does not contain any charges as a
result of accounting for this plan.
11. STOCK OPTION AND RIGHTS PLANS
At January 1995, under the terms of its incentive stock option plans, the
Company has reserved shares of common stock for issuance to selected key
employees.
Options were granted at prices equal to the fair market value
on the date of the grant and may be paid for in cash or by tendering
previously held common stock of the Company at the time the option is
exercised.
Stock options are non-transferable other than on death, are partially
exercisable one year from the date of grant and expire ten years from date
of grant.
Option Price
No. of Per (Thousands)
Shares Share Total
Outstanding at:
January 1992........................ 698,799 $9.00-15.00 $8,985
Exercised........................... (18,164) 9.00-15.00 (206)
Expired............................. (49,180) 9.00-15.00 (572)
Outstanding at:
January 1993........................ 631,455 9.00-15.00 8,207
Granted............................. 154,000 11.38 1,752
Exercised........................... (11,000) 9.00 (99)
Expired............................. (74,140) 9.00-15.00 (963)
Outstanding at:
January 1994 ........................ 700,315 9.00-15.00 8,897
Granted............................ 152,000 13.63 2,071
Exercised..........................(107,500) 9.00-15.00 (1,290)
Expired............................ (6,936) 9.00-15.00 (86)
Outstanding at:
January 1995........................ 737,879 9.00-15.00 $9,592
Shares remaining available for grant.... 300,239
Total exercisable as of January l995.... 398,029
At the time options are exercised the proceeds of the shares issued are
credited to the related stockholders' equity accounts. There are no
charges to income in connection with the options.
The Company maintains a shareholder rights plan. The rights were distributed
to shareholders at the rate of one right per share. The rights entitle the
holder to purchase one additional share of voting common stock at a
substantial discount and are exercisable only in the event of the
acquisition of 20% or more of the Company's voting common stock, or the
commencement of a tender or exchange offer under which the offeror would own
30% or more of the Company's voting common stock. The rights will expire on
December 13, 1999.
135
12. OPERATIONS BY INDUSTRY SEGMENT
The Company's operations and assets are in two principal industries:
tableware products and industrial wire products. The Company's tableware
operations, which are located in the United States, Canada, Mexico, Italy and
the United Kingdom, involve the manufacture and distribution of stainless,
plated and sterling flatware, silverplated and stainless holloware, cutlery
and crystal. These products are sold directly to a broad base of retail
outlets including department stores, mass merchandisers and chain stores.
Additionally, these products are sold to special sales markets, which include
customers who use them as premiums, incentives and business gifts. The
Company also sells flatware, holloware and commercial chinaware directly or
through distributors to foodservice operations worldwide, including hotels,
restaurants, airlines, schools and health care facilities.
The Company's industrial wire division produces copper conducting wire,
as well as tin or alloy plated wire for a wide range of customers in
electronics, transportation, industrial/energy, construction and consumer
products markets.
Information as to the Company's operations by industry segment for 1995, 1994
and 1993 is summarized below:
(Thousands)
1995 1994 1993
NET SALES AND OTHER OPERATING
REVENUES:
Tableware products........................... $336,300 $322,988 $329,201
Industrial wire products..................... 157,122 132,681 150,763
Total........................................ $493,422 $455,669 $479,964
OPERATING PROFIT:
Tableware products........................... $28,205 $26,917 $17,920
Industrial wire products..................... 6,829 4,127 3,226
Operating profit............................. 35,034 31,044 21,146
Corporate expense............................ 4,839 5,290 4,903
Interest expense............................. 7,362 7,751 10,304
Income before income taxes and cumulative
effect of accounting changes.............. $22,833 $18,003 $5,939
CUMULATIVE EFFECT OF ACCOUNTING CHANGES
(NET OF INCOME TAX BENEFIT $21,373):
Tableware products........................... $(31,842)
Industrial wire products..................... (5,122)
Total ....................................... $(36,964)
IDENTIFIABLE ASSETS:
Tableware products........................... $255,073 $246,510 $245,103
Industrial wire products..................... 78,750 68,768 70,373
Total........................................ 333,823 315,278 315,476
Corporate Assets-Cash........................ 2,207 3,227 2,203
Total....................................... $336,030 $318,505 $317,679
DEPRECIATION EXPENSE:
Tableware products........................... $ 9,712 $9,681 $9,136
Industrial wire products..................... 4,633 4,398 4,292
Total.................................... $ 14,345 $14,079 $13,428
136
PROPERTY, PLANT AND EQUIPMENT ADDITIONS:
Tableware products.......................... $ 11,443 $10,587 $9,986
Industrial wire products.................... 5,747 2,693 4,177
Total................................... 17,190 $13,280 $14,163
Foreign operations of the Company are not material and are therefore not
separately set forth.
13. CHANGES IN STOCKHOLDERS' EQUITY
Following is a summary of the changes in Stockholders' Equity for the three
years ended January 1995:
(Thousands)
Equity
Add'l Adj Unalloc
Common Common Pfd Paid-In Ret. From Treas ESOP
Shares Stock Stock Capital Earning Tran Stock Shares
Bal Jan 1992...11,245,067 $70,282 $2,276 $17,427 $41,209 $703 $(9,262) $(8,248)
Change in par
of common stock (59,037) 59,037
Stock pur plan.. 49,867 50 525
Div reinvestment
plan........... 59,676 60 703
Restricted stock
plan........... (3,000) (3) (23)
Stock option plan. 9,669 9 54
Pur/retire of
treasury stock. (5) 2
Cash div declared
($.48 per share).. (5,226)
Net loss........ (33,252)
ESOP shares allocated
to participants 2,753
Equity adjustment
from translation.. (2,370)
Bal Jan 1993...11,361,279 11,361 2,271 77,725 2,731(1,667)(9,262) (5,495)
Stock pur plan. 21,797 22 211
Div reinvestment
plan.......... 44,818 45 517
Restricted stock
plan......... 4,996 5 29
Stock option plan...9,619 10 72
Pur/retire of
treasury stock (12,666) (13) (35) (131) 160
Cash div declared
($.48 per share) (5,264)
Net income...... 10,662
ESOP shares allocated
to participants 2,753
Equity adjustment from
translation... (794)
137
Bal Jan 1994...11,429,843 11,430 2,236 78,423 8,129(2,461)(9,102) (2,742)
Stock pur plan. 110,175 110 1,112
Div reinvestment
plan.......... 80 529 (11)
Restricted stock
plan.......... 7,920 8 118
Stock option plan. 32,026 32 (6) 7
Cash div declared
($.48 per share). (5,367)
Net income..... 13,493
ESOP shares allocated
to participants 2,753
Equity adjustment from
translation... (3,574)
Bal Jan l995...11,579,964 $11,580 $2,230 $79,740$16,255$(6,035)$(8,573)
14. SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
(Thousands except per share amounts)
Quarter Ended
1995 April 30, July 30, October 29, January 28,
1994 1994 1994 1995
Net sales................ $111,022 $115,561 $134,212 $132,159
Gross margin............. 29,186 30,736 35,563 37,371
Net income.............. 1,706 1,938 4,368 5,481
Earnings per share....... .16 .18 .40 .50
Quarter Ended
1994 May 1, July 31, October 30, January 29,
1993 1993 1993 1994
Net sales................ $113,833 $106,977 $119,816 $114,566
Gross margin............ 30,091 29,585 33,613 33,280
Net income.............. 2,382 1,488 3,530 3,262
Earnings per share....... .23 .14 .33 .31
138
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of Oneida Ltd.
We have audited the accompanying consolidated balance sheet of Oneida Ltd. as
of January 28, 1995 and January 29, 1994, and the related consolidated
statements of operations and cash flows for each of the three years in the
period ended January 28, 1995. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Oneida Ltd.
as of January 28, 1995 and January 29, 1994, and the consolidated
results of its operations and its cash flows for each of the three years in
the period ended January 28, 1995 in conformity with generally accepted
accounting principles.
As discussed in Note 9 to the financial statements, the Company changed
its methods of accounting for postemployment and postretirement benefits other
than pensions in 1993.
Coopers & Lybrand, L.L.P.
a professional services firm
/s/ Coopers & Lybrand, L.L.P.
Syracuse, New York
February 22, 1995
139
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Thousands)
1995 1994 1993
Net Sales................. $492,954 $455,192 $479,442
Gross Margin.............. 132,856 126,569 123,292
% Net Sales.............. 27.0% 27.8% 25.7%
Operating Expense......... 101,947 100,074 106,639
% Net Sales............. 20.7% 22.0% 22.2%
Fiscal year ended January 1995 compared with fiscal year ended January 1994
Operations
1995 consolidated net sales were $37,762, or 8.3% higher than in the previous
year. Approximately two thirds of this increase was attributable to the
industrial wire division. Sales of wire products increased by 18.4% over
1994, primarily as a result of significantly higher copper costs (which are
passed along to customers) throughout fiscal 1995. Sales of tableware
products rose 4.1 % over 1994 levels. Both the consumer and foodservice
tableware divisions recorded higher sales volume. Consumer sales were below
1994 during the first half of the year, but ended slightly higher for the year
with a very strong second half. Foodservice sales were up throughout the
year.
Gross margin as a percent of net sales decreased to 27.0% from 27.8% in 1994.
When the higher copper costs incurred by the industrial wire division are
factored out, the gross margin percentage was unchanged from 1994.
Operating expenses increased by $1,873 or 1.9% over 1994. Selling and
distribution costs rose by 4.5%, in direct relation to the higher sales
level realized by the Company this year. In contrast, general and
administrative costs decreased by 4.2%. The restructuring charges recorded in
1993 were settled in 1994 and 1995 for the amounts originally accrued.
There is no future impact on either operations or liquidity.
1995 interest expense (prior to capitalized interest) decreased by $425
or 5.2%. Although the Company's average debt level decreased in 1995,
rising interest rates offset approximately one -third of the potential
benefit.
Liquidity and Financial Resources
During the current year, the Company has invested approximately
$18,500 in capital additions, primarily in its manufacturing facilities. The
Company plans to spend $16,000 on similar projects in 1996.
Total outstanding debt increased by $5,469 or 5.2% during 1995. Additional
funds were utilized to finance working capital needs principally as a
result of higher carrying costs of copper. Cash from 1996 operations should
provide sufficient liquidity to meet the Company's capital
requirements. Significant bank lines of credit are also available.
The Company operates two manufacturing facilities in Mexico. These plants
produce Foodservice china and stainless steel tableware. As a result of the
recent devaluation of the peso, the Company has recorded, as a negative
adjustment to equity, a $3,150 charge which relates to the effect of the
devaluation on the Company's long-term investments in its Mexican assets. In
the Company's opinion, the underlying economic value of both these Mexican
plants have been enhanced since the products they manufacture should
become even more cost competitive in the future. The Company expects no
negative impact on liquidity and intends to continue operating these plants
at current levels.
140
Fiscal year ended January 1994 compared with fiscal year ended January 1993
Operations
Consolidated net sales for the year ended January 1994 decreased by
$24,250 or 5.1% over the previous year. The $18,082, or 12%, decrease in
the industrial wire division's sales is the result of significantly lower
copper costs throughout fiscal 1994, which are passed along to customers.
The tableware division's sales decreased by $6,168, or 1.9%, when compared to
1993 sales. This decline was primarily in the foodservice division, reflecting
the Company's decision to scale back on certain lower gross profit contracts.
Increased sales volume is forecast for all divisions in the upcoming year.
Gross margin as a percent of net sales increased to 27.8% from 25.7% for the
previous year. Contributing to this trend were the lower copper costs at the
industrial wire division and a more favorable mix in foodservice product
sales, both cited above.
In addition, increased manufacturing efficiencies were realized at the
Company's tableware and industrial wire factories.
Operating expense (excluding restructuring costs) as a percent of net sales
remained consistent with the prior year. Operating expenses actually
decreased $4,100 from 1993 levels, primarily as the result of lower
administrative costs.
Interest expense (prior to capitalized interest) decreased $2,623 or 24.3%.
The decrease is mainly attributable to the Company's lower average debt
level in 1994 as compared to 1993. Lower interest rates throughout the
year also contributed to this decrease.
Dividends and Price Range of the Company's Stock
The Company's Common Stock is traded on the New York Stock Exchange and the
total number of stockholders of record as of January 1995 was 5,336. The
following table sets forth the high and low sales prices per share of the
Company's Common Stock for the periods indicated on the Composite Tape, and
cash dividends declared for the quarters in the Company's 1995 and 1994 fiscal
years.
JANUARY 1995 JANUARY 1994
Fiscal Dividends Fiscal Dividends
Quarter High Low Per Share Quarter High Low Per Share
First.... $16.63 $14.00 $.12 First.... $13.00 $11.13 $.12
Second... 16.00 13.50 .12 Second... 12.63 11.38 .12
Third.... 14.63 13.38 .12 Third.... 13.75 12.13 .12
Fourth... 15.00 12.38 .12 Fourth... 14.25 12.50 .12
141
FIVE YEAR SUMMARY
ONEIDA LTD.
(Thousands except per share amounts)
Year ended in January 1995 1994 1993 1992 1991
OPERATIONS
Net sales.......................$492,954 $455,192 $479,442 $446,602 $428,403
Gross margin ................... 132,856 126,569 123,292 122,566 117,093
Interest expense................ 7,362 7,751 10,304 10,452 11,173
Income before income taxes and
cumulative effect............... 22,833 18,003 5,939 14,510 12,502
Income taxes ................... 9,340 7,341 2,227 5,586 4,688
Net income (loss)............... 13,493 10,662 (33,252) 8,924 7,814
Cash dividends declared--
Preferred stock.............. 134 135 136 137 137
Common stock................. 5,233 5,129 5,090 5,026 5,192
PER SHARE OF COMMON STOCK
Income before accounting changes 1.24 1.01 .36 .90 .80
Net income (loss)............... 1.24 1.01 (3.32) .90 .80
Dividends declared.............. .48 .48 .48 .48 .48
Book value...................... 8.53 7.97 7.39 11.35 10.94
FINANCIAL DATA
Current assets.................. 212,124 196,746 195,712 210,952 178,061
Working capital................. 118,918 111,817 109,388 103,691 92,028
Total assets.................... 336,030 318,505 317,679 328,613 292,223
Long-term debt.................. 77,278 75,301 81,906 77,573 71,271
Stockholders' equity............ 95,196 85,913 77,664 114,387 107,151
Additions to property, plant
and equipment................ 17,190 13,280 14,163 18,755 19,464
Property, plant and
equipment -at cost ............ 242,198 227,290 216,216 207,514 194,749
Accumulated depreciation........ 129,906 116,496 104,297 95,034 87,304
SHARES OF CAPITAL STOCK
Outstanding at end of year
Preferred.................... 89 89 91 91 91
Common....................... 10,902 10,498 10,205 9,876 9,588
Weighted average number of
common shares outstanding
during the year.............. 10,784 10,393 10,056 9,767 9,607
SALES OF MAJOR PRODUCTS BY PERCENT
OF TOTAL SALES
Tableware....................... 68% 71% 69% 71% 70%
Industrial wire products........ 32% 29% 31% 29% 30%
AVERAGE NUMBER OF EMPLOYEES ...... 5,590 5,466 5,530 5,252 4,982