EXHIBIT 13
CONSOLIDATED STATEMENT OF OPERATIONS
ONEIDA LTD.
For the years ended January 1996, 1995 and 1994
(Thousands except per share amounts)
Year ended in January 1996 1995 1994
NET SALES.........................$513,799 $492,954 $455,192
COST OF SALES.....................369,648 360,098 328,623
GROSS MARGIN......................144,151 132,098 126,569
OPERATING REVENUES................482 468 477
144,633 133,324 127,046
OPERATING EXPENSES:
Selling, advertising
and distribution...............73,425 72,550 69,307
General and
administrative.................31,510 29,397 30,677
Total....................104,935 101,947 100,074
INCOME FROM OPERATIONS............39,698 31,377 26,972
OTHER EXPENSES....................1,289 1,182 1,218
INTEREST EXPENSE..................8,639 7,362 7,751
INCOME BEFORE INCOME
TAXES..........................29,770 22,833 18,003
PROVISIONS FOR INCOME
TAXES..........................11,682 9,340 7,341
NET INCOME........................$18,088 13,493 $10,662
EARNINGS PER SHARE OF
COMMON STOCK...................$1.63 $1.24 $1.01
See notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEET
ONEIDA LTD.
(Thousands)
ASSETS January 27, 1996 January 28, 1995
CURRENT ASSETS:
Cash .............................$2,847 $2,207
Receivables ......................57,152 64,873
Inventories ......................145,763 135,810
Other current assets .............9,471 9,234
Total current assets ....215,233 212,124
PROPERTY, PLANT AND EQUIPMENT:
Land and buildings ...............58,338 57,566
Machinery and equipment ..........193,420 184,632
Total....................251,758 242,198
Less accumulated depreciation ....136,559 129,906
Property, plant and
equipment - net .......115,199 112,292
OTHER ASSETS:
Deferred income taxes ............9,728 7,055
Other ............................4,203 4,559
TOTAL ...................$344,363 $336,030
LIABILITIES AND STOCKHOLDERS' (Thousands)
EQUITY January 27, 1996 January 28, 1995
CURRENT LIABILITIES:
Short-term debt ..................24,067 27,555
Accounts payable .................26,621 27,625
Accrued liabilities ..............38,314 33,004
Current installments
of long-term debt ............4,749 5,022
Total current
liabilities............93,751 93,206
LONG-TERM DEBT ...................72,129 77,278
OTHER LIABILITIES:
Accrued postretirement liability..61,800 60,509
Accrued pension liability ........5,209 4,618
Other liabilities ................5,174 5,223
Total ........ ..........72,183 70,350
STOCKHOLDERS' EQUITY:
Cumulative 6% preferredstock-$25
par value; authorized 95,660 shares,
issued 88,989 and 89,202 shares,
respectively; callable at
$30 per share...................2,225 2,230
Common stock - $l .00 par value;
authorized 24,000,000 shares,
issued 11,706,224 and 11,579,964
shares, respectively ...........11,706 11,580
Additional paid-in capital .......81,150 79,740
Retained earnings ............... 28,936 16,255
Equity adjustment from
translation .....................(8,614) (6,035)
Less cost of common stock held in
treasury; 672,617 and 678,298
shares, respectively ...........(8,563) (8,574)
Less unallocated ESOP shares of
common stock of 34,347 .........(540)
Stockholders' equity ....106,300 95,196
TOTAL ...................$344,363 $336,030
See notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
ONEIDA LTD.
for the years ended January 1996, 1995 and 1994
(Thousands)
Year ended in January 1996 1995 1994
CASH FLOW FROM OPERATING ACTIVITIES:
Net income...............................$18,088 $13,493 $10,662
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation ...................15,402 14,345 14,079
ESOP shares allocated to
participants ..............................2,753 2,753
Deferred taxes and other
non-cash charges ............(1,018) (2,889) (1,707)
Decrease (increase) in
operating assets:
Receivables ...............7,655 (10,023) 1,130
Inventories ...............(10,466) (8,181) (2,143)
Other current assets.......(248) 220 888
Other assets...............60 (84) 249
Increase (decrease) in
accounts payable ............(1,056) (162) 4,161
Increase in accrued
liabilities ................. 5,036 4,658 4,165
Net cash provided by
operating activities ...33,453 14,130 34,237
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and
equipment expenditures ..............(20,319) (18,532) (13,800)
Retirement of property,
plant and equipment .................962 1,241 540
Other, net ..............................67 211 1,045
Net cash used in
investing activities ...(19,290) (17,080) (12,215)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance
of common stock .....................1,809 1,982 910
Purchase of treasury stock, net .........(268) (3) (19)
Purchase of ESOP Shares .................(540)
Net payment under short-term debt........(3,488) (631) (6,981)
Proceeds from issuance of
long-term debt .......................5,000 7,000 33,000
Payment of long-term debt ...............(10,423) (899) (42,582)
Dividends paid ..........................(5,407) (5,367) (5,264)
Net cash provided by (used in)
financing activities ....(13,317) 2,082 (20,936)
EFFECT OF EXCHANGE RATE CHANGES
ON CASH .............................(206) (152) (62)
NET INCREASE (DECREASE) IN CASH .........640 (1,020) (1,024)
CASH AT BEGINNING OF YEAR ...............2,207 3,227 2,203
CASH AT END OF YEAR .....................$2,847 $2,207 $3,227
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid ..................$8,800 $6,860 $8,272
Income taxes paid ..............9,563 8,873 4,346
See notes to consolidated financial statements.
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. The financial statements of certain foreign subsidiaries
are consolidated with those of the parent on the basis of years ending in
December.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the dates of the
financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.
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.
Inventories
Inventories are valued at the lower of cost or market. Approximately 54% 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,
principally long-term debt, approximate their recorded values.
Recently Issued Accounting Pronouncements
The Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (FAS 121) in March 1995,
which is effective for Oneida beginning January 28, 1996. FAS 121 requires
that an impairment loss be recognized when circumstances indicate that the
carrying amount of an asset may not be recoverable. Historically, Oneida has
used a methodology similar to FAS 121 in determining the amount of an
impairment. Accordingly, the issuance of FAS 121 will not have a significant
impact on Oneida's consolidated financial statements.
In October 1995, the FASB issued Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" (FAS 123). As permitted by
FAS 123, Oneida will continue to apply the recognition and measurement
provisions of Accounting Principles Board Opinion No. 25 "Accounting for Stock
Issued to Employees" and adopt the disclosure requirements of FAS 123 beginning
in 1996. Accordingly, the issuance of FAS 123 will not impact on Oneida's
consolidated financial statements.
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.
The components of the deferred tax assets and liabilities are as follows:
(Thousands)
Net Assets (Liabilities)
1996 1995
Deferred Income Taxes:
Postretirement benefits................$24,574 $24,004
Employee benefits......................8,000 7,039
Total deferred tax assets..............32,574 31,043
Depreciation...........................(17,409) (17,951)
Other..................................(656) (2,437)
Total deferred tax liabilities.........(18,065) (20,388)
Total..............................14,509 10,655
Current deferred.......................4,781 3,600
Non-current deferred...................$9,728 $7,055
The provision for income taxes consists of the following:
(Thousands)
1996 1995 1994
Current tax expense:
U.S. Federal.................$13,234 $8,389 $7,612
Foreign......................1,466 570 155
State........................836 928 598
15,536 9,887 8,365
Deferred tax expense..............(3,854) (547) (1,024)
Total........................$11,682 $9,340 $7,341
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. The reasons for the differences are as follows:
(Thousands)
1996 1995 1994
Statutory U.S. Federal taxes......$10,419 $7,992 $6,301
Difference due to:
Foreign taxes................(451) (20) (383)
State taxes..................543 603 387
Other........................1,171 765 1,036
Provision for taxes..........$11,682 $9,340 $7,341
The following presents the U.S. and non-U.S. components of income before income
taxes:
(Thousands)
1996 1995 1994
U.S.income........................$23,907 $20,177 $16,076
Non-U.S. income...................5,863 2,656 1,927
Total........................$29,770 $22,833 $18,003
3. RECEIVABLES
Receivables by major classification are as follows:
(Thousands)
1996 1995
Accounts receivable.........................$56,649 $63,875
Other accounts and notes receivable.........2,200 2,663
Less allowance for doubtful accounts........(1,697) (1,665)
Recievables............................$57,152 $64,873
4. INVENTORIES
Inventories by major classification are as follows:
(Thousands)
1996 1995
Finished goods.........................$101,864 $99,218
Goods in process.......................22,796 22,668
Raw materials and supplies.............21,103 13,924
Total.........................$145,763 $135,810
Excess of replacement cost
over LIFO value of inventories......$34,700 $31,400
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 $7,944,000, $8,208,000 and $8,010,000, for
1996, 1995 and 1994, 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 1996 are as follows:
(Thousands)
Lease Sublease
Commitment Income
1997.........................$7,484 $1,249
1998.........................6,533 1,309
1999.........................5,633 1,271
2000.........................4,442 539
2001.........................2,758 362
Remainder through 2008.......13,846 189
Total...................$40,696 $4,919
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
all of the facility.
6. SHORT-TERM DEBT AND COMPENSATING BALANCES
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 main-
tenance of compensating balances of up to 1.25% of the credit line or fees in
lieu thereof. At January 1996, the Company had lines of credit of $86,000,000
of which $62,500,000 was available.
The average outstanding balances of short-term debt for the fiscal years ending
January 1996 and January 1995 were $35,109,000 and $38,148,000, respectively,
computed by using daily balances and the weighted interest rates of 6.5% in
1996 and 5.0% in 1995.
7. ACCRUED LIABILITIES
Accrued liabilities by major classification are as follows:
(Thousands)
1996 1995
Accrued vacation pay...................$6,769 $6,441
Accrued wage incentive.................8,167 6,456
Accrued workmen's compensation.........7,251 6,252
Accrued wages and commissions..........4,928 4,741
Accrued income taxes...................3,282 1,882
Dividends payable......................1,357 1,342
Other accruals.........................6,560 5,890
Total..................................$38,314 $33,004
8. LONG-TERM DEBT
Long-term debt at January 1996 and 1995 consisted of the following:
(Thousands)
1996 1995
Senior notes, 8.52% due January
15, 2002, payable $4,285,710
$25,714 $30,000 annually................$25,714 $30,000
Notes payable at various interest
rates (6.50% - 6.63%), due
February 20, 2001.......................40,000 40,000
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 (7% -9.25%) due
through 2000............................2,164 3,300
Total..............................76,878 82,300
Less amounts due currently..................4,749 5,022
Long-term debt..............................$72,129 $77,278
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.
The aggregate amounts of long-term maturities due each year are as follows:
1997...................................$4,749
1998...................................4,789
1999...................................4,831
2000...................................4,752
2001...................................4,471
After..................................53,286
Total.........................$76,878
Total interest costs incurred by the Company are presented net of capitalized
interest of $505,000, $354,000, and $390,000 for 1996, 1995 and 1994,
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. Dividends on all shares are added
to participant accounts. Future contributions to the ESOP 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 1996, 1995 and 1994 were as follows:
(Thousands)
1996 1995 1994
Service cost - benefits earned
during the year..................$1,509 $1,031 $1,028
Interest cost on projected
benefit obligation...............2,243 1,501 1,569
Actual return on plan assets.........(3,090) 278 (1,306)
Net amortization and deferral........1,627 (1,448) (24)
Net periodic pension cost...$2,289 $1,362 $1,267
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 1996 and 1995.
(Thousands)
U.S. PLANS FOREIGN PLAN
1996 1995 1996 1995
Plan assets at fair value.........$15,43 $11,50 $5,703 $5,346
Actuarial present value of benefit
obligations:
Vested benefits..........16,614 12,568 4,272 4,198
Nonvested benefits.......16,740 10,884 193 157
Accumulated benefit obligation....33,354 23,452 4,465 4,355
Projected future salary
increases......................910 524 1,020 921
Projected benefit obligation......34,264 23,976 5,485 5,276
Plan assets more (less) than
projected benefit
obligation....................(18,825) (12,468) 218 70
Unrecognized net losses...........14,621 9,117 1,168 1,402
Unrecognized prior
service cost...................396 285 9 12
Unrecognized net asset............(1,401) (1,552) (368) (450)
Accrued pension asset
(liability)............. $(5,209) $(4,618) $1,027 $1,034
Discount rate.....................7.0% 8.2% 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 $2,022,000, $3,377,000
and $3,166,000, for 1996, 1995 and 1994, 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.
Net periodic postretirement benefit cost for 1996, 1995 and 1994 included the
following components:
(Thousands)
1996 1995 1994
Service cost of benefits earned........$1,048 $1,290 $1,444
Interest cost on accumulated
postretirement benefit
obligation.........................3,694 3,735 4,291
Net amortization and deferral..........(947) (722) (596)
Net periodic postretirement
benefit cost.......................$3,795 $4,303 $5,139
The following table sets forth the status of the Company's postretirement
plans, which are unfunded, at January 1996 and January 1995:
(Thousands)
1995 1994
Accumulated postretirement
benefit obligation:
Retirees...........................$27,712 $27,168
Fully eligible active
plan participants...............7,079 5,943
Other active plan
participants....................20,995 15,008
Accrued postretirement
benefit.................................55,786 48,119
Unrecognized prior service
cost....................................8,958 9,063
Unrecognized net gain (loss)................(1,034) 5,327
Accrued postretirement
benefit.........................63,710 62,509
Less current portion........................1,910 2,000
Accrued Postretirement
benefit.........................61,800 60,509
Discount rate...............................7.1% 8.4%
Health care inflation rate..................9.0% 10.0%
The 1996 health care inflation rate was 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 1996 by $4,657,000 and the net
postretirement benefit cost for 1996 by $586,000.
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 1996, under the terms of a stock purchase plan, the Company has
reserved 1,065,199 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. The option price for the shares
outstanding at January 1996 is $13.28.
1996 1995 1994
Outstanding at beginning
of year.......................453,010 426,770 422,073
Exercised during the year.........(45,701) (110,175) (21,797)
Expired during the year...........(440,839) (322,712) (423,891)
Granted during the year...........482,943 459,127 450,385
Outstanding at end of year........449,413 453,010 26,770
Average per share price
of rights exercised...........$13.83 $11.00 $10.68
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 1996, 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 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
Exercised ..........(106,086) 9.00-15.00 (1,266)
Outstanding at:
January 1996 .......631,793 9.00-15.00 $9,326
Shares remaining available
for grant ................194,153
Total exercisable as of
January 1996 .............397,393
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.
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 1996, 1995
and 1994 is summarized below:
(Thousands)
1996 1995 1994
NET SALES AND OTHER OPERATING
REVENUES:
Tableware products................$364,293 $336,300 $322,988
Industrial wire products..........149,988 157,122 132,681
Total....................$514,281 $493,422 $455,669
OPERATING PROFIT:
Tableware products ...............$37,235 $28,205 $26,917
Industrial wire products .........5,900 6,829 4,127
Operating profit .................43,135 35,034 31,044
Corporate expense ................4,726 4,839 5,290
Interest expense .................8,639 7,362 7,751
Income before income taxes .......$29,770 $22,833 $18,033
IDENTIFIABLE ASSETS:
Tableware products................$271,596 $255,073 $246,510
Industrial wire products .........69,920 78,750 68,768
Total ...................341,516 333,823 315,278
Corporate Assets-Cash ............2,847 2,207 3,227
Total ...................$344,363 $336,030 $318,505
DEPRECIATION EXPENSE:
Tableware products................$10,615 $9,712 $9,681
Industrial wire products..........4,787 4,633 4,398
Total....................$15,402 $14,345 $14,079
PROPERTY, PLANT AND EQUIPMENT
ADDITIONS:
Tableware products ...............$12,434 $11,443 $10,587
Industrial wire products .........6,888 5,747 2,693
Total ...................$19,322 $17,190 $13,280
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 1996
(Thousands)
Equity
Adjust- Un-
Addt'l ment allocated
Common Common Pref'd Paid-in Ret'd from Treasury ESOP
Shares Stock Stock Capital Earnings Translation Stock Shares
Balance
Jan. 1993......... 11,361,279 $11,361 $2,271 $77,725 $2,731 $(1,667) $(9,262) $(5,495)
Stock purchase
plan............ 21,797 22 211
dividend
reinvestment
plan............ 44,818 45 517
stock option
plan............ 4,996 5 29
Purchase/
retirement
of treasury
stock........... (12,666) (13) (35) (131) 160
Cash dividends
declared ($.48
per share)............................................. (5,264)
Net Income............................................... 10,662
ESOP shares
allocated to
participants............................................................................. 2,753
Equity Adjustment
from translation.............................................................. (794)
Balance
Jan. 1994......... 11,429,843 11,430 2,236 78,423 8,129 (2,461) (9,102) (2,742)
Stock purchase
plan............ 110,175 110 1,112
dividend
reinvestment
plan............ 80 528 (11)
Restricted stock
plan............ 7,920 8 118
stock option
plan............ 32,026 32 (6) 7
Cash dividends
declared ($.48
per share)............................................. (5,367)
Net Income............................................... 13,493
ESOP shares
allocated to
participants............................................................................. 2,753
Equity Adjustment
from translation......................................................................... (3,574)
Balance
Jan. 1995......... 11,579,964 11,580 2,230 79,740 16,255 (6,035) (8,574)
Stock purchase
plan............ 45,701 46 586
dividend
reinvestment
plan............ 56 276
Restricted stock
plan............ 4,348 4 67
Purchase/
retirement of
treasury stock....................... (5) 2 (265)
stock option
plan............ 76,211 76 699
Purchase of
ESOP shares.............................................................................. (540)
Cash dividends
declared ($.48
per share)............................................. (5,407)
Net Income............................................... 18,088
Equity Adjustment
from translation.............................................................. (2,579)
Balance
Jan. 1996......... 11,706,224 $11,706 $2,225 $81,150 $28,936 $(8,614) $(8,563) $(540)
14. SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
(Thousands except per share amounts)
Quarter Ended
1996 April 29, July 29, October 28, January 27,
1995 1995 1995 1996
Net sales ............. $121,807 $124,898 $139,964 $127,130
Gross margin........... 33,964 34,576 39,060 36,551
Net income ............ 3,385 3,450 5,345 5,908
Earnings per share .... .30 .31 .48 .53
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
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 27, 1996 and January 28, 1995 and the related consolidated
statements of operations and cash flows for each of the three years in the
period ended January 27, 1996. 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 27, 1996 and January 28, 1995, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
January 27, 1996 in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
a professional services firm
/s/ Coopers & Lybrand L.L.P.
Syracuse, New York
February 22, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Thousands)
1996 1995 1994
Net Sales ...................$513,799 $492,954 $455,192
Gross Margin ................144,151 132,856 126,569
% Net Sales.............28.1% 27.0% 27.8%
Operating Expense ...........104,935 101,947 100,074
% Net Sales.............20.4% 20.7% 22.0%
Fiscal year ended January 1996 compared with fiscal year ended January 1995
Operations
1996 consolidated net sales were $20,845, or 4.2% higher than in the previous
year. Sales of tableware products rose 8.3 % over 1995 levels. The tableware
division registered increases in both the domestic consumer and foodservice
markets, as well as in international sales. Tableware sales benefited from the
introduction of several well received new patterns and increased distribution
efficiencies. In particular, significant sales increases were achieved in the
retail department store and mas merchandise markets. Sales of the industrial
wire division decreased by $7,133 or 4.5%. The industrial wire facility had a
significant decline in the volume of wire produced this year. This decrease
was somewhat offset by rising copper prices (which are passed along to
customers) and improved product mix.
Gross margin as a percent of net sales increased to 28.1% from 27.0% in 1995,
primarily because of improved tableware volume and manufacturing efficiency.
Camden's gross profit margin remained stable in 1996 despite copper costs
being approximately 25% higher on average that the prior year. If the
increased copper costs are factored out, the Company's 1996 consolidated gross
profit percentage would show a pro forma rate of 29.0%.
Operating expenses increased by $2,988 or 2.9% over 1995. Selling and
distribution costs rose by 1.2%. These costs increased by 3% at the tableware
division and decreased by 14% at Camden Wire primarily due to sales volume
fluctuations. General and administrative costs increased by 7.2%., principally
due to higher employee profit sharing accruals.
1996 interest expense (prior to capitalized interest) increased by $1,428 or
18.5%. The rise in interest expense was principally due to the effect of
increasing interest rates on the Company's borrowings in 1996 versus 1995.
Liquidity and Financial Resources
During the current year, the Company has invested approximately $20,300 in
capital additions, primarily in its manufacturing facilities. In 1996, $4,200
was spent as part of a $23,500 multi-year expansion plan for the industrial
wire division. Camden Wire is constructing a new plant in El Paso, Texas and
transferring a portion of its net assets there. It is also modernizing the
Pine Bluff, Arkansas and Camden, New York facilities. The Company plans to
spend $22,000 on capital projects in 1997. Roughly 30% of this amount will be
allocated to the Camden expansion plan.
Total outstanding debt increased by $8,910 or 8.1% during 1996. Debt as a
percentage of total capital decreased to 48.7% from 53.6% one year ago. Cash
from 1997 operations is expected to provide sufficient liquidity for all of the
Company's capital needs.
As a result of the recent devaluation of the Mexican peso in 1996, the Company
has recorded, as a negative adjustment to equity, a $2,300 charge which relates
to the effect of the devaluation on the Company's long-term investments in its
Mexican assets. While this charge is in accordance with generally accepted
accounting principles, management believes that devaluation has made the
Company's products manufactured in Mexico more cost competitive.
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%.
1995 Interest expense (prior to capitalized interest) decreased $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.
Dividends and Price Range of the Company's Common Stock
The Company's Common Stock is traded on the New York Stock Exchange and the
total number of stockholders of record at January 1996 was 4,297. 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 1996 and 1995 fiscal
years.
JANUARY 1996 JANUARY 1995
Fiscal Dividends Fiscal Dividends
Quarter High Low Per Share Quarter High Low Per Share
First.......$15.25 $13.38 $.12 First.......$16.63 $14.00 $.12
Second......15.88 14.00 .12 Second......16.00 13.50 .12
Third.......16.75 15.00 .12 Third.......14.63 13.38 .12
Fourth......17.63 15.13 .12 Fourth......15.00 12.38 .12
FIVE YEAR SUMMARY
ONEIDA LTD.
(Thousands except per share amounts)
Year ended in January 1996 1995 1994 1993 1992
OPERATIONS
Net sale............... $513,799 $492,954 $455,192 $479,442 $446,602
Gross margin .......... 144,151 132,856 126,569 123,292 122,566
Interest expense....... 8,639 7,362 7,751 10,304 10,452
Income before income
taxes and
cumulative effect.. 29,770 22,833 18,003 5,939 14,510
Income taxes .......... 11,682 9,340 7,341 2,227 5,586
Net income (loss) ..... 18,088 13,493 10,662 (33,252) 8,924
Cash dividends declared-
Preferred stock. 134 134 135 136 137
Common stock.... 5,272 5,233 5,129 5,090 5,026
PER SHARE OF COMMON STOCK
Income before
accounting changes. 1.63 1.24 1.01 .36 .90
Net income (loss) ..... 1.63 1.24 1.01 (3.32) .90
Dividends declared .... .48 .48 .48 .48 .48
Book value............. 9.46 8.53 7.97 7.39 11.35
FINANCIAL DATA
Current assets ........ 215,233 212,124 196,746 195,712 210,952
Working capital ....... 121,482 118,918 111,817 109,388 103,691
Total assets........... 344,363 336,030 318,505 317,679 328,613
Long-term debt ........ 72,129 77,278 75,301 81,906 77,573
Stockholders' equity... 106,300 95,196 85,913 77,664 114,387
Additions to property, plant
and equipment...... 19,322 17,190 13,280 14,163 18,755
Property, plant and
equipment-at cost.. 251,758 242,198 227,290 216,216 207,514
Accumulated
depreciation ...... 136,559 129,906 116,496 104,297 95,034
SHARES OF CAPITAL STOCK
Outstanding at end of year
Preferred .... 89 89 89 91 91
Common ....... 10,999 10,902 10,498 10,205 9,876
Weighted average number
of common shares
outstanding during
the year........... 11,019 10,784 10,393 10,056 9,767
SALES OF MAJOR PRODUCTS BY PERCENT
OF TOTAL SALES
Tableware ............. .71% 68% 71% 69% 71%
Industrial wire
product............ 29% 32% 29% 31% 29%
AVERAGE NUMBER OF
EMPLOYEES.......... 5,708 5,590 5,466 5,530 5,252