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 October 26, 1996
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 No.
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 November 20, 1996.
11,073,675
ONEIDA LTD
FOR THE THREE MONTHS ENDED OCTOBER 26, 1996
FORM 10-Q
INDEX
PART I FINANCIAL INFORMATION:
Consolidated Statement of Operations
Consolidated Balance Sheet
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)
One report on Form 8-K was filed during the quarter
for which this report on Form 10-Q is filed. On
September 10, 1996, a report on Form 8-K, dated
August 29, 1996, was filed disclosing the execution
of an agreement whereby Oneida Ltd. would purchase
substantially all of the assets of THC Systems, Inc.
SIGNATURES
ONEIDA LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
(Thousands except per OCT 26, OCT 28, OCT 26, OCT 28,
share amounts) 1996 1995 1996 1995
--------- --------- --------- ---------
NET SALES..................... $101,280 $100,627 $270,477 $270,275
COST OF SALES................. 66,047 65,923 177,188 176,877
--------- --------- --------- ---------
GROSS MARGIN.................. 35,233 34,704 93,289 93,398
OPERATING REVENUES............ 98 117 362 412
--------- --------- --------- ---------
35,331 34,821 93,651 93,810
--------- --------- --------- ---------
OPERATING EXPENSES:
Selling and distribution.... 17,098 17,321 49,764 50,206
General and administrative.. 7,659 7,333 20,559 20,630
--------- --------- --------- ---------
Total..................... 24,757 24,654 70,323 70,836
--------- --------- --------- ---------
INCOME FROM OPERATIONS........ 10,574 10,167 23,328 22,974
OTHER EXPENSE................. 244 393 667 822
INTEREST EXPENSE.............. 1,603 1,795 4,677 5,411
--------- --------- --------- ---------
INCOME BEFORE TAXES........... 8,727 7,979 17,984 16,741
PROVISION FOR INCOME TAXES.... 3,421 3,239 7,055 6,739
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS.................. 5,306 4,740 10,929 10,002
--------- --------- --------- ---------
DISCONTINUED OPERATIONS:
Income(loss) from discontinued (105) 605 (304) 2,178
Loss from disposal of
discontinued operations..... (900) (900)
--------- --------- --------- ---------
Total.................... (1,005) 605 (1,204) 2,178
--------- --------- --------- ---------
NET INCOME.................... $4,301 $5,345 $9,725 $12,180
========= ========= ========= ==========
PER SHARE OF COMMON STOCK:
Continuing operations....... $0.47 $0.42 $0.98 $0.90
Discontinued operations..... (0.09) 0.06 (0.11) 0.20
Net income.................. 0.38 0.48 0.87 1.10
Cash dividends declared..... 0.13 0.12 0.39 0.36
Shares used in per share data 11,162 11,089 11,129 10,993
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
OCTOBER 26, 1996 AND JANUARY 27, 1996
(Thousands)
OCT 26, JAN 27,
ASSETS 1996 1996
--------- ---------
CURRENT ASSETS:
Cash........................................... $2,970 $2,844
Accounts receivable............................ 55,643 41,761
Less allowance for doubtful accounts........... (1,597) (1,398)
Other accounts and notes receivable............ 2,965 1,970
Inventories:
Finished goods................................ 91,771 93,826
Goods in process.............................. 16,082 17,120
Raw materials and supplies.................... 17,750 15,097
Other current assets........................... 11,346 8,584
Net assets of discontinued operations.......... 34,816 32,125
--------- ---------
Total current assets........................ 231,746 211,929
--------- ---------
PROPERTY, PLANT AND EQUIPMENT-At cost:
Land and buildings............................. 45,224 42,625
Machinery and equipment........................ 148,322 143,012
--------- ---------
Total....................................... 193,546 185,637
Less accumulated depreciation.................. 114,715 105,957
--------- ---------
Property, plant & equipment-net............. 78,831 79,680
--------- ---------
OTHER ASSETS.................................... 15,258 14,959
--------- ---------
TOTAL...................................... $325,835 $306,568
========= =========
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
OCTOBER 26, 1996 AND JANUARY 27, 1996
(Thousands)
OCT 26, JAN 27,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1996
--------- ---------
CURRENT LIABILITIES:
Short-term debt................................ $32,396 $24,067
Accounts payable............................... 14,181 13,362
Accrued liabilities............................ 37,802 33,646
Current installments of long-term debt......... 4,677 4,749
--------- ---------
Total current liabilities................... 89,056 75,824
--------- ---------
LONG-TERM DEBT.................................. 62,470 63,129
--------- ---------
OTHER LIABILITIES:
Accrued postretirement liability............... 52,092 50,931
Other liabilities.............................. 9,853 10,384
--------- ---------
Total....................................... 61,945 61,315
--------- ---------
STOCKHOLDERS' EQUITY:
6% cumulative preferred stock; $25 par
value; authorized 95,660 shares, issued
88,694 and 88,989 shares, respectively,
callable at $30 per share..................... 2,216 2,225
Common stock $1 par value; authorized
24,000,000 shares, issued 11,851,885
and 11,706,224 shares, respectively........... 11,852 11,706
Additional paid-in capital..................... 82,889 81,150
Retained earnings.............................. 34,121 28,936
Equity adjustment from translation............. (8,418) (8,614)
Less cost of common stock held in
treasury; 733,054 and 672,617 shares,
respectively................................. (9,554) (8,563)
Less unallocated ESOP shares of common
stock of 46,070 and 34,347, respectively...... (742) (540)
--------- ---------
Stockholders' Equity........................ 112,364 106,300
--------- ---------
TOTAL...................................... $325,835 $306,568
========= =========
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED OCTOBER 26, 1996 and OCTOBER 28, 1995
(In Thousands) FOR THE
NINE MONTHS ENDED
OCT 26, OCT 28,
1996 1995
CASH FLOW FROM OPERATING ACTIVITIES: --------- ---------
Net income from continuing operations.............. $10,928 $10,002
Net income(loss) from discontinued operations...... (1,204) 2,178
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation..................................... 8,758 8,606
Deferred taxes and other non-cash
charges and credits............................. 621 209
Decrease (increase) in operating assets:
Receivables..................................... (14,621) (13,840)
Inventories..................................... 442 (16,961)
Other current assets............................ (2,752) (2,095)
Other assets.................................... 324 29
Increase in accounts payable...................... 821 3,517
Increase in accrued liabilities................... 3,632 6,573
Discontinued operations........................... 1,332 9,482
--------- ---------
Net cash provided by operating activities...... 8,281 7,700
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and equipment expenditures........ (8,388) (10,826)
Retirement of property, plant and equipment....... 512 604
Other, net........................................ (609) 48
Discontinued operations........................... (9,985) (3,289)
--------- ---------
Net cash used in investing activities.......... (18,470) (13,463)
--------- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock............ 1,896 981
Issuance of restricted stock plan shares.......... (16) 71
Purchase/retirement of preferred stock............ (5) (1)
Purchase/issuance of treasury stock............... (992)
Purchase of ESOP shares........................... (202) (1,276)
Net proceeds under short-term debt and
banker's acceptances............................. 8,330 12,502
Proceeds from issuance of long-term debt.......... 388 5,000
Payment of long-term debt......................... (1,119) (6,090)
Dividends paid.................................... (4,539) (4,048)
Discontinued operations........................... 6,500
--------- ---------
Net cash provided by financing activities....... 10,241 7,139
--------- ---------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH............ 71 (380)
--------- ---------
NET INCREASE IN CASH................................ 123 996
CASH AT BEGINNING OF YEAR........................... 2,847 2,207
--------- ---------
CASH AT END OF PERIOD............................... $2,970 $3,203
Supplemental Cash Flow Disclosures: ========= =========
Interest paid ..................................... $4,229 $6,194
Income taxes paid.................................. 5,452 4,728
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
1. The statements for the nine months ended October 26, 1996
and October 28, 1995 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 for such periods.
The consolidated financial statements for the year ending
January 25, 1997 are subject to adjustment at the end of
the year when they will be audited by independent
auditors. The results of operations for the nine months
ended October 26, 1996 are not necessarily indicative of
the results of operations to be expected for the year
ending January 25, 1997. The consolidated financial
statements and notes thereto should be read in
conjunction with the financial statements and notes for
the years ended in January 1996 and 1995 included in the
Company's January 27, 1996 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 basis of assets and liabilities. The temporary
differences arise principally from postretirement
benefits, depreciation, and other employee benefits.
3. 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 and stock
option plans. The shares owned by the Company's employee
stock ownership plan are treated as outstanding for
purposes of the earnings per share calculation only to
the extent they have been allocated.
4. 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 October
26, 1996 the maximum amount available for payment of
dividends was $8,323.
5. On November 4, 1996, the Company purchased substantially
all of the assets and assumed certain liabilities of THC
Systems, Inc. THC, which operates as Rego China, is a
leading importer and marketer of commercial vitreous
china for the Foodservice Industry in the United States.
THC reported net sales of $25,665 for the nine months
ended October 26, 1996. The preliminary purchase price
of $42,600 (net of $2,000 held in escrow), paid in cash
by Oneida Ltd. to THC pursuant to the Asset Purchase
Agreement, is subject to adjustment based on the net
assets (as defined in the agreement) of the acquired
business as of November 4, 1996.
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
The transaction is being partially financed with $35,000
in 7.49% senior notes due in 2008. The remainder of the
purchase price was financed with Oneida Ltd.'s existing
lines of credit.
6. In October 1996, the Board of Directors of Oneida Ltd.
considered a proposal to purchase the capital stock of
Camden Wire Co., Inc., a wholly owned subsidiary, and
authorized management to negotiate a definitive purchase
agreement with a subsidiary of the Aarque Companies. On
November 26, 1996, Oneida Ltd. signed an agreement to
sell Camden Wire Co., Inc. to a subsidiary of the Aarque
Companies. The transaction involves a cash payment to
Oneida Ltd. of approximately $35,200 and the assumption
of Oneida's guarantee on $15,500 in Camden Wire debt for
a total of approximately $51,000. Closing of the
transaction is subject to certain conditions being
satisfied, but is expected to be completed before
Oneida's current fiscal year concludes January 25, 1997.
The disposition of Camden Wire Co., Inc. has been
treated in the attached financial statements as a
discontinued operation. The operations to that date and
the loss on disposal are shown in the consolidated
statement of income under the caption "Discontinued
Operations."
The Net Assets of Camden Wire Co., Inc. (equal to the
expected proceeds) at October 26, 1996 consisted of the
following:
Current Assets...........$39,772
Non-current Assets....... 40,911
Liabilities..............(45,867)
--------
Net Assets............$34,816
The loss on disposal of Camden Wire Co., Inc. of $900
(net of income taxes of $258) is attributable to certain
tax attributes and expenses of the transaction.
Net sales of Camden Wire Co., Inc. for the periods ended
October 26, 1996 and October 28, 1995 are as follows:
Oct. 26, 1996 Oct. 28, 1995
--------------- ---------------
Three months ended... $ 35,231 $ 39,337
Nine months ended.... 103,628 116,394
The income tax expense related to the loss/income from
discontinued operations for the periods ended October
26, 1996 and October 28, 1995 are as follows:
Oct. 26, 1996 Oct. 28, 1995
--------------- ---------------
Three months ended... $ 13 $ 523
Nine months ended.... 280 1,742
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended October 26, 1996 compared with
the quarter ended October 28, 1995
(In Thousands)
Continuing Operations
Consolidated net sales, for the quarter ended October 26,
1996 increased $653, over the same quarter a year ago.
Net Sales 1996 1995 % Change
Consumer Products........ $ 66,023 $ 65,192 1.3%
Foodservice.............. 35,257 35,435 ( 0.5%)
Total...................... 101,280 100,627 0.6%
Consumer market sales were flat relative to the strong third
quarter of 1995. Sales to mass merchandisers increased 25%
over the same period last year, offsetting a decline in sales
to department stores. Sales of foodservice products were
approximately equal to last year's level.
Gross margin, as a percentage of net sales, was equal to
34.8% for the third quarter of 1996 and 34.5% for 1995.
Improved manufacturing yields in the Company's tableware
plants offset gross margin reductions caused by a less rich
sales mix.
1996 1995 % Change
Operating Expenses.......... $24,757 $24,654 0.4%
Total operating expenses increased by $103 from the same
quarter last year. Selling and distribution costs decreased
by $223 while administrative costs increased by $326. This
slight increase in overall operating expenses reflects cost
reduction efforts in all segments.
Interest expense, prior to capitalized interest, was $1,678
for the quarter, a decrease of $231 from the third quarter of
1995. This decrease is the result of lower borrowings and
lower average interest rates in the current quarter versus
the same period last year. Interest expense of $100 for
October 26, 1996 and $209 for October 28, 1995 was
reallocated from continuing operations to discontinued
operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Nine-month period ended October 26, 1996 compared with
the nine-month period ended October 28, 1995
(In thousands)
Continuing Operations
Consolidated net sales, for the nine-months ended October 26,
1996 increased $202, over the same period a year ago.
Net Sales 1996 1995 % Change
Consumer Products........ $165,395 $169,631 ( 2.5%)
Foodservice.............. 105,082 100,644 4.4%
Total...................... 270,477 270,275 0.1%
Consumer product sales lagged 1995 levels for the first half
of 1996, but this stabilized in the current quarter. Year to
date sales levels compared to 1995 are lower in the
department store and consumer direct markets. Foodservice
sales for the nine month period continue to exceed 1995
figures. This increase is attributable to growth in sales of
foodservice products.
Gross margin, as a percentage of net sales, was equal to
34.5% for the period ended October 26, 1996, as compared to
34.6% for the same period in 1995. While the Company's
manufacturing facilities have been operating more efficiently
in 1996, a slightly less favorable product mix affected
profit margins.
1996 1995 % Change
Operating Expenses.......... $70,323 $70,836 ( 0.7%)
Total operating expenses decreased by $513 from the same
period last year. Selling and distribution costs decreased
by $442 while administrative costs decreased by $71. These
decreases are attributable to cost containment measures in
all of the Company's operating areas.
For the nine months ended October 26, 1996, interest expense
prior to capitalized interest decreased to $4,849 from $5,668
the same period in 1995. This decrease is the result of lower
average interest rates and lower debt levels compared to the
same period last year. Interest expense of $611 for October
26, 1996 and $575 for October 28, 1996 was reallocated from
continuing operations to discontinued operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Nine-month period ended October 26, 1996 compared with
the nine-month period ended October 28, 1995
(In thousands)
Liquidity & Financial Resources
During the first nine months of this year, the Company
expended approximately $8,400 on capital expenditures. The
company expects to invest another $4,000 during the remainder
of the current fiscal year.
As described in Note 5 to the financial statements, the
Company completed the purchase of the net assets of THC
Systems, Inc. on November 4, 1996. The $44,600 purchase
price was primarily financed with $35,000 of 7.49% senior
notes due in 2008. The remainder was drawn from the
Company's existing credit lines.
Also described in the attached footnotes (see Note 6) is the
pending sale of the Company's Camden Wire subsidiary to the
Aarque Companies. This transaction will yield a net payment
to Oneida Ltd. of approximately $35,200. These proceeds,
which are intended to be received prior to year end, are
expected to be used to reduce debt and buy back 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 October 26, 1996, the Company had unused credit
lines equal to $54,500 and working capital of $142,690.
ONEIDA LTD
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
OCTOBER 26, 1996
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: December 10, 1996
____________________________
Edward W. Thoma
Senior Vice President Finance