UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 26, 1997
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 Identification
incorporation or organization) Number
ONEIDA, NEW YORK 13421
(Address of principal executive offices) (Zip code)
(315) 361-3636
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of August 4, 1997.
11,033,727
ONEIDA LTD.
FOR THE THREE MONTHS ENDED JULY 26, 1997
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)
There were no reports filed under 8-K for this quarter.
ONEIDA LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
(Thousands except per JUL 26, JUL 27, JUL 26, JUL 27,
share amounts) 1997 1996 1997 1996
-------- ------- -------- --------
NET SALES........................... $102,274 $86,307 $199,251 $169,197
COST OF SALES....................... 63,533 56,042 125,114 111,141
------- ------ ------- -------
GROSS MARGIN........................ 38,741 30,265 74,137 58,056
OPERATING REVENUES.................. 306 306
------- ------ ------- -------
39,047 30,265 74,443 58,056
------- ------ ------- -------
OPERATING EXPENSES:
Selling, advertising and distrib... 18,625 16,353 36,229 32,666
General and administrative......... 9,440 6,917 18,126 12,900
------- ------ ------- -------
28,065 23,270 54,355 45,566
------- ------ ------- -------
INCOME FROM OPERATIONS.............. 10,982 6,995 20,088 12,490
OTHER EXPENSE....................... 239 264 482 159
INTEREST EXPENSE.................... 1,807 1,639 3,525 3,071
------- ------ ------- -------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES................ 8,936 5,092 16,081 9,260
PROVISION FOR INCOME TAXES.......... 3,418 1,991 6,151 3,635
------- ------ ------- -------
INCOME FROM CONTINUING OPERATIONS... 5,518 3,101 9,930 5,625
LOSS FROM DISCONTINUED OPERATIONS... (346) (201)
GAIN ON DISPOSAL OF
DISCONTINUED OPERATIONS (NOTE 2:).. 2,566
-------- ------- -------- --------
NET INCOME.......................... $ 5,518 $ 2,755 $ 12,496 $ 5,424
-------- ------- -------- --------
PER SHARE OF COMMON STOCK:
Continuing Operations.............. 0.50 0.28 0.90 0.50
Discontinued Operations............ (0.04) 0.23 (0.02)
Net Income......................... 0.50 0.24 1.13 0.48
Cash Dividends Declared............ 0.13 0.13 0.39 0.26
Shares used in per share data...... 10,981 11,152 10,976 11,112
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
JULY 26, 1997 AND JANUARY 25, 1997
(Thousands)
JUL 26, JAN 26,
ASSETS 1997 1997
-------- --------
CURRENT ASSETS:
Cash....................................... $ 5,066 $ 3,183
Accounts receivable........................ 52,342 47,384
Less allowance for doubtful accounts....... (1,863) (1,797)
Other accounts and notes receivable........ 2,688 3,122
Inventories:
Finished goods............................ 99,233 93,339
Goods in process.......................... 15,736 14,798
Raw materials and supplies................ 17,026 16,156
Other current assets....................... 15,778 13,393
Net assets of discontinued operations...... 33,762
------- -------
Total current assets...................... 206,006 223,340
------- -------
PROPERTY, PLANT AND EQUIPMENT-At cost:
Land and buildings......................... 47,033 45,502
Machinery and equipment.................... 154,317 149,927
------- -------
Total..................................... 201,350 195,429
Less accumulated depreciation.............. 122,029 116,283
------- -------
Property, plant & equipment-net........... 79,321 79,146
------- -------
OTHER ASSETS:
Cost in excess of assets acquired-net...... 31,172 32,375
Other assets............................... 15,571 15,367
-------- --------
TOTAL.................................... $332,070 $350,228
-------- --------
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
CONSOLIDATED BALANCE SHEET
JULY 26, 1997 AND JANUARY 25, 1997
(Thousands)
JUL 26, JAN 25,
LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1997
-------- --------
CURRENT LIABILITIES:
Short-term debt............................ $ 9,500 $ 15,593
Accounts payable........................... 17,120 14,176
Accrued liabilities........................ 44,365 37,082
Current installments of long-term debt..... 4,707 29,703
------- -------
Total current liabilities................. 75,692 96,554
------- -------
LONG-TERM DEBT............................. 67,918 68,126
------- -------
OTHER LIABILITIES:
Accrued postretirement liability........... 52,901 52,273
Other liabilities.......................... 12,144 14,957
------- -------
Total..................................... 65,045 67,230
------- -------
STOCKHOLDERS' EQUITY:
Cumulative 6% preferred stock; $25 par
value; authorized 95,660 shares, issued
88,155 and 88,624 shares, respectively,
callable at $30 per share................. 2,204 2,216
Common stock $1 par value; authorized
24,000,000 shares, issued 12,173,370
and 11,867,806 shares, respectively....... 12,173 11,868
Additional paid-in capital................. 87,363 83,103
Retained earnings.......................... 48,046 39,893
Equity adjustment from translation......... (8,631) (8,468)
Less cost of common stock held in
treasury; 1,143,888 and 766,241 shares,
respectively.............................. (17,572) (10,156)
Less unallocated ESOP shares of common
stock of 6,576 and 8,531, respectively.... (168) (138)
------- -------
Stockholders' Equity....................... 123,415 118,318
-------- --------
TOTAL $332,070 $350,228
-------- --------
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 26, 1997 and JULY 27, 1996
(In Thousands)
FOR THE
SIX MONTHS ENDED
JUL 26, JUL 27,
1997 1997
-------- --------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income.........................................$ 12,496 $ 5,424
Less gain on disposal of discontinued operations.. (2,566)
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation...................................... 5,870 5,789
Amortization of intangibles....................... 1,314
Deferred taxes and other non-cash charges
and credits...................................... (1,179) 205
Decrease (increase) in operating assets:
Receivables...................................... (2,925) (761)
Inventories...................................... (7,715) (5,930)
Other current assets............................. (2,845) (4,092)
Other assets..................................... (2,477) 312
Increase (decrease) in accounts payable............ 2,939 (138)
Increase (decrease) in accrued liabilities......... 7,273 (4,393)
Discontinued operations............................ (919)
------- -------
Net cash provided by (used in) operating activities 10,185 (4,503)
CASH FLOW FROM INVESTING ACTIVITIES: ------- -------
Property, plant and equipment expenditures......... (7,139) (5,737)
Retirement of property, plant and equipment........ 1,081 412
Proceeds from sale of discontinued operations...... 36,328
Other, net......................................... 68 (129)
Discontinued operations............................ (7,935)
------- -------
Net cash provided by (used in) investing activities 30,338 (13,389)
CASH FLOW FROM FINANCING ACTIVITIES: ------- -------
Proceeds from issuance of common stock............. 4,478 1,755
Issuance of restricted stock plan shares........... 82 (15)
Purchase/retirement of preferred stock............. (6) (4)
Purchase (allocation) of ESOP shares............... (30) 303
Net proceeds (payments) under short-term debt...... (6,093) 14,519
Proceeds from issuance of long-term debt........... 388
Payment of long-term debt.......................... (25,205) (953)
Net purchase of treasury stock..................... (7,417) (834)
Dividends paid..................................... (4,343) (1,762)
Discontinued operations............................ 5,200
------- -------
Net cash provided by (used in) financing activities (38,534) 18,597
------- -------
EFFECTS OF EXCHANGE RATE CHANGES ON CASH........... (107) 49
NET INCREASE IN CASH............................... 1,883 754
CASH AT BEGINNING OF YEAR.......................... 3,183 2,844
-------- --------
CASH AT END OF YEAR................................$ 5,066 $ 3,598
-------- --------
Supplemental Cash Flow Disclosures:
Interest paid $ 3,861 $ 5,088
Income taxes 3,654 5,452
<FN>
See notes to consolidated financial statements.
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
1. The statements for the six months ended July 26, 1997
and July 27, 1996 are unaudited; in the opinion of
the Company such unaudited statements include all
adjustments (which comprise only normal recurring
accruals) necessary for a fair presentation of the
results of such periods. The consolidated financial
statements for the year ended January 31, 1998 are
subject to adjustment at the end of the year when they
will be audited by independent auditors. The results
of operations for the six months ended July 26, 1997
are not necessarily indicative of the results of
operations to be expected for the year ending January
31, 1998. The consolidated financial statements and
notes thereto should be read in conjunction with the
financial statements and notes for the year ended in
January 1997 and 1996 included in the Company's January
25, 1997 Annual Report to the Securities and Exchange
Commission on Form 10-K.
2. On February 12, 1997, the Company sold its Camden Wire
Co., Inc. (Camden) subsidiary to International Wire
Group, Inc. for $43,500 in cash. The sale resulted in
an after tax gain of $2,566 (net of applicable income
taxes of $3,616) or $0.23 per share. Operating losses
for the fourth quarter of 1996 and the first quarter of
1997 totalling $1,200 were deducted from the gain for
financial statement purposes. Camden's net sales were
$31,972 for the second quarter and $68,397 for the
first six months of 1996. Camden generated a net loss
of $346 for the second quarter and a net loss of $201
for the first six months of 1996.
3. On November 4, 1996, the Company purchased the net
assets of THC Systems, Inc. (Rego China) a leading
importer of institutional china for the foodservice
industry. The financial statements include the results
of operations of Rego China for the current quarter and
year to date. On a proforma basis, assuming the
acquisition had occurred at the beginning of fiscal 1996
and based on unaudited amounts for Rego China, the
consolidated results of operations for the Company for
the quarter and six months ended July 27, 1996 would
have been:
Quarter 6 Months
------- --------
[S] [C] [C]
Net sales.............................. $93,944 $185,903
Net income............................. 2,242 4,875
Net income per share of common stock... 0.20 0.44
4. 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.
ONEIDA LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Thousands)
(cont'd)
5. 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. No fully diluted earnings per share are
presented as the difference between primary and fully
diluted earnings per share is not significant.
6. Included in the long-term debt caption on the balance
sheet are various senior notes. The note agreements
relating thereto contain provisions which restrict
borrowings, business investments, acquisition of the
Company's stock and payment of cash dividends. At July
26, 1997, the maximum amount available for payment of
dividends was $11,093.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Quarter ended July 26, 1997 compared with
the quarter ended July 27, 1996
(In Thousands)
Operations
Consolidated net sales, for the quarter ended July 26, 1997
increased $15,967, over the same quarter a year ago.
Net Sales 1997 1996 % Change
-------- -------- -------
North America - Consumer............ $52,442 $47,486 10.4%
- Foodservice......... 43,697 33,201 31.6%
Other Foreign Operations............ 6,135 5,620 9.2%
-------- ------- -------
Total............................... $102,274 $86,307 18.5%
-------- ------- -------
Sales of product throughout North America increased by $15,452
or 19.2%. Consumer sales increased in department store, mass
merchandise and direct to consumer markets. The increase in
foodservice sales is primarily due to the Company's acquisition
of Rego China in late 1996. In addition, sales of Buffalo China
products were up significantly over the second quarter of 1996.
Sales growth continued in the Company's other foreign operations.
Gross margin, as a percentage of net sales, was equal to 37.9%
for the second quarter of 1997 and 35.1% for the same period of
1996, reflecting a richer product mix and improved manufacturing
efficiencies at all of the Company's plants.
Operating Expenses 1997 1996 % Change
-------- -------- --------
Selling, advertising and distribution. $18,625 $16,353 13.9%
General and administrative............ 9,440 6,917 36.5%
------- ------- --------
Total................................. $28,065 $23,270 20.6%
------- ------- --------
Total operating expenses increased by $4,795 from the same quarter
last year. The increase in selling expenses is attributable to
the addition of Rego China and a higher overall sales volume. As
a percent of total sales, selling expenses declined to 18.2% from
18.9% in the prior year. The increase in administrative costs
relates to the amortization of intangibles associated with the
purchase of Rego China and higher employee profit sharing accruals
resulting from improved profitability levels.
Interest expense, prior to capitalized interest, was $1,857 for
the quarter, an increase of $121 from the same period last year.
For the current quarter, the Company's average borrowing rate
increased over the second quarter of 1996.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six month period ended July 26, 1997 compared with
the six month period ended July 27, 1996
(In Thousands)
Operations
Consolidated net sales, for the six month period ended July 26, 1997
increased $30,054, over the same period a year ago.
Net Sales 1997 1996 % Change
-------- -------- --------
North America - Consumer............. $101,893 $93,170 9.4%
- Foodservice.......... 85,685 65,969 29.9%
Other Foreign Operations............. 11,673 10,058 16.1%
-------- -------- --------
Total................................ $199,251 $169,197 17.8%
-------- -------- --------
The Consumer products division has posted strong sales growth in
all major markets this year. The majority of the growth in
foodservice sales is attributable to sales of china products,
primarily due to the acquisition of Rego China in late 1996. In
addition, sales of Buffalo China products have increased 17.5%
over the first half of last year. International sales have
continued to grow, particularly at the Company's foodservice
operation in Italy.
Gross margin, as a percentage of net sales, was equal to 37.2%
for the first six months of 1997 and 34.3% for the same period
of 1996, reflecting a more profitable product mix and reduced
manufacturing variances.
Operating Expenses 1997 1996 % Change
-------- -------- --------
Selling, advertising and distribution. $36,229 $32,666 10.9%
General and administrative............ 18,126 12,900 40.5%
------- ------- --------
Total................................. $54,355 $45,566 19.3%
------- ------- --------
Total operating expenses increased by $8,789 from the same
period last year. The increase in selling expenses is
attributable to the addition of Rego China and a higher overall
sales volume. As a percent of total sales, selling expenses
decreased to 18.2% from 19.3% in the prior year. The majority of
the increase in administrative costs relates to the amortization of
intangibles arising from the Rego purchase, as well as higher
employee profit sharing expense resulting from improved
profitability levels.
Interest expense, prior to capitalized interest, was $3,625
for the six months, an increase of $457 from the first six
months of 1996. This increase is attributable to higher average
borrowing rates on the Company's debt in 1997.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six month period ended July 26, 1997 compared with
the six month period ended July 27, 1996
(In Thousands)
Liquidity & Financial Resources
During the first six months of this year, the Company spent
approximately $7,100 on capital projects focused primarily on
it's manufacturing facilities. The company expects to invest
another $7,400 on similar projects during the remainder of the
current fiscal year. In the first quarter, the Company
repurchased 380,342 shares of its common stock at a cost of
$7,400. The Board of Directors, at its May 28, 1997 meeting,
authorized the repurchase of an additional 500,000 shares.
In February of this year, the Company completed the sale of
its Camden Wire subsidiary to the International Wire Group, Inc.
The majority of the proceeds were used to pay down outstanding
debt and to provide a special one time dividend of $.13 per
share of common stock.
Management believes there is sufficient liquidity to support
the Company's ongoing funding requirements from future
operations as well as the availability of bank lines of credit.
At July 26, 1997, the Company had unused credit lines equal
to $76,500 and working capital of $130,314.
ONEIDA LTD
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
JULY 26, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto
duly authorized.
ONEIDA LTD
(Registrant)
Date: September 2, 1997
Edward W. Thoma
Senior Vice President Finance