EXHIBIT 99.1
The Reader's Digest Association, Inc.
Media: William Adler, (914) 244-7585 william.adler@rd.com
Investor Relations: Richard Clark, (914) 244-5425 richard.clark@rd.com
Reader's Digest Association Announces 2Q Fiscal 2006 Earnings;
Results Include Non-Cash Goodwill Charge;
New Initiatives Are Performing Above Expectations
Note: Unless otherwise stated, all results pertain to the second
quarter of Fiscal 2006 ended December 31, 2005, versus the same
quarter the prior fiscal year.
PLEASANTVILLE, NY, January 26, 2006 - The Reader's Digest
Association, Inc. (NYSE: RDA) today reported results for the
second quarter of Fiscal 2006 ended December 31, 2005. The
quarterly results included a non-cash charge of $(188) million,
or $(1.94) per share, to fully write down goodwill at Books Are
Fun. On a comparative basis, Fiscal 2005 results included a
non-cash charge of $(26) million, or $(0.17) per share, for the
amortization of previously deferred magazine promotion expense.
The following are company-wide results:
- Revenues were $765 million, versus $798 million.
- Operating loss on a reported basis was $(77) million, versus
a profit of $88 million.
- Adjusted Operating Profit, excluding charges, was $111
million, versus $114 million.
- EPS was a loss of $(1.27), versus $0.58. Adjusted EPS was
$0.67, versus $0.74.
Operating Profit and Earnings per Share Q2 2006 (a) Q2 2005 (a)
Operating Operating
Amounts in millions, except per share data Profit EPS Profit EPS
Reported $ (77) $ (1.27) $ 88 $ 0.58
Add:
Goodwill Charge 188 $ 1.94 -- --
Deferred Promotion Amortization -- -- 26 $ 0.17
Adjusted Operating Profit / Adjusted EPS
----- -------- ----- --------
$ 111 $ 0.67 $ 114 $ 0.74
===== ======== ===== ========
(a) Certain amounts do not recalculate due to rounding.
"Overall, our operating performance for the quarter was
about as expected, and we remain on track with our full-year
guidance excluding the non-cash charge," said Eric Schrier,
President and Chief Executive Officer. "As we anticipated last
quarter, profits were down in the second quarter and should be
higher in the second half because of the timing of investment
spending and higher new customer acquisition mailings relative to
last year's quarter. Given our expectations for a strong second
half, we have accelerated our share repurchase program. For the
full year, RD International will likely exceed its original
target of high single-digit profit growth. QSP is on track to
achieve high double-digit operating profit growth, as is RD North
America.
"Beyond the numbers, we are pleased to report significant
progress with all three of our major new business initiatives -
the launch of the magazine Every Day with Rachael Ray, the
pending launch of Taste of Home Entertaining, and our
fast-growing international expansion program. Today we are
announcing the launch of businesses in four new countries -
Lithuania, United Arab Emirates, Bulgaria and Kazakhstan -
bringing to 10 the number of new country launches in the past two
years. In fact, all three major initiatives at this point are
exceeding our expectations, and each has the potential to make a
significant contribution to the company's future financial
performance."
Factors Driving 2Q Variance (excluding the non-cash goodwill
charge):
- Revenues: RDA declined overall by 4 percent to $765 million
or 3 percent currency-neutral. RD International (RDI) was
down 2 percent, up 2 percent currency-neutral. RD North
America (RDNA) declined 2 percent and Consumer Business
Services (CBS) declined 9 percent.
- Profit: Adjusted Operating Profit was $111 million, down 3
percent, driven by unfavorable foreign exchange, incremental
investment spending, an 11 percent decline at CBS, direct
impact from Hurricanes Katrina and Rita, and higher fuel
prices. This was offset by 11 percent higher profits at
RDNA and lower corporate unallocated expense.
- Other Income: Other Income (Expense), Net decreased by $6
million because Fiscal 2005 results included $7 million in
gains from asset sales.
- EPS: Adjusted EPS was $0.67, versus $0.74 last year. EPS
for Fiscal 2005 included gains of $0.05 due to asset sales
and $0.04 due to a favorable tax settlement.
Non-Cash Goodwill Write-Down
As mentioned, the company took a non-cash charge of $(188)
million, or $(1.94) per share, to fully write down goodwill for
Books Are Fun. In accordance with U.S. GAAP requirements, the
company analyzes and assesses recoverability of all of its
goodwill and intangibles each year. The unit has been operating
in an increasingly competitive market, which has put a premium on
programs to recruit and retain independent sales representatives,
resulting in lower revenues and margins over the short term.
Schrier said: "Books Are Fun continues to be a profitable
business and is the leader in the lucrative North American
display marketing industry. We believe that the business model
at Books Are Fun is sound and that it continues to hold long-term
promise. It has the largest and most experienced sales force in
the business. It operates in an underpenetrated market that
represents an opportunity for growth. Also, it offers its
customers a unique value proposition, and it is becoming an
increasingly important channel with which to distribute our
products outside of direct mail. Our company is committed to
investing the time, effort and resources needed to put Books Are
Fun quickly back on the path to revenue and profit growth."
Free Cash Flow
Free Cash Flow (change in cash before the change in total
borrowings, dividends, share repurchases, divestitures and
acquisitions) was $120 million, versus $181 million. The
prior-year figure included certain asset sales and reflected a
weaker U.S. dollar, which increased foreign-based cash flows and
the value of cash balances. Cash flow from operations was lower
by about $40 million this quarter as a result of lower EBITDA,
timing of tax refunds and working capital, primarily inventory
and receivables. The company anticipates cash flow from
operations to be considerably favorable to the prior year in the
Fiscal 2006 second half.
Income Taxes
Income tax expense was $(36) million, versus $(27) million.
Despite a reported loss, no tax benefit was given to the goodwill
charge. The higher effective tax rate reflects the absence of
non-recurring events including favorable tax audit settlements in
the prior-year quarter.
Share Repurchase Program
During the quarter, the company repurchased about 1,753,000
shares of its stock at a total cost of $27 million under the $100
million share repurchase authorization announced in April 2005.
As of December 31, 2005, the company had purchased about
2,738,000 shares of its stock at a cost of $43 million under that
authorization.
Outlook
At the outset of Fiscal 2006, the company commenced a
three-year plan that targeted annual revenue growth in the low-
to mid-single digits and operating profit growth in the
high-single to low-double digits. For Fiscal 2006, the company's
prior guidance called for "full-year revenues to grow low- to
mid-single digits on a currency-neutral basis, operating profits
to grow in the mid teens, and earnings per share to be $0.90 to
$1.00." The company remains on track to achieve those
operational growth targets, excluding the charges, based on
improved profits at RDI (originally targeted to grow in the
mid-single digits and now expected to grow by low teens) and high
double-digit profit growth at QSP. RDNA is expected to grow
operating profit by double digits as well. The company
reiterates its previous guidance for full-year EPS, excluding the
non-cash write-down of goodwill for Books Are Fun and any other
special items. The second half improvement in profits will be
strongly weighted toward the fourth quarter.
Segment Information
Fiscal 2006 Fiscal 2005 Better/
In millions Quarter 2 (a) Quarter 2 (a) (Worse) (a)
Revenues:
Reader's Digest North America $ 247 $ 252 $ (5)
Reader's Digest International 301 306 (5)
Consumer Business Services 229 250 (21)
Intercompany Eliminations (11) (10) (1)
----- ----- -----
Total revenues $ 765 $ 798 $ (33)
Operating Profit (Loss):
Reader's Digest North America $ 28 $ 25 $ 3
Reader's Digest International 39 41 (2)
Consumer Business Services 54 61 (7)
Corporate Unallocated (10) (13) 3
Goodwill Charge (188) -- (188)
Deferred Promotion Amortization -- (26) 26
----- ----- -----
Total operating profit (loss) $ (77) $ 88 $(165)
(a) Certain amounts do not recalculate due to rounding.
Reader's Digest North America (RDNA)
RDNA had revenues of $247 million, versus $252 million.
Operating profit was $28 million, versus $25 million. The
principal reason for the profit increase was a $6 million
reduction in amortization expense at Reiman. Also driving the
results were higher profits for certain Reiman magazines and
increased profits for Reader's Digest magazine, offset by lower
profits at the special interest publications and increased
investment spending of approximately $3 million on new products
during the quarter, including Every Day with Rachael Ray and
Taste of Home Entertaining. RDNA results were moderately
affected by the impact of Hurricanes Katrina and Rita, which
interfered with magazine and BHE mailings and the delivery of
products, as well as by higher fuel prices.
The Revenue decline reflected lower sales of Reiman book
annuals, soft advertising sales at Selecciones and The Family
Handyman and lower sales at US BHE, partly offset by higher
advertising revenues at U.S. Reader's Digest magazine and
increased subscription sales of Backyard Living, Cooking for 2,
and Birds & Blooms Extra. Also contributing to revenue gains was
Every Day with Rachael Ray, which performed well above
expectations, prompting a decision to increase the rate base
twice within its first year, to 750,000.
Reader's Digest International (RDI)
Revenues for RDI were $301 million, versus $306 million.
Operating profits were $39 million, versus $41 million. Excluding
the negative effects of foreign currency translation, revenues
were up 2 percent and profits were down 1 percent.
Revenue gains were driven by higher sales in most markets
including significant currency neutral increases in Germany,
Russia, Australia and Brazil. The company has now launched
businesses in 10 new countries in the past 22 months. Further
driving topline growth were higher revenues from four of the new
countries launched in late Fiscal 2004 and early Fiscal 2005 -
Romania, Croatia, Slovenia, and Ukraine - which continue to
perform well above plan. During the quarter, RDI also launched
Reader's Digest magazine in Romania, which has already generated
more than 100,000 subscriptions.
Operating profits declined slightly, currency neutral, but
performed significantly better than plan as improved profits in
Germany, Russia and Brazil, as well as higher profits from last
year's new-launch markets, offset increased investment spending
and lower results in the United Kingdom.
Of RDI's 10 new-country launches, six are from Fiscal 2006 -
Bosnia and Serbia (launched and announced in the second quarter),
Lithuania (launched late in the second quarter and announced
today), and United Arab Emirates, Bulgaria and Kazakhstan
(announced today and launching in February). By the end of the
second quarter, Bosnia, Serbia and Lithuania had generated
approximately 300,000 orders from initial mailings. The company
plans to continue its international expansion program in the
second half of Fiscal 2006 with tests in at least three
additional countries.
Consumer Business Services (CBS)
In the second quarter, revenues at CBS were $229 million,
versus $250 million. Operating profits were $54 million, versus
$61 million. Some of the reduction was timing-related: CBS
sales during the first half (the "Fall Season") were down 6
percent.
At Books Are Fun, revenues and profits declined due to fewer
events and lower averages versus the year-ago quarter, reflecting
a highly competitive environment, timing of school campaigns and impact
from Hurricanes Katrina and Rita. To address the highly competitive
environment, BAF has undertaken a comprehensive program to expand its
market-leading position, including making substantial investments to
recruit, train and retain the largest team of display-marketing
representatives in the industry.
At QSP, revenues were down but operating profit was up 4
percent. For the Fall Season, operating profits were up double
digits. Lower revenues reflected a drop in magazine and food
sales, offset by higher gift and Internet sales. Gift sales
increased because of improved promotional material and stronger
products in the catalog. Fewer magazine subscriptions were sold
in the quarter, as expected, but more new accounts were acquired
than the year-ago quarter. Food sales were adversely affected by
the impact of Hurricanes Katrina and Rita, and a labor action in
Canada.
Corporate Unallocated
Corporate unallocated expenses were $(10) million in the
quarter, versus $(13) million in the year-ago quarter. The
favorable variance reflects the reversal of litigation-related
reserve accruals recorded in previous periods that are no longer
necessary, lower facility-related costs and other expense
savings, offset by increased costs associated with the expensing
of stock options, and lower pension income.
Non-GAAP Financial Measures
The company publicly reports its financial information in
accordance with United States generally accepted accounting
principles (GAAP). To facilitate internal managerial and
external analysis of the company's operating performance, the
company also presents financial information that may be
considered "non-GAAP financial measures" under Regulation G and
related reporting requirements promulgated by the Securities and
Exchange Commission. Non-GAAP financial measures should be
evaluated in conjunction with, and are not a substitute for, GAAP
financial measures. The following non-GAAP financial measures
are included in this release are used by the company in its
internal analysis of the business.
- Free Cash Flow (change in cash before the change in total
borrowings, dividends, share repurchases, divestitures and
acquisitions) - Free cash flow is presented to provide
period-to-period cash flow trends generated by the business
before any discretionary, finance-related uses/sources of
cash. It is used by management to reconcile the change in
net debt from period to period. Certain amounts do not
recalculate due to rounding.
Reconciliation of Free Cash Flow, Q2 Fiscal Q2 Fiscal
in millions 2006 2005
Reported change in cash per cash flow $ 14 $ 21
statement (see Table 4)
Change in total borrowings 70 203
Dividends 10 5
Share repurchases 26 --
Sale of building -- (47)
Debt financing fees -- (1)
----- -----
Free Cash Flow Source $ 120 $ 181
===== =====
- Net Debt (total borrowings less cash and cash equivalents) -
Net debt is one of management's measures of leverage and is
an approximate measure of the company's debt less amounts
the company has the capacity to repay. The company
typically manages its cash and debt by using any "excess"
cash (i.e., cash in excess of a desired on-hand amount) to
make principal payments on its outstanding debt.
- Adjusted Operating Profit / Adjusted EPS --
Adjusted Operating Profit is defined as operating profit
excluding certain non-operating items and significant
non-cash charges.
Adjusted EPS is defined as earnings per share excluding
certain non-operating items and significant non-cash
charges.
The company considers Adjusted Operating Profit and Adjusted
EPS to be profitability measures that facilitate forecasting
of our operating results for future periods and allows for
the comparison of our operating results to historical
periods. A limitation of these measures is that they do not
include all items that affect operating profit and earnings
per share during the period.
- Previously Announced Fiscal 2006 Guidance - Management uses
Fiscal 2006 Guidance to assess the company's actual
performance relative to its full-year expectations on a per
share basis. The Company's previously announced full-year
earnings per share guidance excluded restructuring charges
and other items that could not have been forecasted at that
time. During 2006, items identified to date include the
non-cash goodwill charge.
Reconciliation of Expected GAAP EPS to Previously
Announced Fiscal 2006 Guidance EPS
Expected GAAP Fiscal 2006 loss per share $(1.04) - $(0.94)
Less:
BAF Goodwill Charge $(1.94)
Previously Announced Fiscal 2006 Guidance $0.90 - $ 1.00
The company will host a conference call with financial
analysts to discuss the company's first quarter results on
Thursday, January 26, 2006, at 8:30 a.m. EST. The company
invites investors to listen to the webcast of the conference call
at the company's Investor Relations Web site, www.rda.com. This
will also include a reconciliation of non-GAAP financial measures
that may be disclosed on the conference call or from time to time
in other oral, webcast or broadcast public announcements by the
company. A transcript of the conference call will be posted on
www.rda.com.
The Reader's Digest Association, Inc. is a global publisher
and direct marketer of products that inform, entertain and
inspire people of all ages and cultures around the world. The
company reports business results in three segments: RD North
America, RD International and Consumer Business Services. Global
headquarters are located at Pleasantville, New York.
This release may include "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements inherently involve risks and
uncertainties that could cause actual future results and
occurrences to differ materially from the forward-looking
statements. The Reader's Digest Association, Inc.'s filings with
the Securities and Exchange Commission, including its reports on
Forms 10-K, 10-Q and 8-K, contain a discussion of additional
factors that could affect future results and occurrences. RDA
does not undertake to update any forward-looking statements.
Table 1 of 4
The Reader's Digest Association, Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(In millions, except per share data)
(unaudited)
Three-month period ended Six-month period ended
December 31, 2005 and 2004 (A) December 31, 2005 and 2004
Fiscal Year Better/ Fiscal Year Better/
2006 2005 (Worse) 2006 2005 (Worse)
Revenues $765.2 $798.0 (4%) $1,281.6 $1,288.0 (0%)
Product, distribution and editorial expenses (301.3) (308.5) 2% (522.4) (511.5) (2%)
Promotion, marketing and administrative expenses (353.1) (401.3) 12% (657.8) (724.3) 9%
Goodwill Charge (B) (187.8) --- N/M (187.8) --- N/M
------- ------ --- -------- -------- ----
Operating (loss) profit (77.0) 88.2 (187%) (86.4) 52.2 (266%)
Other income and (expense), net (9.6) (3.6) (167%) (16.2) (14.5) (12%)
------- ------ --- -------- -------- ----
(Loss) Income before provision for income tax (86.6) 84.6 (202%) (102.6) 37.7 (372%)
Provision for income taxes (35.8) (26.8) (34%) (28.0) (10.2) (175%)
------- ------ --- -------- -------- ----
Net (loss) income ($122.4) $57.8 (312%) ($130.6) $27.5 (575%)
======= ===== === ======== ======== ====
Basic (loss) earnings per share:
Weighted average common shares outstanding 96.6 97.4 N/M 97.0 97.4 N/M
Basic (loss) earnings per share ($1.27) $0.59 N/M ($1.35) $0.28 N/M
======= ===== === ======== ======== ====
Diluted (loss) earnings per share:
Adjusted weighted average common shares outstanding 96.6 99.9 N/M 97.0 99.9 N/M
Diluted (loss) earnings per share ($1.27) $0.58 N/M ($1.35) $0.27 N/M
======= ===== === ======== ======== ====
Dividends per common share $0.10 $0.05 --- $0.20 $0.10 ---
(A) RDA reports on a fiscal year beginning July 1. The three-month periods ended December 31, 2005 and 2004 are the second fiscal
quarters of fiscal year 2006 and fiscal year 2005, respectively. Operating results for any interim period are not necessarily
indicative of the results for an entire year.
(B) At least annually, (in the third quarter) RDA reviews the carrying amount of goodwill and other intangibles for recoverability.
During interim periods the Company monitors changes in businesses for indicators of impairment. Due to a shortfall in Books Are
Fun's operating performance relative to expectations during the peak-selling season, we were required to review goodwill balances
related to this business in the second quarter. Based on our assessment, Books Are Fun recorded a non-cash charge of $(187.8)
million, or $(1.94) per share, to reduce the carrying amount of Books Are Fun goodwill.
N/M - Not meaningful.
Table 2 of 4
The Reader's Digest Association, Inc. and Subsidiaries
Revenues and Operating Profit by Operating Segments
(In millions)
(unaudited)
Three-month period ended Six-month period ended
December 31, 2005 and 2004 (A) December 31, 2005 and 2004
Fiscal Year Fiscal Year
Better/ Better/
2006 2005 (Worse) 2006 2005 (Worse)
Revenues
Reader's Digest North America $247.0 $251.8 (2%) $474.7 $478.0 (1%)
Reader's Digest International 300.8 306.2 (2%) 535.8 521.0 3%
Consumer Business Services 228.7 250.3 (9%) 288.5 305.3 (6%)
Intercompany eliminations (B) (11.3) (10.3) (10%) (17.4) (16.3) (7%)
------ ------ ---- -------- -------- ----
Total Revenues $765.2 $798.0 (4%) $1,281.6 $1,288.0 (0%)
====== ====== ==== ======== ======== ====
Operating profit (loss)
Reader's Digest North America $28.1 $25.2 12% $44.1 $41.1 7%
Reader's Digest International 38.7 41.2 (6%) 40.1 41.9 (4%)
Consumer Business Services 54.3 61.2 (11%) 36.3 42.7 (15%)
Corporate unallocated (C) (10.3) (13.3) 23% (19.1) (21.9) 13%
------ ------ ---- -------- -------- ----
$110.8 $114.3 (3%) $101.4 $103.8 (2%)
Goodwill Charge (D) (187.8) --- N/M (187.8) --- N/M
Deferred promotion amortization (E) --- (26.1) N/M --- (51.6) N/M
------ ------ ---- -------- -------- ----
Total operating profit (loss) ($77.0) $88.2 (187%) ($86.4) $52.2 (266%)
====== ====== ==== ======== ======== ====
(A) RDA reports on a fiscal year beginning July 1. The three-month periods ended December 31, 2005 and 2004 are the second fiscal
quarters of fiscal year 2006 and fiscal year 2005, respectively. Operating results for any interim period are not necessarily
indicative of the results for an entire year.
(B) In the normal course of business, the company's segments enter into transactions with one another.These intercompany
transactions are recorded by each segment at amounts as if the transactions were with third parties and, therefore, affect segment
performance. Operating segment revenues, above, are presented gross before intercompany eliminations. However, intercompany
revenues and associated expenses are eliminated in consolidation and are not reflected in the company's consolidated results.
(C) Corporate unallocated expenses include the cost of governance and other centrally managed expenses, as well as the accounting
for U.S. pension plans, post-retirement healthcare costs, and executive compensation programs which are not allocated to the
operating segments. Governance and centrally managed expenses include costs such as corporate finance and general management,
investor and public relations, legal, treasury, and any related information technology and facility costs utilized by these
departments.
(D) At least annually, (in the third quarter) RDA reviews the carrying amount of goodwill and other intangibles for recoverability.
During interim periods the Company monitors changes in businesses for indicators of impairment. Due to a shortfall in Books Are
Fun's operating performance relative to expectations during the peak-selling season, we were required to review goodwill balances
related to this business in the second quarter. Based on our assessment, Books Are Fun recorded a non-cash charge of $(187.8)
million to reduce the carrying amount of Books Are Fun goodwill.
(E) The deferred promotion amortization of $(26.1) million reflects the expensing of the deferred magazine promotion asset as of
June 30, 2004, and includes $(0.2) million from the effects of foreign exchange. For the six-month period ended December 31, 2004,
the total deferred promotion amortization is $(51.6) and includes $(0.3) million from the effects of foreign exchange.
N/M - Not meaningful.
Table 3 of 4
The Reader's Digest Association, Inc. and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2005 and June 30, 2005
(In millions)
(unaudited)
December 31, June 30,
2005 2005
Assets
Cash and cash equivalents $68.8 $37.7
Accounts receivable, net 340.4 233.9
Inventories 200.5 162.4
Prepaid and deferred promotion costs 43.2 53.8
Prepaid expenses and other current assets 167.5 144.9
-------- --------
Total Current Assets 820.4 632.7
Property, plant and equipment, net 117.5 119.3
Goodwill 693.4 880.9
Other intangible assets, net 130.3 137.8
Prepaid pension assets 316.8 307.9
Other noncurrent assets 94.7 102.0
-------- --------
Total Assets $2,173.1 $2,180.6
======== ========
Liabilities and Stockholders' Equity
Accounts payable $145.9 $109.8
Loans and notes payable 0.4 ---
Accrued expenses 273.1 267.4
Income taxes payable 25.9 34.5
Unearned revenues 435.4 395.5
Other current liabilities 14.6 12.4
-------- --------
Total Current Liabilities 895.3 819.6
Long-term debt 625.0 559.2
Unearned revenues 142.3 133.0
Accrued pension 119.3 121.5
Postretirement and postemployment benefits other than pensions 95.7 96.7
Other noncurrent liabilities 107.9 84.4
-------- --------
Total Liabilities 1,985.5 1,814.4
Capital stock 30.4 21.2
Paid-in capital 200.6 206.8
Retained earnings 1,070.7 1,221.6
Accumulated other comprehensive loss (80.8) (84.1)
Treasury stock, at cost (1,033.3) (999.3)
-------- --------
Total Stockholders' Equity 187.6 366.2
-------- --------
Total Liabilities and Stockholders' Equity $2,173.1 $2,180.6
======== ========
Table 4 of 4
The Reader's Digest Association, Inc. and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(In millions)
(unaudited)
Three-month period ended Six-month period ended
December 31, December 31,
2005 2004 2005 2004
Cash flows from operating activities
Net (loss) income ($122.4) $57.8 ($130.6) $27.5
Depreciation and amortization 9.3 15.3 18.7 30.4
Goodwill charge 187.8 --- 187.8 ---
Amortization of debt issuance costs 0.3 1.0 0.7 2.0
Stock-based compensation 3.6 2.4 7.1 5.5
Net gain on sales of long-term assets (0.9) (7.2) (3.4) (7.2)
Changes in current assets and liabilities, net
Accounts receivable, net (56.7) (61.0) (107.4) (97.6)
Inventories 14.5 34.6 (38.5) (17.8)
Prepaid and deferred promotion costs 16.7 45.6 10.2 45.5
Unearned revenues 7.6 6.9 40.4 26.2
Accounts payable and accrued expenses 34.9 43.2 45.6 44.5
Other, net 15.3 32.0 (29.2) (1.5)
Changes in noncurrent assets and liabilities, net 13.6 (5.0) 29.4 23.7
------- ------ ------- ------
Net change in cash due to operating activities 123.6 165.6 30.8 81.2
------- ------ ------- ------
Cash flows from investing activities
Proceeds from other long-term investments and sales of
businesses 0.2 4.2 0.2 4.2
Proceeds from sales of property, plant and equipment 0.3 10.2 3.7 10.2
Proceeds from the sale of the Pleasantville facility --- 48.2 --- 48.2
Purchases of intangible assets --- --- (0.5) ---
Capital expenditures (4.5) (4.4) (10.8) (7.6)
------- ------ ------- ------
Net change in cash due to investing activities (4.0) 58.2 (7.4) 55.0
------- ------ ------- ------
Cash flows from financing activities
Proceeds / (repayments) from borrowings, net (69.6) (130.3) 66.2 (44.6)
Repayments of term loan --- (73.0) --- (80.9)
Dividends paid (10.0) (5.2) (20.1) (10.4)
Cash paid for financing fees --- --- --- (0.5)
Treasury stock repurchases (26.2) --- (35.6) ---
Proceeds from employee stock purchase plan and exercise of
stock options 0.9 1.3 1.5 1.4
Other, net (0.1) (1.8) (3.8) (1.9)
------- ------ ------- ------
Net change in cash due to financing activities (105.0) (209.0) 8.2 (136.9)
------- ------ ------- ------
Effect of exchange rate changes on cash (1.0) 6.0 (0.5) 6.8
------- ------ ------- ------
Net change in cash and cash equivalents 13.6 20.8 31.1 6.1
------- ------ ------- ------
Cash and cash equivalents at beginning of period 55.2 35.6 37.7 50.3
------- ------ ------- ------
Cash and cash equivalents at end of period $68.8 $56.4 $68.8 $56.4
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