EXHIBIT 99.1
ONEIDA
NEWS RELEASE
INVESTOR RELATIONS CONTACTS: PRESS CONTACTS:
Andrew G. Church, Chief Financial Officer Catherine H. Suttmeier, Corporate Public Relations
Oneida Ltd. (315) 361-3000 Oneida Ltd. (315) 361-3000
Oneida Ltd. Reports Improved Operating Income for Second Quarter and Six
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Months Ended July 30, 2005
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ONEIDA, N.Y., Sept. 7, 2005 -- Oneida Ltd. (OTCBB: ONEI) today announced
operating and financial results for the second quarter and six month period
ended July 30, 2005. Operating income for the second quarter was $1.2 million,
compared to an operating loss of $(44.2) million during the corresponding period
last year. The prior year's operating loss included impairment losses on
depreciable and other assets of $(36.7) million, and a $4.8 million gain on the
sale of fixed assets. The operating income improvement also reflects the
favorable impact of the Company's comprehensive restructuring program. Oneida's
restructuring efforts are focused on returning to profitability by reducing the
Company's cost structure and transitioning from fixed-cost manufacturing to
variable-cost sourcing throughout its product line portfolio, thereby maximizing
the Company's competitiveness in today's global marketplace.
Revenues for the second quarter were $79.3 million, compared to $101.3 million
in the second quarter of the previous fiscal year. The decline in revenues is
partially attributed to the August 2004 sale of Encore Promotions, Inc.; the
closure of 22 unprofitable Oneida Home Stores during the previous twelve months;
the Company's decision to discontinue certain marginally profitable product
lines, including the distribution of common glassware products; and the impact
of several large customers opting to dual source a portion of their tabletop
product requirements.
Gross margins improved from $21.1 million (20.8% of revenues) during the three
month period ended July 31, 2004, to $27.9 million (35.2% of revenues) during
the quarter ended July 30, 2005. The improvement was achieved as a result of the
March 22, 2005 sale of the Sherrill, N.Y. manufacturing facility; complete
outsourcing of the Company's manufacturing operations; product line
rationalization; reduction of LIFO valued inventory levels; and a reduction of
excess and obsolete inventory write-downs. Operating income was also favorably
impacted by the closure of unprofitable Oneida Home Stores; reductions in
personnel, employee benefits, general & administrative expenses, and logistics
costs.
Net loss for the second quarter ended July 30, 2005 was $(6.8) million, equal to
$(0.15) per share, compared to year-ago net loss of $(48.3) million, or $(2.88)
per share.
For the first six months of the fiscal year ending January 2006, Oneida's
operating income was $6.7 million, on revenues of $169.5 million, compared to an
operating loss of $(46.1) million on revenues of $212.6 million during the first
half of the prior fiscal year. Net loss was $(10.1) million for the six month
period ended July 30, 2005, versus net income of $6.1 million during the
corresponding period last year. The prior year's net income included
non-recurring income items, totaling $60.7 million, attributed to the net effect
of eliminating the Company's post-retirement medical liabilities, termination of
the Company's long-term disability plan and freezing the Company's defined
benefit pension plans.
Net cash flow provided by operating activities was $4.2 million during the six
month period ended July 30, 2005, versus net cash used by operating activities
of $(28.7) million during the corresponding period last year. Liquidity under
the Company's U.S. revolving credit agreement and available cash balances was
$24.0 million at July 30, 2005, increased from $22.2 million and $12.2 million
at January 29, 2005 and October 30, 2004, respectively.
ONGOING RESTRUCTURING INITIATIVES AND EXECUTIVE APPOINTMENTS
The following was accomplished since the first quarter ended April 30, 2005:
o Appointed Foster Sullivan as Senior Vice President and General Manager
of Oneida's Foodservice division. Sullivan was most recently Senior
Vice President of Oneida's Hotel & Gaming sales group. Prior to
joining Oneida in 1996, Sullivan was with THC Systems (acquired by
Oneida) and the Edward Don Company, a leading equipment and supply
distributor to the foodservice industry.
o Appointed David Sank as Senior Vice President of Marketing,
responsible for establishing Oneida's global marketing vision, and
developing strategic marketing plans for the Company's Foodservice,
Consumer and International divisions. Sank has held senior marketing
and brand management positions in the consumer and foodservice
industries, including Cecilware, Kraft Foods, Campbell Soup and
General Mills.
o Substantially completed the closure of Oneida's foodservice
distribution facility located in Buffalo, N.Y., and consolidation of
the Company's east coast distribution operations into Oneida, N.Y.,
which is expected to generate additional supply chain savings and
service level improvements.
"Oneida has successfully established an international network of world-class
suppliers and a streamlined distribution system for bringing our products to
market" said Terry Westbrook, President and Chief Executive Officer. "With these
important milestones behind us, we are focused on delivering innovative new
products and packaging concepts to the marketplace to drive growth in the
Company's consumer and food service franchises," said Westbrook.
Oneida is a leading source of flatware, dinnerware, crystal and metal serveware
for both the consumer and food service industries worldwide.
Forward Looking Information
With the exception of historical data, the information contained in this Press
Release, as well as those other documents incorporated by reference herein, may
constitute forward-looking statements, within the meaning of the Federal
securities laws, including but not limited to the Private Securities Litigation
Reform Act of 1995. As such, the Company cautions readers that changes in
certain factors could affect the Company's future results and could cause the
Company's future consolidated results to differ materially from those expressed
or implied herein. Such factors include, but are not limited to: changes in
national or international political conditions; civil unrest, war or terrorist
attacks; general economic conditions in the Company's own markets and related
markets; availability or shortage of raw materials; difficulties or delays in
the development, production and marketing of new products; financial stability
of the Company's contract manufacturers, and their ability to produce and
deliver acceptable quality product on schedule; the impact of competitive
products and pricing; certain assumptions related to consumer purchasing
patterns; significant increases in interest rates or the level of the Company's
indebtedness; inability of the Company to maintain sufficient levels of
liquidity; failure of the Company to obtain needed waivers and/or amendments
relative to it's finance agreements; foreign currency fluctuations; major
slowdowns in the retail, travel or entertainment industries; the loss of several
of the Company's key executives, major customers or suppliers; underutilization
of, or negative variances at, some or all of the Company's distribution
facilities; the Company's failure to achieve the savings and profit goals of any
planned restructuring or reorganization programs; future product shortages
resulting from the Company's transition to an outsourced manufacturing platform;
international health epidemics such as the SARS outbreak; impact of changes in
accounting standards; potential legal proceedings; changes in pension and
medical benefit costs; and the amount and rate of growth of the Company's
selling, general and administrative expenses.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands of Dollars, except per share data)
(Unaudited)
For the Three Months Ended For the Six Months Ended
July 30, 2005 July 31, 2004 July 30, 2005 July 31, 2004
--------------- ------------- ------------- -------------
Revenues:
Net sales .............................................. $ 78,692 $ 101,020 $ 168,429 $ 211,665
License fees ........................................... 603 306 1,089 887
--------- --------- --------- ---------
Total Revenues ........................................... 79,295 101,326 169,518 212,552
--------- --------- --------- ---------
Cost of sales ............................................ 51,408 80,206 109,929 160,460
--------- --------- --------- ---------
Gross margin ............................................. 27,887 21,120 59,589 52,092
--------- --------- --------- ---------
Operating expenses:
Selling, distribution and
administrative expense................................. 25,630 33,567 51,964 66,460
Restructuring expense ................................. 835 (137) 1,176 (137)
Impairment loss on depreciable assets ................. -- 34,016 -- 34,016
Impairment loss on other assets ....................... 242 2,700 242 2,700
(Gain) loss on the sale of fixed assets ............... (10) (4,823) (445) (4,837)
--------- --------- --------- ---------
Total ............................................ 26,697 65,323 52,937 98,202
--------- --------- --------- ---------
Operating income (loss) .................................. 1,190 (44,203) 6,652 (46,110)
Other income ............................................. (1,043) (2,390) (1,601) (66,128)
Other expense ............................................ 741 1,764 1,302 4,656
Interest expense including amortization of
deferred financing costs ................................. 8,023 3,963 15,982 7,733
--------- --------- --------- ---------
(Loss) income before income taxes ........................ (6,531) (47,540) (9,031) 7,629
Income tax expense ....................................... 233 751 1,033 1,535
--------- --------- --------- ---------
Net (loss) income......................................... $ (6,764) $ (48,291) $ (10,064) $ 6,094
========= ========= ========= =========
Preferred stock dividends ................................ (32) (32) (64) (64)
Net (loss) income available to common
shareholders ............................................. $ (6,796) $ (48,323) $ (10,128) $ 6,030
========= ========= ========= =========
(Loss) income per share
Net income:
Basic ............................................ $ (0.15) $ (2.88) $ (0.22) $ .36
Diluted .......................................... $ (0.15) $ (2.88) $ (0.22) $ .36
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
Unaudited Audited
July 30, 2005 January 29, 2005
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ASSETS
Current assets:
Cash ......................................................................... $ 1,368 $ 2,064
Trade accounts receivables, less allowance for doubtful
accounts of $3,027 and $3,483, respectively .............................. 51,893 53,226
Other accounts and notes receivable .......................................... 3,376 1,398
Inventories, net of reserves of $10,587 and $22,405, respectively ............ 96,581 106,951
Other current assets ......................................................... 4,976 3,789
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Total current assets .................................................. 158,194 167,428
Property, plant and equipment, net .................................................. 17,568 23,149
Assets held for sale ................................................................ 5,610 1,263
Goodwill ............................................................................ 120,563 121,103
Other assets ........................................................................ 12,677 15,869
---------------- ----------------
Total assets .......................................................... $ 314,612 $ 328,812
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt .............................................................. $ 7,217 $ 9,577
Accounts payable ............................................................. 11,902 14,735
Accrued liabilities .......................................................... 28,137 33,651
Accrued restructuring ........................................................ 1,050 524
Accrued pension liabilities .................................................. 17,307 17,667
Deferred income taxes ........................................................ 1,214 1,214
Long term debt classified as current ......................................... 661 2,572
---------------- ----------------
Total current liabilities ............................................. 67,488 79,940
Long term debt ...................................................................... 210,303 204,344
Accrued postretirement liability .................................................... 2,716 2,633
Accrued pension liability ........................................................... 26,474 24,254
Deferred income taxes ............................................................... 9,897 9,087
Other liabilities ................................................................... 12,330 12,173
---------------- ----------------
Total liabilities ..................................................... 329,208 332,431
Commitments and contingencies
Stockholders' (deficit):
Cumulative 6% preferred stock--$25 par value; authorized 10,000,000 shares,
issued 86,036 shares, callable at $30 per share respectively .................. 2,151 2,151
Common stock--$l.00 par value; authorized 100,000,000 shares,
issued 47,781,288 shares for both periods .................................... 47,781 47,781
Additional paid-in capital .......................................................... 84,719 84,719
Retained deficit .................................................................... (94,126) (84,062)
Accumulated other comprehensive loss ................................................ (33,552) (32,639)
Less cost of common stock held in treasury; 1,149,364 shares
for both periods ........................................................... (21,569) (21,569)
---------------- ----------------
Total stockholders' (deficit): ........................................ (14,596) (3,619)
---------------- ----------------
Total liabilities and stockholders' (deficit) .................... $ 314,612 $ 328,812
================ ================
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 30, 2005 AND JULY 31, 2004
(Unaudited, in Thousands of Dollars)
Six months ended
July 30,2005 July 31,2004
------------ ------------
CASH FLOW PROVIDED BY (USED) FROM OPERATING ACTIVITIES:
Net income (loss) ................................................................. $ (10,064) $ 6,094
Adjustments to reconcile net (loss) income to net cash provided by (used in)
operating activities:
Non-cash interest (Payment in Kind) ............................................. 7,018 --
(Gain) on disposal of fixed assets .............................................. (445) (4,837)
Depreciation and amortization ................................................... 1,265 4,328
Deferred income taxes ........................................................... (448) 798
Impairment of long lived assets ................................................. -- 34,016
Impairment of other assets ...................................................... 242 2,700
Inventory write-downs ........................................................... -- 9,519
Pension plan amendment .......................................................... -- 2,577
Post retirement health care plan amendment ...................................... -- (63,277)
(Increase) decrease in working capital:
(566) (1,798)
Receivables ..................................................................... 9,402 5,022
Inventories
Other current assets ............................................................ 1,020 878
Other assets .................................................................... 1,018 851
Decrease in accounts payable .................................................... (2,866) (8,410)
Decrease in accrued liabilities ................................................. (2,356) (12,807)
Increase (decrease) in other liabilities ........................................ 985 (4,358)
---------------- ----------------
Net cash provided (used) by operating activities .............................. 4,205 (28,704)
---------------- ----------------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of properties and equipment ............................................. (783) (2,906)
Proceeds from dispositions of properties and equipment ............................ 1,402 12,760
---------------- ----------------
Net cash provided in investing activities ..................................... 619 9,854
---------------- ----------------
CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in short-term debt ....................................................... (2,360) (616)
Payment of long-term debt ......................................................... (2,970) 11,341
Net cash (used) provided by financing activities .............................. (5,330) 10,725
---------------- ----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH ............................................. (190) (164)
---------------- ----------------
NET (DECREASE) IN CASH .............................................................. (696) (8,289)
CASH AT BEGINNING OF YEAR ........................................................... 2,064 9,886
---------------- ----------------
CASH AT END OF PERIOD ............................................................... $ 1,368 $ 1,597
================ ================
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid during the quarter for :
Interest ....................................................................... $ 14,423 $ 7,071
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CONTACT:
Oneida Ltd. Investor Relations:
Andrew G. Church, Senior Vice President & Chief Financial Officer
(315) 361-3000
Press:
Catherine H. Suttmeier, Corporate Public Relations
(315) 361-3000