EXHIBIT 99
[ENESCO GROUP, INC. LOGO] FOR IMMEDIATE RELEASE
INVESTOR CONTACT: Tom Bradley
225 Windsor Drive 630-875-5990
Itasca, Illinois 60143-1225 tbradley@enesco.com
630.875.5300
fax: 630.875.5350 MEDIA CONTACT: Donna Shaults
www.enesco.coml 630-875-5464
dshaults@enesco.com
*A conference call will be broadcast live on Thursday, July 24, 2003, at 10:00
a.m. Central Time (11:00 a.m. Eastern) at http://www.enesco.com and
http://www.streetevents.com. An online replay also will be available
approximately one hour after the call. Please see the end of this release for
more details.
SECOND QUARTER 2003 FINANCIAL RESULTS REPORTED BY ENESCO GROUP, INC.
ITASCA, ILL. -- JULY 23, 2003 -- Enesco Group, Inc. (NYSE: ENC) today reported
results for the second quarter ended June 30, 2003.
SECOND QUARTER 2003 HIGHLIGHTS
o Net income was $2.2 million, an increase of $.4 million or 21
percent over the second quarter of 2002.
o Operating income of $4.0 million increased $.3 million or 9
percent over prior year.
o Gross profit of $27.6 million increased $1.1 million or 4 percent
over 2002.
o Gross profit margins improved from 39.8 percent to 45.3 percent.
o The Company entered into a three-year $50 million unsecured
revolving credit agreement with Fleet National Bank and LaSalle
Bank N.A.
FINANCIAL RESULTS
For the second quarter of 2003, Enesco reported total revenues of $ 60.9 million
compared with revenues of $ 66.5 million for the second quarter of 2002. The 8
percent decline in revenue related primarily to a decrease in promotional sales
into the mass market and fewer closeout sales compared to the same period of
2002. A sluggish global economy and SARS epidemic-related declines in worldwide
tourism also negatively impacted second quarter 2003 revenues. These factors
were partially offset by inclusion of revenues from the Bilston and Battersea
acquisition, favorable foreign currency exchange rates and successful new
product introductions in the U.S.
Gross profit of $27.6 million was up 4 percent from the second quarter of 2002.
This increase was due to new product introductions, cost improvement programs
and favorable foreign currency impacts, offset by lower revenue.
-more-
SECOND QUARTER 2003 FINANCIAL RESULTS REPORTED BY ENESCO -- PAGE 2
Operating expenses, exclusive of Bilston & Battersea and favorable foreign
currency exchange impacts, declined by 3 percent or $.6 million compared to the
same period in 2002. Operating income of $ 4.0 million for the second quarter of
2003 was $.3 million or 8 percent better than prior year due to favorable gross
profit performance and continued expense control.
Net income of $2.2 million represented a 21 percent increase over the same
period last year and generated $.15 per diluted share versus $.13 per diluted
share in 2002.
"We are pleased with our second quarter earnings performance," said Dan
DalleMolle, president and CEO of Enesco. "Our profitability improvement,
resulting from operating efficiencies and cost containment, is consistent with
our product and customer rationalization strategies. Enesco will seize growth
opportunities across all markets through channel management, new product
introductions and retailer friendly programs."
ABOUT ENESCO GROUP, INC.
A global leader in the gift, collectibles and home decor industries for 45
years, Enesco Group, Inc. offers such popular product lines as Cherished
Teddies, Disney, Nickelodeon, Lilliput Lane, Border Fine Arts and NICI, among
others. The Company's award winning Precious Moments figurine collection is one
of the top collectible lines throughout the world. Further information is
available on the Company's web site at www.enesco.com.
This press release contains various forward-looking statements that are based on
management's current assumptions and beliefs and upon information currently
available to management. The Company has tried to identify such forward-looking
statements by use of such words as "expects," "intends," "anticipates," "could,"
"estimates," "plans," and "believes," and similar expressions, but these words
are not the exclusive means of identifying such statements. Such statements are
subject to various risks, uncertainties and other factors which could cause
actual results to vary materially from those anticipated, estimated, expected or
projected. Important factors that may cause actual future events or results to
differ materially and adversely from those described in the forward-looking
statements include, but are not limited: the Company's success in developing new
products and consumer reaction to the Company's new products; the Company's
ability to secure, maintain and renew popular licenses, particularly our
licenses for Precious Moments, Cherished Teddies, and Disney; the Company's
ability to grow revenues in mass and niche market channels; the Company's
ability to identify and close on strategic acquisitions; changes in general
economic conditions, as well as specific market conditions; fluctuations in
demand for our products; manufacturing lead times; the timing of orders and
shipments and our ability to predict customer demands; inventory levels and
purchase commitments exceeding requirements based upon incorrect forecasts;
collection of accounts receivable; changes in the regulations and procedures
affecting the importation of goods into the United States; changes in foreign
exchange rates; price and product competition in the giftware industry;
variations in sales channels, product costs or mix of products sold; and,
possible future terrorist attacks, epidemics, or acts of war.
In addition, the Company operates in a continually changing business environment
and does not intend to update or revise the forward-looking statements contained
herein, which speak only as of the date hereof. Additional information regarding
forward-looking statement risk factors is contained in the Company's reports and
filings with the Securities and Exchange Commission. In light of these risks and
uncertainties, the forward-looking statements contained herein may not occur and
actual results could differ materially from those set forth herein. Accordingly,
you should not rely on these forward-looking statements as a prediction of
actual future results.
TO LISTEN TO THE WEBCAST, YOUR COMPUTER MUST HAVE REALPLAYER INSTALLED. IF YOU
DO NOT HAVE REALPLAYER, GO TO HTTP://WWW.STREETEVENTS.COM PRIOR TO THE CALL,
WHERE YOU CAN DOWNLOAD REALPLAYER FOR FREE.
FOR A PHONE REPLAY, CALL 800/642-1687. PASSCODE: 1599402. THE REPLAY WILL BE
AVAILABLE FOR ONE WEEK FOLLOWING THE CALL.
# # #
ENESCO GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SECOND QUARTER SIX MONTHS
----------------------------- ----------------------------------
2003 2002 % Change 2003 2002 % Change
---- ---- -------- ---- ---- --------
Net revenues $60,886 $66,489 -8% $ 107,023 $ 121,366 -12%
Cost of sales 33,277 40,006 -17% 60,904 70,697 -14%
------- ------- --------- ---------
Gross profit 27,609 26,483 4% 46,119 50,669 -9%
Selling, distribution, general and
administrative expense 23,590 22,808 3% 46,611 49,206 -5%
------- ------- --------- ---------
Operating profit (loss) 4,019 3,675 (492) 1,463
Interest expense (495) (179) (544) (302)
Interest income 236 51 406 149
Other income (expense), net (229) (437) (635) (748)
------- ------- --------- ---------
Income (loss) before income taxes and cumulative
effect of a change in accounting principle 3,531 3,110 (1,265) 562
Income taxes expense (benefit) 1,357 1,313 (648) 172
------- ------- --------- ---------
Income (loss) before cumulative
effect of a change in accounting principle 2,174 1,797 (617) 390
Cumulative effect of a change in accounting
principle, net of income taxes (1) - - - (29,031)
------- ------- --------- ---------
Net income (loss) $ 2,174 $ 1,797 $ (617) $ (28,641)
======= ======= ========= =========
Earnings (loss) per share:
Income (loss) before cumulative effect of a
change in accounting principle:
Basic $ 0.15 $ 0.13 ($0.04) $ 0.03
Diluted $ 0.15 $ 0.13 ($0.04) $ 0.03
Basic and diluted cumulative effect of a
change in accounting principle, net of income taxes - - - ($2.10)
Net income (loss): Basic $ 0.15 $ 0.13 ($0.04) ($2.07)
Diluted $ 0.15 $ 0.13 ($0.04) ($2.07)
Average basic shares outstanding 14,026 13,852 13,972 13,820
Average diluted shares outstanding 14,420 14,184 13,972 13,820
(1) Amortization of goodwill ceased after 2001, per FAS 142. In 2002,
goodwill impairment is recorded as the cumulative effect of a change in
accounting principle in accordance with FAS 142.
ENESCO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS Unaudited
June 30, December 31,
2003 2002
-------- --------
CURRENT ASSETS:
Cash and equivalents $ 7,571 $ 17,418
Accounts receivable, net 63,899 54,347
Inventories 50,468 48,334
Other current assets 8,654 10,077
-------- --------
Total current assets 130,592 130,176
Property, plant and equipment, net 27,401 26,229
Other assets 26,235 23,380
-------- --------
Total assets $184,228 $179,785
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes and loans payable $ 1,051 $ -
Accounts payable 23,352 18,395
Federal, state and foreign income taxes 13,003 15,416
Total accrued expenses 17,698 20,266
-------- --------
Total current liabilities 55,104 54,077
Total long-term liabilities 3,588 3,795
Minority interest 114 -
Total shareholders' equity 125,422 121,913
-------- --------
Total liabilities and shareholders' equity $184,228 $179,785
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