EXHIBIT 99.1
FOR IMMEDIATE RELEASE
ROYAL APPLIANCE REPORTS 2002 RESULTS
CLEVELAND, Ohio -- February 13, 2003 - Royal Appliance Mfg. Co. (RAM -
NYSE), maker of Dirt Devil(R) floor care products and the Telezapper(R), had net
income of $9.6 million, or $.69 per share for the year ended December 31, 2002,
compared to $9.3 million or $.65 per share for the year ended December 31, 2001.
Net sales for the year ended December 31, 2002 were $389.7 million, down 7.5%
from last year's $421.3 million.
Net income increased for the fourth quarter ended December 31, 2002, to
$7.7 million, or $.56 per share, from $3.8 million, or $.27 per share for the
comparable 2001 period. Net sales for the fourth quarter ended December 31, 2002
decreased 7.6% to $117.5 million from $127.2 million for the comparable 2001
period.
The Company recorded earnings of $.31 per share in the fourth quarter of
2002 from the settlement of litigation and revenues from various licensing
agreements of the Company's intellectual property, including the TeleZapper(R)
and the Company's bagless upright vacuum technology.
As previously announced, Royal has entered into a definitive agreement
("agreement") for its acquisition by TechTronic Industries. The agreement
provides for Royal Appliance shareholders to receive US$7.37 per share in cash,
or a total purchase price of approximately US$105 million.
Under the terms of the agreement, Royal will be merged with a subsidiary
of TechTronic Industries which, following the completion of the merger, will
operate as a wholly owned subsidiary of TechTronic Industries. The transaction
is expected to close in late March or early April of 2003. It is subject to,
among other things, the expiration or termination of the Hart-Scott-Rodino Act
waiting period and approval by the shareholders of both TechTronic Industries
and Royal Appliance.
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Three months ended Twelve months ended
December 31, December 31,
2002 2001 2002 2001
--------- --------- --------- ---------
(Dollars in thousands, except per share amounts)
Net sales $ 117,467 $ 127,236 $ 389,726 $ 421,311
Cost of sales 85,211 94,573 301,692 325,746
--------- --------- --------- ---------
Gross margin 32,256 32,663 88,034 95,565
Selling, general and administrative expenses 23,423 26,168 74,684 77,587
--------- --------- --------- ---------
Income from operations 8,833 6,495 13,350 17,978
Interest expense, net 371 518 1,413 2,415
Litigation settlement, receivable securitization and other
expense (income), net (3,561) 116 (2,972) 1,181
--------- --------- --------- ---------
Income before income taxes 12,023 5,861 14,909 14,382
Income tax expense 4,348 2,088 5,344 5,058
--------- --------- --------- ---------
Net income $ 7,675 $ 3,773 $ 9,565 $ 9,324
========= ========= ========= =========
BASIC
Weighted average number of common
shares outstanding (in thousands) 12,823 13,634 12,983 13,731
Earnings per share $ .60 $ .28 $ .74 $ .68
DILUTED
Weighted average number of common
shares and equivalents outstanding (in thousands) 13,696 14,206 13,877 14,297
Earnings per share $ .56 $ .27 $ .69 $ .65
Royal Appliance primarily develops, assembles, sources, and markets
vacuum cleaners and other cleaning appliances for home and commercial use under
the Dirt Devil(R) and Royal(R) brand names, as well as the Telezapper(R), a
device that helps reduce computer-dialed telemarketing calls. The Company's
executive offices are located at 7005 Cochran Road, Glenwillow, Ohio 44139.
Web site addresses: www.royalappliance.com, www.dirtdevil.com,
www.telezapper.com, www.privacytechnologies.com,
www.productlaunchpartners.com and www.royalvacuums.com.
Forward-looking statements in this release are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Readers
are cautioned not to place undue reliance on these forward-looking statements
which speak only as of the date hereof. Potential risks and uncertainties
include, but are not limited to: approval of the merger agreement by the
shareholders of both TechTronic Industries and the Company, the financial
strength of the retail industry particularly in the major mass retail channel;
the impact of Kmart's recent bankruptcy filing on Royal's future sales and
earnings; the competitive pricing and aggressive product development environment
within the floorcare industry; the impact of private-label programs by mass
retailers; the cost and effectiveness of planned advertising, marketing and
promotional campaigns; the success at retail and the continued acceptance by
consumers of the Company's new products, the dependence upon the Company's
ability to continue to successfully develop and introduce innovative products;
the uncertainty of the Company's global supply chain and suppliers to
continuously supply sourced finished goods and component parts; and general
business and economic conditions.
CONTACTS: Michael J. Merriman, Chief Executive Officer
Richard G. Vasek, Chief Financial Officer
PHONE: (440) 996-2000
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