Exhibit 99
Enesco Group, Inc. Reports Third Quarter 2003 Results; Recent Acquisition and
Improving Product Mix Drive Profitability
ITASCA, Ill.--(BUSINESS WIRE)--Oct. 23, 2003--Enesco Group, Inc.
(NYSE:ENC), a leader in the giftware, collectible and home decor
industry, today reported results for the third quarter ended September
30, 2003.
Third Quarter 2003 Highlights
-- Revenue of $71.8 million, 4 percent higher than 3Q02.
-- Gross profit margins improved to 43.4 percent from 41.5
percent in 3Q02.
-- Operating profit of $7.1 million increased 6 percent compared
to the same quarter last year.
-- Net income was $4.6 million, a 4 percent increase compared to
3Q02.
Financial Results
For the third quarter of 2003, Enesco reported total revenues of
$71.8 million, an increase of 4 percent when compared to revenues of
$69.0 million for the third quarter of 2002. The Company's revenue
growth was attributed to $2.0 million of revenues from the Bilston &
Battersea acquisition, as well as the $1.9 million impact of favorable
foreign currency exchange rates.
Gross profit of $31.1 million was 9 percent higher than the third
quarter of 2002. This increase was attributable to continued cost
improvement programs, the Bilston & Battersea acquisition, and the
impact of favorable foreign currency exchange rates. Increased success
with new higher-margin product lines has also contributed to gross
profit growth for the quarter.
Operating expenses were $24.0 million, including $0.6 million of
Bilston & Battersea expenses and $0.7 million related to foreign
currency exchange rate impacts, which resulted in a 10 percent
increase from the same period in 2002. Operating profit of $7.1
million for the third quarter of 2003 was 6 percent better than the
same period in the prior year due to favorable gross profit
performance and continued expense control.
Net income of $4.6 million represented a 4 percent increase over
the same period last year and generated $0.32 per diluted share versus
$0.31 per diluted share in the third quarter of 2002.
"This was an encouraging and pivotal quarter for our company,"
said Dan DalleMolle, president and CEO of Enesco. "Our dedication and
persistence in refocusing the company over the last two years has
resulted in both revenue and earnings growth this quarter. We improved
our product mix to generate higher margin sales, and worked diligently
to build a more efficient operating platform. We are excited about our
expanded Disney relationship, announced earlier this quarter. We look
forward to continuing to fortify growth through this strategic
alliance."
A conference call will be broadcast live on Friday, October 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.
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.
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.
ENESCO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS Unaudited
September 30, December 31,
2003 2002
------------ ------------
Current Assets:
Cash and equivalents $5,277 $17,418
Accounts receivable, net 78,296 54,347
Inventories 55,993 48,334
Other current assets 9,000 10,077
------------ ------------
Total current assets 148,566 130,176
Property, plant and equipment, net 27,490 26,229
Other assets 26,754 23,380
------------ ------------
Total assets $202,810 $179,785
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes and loans payable $13,471 $-
Accounts payable 22,800 18,395
Federal, state and foreign income taxes 13,384 15,416
Total accrued expenses 19,070 20,266
------------ ------------
Total current liabilities 68,725 54,077
Total long-term liabilities 3,606 3,795
Minority interest 114 -
Total shareholders' equity 130,365 121,913
------------ ------------
Total liabilities and shareholders' equity $202,810 $179,785
============ ============
ENESCO GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Third Quarter and Nine Months Ended September 30, 2003 and 2002
(In thousands, except per share amounts)
Third Quarter Nine Months
--------------------------- ---------------------------
2003 2002 % Change 2003 2002 % Change
--------------------------- ---------------------------
Net
revenues $71,764 $69,043 4% $178,789 $190,409 -6%
Cost of
sales 40,627 40,412 101,532 111,109
----------------- ------------------
Gross
profit 31,137 28,631 9% 77,257 79,300 -3%
Gross
profit % 43.4% 41.5% 43.2% 41.6%
Selling,
distribution,
general and
administrative
expense 24,008 21,896 10% 70,615 71,102 -1%
----------------- ------------------
Operating
profit 7,129 6,735 6% 6,642 8,198 -19%
Interest
expense (97) (203) (641) (505)
Interest
income 66 65 472 214
Other income
(expense),
net (339) (362) (974) (1,110)
----------------- ------------------
Income before
income taxes
and cumulative
effect of a change
in accounting
principle 6,759 6,235 5,499 6,797
Income
taxes 2,162 1,834 1,514 2,006
----------------- ------------------
Income before
cumulative
effect of a
change in
accounting
principle 4,597 4,401 4% 3,985 4,791 -17%
Cumulative
effect of
a change in
accounting
principle, net
of income
taxes (1) - - - (29,031)
----------------- ------------------
Net income
(loss) $4,597 $4,401 4% $3,985 $(24,240) n/m(2)
================= ==================
Earnings (loss)
per share:
Income before
cumulative
effect of a
change in
accounting
principle
Basic $0.33 $0.32 $0.28 $0.35
Diluted $0.32 $0.31 $0.28 $0.34
Basic and
diluted
cumulative
effect of
a change in
accounting
principle,
net of
income taxes $0.00 $0.00 $0.00 ($2.10)
Net income
(loss):
Basic $0.33 $0.32 $0.28 ($1.75)
Diluted $0.32 $0.31 $0.28 ($1.75)
Average basic
shares
outstanding 14,065 13,879 14,000 13,839
Average
diluted shares
outstanding 14,461 14,246 14,344 14,095
(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.
(2) n/m =not meaningful
CONTACT: Enesco Group, Inc.
Tom Bradley (Investors), 630-875-5990
jgadzins@enesco.com
or
Donna Shaults (Media), 630-875-5464
dshaults@enesco.com