EXHIBIT 99.2
Investor contact: Nathan Elwell
Ashton Partners
312-553-6706
nelwell@ashtonpartners.com
Media contact: Donna Shaults
630-875-5464
dshaults@enesco.com
ENESCO ANNOUNCES AMENDMENT TO PRECIOUS MOMENTS(R)
LICENSE AGREEMENT
ITASCA, Ill.--May 17, 2005--Enesco Group, Inc. (NYSE:ENC), a leader in the
giftware, and home and garden decor industries, today announced that the Company
has signed an amendment to its Precious Moments license agreement with Precious
Moments, Inc. (PMI). The amendment includes transitioning the Precious Moments
business to PMI during a six-month time period from July 1 through December 31,
2005. Enesco's original Precious Moments license agreement was to expire on
December 31, 2007.
Under the terms of the amendment, effective July 1, Enesco will transfer the
management of the Precious Moments brand, including product development, to PMI.
Enesco will continue to distribute the line to its retail outlets until December
31, 2005, and provide transitional services to PMI through the end of 2006. At
that time, PMI, a family-owned business, will then assume all responsibilities
of the Precious Moments Collection, including bisque figurines and giftware
products.
The current Precious Moments license agreement requires a $15 million minimum
annual royalty payment. Enesco sales of Precious Moments in 2004 were
approximately $55 million, down 35% from the prior year.
Cynthia Passmore-McLaughlin, President and CEO of Enesco Group, Inc., stated,
"After careful consideration, we have agreed to transfer the Precious Moments
business to PMI, ending our Precious Moments license agreement. We have been in
collaborative discussions with PMI, and this amendment is a win-win for both
companies. While Precious Moments has been able to weather the decline in the
collectible figurine category longer than many collectible brands, the current
sales levels and the royalty agreement were pressuring our operating margins.
For Enesco, this is an important and positive step that allows us to focus on
our leadership in the gift category and growth in the home and garden decor
business. This allows PMI to fully integrate the brand with its growing base of
more than 140 licensees."
Highlights of the License Agreement Amendment:
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o Annual royalty for 2005 reduced from $15 million to $4 million or
actual earned royalties, whichever is higher.
o As of July 1, 2005, PMI to assume product development and marketing of
the Precious Moments figurines and giftware, and assume responsibility
for the Precious Moments Collectors Clubs.
o Enesco sales force to sell Precious Moments until December 31, 2005,
under a transition services agreement.
Passmore-McLaughlin added, "As we reported last quarter, Enesco has developed a
strategy focused on leveraging our intellectual property and design capability
to bring innovative products to market and on creating operational efficiencies.
We now will be able to accelerate growth as we focus our resources on the
giftware, and home and garden decor product categories."
A conference call will be broadcast live on Wednesday, May 18, at 1:00 p.m.
Central Time (2:00 p.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.
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, to
download RealPlayer for free.
For a phone replay, call 1-800-642-1687, Passcode: 6448537. The replay will be
available for one week following the conference call.
About Enesco Group, Inc.
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Enesco Group, Inc. is a world leader in the giftware, and home and garden decor
industries. Serving more than 40,000 customers globally, Enesco distributes
products to a wide variety of specialty card and gift retailers, home decor
boutiques as well as mass-market chains and direct mail retailers.
Internationally, Enesco serves markets operating in Europe, Canada, Australia,
Mexico, Asia and the Pacific Rim. With subsidiaries located in Europe and
Canada, and a business unit in Hong Kong, Enesco's international distribution
network is a leader in the industry. The Company's product lines include some of
the world's most recognizable brands, including Heartwood Creek by Jim Shore,
Walt Disney Company, Walt Disney Classics Collection, Pooh & Friends,
Nickelodeon, Bratz, Halcyon Days, Lilliput Lane and Border Fine Arts, among
others. Further information is available on the Company's Web site at
www.enesco.com.
This press release contains 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 to: 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 Cherished Teddies, Heartwood Creek and Disney; the Company's ability to
grow revenues in mass and niche market channels; the Company's ability to
effectively transition to the legacy information system; 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.
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