Acorn Products Reports Strong Second Quarter Net Income Improvement and Announces Credit Facility Agreement.Business Editors COLUMBUS Columbus. 1 City (1990 pop. 178,681), seat of Muscogee co., W Ga., at the head of navigation on the Chattahoochee River; settled and inc. 1828 on the site of a Creek village. , Ohio--(BUSINESS WIRE)--Aug. 10, 2001 Acorn Products, Inc. (Nasdaq:ACRN ACRN America's Career Resource Network ACRN Accounting Classification Reference Number ACRN Asthma Clinical Research Network (National Heart, Lung and Blood Institute) ACRN AIDS Certified Registered Nurse - news) today reported net income of $0.9 million for the first six months of fiscal 2001, an improvement of $5.2 million, versus a loss of $4.3 million in the comparable period of fiscal 2000. The Company reported a net profit of $0.15 per share (basic) and $0.14 (diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) for the first six months of fiscal 2001 compared to a net loss of $0.71 per share (basic and diluted) in the comparable period of 2000. For the second quarter of fiscal 2001, the Company reported a net loss of $0.08 per share (basic and diluted), versus a net loss of $0.82 per share (basic and diluted) in the comparable period of calendar 2000. Net Sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight . Net sales decreased 16.3%, or $5.8 million, to $29.4 million in the second quarter of fiscal 2001 compared to $35.2 million in the comparable period of fiscal 2000. The decline in net sales reflects the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of the sale and manufacture of watering products and the ongoing rationalization rationalization, in psychology: see defense mechanism. of customers and products within our custom injection molding injection molding n. A manufacturing process for forming objects, as of plastic or metal, by heating the molding material to a fluid state and injecting it into a mold. product line. There was also a decrease in the sale of long handled tools, primarily due to the credit condition of a few key customers, limiting our ability to ship their full demand in the second quarter of fiscal 2001. Net sales decreased 23.9%, or $18.2 million, to $57.7 million for the first six months of fiscal 2001 compared to $75.9 million in the comparable period of fiscal 2000. The decline in net sales was driven by a 17% drop in the sale of long handled tools, caused by soft demand and the credit condition of a few key customers, limiting our ability to ship their full demand in the first six months of fiscal 2001. We believe the soft demand has been industry wide and resulted from customer actions to manage to lower retail inventories, as well as, a longer winter weather pattern across the country that negatively effected spring season purchases. The discontinuation of the sale and manufacture of watering products and the ongoing rationalization of customers and products within our custom injection molding product line also contributed to the decline in net sales in the first six months of fiscal 2001. Gross Profit. Gross profit decreased 16.2%, or $1.2 million, to $6.3 million for the second quarter of fiscal 2001 compared to $7.5 million in the comparable period of fiscal 2000. Gross margin was essentially flat at 21.5% for the second quarter of fiscal 2001 and for the comparable period of fiscal 2000. The decrease in gross profit was due to lower sales volume. The gross margin was influenced by continued cost improvements offset by the loss of overhead absorption due to lower production levels in response to the decline in sales. Gross profit decreased 14.6%, or $2.4 million, to $14.0 million for the first six months of fiscal 2001 compared to $16.4 million in the comparable period of fiscal 2000. Gross margin increased to 24.3% for the first six months of fiscal 2001 from 21.6% for the comparable period of fiscal 2000. The decrease in gross profit was due to lower sales volume partially offset by cost improvements in the manufacturing and logistical lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation processes of the Company. The increase in gross margin was driven by cost improvements which includes the effect of rationalizing products and customers, as well as, the reduction of certain employee benefit programs, including post-retirement medical benefits. Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased $1.1 million, or 19.4%, to $4.7 million for the second quarter of fiscal 2001 versus $5.8 million in the comparable period of fiscal 2000. As a percentage of net sales, selling, general and administrative expenses decreased to 15.9% in the second quarter of fiscal 2001 as compared to 16.4% in the comparable period of fiscal 2000. The improvement in selling, general and administrative expenses is due to cost reductions in sales support costs and administrative overhead, including the effect of the discontinuation of watering products. Selling, general and administrative expenses decreased $2.9 million, or 24.6%, to $8.9 million for the first six months of fiscal 2001 versus $11.8 million in the comparable period of fiscal 2000. As a percentage of net sales, selling, general and administrative expenses decreased to 15.4% in the first six months of fiscal 2001 as compared to 15.5% in the comparable period of fiscal 2000. The decrease in selling, general and administrative expenses is due to cost reductions in sales support costs and administrative overhead, including the effect of the discontinuation of watering products. Operating Profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. . Operating profit (gross profit less selling, general and administrative expenses) decreased $0.1 million, or 5.7%, to a profit of $1.7 million for the second quarter of fiscal 2001 compared to a profit of $1.8 million in the comparable period of fiscal 2000. The decrease in operating profit for the second quarter was primarily due to the items discussed above. Operating profit increased $0.5 million, or 10.9%, to a profit of $5.1 million for the first six months of fiscal 2001 compared to a profit of $4.6 million in the comparable period of fiscal 2000. The increase in operating profit was primarily due to the items discussed above. Interest Expense. Interest expense decreased $0.2 million, to $1.7 million for the second quarter of fiscal 2001 compared to $1.9 million in the comparable period of fiscal 2000. The benefit of lower debt levels was partially offset by higher financing and related costs. Interest expense decreased $0.1 million, to $3.6 million for the first six months of fiscal 2001 compared to $3.7 million in the comparable period of fiscal 2000. Amortization of Goodwill and Other Expenses, Net. Other expenses, net, including amortization of goodwill, was essentially flat at $0.4 million in the second quarter of fiscal 2001 and the comparable period of fiscal 2000. Other expenses, net, including amortization of goodwill, decreased to $0.7 million for the first six months of fiscal 2001 compared to $0.8 million in the comparable period of fiscal 2000. Asset Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. Charge. An asset impairment charge of $4.4 million was recognized in the second quarter of fiscal 2000 based on management review of the net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. on long-lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. assets, specifically the value of goodwill related to the acquisitions of the Company's watering product line. There was no asset impairment charge taken in the comparable period of fiscal 2001. Income (Loss) Before Income Taxes. Income (loss) before income taxes improved to a loss of $0.5 million for the second quarter of fiscal 2001 compared to $5.0 million in the comparable period of fiscal 2000. The improvement was attributed primarily to the items discussed above. Income (loss) before income taxes improved to a profit of $0.9 million for the first six months of fiscal 2001 compared to a loss of $4.3 million in the comparable period of fiscal 2000. Net Income (Loss). Net loss was $0.5 million for the second quarter of fiscal 2001 compared to $5.0 million in the comparable period of fiscal 2000. Net loss per share (basic and diluted) was $0.08 for the second quarter of fiscal 2001 based on a weighted average number of shares outstanding of approximately 6.1 million, compared to net loss per share of $0.82 for the comparable period of fiscal 2000, based on a weighted average number of shares outstanding of approximately 6.1 million. Net income was $0.9 million for the first six months of fiscal 2001 compared to a loss of $4.3 million in the comparable period of fiscal 2000. Net income per share was $0.15 (basic) and $0.14 (diluted) for the first six months of fiscal 2001 based on a weighted average number of shares outstanding of approximately 6.1 million, compared to net loss per share of $0.71 for the comparable period of fiscal 2000, based on a weighted average number of shares outstanding of approximately 6.1 million. A. Corydon Corydon can be In literature
American writer and a founder of Barnard College at Columbia University (1889). Her plays include The Dominant Sex (1911) and Black Souls (1932). , Acorn's President and Chief Executive Officer, stated, "We continue to make strong progress on reducing the cost structure of the business. We see the results of these efforts in our first six months of 2001 results, though dampened by a volume decline. We are approaching the retail marketplace in a prudent manner, having weathered the poor spring season and credit condition of certain customers." Acorn Products, Inc. today announced that it has entered into an agreement to extend its credit facility to April 30, 2002. Under the terms of the agreement, the Company has engaged the investment banking firm of Houlihan, Lokey, Howard Howard, English noble family. Landowners in Norfolk from the 13th cent., the Howards obtained the duchy of Norfolk through the marriage of Sir Robert Howard to Margaret Mowbray, daughter of Thomas Mowbray, 1st duke of Norfolk. and Zukin Capital to advise and assist in exploring strategic alternatives. "This extension of the credit facility confirms the support of our turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. process and Houlihan, Lokey, Howard and Zukin Capital will assist in finding the most viable, long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. solution to realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. our capital structure," said A. Corydon Meyer, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Acorn Products. "In addition, we have received further support for our efforts by being able to announce that the union representing the hourly employees at our primary manufacturing facility in Frankfort Frankfort, city (1990 pop. 25,968), state capital and seat of Franklin co., N central Ky., on both sides of the Kentucky River, in the heart of the bluegrass country; inc. 1796. , New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , have ratified rat·i·fy tr.v. rat·i·fied, rat·i·fy·ing, rat·i·fies To approve and give formal sanction to; confirm. See Synonyms at approve. a three year agreement with the Company." Acorn Products, Inc., through its operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. UnionTools, Inc., is a leading manufacturer and marketer of non-powered lawn and garden tools in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The Company's principal products include long handle tools (such as forks Forks may refer to:
post-hole digger shovel - a hand tool for lifting loose material; consists of a curved container or scoop and a handle , wheelbarrows, striking tools and cutting tools. The Company sells its products under a variety of well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. brand names, including Razor-Back(TM), Union(TM), Yard `n Garden(TM), Perfect Cut(TM) and, pursuant to a license agreement, Scotts(TM). In addition, the Company manufactures private label products for a variety of retailers. The Company's customers include mass merchants, home centers, buying groups and farm and industrial suppliers. Razor-Back(TM), Union(TM), Yard `n Garden(TM) and Perfect Cut(TM) are registered trademarks of the Company. Scotts(TM) is a registered trademark of The Scotts Company. The statements contained herein that are not purely historical are forward looking statements within the meaning of the Securities Exchange Act of 1934, including statements regarding the Company's expectations, beliefs, hopes, intentions or strategies regarding the future. All forward looking statements contained herein are based upon information available to the Company as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and the Company assumes no obligation to update any such forward looking statements. Actual results could differ materially from the Company's current expectations. Factors that could cause or contribute to such differences include, but are not limited to, the factors and risks discussed in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December December: see month. 31, 2000, the Company's Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. dated September 18, 1997, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. on October 29, 1998 and November 12, 1999, and as may be amended from time to time, and the other reports filed from time to time by the Company with the Securities and Exchange Commission.
Acorn Products, Inc.
Selected Consolidated Financial Data
For the Three Months Ended For the Six Months Ended
------------------------ ------------------------
July 2, 2000 July 1, 2001 July 2, 2000 July 1, 2001
----------- ----------- ----------- -----------
(Unaudited)
--------------------------------------------------
(In thousands, except share and per share data)
Statement of
Operations:
Net sales $35,170 $29,428 $75,907 $57,744
Cost of goods sold 27,621 23,099 59,497 43,724
----------- ----------- ----------- -----------
Gross profit 7,549 6,329 16,410 14,020
Selling, general
and administrative
expenses 5,784 4,665 11,770 8,874
----------- ----------- ----------- -----------
Operating income 1,765 1,664 4,640 5,146
Interest expense 1,885 1,730 3,712 3,568
Asset impairment
charge 4,402 0 4,402 0
Amortization of
goodwill 297 218 566 438
Other expenses, net 139 174 245 218
----------- ----------- ----------- -----------
Income (loss)
before income
taxes (4,958) (458) (4,285) 922
Income taxes 20 21 40 42
----------- ----------- ----------- -----------
Net income (loss) ($4,978) ($479) ($4,325) $880
=========== =========== =========== ===========
Per Share Data
(Basic and
Diluted):
Net income (loss)
- basic ($0.82) ($0.08) ($0.71) $0.15
=========== =========== =========== ===========
Net income (loss)
- diluted ($0.82) ($0.08) ($0.71) $0.14
=========== =========== =========== ===========
Weighted average
shares
outstanding
- basic 6,058,728 6,062,159 6,052,639 6,062,159
=========== =========== =========== ===========
Weighted average
shares
outstanding
- diluted 6,058,728 6,062,159 6,052,639 6,078,065
=========== =========== =========== ===========
Other Data:
Gross margin 21.46% 21.51% 21.62% 24.28%
EBITDA(1) $2,748 $2,510 $6,582 $6,815
Balance Sheet Data:
Total assets $103,348 $83,161
Total liabilities $70,622 $59,971
Total stockholders'
equity $32,726 $23,190
(1) EBITDA represents earnings before interest, income taxes,
depreciation and amortization (including non-cash asset impairment
charge).
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