Acorn Products Reports Third Quarter Net Income Improvement.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)--Nov. 13, 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 ) today reported a net loss of $0.4 million for the first nine months of fiscal 2001, an improvement of $9.6 million, versus a loss of $10.0 million in the comparable period of fiscal 2000. The Company reported a net loss of $0.07 per share (basic and 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 nine months of fiscal 2001 compared to a net loss of $1.65 per share (basic and diluted) in the comparable period of 2000. For the third quarter of fiscal 2001, the Company reported a net loss of $0.21 per share (basic and diluted), versus a net loss of $0.94 per share (basic and diluted) in the comparable period of fiscal 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 18.1%, or $4.0 million, to $18.1 million in the third quarter of fiscal 2001 compared to $22.1 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 third quarter of fiscal 2001. Net sales decreased 22.6%, or $22.2 million, to $75.8 million for the first nine months of fiscal 2001 compared to $98.0 million in the comparable period of fiscal 2000. The decline in net sales was driven by a drop in the sale of long handled tools, caused by soft demand during the spring season and the credit condition of a few key customers, limiting our ability to ship their full demand in the first nine 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 nine months of fiscal 2001. Gross Profit. Gross profit increased 52.3%, or $1.7 million, to $5.0 million for the third quarter of fiscal 2001 compared to $3.3 million in the comparable period of fiscal 2000. Gross margin increased to 27.7% for the third quarter of fiscal 2001 compared to 14.9% in the comparable period of fiscal 2000. The majority of the increase in gross profit and gross margin was due to the net favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. effect of changes in certain employee benefit plans, including the termination of certain retiree medical and life benefits, which resulted in a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain of $1.5 million less related expenses. Gross profit and gross margin were also favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. influenced by continued cost improvements partially offset by the loss of overhead absorption due to lower production levels in response to the decline in sales. Gross profit decreased 3.4%, or $0.7 million, to $19.0 million for the first nine months of fiscal 2001 compared to $19.7 million in the comparable period of fiscal 2000. Gross margin increased to 25.1% for the first nine months of fiscal 2001 from 20.1% for the comparable period of fiscal 2000. The decrease in gross profit was due to lower sales volume and the related loss of overhead absorption from lower production levels, partially offset by continued cost improvements and the net favorable effect of changes in certain employee benefit plans, including the termination of certain retiree medical and life benefits, which resulted in a one-time gain of $2.0 million less related expenses. Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased $1.2 million, or 21.3%, to $4.5 million for the third quarter of fiscal 2001 versus $5.7 million in the comparable period of fiscal 2000. As a percentage of net sales, selling, general and administrative expenses decreased to 24.7% in the third quarter of fiscal 2001 as compared to 25.7% in the comparable period of fiscal 2000. Selling, general and administrative expenses decreased $4.1 million, or 23.5%, to $13.4 million for the first nine months of fiscal 2001 versus $17.5 million in the comparable period of fiscal 2000. As a percentage of net sales, selling, general and administrative expenses decreased to 17.6% in the first nine months of fiscal 2001 as compared to 17.8% 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 in response to lower sales volume, 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) increased $2.9 million, or 122.7%, to a profit of $0.5 million for the third quarter of fiscal 2001 compared to a loss of $2.4 million in the comparable period of fiscal 2000. Operating profit increased $3.4 million, or 153.1%, to a profit of $5.7 million for the first nine months of fiscal 2001 compared to a profit of $2.2 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 $0.1 million, to $1.6 million for the third quarter of fiscal 2001 compared to $1.7 million in the comparable period of fiscal 2000. The decrease was primarily due to lower interest rates and slightly lower debt levels, partially offset by costs incurred to extend our credit facility, expensed during the third quarter of fiscal 2001. Interest expense decreased $0.2 million, to $5.2 million for the first nine months of fiscal 2001 compared to $5.4 million in the comparable period of fiscal 2000. Amortization of Goodwill and Other Expenses, Net. Other expenses, net, including amortization of goodwill, decreased $1.4 million to $0.2 million for the third quarter of fiscal 2001 compared to $1.6 million in the comparable period of fiscal 2000. The decrease in other expenses is primarily due to the loss on sale of assets used in the manufacture and sale of watering products recognized in the third quarter of fiscal 2000, absent in fiscal 2001. Other expenses, net, including amortization of goodwill, decreased to $0.8 million for the first nine months of fiscal 2001 compared to $2.4 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 for the first nine months 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 in the comparable period of fiscal 2001. Loss Before Income Taxes. Loss before income taxes improved to a loss of $1.3 million for the third quarter of fiscal 2001 compared to $5.7 million in the comparable period of fiscal 2000. Loss before income taxes improved to a loss of $0.3 million for the first nine months of fiscal 2001 compared to a loss of $10.0 million in the comparable period of fiscal 2000. The improvement was attributed primarily to the items discussed above. Net Loss. Net loss was $1.3 million for the third quarter of fiscal 2001 compared to $5.7 million in the comparable period of fiscal 2000. Net loss per share (basic and diluted) was $0.21 for the third quarter of fiscal 2001 based on a weighted average number of shares outstanding of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 6.1 million, compared to net loss per share of $0.94 (basic and diluted) for the comparable period of fiscal 2000, based on a weighted average number of shares outstanding of approximately 6.1 million. Net loss was $0.4 million for the first nine months of fiscal 2001 compared to a loss of $10.0 million in the comparable period of fiscal 2000. Net loss per share was $0.07 (basic and diluted) for the first nine 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 $1.65 (basic and diluted) 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 focus on customer satisfaction and profitability and on simplifying our business. We are excited about the strengthened platform we are creating to drive future growth and efficiencies." 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 September: see month. 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 October: see month. 29, 1998 and November November: see month. 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 For the
Three Months Ended Nine Months Ended
--------------------- --------------------
Oct. 1, Sept. 30, Oct. 1, Sept. 30,
2000 2001 2000 2001
--------------------- --------------------
(Unaudited)
--------------------------------------------
(In thousands, except share and per share data)
Statement of Operations:
Net sales $22,098 $18,097 $98,005 $75,841
Cost of goods sold 18,803 13,079 78,300 56,803
--------- --------- --------- ---------
Gross profit 3,295 5,018 19,705 19,038
Selling, general and
administrative expenses 5,688 4,476 17,458 13,350
--------- --------- --------- ---------
Operating income (loss) (2,393) 542 2,247 5,688
Interest expense 1,701 1,616 5,413 5,184
Asset impairment charge 0 0 4,402 0
Amortization of goodwill 181 218 747 656
Other expenses, net 1,396 (35) 1,641 183
--------- --------- --------- ---------
Loss before income taxes (5,671) (1,257) (9,956) (335)
Income taxes 21 21 61 63
--------- --------- --------- ---------
Net loss ($5,692) ($1,278) ($10,017) ($398)
========= ========= ========= =========
Per Share Data
(Basic and Diluted):
Net loss - basic
and diluted ($0.94) ($0.21) ($1.65) ($0.07)
========= ========= ========= =========
Weighted average
shares outstanding -
basic and diluted 6,058,728 6,062,359 6,055,789 6,062,359
========= ========= ========= =========
Other Data:
Gross margin 14.91% 27.73% 20.11% 25.10%
EBITDA(1) ($2,868) $1,441 $3,714 $8,256
Balance Sheet Data:
Total assets $83,125 $73,221
Total liabilities $56,091 $51,310
Total stockholders'
equity $27,034 $21,911
(1) EBITDA represents earnings before interest, income taxes,
depreciation and amortization (including non-cash asset impairment
charge).
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