CML Reports Fiscal 1998 Results.ACTON, Mass.--(BUSINESS WIRE)--Oct. 29, 1998--CML Group, Inc. (NYSE NYSE See: New York Stock Exchange :CML 1. CML - A query language. ["Towards a Knowledge Description Language", A. Borgida et al, in On Knowledge Base Management Systems, J. Mylopoulos et al eds, Springer 1986]. 2. CML - Concurrent ML. ) today reported a consolidated net loss of $127,378,000, or $2.54 per share, for the fiscal year ended July 31, 1998, compared with a net loss of $40,214,000, or $0.81 per share, in fiscal 1997. The Company's consolidated results for fiscal 1998 included a provision for income taxes of $31,416,000, reflecting a reduction of the Company's deferred income tax balances. The consolidated results for the prior year reflected an income tax benefit of $20,717,000. The net loss for fiscal 1998 also included restructuring and 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. charges of $11,767,000, which NordicTrack recorded for the shutdown of its manufacturing and distribution facility in Glencoe, Minnesota Glencoe is a city in McLeod County, Minnesota, United States. The population was 5,453 at the 2000 census. It is the county seat of McLeod County6. Geography According to the United States Census Bureau, the city has a total area of 6.9 km² (2.7 mi²), all land. , and to exit the direct response and catalog catalog, descriptive list, on cards or in a book, of the contents of a library. Assurbanipal's library at Nineveh was cataloged on shelves of slate. The first known subject catalog was compiled by Callimachus at the Alexandrian Library in the 3d cent. B.C. businesses. Sales for fiscal 1998 totaled $274,360,000, compared with $341,315,000 for fiscal 1997, primarily reflecting the Company's decision to exit the unprofitable direct response and catalog distribution channels. For fiscal 1998, Smith & Hawken's 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. was $2,801,000, compared with an operating profit of $2,008,000 in fiscal 1997. NordicTrack's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , including restructuring and asset impairment charges for fiscal 1998, was $85,649,000, compared with an operating loss of $58,641,000 in fiscal 1997. For fiscal 1998, sales at Smith & Hawken increased 19.7% over fiscal 1997 to $88,041,000, while sales at NordicTrack decreased 30.4% to $186,319,000. The sales decrease at NordicTrack was primarily attributable to the decision made in January to exit the direct response and catalog sales channels. For the fourth quarter of fiscal 1998, CML reported a net loss on a consolidated basis of $25,007,000, or $0.49 per share. The net loss for the quarter included restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $357,000 related to the strategic repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. of NordicTrack which began during the second quarter of the fiscal year. For the fourth quarter of fiscal 1997, the Company reported a net loss of $12,776,000, or $0.26 per share. Sales for the fourth quarter of fiscal 1998 totaled $47,529,000, compared with $62,915,000 for the corresponding period of fiscal 1997. For the fourth quarter of fiscal 1998, Smith & Hawken's operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. equaled $3,968,000, compared with operating income of $2,874,000 in the corresponding period of fiscal 1997. NordicTrack's operating loss for the fourth quarter of fiscal 1998 was $23,986,000, compared with an operating loss of $21,205,000 in the corresponding period of the fiscal 1997. Sales at Smith & Hawken for the fourth quarter of fiscal 1998 totaled $28,125,000, an increase of 23.8% over the corresponding quarter of fiscal 1997, while sales at NordicTrack totaled $19,404,000, representing a decrease of 51.7% over the prior year quarter. The sales decrease at NordicTrack was primarily attributable to the decision made in January to exit the direct response and catalog sales channels. Separately, CML plans to file an application with The Securities and Exchange Commission (SEC) for a 15-day extension in the filing of 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 July 31, 1998. The Company also disclosed that as a result of the Company's recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. losses from operations and stockholders' deficit, the Company expects that its independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. report on the Company's fiscal 1998 consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge will contain an explanatory paragraph relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc uncertainty with respect to the Company's ability to continue as a going concern in its present configuration. As previously announced, CML is taking steps to position its Smith & Hawken subsidiary to execute its strategic plan. To that end, CML is in discussions with its lenders to provide Smith & Hawken with continued and expanded financing for its retail store expansion strategy. The Company's lenders have indicated their intent to provide continued and expanded financing to Smith & Hawken subject to final agreement on terms and conditions. CML is a marketer of products for consumers that enhance healthy, active lifestyles. Its products are sold under the trade names Smith & Hawken, NordicTrack and Nordic Advantage. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. relating to the Company's future strategic prospects and opportunities, and such statements involve risks and uncertainties. In addition to the risk factors referred to in the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1997, factors which may affect the Company's future operating results include: the market's response to the Company's new and existing products; the impact of competition in the Company's marketplace; the ability of the Company to successfully manage its marketing channels, including its wholesale channel; the Company's continuing efforts to reduce costs; the Company's ability to successfully execute the NordicTrack restructuring plan; the Company's ability to successfully introduce new NordicTrack product lines; the availability of capital resources; and delays in the introduction of new products. -0-
CML GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
(In 000's, except per share data and shares outstanding)
Three Months Ended For the Year Ended
July 31, July 31, July 31, July 31,
1998 1997 1998 1997
Net sales $ 47,529 $ 62,915 $ 274,360 $ 341,315
Less costs and
expenses:
Cost of goods
sold 34,036 34,946 161,875 164,081
Selling,
general and
administrative
expenses 32,443 46,616 185,606 235,765
Impairment charges -- 106 2,877 603
Restructuring
charges 357 -- 8,890 --
Interest expense 5,700 605 11,074 1,797
Total costs and
expenses 72,536 82,273 370,322 402,246
Loss from
operations
before income
taxes (25,007) (19,358) (95,962) (60,931)
Income tax
provision
(benefit) -- (6,582) 31,416 (20,717)
Net loss ($ 25,007) ($ 12,776) ($ 127,378) ($ 40,214)
Loss per share,
basic and
diluted ($ 0.49) ($ 0.26) ($ 2.54) ($ 0.81)
Weighted average
shares
outstanding 50,831,605 49,913,333 50,207,014 49,837,026
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