Enesco Group, Inc. Reports Third Quarter Results.ITASCA I·tas·ca A lake of northwest Minnesota. It was identified in 1832 as the source of the Mississippi River. , Ill.--(BUSINESS WIRE)--Oct. 22, 1998--Enesco Group, Inc. (NYSE NYSE See: New York Stock Exchange :ENC ENC Encoded (File Name Extension) ENC Enclosure ENC Mime-Encoded (virus scanners) ENC Eastern North Carolina ENC Eisenhower National Clearinghouse for Mathematics and Science Education ) today reported financial results for the third quarter and nine months, in line with the Company's October October: see month. 7, 1998 pre-released expectations. Results for the year-ago periods reflect the treatment of the divested Worldwide Direct Selling Direct selling is the marketing of products or services to consumers through sales tactics including presentations, demonstrations, and phone calls. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets, distributors or brokers. and Hamilton Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. Direct Response businesses as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Results from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the reflect Enesco Group's gift and collectibles business. Total sales were $110 million for the third quarter, down 14% from the $128 million reported for the 1997 third quarter. Total 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 $12.9 million for the 1998 period versus $17.7 million a year earlier (excluding Corporate downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing ), a decrease of 27%. Net income from continuing operations in the 1998 third quarter was $6.3 million or $.39 per share on a 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. basis, compared with a net loss of $2.8 million or $.16 per diluted share in 1997. The third quarter 1997 results included an $18.0 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern ($11.2 million after-tax or $.63 per share) charge to downsize Downsize Reducing the size of a company by eliminating workers and/or divisions within the company. Notes: When a company downsizes, it is attempting to find ways to improve efficiency and increase profitability. It is sometimes referred to as trimming the fat. and move Corporate Headquarters. For the nine months ended September 30, 1998, total sales were $356 million, a 3% decrease from $367 million in 1997. Operating profit for the 1998 period totaled $42.4 million, a 3% decrease from the $43.8 million (excluding Corporate downsizing) recorded in 1997. Net income from continuing operations for the first nine months of 1998 increased 134% to $21.6 million from $9.2 million in 1997, with earnings per share $1.32 on a diluted basis, up 159% from $.51 per diluted share for the first nine months of 1997. Earnings per diluted share from continuing operations for the first nine months increased 16% from comparable year-ago results, excluding the above referenced 1997 downsizing charge. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , Enesco Group, Inc. has repurchased 1.3 million shares of its outstanding common stock under its ongoing stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program. The Company further announced today that its Board of Directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to 2.5 million shares of the Company's outstanding common stock under this program, to be used for general corporate purposes or employee benefit plans. Share purchases will be made from time to time in the open market or in private transactions, depending on market and business conditions. Enesco Group, Inc. is a global marketer of quality branded gifts and collectibles. The Company's product lines include the Precious Moments, Cherished Teddies, Kim Anderson's Pretty as a Picture and Lilliput Lane brands, among others. -0-
ENESCO GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Third Quarter and First Nine Months Ended September 30,
(In thousands, except per share amounts)
THIRD QUARTER
Unaudited
Percent
1998 1997 Change
Net sales $110,170 $128,261 (14%)
Cost of sales 60,645 72,570 (16%)
Gross profit 49,525 55,691 (11%)
Corporate downsizing - 18,000
Selling, distribution,
general and
administrative expense 36,614 37,951 ( 4%)
Operating profit/(loss) 12,911 (260) ++
Net interest (977) (1,618)
Amortization and other items (823) (1,038)
Net other expense (1,800) (2,656)
Income/(loss) from continuing
operations before taxes 11,111 (2,916) ++
Income taxes 4,827 (164)
Net income/(loss)
continuing operations 6,284 (2,752) ++
Net income/(loss)
discontinued operations - (700)
Net loss on sale of
Direct Response - -
Total net income/(loss) $ 6,284 ($3,452) ++
Earnings/(loss) per share:
Basic:
Continuing operations $ .39 ($.16) ++
Discontinued operations - (.04)
Sale of Direct Response - -
Total $ .39 ($.20) ++
Diluted:
Continuing operations $ .39 ($.16) ++
Discontinued operations - (.04)
Sale of Direct Response - -
Total $ .39 ($.20) ++
Average shares outstanding 16,035 17,432
Average shares diluted 16,102 17,541
Dividends per share $ .28 $ .28 -
FIRST NINE MONTHS
Unaudited
Percent
1998 1997 Change
Net sales $355,559 $367,323 (3%)
Cost of sales 190,304 198,406 (4%)
Gross profit 165,255 168,917 (2%)
Corporate downsizing - 18,000
Selling, distribution,
general and
administrative expense 122,851 125,077 (2%)
Operating profit/(loss) 42,404 25,840 64%
Net interest (1,958) (4,251)
Amortization and other items (2,546) (3,161)
Net other expense (4,504) (7,412)
Income/(loss) from continuing
operations before taxes 37,900 18,428 106%
Income taxes 16,346 9,228
Net income/(loss)
continuing operations 21,554 9,200 134%
Net income/(loss)
discontinued operations - 2,158
Net loss on sale of
Direct Response - (35,000)
Total net income/(loss) $ 21,554 ($23,642) ++
Earnings/(loss) per share:
Basic:
Continuing operations $ 1.32 $ .52 154%
Discontinued operations - .12
Sale of Direct Response - (1.98)
Total $ 1.32 ($1.34) ++
Diluted:
Continuing operations $ 1.32 $ .51 159%
Discontinued operations - .12
Sale of Direct Response - (1.96)
Total $ 1.32 ($1.33) ++
Average shares outstanding 16,315 17,652
Average shares diluted 16,382 17,761
Dividends per share $ .84 $ .84 -
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