U.S. Home & Garden Reports Audited Fiscal Year Ended June 30, 2002 Results.
SAN FRANCISCO--(BUSINESS WIRE)--Oct. 16, 2002
U.S. Home & Garden Inc.(NASDAQ:USHG):
Company Comments on Discussions with Lenders' and Trust
Preferred Distributions for October 2002
U.S. Home & Garden Inc. (Nasdaq: USHG) today reported its audited operating results for the fiscal fourth quarter and year ended June 30, 2002.
The Company reported fourth quarter net sales of $29.8 million compared to $29.2 million for the fourth quarter of fiscal 2001. Income from continuing operations for the fourth quarter of fiscal 2002 was $3.7 million, or $0.21 per diluted share compared to a loss from continuing operations of $1.0 million or $0.06 per diluted share for the fourth quarter of fiscal 2001. After giving effect to the Company's after tax expense of $1.2 million related to the previously announced decision to discontinue the operations of its subsidiary, Weed Wizard Acquisition Corporation, net income for the fourth quarter of fiscal 2002 was $2.5 million or $0.14 per diluted share. Net loss for the fourth quarter of 2001 was $17.9 million or $1.02 per diluted share, after giving effect to after tax expense of discontinued operations of $16.9 million incurred during the 2001 quarter.
Total gross margin was 47.7% for the fourth quarter of fiscal 2002 and 50.6% in the prior comparable quarter. Total operating expenses decreased to 27.9% of net sales for the fourth quarter of fiscal 2002, compared to 44.3% of revenue in the prior comparable quarter, reflecting the benefits of the Company's ongoing focus on cost containment. This reduction in operating expenses contributed to a 13.5 % improvement in the Company's income from operations for the fourth quarter of fiscal year 2002.
The Company reported net sales of $78.9 million for fiscal 2002 compared to $78.9 million for fiscal 2001. Income from continuing operations for fiscal 2002 was $130,000, or $0.01 per diluted share before giving effect to the Company's after tax expense of $1.7 million related to its previously announced decision to discontinue the operations of its subsidiary, Weed Wizard Acquisition Corporation, and the cumulative effect of the change in accounting principle resulting from the adoption of SFAS no. 142, which resulted in a non cash write-off of certain goodwill of $9.9 million. As required by SFAS no.142, the $9.9 million write off has been applied to the first quarter of fiscal 2002 although the computation of the write off was not completed until the fourth quarter of fiscal 2002. Losses from continuing operations for fiscal year 2001 were $4.6 million or $0.26 per diluted share, before giving effect to the Company's after tax expense of discontinued operations of approximately $20.8 million for fiscal 2001. After giving effect to the discontinued operations and cumulative effect of the change in accounting principle, the Company recorded a net loss of $11.5 million, or $0.64 per diluted share, for the fiscal year 2002. This compares to a net loss of $25.4 million, or $1.40 per diluted share, after including the discontinued operations for the comparable period in fiscal 2001.
Total gross margin was 45.1% for fiscal 2002 and 44.1% in the prior fiscal year. Total operating expenses decreased to 35.4% of net sales for fiscal 2002, compared to 42.5% of revenue in the prior fiscal year, reflecting the benefits of the Company's ongoing focus on cost containment. This reduction in operating expenses contributed to an 8.0% improvement in the Company's income form operations for the fiscal year 2002.
Cash flow from continuing operations was $0.19 per fully diluted share for the fiscal year 2002 compared to a negative $0.02 for the fiscal year 2001.
"We are pleased to report that the audited financial results for fiscal 2002 came in substantially as reported in our preliminary release on September 11, 2002," stated Robert Kassel, chairman and CEO of U.S. Home & Garden
The Company also announced that it intends to defer the October 2002 distributions to the holders of its 9.4% Cumulative Trust Preferred Securities (U.S. Home & Garden Trust I) (Amex: UHG_pa) pending the completion of a proposed new credit facility. The Company has reached an agreement in principle with proposed new lenders to replace its borrowings under its current Credit Agreement and Note Agreement and is negotiating terms of the repayment with the existing lenders. The Company expects to complete a new credit facility by the end of October which would replace the existing credit facility on terms equal to or more favorable to it than those of the existing facility. The Company anticipates that upon completion of the new financing, the Company intends to make the payments that would enable the Trust to make the October 2002 distributions to holders of its Trust Preferred Securities together with any interest caused by delay in such payments, from the proceeds of the new financing. If the Company were unable to complete the proposed loan facility, the scheduled distributions under the Trust Preferred Securities could be prevented or delayed, and the Company would advise the holders as such.
About U.S. Home & Garden Inc.
U.S. Home & Garden Inc. is a leading manufacturer and marketer of a broad range of consumer lawn and garden products including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders which are sold under various recognized brand names including Weedblock(R), Jobe's(R), Emerald Edge(R), Shade Fabric(TM) Ross(R)(pound) and Tensar(R). The Company markets its products through most large national home improvement and mass merchant retailers.
To learn more about U.S. Home & Garden Inc., please visit its web site at www.ushg.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
Certain statements contained in this press release that are not historical facts are forward looking statements that involve a number of known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievement expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ability of the Company to successfully integrate any future businesses or product lines acquired into existing operations, the Company's growth strategy, customer concentration, outstanding indebtedness, dependence on weather conditions, seasonality, expansion, and other activities of competitors, changes in federal or state environmental laws and the administration of such laws, protection of trademarks and other proprietary rights, the general condition of the economy, the general effect of the slowdown of the economy on the Company's operations, its ability to achieve the financial objectives discussed in this release, and other risks detailed in the Company's Securities and Exchange Commission filings. The words "anticipate", "expect", and "intend", and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.
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|Date:||Oct 16, 2002|
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