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FINGERHUT REPORTS RECORD EARNINGS & NET REVENUE FOR FOURTH QUARTER & TOTAL YEAR 1992 AND DECLARES QUARTERLY DIVIDEND

 MINNEAPOLIS, Jan. 14 /PRNewswire/ -- Fingerhut Companies, Inc. (NYSE: FHT) announced that 1992 fourth quarter net earnings were a record $35.4 million or $1.37 per share on 25.8 million shares compared with fourth quarter 1991 net earnings of $27.0 million or $1.06 per share on 25.3 million shares, an increase in net earnings of approximately 31 percent. Net revenues for the fourth quarter were a record $584.4 million compared with net revenues of $498.7 million for the same period in 1991, an increase of approximately 17 percent.
 Net earnings for the full year 1992 were a record $61.8 million or $2.38 per share on 26.0 million shares, compared with $53.6 million or $2.14 per share on 25.0 million shares for 1991, an increase in net earnings of more than 15 percent. The $2.38 includes one time costs associated with the December 1992 secondary stock offering by Primerica. Net revenues were a record $1.606 billion compared with net revenues of $1.428 billion for 1991, an increase of more than 12 percent.
 "We are very pleased with our performance for the year. Customer response, particularly in the core business, improved substantially during the fourth quarter," said Ted Deikel, Fingerhut chairman and CEO. "As a result, we saw fourth quarter profit improvements in every business unit."
 Fourth Quarter
 Net sales for the 13 week period ended Dec. 25, 1992 were $534.0 million compared to $462.1 million for the related period in 1991, an increase of 15.5 percent. Fingerhut Corporation (Fingerhut), the company's core business, had fourth quarter net sales of $420.4 million compared to $351.2 million in 1991, an increase of almost 20 percent. In the fourth quarter, Fingerhut implemented a price/value strategy which lowered selected retail prices across all product lines (thereby reducing gross margins and also advertising expense as a percent of net sales), and lengthened selected payment plans, both of which were designed to increase customer response. Net sales from Fingerhut's existing customer list increased approximately 20 percent primarily as a result of improved sales per mailing, as well as from increased mailings. Net sales from Fingerhut's new customer acquisition programs increased approximately 17 percent primarily as a result of improved sales per mailing. Net sales from Figi's were $57.3 million compared to $66.6 million in 1991. Net sales from COMB were $33.1 million compared to $35.1 million in the prior year. The decrease for both business units was due to a strategy to reduce or eliminate mailings to certain customer segments to improve overall profitability. Net sales from USA Direct were $19.3 million compared to $4.4 million for the same period in 1991.
 Finance income, net for the 13 week period was $50.4 million compared to $36.6 million in 1991. The increase was primarily due to increased sales from Fingerhut's customer list as well as lengthened payment plans.
 Product cost for the 13 week period ended Dec. 25, 1992 was $262.0 million or 49.1 percent of net sales compared to $214.2 million or 46.4 percent of net sales during the comparable prior year period. The increase as a percentage of net sales was primarily a result of the price/value strategy implemented in Fall, 1992 and, to a much lesser extent, higher initial shipping labor costs related to the new distribution center in Tennessee.
 Administrative and selling expenses for the 13 week period were $189.9 million or 35.6 percent of net sales compared to $174.4 million or 37.7 percent of net sales in the comparable prior year period. The decrease as a percentage of net sales was primarily attributable to improved sales per mailing from Fingerhut, Figi's and COMB which was partially offset by increased administrative expenses resulting from amortization of capitalized software, higher expenses related to increased computer and distribution capacity, expenses related to the recent secondary public offering, and timing of certain expenses related to the increased profits generated in the fourth quarter.
 Provision for uncollectible accounts for the fourth quarter was $60.5 million or 11.3 percent of net sales compared with $54.6 million or 11.8 percent of net sales for the same period in the prior year. The decrease as a percent of net sales was primarily due to improvement in Fingerhut's new customer acquisition programs.
 Discount on sale of accounts receivable for the 13 week period ended Dec. 25, 1992 was $8.8 million compared to $7.9 million for the comparable period in 1991. Increased sales from Fingerhut's customer list resulted in more sales of accounts receivable and an overall increase in the discount, partially offset by lower average commercial paper rates.
 Interest expense, net for the 13 week period was $9.4 million compared to $7.2 million in the comparable prior year period. The increase of $2.2 million was primarily attributable to amounts payable under the interest rate swap agreements as well as higher average borrowings.
 The effective tax rate for the fourth quarter was 34.2 percent compared with 33.4 percent in the prior year. The prior year rate reflected favorable resolution of certain tax issues.
 Total Year
 Fiscal 1992 net sales were $1.471 billion compared to $1.315 billion for 1991, an increase of approximately 12 percent. Net sales from Fingerhut Corporation were $1.216 billion compared to $1.075 billion in 1991, an increase of approximately 13 percent. Net sales from Fingerhut's existing customer list increased more than 12 percent as a result of increased mailings and list growth partially offset by lower sales per mailing. Net sales from Fingerhut's new customer acquisition programs increased approximately 16 percent primarily due to the shift in 1992 to catalogs and other multiproduct offerings from mass media promotions. Net sales associated with Figi's were $75.9 million compared to $88.9 million in 1991 and net sales from COMB were $103.2 million compared to $123.2 million in the prior year. The decrease for both business units was due to a planned reduction or elimination of mailings to certain customer segments which was partially offset by improved sales per mailing. Net sales from USA Direct were $58.8 million compared to $6.5 million for the prior year.
 Finance income, net for the year increased to $135.5 million from $113.8 million in 1991, primarily due to increased sales from Fingerhut's customer list and new customer acquisition programs, lengthened payment plans offered to Fingerhut's customers, and an increase in the percentage of accounts receivable sold.
 Product cost was $711.8 million or 48.4 percent of 1992 net sales compared to $621.5 million or 47.3 percent of net sales for the prior year. The increase as a percent of net sales was largely due to the price/value strategy and to a lesser extent, the higher shipping labor costs related to the start-up of the Tennessee distribution center.
 Administrative and selling expenses increased to $558.4 million or 38.0 percent of net sales from $497.8 million or 37.9 percent of net sales in the prior year primarily due to increased mailings to Fingerhut's customer list and higher promotional expenses for USA Direct. Fingerhut experienced lower sales per advertising dollar spent on its customer list during the first three quarters offset by improved sales per advertising dollar spent on its new customer acquisition programs. In addition, the start-up costs of the Montgomery Ward Direct joint venture are included in the administrative expenses.
 Provision for uncollectible accounts decreased from 13.6 percent of net sales in 1991 to 12.7 percent of net sales in 1992 primarily due to improvements in Fingerhut's new customer acquisition programs as well as improvements in Figi's and COMB.
 Discount on sale of accounts receivable for the year was $22.3 million compared to $24.5 million for 1991. The decrease was due to lower average commercial paper rates in 1992 partially offset by an increase in the average amount of accounts receivable sold.
 Interest expense, net for the current 52 week period was $33.3 million compared to $24.2 million last year. The increase of $9.1 million was attributable to amounts payable under the interest rate swap agreements, as well as higher average borrowings.
 The company also announced that it has declared a quarterly cash dividend in the amount of $.08 per share, payable on Feb. 18, 1993, to the shareholders of record at the close of business on Jan. 28, 1993.
 Fingerhut Companies, Inc., one of the nation's largest catalog marketing companies, sells name brand and private label merchandise primarily through the mail to an active customer base of 13 million customers. The company employs approximately 8,000 people in Minnesota, Wisconsin and Tennessee. Fingerhut Companies, Inc. common stock trades on the New York Stock Exchange under the symbol FHT.
 FINGERHUT COMPANIES, INC. AND SUBSIDIARIES
 (In thousands of dollars, except per share data)
 (Unaudited)
 13 Weeks Ended 52 Weeks Ended
 12/25/92 12/27/91 12/25/92 12/27/91
 Revenues $584,380 $498,741 $1,606,114 $1,428,428
 Net income $35,372 $26,958 $61,806 $53,558
 Earnings per share
 of common stock
 and common stock
 equivalents $1.37 $1.06 $2.38 $2.14
 Weighted average shares
 of common stock and
 common stock
 equivalents (000s) 25,785 25,321 25,969 24,980
 FINGERHUT COMPANIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF EARNINGS
 (In thousands of dollars, except per share data)
 (Unaudited)
 13 Weeks Ended 52 Weeks Ended
 12/25/92 12/27/91 12/25/92 12/27/91
 Revenues:
 Net sales $533,973 $462,127 $1,470,628 $1,314,636
 Finance income, net 50,407 36,614 135,486 113,792
 -- 584,380 498,741 1,606,114 1,428,428
 Cost and expenses:
 Product cost 261,997 214,216 711,764 621,531
 Administrative and
 selling expenses 189,896 174,382 558,416 497,770
 Provision for
 uncollectible
 accounts 60,526 54,592 186,372 179,085
 Discount on sale of
 accounts receivable 8,842 7,930 22,325 24,460
 Interest expense, net 9,362 7,172 33,307 24,184
 -- 530,623 458,292 1,512,184 1,347,030
 Income before income
 tax provision 53,757 40,449 93,930 81,398
 Provision for income
 taxes 18,385 13,491 32,124 27,840
 Net income $35,372 $26,958 $61,806 $53,558
 Earnings per share of
 common stock and common
 stock equivalents $1.37 $1.06 $2.38 $2.14
 Weighted average shares
 of common stock and
 common stock
 equivalents 25,784,739 25,321,401 25,968,968 24,980,273
 -0- 1/14/93
 /CONTACT: Theodore Deikel of Fingerhut, 612-936-5410/
 (FHT)


CO: Fingerhut Companies, Inc. ST: Minnesota IN: REA SU: ERN

AL -- MN002 -- 4693 01/14/93 07:58 EST
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