Oneida: results for 4Q and year to 29 January 2005

Oneida Ltd. announced 14 April 2005 financial results for the 4Q and fiscal year ended 29 January 2005. Revenues for the 4Q were USD 102.7 million, compared to revenues of USD 122.1 million in the 4Q …

Oneida Ltd. announced 14 April 2005 financial results for the 4Q and fiscal year ended 29 January 2005. Revenues for the 4Q were USD 102.7 million, compared to revenues of USD 122.1 million in the 4Q of the fiscal year ended January 2004. The quarterly decline in revenues from the prior year is mainly due to the August 2004 sale of Encore Promotions, Inc., the closure of 17 unprofitable Oneida Home Stores during the year, the impact attributed to the company“s August 2004 financial restructuring and general economic conditions. Oneida reported a 4Q net loss of USD 33.4 million, equal to USD (0.72) per share, which included charges and certain one-time expenses totaling USD 25.2 million pre-tax. This compared to year-ago net loss of USD 17.4 million, or USD (1.04) per share. For the fiscal year ended January 2005, Oneida“s revenues totaled USD 417.5 million, compared to revenues of USD 454.5 million for the same period a year ago. The majority of the year-on-year revenue decline is due to the sale of Encore Promotions, Inc. and closure of unprofitable Oneida Home Stores during the year ended 29 January 2005. The company reported a fiscal year-end net loss of USD 51.1 million, or USD (1.68) per share, which included the aforementioned 4Q charges and certain one-time expenses relating to inventory write-downs (USD 10.1 million), non-cash impairment losses on depreciable and intangible assets (USD 4.9 million), estimated environmental cleanup costs of USD 1.4 million and manufacturing cost inefficiencies of USD 6.7 million attributed to the Sherrill, New York plant closure, and restructuring-related professional service expenses (USD 2.1 million). This compared to a net loss of USD 99.2 million, or USD (5.98) per share, for the fiscal year ended January 2004. “2004 was a transition year for Oneida, as the Company“s manufacturing restructuring and global product sourcing initiatives neared completion,” said Terry Westbrook, Oneida President and Chief Executive Officer. “Oneida is in the final stages of a comprehensive business restructuring which is focused on returning the Company to profitability by reducing the Company“s cost structure and eliminating the substantial negative variances created by the Company“s non-competitive Sherrill, New York manufacturing operations. The sale of the Sherrill, New York plant on 22 March 2005 is the final step of Oneida“s transformation from a manufacturer to a sales, marketing and distribution company with a 100% contract manufacturing platform.” Andrew Church, Senior Vice President & Chief Financial Officer, noted that, “Oneida has taken aggressive actions during the year to reduce product costs, reduce operating expenses and inventory levels, rationalize underperforming business units, and restructure our debt in order to improve liquidity and profitability. In addition to the closure and/or sale of the company“s six owned manufacturing facilities during the past two years, the implemented savings programs include the closure of unprofitable Oneida Home Stores, reductions in personnel, employee benefits, general & administrative expenses, and logistics costs.” Oneida says it is in compliance with all of its bank covenants at the quarter ended 29 January 2005. On 7 April 2005, the company“s lending syndicate approved an amendment to the Company“s credit agreement providing less restrictive financial covenants, consenting to the sale of certain non-core assets and authorizing the release of certain proceeds to the Company on the sale of assets. “Our restructuring program has been strongly supported by our lenders,” said Church. “The credit agreement amendment provides Oneida with the financial flexibility required to implement our operational plan and demonstrates our lenders“ confidence in Oneida and the Company“s future.” The company has recently completed a comprehensive assessment of its market segments, positioning, and competitive advantages. Operating objectives have been formulated that form the basis of the future strategy and direction of the Company. “We intend to go to market by exploiting our demonstrable advantages in design and product expertise, global sourcing, customer service, and logistics,” said Westbrook. Oneida is a supplier flatware, dinnerware, crystal and metal serveware for both the consumer and food service industries worldwide.