Enesco (NYSE:ENC)
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Enesco Group, Inc. (NYSE:ENC), a leader in the giftware,
and home and garden decor industries, today announced a corporate
downsizing as part of the Company's efforts to reduce overhead costs.
Enesco has taken steps to reduce its U.S. salary expense by 12%, which
includes the elimination of open salaried positions that will not be
filled.
As part of the downsizing, the Company is eliminating its Chief
Operating Officer position, currently held by Jeffrey S. Smith. Mr.
Smith will remain in this role through July 15 to oversee the transfer
of the Precious Moments business to Precious Moments, Inc. and the
transition of his functional responsibilities to other areas within
the organization. Michael Rumak, who joined the Company in March, will
assume an expanded role as both Senior Vice President, Operations and
CIO.
"Enesco's corporate overhead spending supported a different type
of company than we are today," said Cynthia Passmore-McLaughlin,
president and CEO. "With a stronger focus on our gift, garden and home
decor business, we are working to bring our corporate overhead
spending in line with the needs of our current business. We are
committed to strategically reducing our cost structure and continuing
to make operational improvements to position the Company for improved
profitability."
The majority of the salary expense was eliminated in the Chicago
region in the areas of operations and information technology,
following the successful warehouse conversion in Elk Grove Village to
an upgraded version of the Company's legacy information system. The
Company anticipates a total charge associated with the workforce
reduction of approximately $340,000, which will be recorded in the
second quarter of 2005. Enesco expects annual savings from the salary
expense reduction will be approximately $2 million.
About Enesco Group, Inc.
Enesco Group, Inc. is a world leader in the giftware, and home and
garden decor industries. Serving more than 40,000 customers globally,
Enesco distributes products to a wide variety of specialty card and
gift retailers, home decor boutiques as well as mass-market chains and
direct mail retailers. Internationally, Enesco serves markets
operating in Europe, Canada, Australia, Mexico, Asia and the Pacific
Rim. With subsidiaries located in Europe and Canada, and a business
unit in Hong Kong, Enesco's international distribution network is a
leader in the industry. The Company's product lines include some of
the world's most recognizable brands, including Heartwood Creek by Jim
Shore, Walt Disney Company, Walt Disney Classics Collection, Pooh &
Friends, Nickelodeon, Bratz, Halcyon Days, Lilliput Lane and Border
Fine Arts, among others. Further information is available on the
Company's web site at www.enesco.com.
This press release contains forward-looking statements, which
reflect management's current assumptions and beliefs and are based on
information currently available to management. The Company has tried
to identify such forward-looking statements by use of such words as
"expects," "intends," "anticipates," "could," "estimates," "plans,"
and "believes," and similar expressions, but these words are not the
exclusive means of identifying such statements. Such statements are
subject to various risks, uncertainties and other factors, which could
cause actual results to vary materially from those anticipated,
estimated, expected or projected. Important factors that may cause
actual future events or results to differ materially and adversely
from those described in the forward-looking statements include, but
are not limited to: the Company's success in developing new products
and consumer reaction to the Company's new products; the Company's
ability to secure, maintain and renew popular licenses, particularly
our licenses Cherished Teddies, Heartwood Creek and Disney; the
Company's ability to grow revenues in mass and niche market channels;
the Company's ability to comply with covenants contained in its credit
facility; the Company's ability to effectively transition to the
legacy information system; changes in general economic conditions, as
well as specific market conditions; fluctuations in demand for our
products; manufacturing lead times; the timing of orders and shipments
and our ability to predict customer demands; inventory levels and
purchase commitments exceeding requirements based upon incorrect
forecasts; collection of accounts receivable; changes in the
regulations and procedures affecting the importation of goods into the
United States; changes in foreign exchange rates; price and product
competition in the giftware industry; variations in sales channels,
product costs or mix of products sold; and, possible future terrorist
attacks, epidemics, or acts of war. In addition, the Company operates
in a continually changing business environment and does not intend to
update or revise the forward-looking statements contained herein,
which speak only as of the date hereof. Additional information
regarding forward-looking statement risk factors is contained in the
Company's reports and filings with the Securities and Exchange
Commission. In light of these risks and uncertainties, the
forward-looking statements contained herein may not occur and actual
results could differ materially from those set forth herein.
Accordingly, you should not rely on these forward-looking statements
as a prediction of actual future results.