Enesco (NYSE:ENC)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Enesco Charts. Click Here for more Enesco Charts.](/p.php?pid=staticchart&s=NY%5EENC&p=8&t=15)
Enesco Group, Inc. (NYSE:ENC), a leader in the gift,
collectibles and home and garden decor industries, today announced
financial results for the first quarter ended March 31, 2005.
First Quarter 2005 Summary
-- Revenue of $60.1 million, 14.8% higher than 1Q '04
-- Gross profit of $22.6 million, a slight increase from 1Q '04
-- Net loss increased to $15.2 million, primarily due to reduced
gross margin and higher SG&A, interest and tax expense
Financial Results
Revenue for the quarter increased 14.8% to $60.1 million from
$52.3 million in the comparable period of 2004. The revenue increase
is primarily due to strength in the Heartwood Creek product line and
contributions from Gregg Gift and Dartington Crystal, which were
acquired in February and July 2004, respectively. Revenue for the
quarter also includes a $1.2 million favorable impact from changes in
foreign currency translation rates.
Gross profit was $22.6 million compared to $22.3 million in the
first quarter of 2004. Gross profit from higher sales during the first
quarter of 2005 was offset by an increase in the Precious Moments
royalty, an increase in closeout sales and a decrease in Club kit
sales.
Selling, general and administrative (SG&A) expenses were $34.6
million versus $29.5 million in the same period last year. The
increase primarily reflects a $2.4 million accelerated depreciation on
the Enterprise Resource Planning (ERP) system and an increase in SG&A
expenses related to the Gregg Gift and Dartington Crystal acquisitions
from 2004, as well as Sarbanes-Oxley compliance.
The operating loss for the first quarter was $12.0 million
compared to an operating loss of $7.2 million in the year ago period.
First quarter net loss was $15.2 million, or ($1.04) per diluted
share, versus $4.4 million, or ($0.31) per diluted share, during the
first quarter of 2004. The increase in net loss was due to the
increased operating loss, and higher interest and tax expenses.
Commenting on first quarter results, Cynthia Passmore-McLaughlin,
President and CEO, stated, "While we continue to face challenges to
our business, we are pleased with the 15% top line growth we
experienced during the quarter. We took a proactive approach to
clearing slow moving inventory and have improved our inventory
position. Despite the SG&A increase, which was due largely to
accelerated depreciation from the ERP system, we continue to focus on
improving our operating efficiencies. While the ERP system caused a
backlog of $26 million at the end of 2004, I'm pleased to report we
were able to return to normal levels by the end of the first quarter
of 2005.
"In addition," added Passmore-McLaughlin, "our Heartwood Creek and
Dartington Crystal lines are performing very well and reflect our
strength as a global market leader in gifts and home and garden decor.
As we move ahead, we look forward to making further progress toward
our goal of generating long-term growth and improved profitability."
A conference call will be broadcast live on Tuesday, May 10, at
1:00 p.m. Central Time (2:00 p.m. Eastern) at http://www.enesco.com
and http://www.streetevents.com. An online replay also will be
available approximately one hour after the call.
To listen to the Webcast, your computer must have RealPlayer
installed. If you do not have RealPlayer, go to
http://www.streetevents.com prior to the call, to download RealPlayer
for free.
For a phone replay, call 1-800-642-1687, Passcode: 6151501. The
replay will be available for one week following the conference call.
About Enesco Group, Inc.
Enesco Group, Inc. is a world leader in the gift, collectible, 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 boutique 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 Walt
Disney Classics Collection, Nickelodeon, Heartwood Creek, Halycon
Days, Lilliput Lane, Border Fine Arts and Precious Moments, among
others. Further information is available on the Company's web site at
www.enesco.com.
This press release contains various forward-looking statements
that are based on management's current assumptions and beliefs and
upon 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 for Precious Moments, Cherished Teddies, Heartwood Creek
and Disney; the Company's ability to grow revenues in mass and niche
market channels; the Company's ability to effectively complete the
implementation of the ERP 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.
-0-
*T
ENESCO GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
First Quarter Ended March 31, 2005 and 2004
(In thousands, except per share amounts)
2005 2004 % Change
--------- --------- ----------
Net revenues $60,084 $52,323 15%
Cost of sales 37,481 30,014 25%
--------- ---------
Gross profit 22,603 22,309 1%
Gross Profit % 37.6% 42.6%
Selling, distribution, general and
administrative expense 34,626 29,531 17%
--------- ---------
Operating loss (12,023) (7,222) -66%
Interest expense (399) (85)
Interest income 120 112
Other income (expense), net (835) (315)
--------- ---------
Loss before income taxes (13,137) (7,510) -75%
Income tax benefit (expense) (2,079) 3,108
--------- ---------
Net loss $(15,216) $(4,402) -246%
========= =========
Loss per share basic and diluted:
Net loss ($1.04) ($0.31)
Average basic and diluted shares
outstanding 14,607 14,178
ENESCO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
March 31, December 31,
2005 2004
------------ ------------
Current Assets:
Cash and equivalents $18,636 $14,646
Accounts receivable, net 64,389 70,526
Inventories 62,633 65,371
Prepaid Expenses 4,934 3,310
Deferred income taxes 820 920
-------------------------
Total current assets 151,412 154,773
Property, plant and equipment, net 19,334 22,509
Other assets 16,486 16,601
-------------------------
Total assets $187,232 $193,883
=========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes and loans payable $38,048 $26,354
Accounts payable 14,395 18,680
Federal, state and foreign income taxes 8,078 6,405
Deferred gain on sale of fixed assets 1,711 1,711
Accrued Expenses - 21,576 21,628
-------------------------
Total current liabilities 83,808 74,778
Long-term liabilities: 9,234 9,838
Total shareholders' equity 94,190 109,267
-------------------------
Total liabilities and shareholders' equity $187,232 $193,883
=========================
ENESCO GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(Unaudited)
(In thousands)
2005 2004
------------ ------------
Operating Activities:
Net Loss $(15,216) $(4,402)
Adjustments to reconcile net loss to net
cash used by operating activities 7,281 (7,003)
------------ ------------
Net cash used by operating activities (7,935) (11,405)
------------ ------------
Investing Activities:
Acquisition, net of cash acquired -- (7,262)
Purchase of property, plant and equipment (618) (868)
Proceeds from sales of property, plant and
equipment 5 12
------------ ------------
Net cash used by investing activities (613) (8,118)
------------ ------------
Financing Activities:
Issuance of notes and loans payable 11,761 18,523
Common stock issuance and exercise of stock
options 717 306
------------ ------------
Net cash provided by financing activities 12,478 18,829
------------ ------------
Effect of exchange rate changes on cash and
cash equivalents 60 620
------------ ------------
Increase/(decrease) in cash and cash
equivalents 3,990 (74)
Cash and cash equivalents, beginning of
period 14,646 10,645
------------ ------------
Cash and cash equivalents, end of period $18,636 $10,571
============ ============
*T