(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
(Exact name of the registrant as specified in its charter)
| Delaware | 04-2942374 |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
(Address of principal
executive offices)
(Zip Code)
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 and 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| Yes | X | No |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
| Yes | X | No |
The number of common shares of the Registrant outstanding on May 11, 2004 was 13,335,564.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
| ASSETS | Mar. 27, 2004 |
Jun. 28, 2003 | ||||||
|---|---|---|---|---|---|---|---|---|
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 8,057 | $ | 4,743 | ||||
| Accounts receivable, net | 71,477 | 71,049 | ||||||
| Inventories, net | 40,735 | 39,792 | ||||||
| Direct mail advertising materials, net | ||||||||
| and prepaid expenses | 18,727 | 18,710 | ||||||
| Deferred income tax asset | 13,662 | 14,041 | ||||||
| Total current assets | 152,658 | 148,335 | ||||||
| Property and Equipment, net | 78,623 | 80,110 | ||||||
| Property Held for Sale | -- | 328 | ||||||
| Deferred Income Tax Asset | 20,740 | 20,728 | ||||||
| Goodwill, net | 98,902 | 88,001 | ||||||
| Other Intangible Assets, net | 88,571 | 76,292 | ||||||
| Other Assets | 6,045 | 4,672 | ||||||
| TOTAL ASSETS | $ | 445,539 | $ | 418,466 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 21,540 | $ | 22,937 | ||||
| Accrued expenses | 69,730 | 65,192 | ||||||
| Obligations under capital lease-current portion | 479 | 764 | ||||||
| Current portion of long-term debt | 10,000 | -- | ||||||
| Total current liabilities | 101,749 | 88,893 | ||||||
| Long-Term Debt | 157,344 | 157,025 | ||||||
| Deferred Income Tax Liability | 21,391 | 21,377 | ||||||
| Stockholders' Equity | ||||||||
| Common stock | 15,947 | 15,889 | ||||||
| Additional paid-in capital | 61,865 | 59,111 | ||||||
| Unamortized value of restricted stock awards | (2,893 | ) | (487 | ) | ||||
| Accumulated other comprehensive loss | (1,150 | ) | (2,626 | ) | ||||
| Retained earnings | 145,374 | 135,634 | ||||||
| Treasury stock, at cost | (54,088 | ) | (56,350 | ) | ||||
| Total stockholders' equity | 165,055 | 151,171 | ||||||
| TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ | 445,539 | $ | 418,466 | ||||
See Notes to Condensed Consolidated Financial Statements
| Three Months Ended | Nine Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Mar. 27, 2004 |
Mar. 29, 2003 |
Mar. 27, 2004 |
Mar. 29, 2003 | |||||||||||
| Net Sales | $ | 173,488 | $ | 127,267 | $ | 537,642 | $ | 408,717 | ||||||
| Cost of Sales (including shipping costs) | 73,773 | 54,765 | 224,633 | 172,182 | ||||||||||
| Gross Profit | 99,715 | 72,502 | 313,009 | 236,535 | ||||||||||
| Operating Expenses: | ||||||||||||||
| Selling and advertising | 63,222 | 44,519 | 196,837 | 140,117 | ||||||||||
| General and administrative | 28,147 | 17,393 | 76,812 | 55,908 | ||||||||||
| Exit costs | 1,480 | -- | 3,280 | -- | ||||||||||
| Other intangible asset impairment | 646 | -- | 646 | -- | ||||||||||
| Total operating expenses | 93,495 | 61,912 | 277,575 | 196,025 | ||||||||||
| Income from Operations | 6,220 | 10,590 | 35,434 | 40,510 | ||||||||||
| Other (Expense) Income: | ||||||||||||||
| Interest income | 83 | 35 | 235 | 110 | ||||||||||
| Interest expense | (2,215 | ) | (1,622 | ) | (5,757 | ) | (6,677 | ) | ||||||
| Loss on settlement of interest rate swaps | -- | -- | -- | (3,277 | ) | |||||||||
| Gain on sale of long-term investment | -- | 1,027 | -- | 11,424 | ||||||||||
| Total other (expense)/income | (2,132 | ) | (560 | ) | (5,522 | ) | 1,580 | |||||||
| Income Before Income Taxes | 4,088 | 10,030 | 29,912 | 42,090 | ||||||||||
| Provision for Income Taxes | 1,704 | 4,144 | 12,034 | 16,309 | ||||||||||
| Net Income | $ | 2,384 | $ | 5,886 | $ | 17,878 | $ | 25,781 | ||||||
See Notes to Condensed Consolidated Financial Statements
| Three Months Ended | Nine Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Mar. 27, 2004 |
Mar. 29, 2003 |
Mar. 27, 2004 |
Mar. 29, 2003 | |||||||||||
| Per Share Amounts: | ||||||||||||||
| Basic Earnings Per Share | $ | 0.18 | $ | 0.46 | $ | 1.36 | $ | 1.98 | ||||||
| Diluted Earnings Per Share | $ | 0.17 | $ | 0.44 | $ | 1.31 | $ | 1.93 | ||||||
| Dividends Paid | $ | 0.22 | $ | 0.20 | $ | 0.62 | $ | 0.60 | ||||||
| Basic Weighted Average Shares Outstanding | 13,132 | 12,932 | 13,098 | 12,991 | ||||||||||
| Plus incremental shares from assumed | ||||||||||||||
| conversion of stock options and | ||||||||||||||
| contingently returnable shares | 567 | 342 | 559 | 333 | ||||||||||
| Diluted Weighted Average Shares Outstanding | 13,699 | 13,274 | 13,657 | 13,324 | ||||||||||
See Notes to Condensed Consolidated Financial Statements
| Nine Months Ended | ||||||||
|---|---|---|---|---|---|---|---|---|
| Mar. 27, 2004 |
Mar. 29, 2003 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net Income | $ | 17,878 | $ | 25,781 | ||||
| Adjustments to reconcile net income to net cash | ||||||||
| provided by operating activities: | ||||||||
| Depreciation | 17,622 | 14,774 | ||||||
| Amortization | 5,921 | 5,342 | ||||||
| Deferred income taxes | (53 | ) | (79 | ) | ||||
| Tax benefit from equity transactions | 1,493 | 233 | ||||||
| Exit costs | 3,280 | -- | ||||||
| Loss on disposal of equipment | 73 | 52 | ||||||
| Gain on sale of long-term investment | -- | (11,424 | ) | |||||
| Accrued cost of minimum royalty payments | 3,200 | -- | ||||||
| Other intangible asset impairment | 646 | -- | ||||||
| Provision for losses on accounts receivable | 3,522 | 4,267 | ||||||
| Deferred grants | (7 | ) | (6 | ) | ||||
| Employee benefit charges | 1,369 | 694 | ||||||
| Changes in assets and liabilities (net of acquisition of businesses): | ||||||||
| Accounts receivable, net | (718 | ) | (1,124 | ) | ||||
| Inventories, net | (88 | ) | (831 | ) | ||||
| Direct mail advertising materials, net and prepaid expenses | 1,462 | 287 | ||||||
| Other assets | (285 | ) | 527 | |||||
| Accounts payable | (2,854 | ) | (4,123 | ) | ||||
| Income taxes payable | (5,104 | ) | 1,492 | |||||
| Other accrued expenses | (272 | ) | (1,418 | ) | ||||
| Net cash provided by operating activities | 47,085 | 34,444 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Additions to property and equipment | (15,454 | ) | (11,501 | ) | ||||
| Purchase of long-term investment | -- | (5,421 | ) | |||||
| Proceeds from sale of long-term investment | -- | 47,366 | ||||||
| Proceeds from sale of property, plant and equipment | 386 | 11 | ||||||
| Acquisition of businesses - net of cash acquired | (30,374 | ) | -- | |||||
| Net cash (used in)/provided by investing activities | (45,442 | ) | 30,455 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Repayment of debt | (116,665 | ) | (90,769 | ) | ||||
| Proceeds from borrowings - net of issuance costs | 126,396 | 37,309 | ||||||
| Proceeds from issuance of common stock | 6,699 | 619 | ||||||
| Acquisition of treasury stock | (6,893 | ) | (4,894 | ) | ||||
| Dividends paid | (8,138 | ) | (7,811 | ) | ||||
| Net cash provided by/(used in) financing activities | ||||||||