FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 28, 2002
Commission file number: 1-11908
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Department 56, Inc. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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13-3684956 |
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(State or other
jurisdiction of |
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(I.R.S. Employer |
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One Village Place, 6436 City West Parkway, Eden Prairie, MN 55344 |
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(Address of
principal executive offices) |
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(952) 944-5600 |
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(Registrant’s telephone number, including area code) |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 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 ý No o
As of September 28, 2002, 13,074,155 shares of the registrant’s common stock, par value $.01 per share, were outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEPARTMENT 56, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
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SEPTEMBER
28, |
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DECEMBER
29, |
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SEPTEMBER
29, |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
3,535 |
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$ |
48,088 |
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$ |
249 |
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Accounts receivable, net |
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95,521 |
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23,584 |
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88,611 |
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Inventories |
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21,550 |
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11,151 |
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19,002 |
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Other current assets |
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10,213 |
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11,328 |
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10,087 |
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Total current assets |
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130,819 |
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94,151 |
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117,949 |
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PROPERTY AND EQUIPMENT, net |
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21,519 |
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29,749 |
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30,657 |
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GOODWILL, TRADEMARKS AND OTHER, net |
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60,118 |
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153,963 |
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155,163 |
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OTHER ASSETS |
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2,165 |
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1,958 |
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2,076 |
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$ |
214,621 |
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$ |
279,821 |
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$ |
305,845 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Current portion of long-term debt |
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$ |
2,235 |
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$ |
900 |
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$ |
900 |
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Borrowings on revolving credit agreement |
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36,000 |
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— |
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31,000 |
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Accounts payable |
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10,527 |
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10,811 |
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7,073 |
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Other current liabilities |
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20,049 |
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19,546 |
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22,810 |
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Total current liabilities |
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68,811 |
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31,257 |
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61,783 |
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DEFERRED TAXES |
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5,409 |
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7,717 |
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6,176 |
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LONG-TERM DEBT |
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51,765 |
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84,100 |
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84,100 |
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STOCKHOLDERS’ EQUITY |
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88,636 |
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156,747 |
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153,786 |
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$ |
214,621 |
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$ |
279,821 |
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$ |
305,845 |
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See notes to condensed consolidated financial statements.
2
DEPARTMENT 56, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
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QUARTER ENDED |
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SEPTEMBER
28, |
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SEPTEMBER
29, |
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NET SALES |
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$ |
58,562 |
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$ |
60,129 |
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COST OF SALES |
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27,869 |
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27,107 |
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Gross profit |
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30,693 |
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33,022 |
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OPERATING EXPENSES: |
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Selling, general, and administrative |
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15,519 |
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16,551 |
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Amortization of goodwill, trademarks and other |
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58 |
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1,290 |
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Total operating expenses |
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15,577 |
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17,841 |
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INCOME FROM OPERATIONS |
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15,116 |
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15,181 |
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OTHER EXPENSE: |
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Interest expense |
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761 |
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1,694 |
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Other, net |
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233 |
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3,006 |
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INCOME BEFORE INCOME TAXES |
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14,122 |
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10,481 |
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INCOME TAX PROVISION |
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5,084 |
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3,983 |
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NET INCOME |
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$ |
9,038 |
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$ |
6,498 |
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NET INCOME PER SHARE – BASIC |
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$ |
0.69 |
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$ |
0.50 |
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NET INCOME PER SHARE – ASSUMING DILUTION |
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$ |
0.69 |
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$ |
0.50 |
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WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC |
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13,044 |
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12,887 |
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WEIGHTED AVERAGE SHARES OUTSTANDING – ASSUMING DILUTION |
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13,181 |
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12,916 |
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See notes to condensed consolidated financial statements.
3
DEPARTMENT 56, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)
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39 WEEKS ENDED |
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SEPTEMBER
28, |
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SEPTEMBER
29, |
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NET SALES |
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$ |
150,911 |
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$ |
144,423 |
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COST OF SALES |
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68,126 |
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64,309 |
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Gross profit |
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82,785 |
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80,114 |
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OPERATING EXPENSES: |
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