UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: April 5, 2003
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
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes ý No o
As of April 5, 2003, 13,079,409 shares of the registrant’s common stock, par value $.01 per share, were outstanding.
Item 1. Financial Statements
DEPARTMENT 56, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
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APRIL 5, |
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DECEMBER 28, |
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MARCH 30, |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
11,501 |
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$ |
42,494 |
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$ |
56,324 |
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Accounts receivable, net |
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24,327 |
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32,620 |
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17,520 |
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Inventories |
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14,652 |
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14,324 |
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8,315 |
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Other current assets |
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7,828 |
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9,093 |
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9,023 |
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Total current assets |
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58,308 |
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98,531 |
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91,182 |
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PROPERTY AND EQUIPMENT, net |
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19,839 |
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20,908 |
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22,859 |
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GOODWILL, TRADEMARKS AND OTHER, net |
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59,998 |
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60,061 |
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60,243 |
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OTHER ASSETS |
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2,637 |
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1,825 |
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2,215 |
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$ |
140,782 |
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$ |
181,325 |
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$ |
176,499 |
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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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$ |
22,000 |
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$ |
2,235 |
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$ |
32,235 |
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Accounts payable |
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6,894 |
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8,172 |
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5,701 |
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Other current liabilities |
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9,441 |
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16,597 |
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15,271 |
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Total current liabilities |
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38,335 |
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27,004 |
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53,207 |
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DEFERRED TAXES |
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5,456 |
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5,808 |
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5,432 |
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LONG-TERM DEBT |
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— |
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51,765 |
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51,765 |
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STOCKHOLDERS’ EQUITY |
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96,991 |
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96,748 |
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66,095 |
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$ |
140,782 |
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$ |
181,325 |
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$ |
176,499 |
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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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APRIL 5, |
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MARCH 30, |
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NET SALES |
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$ |
34,879 |
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$ |
32,498 |
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COST OF SALES |
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16,214 |
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14,220 |
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Gross profit |
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18,665 |
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18,278 |
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OPERATING EXPENSES: |
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Selling, general, and administrative |
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17,990 |
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18,176 |
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Amortization of other intangibles |
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62 |
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66 |
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Total operating expenses |
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18,052 |
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18,242 |
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INCOME FROM OPERATIONS |
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613 |
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36 |
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OTHER EXPENSE (INCOME): |
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Interest expense |
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584 |
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1,056 |
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Litigation settlement |
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— |
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(5,388 |
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Other, net |
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(366 |
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(208 |
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INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE |
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395 |
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4,576 |
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INCOME TAX PROVISION |
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142 |
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1,647 |
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INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE |
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253 |
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2,929 |
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CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE |
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— |
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(93,654 |
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NET INCOME (LOSS) |
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$ |
253 |
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$ |
(90,725 |
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INCOME PER SHARE BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE – BASIC |
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$ |
0.02 |
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$ |
0.23 |
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CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE – BASIC |
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— |
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(7.26 |
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NET INCOME (LOSS) PER SHARE – BASIC |
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$ |
0.02 |
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$ |
(7.03 |
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