Oneida Ltd. restructuring showing results in second quarter

CNY Business Journal (1996+), Sep 03, 1999

ONEIDA-Oneida Ltd. (NYSE: OCQ) reports that 1999 second-quarter earnings, for the period ending July 3 1, rose 53 percent, to a record $0.46 per diluted shareup from $0.30 in the 1998 second quarter, which ended August 1, 1998.

Oneida's first-half earnings, excluding first-quarter restructuring and other special charges, totaled $0.86 per share for the fiscal year to date, a 39percent increase over 1998 first-half earnings of $0.62. Including the previouslyannounced charges, Oneida's first-half results reflected a loss of $0.65 per share, or $10.7 million.

The company's earnings include the impact of the following special charges: restructuring costs of $11 million (principally termination benefits), asset impairments of $12 million (principally due to an investment in Italy and exit costs associated with various product lines), unusual charges of $9.8 million (related to expansion into glassware and an unsolicited takeover proposal), and, finally, inventory write-down of $3 million related to costs associated with exiting of certain products. Before the impact of all these charges, the company's net income during the first six months of 1999 was $14.5 million, or $0.86 per share.

Net sales for the third quarter 1999 were $112.1 million, compared to net sales of $104.2 million for the comparable period of 1998. Net income of $7.7 million for the second quarter 1999 compare to that for the second quarter 1998 of $5.1 million.

Within the past year, repeated attempts by Libbey to acquire Oneida Ltd. have been turned down by Oneida's board of directors; earlier this summer, Libbey announced that it is no longer attempting to purchase Oneida Ltd.

Oneida President and CEO Peter J. Kallet said that Oneida is beginning to benefit from cost savings under the restructuring program announced earlier this year. When fully realized in the year 2000, the restructuring is expected to reduce annual operating costs by approximately $20 million. The program includes decreases in overhead expenses, streamlining manufacturing operations, and reductions in the work force and inventories.

"Our strategic plan is on course to expand our company as a complete tabletop provider both domestically and globally," Kallet said. He added that strong earnings are anticipated over the balance of the fiscal year.

Oneida Ltd. manufactures stainlesssteel and silverplated flatware for both the consumer and foodservice industries, and supplies dinnerware to the foodservice industry. The company also supplies a variety of crystal, glassware, and metal serveware for the tabletop industries.