8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 30, 2003

APPLICA INCORPORATED

(Exact name of Registrant as specified in its charter)

Commission File Number 1-10177

Florida (State or other jurisdiction of incorporation or organization)	59-1028301 (I.R.S. Employer Identification Number)
5980 Miami Lakes Drive, Miami Lakes, Florida	33014
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (305) 362-2611

Item 12. Results of Operations and Financial Condition.

     On October 30, 2003, Applica Incorporated issued a press release describing its results of operations for its three and nine months ended September 30, 2003. A copy of the press release is attached as Exhibit 12 to this report. This information is not deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into any Securities Act registration statements.

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 30, 2003	Applica Incorporated
	By: /s/ Terry Polistina
	Terry Polistina, Senior Vice President and Chief Financial Officer of Applica Incorporated

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Exhibit Index

Exhibit No	Description
12	Applica Incorporated Press Release dated October 30, 2003

4 EX-12 3 g85520exv12.htm PRESS RELEASE DATED OCTOBER 30, 2003

Exhibit 12

[Applica Logo]

FOR IMMEDIATE RELEASE

Contact: Investor Relations Department
(305) 362-2611
investor.relations@applicamail.com

Applica Incorporated Reports 2003 Third-Quarter and
First Nine Months Financial Results

     Miami Lakes, Florida (October 30, 2003) — Applica Incorporated (NYSE: APN) today announced that third-quarter sales for 2003 were $173.5 million, a decrease of 11.0% from the same period in 2002. For the first nine months of 2003, net sales declined 14.7% to $431.6 million. The decrease was largely the result of planned lower contract manufacturing sales and softer U.S. sales.

     Applica reported earnings for the 2003 third quarter of $4.9 million, or $0.20 per diluted share, compared with earnings of $5.2 million, or $0.22 per diluted share, for the 2002 third quarter. The third-quarter 2003 earnings included $16.2 million ($9.7 million, net of tax) of equity in the net earnings of a joint venture in which Applica owns a 50% interest and expenses of $1.9 million ($1.1 million, net of tax) related to the early extinguishment of $30.0 million of debt. For the first nine months of 2003, Applica reported net income of $21.7 million, or $0.87 per diluted share, as compared to a loss of $78.9 million, or $3.37 per share for the same period last year. The 2003 earnings included $55.2 million ($33.1 million, net of tax) of equity in the net earnings of a joint venture and expenses of $1.9 million ($1.1 million, net of tax) related to the early extinguishment of debt. In the first nine months of 2002, Applica recognized an adjustment of $121.3 million ($78.8 million, or $3.37 per share, net of tax) to reduce the carrying value of goodwill pursuant to the provisions of SFAS 142.

     Applica’s gross profit margin decreased to 29.5% in the three-month period ended September 30, 2003 as compared to 33.2% for the same period in 2002. For the nine-month period ended September 30, 2003, the gross profit margin decreased to 29.8% as compared to 31.5% for the same period in 2002. The gross profit margin decrease is primarily attributed to a poor product mix and unabsorbed overhead related to lower production levels at our manufacturing facilities.

     At September 30, 2003, total debt as a percentage of total capitalization was 39.0%, with total debt of $156.1 million and shareholders’ equity of $244.5 million. The Company’s book value per share was $10.33 at September 30, 2003. Capital expenditures for the first nine months ended September 30, 2003 and 2002 were $9.5 million and $12.3 million, respectively.

     Harry D. Schulman, Applica’s President and Chief Executive Officer, commented, “We are disappointed with our performance for the third quarter and the year, and we are taking specific cost reductions actions to address the fixed costs in our operating model. Finally, we are very excited about being able to announce our relationship with The Procter & Gamble Company. This begins an exciting new chapter in Applica’s history combining our strength in application technology with a premier partner and leader in consumer packaged goods. We expect a national launch of the first two products under this alliance to occur in the second quarter of 2004.”

     Applica will hold a conference call today at 11:00 a.m., Eastern Time, to discuss its third-quarter and year-to-date results and to give guidance on future results and trends in operations. Live audio of the conference call will be

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simultaneously broadcast over the Internet and will be available to members of the news media, investors and the general public. The conference call is expected to last approximately one hour. Broadcast of the event can be accessed on the Company’s website, www.applicainc.com by clicking on the Investor Relations page. You may also access the call via CCBN, at www.streetevents.com. The event will be archived and available for replay through Thursday, November 6, 2003, at midnight.

     Applica Incorporated and its subsidiaries are manufacturers, marketers and distributors of a broad range of branded and private-label small electric consumer goods. The Company manufactures and distributes small household appliances, pest control products, home environment products, pet care products and professional personal care products. Applica markets products under licensed brand names, such as Black & Decker®, its own brand names, such as Windmere®, LitterMaid® and Applica™, and other private-label brand names. Applica’s customers include mass merchandisers, specialty retailers and appliance distributors primarily in North America, Latin America and the Caribbean. The Company operates manufacturing facilities in China and Mexico. Applica also manufactures products for other consumer products companies. Additional information regarding the Company is available at www.applicainc.com.

     Certain matters discussed in this news release are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These factors include uncertainties regarding the impact that the war with Iraq or terrorist activities may have on the economy; adverse effects of newly acquired businesses or product lines; the bankruptcy or loss of a major retail customer, distributor or supplier; economic conditions and the retail environment; the Company’s dependence on the timely development, introduction and customer acceptance of products; competitive products and pricing; reliance on key customers; dependence on foreign suppliers and supply and manufacturing constraints; increases in raw materials costs; cancellation or reduction of orders; the uncertainties in the Latin American economies; the potential for product recalls and product liability claims, and other risks and uncertainties detailed from time to time in the Company’s Securities and Exchange Commission filings, including the Annual Report on Form 10-K for the year ended December 31, 2002, and the subsequent Form 10-Q reports. Readers are cautioned not to place undue reliance on forward-looking statements. Applica undertakes no obligation to publicly revise any forward-looking statements to reflect events or circumstances that arise after the date hereof.

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Applica Incorporated and Subsidiaries

CONSOLIDATED BALANCE SHEETS

					September 30,
					2003			December 31,
					(Unaudited)			2002
					(In thousands)
				Assets
Current Assets:
	Cash and cash equivalents				$	6,974		$	7,683
	Accounts and other receivables, less allowances of $17,408 in 2003 and $15,830 in 2002					133,912			146,567
	Receivables from affiliates					1,587			2,060
	Inventories					150,181			111,453
	Prepaid expenses and other					13,975			11,862
	Refundable income taxes					3,939			1,663
	Future income tax benefits					14,654			18,654
			Total current assets			325,222			299,942
Investment in Joint Venture						5,038			1,249
Property, Plant and Equipment - at cost, less accumulated depreciation of $125,488 in 2003 and $109,949 in 2002						71,315			76,963
Future Income Tax Benefits, Non-Current						43,070			54,378
Goodwill						62,812			62,812
Other Intangibles, Net						14,528			20,860
Other Assets						3,990			5,461
		Total Assets			$	525,975		$	521,665
Liabilities and Shareholders’ Equity
Current Liabilities:
	Accounts payable				$	52,641		$	31,446
	Accrued expenses					65,789			74,686
	Current maturities of long-term debt					151			144
	Current taxes payable					4,613			518
	Deferred rent					319			372
			Total current liabilities			123,513			107,166
Other Long-Term Liabilities						2,077			1,533
Long-Term Debt, Less Current Maturities						155,931			193,838
Shareholders’ Equity:
	Common stock – authorized:75,000 shares of $.10 par value; issued and outstanding: 23,657 shares in 2003 and 23,497 shares in 2002					2,366			2,350
	Paid-in capital					156,432			155,395
	Retained earnings					92,942			71,251
	Note receivable – officer					(1,496	)		(1,496	)
	Accumulated other comprehensive earnings (loss)					(5,790	)		(8,372	)
		Total shareholders’ equity				244,454			219,128
		Total liabilities and shareholders’ equity			$	525,975		$	521,665

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Applica Incorporated and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

				Three Months Ended September 30,
				2003					2002
				(In thousands, except per share data)
Net sales				$	173,512		100.0	%	$	194,851		100.0	%
Cost of goods sold					122,257		70.5			130,243		66.8
			Gross profit		51,255		29.5			64,608		33.2
Selling, general and administrative expenses:
	Operating expenses				54,105		31.2			47,050		24.2
	Repositioning charge				—		—			5,397		2.8
			Operating earnings (loss)		(2,850	)	(1.7	)		12,161		6.2
Other expense (income):
	Interest expense				3,597		2.1			4,967		2.5
	Interest and other income				(245	)	(0.1	)		(866	)	(0.4	)
	Loss on early extinguishment of debt				1,906		1.0			—		—
	Gain on litigation settlement				—		—			(557	)	(0.3	)
					5,258		3.0			3,544		1.8
	Earnings (loss) before equity in net earnings (loss) of joint venture and income taxes				(8,108	)	(4.7	)		8,617		4.4
	Equity in net earnings (loss) of joint venture				16,199		9.3			(598	)	(0.3	)
	Earnings (loss) before income taxes				8,091		4.6			8,019		4.1
	Income tax expense (benefit)				3,236		1.8			2,805		1.4
			Net earnings (loss)	$	4,855		2.8	%	$	5,214		2.7	%
Earnings (loss) per common share:
		Earnings (loss) per common share – basic		$	0.21				$	0.22
		Earnings (loss) per common share – diluted		$	0.20				$	0.22

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Applica Incorporated and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

				Nine Months Ended September 30,
				2003					2002
				(In thousands, except per share data)
Net sales				$	431,598		100.0	%	$	505,948		100.0	%
Cost of goods sold					302,882		70.2			346,562		68.5
			Gross profit		128,716		29.8			159,386		31.5
Selling, general and administrative expenses:
	Operating expenses				135,320		31.4			137,545		27.2
	Repositioning charge				—		—			10,643		2.1
			Operating earnings (loss)		(6,604	)	(1.6	)		11,198		2.2
Other expense (income):
	Interest expense				11,431		2.6			12,624		2.5
	Interest and other income				(893	)	(0.2	)		(1,612	)	(0.3	)
	Loss on early extinguishment of debt				1,906		0.4			—		—
	Gain on litigation settlement				—		—			(557	)	(0.1	)
					12,444		2.8			10,455		2.1
	Earnings (loss) before equity in net earnings (loss) of joint ventures, income taxes and cumulative effect of change in accounting principle				(19,048	)	(4.4	)		743		0.1
	Equity in net earnings (loss) of joint ventures				55,199		12.8			(783	)	(0.1	)
			Earnings (loss) before income taxes and cumulative effect of change in accounting principle		36,151		8.4			(40	)	0.0
Income tax expense (benefit)					14,460		3.4			(16	)	0.0
	Earnings (loss) before cumulative effect of change in accounting principle				21,691		5.0			(24	)	0.0
	Cumulative effect of change in accounting principle, net of tax benefit of $0 and $42,447 in 2003 and 2002				—		—			(78,829	)	(15.6	)
			Net earnings (loss)	$	21,691		5.0	%	$	(78,853	)	(15.6	)%
Earnings (loss) per common share — basic:
	Earnings (loss) before cumulative effect of change in accounting principle			$	0.92				$	0.00
	Cumulative effect of change in accounting principle				—					(3.37	)
		Earnings (loss) per common share – basic		$	0.92				$	(3.37	)
Earnings (loss) per common share — diluted:
	Earnings (loss) before cumulative effect of change in accounting principle			$	0.87				$	0.00
	Cumulative effect of change in accounting principle				—					(3.37	)
		Earnings (loss) per common share – diluted		$	0.87				$	(3.37	)

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