EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

   

FOR:

 

Home Products International, Inc.

 

   

APPROVED BY:

 

James R. Tennant, Chairman & CEO

Home Products International, Inc.

(773) 890-1010

FOR IMMEDIATE RELEASE         
   

CONTACT:

  Investor Relations:
       

James Winslow, Executive VP & CFO

       

Home Products International, Inc.

       

(773) 890-1010

 

HOME PRODUCTS INTERNATIONAL ANNOUNCES

 

FIRST QUARTER RESULTS

 

Chicago, IL, April 28, 2004—Home Products International, Inc. (Nasdaq SmallCap: HOMZ), (the “Company”), a leader in the housewares industry, today announced financial results for the first quarter of its 2004 fiscal year.

 

The Company reported a loss of $0.2 million, $(0.03) per share, for the first quarter ended March 27, 2004 as compared to a loss in the first quarter of 2003 of $3.1 million, $(0.40) per share. The earnings improvement as compared to a year ago was due to higher sales, bad debt recoveries, spending cuts, and improved factory efficiencies. Increased raw material costs had a significant negative impact on results.

 

Sales in the quarter increased to $53.2 million from $49.1 million a year ago. The sales increase of 8% was due to unit gains at the Company’s largest customers. The Company reported positive cash flow (which the Company defines as the net change in cash and debt) during the first quarter of $12.6 million. Reductions in working capital, primarily receivables, provided the positive cash flow. The Company continues to be in compliance with all of its


HPI: Announces First Quarter Results  

Page 2

 

loan covenants. At March 27, 2004, the Company had no borrowings outstanding under its $50 million senior loan agreement. Availability to borrow based on the Company’s asset base and outstanding letters of credit was $38 million.

 

Commenting on the results, James R. Tennant, chairman and chief executive officer, stated, “While we are pleased by the sales unit gains, we still face a difficult environment. The cost of our primary raw materials, plastic resin and steel, has continued to trend higher. As of yet, we have been unable to recover the cost increases through selling price adjustments. The reduction in our loss, as compared to the first quarter of last year, was due in large part to higher sales, reductions in bad debt expense and across the board operating expense reductions.”

 

Mr. Tennant concluded, “As we look forward, until we see our raw material pricing return to more historical levels and without the ability to significantly adjust our selling prices upward, it is unlikely that we will achieve full-year profitability in the near term.”

 

The Company’s first quarter conference call will take place Wednesday, April 28, 2004, starting at 11:00 a.m. Eastern Time (10:00 a.m. CT, 9:00 a.m. MT, and 8:00 a.m. PT). Dial 800/406-5345, and give confirmation code 124541 approximately 10 minutes prior to conference time.

 

A replay of the Company’s first quarter conference call will be available from 2:00 p.m. Eastern Time April 28, 2004 through midnight Eastern Time May 5, 2004. Dial 888/203-1112, then enter confirmation code 124541.


HPI: Announces First Quarter Results  

Page 3

 

Home Products International, Inc. is an international consumer products company specializing in the manufacture and marketing of quality diversified housewares products. The Company sells its products through national and regional discounters including Kmart, Wal-Mart and Target, hardware/home centers, food/drug stores, juvenile stores and specialty stores.

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements that may concern the Company’s future growth, operating results, product development, markets and competitive position. While management makes its best efforts to be accurate in making these forward-looking statements, such statements are based on management’s current expectations and are subject to risks, uncertainties and assumptions, including those identified below as well as other risks not yet known to the Company or not currently considered material by the Company. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those expected. These risks include unanticipated plant closing costs; unanticipated difficulties and costs associated with the relocation of equipment and the manufacture or sourcing of products; market risks such as increased competition for both the Company and its end users and changes in retail distribution channels; dependence on a few large customers; economic risks; financial risks such as fluctuations in the price of raw materials, future liquidity and access to debt and equity markets. For a more detailed description of these and other risk factors, please refer to the Company’s 10 K, 10-Q and other SEC filings. The Company undertakes no obligation to update any such factors or to announce the results of any revision to any of the forward-looking statements contained herein to reflect future events or developments.


Home Products International, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

($ in thousands)

 

    

March 27,

2004


  

December 27,

2003


Cash

   $ 3,510    $ 797

Accounts receivable, net

     34,194      47,963

Inventories

     23,088      17,903

Prepaid expenses and other current assets

     2,802      2,421
    

  

Current assets

     63,594      69,084
    

  

Fixed assets, net

     31,730      32,812

Other non-current assets

     3,221      4,019

Other intangibles, net

     484      608

Goodwill, net

     73,752      73,752
    

  

Total assets

   $ 172,781    $ 180,275
    

  

Revolving line of credit and other current debt

   $ 158    $ 9,969

Accounts payable

     23,138      21,425

Accrued liabilities

     18,566      17,976
    

  

Current liabilities

     41,862      49,370
    

  

Long term debt

     120,546      120,578

Other non-current liabilities

     4,241      3,986
    

  

Long term debt and other non-current liabilities

     124,787      124,564
    

  

Stockholders’ equity

     6,132      6,341
    

  

Total liabilities and stockholders’ equity

   $ 172,781    $ 180,275
    

  


Home Products International, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

($ in thousands, except share and per share amounts)

 

    

Thirteen weeks

ended March 27, 2004


   

Thirteen weeks

ended March 29, 2003


 

Net sales

   $ 53,190     100.0%     $ 49,129     100.0%  

Cost of goods sold

     43,289     81.4%       40,459     82.4%  
    


 

 


 

Gross profit

     9,901     18.6%       8,670     17.6%  

Selling, general and administrative expenses

     6,713     12.6%       8,232     16.8%  

Amortization of intangibles

     124     0.2%       126     0.3%  
    


 

 


 

Operating profit

     3,064     5.8%       312     0.5%  

Interest expense

     (3,255 )   (6.1% )     (3,477 )   (7.1% )

Other (expense) income

     (5 )   (0.0% )     43     0.1%  
    


 

 


 

Loss before income taxes

     (196 )   (0.3% )     (3,122 )   (6.5% )

Income tax expense

     (7 )   (0.0% )     (24 )   (0.0% )
    


 

 


 

Net loss

   $ (203 )   (0.3% )   $ (3,146 )   (6.5% )
    


 

 


 

Net loss per share:

                            

Basic

   $ (0.03 )         $ (0.40 )      

Diluted

   $ (0.03 )         $ (0.40 )      

Number of weighted average common shares outstanding:

                            

Basic

     7,986,556             7,898,829        

Diluted

     7,986,556             7,898,829        


Home Products International, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Amounts in thousands)

 

     Thirteen weeks ended

 
     March 27,
2004


    March 29,
2003


 

Operating activities:

                

Net loss

   $ (203 )   $ (3,146 )

Adjustments to reconcile net loss to net cash provided by operating activities:

                

Depreciation and amortization

     2,130       2,346  

Amortization of restricted stock compensation

     —         57  

Other, net

     1,039       350  

Changes in current assets and liabilities:

                

Decrease in accounts receivable

     13,769       24,481  

Increase in inventories

     (5,185 )     (2,597 )

Increase in prepaid expenses and other

     (381 )     (143 )

Increase (decrease) in accounts payable

     1,713       (4,509 )

Increase (decrease) in accrued liabilities

     590       (6,224 )
    


 


Net cash provided by operating activities

     13,472       10,615  
    


 


Investing activities:

                

Capital expenditures, net

     (924 )     (1,236 )
    


 


Net cash used in investing activities

     (924 )     (1,236 )
    


 


Financing activities:

                

Net repayments under loan and security agreement

     (9,811 )     —    

Payments of capital lease obligation

     (32 )     (23 )

Exercise of stock options, issuance of common stock under stock purchase plan and other

     8       28  
    


 


Net cash (used in) provided by financing activities

     (9,835 )     5  
    


 


Net increase in cash and cash equivalents

     2,713       9,384  

Cash and cash equivalents at beginning of period

     797       3,974  
    


 


Cash and cash equivalents at end of period

   $ 3,510     $ 13,358