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)                      March 31, 2006                                        

Enesco Group, Inc.

(Exact name of registrant as specified in its charter)

Illinois	001-09267	04-1864170
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

225 Windsor Drive, Itasca, IL	60143
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code                     (630) 875-5300                    

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01 Entry into a Material Definitive Agreement.
	Item 2.02 Results of Operations and Financial Condition.
	Item 8.01 Other Events.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
Eleventh Amendment
Press Release

Item 1.01 Entry into a Material Definitive Agreement.

On March 31, 2006, Enesco Group, Inc. entered into an eleventh amendment to its existing U.S. credit facility, effective March 31, 2006. This amendment reset Enesco’s 2006 cumulative minimum monthly EBITDA covenants effective January 30, 2006 based on its reforecast and reduced the credit facility commitments from $75.0 million to $70.0 million effective between the eleventh amendment date and January 1, 2007. In addition, unless the outstanding loans and letters of credits under the existing U.S. credit facility are paid in full prior to the dates described below, the eleventh amendment accelerated by one month the fees payable per the tenth amendment which were to be due May 1, 2006 and June 1, 2006. Accordingly, the total fee payable April 1, 2006 is $1,025,000 and, unless the outstanding loans and letters of credit are paid in full prior to May 1, 2006, the fee payable May 1, 2006 is $750,000. The monthly fee of 0.10% of the highest loan amount outstanding during the preceding month will increase to 0.20% on May 1, 2006, rather than June 1, 2006 as per the tenth amendment, and will continue until the Facility Termination Date.

The eleventh amendment to the credit facility is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 2.02 Results of Operations and Financial Condition.

On March 31, 2006, Enesco Group, Inc. issued a press release regarding its fourth quarter 2005 and year-end earnings. The press release is furnished as Exhibit 99.2 and is incorporated herein by reference.

Item 8.01 Other Events.

On December 14, 2005, Enesco Group, Inc. signed a commitment letter with LaSalle Business Credit, LLC to arrange a new $75 million senior secured credit facility, which is to replace the existing credit facility with Bank of America, as successor to Fleet National Bank, and LaSalle Bank National Association. Under the letter, the commitment was to close on the new credit facility on or before January 31, 2006. Enesco received subsequent modifications to its commitment letter from LaSalle Business Credit, LLC, extending the expiration dates from January 31, 2006 to March 31, 2006.

On March 31, 2006, Enesco received a modification to its commitment letter from LaSalle Business Credit, LLC, extending the expiration date from March 31, 2006 to April 30, 2006.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Eleventh Amendment, dated as of March 31, 2006, by and among Enesco Group, Inc.; Bank of America, N.A., as Agent; and LaSalle Bank National Association.

99.2 Press Release, dated March 31, 2006, regarding Enesco’s fourth quarter 2005 and year-end earnings.

SIGNATURES

     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 hereunto duly authorized.

Enesco Group, Inc.  

(Registrant) 

Date: March 31, 2006	By:	/s/ Charles E. Sanders
		Charles E. Sanders
		Treasurer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Eleventh Amendment, dated as of March 31, 2006, by and among Enesco Group, Inc.; Bank of America, N.A., as Agent; and LaSalle Bank National Association.
99.2	Press Release, dated March 31, 2006, regarding Enesco’s fourth quarter 2005 and year-end earnings.

EX-99.1

Exhibit 99.1

ELEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED
SENIOR REVOLVING CREDIT AGREEMENT

      This ELEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED SENIOR REVOLVING CREDIT AGREEMENT (this “Amendment”) is made as of March 31, 2006, by and among ENESCO GROUP, INC., an Illinois corporation (the “Borrower”), the Borrowing Subsidiaries that may from time to time become a party to the Second Amended and Restated Senior Revolving Credit Agreement, the Lenders, and BANK OF AMERICA, N.A. (successor by merger to Fleet National Bank), a national banking association, as Agent (the “Agent”).

RECITALS

     WHEREAS, the Borrower, the Borrowing Subsidiaries, the Lenders and the Agent are parties to a certain Second Amended and Restated Senior Revolving Credit Agreement dated as of June 16, 2003, as amended by a First Amendment dated as of March 5, 2004; a Second Amendment dated as of August 10, 2004; a Third Amendment dated as of November 2, 2004; a Fourth Amendment dated as of November 22, 2004; a Fifth Amendment dated as of January 28, 2005, as amended by a letter agreement dated as of February 7, 2005; a Sixth Amendment dated as of March 29, 2005; a Seventh Amendment dated as of May 16, 2005; an Eighth Amendment dated as of July 7, 2005, as amended by a letter agreement dated as of July 28, 2005; a Ninth Amendment dated as of August 31, 2005; and a Tenth Amendment dated as of December 21, 2005 (as the same may be further amended or restated from time to time, collectively, the “Credit Agreement”), pursuant to which the Lenders have, subject to the terms and conditions set forth therein, made certain credit facilities available to the Borrower and the Borrowing Subsidiaries including those evidenced by the Notes executed and delivered pursuant to the Credit Agreement; and

     WHEREAS, the Borrower has requested that the Lenders amend certain terms of the Credit Agreement; and

     WHEREAS, the Lenders are willing to further modify the Credit Agreement upon the terms and conditions set forth herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

     1.      All capitalized terms used herein and not otherwise defined herein shall have their meanings as defined in the Credit Agreement.

     2.      Upon satisfaction in full, on or prior to March 31, 2006 (i.e. not later than midnight, New York time, on March 31, 2006), of the conditions precedent set forth in Section 3 below, the Credit Agreement is amended as follows:

(a)      The following definitions are added in alphabetical order to (or, with respect to terms that were previously defined in the Credit Agreement, amended and restated in their entirety in alphabetical order in) ARTICLE I:

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      “Commitment” means the obligations of each Lender, subject to Borrowing Capacity, to make Advances not exceeding the aggregate principal amount (or, with respect to Letters of Credit and Bankers’ Acceptances, face amount) outstanding at any time as set forth below, or as set forth in any Notice of Assignment relating to any assignment that has become effective pursuant to Section 12.3.2, as such amount may be modified from time to time pursuant to the terms hereof:

      Between Eleventh Amendment Date and January 1, 2007:

Bank of America, N.A.	LaSalle Bank National Association
$37,800,000 Loans	$25,200,000 Loans
$4,200,000 L/C and B/A Facility	$2,800,000 L/C and B/A Facility

     “Maximum Borrowing Amount” means between the Eleventh Amendment Date and January 1, 2007, $63,000,000 for Loans (excluding Letters of Credit and Bankers’ Acceptances) and $7,000,000 for Letters of Credit and Bankers’ Acceptances.

     “Eleventh Amendment Date” means the date that the Eleventh Amendment to this Agreement takes effect.

(b)      Section 2.24 is amended and restated in its entirety to read as follows:

     2.24 Usage Fee and Extension Fees. In addition to the Facility Fee, Commitment Fee, and all other amounts payable hereunder and previously paid hereunder, the Borrower shall pay to the Agent for the account of the Lenders, (a) (i) on April 1, 2006, a fee in the amount of 0.10% (10 basis points) of the highest amount of Loans that were outstanding on any day in the immediately preceding month, and (ii) on the first Business Day in each month, commencing on May 1, 2006 and continuing until the Facility Termination Date, a fee in the amount of 0.20% (20 basis points) of the highest amount of Loans that were outstanding on any day in the immediately preceding month, (b) on April 1, 2006, a fee in the amount of $1,025,000, and (c) on May 1, 2006, a fee in the amount of $750,000, provided that, (i) the fee payable under clause (c) of this paragraph will be waived by the Lenders if, prior to May 1, 2006 (i.e. not later than midnight, New York time, on April 28, 2006), the Obligations are paid in full and all Letters of Credit and Bankers’ Acceptances expire, are returned to the Agent for cancellation or are secured with cash collateral in a manner satisfactory to the Agent and the Commitment hereunder is terminated.

(c)      Section 6.12.3 is amended and restated in its entirety to read as follows:

     6.12.3      Minimum EBITDA. The Borrower and its Subsidiaries shall have consolidated EBITDA for the period commencing on January 1, 2006 and ending on the last day of each of the following months that is not less than (i.e. if negative shall not be negative by more than) the following amounts:

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	Cumulative Minimum
	EBITDA for Period Commencing
Period Ending	on January 1, 2006
January 31, 2006		($4,554,000	)
February 28, 2006		($7,250,000	)
March 31, 2006		($9,600,000	)
April 30, 2006		($14,000,000	)
May 31, 2006		($18,600,000	)
June 30, 2006		($19,300,000	)
July 31, 2006		($17,850,000	)
August 31, 2006		($15,400,000	)
September 30, 2006		($10,900,000	)
October 31, 2006		($7,700,000	)
November 30, 2006		($5,700,000	)
December 31, 2006		($3,000,000	)

(d)      The form of Exhibit C-1 (Borrowing Base Certificate) is deleted in its entirety and is replaced with the form of Exhibit C-1 (Borrowing Base Certificate) attached to this Amendment as Exhibit A.

     3.      The amendments set forth in Section 2 hereof shall become effective as of the date that the following conditions shall have been satisfied (the date that such amendments take effect being the “Amendment Effective Date”, except that for purposes of Section 2(c) hereof, upon satisfaction of the conditions set forth in this Section 3, the “Amendment Effective Date” shall mean January 30, 2006).

(a)      The Lenders shall have executed this Amendment and shall have received a copy of this Amendment duly executed by the Borrower, the Borrowing Subsidiaries and the Guarantors.

(b)      The Borrower shall have paid to counsel for the Agent the amount of their reasonable fees and disbursements owed to such counsel in connection with the Credit Agreement, this Amendment and matters related hereto and thereto, and the Borrower shall have paid the fees and disbursements owed or paid to any appraisers and consultants retained by the Agent in connection with the Credit Agreement and the Loans.

     4.      Except as amended, modified or supplemented by this Amendment, all of the terms, conditions, covenants, provisions, representations, warranties and conditions of the Credit Agreement shall remain in full force and effect and are hereby acknowledged, ratified, confirmed and continued as if fully restated hereby.

     5.      The invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of any other term or provision hereof or contained in the Credit Agreement.

     6.      It is the intention of the parties hereto that this Amendment shall not constitute a novation and shall in no way adversely affect or impair performance of the obligations of the

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Borrower, the Borrowing Subsidiaries or the Guarantors under the Credit Agreement and the other Loan Documents.

     7.      Regardless of whether the conditions in Section 3 hereof are satisfied and whether or not the amendments in Section 2 take effect, each of the Borrower, the Borrowing Subsidiaries and the Guarantors hereby confirms and ratifies the Obligations incurred by it under the Credit Agreement and the other Loan Documents, and acknowledges that, as of the date hereof, neither the Borrower, the Borrowing Subsidiaries nor any of the Guarantors has any defense, offset, counterclaim, or right of recoupment against the Agent or any Lender with respect to any of such Obligations or any other matter.

     8.      This Amendment is to be governed and construed in accordance with the laws of the Commonwealth of Massachusetts (without regard to it conflict of laws or choice of law principles).

     9.      This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties thereto may execute this Amendment by signing any such counterpart. This Amendment shall be effective when it has been executed by the Borrower, each of the Borrowing Subsidiaries, the Guarantors, the Agent and the each of the Lenders, and the amendments set forth in Section 2 hereof shall take effect on the Amendment Effective Date. Delivery of a signed counterpart of this Amendment by facsimile will have the same effect as the delivery of the signed original of such counterpart.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

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     IN WITNESS WHEREOF, the foregoing has been executed as an instrument under seal as of the date first above written.

ENESCO GROUP, INC.
By:	/s/ Cynthia Passmore
Name:		Cynthia Passmore
Title:		President and Chief Executive Officer

By:	/s/ Charles E. Sanders
Name:		Charles E. Sanders
Title:		Treasurer

BANK OF AMERICA, N.A., as Agent and as lender
By:	/s/ C. Christopher Smith
Name:		C. Christopher Smith
Title:		Senior Vice President

LASALLE BANK NATIONAL ASSOCIATION
By:	/s/ Scott E. Rubenstein
Name:		Scott E. Rubenstein
Title:		Vice President

N.C. CAMERON & SONS LIMITED
By:	/s/ Charles E. Sanders
Name:		Charles E. Sanders
Title:		Treasurer

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ENESCO INTERNATIONAL (H.K.) LIMITED
By:	/s/ Charles E. Sanders
Name:		Charles E. Sanders
Title:		Director

GREGG MANUFACTURING, INC.
By:	/s/ Charles E. Sanders
Name:		Charles E. Sanders
Title:		Treasurer and Chief Financial Officer

ENESCO INTERNATIONAL LTD.
By:	/s/ Charles E. Sanders
Name:		Charles E. Sanders
Title:		Treasurer

ENESCO HOLDINGS LIMITED
By:	/s/ Charles E. Sanders
Name:		Charles E. Sanders
Title:		Director

ENESCO LIMITED
By:	/s/ Charles E. Sanders
Name:		Charles E. Sanders
Title:		Director

BILSTON & BATTERSEA ENAMELS LIMITED
By:	/s/ Charles E. Sanders
Name:		Charles E. Sanders
Title:		Director

EX-99.2

		For Immediate Release
	Investor Contact:	Leigh Parrish Financial Dynamics 212-850-5651 lparrish@fd-us.com
	Media Contact:	Donna Shaults
		Enesco Group, Inc.
		630-875-5464
		dshaults@enesco.com

Enesco Group, Inc. Reports Fourth Quarter and Fiscal 2005 Financial Results
- - Company Provides Update on Operating Improvement Plan -

Itasca, Ill. — March 31, 2006 - Enesco Group, Inc. (NYSE: ENC), a leader in the giftware, and home and garden décor industries, today announced financial results for the fourth quarter and year ended December 31, 2005, and also provided an update on its operating improvement plan.

Fourth Quarter and Recent Highlights

• Fourth quarter net revenues decreased 19.7% to $56.0 million; excluding U.S. sales of Precious Moments products, net revenues decreased 7.6% to $53.6 million.

• Full year net revenues decreased 9.1% to $244.4 million; excluding U.S. sales of Precious Moments products, net revenues were down 2.3% from the prior year to $210.9 million.

• Reached 2005 goal of reducing expenses that Enesco believes will generate pre-tax annualized cost savings of $26.7 million.

• Completed product rationalization by reducing product lines from 170 to approximately 50.

• Initiated the transition to a third-party distribution facility in December 2005.

• Entered into a new strategic alliance with Jim Shore Designs, Inc.

Fourth Quarter
Net revenues for the quarter decreased 19.7% to $56.0 million from $69.7 million in the fourth quarter of 2004, reflecting the significant reduction in U.S. sales of Precious Moments products, which was due primarily to the termination of the U.S. license agreement in the second quarter of 2005. Excluding U.S. sales of Precious Moments, net revenues for the fourth quarter, were down 7.6% from the same period in 2004.

Gross profit was $16.5 million compared to $22.3 million in the fourth quarter of 2004. Gross profit margin was 29.5% compared with 32.0% in the fourth quarter of 2004. Gross profit was negatively impacted by lower sales volume, a lower margin achieved on the U.S. sales of Precious Moments products, as well as increases in slow-moving and excess inventory reserves, which resulted from additional discontinued inventories related to Enesco’s product line rationalization. Gross margin, excluding U.S. sales of Precious Moments products, decreased to 33.4% for the quarter versus 36.4% for the same period last year.

Selling, general and administrative expenses (SG&A) decreased 13.5% to $30.8 million compared to $35.5 million reported in the fourth quarter of 2004. This decrease was primarily the result of reduced salary expense and lower selling and marketing costs, as well as other cost saving initiatives implemented throughout the quarter. These factors were offset in part by the write-off of $1.1 million of Dartington goodwill and restructuring and severance provisions of $1.0 million associated with the transition to third-party warehousing and distribution and the closure of non-essential showrooms.

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Operating loss for the fourth quarter was $14.2 million compared to an operating loss of $9.3 million in the same period in 2004. The operating loss for the fourth quarter of 2004 included a gain of $4.0 million on the sale of Enesco’s distribution and warehousing facility in Elk Grove Village, Illinois, which subsequently was leased back under a five-year operating lease.

Fourth quarter net loss was $14.7 million, or ($0.99) per diluted share, compared to a net loss of $40.7 million, or ($2.80) per diluted share, in the fourth quarter of 2004. The reduction in net loss primarily reflects Enesco’s tax benefit of $0.5 million in the fourth quarter of 2005 versus a tax expense of $31.1 million in the fourth quarter of 2004.

Fiscal 2005
Net revenues for the year decreased 9.1% to $244.4 million from $269.0 million in 2004, primarily due to the continued decline in sales of collectibles in the U.S., primarily sales related to Precious Moments. Excluding U.S. sales of Precious Moments products, net revenues were down 2.3% from 2004.

Gross profit was $82.8 million compared to $106.5 million in 2004. Gross profit margin declined to 33.9% compared to 39.6% last year. Gross profit was negatively impacted by lower sales volume, a loss on the termination of the license agreement with Precious Moments Inc. of $7.7 million, a lower margin achieved on the U.S. sales of Precious Moments products, and increases in slow-moving and excess inventory reserves, which resulted from additional discontinued inventories related to Enesco’s product line rationalization. Gross margin, excluding U.S. sales of Precious Moments products, declined to 38.1% for 2005 compared to 40.9% in 2004.

SG&A expenses increased 1.9% to $130.0 million compared to $127.5 million last year, primarily reflecting higher bank fees, accelerated depreciation on the ERP system and incremental costs incurred as a result of the Dartington acquisition. These factors were partially offset by reduced selling and marketing costs, as well as lower salary expense.

Operating loss for the year was $47.2 million compared with an operating loss of $17.0 million in 2004. The operating loss for 2004 included a gain of $4.0 million on the sale of Enesco’s distribution and warehousing facility in Elk Grove Village, Illinois.

Fiscal 2005 net loss was $54.0 million, or ($3.67) per diluted share, compared to a net loss of $45.2 million, or ($3.16) per diluted share, in 2004. The increase in net loss reflects the increase in operating loss and additional interest expense in 2005, partially offset by a significantly reduced tax expense as compared to the prior year.

Cynthia Passmore, President and Chief Executive of Enesco, stated, “2005 was a year of transition for Enesco as we focused on stabilizing the business. We successfully completed a number of strategic financial and operational initiatives in the first half of the year, including the termination of our Precious Moments license agreement and corporate restructurings, which enabled us to reduce salary expense and streamline operations. In September, we introduced a comprehensive operating improvement plan designed to build on our earlier initiatives and establish a sustainable and profitable business model. While our financial results for the year are not in line with our long-term objectives, we began to see positive impact from the implementation of our operating improvement plan in the second half of 2005. Specifically, we benefited from a reduced cost structure, better inventory management and the completion of the rationalization of our product lines which allowed us to focus on our core merchandising categories.”

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Operating Improvement Plan Update
Enesco made substantial progress in implementing its operating improvement plan and, as of this date, has accomplished the following:

• Enesco completed its product rationalization in the fourth quarter of 2005, reducing its product lines by more than 70%, from 170 product lines to approximately 50. The remaining lines in total represent approximately 90% of Enesco’s U.S. sales, excluding Precious Moments. The remaining product lines fit into Enesco’s core merchandising categories: decorative gifts, inspirational gifts, brand enthusiast gifts and occasion-based gifts. Enesco believes that the product lines in these categories generate strong and sustainable market demand and profitability and leverage Enesco’s core distribution base.

• Enesco began its transition to a third-party distribution center and began shipping from the new facility at the end of January 2006. Enesco experienced a delay in beginning shipments from the new facility, as the new facility ramp-up took longer than expected. Enesco expects to work through the backlog by the end of April and, in May, expects to be at the shipping levels required to meet its targets for the year.

• Enesco reached its 2005 goal of reducing expenses that will generate pre-tax cost savings on an annualized basis of $26.7 million. These savings are included in the total $34 million to $38 million in pre-tax annualized cost savings, which Enesco expects to realize as a result of the operating improvement plan in 2007.

• Enesco established a new Executive Committee which will direct Enesco’s turnaround and help ensure that it is positioned appropriately for sustainable growth when its operating improvement plan objectives are achieved. The Executive Committee will include Ms. Passmore, a future Executive Vice President and Chief Financial Officer, and key business unit leaders in the U.S., the U.K. and Canada.

Passmore concluded, “We are making progress with the implementation of our operating improvement plan. We have accomplished a number of goals already in 2006, with the transition to the new third-party distribution facility and the signing of our new strategic alliance with Jim Shore Designs. Further, as a result of our product line rationalization, our sales and marketing teams have been able to focus on our top selling product lines, resulting in a 16% increase in orders taken at this year’s January gift shows. In addition, excluding Precious Moments orders in 2005, product orders at the January 2006 gift shows increased 21%. We believe we are driving positive change for the business and anticipate seeing gradual improvements in our performance over the course of 2006.”

More detailed information is set forth in Enesco’s Form 10-K for the year ended December 31, 2005, which was filed on March 31, 2006.

Credit Facility
On March 31, 2006, Enesco entered into the eleventh amendment to its existing credit facility, effective March 31, 2006, and reset Enesco’s 2006 cumulative minimum monthly EBITDA covenants, effective January 30, 2006, based on its reforecast. The eleventh amendment also reduced the credit facility commitment from $75.0 million to $70.00 million and accelerated by one month the tenth amendment fees payable unless outstanding loans and letters of credit under the existing U.S. credit facility are paid in full prior to specified dates.

On December 14, 2005, Enesco Group, Inc. signed a commitment letter with LaSalle Business Credit, LLC to arrange a new $75 million senior secured credit facility, which is to replace the existing credit facility with Bank of America, as successor to Fleet National Bank, and LaSalle Bank N.A. Under the letter, the commitment was to close on the new credit facility on or before January 31, 2006. Enesco Group, Inc. has subsequently received modifications to its commitment letter from LaSalle Business Credit, LLC, extending the expiration date from January 31, 2006 to March 31, 2006. On March 31, 2006, Enesco Group, Inc. received another modification to its commitment letter from LaSalle Business Credit, LLC, extending the expiration date from to April 30, 2006.

Conference Call
A conference call will be broadcast live on Monday, April 3 at 3:00 p.m. CST (4:00 p.m. EST). Investors interested in participating on the live call can do so by calling 1-888-271-7222, and ask for the Enesco Quarterly Earnings conference call. Investors also may listen to the live call via a Webcast at http://www.enesco.com and click on “Investor Relations,” or by logging onto http://www.streetevents.com.

To listen to the Webcast, your computer must have RealPlayer installed. This Webcast will be available online for 90 days following the live conference call. If you do not have RealPlayer, go to http://www.streetevents.com prior to the call to download RealPlayer for free.

For a phone replay, call 1-800-642-1687, Passcode: 7439355. The phone replay will be available for one month following the conference call.

About Enesco Group, Inc.
Enesco Group, Inc. is a world leader in the giftware, and home and garden décor industries. Serving more than 30,000 customers globally, Enesco distributes products to a wide variety of specialty card and gift retailers, home décor boutiques, as well as mass-market chains and direct mail retailers. Internationally, Enesco serves markets operating in the United Kingdom, Canada, Europe, Mexico, Australia and Asia. With subsidiaries located in Europe and Canada, and a business unit in Hong Kong, Enesco’s international distribution network is a leader in the industry. Enesco’s product lines include some of the world’s most recognizable brands, including Border Fine Arts, Bratz, Circle of Love, Foundations, Halcyon Days, Jim Shore Designs, Lilliput Lane, Pooh & Friends, Walt Disney Classics Collection, and Walt Disney Company, among others. Further information is available on Enesco’s web site at www.enesco.com.

This press release contains forward-looking statements, which reflect management’s current assumptions and beliefs and are based on information currently available to management. Enesco has tried to identify such forward-looking statements by use of such words as “expects,” “intends,” “anticipates,” “could,” “estimates,” “plans,” and “believes,” and similar expressions, but these words are not the exclusive means of identifying such statements. Such statements are subject to various risks, uncertainties and other factors, which could cause actual results to vary materially from those anticipated, estimated, expected or projected. Important factors that may cause actual future events or results to differ materially and adversely from those described in the forward-looking statements include, but are not limited to: Enesco’s success in implementing its comprehensive plan for operating improvement and achieving its goals for cost savings and market share increases; Enesco’s success in developing new products and consumer reaction to Enesco’s new products; Enesco’s ability to secure, maintain and renew popular licenses, particularly our Cherished Teddies, Disney and Jim Shore Designs licenses; Enesco’s ability to grow revenues in mass and niche market channels; Enesco’s ability to comply with covenants contained in its credit facility; changes in general economic conditions, as well as specific market conditions; fluctuations in demand for our products; manufacturing lead times; the timing of orders and shipments and our ability to predict customer demands; inventory levels and purchase commitments exceeding requirements based upon forecasts; collection of accounts receivable; changes in the regulations and procedures affecting the importation of goods into the United States; changes in foreign exchange rates; price and product competition in the giftware industry; variations in sales channels, product costs or mix of products sold; and, possible future terrorist attacks, epidemics, or acts of war. In addition, Enesco operates in a continually changing business environment and does not intend to update or revise the forward-looking statements contained herein, which speak only as of the date hereof. Additional information regarding forward-looking statement risk factors is contained in Enesco’s reports and filings with the Securities and Exchange Commission. In light of these risks and uncertainties, the forward-looking statements contained herein may not occur and actual results could differ materially from those set forth herein. Accordingly, you should not rely on these forward-looking statements as a prediction of actual future results.

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ENESCO GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED

Three Months Ended December 31, 2005 and 2004
(In thousands, except per share amounts)

	2005			2004			% Change
Net revenues	$	55,970		$	69,658			-20	%
Cost of sales		39,450			47,365			-17	%
Gross profit		16,520			22,293			-26	%
Gross profit%		29.5	%		32.0	%
Selling, general and administrative expense		30,750			35,531			-13	%
Gain on sale of building		—			(3,985	)
Operating income		(14,230	)		(9,253	)		54	%
Interest expense		(744	)		(524	)		42	%
Interest income		28			59			-53	%
Other income (expense), net		(168	)		169			199	%
Income (Loss) before income taxes		(15,114	)		(9,549	)		58	%
Income tax benefit (expense)		456			(31,124	)		-101	%
Net income (loss)	$	(14,658	)	$	(40,673	)		-64	%

ENESCO GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
For The Years Ended 2005 and 2004
(In thousands, except per share amounts)

	2005			2004			% Change
Net revenues	$	244,434		$	268,967			-9	%
Cost of sales		153,935			162,423			-5	%
Cost of sales — loss on license termination		7,713			—			100	%
Gross profit		82,786			106,544			-22	%
Gross profit %		33.9	%		39.6	%
Selling, general and administrative expense		129,956			127,543			2	%
Sale of building (gain)		—			(3,985	)
Total selling, general and administrative expense		129,956			123,558
Operating loss		(47,170	)		(17,014	)		-177	%
Interest expense		(2,260	)		(1,148	)		97	%
Interest income		201			404			-50	%
Other income (expense), net		(449	)		(75	)		499	%
Loss before income taxes		(49,678	)		(17,833	)		-179	%
Income tax benefit (expense)		(4,347	)		(27,355	)		-84	%
Net loss	$	(54,025	)		(45,188	)	$	-20	%
Loss per share:
Basic:
Net loss	$	(3.67	)	$	(3.16	)		-16	%
Average shares outstanding		14,739			14,309			-3	%
Diluted:
Net loss	$	(3.67	)	$	(3.16	)		-16	%
Average shares outstanding		14,739			14,821			1	%

ENESCO GROUP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2005 AND 2004

(In thousands)

	2005		2004
ASSETS
Current Assets:
Cash and equivalents	$	12,918	$	14,646
Accounts receivable, net		42,285		70,526
Inventories		40,659		65,371
Prepaid expenses		3,471		3,310
Deferred income taxes		783		920
Total current assets		100,116		154,773
Property, plant and equipment, net		15,504		22,509
Other assets		14,571		16,601
Total assets	$	130,191	$	193,883
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Notes and loans payable	$	30,823	$	26,354
Accounts payable		15,306		18,680
Income taxes payable		9,005		6,405
Deferred gain on sale of fixed assets		6,358		1,711
Accrued Expenses		14,592		21,628
Total current liabilities		76,084		74,778
Long-term liabilities		1,281		9,838
Total shareholders’ equity		52,826		109,267
Total liabilities and shareholders’ equity	$	130,191	$	193,883

ENESCO GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004
(Unaudited)
(In thousands)

	2005			2004
Operating Activities:
Net loss	$	(54,025	)	$	($45,188	)
Adjustments to reconcile net loss to net cash used by operating activities		49,639			23,576
Net cash used by operating activities		(4,386	)		(21,612	)
Investing Activities:
Acquisition, net of cash acquired		—			(14,409	)
Purchase of property, plant and equipment		809			19,265
Proceeds from sales of property, plant and equipment		(2,348	)		(4,552	)
Net cash used by investing activities		(1,539	)		304
Financing Activities:
Issuance of notes and loans payable		4,599			22,656
Exercise of stock options		322			1,552
Net cash provided by financing activities		4,921			24,208
Effect of exchange rate changes on cash and cash equivalents		(724	)		1,101
Increase/(decrease) in cash and cash equivalents		(1,728	)		4,001
Cash and cash equivalents, beginning of period		14,646			10,645
Cash and cash equivalents, end of period	$	12,918		$	14,646