Enesco Group, Inc. Announces Comprehensive Plan for Operating Improvement; Company to Host Conference Call on September 28, 2005
28 9월 2005 - 5:21AM
Business Wire
Enesco Group, Inc. (NYSE:ENC), a leader in the giftware, and home
and garden decor industries, today announced a comprehensive plan
to improve the Company's operating performance and establish a
platform for gaining increased share of the $30 billion to $40
billion wholesale gift market in the U.S., U.K. and Canada. As a
result of the recently adopted operating improvement plan to be
executed throughout 2006, the Company anticipates achieving pre-tax
cost savings on an annualized basis in the range of $34 million to
$38 million. These cost savings include approximately $12 million
in expenses related to the termination of the Precious Moments
license agreement, bank penalty fees, severance costs and
accelerated depreciation related to the Enterprise Resource
Planning system as previously reported by the Company which are not
expected to recur in future years. The cost savings are anticipated
to be fully realized in 2007. The Company's plan will center around
three key initiatives: rationalizing the product portfolio;
reducing corporate overhead, general and administrative and
marketing costs; and creating a more efficient and cost-effective
distribution and warehousing model. -- Product Portfolio: The
Company intends to reduce its number of overall product lines from
approximately 170 to between 50 and 60 to concentrate on giftable
products which elicit strong and sustainable market demand and
profitability, and leverage Enesco's core distribution base. The
Company expects to eliminate those product lines that do not meet
these criteria. -- Corporate Overhead, General and Administrative
and Marketing: The Company intends to reduce corporate and general
and administrative costs, as well as professional and consulting
fees by $30 million to $32 million pre-tax on an annualized basis.
-- Distribution and Warehousing: The Company expects to implement
strategies to bring its distribution and warehousing costs more in
line with industry standards, while improving quality and service
levels. Cost savings are expected to be in the range of $4 million
to $6 million pre-tax on an annualized basis. The Company's goal is
to implement an operating model commensurate with other leading
companies in the giftware and related markets. This operating model
will target gross margins in the range of 40% to 45% and an
operating profit margin of 3% to 5% to be achieved in 2007. Cynthia
Passmore-McLaughlin, President and CEO, commented, "Our exhaustive
study of the business has resulted in a plan to transform Enesco by
rationalizing our product lines around our best performing and most
profitable merchandise categories, and producing an organizational
structure properly sized to the scale of the Company's current
business. The evaluation of our business and industry was not only
completed to identify ways to generate cost savings but also to
maximize future revenue potential. The Company will concentrate on
merchandise categories in which Enesco can leverage its key
competitive advantages of market leadership, proprietary products
and channels of distribution. When fully implemented, we will be a
much leaner, more focused and efficient company with gross and
operating margins more in line with our peers. We have begun to
implement the changes outlined in our plan." Ms.
Passmore-McLaughlin concluded with an update on the Company's
current credit facility, "As previously announced, we had reset the
EBITDA and capital expenditure covenant minimums on our credit
facility in August. We continue to make progress regarding
replacement financing. As we continue to comply with our bank
covenants or exceed the plan accepted by our banks, we believe we
are better positioned to secure replacement financing that is
favorable for the Company for the near- and long-term." Conference
Call A conference call will be broadcast live on Wednesday,
September 28, at 9:00 a.m. Central (10:00 a.m. Eastern) to discuss
the plan for operating improvement. Investors interested in
participating on the live call can do so by calling 1-888-271-7222,
and asking for the Enesco investor conference call. Investors also
may listen to the live call via a Webcast at www.enesco.com and
click on "Investor Relations," or by logging on to
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: 9906607. The phone replay will be
available for one week following the conference call. About Enesco
Group, Inc. Enesco Group, Inc. is a world leader in the giftware,
and home and garden decor industries. Serving more than 30,000
customers globally, Enesco distributes products to a wide variety
of specialty card and gift retailers, home decor boutiques as well
as mass-market chains and direct mail retailers. Internationally,
Enesco serves markets operating in Europe, Canada, Australia,
Mexico, 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. The Company's
product lines include some of the world's most recognizable brands,
including Heartwood Creek, Walt Disney Company, Walt Disney
Classics Collection, Pooh & Friends, Jim Shore, Foundations,
Circle of Love, Nickelodeon, Bratz, Halcyon Days, Lilliput Lane and
Border Fine Arts, among others. Further information is available on
the Company'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. The Company 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: the Company's success
in developing new products and consumer reaction to the Company's
new products; the Company's ability to secure, maintain and renew
popular licenses, particularly our Cherished Teddies, Heartwood
Creek and Disney licenses; the Company's ability to grow revenues
in mass and niche market channels; the Company's success in
implementing its comprehensive plan for operating improvement and
its achievement of its goals for cost savings and market share
increases; the Company's ability to comply with covenants contained
in its credit facility; the Company's ability to obtain a new
global senior 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 incorrect 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, the Company 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 the Company'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.
Enesco (NYSE:ENC)
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