Blyth Reports Loss, Forecasts Earnings
By Staff -- Gifts and Dec, 4/4/2007 12:25:00 PM
Greenwich, CT — Blyth Inc., corporate parent of gift vendors Colonial Candle, CBK and Seasons of Cannon Falls, reported flat sales but big losses, an apparent contradiction explained by big ticket non-cash charges. Blyth’s net sales of $379.8 million for the fourth quarter were essentially even with the previous fiscal year’s fourth quarter net sales: $380.7 million. Excluding the effect of Impact Plastics, which was sold in last year’s fourth quarter, sales increased 1 percent over the prior year quarter, primarily due to international sales growth in direct selling business PartyLite, plus catalog and Internet sales from Miles Kimball Company and Boca Java. For the full year, net sales fell 3 percent to $1,220.6 million from $1,254.3 million in the prior year. Excluding Impact Plastics, full year net sales were approximately flat compared with last year.
Despite turning in essentially the same performance, the company recorded a net loss of $103.2 million for this fiscal year, compared to net earnings of $24.9 million last year. The difference results in large part from a non-cash, pre-tax goodwill impairment charge of $48.8 million from an assessment of goodwill associated with Blyth's North American wholesale businesses, as well as pre-tax restructuring charges of $24 million related to the North American wholesale mass channel home fragrance business.
Robert B. Goergen, Blyth's chairman and CEO, said, "Fiscal year 2007 has been one of significant transition for Blyth, as demonstrated by our fourth quarter and full year restructuring charges. Most of these unusual charges are non-cash, and Blyth continues to generate strong cash flow, achieving $95 million in cash flow from operations in fiscal year 2007. Restructuring efforts within the multi-channel group of wholesale and catalog and Internet businesses, as well as the direct selling segment, have further streamlined operations, eliminated numerous less profitable customers and continued to improve the efficiency of our asset base. We believe that these steps will position the Company for improved performance and profitability in fiscal year 2008."
Blyth forecasts 2008 earnings per share of $1.07–$1.17, compared with its fiscal 2007 loss of $2.58 per share.
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