EX-99 3 a4440367ex991.txt EXHIBIT 99.1 Exhibit 99.1 Playtex Products Reports Second Quarter Results WESTPORT, Conn.--(BUSINESS WIRE)--July 23, 2003--Playtex Products, Inc. (NYSE: PYX), today reported that in the second quarter of 2003, the Company earned $4.7 million or $0.08 per share. These results compare with second quarter 2002 reported earnings of $16.7 million or $0.27 per share. For the six month period ended June of 2003, the Company earned $16.1 million or $0.26 per share compared with 2002 results for the same period of $32.9 million and $0.53 per share. Net sales were $180.0 million in the second quarter of 2003, which compare with prior year results of $201.6 million. Versus year ago, Feminine Care net sales were 20% lower for the second quarter. These results were affected by the impact of intense competitive activity in the tampon category and a continuation of differences in shipment versus consumption levels in tampons due to promotional activities in the category in past quarters. Infant Care net sales were 2% below the year ago quarter due to a non-core baby wipes sales decline while the remaining segments were approximately 1% above year ago. Within Sun Care, the Company curtailed shipments during the quarter in response to the unfavorable weather impact on the sun care category, consistent with its returns reduction strategy launched last year. Sun Care sales were below year ago by 11% for the quarter and by 1% on a year to date basis. Household Products/Personal Grooming net sales were down 12% in the quarter versus the prior year due to a continuation of unfavorable category trends. "The results for the quarter reflect the impact of the continuation of economic and competitive factors as well as the weather. Overall, our market share trends remain solid and our brands continue to maintain leadership positions in their respective categories. As previously reported, tampon shipments began to mirror consumption levels in the month of June so it appears that the promotional inventory impact is largely behind us," said Michael R. Gallagher, Playtex's Chief Executive Officer. The Company's financial results for the prior year were impacted by accounting changes for intangibles, a favorable tax ruling, a plant closing, and debt retirement costs. Please refer to the attached Consolidated Statement of Earnings for a full reconciliation of reported and as adjusted results. Playtex will hold a conference call with analysts and investors at 10:30 a.m. EST on Thursday, July 24, 2003. To access the simultaneous web cast or replay of this call, please go to the "Investor Relations" portion of our web site: www.playtexproductsinc.com. Playtex Products, Inc. is a leading manufacturer and distributor of a diversified portfolio of personal care and consumer products, including Playtex infant feeding products, Wet Ones, Baby Magic, Diaper Genie, Mr. Bubble, Playtex tampons, Banana Boat, Woolite rug and upholstery cleaning products, Playtex gloves, Binaca and Ogilvie. With the exception of the historical information contained in the release, the matters described herein, and, in particular, all earnings guidance and projections, contain forward-looking statements that are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company's control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to, general economic conditions, interest rates, competitive market pressures, the loss of a significant customer, raw material and manufacturing costs, capacity limitations, the ability to integrate acquisitions, adverse publicity and product liability claims, capital structure, the impact of weather conditions on sales, and other factors detailed in the Company's reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update such information. PLAYTEX PRODUCTS, INC. CONSOLIDATED NET SALES (Unaudited, in thousands) Three Months Ended Six Months Ended ------------------- -------------------- June 28, June 29, June 28, June 29, 2003 2002 2003 2002 --------- --------- --------- --------- Infant Care $ 72,858 $ 74,052 $ 131,660 $ 139,628 Feminine Care 53,599 67,049 102,402 128,172 Sun Care 34,236 38,526 88,076 89,058 Household Products & Personal Grooming 19,336 21,925 38,824 41,445 --------- --------- --------- --------- Total $ 180,029 $ 201,552 $ 360,962 $ 398,303 ========= ========= ========= ========= PLAYTEX PRODUCTS, INC. CONSOLIDATED STATEMENTS OF EARNINGS THREE MONTHS ENDED (Unaudited, in thousands, except per share data) June 29, 2002 ----------------------------------- June 28, As Debt As 2003 Reported Retirement (1) Adjusted -------- -------- ---------------- -------- Net sales $ 180,029 $ 201,552 $ - $ 201,552 Cost of sales 86,786 87,711 - 87,711 ---------- ---------- --------- -------- Gross profit 93,243 113,841 - 113,841 Operating expenses: Selling, general and - administrative 71,751 65,149 - 65,149 Amortization of intangibles 225 225 - 225 --------- --------- --------- -------- Total operating expenses 71,976 65,374 - 65,374 --------- --------- --------- -------- Operating earnings 21,267 48,467 - 48,467 Interest expense, net 13,387 15,248 - 15,248 Expenses related to retirement of debt - 5,882 5,882 - Other expenses 572 681 - 681 --------- --------- --------- -------- Earnings before taxes 7,308 26,656 (5,882) 32,538 Income tax expense (benefit) 2,654 9,918 (2,147) 12,065 --------- --------- --------- -------- Net earnings $ 4,654 $ 16,738 $ (3,735) $ 20,473 ========= ========= ========= ======== EPS: Basic $ 0.08 $ 0.27 $ (0.06) $ 0.33 Diluted $ 0.08 $ 0.27 $ (0.06) $ 0.32 Weighted average shares outstanding: Basic 61,216 61,118 61,118 Diluted 61,237 64,562 64,562 Memo Accounts: Operating earnings $ 21,267 $ 48,467 $ - $ 48,467 Amortization of intangibles 225 225 - 225 Depreciation 3,526 3,529 - 3,529 --------- --------- --------- -------- EBITDA (2) $ 25,018 $ 52,221 $ - $ 52,221 ========= ========= ========= ========= Capital expenditures $ 5,663 $ 2,810 $ - $ 2,810 (1) On May 29, 2002, we issued a new $450.0 milli on Term C Loan and, together with cash, we fully repaid our $76.0 million Term A Loan and our $395.8 million Term B Loan. As a result of this transaction, we recorded a pre-tax loss of $5.9 million during our second quarter ended June 29, 2002. We believe that this elimination is useful to investors because it provides a consistent basis of comparison between the current and prior year periods presented. (2) EBITDA is defined as operating earnings plus depreciation and amortization of intangibles. EBITDA should not be considered as an alternative to or superior measure of: operating earnings, net income, or cash provided by operating, investing and financing activities (as determined in accordance with generally accepted accounting principles in the United States). We believe that EBITDA is a measure commonly reported and widely used by investors and other interested parties as a measure of a company's operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to depreciation and amortization, which can vary significantly depending upon accounting methods or nonoperating factors (such as historical cost). Additionally, EBITDA is a significant performance metric associated with our Senior Credit Facility. PLAYTEX PRODUCTS, INC. CONSOLIDATED STATEMENTS OF EARNINGS SIX MONTHS ENDED (Unaudited, in thousands, except per share data) June 29, 2002 ------------------------------- June 28, As Plant Tax 2003 Reported Closure (1) Issue (2) -------- --------- ----------- --------- Net sales $ 360,962 $ 398,303 $ - $ - Cost of sales 170,969 173,422 - - ---------- --------- -------- --------- Gross profit 189,993 224,881 - - Operating expenses: Selling, general and administrative 136,472 128,883 - - Restructuring and asset impairment - 7,599 7,599 - Amortization of intangibles 451 451 - - ---------- --------- -------- --------- Total operating expenses 136,923 136,933 7,599 - ---------- --------- -------- --------- Operating earnings 53,070 87,948 (7,599) - Interest expense, net 26,834 31,354 - - Expenses related to retirement of debt - 5,882 Other expenses 1,025 1,571 - - ---------- --------- -------- --------- Earnings before taxes and cumulative effect of change in accounting principle 25,211 49,141 (7,599) - Income tax expense (benefit) 9,154 3,863 (2,789) (14,298) ---------- --------- -------- --------- Earnings before cumulative effect of change in accounting principle 16,057 45,278 (4,810) 14,298 Cumulative effect of change in accounting principle, net of $7,141 tax benefit - (12,423) - - ---------- --------- -------- --------- Net earnings $ 16,057 $ 32,855 $ (4,810)$ 14,298 ========== ========= ======== ========== EPS: Basic $ 0.26 $ 0.54 $ (0.08)$ 0.23 Diluted $ 0.26 $ 0.53 $ (0.07)$ 0.22 Weighted average shares outstanding: Basic 61,216 61,084 Diluted 61,237 64,206 Memo Accounts: Operating earnings $ 53,070 $ 87,948 $ (7,599)$ - Amortization of intangibles 451 451 - - Depreciation 6,997 7,024 - - ---------- --------- -------- --------- EBITDA (5) $ 60,518 $ 95,423 $ (7,599)$ - ========== ========= ======== ========= Capital expenditures $ 9,336 $ 5,784 $ - $ - ---------------------------------------- Debt Intangible As Retirement (3) Acctng (4) Adjusted (6) -------------- ------------ ------------ Net sales $ - $ - $ 398,303 Cost of sales - - 173,422 ---------- ---------- ----------- Gross profit - - 224,881 Operating expenses: Selling, general and administrative - - 128,883 Restructuring and asset impairment - - - Amortization of intangibles - - 451 ---------- ---------- ----------- Total operating expenses - - 129,334 ---------- ---------- ----------- Operating earnings - - 95,547 Interest expense, net - - 31,354 Expenses related to retirement of debt 5,882 - Other expenses - - 1,571 ---------- ---------- ----------- Earnings before taxes and cumulative effect of change in accounting principle (5,882) - 62,622 Income tax expense (benefit) (2,147) - 23,097 ---------- ---------- ----------- Earnings before cumulative effect of change in accounting principle (3,735) - 39,525 Cumulative effect of change in accounting principle, net of $7,141 tax benefit - (12,423) - ---------- ---------- ----------- Net earnings $ (3,735)$ (12,423)$ 39,525 ========== ========== =========== EPS: Basic $ (0.06)$ (0.20)$ 0.65 Diluted $ (0.06)$ (0.19)$ 0.63 Weighted average shares outstanding: Basic 61,084 Diluted 64,206 Memo Accounts: Operating earnings $ - $ - $ 95,547 Amortization of intangibles - - 451 Depreciation - - 7,024 ---------- ---------- ----------- EBITDA (5) $ - $ - $ 103,022 ========== ========== =========== Capital expenditures $ - $ - $ 5,784 (1) On March 25, 2002 we announced the closing of our plastic molding facility which resulted in charges for restructuring and asset impairment. (2) On March 7, 2002 the U.S. Treasury issued new regulations which permitted Playtex to utilize a previously incurred capital loss. The impact of the regulations resulted in a tax benefit of $14.3 million with a subsequent cash tax savings in 2003. (3) On May 29, 2002, we issued a new $450.0 million Term C Loan and, together with cash, we fully repaid our $76.0 million Term A Loan and our $395.8 million Term B Loan. As a result of this transaction, we recorded a pre-tax loss of $5.9 million during our second quarter ended June 29, 2002. (4) We adopted new accounting standards for goodwill and other intangible assets at the beginning of our 2002 fiscal year. The adoption of the new accounting standards resulted in the write-down of certain intangible assets. (5) EBITDA is defined as operating earnings plus depreciation and amortization of intangibles. EBITDA should not be considered as an alternative to or superior measure of: operating earnings, net income, or cash provided by operating, investing and financing activities (as determined in accordance with generally accepted accounting principles in the United States). We believe that EBITDA is a measure commonly reported and widely used by investors and other interested parties as a measure of a company's operating performance and debt servicing ability because it assists in comparing performance on a consistent basis without regard to depreciation and amortization, which can vary significantly depending upon accounting methods or nonoperating factors (such as historical cost). Additionally, EBITDA is a significant performance metric associated with our Senior Credit Facility. (6) We believe that the elimination of the items described in notes (1) - (4) above is useful to investors because it provides a consistent basis of comparison between the current and prior year periods presented. PLAYTEX PRODUCTS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) June 28, December 28, 2003 2002 ----------- ---------- Assets Unaudited Current assets: Cash $ 27,442 $ 31,605 Receivables, less allowance for doubtful accounts 36,569 27,735 Retained interest in receivables 55,817 59,774 Inventories 75,198 85,160 Due from related party 80,017 80,017 Deferred income taxes 7,318 8,130 Other current assets 6,904 7,782 ----------- ---------- Total current assets 289,265 300,203 Net property, plant and equipment 123,402 121,199 Intangible assets, net: Goodwill 494,307 494,307 Trademarks, patents & other 138,723 139,174 ----------- ---------- Total intangible assets, net 633,030 633,481 Deferred financing costs 14,238 13,592 Other noncurrent assets 9,197 9,712 ----------- ---------- Total assets $ 1,069,132 $1,078,187 =========== ========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 33,085 $ 47,088 Accrued expenses 55,277 54,217 Due to related party 78,386 78,386 Income taxes payable 5,534 1,086 Current maturities of long-term debt 14,500 4,500 ----------- ---------- Total current liabilities 186,782 185,277 Long-term debt 791,000 823,250 Other noncurrent liabilities 15,300 14,526 Deferred income taxes 51,973 49,601 ----------- ---------- Total liabilities 1,045,055 1,072,654 ----------- ---------- Stockholders' equity: Common stock, $0.01 par value, authorized 100,000,000 shares, issued 61,215,856 shares at June 28, 2003 and December 28, 2002 612 612 Additional paid-in capital 526,233 526,233 Retained earnings (deficit) (500,714) (516,771) Accumulated other comprehensive earnings (2,054) (4,541) ----------- ---------- Total stockholders' equity 24,077 5,533 ----------- ---------- Total liabilities and stockholders' equity $ 1,069,132 $1,078,187 =========== ========== Memo accounts: Long-term debt including current maturities of long-term debt $ 805,500 $ 827,750 =========== ========== Receivables, comparative $ 154,186 $ 126,509 =========== ========== CONTACT: Playtex Products Glenn Forbes, 203/341-4264