HOW ABOUT NEWS JUST OUT FOR KNIC!!!
(PR NEWSWIRE) L. L. Knickerbocker Reports Second Quarter and Six Months Re
L. L. Knickerbocker Reports Second Quarter and Six Months Results; Revenues
Remain Strong With Significant Turnaround in Operations
LAKE FOREST, Calif., Aug. 10 /PRNewswire/ -- The L. L. Knickerbocker Co.,
Inc. (Nasdaq: KNIC) announced today results of operations for the second
quarter and six months ended June 30, 1999.
Revenues for the second quarter of fiscal 1999 were $13,367,000, as
compared to $13,434,000 for the corresponding quarter in 1998. Operating
losses for the second quarter were $581,000, down sharply from $2,520,000 in
operating losses reported for the corresponding quarter in 1998. Net loss for
the quarter was $1,088,000 ($.04 per diluted share), as compared to $2,680,000
($.14 per diluted share) in 1998. Revenues for the first six months of fiscal
1999 were $22,852,000, with a net loss of $3,365,000 ($.12 per diluted share),
as compared to $24,916,000, with a net loss of $5,256,000 ($.28 per diluted
share), for the corresponding period in 1998. Shares used in computing net
loss per share were 29,638,455 and 27,883,713 for the three and six month
periods, respectively, ended June 30, 1999, compared to 19,126,757 and
19,038,910 in 1998.
"We are moving closer to profitability from operations, as evidenced by
the nearly $2 million improvement in operating results this quarter," said
Tony Shutts, CFO for L. L. Knickerbocker. "The Company's cash flow is
stabilizing, reflected by an improvement in the second quarter of earnings
before interest, taxes and depreciation (EBITDA) to ($240,000). General and
administrative costs for the second quarter improved by nearly 32%, with a
reduction of approximately $1.7 million in G&A expense, compared to last year.
Another critical factor, while maintaining strong sales volume, the Company's
advertising expense was down for the quarter by nearly $1.7 million, or 65%,
reflecting the Company's shift in sales from direct response marketing to
retail and the Internet. Continued improvement in operations is expected to
assist the Company in expediting the restructuring plan currently in process."
Louis L. Knickerbocker, President and CEO of L. L. Knickerbocker,
commented as follows: "The Company has been faced with many challenges. We
are working our way through them. As you can see from the quarterly results,
our primary focus is on downsizing operations, increasing profitability,
diversification of our distribution channels, and a strong shift from direct
response sales to retail and the Internet. To accomplish this, we have put a
new management team in place consisting of long-time employees that have been
elevated from within the Company. The downsizing of Georgetown and Magic
Attic and the integration into our California operation have been completed,
an action event that was long overdue in happening and very costly to the
Company.
"The transition into retail is not an easy one, but we are pleased with
the results to date. In the second quarter alone, we tripled our retail sales
over the comparable 1998 period, and increased our retail customers to over
4,000. To increase our retail and Internet business, we now have in place an
in-house telemarketing division. For the first time ever, we have
accomplished a partnering agreement for our brand distribution with a major
retailer and a major home shopping channel, whereby the home shopping channel
will direct TV shoppers to the retail chain."
In concluding, Mr. Knickerbocker said: "I repeat, the challenges have
been many and, although we are working our way through them, they are ongoing
and we have more work to do. As the founder of the Company and a major
shareholder, I take full responsibility for meeting these challenges. My
clear goal is to bring shareholder value back to myself and to our
shareholders."
The L. L. Knickerbocker Co., Inc. sells collectible gifts and toy-related
merchandise, primarily porcelain and vinyl dolls and teddy bears. The Company
also designs, manufactures and markets fashion jewelry and accessories, in
addition to offering an extensive line of fine jewelry products and supplying
other jewelry manufacturers with loose cut stones. The Company's products are
sold through diverse international distribution channels, including its own
web sites, television shopping outlets, direct response sales and wholesale
sales to retailers. The Company also holds a substantial equity interest in
Pure Energy Corporation, a privately held company, and in Ontro, Inc., a
publicly held company.
For more information, visit the Company's website at www.knickerbocker.com
This press release contains forward-looking statements within the meaning
of the Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, which involve risks and uncertainties, including, but not
limited to, economic, competitive, governmental and technological factors
affecting the Company's operations, markets, products, services and prices,
and other factors. The Company's actual results could differ materially from
those projected in the forward-looking statements as a result of the factors
described herein.
The L. L. Knickerbocker Co., Inc.
Statement of Operations
Three months ended June 30
1999 1998
Sales, net of returns $13,367,000 $13,434,000
Cost of sales 7,379,000 6,488,000
Gross profit 5,988,000 6,946,000
Advertising expense 926,000 2,611,000
Selling expense 1,983,000 1,483,000
General and administrative expense 3,660,000 5,372,000
Operating loss (581,000) (2,520,000)
Loss on equity method investments --- 262,000
Other (income) expense, net (49,000) 163,000
Interest expense 503,000 702,000
Loss before minority interest and
income tax expense (benefit) (1,035,000) (3,647,000)
Minority interest in loss of subsidiary --- (141,000)
Income tax expense (benefit) 53,000 (826,000)
Net loss $(1,088,000) $(2,680,000)
Diluted loss per share $(0.04) $(0.14)
Diluted weighted average
shares outstanding 29,638,455 19,126,757
Six months ended June 30
1999 1998
Sales, net of returns $22,852,000 $ 24,916,000
Cost of sales 12,147,000 11,344,000
Gross profit 10,705,000 13,572,000
Advertising expense 2,048,000 5,024,000
Selling expense 3,752,000 2,461,000
General and administrative expense 7,227,000 10,165,000
Operating loss (2,322,000) (4,078,000)
Loss on equity method investments --- 815,000
Other (income) expense, net (167,000) 180,000
Interest expense 1,136,000 1,283,000
Loss before minority interest and
income tax expense (benefit) (3,291,000) (6,356,000)
Minority interest in loss of subsidiary --- (274,000)
Income tax expense (benefit) 74,000 (826,000)
Net loss $(3,365,000) $(5,256,000)
Diluted loss per share $(0.12) $(0.28)
Diluted weighted average
shares outstanding 27,883,713 19,038,910
SOURCE The L. L. Knickerbocker Co., Inc.
-0- 08/10/99
/CONTACT: Louis L. Knickerbocker of The L. L. Knickerbocker Co., Inc.,
949-595-7900; or Fran Daniels of Financial Sciences of America, 310-278-4413,
for The L. L. Knickerbocker Co., Inc./
/Web site: knickerbocker.com
(KNIC)
CO: L. L. Knickerbocker Co., Inc.
ST: California
IN: REA
SU: ERN
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