Great numbers on SHD today...I think the warrants are a buy (SHD+)
Thursday December 2, 8:08 am Eastern Time
Company Press Release
Sherwood Brands Fiscal 2000 First
Quarter Net Income From Operations
Nearly Quadruples to $0.27 Per Share As Sales Double to
$12,866,000
Orders Remain Strong
ROCKVILLE, Md.--(BUSINESS WIRE)--Dec. 2, 1999--Sherwood Brands, Inc. (AMEX:SHD -
news), a manufacturer, marketer and distributor of branded confectionery products and gift
items, announced today that net income for the first quarter of fiscal 2000 ended Oct. 31, 1999,
before a one-time gain, net of tax, nearly quadrupled to $985,000, or $0.27 per diluted share, as
revenue more than doubled to $12,866,000.
Including the one-time gain, net income was $1,207,000, or $0.33 per diluted share. This
compares to net income for the first quarter of fiscal 1999 of $253,000, or $0.07 per diluted
share, on revenue of $6,240,000.
''In 1998, after acquiring E. Rosen from receivership, we made the strategic decision to invest
in our sales and marketing programs and the development of our computerized accounting and
management information systems to efficiently manage our anticipated growth. We are beginning
to reap the benefits of this investment,'' said Uziel Frydman, president and chief executive
officer.
''With our manufacturing, sales and marketing platform now properly positioned to support
higher growth, we expect to continue to benefit from the operating leverage built into the
Company as we further expand Sherwood's product lines and customer base, and make
additional acquisitions if they become available,'' he said.
''The Halloween and Christmas holiday selling seasons were the best in our history, and we are
enjoying continued strength for the Valentine's Day and Easter holiday selling seasons. We
believe that these orders should drive our sales and profits higher for the next several quarters.
We are optimistic about Sherwood's performance for the balance of the fiscal year,'' Frydman
said.
The CEO attributed the growth in revenue to higher-than-expected sales of new products
introduced in recent months including gift baskets, gift items and candies. He noted that gross
margin improved to 31% of revenue for the first quarter, despite the lingering effect of low
capacity utilization at the Company's Rhode Island facility early in the first quarter.
''While we still have work to do to fully realize all of the improvements we are striving for, our
manufacturing operations are running more efficiently as we enter the second quarter,'' he said.
About Sherwood Brands Inc.
Sherwood Brands, with headquarters in Rockville, manufactures, markets and distributes
confectionery products. The Company's branded products include COWS®, a line of soft and
chewy toffees and dairy butter and cream hard candies; RUGER® wafers, a line of wafer
cookies in chocolate, vanilla and strawberry flavors; ELANA®, Belgian chocolate bars; and
demitasse®, a line of tea biscuits in a variety of flavors.
Sherwood also manufactures hard candies, jelly beans, ALIEN® and TONGUE TATTOO®
lollipops, and packs gift baskets and gift items in its facility in Rhode Island.
The statements contained in this news release that are not historical facts may be deemed to
contain ''forward-looking statements'' within the meaning of federal securities laws with respect
to events, the occurrence of which involve risks and uncertainties, including, without limitation,
demand and competition for the Company's products, its ability to successfully integrate
acquisitions, the effects of general economic conditions, and other risks or uncertainties detailed
in the Company's Securities and Exchange Commission filings.
SHERWOOD BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
October 31,
1999 1998
Net Sales $ 12,866 $ 6,240
Cost of sales 8,897 4,179
Gross profit 3,969 2,061
Selling, general and administrative expenses 1,685 1,016
Pre-production costs -- 213
Salaries and related expenses 764 481
Total operating expenses 2,449 1,710
Income from operations 1,520 351
Interest income (expense), net (56) 40
Insurance claim, net 350 --
Other (expense) income 92 (19)
Total other income 386 21
Income before provision for taxes 1,906 372
Provision for taxes 699 119
Net income $ 1,207 $ 253
Earnings per basic and diluted share
Income from operations, net of tax $ 0.27 $ 0.07
Insurance claim, net of tax 0.06 --
Net income per share $ 0.33 $ 0.07
Weighted average common shares 3,700 3,700
SHERWOOD BRANDS, INC. AND SUBSIDIARIES |
