L. L. Knickerbocker Reports First Quarter Results
LAKE FOREST, Calif., May 7 /PRNewswire/ -- The L. L. Knickerbocker Co., Inc. (Nasdaq:
KNIC - news) today announced results of operations for the first quarter of fiscal 1998 ended
March 31, 1998.
Revenues for the first quarter of fiscal 1998 were $11,482,000, with gross profit of $6,626,000,
compared to revenues of $13,441,000 and gross profit of $6,797,000 last year. As a percentage of
net sales, gross profit for the first quarter increased to 57.7% from 50.6% last year. Net income was
$239,000, or $.01 per share, as compared to a net loss of ($3,839,000), or ($.23) per share,
reported for the first quarter of fiscal 1997. Weighted number of average shares outstanding on a
diluted basis in 1998 and 1997 were 20,696,985 and 16,933,273, respectively.
Advertising expense increased to $2,413,000 from $1,577,000 in the first quarter due primarily to
increases in the Company's advertising costs in connection with the expansion of its direct response
business. SG&A decreased to $5,771,000 in 1998 from $6,269,000 in 1997. The decrease in
SG&A is primarily attributable to the Company's focus on reducing its fixed, general and
administrative costs of its collectible division, and aggressive consolidation of facilities and other
operational efficiencies. Interest expense decreased to $581,000 from $3,093,000, due primarily to
a combination of a restructuring charge and conversion discounts that occurred in the first quarter of
1997 associated with the Company's 1996 debenture offering. Other income increased to
$2,830,000 from other expense of ($113,000) in 1997. The increase relates primarily to a gain
recognized in a sale of 2% of the Company's investment in Pure Energy Corporation. Impacting net
income was $553,000 of non-cash charges related to the Company's investment in PEC.
''A delay in the development of certain products contributed to the reduction in sales in the first
quarter,'' said Robert L. West, Chief Operating Officer. ''Our plan to enhance gross profit margins
and cut SG&A costs is working, both of which improved in the first quarter. The increase in
advertising costs is expected to generate sales opportunities quarter by quarter on a go-forward
basis. Our goal to enhance operating profit and net income in 1998 is being addressed daily through
intensified focus on our core business.''
The L. L. Knickerbocker Co., Inc. is a diverse international company with operations in three
strategic divisions, collectibles, jewelry and investments. The Company markets all of its products
worldwide. Through its investments division, it has a 50% interest in Arkenol Asia, Inc., an
approximate 32% equity interest in Pure Energy Corporation and a 28% equity interest in Ontro, Inc.
For more information visit The L. L. Knickerbocker Co. web site 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.
SOURCE: L. L. Knickerbocker Co., Inc.
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