Jacuzzi Brands, Inc. (West Palm Beach, FLA, U.S.), a producer of bath and plumbing products for the residential, commercial and institutional markets, announced earnings of the fourth quarter ended Oct. 2, 2004.
Net sales for the quarter increased 5.0 percent to U.S. $343.7 million compared with net sales of $327.4 million for the fourth quarter of fiscal 2003. Operating income for the quarter increased 78.7 percent to $22.7 million compared with operating income of $12.7 million for the fourth quarter of fiscal 2003.
Net earnings for the quarter improved to $5.5 million, or $0.07 per share, from a net loss of $16.3 million, or $0.22 per share, in the fourth quarter of fiscal 2003.
The increase in fiscal 2004 fourth-quarter sales includes a $9.3-million benefit from favorable currency exchange rates, while the increase in fiscal 2004 fourth-quarter operating income includes a $1.0-million benefit. Operating income includes $13.7 million of restructuring charges, while fiscal 2003 fourth quarter operating income for the quarter includes $11.6 million of restructuring charges and $2.5 million of charges related to a note write-off.
Fiscal 2004 fourth-quarter net earnings includes restructuring charges of $7.1 million (net of tax), a note write-off of $1.5 million (net of tax), and debt restructuring costs of $11.7 million (net of tax).
Fiscal 2004 fourth-quarter sales of $236.3 million increased 3.0 percent compared to the same period in fiscal 2003, led by higher sales of domestic whirlpool baths, reflecting strong performance in both jetted and non-jetted baths. The company said sales in the European market were also strong, primarily due to growth in the home center sector. Favorable currency exchange rates contributed $9.3 million to the fourth-quarter sales increase. However, the favorable currency exchange rates benefit was offset by lower sales at Elijer due to the rationalization of its unprofitable product lines and softness in the domestic spa business, Jacuzzi said.
Fourth-quarter operating income increased by $13.3 million to $3.5 million due primarily to strong sales growth in the whirlpool bath business, and marginal growth in both the domestic spa and whirlpool bath businesses.
Fiscal Year Summary
Net sales for fiscal 2004 were up 13.0 percent to $1.35 billion as compared to net sales of $1.19 billion for fiscal 2003. The increase was the result of strong sales in the Bath Products and Plumbing Products segments, the company said. The increase in the Bath Products segment resulted from continued growth in the domestic spa and bath business, due to an expanded specialty retailer base, as well as growth in the European bath and sink businesses, which was primarily the result of continued higher sales to the home center channel.
Fiscal 2004 sales in the Bath Products segment also included a $38.3 million benefit from favorable currency exchange rates. Sales growth in the Bath Products segment was partially offset by an approximate 12 percent decrease in sales at Elijer, as a result of the rationalization of unprofitable product lines.
Fiscal 2004 earnings from continuing operations of $0.38 per share include restructuring charges of $22.3 million ($13.6 million, net of tax) or $0.18 per share. The company reported fiscal 2004 earnings before restructuring of $0.56 per share. For the year, the Bath Products segment increased operating margins before restructuring by 260 basis points, from 2.7 percent to 5.3 percent of sales, above the company's goal of 150 to 200 basis points in improvement per year.
The company expects to incur additional restructuring charges of approximately $6.6 million ($4.4 million, net of tax), or $0.06 per share, in fiscal 2005 related to the Tupelo, Ford City, Salem, and shared services initiatives. Each of these actions is part of the company's previously announced ongoing initiatives to improve the operating performance of the Bath Products segment.
As previously announced, the company expects to report net earnings for its fiscal year ending Sept. 30, 2005 of between $0.61 to $0.65 per diluted share, which will include restructuring charges of $0.06 per diluted share related to plant closings and other actions initiated during fiscal 2004. Excluding these charges, net earnings for fiscal 2005 are expected to be in a range of $0.67 per diluted share to $0.71 per diluted share.
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