Royal Appliance Announces Q3 Results, Litigation Settlement
Oct 18, 2002
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Royal Appliance Mfg. Co., maker of Dirt Devil(R) floor care products, today announced net sales of U.S. $91.7 million for the third quarter ended Sept. 30, 2002, down 18 percent over the $111.5 million for the comparable period in 2001. Net sales for the first 9 months of 2002 were $272.3 million, down 7 percent over the first 9 months of 2001 net sales of $294.1 million.
The company reported net income of $3.1 million or $0.23 per share for the quarter ended Sept. 30, 2002, compared to net income of $4.1 million or $0.29 per share for the comparable period in 2001. Net income for the 9-month period ended Sept. 30, 2002, was $1.9 million or $0.14 per share, compared to net income of $5.6 million or $0.39 per share in the comparable period for 2001.
According to the company, the decrease in net sales for the 3 and 9 months ended Sept. 30 was primarily attributable to lower selling prices. Net sales for the third quarter of 2001 included initial shipments of the Platinum Force(TM) line of products into retail stores last year.
The company also announced today that the Hoover Company and Royal Appliance Mfg. Co. have reached an agreed settlement of all patent-related litigation that has been pending between the companies in the federal court for the Northern District of Ohio. Hoover has granted rights to Royal with regard to its existing carpet extractor patents. Royal has granted rights to Hoover with regard to its existing bagless upright vacuum cleaner patents. The settlement, which results in positive cash payments to Royal, puts an end to litigation that has been pending in the courts since early 2000.
The company expects to record earnings of at least $0.18 per share in the fourth quarter of 2002 from the settlement of the Hoover litigation and revenues from other licensing agreements of the Company's intellectual property, including the TeleZapper(TM).
Michael J. Merriman, CEO, stated, "Our business continues to be driven by our strategy of introducing innovative and proprietary consumer products to the mass market. Our quarterly results are affected by the timing of new product launches into retail. Last year we had the launch of the Platinum Force line and its related advertising campaign in the third quarter. This fourth quarter we will introduce to the market our fourth family of bagless upright vacuums. We remain cautious about the fourth quarter because of the continued emphasis on lower price point products and retailers' concern about the holiday season due to the current economic climate."
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