Samsonite Corporation

Samsonite Announces Fourth Quarter and Annual Operating Results

Denver (ots/PRNewswire) - SAMSONITE CORPORATION (OTC Bulletin Board: SAMC) today announced financial results for the fourth quarter and fiscal year ended January 31, 2005. Revenues and operating income for the fourth quarter were US$243.5 million and US$22.6 million, respectively, compared to revenues of US$215.3 million and operating income of US$23.7 million in the prior year quarter. Fiscal 2005 fourth quarter operating income includes a charge of US$2.8 million related to a restructuring plan to streamline certain operating overhead functions in Canada and the United States and to recognize impairment of certain apparel trademark intangible assets. Income to common stockholders was US$3.3 million or US$0.01 per weighted average share outstanding for the fourth quarter compared to US$4.0 million or US$0.02 per weighted average share outstanding in the prior year quarter. Revenues and operating income for the fiscal year ended January 31, 2005 were US$902.9 million and US$65.0 million, respectively, which compares to US$776.5 million and US$69.7 million in the prior year. Operating income for the current fiscal year includes charges totaling US$10.6 million for restructuring provisions and expenses and asset impairment charges related to the elimination of production operations in Spain and Mexico, the restructuring plan to streamline certain operating overhead functions in Canada and the United States, the impairment of certain apparel trademark intangible assets, and executive severance. Operating income for the prior fiscal year includes charges totaling US$5.7 million for restructuring provisions and asset impairments related to the closure of the Company's Nogales, Mexico manufacturing facility and the impairment of certain apparel trademark intangible assets. In addition, operating income includes a charge of US$4.0 million for stock compensation expense related to options granted to executive officers which was not incurred in the prior year. Loss to common stockholders for the fiscal year was US$22.7 million or US$0.10 per share, compared to US$27.5 million or US$0.22 per share in the prior fiscal year. Adjusted EBITDA (earnings before interest expense, taxes, depreciation, amortization and minority interest, adjusted for items which management believes should be excluded to reflect recurring operations, including stock compensation expense and executive severance, asset impairment charges, restructuring charges and expenses and to include realized currency hedge gains and losses) was US$31.3 million for the fourth quarter which compares with US$34.1 million for the same period in the prior year. Adjusted EBITDA for the year ended January 31, 2005 was US$100.7 million compared to US$93.1 million in the prior year. Cash provided by operating activities (as reflected in the Company's consolidated statements of cash flows) for the fourth quarter was US$26.9 million, which compares to US$21.8 million for the same period in the prior year. Cash provided by operating activities for the year ended January 31, 2005 was US$34.7 million compared to US$28.0 million in the prior year. A reconciliation of Adjusted EBITDA to cash provided by operating activities is included in the tables appearing at the end of this press release. Neither EBITDA nor Adjusted EBITDA is an accounting term used in generally accepted accounting principles. Chief Executive Officer, Marcello Bottoli, stated: "With the economic recovery in the first half of the year, increased marketing and advertising expenditures in the latter half, and the effects of the stronger euro, the Company's sales growth approximated 16% for the year. Expanded product diversity and increased market penetration drove sales growth in our non-luggage product categories, with casual and outdoor bag sales increasing 28%, and business case and computer bag sales increasing 17%. Fueled by new product introductions and marketing and advertising expenditures, sales of traditional luggage products also grew at 14%. Sales in each of our three major geographic regions grew at double-digit rates with Europe increasing 17.6%, the Americas at 12.8% and Asia at 33.6%. In addition, in January we completed negotiations and signed definitive agreements to commence our direct market entry into Japan by consummating a joint venture agreement with a local partner. We should begin to see the benefits of Japan's sales in our operations in the latter half of fiscal 2006. We continue to improve our cost structure by pursuing lower cost methods to produce and engineer our products and by streamlining operating functions to reduce expenses. Our gross profit margin improved 100 basis points over the prior year to 46.1% and Adjusted EBITDA increased US$7.6 million to US$100.7 million, despite increasing our investment in marketing and advertising expenses by US$14.9 million or 35%. We plan to increase investment in our brands by adding additional marketing and advertising expenditures to our operating budgets and by increasing expenditures in the product research and development area." Richard Wiley, Chief Financial Officer, commented: "During fiscal 2005 and the fourth quarter we continued to realize the benefits of our efforts to improve operating cash flows, income statement performance and balance sheet efficiency. Our programs to improve the Company's working capital efficiency coupled with our improved operating performance are the drivers to the improvement in the Company's cash flow and liquidity and to the repayment of debt. During the fourth quarter our debt, net of cash, declined US$18.8 million to US$298.0 million." Samsonite Corporation will hold a conference call with securities analysts to discuss this press release at 9:00 a.m. Eastern Daylight Time on Wednesday, April 13, 2005. Investors and interested members of the public are invited to listen to the discussion. The dial-in phone numbers are +1-877- 809-7599 in the U.S./Canada and +1-706-679-6135 for international calls, the conference name is Samsonite and the conference ID # is 5460037. The leader of the call is Marcello Bottoli. If you cannot attend this call, it will be played back through Friday, April 29, 2005. The playback numbers are +1-800- 642-1687 in the U.S./Canada and +1-706-645-9291 for international calls, and the conference ID # is 5460037. Samsonite is one of the world's largest manufacturers and distributors of luggage and markets luggage, casual bags, business cases and travel-related products under brands such as SAMSONITE(R), AMERICAN TOURISTER(R), LARK(R), HEDGREN(R), LACOSTE(R) and SAMSONITE(R) black label. A summary of the Company's calculation of Adjusted EBITDA, a reconciliation of Adjusted EBITDA to net cash provided by (used in) operating activities, and a summary of the Company's earnings (losses) under generally accepted accounting principles are attached as part of this release. The Company believes that disclosure of its operating earnings before interest, taxes, depreciation and amortization, as further adjusted to exclude goodwill and asset impairment charges, restructuring charges and expenses, executive severance and stock compensation expense and to include realized currency hedge gains and losses ("Adjusted EBITDA"), provides useful information regarding the Company's ability to incur and service debt, but that it should not be considered a substitute for operating income or cash flow from operations determined in accordance with generally accepted accounting principles. Other companies may calculate EBITDA, or derivations thereof, in a different manner than the Company. Adjusted EBITDA does not take into consideration substantial costs and cash flows of doing business, such as interest expense, income taxes, depreciation, amortization, restructuring charges and expenses, and stock compensation expense, executive severance and should not be considered in isolation to or as a substitute for other measures of performance. Adjusted EBITDA, as calculated by the Company, also excludes extraordinary items, discontinued operations, minority interest in earnings of subsidiaries, certain items of other income and expense and preferred stock dividends. Adjusted EBITDA does not represent funds available for discretionary use by the Company because those funds are required for debt service, capital expenditures, working capital, and other commitments and obligations. Neither EBITDA nor Adjusted EBITDA is an accounting term used in generally accepted accounting principles. Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They can often be recognized by words such as "proposed," "may," "will," "anticipate," "believe," "estimate," "intend," "plan" and "expect" and similar expressions. Variations on those or similar words, or the negative of those words, may also indicate forward-looking statements. Forward-looking statements involve numerous assumptions, known and unknown risks, uncertainties and other factors that may cause actual and future performance or achievements of the Company to be materially different from any future estimated results, performance or achievements express or implied by such forward-looking statements. These factors include, among others, events which affect travel levels (such as the impact of terrorist attacks, armed conflicts in the Middle East and other regions, the incidence or spread of contagious diseases (such as SARS), or other economic, political or public health or safety conditions or events that impact consumer confidence and spending); general economic and business conditions, including foreign currency exchange rate fluctuations; industry capacity; changes in consumer preferences; demographic changes; competition; changes in methods of distribution and technology; changes in political, social and economic conditions and local regulations; general levels of economic growth in emerging market countries; the loss of significant customers; completion of new product developments within anticipated time frames; changes in interest rates; and other factors that are beyond our control. More information on the risks, uncertainties and other factors affecting Samsonite Corporation may be obtained from the Company's filings with the United States Securities and Exchange Commission. Forward-looking statements are believed to be accurate as of the date of this release, and the Company undertakes no obligation to update or revise said statements as a result of future events. Samsonite Corporation Earnings and EBITDA Summary January 31, 2005 and 2004 (in thousands, except per share data) (all figures in US$) Three months ended Year ended January 31, January 31, 2005 2004 2005 2004 Net sales $243,506 215,271 902,896 776,451 Cost of goods sold 130,396 115,657 486,594 426,509 Gross profit 113,110 99,614 416,302 349,942 Selling, general and administrative expenses 87,298 69,912 341,551 273,213 Amortization and impairment of intangible assets 1,447 1,611 3,214 2,578 Asset impairment expense -- 2,658 671 2,658 Provision for restructuring operations 1,788 1,768 5,862 1,768 Operating income 22,577 23,665 65,004 69,725 Interest expense and amortization of debt issue costs (7,996) (9,982) (35,206) (43,528) Interest and other income (expense), net (1,697) (2,365) (22,323) (9,663) Income before income taxes and minority interests 12,884 11,318 7,475 16,534 Income tax expense (5,436) (3,700) (13,003) (10,431) Minority interests in earnings of subsidiaries (599) (389) (3,521) (2,548) Net income (loss) 6,849 7,229 (9,049) 3,555 Redeemable preferred stock dividends and accretion of preferred stock discount (3,532) (3,264) (13,683) (31,055) Net income (loss) to common stockholders $3,317 3,965 (22,732) (27,500) Income (loss) to common stockholders per share - basic: Net income (loss) per share $0.01 0.02 (0.10) (0.22) Weighted average shares outstanding 224,835 224,705 224,764 122,842 Income (loss) to common stockholders per share - diluted: Net income (loss) per share $0.01 0.02 (0.10) (0.22) Weighted average shares outstanding 654,684 224,705 224,764 122,842 Summary of Adjusted EBITDA Calculation Operating income $22,577 23,665 65,004 69,725 Depreciation expense 4,905 4,433 18,971 17,948 Amortization and impairment of intangible assets 1,447 1,611 3,214 2,578 Asset impairment and restructuring charges and expenses 1,937 4,426 9,702 4,426 Stock compensation expense 1,293 -- 4,031 -- Realized losses on foreign currency forward contracts (881) -- (230) (1,618) Adjusted EBITDA 31,278 34,135 100,692 93,059 Adjustments to reconcile Adjusted EBITDA to net cash provided by operating activities Restructuring related expenses, not previously accrued (172) -- (3,169) -- Cash provided by changes in operating assets and liabilities 9,025 2,334 587 1,117 Non-cash operating additions (subtractions) Amortization and write-off of debt issue costs and premium 629 571 6,500 3,110 Provision (recovery) for doubtful accounts (378) 330 1,540 723 Pension and other post- retirement plan losses 827 118 3,243 398 Other, net 590 (1,330) (25) (5,979) Income (expense) excluded from Adjusted EBITDA Interest income 224 168 549 396 Interest expense (7,996) (9,982) (35,206) (43,528) Income tax expense (5,436) (3,700) (13,003) (10,431) Minority interests in earnings of subsidiaries (599) (389) (3,521) (2,548) Other income (expense) items, net (1,093) (434) (23,461) (8,334) Net cash provided by operating activities $26,899 21,821 34,726 27,983 ots Originaltext: Samsonite Corporation Im Internet recherchierbar: http://www.presseportal.ch Contact: Richard Wiley of Samsonite Corporation, +1-303-373-6373

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