RUSS BERRIE CO INC 
By
(i) non-cash charge of
(ii)
(iii)
(iv) 0.7 million of certain financing expenses recorded in other expense
in connection with the Company's amended and restated Infant & Juvenile credit
facilities, of which
Excluding these unusual charges, adjusted consolidated pre-tax income for
the second quarter of 2008 was
Mr. Crain continued, "Our Gift segment results reflect continuing weak industry trends as well as difficult comparisons against the strong Shining Stars product line launch in the second quarter of last year. We recently received a positive reception from retailers to the introduction of a wide range of new seasonal and non-seasonal products at major tradeshows, although much lower attendance at the domestic gift tradeshows and ongoing weak demand for discretionary consumer goods indicate we may continue to see pressure on this business near-term. At the same time, we continue to implement and execute strategies to return this business to a profitable industry leadership position."
Second Quarter 2008
Consolidated net sales for the second quarter of 2008 increased 24.0% to
Consolidated gross profit in the second quarter of 2008 was
Consolidated SG&A expenses for the second quarter of 2008 were
As a result of the foregoing, consolidated net loss was
First Half of 2008
Consolidated net sales for the first half of 2008 increased 12.2% to
Consolidated net loss for the first half of 2008 was
Conference Call Information
The conference call, which will be held at
Non-GAAP Information
In this release, certain financial measures for the three and six months
ended
About
The Infant & Juvenile segment sells its products under the Sassy(R) and
KidsLine(R) brand names and select private label programs. The Kids Line
division designs and markets infant bedding and related nursery accessories.
The Sassy division offers products and collections such as infant development
toys, teething, feeding, bathing and baby care products. The businesses also
license brands for select categories and markets including Disney(R), Leap
Frog(TM) and Carter's(R). In
The Gift segment encompasses seasonal and everyday plush and other gift products. The Gift segment markets its products primarily under the RUSS(R) and APPLAUSE(R) brand names and also produces product in select markets and categories under licenses that include Shining Stars(R), Raggedy Ann(TM), Curious George(TM), Simpsons(TM) and a variety of other well-recognized trademarks.
More information about the Company can be found at: www.russberrie.com.
Note: This press release contains certain forward-looking statements. Additional written and oral forward-looking statements may be made by the Company from time to time in Securities and Exchange Commission (SEC) filings and otherwise. The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for forward-looking statements. These statements may be identified by the use of forward-looking words or phrases including, but not limited to, "anticipate", "believe", "expect", "project", "intend", "may", "planned", "potential", "should", "will" or "would". The Company cautions readers that results predicted by forward-looking statements, including, without limitation, those relating to the Company's future business prospects, revenues, working capital, liquidity, capital needs, order backlog, interest costs and income are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward- looking statements. Specific risks and uncertainties include, but are not limited to those set forth under Item 1A, "Risk Factors", of the Company's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the SEC. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
AT THE COMPANY AT FINANCIAL DYNAMICS
Marc S. Goldfarb Erica Pettit / Leigh Parrish
Senior Vice President & General Counsel General Information
201-337-9000 212-850-5600
(tables to follow)
RUSS BERRIE AND COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Share and Per Share Data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2008 2007 2008 2007
Net sales $87,693 $70,714 $163,617 $145,787
Cost of sales 59,190 42,346 104,556 86,092
Gross profit 28,503 28,368 59,061 59,695
Selling, general and
administrative
expenses 36,297 25,680 63,281 52,138
Operating income (7,794) 2,688 (4,220) 7,557
Other expenses (2,378) (1,169) (2,977) (2,291)
(Loss)/income before
income tax
provision (10,172) 1,519 (7,197) 5,266
Income tax provision 1,967 1,154 2,942 2,355
Net (loss)/income $(12,139) $365 $(10,139) $2,911
Net (loss)/income per
share:
Basic $(0.57) $0.02 $(0.48) $0.14
Diluted $(0.57) $0.02 $(0.48) $0.14
Weighted average shares:
Basic 21,300,000 21,080,000 21,300,000 21,078,000
Diluted 21,300,000 21,228,000 21,300,000 21,191,000
RUSS BERRIE AND COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Dollars in Thousands)
June 30, December 31,
2008 2007
(Unaudited) (Audited)
Cash and cash equivalents $16,919 $21,925
Accounts receivable, net 64,354 64,544
Inventories, net 71,359 59,069
Other current assets 5,954 5,419
Long-term assets 238,175 191,018
Total assets $396,761 $341,975
Short-term debt $46,827 $34,844
Other current liabilities 48,921 52,980
Long-term liabilities 105,057 49,512
Total liabilities 200,805 137,336
Shareholders' equity 195,956 204,639
Total liabilities and shareholders' equity $396,761 $341,975
RUSS BERRIE AND COMPANY, INC.
RECONCILIATION OF CONSOLIDATED GROSS PROFIT, SG&A AND
(LOSS)/INCOME BEFORE PROVISION FOR INCOME TAX
(Dollars in Thousands, Except per Share Data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Gross profit, as reported $28,503 $28,368 $59,061 $59,695
Exclude: Inventory
charge 1,643 - 1,643 -
Exclude: Write-off
of website costs 1,015 - 1,015 -
Exclude: Asset
impairment charge 342 - 342 -
Adjusted gross profit $31,503 $28,368 $62,061 $59,695
Adjusted gross profit
margin 35.7 % 40.1 % 37.9 % 40.9 %
Selling, general and
administrative
expense, as reported $36,297 $25,680 $63,281 $52,138
Exclude: Asset
impairment charge (6,700) - (6,700) -
Adjusted selling, general
and administrative expense $29,597 $25,680 $56,581 $52,138
Adjusted SG&A as a
percentage of sales 33.8 % 36.3 % 34.6 % 35.8 %
(Loss)/income before
income tax
provision, as reported $(10,172) $1,519 $(7,197) $5,266
Exclude: Inventory
charge 1,643 - 1,643 -
Exclude: Write-off
of website costs 1,015 - 1,015 -
Exclude: Asset
impairment charge 7,042 - 7,042 -
Exclude: Interest
expense 728 - 728 -
Adjusted income before
income tax provision $256 $1,519 $3,231 $5,266
RUSS BERRIE AND COMPANY, INC.
RECONCILIATION OF GIFT SEGMENT GROSS PROFIT AND SG&A
(Dollars in Thousands, Except per Share Data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Gross profit, as reported $8,300 $14,304 $23,703 $30,754
Exclude: Inventory
charge 1,643 - 1,643 -
Exclude: Write-off of
website costs 1,015 - 1,015 -
Exclude: Asset
impairment charge 342 - 342 -
Adjusted gross profit $11,300 $14,304 $26,703 $30,754
Adjusted gross profit margin 43.4 % 42.3 % 44.3 % 43.8 %
Selling, general and
administrative
expense, as reported $23,593 $18,893 $43,260 $38,659
Exclude: Asset
impairment charge (6,700) - (6,700) -
Adjusted selling, general
and administrative expense $16,893 $18,893 $36,560 $38,659
Adjusted SG&A as a
percentage of sales 64.8 % 55.8 % 60.6 % 55.0 %
SOURCE
