Lillian Vernon Corporation Reports Fiscal Year 2001 Results And Declares Quarterly Dividend

Apr 26, 2001, 01:00 ET from Lillian Vernon Corporation

    RYE, N.Y., April 26 /PRNewswire/ -- Lillian Vernon Corporation (Amex:   LVC)
 reported results for its fourth quarter and fiscal year ended February 24,
 2001.
     Revenues for the fiscal year 2001 increased to $287.1 million, compared to
 $281.0 million last year. Revenues rose primarily because of the acquisition
 of Rue de France, Inc., an upscale catalog and website of home furnishings, in
 April 2000.
     As previously announced, the Company recorded restructuring and severance
 charges of $2,050,000 (pre-tax), or $.15 cents per share, for a company-wide
 reduction of its salaried workforce and the consolidation of the Company's Las
 Vegas Call Center into its National Distribution Center in Virginia Beach,
 Virginia. In addition, the Company recorded a one-time cumulative effect of
 $640,000 ($.07 per share) as a result of the adoption of SEC Staff Accounting
 Bulletin "SAB" No. 101 relating to revenue recognition. The Company also
 incurred a tax charge of $780,000 ($.09 per share) related to the expiration
 of charitable contribution tax carryforwards.
     Including these charges, the net loss for the fiscal year was
 $(1.4) million, or $(.16) per share, compared to net income of  $6.3 million,
 or $.69 per share, the prior year.  Before the cumulative effect of adopting
 SAB 101 in Fiscal 2001, and excluding the restructuring charge and the effect
 of the expiration of tax carryforwards, the Company would have had net income
 of $1.4 million, or $.15 per share, compared to $6.3 million or $.69 per share
 last year.  The principal reason for the decline in fiscal 2001 was the weak
 economy during the holiday shopping season, which reduced response to the
 Company's catalogs.
     Revenues for the fourth quarter were $95.2 million compared to
 $83.3 million last year, including $11.5 million of revenues in the current
 quarter from the timing of revenue recognition due to the adoption of SAB 101.
 Excluding the effect of SAB 101, revenues were flat on higher catalog
 circulation, principally caused by the slowing retail economy and weak
 consumer spending. The net loss for the fourth quarter was $(2.9) million, or
 $(.33) per share, including a benefit from the adoption of SAB 101 of
 $.18 per share, partially offset by restructuring charges of $.12 per share.
 The Company reported net income of $.9 million, or $.10 per share, in the
 fourth quarter last year, which included other income of $.05 per share from
 the sale of stock received upon the demutualization of an insurance company.
 Without the effect of SAB 101 and the restructuring charges in the fourth
 quarter of Fiscal 2001 and the income from the sale of stock in Fiscal 2000,
 the loss per share would have been ($.39) in the fourth quarter of Fiscal 2001
 compared to $.05 earnings per share in Fiscal 2000. The primary reason for the
 reduction in income in the fourth quarter of Fiscal 2001 was lower response to
 the Company's catalogs.
     Lillian Vernon, Chairman and Chief Executive Officer, stated, "We are
 disappointed with these results and are working diligently to improve sales
 and profitability.  Our Company remains strong with $32.0 million of cash
 reserves and no debt outstanding.  Orders placed during the year through our
 internet site more than doubled over last year.  We will launch an upgraded
 consumer website in the fall to build on the success of our online sales and
 continue to attract new customers.  Also, sales from our fourteen retail
 outlet stores are above our expectations."
     The Company's financial position remains strong.  Inventory was
 $31.9 million at the end of the fiscal year, compared to $33.9 million last
 year. Cash and investments as of April 25, 2001 were approximately
 $32.0 million. The Company has no debt or short-term borrowings outstanding.
     As of April 25, 2001, the Company has repurchased 1,895,092 shares of its
 common stock since October 1995, and has available for repurchase
 604,908 shares under its current open market stock repurchase program.
     On April 26, 2001, the Board of Directors declared the regular quarterly
 cash dividend of $.08 per share, payable on June 1, 2001 to all stockholders
 of record on May 15, 2001.
 
     Lillian Vernon Corporation is a 50 year-old specialty catalog and online
 retailer that markets gift, household, gardening, kitchen, Christmas, and
 children's products.  The Company is one of the largest specialty catalogs in
 the United States.  Lillian Vernon Corporation and its subsidiaries publish
 nine catalog titles:  Lillian Vernon, Lilly's Kids, Christmas Memories, Neat
 Ideas, Favorites, Personalized Gifts, Rue de France, Sales & Bargains, and
 Lillian Vernon Gardening. Lillian Vernon's online catalogs are accessible at
 http://www.lillianvernon.com and http://www.ruedefrance.com.  The Company also
 sells its products in the Business-to-Business and Outlet Store markets.
 
     Except for the historical information contained herein, statements
 included in this release may constitute forward-looking statements within the
 meaning of the Private Securities Litigation Reform Act of 1995.  These
 statements relate to the Company's future performance, including without
 limitation, statements with respect to the Company's anticipated results of
 operations, revenues and/or level of business.  Such statements represent the
 Company's current expectations only and are subject to certain risks,
 assumptions and uncertainties.  Should one or more of these risks, or
 uncertainties materialize, or should underlying assumptions prove incorrect,
 actual results may vary materially from those anticipated or projected.
     Among the factors that could cause actual results to materially differ
 include the overall strength of the economy, the level of consumer confidence
 and spending, customer preferences, circulation changes and other initiatives,
 increased competition in the direct mail industry and from the growing
 Internet market, changes in government regulations, risks associated with the
 social, political, economic and other conditions affecting foreign sourcing,
 possible future increases in operating costs including postage and paper
 costs, and other factors which are discussed in the Company's 2000 Annual
 Report and Form 10-K for the fiscal year ended February 26, 2000.  The Company
 undertakes no obligation to publicly update or revise any forward-looking
 statements, whether as a result of new information, future events or
 otherwise.
 
                           LILLIAN VERNON CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                                     Fourth Quarter Ended
                                            February       February    February
                                                 24,         24,         26,
                                                2001        2001        2000
                                                         Without The
                                                           Effect
                                                         of SAB 101(2)
 
        Revenues(1)                          $95,159     $83,682     $83,344
        Costs and expenses:
          Product and delivery costs(1)       56,215      50,755      48,179
          Selling, general and
           administrative expenses            41,834      38,224      34,482
          Restructuring and other
           costs(3)                            1,690       1,690           --
        Other income (4)                          --         --        (746)
        Interest (income) expense - net         (319)       (319)       (337)
        Income (loss) before income taxes     (4,261)     (6,668)      1,766
        Provision for (benefit from)
         income taxes                         (1,384)     (2,250)        885
        Income (loss) before cumulative
         effect of
            accounting change(2)              (2,877)     (4,418)        881
        Cumulative effect of accounting
         change(2)                                --          --          --
        Net Income (Loss)                    ($2,877)    ($4,418)       $881
 
        Basic and Diluted earnings (loss)
         per share:(2)
        Earnings (loss) before cumulative
         effect
            of accounting change               $(.33)      $(.51)        $.10
        Cumulative effect of accounting
         change                                    --          --          --
                                               $(.33)      $(.51)        $.10
        Weighted average number of common
         shares -
          Basic                                8,685       8,685       8,983
 
        Weighted average number of common
         shares -
          Diluted                              8,685       8,685       8,983
 
 
                           LILLIAN VERNON CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                    (In thousands, except per share amounts)
                                                     Twelve Months Ended
                                           February     February    February
                                                  24,         24,         26,
                                                 2001        2001        2000
                                                          Without The
                                                             Effect
                                                         of SAB 101(2)
 
        Revenues(1)                          $287,094    $286,504    $281,044
 
        Costs and expenses:
          Product and delivery costs(1)       162,647     162,364     156,640
          Selling, general and
           administrative expenses            123,398     123,214     115,792
          Restructuring and other costs(3)      2,050       2,050          --
        Other income (4)                           --         --         (746)
        Interest (income) expense - net        (1,176)     (1,176)       (992)
        Income (loss) before income taxes         175          52      10,350
        Provision for (benefit from)
         income taxes                             913         869       4,061
        Income (loss) before cumulative
         effect of
            accounting change(2)                 (738)       (817)      6,289
        Cumulative effect of accounting
         change(2)                                640          --          --
        Net Income (Loss)                     ($1,378)      ($817)     $6,289
 
        Basic and Diluted earnings (loss)
         per share:(2)
        Earnings (loss) before cumulative
         effect
            of accounting change                $(.09)      $(.09)        $.69
        Cumulative effect of accounting
         change                                  (.07)         --           --
                                                $(.16)      $(.09)        $.69
 
        Weighted average number of common
         shares -
          Basic                                 8,740       8,740       9,128
 
        Weighted average number of common
         shares -
          Diluted                               8,740       8,740       9,130
 
       (1) In the fourth quarter of Fiscal 2001, the Company adopted the
           provisions of Emerging Issues Task Force ("EITF") 00-10, "Accounting
           for Shipping and Handling Fees and Costs" which requires that
           amounts billed to customers for shipping and handling fees be
           classified as revenues.  All periods shown reflect EITF 00-10. The
           implementation of EITF 00-10 resulted in additional fourth quarter
           revenues of $11,658 and $11,817 for the quarter ended February 24,
           2001 and February 26, 2000, respectively, and $39,156 and $39,271
           for the years ended February 24, 2001 and  February 26, 2000,
           respectively.
 
       (2) In the fourth quarter of Fiscal 2001, the Company adopted SEC Staff
           Accounting Bulletin 101 "Revenue Recognition in Financial
           Statements" ("SAB 101").  The cumulative effect of implementing SAB
           101 was a charge of $640 for Fiscal 2001. In addition, the
           implementation of SAB 101, which is reflected in the statements of
           operations for the fourth quarter and fiscal year ended February 24,
           2001, resulted in additional revenues of  $11,477 and $590,
           respectively, as compared to the fourth quarter and fiscal year
           ended February 26, 2000. There is additional net income of $1,540
           and $79, respectively, when compared to the fourth quarter and the
           fiscal year ended February 26, 2000.  Earnings per share increased
           by $.18 and $.01 for the fourth quarter and fiscal year ended
           February 24, 2001, respectively, as compared to the fourth quarter
           and fiscal   year ended February 26, 2000. The columns labeled
           "Without The Effect of SAB 101" are presented above for comparative
           purposes.
 
       (3) On March 9, 2001, the Company announced a restructuring plan. As a
           result of the restructuring plan and other severance costs, the
           Company incurred a charge of $1,690 ($.12 per share) in the fourth
           quarter of Fiscal 2001 and $2,050 ($.15 per share) for the year
           ended February 24, 2001.
 
       (4) In the fourth quarter of Fiscal 2000, the Company recorded other
           income principally relating to the sale of stock received from the
           demutualization of an insurance company.
 
                    LILLIAN  VERNON  CORPORATION
                    CONDENSED CONSOLIDATED  BALANCE  SHEETS
                             (Dollars in thousands)
 
                                               February 24,        February 26,
             ASSETS                                    2001               2000
           Cash and cash equivalents                $34,180            $35,364
           Accounts receivable, net                  19,483             22,403
           Merchandise inventories                   31,944             33,926
           Other current assets                       5,844              5,596
             Total current assets                    91,451             97,289
 
           Property, plant and equipment,
            net                                      33,841             35,092
           Deferred catalog costs                     8,797              5,624
           Other assets                               5,660              3,313
             Total assets                          $139,749           $141,318
 
             LIABILITIES AND
              STOCKHOLDERS' EQUITY
               Current liabilities                  $28,728            $22,722
 
           Total other liabilities                    4,048              4,218
 
           Total stockholders' equity               106,973            114,378
             Total liabilities and
              stockholders' equity                 $139,749           $141,318
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X14705794
 
 

SOURCE Lillian Vernon Corporation
    RYE, N.Y., April 26 /PRNewswire/ -- Lillian Vernon Corporation (Amex:   LVC)
 reported results for its fourth quarter and fiscal year ended February 24,
 2001.
     Revenues for the fiscal year 2001 increased to $287.1 million, compared to
 $281.0 million last year. Revenues rose primarily because of the acquisition
 of Rue de France, Inc., an upscale catalog and website of home furnishings, in
 April 2000.
     As previously announced, the Company recorded restructuring and severance
 charges of $2,050,000 (pre-tax), or $.15 cents per share, for a company-wide
 reduction of its salaried workforce and the consolidation of the Company's Las
 Vegas Call Center into its National Distribution Center in Virginia Beach,
 Virginia. In addition, the Company recorded a one-time cumulative effect of
 $640,000 ($.07 per share) as a result of the adoption of SEC Staff Accounting
 Bulletin "SAB" No. 101 relating to revenue recognition. The Company also
 incurred a tax charge of $780,000 ($.09 per share) related to the expiration
 of charitable contribution tax carryforwards.
     Including these charges, the net loss for the fiscal year was
 $(1.4) million, or $(.16) per share, compared to net income of  $6.3 million,
 or $.69 per share, the prior year.  Before the cumulative effect of adopting
 SAB 101 in Fiscal 2001, and excluding the restructuring charge and the effect
 of the expiration of tax carryforwards, the Company would have had net income
 of $1.4 million, or $.15 per share, compared to $6.3 million or $.69 per share
 last year.  The principal reason for the decline in fiscal 2001 was the weak
 economy during the holiday shopping season, which reduced response to the
 Company's catalogs.
     Revenues for the fourth quarter were $95.2 million compared to
 $83.3 million last year, including $11.5 million of revenues in the current
 quarter from the timing of revenue recognition due to the adoption of SAB 101.
 Excluding the effect of SAB 101, revenues were flat on higher catalog
 circulation, principally caused by the slowing retail economy and weak
 consumer spending. The net loss for the fourth quarter was $(2.9) million, or
 $(.33) per share, including a benefit from the adoption of SAB 101 of
 $.18 per share, partially offset by restructuring charges of $.12 per share.
 The Company reported net income of $.9 million, or $.10 per share, in the
 fourth quarter last year, which included other income of $.05 per share from
 the sale of stock received upon the demutualization of an insurance company.
 Without the effect of SAB 101 and the restructuring charges in the fourth
 quarter of Fiscal 2001 and the income from the sale of stock in Fiscal 2000,
 the loss per share would have been ($.39) in the fourth quarter of Fiscal 2001
 compared to $.05 earnings per share in Fiscal 2000. The primary reason for the
 reduction in income in the fourth quarter of Fiscal 2001 was lower response to
 the Company's catalogs.
     Lillian Vernon, Chairman and Chief Executive Officer, stated, "We are
 disappointed with these results and are working diligently to improve sales
 and profitability.  Our Company remains strong with $32.0 million of cash
 reserves and no debt outstanding.  Orders placed during the year through our
 internet site more than doubled over last year.  We will launch an upgraded
 consumer website in the fall to build on the success of our online sales and
 continue to attract new customers.  Also, sales from our fourteen retail
 outlet stores are above our expectations."
     The Company's financial position remains strong.  Inventory was
 $31.9 million at the end of the fiscal year, compared to $33.9 million last
 year. Cash and investments as of April 25, 2001 were approximately
 $32.0 million. The Company has no debt or short-term borrowings outstanding.
     As of April 25, 2001, the Company has repurchased 1,895,092 shares of its
 common stock since October 1995, and has available for repurchase
 604,908 shares under its current open market stock repurchase program.
     On April 26, 2001, the Board of Directors declared the regular quarterly
 cash dividend of $.08 per share, payable on June 1, 2001 to all stockholders
 of record on May 15, 2001.
 
     Lillian Vernon Corporation is a 50 year-old specialty catalog and online
 retailer that markets gift, household, gardening, kitchen, Christmas, and
 children's products.  The Company is one of the largest specialty catalogs in
 the United States.  Lillian Vernon Corporation and its subsidiaries publish
 nine catalog titles:  Lillian Vernon, Lilly's Kids, Christmas Memories, Neat
 Ideas, Favorites, Personalized Gifts, Rue de France, Sales & Bargains, and
 Lillian Vernon Gardening. Lillian Vernon's online catalogs are accessible at
 http://www.lillianvernon.com and http://www.ruedefrance.com.  The Company also
 sells its products in the Business-to-Business and Outlet Store markets.
 
     Except for the historical information contained herein, statements
 included in this release may constitute forward-looking statements within the
 meaning of the Private Securities Litigation Reform Act of 1995.  These
 statements relate to the Company's future performance, including without
 limitation, statements with respect to the Company's anticipated results of
 operations, revenues and/or level of business.  Such statements represent the
 Company's current expectations only and are subject to certain risks,
 assumptions and uncertainties.  Should one or more of these risks, or
 uncertainties materialize, or should underlying assumptions prove incorrect,
 actual results may vary materially from those anticipated or projected.
     Among the factors that could cause actual results to materially differ
 include the overall strength of the economy, the level of consumer confidence
 and spending, customer preferences, circulation changes and other initiatives,
 increased competition in the direct mail industry and from the growing
 Internet market, changes in government regulations, risks associated with the
 social, political, economic and other conditions affecting foreign sourcing,
 possible future increases in operating costs including postage and paper
 costs, and other factors which are discussed in the Company's 2000 Annual
 Report and Form 10-K for the fiscal year ended February 26, 2000.  The Company
 undertakes no obligation to publicly update or revise any forward-looking
 statements, whether as a result of new information, future events or
 otherwise.
 
                           LILLIAN VERNON CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
                                                     Fourth Quarter Ended
                                            February       February    February
                                                 24,         24,         26,
                                                2001        2001        2000
                                                         Without The
                                                           Effect
                                                         of SAB 101(2)
 
        Revenues(1)                          $95,159     $83,682     $83,344
        Costs and expenses:
          Product and delivery costs(1)       56,215      50,755      48,179
          Selling, general and
           administrative expenses            41,834      38,224      34,482
          Restructuring and other
           costs(3)                            1,690       1,690           --
        Other income (4)                          --         --        (746)
        Interest (income) expense - net         (319)       (319)       (337)
        Income (loss) before income taxes     (4,261)     (6,668)      1,766
        Provision for (benefit from)
         income taxes                         (1,384)     (2,250)        885
        Income (loss) before cumulative
         effect of
            accounting change(2)              (2,877)     (4,418)        881
        Cumulative effect of accounting
         change(2)                                --          --          --
        Net Income (Loss)                    ($2,877)    ($4,418)       $881
 
        Basic and Diluted earnings (loss)
         per share:(2)
        Earnings (loss) before cumulative
         effect
            of accounting change               $(.33)      $(.51)        $.10
        Cumulative effect of accounting
         change                                    --          --          --
                                               $(.33)      $(.51)        $.10
        Weighted average number of common
         shares -
          Basic                                8,685       8,685       8,983
 
        Weighted average number of common
         shares -
          Diluted                              8,685       8,685       8,983
 
 
                           LILLIAN VERNON CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                    (In thousands, except per share amounts)
                                                     Twelve Months Ended
                                           February     February    February
                                                  24,         24,         26,
                                                 2001        2001        2000
                                                          Without The
                                                             Effect
                                                         of SAB 101(2)
 
        Revenues(1)                          $287,094    $286,504    $281,044
 
        Costs and expenses:
          Product and delivery costs(1)       162,647     162,364     156,640
          Selling, general and
           administrative expenses            123,398     123,214     115,792
          Restructuring and other costs(3)      2,050       2,050          --
        Other income (4)                           --         --         (746)
        Interest (income) expense - net        (1,176)     (1,176)       (992)
        Income (loss) before income taxes         175          52      10,350
        Provision for (benefit from)
         income taxes                             913         869       4,061
        Income (loss) before cumulative
         effect of
            accounting change(2)                 (738)       (817)      6,289
        Cumulative effect of accounting
         change(2)                                640          --          --
        Net Income (Loss)                     ($1,378)      ($817)     $6,289
 
        Basic and Diluted earnings (loss)
         per share:(2)
        Earnings (loss) before cumulative
         effect
            of accounting change                $(.09)      $(.09)        $.69
        Cumulative effect of accounting
         change                                  (.07)         --           --
                                                $(.16)      $(.09)        $.69
 
        Weighted average number of common
         shares -
          Basic                                 8,740       8,740       9,128
 
        Weighted average number of common
         shares -
          Diluted                               8,740       8,740       9,130
 
       (1) In the fourth quarter of Fiscal 2001, the Company adopted the
           provisions of Emerging Issues Task Force ("EITF") 00-10, "Accounting
           for Shipping and Handling Fees and Costs" which requires that
           amounts billed to customers for shipping and handling fees be
           classified as revenues.  All periods shown reflect EITF 00-10. The
           implementation of EITF 00-10 resulted in additional fourth quarter
           revenues of $11,658 and $11,817 for the quarter ended February 24,
           2001 and February 26, 2000, respectively, and $39,156 and $39,271
           for the years ended February 24, 2001 and  February 26, 2000,
           respectively.
 
       (2) In the fourth quarter of Fiscal 2001, the Company adopted SEC Staff
           Accounting Bulletin 101 "Revenue Recognition in Financial
           Statements" ("SAB 101").  The cumulative effect of implementing SAB
           101 was a charge of $640 for Fiscal 2001. In addition, the
           implementation of SAB 101, which is reflected in the statements of
           operations for the fourth quarter and fiscal year ended February 24,
           2001, resulted in additional revenues of  $11,477 and $590,
           respectively, as compared to the fourth quarter and fiscal year
           ended February 26, 2000. There is additional net income of $1,540
           and $79, respectively, when compared to the fourth quarter and the
           fiscal year ended February 26, 2000.  Earnings per share increased
           by $.18 and $.01 for the fourth quarter and fiscal year ended
           February 24, 2001, respectively, as compared to the fourth quarter
           and fiscal   year ended February 26, 2000. The columns labeled
           "Without The Effect of SAB 101" are presented above for comparative
           purposes.
 
       (3) On March 9, 2001, the Company announced a restructuring plan. As a
           result of the restructuring plan and other severance costs, the
           Company incurred a charge of $1,690 ($.12 per share) in the fourth
           quarter of Fiscal 2001 and $2,050 ($.15 per share) for the year
           ended February 24, 2001.
 
       (4) In the fourth quarter of Fiscal 2000, the Company recorded other
           income principally relating to the sale of stock received from the
           demutualization of an insurance company.
 
                    LILLIAN  VERNON  CORPORATION
                    CONDENSED CONSOLIDATED  BALANCE  SHEETS
                             (Dollars in thousands)
 
                                               February 24,        February 26,
             ASSETS                                    2001               2000
           Cash and cash equivalents                $34,180            $35,364
           Accounts receivable, net                  19,483             22,403
           Merchandise inventories                   31,944             33,926
           Other current assets                       5,844              5,596
             Total current assets                    91,451             97,289
 
           Property, plant and equipment,
            net                                      33,841             35,092
           Deferred catalog costs                     8,797              5,624
           Other assets                               5,660              3,313
             Total assets                          $139,749           $141,318
 
             LIABILITIES AND
              STOCKHOLDERS' EQUITY
               Current liabilities                  $28,728            $22,722
 
           Total other liabilities                    4,048              4,218
 
           Total stockholders' equity               106,973            114,378
             Total liabilities and
              stockholders' equity                 $139,749           $141,318
 
                     MAKE YOUR OPINION COUNT -- Click Here
                http://tbutton.prnewswire.com/prn/11690X14705794
 
 SOURCE  Lillian Vernon Corporation