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First Quarter 2002 Conference Call April 24, 2002
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2 Safe Harbor Statement P P ortions of this presentation are forward-looking and, as such, reflect only the Company’s best assessment at this time. Investors are cautioned that forward-looking statements involve risks and uncertainty, that actual results may differ materially from such statements and that investors should not place undue reliance on such statements. Factors that may affect actual results include, but are not limited to potential regulations; the Company’s ability to effectively manufacture, market and distribute new products; the success of the Company’s operating plans; regional weather conditions; and the condition of the industry and the economy. For a further discussion of risk factors, investors should refer to the Company’s Securities and Exchange Commission reports, including, but not limited to, Form 10-K for the year ended December 31, 2001.
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3 Debt refinancing - pre tax charge of $4.6 million; $2.9 million after taxesDebt refinancing - pre tax charge of $4.6 million; $2.9 million after taxes FASB No. 142 adoption - all goodwill has been expensed; pre-tax charge of $7.3 million; $4.6 million after taxesFASB No. 142 adoption - all goodwill has been expensed; pre-tax charge of $7.3 million; $4.6 million after taxes Extraordinary Charges
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4 Statement of Operations
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5 Consolidated Balance Sheet
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6 Consolidated Statement of Cash Flow
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7 Michael P. DiMino, President & Chief Executive Officer
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8 Management Focus in 2002 Customer loyalty and satisfactionCustomer loyalty and satisfaction Shareholder valueShareholder value Business process improvementBusiness process improvement Expense controls and capital disciplinesExpense controls and capital disciplines Enhancement of associate skills and productivityEnhancement of associate skills and productivity
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9 We know what creates value Sales growthSales growth Return on invested capital (ROIC) greater than the cost of capitalReturn on invested capital (ROIC) greater than the cost of capital EPS attainment to current year guidanceEPS attainment to current year guidance
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10 *2002 (1Q Actual & Plan) Sales Seasonality
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11 First Quarter Sales - 3% Comparative Increase over 2001
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12 First Quarter Sales - Channels
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13 First Quarter Sales - Products *Other includes Pest Control, Golf Accessories, Irrigation, and Miscellaneous.
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14 Gross Profit on Sales - $
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15 Gross Profit on Sales - %
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16 Warehouse & Delivery Expenses - $
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17 Warehouse & Delivery - % of Sales
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18 Selling Expenses - $
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19 Selling Expense - % of Sales
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20 General & Administrative Expenses - $ (excludes severance costs)
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21 Interest Expense
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22 Net Loss Before Extraordinary Charge and Change in Accounting
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23 “Net Loss Before Extraordinary Items & Severance Costs” is not a measure of financial performance under GAAP. Net Loss Before Extraordinary Charge, Change in Accounting & Severance
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24 “EPS Loss Before Extraordinary Items & Severance Costs” is not a measure of financial performance under GAAP. EPS Loss Before Extraordinary Charge, Change in Accounting & Severance Costs
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25 Working Capital Investment
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26 Borrowings Under Debt Facilities
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27 2002 Full Year Guidance
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28 Sales growth 4-5%Sales growth 4-5% GM% increase 150 bpsGM% increase 150 bps Expenses - increase of approx. $2M or approx. 1% as a percentage of salesExpenses - increase of approx. $2M or approx. 1% as a percentage of sales Return to profitability in the range of $0.60 - $0.70 EPS*Return to profitability in the range of $0.60 - $0.70 EPS* * Excludes extraordinary charges for debt restructuring and FASB No. 142 and unusual charges due to severance costs relating to management restructuring. 2002 Plan
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29 Sales Growth & ROIC Goals
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30 Questions & Answers
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