SOURCE: Easy Gardener Products, Ltd

October 27, 2005 13:25 ET

Easy Gardener Products, Ltd. Announces Receipt of Lender Waivers, Filing of Its Form 10-K and a Conference Call: November 2, 2005 at 3:00 P.M. Eastern

WACO, TX -- (MARKET WIRE) -- October 27, 2005 -- Easy Gardener Products today announces the receipt of waivers from lenders and the filing of its annual report on Form 10-K with the Securities & Exchange Commission (AMEX: EZY_pa) (AMEX: (AMEX: EZYPRA) (AMEX: EZY/PA) for the year ended June 30, 2005. The Company also announced that it will host a conference call on Wednesday, November 2, 2005 at 3:00 P.M. Eastern to review the results for the year.

The dial-in number for the call is 1-866-533-0064.

The Company's senior lenders have waived the covenant misses as of June 30, 2005 and reset other covenants through June 30, 2006. Additionally, the senior lenders and the Company have agreed that the maturity of the their loans would be moved to September 30, 2006 from October 29, 2008 for the term lender and from April 27, 2007 for the revolving credit facility, the Company hire an investment banker to explore strategic alternatives to repay the term loan, the Company hire a consultant and the interest rate on the term loan be increased 2.0% per annum and 0.5% per annum on the revolving credit facility under certain conditions. Additionally, the term lender has required a performance fee of up to $2 million if certain conditions are not met. The performance fee, if any, is due at the repayment of the term loan. The revolving credit lender has required an additional repayment fee of up to $250,000 under certain conditions.

The Company reported an increase of 7% in net sales to $83.0 million for the year ended June 30, 2005 compared to $77.5 million during the prior year. The prior year includes the four months of operations (July through October 2003) of the predecessor company. The increase in net sales was the result of an increase in the volume of products sold including new products and price increases.

Income from operations was $6.0 million, a decrease of $0.9 million as compared to the prior year. The decrease results from increased costs of petroleum-based products and freight costs partially offset by costs of the predecessor company not assumed by the Company.

Net loss decreased by $1.5 million to $3.1 million during the year ended June 30, 2005 from a net loss of $4.6 million during the prior year. The decrease results from not having refinancing and transaction costs in the current year, increased tax benefits and a gain on discontinued operations as opposed to a loss in the prior year partially offset by increased interest expense and reduced income from operations

About Easy Gardener Products, Ltd.

The Company's Form 10-K for the period ended June 30, 2005 and other historical financial statements can be found on the Company's web site, or on the Securities & Exchange Commission's web site under the name Easy Gardener Products, Ltd.

Easy Gardener Products, Ltd. is a leading manufacturer and marketer of a broad range of consumer lawn and garden products including weed preventative landscape fabrics, fertilizer spikes, decorative landscape edging, shade cloth and root feeders which are sold under various recognized brand names including Easy Gardener, Weedblock, Jobe's, Emerald Edge, and Ross. The Company markets its products through most large national home improvement and mass merchant retailers, hardware stores and garden centers.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this Report contains statements that are forward-looking, such as statements relating to plans for future activities. Such forward-looking information involves important known and unknown risks and uncertainties that could significantly affect actual results, performance or achievements in the future and, accordingly, such actual results, performance or achievements may materially differ from those expressed or implied in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, those relating to the Company's growth strategy, customer concentration, outstanding indebtedness, dependence on weather conditions, seasonality, expansion, changes in interest rates, ability to service debt, activities of competitors, ability to successfully introduce new products and product lines, changes in federal or state environmental laws and the administration of such laws, protection of trademarks and other proprietary rights, the ability to maintain adequate financing arrangements necessary to fund operations and the general condition of the economy and its effect on the securities markets and other risks detailed in other filings with the Securities and Exchange Commission. The words "believes," "expects," "anticipates," "intends," "plans," "may," "might," "could," "should" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

                   Easy Gardener Products, Ltd.  Subsidiaries
                            Statement of Operations
                   For the years ended June 30, 2005 and 2004
                            (Dollars in thousands)

                         Year Ended    Eight Months Ended Four Months Ended
                           June 30           June 30       October 31, 2003
                             2005              2004          (Predecessor)
                       Dollars  %of net  Dollars  %of net  Dollars  %of net
                       -------  -------  -------  -------  ---------------
Net sales              $82,997    100.0% $60,061    100.0% $17,473   100.0%
Cost of Sales           49,884     60.1%  33,454     55.7%  10,953    62.7%
                       -------  -------  -------  -------  ---------------
Gross Profit            33,113     39.9%  26,607     44.3%   6,520    37.3%
                       -------  -------  -------  -------  ---------------
Operating Expenses
Selling and shipping    20,107     24.2%  13,021     21.7%   5,838    33.4%
General and
 administrative          6,017      7.2%   3,758      6.3%   2,557    14.6%
Depreciation and
 amortization              986      1.2%     610      1.0%     431     2.5%
   Total Operating
    Expenses            27,110     32.7%  17,389     29.0%   8,826    50.5%
                       -------  -------  -------  -------  ---------------
   Income (Loss) from
    Operations           6,003      7.2%   9,218     15.3%  (2,306)  -13.2%
                       -------  -------  -------  -------  ---------------
   Other Expenses
      Refinancing and
       costs                 0      0.0%    (410)    -0.7%    (159)   -0.9%
      Interest expense (10,843)   -13.1%  (6,878)   -11.5%  (2,868)  -16.4%
                       -------  -------  -------  -------  ---------------
Income(Loss) from
 Operations Before
 Income Taxes           (4,840)    -5.8%   1,930      3.2%  (5,333)  -30.5%
                       -------  -------  -------  -------  ---------------
Income Tax Benefit
 (Expense)               1,319      1.6%    (698)    -1.2%     (44)   -0.3%
Income (Loss) from
 Operations             (3,521)    -4.2%   1,232      2.1%  (5,377)  -30.8%
 Operations -
      Income from
       operations          373      0.4%    (458)    -0.8%     (75)   -0.4%
                       -------  -------  -------  -------  ---------------
Net Income (Loss)     ($ 3,148)    -3.8% $   774      1.3%($ 5,452)  -31.2%
                       -------  -------  -------  -------  ---------------

Contact Information

  • Contact:
    Dick Kurz
    Easy Gardener Products, Ltd.
    Email: Email Contact