SOURCE: Easy Gardener Products, Ltd.

May 25, 2005 17:25 ET

Easy Gardener Products, Ltd. to Host Conference Call: May 31, 2005 at 3:00 P.M. Eastern and Reports Third Quarter Results

WACO, TX -- (MARKET WIRE) -- May 25, 2005 -- Easy Gardener Products today announces that it will host a conference call on Tuesday May 31, 2005 at 3:00 P.M. Eastern to review the March 31, 2005 quarter end and nine months results. The Company received waivers from its senior lenders and is in compliance with all loan covenants. The Company filed its quarterly report as of March 31, 2005 on Form 10-Q with the Securities & Exchange Commission on May 16, 2005 (AMEX: EZY_pa), (AMEX: EZY.pr.a), (AMEX: EZY/PA) (AMEX: EZYPRA).

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

The Company reported third quarter net sales of $27.8 million, an increase of approximately 17.5% compared to $23.6 million for the third quarter of fiscal 2004. 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 in the third quarter of fiscal 2005 decreased by $617,000, or 13.7% to $3.9 million. The decrease in income from operations was primarily due to increased costs of petroleum-based products and increased outbound freight costs. As a percentage of net sales, income from operations decreased to 14.0% for the third quarter of fiscal 2005 compared to 19.0% during the comparable period in fiscal 2004.

Net income for the third quarter of fiscal 2005 was $1.2 million compared to net income of $1.3 million during the comparable period in fiscal 2004.

The Company reported net sales of $52.9 million for the nine months ended March 31, 2005 compared to $48.1 million during the comparable period in 2004. The comparable period in 2004 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.

The nine month income from operations increased by $843,000 or 53.1% to $2.4 million during the nine months ended March 31, 2005, from $1.6 million during the comparable period in 2004. The increase in income from operations results from costs of the predecessor company not assumed by the company. These savings were partially offset by the increased costs of petroleum-based products and freight. As a percentage of net sales, income from continuing operations increased to 4.6% for the nine months ended March 31, 2005 from 3.3% during the comparable period in 2004.

Net loss decreased by $2.2 million to $3.5 million during the nine months ended March 31, 2005 from a net loss of $5.6 million during the comparable period in 2004.

About Easy Gardener Products, Ltd.

The Company's Form 10-K for the period ended June 30, 2004 and other historical financial statements can be found on the Company's web site, www.easygardener.com or on the Securities & Exchange Commission's web site www.sec.gov 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 three months and nine months ended
                        March 31, 2005 and 2004
                         (Dollars in thousands)

                            Three Months Ended
                                March 31
                         2005                2004
                              %                   %
                  Dollars   of net    Dollars   of net
                  --------  ------    --------  ------
Net sales         $ 27,774   100.0%   $ 23,638   100.0%
Cost of Sales       16,389    59.0%     12,636    53.5%
                  --------  ------    --------  ------
Gross Profit        11,385    41.0%     11,002    46.5%
                  --------  ------    --------  ------
Operating Expenses
Selling and
 shipping            6,115    22.0%      4,680    19.8%
General and
 administrative      1,144     4.1%      1,351     5.7%
Depreciation and
 amortization          249     0.9%        477     2.0%
  Total Operating
   Expenses          7,508    27.0%      6,508    27.5%
                  --------  ------    --------  ------
  Income (Loss)
   from Operations   3,877    14.0%      4,494    19.0%
                  --------  ------    --------  ------
  Other Expenses
    Refinancing
     and
     transaction
     costs               0     0.0%          0     0.0%
    Interest
     expense        (2,615)   -9.4%     (2,628)  -11.1%
                  --------  ------    --------  ------
  Income (Loss)
   from Operations
   Before Income
   Taxes             1,262     4.5%      1,866     7.9%
                  --------  ------    --------  ------
  Income Tax
   Benefit
   (Expense)          (439)   -1.6%       (699)   -3.0%
  Income (Loss)
   from Operations     823     3.0%      1,167     4.9%
  Discontinued
   Operations -
    Income from
     discontinued
     operations        336     1.2%        124     0.5%
                  --------  ------    --------  ------
  Net Income
   (Loss)         $  1,159     4.2%   $  1,291     5.5%
                  --------  ------    --------  ------


                  Nine Months Ended   Five Months Ended   Four Months Ended
                       March 31           March 31        October 31, 2003
                         2005               2004           (Predecessor)
                              %                   %                   %
                  Dollars   of net    Dollars   of net    Dollars   of net
                  --------  ------    --------  ------    --------  ------
Net sales         $ 52,872   100.0%   $ 30,623   100.0%   $ 17,473   100.0%
Cost of Sales       32,204    60.9%     16,994    55.5%     10,953    62.7%
                  --------  ------    --------  ------    --------  ------
Gross Profit        20,668    39.1%     13,629    44.5%      6,520    37.3%
                  --------  ------    --------  ------    --------  ------
Operating Expenses
Selling and
 shipping           13,809    26.1%      6,725    22.0%      5,838    33.4%
General and
 administrative      3,730     7.1%      2,207     7.2%      2,557    14.6%
Depreciation and
 amortization          698     1.3%        803     2.6%        431     2.5%
  Total Operating
   Expenses         18,237    34.5%      9,735    31.8%      8,826    50.5%
                  --------  ------    --------  ------    --------  ------
  Income (Loss)
   from Operations   2,431     4.6%      3,894    12.7%     (2,306)  -13.2%
                  --------  ------    --------  ------    --------  ------
  Other Expenses
    Refinancing
     and
     transaction
     costs               0     0.0%          0     0.0%       (159)   -0.9%
    Interest
     expense        (7,948)  -15.0%     (4,219)  -13.8%     (2,868)  -16.4%
                  --------  ------    --------  ------    --------  ------
  Income (Loss)
   from Operations
   Before Income
   Taxes            (5,517)  -10.4%       (325)   -1.1%     (5,333)  -30.5%
                  --------  ------    --------  ------    --------  ------
  Income Tax
   Benefit
   (Expense)         1,700     3.2%         59     0.2%        (44)   -0.3%
  Income (Loss)
   from Operations  (3,817)   -7.2%       (266)   -0.9%     (5,377)  -30.8%
  Discontinued
   Operations -
    Income from
     discontinued
     operations        336     0.6%         85     0.3%        (75)   -0.4%
                  --------  ------    --------  ------    --------  ------
  Net Income
   (Loss)         $ (3,481)   -6.6%   $   (181)   -0.6%   $ (5,452)  -31.2%
                  --------  ------    --------  ------    --------  ------

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