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Blyth Reports 2nd Quarter Sales and Earnings
September Stock Watch

Blyth Reports 2nd Quarter Sales and Earnings

Blyth, Inc., (BTH-NYSE) recently reported that net sales for the second quarter ended July 31, 2006, increased approximately 2 percent to $262.6 million compared with $256.3 million a year earlier. International sales represented 27 percent of total sales in the second quarter this year versus 23 percent last year, reflecting strong growth in PartyLite's international markets.

Second-quarter operating loss was $27.7 million this year versus operating profit of $16.9 million last year. The loss includes a noncash, pretax goodwill impairment charge of $36.8 million arising from a revaluation of goodwill associated with Blyth's North American Wholesale businesses. Included in last year's second-quarter results was a favorable U.S. state settlement that allowed for a reserve reversal of $5.5 million. Excluding the goodwill impairment charge and the reserve reversal, second-quarter Operating Profit was $9.0 million this year versus $11.4 million last year.

The company also reported a loss of $68.6 million, or $1.72 per share, during the second quarter on the discontinued operations of Edelman, Euro-Decor, Gies and Colony, Blyth's European wholesale home and seasonal decorations companies and candle businesses. The loss primarily reflects impairment charges related to Gies and Colony. Subsequent to the end of the second quarter, the Gies business was sold.

Net loss for the quarter was $89.4 million versus net earnings of $4.2 million a year earlier. Diluted earnings per share for the quarter was a loss of $2.24 per share compared to earnings of $0.10 per share a year earlier. Earnings per share from continuing operations, before this year's goodwill impairment charge, and before last year's $0.10 benefit from the reserve reversal, was $0.13 this year versus $0.11 last year.

Regarding the company's performance, Robert B. Goergen, Blyth's Chairman of the Board and CEO, said, "Blyth reported higher second-quarter sales primarily due to continued strong growth in PartyLite's international markets. Nevertheless, second-quarter profits were challenged by continued commodity cost increases and lower sales volume across several of our U.S. businesses. Management remains completely focused on driving profitable sales growth and making continuous improvements in our cost structure."

Blyth, Inc., headquartered in Greenwich, Conn., USA, is a Home Expressions company competing primarily in the home fragrance, home decor, seasonal decorations and gift industry.