Ashworth, Inc. Reports Fiscal 2005 First Quarter Financial Results.CARLSBAD Carlsbad, cities, United States
1 City (1990 pop. 63,126), San Diego co., S Calif., on the Pacific coast; settled in the 1880s, inc. 1952. , Calif. -- Ashworth, Inc. (NASDAQ NASDAQ
in full National Association of Securities Dealers Automated Quotations
U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ASHW), a leading designer of golf-inspired lifestyle sportswear, today announced financial results for its first quarter ended January 31, 2005. In addition, the Company reported that it received a strong response to the new Ashworth(R) and Callaway Golf apparel lines during the recent PGA (1) (Professional Graphics Adapter) An early IBM PC display standard for 3D processing with 640x480x256 resolution. It was not widely used.
(2) (Programmable Gate Array) See gate array and FPGA. Show in Orlando and Market Week in New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of .
Consolidated net revenue for the first quarter ended January 31, 2005 increased 33.6% to $36.5 million as compared to $27.3 million for the first quarter of 2004. The Company reported consolidated first quarter net income of $83,000, or $0.01 per diluted di·lute
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.
2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $134,000, or $0.01 per diluted share, for the same quarter of the prior year. Net revenue for the domestic segment increased 37.1% to $31.6 million from $23.0 million for the same period of the prior year. Net revenue from the international segment increased 14.6% to $4.9 million from $4.3 million for the same period of the prior year. Currency fluctuations had a favorable fa·vor·a·ble
1. Advantageous; helpful: favorable winds.
2. Encouraging; propitious: a favorable diagnosis.
3. impact of $0.2 million on fiscal 2005 first quarter net revenues. First quarter revenue from Ashworth branded merchandise decreased 6.5% to $19.3 million while revenue from Callaway Golf apparel increased 28.3% to $8.6 million for the quarter.
Randall L. Herrel, Sr., Chairman and Chief Executive Officer, stated, "We are encouraged to report that first-quarter earnings were within analysts' expectations considering the generally slow golf industry during the period. The net income in the first quarter of fiscal 2005 was impacted by approximately $0.02 per diluted share due to incremental Additional or increased growth, bulk, quantity, number, or value; enlarged.
Incremental cost is additional or increased cost of an item or service apart from its actual cost. fixed costs fixed costs,
n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). related to the new embroidery embroidery, ornamental needlework applied to all varieties of fabrics and worked with many sorts of thread—linen, cotton, wool, silk, gold, and even hair. Decorative objects, such as shells, feathers, beads, and jewels, are often sewn to the embroidered piece. and distribution center. Management currently anticipates that expected cost savings from our new distribution center will start to materialize ma·te·ri·al·ize
v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es
1. To cause to become real or actual: By building the house, we materialized a dream. in the second half of fiscal 2005. Overall, we believe these results are due in part to the addition of new brands and three new distribution channels to our multi-brand, multi-channel business strategy."
Mr. Herrel continued, "Net revenues for the first quarter of fiscal 2005 compared to first quarter fiscal 2004 were up 14.6% for our international segment and up 1.3% for our retail channel, with Men's business in the retail channel growing approximately 20% as compared to last year. Our corporate channel was down 8.6% and our core golf and off-course specialty channel A specialty channel (or speciality channel) is a television channel which consists of programming focused on a single type or targeted at a specific demographic. was down 1.2%. Our corporate distribution channel was affected by a delay in the launch of our 2005 Authentics AUTHENTICS, civ. law. This is the name given to a collection of the Novels of Justinian, made by an anonymous author. It is called authentic on account of its authority.
2. There is also another collection which bears the name of authentics. (TM) product line. Our golf related distribution channel was affected by the generally slow golf industry conditions and pro shop buyers placing their orders closer to the start of the golf season versus last year. The Game(R) and Kudzu kudzu (kd`z), plant of the family Leguminosae (pulse family), native to Japan. (R) brands contributed $8.6 million in revenues in the first quarter of fiscal 2005."
In reviewing the Company's financial position, Terence Tsang, Executive Vice President and Chief Financial Officer, stated, "Our gross margins increased 100 basis points to 40.1% for the first quarter of fiscal 2005, due primarily to the addition of The Game and Kudzu brands, partially offset by the additional costs of our new embroidery and distribution center."
Mr. Tsang continued, "Our net accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying increased 11.2% over the prior year, which is a much slower rate of increase than our 33.6% increase in net revenues for the first quarter, resulting in an improvement in our DSOs to 77 days from 92 days in last year's first quarter. Our inventory increased 11.6% to $59.2 million as of January 31, 2005 as compared to $53.1 million as of January 31, 2004, primarily due to the addition of the Gekko Brands' inventory."
The Company also reiterated and maintained its revenue and earnings guidance for fiscal 2005. Based on current information, the Company expects consolidated net revenues for fiscal 2005 of $207.0 million to $215.0 million and earnings of $0.76 to $0.82 per diluted share.
Based on current business trends, the Company expects fiscal 2005 second quarter net revenues of $65 million to $67 million and earnings of $0.38 to $0.40 per diluted share. The Company currently expects to report fiscal 2005 second quarter results on Thursday, June 9th at market close.
Mr. Herrel concluded, "Synergies between our apparel and headwear head·wear
A hat or other covering for the head. operations and product lines have begun to appear earlier than expected, and we should start to see further positive effects in the second half of fiscal 2005. Our collegiate col·le·giate
1. Of, relating to, or held to resemble a college.
2. Of, for, or typical of college students.
3. Of or relating to a collegiate church. headwear reps are beginning to sell our apparel lines into new distribution channels, and our golf apparel reps are beginning to sell headwear into our current apparel channels. We believe our multi-brand, multi-channel business model has new potential and positions us well for the future."
Investors and all others are invited to listen to a conference call discussing first quarter results and fiscal 2005 outlook, today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific time). The call will be broadcast over the Internet Internet
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.ashworthinc.com. An online replay will be available until March 10, 2005. Additionally, a 48-hour telephone replay will be accessible by calling 1-877-519-4471 for domestic callers and 1-973-341-3080 for international callers; conference ID 5745907.
Ashworth, Inc. is a designer of men's and women's golf-inspired lifestyle sportswear distributed domestically and internationally in golf pro shops, resorts, upscale department and specialty stores Noun 1. specialty store - a store that sells only one kind of merchandise
shop, store - a mercantile establishment for the retail sale of goods or services; "he bought it at a shop on Cape Cod" and to corporate customers. Ashworth products include three main brand extensions. Ashworth Collection(TM) is a range of upscale sportswear designed to be worn on and off course. Ashworth Authentics(TM) showcases popular items from the Ashworth line. Ashworth Weather Systems(R) utilizes technology to create a balance between fashion and function in a variety of climatic conditions. Callaway Golf is a trademark of Callaway Golf Company Callaway Golf Company is an American golf company based in Carlsbad, California. They manufacture woods, irons, wedges, putters and golf balls and license its name for apparel, footwear, timepieces and accessories. . Ashworth, Inc., 2765 Loker Avenue West, Carlsbad, CA 92008 is an Official Licensee licensee n. a person given a license by government or under private agreement. (See: license, licensor)
LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. of Callaway Golf Company.
In July 2004, Ashworth, Inc. acquired Gekko Brands, LLC (Logical Link Control) See "LANs" under data link protocol.
LLC - Logical Link Control ("Gekko"), a leading designer, producer and distributor of headwear and apparel under The Game(R) and Kudzu(R) brands. This strategic acquisition provides opportunity for additional growth in three new, quality channels of distribution for the Ashworth(R) and Callaway Golf apparel brands as well as further growth from The Game(R) and Kudzu(R) brands' sales into the Company's three current distribution channels. The Game(R) brand products are marketed primarily under other licenses to over 1,000 colleges and universities, as well as to the PGA TOUR The PGA Tour is an organization that operates the USA's main professional golf tours. It is headquartered in Ponte Vedra Beach, Florida, USA. Its name is officially rendered in all caps as “PGA TOUR". , resorts, entertainment complexes and sporting goods Noun 1. sporting goods - sports equipment sold as a commodity
commodity, trade good, good - articles of commerce
sports equipment - equipment needed to participate in a particular sport dealers that serve the high school and college markets. The Game(R) brand is one of the leading headwear brands in the College/Bookstore distribution channel. The Kudzu(R) brand products are sold into the NASCAR/racing markets and through outdoor sports distribution channels, including fishing and hunting.
To learn more, please visit our Web site at www.ashworthinc.com.
This press release contains forward-looking statements forward-looking statement
A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. related to the Company's market position, finances, operating results, marketing plans and strategies. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of
Formal or law of or concerning this
Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" and the Company undertakes no obligation to republish re·pub·lish
tr.v. re·pub·lished, re·pub·lish·ing, re·pub·lish·es
1. To publish again.
2. Law To revive (a libel or a canceled will). revised forward-looking statements to reflect the occurrence of unanticipated events. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the timely development and acceptance of new products, as well as strategic alliances, the integration of the Company's recent acquisition, the impact of competitive products and pricing, the success of the Callaway Golf apparel product line, the preliminary nature of bookings information, the ongoing risk of excess or obsolete inventory Obsolete Inventory
Term that refers to inventory that is at the end of its product life cycle and has not seen any sales or usage for a set period of time usually determined by the industry. This type of inventory has to be written down and can cause large losses for a company. , potential inadequacy of booked reserves, successful operation of the new distribution facility in Oceanside, CA, and other risks described in Ashworth, Inc.'s SEC reports, including the report on Form 10-K Form 10-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. for the year ended October 31, 2004 and Form 10-Q's filed thereafter.
ASHWORTH, INC. Consolidated Statements of Income First Quarter ended January 31, 2005 and 2004 (Unaudited) Summary of Results of Operations 2005 2004 ------------ ------------ First Quarter ------------- Net Revenue $36,513,000 $27,338,000 Cost of Sales 21,878,000 16,647,000 ------------ ------------ Gross Profit 14,635,000 10,691,000 Selling, General and Administrative Expenses 14,091,000 10,405,000 ------------ ------------ Income from Operations 544,000 286,000 Other Income (Expense): Interest Income 20,000 21,000 Interest Expense (533,000) (169,000) Other Income, net 107,000 85,000 ------------ ------------ Total Other Expense, net (406,000) (63,000) Income Before Provision for Income Taxes 138,000 223,000 Provision for Income Taxes (55,000) (89,000) ------------ ------------ Net Income $83,000 $134,000 ============ ============ Income Per Share - BASIC $0.01 $0.01 Weighted Average Common Shares Outstanding 13,726,000 13,302,000 ============ ============ Income Per Share - DILUTED $0.01 $0.01 Adjusted Weighted Average Shares and Assumed Conversions 14,110,000 13,644,000 ============ ============ ASHWORTH, INC. Consolidated Balance Sheets As of January 31, 2005 and 2004 (Unaudited) January 31, January 31, ASSETS 2005 2004 ------ ------------- ------------- CURRENT ASSETS Cash and Cash Equivalents $3,981,000 $3,831,000 Accounts Receivable-Trade, net 30,519,000 27,442,000 Inventories, net 59,248,000 53,070,000 Other Current Assets 9,805,000 8,761,000 ------------- ------------- Total Current Assets 103,553,000 93,104,000 Property and Equipment, net 35,849,000 17,682,000 Other Assets, net 24,145,000 1,634,000 ------------- ------------- Total Assets $163,547,000 $112,420,000 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES Line of Credit Payable $8,250,000 $3,800,000 Current Portion of Long-Term Debt 4,497,000 289,000 Accounts Payable - Trade 13,853,000 10,103,000 Other Current Liabilities 6,332,000 4,123,000 ------------- ------------- Total Current Liabilities 32,932,000 18,315,000 Long-Term Debt 26,105,000 2,560,000 Other Long-Term Liabilities 2,382,000 1,279,000 Stockholders' Equity 102,128,000 90,266,000 ------------- ------------- Total Liabilities and Stockholders' Equity $163,547,000 $112,420,000 ============= =============