Ashworth, Inc. Reports Record Fiscal 2003 Revenue and Earnings; Company Also Reports Strong Bookings for Spring/Summer 2004.Business Editors CARLSBAD Carlsbad, cities, United States Carlsbad (kärlz`băd). 1 City (1990 pop. 63,126), San Diego co., S Calif., on the Pacific coast; settled in the 1880s, inc. 1952. , Calif.--(BUSINESS WIRE)--Dec. 18, 2003 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 sportswear and golf apparel, today announced financial results for the fourth quarter and fiscal year ended October October: see month. 31, 2003. In addition, the Company announced continued strong booking trends for its Spring/Summer 2004 Ashworth and Callaway Callaway may refer to:
Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net revenue for the fourth quarter ended October 31, 2003 increased 9.5% to a record $32.2 million as compared to $29.4 million for the fourth quarter of fiscal 2002. The Company reported consolidated fourth quarter net income of $877,000 or $0.07 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 as compared to consolidated net income of $550,000 or $0.04 per diluted share in the same quarter of the prior year. Net revenue for the domestic segment increased 8.6% to $27.7 million from $25.5 million reported the same quarter of the prior year. Net revenue from the international segment increased 15.4% to $4.5 million from $3.9 million in the same period of the previous year. Fourth quarter revenue from Ashworth branded merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain increased 5.8% to $25.2 million and revenue from Callaway Golf apparel, increased 25.6% to $7.0 million during the quarter. Consolidated net revenue for fiscal 2003 increased 15.5% to a record $149.3 million as compared to $129.3 million for fiscal 2002. Consolidated net income for fiscal 2003 was a record $7.3 million or $0.56 per diluted share compared to $2.5 million or $0.19 per diluted share in fiscal 2002. During the third quarter of fiscal 2002 the Company recorded a $4.25 million increase in the reserve for bad debts reserve for bad debts See allowance for doubtful accounts. related to a single major retail account. Without the increase in reserve, the Company would have reported consolidated net income of $5.1 million or $0.38 per diluted share in fiscal 2002. The increase in net income for fiscal 2003 over fiscal 2002 would have been 43.1%. The Company believes that excluding the effect of the increase in reserve for bad debts booked in the third quarter of fiscal 2002 for the single customer filing for protection under the U.S. bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most laws provides additional information to investors to better understand the impact the transaction had on the Company's performance for fiscal 2003 as compared to fiscal 2002 and, therefore, the adjusted consolidated net income measure is useful to investors. Net revenue for the domestic segment increased 13.2% to $126.4 million from $111.7 million in the prior year. Net revenue from the international segment increased 30.1% to $22.9 million from $17.6 million in the prior year. Fiscal 2003 revenue from Ashworth branded merchandise increased 5.5% to $118.5 million and revenue from Callaway Golf apparel, which was introduced in April 2002, increased 81.9% to $30.8 million for the twelve-month period. Randall Randall may refer to the following: In places:
Mr. Herrel continued, "The response to our Spring/Summer 2004 Ashworth and Callaway Golf apparel lines has been favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. . We believe we are on plan to increase account penetration The successful unauthorized breach of a security perimeter. See penetration test. and grow our overall market share. Ashworth, Inc.'s consolidated global bookings for both brands increased 18.9% versus last year. As compared to last year, the Ashworth brand's bookings increased 13.4%, with domestic bookings increasing 9.7% and international bookings increasing 34.0%. The Callaway Golf apparel bookings increased 35.1%, with domestic bookings increasing 29.4% and international bookings increasing 54.6% versus last year." In reviewing the Company's financial position, Terence Terence (Publius Terentius Afer) (tĕr`əns), b. c.185 or c.195 B.C., d. c.159 B.C., Roman writer of comedies, b. Carthage. As a boy he was a slave of Terentius Lucanus, a Roman senator, who brought him to Rome, educated him, and gave him his Tsang Tsang can refer to:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and Chief Financial Officer, stated, "Our gross margins increased 70 basis points to 40.6% for the fourth quarter of fiscal 2003, due primarily to our continued initiative to improve sourcing. This sourcing initiative enables the Company to stay competitive without affecting our gross margin in the golf apparel market which is experiencing price compression Price compression The limitation of the price appreciation potential for a callable bond in a declining interest rate environment, based on the expectation that the bond will be redeemed at the call price. ." Mr. Tsang continued, "Our balance sheet continues to get stronger as we manage our working capital and seek to optimize optimize - optimisation our financial leverage. 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 decreased 8.0% over the prior year while net revenues increased 9.5% for the fourth quarter. Our total inventory increased 8.0% to $44.5 million as of October 31, 2003 as compared to $41.2 million as of October 31, 2002 and is in line with the increase in net revenues. Finally, we utilized our solid cash flow to reduce our total debt by 56.8% to $6.3 million from $14.6 million as of October 31, 2003 and 2002, respectively." The Company issued its initial revenue and earnings guidance for fiscal 2004. Based on current information, the Company expects consolidated net revenues for fiscal 2004 of $155.0 million to $162.0 million and earnings of $0.59 to $0.65 per share. Based on current business trends the Company expects fiscal 2004 first quarter net revenues of $26.7 million to $27.2 million and earnings of $0.01 to $0.02 per diluted share. The Company currently expects to report fiscal 2004 first quarter results on Thursday Thursday: see week. , March 4th at market close. Mr. Herrel concluded, "Though we remain prudently pru·dent adj. 1. Wise in handling practical matters; exercising good judgment or common sense. 2. Careful in regard to one's own interests; provident. 3. Careful about one's conduct; circumspect. conservative in our guidance due to the uncertainty of the economy as well as the golf industry challenges, we continue to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future of Ashworth. In 2004, we have two strong brands to grow our business and we are encouraged by recent strong results in the department store channel. As evidenced by our positive operating results starting in the fourth quarter of fiscal 2002 and continuing throughout fiscal 2003, our new business model, which includes multi-brand and multi-channel strategies, is a key driver of this success." Investors and all others are invited to listen to a conference call discussing fourth quarter and year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results and fiscal 2004 outlook, today at 4:30 p.m. Eastern 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 December December: see month. 26, 2003. Additionally, a 48-hour telephone replay will be accessible by calling (877) 519-4471 for domestic callers and (973) 341-3080 for international callers; conference ID# 4359664. 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 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) showcases the most popular items from the Ashworth line. Ashworth Weather Systems(R) utilizes technology to create a balance between fashion and function in any climatic condition. 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 </noinclude> Loker (unofficial French Locre) is a small village in the Belgian province of West Flanders, and a part ("deelgemeente") of the municipality of Heuvelland. 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. 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 adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . These 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 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, the timely completion and successful operation of the new distribution facility in Oceanside Oceanside. 1 City (1990 pop. 128,398), San Diego co., S Calif., on the Gulf of Santa Catalina; inc. 1888. It is a commercial and trading center for an inland farm area and for nearby Camp Pendleton, a huge U.S. marine corps amphibious base. , 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. Form 10-K See 10-K. for the year ended October 31, 2002 and Form 10-Q's filed thereafter.
ASHWORTH, INC.
Consolidated Statements of Income
Fourth Quarter ended October 31, 2003 and 2002
(Unaudited)
Summary of Results of
Operations
2003 2002
------------- -------------
Fourth Quarter
--------------
Net Revenue $32,174,000 $29,366,000
Cost of Sales 19,112,000 17,653,000
------------- -------------
Gross Profit 13,062,000 11,713,000
Selling, General and Administrative
Expenses 11,489,000 10,624,000
------------- -------------
Income from Operations 1,573,000 1,089,000
Other Income (Expense):
Interest Income 12,000 7,000
Interest Expense (193,000) (188,000)
Other Income, net 70,000 9,000
------------- -------------
Total Other Expense, net (111,000) (172,000)
Income Before Provision for Income Tax
Expense 1,462,000 917,000
Provision for Income Tax Expense (585,000) (367,000)
------------- -------------
Net Income $877,000 $550,000
============= =============
Income Per Share -- BASIC $0.07 $0.04
Weighted Average Common Shares Outstanding 13,107,000 13,130,000
============= =============
Income Per Share -- DILUTED $0.07 $0.04
Adjusted Weighted Average Shares and
Assumed Conversions 13,428,000 13,222,000
============= =============
Twelve Months
-------------
Net Revenue $149,292,000 $129,286,000
Cost of Sales 88,627,000 77,097,000
------------- -------------
Gross Profit 60,665,000 52,189,000
Selling, General and Administrative
Expenses 47,934,000 47,279,000
------------- -------------
Income from Operations 12,731,000 4,910,000
Other Income (Expense):
Interest Income 36,000 46,000
Interest Expense (876,000) (842,000)
Other Income, net 323,000 68,000
------------- -------------
Total Other Expense, net (517,000) (728,000)
Income Before Provision for Income Tax
Expense 12,214,000 4,182,000
Provision for Income Tax Expense (4,886,000) (1,673,000)
------------- -------------
Net Income $7,328,000 $2,509,000
============= =============
Income Per Share -- BASIC $0.56 $0.19
Weighted Average Common Shares Outstanding 13,006,000 13,202,000
============= =============
Income Per Share -- DILUTED $0.56 $0.19
Adjusted Weighted Average Shares and
Assumed Conversions 13,198,000 13,487,000
============= =============
ASHWORTH, INC.
Consolidated Balance Sheets
As of October 31, 2003 and 2002
(Unaudited)
October 31, October 31,
ASSETS 2003 2002
------ ------------- -------------
CURRENT ASSETS
Cash and Cash Equivalents $5,248,000 $2,336,000
Accounts Receivable-Trade, net 30,876,000 33,572,000
Inventories, net 44,476,000 41,188,000
Other Current Assets 7,342,000 7,099,000
------------- -------------
Total Current Assets 87,942,000 84,195,000
Property and Equipment, net 17,462,000 17,889,000
Other Assets, net 653,000 891,000
------------- -------------
Total Assets $106,057,000 $102,975,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Notes Payable $3,400,000 $11,125,000
Current Portion of Long-Term Debt 289,000 553,000
Accounts Payable -- Trade 5,731,000 6,338,000
Other Current Liabilities 4,056,000 3,014,000
------------- -------------
Total Current Liabilities 13,476,000 21,030,000
Long-Term Debt 2,631,000 2,921,000
Other Long-Term Liabilities 1,395,000 1,439,000
Stockholders' Equity 88,555,000 77,585,000
------------- -------------
Total Liabilities and Stockholders' Equity $106,057,000 $102,975,000
============= =============
This earnings release includes information presented on a pro forma
basis. These pro-forma financial measures are considered "non-GAAP"
financial measures within the meaning of SEC Regulation G. The Company
believes that this presentation of pro forma results provides useful
information to both management and investors to better understand the
impact of the additional bad debt charge booked in the third quarter
of fiscal 2002. The presentation of this additional information should
not be considered in isolation or as a substitute for results prepared
in accordance with generally accepted accounting principles. The
reconciliation set forth below is provided in accordance with
Regulation G and reconciles the pro forma financial measure with the
most directly comparable GAAP-based financial measure.
ASHWORTH, INC.
Pro Forma Consolidated Statements of Income
Fiscal Year ended October 31, 2003 and 2002
(Unaudited)
Fiscal Year
Ended Fiscal Year Ended
10/31/03 10/31/02
------------- -------------------------------------
Additional
As As Bad Debt Pro Forma
Reported Reported Reserve Results
------------- ------------ ---------- -------------
Net Revenue $149,292,000 $129,286,000 -- $129,286,000
Cost of Sales 88,627,000 77,097,000 -- 77,097,000
------------- ------------ ---------- -------------
Gross Profit 60,665,000 52,189,000 -- 52,189,000
Selling, General
and Administrative
Expenses 47,934,000 47,279,000 (4,250,000) 43,029,000
------------- ------------ ---------- -------------
Income from
Operations 12,731,000 4,910,000 4,250,000 9,160,000
Other Income
(Expense):
Interest Income 36,000 46,000 -- 46,000
Interest Expense (876,000) (842,000) -- (842,000)
Other Income, net 323,000 68,000 -- 68,000
------------- ------------ ---------- -------------
Total Other
Expense, net (517,000) (728,000) -- (728,000)
Income Before
Provision for
Income Tax
Expense 12,214,000 4,182,000 4,250,000 8,432,000
Provision for
Income Tax Expense (4,886,000) (1,673,000)(1,700,000) (3,373,000)
------------- ------------ ---------- -------------
Net Income $7,328,000 $2,509,000 $2,550,000 $5,059,000
============= ============ ========== =============
Income Per Share --
BASIC $0.56 $0.19 $0.19 $0.38
Weighted Average
Common Shares
Outstanding 13,006,000 13,202,000 13,202,000 13,202,000
============= ============ ========== =============
Income Per Share --
DILUTED $0.56 $0.19 $0.19 $0.38
Adjusted Weighted
Average Shares
and Assumed
Conversions 13,198,000 13,487,000 13,487,000 13,487,000
============= ============ ========== =============
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