Ashworth, Inc. Reports Record Fiscal 2004 Second Quarter Financial Results.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)--June 10, 2004 Ashworth, Inc. (Nasdaq:ASHW), a leading designer of sportswear and golf apparel, today announced the financial results for the second quarter and first half of fiscal 2004, as compared to the same periods in fiscal 2003. 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 second quarter of 2004 increased 4.0% to a record $54.7 million as compared to $52.6 million for the second quarter of 2003. Consolidated second quarter net income increased 32.6% to $5.7 million or $0.41 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 consolidated net income of $4.3 million or $0.33 per diluted share for the second quarter of 2003. In February February: see month. 2004, the Company sold its existing distribution center facility located in Carlsbad, California Carlsbad is a coastal resort-town in northern San Diego County, California. According to the state Department of Finance, the city had a total population of 90,271 in 2003. and recorded an after tax gain on disposal of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → of $1.0 million. Without the gain on sale of fixed assets, the Company would have reported record consolidated net income of $4.7 million or $0.34 per diluted share. The Company believes that excluding the effect of the gain on sale of fixed assets provides useful information to investors in analyzing the impact the non-operational transaction had relative to the Company's performance in fiscal 2004 as compared to fiscal 2003; and, the adjusted consolidated net income measure more closely reflects consolidated net income based on the Company's operations. Consolidated net revenue for the domestic segment increased 2.5% to $44.5 million for the second quarter of fiscal 2004 from $43.4 million for the second quarter of 2003. Consolidated net revenue for the international segment increased 10.9% to $10.2 million for the second quarter of fiscal 2004 from $9.2 million for the second quarter of 2003. For the six-month period ended April 30, 2004, consolidated net revenue increased 3.5% to $82.0 million compared to $79.2 million for the same period in fiscal 2003. Consolidated net income for the first half of fiscal 2004 increased 31.8% to $5.8 million or $0.42 per diluted share compared to consolidated net income of $4.4 million or $0.34 per diluted share for the same period of fiscal 2003. Without the above-mentioned A`bove´-men`tioned a. 1. Mentioned or named before; aforesaid; mentioned or named earlier in the same text (in written documents). Adj. 1. one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain on sale of fixed assets, the Company would have reported consolidated net income of $4.8 million or $0.35 per diluted share for the six-month period ended April 30, 2004. The Company believes that excluding the effect of the gain on sale of fixed assets provides useful information to investors in analyzing the impact the non-operational transaction had on the Company's performance in fiscal 2004 as compared to fiscal 2003; and, the adjusted consolidated net income measure more closely reflects consolidated net income based on the Company's operations. Net revenue for the domestic segment increased 0.8% to $67.5 million for the first half of fiscal 2004 from $67.0 million for the same period of fiscal 2003. Net revenue from the international segment increased 18.9% to $14.5 million for the first half of fiscal 2004 from $12.2 million for the same period of fiscal 2003. Randall Randall may refer to the following: In places:
Mr. Herrel continued, "The response to our Fall/Holiday 2004 Ashworth and Callaway Callaway may refer to:
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, "We are pleased with our operational improvements with our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increasing 120 basis points to 15.0% for the second quarter of fiscal 2004 from 13.8% for the same period last year. Our gross margins increased 80 basis points to 42.6% for the second quarter of fiscal 2004 from 41.8% for the same period last year, due primarily to cost savings resulting from improved sourcing." Mr. Tsang continued, "Our balance sheet remains strong 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 0.7% over the prior year while net revenues increased 4.0% for the second quarter. Our inventory remained essentially flat as compared to the prior year with total inventory increasing 0.2% to $43.5 million as of April 30, 2004 as compared to $43.4 million as of April 30, 2003. Our total borrowing on the line of credit decreased to $7.0 million at April 30, 2004 from $18.7 million at April 30, 2003. In April of 2004 we purchased our new distribution center in Oceanside, California Oceanside is the third largest city in San Diego County, California. The city has a population of 173,303. Together with Vista and Carlsbad, it makes up the Tri-City area. The city is just south of U.S. for $13.7 million and financed part of the purchase price with $11.7 million in long term debt." The Company also reiterated and maintained its revenue 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. The Company expects earnings of $0.66 to $0.72 per diluted share including the after tax gain on sale of its distribution center buildings in Carlsbad, California, booked in the second quarter of fiscal 2004, of $1.0 million or $0.07 per diluted share. The tax deferred gain of $1.6 million will create a lower cost basis, for tax purposes, in our new Oceanside, California building instead of a lower tax rate during the second quarter of fiscal 2004. Based on current business trends the Company expects fiscal 2004 third quarter net revenues of $39 million to $41 million, an increase in the range of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 3% to 8% compared to the same quarter of fiscal 2003, and earnings of $0.16 to $0.19 per diluted share, compared to $0.16 in the same quarter of fiscal 2003. The Company currently plans to report third quarter 2004 results on Thursday Thursday: see week. , September September: see month. 9, 2004 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 and challenges in the golf industry, 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 and multiple channels 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 into fiscal 2004, our business model, which includes multi-brand and multi-channel See multichannel. strategies, is a key driver of this success." Investors and all others are invited to listen to a conference call discussing fiscal 2004 second quarter results and the outlook for the remainder of fiscal 2004, 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 and can be accessed by visiting the Company's investor information page at www.ashworthinc.com. An online replay will be available until June June: see month. 18, 2004. Additionally, a 48-hour telephone replay will be accessible by calling (877) 519-4471 for domestic callers and (973) 341-3080 for international callers; enter pass code 4823120. 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 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 </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. , the 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 October: see month. 31, 2003 and Form 10-Q's filed thereafter.
ASHWORTH, INC.
Consolidated Statements of Income
Second Quarter ended April 30, 2004 and 2003
Summary of Results of
(Unaudited) Operations
2004 2003
------------ ------------
SECOND QUARTER
--------------
Net Revenue $54,672,000 $52,595,000
Cost of Sales 31,363,000 30,635,000
------------ ------------
Gross Profit 23,309,000 21,960,000
Selling, General and Administrative Expenses 15,087,000 14,712,000
------------ ------------
Income from Operations 8,222,000 7,248,000
Other Income (Expense):
Interest Income 11,000 5,000
Interest Expense (227,000) (259,000)
Other Income, net 1,434,000 143,000
------------ ------------
Total Other Income (Expense), net 1,218,000 (111,000)
Income Before Provision for Income Taxes 9,440,000 7,137,000
Provision for Income Taxes (3,777,000) (2,855,000)
------------ ------------
Net Income $5,663,000 $4,282,000
============ ============
Income Per Share - BASIC $0.42 $0.33
Weighted Average Common Shares Outstanding 13,373,000 12,958,000
============ ============
Income Per Share - DILUTED $0.41 $0.33
Adjusted Weighted Average Shares and Assumed
Conversions 13,737,000 13,082,000
============ ============
SIX MONTHS
----------
Net Revenue $82,010,000 $79,158,000
Cost of Sales 48,010,000 47,231,000
------------ ------------
Gross Profit 34,000,000 31,927,000
Selling, General and Administrative Expenses 25,492,000 24,394,000
------------ ------------
Income from Operations 8,508,000 7,533,000
Other Income (Expense):
Interest Income 32,000 15,000
Interest Expense (396,000) (451,000)
Other Income, net 1,519,000 216,000
------------ ------------
Total Other Income (Expense), net 1,155,000 (220,000)
Income Before Provision for Income Taxes 9,663,000 7,313,000
Provision for Income Taxes (3,866,000) (2,925,000)
------------ ------------
Net Income $5,797,000 $4,388,000
============ ============
Income Per Share - BASIC $0.43 $0.34
Weighted Average Common Shares Outstanding 13,331,000 12,955,000
============ ============
Income Per Share - DILUTED $0.42 $0.34
Adjusted Weighted Average Shares and Assumed
Conversions 13,679,000 13,081,000
============ ============
ASHWORTH, INC.
Consolidated Balance Sheets
As of April 30, 2004 and 2003
(Unaudited)
April 30, April 30,
ASSETS 2004 2003
------ ------------- -------------
CURRENT ASSETS
Cash and Cash Equivalents $1,747,000 $1,258,000
Accounts Receivable-Trade, net 48,149,000 48,468,000
Inventories, net 43,539,000 43,371,000
Other Current Assets 8,644,000 8,310,000
------------- -------------
Total Current Assets 102,079,000 101,407,000
Property and Equipment, net 29,321,000 17,619,000
Other Assets, net 1,591,000 779,000
------------- -------------
Total Assets $132,991,000 $119,805,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Line of Credit $7,000,000 $18,682,000
Current Portion of Long-Term Debt 308,000 287,000
Accounts Payable - Trade 9,199,000 5,892,000
Other Current Liabilities 7,235,000 7,998,000
------------- -------------
Total Current Liabilities 23,742,000 32,859,000
Long-Term Debt 11,528,000 2,776,000
Other Long-Term Liabilities 1,923,000 1,561,000
Stockholders' Equity 95,798,000 82,609,000
------------- -------------
Total Liabilities and Stockholders' Equity $132,991,000 $119,805,000
============= =============
This earnings release includes information presented on an adjusted non-GAAP basis. These adjusted non-GAAP financial measures are considered "non-GAAP" financial measures within the meaning of SEC Regulation G. The Company believes that this presentation of adjusted non-GAAP results provides useful information to both management and investors to better understand the impact of the gain on sale of the Company's existing distribution facility in Carlsbad, California booked in the second quarter of fiscal 2004. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . The reconciliation set forth below is provided in accordance with Regulation G and reconciles the adjusted non-GAAP financial measure with the most directly comparable GAAP-based financial measure.
ASHWORTH, INC.
Adjusted Non-GAAP Consolidated Statements of Income
Second Quarter ended April 30, 2004 and 2003
(Unaudited)
Quarter
Quarter Ended Ended
4/30/04 4/30/03
----------------------------------------------------
Elimination
of Gain on
Sale of
Existing Adjusted
As Distribution Non-GAAP As
Reported Center Results Reported
------------ ------------- ------------ ------------
Net Revenue $54,672,000 $- $54,672,000 $52,595,000
Cost of Sales 31,363,000 - 31,363,000 30,635,000
------------ ------------- ------------ ------------
Gross Profit 23,309,000 23,309,000 21,960,000
Selling, General
and
Administrative
Expenses 15,087,000 - 15,087,000 14,712,000
------------ ------------- ------------ ------------
Income from
Operations 8,222,000 8,222,000 7,248,000
Other Income
(Expense):
Interest Income 11,000 - 11,000 5,000
Interest Expense (227,000) - (227,000) (259,000)
Other Income
(Expense), net 1,434,000 (1,589,000) (155,000) 143,000
------------ ------------- ------------ ------------
Total Other
Income
(Expense), net 1,218,000 (1,589,000) (371,000) (111,000)
Income Before
Provision for
Income Taxes 9,440,000 (1,589,000) 7,851,000 7,137,000
Provision for
Income Taxes (3,777,000) 636,000 (3,141,000) (2,855,000)
------------ ------------- ------------ ------------
Net Income $5,663,000 $(953,000) $4,710,000 $4,282,000
============ ============= ============ ============
Income Per Share
- BASIC $0.42 $(0.07) $0.35 $0.33
Weighted Average
Common
Shares
Outstanding 13,373,000 13,373,000 13,373,000 12,958,000
============ ============= ============ ============
Income Per Share
- DILUTED $0.41 $(0.07) $0.34 $0.33
Adjusted Weighted
Average Shares
And Assumed
Conversions 13,737,000 13,737,000 13,737,000 13,082,000
============ ============= ============ ============
ASHWORTH, INC.
Adjusted Non-GAAP Consolidated Statements of Income
Six Months ended April 30, 2004 and 2003
(Unaudited)
Six Months
Six Months Ended Ended
4/30/04 4/30/03
----------------------------------------------------
Elimination
of Gain on
Sale of
Existing Adjusted
As Distribution Non-GAAP As
Reported Center Results Reported
------------ ------------- ------------ ------------
Net Revenue $82,010,000 $- $82,010,000 $79,158,000
Cost of Sales 48,010,000 - 48,010,000 47,231,000
------------ ------------- ------------ ------------
Gross Profit 34,000,000 34,000,000 31,927,000
Selling, General
and
Administrative
Expenses 25,492,000 - 25,492,000 24,394,000
------------ ------------- ------------ ------------
Income from
Operations 8,508,000 8,508,000 7,533,000
Other Income
(Expense):
Interest Income 32,000 - 32,000 15,000
Interest Expense (396,000) - (396,000) (451,000)
Other Income
(Expense), net 1,519,000 (1,589,000) (70,000) 216,000
------------ ------------- ------------ ------------
Total Other
Income
(Expense), net 1,155,000 (1,589,000) (434,000) (220,000)
Income Before
Provision for
Income Taxes 9,663,000 (1,589,000) 8,074,000 7,313,000
Provision for
Income Taxes (3,866,000) 636,000 (3,230,000) (2,925,000)
------------ ------------- ------------ ------------
Net Income $5,797,000 $(953,000) $4,844,000 $4,388,000
============ ============= ============ ============
Income Per Share
- BASIC $0.43 $(0.07) $0.36 $0.34
Weighted Average
Common
Shares
Outstanding 13,331,000 13,331,000 13,331,000 12,955,000
============ ============= ============ ============
Income Per Share
- DILUTED $0.42 $(0.07) $0.35 $0.34
Adjusted Weighted
Average Shares
And Assumed
Conversions 13,679,000 13,679,000 13,679,000 13,081,000
============ ============= ============ ============
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