Ashworth Inc. Reports 114% Increase in Fourth Quarter Net Earnings and 73% Increase in Fiscal 2000 Net Earnings.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. 14, 2000 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) Thursday Thursday: see week. announced financial results for the fourth quarter and fiscal year ended Oct. 31, 2000. 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 2000 increased 20.8% to $27,172,000 as compared to $22,502,000 for the fourth quarter 1999. Consolidated net income for the quarter increased 114.1% to $1,060,000 as compared to $495,000 in the same quarter of the prior year. The company reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.08 for the fourth quarter 2000 as compared to $0.04 for the fourth quarter 1999, an increase of 100.0%. Net revenue for the domestic segment increased 26.3% to $25,053,000 from $19,832,000 in the same period of the prior year. Net revenue for the foreign segment decreased 20.6% to $2,119,000 from $2,670,000 in the same period of the prior year. Consolidated net revenue for fiscal 2000 increased 16.7% to $125,947,000 as compared to $107,921,000 for fiscal 1999. Consolidated net income for the year increased 72.8% to $6,597,000 as compared to $3,817,000 in the prior year. The company reported diluted earnings per share of $0.49 for the year as compared to $0.27 for fiscal 1999, an increase of 81.5%. Net revenue for the domestic segment increased 17.3% to $109,743,000 from $93,527,000 in of the prior year. Net revenue for the foreign segment increased 12.6% to $16,204,000 from $14,394,000 the prior year. Commenting on the company's fourth quarter results, Randall Randall may refer to the following: In places:
"We believe Ashworth's fiscal 2000 results reflect our success in implementing solid strategic plans and our success in executing operational initiatives. Specifically, we have committed to further penetrating penetrating breaching the tissues of the body. our distribution channels, broadening broad·en tr. & intr.v. broad·ened, broad·en·ing, broad·ens To make or become broad or broader. broad product design, and offering new and innovative lifestyle sportswear related 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 . We believe these financial results demonstrate that our strategy is working. The operational initiatives included achieving more cost effective sourcing, improved inventory control procedures and stronger financial controls. Improvements in systems and process automation also contributed to better overall results." Herrel continued, "Additionally, all four of Ashworth's major distribution channels (golf, retail, corporate and international) showed good growth in fiscal 2000 and spring/summer 2001 future bookings indicate continued growth in these channels as well. The growth in Ashworth's core distribution channels was supported in fiscal 2000 by several independent and leading surveys indicating that Ashworth has continued to strengthen its brand equity as well as increase its market share in its core distribution channels. For the fifth year in a row the prestigious Darrell There are many well-known people named Darrell, including: In sports:
Ashworth's global spring/summer 2001 bookings increased 22.4% versus last year. Domestic spring/summer bookings increased 23.7%. International spring/summer bookings increased 17.0%. Domestic green grass bookings increased 20.0%, while retail/department store bookings increased 73.8%. These booking trends reflect the favorable reception Noun 1. favorable reception - acceptance as satisfactory; "he bought it on approval" favourable reception, approval acceptance - the state of being acceptable and accepted; "torn jeans received no acceptance at the country club" of Ashworth's spring/summer 2001 line and the company's continued use of new, technical and innovative fabrics and product extensions. Consolidated gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the fourth quarter improved 70 basis points to 39.4% from 38.7% in the same period last year. The consolidated gross profit margin for fiscal year 2000 improved 240 basis points to 38.9% from 36.5% in the prior fiscal year. These increases are primarily a result of improved sourcing and inventory control. Selling, general and administrative (SG&A) expenses for the fourth quarter increased 8.6% to $8,727,000 as compared to the same period last year. As a percentage of net revenue, SG&A expenses decreased to 32.1% for the fourth quarter from 35.7% for the fourth quarter last year. SG&A for fiscal 2000 increased 11.4% to $36,603,000 as compared to the same period last year. As a percentage of net revenue, SG&A expenses decreased to 29.1% for fiscal 2000 from 30.5% for fiscal 1999. Herrel also noted, "Due to strong top-line growth, coupled with improved gross margin and expense control, operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 7.2% and 9.8% of revenue for the fourth quarter and the year ended Oct. 31, 2000, respectively, from 3.0% and 6.0% of revenue for the fourth quarter and the year ended Oct. 31, 1999, respectively. 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 20.7% to $25,578,000 at Oct. 31, 2000 as compared to $21,194,000 during the prior year period, and this was in line with the 20.8% increase in consolidated wholesale net revenue for the fourth quarter of fiscal year 2000. Inventory increased 22.5% to $37,526,000 from $30,644,000 at Oct. 31, 1999 and was in line with Ashworth's future bookings increases." Herrel concluded, "The fourth quarter and fiscal year results reflected the highest revenue, net income, and earnings per share, versus the comparable quarter and fiscal year, of the company's history and we look forward to continuing to build on this momentum. With our strengthened management team in place, and our strategies and growth initiatives continuing to yield solid financial results, we are now looking at additional options to accelerate the evolution of our business. "The strength of the Ashworth(R) brand, our financial condition, and our organization will enable Ashworth to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. future opportunities that complement Ashworth's strategic focus and will contribute to the company's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. success. Looking ahead, we believe Ashworth is well positioned and we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our prospects for continued sales and earnings growth in fiscal 2001." Interested shareholders are invited to listen to the fourth quarter earnings conference call scheduled for Thursday, Dec. 14, 2000 at 10 a.m. Eastern Time. The call will be broadcast live 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 and www.vcall.com. An online archive (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. will be available shortly after the call and will be accessible on both Web sites until Dec. 21, 2000. Additionally, a replay can be accessed by dialing 800/633-8284, access code "17220016," and will be available through Dec. 16, 2000. Ashworth Inc. is a Southern California-based designer of men's and women's golf-inspired lifestyle sportswear distributed domestically and internationally in golf pro shops, resorts and 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" . Visit our new 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, the impact of competitive products and pricing, the success of the women's and corporate divisions, 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 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 Oct. 31, 1999.
Ashworth Inc.
Consolidated Statements of Income
Fourth Quarter and Twelve Months ended October 31, 2000 and 1999
(Unaudited)
Summary of Results of Operations
2000 1999
Fourth Quarter
Net revenue $27,172,000 $22,502,000
Cost of revenue 16,476,000 13,804,000
Gross profit 10,696,000 8,698,000
Selling, general and
administrative expenses 8,727,000 8,034,000
Income from operations 1,969,000 664,000
Other income (expense):
Interest income 146,000 59,000
Interest expense (141,000) (86,000)
Other expense, net (184,000) 175,000
Total other income (expense), net (179,000) 148,000
Income before provision for
Income tax expense 1,790,000 812,000
Provision for income tax expense (730,000) (317,000)
Net income $1,060,000 $495,000
Earnings per share -- Basic $0.08 $0.04
Weighted average common
shares outstanding 13,154,000 13,917,000
Earnings per share -- Diluted $0.08 $0.04
Adjusted weighted average shares
and assumed conversions 13,331,000 13,929,000
Twelve Months
Net revenue $125,947,000 $107,921,000
Cost of revenue 76,963,000 68,558,000
Gross profit 48,984,000 39,363,000
Selling, general and
administrative expenses 36,603,000 32,867,000
Income from operations 12,381,000 6,496,000
Other income (expense):
Interest income 204,000 112,000
Interest expense (640,000) (431,000)
Other expense, net (957,000) 90,000
Total other expense, net (1,393,000) (229,000)
Income before provision for
income tax expense 10,988,000 6,267,000
Provision for income tax expense (4,391,000) (2,450,000)
Net income $6,597,000 $3,817,000
Earnings per share -- Basic $0.49 $0.27
Weighted average common
shares outstanding 13,406,000 14,035,000
Earnings per share -- Diluted $0.49 $0.27
Adjusted weighted average shares
and assumed conversions 13,467,000 14,045,000
Ashworth Inc.
Consolidated Balance Sheets
As of October 31, 2000 and 1999
(Unaudited)
Oct. 31, Oct. 31,
ASSETS 2000 1999
CURRENT ASSETS
Cash and cash equivalents $ 1,231,000 $ 6,507,000
Accounts receivable-trade, net 25,578,000 21,194,000
Inventories, net 37,526,000 30,644,000
Other current assets 6,316,000 6,216,000
Total current assets 70,651,000 64,561,000
Property and equipment, net 14,848,000 13,103,000
Other assets 1,880,000 2,442,000
$ 87,379,000 $ 80,106,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable and current portion
of LTD $ 2,182,000 $ 681,000
Accounts payable -- trade 4,477,000 3,460,000
Other current liabilities 3,989,000 2,686,000
Total current liabilities 10,648,000 6,827,000
Long-term debt 3,293,000 2,764,000
Other long-term liabilities 1,465,000 1,089,000
Stockholders' equity 71,973,000 69,426,000
$ 87,379,000 $ 80,106,000
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