Ashworth Inc. Reports Fiscal 2002 Third Quarter and Nine-Month Results; Third Quarter Net Revenues Rise 20.5%; Continued Strong Demand for Its New Callaway Golf Apparel Line.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)--Aug. 28, 2002 Ashworth Inc. (Nasdaq:ASHW), a leading designer of sportswear and golf apparel, today announced financial results for the third quarter and first nine months of fiscal 2002. In addition, the company announced continued strong demand and sell-through sell-through Adjective of the sale of prerecorded video cassettes, without their first being for hire only for its Callaway Callaway may refer to:
adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. comments from retail accounts, especially major department stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. attending 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 , August 12th-16th. 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 third quarter ended July July: see month. 31, 2002 increased 20.5% to $35.9 million as compared to $29.8 million for the third quarter of 2001. Due to the previously announced $4.25 million increase in the reserve for bad debts reserve for bad debts See allowance for doubtful accounts. related to a single major account, the company reported a net loss of $573,000 or $0.04 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 a net income of $615,000 or $0.05 per diluted share in the same quarter of the prior year. Without the increase in reserve, the company would have reported consolidated net income of $2.0 million or $0.15 per diluted share for the third quarter of fiscal 2002. Consolidated net revenue for the domestic segment increased 20.8% to $30.8 million from $25.5 million in the same period of the prior year. Consolidated net revenue for the international segment increased 18.6% to $5.1 million from $4.3 million in the like period of the last year. For the nine-month period ended July 31, 2002 consolidated net revenue was $98.5 million compared to $104.4 million for the same period in fiscal 2001. Consolidated net revenues for the current nine-month period continued to be impacted by several external factors including broad economic weakness adversely affecting the company's retail division and at-once orders from its green grass accounts, and weakness in the company's resort business resulting from the effects of 9/11. Consolidated net income for the first nine months of fiscal 2002 was $2.0 million or $0.14 per diluted share, including the effect of the bad debt reserve increase noted above, compared to $5.0 million or $.37 per diluted share in the same period last year. Without the effect of the reserve increase, the company would have reported consolidated net income of $4.5 million or $0.33 per diluted share in the nine-month period of fiscal 2002. Consolidated net revenue in the domestic segment decreased 5.7% to $84.8 million from $89.9 million in fiscal 2001. Consolidated net revenue for the international segment decreased 5.5% to $13.7 from $14.5 million in the same period of the prior year. Randall Randall may refer to the following: In places:
 r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). increased 38.1% as compared to the third
quarter of fiscal 2001. We are particularly pleased with the
contribution from the new Callaway Golf apparel line, which was
originally expected to produce net revenues in fiscal 2002 of
approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $6 million and now may reach $14 million for the full year. We believe these trends indicate that the new Callaway Golf apparel line is quickly becoming a major apparel brand and represents one of the most successful launches of a new golf apparel line." Herrel concluded, "The response to the Spring/Summer 2003 Ashworth(R) and Callaway Golf apparel lines, showed at Market Week in New York (August 12th-16th), has been favorable. We believe we are on target to double our door base in the department stores arena for the Spring/Summer 2003 season. While the near term economic environment remains somewhat uncertain, we are committed to leveraging our leadership position in the golf apparel industry and capitalizing on future opportunities." 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, "Despite the $4.25 million increase in the reserve for bad debts related to a specific major account during the third quarter, we are pleased with the overall operations of the company. 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 4.4% over the prior year. Excluding 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. bad debt reserve increase, our receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed increased 9.1% from the prior year as compared to the 20.5% increase in net revenues. Our inventory increased 18.0% to $38.9 million at July 31, 2002 compared to $32.9 million at July 31, 2001 primarily due to the addition of the Callaway Golf apparel product line. The Ashworth(R) brand inventory declined slightly on a comparable basis. Consolidated gross margin for the third quarter increased 200 basis points to 40.4% from 38.4% in the same quarter of the prior year primarily due to improved sourcing in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite a very promotional environment. Additionally, SG&A expenses were $15.2 million during the quarter. Excluding the above mentioned bad debt reserve increase, our operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased 9.6% from the prior year, well below the net revenues growth rate, as a result of our expense reduction efforts that had been put in place during the past year." Tsang continued, "We believe our overall financial condition remains sound, which provides a solid platform for growth as industry and economic conditions improve. In view of the trends for both Ashworth(R) and Callaway Golf apparel, we are currently estimating fourth quarter net revenues will increase approximately 29% to 35% compared to the same quarter a year ago, with earnings in the range of $0.03 to $0.05 per diluted share compared to a loss of $0.17 per diluted share for the same quarter a year ago. Ashworth currently expects net revenues of $125.0 million to $126.0 million and 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 $0.18 to $0.20 for fiscal 2002." Tsang concluded, "Looking forward to fiscal 2003, we are enthusiastic about the company's prospects for significant growth and solid profitability, and we believe that we are on target to increase net income to approximately $0.54 to $0.59 per diluted share with net revenues increasing approximately 16% to 20% for the fiscal year ending Oct. 31, 2003." Investors and all others are invited to listen to a conference call discussing the third quarter and fiscal 2002 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 Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , Sept. 6, 2002. Additionally, a 48-hour telephone replay will be accessible by calling 877/289-8525 for domestic callers and 416/640-1917 for international callers; enter pass code 205339. Ashworth Inc. is a 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" . Ashworth products include four 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. Ashworth 7(TM) addresses the demand for business casual sportswear. 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. 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, 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 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, 2001 and Form 10-Q's filed thereafter.
ASHWORTH INC.
Consolidated Statements of Income
Third Quarter ended July 31, 2002 and 2001
(Unaudited)
Summary of Results of Operations
2002 2001
------------- -------------
Third Quarter
-------------
Net Revenue $ 35,860,000 $ 29,765,000
Cost of Sales 21,385,000 18,344,000
------------- -------------
Gross Profit 14,475,000 11,421,000
Selling, General and
Administrative expenses 15,233,000 10,022,000
------------- -------------
Income from Operations (758,000) 1,399,000
Other Income (Expense):
Interest Income 7,000 5,000
Interest Expense (258,000) (377,000)
Other Expense, net 54,000 (2,000)
------------- -------------
Total Other Expense, net (197,000) (374,000)
Income (Loss) Before Provision for
Income Tax (Expense) Benefit (955,000) 1,025,000
Provision for Income Tax
(Expense) Benefit 382,000 (410,000)
------------- -------------
Net Income (Loss) ($ 573,000) $ 615,000
============= =============
Income (Loss) Per Share
-- BASIC ($ 0.04) $ 0.05
Weighted Average Common
Shares Outstanding 13,289,000 13,155,000
============= =============
Income (Loss) Per Share
-- DILUTED ($ 0.04) $ 0.05
Adjusted Weighted Average Shares
and Assumed Conversions 13,289,000 13,370,000
============= =============
Nine Months
Net Revenue $ 98,542,000 $ 104,379,000
Cost of Sales 59,444,000 63,759,000
------------- -------------
Gross Profit 39,098,000 40,620,000
Selling, General and
Administrative expenses 35,277,000 31,139,000
------------- -------------
Income from Operations 3,821,000 9,481,000
Other Income (Expense):
Interest Income 39,000 14,000
Interest Expense (654,000) (1,157,000)
Other Income, net 59,000 7,000
------------- -------------
Total Other Expense, net (556,000) (1,136,000)
Income Before Provision for
Income Tax Expense 3,265,000 8,345,000
Provision for Income Tax Expense (1,306,000) (3,338,000)
------------- -------------
Net Income $ 1,959,000 $ 5,007,000
Income Per Share -- BASIC $ 0.15 $ 0.38
Weighted Average Common
Shares Outstanding 13,224,000 13,149,000
============= =============
Income Per Share -- DILUTED $ 0.14 $ 0.37
Adjusted Weighted Average Shares
and Assumed Conversions 13,597,000 13,470,000
============= =============
ASHWORTH INC.
Consolidated Balance Sheets
As of July 31, 2002 and 2001
(Unaudited)
July 31, July 31,
ASSETS 2002 2001
------ ------------ ------------
CURRENT ASSETS
Cash and cash equivalents $ 399,000 $ 2,610,000
Accounts receivable-trade, net 38,766,000 37,149,000
Inventories, net 38,857,000 32,930,000
Other current assets 7,664,000 7,791,000
------------ ------------
Total current assets 85,686,000 80,480,000
Property and equipment, net 18,177,000 19,182,000
Other assets 970,000 1,550,000
------------ ------------
Total Assets $104,833,000 $101,212,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Notes Payable $ 10,350,000 $ 11,075,000
Current portion of long-term debt 803,000 727,000
Accounts payable -- trade 7,365,000 2,850,000
Other current liabilities 3,436,000 4,757,000
------------ ------------
Total current liabilities 21,954,000 19,409,000
Long-term debt 2,866,000 3,253,000
Other long-term liabilities 1,279,000 1,359,000
Stockholders' equity 78,734,000 77,191,000
------------ ------------
Total Liabilities and Stockholders'
Equity $104,833,000 $101,212,000
============ ============
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