Bell Sports Corp. Announces Fiscal 1999 and Fourth Quarter Results.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Aug. 3, 1999-- Bell Sports Corp. announced today the results for its fiscal 1999 fourth quarter ended July 3, 1999. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter increased 3 percent to $70.7 million from $68.7 million in the fourth quarter of fiscal 1998. The increase in sales is primarily attributable to strong U.S. sales in the mass merchant channel and in Bell branded product. Selling, general and administrative expenses decreased to 19.0 percent of net sales for the quarter from 20.4 percent of net sales for the fourth quarter of fiscal 1998. Fourth quarter EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become rose approximately 7.8 percent to $12.9 million from $12.0 million in the fourth quarter of fiscal 1998. The company recorded restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other one-time charges of $29.0 million related to the restructuring plan announced in the third quarter of fiscal 1999, a provision for product liability reserves related to outstanding cases, and one time costs associated with the sale of Bell's former auto racing helmet division. Net loss for the quarter was $12.7 million, compared to net income of $4.5 million for the fourth quarter of fiscal 1998. Interest expense for the quarter increased to $4.6 million from $1.2 million in the fourth quarter of fiscal 1998 primarily attributable to an increase in the company's outstanding debt from the issuance of $125.0 million of new debt in August 1998. This increase was partially offset by the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of $62.5 million aggregate principal amount of its Debentures due November 2000 during the first quarter of fiscal 1999. Net sales for fiscal 1999 increased 2 percent to $210.9 million compared to $207.2 million in fiscal 1998. Selling, general and administrative expenses for the year decreased to 23.0 percent of net sales from 23.5 percent of net sales for fiscal 1998. Full year EBITDA increased by $1 million or 4 percent to $27.6 million from $26.6 million in fiscal 1998. Interest expense increased to $15.8 million from $4.7 million for fiscal year 1998. Net loss for the year was $22.9 million, compared to net income of $8.6 million in fiscal year 1998. The fiscal 1999 loss included $13.3 million of one-time transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). related to the company's August 1998 recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. transaction and $29.0 million of one-time charges outlined above. These charges were offset by an extraordinary gain of $2.9 million associated with the company's repurchase of its Debentures due November 2000. Mary J. George, chief executive officer and president commented, "We are pleased with the improved sales and operating results. The Company is also excited about the completion of the restructuring plans announced in the third quarter. "The manufacturing facilities in Ireland, Canada, and Santa Cruz, California Santa Cruz is the county seat and largest city of Santa Cruz County, California, United States. As of the 2000 U.S. Census, Santa Cruz had a total population of 54,593. have all been closed on schedule. In addition, a letter of intent is in place to sell the manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. of the Company's remaining European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations. "The consolidation of manufacturing operations from five facilities to one has increased capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. from 60% to 90% worldwide. In addition to these manufacturing consolidations, the Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. sales and marketing office has been sold to Gemini Bicycle Centres Pty Ltd PTY LTD Propriety Limited (company structure in Australia) . "These changes will enable the Company to increase its focus on its core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
George continued, "We are seeing the benefits of consolidating our product design and test labs into one global facility, and we expect to launch an extremely innovative and successful line at the Fall trade shows. We believe the Company is strategically positioned to exceed our customers' expectations and execute our plans in fiscal 2000 and beyond." Certain matters in this press release are 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. that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These include but are not limited to: expected sales, profitability, cash flow, seasonality, adverse weather conditions, market acceptance of new products, competitive actions, relationships with major retail customers, retail environment, economic conditions, currency fluctuations and other risks indicated in filings from time-to-time with the Securities and Exchange Commission. The company is the leading manufacturer and marketer of bicycle helmets A bicycle helmet is a helmet intended to be worn while riding a bicycle. They are designed to attenuate impacts to the head of a cyclist in falls while minimizing side effects such as interference with peripheral vision. worldwide and a leading supplier of a broad line of bicycle accessories in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . The company is also a leading supplier of bicycle accessories worldwide. In fiscal 1998, the company began marketing in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. skating skating: see ice skating; ice dancing; roller skating. skating Sport in which bladelike runners or sets of wheels attached to shoes are used for gliding on ice or on surfaces other than ice. , snowboarding snowboarding: see under skiing. snowboarding Sport of sliding downhill over snow on a snowboard, a wide ski ridden in a surfing position. Derived from surfing and influenced also by skateboarding as well as skiing, snowboarding began to burgeon , snow skiing and water sport helmets. The company markets its helmets under the widely recognized Bell, Bell Pro and Giro giro Noun pl -ros 1. (in some countries) a system of transferring money within a bank or post office, directly from one account into another 2. brand names, and its bicycle accessories under such leading brands as Bell, Blackburn, Rhode Gear, VistaLite, Copper Canyon The Copper Canyon (Spanish: Barranca del Cobre) is a canyon system in the Sierra Tarahumara in the southwestern part of the state of Chihuahua in Mexico. This canyon system is larger and deeper than the Grand Canyon in the neighboring United States, although the Grand Cycling and Spoke-Hedz. -0-
BELL SPORTS CORP.
FINANCIAL HIGHLIGHTS
(unaudited; in thousands)
Results of Operations Fiscal year ended Three Months Ended
-----------------------------------------
July 3, June 27, July 3, June 27,
1999 1998 1999 1998
--------- --------- --------- --------
Net sales $ 210,909 $ 207,236 $ 70,665 $ 68,682
Cost of sales 140,673 137,672 45,925 44,081
--------- --------- --------- ---------
Gross profit 70,236 69,564 24,740 24,601
Selling, general and
administrative
expenses 48,338 48,562 13,406 13,992
Foreign exchange
(gain) loss 1,735 (45) (170) 26
Amortization of
goodwill and
intangible assets 2,117 2,260 528 525
--------- --------- --------- ---------
Operating expenses 52,190 50,777 13,764 14,543
Other costs of
operations
Transaction costs 13,101 -- -- --
Product liability
costs 12,500 -- 12,500 --
Restructuring charges 8,970 1,192 8,970 (36)
Asset write-offs 5,266 -- 5,266 --
Other costs 2,292 -- 2,292 --
Loss on disposal of
product
lines and sale of
assets -- 700 -- 2,000
--------- --------- --------- ---------
Total other costs of
operations 42,129 1,892 29,028 1,964
Income (loss) from
operations (24,083) 16,895 (18,052) 8,094
Net investment income (1,073) (1,716) (136) (335)
Interest expense 15,768 4,715 4,613 1,176
--------- --------- --------- ---------
Net income (loss) before
provision for (benefit
from) income taxes (38,778) 13,896 (22,529) 7,253
Provision for (benefit from)
income taxes (13,017) 5,318 (9,832) 2,794
--------- --------- --------- ---------
Net income (loss) before
extraordinary items (25,761) 8,578 (12,697) 4,459
Extraordinary item: Gain
on early extinguishment
of debt, net of taxes
of $2,006 2,887 -- -- --
--------- --------- --------- ---------
Net income (loss) $ (22,874) $ 8,578 $ (12,697) $ 4,459
========= ========= ========= =========
EBITDA $ 27,592 $ 26,596 $ 12,885 $ 11,957
========= ========= ========= =========
Condensed Balance Sheet:
July 3, June 27,
1999 1998
---------- ----------
Cash and marketable securities $ 8,875 $ 45,093
Accounts receivable, net 58,634 63,472
Inventories 43,664 39,679
Property, plant and equipment, net 16,162 20,636
Goodwill 52,430 54,292
Other assets 44,544 23,895
-------- --------
Total assets $224,309 $247,067
Accounts payable $ 9,250 $ 7,663
Accrued expenses 35,602 21,699
Debt and capital leases 159,606 88,384
Other liabilities 11,551 1,062
Stockholders' equity 8,300 128,259
-------- --------
Total liabilities and
stockholders' equity $224,309 $247,067
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