Bell Sports Corp. Announces Fiscal 2000 First 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)--Oct. 26, 1999-- Bell Sports Corp. announced today the results for its fiscal 2000 first quarter ended October 2, 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 from ongoing operations for the quarter increased 20% to $46.9 million from $39.1 million in the first quarter of fiscal 1999, (a net 15% increase including all operations). The increase in sales is primarily attributable to strong U.S. sales in both the specialty retail and mass merchant channels. Gross margins improved to 36.5% from 33.1% in the prior year period. This improvement was led by production efficiencies resulting from the manufacturing consolidations completed in the Company's fourth quarter of fiscal 1999. Selling, general and administrative expenses remained a constant 27% of net sales for the quarter. First 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 41% to $5.5 million from $3.9 million in the first quarter of fiscal 1999. Net interest expense, net of interest income, increased to $4.1 million from $1.9 million in the comparable prior year period. Net loss for the quarter was $104 thousand, compared to a net loss of $7.6 million for the first quarter of fiscal 1999. The prior year period included $6.9 million expenses related to the Company's plan of 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. and merger with HB Acquisition and the Company's debt tender offer for its 4 1/4% Convertible Subordinated Debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before due 2000. Mary J. George, Chief Executive Officer commented, "We are very excited about our positive sales and operating results, and believe these results are the beginning of a strong fiscal 2000 for Bell. The robust sales in the US specialty retail and mass channels reflects the market's enthusiasm for our new products, the strength of our brands, and the overall depth and quality of our product lines. "Our entire company continues to be focused on investing in and creating superior products and meeting our customers' expectations. I am also proud of all the efforts that our employees have made 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>. the manufacturing consolidation that we completed in the fourth quarter of fiscal 1999. A gross margin improvement of nearly three and a half points is tremendous. "Finally, we completed the sale of Bell's European 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. in this quarter. We are now operating only one manufacturing facility worldwide, at a 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. of 90%, which should continue to bring us greater operating efficiencies." 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 throughout 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. , Europe, Australia, and Asia. The company also markets in-line 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 Three Months Ended
October 2, September 26,
1999 1998
Net sales $46,850 $40,916
Cost of sales 29,736 27,372
Gross Profit 17,114 13,544
Selling, general and
administrative expenses 12,656 11,057
Foreign exchange (gain) loss 15 28
Amortization of goodwill and
intangible assets 527 562
Operating expenses 3,916 1,897
Other costs of operations
Transaction costs 0 6,880
Total other costs of operations 0 6,880
Income (loss) from operations 3,916 (4,983)
Net investment income 106 601
Interest expense 4,198 2,538
Net income (loss) before
provision for (benefit from)
income taxes (176) (6,920)
Provision for (benefit from)
income taxes (72) 640
Net income (loss) (104) (7,561)
EBITDA $5,543 $3,889
Condensed Balance Sheet
July 3, October 2,
1999 1999
Cash and marketable securities $8,875 $7,981
Accounts receivable, net 58,634 50,047
Inventories 43,664 36,911
Property, plant and equipment, net 16,162 13,201
Goodwill 52,430 51,944
Other assets 39,169 40,023
Total assets $218,934 $200,107
Accounts payable $9,250 $8,730
Accrued expenses 34,262 24,716
Debt and capital leases 159,606 149,581
Other liabilities 9,351 8,249
Stockholders' equity 6,465 8,831
Total liabilities and
stockholders' equity $218,934 $200,107
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