Brass Eagle Announces First Quarter Results.Business Editors BENTONVILLE Bentonville, city (2000 pop. 19,730), seat of Benton co., extreme NW Ark., in the Ozark Mts.; settled 1837 and named for Senator Thomas Hart Benton. Local industries produce fabricated metal products, plastic molding, electronic equipment, textiles, cutting tools, , Ark.--(BUSINESS WIRE)--May 2, 2000 Brass Eagle 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 :XTRM XTRM Extreme ), the worldwide leader in the manufacturing, marketing and distribution of paintball paintball Sports medicine A sport in which marble-sized gelatin capsules filled with a nontoxic dye are shot at speeds of 300 kph/200 mph Warning: products, today reported results for the first quarter ended March 31, 2000. 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 decreased by 21.1% to $15.0 million for the first quarter ended March 31, 2000, from $19.0 million during the same period last year. Net income for the three months ended March 31, 2000 was $812,000, or $0.11 per share on a fully 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. basis, versus $2.2 million or $0.29 per diluted share earned in the first quarter of 1999. The decrease in sales was primarily due to a decrease in volume of marker marker /mark·er/ (mahrk´er) something that identifies or that is used to identify. tumor marker sales. Major retailers reduced inventory levels in the first three months ended March 31, 2000, compared to the first three months of March 31, 1999, and also reduced purchases of certain markers in anticipation of new product introductions in the second quarter. Lynn Scott Lynn Scott (born June 23, 1977 in Turpin, Oklahoma) is a former American football safety for the Dallas Cowboys of the NFL. He was signed by the Cowboys in 2001 as an undrafted free agent out of Northwestern Oklahoma State University. , Brass Eagle President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. stated, "We were pleased with our results for the quarter which exceeded analysts' expectations both on the top and bottom line. The paintball industry is robust and the inventory issues at the retail level that have been negatively impacting our business have now been remedied. As we have previously stated, last year's first quarter sales were higher due to large purchases by retailers anticipating stronger sell-through. In fact, retail sales are up nicely at most of our major accounts and this strong momentum continues into the second quarter." Brass Eagle also announced that during the quarter the Company entered into a commitment for a Senior Credit Facility for $40 million. The agreement would allow the Company to use the credit facility for general operations and business expansion. Mr. Scott further commented, "We also continued to make positive strides on the strategic front during the quarter. In March, we signed an agreement to acquire JT-USA, a leading manufacturer of protective accessories and apparel for the paintball industry, and in February, we entered into a commitment for a $40 million Senior Credit Facility with Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. . Both of these initiatives better position Brass Eagle for the future." "We expect JT to be accretive and over the first year to result in increased market share, substantial margin expansion and increased retail product offerings, all of which should translate into significantly enhanced revenues and profitability over the next few years," Mr. Scott continued. "More importantly, the JT brand can be leveraged across other product categories, which better enables Brass Eagle to expand outside paintball into the broader extreme sports extreme sports Sports events characterized by high speed or high risk. Such sports include aggressive inline skating, wakeboarding, street luge, skateboarding, and freestyle bicycle events (wherein tricks such as back flips are performed on a bicycle). market. Furthermore, our new credit facility will give us the flexibility and liquidity to carry out our growth plans over the next few years." Additionally, the Company reported that it continues to explore strategic and financial opportunities to enhance shareholder value. As mentioned before, Brass Eagle has retained McDonald Investments Inc. to advise it in its development and consideration of alternatives, which could include, but are not necessarily limited to, the sale of the Company, as well as a corporate stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program and strategic acquisitions. Mr. Scott concluded, "We enter the new millennium with enthusiasm 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 short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. and 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. prospects. The popularity of paintball continues to increase, particularly among the fast growing youth market, and we continue to enhance our dominant position within the industry. Our recent initiatives such as Challenge Park Xtreme and the JT acquisition allow us to expand our reach into other extreme sports and broaden our growth opportunities. We look forward to capitalizing on the opportunities that lie ahead." Brass Eagle is unique in providing a full line of paintball markers  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. and accessory accessory, in criminal law, a person who, though not present at the commission of a crime, becomes a participator in the crime either before or after the fact of commission. products from beginner through competition level. The Company is the dominant supplier of products for this rapidly growing sport. For more information, please call Chad Chad (chăd, chäd), Fr. Tchad, officially Republic of Chad, republic (2005 est. pop. 9,826,000), 495,752 sq mi (1,284,000 sq km), N central Africa. Jacobs, Integrated Corporate Relations, Inc., at 203-222-9013 or send faxes to 203-222-9372. Certain statements in this press release (including statements containing the words "expect," "will," "believe," "continue," "could," "intend" and similar words) may constitute 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. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Brass Eagle, its industry or others to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from Brass Eagle's expectations include the following: (1) Intensifying in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: competition, including specifically the intensification in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: of price competition, the entry of new competitors and the introduction of new products by new and existing competitors; (2) Failure to obtain new customers or retain existing customers; (3) Inability to carry out marketing, sales or other business plans and strategies; (4) Loss of key executives; (5) General economic and business conditions which are less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. than expected; and (6) Unanticipated changes in industry trends.
BRASS EAGLE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
MARCH 31, DECEMBER 31,
2000 1999
-------------- ----------
(unaudited)
Assets
Current assets
Cash & cash equivalents $ 7,711 $ 3,185
Accounts receivable - less allowance
for doubtful accounts of $367 in 2000
and $357 in 1999 15,206 16,888
Due from affiliate 411 420
Inventories 8,789 9,224
Prepaid expenses and other
current assets 972 1,831
Deferred taxes 1,221 1,040
------------ ------------
Total current assets 34,310 32,588
Property and equipment, net 9,493 9,239
Other assets 1,000 0
Intangible assets, net 6,534 6,618
------------ ------------
$ 51,337 $ 48,445
========== =========
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 3,327 $ 3,139
Accrued expenses 4,529 2,739
------------ ------------
Total current liabilities 7,856 5,878
Minority interest 39 0
Deferred income taxes 596 560
Stockholders' equity
Common stock, $.01 par value,
10,000,000 shares authorized,
7,254,831 issued and 7,135,131
outstanding in 2000;
7,249,087 issued and
7,129,387 outstanding in 1999 73 72
Additional paid-in capital 25,784 25,758
Retained earnings 17,532 16,720
Treasury stock 119,700 shares at cost (543) (543)
------------- -------------
42,846 42,007
------------ ------------
$ 51,337 $ 48,445
========== =========
BRASS EAGLE INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share data)
THREE MONTHS ENDED
MARCH 31,
-------------
2000 1999
------------ --------
(unaudited)
Net sales $ 15,027 $ 19,004
Cost of sales 10,197 11,608
-------------- -------------
Gross profit 4,830 7,396
Operating expenses 3,688 3,805
-------------- -------------
Operating income 1,142 3,591
Minority interest 10 0
Interest income / (expense) 147 65
--------------- --------------
Income before income taxes 1,299 3,656
Provision for income taxes 487 1,426
-------------- -------------
Net income $ 812 $ 2,230
======= =======
Net income per share:
Basic $ 0.11 $ 0.31
Diluted $ 0.11 $ 0.29
Weighted Average Shares Outstanding:
Basic 7,134,942 7,245,036
Diluted 7,527,444 7,691,500
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