Brass Eagle Announces Record Third Quarter Results; Exceeds Wall Street Estimates.ROGERS, Ark.--(BUSINESS WIRE)--Oct. 28, 1998--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 ), worldwide leader in the manufacture 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: guns, paintballs and a full line of accessories, today reported record results for the third quarter ended September September: see month. 30, 1998. 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 increased 37% to $13,527,000 for the third quarter ended September 30, 1998, from $9,909,000 for the same period last year. Net income for the three months ended September 30, 1998 increased 36% to $1,290,000, or $0.17 per share on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma 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, from $951,000 or $0.12 per pro forma diluted share earned in the third quarter of fiscal 1997. The pro forma diluted result for third quarter of 1997 has been computed by dividing net income by the diluted shares plus the number of shares issued in the Company's Initial Public Offering, including overallotments, as if these shares were outstanding during the period. On a diluted basis Brass Eagle reported $0.17 versus $0.17 per share a year ago. Earnings in the quarter were negatively impacted by a one-time $0.03 per share start-up Start-up The earliest stage of a new business venture. expense related to the new paintball manufacturing plant in Neosho, MO. Excluding this expense, diluted earnings for the period would have been $0.20 per share. For the nine-month period ended September 30, 1998 net sales increased 123% to $48,682,000 from $21,814,000 for the same period last year. Net income was up 148% to $5,139,000 or $0.67 per share on a pro forma diluted basis for the first nine months of 1998 compared to $2,071,000, or $0.27 per pro forma diluted share for the first nine months of 1997. On a diluted basis Brass Eagle generated $0.38 per share for the prior period. During the quarter, inventories increased to $11,945,000 versus $7,745,000 for the period ended June 30, 1998. The increase includes finished product assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. for significant promotional orders scheduled to ship in October, 1998. Inventories are expected to be significantly lower by year-end. 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. , the Company's 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 that "third quarter results exceeded expectations in sales, net income, and operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before due to sporting goods Noun 1. sporting goods - sports equipment sold as a commodity commodity, trade good, good - articles of commerce sports equipment - equipment needed to participate in a particular sport retailers and mass merchandisers such as Kmart and Wal-Mart increasing their sales of Brass Eagle products." In addition, he stated, "We remain excited about retail sales reflecting continued growth in the popularity of the sport which appeals to a wide demographic, in particular the youth market which represents 66 million individuals and $500 billion in spending power The power of legislatures to tax and spend. Spending power is conferred to state and federal legislatures through their constitution. Judicial Review of legislative spending varies from state to state, but the law of federal spending informs courts in all states. ." Brass Eagle is unique in providing a full line of paintball guns 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. -0-
BRASS EAGLE INC.
CONDENSED STATEMENTS OF OPERATIONS
UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
NET SALES $ 13,527 $ 9,909 $ 48,682 $ 21,814
COST OF SALES 8,870 6,645 31,319 14,639
GROSS PROFIT 4,657 3,264 17,363 7,175
OPERATING EXPENSES 2,628 1,665 9,326 3,638
OPERATING INCOME 2,029 1,599 8,037 3,537
INTEREST INCOME/(EXPENSE) 69 (58) 300 (181)
INCOME BEFORE INCOME TAXES 2,098 1,541 8,337 3,356
PROVISION FOR INCOME TAXES 808 590 3,198 1,285
NET INCOME $ 1,290 $ 951 $ 5,139 $ 2,071
NET INCOME PER SHARE
PRO FORMA DILUTED $ 0.17 $ 0.12 $ 0.67 $ 0.27
DILUTED 0.17 0.17 0.67 0.38
BASIC 0.18 0.21 0.71 0.45
WEIGHTED AVERAGE SHARES
OUTSTANDING
PRO FORMA DILUTED 7,661,870 7,652,824(1) 7,676,460 7,655,955
DILUTED 7,661,870 5,455,853 7,676,460 5,458,984
BASIC 7,241,223 4,608,871 7,238,173 4,608,871
(1) Pro forma diluted net income per share has been presented in order
to compare diluted earnings per share for 1998 to 1997,
considering the additional shares, including overallotments,
issued in the Initial Public Offering in November 1997.
BRASS EAGLE INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SEPT. 30, DEC. 31,
1998 1997
(unaudited)
ASSETS
CURRENT ASSETS
CASH & CASH EQUIVALENTS $ 4,970 $ 504
SECURITIES AVAILABLE-FOR-SALE 0 12,659
ACCOUNTS RECEIVABLE - LESS ALLOWANCE FOR
DOUBTFUL ACCOUNTS OF $502 IN 1998 AND
$118 IN 1997 14,140 12,242
DUE FROM AFFILIATE 63 2,024
INVENTORIES 11,945 3,584
PREPAID EXPENSES AND OTHER CURRENT ASSETS 1,828 1,216
TOTAL CURRENT ASSETS 32,946 32,229
PROPERTY AND EQUIPMENT, NET 5,143 1,334
OTHER ASSETS
INTANGIBLE ASSETS, NET 2,611 2,666
$40,700 $36,229
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
CURRENT MATURITIES OF LONG-TERM DEBT $ 398 $ 698
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 8,937 6,256
DUE TO AFFILIATE 0 2,737
TOTAL CURRENT LIABILITIES 9,335 9,691
LONG-TERM DEBT, LESS CURRENT MATURITIES 12 18
DEFERRED INCOME TAXES 143 365
STOCKHOLDERS' EQUITY
COMMON STOCK, $.01 PAR VALUE, 10,000,000
SHARES AUTHORIZED, ISSUED AND OUTSTANDING
7,241,291 IN 1998, AND 7,225,121 IN 1997 72 72
ADDITIONAL PAID-IN CAPITAL 25,659 25,631
RETAINED EARNINGS 5,479 452
31,210 26,155
$40,700 $36,229
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