Brass Eagle Announces Second 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, , AR--(BUSINESS WIRE)--August 10, 2000 Brass Eagle Inc. (Nasdaq: 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 earnings for the second quarter and six months ended June June: see month. 30, 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 3.7% to $16,765,000 for the second quarter ended June 30, 2000, versus $17,416,000 for the prior year period. Net income for the three months ended June 30, 2000 was $1,542,000 or $0.21 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 $2,832,000 million or $0.37 per diluted share in the second quarter of 1999. As reported on July July: see month. 24, the decrease in earnings was caused by declines in gross margins, which were primarily affected by increased sales in lower margin products as well as increased promotional activity during the quarter. For the six month period ended June 30, 2000, net sales decreased 12.7% to $31,792,000 versus $36,420,000 for the same period last year. Net income for the first six months of fiscal 2000 was $2,354,000, or $0.31 on a fully diluted basis, compared to $5,062,000, or $0.66 per diluted share in the first six months of fiscal 1999. 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 expect, now that inventories at the retail level are very clean, that gross margins should show improvement over the next couple of quarters. We also anticipate a return to solid rates of revenue growth through the second half of this year. We are pleased with our current market position and remain comfortable with analyst estimates for the third and fourth quarters." Mr. Scott concluded, "We continue to remain enthusiastic about the prospects of the paintball industry, as our target audience, the youth market remains one of the fastest growing demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. . Over the past 18 months, with the acquisitions of JT USA and CM Support, we have expanded our products and diversified diversified (di·verˑ·s our distribution channels, furthering our position in the industry. Simultaneously, with the opening of Challenge Park Xtreme, we are leveraging our brands 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). category. We look forward to capitalizing on the opportunities that lie ahead." 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, including the sale of the Company. 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. Brass Eagle was named one of the "Top 100" Hot Growth Companies by Business Week magazine in 1998 and again in 1999, and one of the IW Growing Companies 25, America's Most Successful Small Manufacturers by Industry Week magazine. Certain statements in this press release (including statements containing the words "expect," "will," "believe," "continue," "anticipate," "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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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 COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. 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 STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -------------
2000 1999 2000 1999
---- ---- ---- ----
NET SALES $16,765 $17,416 $31,792 $36,420
COST OF SALES 10,779 9,670 20,976 21,278
------- ------ ------- ------
GROSS PROFIT 5,986 7,746 10,816 15,142
OPERATING EXPENSES 3,661 3,359 7,349 7,164
------ ------ ------ -----
OPERATING INCOME 2,325 4,387 3,467 7,978
MINORITY INTEREST 11 0 21 0
INTEREST INCOME / (EXPENSE) 125 55 272 120
---- --- ---- ---
INCOME BEFORE INCOME TAXES 2,461 4,442 3,760 8,098
PROVISION FOR INCOME TAXES 919 1,610 1,406 3,036
---- ------ ------ -----
NET INCOME $1,542 $2,832 $2,354 $5,062
======= ======= ======= ======
NET INCOME PER SHARE
BASIC $0.22 $0.39 $0.33 $0.70
DILUTED $0.21 $0.37 $0.31 $0.66
WEIGHTED AVERAGE SHARES
OUTSTANDING
BASIC 7,136,186 7,246,434 7,135,907 7,245,739
DILUTED 7,520,672 7,730,061 7,525,240 7,709,827
BRASS EAGLE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
JUNE 30, DECEMBER 31,
2000 1999
----------- ------------
(unaudited)
ASSETS
CURRENT ASSETS
CASH & INVESTMENTS $3,008 $3,185
ACCOUNTS RECEIVABLE-LESS ALLOWANCE FOR
DOUBTFUL ACCOUNTS OF $410 IN 2000 AND $357 IN
1999 18,241 16,888
DUE FROM AFFILIATE 484 420
INVENTORIES 12,867 9,224
PREPAID EXPENSES AND OTHER CURRENT ASSETS 1,142 1,831
DEFERRED TAXES 1,363 1,040
------- ------
TOTAL CURRENT ASSETS 37,105 32,588
PROPERTY AND EQUIPMENT, NET 11,737 9,239
OTHER ASSETS 350 0
INTANGIBLE ASSETS, NET 35,332 6,618
------- ------
$84,524 $48,445
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE 6,264 3,139
ACCRUED EXPENSES 5,187 2,739
CURRENT MATURITIES OF LONG-TERM DEBT 5,607 0
------- ------
TOTAL CURRENT LIABILITIES 17,058 5,878
MINORITY INTEREST 29 0
LONG-TERM DEBT, LESS CURRENT MATURITIES 22,418 0
DEFERRED INCOME TAXES 625 560
STOCKHOLDERS' EQUITY
COMMON STOCK, $.01 PAR VALUE, 10,000,000 SHARES
AUTHORIZED, 7,255,947 ISSUED AND 7,136,247
OUTSTANDING 7,248,055 IN 2000, AND 7,129,387
IN 1999 73 72
ADDITIONAL PAID-IN CAPITAL 25,790 25,758
RETAINED EARNINGS 19,074 16,720
TREASURY STOCK 119,700 AT COST (543) (543)
------- ------
44,394 42,007
------- ------
$84,524 $48,445
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