Brass Eagle Inc. Announces Fourth Quarter and Fiscal Year 2002 Results; Exceeds Expectations.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)--Feb. 11, 2003 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 announced reported results for the fourth quarter and fiscal year ended December December: see month. 31, 2002. Brass Eagle reported 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 fourth quarter increased 5.8% to $36.2 million versus $34.2 million for the same period last year. Net income for the three months ended December 31, 2002 increased 147.4% to $4.7 million or $0.63 per 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. share, compared to $1.9 million or $0.25 per diluted share for the corresponding period in 2001. For the fiscal year ended December 31, 2002, net sales increased 14.1% to $104.9 million versus $91.9 million for the same period last year. Net income increased 149% to $9.7 million, or $1.30 per diluted share, compared to $3.9 million, or $0.52 per diluted share, for the year ended December 31, 2001. 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 are pleased with our sales and earnings in 2002, despite a sluggish retail environment around the Christmas Christmas [Christ's Mass], in the Christian calendar, feast of the nativity of Jesus, celebrated in Roman Catholic and Protestant Churches on Dec. 25. In liturgical importance it ranks after Easter, Pentecost, and Epiphany (Jan. 6). holiday season. We were particularly excited by gains with the specialty sporting good chains and dealers achieved during the year." For the 2003 fiscal year, the Company expects an increase in both sales and earnings over 2002. The Company estimates sales will exceed $112 million for 2003, and earnings per share will exceed $1.38. Mr. Scott concluded, "Brass Eagle enters 2003 with a strong portfolio of brands, a wide-range of products and broad distribution. We provide markers, paintballs, apparel and accessories to all enthusiast A person who enjoys using computers and electronic equipment. Enthusiasts like technology and are willing to learn more of the ins and outs of a product than the average consumer, who just wants to use it. An enthusiast is more like a "prosumer." See consumer and prosumer. levels, from beginner to expert, in a variety of channels ranging from the mass market to specialty 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 chains and dealers. It is this and the good work of our people that makes Brass Eagle unique in the industry and helps us maintain our leadership position in the market." 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, 1999 and 2001, 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 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.
CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
December 31, 2002 and 2001
2002 2001
-------- --------
ASSETS
Current assets
Cash and cash equivalents $365 $9
Accounts receivable - less allowance for doubtful
accounts of
$2,175 in 2002 and $2,000 in 2001 27,215 26,371
Inventories 19,095 13,120
Prepaid expenses and other current assets 834 1,191
Deferred income taxes 2,598 2,544
-------- --------
Total current assets 50,107 43,235
Property, plant and equipment, net 15,949 16,506
Other assets:
Other assets 579 270
Goodwill 32,284 32,284
-------- --------
$98,919 $92,295
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Revolving credit facility $4,300 $3,900
Accounts payable 4,755 4,438
Accrued expenses 7,336 6,549
Current maturities of long-term debt 6,207 6,407
-------- --------
Total current liabilities 22,598 21,294
Long-term debt, less current maturities 8,400 14,607
Deferred income taxes 2,638 1,350
Other liabilities 936 889
Stockholders' equity:
Common stock, $.01 par value; 10,000,000 shares
authorized, 7,461,511 issued and 7,303,261
outstanding in 2002 7,266,618 issued and
7,146,918 outstanding in 2001 75 73
Additional paid-in capital 26,405 25,851
Accumulated other comprehensive loss (321) (540)
Retained earnings 38,985 29,314
Treasury stock, 158,250 shares at cost 2002, 119,700
shares at cost 2001 (797) (543)
-------- --------
64,347 54,155
-------- --------
$98,919 $92,295
======== ========
BRASS EAGLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
Three Months Twelve Months
Ended Ended
December 31, December 31,
----------------- ------------------
2002 2001 2002 2001
-------- -------- --------- --------
Net sales $36,212 $34,212 $104,923 $91,885
Cost of sales 21,574 22,925 63,918 58,845
-------- -------- --------- --------
Gross profit 14,638 11,287 41,005 33,040
Operating expenses 7,338 7,639 24,862 24,628
-------- -------- --------- --------
Operating income 7,300 3,648 16,143 8,412
Interest income/(expense)/other (425) (615) (1,456) (1,920)
-------- -------- --------- --------
Income before income taxes 6,875 3,033 14,687 6,492
Provision for income taxes 2,200 1,174 5,016 2,566
-------- -------- --------- --------
Net income $4,675 $1,859 $9,671 $3,926
======== ======= ======= =======
Net income per diluted share $0.63 $0.25 $1.30 $0.52
Weighted average diluted shares
outstanding 7,462 7,527 7,461 7,540
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