Brass Eagle Inc. Announces Merger Agreement with K2 Inc. and Third Quarter 2003 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)--Oct. 22, 2003 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 announced a Merger Agreement with K2 Inc. (NYSE NYSE See: New York Stock Exchange : KTO Kto Konto (German: Account) KTO Korea Tourism Organization KTO Kuwaiti Theater of Operations KTO Korean Theater of Operations KTO Keep Tube Open (enteral feeding pump feature) ) and reported results for the third quarter ending September 30, 2003. Brass Eagle entered into an Agreement today to merge the Company with K2 Inc. of Carlsbad, California Carlsbad is a coastal resort-town in northern San Diego County, California. According to the state Department of Finance, the city had a total population of 90,271 in 2003. in an all stock transaction. The Agreement contemplates an exchange offer of K2 common shares for common shares of Brass Eagle followed by a merger. Brass Eagle Shareholders will receive 0.6036 shares of K2 common stock for each share of Brass Eagle common stock. The Board of Directors of Brass Eagle recommends that shareholders accept the offer, and tender their shares to K2. The merger may be finalized See finalization. as soon as December, 2003. 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 very enthused about the future, and believe that the merger with K2 presents significant opportunities for the Company. K2's resources in marketing and brand building, manufacturing, and product development will help Brass Eagle achieve the long term goal of becoming a diversified diversified (di·verˑ·s action sports company, while remaining the number one supplier of paintball products to the market place." Brass Eagle also reported that 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 third quarter increased 12.3% to $24.6 million versus $21.9 million for the same period last year. Net income for the three months ended September 30, 2003 was $1.3 million compared to $1.5 million for the corresponding period in 2002. Earnings 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 were $0.18 compared to $0.21 in 2002. For the first nine months of the year, net sales decreased 8.7% to $62.7 million from $68.7 million for the same period in 2002. Net income for the first nine months of the year was $1.7 million compared to $5.0 million last year. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of decreased 65.7 % this year to $0.23 from $0.67 for the first nine months of 2002. 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. 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 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. ADDITIONAL INFORMATION: This press release shall not constitute an offer to sell or the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offer will only be made through a prospectus, which is part of a registration statement on Form S-4 to be filed with the SEC. by K2. K2 will also file with the SEC a Schedule TO and Brass Eagle will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the exchange offer. K2 and Brass Eagle expect to mail a prospectus of K2 and related exchange offer materials, as well as the Schedule 14D-9, to Brass Eagle stockholders. Brass Eagle stockholders are urged to carefully read these documents and the other documents relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the exchange offer when they become available because these documents will contain important information relating to the offer. You may obtain a free copy of these documents after they have been filed with the SEC, and other annual, quarterly and special reports, proxy statements Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. and other information filed with the SEC by K2 or Brass Eagle, at the SEC's website at http:www.sec.gov. A free copy of the exchange offer materials, when they become available, may also be obtained from K2 or Brass Eagle.
BRASS EAGLE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
SEPTEMBER DECEMBER
30, 31,
2003 2002
--------- --------
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 171 $ 365
Accounts receivable - less allowance
for doubtful accounts of $510 in 2003 and
$2,175 in 2002 22,775 27,215
Inventories 25,405 19,095
Prepaid expenses and other current assets 613 834
Deferred taxes 1,956 2,598
--------- -------
Total current assets 50,920 50,107
Property, plant and equipment, net 15,670 15,949
Other assets
Other assets 809 579
Goodwill 32,284 32,284
--------- -------
$ 99,683 $98,919
========= =======
Liabilities and stockholders' equity
Current liabilities
Revolving credit facility $ 1,800 $ 4,300
Accounts payable 12,294 4,755
Accrued expenses 5,309 7,336
Current maturities of long-term debt 5,600 6,207
--------- -------
Total current liabilities 25,003 22,598
Long-term debt, less current maturities 4,200 8,400
Deferred income taxes 2,913 2,638
Other liabilities 754 936
Stockholders' equity
Common stock, $.01 par value, 10,000,000 shares
authorized, 7,706,934 issued and 7,488,954
outstanding in 2003; 7,461,511 issued and
7,303,261 outstanding in 2002 77 75
Additional paid-in capital 27,283 26,405
Accumulated other comprehensive loss 0 (321)
Retained earnings 40,729 38,985
Treasury stock 217,980 shares at cost 2003,
158,250 shares at cost 2002 (1,276) (797)
--------- -------
66,813 64,347
--------- -------
$ 99,683 $98,919
========= =======
BRASS EAGLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Net sales $ 24,631 $ 21,887 $ 62,670 $ 68,711
Cost of sales 16,043 13,455 41,008 42,344
---------- ---------- ---------- ----------
Gross profit 8,588 8,432 21,662 26,367
Operating expenses 6,192 5,805 18,047 17,524
---------- ---------- ---------- ----------
Operating income 2,396 2,627 3,615 8,843
Minority interest 0 6 0 75
Interest income
(expense) (237) (371) (804) (1,106)
---------- ---------- ---------- ----------
Income before income
taxes 2,159 2,262 2,811 7,812
Provision for income
taxes 821 724 1,067 2,816
---------- ---------- ---------- ----------
Net income $ 1,338 $ 1,538 $ 1,744 $ 4,996
========== ========= ========== =========
Net income per share:
Basic $ 0.18 $ 0.21 $ 0.24 $ 0.70
Diluted 0.18 0.21 0.23 0.67
Weighted average shares
outstanding:
Basic 7,488,612 7,182,342 7,380,625 7,160,659
Diluted 7,546,418 7,478,702 7,567,391 7,472,201
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion