Brass Eagle Inc. Announces Second Quarter Sales and Earnings.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)--Aug. 5, 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 reported results for the 2nd quarter ending June June: see month. 30, 2003. 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 second quarter decreased 7.9% to $24.6 million versus $26.7 million for the same period last year. For the three months ended June 30, 2003 the Company reported a profit of $632,000 or $0.08 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 a profit of $2.37 million or $0.31 per diluted share for the corresponding period in 2002. For the first half of the year, net sales decreased 18.8% to $38.0 million from $46.8 million for the same period in 2002. Net income for the first half of the year decreased to $406,000 or $0.05 per diluted share from $3.46 million or $0.46 per diluted share for the same period in 2002. The Company identified continued tight inventory controls at major retailers as a key reason for the second quarter income shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. . In addition, the Company incurred increased expenses of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $500,000 related to new computer software implementation. Brass Eagle continues to expect fiscal year 2003 sales to range from $98 million to $105 million. The Company expects fiscal 2003 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 of approximately $1.00 after the above mentioned expenses. 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, "The soft retail environment, which prompted reductions in major retailers' inventories, caused lower than expected first quarter sales results. Although second quarter income was below our internal expectations, we are very encouraged by the strong demand for our products at retail." "We continue to believe the basic business of Brass Eagle is sound and we remain the leader in a growing market with strong demographic trends at our back. We will continue to focus on growing our core business while simultaneously looking to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. into complementary markets." 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 and markets its products under the Brass Eagle, Viewloader, and JT USA brands. 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
JUNE 30, DECEMBER 31,
2003 2002
----------- ------------
(unaudited)
Assets
Current assets
Cash and cash equivalents $230 $365
Accounts receivable - less allowance
for doubtful accounts of $508 in 2003
and $2,175 in 2002 25,035 27,215
Inventories 19,508 19,095
Prepaid expenses and other current assets 907 834
Deferred taxes 1,987 2,598
----------- ------------
Total current assets 47,667 50,107
Property, plant and equipment, net 15,912 15,949
Other assets
Other assets 754 579
Goodwill 32,284 32,284
----------- ------------
$96,617 $98,919
=========== ============
Liabilities and stockholders' equity
Current liabilities
Revolving credit facility $3,800 $4,300
Accounts payable 8,312 4,755
Accrued expenses 4,285 7,336
Current maturities of long-term debt 5,801 6,207
----------- ------------
Total current liabilities 22,198 22,598
Long-term debt, less current maturities 5,600 8,400
Deferred income taxes 2,634 2,638
Other liabilities 814 936
Stockholders' equity
Common stock, $.01 par value, 10,000,000
shares authorized, 7,705,434 issued and 7,487,454
outstanding in 2003; 7,461,511 issued and
7,303,261 outstanding in 2002 77 75
Additional paid-in capital 27,262 26,405
Accumulated other comprehensive loss (83) (321)
Retained earnings 39,391 38,985
Treasury stock 158,250 shares at cost 2002,
217,980 shares at cost 2003 (1,276) (797)
----------- ------------
65,371 64,347
----------- ------------
$96,617 $98,919
=========== ============
BRASS EAGLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ---------------------
2003 2002 2003 2002
------------ ---------- ---------- ----------
(unaudited) (unaudited)
Net sales $24,627 $26,694 $38,039 $46,824
Cost of sales 16,706 16,493 24,965 28,889
------------ ---------- ---------- ----------
Gross profit 7,921 10,201 13,074 17,935
Operating expenses 6,626 6,070 11,855 11,719
------------ ---------- ---------- ----------
Operating income 1,295 4,131 1,219 6,216
Minority interest 0 18 0 69
Interest income (expense) (278) (354) (567) (735)
------------ ---------- ---------- ----------
(278) (336) (567) (666)
------------ ---------- ---------- ----------
Income before income taxes 1,017 3,795 652 5,550
Provision for income taxes 385 1,426 246 2,092
------------ ---------- ---------- ----------
Net income $632 $2,369 $406 $3,458
=========== ========= ========== =========
Net income per share:
Basic $0.09 $0.33 $0.06 $0.48
Diluted 0.08 0.31 0.05 0.46
Weighted average shares outstanding:
Basic 7,344,004 7,150,744 7,325,835 7,149,674
Diluted 7,578,356 7,541,281 7,580,530 7,536,606
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