Coastcast Reports Financial Results for Fourth Quarter and Twelve Months of 1998.RANCHO ran·cho n. pl. ran·chos Southwestern U.S. 1. A hut or group of huts for housing ranch workers. 2. A ranch. DOMINGUEZ, Calif.--(BUSINESS WIRE)--Feb. 10, 1999-- Coastcast Corp. (NYSE NYSE See: New York Stock Exchange :PAR) Wednesday reported financial results for the fourth quarter 1998, ended Dec. 31. For the fourth quarter of 1998 as compared with the same period in 1997, sales were $24,024,000 vs. $36,641,000, net loss was $872,000 vs. net income of $3,122,000, and earnings per share on a 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 were a loss of 11 cents vs. income of 35 cents. For the twelve months ended Dec. 31, 1998, as compared with the same period in 1997, sales were $144,560,000 vs. $149,515,000, net income was $7,675,000 vs. $10,876,000, and earnings per share on a diluted basis were 87 cents vs. $1.22. "Compared to the fourth quarter of 1997 and the first two quarters of 1998, orders for golf clubheads from our customers have declined," said Hans Buehler, chairman 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. of Coastcast. "We believe this was caused by weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. sales at the retail level
and a resulting inventory buildup build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. in the supply chain. "In response, we have taken a number of steps to lower our costs. For example, our workforce has been reduced by 50 percent from its 1998 peak. Reductions have been made at all levels including supervisors and managers. For fiscal-year 1999, we expect that these adjustments and other changes will allow us to operate profitably." The fourth-quarter gross profit was negatively affected by write-downs of inventory and nonproducing assets as well as the effects of starting-up the Tijuana plant. The net effect of these factors was approximately $2 million in additional costs. Administrative expenses were negatively affected by severance pay Severance Pay Compensation that an employer gives to someone who is about to lose their job. Notes: Severance pay is not always paid to employees. It depends on the situation in which the employee is losing their job and whether legislation requires severance to be paid. plus legal fees and settlement costs related to a threatened proxy contest Proxy contest A battle for the control of a firm in which a dissident group seeks, from the firm's other shareholders, the right to vote those shareholders' shares in favor of the dissident group's slate of directors. Also called proxy fights. which was resolved in the fourth quarter. However, these administrative expenses were offset by significant changes to the company's supplemental executive retirement plan that reduced the future benefits and the corresponding liability and expense. Buehler also noted that the Tijuana facility is on schedule -- it is fully operational and is ramping up production. "We expect that the majority of our steel golf clubhead raw castings will be produced in our Tijuana foundry A semiconductor manufacturer that makes chips for third parties. It may be a large chip maker that sells its excess manufacturing capacity or one that makes chips exclusively for other companies. by the end of the second quarter of this year," Buehler continued. "It has been our strategy with this facility to offer lower prices to our customers while improving margins and maintaining quality. This still appears likely even though the current lower volumes may overshadow o·ver·shad·ow tr.v. o·ver·shad·owed, o·ver·shad·ow·ing, o·ver·shad·ows 1. To cast a shadow over; darken or obscure. 2. To make insignificant by comparison; dominate. the improvements in the short run. "While staying focused on profitability in 1999, we are continuing to pursue our strategy of gaining titanium titanium (tītā`nēəm, tĭ–) [from Titan], metallic chemical element; symbol Ti; at. no. 22; at. wt. 47.88; m.p. 1,675°C;; b.p. 3,260°C;; sp. gr. 4.54 at 20°C;; valence +2, +3, or +4. casting business outside the golf industry. Our targets are industrial and consumer parts that could benefit from the light weight and noncorrosive properties of titanium. "This is a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. opportunity with a variety of niches, and recent orders have supported our enthusiasm for this effort. We are cautiously optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that this effort could begin to generate sales in the range of $1 million per month by the end of 1999 or early next year." Coastcast, a leading manufacturer of golf clubheads, produces metal woods, irons and putters in a variety of metals, including stainless steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. and titanium. Customers include Callaway, Cleveland, Cobra, Daiwa, Never Compromise, Odyssey Odyssey (ŏd`ĭsē): see Homer. Odyssey Homer’s long, narrative poem centered on Odysseus. [Gk. Lit.: Odyssey] See : Epic Odyssey , Taylor Made, Titleist and Wilson. The company also manufactures a variety of investment-cast orthopedic orthopedic /or·tho·pe·dic/ (-pe´dik) pertaining to the correction of deformities of the musculoskeletal system; pertaining to orthopedics. implants and surgical tools that are made to customer specifications. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement: Except for historical information, the matters discussed in this news release are 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. , including the statements of the company's CEO relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the golf industry, and the statements of the company's CEO concerning anticipated or projected future performance, earnings, sales and costs of the company. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not limited to, industry conditions, economic conditions, competitive factors and pricing pressures, shifts in market demand, the costs of product development and production as well as other risks indicated from time to time in the company's filings with the Securities and Exchange Commission. The company assumes no obligation to update or supplement forward-looking statements that become untrue un·true adj. un·tru·er, un·tru·est 1. Contrary to fact; false. 2. Deviating from a standard; not straight, even, level, or exact. 3. Disloyal; unfaithful. because of subsequent events. -0-
Coastcast Corp.
Financial Highlights - Quarterly and Year to Date
($ in 000s, except shares data)
Income Statement Summary
Year to Date Fourth Quarter
12/31/98 1998
Sales $ 144,560 $ 24,024
Cost of sales 122,195 24,035
Gross profit 22,365 (11)
Selling, general & administrative expense 10,394 1,839
Income from operations 11,971 (1,850)
Other income, net 1,533 348
Income before provision for income taxes 13,504 (1,502)
Provision for income taxes 5,672 (630)
Income from continuing operations 7,832 (872)
Loss from discontinued operations
(net of income tax benefit of $113) (157) --
Net income $ 7,675 $ (872)
Income from continuing operations
per share - basic $ 0.91 $ (0.11)
Loss from discontinued operations
per share - basic $ (0.02) $ --
Net income per share - basic $ 0.89 $ (0.11)
Weighted average shares outstanding
- basic 8,637,724 7,991,067
Income from continuing operations
per share - diluted $ 0.89 $ (0.11)
Loss from discontinued operations
per share - diluted $ (0.02) $ --
Net income per share - diluted $ 0.87 $ (0.11)
Weighted average shares outstanding
- diluted 8,837,304 7,991,605
Year to Date Fourth Quarter
12/31/97 1997
Sales $ 149,515 $ 36,641
Cost of sales 120,982 29,484
Gross profit 28,533 7,157
Selling, general & administrative expense 10,757 2,170
Income from operations 17,776 4,987
Other income, net 975 395
Income before provision for income taxes 18,751 5,382
Provision for income taxes 7,875 2,260
Net income $ 10,876 $ 3,122
Net income per share - basic $ 1.24 $ 0.35
Weighted average shares outstanding
- basic 8,797,734 8,817,756
Net income per share - diluted $ 1.22 $ 0.35
Weighted average shares outstanding
- diluted 8,924,262 8,986,494
Coastcast Corp.
Financial Highlights - Year End
($ in 000s)
Balance Sheet Summary
12/31/98 12/31/97
Assets
Cash and cash equivalents $ 27,551 $ 28,187
Accounts receivable - net 7,556 12,893
Inventories 10,326 21,208
Prepaid expenses and other current assets 7,520 4,527
Total current assets 52,953 66,815
Property, plant & equipment - net 24,116 19,079
Other assets 6,604 4,131
Total assets $ 83,673 $ 90,025
Liabilities and Shareholders' Equity
Total current liabilities $ 6,236 $ 10,020
Deferred compensation 295 1,614
Shareholders' equity 77,142 78,391
Total liabilities & shareholders' equity 83,673 90,025
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