Converse Announces Second Quarter 2000 Results.Business Editors NORTH READING, Mass.--(BUSINESS WIRE)--Aug. 15, 2000 Converse (logic) converse - The truth of a proposition of the form A => B and its converse B => A are shown in the following truth table: A B | A => B B => A ------+---------------- f f | t t f t | t f t f | f t t t | t t Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :CVEO) today announced financial results for its second quarter ended July July: see month. 1, 2000. Second Quarter 2000 Results Net revenue for the second quarter of fiscal 2000 was $56.5 million, down 3.0% from last year's second quarter of $58.3 million. Excluding the impact of the conversion of wholly-owned subsidiaries with foreign operations into licensing arrangements, the company's second quarter 2000 net revenue would have been higher by $0.6 million compared to the prior year period. Net revenue in the U.S. increased 19.8% to $40.0 million in the second quarter of 2000 compared to $33.4 million for the second quarter of 1999. International net revenue decreased 33.7% to $16.5 million for second quarter 2000, from $24.9 million for the second quarter of 1999. The company recorded earnings from operations of $2.2 million in the second quarter of 2000 compared to $0.7 million in the second quarter of 1999. The company's reported net loss was $4.7 million compared to $5.6 million in the second quarter of 1999. First Half 2000 Results Net revenue for the first half of 2000 was $108.9 million, down 15.8% from $129.3 million for the first half of 1999. Excluding the impact of the conversion of wholly-owned subsidiaries with foreign operations into licensing arrangements, the company's first half 2000 net revenue would have been lower by $10.8 million compared to the prior year period. Net revenue in the U.S. increased 7.1% to $73.9 million in first half of 2000 compared to $69.0 million in the first half of 1999. International net revenue decreased 42.0% to $35.0 million in the first half of 2000 from $60.3 million in the first half of 1999. The company recorded earnings from operations in the first half of 2000 of $3.3 million compared to $2.7 million in the first half of 1999. The company's reported net loss was $9.8 million in first half 2000 compared to $8.8 million in first half 1999. Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. At the end of second quarter 2000, the company's global order backlog was $67.9 million compared to $75.9 million at the end of second quarter 1999, a decrease of 10.5%. The U.S. backlog at the end of second quarter 2000 was $56.0 million, or 12.9% ahead of last year, while the international backlog was $11.6 million, or 55.9% below last year. General As previously announced, the company has received a commitment letter from Euro American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Investment Corporation, a private investment concern, to provide $25.0 million in credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing to afford the company additional liquidity under its credit agreement. Under the terms of the commitment letter, Euro American would also purchase, at $0.001 per share, 20,000,000 shares of common stock of Converse and would have an option, for six months following the closing of the $25.0 million financing, to provide an additional $50.0 million in secured debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay and receive warrants to purchase up to 50,000,000 shares of stock at $1.50 per share. The commitment letter also provides, among other things, for designees of Euro American to become a majority of the Board of Directors. The $25.0 million financing, which remains subject to customary closing conditions (including Hart-Scott-Rodino clearance CLEARANCE, com. law. The name of a certificate given by the collector of a port, in which is stated the master or commander (naming him) of a ship or vessel named and described, bound for a port, named, and having on board goods described, has entered and cleared his ship or vessel , if required) and requires the existing secured creditors One who holds some special monetary assurance of payment of a debt owed to him or her, such as a mortgage, collateral, or lien. of Converse to consent to the transaction. The transaction is expected to close by August 31, 2000, subject to receipt of required consents and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. review. As previously announced, Converse is currently in covenant covenant (kŭv`ənənt), agreement entered into voluntarily by two or more parties to do or refrain from doing certain acts. In the Bible and in theology the covenant is the agreement or engagement of God with man as revealed in the default under its credit facility and senior secured notes, as well as interest payment default under its convertible subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes. On August 4, 2000, the trustee A user or group of users that has been given access rights to files on a network server. See also TRUSTe. under the indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. for the convertible notes sent Converse a letter stating that holders of more than twenty-five percent (25%) of the convertible notes had directed it to declare TO DECLARE. To make known or publish. By tho constitution of the United States, congress have power to declare war. In this sense the word, declare, signifies, not merely to make it known that war exists, but also to make war and to carry it on. 4 Dall. 37; 1 Story, Const. Sec. the full amount of principal and interest under the notes to be due and payable. Euro American and the company have been in communication with the trustee and certain holders of the subordinated notes. Converse expects those communications to continue. Any statements set forth above which are not historical facts, including the statements concerning the outlook for cost savings from restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). , increased royalty Compensation for the use of property, usually copyrighted works, patented inventions, or natural resources, expressed as a percentage of receipts from using the property or as a payment for each unit produced. income from the conversion of foreign operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon into licensee/distributors, the planned Euro American financing, revenue, product acceptance and product and industry developments for 2000, are forward looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Potential risks and uncertainties include such factors as the financial strength of the company, the competitive pricing environment and inventory levels within the footwear Footwear consists of garments worn on the feet. It is worn for a variety of reasons, including protection against the environment, hygiene and adornment. Usually, socks and other hosiery are worn between the feet and the footwear, except for sandals and flip flops (thongs). and apparel industries, consumer demand for athletic athletic (athlet´ik), adj pertaining to a bodily constitution characterized by a strong, muscular, robust appearance. athletic injuries, n. footwear, market acceptance of the company's products, the availability and cost of working capital financing, the strength of the U.S. dollar and the success of planned advertising, marketing and promotional campaigns and other risks identified in documents filed by the company with the Securities and Exchange Commission.
CONVERSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
July 1, July 3, July 1, July 3,
2000 1999 2000 1999
Net revenue $ 56,524 $ 58,320 $ 108,919 $ 129,318
Cost of sales 44,286 43,268 85,126 95,525
Gross profit 12,238 15,052 23,793 33,793
Selling, general
and administrative
expenses 14,451 18,714 29,093 40,365
Royalty income 4,051 4,940 8,218 9,782
Restructuring and
other unusual
charges (387) 543 (387) 543
Earnings from
operations 2,225 735 3,305 2,667
Interest expense,
net 5,658 5,283 10,981 10,522
Other (income)
expense, net 639 94 735 (902)
Loss before
income tax (4,072) (4,642) (8,411) (6,953)
Income tax expense 638 938 1,366 1,866
Net loss $ (4,710) $ (5,580) $ (9,777) $ (8,819)
Net basic and diluted
loss per share $ (0.27) $ (0.32) $ (0.56) $ (0.51)
Weighted average number
of common shares
outstanding 17,514 17,396 17,503 17,363
CONVERSE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in thousands, except per share amounts)
(Unaudited)
July 3, 1999 July 1, 2000
ASSETS
Current assets:
Cash and cash equivalents $ 2,317 $ 2,559
Receivables, less allowances
of $1,801 and $2,298,
respectively 55,569 45,016
Inventories 77,723 69,037
Prepaid expenses and other
current assets 6,591 3,027
Total current assets 142,200 119,639
Net property, plant and
equipment 19,885 16,474
Other assets 31,940 12,076
-------- --------
$194,025 $148,189
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY)
Current liabilities:
Short-term debt $ 9,010 $ 3,459
Credit facility 85,096 77,010
Current portion
of long-term debt -- 102,784
Accounts payable 37,206 40,616
Accrued expenses 8,745 15,004
Income taxes payable 3,354 6,505
Total current liabilities 143,411 245,378
Long-term debt 102,191 --
Current assets in excess of
reorganization value 27,183 25,105
Stockholders' equity (deficiency):
Common stock, $1.00 stated value,
50,000,000 shares authorized,
17,437,140 and 17,513,816, shares
issued and outstanding at July 3, 1999
and July 1, 2000,
respectively 17,437 17,514
Preferred stock, no par value,
10,000,000 shares authorized, none
issued and outstanding ---- ----
Additional paid-in capital 4,748 4,604
Unearned compensation (1,450) (644)
Retained deficit (96,948) (141,514)
Accumulated other
comprehensive income (2,547) (2,254)
Total stockholders' equity
(deficiency) (78,760) (122,294)
-------- ----------
$ 194,025 $ 148,189
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion