Converse announces third quarter results.NORTH READING, Mass.--(BUSINESS WIRE)--Nov. 14, 1995--Converse Inc. (NYSE NYSE See: New York Stock Exchange :CVE (Common Vulnerabilities and Exposures) A list of information security exposures and vulnerabilities sponsored by US-CERT and maintained by the MITRE Corporation. ) today announced financial results for the third quarter and nine month period ended September September: see month. 30, 1995. Revenues for the 1995 third quarter were $110.1 million, compared to $126.4 million in the third quarter of 1994. The loss from operations was $2.2 million versus earnings from operations of $9.9 million last year. The net loss was $6.6 million, or $0.39 per share compared to net income of $4.9 million, or $0.29 per share for the third quarter of 1994. For the nine month period, revenues were $330.6 million versus $353.5 million last year. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before were $6.5 million compared to $34.2 million in the comparable period of 1994. The net loss was $30.4 million, or $1.82 per share compared to net income of $17.4 million, or $1.04 per share for the same period last year. Net revenues for the third quarter primarily reflect a decrease of 23% in domestic sales, offset in part by a modest increase in international revenues. International revenues have increased 42% for the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. period, a trend which is expected to continue in the fourth quarter. The Company posted significant increases in its Children's and Cross-Training cross-training Multiskilling Sports medicine 1. The regular participation in multiple sports–eg, basketball and long-distance running 2. The exercising of muscle groups or participation in a sport differing from than an athlete's primary sport. See Training. categories, which were offset by declines in the basketball and athleisure segments. The decline in gross profits for the quarter is primarily attributable to lower than anticipated sales volume due to poor U.S. sell-through sell-through Adjective of the sale of prerecorded video cassettes, without their first being for hire only at retail, reduced manufacturing utilization and efficiencies, and higher distribution expenses related to the conversion of our international distributors into directly controlled 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 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 . The Company continues to aggressively control inventories and limit gross profit exposure through focused purchasing and timely distribution of product. Global 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. stood at $149.3 million at September 30, 1995, versus $180.7 million at October October: see month. 1, 1994. This backlog was affected by the timing impact of international orders related to the Company's transition from distributors to direct operating units, as well as general weakness in the U.S. retail market. Gib Ford, Chairman and Chief Executive Officer, said, "To improve the financial performance of the Company, we have taken several aggressive steps. We have addressed our domestic manufacturing issues by closing our Mission, Texas factory in September; 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). the Lumberton Lumberton, city (1990 pop. 18,601), seat of Robeson co., S N.C., on the Lumber River; founded 1787, inc. 1852. It is in an agricultural area, with tobacco, grains, soybeans, and livestock. , North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. facility and moving the stitching operation to our Reynosa Rey·no·sa A city of eastern Mexico on the Rio Grande east-northeast of Monterrey. It is a processing and shipping center in an agricultural region. Population: 461,000. , Mexico manufacturing plant; reducing our domestic manufacturing workforce by over 475 people. These initiatives have resulted in $4.5 million in cost savings." "In October, we restructured the domestic sales organization, resulting in the consolidation of sales territories, the removal of sales management Sales Management Role and Goal Importance of sales management is critical for any commercial organization. Expanding business in not possible without increasing sales volumes, and effective sales management goal is to organize sales team work in such a manner that ensures a levels, plus the elimination of 21 positions within the field sales force and a revision of the compensation structure to a commission basis for greater earnings potential. We believe these steps will enable our sales force to focus on the most effective distribution channels to better serve the needs of the marketplace." "We have made significant progress in reducing our SG&A expenses and are on target to potentially exceed our goal of $15 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. savings for 1996. We are continuing to evaluate a number of other options including product category and SKU (StockKeeping Unit) The number of one specific product available for sale. If a hardware device or software package comes in different versions, there is an SKU for each one. SKU - stock-keeping unit consolidation, refocusing Noun 1. refocusing - focusing again focalisation, focalization, focusing - the act of bringing into focus our retail account strategy and the ongoing reengineering of the Company," Mr. Ford concluded. -0-
CONVERSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
9/30/95 10/1/94 9/30/95 10/1/94
Net Sales $110,121 $126,352 $330,641 $353,507 Cost of sales 80,783 83,739 225,820 227,706 Gross profit 29,338 42,613 104,821 125,801 Selling, general and administrative expenses 36,026 35,648 110,586 99,932 Royalty income 4,489 2,974 12,240 8,363 Earnings (loss) from operations (2,199) 9,939 6,475 34,232 Loss on investment in unconsolidated subsidiary - - 41,599 - Restructuring expense - - 1,000 - Interest expense 3,525 1,688 9,518 5,221 Other income (expense), net (962) (519) 555 (886) Earnings (loss) before income tax (6,686) 7,732 (45,087) 28,125 Income tax expense (benefit) (103) 2,871 (14,660) 10,728 Net earnings (loss) $ (6,583) $ 4,861 $(30,427) $17,397 Net earnings (loss) per share $ (0.39) $ 0.29 $ (1.82) $ 1.04 Weighted average number of common shares 16,692 16,692 16,692 16,692 -0-
CONVERSE INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)
September 30, 1995 December 31, 1994
Assets Current assets: Cash and cash equivalents $ 4,167 $ 4,992 Receivables, less allowances of $1,553 and $2,195 respectively 85,636 68,921 Inventories 101,003 99,482 Prepaid expenses and other current assets 15,715 11,540 Refundable Income Taxes 12,934 ---
Total current assets 219,455 184,935
Property, plant and equipment:
Buildings and improvements 12,022 10,288
Machinery and equipment 15,753 12,315
27,775 22,603
Less accumulated depreciation 4,600 2,254
Net property, plant and equipment 23,175 20,349
Other assets 22,499 18,442
Total Assets $265,129 $223,726
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt 23,112 5,813
Accounts payable 28,121 30,540
Accrued employee compensation 5,742 7,078
Accrued interest expense 268 788
Other accrued expenses 20,012 7,743
Income taxes payable 2,367 1,573
Total current liabilities 79,622 53,535
Long-term debt, less current
maturities 110,000 77,087
Subordinated debt 9,644 -
Current assets in excess of
reorganization value 34,974 36,532
Deferred postretirement benefits
other than pensions 11,170 11,307
Other liabilities 278 278
Stockholders' equity:
Common stock $1.00 stated value,
50,000,000 shares
authorized, 16,692,156 shares
issued and outstanding
at July 1, 1995 16,692 16,692
Preferred stock, no par value,
authorized 10,000,000 shares
none issued and outstanding - -
Additional paid in capital 3,528 -
Retained earnings (510) 29,917
Foreign currency translation
adjustment (269) (1,622)
Total stockholders' equity 19,441 44,987
Total liabilities & stockholders'
equity $265,129 $223,726
-0-
Converse Inc., the largest U.S. manufacturer of athletic shoes,
is a leading designer, manufacturer and marketer of high quality
athletic and leisure footwear and is a licensor of sports apparel and
accessories that are distributed worldwide through over 9,000
athletic specialty, sporting goods, department and shoe stores.
CONTACT: Converse Inc. Investor Contact: Donald J. Camacho Chief Financial Officer 508/664-1100 or Media Contact: Jennifer Murray Jennifer Murray born June, 1940 in Providence, Rhode Island, who in 1997 circumnavigated the world aboard a Robinson R44 helicopter the distance of 36,000 miles in 97 days, earning her the current Guinness World Record for Director of Corporate Communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. 508/664-1100 or Stacy Berns Morgen-Walke Associates 212/850-5600 or Robert Jones/Christine DiSanto Morgen-Walke Associates 212/850-5600 |
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