Coyote Sports Inc. Third Quarter Results; Third Quarter Revenues Increase 35%.BOULDER Boulder, city, United States Boulder, city (1990 pop. 83,312), seat of Boulder co., N central Colo.; inc. 1871. A Rocky Mountain resort and a suburb of Denver, it is the seat of the Univ. of Colorado (1876). , Colo.--(BUSINESS WIRE)--Nov. 11, 1998--Coyote Sports Inc. (Nasdaq:COYT), a leading provider of recreational products and sports equipment to the golf and cycling industries, Wednesday released results for the three months ended Sept. 30, 1998. Revenues for the third quarter climbed to $10,011,658, a 35% increase as compared to $7,407,233 reported in the third quarter of 1997. Revenues for the nine months ended Sept. 30, 1998, climbed to $30,889,395, a 53% increase over revenues of $20,157,402 reported in the same period in 1997. Net income reported was $1,055,776 or $0.22 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, which includes a gain from exchange of ownership interests of $1,022,467 or $0.21 per diluted share, as compared to a net loss of $514,734 or $0.17 loss per share for the comparable period in 1997. Net income was $1,576,236 or $0.34 earnings per diluted share, which includes a gain from the exchange of ownership interests of $1,022,467 or $0.22 per diluted share and $0.07 earnings per diluted share on an extraordinary gain, for the nine months ended Sept. 30, 1998, as compared to a net loss of $2,180,216 or $0.66 loss per share for the comparable period in 1997. Gross profit for the three months ended Sept. 30, 1998, improved to 26% compared to 21% of 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 same period last year. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the three months ended Sept. 30, 1998 decreased to 22% of net sales as compared to 27% for the comparable period in 1997. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the third quarter increased to $373,345 compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $397,162 for the comparable period in 1997. Gross profit for the nine months ended Sept. 30, 1998, improved to 24% compared to 23% of net sales for the same period last year. Operating expenses for the nine months ended Sept. 30, 1998 decreased to 21% of net sales as compared to 30% for the comparable period in 1997. Operating income for the nine month period increased to $835,897 compared to an operating loss of $1,503,068 for the comparable period in 1997. "Coyote continues to achieve record revenues, operating income and net income. The turnaround is due to the company's aggressive pursuit of top line revenue growth while focusing on managing costs," said Jim Probst, 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. and president, Coyote Sports Inc. In the third quarter, the company acquired substantially all of the assets of West Coast Composites, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Cobra Golf Inc. In connection with the acquisition, Coyote signed an exclusive, five-year contract to supply Cobra 90% of its graphite graphite (grăf`īt), an allotropic form of carbon, known also as plumbago and black lead. It is dark gray or black, crystalline (often in the form of slippery scales), greasy, and soft, with a metallic luster. golf shaft requirements. In addition, the company announced a consolidation of the operations of the West Coast Composites facility into the company's Unifiber plant. This is the third acquisition of a golf shaft operation by Coyote. The company acquired Apollo Golf, a manufacturer and distributor of steel golf shafts The shaft of a golf club is the long, cylindrical piece - generally made of steel or graphite - which connects the golfer’s hands to the club head. While hundreds of different designs exist, the primary purpose of the golf shaft remains the same - to provide the player with a in September 1996 and acquired Unifiber Corp., a manufacturer and distributor of premium graphite golf shafts in March 1998. "Coyote Sports is in a unique position to become the predominant pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. supplier of premium golf shafts in the world," said Probst. "In a highly competitive market, we have a strategic manufacturing advantage with Apollo and Unifiber as the only two ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 certified See certification. golf shaft manufacturing companies in the world. With the recent acquisition of West Coast Composites, not only did we strengthen our manufacturing advantage, but we also signed an exclusive five-year graphite shaft supply contract with Cobra Golf. "We are committed to giving our customers the best manufacturing processes and research and development support which exist today," added Probst. Coyote Sports Inc. is a diversified diversified (di·verˑ·s sports manufacturing company that specializes in golf (Apollo and Unifiber golf shafts), cycling (Reynolds premium cycle tubing), and the manufacture of advanced composite materials composite material or composite, any material made from at least two discrete substances, such as concrete. Many materials are produced as composites, such as the fiberglass-reinforced plastics used for automobile bodies and boat hulls, but the used for sporting goods Noun 1. sporting goods - sports equipment sold as a commodity commodity, trade good, good - articles of commerce sports equipment - equipment needed to participate in a particular sport products. Certain oral and written statements of management of the company included in this press release may contain 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 Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, that involve risks and uncertainties that could cause actual results to differ materially. -0-
COYOTE SPORTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months Nine months
Ended Ended
Sept. 30, Sept. 30,
1998 1997 1998 1997
Net sales $10,011,658 7,407,233 30,889,395 20,157,402
Cost of goods sold (7,447,523) (5,825,644) (23,487,493)(15,610,179)
Gross profit 2,564,135 1,581,589 7,401,902 4,547,223
Operating expenses (2,190,790) (1,978,751) (6,566,005) (6,050,291)
Operating income
(loss) 373,345 (397,162) 835,897 (1,503,068)
Other income
(expense):
Interest expense,
net (414,808) (165,595) (814,657) (365,213)
Gain (loss) on
forward exchange
contracts, net 69,000 (132,000) 64,000 (171,000)
Debt financing costs (100,141) (20,000) (200,140) (570,000)
Gain on exchange of
ownership interest 1,022,467 -- 1,022,467 --
Other 30,023 -- 123,053 --
Income (loss) before
income taxes,
minority interests
and extraordinary
item 979,886 (714,757) 1,030,620 (2,609,281)
Income tax (expense)
benefit -- 155,000 (13,000) 336,000
Minority interests in
subsidiaries' losses 75,890 45,023 212,035 93,065
Net income (loss)
before extraordinary
item 1,055,776 (514,734) 1,229,655 (2,180,216)
Extraordinary item,
net of taxes -- -- 346,581 --
Net income (loss) $1,055,776 (514,734) 1,576,236 (2,180,216)
Basic earnings
per share
Income (loss) before
extraordinary item $0.22 (0.17) 0.27 (0.66)
Extraordinary item,
net of taxes -- -- 0.08 --
Net income (loss) $0.22 (0.17) 0.35 (0.66)
Diluted earnings
per share
Income (loss) before
extraordinary item $0.22 (0.17) 0.27 (0.66)
Extraordinary item,
net of taxes -- -- 0.07 --
Net income (loss) $0.22 (0.17) 0.34 (0.66)
Shares used in
calculating basic
earnings per
share 4,823,221 2,963,315 4,546,757 3,285,989
Shares used in
calculating diluted
earnings per
share 4,829,118 2,963,315 4,574,060 3,285,989
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