K2 Inc. reports sales and earnings for the fourth quarter and year and declares a regular quarterly dividend of 11 cents per share.

LOS ANGELES--(BUSINESS WIRE)--Feb. 21, 1997--K2 Inc. (NYSE:KTO) (formerly Anthony Industries Inc.) Friday reported sales and earnings for the year ended Dec. 31, 1996.

Income from continuing operations for the year rose 27 percent to $25.2 million, from $19.8 million in 1995. Earnings per share from continuing operations, reflecting the completion on June 1, 1995, of the company's public offering of 4.6 million shares, was $1.51 per share, as compared with $1.37 per share a year ago. Sales for the period increased 11 percent to $602.7 million from $544.3 million.

Net income for 1996 totaled $25.2 million, or $1.51 per share, as compared with $14.9 million, or $1.03 in the prior year, which included a loss of $4.9 million related to the disposition of the swimming pool business.

For the fourth quarter, net income from continuing operations was $6.3 million, or 38 cents per share, an increase of 31 percent from $4.8 million, or 29 cents per share, a year ago. Sales for the quarter increased 13 percent to $152.8 million from $135.7 million in the prior year.

Net income for the fourth quarter was $6.3 million, or 38 cents per share, compared with a loss of $158,000, or 1 cent per share, which included the loss related to the swimming pool business sale.

Commenting on the results for the year, Richard M. Rodstein, president and chief executive officer, said: "K2 in-line skates have been a tremendous success in 1996 and spearheaded sales and earnings growth for the year. Sales of K2 skates doubled, reflecting explosive growth in the European market and increased distribution in the domestic market.

"The results in the U.S. market are particularly gratifying, since industry skate sales in this market were sluggish during the year. The popularity of the K2 skate is continued evidence of the growing acceptance of the soft boot technology, of which K2 is the recognized innovative leader. K2's new shaped skis and Stearns' new camping and water sports products also helped drive earnings improvement.

The worldwide Shakespeare fishing tackle business reported higher sales and earnings, despite sluggish shipments to some large customers, reflecting the positive impact of a one-year promotional program entered into early in the year. Partially offsetting these earnings gains was a loss reported by our full-suspension mountain bike business due in part to softness in the mountain bike market.

"Our active apparel business also suffered a decline in earnings. The new 1997 models of our ProFlex mountain bikes incorporate proprietary Noleen shock absorbers in addition to several new innovations, and our camping products for this year have been bolstered with the introduction of an innovative new line of K2 Outdoor backpacks, daypacks and hydration systems."

Rodstein added, "In the industrial products group, the year benefited from volume driven earnings gains of Shakespeare monofilament products. Improved margins on Simplex building products also contributed to our earnings gains."

As to the fourth quarter, Rodstein commented: "The increase in sales and earnings was driven by the success of the in-line skates holiday program, strong reorders of K2 shaped skis, the introduction of the new electronic Merlin V skis and improved fishing tackle sales.

"Partially moderating these improvement were a year-end liquidation of overstocked backpacks, apparel and mountain bikes and lower sales of Stearns products to certain large retailers and of Thermo-ply insulative sheathing due to competitive pricing."

K2's board of directors declared a regular quarterly cash dividend of 11 cents per share payable April 1, 1997, to shareholders of record March 14, 1997.

K2 is a leading designer, manufacturer and marketer of brand name sporting goods and recreational and industrial products. The company's sporting goods and recreational products include well-known names such as K2 and Olin alpine skis, K2 snowboards, K2 Exotech and Endotech in-line skates, Stearns sports equipment, Shakespeare fishing tackle, ProFlex mountain bikes, Dana Design and K2 Outdoor backpacks and Hilton active apparel.

K2's industrial products include Thermo-ply residential insulative sheathing and, under the Shakespeare brand, extruded monofilaments, marine antennas and fiberglass light and power line poles.

                              K2 INC.
                       SUMMARY OF OPERATIONS
              (in thousands except for per share figures)

                            FOURTH QUARTER             YEAR ENDED
                            ended Dec. 31               Dec. 31
                             (unaudited)
                          1996        1995         1996         1995

Net Sales           $ 152,844    $ 135,743    $ 602,734    $ 544,268
Cost of products
 sold                 108,318       99,156      432,775      400,840
   Gross profit        44,526       36,587      169,959      143,428

Selling expenses       20,107       15,707       73,844       61,256
General and
 administrative
 expenses              13,589       12,118       51,759       45,086
    Operating income   10,830        8,762       44,356       37,086

Interest expense        2,489        2,440        9,294        9,916
Other income, net        (415)        (396)      (1,480)      (1,449)
  Income before
   provision for
   income taxes         8,756        6,718       36,542       28,619

Provision for
 income taxes           2,435        1,900       11,325        8,820 (a)

 Income from
  continuing
  operations            6,321        4,818       25,217       19,799

Discontinued
 operations, net
 of taxes                   0       (4,976)           0       (4,920)

  Net income        $   6,321    $    (158)   $  25,217    $  14,879

Per share:
  Continuing
   operations (b)   $    0.38    $    0.29    $    1.51    $    1.37
  Discontinued
   operations            0.00        (0.30)        0.00        (0.34)
  Net income        $    0.38    $   (0.01)   $    1.51    $    1.03

Dividends
 Cash dividend      $    0.11    $    0.11    $    0.44    $    0.44

Average shares
 outstanding           16,742       16,664       16,734       14,498

(a) Reduced by $259, or 2 cents per share, foreign tax settlement

(b) Assuming the company's June 1, 1995 public offering had been

completed on Jan. 1, 1995, earnings per share from continuing

operations were $1.51 for the 1996 year end period vs. $1.27 for the

corresponding year-ago period on a proforma basis.

CONTACT: K2 Inc., Los Angeles

John J. Rangel, 213/890-5830