PR: Morrow Report Record Sales and Earnings
(October 25, 1996)

Net sales for the quarter were $19,667,000, an increase of 93 percent from $10,212,000 in the prior year's third quarter. Net income for the latest quarter was $3,069,000, more than four times the net income of $681,000 recorded in the third quarter last year.

Earnings per share for the 1996 third quarter were 51 cents, compared with earnings per share of 19 cents in the 1995 third quarter. The weighted average shares outstanding in the 1996 third quarter were 6,046,000, compared with 3,540,000 in the comparable period a year ago.

For the first nine months of 1996, net sales were $22,352,000, or 49 percent above the $14,963,000 reported in the first nine months of 1995. Net income for the first nine months of the current year was $1,698,000, or 28 cents per share, compared with a net loss of $218,000, or 5 cents per share, in the comparable period a year ago.

"We are extremely pleased with our results for the quarter, which is seasonally the largest revenue period for us each year," commented David Calapp, chief executive officer of Morrow Snowboards. "Revenue growth was strong as a result of the solid preseason orders we announced earlier in the year, along with the strong performance and growth of the Morrow brand.

"A key element of our performance in the latest quarter was an improved gross margin of 39.2 percent, compared with 30.4 percent in the third quarter a year ago," Calapp added. "This planned improvement was driven by our focus on the Morrow brand and the corresponding de-emphasis of manufacturing for other snowboard companies, plus the improvements we have made to our manufacturing processes in the last year.

"As planned, we enhanced our service and responsiveness to our customers, improving product deliveries compared with last year. This effort further increased the third quarter sales over last year. While we expect continued year-over-year sales growth in the fourth quarter, the rate of growth will not be as high as the third quarter rate, due to the change in our shipping pattern this year.

"While we are pleased with our results for the quarter, they are essentially in line with the business strategy executed earlier in the year," Calapp concluded. "We continue to see opportunities to improve our operating effectiveness as a leader in an exciting, growing market."

This press release contains forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. The forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from the forward-looking statements, including, without limitation, new initiative by competitors, Morrow's ability to manufacture product at planned costs, and weather in primary winter sports areas of the world. The forward-looking statements should be considered in light of these risks and uncertainties.

Morrow Snowboards is a leading designer, manufacturer and marketer of premium snowboards and related products.

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