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PR: Ride Sports Announces Fiscal Year 1998 Year End Results
9/29/98
PRESTON, Wash., Sept. 28 -- Ride Sports (Nasdaq: RIDE) a
leading manufacturer and marketer of snowboard equipment and accessories,
wakeboards and related products, announced today its financial results
for the
six-month FY 1998 year end.
Sales for the six months ending June 30,1998 were $7.3 million, compared
with $7.6 million for the same period in 1997. Snowboard hardgood sales
decreased by $328,000 from the corresponding period in 1997. Hardgood
sales
for wake, skate and other products were up $737,000 due to the addition
of the
Company's FullTilt and Sub Rosa brand wakeboard products in 1998.
Pre-tax loss for the six months ending June 30, 1998 was $11.8 million
compared to $6.3 million for the same period in 1997. In FY 1998, the
Company
transferred its wakeboard operations to its Ride Manufacturing facility in
Corona, California and incurred associated closure and consolidation
costs,
had closeout sales at lower than expected margins, and increased its
inventory
reserves for remaining closeout merchandise due to the continuing soft
market
conditions in the industry. In addition, approximately $1.0 million of the
1998 loss is attributable to non-recurring costs associated with the
settlement of the securities class action lawsuit, as well as certain
severance and other costs associated with management reorganization and
restructuring. Bad debt expense increased by approximately $700,000 in
1998
due to slower than expected collection of accounts receivable from 1997.
The
balance was attributable to additional administrative cost related to the
Device, Smiley Hats, and US2 acquisitions made in the second half of 1997
that
was included in the first six months of 1998.
The net loss for the six-month period ending June 30, 1998 was
$11.8 million ($.99 loss per share) compared to a net loss of $4.4 million
($.41 loss per share) for the same period in 1997. The 1997 net loss
included
a tax recovery of $1.9 million that was not repeated in 1998.
"The six-month 1998 stub-year was a period of difficult but healthy
transition for the Company," stated Robert F. Marcovitch, President and
CEO.
"The Company converted to a June 30 year end, settled the securities class
action lawsuit, and made important changes in top management."
"We are optimistic about the Company's future," continued Marcovitch, "and
have substantial evidence to support this sentiment. Among other things,
the
Company now has a three-year finance facility in place, it has
experienced a
significant increase in preseason orders compared to last year, it
recently
signed a multi-year agreement with Atomic's Oxygen brand to market Ride's
patented Device interface step-in binding system globally, and it has
recently
received notice from the Japanese Patent and Trademark office confirming
its
intention to issue to Ride a patent for the side-mount step-in binding
that
will further cement the Company's presence in the growing worldwide
step-in
binding market. In addition," Marcovitch stated, "our recent success at
the
Surf Expo trade show in Orlando, Florida confirms our expectations that
the
Company's FullTilt and Sub Rosa wakeboard product sales will add
counter-seasonal revenues to Ride's sales figures and improve
efficiencies at
our Corona, California manufacturing facility."
"In the 100 days this management team has been in place," concluded
Marcovitch, "we have made significant progress in refocusing our energies
on
maximizing the equity of the Company's brands and streamlining its
operations.
We anticipate our actions and the momentum of our brands in their
respective
markets will lead to improving profitability. This result should be
clearly
evident in our first quarter results ending September 30."
Established in 1992, Ride is headquartered at the foothills of the Cascade
Mountains, in Preston, Washington. Ride is a leading manufacturer of
contemporary sports equipment, including snowboard equipment, wakeboards
and
apparel under the brand names: Ride, Liquid, 5150, Smiley Hats, SMP and
FullTilt.
This Press Release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section
21E of the Securities Exchange Act of 1934, as amended. Although the
Company
believes the assumptions underlying the forward-looking statements
contained
herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
contained in this Press Release will prove to be accurate.
RIDE, INC.,
Financial Highlights
(in thousands, except per share data)
INCOME STATEMENT DATA (a):
Six Months Ended June 30,
1998 1997
Not Sales $ 7,279 $ 7,559
Cost of sales $ 8,287 $ 5,567
Gross profit
(loss) $ (1,008) $ 1,992
Selling, general
and
administrative
expenses $ 10,735 $ 8,392
Operating
expenses $ 10,735 $ 8,392
Operating
loss $(11,743) $(6,400)
Interest
income
(expense) $(30) $ 60
Loss before
taxes $(11,773) $ (6,340)
Income tax
expense
(benefit) $ -- $ (1,904)
Net loss $(11,773) $ (4,436)
Finished goods
Per share:
Basic (0.99) (0.41)
Diluted (0.99) (0.41)
Weighted average
common shares
outstanding:
Basic 12,261 10,826
Diluted 12,261 10,826
BALANCE SHEET DATA:
As of As of
June 30, 1998 December 31,1997
Cash and cash
equivalents $ 165 $ 1,332
Accounts
receivable,
net $ 4,487 $12,588
Inventories:
Finished
goods $ 8,283 $ 6,186
Raw materials
and work in
process $ 2,916 $ 2,417
Obsolescence
reserves $(1,447) $(2,039)
Total
inventories $ 9,752 $ 6,564
Working
capital $ 2,489 $14,823
Total
assets $34,604 $40,610
Total
shareholder's
equity $19,252 $31,070
SOURCE Ride Sports
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