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PR:Bell Sports Corp. Announces Fiscal 1999 Third Quarter Results
Quarter.
5/11/99
SAN JOSE, Calif.--(BUSINESS WIRE)--May 10, 1999--Bell Sports
Corp. Monday announced the results for its fiscal 1999 third quarter
ended March 27, 1999.
Net sales for the quarter increased 4% to $54.3 million from
$52.3 million in the third quarter of fiscal 1998. The increase in
sales is primarily attributable to strong U.S. mass merchant bicycle
helmet and bicycle accessory sales. Gross margins for the quarter
decreased to 32.1% of net sales from 34.8% of net sales in the prior
year period.
Selling, general and administrative expenses decreased over one
percentage point to 21.4% of net sales for the quarter from 22.7% of
net sales for the third quarter of fiscal 1998. Operating income
decreased to $5.8 million, or 10.7% of net sales compared to $6.3
million, or 12.1% of net sales, in the third quarter of fiscal 1998.
Interest expense for the quarter increased to $4.4 million from
$1.2 million in the third quarter of fiscal 1998. The increased
interest expense is attributable to an increase in the company's
outstanding debt from the issuance of $125.0 million of new debt in
August 1998, offset by the repurchase of $62.5 million aggregate
principal amount of its Debentures due November 2000 during the first
quarter of fiscal 1999.
Net income for the quarter was $188,000, which included one-time
transaction charges of $703,000 related to the company's August 1998
recapitalization transaction, compared to net income of $3.2 million
for the third quarter of fiscal 1998.
Year-to-date net sales were $140.2 million for the quarter
compared to $138.6 million in the first nine-month period of fiscal
1998. Year-to-date gross margins remained stable at 32.4% of net sales
as compared to 32.5% of net sales in the prior year period. Selling,
general and administrative expenses for the nine-month period remained
consistent at 24.9% of net sales.
Year-to-date operating income increased to $10.6 million, or 7.5%
of net sales compared to $10.4 million, or 7.5% of net sales, in the
first nine-month period of fiscal 1998. Interest expense increased to
$11.2 million for the year-to-date period from $3.5 million in the
prior year period.
Year-to-date net loss was $10.2 million, which included $13.1
million of one-time transaction costs related to the company's August
1998 recapitalization transaction offset by an extraordinary gain of
$2.9 million associated with the company's repurchase of its
Debentures due November 2000, compared to net income of $4.1 million
in the comparable fiscal 1998 period.
Mary J. George, chief executive officer and president commented,
"We are encouraged by the increase in sales and the reduction in
selling, general and administrative costs during the third quarter.
"These increases were partially offset by a temporary increase in
manufacturing expenses at our Santa Cruz, California manufacturing and
distribution facility, relating to the Company's consolidation of its
Santa Cruz manufacturing operations with its Rantoul facility.
"We are very pleased that this transition is going smoothly and
is expected to be complete by the end of June, 1999, approximately six
months ahead of schedule."
George continued: "The Company is also excited about potential
cost savings associated with an international restructuring plan. By
closing our Irish and Canadian manufacturing facilities, we will be
making our Rantoul, Illinois plant the world's largest bicycle helmet
manufacturing facility, and our helmet facility in Roche la Moliere,
France the largest in Europe.
"This will enable the Company to focus on its core competencies -
sales, marketing and shelf space management - while operating at a
lower cost structure.
"Further, by mid-July this year, we will have created the largest
and most advanced bicycle helmet research, design, and testing center
in the world in our Santa Cruz, California facility, strengthening our
commitment to be the leader in innovation in the bicycle market."
Richard S Willis, chief financial officer commented, "The
restructuring plan to realign the international operations and
complete the Santa Cruz, California transition will be recorded in the
Company's fourth quarter. We are currently quantifying the costs
associated with the restructurings and anticipate making an
announcement in the forth quarter."
Certain matters in this press release are forward-looking
statements that involve risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements.
These include but are not limited to: expected sales,
profitability, cash flow, seasonality, adverse weather conditions,
market acceptance of new products, competitive actions, relationships
with major retail customers, retail environment, economic conditions,
currency fluctuations and other risks indicated in filings from
time-to-time with the Securities and Exchange Commission.
The company is the leading manufacturer and marketer of bicycle
helmets worldwide and a leading supplier of a broad line of bicycle
accessories in North America. The company is also a leading supplier
of auto racing helmets and a supplier of bicycle accessories
worldwide. Recently, the company began marketing in-line skating,
snowboarding, snow skiing and water sport helmets.
The company markets its helmets under the widely recognized Bell,
Bell Pro and Giro brand names, and its bicycle accessories under such
leading brands as Bell, Blackburn, Rhode Gear, VistaLite, Copper
Canyon Cycling and Spoke-Hedz.
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