Bell Sports Corp. Announces Fiscal 2000 Third Quarter Results
SAN JOSE, Calif.–April 24, 2000–Bell SportsCorp. Monday announced the results for its fiscal 2000 third quarterended April 1, 2000.
Net sales from continuing operations for the quarter increased 33%to $68.9 million from $51.7 million in the third quarter of fiscal1999. Third quarter EBITDA rose approximately 80% to $12.9 millionfrom $7.2 million in the third quarter of fiscal 1999. The increase insales is primarily attributable to strong North American sales in themass and specialty retail channels.
Gross margins improved to 35.4% from 32.1% in the prior yearperiod. This improvement was driven by the company’s ongoing effortsto enhance and streamline its supply chain. Selling, general andadministrative expenses improved to 18% of net sales from 21% in theprior year period.
Interest expense, net of investment income, increased to $4.6 million from $4.3 million in the comparable prior year period.Net income for the quarter was $4.0 million, compared to net income of$188,000 for the third quarter of fiscal 1999.
Year-to-date net sales from continuing operations increased 25% to$166.7 million from $133.2 million for the first nine months of 1999.Year-to-date EBITDA improved 66% to $24.5 million from $14.7 millionin the prior period. Gross margins improved to 35.0% from 32.4% in theprior year period.
Selling, general and administrative expenses decreased to 22% ofnet sales, from 25% of net sales in the first nine months of 1999.
Interest expense of $12.8 million increased over the prior year of$10.2 million principally due to the company’s 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 year-to-date was $4.1 million versus a loss of $10.2 million for the prior year period. The prior year period included $8.2 million of expenses related to the company’s plan ofrecapitalization and merger with HB Acquisition.
Mary J. George, chief executive officer, commented, “As we havereiterated in past quarters, we have seen a substantial improvement inoperating results due to a significantly lower cost structure infiscal 2000. These supply chain initiatives have enabled us to realizesolid net sales growth through focusing our efforts on sales,marketing, distribution and product development.
“We are very pleased with the continued strong sales demand fromour customer base. We look forward to continued strong sales andoperating momentum.”
Certain matters in this press release are forward-lookingstatements that involve risks and uncertainties that could causeactual results to differ materially from those in the forward-lookingstatements.
These include but are not limited to: expected sales,profitability, cash flow, seasonality, adverse weather conditions,market acceptance of new products, competitive actions, relationshipswith major retail customers, retail environment, economic conditions,currency fluctuations and other risks indicated in filings fromtime-to-time with the Securities and Exchange Commission.
The company is the leading manufacturer and marketer of bicyclehelmets worldwide and a leading supplier of a broad line of bicycleaccessories throughout North America, Europe, Australia, and Asia.
The company also markets in-line skating, snowboarding and snowskiing helmets. The company markets its helmets under the widelyrecognized Bell, Bell Pro and Giro brand names, and its bicycleaccessories under such leading brands as Bell, Blackburn, Rhode Gear,VistaLite and Spoke-Hedz.
Bell Sports Corp.
(unaudited; in thousands)
Results of Operations Three Months Ended Nine Months Ended
March 27, Appril 1, March 27, April 1, 1999 2000 1999 2000
Net sales $ 54,306 $ 68,883 $ 140,245 $ 166,705Cost of sales 36,873 44,441 94,749 108,298Gross profit 17,433 24,442 45,496 58,407
Selling, general and
expenses 11,631 12,613 34,931 37,101
(gain) loss (34) (69) 1,905 (57) Amortization of
assets 528 530 1,589 1,609Operating income 5,308 11,368 7,071 19,754
Other costs of operations
costs 703 0 8,207 0Total other costs of operations 703 0 8,207 0
(loss) from operations 4,605 11,368 (1,136) 19,754
Net investment income (126) (83) (936) (258)Interest expense 4,411 4,644 11,153 13,065
(loss) before provision for
(benefit from) income taxes 320 6,807 (11,353) 6,947
(benefit from) income taxes 132 2,791 (1,177) 2,848
(loss) 188 4,016 (10,176) 4,099
EBITDA $ 7,179 $ 12,889 $ 14,706 $ 24,463
Bell Sports Corp.
(unaudited; in thousands)
Condensed Balance Sheet
July 3, April 1, 1999 2000
Cash and marketable securities $ 8,875 $ 14,447Accounts receivable, net 58,634 83,149Inventories 43,664 51,275Property, plant and equipment, net 16,162 13,163Goodwill 52,429 51,477Other assets 39,170 38,633
Total assets $218,934 $252,144
Accounts payable $ 9,249 $ 15,388Accrued expenses 34,262 27,479Debt and capital leases 159,606 196,448Other liabilities 9,352 1,071Stockholders’ equity 6,465 11,758
and stockholders’ equity $218,934 $252,144