SAN JOSE, Calif.–(BUSINESS WIRE)–Aug. 3, 1999–Bell SportsCorp. announced today the results for its fiscal 1999 fourth quarterended July 3, 1999.
Net sales for the quarter increased 3 percent to $70.7 millionfrom $68.7 million in the fourth quarter of fiscal 1998. The increasein sales is primarily attributable to strong U.S. sales in the massmerchant channel and in Bell branded product.
Selling, general and administrative expenses decreased to 19.0percent of net sales for the quarter from 20.4 percent of net salesfor the fourth quarter of fiscal 1998. Fourth quarter EBITDA roseapproximately 7.8 percent to $12.9 million from $12.0 million in thefourth quarter of fiscal 1998.
The company recorded restructuring and other one-time charges of$29.0 million related to the restructuring plan announced in the thirdquarter of fiscal 1999, a provision for product liability reservesrelated to outstanding cases, and one time costs associated with thesale of Bell’s former auto racing helmet division.
Net loss for the quarter was $12.7 million, compared to netincome of $4.5 million for the fourth quarter of fiscal 1998. Interestexpense for the quarter increased to $4.6 million from $1.2 million inthe fourth quarter of fiscal 1998 primarily attributable to anincrease in the company’s outstanding debt from the issuance of $125.0million of new debt in August 1998.
This increase was partially offset by the repurchase of $62.5million aggregate principal amount of its Debentures due November 2000during the first quarter of fiscal 1999.
Net sales for fiscal 1999 increased 2 percent to $210.9 millioncompared to $207.2 million in fiscal 1998. Selling, general andadministrative expenses for the year decreased to 23.0 percent of netsales from 23.5 percent of net sales for fiscal 1998.
Full year EBITDA increased by $1 million or 4 percent to $27.6million from $26.6 million in fiscal 1998. Interest expense increasedto $15.8 million from $4.7 million for fiscal year 1998. Net loss forthe year was $22.9 million, compared to net income of $8.6 million infiscal year 1998.
The fiscal 1999 loss included $13.3 million of one-timetransaction costs related to the company’s August 1998recapitalization transaction and $29.0 million of one-time chargesoutlined above. These charges were offset by an extraordinary gain of$2.9 million associated with the company’s repurchase of itsDebentures due November 2000.
Mary J. George, chief executive officer and president commented,”We are pleased with the improved sales and operating results. TheCompany is also excited about the completion of the restructuringplans announced in the third quarter.
“The manufacturing facilities in Ireland, Canada, and Santa Cruz,California have all been closed on schedule. In addition, a letter ofintent is in place to sell the manufacturing operations of theCompany’s remaining European operations.
“The consolidation of manufacturing operations from fivefacilities to one has increased capacity utilization from 60% to 90%worldwide. In addition to these manufacturing consolidations, theAustralian sales and marketing office has been sold to Gemini BicycleCentres Pty Ltd.
“These changes will enable the Company to increase its focus onits core competencies — sales, marketing, distribution and productioninnovation, while operating under a significantly lower coststructure.”
George continued, “We are seeing the benefits of consolidatingour product design and test labs into one global facility, and weexpect to launch an extremely innovative and successful line at theFall trade shows. We believe the Company is strategically positionedto exceed our customers’ expectations and execute our plans in fiscal2000 and beyond.”
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-lookinngstatements.
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 in North America. The company is also a leading supplierof bicycle accessories worldwide. In fiscal 1998, the company beganmarketing in-line skating, snowboarding, snow skiing and water sporthelmets.
The company markets its helmets under the widely recognized Bell,Bell Pro and Giro brand names, and its bicycle accessories under suchleading brands as Bell, Blackburn, Rhode Gear, VistaLite, CopperCanyon Cycling and Spoke-Hedz.