K2 Snowboards has been experiencing many changes to its staff in the past year. The pro team has three new riders, and the in-house staff has grown.

Brian Craighill has just been brought on as the new team manager for K2. A Utah local, Brian was working at Blindside Snowboard shop and was a K2 regional team rider before coming in-house.

Also new to the marketing department is Gin Yang. She comes to K2 from the Snowboard Connection in Seattle and will be the Marketing Coordinator and media contact. K2 veteran Hayley Martin continues as Director of Marketing and Dave Billinghurst has become the Field Marketing Manager. Nick Sherman, who has been with K2 since 1998, is now the Creative Manager, in charge of developing board graphics, binding colors, softgoods styling, and all packaging needs. Graphic Artist Fran Stoll and Graphic Assistant Cory Little have been hired, expanding our in-house graphics department. We can thank them for K2′s kick ass new board graphics.

Sales Director Luke Edgar has recently hired Bill Cox as the new sales rep of the great Southeast.

The newest members to the K2 Pro Team are Bobby Meeks, Wille Luoma, and Louie Fountain. Bobby Meeks comes to K2 after a brief leave of absence from pro riding due to injuries. Wille Luoma, who is a proud new papa, was the first rider to willfully leave Forum. Louie Fountain was a regional rider from Bend, OR that has stepped it up to Pro status this season, check out his killer part in the Recast film, This Time.

The product development department at K2 has also expanded, with new category directors for all hard goods. John O’Connor is heading up the board development team, which includes Cameron Andrus,Doug Sanders, Hunter Waldron, Damon Flemming, Lori Paul, Pat Timmons, and Mark Hayden. Jay Wailer is working with John Martin and Bill Hall on boot design and Alex Draper is developing bindings with the help of Bob Carrasca, and Andy Aiken.

In the softgoods department, the Category Director is Geoff Rittmeyer and Apparel Product Manager is Ammi Borenstein. K2 recently brought on Sara Arevalo as Soft Goods Assistant Designer.

The K2 Snowboard in-house team has never been so strong and so focused. This season they will be working hard and riding hard!

K2 Inc. Third Quarter Sales Up

K2 Inc. announced that earnings for its third quarter ended Sept. 30, 2000, rose 37 percent on sales increases of 17 percent, compared with year-ago results.

The improvements were driven by strong performances in snowboard products, K2 Kickboard small-wheeled scooters, Stearns marine products, skateboard shoes and Shakespeare marine antennas and composite light poles.

For the current third quarter, K2 reported net sales of $163.5 million, up 17 percent from $139.9 million reported a year earlier. Income from continuing operations and net income in the 2000 quarter were $4.5 million, up 37 percent from the comparable 1999 figures of $3.3 million.

For the 2000 third quarter, earnings from continuing operations and net income were 25 cents per diluted share based on 18.1 million average diluted shares outstanding, compared with the year-earlier period in which earnings from continuing operations and net income per diluted share were 20 cents, based on 16.5 million average diluted shares. The additional shares were issued in conjunction with the acquisition of Ride Inc. in October 1999.

For the third quarter, the company’s operating income increased to $9.4 million, or 5.8 percent of sales, from $7.5 million, or 5.4 percent of sales, in the year-ago period as a result of improved gross margins and expense controls.

For the nine months ended Sept. 30, 2000, K2 reported net sales of $504.3 million, up 9 percent from $461.2 million reported a year earlier. Income from continuing operations in the current period was $14.2 million, up 5 percent from the comparable 1999 income of $13.5 million.

On a per share basis, income from continuing operations was impacd by the issuance of 1.5 million shares to acquire Ride Inc. last October. For the current year, earnings from continuing operations per diluted share was 79 cents, compared with the year-earlier period of 82 cents per diluted share.

Net income for the first nine months of 2000, including discontinued operations, was $14.6 million, or 81 cents per diluted share, as compared with net income of $14.6 million, or 88 cents per diluted share, in the prior year.

The company’s operating income increased to $32.6 million, or 6.5 percent of sales, up from $28.8 million, or 6.2 percent of sales, in the year-ago period due mainly to a rise in the gross profit percentage. The company’s interest expense increased to $11.3 million, up from $9.0 million in the prior year, reflecting higher borrowing rates.

Richard M. Rodstein, president and chief executive officer, said: “K2′s strong third-quarter results reflect the positive impact of our focus on continued product innovations, improving margins and strengthening the balance sheet. Our improved balance sheet has allowed us to reduce debt and to pursue acquisition opportunities such as the recent announcement of the signed letter of intent to acquire the Igloo, Zebco (North America), MotorGuide and Hoppe’s businesses of Brunswick Corporation. Based on the synergies we believe we can achieve, we anticipate the acquisition of the businesses will be accretive to K2′s earnings in 2001.”

Operations Review

Rodstein added: “Our performance in the third quarter compared favorably against a year ago across a number of our product lines, especially snowboards, K2 Kickboard scooters, our Stearns marine products, skateboard shoes and in some of our industrial areas. These improvements were partially offset by sales declines in in-line skates, bikes and paperweaving monofilament line.

“Gross margins improved modestly, reflecting the margin benefit we are deriving from our successful execution of cost-reduction programs, although somewhat restrained by declining margins in the industrial products businesses and the impact of a weaker Euro on sales of dollar denominated product in Europe. Our program to improve gross profits of our snowboards and skis by shifting manufacturing to our overseas plants is on target. Operating margins also benefited from the impact of lower operating expenses as a percentage of sales.”

The sporting goods segment reported sharply higher sales for the quarter of $126.6 million, up 24 percent from the $102.2 million reported in the prior year’s period.

“The increase in sporting goods sales benefited from strong demand during the quarter for K2 snowboard products and from the addition of Ride and Morrow, all of which contributed to a 76 percent increase in category sales over the year-ago quarter. Ride continued to generate momentum in the marketplace with strong demand for its boards and bindings. In a seasonally slow in-line skate quarter, we began to see the benefits of creating a small-wheeled products group, based on the strength of our in-line skate businesses,” Rodstein said.

“We were able to leverage the strength of the K2 brand and strong distribution ties to generate sales of our high-performance, three-wheeled Kickboard scooter that more than offset the decline in in-line skate sales, resulting in a 16 percent improvement in the category’s sales. A recent broadening of the scooter’s offering has positioned the product line for future growth potential. Sales of in-line skates were further impacted by a weak European currency, decreasing the dollar equivalent of our skate sales by 9 percent.

“Sales of our Stearns products also increased significantly for the quarter, reflecting the benefits of new product sales. The Shakespeare fishing tackle business continued its improvement into the seasonally slow third quarter led by the popularity of packaged rods and reels and new product introductions. Although ski shipments were comparable with the prior year’s quarter, we had strong sales in the domestic market reflecting initial popularity of the new K2 MOD-X ski line.”

Sales of Adio and Hawk skateboard shoes increased by double digits over the prior yeaQ’s quarter. Declines, however, in corporate apparel sales resulted in an overall 3 percent increase in sales in K2′s other recreational products segment to $10.7 million from $10.4 million.

Sales of K2′s industrial products group decreased 4 percent in the current third quarter to $26.2 million from $27.4 million a year ago. Lower industrial product sales reflected reduced demand for monofilament line used in the paper industry. Partially offsetting this were improved sales of specialty monofilaments and composite light poles. The decline in sales and resulting lower gross margins decreased the operating income for the segment.

K2 Inc. is a leading designer, manufacturer and marketer of brand- name sporting goods, recreational and industrial products. The company’s sporting goods and recreational products include well-known names such as K2 and Olin alpine skis; K2, Ride and Morrow snowboards; boots and bindings; K2 in-line skates; Stearns sports equipment; Shakespeare fishing tackle; K2 bikes; and Dana Design backpacks.

K2′s other recreational products include Planet Earth apparel, Adio skateboard shoes and Hilton corporate casuals. K2′s industrial products include Shakespeare extruded monofilaments, marine antennas and composite light poles.the prior year’s quarter, we had strong sales in the domestic market reflecting initial popularity of the new K2 MOD-X ski line.”

Sales of Adio and Hawk skateboard shoes increased by double digits over the prior yeaQ’s quarter. Declines, however, in corporate apparel sales resulted in an overall 3 percent increase in sales in K2′s other recreational products segment to $10.7 million from $10.4 million.

Sales of K2′s industrial products group decreased 4 percent in the current third quarter to $26.2 million from $27.4 million a year ago. Lower industrial product sales reflected reduced demand for monofilament line used in the paper industry. Partially offsetting this were improved sales of specialty monofilaments and composite light poles. The decline in sales and resulting lower gross margins decreased the operating income for the segment.

K2 Inc. is a leading designer, manufacturer and marketer of brand- name sporting goods, recreational and industrial products. The company’s sporting goods and recreational products include well-known names such as K2 and Olin alpine skis; K2, Ride and Morrow snowboards; boots and bindings; K2 in-line skates; Stearns sports equipment; Shakespeare fishing tackle; K2 bikes; and Dana Design backpacks.

K2′s other recreational products include Planet Earth apparel, Adio skateboard shoes and Hilton corporate casuals. K2′s industrial products include Shakespeare extruded monofilaments, marine antennas and composite light poles.