HEAD NV announces Results for the Three and Six Months ended 30 June
2009
(Thomson Reuters ONE) - Amsterdam - 21st August 2009 - Head N.V. (VSX: HEAD, U.S. OTC:HEDYY.PK), a leading global manufacturer and marketer of sportsequipment, announced the following results today.For the six months ended 30 June 2009 compared to the six monthsended 30 June 2008: * Reported net revenues decreased 2.9% to ?114.4 million * On a constant currency basis, net revenues decreased by 6.6% * Reported Operating loss deteriorated by ?3.8 million to a loss of ?13.9 million from a loss of ?10.1 million in June 2008. * Excluding the impact of the non cash share based compensation, and restructuring costs, operating loss would have improved by ?2.3 million to a loss of ?11.7 million from a loss of ?14.1 million in June 2008 * The net loss for the period was ?17.1 million compared to a net loss in June 2008 of ?9.7 million.For the three months ended 30 June 2009 compared to the three monthsended 30 June 2008: * Reported net revenues increased 1.9% to ?57.3 million * On a constant currency basis, net revenues decreased by 1.8%. * Reported Operating loss improved by ?3.2 million to a loss of ?3.8 million from a loss of ?7.0 million in Q2 2008. * Excluding the impact of the non cash share based compensation, and restructuring costs, operating loss would have improved by ?4.4 million from a loss of ?7.7 million in Q2 2008 to a loss of ?3.3 million for the same period in 2009.Johan Eliasch, Chairman and CEO, commented:We continue to be effected by the current uncertain economicconditions. As expected, our diving division has been the mosteffected due to its link to travel and the relatively high pricepoints of the products. Overall the sales in this division havefallen by 18.4% on a constant currency basis for the first six monthsof the year compared to the first six months of 2008. We estimate ona world wide basis that the market declined by around 15%-20% for theperiod, with the US being particularly badly effected. We do not seea significant recovery in the market in 2009.Whilst the first six months of the year is not a key selling periodfor our winter sports business, volume sales were down significantlyin all key product groups due to lower re-orders and sell outs: skisunits sold for the period were down 21% to 60 thousand, unit sales ofbindings down 20% to 216 thousand and unit sales of boots were down31% to 44 thousand.Sales value did not decline to the same extent due to the positiveimpact of exchange rate movements and some increase in average pricesdue to improved mix resulting in an overall decline in sales of 12.5%for the first six months of 2009 compared to the same period in 2008.We have now collected a significant proportion of our orders for the2009/2010 season and our order book is, as expected, below last yearslevel due mainly to caution by retailers given the current suppressedconsumer demand particularly in the US.Our racquets division, on the other hand, showed some growth in thesecond quarter of 2009 as we launched a new series of products underthe YouTek concept in conjunction with a brand repositioning, thiscompares to the second quarter last year when no new products werelaunched. The launch improved volumes in the second quarter, butoverall for the first six months volumes of racquets were still down10% to 963 thousand.Ball sales grew in volume for the first six months of the year by4.8% to 3.8 million douzen with increases in both the Penn ball inthe US and in our Head ball in Europe.The combination of the improved racquet mix due to the new productlaunch, higher ball sales and the positive impact of exchange ratemovements, has resulted in our sales for this division being up by6.2% for the first six months.Our gross margin for the period has seen an improvement from 39.0% to40.5% which has helped improve our overall profitability. Theimprovement has come from lower manufacturing costs and an enhancedproduct mix, particularly in racquet sports.For the full year 2009, we are still anticipating our sales to belower than those achieved in 2008. The expected decline in sales,together with a lower cash and available for sale financial assetsbalance at June, 2009 (?24.0 million) compared to the same period in2008 (?30.7 million), combined with the cash costs of our interestexpense and our capital expenditures, will result in us having to useadditional lines of credit during the third and fourth quarters thisyear.The Company has been focusing on reducing its debt and interestburden. In April 2009, the Company announced a private exchange offerto exchange its existing ?135.0 million 8.5% senior notes due 2014for its new 10% senior secured notes due 2014. It supplemented thiswith a revised offer in July, and the offer closed on the 13th August2009 and was settled on the 19th of August.The results of the exchange offer were that ?85,723,000 of existingnotes validly tendered (75.3% taking into account the cancellation of?21.2 million 8.5% senior notes held by a subsidiary) and have beenexchanged into approximately ?43,738,000 of new secured notes and22,491,278 ordinary shares in Head NV. This reduced the par value ofthe outstanding liability to our bondholders on our balance sheet bynearly ?42.0 million and also reduces our annual interest costrelating to these notes by nearly ?3.0 million. In 2009, there willalso be a one off further reduction of interest of ?3.6 million dueto the non-payment of the accrued interest to those note holder whotendered. In addition, as part of the exchange offer, the Company nowhas access to ?10.0 million of working capital finance in 2009, whichit anticipates utilising in the third and fourth quarters of theyear.The company will no longer be holding quarterly conference calls.Results for the three and six months ended June 30, 2009 and 2008:Winter Sports revenues for the three months ended June 30, 2009decreased by ?1.4 million, or 17.3%, to ?6.5 million from ?7.9million in the comparable 2008 period. This decrease was due to lowersales volumes partially offset by a favorable product mix.For the six months ended June 30, 2009 Winter Sports revenuesdecreased by ?2.9 million, or 12.5%, to ?20.4 million from ?23.3million in the comparable 2008 period. This decrease was due to lowersales volumes of all of our winter sports except protection wear.Racquet Sports revenues for the three months ended June 30, 2009increased by ?5.1 million, or 16.6%, to ?35.9 million from ?30.8million in the comparable 2008 period. This increase was due tohigher sales volumes and favorable product mix resulting from thelaunch of our new tennis racquets as well as the strengthening of theU.S. dollar against the euro.For the six months ended June 30, 2009 Racquet Sports revenuesincreased by ?3.9 million, or 6.2%, to ?67.1 million from ?63.2million in the comparable 2008 period. This increase was mainly dueto the strengthening of the U.S. dollar against the euro and afavorable product mix. Lower sales volumes of tennis racquets werepartially offset by higher sales volumes of balls and badmintonproducts.Diving revenues for the three months ended June 30, 2009 decreased by?3.4 million, or 18.7%, to ?14.6 million from ?18.0 million in thecomparable 2008 period due to decreased sales.For the six months ended June 30, 2009, Diving revenues decreased by?5.2 million, or 16.2%, to ?26.7 million from ?31.9 million in thecomparable 2008 period. This decrease was mainly driven by theoverall decline in the economic environment and consumer spending asa result of the financial crisis.Licensing revenues for the three months ended June 30, 2009 increasedby ?0.4 million, or 29.7% to ?1.7 million from ?1.3 million in thecomparable 2008 period.For the six months ended June 30, 2009 Licensing revenues increasedby ?0.3 million, or 10.6%, to ?3.2 million from ?2.9 million in thecomparable 2008 period due to the strengthening of the U.S. dollaragainst the euro.Sales deductions for the three months ended June 30, 2009 decreasedby ?0.3 million, or 15.5%, to ?1.5 million from ?1.8 million in thecomparable 2008 period due to promotion sales of close out productsin 2008.For the six months ended June 30, 2009 sales deductions decreased by?0.5 million, or 13.7%, to ?3.0 million from ?3.5 million in thecomparable 2008 period due lower sales.Gross Profit. For the three months ended June 30, 2009 gross profitincreased by ?3.4 million to ?24.6 million from ?21.1 million in thecomparable 2008 period. Gross margin increased to 42.9% in 2009 from37.6% in the comparable 2008.For the six months ended June 30, 2009 gross profit increased by ?0.4million to ?46.4 million from ?46.0 million in the comparable 2008period. Gross margin increased to 40.5% in 2009 from 39.0% in thecomparable 2008 period. This increase was due to improvedmanufacturing costs as well as a favorable product mix in RacquetSports.Selling and Marketing Expense. For the three months ended June 30,2009, selling and marketing expense increased by ?0.3 million, or1.6%, to ?21.8 million from ?21.4 million in the comparable 2008period.For the six months ended June 30, 2009, selling and marketing expensedecreased by ?1.6 million, or 3.6%, to ?44.1 million from ?45.7million in the comparable 2008 period. This decrease resulted from areduction in departmental selling costs.General and Administrative Expense. For the three months ended June30, 2009, general and administrative expense decreased by ?0.6million, or 7.5%, to ?6.9 million from ?7.4 million in the comparable2008 period.For the six months ended June 30, 2009, general and administrativeexpense decreased by ?0.8 million, or 5.4%, to ?14.0 million from?14.8 million in the comparable 2008 period mainly due to tough costmanagement.Share-Based Compensation Expense (Income). For the three months endedJune 30, 2009, we recorded ?0.2 million of share-based compensationexpense for our Stock Option Plans compared to ? 0.7 million ofshare-based compensation income in the comparable 2008 period.For the six months ended June 30, 2009, we recorded ?0.2 million ofshare-based compensation expense for our Stock Option Plans comparedto ? 4.1 million of share-based compensation income in the comparable2008 period. This was a result of the increased liability as of June30, 2009 due to the higher share price compared to December 31, 2008.Other Operating Income, net. For the three months ended June 30,2009, other operating income, net increased by ?0.7 million, to ?0.7million from ?0.0 million in the comparable 2008.For the six months ended June 30, 2009, other operating income, netdecreased by ?0.5 million to ?0.1 million from ?0.6 million in thecomparable 2008 mainly due to foreign exchange rate fluctuations.Operating Loss. As a result of the foregoing factors, operating lossfor the three months ended June 30, 2009 decreased by ?3.2 million to?3.8 million from ?7.0 million in the comparable 2008 period.For the six months ended June 30, 2009, operating loss increased by?3.8 million to ?13.9 million from ?10.1 million in the comparable2008 period.Interest Expense. For the three months ended June 30, 2009, interestexpense increased by ?0.5 million, or 14.3%, to ?3.6 million from?3.2 million in the comparable 2008 due to ?0.6 million relating toour exchange offer.For the six months ended June 30, 2009, interest expense increased by?2.4 million, or 37.4%, to ?8.7 million from ?6.3 million in thecomparable 2008. Costs in connection with our exchange offer of ?2.5million were recorded.Interest Income. For the three months ended June 30, 2009, interestincome decreased by ?0.2 million, or 55.4%, to ?0.2 million from ?0.4million in the comparable 2008 period.For the six months ended June 30, 2009, interest income decreased by?0.3 million, or 49.7% to ?0.3 million from ?0.7 million in thecomparable 2008 period. This decrease was due to lower cash and cashequivalents.Other Non-operating Income, net. For the three months ended June 30,2009, other non-operating expense, net decreased by ?0.7 million toan income, net of ?0.7 million from an income, net of ?1.4 million inthe comparable 2008 period mainly attributable to fewer foreigncurrency gains.For the six months ended June 30, 2009, other non-operating income,net increased by ?1.0 million to an income, net of ?2.1 million froman income, net of ?1.1 million in the comparable 2008 period mainlyattributable to foreign currency gains.Income Tax Benefit. For the three months ended June 30, 2009, theincome tax benefit was ?1.3 million, a decrease of ?1.0 millioncompared to an income tax benefit of ?2.3 million in the comparable2008 period.For the six months ended June 30, 2009, the income tax benefit was?3.1 million, a decrease of ?1.8 million compared to an income taxbenefit of ?4.9 million in the comparable 2008 period. This decreaseresulted from higher current income tax expenses due to a provisionfor potential income tax liabilities of prior years of ?1.2 millionand lower taxable losses before share-based compensation (income)expense as this income/expense has no tax effect.Net Loss. As a result of the foregoing factors, for the three monthsended June 30, 2009, we had a net loss of ?5.3 million, compared to anet loss of ?6.1 million in the comparable 2008 period. For the sixmonths ended June 30, 2009, we had a net loss of ?17.1 millioncompared to a net loss of ?9.7 million in the comparable 2008 period.About HeadHEAD NV is a leading global manufacturer and marketer of premiumsports equipment.HEAD NV's ordinary shares are listed on the Vienna Stock Exchange("HEAD").Our business is organized into four divisions: Winter Sports, RacquetSports, Diving and Licensing. We sell products under the HEAD(tennis, squash and racquetball racquets, tennis balls, tennisfootwear, badminton products, alpine skis, ski bindings and skiboots, snowboards, bindings and boots), Penn (tennis and racquetballballs), Tyrolia (ski bindings), and Mares/Dacor (diving equipment)brands.We hold leading positions in all of our product markets and ourproducts are endorsed by some of the world's top athletes includingAndre Agassi, Hermann Maier, Bode Miller, Amelie Mauresmo, SvetlanaKuznetsova, Novak Djokovic, Andrew Murray, Ivan Ljubicic, DidierCuche, Marco Büchel, Patrick Staudacher, Maria Riesch and SarkaZahbrovska.For more information, please visit our website: www.head.comAnalysts, investors, media and others seeking financial and generalinformation, please contact:Clare Vincent, Investor RelationsTel: +44 207 499 7800Fax: +44 207 491 7725E-mail: headinvestors(at)aol.comGunter Hagspiel, Chief Financial OfficerTel: +43 5574 608 0Fax +43 5574 608 130Head N.V.Rokin 55NL 1012 KK AmsterdamISIN: NL0000238301Stock Market: Official Market of the Vienna Stock ExchangeThe full press release including tables can be downloaded from thefollowing link:http://hugin.info/133711/R/1336259/317937.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 21.08.2009 - 09:01 Uhr
Sprache: Deutsch
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