HEAD NV Announces Results for the Three and Nine Months ended 30
September 2009
(Thomson Reuters ONE) - Amsterdam - 12th November 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 three months ended 30 September 2009 compared to the threemonths ended 30 September 2008: * Net revenues were down 1.0% to ?92.2 million * Operating profit, excluding share based compensation, restructuring costs and other operating expenses and income (non-recurring) increased by ?3.2 million to a profit of ?8.7 million * Operating profit as reported improved by ??¬11.2 million to ?16.0 million * The net profit for the period, including the gain on exchange of senior notes, net of tax (?31.2 million) was ?41.5 million compared to a ?1.2 million net profit in Q3 2008.For the nine months ended 30 September 2009 compared to the ninemonths ended 30 September 2008: * Net revenues were down 2.0% to ?206.7 million * Operating loss, excluding share based compensation, restructuring costs and other operating expenses and income (non-recurring) increased by ?6.1 million from a loss of ?9.2 million in 2008 to a loss of ?3.1 million in 2009. * Operating profit as reported improved by ?7.4 million to ?2.1 million * The net profit for the period, including the gain on exchange of senior notes, net of tax (?29.3 million) was ?24.4 million compared to a net loss of ?8.5 million in the comparable 2008 period.Johan Eliasch, Chairman and CEO, commented:We continue to be affected by the current uncertain economicconditions. We believe all our markets have declined in the lasttwelve months. As expected, our diving division continues to be themost affected due to its link to travel and the relatively high pricepoints of the products. Overall the sales in this division havefallen by 12% for the first nine months of the year compared to thefirst nine months of 2008. Although in the third quarter sales werebroadly flat compared to prior year reversing the quarter on quarterdecline we do not expect to see any significant recovery in themarket in 2009.The key selling season is now under way for our winter sportsbusiness and for the first nine months of the year volumes were downas anticipated in all key product groups due to cautious globalpreseason ordering brought about by the difficult economicconditions. In weak markets, for the nine months ski volumes weredown by 20%, bindings 11% and boots 13%. Overall winter sports saleshave declined by only 8.9% reflecting the improved product mix in2009 and favourable exchange rate movements.For the nine months our racquets division had mixed results - overallsales were up over 7% in what we believe has been a declining market,but volumes of our racquets fell by 8%. The improvement in sales wasa result of the launch of a new series of products under the YouTekconcept in conjunction with a brand repositioning which resulted inan improved product mix. Tennis ball volumes grew slightly in boththe US and Europe and this, combined with the positive exchangeimpact on US balls, resulted in overall revenue growth.Our gross margin for the period has seen an improvement from 38.2% to40.3% which has helped improve our overall profitability. Theimprovement has come from lower manufacturing costs and an enhancedproduct mix in both our racquet and winter sports divisions.For the full year 2009, we are still anticipating our sales to belower than those achieved in 2008. We are not anticipating a quickrecovery for the sporting goods market, and forecasting remainsdifficult during these challenging market conditions. We believe 2010will be a difficult year, and we will seek to preserve cash as muchas possible.As previously announced, the Company has been focusing on reducingits debt and interest burden and in August this year announced thesuccessful conclusion of an exchange of ?85.7 million of unsecuredsenior notes plus ?3.6 million of accrued interest for ?43.7 millionof new secured notes and 22.5 million shares. In addition, a ?10.0million short term working capital facility agreement was enteredinto to overcome the anticipated shortfall in cash in the third andfourth quarters of this year. In connection with this working capitalfacility, an additional 28.3 million shares were awarded.The company will no longer be holding quarterly conference calls.Results for the three and nine months ended September 30, 2009 and2008:Total RevenuesFor the three months ended September 30, 2009 total net revenuesdecreased by ?0.9 million, or 1.0%, to ?92.2 million from ?93.1million in the comparable 2008 period. This decrease was due todecreased sales volumes in Winter Sports partially offset by a betterproduct mix, higher sales volumes in Racquet Sports and thestrengthening of the U.S. dollar against the euro.For the nine months ended September 30, 2009 total net revenuesdecreased by ?4.3 million, or 2.0%, to ?206.7 million from ?211.0million in the comparable 2008 period. This decrease was mainly dueto lower sales volumes of our Winter Sports and Diving division,partly offset by favorable product mix and the strengthening of theU.S. dollar against the euro.Winter SportsWinter Sports revenues for the three months ended September 30, 2009decreased by ?4.0 million, or 7.3%, to ?50.4 million from ?54.3million in the comparable 2008 period. This decrease was due to lowersales volumes partially offset by favorable product mix and thestrengthening of the U.S. dollar against the euro compared to thecomparable 2008 period.For the nine months ended September 30, 2009 Winter Sports revenuesdecreased by ?6.9 million, or 8.9%, to ?70.8 million from ?77.7million in the comparable 2008 period. This decrease was due to lowersales volumes of all of our major winter sports products partiallyoffset by favorable product mix and the strengthening of the U.S.dollar against the euro.Racquet SportsRacquet Sports revenues for the three months ended September 30, 2009increased by ?2.8 million, or 9.3%, to ?33.4 million from ?30.5million in the comparable 2008 period. This increase was due tohigher sales volumes of tennis racquets and footwear and favorableproduct mix resulting from the launch of our new tennis racquets aswell as the strengthening of the U.S. dollar against the euro.For the nine months ended September 30, 2009 Racquet Sports revenuesincreased by ?6.7 million, or 7.2%, to ?100.5 million from ?93.7million 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, footwear andbadminton products.DivingDiving revenues for the three months ended September 30, 2009increased by ?0.1 million, or 1.3%, to ?10.1 million from ?10.0million in the comparable 2008 period due to the strengthening of theU.S. dollar against the euro compared to the comparable 2008 period.For the nine months ended September 30, 2009, Diving revenuesdecreased by ?5.0 million, or 12.0%, to ?36.9 million from ?41.9million in the comparable 2008 period. This decrease was mainlydriven by lower sales resulting from the overall decline in theeconomic environment and consumer spending as a result of thefinancial crisis.LicensingLicensing revenues for the three months ended September 30, 2009remained stable at ?1.2 million compared to the comparable 2008period.For the nine months ended September 30, 2009 Licensing revenuesincreased by ?0.3 million, or 7.2%, to ?4.4 million from ?4.1 millionin the comparable 2008 period due to the strengthening of the U.S.dollar against the euro.ProfitabilityGross Profit. For the three months ended September 30, 2009 grossprofit increased by ?2.2 million to ?36.9 million from ?34.7 millionin the comparable 2008 period. Gross margin increased to 40.0% in2009 from 37.3% in the comparable 2008 period.For the nine months ended September 30, 2009 gross profit increasedby ?2.6 million to ?83.2 million from ?80.7 million in the comparable2008 period. Gross margin increased to 40.3% in 2009 from 38.2% inthe comparable 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 September30, 2009, selling and marketing expense decreased by ?0.3 million, or1.2%, to ?21.9 million from ?22.1 million in the comparable 2008period.For the nine months ended September 30, 2009, selling and marketingexpense decreased by ?1.9 million, or 2.8%, to ?66.0 million from?67.9 million in the comparable 2008 period. This decrease resultedfrom a reduction in departmental selling costs.General and Administrative Expense. For the three months endedSeptember 30, 2009, general and administrative expense decreased by?0.8 million, or 11.2%, to ?6.3 million from ?7.1 million in thecomparable 2008 period.For the nine months ended September 30, 2009, general andadministrative expense decreased by ?1.6 million, or 7.3%, to ?20.4million from ?22.0 million in the comparable 2008 period mainly dueto tough cost management.Share-Based Compensation Expense (Income). For the three months endedSeptember 30, 2009, the Company recorded ?0.6 million of share-basedcompensation expense for our Stock Option Plans compared to ?0.4million of share-based compensation income in the comparable 2008period.For the nine months ended September 30, 2009, the Company recorded?0.8 million of share-based compensation expense for our Stock OptionPlans compared to ?4.4 million of share-based compensation income inthe comparable 2008 period. The increase in the Company's share priceresulted in a higher liability and accordingly increased share-basedcompensation expense.Other Operating Expense (Income), net. For the three months endedSeptember 30, 2009, other operating income, net increased by ?8.5million, to ?8.1 million from other operating expense, net of ?0.3million in the comparable 2008. This increase resulted mainly fromthe gain on a sale of certain trademarks registered in Korea of ?7.6million and foreign exchange rate fluctuations.For the nine months ended September 30, 2009, other operating income,net increased by ?8.0 million to ?8.2 million from ?0.2 million inthe comparable 2008 mainly due to the gain on a sale of trademarksregistered in Korea of ?7.6 million.Operating Profit (Loss). As a result of the foregoing factors,operating income for the three months ended September 30, 2009increased by ?11.2 million to ?16.0 million from ?4.8 million in thecomparable 2008 period.For the nine months ended September 30, 2009, the operating resultincreased by ?7.4 million to an operating profit of ?2.1 million froman operating loss of ?5.3 million in the comparable 2008 period.Interest Expense. For the three months ended September 30, 2009,interest expense decreased by ?0.5 million, or 14.3%, to ?2.7 millionfrom ?3.2 million in the comparable 2008 due to the waiver of ?42.0million of our 8.5% senior notes as a result of the exchange offer.For the nine months ended September 30, 2009, interest expensedecreased by ?0.6 million, or 6.2%, to ?8.9 million from ?9.5 millionin the comparable 2008 period.Interest Income. For the three months ended September 30, 2009,interest income decreased by ?0.1 million, or 68.1%, to ?0.1 millionfrom ?0.2 million in the comparable 2008 period.For the nine months ended September 30, 2009, interest incomedecreased by ?0.5 million, or 53.4% to ?0.4 million from ?0.9 millionin the comparable 2008 period. This decrease was due to lower cashand cash equivalents.Gain on Exchange of Senior Notes. As a result of the successfulclosure of the exchange offer, the Company recorded a gain of ?40.3million consisting of ?42.0 million waiver of the 8.5% senior notes,?3.6 million gain on interest forfeited, reduced by ?5.4 million ofexpense relating to the exchange of the senior notes.Other Non-operating Income, net. For the three months ended September30, 2009, other non-operating income, net increased by ?0.1 millionto ?0.5 million from ?0.4 million in the comparable 2008 periodmainly attributable to foreign currency gains.For the nine months ended September 30, 2009, other non-operatingincome, net increased by ?0.5 million to ?2.0 million from ?1.5million in the comparable 2008 period mainly attributable to foreigncurrency gains.Income Tax Benefit (Expense). For the three months ended September30, 2009, the income tax expense was ?14.6 million, an increase of?13.6 million compared to ?1.0 million in the comparable 2008 period.This increase was mainly due to the tax expense incurred as a resultof the gain on exchange of senior notes. Tax losses brought forwardby the company have been utilised. For the nine months endedSeptember 30, 2009, the income tax expense was ?11.5 million comparedto an income tax benefit of ?3.9 million in the comparable 2008period. This increase in income tax expense was due to the taxexpense incurred as a result of the gain on exchange of senior notes,and higher current income tax expenses due to a provision forpotential income tax liabilities of prior years of ?1.2 million andlower taxable losses before share-based compensation (income) expenseas this income/expense has no tax effect. Tax losses brought forwardby the company have been utilised.Net Profit (Loss). As a result of the foregoing factors, for thethree months ended September 30, 2009, the Company had a net profitof ?41.5 million, compared to a net profit of ?1.2 million in thecomparable 2008 period. For the nine months ended September 30, 2009,the Company had a net profit of ?24.4 million compared to a net lossof ?8.5 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, Lindsey Vonn, AmelieMauresmo, Svetlana Kuznetsova, Novak Djokovic, Andrew Murray, IvanLjubicic, Didier Cuche, Marco Büchel, Patrick Staudacher, MariaRiesch and Sarka Zahrobska.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 150Fax +43 5574 608 130This press release should be read in conjunction with the company'sreport for the three and none months ended 30 September 2009.This press release and the statements of Mr. Johan Eliasch quotedherein contain certain forward-looking statements within the meaningof Section 27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended, which areintended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involverisks and uncertainties. Although Head believes that the assumptionsunderlying the forward-looking statements contained herein arereasonable, any of the assumptions could be inaccurate, andtherefore, there can be no assurance that the forward-lookingstatements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in theforward-looking statements included and quoted herein, the inclusionof such information should not be regarded as a representation byHead or any other person that the objectives and plans of Head willbe achieved.Head 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/1354356/328364.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 12.11.2009 - 09:01 Uhr
Sprache: Deutsch
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