Fila surprises, profitability returns

After a dismal period when everybody was busy guessing when Fila’s demise would be announced, the company has returned to profitability. Operating profit for the quarter ended Dec. 31 was Euro 4.7 million (USD $5.1 million), compared to an operating loss of Euro 25.5 million (USD $27.78 million) in the fourth quarter of 2001. For the full year operating profit was Euro 20.0 million (USD $21.8 million), compared to an operating loss of Euro 49.9 million (USD $54.37 million) last year. Gross profit margin for the full year was 38.5 percent (35.3 percent in 2001).

In U.S. dollars, fourth quarter net loss was USD $16.6 million compared with a net loss of USD $46.7 million in the fourth quarter of 2001; for the full year, net loss was USD $76.4 million compared with USD $125.2 million in 2001. Results in 2002 were impacted by some factors such as the discontinuation of the Australian and Brazilian subsidiaries in favor of a licensing strategy in those countries, the strong appreciation of the Euro against the U.S. Dollar during the second half of the year, the restructuring process in the UK with considerable write-down of assets, and the impact of exchange rate changes for Argentina and Brazil. Without these factors, the result before taxes for the full year would have been close to break even.

Net direct sales in the fourth quarter of 2002 totaled Euro 171.7 million (USD $187 million), down 20 percent compared to the corresponding period of 2001. Apparel sales were down by 12 percent and footwear down 33 percent. Loss before income taxes in the fourth quarter of 2002 was Euro 13.2 million (USD $14.38 million) compared with Euro 42.8 million (USD $46.6 million) in the same quarter of 2001. For details, go to www.fila.com/aboutFila.