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Fitness financials: Saucony shareholder plans "no" vote to sale, plus Nike, Finish Line, Amer Sports

Saucony shareholder plans "no" vote to sale, Nike Q4 strong, but stock drops on cautious forecast, Finish Line Q1 net income jumps 23 percent, Amer Sports 2005 warrants subscribed

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Saucony shareholder plans “no” vote to sale
Saucony (NasdaqNM: SCNYA and SCNYB) shareholder Fairview Capital Investment Management — which holds a 2.6 percent stake — said it will vote against Saucony’s proposed sale to Stride Rite Corp. (NYSE: SRR) because the sale price is “inadequate.” Stride Rite has offered to pay $23 per share for Saucony class A and class B common stock.

The lack of an independent committee during the strategic review process and Saucony’s earlier rejection of a higher, $25 offer in April were among the factors that caused Fairview to oppose the deal, the shareholder said. It added that it believes Saucony shareholders “will receive zero control premium and none of the projected cost-saving synergies.”

In addition, “executive benefits” payments to Saucony President and CEO John Fisher and to Charles Gottesman, Saucony’s executive vice president of business development, would effectively pay them $26 for each of their shares, Fairview said.

Saucony did get a bit of good news. It ranked No. 37 on Forbes’ list of the 100 fastest-growing small public companies Companies were screened by Zacks, a financial research firm, which identified companies with annual revenue of less than $200 million and a stock price of more than $1 and ranked them based on the past three years’ earnings growth, revenue growth, and stock performance. Saucony’s revenue was $166.6 million.

Nike Q4 strong, but stock drops on cautious forecast
Nike (NYSE:NKE) posted better-than-expected quarterly earnings on strong sales of high-priced athletic shoes, but its stock dropped 5 percent after a cautious revenue forecast.

Net income rose to $349.5 million, or $1.30 per share, in the fourth quarter ended May 31, from $305.0 million, or $1.13 per share, a year earlier. The per-share earnings were 3 cents better than the average forecast among analysts.

Nike’s fourth-quarter revenue rose 7 percent to $3.7 billion as demand grew across all regions and the weak dollar helped boost the value of overseas sales. In the United States, the company’s No. 1 market, revenue increased 3 percent to $1.3 billion, including a 7 percent rise in U.S. athletic footwear revenue to $907.2 million. Asia-Pacific revenue rose 19 percent to $535 million, while revenue in the Europe-Middle East-Africa region increased 4 percent to $1.1 billion. Revenue from the company’s other brands, such as Cole Haan, Converse and Hurley, rose 6 percent, to $529.2 million.

Worldwide orders for athletic footwear and apparel for delivery from June through November increased 9.5 percent from a year earlier to $6.3 billion. Future orders in the United States rose 10 percent.

The results come as a recent fashion shift to premium athletic shoes has padded profits at companies like Nike, analysts said. According to marketing firm NPD Group, demand for athletic shoes that cost more than $100 a pair grew 18 percent in the United States last year, to almost $600 million.

In its conference call, Nike said it still expects high single-digit revenue growth for fiscal 2006 but forecast growth in the first quarter will be toward the low end of the expected range of 7 percent to 9 percent.

Nike shares were down $4.50 to $84.85 in morning trade on the New York Stock Exchange on June 27.

Finish Line Q1 net income jumps 23 percent
For its first quarter, Finish Line (Nasdaq: FINL) reported a 23 percent increase in net income — $12.7 million, or $0.26 per diluted share, vs. $10.4 million, or $0.21 per diluted share last year.

Net sales increased 13 percent to $291.3 million for the quarter compared to $258.0 million reported in 2004. Comparable store net sales increased 2 percent this year on top of a 14 percent increase reported last year.

Merchandise inventories on a consolidated basis were $259.8 million. Its store merchandise inventories were $255.6 million compared to $221.6 million. On a per square foot basis, Finish Line store merchandise inventories increased approximately 3 percent compared to one year ago.

During the quarter, it opened 28 new stores, remodeled seven existing stores and closed one store in the quarter. It now operates 625 Finish Line stores.

Amer Sports 2005 warrants subscribed
Amer Sports said all 500,000 2005 warrants have been subscribed. Each warrant entitles its holder to subscribe for one Amer Sports Corp. share whose accounting countervalue is Euro 4. Waiving the pre-emptive subscription right of shareholders, the warrants were granted for subscription by Amera Oy, a fully-owned subsidiary of Amer Sports, and they will be used as long-term incentives for the company’s group management in 2005-2009. Warrants will be granted to the group management after the publication of the 2007 financial statements.

The share subscription price is Euro 14.86, which is the share turnover-weighted average price of Amer Sports’s shares on the Helsinki Stock Exchange during the period from Jan. 2 to Feb. 14, 2005, plus 10 percent. The share subscription period will begin on March 1, 2008, and end on Dec. 31, 2009.
In other company news, the London listing authority has approved the delisting of Amer Sports shares from the official list of London Stock Exchange. Delisting took place on June 24. Its ordinary shares will continue to be traded on the main list of the Helsinki Stock Exchange.

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