Outdoor financials: Amer Sports reports Q4, FY '06 earnings results, plus Jarden, Eddie Bauer, K2, GSI, Wellman, Johnson Outdoors

Amer Sports reports Q4 and FY '06 earnings results, Jarden's Q4 profit increase on fewer charges, S&P keeps Eddie Bauer on CreditWatch while former CEO to collect $4.5 million in salary, K2 names new CEO, GSI's Q4 net income jumps aided by tax benefit, Wellman to combine chemical-based units, and Johnson Outdoors receives $1.65 million tent order.

Amer Sports reports Q4, FY ’06 earnings results
Amer Sports said its 2006 net sales increased 31 percent due to Salomon’s inclusion in the full-year figures. Net sales grew by 4 percent to Euro 1.79 billion (USD $2.33 billion) compared to Euro $1.73 billion in 2005.

For the full year, net sales for the outdoor and ski business segments were: Salomon, 37 percent; Atomic, 11 percent; and Suunto, 5 percent. Salomon’s sales were up 6 percent. Sales of Salomon apparel and footwear shot up 18 percent. Suunto sales grew by 13 percent, while Atomic was down by 4 percent.

Amer’s earnings before interest and taxes for the year amounted to Euro 120.2 million (USD $157.1 million) versus Euro 117.1 million in 2005. Its earnings before taxes were Euro 96.6 million (USD $126.2 million) compared to Euro 93.1 million. Earnings per share came in at Euro 0.98 (USD $1.28) versus Euro 0.87 last year.

Fourth-quarter net sales for Amer were up 4 percent to Euro 581.6 million (USD $760.2 million) compared to Euro 558.5 million in the same period last year.

Salomon’s fourth-quarter net sales increased 11 percent — Euro 282.1 million (USD $368.7 million) compared to Euro 255.2 million last year. EBIT was Euro 40.3 million (USD $52.6 million) versus Euro 37.9 million the year before.

For the full year, Salomon’s net sales were up 6 percent to Euro 661.4 million (USD $864.5 million) compared to Euro 623.5 million. EBIT was up 30 percent to Euro 23.6 million (USD $30.8 million).

Amer said net sales of winter sports equipment were at last year’s level. Weak winter conditions early in the 2006/2007 season reduced the volume of re-orders received by Salomon. Cross-country skiing experienced the fastest growth of winter sports product groups, it said, with net sales up 19 percent. Sales of alpine skiing equipment decreased 5 percent.

Net sales of apparel and footwear in the Salomon segment increased 18 percent to Euro 208.0 million (USD $271.8 million). The apparel business posted the fastest sales growth — Salomon increased 40 percent and Arc’Teryx 26 percent.

For Suunto, fourth-quarter net sales grew 34 percent — Euro 22.8 million (USD $29.8 million) versus Euro 17.0 million. For the year, sales were up 13 percent to Euro 81.3 million (USD $106.2 million) compared to Euro 72.0 million.

Amer said sales of wrist-top computers grew by 33 percent, boosted particularly by demand for the new training product series.

Amer said Atomic’s operations didn’t measure up to its expectations in the fourth quarter and dropped 4 percent. Net sales were Euro 82.2 million (USD $107.4 million) compared to Euro 85.9 million last year. For the year, sales were down 4 percent — Euro 204.8 million (USD $267.7 million) versus Euro 214.0 million in 2005.

(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Feb. 13.)

Jarden’s Q4 profit increase on fewer charges
Jarden Corp. (NYSE: JAH), parent of Coleman and Campingaz, said fourth-quarter profit rose significantly from the year-ago period due to fewer charges.

Net income increased to $35.7 million, or $0.52 per share, from $2.5 million, or $0.04 per share, in the prior year period.

The 2005 results included acquisition, reorganization, amortization and stock-based compensation expenses totaling $50.4 million and a tax benefit of $18.4 million. Excluding those items, the company earned $0.51 per share. In the 2006 quarter, the company incurred similar expenses totaling $30.4 million and a tax benefit of $11.3 million. Excluding those, the company earned $0.80 per share.

Revenue rose 9 percent to $1.06 billion from $975.4 million in the fourth quarter of 2005.

For the year, net income rose 75 percent to $106 million, or $1.59 per share, from $60.7 million, or $0.22 per share in the prior year. Sales rose 21 percent to $3.85 billion from $3.19 billion in 2005.

Separately, Jarden completed its debt refinancing plan, including issuing and selling $650 million in 10-year notes.

Jarden also changed its existing senior credit facility and bought $167 million, or about 93 percent, of the total amount of its outstanding 9.75 percent senior subordinated notes due 2012 as part of a tender offer announced previously.

Jarden said it will use any remaining proceeds from its sale of notes to buy back any remaining 2012 notes tendered connected to the tender offer, to pay down debt and for general corporate purposes, which might including funding capital expenditures and potential acquisitions. The tender offer is set to expire on Feb. 27.

S&P keeps Eddie Bauer on CreditWatch, former CEO to collect $4.5 million in salary
Credit ratings agency Standard & Poor’s said its ratings on Eddie Bauer Holdings (Nasdaq: EBHI) remains on CreditWatch with negative implications after the company’s shareholders rejected a takeover bid.

Shareholders rejected the $286 million buyout offer from two private equity firms, Sun Capital Partners and Golden Gate Capital on Feb. 8. The next day, Fabian Mansson, the president and CEO for the company, resigned.

Standard & Poor’s said there is “considerable uncertainty” regarding the company because the CEO post is still vacant, operating performance was lower than expected and it has a highly leveraged capital structure and covenant compliance issues.

“Although operations apparently trended up in the fourth quarter of 2006, we believe that the year as a whole was below our expectations,” David Kuntz, Standard & Poor’s credit analyst, said in a statement. “Furthermore, we estimate that debt leverage continued to worsen.”

In other company news: Fabian Mansson, the former president and CEO of Eddie Bauer Holdings who resigned one day after shareholders rejected the company’s proposed sale, will collect more than $4.5 million in salary and bonuses over the next two years, according to an SEC filing. Eddie Bauer said Mansson’s severance package was part of an employment contract that dates to 2005.

The filing said Mansson will continue to draw his $980,000 salary through May 9, 2009. He also will get a $980,000 bonus in 2007 and 2008, and a $346,356 bonus for 2009. The company said Mansson also will get life insurance, health benefits and accelerated vesting of stock options and restricted stock units.

He is also is eligible for up to $35,000 in outplacement services, relocation expenses for returning to Sweden, and reimbursement of some costs of selling his U.S. home and purchasing a new house in Sweden.

The SEC filing also said that if there is a “change of control” of the company within nine months, Mansson will collect another year of his $980,000 salary and an additional $980,000 bonus, along with $15,000 more in outplacement costs and another year of company benefits.

K2 names new CEO
K2 Inc. (NYSE: KTO) has appointed J. Wayne Merck as the company’s president and CEO, and to K2’s board of directors.

Merck, a 15-year veteran of K2 and its predecessor companies, has served as president and COO since November of 2003, executive vice president and COO since October 2002, and executive vice president since July 2000.

Merck’s predecessor as CEO was Richard J. Heckmann. He will remain as chairman, and was appointed as executive chairman.

GSI’s Q4 net income jumps, aided by tax benefit

GSI Commerce (Nasdaq: GSIC), a creator and operator of e-commerce websites, said its fourth-quarter net income climbed sharply, aided by a hefty tax benefit.

Quarterly earnings rose to $67.9 million, or $1.33 per share, from $11.7 million, or $0.25 per share, during the year-ago quarter. Excluding a $44.4 million cash benefit and including a stock-option expense, amortization of acquisition-related intangibles and the cumulative effect of an accounting change, earnings were $0.50 per share.

Revenue for the quarter was also up — 49 percent to $257.2 million from $172.3 million in the prior-year quarter.

For the full year, profit climbed to $53.7 million, or $1.10 per share, from $2.7 million, or $0.06 per share, in 2005. Revenue grew 38 percent to $609.6 million, from $440.4 million in 2005.

Additionally, the company reported that it expects earnings to decline in 2007, due to a tough comparison against a 2006 helped by a hefty tax benefit.

For the year, GSI expects earnings between $34 million and $39 million, along with revenue between $685 million and $735 million.

GSI also said it expects higher investment spending to cause a loss during the first three quarters of 2007, followed by high earnings in 2007.

The company sees a first-quarter loss between $5.5 million and $6.5 million, on net revenue between $128 million and $138 million.

Wellman to combine chemical-based units
Wellman (NYSE: WLM) plans to combine its polyester fiber and PET resin into one chemical-based business segment. No layoffs are expected as part of the reorganization.

Wellman said separately it is continuing to explore strategic options for its European operations, a move first announced in September.

As part of the reorganization, Steve Ates, previously business manager PET resins, will become vice president of sales and marketing. Mark Ruday, previously controller and chief accounting officer, will be vice president of business operations.

Ian Shaw, previously Palmetto plant manager, will become vice president of manufacturing vice president of manufacturing and research and development.

Joe Tucker, vice president, fibers and recycling products group, will head raw material procurement and strategic development.

David Styka, director of taxation, will replace Mark Ruday as controller and chief accounting officer.

Johnson Outdoors receives $1.65 million tent order
The Marine Corps has ordered $1.65 million in military tents from Johnson Outdoors (Nasdaq: JOUT). The tent order was announced earlier this week by U.S. Senators Charles Schumer and Hillary Rodham Clinton and U.S. Rep. Maurice Hinchey, all of the state of New York. The tents are produced at Johnson Outdoors’ plant in Binghamton, N.Y.

Johnson Outdoors said in its annual report filed in January that total military tent sales in fiscal 2007 are expected to be in the $25 million to $30 million range, compared with total sales in fiscal 2006 of approximately $32 million.

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