Outdoor financials: Both sales and earnings drop for Garmin in Q2, plus Sport Chalet, Outdoor Channel, Rocky, Big 5, Eddie Bauer
Both sales and earnings dropped for Garmin in Q2, Sport Chalet's Q1 2010 sales dropped, Outdoor Channel swung to a Q2 net loss, the General Services Administration said it would purchase boots from Rocky, Big 5's earnings doubled for Q2, and Golden Gate Capital closed a deal to buy Eddie Bauer.
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outdoorBoth sales and earnings drop for Garmin in Q2
Garmin (Nasdaq: GRMN) posted a 27-percent drop in second-quarter revenue as all its business segments reported sales declines.
For the quarter ended June 27, sales dove 27 percent to $669.1 million from $911.7 million.
Earnings were also down by 37 percent: $161.9 million, or $0.81 per share, compared to $256.1 million, or $1.19 per share, during the same period a year ago.
Excluding one-time items, such as the effects of foreign exchange rates and the sale of TeleAtlas N.V. shares, the company earned $0.83 per share.
Outdoor and fitness products saw their sales decline 9 percent. Sales of automotive devices declined during the quarter 31 percent, while the aviation segment fell 28 percent and marine segment declined 15 percent.
The company said in a statement, “The outdoor/fitness segment has been our most resilient business in this down economy. However, after nine consecutive quarters of revenue growth, we experienced a revenue decline of 9 percent in the second quarter as we faced difficult comparables from the second quarter of 2008 when we launched a number of new products.”
It added that it continues to believe that solid long-term potential exists in this segment. It expects the deliveries of its new Oregon 550t and Dakota line of handhelds in the outdoor market, and Forerunner 310XT and the FR 60 line of fitness products will assist it in seeing steady revenues and margins in future quarters.
In North America, sales fell 24 percent but saw an increase in overall units. Sales were down 36 percent in Europe but increased 21 percent in the emerging Asian market, which also saw a unit sale gain.
Also, its board approved an annual cash dividend of $0.75 per share, payable to shareholders of record on Dec. 1 on Dec. 15.
Sport Chalet Q1 ’10 sales drop, narrows loss
Sport Chalet (Nasdaq: SPCHA and SPCHB) blamed its first quarter 2010 sales decline of 8.9 percent on “continued weak macro economic conditions.”
For the quarter ended June 28, sales were $79.4 million compared to $87.1 million for the first quarter of fiscal 2009.
The company said four new stores not included in same-store sales contributed $4.0 million in sales for the quarter, while same store sales decreased 14.7 percent. Same-store sales were negatively impacted primarily by continued weak macro economic conditions.
Net loss for the first quarter of fiscal 2010 was $3.0 million, or $0.21 per diluted share, compared to a net loss of $4.5 million, or $0.32 per diluted share, for the first quarter of fiscal 2009.
The net loss for the first quarter of 2010 did not reflect any net tax benefit, while the first quarter of 2009 reflected a net tax benefit of $3.0 million, or $0.21 per share. Without the tax benefit, the company said the net loss for the first quarter of 2009 would have been $7.5 million, or $0.53 per share.
The company said it achieved EBITDA of $1.1 million compared to the minimum requirement of a negative $1.2 million EBITDA contained in the company’s current bank loan agreement. The $2.3 million achieved above the minimum EBITDA requirement in the first quarter of fiscal 2010 can be used to offset any future shortfalls during the remainder of fiscal 2010, it added.
Gross profit as a percent of sales increased to 26.4 percent from 26.1 percent last year. Selling, general and administrative expenses as a percent of sales decreased to 25.1 percent from 29.8 percent.
Outdoor Channel swings to Q2 net loss
While revenues were up nearly 50 percent from an acquisition, Outdoor Channel Holdings (Nasdaq: OUTD) swung to a net loss in the second quarter, impacted by the industry-wide challenging advertising environment.
Net loss was $0.9 million, or $0.04 per diluted share, compared with net income of $0.3 million, or $0.01 per diluted share, in the prior-year period.
Total revenues were $19.2 million versus $13.0 million in the corresponding period a year ago. The company said total revenues were up 47.3 percent for the three-month period ended June 30 due largely to the acquisition of Winnercomm Inc., which contributed $6.8 million to the bottom line.
Advertising revenue decreased 16.3 percent to $7.1 million from $8.5 million in the prior-year period. Subscriber fees totaled $5.3 million for the second quarter of 2009 compared to subscriber fees of $4.6 million in the prior-year period.
In January 2009, Outdoor Channel acquired certain assets of Winnercomm and its related entities, and revenues generated by Winnercomm are reported as “production services,” it said. Production services revenue totaled $6.8 million during the 2009 second quarter. These revenues were comprised primarily of production services for customer-owned telecasts and marketing, the company added.
GSA to purchase boots from Rocky
Rocky Brands (Nasdaq: RCKY) said it has received a blanket purchase agreement to produce insulated boots for the General Services Administration.
Under the terms of the agreement, the GSA has the right to purchase approximately $29 million of these boots through July 2014. The company has received an initial order to produce 205,000 pairs of these boots with an approximate value of $14.5 million.
Shipment of this order is expected to begin in September 2009. All of these boots will be manufactured in the company’s factory in Moca, Puerto Rico.
Big 5 earnings double for Q2
Second-quarter earnings for Big 5 Sporting Goods (Nasdaq: BGFV) more than doubled as it boosted sales and trimmed expenses.
Profit for the quarter ended June 28 rose to $4.7 million, or $0.22 per share, compared with $1.7 million, or $0.08 per share, last year. Year-ago results include $0.04 for a one-time charge.
Sales increased 3 percent to $216 million from $209 million. Same-store sales were up 0.3 percent. Selling and administrative expenses declined to $63 million from $64.4 million.
For the fiscal third quarter, Big 5 said it expects same-store sales in the flat to positive low-single-digit range. Earnings are expected between $0.27 and $0.34, up from $0.21 per share, a year ago.
Also, the company declared a quarterly cash dividend of $0.05 per share, paid on Sept. 15 to shareholders of record as of Sept. 1.
Golden Gate Capital closes deal to buy Eddie Bauer
Golden Gate Capital, a San Francisco private equity firm, closed a deal to buy Eddie Bauer (Pink Sheets: EBHIQ) for $286 million. The deal was approved by a bankruptcy judge two weeks ago. Eddie Bauer has been operating under court protection since June.
The company said in a statement, “Eddie Bauer will have the benefit of a much stronger balance sheet, little or no long-term debt and a substantially lower cost structure. Golden Gate Capital has indicated its support for management and their strategy of refocusing the brand on its rich outdoor heritage. Eddie Bauer plans to maintain the substantial majority of its stores and employees. Under Golden Gate’s ownership, Eddie Bauer will benefit from having a well-capitalized partner with extensive expertise in multi-channel specialty retail.”
Golden Gate has been trying to buy the retailer since late 2006, an effort that has entailed a proxy fight and the resignation of Eddie Bauer’s CEO in February 2007. Eddie Bauer had been considering a sale as early as May 2006, as it struggled to stem losses from its struggling business.
–Compiled by Wendy Geister
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