Outdoor financials: Warm weather hurts Amer Sports' Q2 report, plus Jarden/K2, Oakley, Liberty Media, 3point5 buys Influence Technologies, Outdoor Channel
Warm weather hurts Amer Sports' Q2 report, Jarden completes K2 acquisition, Luxottica seeks $2 billion loan to finance Oakley buy, Backcountry.com-parent Liberty Media reports mixed Q2 results, 3point5.com buys Influence Technologies, and Outdoor Channel's Q2 revenues up 15.2 percent.
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Warm weather hurts Amer Sports’ Q2 report
An exceptionally warm winter hit sales within the Salomon and Atomic business segments hard, causing Amer Sports’ net sales as a whole to decrease 4 percent to EUR 310.3 million (USD $425.0 million) compared to EUR 321.8 million in 2006. In local currency terms, net sales were on par with the previous year.
Amer Sports’ second-quarter EBIT loss widened from last year — EUR -12.8 million (USD -$17.5 million) versus EUR -9.0 million in 2006. Net financial expenses totaled EUR -1.1 million (USD -$1.5 million) compared to EUR -6.4 million, and earnings before taxes were EUR -13.9 million (USD -$19.0 million) versus EUR -15.4 million.
Its net sales in January-June 2007 decreased 6 percent to EUR 692.1 million (USD $948.1 million) from EUR 739.2 million in 2006. Net sales in local currency terms declined 2 percent.
For the six-month period, net sales by business segment were: Wilson 45 percent, Salomon 27 percent, Precor 19 percent, Suunto 6 percent, and Atomic 3 percent. Salomon’s sales declined 8 percent, Wilson’s 7 percent, and Atomic’s 41 percent. Precor’s sales were on par with the previous year and Suunto’s net sales rose 9 percent. In local currency terms, Salomon’s sales were down 6 percent and Atomic’s 40 percent. Wilson’s sales were on par with the previous year. Suunto’s sales increased 12 percent and Precor’s 8 percent.
The group’s EBIT was EUR -20.6 million (USD -$28.2 million). In 2006, it was EUR -7.4 million.
Earnings before taxes were EUR -28.4 million (USD -$38.9 million) compared to EUR -18.7 million in 2006. Earnings per share stood at EUR -0.30 (USD -$0.41), while 2006 it was EUR -0.19. Net financial expenses totaled EUR -7.8 million (USD -$10.6 million) compared to EUR -11.3 million last year, reduced by interest rate swaps executed in May, which resulted in a gain of EUR 6.4 million.
Second-quarter net sales for the Salomon business segment were down — EUR 73.0 million (USD $100.0 million) versus EUR 76.4 million in the same period last year. Sales for winter sports equipment were down — EUR 10.1 million (USD $13.8 million) versus EUR 13.8 million — while apparel and footwear was on the rise — EUR 36.4 million (USD $49.8 million) versus EUR 30.1 million.
Salomon’s net sales in January-June decreased 6% in local currency terms. In that six-month period, the segment’s EBIT decreased 7% in local currency terms to EUR -41.7 million (USD -$57.1 million). However, the company said the synergies achieved in winter sports coupled with enhanced cost control compensated for the negative impact of the decrease in sales.
Second-quarter sales for the Atomic segment dipped from EUR 5.6 million in 2006 to EUR 4.8 million (USD $6.5 million) in 2007. For the six-month period, sales dropped 41 percent to EUR 17.3 million (USD $23.6 million) from EUR 29.3 million in 2006.
For the Suunto division, second-quarter net sales edged up to EUR 22.4 million (USD $30.6 million) from EUR 21.0 million the year before. For the six months, sales were EUR 43.8 million (USD $60.0 million) in 2007 versus EUR 40.2 million in 2006.
For 2007, Amer Sports said EBIT for the company as a whole is not expected to reach last year’s level. A mild winter reduced pre-orders for winter sports more than expected and increased uncertainty about re-orders in the latter part of the year. The result for winter sports equipment will be in the red, while other business areas are expected to develop positively in the latter part of the year.
(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 Aug. 9.)
Jarden completes K2 acquisition
Jarden Corp. (NYSE: JAH) said it resolved regulatory issues to complete its acquisition of K2 Inc. (NYSE: KTO) for about $15.50 per share, or $765.9 million. Including the assumption of debt, the transaction is valued at approximately $1.2 billion.
The acquisition, first announced in April, faced a challenge by the Federal Trade Commission, but Jarden said that was resolved after K2 sold assets related to four types of monofilament fishing line, including Cajun Line, Omniflex, Outcast and Supreme. The revenue associated with the lines was immaterial to Jarden or K2, Jarden said.
The transaction was completed Aug. 8, following approval of the merger by K2 shareholders at a special meeting of shareholders. With the closing of the transaction, trading in K2 common stock was halted at the close of business Aug. 8.
Under the terms of the agreement, K2 shareholders received 0.1118 of a share of Jarden common stock plus $10.85 in cash, for each share of K2 common stock held at closing.
In connection with the completion of the acquisition, K2 purchased, as part of its previously announced tender offer and consent solicitation, approximately $199 million, or approximately 99.5 percent, of the aggregate principal amount of its outstanding 7-3/8 percent senior notes due 2014.
Luxottica seeks $2 billion loan to finance Oakley buy
Luxottica (Xetra: LUXA) has mandated a group of banks to arrange a $2 billion credit line to finance its planned acquisition of Oakley (NYSE: OO). The credit line will consist of a five-year loan of $1.5 billion and a short-term bridge loan of $500 million.
In June, Luxottica agreed to acquire Oakley for $29.30 a share, or about $2.1 billion.
Backcountry.com-parent Liberty Media reports mixed Q2 results
Liberty Media Corp. (Nasdaq: LINTA), new parent of Backcountry.com, said its second-quarter net income more than doubled despite slower growth at home-shopping channel QVC and a 4 percent revenue drop for Starz Entertainment.
Liberty Media divided its assets into two tracking stocks in May 2006 to make it easier for shareholders to follow its disparate parts. Liberty Interactive Group, the first tracking stock, includes home-shopping channel QVC and other interactive businesses including Backcountry.com. Liberty Capital Group includes Starz and a range of entertainment businesses.
For the quarter ending June 30, Liberty Media reported net income of $1 billion, up from $478 million in the second quarter of 2006. Revenue totaled $2.2 billion, up from $2 billion in the year-ago quarter. Per-share figures were not calculated for the company as a whole.
In the first six months, Liberty Media had net income of $1.4 billion, compared with $452 million in the first six months of 2006. Revenue rose to $4.3 billion from $3.9 billion.
Liberty Interactive’s second-quarter operating income rose 1 percent to $244 million from $242 million in the previous second quarter, while revenue rose 4 percent to $1.69 billion.
3point5.com buys Influence Technologies
3point5.com recently finalized an agreement to purchase Tustin, Calif.-based, Influence Technologies, which specializes in online consumer and business-to-business catalogs, specialty sales programs and manages industry-specific web marketplaces including BroForm.com.
Salt Lake City-based 3point5.com intends to operate Influence Technologies, including BroForm.com, in its current form and retain all existing employees. In the months ahead, 3point5.com will integrate the company’s services into 3point5.com creating one company that provides a varied menu of services for its clients. Services will include designing and supporting internet-based training as well as transaction-based interactions with important marketing and sales influencers.
3point5.com is an online training system that represents over 50,000 registered pros and sales professionals, 250 manufacturers, over 5,000 retailers in an increasing number industries, including outdoor, snow, bike, action sports, golf, tennis and hunt/fish.
Outdoor Channel’s Q2 revenues up 15.2 percent
Outdoor Channel Holdings (Nasdaq: OUTD) posted a second-quarter increase in total revenues of 15.2 percent.
Advertising revenue for the 2007 second quarter, which is generated from the sale of advertising time on Outdoor Channel, rose 19.2 percent to $6.8 million from $5.7 million in the prior-year period. Reflecting growth in the subscriber base of the company’s national television network and contractual increases in subscriber fee rates, subscriber fees grew 10.0 percent to $4.8 million from $4.3 million in the 2006 second quarter. Total revenues from continuing operations rose 15.2 percent to $11.5 million from 20006’s $10.0 million.
Net income from continuing operations for the 2007 second quarter totaled $351,000, or $0.01 per diluted share, based on 26.2 million weighted average shares outstanding. This compares with a net loss from continuing operations of $17,000 in the corresponding period a year ago, equal to $0.00 per diluted share, based on 24.8 million weighted average shares outstanding.
During the quarter, concurrent with the departure of two former board members, the company named Ajit M. Dalvi, David D. Kinley and Michael L. Pandzik, all with extensive cable industry experience, as newly appointed directors to the board of Outdoor Channel Holdings.
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