Converse management has decided to delay the timing of its Initial Public Offering until current global geo-political issues can play out and the market returns to a somewhat normal cycle. The company hasnt launched a pre-offering “roadshow” for institutional investors, or set a firm offering date-and is now unlikely to do so until there’s more clarity in Iraq.
The planned IPO, revealed in an S-1 filed with the U.S. Securities and Exchange Commission in mid December, is expected to raise $86 million. The company will trade under the symbol “CNVS” on NASDAQ.
Converse planned to use the net proceeds to redeem outstanding preferred stock, pay down more than $30 million in debt owed on a credit facility, fund working capital and spend on other general corporate purposes.
The preliminary filing did not say how many common shares the company plans to sell or the price range. That information is expected in future filings.
In a supplemental SEC filing last week outlining year-end 2002 results, Converse reported full year net income of $18.6 million, and increase of 222% of full year 2001.
The company saw Q4 net income come in at $1.1 million compared to a $426,000 loss in Q4 of the previous year.
Converse total sales grew 37.7% to $205.3 million in 2002, with $181.3 million, or 88.3%, coming from wholesale revenues and $24.0 million in licensing revenues.
Wholesale revenues were 89.3% of sales in 01.
Worldwide wholesale sales of all products bearing the Converse brand were approximately $580 million for 2002, with 38% coming from the Americas, 46% from Asia-Pacific and 16% from EMEA.
On a category basis, Sports Classics contributed 37% of revenues, or $67.1 million; Sports Performance represented 27%, or $49.0 million; and Sports Lifestyle totaled $65.3 million, or 36% of total wholesale sales.
Converse posted $44.8 million in sales in Q4.
Gross Margins gained ten full percentage points to 42.9% for the full year and Q4 margins increased 280 basis points to 41.1%.
Foot Locker accounted for 23% of net revenue last year and 35.8% of receivables at year-end. No other customer accounted for 10% or more of revenue.
Converse has an agreement with Foot Locker to be its exclusive mall-based, athletic specialty store distributor of All Star performance basketball footwear in the U.S. Foot Locker also has the exclusive right to distribute certain basic athletic apparel products in the U.S. The deal runs through December 2005, but can be terminated with 30 days notice from either party.
Backlog at year-end was up 23.1% to $78.6 million.
