Cutter & Buck had a fairly active week last week, first announcing the settlement of its shareholder lawsuits, followed by a report that the company had reached an agreement with the SEC that would resolve its investigation, and finally ending with the release of their financials for fiscal Q4 and year-end ended April 30th.
The company basically feels that they are pretty much done “fixing” the business and can now concentrate on “growing” the business.
Aside from the closing of its retail business — which impacted its “other” category-and the shuttering of its direct sales operation in Europe-which impacted the “international” number-the company was hit hardest in the specialty golf business.
CBUK CEO Fran Conley said the already soft Golf retail business was heavily impacted by the SEC investigation, with the pros running those shops responding to widespread speculation of the companys health.
Conversely, Conley saw the decline in the Corporate market as a direct result of the economy, noting that companys will cut some of the programs that feed that business first as they move to reduce expenses. She did say they have seen an upturn in that end of the business in recent weeks.
The company pointed to $6.5 million in pre-tax profit for the year as the actual indicator of the health of the business. Margin improvement was a contributor here, with CBUK seeing a 1500 basis point gain in Q4 and a 750 basis point improvement for the year. The company had a pre-tax loss of $1.9 million in fiscal 2002.
The loss also includes $8.2 million pre-tax restatement expenses, which includes the recently announced $4.0 million charge for the settlement of shareholder lawsuits and restructuring charges for the closing of the retail stores.
>>> CBUK estimates that it costs them in excess of $1.25 million a year to be a public company. While not addressing it directly, you have to wonder if they may look at the private route too…