Globe International Limited of Australia reported sales declined 6.0 percent to A$39.3 million ($40mm) at its North American division in the fiscal year ended June 30 as a 15 percent sales decline at Dwindle Distribution more than offset 14 percent growth in sales of its flagship Globe brand. EBITDA at the division was negative A$3.12 million, compared with positive EBITDA of A$1.70 million for the fiscal year ended June 30, 2012 as the company took a A$1.35 million charge for costs incurred restructuring Dwindle.
Globe International’s 2002 acquisition of El Segundo, CA-based Dwindle made it the largest skateboard company in the world. Today Dwindle owns the Blind, Cliché, Darkstar, Dusters, Enjoi, Speed Demons and Tensor skateboard brands. Dwindle, however, was a drag on sales and earnings in fiscal 2012.
Globe International reported total group sales for the year grew 2 percent to A$84.1 million ($86 mm), thanks to 10 percent growth at Globe brand and 29 percent growth in sales of new apparel brands the company has launched or licensed in recent years. Revenues grew 16 percent at the company’s European division thanks to growth across all Globe brand categories of footwear, apparel, socks and skate hardgoods. The Australian division posted revenue growth of 7 percent through Globe apparel and hardgoods, new work wear brand FXD and Obey clothing.
Selling and administrative expenses increased 11.1 percent to A$26.4 million ($27 mm), or 31.4 percent of revenue, up 290 basis points from fiscal 2012. Globe International reported a consolidated net loss after taxes of A$5.69 million ($6 mm) in the most recent fiscal year as it took A$4.25 million in one-off charges. EBITDA was a negative A$4.70 million, compared with a gain of A$1.72 million a year earlier. The EBITDA loss was largely due to the one-off costs, which included the restructuring costs at Dwindle; A$1.5 million in costs related to delayed shipping; A$700,000 increase in provisions for doubtful debt; and brand set up costs of A$700,000. Excluding these and other non-recurring expenses not expected to recur next year, EBITDA approached break even.
The company ended the year with A$6.41 million in cash and cash equivalent and inventories valued at A$15.9 million ($16 mm), down 62.7 percent and up 9.7 percent respectively from June 30, 2012.
After several years of restructuring, Globe has gone from a company that relies predominantly on in-house skateboard brands to a company that own, licenses and distributes to the boardsports, street wear, fashion and work wear markets. Initiatives have included extending the Globe brand into new apparel, hardgoods and sock categories; relaunching the Globe apparel brand in Asian markets, acquiring licenses for the Stussy clothing and Vision Streetwear apparel brands for Australia and New Zealand; launching the work wear brand FXD, and restructuring the Dwindle division.
“Our growth engines are now in place with a revamped operational and brand platform in North America, and branded investments such as Globe apparel, FXD and the new
Stussy license,” said CEO Matt Hill. “After a year of significant one off restructure and branded investment costs we remain financially stable with solid cash holdings and no net debt.”