Huffy Corporation announced that preliminary fourth quarter sales figures are in line with expectations, but that initial income figures indicate that the loss from continuing operations for the fourth quarter and the year will be higher than previously indicated.
Paul R. D'Aloia, President and Chief Executive Officer stated, “Although we will not have final results from all business units until later in the month, preliminary indications are that fourth quarter sales are within the
$120.0 million to $125.0 million range that we previously indicated, but the loss from continuing operations for the quarter will be substantially higher than previously anticipated and will likely result in a modest loss from
continuing operations for the full year. Factors contributing to the higher loss include lower gross margins in the basketball backboard segment, action
sport and in-line skate segment, and higher than anticipated expense levels at Gen-X.”
Robert W. Lafferty, Vice President and Chief Financial Officer added, “We
have had on-going discussions with our lenders, led by Congress Financial
Corporation, related to amending certain financial covenants in our loan
agreement to reflect lower sales and earnings projections. A recently
negotiated amendment to our revolving loan agreement includes revised
financial covenants that reflect the lower projections, a phased decrease of
the loan limit under the facility consistent with initiatives to reduce
working capital, as well as confirmation that the lenders will not test
compliance with certain existing financial covenants at December 31, 2003.”
D'Aloia concluded, “It is disappointing to report that our fourth quarter
results will be worse than anticipated, yet I am optimistic that the actions
that are currently underway will have a favorable impact on earnings. Our
management team is focused on a variety of strategic initiatives designed to
move the Company to a more profitable operating platform and will provide more
detail regarding these strategic initiatives during our earnings call in early
February.”
The Company indicated that it expects sales for 2004 will be in the range
of $450 million to $460 million, with earnings per common share in the range
of $0.22 to $0.27 per common share.
