The Hockey Company Holdings Inc. reported that net sales for the three months ended September 30, 2003 were
$81.1 million, an increase of $8.4 million or 11.6% compared with last year. Net income amounted to $8.5 million or $0.71 per share compared with $5.9 million or $0.82 per share in 2002.
Gross margin grew by $3.9 million or 12.2% to $35.8 million or 44.1% of sales
compared with 43.9% in 2002. EBITDA amounted to $18.2 million, including a foreign exchange gain on long-term debt of $0.2 million, compared with $13.1 million a year ago, in which there was an exchange loss on the debt of
$2.3 million.
Net sales for the nine months ended September 30, 2003 were
$171.2 million, an increase of $19.8 million or 13.1% compared with last year. Gross margin grew by $9.8 million or 14.6% to $76.9 million or 44.9% of sales
compared with 44.3% in 2002. EBITDA amounted to $38.8 million, including a foreign exchange gain on long-term debt of $10.2 million, compared with $23.3 million a year ago, in which there was also an exchange gain on the debt
of $0.5 million. Net income amounted to $13.9 million or $1.52 per share compared with $1.9 million or $0.26 per share in 2002.
The Company reports its results in United States currency. However,
because it is established internationally and operates in local currencies,
foreign exchange rate fluctuations play a part in the reported results. Sales
for nine months have been positively impacted by approximately $14 million
compared with a year ago on a constant dollar basis. Similarly, operating and
other expenses are negatively impacted, mitigating the overall impact on the
Company's reported earnings. The foreign exchange gain on the long-term debt
amounted to approximately $8.0 million on an after-tax basis in the nine
months ended September 2003.
The trends evident in the first half of the year continued into the third
quarter, with growth in the equipment business of 15% being the main revenue
driver. Apparel sales in the third quarter grew about 4% compared with a year
ago, and on a year to date basis are at about the same level as the prior
year, having been impacted in the first half of the year by the small market
teams making the playoffs and negatively affecting sales of replica jerseys.
Margins remained strong in both segments. Geographically, Canada and Europe
continue to demonstrate strength while the United States economy provides
greater challenge.
Matthew H. O'Toole, President and Chief Executive Officer said, “I am
pleased with our overall performance this quarter. We have had significant
growth in profitability and continue to exceed our plan for the year. Our
initiatives in product innovation have resulted in market acceptance of the
Company's 2003 new product introductions. Both the CCM Vector one-piece
composite hockey stick and the CCM Pro Tack ice skate have been well received
by elite players and retailers alike.”
“In August we completed the acquisition of Roger Edwards Sport Ltd. which
will position us well for future growth in the retro-inspired apparel segment.
Meanwhile, our core hockey jersey business continues to deliver solid results
after a slow playoff season” O'Toole continued. “The biggest challenge in the
apparel business has been the difficult retail conditions in the United
States, and we do not foresee a change to these conditions in the fourth
quarter.”
“Overall, the strong quarter bodes well for us and we believe that we
will have another solid year and significantly exceed last year's results. We
also have several exciting new products ready for introduction in 2004 that
will continue to reinforce The Hockey Company's position as a leader in
product innovation and the number one manufacturer of hockey equipment and
related apparel in the world.”
The Hockey Company Holdings Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(All amounts in thousands of U.S. dollars, except share data)
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For the Three For the Nine
Months ended Months ended
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September September September September
30, 30, 30, 30,
2002 2003 2002 2003
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Net sales $ 72,696 $ 81,119 $ 151,424 $ 171,227
Cost of goods sold 40,769 45,367 84,340 94,345
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Gross profit 31,927 35,752 67,084 76,882
Selling, general
and administrative
expenses 17,104 19,956 46,589 52,935
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Operating income 14,823 15,796 20,495 23,947
Other expenses
(income), net 269 53 198 (1,550)
Interest expense 4,978 4,336 13,335 14,511
Foreign exchange
loss (gain) 2,443 (1,296) 173 (9,710)
Loss on early
extinguishment
of debt - - 3,265 -
--------------------------------------------------
Income before
income taxes 7,133 12,703 3,524 20,696
Income taxes 1,252 4,166 1,620 6,792
--------------------------------------------------
Net income $ 5,881 $ 8,537 $ 1,904 $ 13,904
--------------------------------------------------
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Earnings per share:
- Basic $ 0.82 $ 0.71 $ 0.26 $ 1.52
- Diluted $ 0.82 $ 0.69 $ 0.26 $ 1.48
