Torpedo Sports USA, Inc. announced its unaudited financial results for the three and six months ended January 31, 2003.
The financial statements presented for the current period are those of our subsidiary Torpedo Sports, Inc. on a consolidated basis with those of Torpedo Sports USA, Inc., while the financial results presented for the prior year’s period are those of Torpedo Sports, Inc.
Overall sales decreased during the quarter ended January 31, 2003, as compared to the quarter ended January 31, 2002, primarily due to retailers being substantially in stock at the beginning of the 2002/2003 winter selling season, resulting in customers buying fewer products in the fall and winter of 2002. In an effort to provide greater brand depth within its snow goods product lines, the Company announced on December 23, 2002, that it signed a five-year license agreement for an exclusive license to the Flexible Flyer and Mongoose brand names, and a non-exclusive license to the Schwinn brand name, to market all “snow products” including metal runner sleds, toboggans and snowboards.
Historically, approximately 95% of the Company’s sales occurred in the first two fiscal quarters. To help alleviate Torpedo’s reliance on its winter goods product lines, the Company has introduced a wide range of spring and summer products including trikes, bikes, wagons and summer inflatables, and has begun shipping initial product orders in the fiscal quarter ending April 2003.
“Although our revenues came down from the year-ago comparable quarter, the loss from operations, if you exclude non-cash stock-based compensation, was approximately $301,200 compared to income of $497,000 for the year-ago period,” commented Ed Shake, President and Chief Operating Officer. “We are also very encouraged about future sales and growth based upon the introduction of our new spring/summer product lines as well as the recent signing of the license agreement for the Flexible Flyer, Mongoose and Schwinn brand names. Flexible Flyer, a brand established in 1889, is one of the oldest and most recognizable brand names in winter snow products, while the Mongoose and Schwinn brands enjoy wide distribution in various sporting goods categories.”
“In reading the financial statements, a reader should note the disparity in the number of outstanding shares for the current periods versus the prior-year periods, taking into account the shares issued as a result of the shares issued in the merger completed in 2002,” stated Barry Hollander, Chief Financial Officer of Torpedo.
Torpedo Sports USA, Inc. and Subsidiary
Selected Consolidated Financial Data
For the Three and Six Months Ended
January 31, 2003 and 2002
(Unaudited)
Three Three
Six Months Six Months Months Months
Ended Ended Ended Ended
January 31, January 31, January 31, January 31,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Net sales $5,599,935 $7,990,686 $2,410,629 $3,382,195
Cost of sales 3,933,098 5,275,109 2,019,890 2,229,596
----------- ----------- ----------- -----------
Gross profit 1,666,837 2,715,577 390,739 1,152,599
Operating expenses (1,683,500) (1,419,998) (829,520) (655,462)
----------- ----------- ----------- -----------
Income (loss) from
operations (16,663) 1,295,579 (438,781) 497,137
Other income (expense) (313,170) (336,809) (195,565) (265,923)
----------- ----------- ----------- -----------
Income (loss) before
income taxes (329,833) 958,770 (634,346) 231,214
Income tax expense
(benefit) 33,862 - (132,024) -
----------- ----------- ----------- -----------
Net income (loss) (363,695) 958,770 (502,322) 231,214
