ROTTERDAM, The Netherlands, May 16, 2002 (PRIMEZONE) -- Head N.V. (NYSE:HED) (VSX:HEAD), a leading global manufacturer and marketer of sports equipment, announced today revenues of $74.9 million for the three months ended March 31, 2002. Excluding 2001 sales of footwear, which beginning January 2002 is a licensed product, revenues were up 2.1% from the same period last year and at constant currency revenues were up 6.2%. For the period Head's operating result improved by $1.2 million from a loss of $3.1 million in the first quarter of 2001 to loss of $1.9 million in the same period in 2002. Due to a $4.7 million foreign exchange gain in the first quarter of 2001 versus $0.3 million in 2002, the loss per share for the three month period was $0.09 compared to $0.04 for the same period in 2001.
Johan Eliasch, Chairman and CEO commented: "While the global economic out look remains difficult, the Company is starting to see the positive effects of some of the measures taken last year to improve profitability.
Due to the seasonality of our business, the first quarter results are not indicative of what we expect for the full year. As we look forward, 2002 is going to be a year where Head is looking for profit improvement and not necessarily top line growth. Our operations are in excellent shape. We continue to have positive operating cash flow, a strong balance sheet with ample liquidity to manage our business and a committed team running the business with a strong focus on creating shareholder value. I'm also pleased to report that we will be paying a 2001 dividend on June 6 of euro 0.14 per share to shareholders of record on May 29.
The alpine ski market, has seen two consecutive years of poor snow conditions. We have some great new products for the 2002/03 ski season including the new line of Head Intelligence skis and we should do well, but the retail order book will be constrained by excess inventory in the trade channels.
In Diving, the effects of 9/11 and the current situation in the Middle East are having an effect on sales, but we are hopeful that the results of our Diving division will pick up in the second half of the year.
In Licensing we are expanding. Our new agreement for Head branded sportswear in greater China is particularly exciting.
In Racquet Sports, we are continuing to see improvement as we expand the Head Intelligence line of racquets and tennis ball sales have improved as well. The Grand Slams are just starting, Andre Agassi is in good form and many of our other pros are doing very well.
So, it should be a good season for the Head Team on Tour and I encourage you to come out and enjoy some tennis!"
Three Months Ended March 31, 2002 and 2001
Total Revenues. For the three months ended March 31, 2002 total revenues decreased by $2.5 million or 3.2% to $74.9 million from $77.4 million in the comparable 2001 period. This decrease was primarily due to currency translation adjustments resulting from the depreciation of the euro against the U.S. dollar and $4.1 million of revenues from footwear in the three months ended March 31, 2001. As of January 2002 footwear is now a licensed product. Excluding the effect of changes in exchange rates, total revenues for the three months ended March 31, 2002 increased by $0.5 million, or 0.7% due to an increase in revenues from our products in our Winter Sports and Racquet Sports divisions. This increase was offset, however, by decreased revenues from footwear, Diving products and Licensing.
For the Three Months ended March 31,
2001 2002 %
Change
(unaudited) (unaudited)
in thousands $
Product category
Winter Sports 11,835 11,921 0.7
Racquet Sports 47,994 47,171 (1.7)
Diving 15,502 14,092 (9.1)
Licensing 2,030 1,680 (17.2)
Total Revenues $ 77,361 $ 74,864 (3.2)
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About Head
Head NV is a leading global manufacturer and marketer of premium sports equipment. We are a technology driven company, our motto being "Superior Performance Through Superior Technology."
We can trace our roots back to 1950 when Howard Head, the inventor of the first metal ski, founded the company. The Tyrolia bindings and Mares diving brands were added in the 1970's and more recently the Penn balls and Dacor diving brands were acquired during the 1990's.
Head NV has been under its present management since 1996 and was listed on the New York Stock Exchange and the Vienna Stock Exchange in September 2000 in connection with our initial public offering.
Our current operations are organized into four divisions: Winter Sports, Racquet Sports, Diving and Licensing
Within these divisions we have created or acquired some of the most recognizable brands in the sporting goods market including:
Head Tennis, squash and racquetball racquets; alpine skis and
ski boots; snowboarding boards, bindings and boots;
accessories and apparel
Penn Tennis and racquetball balls
Tyrolia Ski bindings
Mares/Dacor Diving equipment
Our key ski, racquet and diving products all have leading market positions and appeal to a wide range of consumers from novices to some of the world's top athletes including Andre Agassi, Gustavo Kuerten, Hannes Trinkl and Francisco "Pipin" Ferreras.
Our products are sold through over 30,000 accounts including pro shops, specialty sporting goods stores and mass merchants in over 80 countries around the world.
Our strategy has always been to develop groundbreaking products positioned at middle to high price points. We believe this helps us achieve our financial returns as well as gain market share.
For more information, please visit our website: www.head.com
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainties. Although Head believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by Head or any other person that the objectives and plans of Head will be achieved.
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