Ad hoc: HEAD NV and HTM Sport GmbH Announce the Unaudited Results for the Three and Six Months ended 30th June 2012.

New York, 09/08/2012 (informazione.it - comunicati stampa - arte e cultura)

HEAD NV and HTM Sport GmbH Announce the Unaudited Results for the Three and Six Months ended 30^th June 2012.

 

Amsterdam - 9^th August 2012 - Head NV (VSX: HEAD; U.S. OTC: HEDYY.PK), a leading global manufacturer and marketer of sports equipment, announced the following results today.

 

Summary Unaudited Financial Information
EUR'000				For the 3 months ended June 30,						For the 6 months ended June 30,
				2012		2011		%		2012		2011		%
Profit and Loss
Gross Sales:
	Winter Sports			9,258		9,222		0.4%		22,810		22,233		2.6%
	Racquet Sports*			37,036		33,705		9.9%		79,266		68,524		15.7%
	Diving			15,658		15,282		2.5%		28,401		26,628		6.7%
	Sportswear*			1,272		1,212		5.0%		3,344		2,349		42.4%
	Licensing			1,028		1,062		-3.3%		2,581		2,287		12.8%
	Sales Deductions			(1,729)		(1,995)		-13.3%		(3,801)		(3,698)		2.8%
Net Sales				62,523		58,489		6.9%		132,601		118,322		12.1%
* 2011 adjusted due to a reclassification to Sportswear
Adjusted Operating Loss				(6,434)		(3,219)				(9,026)		(8,724)
				-10.3%		-5.5%				-6.8%		-7.4%
Adjustments:
	ESOP (non-cash)			(182)		20				(368)		68
Reported Operating Loss				(6,616)		(3,199)				(9,394)		(8,656)
				-10.6%		-5.5%				-7.1%		-7.3%
Interest and Other Finance Expense (exc Disagio)				(1,472)		(2,025)				(2,966)		(4,815)
Non-Cash Disagio Costs				(24)		(808)				(48)		(4,334)
Interest and Investment Income				231		175				456		343
Other Non-Operating Income (Expense)				(1,967)		(1,098)				(553)		568
Current Tax				(611)		(585)				(1,183)		(749)
Deferred Tax				2,576		2,258				3,562		4,648
Net Loss				(7,883)		(5,282)				(10,126)		(12,995)
Cash Flow
Net cash provided by operating activities				(11,746)		(15,086)				13,036		8,406
Purchase of property, plant and equipment				2,154		2,506				3,824		3,935
Balance Sheet
Cash and cash equivalents										35,066		45,120
Available for sale financial assets										4,975		5,732
Borrowings										102,695		104,225
Net Debt										62,654		53,373
Working Capital										124,846		114,954
Net Equity										164,257		159,248

 

Sales for the first six months of 2012 were up 12.1% compared to the first six months of the prior year driven by Racquet Sports, especially in North America, and compounded by favorable exchange rate movements and positive results from the other divisions. At constant currency the sales for the first six months of 2012 were up 8.9% compared to the first six months of 2011.

 

Winter Sports sales for the first six months where ahead of the comparable period in 2011 by 2.6%. This, however, is not a key delivery period for the division and consists mainly of close out sales and some deliveries of bindings under contract manufacturing agreements for the next season.

 

Due to the very mild winter and late snow in both Europe and North America in 2011/12, sell out at retail was considerably down and some International retail chains are therefore reducing pre-season orders by 20% to 25%. We have now collected a majority of our pre-season orders and whilst our declines are not as dramatic, we still have a double-digit deterioration compared to the prior year, with skis and snowboards having suffered more than boots.

 

The racquet sports market started the year positively in North America where we had record sales, but the worldwide growth we achieved in the first quarter of 21.3% slowed in the second to 9.9% as poor weather and lower consumer demand dampened racquet sales in Europe. The overall growth for the first six months of the year of 15.7% compared to the prior year has been achieved through higher volumes and favourable product mix in both racquets and balls, supported by positive exchange rate movements. A number of new products were introduced in the first quarter of the year, and we would not expect the current growth to continue throughout the year.

 

Our diving sales for the first six months of 2012 grew by 6.7% due to market growth in North America and Asia and our strong product lines in computers and regulators.

 

Sportswear sales for the six months improved by EUR1.0m, or 42.4% due to higher sales of Summer Sportswear.

 

Gross margins for the six months to 30^th June 2012 have declined from 41.0% to 39.9% due to higher cost of sales driven in part by lower utilization of our Alpine production facilities, increased labour rates and further investment in our sportswear division.

 

Adjusted operating loss for the six months to 30^th June 2012 increased by EUR0.3m. The increase in the loss was due to the higher sales being more than offset by lower gross margins and higher selling and marketing costs.

 

The buy back and redemption of the Senior Secured Notes in 2011 has substantially decreased our interest and other financial expenses due to the lower interest rates achieved. For the six months to 30^th June 2012 interest and other financial costs decreased by EUR1.8m.

 

The non-cash disagio costs incurred in 2011 were due to the buy back of the Senior Secured Notes in March of that year which led to the acceleration of the amortization of the non-cash Disagio costs.

 

As a result of the foregoing factors, for the six months ended June 30, 2012 we had a net loss of EUR10.1m compared to EUR13.0m in the comparable 2011 period.

 

Net cash provided by operating activities improved by EUR4.6m in the first six months mainly due to lower cash outflow for inventories and lower interest costs in 2012 compared to 2011.

 

Net debt increased by EUR9.3m from 30^th June 2011 to 30^th June 2012 due mainly to higher working capital needs.

 

Overall 2012 appears to have started well, but will be marred by the warm weather at the beginning of the 2011/12 ski season and weak consumer demand. We continue to expect to see a slow down in our sales in the third and fourth quarters of the year and anticipate that this will cause operating results for 2012 to deteriorate compared to 2011.

 

Our interim financial statements for the period ended 30^th of June 2012 can be found on our website at www.head.com/corporate/investors/quarterly_reports.php.

 

 

About Head

 

HEAD NV is a leading global manufacturer and marketer of premium sports equipment and apparel.

 

HEAD NV's ordinary shares are listed on the Vienna Stock Exchange ("HEAD").

 

Our business is organized into five divisions: Winter Sports, Racquet Sports, Diving, Sportswear and Licensing. We sell products under the HEAD (alpine skis, ski bindings, ski boots, snowboard and protection products, tennis, racquetball and squash racquets, tennis balls and tennis footwear and sportswear), Penn (tennis balls and racquetball balls), Tyrolia (ski bindings) and Mares (diving equipment) brands.

 

For more information, please visit our website: www.head.com

 

Analysts, investors, media and others seeking financial and general information, please contact:

 

Clare Vincent, Investor Relations

Tel: +44 207 499 7800

Fax: +44 207 491 7725

E-mail: [email protected]

 

Gunter Hagspiel, Chief Financial Officer

Tel: +43 5574 608

Fax: +43 5574 608 130

E-mail: [email protected]

 

 

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will" and similar terms and phrases, including references to assumptions, as they relate to Head NV, its management or third parties, identify forward-looking statements. Forward-Looking statements include statements regarding Head NV's business strategy, financial condition, results of operations, and market data, as well as any other statements that are not historical facts. These statements reflect beliefs of Head NV's management as well as assumptions made by its management and information currently available to Head NV. Although Head NV believes that these beliefs and assumptions are reasonable, the statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These Factors include, but are not limited to, the following: the still possible impact of the global economic turmoil, weather and other factors beyond our control, competitive pressures and trends in the sporting goods industry, our ability to implement our business strategy, our liquidity and capital expenditures, our ability to obtain financing, our ability to compete, including internationally, our ability to introduce new and innovative products, legal proceedings and regulatory matters, our ability to fund our future capital needs, and general economic conditions. These factors, risks and uncertainties expressly qualify all subsequent oral and written forward-looking statements attributable to Head NV or persons acting on its behalf.

 

 

Head NV

Prins Bernhardplein 200,

1097 JB Amsterdam

 

Shares:

ISIN: NL0000238301

Stock Market: Official Market of the Vienna Stock Exchange

 

Notes:

HTM Senior Notes ISIN: XS0184717956 and XS0184719143

Listing: Luxembourg Stock Exchange

 

The press release can also be downloaded from the following link:

Copyright Thomson Reuters

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