Ad hoc: HEAD NV and HTM Sport GmbH Announce the Unaudited Results for the Three and Nine Months ended 30th September 2013.
HEAD NV and HTM Sport GmbH Announce the Unaudited Results for the Three and Nine Months ended 30th September 2013.
Amsterdam - 7th November 2013 - 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 | ||||||||||||||
€`000 | For the three months ended Sep 30, | For the nine months ended Sep 30, | ||||||||||||
2013 | 2012 | % | 2013 | 2012 | % | |||||||||
(restated*) | (restated*) | |||||||||||||
Profit and Loss | ||||||||||||||
Gross Sales: | ||||||||||||||
Winter Sports | 49,166 | 52,518 | -6.4% | 71,469 | 75,328 | -5.1% | ||||||||
Racquet Sports | 32,522 | 34,251 | -5.0% | 113,934 | 113,517 | 0.4% | ||||||||
Diving | 12,021 | 11,127 | 8.0% | 40,429 | 39,528 | 2.3% | ||||||||
Sportswear | 1,056 | 985 | 7.1% | 4,266 | 4,330 | -1.5% | ||||||||
Licensing | 1,061 | 992 | 6.9% | 3,771 | 3,573 | 5.6% | ||||||||
Sales Deductions | (2,796) | (2,904) | -3.7% | (6,643) | (6,705) | -0.9% | ||||||||
Net Sales | 93,029 | 96,969 | -4.1% | 227,226 | 229,570 | -1.0% | ||||||||
Adjusted Operating Profit (Loss) | 7,554 | 7,953 | (1,282) | (990) | ||||||||||
% of Net Sales | 8.1% | 8.2% | -0.6% | -0.4% | ||||||||||
Adjustments: | ||||||||||||||
ESOP (non-cash) | (10) | (26) | (424) | (394) | ||||||||||
Reported Operating Profit (Loss) | 7,544 | 7,927 | (1,706) | (1,384) | ||||||||||
% of Net Sales | 8.1% | 8.2% | -0.8% | -0.6% | ||||||||||
Interest and Other Finance Expense (exc Disagio) | (798) | (1,379) | (3,308) | (4,344) | ||||||||||
Non-Cash Disagio Costs | (64) | (25) | (182) | (73) | ||||||||||
Interest and Investment Income | 75 | 149 | 298 | 604 | ||||||||||
Other Non-Operating Income (Expense) | 481 | 414 | 408 | (139) | ||||||||||
Current Tax | (541) | (407) | (1,717) | (1,589) | ||||||||||
Deferred Tax | (1,845) | (1,648) | 1,413 | 1,914 | ||||||||||
Net Profit (Loss) | 4,852 | 5,031 | (4,792) | (5,012) | ||||||||||
Cash Flow | ||||||||||||||
Net cash provided by (used for) operating activities | (3,779) | (6,063) | (2,732) | 6,973 | ||||||||||
Purchase of property, plant and equipment | 1,935 | 1,998 | 5,622 | 5,822 | ||||||||||
Balance Sheet | ||||||||||||||
Cash and cash equivalents | 56,765 | 28,562 | ||||||||||||
Available for sale financial assets | 5,009 | 5,000 | ||||||||||||
Borrowings | 122,142 | 104,333 | ||||||||||||
Net Debt | 60,369 | 70,771 | ||||||||||||
Working Capital | 131,570 | 138,895 | ||||||||||||
Net Equity | 165,359 | 166,984 | ||||||||||||
* restated to take into account retrospective application of new IAS on accounting for employee benefits | ||||||||||||||
for full details, see interim financial statements | ||||||||||||||
Sales for the first nine months of 2013 were down 1.0% compared to the prior year, but at constant currency the sales would have increased by 0.9%. At actual and constant currencies, growth was achieved in the Racquet Sports, Diving and Licensing divisions, but both the Winter Sports and Sportswear divisions recorded lower sales than in the prior year.
Winter Sports sales for the first nine months were 5.1% behind the comparable period in 2012. This was in part due to exchange rate movements and at constant currencies the decline would have been 2.4%. By product, skis are ahead of prior year but this was more than offset by declines in ski boots and snowboards, although this fall is mainly due to the timing of shipments and should reverse in the final quarter of the year.
Our Winter Sports bookings at this point in the year at constant currency are still around 10% ahead of those achieved at the same point in the prior year, but due to the exchange rate movements we believe that our full year sales growth in Winter Sports will not fully reflect the increase in orders.
The growth in Racquet Sports division of 0.4% for the nine months to September 2013 was driven by higher volumes of tennis balls, mainly in North America and an improved mix in tennis racquets, offset by currency movements.
Our Diving sales for the first nine months of 2013 were up slightly even though the European market remained challenging due to cold weather conditions and general continued economic uncertainties. Growth was seen in North America and Asia.
Sportswear sales for the nine months declined by 1.5%, due in part to lower sales of bags in the UK.
Gross margins for the nine months to 30th September 2013 have improved from 39.8% to 40.9% mainly due to lower cost of sales for our tennis balls, in particular lower rubber prices, and lower cost of sales of our bindings.
Adjusted operating loss for the nine months to 30th September 2013 increased by €0.3m mainly due to higher selling and marketing costs offset by the higher gross profit. The higher selling and marketing costs were due to higher advertising in our Racquet Sports and Diving divisions and higher selling costs in our Racquet Sports and Sportswear divisions.
The positive development of our financing costs due to lower interest from our long term debt along with exchange rate gains offset by higher tax charges lead to a slightly reduced net loss of €4.8m compared to €5.0m in the comparable 2012 period.
Net cash provided by operating activities declined by €9.7m in the first nine months mainly due to adverse working capital movements in the first nine months of 2013 compared to the first nine months of 2012 as cash inflows from working capital for the first nine months of 2012 amounted to €6.8m compared to cash outflows of €3.1m in 2013.
Net debt decreased by €10.4m from 30th September 2012 to 30th September 2013 due to positive operating cash flows after investing activities in the last quarter of 2012.
During the second quarter of 2013, HTM Sport GmbH ("HTM") redeemed its outstanding Senior Notes due 2014. In September 2013, HTM issued a new €45.0m bond which was subsequently increased to €60.0m due to additional investor demand. At the 30th September 2013 HTM held €5.5m of the bond which was available for resale. During October 2013, €3.5m of the bond held by HTM was sold.
For 2013 we are anticipating a modest growth in sales driven by further recovery of our Winter Sports division but the impact of currency fluctuations, particularly the Yen, and some higher marketing and investment costs mean that overall we believe our operating results will be around those achieved in 2012.
Our interim financial statements for the period ended 30th of September 2013 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, paddle and squash racquets, tennis balls and tennis footwear, sportswear and swimming products), 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: Investor-Relations@head.com
Gunter Hagspiel, Chief Financial Officer
Tel: +43 5574 608
Fax: +43 5574 608 130
E-mail: g.hagspiel@head.com
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: 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
Bond:
ISIN: CH0222437011
Market: SIX Swiss Exchange
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Source: Head N.V. via Thomson Reuters ONE
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