Amsterdam - 8th May 2014 - Head NV (VSX: HEAD; U.S. OTC: HEDYY.PK), a leading global manufacturer and marketer of sports equipment, announced the following results today.
Even with the negative impact of currencies, sales for the first three months of 2014 were up 1.6% compared to the prior year. At constant currencies the sales would have increased by 3.5%.
Winter Sports sales for the first three months were up 9.8% compared to the same period in 2013. 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. The growth in this quarter should not be seen as indicative of the full year as whilst some Southern parts of Europe and the USA experienced good snowfall, the weather in Central and Northern Europe was unseasonably warm and this will impact our winter sports orders in 2014.
The decline of our Racquet Sports sales by 2.6% for the three months to March 2014 was driven mainly by a decline of the volumes of Penn balls in addition to adverse currency movements.
Our Diving equipment sales for the first three months of 2014 were down as European markets remain challenging.
Sportswear sales for the three months were broadly flat.
Gross margins for the three months to 31st March 2014 have improved from 42.0% to 46.0% mainly due to higher licensing revenues, lower cost of sales for our tennis ball business and an improved mix in our diving business.
The adjusted operating loss for the three months to 31st March 2014 decreased by €1.5m as a result of the improved gross profit (€3.3m) offset by increased costs of €1.8m mainly due to higher advertising in Diving and Sportswear and higher selling costs.
Net interest for the period was broadly unchanged, the foreign currency movements caused a positive swing of €0.6m in our non-operating expenses and improved profitability caused a decline in the income tax benefit resulting in a reduction in the net loss from €6.1m in the first three months of 2013 to €3.4m for the first three months of 2014.
Net cash provided by operating activities increased by €7.6m in the first three months to 31st March 2014 driven by the lower net loss and positive working capital movement.
Net debt increased slightly by €1.7m from 31st March 2013 to 31st March 2014 due to the positive operating cash flows being more than offset by the payments for acquisitions in the period.
Our interim financial statements for the period ended 31st of March 2014 can be found on our website at www.head.com/corporate/investors/quarterly_reports.php.
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 and SSI (diving) 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
Gunter Hagspiel, Chief Financial Officer
Tel: +43 5574 608
Fax: +43 5574 608 130
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.
Prins Bernhardplein 200,
1097 JB Amsterdam
Stock Market: Official Market of the Vienna Stock Exchange
Market: SIX Swiss Exchange
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Head N.V. via GlobeNewswire
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