May 10th, 2012
Amsterdam - 10th May 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
see attached pdf file
Sales for the first three months of 2012 were up 17.1%
compared to the first three months of the prior year driven
by Racquet Sports and compounded by favorable exchange rate
movements and positive results from the other divisions. At
constant currency the sales for the first three months of
2012 were up 15.6% compared to the first three months of
2011.
Winter Sports sales for the period where ahead of the
comparable period in 2011. 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
increase in the quarter was mainly due to earlier shipment
of the bindings under contract manufacturing.
The period is key for the Winter Sports Division in
securing orders for the forthcoming 2012/13 winter 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 this is impacting our pre-season
orders for next year. We believe that the worldwide winter
sports market will be substantially down in 2012 and this
will significantly impact our winter sports sales in the
year.
The warm weather that has impacted the winter sports market
has had the opposite effect on the racquet sports market
which has started the year positively in North America. In
addition Japan also seems to have recovered from the impact
of the tsunami. Our Racquet Sports Division grew sales by
21.3% during the first three months of 2012 compared to the
first three months of 2011. Growth came from both increases
in volumes of racquets and balls and positive movements in
average selling prices. 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.
Whilst the diving market remains tough in Italy and
Southern Europe, Asia and North America have developed
favourably in 2012. This market growth and our strong
product lines in computers and regulators has resulted in
sales growth for our Diving Division of 12.3% during the
three months to 31st March compared to the comparable
period in 2011. As the second quarter is more reliant on
our European sales we believe that this level of growth
will be hard to maintain.
Both Licensing and Sportswear Divisions increased in the
period, but from a low base.
Adjusted operating loss for the period improved by €2.9m
due to higher sales being offset in part by higher selling
and marketing costs. Gross margins stayed flat, with higher
raw material prices being compensated for by higher average
selling prices.
Net Interest decreased by €1.3m in the three months ended
March 31, 2012 compared to the first three months in 2011
as the interest rates for our new financing agreements are
lower than those of the Senior Secured Notes that we had in
place in 2011.
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 three months
ended March 31, 2012, we had a net loss of €2.2m, compared
to a net loss of €7.7m in the comparable 2011 period.
Net cash provided by operating activities improved by €1.3m
in the first quarter of 2012 compared to 2011 due to the
net impact of higher profitability and increased working
capital.
Net debt increased by €13.8m from 31st March 2011 to 31st
March 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 expect to see a
slow down in our sales, especially 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 31st
of March 2012 can be found on our website at
http://www.head.com/corporate/investors/quarterly_reports.php.
The Head NV Annual General Meeting will be held on the 24th
May 2012.
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: http://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: headinvestors@aol.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: 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
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