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Net sales for the first nine months of 2014 were up 5.0% compared to the prior year driven by growth in all divisions. At constant currencies the sales growth would have been higher at 6.5%.
Winter Sports sales for the first nine months were up 8.6% versus the comparable period in 2013. At constant currencies, this increase would have been 9.4%.
The growth was mainly due to the rise in volumes of both skis and ski boots which were delivered earlier in 2014 than in the prior year.
Winter Sports bookings for the year to date are around 5% ahead of those achieved by the same point last year. They do not however anticipate that this growth in bookings will be fully reflected in an equivalent full year sales increase. This is due to bookings being affected by a number of timing issues and also the fact that full year sales are dependent upon reorders in the 4th quarter which are closely linked to weather conditions.
The growth in the Racquet Sports division of 1.3% for the nine months to September
2014 was driven by higher volumes in tennis balls and higher revenues in accessories partly offset by exchange rate movements.
Diving sales for the first nine months of 2014 were up 5.4% due to the sales from newly acquired SSI business offset by declines in equipment sales due to tough market conditions.
Sportswear sales for the first nine months of 2014 increased by €0.5m or 11.0% mainly due to an increase in the sale of winter sportswear offset by a decline in bag sales in the UK.
Licensing revenues for the first nine months of 2014 increased by €1.3m or 34.8% due to increased reported sales from licensees.
Gross margins for the nine months to 30th September 2014 have improved from 40.9% to 43.7% mainly due to higher licensing income, the mix in diving business due to the new acquired SSI business and lower costs of sales in bindings and tennis ball businesses.
The adjusted operating results improved from a loss of €1.3m for the nine months to 30th September 2013 to a profit of €1.7m for the nine months to 30th September 2014. This improvement of €3.0m was due to the higher sales and improved margins offset by an increase in selling and marketing costs of €5.5m (mainly higher advertising and departmental selling costs for our winter and diving divisions) and an increase in general and administrative expenses of €1.8m (mainly due to the inclusion of the newly acquired SSI business).
The higher level of long and short-term debt has resulted in an increase in interest and other financial expenses of €1.2m or 34.7% for the period to 30th September 2014 compared to the prior year.
Net cash used for operating activities increased by €10.0m in the first nine months mainly due to adverse working capital movements in the first nine months of 2014 compared to the first nine months of 2013.
Net debt increased by €46.6m from 30th September 2013 to 30th September 2014 predominantly due to the share buy back that took place in the second quarter of 2014 (€23.8m) and the payments for the acquisitions in the period (€9.7m) in addition to the cash used in operations over the twelve months period. Net debt will be further impacted in the fourth quarter of 2014 by the results of recent tender where 4,844,162 shares were tendered at a price of €1.60 amounting to a cost of €7.8m to the Company.
They continue to forecast a modest growth in sales this year based on current order books along with the contribution of our acquisition. However the impact of currency fluctuations and some higher marketing and investment costs mean that overall they believe operating results will be broadly in line with those achieved in 2013.
More: http://www.head.com-Results Q3
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.
The Company´s key products have attained leading market positions based on sales and reputation and have gained high visibility through their use by many of today´s top athletes.
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
Source Head © by press release
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