"Riddell Announces 1998 Results"...begins working with Internet joint partners...
NEW YORK, March 11 /PRNewswire/ -- "Riddell Sports Inc. (Amex: RDL - news) today announced today that its results for 1998 were in line with its estimates that were released on February 22, 1999.
For 1998 the Company reported a loss of $7,139,000 or ($0.78) per share, including a $925,000 charge for certain restructuring costs taken in the fourth quarter of 1998. The 1998 results before the restructuring charge were slightly better than the Company's loss of $6,270,000 or ($0.69) per share on a pro forma basis in 1997. The 1997 pro forma results include the performance of Varsity Spirit Corporation for all of 1997, including the period prior to its acquisition by the Company in June 1997.
Revenue in 1998 grew from $174,084,000 on a pro forma basis in 1997 to $186,600,000 in 1998, including a rise of 9% from the Company's Institutional business.
In addition to the restructuring charge for expenses associated with a centralization strategy for certain facilities and the elimination of approximately 40 jobs, including two senior positions, the Company took other cash and non-cash charges during the fourth quarter in its retail and institutional businesses. Together these charges exceeded $3.0 million.
The Company also reported that it had lost approximately $1.5 million in connection with the introduction of certain new initiatives, including its newly acquired license for UMBRO-branded team soccer apparel, equipment and footwear, its introduction of athletic game uniforms and its entry into the dance market for schools and private dance studios. While these efforts were unprofitable in 1998 because the Company's sales efforts began too late in the year to achieve enough volume to offset the start-up costs, the Company anticipates that with a full-year of operation in 1999 that these initiatives will contribute towards a profitable year in 1999.
Also in the fourth quarter, the Company completed the implementation of several cost saving programs as part of its long-term strategy of improving operations. These measures included combining the Varsity and Riddell insurance programs, negotiations with vendors and reductions in other costs and staffing levels. These actions are expected to result in annual savings of $2.0 to $3.0 million when fully implemented later this year.
Mr. David Mauer, President & CEO of Riddell, said, ''Our goal in 1998 was to leverage the combined strengths of the Varsity and Riddell operating units with the introduction of game uniforms for male and female participants in a variety of sports, including the UMBRO brand for team soccer apparel. With Varsity's expertise in the sourcing of custom uniforms, we believe that we will be able to provide our customers with unsurpassed service. These efforts were launched in 1998, but did not yield significant volume last year. However, the early indications for 1999 are that these initiatives are beginning to yield results. The best evidence of this is that our order growth rate so far this year significantly exceeds the rate of revenue increase that we experienced last year. We are optimistic that the combination of continued strong order growth and the cost saving programs implemented last year will lead to a profitable 1999.''
Mr. Jeffrey Webb, President & COO of Riddell's Varsity Spirit Division and Vice-Chairman of Riddell Sports, Inc., added, ''In addition to the many new business building activities that we initiated in 1998, we recently began working with our Internet joint venture partners, Data Broadcasting Corporation and Dawntreader I LLP, to develop cross-marketing plans for our brands. While the joint venture is still contingent upon the completion of final documentation, we believe that once we are up and running we will be able to draw significant numbers of participants to the RiddellSports.com sites and foster additional commerce for our brands as well as for other brands utilizing our sites. Our Internet joint venture is expected to build increasingly stronger relationships with the over 20 million cheerleading, football, dance and soccer participants in this country..."
source: ©Thursday March 11, 7:30 am Eastern Time, 1999
biz.yahoo.com |
