Callaway Golf Company (NYSE:ELY) today announced its financial results for the third quarter ended September 30, 2007. Highlights for the third quarter include:
• Net sales of $235.5 million, an increase of 22% compared to $193.8 million for the same period in 2006. These strong sales are primarily the result of sales of Fusion drivers and X-series irons, as well as increases in sales of accessories and golf balls.
• Fully diluted earnings per share of $0.02 on 67.6 million shares outstanding compared to a loss per share of $0.18 on 67.0 million shares outstanding in 2006. The third quarter 2007 results include a gain of approximately $0.03 per diluted share related to the sale of a building.
• Fully diluted earnings per share include $0.04 of after-tax charges for gross margin improvement initiatives. The third quarter of 2006 includes after-tax charges of $0.01 for the integration of Top-Flite and $0.01 for the restructuring initiatives announced in September 2005. Excluding these charges, the Company’s pro forma fully diluted earnings per share for the third quarter of 2007 would have been $0.06 compared to a loss per share of $0.16 for the third quarter of 2006.
• Gross profit for the third quarter of 2007 increased 39% to $94.0 million (or 40% of net sales) compared to $67.7 million (or 35% of net sales) for the third quarter of 2006. The increase in gross profit as a percent of sales is primarily the result of the Company’s gross margin improvement initiatives announced in November, 2006 and secondarily a more favorable mix of higher margin Fusion woods and X-series irons products.
• Operating expenses for the third quarter of 2007 were $93.1 million (or 40% of net sales) compared to $84.6 million (or 44% of net sales) in 2006. The dollar increase is primarily due to higher marketing expenses, increased annual incentive compensation associated with the improved financial results compared to 2006, higher legal expenses to enforce the Company’s intellectual property rights, and higher selling expenses associated with increased sales, partially offset by the gain recognized on the sale of a building.
Highlights for the first nine months include:
• Net sales increased 13% to $950.2 million, a new record for the Company. Net Sales were $838.0 million for the same period in 2006.
• Fully diluted earnings per share increased 110% to $1.03 on 68.4 million shares outstanding, as compared to $0.49 on 68.8 million shares outstanding in 2006.
• Fully diluted earnings per share include after-tax charges of $0.07 associated with the Company’s gross margin improvement initiatives. Results for the first nine months of 2006 include after-tax charges of $0.04 for the integration of Top-Flite and $0.01 for restructuring. Excluding these charges, the Company’s pro forma fully diluted earnings per share for 2007 and 2006 would have been $1.10 and $0.54 respectively, an increase of 104%.
• Gross profit for 2007 was $429.9 million (or 45% of net sales) compared to $339.3 million (or 40% of net sales) for 2006. The increase in gross profit is due to the positive results of the Company’s gross margin initiatives and a more favorable mix of higher margin products.
• Operating expenses for 2007 were $311.0 million (or 33% of net sales), compared to $281.1 million (or 34% of net sales) for 2006. The dollar increase is primarily due to increased annual incentive compensation associated with the improved financial results, higher marketing expenses, increased legal expenses to enforce the Company’s intellectual property rights, and higher selling expenses associated with the increase in sales.
“We are very pleased with the results for the quarter and for the first nine months of 2007,” commented George Fellows, President and CEO. “Year to date sales have increased 13% for a new record as a result of strong consumer demand for our 2007 products, driven by our Fusion drivers and X-series irons along with the successful launch of the Top-Flite D2 golf ball. This growth has been across all of our regions, a majority of which was driven by our international business which is up 19% for the year.”
“Our gross margins as a percent of sales also continue to improve,” continued Mr. Fellows, “as we successfully execute the gross margin improvement initiatives announced last November, with a majority of the third quarter improvement resulting from these efforts. We also reduced our third quarter inventory by $28 million compared to last year, in line with our expectations, due to these initiatives while maintaining and in many cases improving customer service levels. ”
Business Outlook
The Company estimates that its full year 2007 net sales will be in the range of $1.095 to $1.105 billion compared to the previous estimate of $1.070 to $1.080 billion. It is also estimated that the 2007 full year pro forma fully diluted earnings per share will be in the range of $0.85 to $0.89 (on 68.0 million shares) compared to the estimate provided last quarter of $0.78 to $0.84 (on 70.0 million shares). Pro forma earnings exclude charges related to the Company’s gross margin improvement initiatives, currently estimated at $0.08 per share for 2007, but include charges related to employee equity-based compensation under FAS 123R.
“We are raising our forecast to reflect the higher than expected third quarter results,” commented Brad Holiday, Chief Financial Officer. “Our full year forecast continues to take into consideration that the fourth quarter, due to seasonality, is typically our smallest revenue quarter and also that unlike last year, there are very limited new product introductions planned in the quarter. Overall we are very pleased with our results to date and feel we are well on track in achieving our three year targets we set earlier this year.”
The Company will be holding a conference call at 2:00 p.m. PDT today. The call will be broadcast live over the Internet and can be accessed at www.callawaygolf.com. To listen to the call, please go to the website at least 15 minutes before the call to register and for instructions on how to access the broadcast. A replay of the conference call will be available approximately three hours after the call ends, and will remain available through 9:00 p.m. PST on Thursday, November 8, 2007. The replay may be accessed through the Internet at www.callawaygolf.com or by telephone by calling 1-800-475-6701 toll free for calls originating within the United States or 320-365-3844 for International calls. The replay pass code is 892455.
Disclaimer: Statements used in this press release that relate to future plans, events, financial results, performance or prospects, including statements relating to estimated future sales and earnings, are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These estimates and statements are based upon current information and expectations. Accurately estimating the Company’s sales and therefore earnings each year is therefore based upon various unknowns including consumer acceptance and demand for the Company’s current or new products as well as future consumer discretionary purchasing behavior. Actual results may differ materially from those estimated or anticipated as a result of these unknowns or other risks and uncertainties, including delays, difficulties or increased costs in the supply of components needed to manufacture the Company’s products, in manufacturing the Company’s products, or in connection with the implementation of the Company’s planned gross margin initiatives, the re-launch of the Top-Flite brand or the implementation of future initiatives; adverse market and economic conditions; adverse weather conditions and seasonality; any rule changes or other actions taken by the USGA or other golf association that could have an adverse impact upon demand or supply of the Company’s products; a decrease in participation levels in golf; and the effect of terrorist activity, armed conflict, natural disasters or pandemic diseases on the economy generally, on the level of demand for the Company's products or on the Company's ability to manage its supply and delivery logistics in such an environment. For additional information concerning these and other risks and uncertainties that could affect these statements and the Company’s business, see Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, as well as other risks and uncertainties detailed from time to time in the Company’s reports on Forms 10-K, 10-Q and 8-K subsequently filed from time to time with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Regulation G: The preliminary financial results reported in this press release have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). In addition to the GAAP results, the Company has also provided additional information concerning its results, which includes certain financial measures not prepared in accordance with GAAP. The non-GAAP financial measures included in this press release exclude charges associated with the integration of the Callaway Golf Company and Top-Flite Golf Company operations, charges related to the September 2005 restructuring initiatives, and charges related to the Company’s gross margin initiatives. These non-GAAP financial measures should not be considered a substitute for any measure derived in accordance with GAAP. These non-GAAP financial measures may also be inconsistent with the manner in which similar measures are derived or used by other companies. Management believes that the presentation of such non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provides additional useful information concerning the Company’s operations without these charges. The Company has provided reconciling information in the text of this press release and in the supplemental financial information attached to this release.
Through an unwavering commitment to innovation, Callaway Golf creates products and services designed to make every golfer a better golfer. Callaway Golf Company manufactures and sells golf clubs and golf balls, and sells golf accessories, under the Callaway Golf®, Top-Flite®, Odyssey® and Ben Hogan® brands. For more information visit www.callawaygolf.com.
| Callaway Golf Company | ||||||||||
| Consolidated Condensed Balance Sheets | ||||||||||
| (In thousands) | ||||||||||
| (Unaudited) | ||||||||||
| September 30, | December 31, | |||||||||
| 2007 | 2006 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 31,640 | $ | 46,362 | ||||||
| Accounts receivable, net | 165,002 | 118,133 | ||||||||
| Inventories, net | 213,902 | 265,110 | ||||||||
| Deferred taxes | 39,488 | 32,813 | ||||||||
| Income taxes receivable | - | 9,094 | ||||||||
| Other current assets | 21,217 | 21,688 | ||||||||
| Total current assets | 471,249 | 493,200 | ||||||||
| Property, plant and equipment, net | 127,103 | 131,224 | ||||||||
| Intangible assets, net | 173,948 | 175,159 | ||||||||
| Deferred taxes | 28,193 | 18,821 | ||||||||
| Other assets | 30,604 | 27,543 | ||||||||
| $ | 831,097 | $ | 845,947 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable and accrued expenses | $ | 113,553 | $ | 111,360 | ||||||
| Accrued employee compensation and benefits | 37,776 | 18,731 | ||||||||
| Accrued warranty expense | 13,067 | 13,364 | ||||||||
| Credit facilities | 932 | 80,000 | ||||||||
| Other current liabilities | 4,436 | - | ||||||||
| Total current liabilities | 169,764 | 223,455 | ||||||||
| Long-term liabilities | 61,593 | 43,388 | ||||||||
| Minority interest | 1,865 | 1,987 | ||||||||
| Shareholders' equity | 597,875 | 577,117 | ||||||||
| $ | 831,097 | $ | 845,947 | |||||||
| Callaway Golf Company | ||||||||||||||
| Statements of Operations | ||||||||||||||
| (In thousands, except per share data) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Quarter Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2007 | 2006 | |||||||||||||
| Net sales | $ | 235,549 | 100 | % | $ | 193,763 | 100 | % | ||||||
| Cost of sales | 141,543 | 60 | % | 126,058 | 65 | % | ||||||||
| Gross profit | 94,006 | 40 | % | 67,705 | 35 | % | ||||||||
| Operating expenses: | ||||||||||||||
| Selling | 65,808 | 28 | % | 56,949 | 29 | % | ||||||||
| General and administrative | 19,394 | 8 | % | 20,901 | 11 | % | ||||||||
| Research and development | 7,928 | 3 | % | 6,788 | 4 | % | ||||||||
| Total operating expenses | 93,130 | 40 | % | 84,638 | 44 | % | ||||||||
| Income (loss) from operations | 876 | (16,933 | ) | -9 | % | |||||||||
| Other income (expense), net | 1,223 | 1 | % | (1,058 | ) | |||||||||
| Income (loss) before income taxes | 2,099 | 1 | % | (17,991 | ) | -9 | % | |||||||
| Income tax provision (benefit) | 830 | (6,075 | ) | |||||||||||
| Net income (loss) | $ | 1,269 | 1 | % | $ | (11,916 | ) | -6 | % | |||||
| Earnings (loss) per common share: | ||||||||||||||
| Basic | $ | 0.02 | ($0.18 | ) | ||||||||||
| Diluted | $ | 0.02 | ($0.18 | ) | ||||||||||
| Weighted-average shares outstanding: | ||||||||||||||
| Basic | 66,516 | 67,000 | ||||||||||||
| Diluted | 67,639 | 67,000 | ||||||||||||
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2007 | 2006 | |||||||||||||
| Net sales | $ | 950,173 | 100 | % | $ | 838,023 | 100 | % | ||||||
| Cost of sales | 520,321 | 55 | % | 498,720 | 60 | % | ||||||||
| Gross profit | 429,852 | 45 | % | 339,303 | 40 | % | ||||||||
| Operating expenses: | ||||||||||||||
| Selling | 222,009 | 23 | % | 202,122 | 24 | % | ||||||||
| General and administrative | 65,139 | 7 | % | 59,226 | 7 | % | ||||||||
| Research and development | 23,851 | 3 | % | 19,786 | 2 | % | ||||||||
| Total operating expenses | 310,999 | 33 | % | 281,134 | 34 | % | ||||||||
| Income from operations | 118,853 | 13 | % | 58,169 | 7 | % | ||||||||
| Other expense, net | (2,006 | ) | (2,029 | ) | ||||||||||
| Income before income taxes | 116,847 | 12 | % | 56,140 | 7 | % | ||||||||
| Income tax provision | 46,103 | 22,656 | ||||||||||||
| Net income | $ | 70,744 | 7 | % | $ | 33,484 | 4 | % | ||||||
| Earnings per common share: | ||||||||||||||
| Basic | $ | 1.05 | $ | 0.49 | ||||||||||
| Diluted | $ | 1.03 | $ | 0.49 | ||||||||||
| Weighted-average shares outstanding: | ||||||||||||||
| Basic | 67,250 | 67,980 | ||||||||||||
| Diluted | 68,407 | 68,777 | ||||||||||||
| Callaway Golf Company | ||||||||||||
| Consolidated Condensed Statements of Cash Flows | ||||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Nine Months Ended | ||||||||||||
| September 30, | ||||||||||||
| 2007 | 2006 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 70,744 | $ | 33,484 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 27,464 | 23,961 | ||||||||||
| Non-cash share-based compensation | 8,207 | 9,611 | ||||||||||
| Deferred taxes | 1,444 | (3,573 | ) | |||||||||
| (Gain) loss on disposal of assets | (3,425 | ) | 1,047 | |||||||||
| Changes in assets and liabilities, net of effects from acquisition | 41,408 | (35,969 | ) | |||||||||
| Net cash provided by operating activities | 145,842 | 28,561 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Capital expenditures | (24,130 | ) | (28,551 | ) | ||||||||
| Proceeds from sale of capital assets | 5,491 | 468 | ||||||||||
| Investment in golf related venture | (1,310 | ) | - | |||||||||
| Business acquisition, net of cash acquired | - | (5,911 | ) | |||||||||
| Net cash used in investing activities | (19,949 | ) | (33,994 | ) | ||||||||
| Cash flows from financing activities: | ||||||||||||
| Issuance of common stock | 47,672 | 9,053 | ||||||||||
| Dividends paid, net | (14,241 | ) | (9,695 | ) | ||||||||
| Acquisition of treasury stock | (101,387 | ) | (52,872 | ) | ||||||||
| Tax benefit from exercise of stock option | 4,537 | 805 | ||||||||||
| (Payments on) proceeds from credit facilities, net | (79,068 | ) | 60,000 | |||||||||
| Other financing activities | (122 | ) | (16 | ) | ||||||||
| Net cash (used in) provided by financing activities | (142,609 | ) | 7,275 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 1,994 | 1,178 | ||||||||||
| Net (decrease) increase in cash and cash equivalents | (14,722 | ) | 3,020 | |||||||||
| Cash and cash equivalents at beginning of period | 46,362 | 49,481 | ||||||||||
| Cash and cash equivalents at end of period | $ | 31,640 | $ | 52,501 | ||||||||
| Callaway Golf Company | |||||||||||||||||||||||||||||||
| Consolidated Net Sales and Operating Segment Information | |||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||
| Net Sales by Product Category | |||||||||||||||||||||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
| September 30, | Growth/(Decline) | September 30, | Growth/(Decline) | ||||||||||||||||||||||||||||
| 2007 | 2006 | Dollars | Percent | 2007 | 2006 | Dollars | Percent | ||||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||||||||||
| Woods | $ | 56,207 | $ | 43,718 | $ | 12,489 | 29 | % | $ | 271,201 | $ | 227,157 | $ | 44,044 | 19 | % | |||||||||||||||
| Irons (1) | 65,391 | 52,966 | 12,425 | 23 | % | 260,809 | 242,674 | 18,135 | 7 | % | |||||||||||||||||||||
| Putters | 21,590 | 22,954 | (1,364 | ) | -6 | % | 88,122 | 85,145 | 2,977 | 3 | % | ||||||||||||||||||||
| Golf balls | 49,045 | 42,700 | 6,345 | 15 | % | 174,705 | 167,533 | 7,172 | 4 | % | |||||||||||||||||||||
| Accessories and other (1) | 43,316 | 31,425 | 11,891 | 38 | % | 155,336 | 115,514 | 39,822 | 34 | % | |||||||||||||||||||||
| $ | 235,549 | $ | 193,763 | $ | 41,786 | 22 | % | $ | 950,173 | $ | 838,023 | $ | 112,150 | 13 | % | ||||||||||||||||
(1) Prior periods have been restated to reflect current period classification. | |||||||||||||||||||||||||||||||
| Net Sales by Region | ||||||||||||||||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||
| September 30, | Growth/(Decline) | September 30, | Growth/(Decline) | |||||||||||||||||||||||||||
| 2007 | 2006 | Dollars | Percent | 2007 | 2006 | Dollars | Percent | |||||||||||||||||||||||
| Net sales: | ||||||||||||||||||||||||||||||
| United States | $ | 124,321 | $ | 103,196 | $ | 21,125 | 20 | % | $ | 512,516 | $ | 470,828 | $ | 41,688 | 9 | % | ||||||||||||||
| Europe | 40,983 | 29,201 | 11,782 | 40 | % | 167,290 | 133,622 | 33,668 | 25 | % | ||||||||||||||||||||
| Japan | 25,154 | 23,236 | 1,918 | 8 | % | 96,941 | 83,392 | 13,549 | 16 | % | ||||||||||||||||||||
| Rest of Asia | 20,540 | 18,279 | 2,261 | 12 | % | 69,006 | 60,828 | 8,178 | 13 | % | ||||||||||||||||||||
| Other foreign countries | 24,551 | 19,851 | 4,700 | 24 | % | 104,420 | 89,353 | 15,067 | 17 | % | ||||||||||||||||||||
| $ | 235,549 | $ | 193,763 | $ | 41,786 | 22 | % | $ | 950,173 | $ | 838,023 | $ | 112,150 | 13 | % | |||||||||||||||
| Operating Segment Information | ||||||||||||||||||||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| September 30, | Growth/ | (Decline) | September 30, | Growth/(Decline) | ||||||||||||||||||||||||||||||
| 2007 | 2006 | Dollars | Percent | 2007 | 2006 | Dollars | Percent | |||||||||||||||||||||||||||
| Net sales: | ||||||||||||||||||||||||||||||||||
| Golf clubs | $ | 186,504 | $ | 151,063 | $ | 35,441 | 23 | % | $ | 775,468 | $ | 670,490 | $ | 104,978 | 16 | % | ||||||||||||||||||
| Golf balls | 49,045 | 42,700 | 6,345 | 15 | % | 174,705 | 167,533 | 7,172 | 4 | % | ||||||||||||||||||||||||
| $ | 235,549 | $ | 193,763 | $ | 41,786 | 22 | % | $ | 950,173 | $ | 838,023 | $ | 112,150 | 13 | % | |||||||||||||||||||
| Income (loss) before provision for income taxes: | ||||||||||||||||||||||||||||||||||
| Golf clubs | $ | 16,689 | $ | 6,570 | $ | 10,119 | 154 | % | $ | 156,213 | $ | 101,931 | $ | 54,282 | 53 | % | ||||||||||||||||||
| Golf balls | (2,757 | ) | (8,717 | ) | 5,960 | 68 | % | 8,244 | (1,781 | ) | 10,025 | 563 | % | |||||||||||||||||||||
| Reconciling items (2) | (11,833 | ) | (15,844 | ) | 4,011 | 25 | % | (47,610 | ) | (44,010 | ) | (3,600 | ) | -8 | % | |||||||||||||||||||
| $ | 2,099 | $ | (17,991 | ) | $ | 20,090 | 112 | % | $ | 116,847 | $ | 56,140 | $ | 60,707 | 108 | % | ||||||||||||||||||
(2) Represents corporate general and administrative expenses and other income (expense) not utilized by management in determining segment profitability. | ||||||||||||||||||||||||||||||||||
| Callaway Golf Company | |||||||||||||||||||||||||||||||||
| Supplemental Financial Information | |||||||||||||||||||||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||
| Quarter Ended September 30, | Quarter Ended September 30, | ||||||||||||||||||||||||||||||||
| 2007 | 2006 | ||||||||||||||||||||||||||||||||
| Pro Forma Callaway Golf | Gross Margin Improvement Initiatives | Total as Reported | Pro Forma Callaway Golf |
Gross |
Integra- |
Restruc- |
Total | ||||||||||||||||||||||||||
| Net sales | $ | 235,549 | $ | - | $ | 235,549 | $ | 193,763 | $ | - | $ | - | $ | - | $ | 193,763 | |||||||||||||||||
| Gross profit | 98,125 | (4,119 | ) | 94,006 | 69,295 | (349 | ) | (1,195 | ) | (46 | ) | 67,705 | |||||||||||||||||||||
| % of sales | 42 | % | n/a | 40 | % | 36 | % | - | n/a | n/a | 35 | % | |||||||||||||||||||||
| Operating expenses | 93,130 | - | 93,130 | 83,564 | - | 79 | 995 | 84,638 | |||||||||||||||||||||||||
| Income (loss) from operations | 4,995 | (4,119 | ) | 876 | (14,269 | ) | (349 | ) | (1,274 | ) | (1,041 | ) | (16,933 | ) | |||||||||||||||||||
| Other expense, net | 1,223 | - | 1,223 | (1,058 | ) | - | - | (1,058 | ) | ||||||||||||||||||||||||
| Income (loss) before income taxes | 6,218 | (4,119 | ) | 2,099 | (15,327 | ) | (349 | ) | (1,274 | ) | (1,041 | ) | (17,991 | ) | |||||||||||||||||||
| Income tax provision (benefit) | 2,429 | (1,599 | ) | 830 | (5,176 | ) | (118 | ) | (430 | ) | (351 | ) | (6,075 | ) | |||||||||||||||||||
| Net income (loss) | $ | 3,789 | $ | (2,520 | ) | $ | 1,269 | $ | (10,151 | ) | $ | (231 | ) | $ | (844 | ) | $ | (690 | ) | $ | (11,916 | ) | |||||||||||
| Diluted earnings (loss) per share: | $ | 0.06 | $ | (0.04 | ) | $ | 0.02 | $ | (0.16 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.18 | ) | |||||||||||
| Weighted-average shares | |||||||||||||||||||||||||||||||||
| outstanding: | 67,639 | 67,639 | 67,639 | 67,000 | 67,000 | 67,000 | 67,000 | 67,000 | |||||||||||||||||||||||||
| Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||
| 2007 | 2006 | ||||||||||||||||||||||||||||||||
| Pro Forma Callaway Golf | Gross Margin Improvement Initiatives | Total as Reported | Pro Forma Callaway Golf |
Gross | Integra- tion Charges |
Restruc- |
Total | ||||||||||||||||||||||||||
| Net sales | $ | 950,173 | $ | - | $ | 950,173 | $ | 838,023 | $ | - | $ | - | $ | 838,023 | |||||||||||||||||||
| Gross profit | 437,327 | (7,475 | ) | 429,852 | 343,174 | (349 | ) | (3,366 | ) | (156 | ) | 339,303 | |||||||||||||||||||||
| % of sales | 46 | % | n/a | 45 | % | 41 | % | n/a | n/a | 40 | % | ||||||||||||||||||||||
| Operating expenses | 310,999 | - | 310,999 | 279,017 | 672 | 1,445 | 281,134 | ||||||||||||||||||||||||||
| Income (loss) from operations | 126,328 | (7,475 | ) | 118,853 | 64,157 | (349 | ) | (4,038 | ) | (1,601 | ) | 58,169 | |||||||||||||||||||||
| Other expense, net | (2,006 | ) | - | (2,006 | ) | (2,029 | ) | - | - | (2,029 | ) | ||||||||||||||||||||||
| Income (loss) before income taxes | 124,322 | (7,475 | ) | 116,847 | 62,128 | (349 | ) | (4,038 | ) | (1,601 | ) | 56,140 | |||||||||||||||||||||
| Income tax provision (benefit) | 49,015 | (2,912 | ) | 46,103 | 24,825 | (118 | ) | (1,491 | ) | (560 | ) | 22,656 | |||||||||||||||||||||
| Net income (loss) | $ | 75,307 | $ | (4,563 | ) | $ | 70,744 | $ | 37,303 | $ | (231 | ) | $ | (2,547 | ) | $ | (1,041 | ) | $ | 33,484 | |||||||||||||
| Diluted earnings (loss) per share: | $ | 1.10 | $ | (0.07 | ) | $ | 1.03 | $ | 0.54 | $ | (0.00 | ) | $ | (0.04 | ) | $ | (0.01 | ) | $ | 0.49 | |||||||||||||
| Weighted-average shares | |||||||||||||||||||||||||||||||||
| outstanding: | 68,407 | 68,407 | 68,407 | 68,777 | 68,777 | 68,777 | 68,777 | 68,777 | |||||||||||||||||||||||||
| Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): | ||||||||||||||||||||||||||||||||||
| 2007 Trailing Twelve Months EBITDA | 2006 Trailing Twelve Months EBITDA | |||||||||||||||||||||||||||||||||
| Quarter Ended | Quarter Ended | |||||||||||||||||||||||||||||||||
| December 31, | March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | September 30, | |||||||||||||||||||||||||||
| 2006 | 2007 | 2007 | 2007 | Total | 2005 | 2006 | 2006 | 2006 | Total | |||||||||||||||||||||||||
| Net income (loss) | $ | (10,194 | ) | $ | 32,836 | $ | 36,639 | $ | 1,269 | $ | 60,550 | $ | (18,664 | ) | $ | 22,861 | $ | 22,539 | $ | (11,916 | ) | $ | 14,820 | |||||||||||
| Interest expense (income), net | 905 | 1,677 | 1,672 | 29 | 4,283 | (165 | ) | 533 | 1,522 | 1,132 | 3,022 | |||||||||||||||||||||||
| Income tax provision (benefit) | (10,948 | ) | 21,682 | 23,591 | 830 | 35,155 | (14,361 | ) | 13,797 | 14,934 | (6,075 | ) | 8,295 | |||||||||||||||||||||
| Depreciation and amortization expense | 8,313 | 9,009 | 8,591 | 9,864 | 35,777 | 7,318 | 7,290 | 7,935 | 8,736 | 31,279 | ||||||||||||||||||||||||
| EBITDA | $ | (11,924 | ) | $ | 65,204 | $ | 70,493 | $ | 11,992 | $ | 135,765 | $ | (25,872 | ) | $ | 44,481 | $ | 46,930 | $ | (8,123 | ) | $ | 57,416 | |||||||||||
Contacts:
Brad Holiday
Patrick Burke
Michele
Szynal
(760) 931-1771
