Ashworth Inc. (NASDAQ:ASHW), Tuesday announced financial results for the second quarter of fiscal 2000.
Consolidated net revenue for the second quarter of fiscal 2000 increased 15.6% to $41,272,000 as compared to $35,690,000 for the same period of the prior year. Consolidated net income for the second quarter of fiscal 2000 was $3,444,000 as compared to $2,328,000 in the same period of the prior year. The company reported diluted earnings per share of $0.26 for the second quarter of fiscal 2000 as compared to $0.17 for the same period of last year. Net revenue for the domestic segment increased 15.9% to $33,893,000 for the second quarter of fiscal 2000 as compared to $29,235,000 for the same period of fiscal 1999. Net revenue for the foreign segment increased 14.3% to $7,379,000 for the second quarter of fiscal 2000 as compared to $6,455,000 in the same period of the prior year.
Consolidated net revenue for the first half of fiscal 2000 increased 15.2% to $63,771,000 as compared to $55,352,000 for the same period of the prior year. Consolidated net income increased 101.9% to $3,717,000 as compared to $1,841,000 in the same period of the prior year. The company reported diluted earnings per share of $0.27 for the first half of fiscal 2000 as compared to $0.13 for the same period of last year. Net revenue for the domestic segment increased 13.5% to $53,626,000 for the first half of fiscal 2000 as compared to $47,230,000 for the same period of fiscal 1999. Net revenue for the foreign segment increased 24.9% to $10,145,000 for the first six months of fiscal 2000 as compared to $8,122,000 in the same period of the prior year.
In reviewing operations, Randall Herrel, president and CEO, noted, “The positive results in the second quarter represented the fourth consecutive quarter for the company achieving stronger revenue and quarterly earnings improvement as compared to the same quarters in the prior year. We are pleased with the balanced growth in both the foreign and domestic segments as well as improvement in the gross margins. Our Accounts Receivable increased 21.6% to $37,464,000 as compared to $30,810,000 at April 30, 1999 and was in line with the 18.6% increase in consolidated wholesale net sales for the second quarter of fiscal year 2000. The inventory level increased 11.7% to $34,344,000 from $30,756,000 at April 30, 1999 and was below current sales trends and future bookings increases.”
Herrel continued, “During the second quarter of fiscal 2000, the strong domestic revenue increase was driven by a solid double-digit growth in our core golf distribution channel as well as an approximately triple-digit growth in our corporate channel. Continuing this favorable trend, our global Fall/Holiday 2000 bookings are approximately 26% ahead of last year. These trends support the recent surveys (Darrell Survey and Golf Retailer Magazine survey) affirming Ashworth as the leading golf brand. We continue to believe that our authenticity and innovative product lines differentiate us from our competitors and the feedback on our Fall 2000 collection was very positive.”
Consolidated gross profit margin for the second quarter of 2000 improved to 40.9% from 38.0% in the same period last year. This increase is primarily a result of improved sourcing and improved inventory control. The consolidated gross profit margin for the first half of 2000 improved to 39.1% from 35.8% in the same period last year.
Selling, general and administrative expenses (SG&A) for the second quarter of fiscal 2000 increased 11.7% to $10,641,000 as compared to the same period last year. As a percentage of net revenue, SG&A expenses decreased to 25.8% during the second quarter of fiscal 2000 from 26.7% for the same period last year, reflecting increased revenues. SG&A for the first six months of fiscal 2000 increased 10.2% to $18,073,000 as compared to the same period last year. As a percentage of net revenue, SG&A expenses decreased to 28.3% during the first six months of fiscal 2000 from 29.6% for the same period last year.
Herrel concluded, “For the past four quarters, we have focused on significantly growing Ashworth’s operating margins and executing our strategic initiatives. These initiatives include a strengthened management team, enhancing the Ashworth brand, new Web site strategies, improved inventory management, pursuing strong growth in our newly penetrated channels such as corporate sales, women’s sales and international sales, improved product sourcing as well as strengthening our balance sheet. We are pleased with the progress and believe the results were reflected in our financial improvement. As we continue to focus on these initiatives in FY2000, we are emphasizing overall efficiency improvement in the operations through process and system automation, as well as continuing to position Ashworth for long-term growth as a premier lifestyle sportswear collection by further expanding our distribution channels and marketing initiatives.”
Ashworth Inc. is a Southern California-based designer of men’s and women’s golf-inspired lifestyle sportswear distributed domestically and internationally in golf pro shops, resorts and upscale department and specialty stores. Visit the company’s new Web site at www.ashworthinc.com.
This press release contains forward-looking statements related to the company’s market position, finances, marketing plans and strategies. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the timely development and acceptance of new products, the impact of competitive products and pricing, the success of the women’s and corporate divisions, the preliminary nature of bookings information, the ongoing risk of excess or obsolete inventory, potential inadequacy of booked reserves and other risks described in Ashworth, Inc.’s SEC reports, including the report on Form 10-K for the year ended Oct. 31, 1999.
