FENTON, Mo., Oct. 29 /PRNewswire-FirstCall/ -- Rawlings Sporting Goods Company, Inc. (Nasdaq: RAWL) announced today final fiscal year 2002 earnings of $0.41 per share versus fiscal year 2001 earnings of $0.22 per share. Total net revenues for fiscal year 2002 were $173.7 million, down 0.5% from fiscal year 2001 net revenues of $174.5 million. Net revenues from baseball and softball equipment were $106.1 million, up 2.6% versus fiscal year 2001 net revenues from baseball and softball of $103.4 million. Declines in inflatables and apparel offset the growth in the Company's core baseball and softball segment. Gross Margin was $48.8 million in fiscal year 2002, up 2.6% from fiscal year 2001 gross margin of $47.5 million. Gross Margin percentage was 28.1% in fiscal year 2002, up 0.9 points from fiscal year 2001 gross margin percentage of 27.2%. Margin increases in baseballs, gloves, aluminum bats and protective gear accounted for this increase despite being offset by margin declines in basketballs and footballs. Selling, General and Administrative (SG&A) fiscal year 2002 expenses were $41.2 million, up 2.2% versus fiscal year 2001 SG&A expenses of $40.3 million. As a percentage of sales, fiscal year 2002 SG&A expenses were 23.7% of sales up 0.6% versus fiscal year 2001 SG&A expenses of 23.1% of sales. Increased distribution expenses related to the start up of the new distribution facility in Washington, Missouri accounted for this increase. Interest charges for fiscal year 2002 were $2.5 million, down 45.6% from fiscal year 2001 interest charges of $4.5 million. Lower rates and lower average borrowings accounted for this reduction. Total bank debt, net of cash, at the end of fiscal year 2002 was $29.4 million, down 23% from $38.0 million at the end of fiscal year 2001. Offsetting the interest charges, taxes in fiscal year 2002 increased to $1.8 million, up 210% from fiscal year 2001 taxes of $0.6 million. Higher income and higher effective rates accounted for this tax increase. During fiscal year 2002 the Company also settled its tax sharing agreement with the successor company to its former parent, Figgie International for $1.0 million, adding $8.3 million to shareholder equity. The Company retains the tax benefit which was created upon formation, as well as its $26.3 million in Net Operating Loss carry-forwards (NOLs) such that it does not expect to pay significant cash taxes in 2002 or the next few years. Net income for fiscal year 2002 was $3.3 million, up 90.5% versus fiscal year 2001 net income of $1.8 million. The fourth quarter of the fiscal year is typically Rawlings lowest revenue and income quarter. For the fourth quarter of fiscal year 2002, net revenues were $26.0 million, down 7.5% from the fourth quarter of fiscal year 2001 net revenues of $28.1 million. Declines in inflatables and apparel accounted for this decrease. Gross margin for fourth quarter fiscal year 2002 was $6.6 million, up 38.8% from fourth quarter fiscal year 2001 gross margin of $4.8 million. Gross margin percentage for fourth quarter fiscal year 2002 was 25.5%, up 8.5% versus fourth quarter fiscal year 2001 of 17.0%. Improvements in product lines, cost reductions, and inventory controls accounted for this improvement. SG&A expenses for fourth quarter 2002 were $10.1 million, up 4.1% versus fourth quarter 2001 SG&A expenses of $9.7 million. Additional reserves for the Kmart pre-petition receivables were the primary reason for the increase in SG&A expense. Net loss for fourth quarter fiscal year 2002 was $2.3 million, a $1.7 million improvement from the fourth quarter net loss of fiscal year 2001 of $3.9 million. Net loss per share in fourth quarter fiscal year 2002 was $0.28 versus net loss per share of $0.49 in fourth quarter 2001. Commenting on the results, Steve O'Hara, Chairman and CEO, stated, "We are pleased to report earnings up significantly despite the difficult economic environment. Moreover, we are happy to continue to report that the outlook for significant earnings improvement in fiscal year 2003 remains good due to a further $4.0 million in expected cost savings. We continue to expect only modest net revenue growth in fiscal year 2003 as solid growth in our baseball and softball markets is offset by our decision to exit unprofitable business elsewhere." Mr. O'Hara continued, "Moreover, we are delighted with our announcement yesterday of our partnership with the National Federation of High Schools. We look forward to working with the NFHS over the next four years to expand its influence in the retail market." The conference call to discuss these results will be held on October 29, 2002 at 4:00 PM Central Standard Time. To participate, call (800) 230-1092 from the United States or (612) 288-0340 internationally and ask for the Rawlings Year End Earnings Release conference call. A replay of this call will be available for thirty days following the call and can be accessed via (800) 475-6701 from the United States or (320) 365-3844 internationally. Enter the access code 658132 for the replay. Rawlings is a leading marketer and manufacturer of baseball equipment and other sporting goods in the United States. Rawlings is the official baseball of Major League Baseball, Minor League Baseball and the NCAA College World Series. Over half of Major League players use a Rawlings' glove, including such stars as Derek Jeter, Alex Rodriguez, Ken Griffey, Jr., and Pedro Martinez. Rawlings also recently announced a comprehensive partnership with the NFHS to become the official sponsor of NFHS baseballs, basketballs, footballs, softballs, volleyballs and soccer balls. Certain information contained in this press release are forward looking statements that involve risks and uncertainties such as the Company's plans to achieve targeted sales and gross margin increases, reduce expenses through various actions, improve operating income, increase EBITDA and earnings per share, and execute new plans successfully. It is important to note that actual results could differ materially from those expressed in such forward- looking statements. Factors that could cause or contribute to such differences include, but are not limited to, changes in customer buying patterns, a general economic slowdown, lower retail sell rates for the Company's products, changes in the Company's financial position, a dramatic increase in raw materials prices such as leather and changes in the competitive environment. Other risks and uncertainties are detailed from time to time in the Company's SEC filings, including the Company's Report on Form 10-K filed for the year ended August 31, 2001. Rawlings Sporting Goods Company, Inc. and Subsidiaries Consolidated Statements of Income (Amounts in thousands, except per share data) Quarter Ended Year Ended August 31, August 31, 2002 2001 2002 2001 (Unaudited) (Unaudited) Net revenues $26,015 $28,117 $173,712 $174,528 Cost of goods sold 19,371 23,329 124,936 126,996 Gross profit 6,644 4,788 48,776 47,532 Selling, general and administrative expenses 10,084 9,690 41,158 40,267 Unusual expense - 622 - 412 Operating income (loss) (3,440) (5,524) 7,618 6,853 Interest expense 475 791 2,452 4,510 Income (loss) before income taxes (3,915) (6,315) 5,166 2,343 Provision (benefit) for income taxes (1,659) (2,407) 1,819 586 Net income (loss) $(2,256) $(3,908) $3,347 $1,757 Net income (loss) per common share, basic and diluted $(0.28) $(0.49) $0.41 $0.22 Shares used in computing per share amounts: Basic 8,135 8,056 8,110 8,025 Assumed exercise of stock options 41 - 23 1 Diluted 8,176 8,056 8,133 8,026 Rawlings Sporting Goods Company, Inc. and Subsidiaries Consolidated Balance Sheets (Amounts in thousands, except share data) August 31, August 31, 2002 2001 Assets Current Assets: Cash and cash equivalents $603 $921 Accounts receivable, net of allowance of $2,861 and $2,871, respectively 24,107 27,750 Inventories 31,796 33,379 Deferred income taxes 4,277 4,277 Prepaid expenses 396 606 Total current assets 61,179 66,933 Property, plant and equipment 7,742 7,271 Deferred income taxes 20,821 22,367 Long-term receivables 417 - Other assets 1,674 1,970 Total assets $91,833 $98,541 Liabilities and Stockholders' Equity Current liabilities: Current portion of long-term debt and revolving credit agreement $27,037 $34,684 Accounts payable 7,689 10,178 Accrued liabilities 9,613 8,740 Total current liabilities 44,339 53,602 Long-term debt, less current maturities 2,941 4,242 Other long-term liabilities - 9,291 Total liabilities 47,280 67,135 Stockholders' equity: Preferred stock, none issued - - Common stock, 8,088,656 and 8,011,145 shares issued and outstanding, respectively 81 80 Additional paid-in capital 39,742 31,151 Stock subscription receivable - (1,421) Cumulative other comprehensive loss (1,617) (1,492) Retained earnings 6,347 3,088 Stockholders' equity 44,553 31,406 Total liabilities and stockholders' equity $91,833 $98,541 Make Your Opinion Count - Click Here http://tbutton.prnewswire.com/prn/11690X48721326
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