Head expecting slightly better results this year
Dutch athletic footwear and sports goods brand Head NV has said that it is anticipating that its full year revenues will be slightly higher than 2000, but with no expectations of a change in operating income. For the six months to the end of June this year, Head generated revenues of $152.9 million, a loss from continued operations before tax of $2.3 million and a net loss of $4.2 million. This compares to the six months to the end of June 2000, where revenues stood at $160.9 million, there was a loss before tax from continued operations of $7.1 million and a net loss of $9 million. Earnings per share for the period were $0.11 compared to $0.37 for the same period in 2000.
Commenting on the results, Johan Eliasch, chairman and chief executive officer, said that several key moves have been made by the company to strengthen business for the balance of the year and beyond. An agreement has been made to license Head Performance Footwear to Romika GmbH which should impact on sales and profits this year, with additional licensing income due next year and beyond set to lower working capital requirements. Other measures include the launch of the Head Snowboard line of products and the Head Intelligence line of racquets. He added that for the remainder of this year, revenue outlook is positive in local currency, however winter sports orders are down 5 per cent compared to 2000. Orders for tennis racquets are up 15 per cent over last year despite the weakness in the tennis ball market, with racquets sports as a whole up 6 per cent. The company’s diving business is expected to perform slightly better than last year.
Eliasch went on to say that measured in local currency, the company expects revenues for the full year to be up slightly over last year, but due to the continued weak retail environment and the weakness of the Euro against the US Dollar, reported revenues will be flat compared to 2000. Excluding the footwear business and restructuring expenses, operating income is expected to be roughly in line with that of last year at $38.6 million. Full year 2001 reported operating income is expected to be between $28 million and $33 million.
