CARLSBAD, Calif. – K2 Inc. (NYSE: KTO) experienced a 20-percent increase in net sales for the second quarter ended June 30, driven in part by gains in its marine and outdoor business, the company reported in a recent statement.
Shakespeare fishing tackle and monofilament, and Stearns marine and outdoor products generated net sales of $130.4 million in the second quarter of 2005, an increase of 21 percent from the comparable quarter in 2004. Sales increases were driven by growth in water-ski vests, rainwear, inflatables, reels, kits and combos, antennas and fish line and the acquisitions of All-Star rods and Hodgman waders during the second quarters of 2004 and 2005, respectively, the company reported.
“We had a solid quarter with over 7% organic growth driven by strong results in Marine and Outdoor, Team Sports, and Apparel and Footwear,” stated Richard Heckmann, chairman and chief executive officer.
Net sales for the second quarter ended June 30 were $301.4 million, an increase from $251.0 million in the prior year, as a result of 7.1 percent organic growth and the balance from acquisitions completed after the second quarter of 2004.
GAAP diluted earnings per share were $0.03 in the second quarter of 2005 as compared to $0.16 for the second quarter of 2004. Operating income in the second quarter of 2005 was $8.3 million as compared to $12.4 million for the 2004 comparable period, and net income for the 2005 second quarter was $1.5 million, as compared to $6.2 million for the second quarter of 2004.
As K2 has forecast for the past 12 months, lower profitability in the second quarter of 2005 as compared to 2004 is principally attributable to the acquisitions of Volkl, Marker and Marmot in the third quarter of 2004, as these product lines have higher levels of fixed expenses as compared to K2’s other business lines, and are seasonally slow from a sales standpoint in the first and second quarters, according to the company.
Net sales for the six month period ended June 30, 2005 were $619.7 million, an increase of 17 percent over the 2004 comparable period, and operating profit for the period was $18.4 million as compared to $32.0 million for the 2004 six month period. GAAP diluted earnings per share were $0.08 for the first six months of 2005.
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