CARLSBAD, Calif. - K2 Inc.'s marine and outdoor categories generated double digit sales growth for the quarter and year ended Dec. 31, the company reported in a recent statement. That compares to overall sales growth in the single digits for the company.
Shakespeare fishing tackle and monofilament, and Stearns marine and outdoor products, generated sales of $70.3 million in the fourth quarter of 2005, an increase of 13 percent from the comparable quarter in 2004.
For fiscal year 2005, sales increased 16.4 percent and operating profits were 12.8 percent of sales in 2005, up slightly from 12.6 percent in 2004 due principally to sales growth and a decline in selling, general and administrative expenses as a percentage of sales.
Sales growth in 2005 was driven primarily by fishing tackle, antennas, children's flotation devices, ski vests, and Hodgman waders (acquired in second quarter 2005), the company reported.
K2's net sales up, profits down
K2 Inc.'s net sales for the fourth quarter ended Dec. 31 were $353.5 million versus $338.9 million in the prior year, an increase of 4.3 percent. Adjusted net income for the fourth quarter of 2005 was $14.7 million, or $0.28
Net sales for the year were $1.3 billion versus $1.2 billion in the prior year, an increase of 9.4 percent. Adjusted net income for fiscal year 2005 was $39.0 million, or $0.78.
"We continue to feel strongly that we have assembled at K2 the most unique collection of brands in sporting goods, with a #1 market share in 8 major product categories,” commented Richard Heckmann, chairman and chief executive officer. “From 2002 to 2005 our sales have grown from $582 million to $1.3 billion, and our operating income from $27 million to over $78 million before the charges that we are taking in 2005.”
Heckmann added that the company's forecast range for 2006 is for growth in both operating and net income in excess of 10 percent over 2005 levels, before charges.
“We expect to achieve these results by a continued focus on new product introductions and innovations, and efficiencies in manufacturing, distribution, and cost containment,” explained.
For fiscal year 2006, K2 forecasts 2006 sales in the range of $1.33 to $1.38 billion, GAAP diluted earnings per share in the range of $0.73 to $0.76 and Adjusted diluted earnings per share in the range of $0.82 to $0.86, in each case based on assumed fully diluted shares outstanding of 55.8 million.
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