Bally hires CFO replacement
Bally Total Fitness (NYSE: BFT) has named Ronald Eidell as chief financial officer, replacing Carl Landeck who has left the company. Eidell will handle all the company's finance and accounting functions.
Eidell is a partner at Tatum LLC, an executive services and consulting firm, where he is a financial leadership partner in the Chicago office. He also serves as a director of NeoPharm, where he is an audit committee member (and where he served as the company's interim president and CEO for most of 2005).
Bally said that Eidell will initially hold the title of senior vice president, finance, while David Reynolds, vice president and controller, will assume responsibility for signing the company's SEC filings through the completion of its first quarter 2006 10-Q report.
The company did not provide a reason for Landeck's departure nor did it say when he left. Landeck was hired in March 2005 and was considered a "turnaround expert."
Bally added that it continues to expect to file its 2005 10-K report and quarterly report for the three months ended March 31, 2006, before the July 10 expiration of the waiver period recently obtained from the company's senior bank lenders and bondholders.
Berkshire Hathaway to acquire Russell
Russell Corp. (NYSE: RML) said it agreed on April 17 to be acquired by billionaire investor Warren Buffett's Berkshire Hathaway (NYSE: BRK.A and BRK.B) for nearly $600 million. Under the terms of the merger agreement, Russell stockholders will receive $18 per share in cash in the merger, based on the company's roughly 33.2 million shares outstanding. The acquisition is expected to close in the third quarter of 2006. Jack Ward, Russell's chairman and CEO, said the sale will put Russell in a stronger financial position. "Russell will be better positioned against our worldwide competitors in all three segments of our business and that includes apparel, sports equipment and athletic shoes." Its major brands include Russell Athletic, Jerzees, Spalding, Brooks, Huffy Sports, Bike, Moving Comfort, AAI and Mossy Oak.
adidas raises guidance, shares branding plan
In an analyst meeting in London, adidas reported that it increased its sales guidance figures and earnings outlook for 2007, and despite being weighed down recently by falling orders at Reebok that the acquisition continues to be a good fit.
CEO Herbert Hainer said the group expects to post high single-digit sales growth for each of the next three years, compared to previous guidance of mid-to-high single-digit revenue growth. It also expects net income to increase by double-digit rates for each of the next three years, including by at least 20 percent in 2007, he added.
The company also anticipates a new annualized cost synergies from the integration of adidas and Reebok of Euro 175 million (USD $212 million), up from an original estimate of Euro 125 million (USD $151 million). The net impact will be realized in 2009, Hainer said. adidas expects net profit in 2006 to be about Euro 500 million (USD $606 million), up 31 percent from Euro 383 million (USD $464 million) last year, and rise another 20 percent in 2007.Â
"We are showing terrific progress in the continued integration of Reebok and are fully confident we can leverage our combined strengths to deliver on our ambitious goals as a group," Hainer said. Another tactic the company is pursuing are plans to change Reebok's product mix to include more sports performance-oriented products and simplify Reebok's brand imagery by reducing the number of logos that it uses.
Adidas acquired Reebok in 2005 in a $3.8 billion deal aimed at closing in on Nike.
(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of April 11.)
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