Merrell continues to rock Wolverine's house
Buoyed by an 11 percent sales increase from Merrell (albeit a bit down from the 25 percent increase reported in Q1) Wolverine reported an 8 percent sales gain to $198 million from $184 million in 2003 and income of $10.9 million against $9.3 million for the second quarter which ended June 19. Gross margins for the year increased to 38 percent. Backlog is up from the prior year 17 percent. Wolverine continues to estimate sales of $960 million to $980 million for the year.
In the conference call, Merrell was definitely singled out as the shining star for Wolverine and the company certainly appears happy with sales response thus far from Merrell's Continuum line (see our story appearing next week in SNEWSÂ®) which segmented the footwear line into understandable blocks of authentic and casual shoes, all with color coordination to make it easier for retailers to purchase.
Phoenix Footwear prices public offering and buys Altama
Phoenix Footwear (Amex:PXG), parent of H.S. Trask, Trotters and Ducks Unlimited footwear brands and Royal Robbins and Audubon apparel brands, priced, on July 14, a common stock offering of 2,500,000 shares priced at $12.50 per share. The company stated it intends to use a portion of the proceeds to pay for the acquisition of Altama Delta Corp. ("Altama") which closed on July 19. Altama, a designer, manufacturer and distributor of high performance combat and tactical boots for U.S. and foreign militaries, government agencies and the commercial sector, generated revenues of $40 million for the 12 months ended April 3, 2004. The company expects that the acquisition will be accretive to earnings per share. The company will update its financial guidance to reflect the acquisition when it reports its second quarter 2004 financial results Aug. 3. Phoenix also announced that Altama has been notified by the Defense Logistics Agency that the Department of Defense (DoD) intends to exercise its option to renew its current contract with Altama for one year for the manufacture of hot-weather infantry boots. The government has not yet specified a quantity of boots that it plans to order. The purchase of Altama cost Phoenix $39.0 million, which it is paying to the sole shareholder of Altma, plus an earn-out payment to that shareholder of $2.0 million subject to Altama meeting certain sales requirements. Additionally, Phoenix has agreed to pay Altama's sole shareholder $2.0 million in consideration for a five-year covenant-not-to-compete and other restrictive covenants, and to enter into a two-year consulting agreement with him for an annual consulting fee of $100,000.
Burton picks up four snowboard brands
Burton has agreed to purchase four snowboard brands (Forum, Special Blend, Jeenyus and Foresquare) from Four Star Distribution. Terms of the sale were not disclosed with the transaction expected to close on or before Aug. 15. Burton stated that it purchased the brands because they had strong consumer acceptance but had yet to reach market potential. Four Star will now focus on C1RCA's footwear and apparel business.
Oakley's Q2 sales figures off, but company optimistic
Oakley has reported that the company's Q2 sales of $152 million will be far short of the projected $165.2 million due to production shortfalls on recent product introductions. The company also blamed launch delays and soft consumer demand. International business was also off. However, thanks to some nifty media coverage of the new Thump eyewear with an MP3 player built into the frame (Lance Armstrong has one and its been mentioned during Tour coverage several times), Oakley expects to see sales recover quickly.
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