SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
______________________________________________________________________________
FORM 8-K
CURRENT REPORT
______________________________________________________________________________
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
August 5, 2003
DATE OF REPORT (Date of earliest event reported)
BRASS EAGLE INC.
(Exact name of registrant as specified in its charter)
DELAWARE |
0-23385 |
71-0578572 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
1201 SE 30TH Street, Bentonville, Arkansas 72712
(Address of principal executive offices) (zip code)
(479) 464-8700
(Registrant's telephone number, including area code)
BRASS EAGLE INC.
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On August 5, 2003, Brass Eagle Inc. issued a press release announcing Second Quarter Sales and Earnings. A copy of the press release is attached hereto as Exhibit 99 (i).
This Current Report on Form 8-K is intended to be made solely under Item 12 of Form 8-K, and none of the filing of the press release as Exhibit 99(i), the listing of the press release in the exhibit index, or any other information contained or incorporated by reference in this current Report on Form 8-K shall render this to be a filing under any item under Form 8-K other than Item 12 thereof.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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BRASS EAGLE INC. |
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DATE: August 6, 2003 |
BY: /s/ J. R. Brian Hanna |
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J. R. Brian Hanna |
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Vice President - Finance and Chief Financial Officer and Treasurer |
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(on behalf of the Registrant and as the |
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Registrant's principal Financial and Accounting Officer) |
EXHIBIT INDEX
EXHIBIT NO. |
EXHIBIT |
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99 (i) |
Press Release dated August 5, 2003, issued by Registrant |
Exhibit 99 (i)
BRASS EAGLE INC.
Company Contact: |
J. R. Brian Hanna |
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Brass Eagle Inc. |
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Chief Financial Officer |
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(479) 464-6630 |
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For Immediate Release
Brass Eagle Inc. Announces Second Quarter Sales and Earnings
Bentonville, AR, August 5, 2003 - Brass Eagle Inc. (Nasdaq: XTRM), the worldwide leader in the manufacturing, marketing and distribution of paintball products, today announced reported results for the 2nd quarter ending June 30, 2003.
Brass Eagle reported net sales for the second quarter decreased 7.9% to $24.6 million versus $26.7 million for the same period last year. For the three months ended June 30, 2003 the Company reported a profit of $632,000 or $0.08 per diluted share, compared to a profit of $2.37 million or $0.31 per diluted share for the corresponding period in 2002.
For the first half of the year, net sales decreased 18.8% to $38.0 million from $46.8 million for the same period in 2002. Net income for the first half of the year decreased to $406,000 or $0.05 per diluted share from $3.46 million or $0.46 per diluted share for the same period in 2002.
The Company identified continued tight inventory controls at major retailers as a key reason for the second quarter income shortfall. In addition, the Company incurred increased expenses of approximately $500,000 related to new computer software implementation.
Brass Eagle continues to expect fiscal year 2003 sales to range from $98 million to $105 million. The Company expects fiscal 2003 diluted earnings per share of approximately $1.00 after the above mentioned expenses.
Lynn Scott, Brass Eagle President and CEO stated, "The soft retail environment, which prompted reductions in major retailers' inventories, caused lower than expected first quarter sales results. Although second quarter income was below our internal expectations, we are very encouraged by the strong demand for our products at retail."
"We continue to believe the basic business of Brass Eagle is sound and we remain the leader in a growing market with strong demographic trends at our back. We will continue to focus on growing our core business while simultaneously looking to diversify into complementary markets."
Brass Eagle is unique in providing a full line of paintball markers and accessory products from beginner through competition level. The Company is the dominant supplier of products for this rapidly growing sport and markets its products under the Brass Eagle, Viewloader, and JT USA brands.
Certain statements in this press release (including statements containing the words "expect," "will," "believe," "continue," "anticipate," "could," "intend" and similar words) may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Brass Eagle, its industry or others to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from Brass Eagle's expectations include the following: (1) Intensifying competition, including specifically the intensification of price competition, the entry of new competitors and the introduction of new products by new and existing competitors; (2) Failure to obtain new customers or retain existing customers; (3) Inability to carry out marketing, sales or other business plans and strategies; (4) Loss of key executives; (5) General economic and business conditions which are less favorable than expected; and (6) Unanticipated changes in industry trends.
BRASS EAGLE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
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JUNE 30, |
DECEMBER 31, |
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2003 |
2002 |
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(unaudited) |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ 230 |
$ 365 |
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Accounts receivable - less allowance |
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for doubtful accounts of $508 in 2003 |
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and $2,175 in 2002 |
25,035 |
27,215 |
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Inventories |
19,508 |
19,095 |
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Prepaid expenses and other current assets |
907 |
834 |
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Deferred taxes |
1,987 |
2,598 |
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Total current assets |
47,667 |
50,107 |
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Property, plant and equipment, net |
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15,912 |
15,949 |
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Other assets |
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Other assets |
754 |
579 |
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Goodwill |
32,284 |
32,284 |
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$ 96,617 |
$ 98,919 |
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Liabilities and stockholders' equity |
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Current liabilities |
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Revolving credit facility |
$ 3,800 |
$ 4,300 |
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Accounts payable |
8,312 |
4,755 |
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Accrued expenses |
4,285 |
7,336 |
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Current maturities of long-term debt |
5,801 |
6,207 |
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Total current liabilities |
22,198 |
22,598 |
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Long-term debt, less current maturities |
5,600 |
8,400 |
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Deferred income taxes |
2,634 |
2,638 |
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Other liabilities |
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814 |
936 |
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Stockholders' equity |
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Common stock, $.01 par value, 10,000,000 shares |
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authorized, 7,705,434 issued and 7,487,454 |
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outstanding in 2003; 7,461,511 issued and |
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7,303,261 outstanding in 2002 |
77 |
75 |
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Additional paid-in capital |
27,262 |
26,405 |
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Accumulated other comprehensive loss |
(83) |
(321) |
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Retained earnings |
39,391 |
38,985 |
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Treasury stock 158,250 shares at cost 2002, 217,980 shares at cost 2003 |
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65,371 |
64,347 |
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$ 96,617 |
$ 98,919 |
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BRASS EAGLE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share data)
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THREE MONTHS ENDED |
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SIX MONTHS ENDED |
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JUNE 30, |
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JUNE 30, |
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2003 |
2002 |
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2003 |
2002 |
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(unaudited) |
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(unaudited) |
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Net sales |
$ 24,627 |
$ 26,694 |
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$ 38,039 |
$ 46,824 |
Cost of sales |
16,706 |
16,493 |
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24,965 |
28,889 |
Gross profit |
7,921 |
10,201 |
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13,074 |
17,935 |
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Operating expenses |
6,626 |
6,070 |
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11,855 |
11,719 |
Operating income |
1,295 |
4,131 |
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1,219 |
6,216 |
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Minority interest |
0 |
18 |
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0 |
69 |
Interest income (expense) |
(278) |
(354) |
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(567) |
(735) |
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(278) |
(336) |
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(567) |
(666) |
Income before income taxes |
1,017 |
3,795 |
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652 |
5,550 |
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Provision for income taxes |
385 |
1,426 |
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246 |
2,092 |
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Net income |
$ 632 |
$ 2,369 |
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$ 406 |
$ 3,458 |
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Net income per share: |
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Basic |
$ 0.09 |
$ 0.33 |
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$ 0.06 |
$ 0.48 |
Diluted |
0.08 |
0.31 |
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0.05 |
0.46 |
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Weighted average shares outstanding: |
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Basic |
7,344,004 |
7,150,744 |
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7,325,835 |
7,149,674 |
Diluted |
7,578,356 |
7,541,281 |
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7,580,530 |
7,536,606 |
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