Globe Announces 07-08 Results; Write-Down Prompts Loss of Nearly $25M

Press Release

• September 09 2008
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Globe International, an Austraila-based maker and distributor of boardsports related products, lost $24.6 million on total revenues of $122.3 million for fiscal 2007-08 due largely to one-time non-cash goodwill adjustment.

The company said that its underlying performance improved when excluding the one-time items. Net sales of $120.7 million for the year, while down by $1.8 million, increased in constant currency terms by $6.0 million, or 5.2% year on year.

Strong sales performance from the company’s skateboarding brands, particularly in North America, were a big factor.

Significant one-off items totaling $24.8 million resulted in a net loss after tax of $24.6 million. Following the annual impairment review of intangible assets, the company has written down the carrying value of goodwill by $20.6 million. A further $2.8 million relates to income tax items and $1.4 million ($2.0 million before tax) relates to legal expenses associated with the trademark litigation case in the UK, which was
reported in the previous half year.

Excluding significant items, EBITDA of $2.8 million represents a $1.5 million improvement compared to the last financial year, largely due to increased margins. NPAT for the year, pre-significant items, of $0.2 million is also ahead of last year by $1.3 million.

“The fact that we have reported a loss as a result of these one-off items is very disappointing,” CEO Matt Hill said. “It is also
regrettable that the strong level of growth that we reported in the first half did not continue into the second half due to more difficult conditions in some markets.

“However, notwithstanding this, we have seen underlying net sales growth in our core business this year despite difficult trading conditions in some markets. While our current financial position is sound, we expect to operate against a backdrop of difficult international trading conditions over the next twelve months.

Accordingly, we will take the steps required to appropriately align our cost base with this outlook.”

Originally printed at SportsSourceOne.com