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Ashworth updates Q4 revenue & earnings guidance
11 Nov '06
2 min read
Ashworth Inc updated its guidance for revenues and earnings for the fiscal year ended October 31, 2006 based upon preliminary information for the fourth quarter, subject to year-end audit. Consolidated revenues for fiscal 2006 are expected to be approximately 2% to 3% below the level previously anticipated which was at the lower end of $210 to $220 million.
The volume decrease is largely the result of lower than expected fourth quarter at-once higher gross margin sales in its Domestic Golf Channel and Gekko subsidiary. The Company also experienced greater than expected markdowns in its Retail and other channels.
The fourth quarter shortfall in higher margin revenues -- together with greater than expected markdowns, lower than expected capacity utilization in its U.S. Embroidery and Distribution Center, and approximately $1.1 million of expense associated with the previously-announced resignation of the Company's former Chairman and CEO and other organizational changes has resulted in an expected fourth quarter loss of approximately $0.20 to $0.25 per diluted share.
For fiscal year 2006, therefore, the Company expects a profit of approximately $0.12 to $0.17 per diluted share.
Included in expected fiscal year 2006 results are special expenses related to the 2006 proxy contest, strategic alternatives process, implementation of FAS 123R and associated stock option expenses, Sarbanes-Oxley 404 compliance costs, and the $1.1 million described above, which, in the aggregate, equate to approximately $0.13 per diluted share on an after-tax basis. The Company expects to formally release its fourth quarter results at the end of December 2006.
The volume decrease is largely the result of lower than expected fourth quarter at-once higher gross margin sales in its Domestic Golf Channel and Gekko subsidiary. The Company also experienced greater than expected markdowns in its Retail and other channels.
The fourth quarter shortfall in higher margin revenues -- together with greater than expected markdowns, lower than expected capacity utilization in its U.S. Embroidery and Distribution Center, and approximately $1.1 million of expense associated with the previously-announced resignation of the Company's former Chairman and CEO and other organizational changes has resulted in an expected fourth quarter loss of approximately $0.20 to $0.25 per diluted share.
For fiscal year 2006, therefore, the Company expects a profit of approximately $0.12 to $0.17 per diluted share.
Included in expected fiscal year 2006 results are special expenses related to the 2006 proxy contest, strategic alternatives process, implementation of FAS 123R and associated stock option expenses, Sarbanes-Oxley 404 compliance costs, and the $1.1 million described above, which, in the aggregate, equate to approximately $0.13 per diluted share on an after-tax basis. The Company expects to formally release its fourth quarter results at the end of December 2006.
Ashworth Inc
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