|RockShox Reports First Quarter ResultsRockShox, Inc. today announced its results for the first quarter of fiscal year 2002. RockShox' first quarter sales totaled $7.1 million, down from $12.2 million for the same period last year. The company's net loss for the quarter was $4.3 million compared to $3.3 million for the same period last year. One-time relocation charges were $850 thousand compared to $950 thousand for the same period last year. |
Bryan Kelln, President and Chief Executive Officer, commented, "As we speculated earlier in the year, the global bicycle industry posted perhaps the most challenging quarter in more than a decade. In Europe, the terrible weather, strong dollar, and economic uncertainty depressed sales at retail, creating an excess of 2001 inventory in the channel and a subsequent delay in the production of 2002 products. In the US, the economic uncertainty and financial challenges facing some of our OEM customers, as well as adverse weather this Spring, created a combination of excess 2001 inventory in the channel, stock-outs of inventory in certain brands, and financial liquidity challenges throughout the channel."
Kelln continued, "But indeed, of those business issues within our control, we continue to drive improvement. The bottom line results demonstrate this progress. With sales off $5 million, earnings were only down $1 million. We continue to drive improvement in our cost of goods, and operating expenses continue to come down. For example, in the first quarter alone, discretionary spending controls resulted in a reduction of more than $500 thousand in operating expenses when compared to our prior years first quarter results. We have already driven several million dollars of improvement in supply chain costs on a year-over-year basis, and we see more improvement on the horizon."
During the first quarter, the company successfully completed the transition of all US-based production from San Jose to its now-complete Colorado Springs facility. With the exception of RockShox' machine shop, all operations are now based in an integrated, smaller facility in Colorado. Consequently, nearly all of the aggressive restructuring work is behind the new team, which can now put even more attention on continuous improvement in the reengineered business.
Kelln commented on the Company's management team and employees, "As we look to the future, we are most excited to report that, as a team we are just getting started! In every dimension of our team, we are markedly stronger than we were a year ago, and gaining momentum. To put these opportunities in perspective, recognize that 35 of our approximately 300 employees in Colorado have been with the company more than 12 months. Imagine the synergies to be gained as the 265 people with just a few months tenure continue to learn how to work better together."
"We believe that the market conditions will improve over the next quarter, but will remain generally soft. It is unfortunate that we will face these top line challenges, but we are ready for it," commented Chris Birkett, Chief Financial Officer.www.rockshox.com