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First quarter sales rose 48 percent to $1.22 billion, below analysts expectations of $1.23 billion. Net income reached $4.7 million vs. $1.4 million the same period last year. The results were boosted by the acquisition of K2 and Pure Fishing in 2007.
Here's what CEO Martin Franklin said during the conference call about the upcoming ski season.
"Well, as you know we've come up with both the business coming off with one of the worst ski seasons on record and then experienced one of the best ski seasons on record at least in the U.S in the 2007, 2008 ski season. So we've gone into the New Year with the lowest excess and obsolete inventory position I think this company has had in its history.
"So on the back of that we had a very favorable expectations, or relatively favorable expectations for how our business will perform in 2008, 2009. So are we seeing what we expected to see in terms of the order build up process? The answer is yes. The way K2 runs their ski business as you know it's a bill-to-order business, so we have a pretty good visibility, and I think we will have a good organic improvement in the business between 2007 and 2008 on the calendar year performance basis."
An analyst followed with a statement that despite the tough ski season last year, K2 gained market share. The analyst wanted to know if Franklin expected that to continue next season.
Franklin: "I don't think that we are looking for significant share gains so much this year as a growth in the demand at retail given the ski season I mean our product did sell through very well last year, for those who review in the quarter know the ski business, you know that the K2 and local brands and the other aligned brands within the group like Line and Ride and 5150 all these component brands that we have in company have performed well. For 2008, 2009 season, we were not so much focused on what market share gains we will make, but focused on really benefiting on filling the channel from all the sell through that occurred during this year, so we will see organic growth. As I said before we see organic growth I'm not sure it will be because of market share gains so much as the market being better in general and I think we were hold on to the gains that we made in 2007-2008."