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Globe returns to profitability; CEO comments

Globe returns to
By Tiffany Montgomery
August 26, 2010 7:01 AM

Globe International Limited returned to profitability even as sales declined for its fiscal year ended June 30.

The company, based in Australia, reported Net Profit After Tax of $1.3 million vs. a loss of $8.9 million last year.

Revenues were $91.7 million, down 9% in constant currency (excluding impact of discontinuation of retail business) and 22% in reported currency.

EBITDA was $5.5 million vs. a loss of $4.5 million last year.

The company said cost restructuring helped the company return to profitability in all regions.

The company ended the year with $14.9 million in cash and no debt.

CEO Matt Hill said in an interview the company was very happy with the results and the peformance was right on plan.

Changes to the Globe footwear brand, including a fresh approach to marketing, design and sales, appear to be paying off as well, and the brand recorded a good second half. The brand's reorder business is strong, and orders for holiday and spring are up.

The footwear business in the U.S. is a big volume driver for the company, so to have that piece of the business firing can lead to good things, he said.

Hill described the hardgoods market as flat, and the European region is fairly flat as well, with orders up slightly there.

Australia is where retailers are having the toughest time lately, he said. In North America, business has stablized compared to last year, but sales slowed as the year progressed. Overall, Hill said business there has improved slightly.

Globe's apparel line, which Hill said is very fashion forward, is doing well in Australia and Europe and he expects the company to make a bigger push with it in the U.S. market in the next 24 months. Currently, there's a smaller offering in the U.S. than in the other territories.

The company is building its business model flat for the year.

"We're optimisitc but conservative" with its financial management approach, Hill said.

Although the company has $14.9 million in cash and no debt, it is not in an "acquisitive mood" and instead is focusing on developing existing brands.

North America

Revenue: $51 million, down 13%.

EBITDA: $5 million, vs. a loss of $691,000 last year.

Europe

Revenue: $16.5 million, down 32%

EBITDA: $904,000 vs. a loss of $1.5 million last year

Australasia

Revenue: $24.3 million, down 29%

EBITDA: $1.8 million, up 87%.

 


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