Globe International Limited's North American sales decline 20 percent, headcount reduced by 38 percent

Australia-based Globe International Limited reported financial results for the fiscal year ended June 30 this week.

In addition to its namesake brand, Globe is home to Dwindle Distribution and brands such as Enjoi, Blind and others with operations in North America and Europe as well as Australia. All figures are in Australian dollars unless noted.

Companywide, revenues declined 3.8 percent to $117.6 million. In constant currency, net sales declined 14 percent.

The company reported a net loss after tax of $8.9 million vs. a loss of $24.6 million the previous year. Excluding charges, the net loss after taxes for this year totaled $2.4 million.

Gross margins fell to 46 percent vs. 50.5 percent in the same period last year.

Cash flows from operating activities reached $6.7 million for the full year. The company has no debt.

North America was particulary hard hit, with sales declining 20 percent in local currency, the company said. However, in the second half, the North America division was able to record a EBITDA profit of AUS$0.9 million vs. a first half loss of AUS$1.6 million.

The improved profit in North America came from aggressive cost cutting, including a 38 percent reduction in headcount. Hardgoods margins also improved.

In Europe, sales decreased 7 percent in local currency. Hardgoods sales grew in markets where Globe recently went direct. Europe EBITDA profits in the second half improved to $1.1 million vs. a $2.6 million loss in the second half. The European division also experienced significant restructuring to cut costs.

In Australia, the company decided to exit the retail business and moved to unload stores. Sales in this division fell 4 percent, excluding adjustments for exiting retail. Globe brand sales increased 6 percent, while the hardgoods market remained soft.

The company said conditions have stablized but it still expects a difficult marketplace in the next 12 months. Also, it is open to acqusitions if the opportunity is right, similar to its recent acquisition of Cliche skateboards.