The 2nd quarter is seasonally slow for K2, and the company’s sales were flat for the period at $301,142,000, but its net profit went up to $2,143,000, as compared to $1,453,000, due exclusively to an after-tax gain of $568,000. The gain was related to a $1.5 million pre-tax boost from the sale of a baseball bat facility, offset by $640,000 in charges for factory shutdowns and severance payments. On the other hand, the company’s decision to license out its bicycle business and earlier shipment of products in the 1st quarter shaved $4.2 million off from total revenues.
By segment, turnover slipped by 1 percent in the marine and outdoor division to $128.8 million in the quarter. Operating profit for the segment fell by 2 percent to $19.6 million mainly due to high fuel prices and a subsequent drop in consumer boating. Team sports sales were up by 8 percent to $96.5 million while operating income grew to $4.4 million, as compared to $900,000 one year ago.
The action sports segment, which depends heavily on winter activities, posted a drop of 15 percent in turnover to $37.5 million and an operating loss of $10.5 million, against a $9.9 million loss in the year-ago period. Pre-season orders for the segment are up by strong single digits, though. Apparel and footwear sales went up by 2 percent to $38.3 million, but operating income slid to $400,000 from $3.0 million because of an investment in a distribution center in Nevada.