K2 Issues 2001 Earnings Warning as Economic Drag Affects Sales

Los Angeles-based sporting goods company K2 Inc. on Sunday said it expected to post 2001 earnings in the range of $1.05 to $1.15 per diluted share as a slowing U.S. economy was likely to hurt sales this year.

K2 was expected to earn $1.21 a share, according to the sole analyst polled by research firm First Call/Thompson Financial.

The maker of alpine skis, snowboards, boots and scooters, earlier Sunday posted fourth-quarter net earnings of 12 cents per diluted share compared with a loss of 27 cents in the year-ago period.

Operating income in the fourth quarter of 2000 totaled 14 cents per diluted share compared with a loss of 29 cents in the same period of 1999. Sales in the quarter ended on Dec. 31 totaled $157.9 million compared with $176.8 million.

Sales and selling expenses reflected a reclassification of freight expense and recoveries required by the Emerging Issues Task Force, the company said.

This change had no effect on earnings, the company said, but resulted in a fourth-quarter 1999 sales increase of $3 million that was offset by an increase in selling expenses.

K2 shares closed Friday off 6 cents at $9.29 on the New York Stock Exchange, above a year low of $6.38 but below a 52-week high of $11.94.