Brass Eagle Inc.

Brass Eagle Inc. of Bentonville, which makes paintball guns and other “extreme sports” products, said sales for the quarter ended Sept. 30 jumped 40.4 percent to $21.9 million from $15.6 million in the comparable quarter of 2001.

Net income for the third quarter of 2002 increased to $1.5 million, compared to a loss of $418,000 for the comparable period of 2001. Earnings per diluted share increased to 21 cents, compared to a loss of 6 cents per share in the third quarter of 2001.

The numbers, however, are being compared to a down third quarter of 2001, due at least in part to the terrorism of September 11.

In the third quarter of 2001, sales dropped by 32.5 percent to $15.6 million, compared to $23.1 million for the third quarter of 2000. Gross profits also dropped in 2001’s third quarter, from $9.6 million to $5.2 million.

“The decrease in net sales was primarily due to decline in the retail market,” Brass Eagle said in last year’s third-quarter report filed with the Securities and Exchange Commission. “The overall slow down in consumer purchases has resulted in retailers more tightly controlling inventories going into the holiday season and this trend was exacerbated by the events of September 11th.”

But Brass Eagle more than made up for the losses a year ago and is on track for a good 2002.

For the 2002 fiscal year, Brass Eagle has revised its guidance upwards as follows: sales to range from $105 million to $110 million and diluted earnings per share to range between $1.10 and $1.20.

“As we expected, our strong portfolio of brands is helping us to achieve favorable results in 2002,” said Lynn Scott, Brass Eagle’s president and CEO. “Our broad range of paintball products, from beginner to expert level, is enhancing our sales and profits in the mass market and in the specialty sporting goods chains.”