Brass Eagle Pained by Kmart Filing
by February 18, 2002 12:00 am 56 views
Brass Eagle Inc. of Bentonville, which manufactures paintball guns and other extreme sports accessories, announced on Feb. 5 that it will take a charge of 9 cents per share on its fourth-quarter earnings because of the bankruptcy of Kmart Corp.
Brass Eagle said it expects net sales for the quarter of $34.2 million and earnings per share between 23 cents and 25 cents. Excluding the charge, the company expects pro forma earnings per share of 32 cents to 34 cents.
In other words, the charge of 9 percent amounts to about 30 percent of what earnings would have been for the quarter. Multiplied by 7,145,123 shares outstanding (as of Sept. 30, the end of Brass Eagle’s third quarter), the charge would amount to $643,062.
Brass Eagle said it would take the charge in the quarter ended Dec. 31 to cover receivables related to Kmart, which filed for Chapter 11 bankruptcy protection on Jan. 22.
Brass Eagle said it has resumed shipping products to Kmart and is negotiating a new vendor agreement with the retailer. Brass Eagle said it foresees no future earnings problems in because of its relationship with Kmart.