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New Product Lines Help Boost Oakley Profit 75%

Earnings: A strong fourth quarter caps year in which sales rose 41%. It's expecting things to cool down this year.


Buoyed by its increasingly diversified product line, Oakley Inc. reported Wednesday that earnings surged 75% in the fourth quarter, capping a strong year and surpassing analysts' expectations for the fourth straight quarter.

But the Foothill Ranch company does not expect to sustain that torrid pace this year.

Oakley, which saw its sales climb 41% last year, expects a 20% growth rate this year, although analysts said the company's projections typically are conservative. The company pegged its earnings per share at 95 cents, which would be a 30% increase.

Oakley's shares, which have tripled in value over the last year, gained 75 cents on Wednesday to finish at $19.35 on the New York Stock Exchange.

In an uncertain economy, "20% [sales] growth is nothing to sneeze at," said Eric Beder, an analyst with Ladenburg Thalmann. "I would not be surprised if they're able to do that and more."

For the fourth quarter, Oakley logged a profit of $9.7 million, or 14 cents a share, up from $5.7 million, or 8 cents, a year earlier. Analysts on average had expected the company to earn 12 cents a share, according to a First Call/Thomson survey. Quarterly sales rose to $93.3 million from $66.3 million.

For the year, earnings shot up 83% to a record $51.1 million, or 73 cents a share, from $28 million, or 40 cents a share, in 1999. Sales for the year hit $363.5 million, from $257.9 million the year before.

"2000 rocked," said Chief Executive Jim Jannard. "But we're over it. 2001 is what matters now."

The company said that all of its product categories, including shoes, apparel and prescription eye wear, contributed to the strong results. Oakley's prescription eye-wear business nearly doubled for the quarter, while sales of footwear, apparel and watches combined surged 160%.

Showing confidence in its stronger shoe division, Oakley said it expects to introduce a golf shoe this summer and will add other specialized sports shoes next year.

The company also faces higher expectations, Beder said.

"They have a lot of balls floating in the air right now," he said. "The challenge is to keep them all going and moving as well as they did last year."

At a Glance

Other Southern California company earnings, excluding one-time gains and charges unless noted:

* Burbank-based Dick Clark Productions Inc. reported a fiscal second-quarter net loss of $338,000, or 3 cents a share, compared with net income of $1 million, or 10 cents, a year ago. Revenue fell 27% to $16.5 million. The company said the decrease in revenue and earnings was due to added TV series production costs and that the year-ago results were aided by completion of a one-time business project.

The company also said it entered an agreement to farm out management of its Dick Clark's American Bandstand Grill restaurant business to Lincoln Restaurant Group as part of a strategy to reduce overhead.

* Fast-food restaurant operator and franchiser Jack in the Box Inc., of San Diego, reported fiscal first-quarter net income of $24 million, or 61 cents a share, compared with $20.4 million, or 52 cents, a year ago. Revenue rose 13% to $506.5 million.

* Diet center operator Jenny Craig Inc., of La Jolla, reported a fourth-quarter operating loss of $4 million on revenue of $60.7 million, compared with a loss of $12.6 million on revenue of $62.2 million a year earlier. Net loss for the period was $1.04 a share versus a loss of 37 cents a year ago.

* Mercury Air Group Inc., a Los Angeles-based aviation fuel and cargo services firm, reported fiscal second-quarter net income of $1.8 million, or 27 cents a share, compared with $1.5 million, or 22 cents, a year ago. Revenue rose 62% to $135.5 million.

* Seed company Seminis Inc., based in Oxnard, reported a fiscal first-quarter net loss of $21.1 million, or 35 cents a share, compared with a loss of $21 million, or 35 cents, a year ago. Revenue was flat at $81.2 million. The company announced a restructuring plan last year and said the quarterly results were in line with its plan for future profitability.

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