Timex Group India (500414) Q4 99/00 earnings summary

Executive summary

• FY 1999-2000 sales volume reached 1.92 million watches; domestic sales of 1.84 million were the highest in the business’s history. Annual loss narrowed to Rs. 1,375.38 lakhs from Rs. 1,750.72 lakhs.

• The turnaround plan combined sales and marketing restructuring with new products, operating efficiencies and planned promoter funding to reduce high-cost debt.

Financial highlights

• Total income was Rs. 9,194.19 lakhs versus Rs. 6,825.77 lakhs; sales were Rs. 9,048.16 lakhs versus Rs. 6,652.14 lakhs.

• Gross profit was Rs. 248.82 lakhs, compared with a gross loss of Rs. 208.42 lakhs; loss for the year was Rs. 1,375.38 lakhs versus Rs. 1,750.72 lakhs.

• Net interest expense increased to Rs. 1,104.55 lakhs from Rs. 1,021.26 lakhs; depreciation was Rs. 519.65 lakhs versus Rs. 521.04 lakhs.

• Operating cash flow was negative Rs. 51.23 lakhs versus negative Rs. 888.11 lakhs; investing cash flow was negative Rs. 149.12 lakhs and financing cash flow negative Rs. 18.95 lakhs.

Outlook and guidance

• Management expected sales volume and market share to rise, supported by expanded access to the parent’s product range and sales and marketing capabilities.

• An aggressive new-product launch programme and sustained media presence were planned, alongside cost reduction across price segments.

• Proceeds from a proposed preferential issue equivalent to US$5 million were intended to repay high-cost loans, improve the debt-equity ratio and reduce FY 2000-01 interest expense.