HEAD NV and HTM Sport GmbH Announce the Unaudited Results of Head NV for the Three and Six Months ended 30th June 2010.

August 12th, 2010

Amsterdam – 12th August 2010 – Head N.V. (VSX: HEAD; U.S. OTC: HEDYY.PK), a leading global manufacturer and marketer of sports equipment, and HTM Sport GmbH, a subsidiary of Head NV, announced the following results today.

Summary Unaudited Financial Information
see attached pdf file


For the six months ended June 30, 2010 total net revenues increased by €5.5 million, or 4.8%, to €120.0 million from €114.4 million in the comparable 2009 period. This increase was mainly due to improved winter sports and racquet sports sales offset by a decline in licensing and diving.

The first six months of the year are not significant for the winter sports division, as typically less than 15% of the annual revenues are derived in this period. The increase in the sales in this period was due to higher volumes and some improved mix.

Racquet sales for the first six months grew from a combination of exchange rate movements (the US dollar strengthened in the period), higher volumes in both racquets and balls and some mix improvement in racquets in the first quarter, offset by mix decline in balls.

Diving saw a slight improvement in sales in the three months to 30th June 2010 compared to the same period in 2009, but overall the six months to June 30th 2010 resulted in a slight decline compared to the prior year, as consumers still appear to be wary of spending on items at these high price points.

The sales improvement for the first six months of 2010 compared to 2009, combined with improved margins positively impacted the adjusted operating loss which decreased by €2.7m during the period. The margin improvement was caused by some manufacturing improvements and mix in the first quarter which were off set in part by higher raw material costs, exchange fluctuations and a deteriorating mix in racquet sports in the second quarter.

The net loss decreased by over €7m in the six months to 30th June 2010 compared to the same period in 2009 mainly due to the improved adjusted operating performance compounded by ESOP income, lower interest costs and no restructuring or bond exchange costs in 2010.

Operating cashflow for the first six months of 2010 compared to the same period in 2009 improved by €8.9m due to enhanced operating results and tighter working capital management. The positive trend in the first quarter of 2010 compared to the same period in 2009 when operating cashflow improve by €12.6m was, however, reversed in the second quarter when it deteriorated by €3.8m mainly due to the higher adjusted operating loss in the second quarter.

The overall improved cashflow and the success of our bond exchange in 2009 has brought our net debt down from €131.2m at the 30th June 2009 to €57.1m at the 30th June 2010.

Based on our current order book, we expect sales to be slightly ahead of last years, but conditions in the industry still remain tough, economic conditions uncertain, and margins suppressed due to mix changes, increasing raw material costs and foreign exchange movements. We will need to continue with restructuring programmes in order to further reduce costs so that we remain price competitive in what continues to be a difficult industry in which to operate.


About Head

HEAD NV is a leading global manufacturer and marketer of premium sports equipment.

HEAD NV’s ordinary shares are listed on the Vienna Stock Exchange (“HEAD”).

Our business is organized into four divisions: Winter Sports, Racquet Sports, Diving and Licensing. We sell products under the HEAD (tennis, squash and racquetball racquets, tennis balls, tennis footwear, badminton products, swimwear, alpine skis, ski bindings and ski boots, snowboards, bindings and boots), Penn (tennis and racquetball balls), Tyrolia (ski bindings), and Mares/Dacor (diving equipment) brands.

We hold leading positions in all of our product markets and our products are endorsed by some of the world’s top athletes including;

Skiers: Bode Miller, Didier Cuche, Aksel Lund Svindal, Ted Ligety, Werner Heel, Kjetil Jansrud, Patrick Staudacher, Hans Grugger, Hermann Maier, Franz Klammer, Jon Olsson, Lindsey Vonn, Maria Riesch, Anja Parson, Elisabeth Gorgl, Sarka Zahrobska

Tennis players: Novak Djokovic, Andy Murray, Robin Soderling, Marin Cilic, Svetlana Kuznetsova, Victoria Azarenka

For more information, please visit our website: http://www.head.com

Analysts, investors, media and others seeking financial and general information, please contact:

Clare Vincent, Investor Relations
Tel: +44 207 499 7800
Fax: +44 207 491 7725
E mail: headinvestors@aol.com

Gunter Hagspiel, Chief Financial Officer
Tel: +43 5574 608
Fax +43 5574 608 130

This press release should be read in conjunction with the company’s report for the three and six months ended 30th June 2010.

Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will” and similar terms and phrases, including references to assumptions, as they relate to Head N.V., its management or third parties, identify forward-looking statements. Forward-Looking statements include statements regarding Head N.V.’s business strategy, financial condition, results of operations, and market data, as well as any other statements that are not historical facts. These statements reflect beliefs of Head N.V.’s management as well as assumptions made by its management and information currently available to Head N.V. Although Head N.V. believes that these beliefs and assumptions are reasonable, the statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. These Factors include, but are not limited to, the following: the impact of the current global economic turmoil, weather and other factors beyond their control, competitive pressures and trends in the sporting goods industry, our ability to implement their business strategy, our liquidity and capital expenditures, our ability to obtain financing, our ability to realize the cost savings expected from the cost reduction program, our ability to compete, including internationally, our ability to introduce new and innovative products, legal proceedings and regulatory matters, our ability to fund their future capital needs, and general economic conditions. These factors, risks and uncertainties expressly qualify all subsequent oral and written forward-looking statements attributable to Head N.V. or persons acting on its behalf.


Equity
Head N.V.
Rokin 55
NL 1012 KK Amsterdam
ISIN: NL0000238301
Stock Market: Vienna Stock Exchange

Bonds
HTM Sport GmbH
Tyroliaplatz 1
A 2320 Schwechat
ISIN 8.5% Senior Notes: XS0184717956 / XS0184719143
ISIN 10.0% Senior Secured Notes: XS0447202218 / XS0447202309
Official Market: Luxembourg

Head_NV_Q2_2010_Press_Release.pdf (30.4 kb)