Quayle to Join K2’s Board of Directors

Sporting goods manufacturer K2 Inc., hoping to beef up its sales and production in Asia, said Wednesday that it had found just the man to help: former Vice President Dan Quayle, who will join the company’s board of directors.

“We chose Dan Quayle for his China connections, his knowledge of the Asian landscape and his political savvy,” said John J. Rangel, the company’s senior vice president for finance. “He’s also a very nice man.”

The Commerce-based company, which has long sold in Japan, began offering products in Singapore and Korea in the last year.

While those markets might prove fruitful in the long term, the company’s immediate need for Asian business expertise has to do with increasing overseas production, said leisure industry analyst Hayley Kissel of Merrill Lynch in New York.

Quayle could not be reached for comment.

Overall, the company produces about half of its total product line overseas, Rangel said. But Kissel said more than half of the company’s biggest sellers, the snow equipment line, are made in Asia.

“It’s obviously a politically sensitive area and they swear [Quayle] has credibility in the Asian markets and a lot of contacts that will help them,” Kissel said. “Ultimately, they’d like to grow there, but first and foremost this is about securing their manufacturing base and making sure their whole export base flows well.”

In 2000, K2 reported about $671 million in sales, up from $635 million the year before.

The company’s operating income in 2000 was $38 million, with net earnings of almost $16.6 million after taxes and charges, compared with operating income of $24.8 million and a net income of $9.8 million in 1999. Earnings per share in 2000 were 92 cents, up from 58 cents the year before.

Although the company is best known for its namesake ski division, which also includes Olin skis, K2 has recently made forays into areas such as surf wear.

After buying apparel maker Katin Inc. of Costa Mesa, K2 heralded its arrival in the market in 1997 with the “K2 Big Wave Challenge,” which offered $50,000 to the surfer who caught that year’s biggest wave. This year, the prize was $60,000, awarded to a surfer who navigated a 66-foot wave off the coast of Orange County.

The company also produces a trademark soft-boot in-line skate, which is the top seller in the $150-plus segment, bikes, life jackets, outdoor gear and a line of fishing rods called Shakespeare’s Ugly Stik.

Last year, in an effort to build on its snow sports business, the company introduced K2 Gravity Tools--a downhill combination ski and bicycle called Snowcycle and a new-age Flexible Flyer sled called Belly Bomber.

But even with a trendy product line and high-profile marketing campaign, K2 has had its share of headaches.

The top seller of skis for North America in the early 1990s, K2 has since vacillated between the second and third slots with Skis Rossignol and Adidas’ Salomon ski division--a battle heightened by bad spring ski weather.

As the ski business slipped during the last several years, Merrill Lynch’s Kissel said, the company had put significant resources into mountain bikes, which proved to be less of a money maker.

In addition, a host of competitors flooded the sporting goods market with cheap ski goods, Kissel said.

Next season, she said, K2 will again be turning its attention to skiing and has a good shot at regaining some of its lost territory.

Cutting costs by moving productions overseas, she said, is one way to improve the company’s performance without sacrificing product quality or innovation.

K2 shares closed up 2 cents on Wednesday at $11.30 on the New York Stock Exchange.