Gross margin, as reported for the twelve months ended December 31, 2010 was 31.3%. Excluding the non-cash adjustment of $5.0 million of inventory step-up value included in cost of goods sold due to purchase accounting, pro forma adjusted gross margin for the full year fiscal 2010 would have been 38.6% compared to 38.1% for the full-year of 2009.
Net income, as reported for the twelve months ended December 31, 2010 was $51.2 million, or $2.56 per diluted share. Net income in 2010 includes a $65 million benefit related to a partial release of the Company's valuation allowance on its net operating loss carryforwards.
Statement Regarding Presentation of Results
The Company, formerly named Clarus, closed its acquisitions of Black Diamond Equipment and Gregory on May 28, 2010 (the "Acquisitions"). At the time of the transaction, Clarus had no business operations. As a result, Black Diamond Equipment is considered the Predecessor Company for financial reporting purposes. The financial results for the twelve-month period ending December 31, 2010, exclude Gregory for the periods prior to May 28, 2010. We believe pro forma results, particularly pro forma sales and pro forma adjusted gross margin, which exclude the non-cash inventory step-up due to purchase accounting, include Clarus, Black Diamond Equipment and Gregory for the full twelve-month period are the most useful and instructive comparison.Balance Sheet Cash at December 31, 2010, totaled $2.8 million. Total long-term debt including the current portion of long term debt was $29.8 million at December 31, 2010, which included $14.7 million outstanding on our $35.0 million line of credit, and a discounted value of $14.0 million on our 5% subordinated notes, as well as $1.1.million in other debt. The face value of the 5% subordinated notes is $22.6 million. As of December 31, 2010, the Company recorded net deferred tax assets of approximately $69.5 million - not including deferred tax liabilities. After considering deferred tax liabilities of $24.2 million primarily related to the step-up in fair value of our assets from purchase accounting in excess of the tax basis, our net deferred tax assets totaled $45.3 million at December 31, 2010.