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Black Diamond Reports Third Quarter 2013 Results

Stocks in this article: BDE

Forward-Looking Statements

Please note that in this press release we may use words such as "appears," "anticipates," "believes," "plans," "expects," "intends," "future," and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this release include, but are not limited to, the overall level of consumer spending on our products; general economic conditions and other factors affecting consumer confidence; disruption and volatility in the global capital and credit markets; the financial strength of the Company's customers; the Company's ability to implement its growth strategy; the Company's ability to successfully integrate and grow acquisitions; the Company's exposure to product liability or product warranty claims and other loss contingencies; stability of the Company's manufacturing facilities and foreign suppliers; the Company's ability to protect trademarks and other intellectual property rights; fluctuations in the price, availability and quality of raw materials and contracted products; foreign currency fluctuations; our ability to utilize our net operating loss carryforwards; and legal, regulatory, political and economic risks in international markets. More information on potential factors that could affect the Company's financial results is included from time to time in the Company's public reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release, and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release.

BLACK DIAMOND, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
     
  September 30, 2013 December 31, 2012
  (Unaudited)  
Assets    
Current assets    
 Cash  $ 4,394  $ 5,111
 Accounts receivable, less allowance for doubtful accounts of $733 and $499, respectively  44,022  30,925
 Inventories  57,193  60,664
 Prepaid and other current assets  3,636  4,846
 Income tax receivable  292  659
 Deferred income taxes  3,128  2,337
 Total current assets  112,665  104,542
     
Property and equipment, net  17,410  17,508
Definite lived intangible assets, net  36,467  38,100
Indefinite lived intangible assets  51,719  51,462
Goodwill  57,744  57,481
Deferred income taxes  49,582  49,631
Other long-term assets  2,216  2,062
Total assets  $ 327,803  $ 320,786
     
Liabilities and Stockholders' Equity    
Current liabilities    
 Accounts payable and accrued liabilities  $ 27,691  $ 22,178
 Current portion of long-term debt   5,959  4,059
 Total current liabilities  33,650  26,237
     
Long-term debt   40,089  36,429
Deferred income taxes  6,654  8,114
Other long-term liabilities  2,040  2,000
 Total liabilities  82,433  72,780
     
Stockholders' Equity    
 Preferred stock, $.0001 par value; 5,000 shares authorized; none issued  --   -- 
 Common stock, $.0001 par value; 100,000 shares authorized; 32,241 and 31,838 issued and 32,166 and 31,763 outstanding  3  3
 Additional paid in capital  476,942  473,628
 Accumulated deficit  (237,940)  (231,334)
 Treasury stock, at cost  (2)  (2)
 Accumulated other comprehensive income  6,367  5,711
 Total stockholders' equity  245,370  248,006
Total liabilities and stockholders' equity  $ 327,803  $ 320,786
 
BLACK DIAMOND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
     
   Three Months Ended 
  September 30, 2013 September 30, 2012
     
Sales    
Domestic sales  $ 19,811  $ 19,128
International sales  32,965  29,614
Total sales  52,776  48,742
     
Cost of goods sold  33,106  30,283
Gross profit  19,670  18,459
     
Operating expenses    
Selling, general and administrative  20,970  16,347
Restructuring charge  --   86
Merger and integration  190  76
Transaction costs  --   415
     
Total operating expenses  21,160  16,924
     
Operating (loss) income  (1,490)  1,535
     
Other (expense) income    
Interest expense, net  (939)  (713)
Other, net  309  521
     
Total other expense, net  (630)  (192)
     
(Loss) income before income tax  (2,120)  1,343
Income tax (benefit) expense  (814)  617
Net (loss) income  $ (1,306)  $ 726
     
(Loss) earnings per share:    
Basic  $ (0.04)  $ 0.02
Diluted  (0.04)  0.02
     
Weighted average shares outstanding:    
Basic 32,023 31,329
Diluted 32,023 31,710
 
BLACK DIAMOND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
     
   Nine Months Ended 
  September 30, 2013 September 30, 2012
     
Sales    
Domestic sales  $ 55,406  $ 53,569
International sales  87,225  73,507
Total sales  142,631  127,076
     
Cost of goods sold  88,091  77,535
Gross profit  54,540  49,541
     
Operating expenses    
Selling, general and administrative  59,901  43,441
Restructuring charge  175  86
Merger and integration  416  76
Transaction costs  54  1,665
     
Total operating expenses  60,546  45,268
     
Operating (loss) income  (6,006)  4,273
     
Other (expense) income    
Interest expense, net  (2,599)  (2,025)
Other, net  217  616
     
Total other expense, net  (2,382)  (1,409)
     
(Loss) income before income tax  (8,388)  2,864
Income tax (benefit) expense  (1,782)  1,456
Net (loss) income  $ (6,606)  $ 1,408
     
(Loss) earnings per share:    
Basic  $ (0.21)  $ 0.05
Diluted  (0.21)  0.05
     
Weighted average shares outstanding:    
Basic 31,875 29,281
Diluted 31,875 29,631
       
BLACK DIAMOND, INC.
RECONCILIATION FROM GROSS PROFIT TO ADJUSTED GROSS PROFIT
AND ADJUSTED GROSS MARGIN
       
THREE MONTHS ENDED
       
  September 30, 2013   September 30, 2012
       
Gross profit as reported  $ 19,670 Gross profit as reported  $ 18,459
Plus impact of product recall  1,541 Plus inventory fair value of purchase accounting  1,094
Adjusted gross profit  $ 21,211 Adjusted gross profit  $ 19,553
       
Gross margin 37.3% Gross margin 37.9%
       
Adjusted gross margin 40.2% Adjusted gross margin 40.1%
       
NINE MONTHS ENDED
       
  September 30, 2013   September 30, 2012
       
Gross profit as reported  $ 54,540 Gross profit as reported  $ 49,541
Plus impact of product recall  1,541 Plus inventory fair value of purchase accounting  1,094
Adjusted gross profit  $ 56,081 Adjusted gross profit  $ 50,635
       
Gross margin 38.2% Gross margin 39.0%
       
Adjusted gross margin 39.3% Adjusted gross margin 39.8%
 
BLACK DIAMOND, INC.
RECONCILIATION FROM NET (LOSS) INCOME TO NET INCOME BEFORE NON-CASH ITEMS, ADJUSTED
NET INCOME BEFORE NON-CASH ITEMS AND RELATED EARNINGS PER DILUTED SHARE
(In thousands, except per share amounts)
         
         
   Three Months Ended 
     Per Diluted     Per Diluted 
  September 30, 2013 Share September 30, 2012 Share
         
         
Net (loss) income  $ (1,306)  $ (0.04)  $ 726  $ 0.02
         
Amortization of intangibles  893  0.03  732  0.02
Depreciation   1,583  0.05  1,167  0.04
Accretion of note discount  294  0.01  258  0.01
Stock-based compensation  1,719  0.05  526  0.02
Inventory fair value of purchase accounting  --   --   1,094  0.03
Product recall  990  0.03  --   -- 
Income tax (benefit) expense  (814)  (0.03)  617  0.02
Cash paid for income taxes  (46)  (0.00)  (204)  (0.01)
         
Net income before non-cash items  $ 3,313  $ 0.10  $ 4,916  $ 0.16
         
Restructuring charge  --   --   86  0.00
Merger and integration  190  0.01  76  0.00
Transaction costs  --   --   415  0.01
State cash taxes on adjustments  (6)  (0.00)  (29)  (0.00)
AMT cash taxes on adjustments  (4)  (0.00)  (11)  (0.00)
         
Adjusted net income before non-cash items  $ 3,493  $ 0.11  $ 5,453  $ 0.17
 
BLACK DIAMOND, INC.
RECONCILIATION FROM NET (LOSS) INCOME TO NET INCOME BEFORE NON-CASH ITEMS, ADJUSTED
NET INCOME BEFORE NON-CASH ITEMS AND RELATED EARNINGS PER DILUTED SHARE
(In thousands, except per share amounts)
         
         
   Nine Months Ended 
     Per Diluted     Per Diluted 
  September 30, 2013 Share September 30, 2012 Share
         
         
Net (loss) income  $ (6,606)  $ (0.21)  $ 1,408  $ 0.05
         
Amortization of intangibles  2,684  0.08  1,397  0.05
Depreciation   3,619  0.11  2,695  0.09
Accretion of note discount  855  0.03  758  0.03
Stock-based compensation  2,361  0.07  1,314  0.04
Inventory fair value of purchase accounting  --   --   1,094  0.04
Product recall  990  0.03  --   -- 
Income tax (benefit) expense  (1,782)  (0.06)  1,456  0.05
Cash received (paid) for income taxes  242  0.01  (843)  (0.03)
         
Net income before non-cash items  $ 2,363  $ 0.07  $ 9,279  $ 0.31
         
Restructuring charge  175  0.01  86  0.00
Merger and integration  416  0.01  76  0.00
Transaction costs  54  0.00  1,665  0.06
State cash taxes on adjustments  (19)  (0.00)  (91)  (0.00)
AMT cash taxes on adjustments  (13)  (0.00)  (35)  (0.00)
         
Adjusted net income before non-cash items  $ 2,976  $ 0.09  $ 10,980  $ 0.37
 
BLACK DIAMOND, INC.
RECONCILIATION FROM NET (LOSS) INCOME TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION (EBITDA), AND ADJUSTED EBITDA
     
(In thousands)
     
   Three Months Ended 
  September 30, 2013 September 30, 2012
     
     
Net (loss) income  $ (1,306)  $ 726
     
Income tax (benefit) expense  (814)  617
Other, net  (309)  (521)
Interest expense, net  939  713
     
Operating (loss) income  (1,490)  1,535
     
Depreciation   1,583  1,167
Amortization of intangibles  893  732
     
EBITDA  $ 986  $ 3,434
     
Restructuring charge  --   86
Merger and integration  190  76
Transaction costs  --   415
Inventory fair value of purchase accounting  --   1,094
Product recall  1,374  -- 
Stock-based compensation  1,719  526
     
Adjusted EBITDA  $ 4,269  $ 5,631
 
BLACK DIAMOND, INC.
RECONCILIATION FROM NET (LOSS) INCOME TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION (EBITDA), AND ADJUSTED EBITDA
     
(In thousands)
     
   Nine Months Ended 
  September 30, 2013 September 30, 2012
     
     
Net (loss) income  $ (6,606)  $ 1,408
     
Income tax (benefit) expense  (1,782)  1,456
Other, net  (217)  (616)
Interest expense, net  2,599  2,025
     
Operating (loss) income  (6,006)  4,273
     
Depreciation   3,619  2,695
Amortization of intangibles  2,684  1,397
     
EBITDA  $ 297  $ 8,365
     
Restructuring charge  175  86
Merger and integration  416  76
Transaction costs  54  1,665
Inventory fair value of purchase accounting  --   1,094
Product recall  1,374  -- 
Stock-based compensation  2,361  1,314
     
Adjusted EBITDA  $ 4,677  $ 12,600
CONTACT: Company Contact:
         Warren B. Kanders
         Executive Chairman
         Tel 1-203-428-2000
         warren.kanders@bdel.com
         or
         Peter Metcalf
         President & CEO
         Tel 1-801-278-5552
         peter.metcalf@bdel.com
         
         Investor Relations:
         Liolios Group, Inc.
         Scott Liolios or Cody Slach
         Tel 1-949-574-3860
         BDE@liolios.com

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