Bauer Performance Sports Ltd.

Bauer Performance Sports Ltd.

August 07, 2013 18:30 ET

Bauer Performance Sports Reports Continued Record Revenue and Earnings

Fourth Quarter and Full Year Adjusted EPS grow by 73% and 21% respectively

Global Market Share in Ice Hockey Equipment Grows to 53%

TORONTO, ONTARIO--(Marketwired - Aug. 7, 2013) - Bauer Performance Sports Ltd. (TSX:BAU) ("Bauer" or the "Company") today announced its audited financial results for the fourth quarter and twelve months ended May 31, 2013 ("Fiscal 2013"). All figures are in U.S. dollars.

US$ 000,000's except per share data and % Three months ended Twelve months ended
May 31, 2013 May 31, 2012 Change vs. prior period May 31, 2013 May 31, 2012 Change vs. prior period
Revenues $ 86.7 $ 80.5 8 % $ 399.6 $ 374.8 7 %
Gross profit 33.8 34.6 -2 % 147.2 142.6 3 %
Adjusted Gross Profit* 35.9 35.2 2 % 153.0 145.1 5 %
Adjusted EBITDA* 14.0 11.0 27 % 62.3 51.5 21 %
Net income (loss) 6.1 6.8 -10 % 25.3 30.2 -16 %
Adjusted Net Income* 9.7 4.7 106 % 35.7 25.5 40 %
Earnings (Loss) per share (diluted) $ 0.17 $ 0.21 -19 % $ 0.70 $ 0.95 -26 %
Adjusted EPS* $ 0.26 $ 0.15 73 % $ 0.98 $ 0.81 21 %

*Note: Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income/Loss and Adjusted EPS are non-IFRS measures. For the relevant definitions and reconciliations to reported results, please see "Non-IFRS Measures" at the end of this news release and in the Company's Management's Discussion and Analysis ("MD&A") for the most recent period.

The 7% increase in overall revenues in Fiscal 2013 (8% excluding the impact of foreign exchange) was led by strong performance in several ice hockey equipment categories, apparel, and lacrosse. Apparel revenues increased by 42% driven by strong growth in Bauer's team uniforms and off-ice apparel, the addition of soccer uniform revenue from Inaria and continued success in performance apparel and bags. Lacrosse sales increased significantly due to the addition of Cascade, propelling the Company to an estimated 25% market share in this rapidly growing market.

Ice hockey equipment revenues were flat year over year overcoming numerous headwinds in the overall market including high inventories at retail and especially the increase in competitor close-out products. Excluding the impact of recent tariff revisions by the Canadian Government, Bauer's ice hockey equipment sales grew by 1%. Bauer's focus on innovation produced strong performance in several equipment categories including helmets (12% growth driven in part by demand for the RE-AKT helmet), accessories (44% growth driven in part by the TUUK LIGHTSPEED EDGE holders with replaceable steel blades), and protective (4% growth driven in part by the new NEXUS line). Offsetting these improvements were declines in skates (down 4%, or down 2% excluding the impact of foreign exchange and the Canadian tariff reduction) and sticks (down 3%), both primarily due to lower performance and recreational sales as a result of high levels of competitor closeout activity. The continued strong performance in hockey equipment has increased Bauer's global ice hockey equipment market share to an estimated 53% from 52% a year ago.

Overall revenues from the North American market grew by 7% in Fiscal 2013, while sales outside North America grew by 6%.

Bauer's Fiscal 2013 fourth quarter revenues grew by 8% (9% excluding the impact of foreign exchange) due, in part, to the ongoing growth in lacrosse and apparel as noted above, as well as a 2% increase in ice hockey equipment sales. Revenues both inside and outside North America were up 8% in the period.

"During Fiscal 2013 we achieved numerous milestones," said Kevin Davis, President and Chief Executive Officer of Bauer. "First, we continued to take market share in a very challenging ice hockey market. In addition, our three acquisitions during Fiscal 2013 have further diversified our performance sports platform while enhancing our portfolio of intellectual property. Going forward, our focus will be to continue our multi-year track record of revenue growth in the ice hockey market, and grow share in the performance sports categories of lacrosse and baseball while expanding our apparel offering across all of our sports. Bauer will intensify our review of acquisition opportunities across a number of existing and new sports categories to further enhance and diversify our portfolio of industry leading products."

Adjusted Gross Profit for Fiscal 2013 increased by $7.9 million, or 5% to $153.0 million. Adjusted Gross Profit as a percentage of revenues remained relatively constant at 38.3% in Fiscal 2013, compared to 38.7% in the comparative period of 2012. During the fourth quarter of Fiscal 2013, Adjusted Gross Profit increased by $0.7 million, or 2%, to $35.9 million, and Adjusted Gross Profit as a percentage of revenues decreased to 41.4% from 43.7%. The decline in Adjusted Gross Profit as a percentage of revenues during the quarter was primarily due to higher product and distribution costs.

Bauer continued to demonstrate operating leverage in SG&A. Excluding the impact of one-time items and share-base compensation expense, spending as a percentage of revenues has declined 120 and 220 basis points for Fiscal 2013 and in the fourth quarter ended May 31, 2013, respectively. The Company's strong operating results drove Adjusted Net Income growth of 40% and 106% in Fiscal 2013 and the fourth quarter, respectively. Adjusted EPS grew by 21% to $0.98 in Fiscal 2013 and by 73% to $0.26 in the fourth quarter of Fiscal 2013. Fourth quarter earnings were favourably impacted by approximately 5 cents per share as a result of favourable tax adjustments. Diluted earnings per share declined by 26% and 19% in Fiscal 2013 and the fourth quarter, respectively, as a result of significantly lower unrealized gains on derivatives which more than offset the strong operating results described above.

The Company continued to manage its balance sheet and generate strong cash flow as its leverage ratio, defined as net indebtedness divided by EBITDA, reduced to 2.70 compared to 2.72 as of May 31, 2012. The continued de-leveraging was achieved in a year where Bauer completed over $75 million in acquisitions funded by over $40 million of debt. As of May 31, 2013 Bauer had working capital of $200.9 million compared to working capital of $163.5 million as of May 31, 2012, an increase of 23%. This increase was driven by the acquisitions of Cascade, Inaria and Combat, the impact of foreign exchange, and our organic revenue growth.


  • Completed three strategic acquisitions - Bauer completed the acquisitions of Cascade, Inaria, and Combat securing a much larger share of the rapidly growing lacrosse market, as well as enhancing its team apparel platform. The recent addition of Combat not only adds industry leading intellectual property to the Company's significant portfolio of patents, but also introduces Bauer in the North American baseball and softball market.

  • Launched the Grow the Game program with a goal to grow hockey participation globally by 1 million new players by 2022 through a unique multi-year program. Partnering with Hockey Canada and USA Hockey, and led by a cross-functional team, including Mark Messier, who joined the Bauer team as a result of the Company's acquisition of Cascade, the initiative will take a leadership role in both growing participation and increasing player safety.

  • Bauer was added to S&P/TSX Small Cap Index - The S&P/TSX Small Cap Index provides an investable index for the Canadian small cap market. The index is float adjusted and market cap weighted and was developed with industry input as the ideal benchmark for those with small cap exposure to the Canadian equity market.


Management will hold a conference call and live audio webcast on Thursday, August 8, 2013 at 10:00 a.m. (ET) to discuss the Company's fourth quarter and fiscal year-end results. The call will be hosted by Kevin Davis, President and CEO and Amir Rosenthal, Chief Financial Officer. Following management's presentation, there will be a question and answer session for analysts and investors.

To access the call, please dial 1-888-572-7025 or 1-719-325-2464. The conference call will also be accessible via webcast at A replay of the conference call will be available from 1:00 p.m. ET on August 8, 2013, until midnight ET, August 22, 2013. To access the replay, dial 1-877-870-5176 or 1-858-384-5517, followed by passcode 7272139.

To participate in the live audio webcast, please visit the Company's website at The webcast will also be archived on the Company's website.


Bauer Performance Sports Ltd. (TSX:BAU) is a leading developer and manufacturer of ice hockey, roller hockey, lacrosse, baseball and softball equipment as well as related apparel. The company has the most recognized and strongest brand in the ice hockey equipment industry, and holds the top market share position in both ice and roller hockey. Its products are marketed under the BAUER, MISSION, MAVERIK, CASCADE, INARIA and COMBAT brand names and are distributed by sales representatives and independent distributors throughout the world. Bauer Performance Sports is focused on building its leadership position and growing market share in all product categories through continued innovation at every level. For more information, visit


Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS are non-IFRS measures. Adjusted Gross Profit is defined as gross profit plus the following expenses which are part of cost of goods sold: (i) amortization and depreciation of intangible assets, (ii) non-cash charges to cost of goods sold resulting from fair market value adjustments to inventory as a result of business acquisitions, (iii) reserves established to dispose of obsolete inventory acquired from acquisitions and (iv) other one-time or non-cash items. Adjusted EBITDA is defined as EBITDA (net income adjusted for income tax expense, depreciation and amortization, losses related to amendments to the Company's credit facility, gain or loss on disposal of fixed assets, net interest expense, deferred financing fees, unrealized gains/losses on derivative instruments, and realized and unrealized gains/losses related to foreign exchange revaluation) before restructuring and other one-time or non-cash charges associated with acquisitions, other one-time or non-cash items, pre-IPO sponsor fees, costs related to share offerings, as well as share-based payment expense. Adjusted Net Income is defined as net income adjusted for unrealized gains/losses related to derivative instruments and unrealized gains/losses related to foreign exchange revaluation, one-time or non-cash charges associated with acquisitions, amortization of acquisition related intangible assets for acquisitions since Fiscal 2012, costs related to share offerings, share-based compensation expense, and other non-cash or one-time items. Adjusted EPS is defined as Adjusted Net Income/Loss divided by the weighted average diluted shares outstanding.

Reconciliations of these non-IFRS measures to the relevant reported results can be found in the Company's MD&A for Fiscal 2013.


This press release includes forward-looking statements within the meaning of applicable securities laws, including with respect to the Company's objectives of continuing its multi-year track record of revenue growth in the ice hockey market, and growing its share in the performance sports categories of lacrosse and baseball while expanding its apparel offering across all of our sports, including through strategic acquisitions. Forward-looking statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward looking statements.

Forward-looking statements, by their nature, are based on assumptions, including those described herein and are subject to important risks and uncertainties. Many factors could cause our actual results to differ materially from those expressed or implied by the forward looking statements, including, without limitation, the following factors: inability to introduce new and innovative products, intense competition in the equipment and apparel industries, inability to introduce technical innovation, inability to protect worldwide intellectual property rights, inability to successfully integrate recent acquisitions, decrease in ice hockey, roller hockey and/or lacrosse participation rates, adverse publicity, reduction in popularity of the NHL and other professional leagues of sports in which our products are used, inability to maintain and enhance brands, reliance on third party suppliers and manufacturers, disruption of distribution chain or loss of significant customers or suppliers, cost of raw materials and shipping freight and other cost pressures, a change in the mix or timing of orders placed by customers, inability to forecast demand for products, inventory shrinkage or excess inventory, product liability claims and product recalls, compliance with standards of testing and athletic governing bodies, departure of senior executives or other key personnel, litigation, employment or union related matters, inability to translate order bookings into realized sales, fluctuations in the value of certain foreign currencies in relation to the U.S. dollar, inability to manage foreign exchange derivative instruments, general economic and market conditions, changes in consumer preferences and the difficulty in anticipating or forecasting those changes, natural disasters, as well as the factors identified in the "Risk Factors" section of Bauer's Annual Information Form dated August 29, 2012 available on SEDAR at

Furthermore, unless otherwise stated, the forward looking statements contained in this press release are made as of the date of this news release, and we have no intention and undertake no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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