Bauer Performance Sports Ltd.

Bauer Performance Sports Ltd.

October 03, 2013 17:00 ET

Bauer Performance Sports Reports Record Q1 Revenues and Continued Earnings Growth

Holiday Booking Orders Grow by 9%

TORONTO, ONTARIO--(Marketwired - Oct. 3, 2013) - Bauer Performance Sports Ltd. (TSX:BAU) ("Bauer" or the "Company") today announced its interim financial results for the first quarter of fiscal 2014 ended August 31, 2013. All figures are in U.S. dollars.

US$ 000,000's except
per share data and %
Three months ended
Aug 31, 2013 Aug 31, 2012 Change vs. prior period
Revenues $154.0 $148.3 4 %
Gross profit 59.7 60.3 -1 %
Adjusted Gross Profit* 61.5 61.0 1 %
Adjusted EBITDA* 36.9 37.9 -3 %
Net income (loss) 21.3 16.0 33 %
Adjusted Net Income* 23.1 22.9 1 %
Earnings (Loss) per share (diluted) $0.57 $0.45 27 %
Adjusted EPS* $0.63 $0.65 -3 %

*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.

Bauer's overall revenues increased by 4% in the first quarter of fiscal 2014. This increase was fueled primarily by strong performance in apparel, lacrosse, and roller hockey as well as several ice hockey equipment categories. Apparel revenues increased by 57% driven by strong growth in off-ice team apparel, base layer performance apparel, lifestyle apparel, and the addition of hockey and soccer uniform sales. Lacrosse sales increased 43% driven by strong demand for the new CASCADE "R" helmet, growth in our MAVERIK equipment line, and an additional month of Cascade sales compared to the first quarter of fiscal 2013. Roller hockey sales grew 47% driven by strong skate sales. Ice hockey equipment sales grew in key categories such as sticks, protective equipment, and replacement steel blades; however, this was offset by the fact that the prior year included the initial launch of BAUER's third family of ice hockey equipment, NEXUS, resulting in a 2% decline in ice hockey equipment sales versus the prior year. High levels of retail inventory in the hockey marketplace also contributed to the lower ice hockey equipment revenues in the quarter.

Overall revenues from the North American market grew by 3% in the first quarter of fiscal 2014, while sales outside North America grew by 7%.

In addition to Bauer's strong first quarter results, the Company also announced that it has obtained $70.1 million of booking orders for its 2013 "Holiday" season (October 2013 - March 2014), an increase of 9% on a currency neutral basis (7% including the impact of foreign currency) over the 2012 "Holiday" season, reflecting the continuing enthusiasm for BAUER's innovative products.

"Our diversified platform, and our dedication to delivering innovative, high quality, performance enhancing products continues to drive growth," said Kevin Davis, President and Chief Executive Officer of Bauer. "Customer demand for our products remains very strong, and we continue to take share in this challenging marketplace. We are extremely pleased with the increase in booking orders and expect that 2014 will be another record year for our top and bottom line performance as the headwinds which have been impacting our revenues are beginning to dissipate."

Adjusted Gross Profit in the first quarter of fiscal 2014 increased slightly to $61.5 million. Adjusted Gross Profit as a percentage of revenues decreased to 39.9%, compared to 41.1% in the comparative period of fiscal 2013, primarily due to growth in uniforms which have lower gross profit margins compared to our other equipment and apparel categories.

Excluding the impact of one-time acquisition related charges and share-based compensation expense, SG&A as a percentage of revenues increased to 15.1% from 14.2% in the comparative quarter last year. This increase was driven primarily by the effect of adding the SG&A from recently acquired companies in a seasonally low revenue quarter for these same companies. Adjusted Net Income grew to $23.1 million and Adjusted EPS was $0.63 per share. The increase in average shares outstanding in the first quarter of fiscal 2014 relative to the first quarter of fiscal 2013 due to the issuance of shares to finance the Cascade acquisition reduced our Q1 Adjusted EPS by three cents per share.

On a trailing twelve-month basis, revenues were $405.2 million, Adjusted Gross Profit reached $153.5 million or 37.9% of revenues, Adjusted EBITDA was $61.3 million, and Adjusted EPS was $0.98.

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 2.78 as of August 31, 2012. As of August 31, 2013 Bauer had working capital of $267.7 million compared to working capital of $250.4 million as of August 31, 2012. This year-over-year increase was due primarily to higher inventories and receivables related to the acquisifations of Inaria International, Inc. and Combat Sports.


  • Combat Sports became the exclusive provider of bats for the NCAA Division I Washington State University ("WSU") baseball program for three years, beginning with the upcoming 2014 season. WSU plays in the competitive Pacific-12 Conference (PAC-12), and has made 16 appearances in the NCAA regional tournament and reached the College World Series four times. The team has produced 23 Major League Baseball draft picks in the last five years.

  • BAUER and Hockey Canada announced the next phase of their Grow the Game partnership, including initial research study results as well as the creation of pilot programs developed to specifically address the results of those findings.


Management will hold a conference call and live audio webcast on Friday October 4, 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 Chief Executive Officer 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 1-888-539-3678 or 1-719-325-2491. 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 October 4, 2013, until midnight ET, October 18, 2013. To access the replay, dial 1-877-870-5176 or 1-858-384-5517, followed by passcode 6619878.


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 the first quarter of fiscal 2014.


This press release includes forward-looking statements within the meaning of applicable securities laws, including with respect to booking orders translating into realized sales, the Company achieving record top and bottom line performance for the remainder of fiscal 2014, the ability of the Company to continue increasing its market share and the dissipation of external factors which have been negatively impacting the Company's revenues. 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 translate booking orders into realized sales, 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 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, 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 27, 2013 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 press 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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