Bauer Performance Sports Ltd.announced its financial results for the first quarter of Fiscal 2013 ended August 31,2012 reported under IFRS.
Revenues grew by 4%(8%excluding the impact of foreign exchange)to$148.3 million in the first quarter of Fiscal 2013 including strong performance in several ice hockey equipment categories and apparel driven by recent new product launches.Composite sticks grew by 9%,driven partially by the launch of the NEXUS family of products,and the new RE-AKT helmet helped drive 16%growth in helmets.
Partially offsetting these gains was a 9%decline in goalie revenues due to the launch of the new product line earlier in the Back-to-Hockey 2012 season than in Back-to-Hockey 2011.Apparel revenues grew by 11%and BAUER's lacrosse revenues increased significantly driven by the positive contribution of two months of sales from the recently acquired Cascade Helmets Holdings,Inc.which added 2%to total revenue growth in the quarter.
Overall revenues from the North American market grew by 2%in the three month period ended August 31,2012 compared to the same period last year,while sales outside North America grew by 10%in the same period.
Adjusted Gross Profit in the three month period ended August 31,2012 increased by$0.8 million,or 1%,to$61.0 million.Adjusted Gross Profit as a percentage of revenues was 41.1%for the three month period ended August 31,2012 versus 42.3%in the three month period ended August 31,2011.The decline in Adjusted Gross Profit as a percentage of revenues was driven primarily by higher product costs and unfavourable foreign exchange,partially offset by favourable other cost of goods sold.
Adjusted Net Income in the three month period ended August 31,2012 increased by$2.0 million,or 10%,to$22.9 million.The increase in Adjusted Net Income is driven by increased Adjusted Gross Profit,continued benefits of operating leverage in selling,general and administrative expenses,and a favourable impact from the Company's hedging activities.
Adjusted EPS decreased 2%,or$0.01,to$0.65,compared to the same period last year due to the higher number of common shares outstanding as a result of the share offerings in June to fund the Cascade Acquisition.Excluding the impact of the Cascade acquisition and related share offerings,Adjusted EPS would have been approximately$0.70.
For the full fiscal year the Company currently expects the Cascade acquisition to be accretive to Adjusted EPS,however due to the seasonality of Cascade's business,the income from Cascade in the first fiscal quarter did not offset the dilutive impact of the higher number of common shares outstanding.
In addition to BAUER's strong first quarter results,the Company also announced that booking orders for its 2012"Holiday"season(October 2012-March 2013)increased 12%over the 2011"Holiday"season.This growth of$8.0 million increased"Holiday"booking orders to$75.1 million,reflecting our retail customers'continuing enthusiasm for BAUER's innovative products.
"We followed up our record fourth quarter with a very strong start to fiscal 2013,outperforming the industry and growing our top line at over 8%on a currency-neutral basis and our bottom line at 10%in the first quarter"said Kevin Davis,President and Chief Executive Officer,BAUER.
"The 12%growth in our Holiday booking orders is further evidence that our high performing products and brands continue to be in strong demand by our customers and consumers".
As of August 31,2012,BAUER had working capital of$250.4 million compared to working capital of$202.2 million as of August 31,2011,an increase of 24%.This increase was driven by sales growth of 18%and 4%in the two most recent quarters,the acquisition of Cascade,and a higher mix of advance booking orders by the Company's customers which carry longer payment terms.
The Company continued to manage its balance sheet as its leverage ratio,defined as net indebtedness divided by EBITDA,was 2.78 compared to 2.80 as of August 31,2011.
Other Recent Highlights
- On June 29,2012,BAUER completed the acquisition of Cascade,a leading manufacturer and distributor of men's and youth lacrosse helmets in North America for$65.0 million(excluding cash acquired).The purchase price and related transaction expenses were funded through the issuance of approximately C$30 million of new equity and the balance in new borrowings.
- On September 21,2012,BAUER was added to the S&P/TSX SmallCap Index.
- On September 26,2012,certain Kohlberg Funds managed by Kohlberg Management VI LLC,BAUER's largest shareholder,entered into an agreement with a syndicate of underwriters to sell 3.6 million common shares of the Company.As of October 2,2012 the Kohlberg Funds,collectively,own approximately 53.0%of the outstanding common shares on a non-diluted basis(43.8%on a fully-diluted basis).Upon completion of this secondary offering,but before giving effect to the over-allotment option granted to the underwriters,of up to 540,000 common shares,the Kohlberg Funds will own approximately 42.6%of the outstanding common shares on a non-diluted basis(35.1%on a fully-diluted basis),and approximately 41.0%of the outstanding common shares on a non-diluted basis(33.8%on a fully-diluted basis)if the over-allotment option is exercised in full.BAUER will not receive any proceeds from the sale.
Adjusted Gross Profit,EBITDA,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"noted below and in the Company's MD&A for the most recent period.Working capital as used above includes trade and other receivables,inventories,and trade and other payables.
Bauer Performance Sports Ltd.is a leading developer and manufacturer of ice hockey,roller hockey,and lacrosse equipment as well as related apparel.
