Press release from Marketwire
Bauer Performance Sports Reports Record Year End Revenue and Earnings Driven by Increased Demand across All Product Categories
Global Market Share in Ice Hockey Equipment Grows to 52%
Wednesday, August 08, 2012
TORONTO, ONTARIO--(Marketwire - Aug. 8, 2012) - 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, 2012 ("Fiscal 2012") reported under IFRS. All figures are in U.S. dollars.
|US$ 000,000's except per share data and %||Three months ended||Twelve months ended|
|May 31, 2012||May 31, 2011||Change vs. prior period||May 31, 2012||May 31, 2011||Change vs. prior period|
|Adjusted Gross Profit*||35.2||31.7||11||%||145.1||122.9||18||%|
|Net income (loss)||6.8||(2.1||)||n/a||30.2||0.4||7450||%|
|Adjusted Net Income *||4.7||5.5||-15||%||25.5||17.3||47||%|
|Earnings (Loss) per share (diluted)||$||0.21||$||(0.07||)||n/a||$||0.95||$||0.01||9400||%|
*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 22% increase in overall revenues in Fiscal 2012 was led by strong performance in all product categories. Ice hockey equipment revenues grew by 23%, led in part by a 30% increase in composite sticks and a 20% increase in skates. BAUER continues to see solid performance as well in both its lacrosse and apparel product categories, which have delivered year over year revenue increases of 51% and 33%, respectively. Revenues from the North American market grew by 20% in Fiscal 2012 compared to the same period last year, while sales outside North America grew by 29% in the same period. Excluding the impact of foreign exchange, revenues grew by 19% in Fiscal 2012.
Fiscal 2012 fourth quarter revenues grew by 18% due to strong growth in ice hockey equipment (14%), including fourth quarter growth in sticks (61%) and goalie equipment (41%), lacrosse (130%) and apparel (87%). Revenues from the North American market were up 15% while sales outside North America were up 27% in the period. Excluding the impact of foreign exchange, revenues grew by 20% in the fourth quarter of Fiscal 2012.
The continued strong performance in hockey equipment has increased BAUER's global ice hockey equipment market share to 52%.
"We are excited to report that in our recently concluded fiscal year, we achieved our stated objective to annually grow revenue faster than the industry and our earnings at a faster rate than our revenue," said Kevin Davis, President and Chief Executive Officer, Bauer Performance Sports. "We grew our market share profitably during fiscal 2012 and continued our strong momentum in some key categories such as skates, where we have a market share in excess of 60%, and sticks where we continue to separate ourselves as the number one brand in the industry. We are also very excited about the strong performance of our lacrosse business, especially in light of our recent acquisition of Cascade Helmets Holdings, Inc., which gives us a strengthened position in North America's fastest growing team sport. Our 18% revenue growth in the fourth quarter exceeded our previously reported Back-to-Hockey booking order growth of 12%, as the requested timing of shipments for the season fell more in Q4 vs. Q1 this year. We are excited about the start of the season and look forward to a successful Back-to-Hockey 2012."
Adjusted Gross Profit for Fiscal 2012 increased by $22.2 million, or 18% to $145.1 million. Adjusted Gross Profit as a percentage of revenues was 38.7% in Fiscal 2012, compared to 40.2% in the comparative period in 2011. During the fourth quarter of Fiscal 2012, Adjusted Gross Profit increased by $3.5 million, or 11%, to $35.2 million, and Adjusted Gross Profit as a percentage of revenues decreased to 43.7% from 46.5%. The decline in Adjusted Gross Profit as a percentage of revenues during the quarter and in Fiscal 2012 was primarily due to the growth in composite stick sales which have lower gross profit margins compared to our other ice hockey categories. Also contributing to the decline in Adjust Gross Profit percentage were higher product costs, partially offset by lower freight and distribution costs.
BAUER continued to demonstrate operating leverage in SG&A where, excluding the impact of one-time items, spending as a percentage of revenues has declined 220 and 350 basis points for Fiscal 2012 and in the fourth quarter ended May 31, 2012, respectively. The Company's operating results, combined with the benefit from lower interest rates under the Company's credit facility, resulted in Adjusted Net Income growth of 47% in Fiscal 2012 to $25.5 million and an increase in Adjusted EPS of 47%, or $0.26, to $0.81, compared to the same period last year. In the fourth quarter of Fiscal 2012, Adjusted Net Income was $4.7 million, or $0.15 per share versus $5.5 million, or $0.17 per share in the comparative period in 2011. The fourth quarter decline in Adjusted Net Income and Adjusted EPS is due to the timing of certain tax related items recorded in the comparative period last year which had the effect of increasing Adjusted Net Income in the fourth quarter of Fiscal 2011 by $1.5 million and Adjusted EPS by $0.05. Without the timing impact of the tax related items noted above, Adjusted EPS would have grown from $0.12 in the fourth quarter of Fiscal 2011 to $0.15 in the fourth quarter of Fiscal 2012, an increase of 25%.
As of May 31, 2012 BAUER had working capital of $163.5 million compared to working capital of $146.5 million as of May 31, 2011, an increase of 12%. The Company continued to manage its balance sheet as its leverage ratio, defined as net indebtedness divided by EBITDA, reduced to 2.72 compared to 3.12 as of May 31, 2011.
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.
INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")
Bauer Performance Sports is reporting under IFRS as a corporate entity. Through May 31, 2011 the Company reported under Canadian generally accepted accounting principles. A full explanation of related accounting changes can be found in the notes to the Company's audited consolidated financial statements for Fiscal 2012 which are available on SEDAR at www.sedar.com and on the Company's website.
The Company's audited consolidated financial statements and MD&A for the period ended May 31, 2012 have been filed with applicable regulatory authorities and are available on SEDAR at www.sedar.com and on the Company's website.
CONFERENCE CALL AND WEBCAST
Management will hold a conference call and live audio webcast on Thursday, August 9, 2012 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 1-888-481-2877 or 1-719-325-2452. The conference call will also be accessible via webcast at www.bauerperformancesports.com. A replay of the conference call will be available from 1:00 p.m. ET on August 9, 2012, until midnight ET, August 23, 2012. To access the replay, dial 1-877-870-5176 or 1-858-384-5517 followed by passcode 2194247.
To participate in the live audio webcast, please visit the Company's website at www.bauerperformancesports.com. The webcast will also be archived on the Company's website.
ABOUT BAUER PERFORMANCE SPORTS LTD.
Bauer Performance Sports Ltd. (TSX:BAU) is a leading developer and manufacturer of ice hockey, roller hockey, and lacrosse 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 Hockey, Mission Roller Hockey, Maverik Lacrosse and Cascade 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 www.bauerperformancesports.com.
Adjusted Gross Profit, EBITDA, 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 for 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, and (iii) reserves established to dispose of obsolete inventory acquired from acquisitions. Adjusted EBITDA is defined as EBITDA (net income adjusted for income tax expense, depreciation and amortization, loss on early extinguishment of debt, gain or loss on disposal of fixed assets, net interest expense, deferred financing fees, the unrealized gain/loss on derivative instruments, and realized and unrealized gains/losses related to foreign exchange revaluation) before restructuring and other charges associated with acquisitions, normalization adjustments relating to the Business Purchase from Nike in 2008, sponsor fees, costs related to share offerings, as well as normalized share-based payment expenses. 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, 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 fully 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 fourth quarter of Fiscal 2012.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements within the meaning of applicable securities laws. 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, 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 25, 2011 available on SEDAR at www.sedar.com.
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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Bauer Performance Sports Ltd. INVESTOR INQUIRIES Amir Rosenthal Chief Financial Officer 603-610-5802 email@example.com
Bauer Performance Sports Ltd. MEDIA INQUIRIES Steve Jones Director, Global Marketing 603-430-2111 firstname.lastname@example.org
Kevin O'Connor Spinnaker Capital Markets Inc. 416-962-3300 email@example.com
Ali Mahdavi Spinnaker Capital Markets Inc. 416-962-3300