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Bauer aims to rebound from NHL lockout with lacrosse play

The NHL lockout's potential impact on business is likely to be top of mind when Bauer Performance Sports Ltd. reports first-quarter earnings Tuesday and follows up with a conference call next week.

But ice hockey won't be the only sport discussed. Though still narrowly associated with Canada's favourite game, ice hockey-equipment maker Bauer also has an ambitious game plan to expand its presence in lacrosse – the fastest-growing team sport in North America.

Expect Bauer chief executive Kevin Davis to reassure investors that the lockout will have minimal impact on the bottom line because sales to NHL players actually represent a small part of revenues, while playing up the lacrosse angle.

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The company, boasting a 52-per-cent global market share in ice hockey equipment, says its biggest customer base is the millions of kids who play the game around the world. At the same time, Bauer stands to lose some of the marketing heft from its association with NHL players, and Mr. Davis will likely field a few analysts' questions on that.

Brandon Snow, principal and portfolio manager at CI Investments Inc.'s Cambridge Advisors, sees the lockout doing minimal damage and even detects a silver lining in the migration of Bauer-equipment-wearing NHL players to Russian and European teams. That should help raise Bauer's profile in markets where it's underrepresented, he says.

"They really have to work on the geographic expansion" to offset low-growth in North America.

And there's lacrosse. Ed Timmons, a senior research analyst with Roth Capital Partners, anticipates senior management will discuss follow-through on the recent $64-million (U.S.) acquisition of Cascade Helmets Holdings Inc., a New York-based designer and manufacturer of lacrosse helmets and eyewear.

"It has every indication of being a good acquisition." He wants to know more about the Cascade play and how new product lines are faring, as well as getting an update on the apparel strategy, where Bauer is weak. Overall, "I think we'll see pretty good results again. They continue to outperform expectations," he said.

He is forecasting $151-million in first-quarter revenue, up from $142.4-million a year ago, and share profit of 64 cents, down slightly from 65 cents a year ago.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More


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