Camelbak’s sales to the military fell to 20 from 35 percent of its revenues in the quarter ended March 31, according to filings by its parent company Compass Diversified Holdings Inc. 



Camelbak sales reached approximately $38.8 million during the quarter, a decrease of $4.0 million, or 9.3 percent, compared to the same period in 2013. The decline was attributed to decreased sales in Hydration Systems ($6.5 million), and Accessories ($1.2 million), offset in part by an increase in sales in Bottles ($2.8 million) and Gloves ($800,000).


The increase in Bottle sales during the three months ended March 31, compared to the same period in 2013 is primarily attributable to an increase in international bottle sales including, eddy, the Podium line of insulated bottles, and the continued expansion in its customer base, including new and existing customers, for all product lines.

 

 

The increase in Glove sales during the same period is the result of timing of government orders which are sporadic in nature. The decrease in sales of Hydration systems during the period is primarily attributable to Marine Corps contract sales in the 2013 quarter ($5.8 million). There were no Marine Corps contract sales in the 2014 quarter. Sales of Hydration Systems and Bottles represented approximately 87 percent of gross sales for the three months ended March 31, compared to 88 percent for the same period in 2013.

 

 

 

Military sales were approximately 20 percent of gross sales   compared to 35 percent for the same period in 2013. International sales were approximately 26 percent of gross sales for the quarter, compared to 21 percent for the same period in 2013. The decrease in Military sales is attributable to the absence of Marine Corps contract sales and a decrease in other Military sales due to decreased demand as a result of the drawdown of U.S. combat troops. The increase in international sales is attributable to growth in that portion of the business and timing of new product launches.


 
Cost of sales

Cost of sales for the quarter were approximately $21.9 million compared to approximately $23.1 million in the same period of 2013. The decrease of $1.3 million is due principally to the corresponding decrease in sales. Gross profit as a percentage of sales decreased to 43.6 percent compared to 45.9 percent in the quarter ended March 31, 2013. The decrease is attributable to an unfavorable sales mix in Bottles and Hydration Systems and a decrease in obsolescence reserve in the first quarter of 2013.


 

Selling, general and administrative expense   increased to approximately $8.7 million or 22.6 percent of net sales compared to $8.3 million or 19.4 percent of net sales for the same period of 2013. This increase is attributable to increases in marketing costs to support new product launches in 2014.
 

Income from operations   was approximately $5.9 million, a decrease of $3.1 million when compared to the same period in 2013, based on the factors described above.

Results of Operations


The table below summarizes the income from operations data for CamelBak for the three month periods ended March 31, 2014 and March 31, 2013.


 































































































































Three months ended
(in thousands) March 31, 2014 March 31, 2013

Net sales

 $ 38,770 $ 42,755

Cost of sales

 21,865 23,136





Gross profit

 16,905 19,619

Selling, general and administrative expense

 8,747 8,278

Fees to manager

 125 125

Amortization of intangibles

 2,178 2,278





Income from operations

 $ 5,855 $ 8,938