Black Diamond Equipment Inc. (BDE) told its shareholders last week it expects to quintuple sales to $500 million in the next five years through organic growth and acquisitions. “We are putting our first flag in the ground with an expectation to reach half a billion dollars, $500 million in annual sales, within next five years,” CEO Peter Metcalf said during BDEs first quarterly earnings call.
At their inaugural annual meeting, BDE shareholders voted to change the name of the company to Black Diamond Equipment Inc. from Clarus Corp. The company had been operating as Clarus Corp. since May 28, when the non-operating publicly-traded company combined with Black Diamond Equipment Ltd. and Gregory Mountain Products in a reverse merger. The transaction gave Black Diamond Equipment and Gregory access to public markets and more than $230 million in net operating loss carry-forwards owned by Clarus with none of the expenses of an initial public offering.
Pro forma information released by BDE last week shows sales of the combined company rose 4% in the second quarter ended June 30 to $23.7 million.
Pro forma adjusted gross profit and adjusted gross margins for the second quarter, excluding certain merger related accounting items, would have been $9.4 million, or 39.8% of sales, compared to $8.5 million, or 37.1% of sales, in the comp period in 2009. The stronger gross margins were attributed mainly to economies of scale in manufacturing operations. For the first half, sales are up 8.4% to $56.8 million on a pro forma basis.
According to an investor presentation BDE is generating 50% of its revenues from Mountain products, 32% from Climbing product and 18% from Ski products. North America represents 53% of revenues; Europe, 27%; and Rest of World made up the 20% balance.
BDE ended the quarter with cash and cash equivalents of $3.3 million and total long-term debt of $23.6 million.
Excluding acquisition related restructuring and integration costs, BDE expects pro forma revenues to range between $120 million and $125 million for 2010 and to be both profitable and cash flow positive. This compares to fiscal 2009 pro forma revenues of $113.5 million.