Black Diamond Grew Net Income 40 Percent in Fourth Quarter

 

The statements confirmed Black Diamond’s total sales increased 24 percent to $60.4 million during the quarter on gross margins of 38.0 percent, up 170 basis points from a year earlier. The company had estimated those results Feb. 11 when it released preliminary, unaudited figures for the quarter.

 

Monday’s audited statements showed net income for the fourth quarter of 2013 included $2.7 million of non-cash items and $200,000 of merger and integration costs, compared to $400,000 of non-cash items, $400,000 in transaction-related costs, $100,000 in restructuring costs and $200,000 in merger and integration costs in the year-ago quarter.

 

Excluding these items, adjusted net income before non-cash items in the fourth quarter of 2013 was $3.6 million, or 11 cents per diluted share, compared to $1.6 million, or 5 cents per diluted share, in the fourth quarter of 2012.

 

Black Diamond said total sales increased 15 percent to $203.0 million for the full fiscal year, compared to $175.9 million in 2012. The growth in sales was attributed to the full year of sales of POC and PIEPS, the launch of Black Diamond apparel, as well as an increase in Gregory's sales in Japan, which the company began taking over its distributor Kabushiki Kaisha A&F's operations.

 

Gross margin in 2013 remained at 38.2 percent, including a $1.5 million mostly non-cash charge for a PIEPS product recall that included 100 percent of existing inventory. Excluding this amount, adjusted gross margin in 2013 was 38.9 percent compared to adjusted gross margin of 39.5 percent in 2012. Net loss in 2013 was $5.9 million, or $(0.18) per diluted share, compared to net income of $2.0 million, or $0.06 per diluted share, in 2012.

 

 

Net loss in 2013 included $11.7 million of non-cash items, $0.1 million in transaction-related costs, $0.2 million in restructuring costs and $0.6 million in merger and integration costs. Excluding these items, adjusted net income before non-cash items in 2013 was $6.6 million, or $0.20 per diluted share, compared to income of $12.5 million, or $0.42 per diluted share, in 2012.

 

2014 Outlook

Black Diamond affirmed guidance it issued Feb. 11 that calls for fiscal year 2014 sales to range between $235 million to $240 million, which would represent an increase of approximately 16 percent to 18 percent from 2013 sales. The company also expects gross margin in fiscal year 2014 to range between 39.5 percent and 40.5 percent.

 

BLACK DIAMOND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share amounts)
	Three Months Ended
	December 31, 2013	December 31, 2012
Sales
Domestic sales	$ 23,449	$ 21,031
International sales	36,956	27,770
Total sales	60,405	48,801
Cost of goods sold	37,460	31,078
Gross profit	22,945	17,723
Operating expenses
Selling, general and administrative	21,480	19,149
Restructuring charge	—	139
Merger and integration	149	168
Transaction costs	—	364
Total operating expenses	21,629	19,820
Operating income (loss)	1,316	(2,097)
Other (expense) income
Interest expense, net	(984)	(933)
Other, net	113	254
Total other expense, net	(871)	(679)
Income (loss) before income tax	445	(2,776)
Income tax benefit	(291)	(3,320)
Net income	$ 736	$ 544
Earnings per share:
Basic	$ 0.02	$ 0.02
Diluted	0.02	0.02