Black Diamond, Inc. reported the launch of its spring apparel line and strong results at its POC ski helmet business helped push sales up 7 percent to $54.5 million in the first quarter ended March 31. The company remains on track to meet its revenue and gross margin forecasts for the full year, executives said.
“Black Diamond's first quarter results are a reflection of our product variety and seasonal diversity, as well as our global distribution platform,” said Peter Metcalf, president and CEO of Black Diamond. “In spite of some extreme dry weather conditions in different parts of the world, our first quarter sales increased more than 8 percent in constant currency and approximately 7 percent in real terms. Black Diamond also grew in all of our major geographies.”
Black Diamond's guidance for fiscal year 2014 remains on track with sales expected to be between $235 million and $240 million, which would represent an increase of approximately 16 percent to 18 percent from 2013. The company also expects gross margin in 2014 to range between 39.5 percent and 40.5 percent. Black Diamond's guidance for the first half of fiscal 2014 also remains on track with sales expected to range between $95 million and $100 million. For the second half of 2014, the company expects total sales to range between $135 million and $145 million.
Net operating Loss (NOL)
The company estimates that it has available NOL carryforwards for U.S. federal income tax purposes of approximately $210.4 million. The company's common stock is subject to a Rights Agreement dated Feb. 7, 2008, intended to assist in limiting the number of 5 percent or more owners and thus reduce the risk of a possible “change of ownership” under Section 382 of the code. Any such “change of ownership” under these rules would limit or eliminate the ability of the company to use its existing NOLs for federal income tax purposes. There is no guaranty, however, that the rights agreement will achieve the objective of preserving the value of the NOLs.
Black Diamond and KPMG, its independent accounting firm, are in the process of finalizing their review of the company's valuation allowance assigned to the company's NOL carryforwards. For this reason, this press release excludes the company's condensed consolidated balance sheets. Black Diamond anticipates filing its first quarter Form 10-Q on or before the filing deadline of Monday, May 12, 2014.
BLACK DIAMOND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
|Three Months Ended|
|March 31, 2014||March 31, 2013|
|Domestic sales||$ 20,698||$ 20,110|
|Cost of goods sold||33,614||31,784|
|Selling, general and administrative||22,632||20,878|
|Merger and integration||—||143|
|Total operating expenses||22,987||21,250|
|Interest expense, net||(895)||(826)|
|Total other expense, net||(1,042)||(1,221)|
|Loss before income tax||(3,104)||(3,255)|
|Income tax benefit||(1,777)||(223)|
|Net loss||$ (1,327)||$ (3,032)|
|Loss per share:|
|Basic||$ (0.04)||$ (0.10)|