Black Diamond, Inc. upped its 2011 guidance after reporting total sales in the second quarter of 2011 increased 19% to $28.3 million compared to pro forma sales of $23.7 million in the second quarter of 2010.
The pro forma prior year sales include the results of Black Diamond Equipment and Gregory Mountain Products prior to their acquisitions by the company in May 2010.
The growth in sales for the second quarter of 2011 was attributable to the successful launch of a number of new products and the increased sales and marketing efforts of existing products.
Gross margin in the second quarter of 2011 was 38.9%, compared to pro forma gross margin of 39.8% in the prior year quarter. The 0.9% decrease in gross margin was primarily attributed to a higher percentage of international distributor sales, which have lower overall margins.
Net loss in the second quarter of 2011 was $800,000, or 4 cents per share, which included $2.1 million of non-cash items. Excluding these items, adjusted net income before non-cash items was $1.3 million or 6 cents per diluted share.
“This was a strong second quarter for Black Diamond as we achieved double-digit sales growth over the same year-ago quarter and exceeded the growth rate of an already healthy outdoor equipment industry,” said Peter Metcalf, president and CEO of Black Diamond. “These results were driven by our successful launch of a number of new products, solid sales and marketing execution, and continued investment in our operational platform. In fact, we believe that this quarter’s performance is the result of proactive steps we made two years ago to invest in product development and establish a flexible and dynamic supply chain to meet our current growth needs.”
The company did not incur any restructuring or merger and integration expenses in the second quarter, as promised, reflecting the completion of the Gregory integration during the first quarter.
“We believe in the American experience and our power to innovate and develop outstanding products. As we continue through the second half of 2011, we intend to remain steadfast in our strategy of investing in product design and development to deliver the high quality, performance products demanded by our retail partners and loyal customers. In the prior twelve months, we have added approximately 50 new jobs to support our business and future growth initiatives. Our new vice president of Gregory has positioned the brand to be ready for its next phase of growth and product line expansion. Our new director of apparel is diligently advancing our entry into the technical apparel market and we expect to remain on track for a fall 2013 initial launch. We expect to continue to leverage our global operational platform as we pursue our organic and acquisition strategies designed to build Black Diamond into one of the world’s most respected outdoor recreational equipment and active lifestyle companies.”
2011 Outlook Update
Black Diamond has increased its fiscal year 2011 guidance and now expects sales to range between $140 – $145 million.
BLACK DIAMOND, INC.
CONDENSED CONSOLIDATED COMBINED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
|THREE MONTHS||THREE MONTHS||TWO MONTHS||THREE MONTHS|
|June 30, 2011||June 30, 2010||May 28, 2010||June 30, 2010|
|Domestic sales||$ 12,972||$ 4,036||$ 5,932||$ 9,968|
|Cost of goods sold||17,303||5,936||6,628||12,564|
|Selling, general and administrative||11,931||7,331||4,823||12,154|
|Merger and integration||—||780||—||780|
|Total operating expenses||11,931||12,741||4,823||17,564|
|Other (expense) income|
|Total other (expense) income, net||(264)||(207)||1,462||1,255|
|(Loss) income before income tax||(1,160)||(11,140)||1,297||(9,843)|
|Income tax (benefit) provision||(349)||(68,433)||382||(68,051)|
|Net (loss) income||$ (811)||$ 57,293||$ 915||$ 58,208|
|(Loss) earnings per share:|
|Basic||$ (0.04)||$ 3.08|