Sales at both CamelBak and Fox Racing Shox rose nearly 16 percent in 2011, according to parent company Compass Diversified Holdings, a publicly traded private equity fund.
CODI reported that the maker of hydration products, which it acquired in August, 2011, generated net sales of approximately $141.3 million in the year ended Dec. 31, 2011, up 15.6 percent from $122.2 million a year earlier. CamelBak pro-forma operating income was $18.0 million, up 34.3 percent from $13.4 million ayear earlier. Net sales from CamelBak from date of acquisition until Dec. 31, 2011 represented 5.5% of CODI's consolidated net sales.
CamelBak had approximately $29.4 million in firm backlog orders and 270 employees as of Dec. 31, 2011.
CODI disclosed that on March 6, CamelBak redeemed all the 11% percent convertible preferred stock it sold to CODI's largest shareholder last year as part of CODI's $258.6 million acquisition of CamelBak. The $47.7 million redemption was funded by intercompany debt and an equity contribution from CODI of $19.2 million and $25.9 million, respectively. In addition, noncontrolling shareholders of CamelBak invested $2.9 million of equity in order for CODI and noncontrolling shareholders to maintain existing ownership percentages of CamelBak common stock of 89.9% and 10.1%, respectively.
CODI’s 10K filing also disclosed the following about CamelBak:
Market share: CamelBak management estimates that it has the #1 market share position in domestic recreational markets (80%-85%) for hands-free hydration packs and the #1 market share position for reusable water bottles in specialty channels (30%). CamelBak is also the hydration pack of choice for the war fighter, with an estimated 85% market share in post-issue hydration packs.
- Research and development: Camelbak spending on research and development totaled $2.6 million and $2.2 million during the years 2011 and 2010, respectively.
- RecreationalDomestic Division: manages approximately 2,500 retail customers with over 8,000 retail storefronts.
- Government/Military Distribution: CamelBak is one of only a few companies allowed to prominently display its brand name on active military products and does business in more than 400 military retail exchanges. It is also leveraging U.S., which calls for replacing some deployed U.S. troops with those of foreign militaries, by increasingly selling to foreign militaries. CamelBak’s success in the U.S. Military carries tremendous credibility abroad, which has enabled the company to achieve meaningful adoption outside the U.S.
CamelBak's Pro Forma Results of Operations
The table below summarizes the pro-forma results of operations for CamelBak for the full fiscal years ended December 31, 2011 and 2010. We acquired CamelBak on August 24, 2011. The following operating results are reported as if we acquired CamelBak on January 1, 2010.
| Year ended December 31, | ||||||||
| (in thousands) | 2011 (Pro-forma) | 2010 (Pro-forma) | ||||||
Net sales | $ | 141,286 | $ | 122,214 | ||||
Cost of sales (a) | 82,999 | 70,617 | ||||||
Gross profit | 58,287 | 51,597 | ||||||
Selling, general and administrative expenses (b) | 30,475 | 28,144 | ||||||
Management fees (c) | 500 | 500 | ||||||
Amortization of intangibles (d) | 9,313 | 9,512 | ||||||
Income from operations | $ | 17,999 | $ | 13,441 | ||||
Pro-forma results of operations of CamelBak for the annual periods ended December 31, 2011 and 2010 include the following pro-forma adjustments applied to historical results:
| (a) | Cost of sales for the year ended December 31, 2011 does not include $6.1 million of amortization expense associated with the inventory fair value step-up recorded in 2011 as a result of and derived from the purchase price allocation in connection with our purchase of CamelBak. |
| (b) | Selling, general and administrative costs were reduced by approximately $7.0 million in the year ended December 31, 2011, representing an adjustment for one-time transaction costs incurred as a result of our purchase. |
| (c) | Represents management fees that would have been payable to the Manager. |
| (d) | An increase in amortization of intangible assets totaling $5.6 million in 2011 and $7.4 million in 2010. This adjustment is a result of and was derived from the purchase price allocation in connection with our acquisition of CamelBak. |
Fox Racing Shox sales rise 15.6 percent
Sales at Scotts Valley, CA-based Fox Racing Shox, which makes suspension products for the mountain bikes, snowmobiles, ATVs and other off-road vehicles, reached $197.7 million in 2011, up 15.6 percent from $171.0 million in 2010, when net sales grew nearly 41 percent. Operating income rose 15.3 percent to $22.6 million in 2011.
Fox’s net sales represented 25.4%, 25.7%, and 24.1% of consolidated net sales for the years ended Dec. 31, 2011, 2010 and 2009, respectively. Fox sells to over 160 OEM and approximately 7,600 Aftermarket customers. OEM sales reached 80% in 2011, compared to 78% and 76% in 2010 and 2009 respectively. The balance of sales were to aftermarket customers.
International sales totaled $129.9 million, $113.6 million and $84.0 million in each of the years 2011, 2010 and 2009, respectively. Sales to Taiwan totaled $53.3 million, $49.5 million and $35.6 million in 2011, 2010 and 2009, respectively. Sales to Germany totaled $27.6 million, $24.0 million and $19.2 million in 2011, 2010 and 2009, respectively.
Fox had approximately $37.0 million and $34.7 million in firm backlog orders at December 31, 2011 and 2010, respectively.
Fox had approximately $37.0 million and $34.7 million in firm backlog orders at December 31, 2011 and 2010, respectively.
Fox Results of Operations
The table below summarizes the results of operations of Fox for the fiscal years ending December 31, 2011, 2010 and 2009. We purchased a controlling interest in Fox on January 4, 2008. | Year Ended December 31, | ||||||||||||
| 2011 | 2010 | 2009 | ||||||||||
| (in thousands) | ||||||||||||
Net sales | $ | 197,740 | $ | 170,983 | $ | 121,519 | ||||||
Cost of sales | 140,850 | 122,373 | 87,038 | |||||||||
Gross profit | 56,890 | 48,610 | 34,481 | |||||||||
Selling, general and administrative expenses | 28,587 | 23,317 | 18,231 | |||||||||
Management fees | 500 | 500 | 375 | |||||||||
Amortization of intangibles | 5,217 | 5,217 | 5,217 | |||||||||
Income from operations | $ | 22,586 | $ | 19,576 | ||||||||
