Camelbak Powers CODI’s 12 Percent Q1 Pro-Forma Growth in Sporting Goods Sales

CODI said that while it remains cautious, it has seen no evidence thus far of weaker demand in Europe at CamelBak, Fox Factory or Liberty Safe.

Sales at CamelBak increased 23.2 percent to $40.2 million in the first quarter as sales of its Antidote reservoir and its new Eddy bottles offset a decline in lower margin gloves and other products to the military. 

Sales of Hydration Systems and Bottles represented approximately 84% of gross sales for the three months ended March 31, 2012 compared to 74% for the same period in 2011. Military sales represented approximately 35% of gross sales for the three months ended March 31, 2012 compared to 39% for the same period in 2011. Gross profit as a percentage of sales increased 250 basis points to 45.2% due to a more favorable sales mix, including the decline in lower-margin glove sales. Selling, general and administrative (SG&A) as a percentage of net sales declined 120 basis points to 21.2 percent. Income from operations was approximately $7.1 million, an increase of $3.0 million.

At Fox Factory, net sales reached $45.7 million, up 6.5% as more mountain biking brands specified its suspension components. Fox’s OEM sales to bicycle, motorsport and off-road vehicle makers rose 5.9 percent to $36.0 million during the quarter.

 

The increase in net sales was largely driven by more mountain biking brands specifying Fox Factory components and to a lesser degree by increased demand for carryover product. Gross margin was 28.7%, down 160 basis points from the first quarter of 2011, due largely to costs associated with consolidating the company’s operations in Watsonville, CA and higher expedited freight costs. Income from operations dropped approximately 14 percent to $4.3 million due to a $900,000 increase in SG&A costs incurred to support higher sales.

At Liberty Safe, net sales rose 4.7 percent to $21.2 million. The company said it was unable to meet demand during the quarter for a line of smaller gun safes as it transitioned from importing those products to making them in the United States. Start-up costs and additional shifts at the new production lines contributed to a 100 basis point drop in gross margins, which hit 23.9 during the quarter. Income from operations decreased $300,000 compared to the first quarter of 2011.

CODI CEO Alan Offenberg said Liberty is well positioned to profit should gun sales surge in the wake of the presidential election. Many have speculated that should Obama be re-elected, gun sales would surge as they did after his election in 2008 on the suspicion that he would push more aggressively for national gun control legislation in a second term.

“We are very confident that Liberty will have a strong topline regardless of the outcome of the election,” said Offenberg. “But that dynamic could in fact help Liberty safes.”