Easton-Bell Sports, Inc. reported net sales increased 4.1% in the second quarter to $206.4 million from $198.3 million for the same quarter last year. Team Sports net sales increased 2.6%, in the second quarter of 2007 to $125.5 million from $122.3 million in the year-ago period. Factors contributing to the increase in Team Sports net sales included increased sales of football helmets, shoulder pads and collectibles, apparel and performance of reconditioning services. Action Sports net sales increased 6.5% to $80.9 million from $75.9 million last year due to increased sales of cycling helmets, powersports helmets, juvenile licensed products and specialty channel accessory products.
For the second quarter of 2007, gross profit was $76.4 million or 37.0% of net sales as compared to $59.9 million, or 30.2% of net sales for the second quarter of 2006. The increase in gross profit as a percentage of net sales is primarily attributable to the impact in the prior year of expensing the purchase accounting inventory write up associated with the Easton acquisition and cost savings realized from moving our manufacturing of aluminum products to Asia, partially offset by sales mix changes.
The companys net income for the second quarter of 2007 was $12.1 million, as compared to $4.2 million for the second quarter of 2006. The increase is primarily due to the increase in gross profit of $16.5 million and a $1.9 million gain on sale of property, partially offset by increased selling, general, and administrative expenses of $2.5 million and additional income tax expense of $8.6 million. Adjusted EBITDA for the second quarter of 2007 was $38.8 million, as reported to the Companys lenders pursuant to the terms of its senior secured credit facility.
Net debt as of June 30, 2007 was $493.2 million (total debt of $501.0 million less cash of $7.8 million), an increase of $26.9 million over such amount at December 30, 2006. The increase is due to fluctuations in the revolver from seasonal working capital needs. Working capital as of June 30, 2007 was $254.7 million versus $225.0 million as of December 30, 2006.
