Easton-Bell Q1 Profits Shrink Despite Team Sales Increase

Easton-Bell Sports, Inc. had net sales of $184.9 million for the first quarter ended April 4, 2009, an increase of $2.8 million, or 1.5%, as compared to $182.1 million of net sales for the first quarter of fiscal 2008. The company�s net sales for the first quarter of fiscal 2009 increased 4.3% on a currency neutral basis, as compared to the first quarter of fiscal 2008.

Team Sports net sales increased $7.0 million, or 6.9% for the first quarter of fiscal 2009, as compared to the first quarter of fiscal 2008. The increase in Team Sports net sales during the quarter related to increased sales of football helmets, ice hockey sticks and reconditioning services, partially offset by lower sales of licensed consumer products and baseball and softball equipment.

Action Sports net sales decreased $4.2 million, or 5.2% for the first quarter of fiscal 2009, as compared to the first quarter of fiscal 2008. The decrease in Action Sports net sales related to reduced sales of fitness products in the Mass channel and reduced sales of components to bicycle manufacturers, partially offset by the introduction of cycling gloves in the Specialty channel.

The company's Adjusted EBITDA of $18.1 million for the first quarter of fiscal 2009 decreased $3.6 million, or 16.6% as compared to $21.7 million of Adjusted EBITDA in the first quarter of fiscal 2008. “Despite our ability to grow sales in difficult economic times, our businesses continued to face margin pressure as consumers trade down price points and we work through inventories which do not fully reflect the benefit of recent operational and sourcing initiatives. We remain focused on managing cash to continue to de-lever the company,” said Paul Harrington, Easton Bell Sports, Inc. president and CEO.

Balance Sheet Items

Net debt totaled $432.1 million (total debt of $458.1 million less cash of $26.0 million) as of April 4, 2009, a decrease of $28.3 million over such amount at March 29, 2008. The decrease in net debt is due to an increase in cash of $9.1 million, a decrease in debt and capital lease obligations of $14.2 million and a decrease in revolver borrowings of $5.0 million. Working capital as of April 4, 2009 was $301.0 million, as compared to $270.0 million as of March 29, 2008, with the increase primarily due to the increase in cash and inventories, partially offset by the increase in accounts payable.