The newly formed Easton-Bell Sports started their first quarter with healthy top-line increases, but considerable deficits on the bottom line. Net sales for the first quarter increased 27.4% to $111.2 million from sales of $87.2 million last year. This increase was largely due to the addition of Easton, which contributed $14.9 million in sales during the quarter. Without Easton, the company’s sales would have still increased 10.4% to $96.3 million.

The addition of Easton primarily impacted the team sports segment, which reported a 67.3% increase in sales to $45.7 million from $28.2 million last year. The Action Sports division, which sells bicycle, motor sports and action sports protective gear and accessories, saw sales increase 8.4% to $65.5 million from $59.0 million last year.

Overall gross margins were down 320 basis points to 33.2% of sales compared to 36.4% last year. The addition of the Easton business actually boosted margins. Easton’s portion of the gross margins equaled 35.6% of sales compared to the rest of the business, which would have been 32.7% of sales.

SG&A expenses decreased 170 basis points to 24.5% of sales. The biggest expenses for the quarter were related to management fees and interest expenses. Easton-Bell Sports paid a $7.5 million one-time management fee to Fenway Partners. In addition, the company paid $4.9 million in deferred debt charges. Without these two large expenses, Easton-Bell would have posted a profit for the quarter, with net income at roughly $4.7 million. However, according to SEC filings Easton-Bell reported a net loss for the quarter of $7.7 million, compared to a net income of $169,000 last year.