Performance Sports Group, the parent of  Bauer, Mission, Maverik, Cascade, Inaria, Combat And Easton, reported preliminary results for its fiscal fourth quarter ended May 31 with EPS easily ahead of Wall Street's consensus estimates.

For the fourth quarter of 2015, the company expects currency neutral revenues of more than $156.0 million, or an approximate 38-percent increase from $112.9 million in the same year-ago quarter. Including the impact of changes in foreign currency rates, the company expects to report record revenues of more than $147.0 million, up approximately 30 percent. Wall Street had been expecting around $147 million on average.

Currency neutral Adjusted Net Income (a non-IFRS measure) in the fourth
quarter of 2015 is expected to be approximately $14.0 million or $0.30
per diluted share, compared to $10.8 million or $0.29 per diluted share
in the year-ago quarter. Wall Street had expected 22 cents a share.

Excluding the $0.09 per diluted share gain from
the BRG Sports intellectual property litigation settlement in the
fourth quarter of fiscal 2014, currency neutral Adjusted Net Income is
expected to increase approximately 85 percent while currency neutral
Adjusted EPS is expected to increase approximately 50 percent,
demonstrating the continued power of the PSG brands and strong
performance of the company’s operations teams. The company expects
foreign exchange to unfavorably impact currency neutral Adjusted Net
Income by approximately $0.13 per diluted share in the fourth quarter of
2015, resulting in reported Adjusted Net Income of approximately $8.0
million or $0.17 per diluted share.

For fiscal 2015, the company expects currency neutral revenues of more than $675.0 million, or an approximate 51-percent increase from $446.2 million in fiscal 2014. Including the impact of changes in foreign currency rates, the company expects to report record revenues of more than $654.0 million, up approximately 47 percent.
 
The growth in reported revenues for both the fourth quarter and full year were driven by solid sales growth in ice hockey and lacrosse equipment, and the addition of Easton baseball/softball, partially offset by the unfavorable impact from foreign exchange.
 
For fiscal 2015, the company expects currency neutral Adjusted Net Income to increase by approximately 65 percent to $61.5 million or $1.33 per diluted share, compared to $37.3 million or $1.00 per diluted share in fiscal 2014. Excluding the litigation settlement referred to above, currency neutral Adjusted Net Income is expected to increase approximately 80 percent while currency neutral adjusted EPS is expected to increase approximately 45 percent. The company expects foreign exchange to unfavorably impact full year currency neutral Adjusted Net Income by approximately $0.30 per diluted share, resulting in reported Adjusted Net Income of approximately $48.0 million or a record $1.03 per diluted share.
 
Management Commentary

“Our record revenues in both the quarter and year reflect strong demand for our innovative and diversified collection of performance sports brands, as well as the powerful platform which supports these brands,” said Kevin Davis, CEO of Performance Sports Group. “We continue to outpace the growth of all our key markets, grow market share, improve our operational efficiency and leverage our platform to drive profitability faster than revenue growth on a currency neutral basis. These have been, and will continue to be, the driving forces of value creation for our shareholders. We have emphasized these key drivers since we went public in 2011, and we expect to reinforce them as changes in foreign currencies impact our reported results.”
 
“Our growth plan remains intact for fiscal year 2016 and beyond,” continued Davis, “and our initiatives for improving cash flow and earnings growth are beginning to demonstrate the results we expected. The one major driver of change in our reported results is the significant increase in the value of the U.S. dollar. As such, we want to emphasize the strong continued performance of our business and continue to be transparent with respect to the impact of foreign currency as we move further into fiscal 2016.
 
“As we have previously disclosed, changes in foreign currency rates can have a significant impact on our results, particularly for hockey, which represents nearly all of our revenues generated outside of the U.S. In the third quarter, we started to experience the sharp appreciation in the U.S. dollar, the impact of which we disclosed with our third quarter results. We also noted that since the fourth quarter typically produces more than twice the hockey-related revenues than the third quarter, the impact from year-over-year changes in foreign exchange rates was expected to at least double in the fourth quarter. We continue to anticipate the impact of foreign currency rates to be more pronounced in the first quarter of fiscal 2016 where hockey typically represents more than 35 percent of our total revenues, as compared to approximately 20 percent in the fourth quarter.
 
“Despite the impact that changing foreign currency rates have on our reported numbers, we are proud that every brand in our portfolio continues to gain category market share while leveraging the PSG platform to support continued profitable growth in fiscal year 2016 and beyond.”
 
Presentation of Financial Information

All figures reported above with respect to the fiscal fourth quarter and full year ending May 31, 2015 are preliminary, have not been reviewed by the company’s auditors and are subject to change as the company’s financial results are finalized. Further, while such preliminary results are presented in accordance with International Financial Reporting Standards (IFRS), the company’s finalized results will be reported in accordance with United States Generally Accepted Accounting Principles (U.S. GAAP) as a result of the company’s transition to U.S. domestic issuer status. 
 
The preliminary results provided in this press release therefore constitute forward-looking statements within the meaning of applicable securities laws, and are based on a number of assumptions subject to a number of risks and uncertainties, including with respect to the conversion of such results from IFRS to U.S. GAAP. Please see the section below entitled “Caution Regarding Forward-Looking Statements.”
 
The company will announce at a later date when it intends to issue a press release with respect to the finalized financial results for the fiscal fourth quarter and full year ending May 31, 2015. At such time, the company will also file its annual report on Form 10-K which will include audited consolidated financial statements, as at and for the years ended May 31, 2015 and 2014, together with the notes thereto and management’s discussion and analysis of financial condition and results of operations of the company for the three and twelve month periods ended May 31, 2015.