Velocity Outdoor, which includes the Crosman, Benjamin, LaserMax, Ravin, CenterPoint, and King’s Camo brands, saw net sales for 2023 decline $60.0 million, or 25.9 percent, to $172.2 million compared to net sales of $232.2 million in 2022.
Parent company Compass Diversified (CODI) said on a conference call with analysts that the decrease in Velocity Outdoor net sales for the year was primarily due to declining consumer demand in the overall outdoor sporting goods category and retailers reducing the inventory days on hand.
Gross margin for the year was 26.2 percent of net sales, an 80 basis point decline from 27.0 percent in the year ended December 31, 2022. The decrease in gross profit as a percentage of net sales was primarily attributable to customer and product mix.
SG&A expense for the year was $36.3 million, or 21.1 percent of net sales, compared to $33.9 million, or 14.6 percent of net sales, for 2022. The increase in SG&A expense was primarily driven by reduced revenue and marketing investments associated with the King’s acquisition.
Velocity performed an interim impairment test of their goodwill during the quarter ended September 30, 2023 as a result of operating results below forecast amounts used in quantitative impairment testing performed in March 2023. The impairment test resulted in Velocity recording an impairment expense of $31.6 million in the year ended December 31, 2023.
Velocity Outdoor’s segment operating loss for the year ended December 31, 2023, was $32.8 million, a decrease of $51.8 million compared to segment operating income of $19.0 million for the comparable period in 2022.
Fourth quarter 2023 net sales at Velocity Outdoor were down 10.9 percent to $45.8 million, compared to $51.5 million in Q4 2022. Adjusted EBITDA for the Velocity Outdoor business was $3.1 million in Q4, compared to $3.8 million in the prior year’s fourth quarter period.
Image courtesy King’s Camo
