Apparel net revenues up by 25% in 9-month period at Bauer

14 Apr '11

4 min read

Bauer Performance Sports Ltd announced financial results for the third quarter and nine months ended February 28, 2011. This is Bauer's first reporting period since the Company closed its Initial Public Offering on March 10, 2011. In both fiscal periods, Bauer has achieved strong financial results including:

Nine-Month Period Ending February 28, 2011

• Net revenues increased 21% to $237.8 million, up from $197.2 million in 2010.
• Gross Profit increased by 38% to $88.1 million (37% of net revenues) compared to $63.8 million (32% of net revenues) last year.
• Adjusted EBITDA grew by 48% to $33.3 million compared to $22.5 million during the same period in 2010.

Third Quarter Ending February 28, 2011

• Net revenues increased 47% to $48.4 million from $33.0 million in the same period in the prior year.
• Gross profit rose 96% to $15.7 million (32% of net revenues) compared to $8.0 million (24% of net revenues) in the third quarter of 2010.
• Adjusted EBITDA improved 36% to a loss of $2.8 million compared to a loss of $4.4 million during the third quarter of 2010.

"Our expanded product line combined with unique marketing initiatives has created strong consumer demand and increased retailer confidence in our entire brand portfolio," said Kevin Davis, President and Chief Executive Officer. "The strong financial results and growth in our order file for the upcoming season demonstrate that we continue to grow market share across all categories, in all regions."

In addition to Bauer's strong third quarter and nine-month results, the Company also announced that booking orders for its 2011 "Back to Hockey" season (April-September 2011) increased $43.2 million to $178.4 million, or approximately 32% over the 2010 "Back to Hockey" season.

Bauer's net revenues are comprised of booking, repeat and other orders. Although booking orders provide the Company some visibility into its future net revenues for the season, there may not be a direct relationship between the change in booking orders year over year and the anticipated total net revenues change for that season, due to several factors including the potential impact booking orders have on the amount and timing of future repeat orders, for which the Company has little visibility. For a more detailed discussion on Bauer's booking and repeat orders, please see the Outlook section of the Company's third quarter MD&A, which will be available on SEDAR at www.sedar.com.

Apparel net revenues increased by 25% in the nine-month period and 22% in the third quarter following the introduction of Bauer's new protective apparel line as well as increased sales of team apparel. Also contributing to net revenue growth in both periods are net revenues for Maverik lacrosse equipment and related apparel that were not included in our fiscal 2010 net revenues.

Adjusted EBITDA for the nine-month period ending February 28, 2011 increased 48% to $33.3 million. Net Income grew 92% to $2.5 million, including an unrealized loss on derivatives (forward contracts) of $13.2 million. Without the unrealized loss on foreign exchange contracts, net income would have been $11.2 million compared to $1.1 million in the prior period.

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