Bauer Performance Sports Announces Record Second Quarter and

Bauer Performance Sports Announces Record Second Quarter and Six
Month Results 
Revenues increase by 9% in the quarter and Q2 Adjusted EPS up 43% 
TORONTO, ONTARIO -- (Marketwire) -- 01/09/13 -- Bauer Performance
Sports Ltd. (TSX:BAU) ("BAUER" or the "Company") today announced
financial results for the second quarter and six months of Fiscal
2013 ended November 30, 2012. All figures are expressed in U.S.
dollars. 


 
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                                Three months            Six months          
US$ 000,000's except per share     ended                  ended             
 data and %                     November 30            November 30          
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                                             Change                 Change  
                                                vs.                    vs.  
                                              prior                  prior  
                                 2012   2011   year     2012   2011   year  
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Revenue                        $109.6 $100.3      9%  $257.9 $242.7      6% 
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Gross Profit                     38.4   33.6     14%    98.7   93.1      6% 
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Adjusted Gross Profit(i)         39.7   34.2     16%   100.7   94.4      7% 
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Adjusted EBITDA(i)               14.2    9.3     53%    52.1   44.2     18% 
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Net Income (loss)                 6.1    8.2    (26)%   22.1   30.9    (29)%
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Adjusted Net Income(i)            7.3    4.4     64%    30.2   25.3     19% 
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Earnings per share (diluted)   $ 0.16 $ 0.26    (38)% $ 0.61 $ 0.98    (38)%
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Adjusted EPS(i)                $ 0.20 $ 0.14     43%  $ 0.84 $ 0.80      5% 
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(i)Note: Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income and    
Adjusted EPS are non-IFRS measures. For the relevant definitions and        
reconciliations to reported results, please see "Non-IFRS Measures" at the  
end of this news release and in the Company's MD&A for the second quarter.  

 
Revenues grew by 6% (9% excluding the impact of foreign exchange) to
$257.9 million in the first half of Fiscal 2013 led by strong
performance in several ice hockey equipment categories driven by
recent new product launches. The new BAUER RE-AKT helmet helped drive
16% growth in helmets, while the success of the new BAUER NEXUS
product line helped drive 11% growth in under-protective category
revenues. Partially offsetting these gains was a 7% decline in goalie
revenues due to the earlier launch of the new goalie product line in
the 2012 Back-to-Hockey season as compared to the prior year.
Lacrosse revenues increased significantly driven by the addition of
sales from the recently acquired Cascade Helmets Holdings, Inc.
("Cascade") and apparel revenues grew by 27% driven by BAUER's new
line of performance apparel and bags. Overall revenues from the North
American market grew by 6% in the six month period ended November 30,
2012 compared to the same period last year, while sales outside North
America grew by 8% in the same period. Second quarter revenues grew
by 9% (10% excluding the impact of foreign exchange) due to the
addition of Cascade and Inaria International, Inc. ("Inaria")
revenues and continued growth in ice hockey equipment and related
apparel categories, partially offset by lower sales to NHL teams as a
result of the NHL lockout. Notably, apparel revenues were up 50% in
the quarter (43% excluding the impact of Inaria). Revenues from the
North American market were up 11% while sales outside of North
America were up 5% in the second quarter. 
Adjusted Gross Profit in the six month period ended November 30, 2012
increased by $6.3 million, or 7%, to $100.7 million. Adjusted Gross
Profit as a percentage of revenues increased slightly to 39.0% for
the six month period ended November 30, 2012 compared to 38.9% in the
six month period ended November 30, 2011. During the second quarter
of Fiscal 2013, Adjusted Gross Profit increased by $5.5 million, or
16%, to $39.7 million and Adjusted Gross Profit as a percentage of
revenues increased to 36.2% from 34.1%. The increase in Adjusted
Gross Profit as a percentage of revenues for the quarter and first
half of Fiscal 2013 was driven by higher margins on ice hockey
equipment, the impact of the Cascade acquisition and favourable other
cost of goods sold, partially offset by the impact of higher product
costs and unfavourable foreign exchange. 
Year-to-date Adjusted Net Income increased by $4.9 million, or 19%,
to $30.2 million and second quarter Adjusted Net Income increased by
$2.9 million, or 64%, to $7.3 million. The increase in Adjusted Net
Income was driven by the increase in Adjusted Gross Profit, continued
benefits of operating leverage in selling, general and administrative
expenses, and a favourable impact from the Company's hedging
activities. 
Adjusted EPS increased 5%, or $0.04, to $0.84 for the six months
ended November 30, 2012 compared to the same period last year and
second quarter Adjusted EPS increased 43%, or $0.06, to $0.20. Fiscal
2013 Adjusted EPS includes an unfavourable impact from the higher
number of common shares outstanding as a result of the share offering
in June to fund the Cascade Acquisition making our Q1 and YTD Fiscal
2013 Adjusted EPS figures not directly comparable to the prior year.
Excluding the impact of the Cascade Acquisition, YTD Adjusted EPS
would have been approximately $0.88 or a 10% increase over the prior
year. For the full fiscal year the Company currently expects the
Cascade acquisition to be accretive to Adjusted EPS, however due to
the seasonality of Cascade's business - a significant amount of
Cascade's income is generated during the second and third fiscal
quarters of the BAUER's fiscal year - the income from Cascade in the
first fiscal half does not yet offset the dilutive impact of the
higher number of common shares outstanding. 
"BAUER continues to deliver strong results in hockey, lacrosse and
our related apparel businesses," said Kevin Davis, President and
Chief Executive Officer, Bauer Performance Sports. "Our newly
launched hockey equipment products and our further investment into
both apparel and lacrosse are key ingredients to our current and
future success. We expect that these investments, combined with our
comprehensive marketing strategy and recently launched brand building
initiatives, will continue to fuel our exceptional performance. Like
the millions of hockey fans around the world, we are excited that the
National Hockey League is returning to action. Bauer Hockey maintains
an important and valuable relationship with both the NHL and its
players, and the recent agreement is welcome news for everyone
involved." 
The Company continued to deleverage as its leverage ratio, defined as
net indebtedness divided by EBITDA, was 2.69 as of November 30, 2012
compared to 2.73 as of November 30, 2011. As of November 30, 2012,
BAUER had working capital of $215.1 million compared to working
capital of $179.6 million as of November 30, 2011, an increase of
20%. This increase was driven by the acquisitions of Cascade and
Inaria, and sales growth of 18%, 4%, and 9% in the three most recent
quarters (which include the entire "Back to Hockey" 2012 booking
season). 
Other Recent Highlights 


 
--  During the week of October 1, 2012 the Company held its annual BAUER
    World event, where leading retailers from around the world were able to
    see and experience the newest BAUER gear, including BAUER's latest VAPOR
    line of skates, new team apparel and a new line of goalie equipment. In
    addition to unveiling new products, the Company also launched several
    key corporate initiatives including: 
    
    --  An objective to grow hockey participation by 1 million new players
        by 2022 through a unique multi-year program. Partnering with Hockey
        Canada, USA Hockey, and led by a cross-functional team, including
        Mark Messier, who joined forces with BAUER as a result of the
        Company's recent acquisition of Cascade, the initiative will take a
        leadership role in both growing participation and increasing player
        safety. 
        
    --  The unveiling of the "OWN THE MOMENT" brand campaign, a fully
        integrated global initiative that focuses on the numerous moments in
        hockey that make the sport truly unique and special. The campaign is
        the first BAUER brand campaign in more than 15 years. 
        
--  On October 16, 2012 BAUER closed the acquisition of substantially all of
    the assets of Inaria, a global provider of team sports and active
    apparel for Cdn$7 million in cash. The acquisition marks the Company's
    entrance into the growing jersey market and provides BAUER with full
    team apparel capabilities, including the design, development and
    manufacturing of uniforms for ice hockey, roller hockey, lacrosse,
    soccer and other team sports, enabling the Company to become a "one-
    stop-shop" for its global retail partners' equipment and team apparel
    needs, for both ice hockey and lacrosse. 
    
--  On October 17, 2012 funds managed by Kohlberg Management VI, LLC (the
    "Kohlberg Funds"), BAUER's largest shareholder, completed the sale of an
    aggregate of 4,140,000 common shares of the Company (the "Offering") at
    a price of Cdn$9.90 per share. A syndicate of underwriters completed the
    Offering on a bought deal basis. BAUER did not receive any proceeds from
    the Offering. Immediately following closing, the Kohlberg Funds owned
    the equivalent of 41.0% of the issued and outstanding common shares on a
    non-diluted basis (approximately 33.8% on a fully diluted basis). 

 
Adjusted Gross Profit, EBITDA, Adjusted EBITDA, Adjusted Net
Income/Loss and Adjusted EPS are non-IFRS measures. For the relevant
definitions and reconciliations to reported results, please see
"Non-IFRS Measures" noted below and in the Company's MD&A for the
most recent period. Working capital as used above includes trade and
other receivables, inventories, and trade and other payables.  
The Company's unaudited condensed consolidated interim financial
statements and MD&A for the period ended November 30, 2012 have been
filed with applicable regulatory authorities and are available on
SEDAR at www.sedar.com and on the Company's website.  
CONFERENCE CALL AND WEBCAST  
BAUER will hold its conference call to discuss its financial and
operating results on January 10, 2013 at 10:00 am ET. Kevin Davis,
President and CEO and Amir Rosenthal, Chief Financial Officer will
host the call. Following management's presentation, there will be a
question and answer session for analysts. 
To access the call, please dial 1-888-437-9445 or 1-719-325-2429. The
conference call will also be accessible via webcast at
www.bauerperformancesports.com.  
A replay of the conference call will be available from 1:00 p.m. ET
on January 10, 2013, until midnight ET, January 24, 2013. To access
the replay, dial 1-877-870-5176 or 1-858-384-5517, followed by
passcode 6094323.  
To participate in the live audio webcast, please visit the Company's
website at www.bauerperformancesports.com. The webcast will also be
archived on the Company's website.  
ABOUT BAUER PERFORMANCE SPORTS LTD. 
Bauer Performance Sports Ltd. (TSX:BAU) is a leading developer and
manufacturer of ice hockey, roller hockey, and lacrosse equipment as
well as related apparel. The company has the most recognized and
strongest brand in the ice hockey equipment industry, and holds the
top market share position in both ice and roller hockey. Its products
are marketed under the BAUER Hockey, Mission Roller Hockey, Maverik
Lacrosse, Cascade, and Inaria brand names and are distributed by
sales representatives and independent distributors throughout the
world. Bauer Performance Sports is focused on building its leadership
position and growing market share in all product categories through
continued innovation at every level. For more information, visit
www.bauerperformancesports.com.  
NON-IFRS MEASURES  
Adjusted Gross Profit, EBITDA, Adjusted EBITDA, Adjusted Net Income,
and Adjusted EPS are non-IFRS measures. Adjusted Gross Profit is
defined as gross profit plus the following expenses which are part of
cost of goods sold: (i) amortization and depreciation of intangible
assets, (ii) non-cash charges to cost of goods sold resulting from
fair market value adjustments to inventory as a result of business
acquisitions, and (iii) reserves established to dispose of obsolete
inventory acquired from acquisitions. Adjusted EBITDA is defined as
EBITDA (net income adjusted for income tax expense, depreciation and
amortization, losses related to amendments to the Company's credit
facility, gain or loss on disposal of fixed assets, net interest
expense, deferred financing fees, unrealized gains/losses on
derivative instruments, and realized and unrealized gains/losses
related to foreign exchange revaluation) before restructuring and
other one-time or non-cash charges associated with acquisitions,
pre-IPO sponsor fees, costs related to share offerings, as well as
share-based payment expense. Adjusted Net Income is defined as net
income adjusted for unrealized gains/losses related to derivative
instruments and unrealized gains/losses related to foreign exchange
revaluation, one-time or non-cash charges associated with
acquisitions, amortization of acquisition related intangible assets
for acquisitions since Fiscal 2012, costs related to share offerings,
share-based compensation expense, and other non-cash or one-time
items. Adjusted EPS is defined as Adjusted Net Income/Loss divided by
the weighted average diluted shares outstanding. 
Reconciliations of these non-IFRS measures to the relevant reported
results can be found in the Company's MD&A for the second quarter of
Fiscal 2013. 
CAUTION REGARDING FORWARD-LOOKING STATEMENTS  
This press release includes forward-looking statements within the
meaning of applicable securities laws. Forward-looking statements
relate to analyses and other information that are based on forecasts
of future results and estimates of amounts not yet determinable. The
words "may", "will", "would", "should", "could", "expects", "plans",
"intends", "trends", "indications", "anticipates", "believes",
"estimates", "predicts", "likely" or "potential" or the negative or
other variations of these words or other comparable words or phrases,
are intended to identify forward-looking statements.  
Forward-looking statements, by their nature, are based on
assumptions, including those described herein and are subject to
important risks and uncertainties. Many factors could cause our
actual results to differ materially from those expressed or implied
by the forward-looking statements, including, without limitation, the
following factors: inability to introduce new and innovative
products, intense competition in the equipment and apparel
industries, inability to introduce technical innovation, inability to
protect worldwide intellectual property rights, inability to
successfully integrate recent acquisitions, decrease in ice hockey,
roller hockey and/or lacrosse participation rates, adverse publicity,
reduction in popularity of the NHL and other professional leagues of
sports in which our products are used, inability to maintain and
enhance brands, reliance on third party suppliers and manufacturers,
disruption of distribution chain or loss of significant customers or
suppliers, cost of raw materials and shipping freight and other cost
pressures, a change in the mix or timing of orders placed by
customers, inability to forecast demand for products, inventory
shrinkage or excess inventory, product liability claims and product
recalls, compliance with standards of testing and athletic governing
bodies, departure of senior executives or other key personnel,
litigation, employment or union related matters, inability to
translate order bookings into realized sales, fluctuations in the
value of certain foreign currencies in relation to the U.S. dollar,
inability to manage foreign exchange derivative instruments, general
economic and market conditions, changes in consumer preferences and
the difficulty in anticipating or forecasting those changes, natural
disasters, as well as the factors identified in the "Risk Factors"
section of BAUER's Annual Information Form dated August 29, 2012
available on SEDAR at www.sedar.com.  
Furthermore, unless otherwise stated, the forward-looking statements
contained in this press release are made as of the date of this news
release, and we have no intention and undertake no obligation to
update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise, except as required by
law. 
Contacts:
INVESTOR INQUIRIES
Bauer Performance Sports Ltd.
Chief Financial Officer
603-610-5802
investors@bauerperformancesports.com 
Spinnaker Capital Markets Inc.
Kevin O'Connor / Ali Mahdavi
416-962-3300
ko@spinnakercmi.com 
MEDIA INQUIRIES
Tory Mazzola
Global Communications Manager
603-610-5908
media@bauer.com
 
 
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