Black Diamond Reports Second Quarter 2013 Results

Black Diamond Reports Second Quarter 2013 Results

- Q2 Sales Up 22% to a Record $38.9 Million; Gross Margin Up 120 Basis Points
                                  to 40.3% -

 - Non-Cash Working Capital Reduced $2.5 Million and Total Debt Reduced $3.7
                       Million from December 31, 2012 -

- Lowering Full Year 2013 Sales Expectations to $205 Million - $210 Million -

           - Black Diamond Apparel Expected to Ship in Mid August -

SALT LAKE CITY, Aug. 5, 2013 (GLOBE NEWSWIRE) -- Black Diamond, Inc.
(Nasdaq:BDE) (the "Company" or "Black Diamond"), a global leading supplier of
innovative, high performance, outdoor and action sport equipment as well as
aspirational active outdoor lifestyle products, reported financial results for
the second quarter ended June 30, 2013.

Second Quarter 2013 Financial Highlights vs. Same Year-Ago Quarter

  *Total sales up 22% to $38.9 million.
  *Gross margin improved 120 basis points to 40.3%.
  *Adjusted net loss before non-cash items of $0.2 million, or $(0.01) per
    diluted share, compared to a loss of $0.3 million, or $(0.01) per diluted
    share.

Second Quarter 2013 Financial Results

Total sales in the second quarter of 2013 increased 22% to $38.9 million
compared to $31.9 million in the second quarter of 2012. The increase was
attributed to the addition of POC Sweden AB (POC), which was acquired in the
second half of 2012, a number of new and existing products sold during the
period, as well as the expected increase in Gregory's sales in Japan due to
the transition of the Japanese distribution assets from Kabushiki Kaisha A&F.

Gross margin in the second quarter of 2013 was 40.3% compared to 39.1% in the
year-ago quarter. The 120 basis pointincrease was primarily due to a
favorable mix in higher margin products and channel distribution.

Net loss in the second quarter of 2013 was $2.3 million, or $(0.07) per
diluted share, compared to net loss of $1.9 million, or $(0.06) per diluted
share, in the year-ago quarter. Net loss in the second quarter of 2013
included $2.0 million of non-cash items and $0.1 million of merger and
integration costs, compared to $0.5 million of non-cash items and $1.1 million
of transaction costs in the year-ago quarter. Excluding these items, adjusted
net loss before non-cash items in the second quarter of 2013 was $0.2 million,
or $(0.01) per diluted share, compared to a loss of $0.3 million, or $(0.01)
per diluted share, in the second quarter of 2012.

At June 30, 2013, cash totaled $2.1 million compared to $5.1 million at
December 31, 2012. Non-cash working capital was $70.7 million at June 30, 2013
compared to $73.2 million at December 31, 2012. Total debt was $36.8 million
at June 30, 2013, which included $8.4 million outstanding on the Company's
$30.0 million line of credit, leaving $21.6 million available. This compares
to total debt of $40.5 million at December 31, 2012.

Management Commentary

"The first half of the year represents our spring/summer product season and
compared to last year, sales during the first half of 2013 were up 15% to
$89.9 million, in-line with our long-term organic growth target," said Peter
Metcalf, president and CEO of Black Diamond. "In addition, we achieved
double-digit growth from all of our brands during the second quarter and
attribute these record sales to our diverse collection of new and existing
active outdoor performance products, global distribution and increased focus
on sales and marketing.

"The industry was not without its challenges during the first half of 2013,
largely due to an extreme, unseasonably cool, wet spring both inNorth America
and especially in Europe. Following two consecutivechallenging winter
seasons, industry purchasing trends are continuing to evolve toward a model
that we believe is intentionally shifting more inventory risk to manufacturers
anddistributors, and we are adjusting our strategy to reflect these dynamics.
In addition, during our first quarter 2013 earnings call, wedescribed a
global retail marketplace that was more reticent to make order commitments on
the scale they have in the past. While we have modestly adjusted our second
half revenue outlook to reflect these near-termdynamics, we remain confident
in our belief that our evolving and innovative product portfoliowill
continueto generate growing consumer demand.

"As we now enter our fall/winter season," concluded Metcalf, "we will continue
to make investments in our strategic initiatives, such as our fall 2013 launch
of Black Diamond apparel, which is expected to ship in mid-August, the
concluding integration of POC and PIEPS, and the spring 2014 launch of POC's
road collection. We look forward to 2014, where we anticipate continued
organic sales growth from innovative new products and the benefit of scale,
integration and operating leverage in our business."

2013 Outlook Update

Black Diamond has revised its fiscal year 2013 guidance and now expects total
sales to range between $205 million and $210 million compared to the
previously estimated range of $216 million and $221 million. This revised
range implies year-over-year sales growth of between 17% and 19% for the full
year 2013. The Company also now expects gross margin for fiscal year 2013 to
range between 38.5% and 40.0% compared to the previously estimated range of
40.0% and 41.0%. Both revised sales and gross margin guidance incorporate the
expected impacts of year-to-date exchange rate fluctuations, but are exclusive
of future exchange rate fluctuations. In 2014, the Company still expects to
increase sales 20% with accelerating profitability.

Net Operating Loss (NOL)

The Company estimates that it has available NOL carryforwards for U.S. federal
income tax purposes of approximately $212.3 million. The Company's common
stock is subject to a Rights Agreement dated February 7, 2008, intended to
assist in limiting the number of 5% or more owners and thus reduce the risk of
a possible "change of ownership" under Section 382 of the Code. Any such
"change of ownership" under these rules would limit or eliminate the ability
of the Company to use its existing NOLs for federal income tax purposes. There
is no guaranty, however, that the Rights Agreement will achieve the objective
of preserving the value of the NOLs.

Conference Call

Black Diamond will hold a conference call today at 5:00 p.m. Eastern time to
discuss its second quarter 2013 results.

The Company's President and CEO Peter Metcalf and Interim CFO and Vice
President of Finance Aaron Kuehne will host the conference call, followed by a
question and answer period.

Date: Monday, August 5, 2013
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Dial-in number: 1-877-941-2068
International number: 1-480-629-9712
Conference ID: 4630171

Please call the conference telephone number 5-10 minutes prior to the start
time. An operator will register your name and organization. If you have any
difficulty connecting with the conference call, please contact Liolios Group
at 1-949-574-3860.

The conference call will be broadcast live and available for replay at
http://public.viavid.com/index.php?id=105351 and via the investor relations
section at www.blackdiamond-inc.com.

A replay of the conference call will be available after 8:00 p.m. Eastern time
on the same day through August 19, 2013.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 4630171

About Black Diamond, Inc.

Black Diamond, Inc. is a global leader in the design, manufacturing and
marketing of innovative active outdoor performance products for climbing,
mountaineering, backpacking, skiing, cycling and other outdoor recreation
activities for a wide range of year-round use. The Company's principal brands,
Black Diamond®, Gregory™, POC™ and PIEPS™, are iconic in the active outdoor
industry and linked intrinsically with the modern history of these sports.
Black Diamond is synonymous with performance, innovation, durability and
safety that the outdoor and action sport communities rely on and embrace in
their active lifestyle. Headquartered in Salt Lake City at the base of the
Wasatch Mountains, the Company's products are created and tested on some of
the best alpine peaks, slopes, crags, roads and trails in the world. These
close connections to the Black Diamond lifestyle enhance the authenticity of
the Company's brands, inspire product innovation and strengthen customer
loyalty. The Company's products are sold by leading specialty retailers in the
U.S. and 50 countries around the world. For additional information, please
visit the Company's websites at www.blackdiamond-inc.com,
www.blackdiamondequipment.com, www.gregorypacks.com, www.pocsports.com or
www.pieps.com.

Use of Non-GAAP Measures

The Company reports its financial results in accordance with U.S. generally
accepted accounting principles ("GAAP"). This press release contains the
non-GAAP measures: (i) net (loss) income before non-cash items and related
(loss) earnings per diluted share, and adjusted net (loss) income before
non-cash items and related (loss) earnings per diluted share, and (ii)
earnings before interest, taxes, other income, depreciation and amortization
("EBITDA"), and adjusted EBITDA. The Company also believes that the
presentation of certain non-GAAP measures, i.e.: (i) net (loss) income before
non-cash items and related (loss) earnings per diluted share, and adjusted net
(loss) income before non-cash items and related (loss) earnings per diluted
share, and (ii) EBITDA and adjusted EBITDA, provide useful information for the
understanding of its ongoing operations and enables investors to focus on
period-over-period operating performance, and thereby enhances the user's
overall understanding of the Company's current financial performance relative
to past performance and provides, to the nearest GAAP measures, a better
baseline for modeling future earnings expectations. Non-GAAP measures are
reconciled to comparable GAAP financial measures in the financial tables
within this press release. The Company cautions that non-GAAP measures should
be considered in addition to, but not as a substitute for, the Company's
reported GAAP results. Additionally, the Company notes that there can be no
assurance that the above referenced non-GAAP financial measures are comparable
to similarly titled financial measures used by other publicly traded
companies.

Forward-Looking Statements

Please note that in this press release we may use words such as "appears,"
"anticipates," "believes," "plans," "expects," "intends," "future," and
similar expressions which constitute forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are made based on our
expectations and beliefs concerning future events impacting the Company and
therefore involve a number of risks and uncertainties. We caution that
forward-looking statements are not guarantees and that actual results could
differ materially from those expressed or implied in the forward-looking
statements. Potential risks and uncertainties that could cause the actual
results of operations or financial condition of the Company to differ
materially from those expressed or implied by forward-looking statements in
this release include, but are not limited to, the overall level of consumer
spending on our products; general economic conditions and other factors
affecting consumer confidence; disruption and volatility in the global capital
and credit markets; the financial strength of the Company's customers; the
Company's ability to implement its growth strategy; the Company's ability to
successfully integrate and grow acquisitions; the Company's exposure to
product liability or product warranty claims and other loss contingencies;
stability of the Company's manufacturing facilities and foreign suppliers; the
Company's ability to protect trademarks and other intellectual property
rights; fluctuations in the price, availability and quality of raw materials
and contracted products; foreign currency fluctuations; our ability to utilize
our net operating loss carryforwards; and legal, regulatory, political and
economic risks in international markets. More information on potential factors
that could affect the Company's financial results is included from time to
time in the Company's public reports filed with the Securities and Exchange
Commission, including the Company's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, and Current Reports on Form 8-K. All forward-looking
statements included in this press release are based upon information available
to the Company as of the date of this press release, and speak only as of the
date hereof. We assume no obligation to update any forward-looking statements
to reflect events or circumstances after the date of this press release.

                                                           
BLACK DIAMOND, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
                                                           
                                              June 30, 2013 December 31, 2012
                                              (Unaudited)   
Assets                                                      
Current assets                                              
Cash                                          $2,054      $5,111
Accounts receivable, less allowance for
doubtful accounts of $580 and $499,            31,302       30,925
respectively
Inventories                                   56,715       60,664
Prepaid and other current assets              4,493        4,846
Income tax receivable                         308          659
Deferred income taxes                         3,006        2,337
Total current assets                          97,878       104,542
                                                           
Property and equipment, net                    17,937       17,508
Definite lived intangible assets, net          36,410       38,100
Indefinite lived intangible assets             50,902       51,462
Goodwill                                       56,907       57,481
Deferred income taxes                          48,594       49,631
Other long-term assets                         2,219        2,062
Total assets                                   $310,847    $320,786
                                                           
Liabilities and Stockholders' Equity                        
Current liabilities                                         
Accounts payable and accrued liabilities      $22,361     $22,178
Current portion of long-term debt            2,804        4,059
Total current liabilities                     25,165       26,237
                                                           
Long-term debt                                33,971       36,429
Deferred income taxes                          6,860        8,114
Other long-term liabilities                    1,961        2,000
Total liabilities                             67,957       72,780
                                                           
Stockholders' Equity                                        
Preferred stock, $.0001 par value; 5,000      --          --
shares authorized; none issued
Common stock, $.0001 par value; 100,000
shares authorized; 31,975 and 31,838 issued    3            3
and 31,900 and 31,763 outstanding
Additional paid in capital                    475,113      473,628
Accumulated deficit                           (236,634)    (231,334)
Treasury stock, at cost                       (2)          (2)
Accumulated other comprehensive income        4,410        5,711
Total stockholders' equity                    242,890      248,006
Total liabilities and stockholders' equity     $310,847    $320,786

                                                 
BLACK DIAMOND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
                                                 
                                    Three Months Ended
                                    June 30, 2013 June 30, 2012
                                                 
Sales                                             
Domestic sales                       $15,485     $15,626
International sales                  23,370       16,289
Total sales                          38,855       31,915
                                                 
Cost of goods sold                   23,201       19,449
Gross profit                         15,654       12,466
                                                 
Operating expenses                                
Selling, general and administrative  18,053       13,319
Merger and integration               83           --
Transaction costs                    --          1,138
                                                 
Total operating expenses             18,136       14,457
                                                 
Operating loss                       (2,482)      (1,991)
                                                 
Other (expense) income                            
Interest expense, net                (834)        (582)
Other, net                           303          (195)
                                                 
Total other expense, net             (531)        (777)
                                                 
Loss before income tax               (3,013)      (2,768)
Income tax benefit                   (745)        (860)
Net loss                             $(2,268)    $(1,908)
                                                 
Loss per share:                                   
Basic                                $(0.07)     $(0.06)
Diluted                              (0.07)       (0.06)
                                                 
Weighted average shares outstanding:              
Basic                                31,836        30,814
Diluted                              31,836        30,814

                                                 
BLACK DIAMOND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
                                                 
                                    Six Months Ended
                                    June 30, 2013 June 30, 2012
                                                 
Sales                                             
Domestic sales                       $35,595     $34,441
International sales                  54,260       43,893
Total sales                          89,855       78,334
                                                 
Cost of goods sold                   54,985       47,252
Gross profit                         34,870       31,082
                                                 
Operating expenses                                
Selling, general and administrative  38,931       27,094
Restructuring charge                 175          --
Merger and integration               226          --
Transaction costs                    54           1,250
                                                 
Total operating expenses             39,386       28,344
                                                 
Operating (loss) income              (4,516)      2,738
                                                 
Other (expense) income                            
Interest expense, net                (1,660)      (1,312)
Other, net                           (92)         95
                                                 
Total other expense, net             (1,752)      (1,217)
                                                 
(Loss) income before income tax      (6,268)      1,521
Income tax (benefit) expense         (968)        839
Net (loss) income                    $(5,300)    $682
                                                 
(Loss) earnings per share:                        
Basic                                $(0.17)     $0.02
Diluted                              (0.17)       0.02
                                                 
Weighted average shares outstanding:              
Basic                                31,800        28,246
Diluted                              31,800        28,581

                                                             
RECONCILIATION FROM NET LOSS TO NET LOSS BEFORE NON-CASH ITEMS, ADJUSTED
NET LOSS BEFORE NON-CASH ITEMS AND RELATED LOSS PER DILUTED SHARE
(In thousands, except per share amounts)
                                                             
                                                             
                      Three Months Ended
                                   Per Diluted              Per Diluted
                      June 30, 2013 Share         June 30, 2012 Share
                                                             
                                                             
Net loss               $(2,268)    $(0.07)     $(1,908)    $(0.06)
                                                             
Amortization of        891          0.03         333          0.01
intangibles
Depreciation          1,004        0.03         757          0.02
Accretion of note      286          0.01         254          0.01
discount
Stock-based            272          0.01         384          0.01
compensation
Income tax benefit     (745)        (0.02)       (860)        (0.03)
Cash received (paid)   251          0.01         (353)        (0.01)
for income taxes
                                                             
Net loss before        $(309)      $(0.01)     $(1,393)    $(0.05)
non-cash items
                                                             
Merger and integration 83           0.00         --          --
Transaction costs      --          --          1,138        0.04
State cash taxes on    (2)          (0.00)       (57)         (0.00)
adjustments
AMT cash taxes on      (2)          (0.00)       (22)         (0.00)
adjustments
                                                             
Adjusted net loss      $(230)      $(0.01)     $(334)      $(0.01)
before non-cash items

                                                                  
RECONCILIATION FROM NET (LOSS) INCOME TO NET (LOSS) INCOME BEFORE NON-CASH
ITEMS, ADJUSTED
NET (LOSS) INCOME BEFORE NON-CASH ITEMS AND RELATED (LOSS) EARNINGS PER
DILUTED SHARE
(In thousands, except per share amounts)
                                                                  
                                                                  
                           Six Months Ended
                                        Per Diluted              Per
                                                                      Diluted
                           June 30, 2013 Share         June 30, 2013 Share
                                                                  
                                                                  
Net (loss) income           $(5,300)    $(0.17)     $682        $0.02
                                                                  
Amortization of intangibles 1,791        0.06         665          0.02
Depreciation               2,036        0.06         1,528        0.05
Accretion of note discount  561          0.02         500          0.02
Stock-based compensation    642          0.02         788          0.03
Income tax (benefit)        (968)        (0.03)       839          0.03
expense
Cash received (paid) for    288          0.01         (639)        (0.02)
income taxes
                                                                  
Net (loss) income before    $(950)      $(0.03)     $4,363      $0.15
non-cash items
                                                                  
Restructuring charge        175          0.01         --          --
Merger and integration      226          0.01         --          --
Transaction costs           54           0.00         1,250        0.04
State cash taxes on         (14)         (0.00)       (63)         (0.00)
adjustments
AMT cash taxes on           (9)          (0.00)       (24)         (0.00)
adjustments
                                                                  
Adjusted net (loss) income  $(518)      $(0.02)     $5,526      $0.19
before non-cash items

                                                        
RECONCILIATION FROM NET LOSS TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION,
AND
AMORTIZATION (EBITDA), AND ADJUSTED EBITDA
(In thousands)
                                                        
                                   Three Months Ended
                                   June 30, 2013         June 30, 2012
                                                        
                                                        
Net loss                            $(2,268)            $(1,908)
                                                        
Income tax benefit                  (745)                (860)
Other, net                          (303)                195
Interest expense, net               834                  582
                                                        
Operating loss                      (2,482)              (1,991)
                                                        
Depreciation                       1,004                757
Amortization of intangibles         891                  333
                                                        
EBITDA                              $(587)              $(901)
                                                        
Merger and integration              83                   --
Transaction costs                   --                  1,138
Stock-based compensation            272                  384
                                                        
Adjusted EBITDA                     $(232)              $621

                                                     
RECONCILIATION FROM NET (LOSS) INCOME TO EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION, AND AMORTIZATION (EBITDA), AND ADJUSTED EBITDA
(In thousands)
                                                     
                                  Six Months Ended
                                  June 30, 2013       June 30, 2012
                                                     
                                                     
Net (loss) income                  $(5,300)          $682
                                                     
Income tax (benefit) expense       (968)              839
Other, net                         92                 (95)
Interest expense, net              1,660              1,312
                                                     
Operating (loss) income            (4,516)            2,738
                                                     
Depreciation                      2,036              1,528
Amortization of intangibles        1,791              665
                                                     
EBITDA                             $(689)            $4,931
                                                     
Restructuring charge               175                --
Merger and integration             226                --
Transaction costs                  54                 1,250
Stock-based compensation           642                788
                                                     
Adjusted EBITDA                    $408              $6,969

CONTACT: Company Contact:
         Warren B. Kanders
         Executive Chairman
         Tel 1-203-428-2000
         warren.kanders@bdel.com
         or
         Peter Metcalf
         Chief Executive Officer
         Tel 1-801-278-5552
         peter.metcalf@bdel.com
        
         Investor Relations:
         Liolios Group, Inc.
         Scott Liolios or Cody Slach
         Tel 1-949-574-3860
         BDE@liolios.com

Black Diamond, Inc. Logo
 
Press spacebar to pause and continue. Press esc to stop.