Investments and growth bring in more money, but also more expenses, and the latter is especially true at the start.
Black Diamond Inc. (Nasdaq:BDE) reported its revenue up 16 percent to $48.7 million in the third quarter 2012, compared to a year ago, primarily due to additional sales from its July 2012 acquisition of protective gear brand Poc Sports.
But that investment, along with Black Diamond’s agreement to acquire Pieps, and purchase its Gregory business from its Japanese distributor dented the company’s bottom line.
Black Diamond’s third-quarter net income slipped to $700,000, or 2 cents per diluted share, versus a net income of $1 million, or 5 cents per diluted share a year ago. Extra costs included $400,000 in transaction-related costs, $100,000 in restructuring costs and $100,000 in merger and integration costs, officials said.
Black Diamond acquired Poc for a final cost of $44.9 million, it agreed to acquire Pieps for $10.3 million, and buy its Gregory Japanese distribution business for $750,000. The Salt Lake City-based outdoor equipment brand also recently previewed its first apparel line, slated to launch in fall 2013, and announced the opening of its 43,000-square foot, in-house ski manufacturing factory in China.
"For the remainder of 2012, we plan to continue our investment in Black Diamond's operational platform, preparing it to support a much larger and more mature organization,” said CEO Peter Metcalf in a statement with the Nov. 5 earnings release. “These investments represent the culmination of many months of strategic planning and resource commitment which, collectively, we expect to drive significant long-term growth and value for our shareholders.”
At the close of the third quarter, Black Diamond reported $14.3 million in cash, $42.3 million in debt and $12.2 million left available in its line of credit.