The acquisition of new international distributors led to a 34 percent increase in sales of Bell Powersports helmets at Easton-Bell Sports and pre-season orders for Bell, Giro and Blackburn helmets went up by 41 percent in the third quarter ended Sept. 28. Giro's snow products benefitted from a rebound in the global market.
Nevertheless, the revenues of the group's Action Sports division fell by 7.5 percent to an implied level of around $82.7 million for the quarter because of the company's exit from the low-margin fitness category and lower sales of Giro specialty cycling helmets and Easton cycling products.
In Team Sports, total sales slid by 5.8 percent to an implied $116.7 million in spite of gains of 22 percent in baseball/softball and American football products other than helmets. The main reason was a decline in sales of Easton hockey products due to inflated inventories and higher closeout sales. Together, Easton's cycling and hockey businesses were down by 30 percent.
Overall, the group's net revenues declined by 6.5 percent to $199.4 million in the quarter. Its gross margin dropped by 0.6 percentage points to 35.1 percent. Excluding one-time severance expenses for the former management, adjusted operating earnings before amortization (Ebitda) declined by 20.3 percent to $21.4 million. Adding the severance payments in both years, Ebitda fell by 21.5 percent to $21.1 million. The final result was net loss of $8,686,000 against income of $3,659,000 in the year-ago period.
The largely new management of Easton-Bell is addressing many aspects of the company's business including an overhaul of the company's cost structure that will result, among other things, in the consolidation of distribution centers and the establishment of a new sales force for the Action Sports division.
