The recent acquisition of Combat Sports and the Easton baseball and softball business led Performance Sports Group to post a 30 percent sales increase to US$112.9 million for the fourth quarter ended May 31, with growth of 35 percent on a currency-neutral basis. The company, formerly called Bauer Performance Sports, claims to be the largest supplier of hockey products worldwide. It owns the Bauer, Mission, Maverik, Cascade and Inaria brands.
According to the management, the global hockey business is doing better than last year in terms of inventories. Even without the new acquisitions, the company raised organic sales by 15 percent in the quarter, thanks to strong growth in ice hockey equipment and products for lacrosse. Sales jumped by 41 percent in the protective and sticks segment. The launch of hockey apparel and the Nexus line of hockey sticks contributed to the increase. Sales of hockey team apparel and uniforms rose by 37 percent.
Gross margins improved in the hockey category, but overall, they fell by 2.6 percentage points to 38.8 percent on an adjusted basis due to currencies and the lower profitability of Easton's products. Adjusted for extraordinary items, earnings before amortization (Ebitda) rose by 52 percent to $21.3 million in the quarter. The company reported net income of only $270,000 for the period, down from $6,147,000 a year ago, but the adjusted net income went up by 12 percent to $10.8 million.
For the full financial year, PSG reported net income of $20,087,000 against $25,332,000 the year before, but on an adjusted basis it grew to $37.3 million from $35.7 million. Adjusted Ebitda rose by 11 percent to $69.0 million and revenues went up by 12 percent to $446.2 million, with organic growth of 6 percent. The gross margin was off to 36.9 percent from 38.3 percent.
The Easton purchase pushed up the total debt to $523.1 million at the end of the financial year, compared with $171.1 million a year earlier. The ratio of net debt to Ebitda stood at 4.78 times for the full year, up from 2.70 times in the previous year. Proceeds of $126 million from the secondary offering made on June 25 allowed the company to repay a large portion of its term loan, reducing the leverage ratio to 3.66 times.
