Gregory sales boosts Black Diamond Q1 revenue, profit; company "far along" in acquisition deal

Black Diamond reported a 19 percent jump in first-quarter revenue and a doubling of profit as it saws gains from its Gregory brand and climbing gear offset weak winter equipment and accessory sales. CEO Peter Metcalf tells investors that negotiations are "far along" to acquire another outdoor brand. Plus, find out Metcalf's strategy for winter goods heading into fall 2012.

A 25 percent boost in Gregory Mountain Product sales helped Black Diamond shake off weak results from its ski equipment, mittens and gloves to close out the winter on a high note.

The Salt Lake City parent company of its namesake brand and Gregory reported its first-quarter 2012 sales up 19 percent to $46.4 million versus $39.1 million a year ago. Black Diamond’s net income doubled to $2.6 million, or 10 cents per diluted share, versus a net income of $1.2 million, or 5 cents per diluted share, a year ago.

Black Diamond CEO Peter Metcalf said the positive results “demonstrates the resilience and multi-season balance of our product line,” along with its successful integration of Gregory. Climbing, lighting, poles, and packs did well with the early spring warm weather, he said on the company’s conference call Monday.

As for the softer sales in winter items, Metcalf said the company expects demand to remain weak initially in fall 2012 as retailers work through inventory and are psychologically downbeat after last year’s weak winter.

“So what we are attempting to do here is go a little bit longer than we normally would in refreshing some of these categories,” Metcalf told an investor on the conference call concerned about some of the company’s higher inventories. “If fall ’12 turns out to be just a normal winter, as opposed to one of the worst winters in a century, we believe the ASAP business will accelerate and we want to be in a position, within a reasonable level, to meet that … into the next season, into fall ’13 if need-be without discounting.”

Metcalf said the company continues to invest in an operational platform to support “an anticipated much larger and more mature organization,” including the company’s plans to grow through acquisitions and expand into apparel for fall 2013.

Both initiatives remain on track, Metcalf said.

“The SKUs for the [apparel] collection have been established and we’ve already initiated work on our spring and fall 2014 designs,” he said. “We also remain committed to our acquisition strategy and are enthusiastic about our growing pipeline of opportunities.”

Metcalf outlined the parameters of possible acquisitions to SNEWS in February, and he told investors Monday that negotiations with one company are “far along,” in addition to talks at various stages with other companies.

As of March 31, Black Diamond reported $41.6 million in cash and cash equivalents, along with a $35 million in available credit.

–David Clucas