Black Diamond has disclosed that it is targeting fall of 2013 as a possible launch time for an outdoor technical apparel brand, expressing the view that both apparel and footwear represent significant long term opportunities to extend the Black Diamond brand.
CEO Peter Metcalf commented, “The next few years hold an extraordinary opportunity for our brand and the next logical step is apparel. We believe the market demand for Black Diamond apparel is substantial and, if executed well, that this category can become equal to or larger than the balance of our business within 5 years of launch."
Black Diamond also announced that, in addition to its FY2011 budget, it has also recently completed a Baseline Strategic Plan for FY2011–FY2015. The Baseline Plan envisions 12.5 percent compounded annual sales growth solely from existing categories, and calls for significant operating expense investments in areas such as a new distribution facility, visual merchandising, direct-to-consumer sales and marketing, product development, and infrastructure.
Metcalf commented, “With the integrations behind us, we are extremely focused on growth. We believe we have a powerful opportunity to both grow the existing business organically and to augment that growth substantially with internally funded and developed initiatives and acquisitions. We believe that we can achieve these rates of growth and realize expanding profitability in years 2013 and beyond without any additional capital.”
The company expects FY2011 sales to range between $135–$140 million, which does not give effect to new category launches or the impact from possible strategic acquisitions. The company further noted gross margins are expected to range between 36 and 39 percent during FY 2011. They also expect, despite the planned near-term increase in platform capabilities, to remain profitable, cash flow positive, and self-funding with respect to working capital needs.
Black Diamond has also released preliminary sales data for the fourth quarter and full year ended December 31, 2010. While exact earnings will not be announced until the audit of the 2010 results is completed, Black Diamond expects to report fourth quarter consolidated sales of approximately $34 million and full-year pro forma sales of approximately $125 million. Pro forma sales include both Black Diamond Equipment and Gregory Mountain Products data for periods prior to their May 28, 2010 acquisition by Black Diamond (known at the time as Clarus Corp.). A reconciliation of consolidated sales to pro forma sales is expected to be reported for the three and twelve months ended December 31, 2010 compared to the same periods in 2009.