Riding High: Black Diamond

Shares of Black Diamond Inc. (BDE) are up nearly 33% year-to-date while the NASDAQ Composite has returned only 18% during the same period.

Black Diamond provides equipments for mountaineering, backpacking, skiing, climbing, and for a wide range of other year-round outdoor recreation activities.

The Company’s products, say, helmets, climbing accessories, trekking poles and protection product line-up, are sold under the brand names Black Diamond and PIEPS in North America, Europe, Asia, and the rest of the world in over 50 countries.
International sales account for major chunk of the Company’s top line. Canada is the single largest customer of the Company’s goods.

In a bid to align its resources with growth, the Company initiated a restructuring plan in 2014, which was completed during the year ended December 31, 2016.

The Company’s sales in 2016 were negatively impacted by unseasonably dry European winter conditions and “Brexit”. However, the growth plan implemented by the Company is creating momentum as can be seen from the first quarter 2017 financial results.

Let’s take a look at some of the key numbers in full years 2015 and 2016 as well as in Q1, 2016 and Q1, 2017.

Metrics FY2015 FY2016
Sales $155.3Mln $148.2Mln
Loss from cont.opns $88.1Mln $9.0Mln
Loss per share $2.70 $0.30
Gross margin 34.9% 29.5%
Operating expenses $92.3Mln $49.6Mln

Metrics Q12016 Q12017
Sales $38.2Mln $41.6Mln
Net loss $4.01Mln $1.46Mln
Loss per share $0.13 $0.05
Gross margin 28.7% 29.6%
Operating expenses $14.8Mln $12.6Mln

The Company ended the first quarter ended March 31, 2017, with cash of $73.6 million.

Recent event:

On June 15, 2017, the Company filed Form S-3 and Form S-4 registration statements with the Securities and Exchange Commission.

Under the Form S-3, Black Diamond may offer, issue and sell, from time to time, in one or more offerings and series, together or separately, shares of its common stock, shares of its preferred stock, debt securities guarantees of debt securities, or warrants up to an aggregate amount of $200 million.

Under the Form S-4, the Company may offer, issue and sell, from time to time, in one or more offerings up to 7.5 million shares of its common stock, in connection with the acquisition of assets, stock or businesses, whether by purchase, merger or any other form of business combination.

Near-term catalyst:

The Company is slated to report Q2, 2017 financial results today (August 7, 2017) after the markets close.

The analysts polled by Thomson Reuters expect the Company to incur a loss…

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