VAN NUYS, CA (BRAIN)—Sales in Easton Bell Sports’ Action Segment, which includes its cycling division, fell 2.3 percent in the second quarter of 2009 as OEM cycling component purchases declined due to soft demand for high-end bikes, according to Paul Harrington, president and chief executive officer of Easton Bell.
Harrington spoke of the company’s second quarter and half-year performance during a conference call with financial analysts on Tuesday afternoon.
Sales in Action Sports were down from $88.5 million in second quarter of 2008 to $86.4 million for the same period this year. For the first six months of the year, sales fell from $169.8 million in 2008 to $163.5 million this year.
Harrington said bicycle helmet and accessories sales were flat, although sales of Giro’s new cycling gloves were up. On the mass-market side, sales through Bell’s Trufit program were up 20 percent, which helped offset sluggish sales of high-end Giro helmets on the specialty side, Harrington said.
Action Sports includes Easton cycling components, Bell helmets and accessories, Giro helmets and accessories and snowsports, powersports and fitness equipment.
The company also has a Team Sports category, which includes baseball, softball and ice hockey equipment.
Companywide, Easton Bell’s sales fell 15.2 percent in the second quarter and 7.6 percent for the first six months of the year.
As of the end of the second quarter—July 4—Easton Bell was not in compliance with the leverage ratio test as set forth in its senior secured credit facility. However, the noncompliance was resolved last Friday with a cash equity infusion of $12.9 million by existing investors and members of management. As a result, the company is currently in compliance with all of its debt covenants.
“Our results for the quarter reflect the challenging retail environment, consumers cutting back spending and municipalities selectively reducing purchases. We benefited during the quarter from our ongoing focus on cash management, including lowering inventories, which allowed us to reduce our net debt year over year,” Harrington said. “The planned cash equity infusion by our shareholders is an important endorsement of our long-term growth potential and strength of our brand portfolio.”
For more details on Easton Bell, including several new helmets and new mountain bike wheels launched in the specialty market this year, read the October issue of Bicycle Retailer and Industry News.
—Nicole Formosa
