SALT LAKE CITY (BRAIN) — Outdoor supplier Black Diamond, Inc., which owns the POC brand, generated record sales in its second quarter, which ended June 30. The company said the growth was driven by sales of Black Diamond apparel and "the continued rollout of POC's cycling products, including its new spring 2015 'Race Day' line."
Sales were $35.1 million in the quarter, a 7 percent increase in constant currency. Gross margin increased 80 basis points to 36.7 percent (up 360 basis points in constant currency).
In a conference call with investors, Peter Metcalf, the CEO of Black Diamond, said POC was the company's fastest-growing division and that Race Day sales and re-orders had been strong. He also said the POC's consumer-direct sales were strong, especially for its bicycle-related products.
POC's road product sales have more than doubled since its introduction last year, Metcalf said.
Metcalf also announced that POC was launching another road cycling clothing line for Spring 2016, called Gran Fondo, joining POC's AVIP and Race Day road collections.
He said the Gran Fondo line will offer "a more approachable fit that appeals to the cycling enthusiast as opposed to an elite cycling athlete."
"We believe the time for a more universal line is now," he told investors on the call.
The company does not break out sales figures for its three major divisions, Black Diamond, POC and PIEPS.
Metcalf noted that Black Diamond has hired outside firms to analyze strategic options that include selling the entire company or parts of it. He said the strategic review process would be completed by the end of the company's third quarter.
"At this point it's too early to discuss details other than to say that one possible outcome is the sale of some company assets," he said. He said the company would not comment further on the strategic review and he did not take questions on the call.
"Our 7 percent currency-neutral sales growth, despite continued headwinds in parts of Europe and Asia, and 360 basis point currency-neutral gross margin expansion demonstrates that our initiatives remain on track. In addition, we exited the quarter with $44.3 million in cash and marketable securities, generating $4.2 million in free cash flow in the first half of 2015.
"Today's results are being driven by POC's successful road bike product line and the addition of women's sportswear for spring '15, making for a more complete seasonal collection of Black Diamond apparel. Our Black Diamond equipment business also continues to gain market share, driven by double-digit sales growth both in the quarter and year-to-date in North America — our largest market. We expect momentum in this market along with our fast-growing POC brand and solid double-digit gains in both POC and Black Diamond's direct-to-consumer channels to drive record results in 2015."
