6/19/2013

BDE Black Diamond


This is a continuation from yesterday’s post.

As I stated in the prior post Clarus Corporation (CLRS.PK) was used as a public company shell backed by proven value creators that have built high growth companies via acquisitions. Mr. Kanders and Schiller used the shell with 81 million in cash and 231M NOLs to take Black Diamond public. Black Diamond goes back to 1957 as a globally recognized equipment brand for mountaineers, climbers, hikers and skiing.


Gregory was also purchased during this transaction. Gregory sells top brand technical backpacking equipment worldwide. The reviews on their products are stellar. These high margin backpacks are also sold through Amazon along with high margin Black Diamond equipment... Not many companies make premium climbing equipment such as “Lightning Ascent Snow Shoes”.  


During 2012 BDE purchased a private company POC Sweden AB and in a separate transaction PIEPS Holding GmbH. POC Sweden AB designs and markets sporting gear and equipment in Sweden.


PIEPS Holding GMBH is a leading Austrian designer and marketer of avalanche beacons and snow safety products.

It’s important to note Mr. Kanders and Schiller built up a company called Armor(AH). They made over 30 acquisitions during a 12 year period. On July 2007 they sold AH (Armor) to BAE Systems for 3.1 Billion.


Some data on BlackDiamond (BDE)

Market Cap: 290.90M, Enterprise Value: 323.50M
Price/Sales: 1.61, Price/Book: 1.19
Enterprise Value/Revenue: 1.79, Enterprise Value/EBITDA: 44.87
Revenue (ttm):  180.46M, Revenue Per Share (ttm):   5.76
Qtrly Revenue Growth (yoy):   9.90%
Gross Profit (ttm):  67.26M, EBITDA (ttm):  7.21M
52-Week Change3: -0.87%, 52-Week High: 10.63, 52-Week Low: 7.55
Shares Outstanding: 31.79M, Float: 17.23M
% Held by Insiders: 29.43%, % Held by Institutions1: 56.60%
Short % of Float: 12.70%


Not much to like on the financial statements. But better times are likely ahead for several reasons/catalysts.  BDE is a contrarian play that is ignored or just not liked by analyst looking shorter term. This negativity may have helped with a lower market/industry under performing stock price. They continue to improve operations, and have made synergistic acquisitions. The board and executive management have proven history of success building companies.

Executive Chairman Warren Kanders, Executive Vice Chairman, Rob Schiller; as well as Mike Henning former senior managing partner at ENY; Phil Duff, former CFO of Morgan Stanley are capable of steering this company in the right financial direction.


 BDE is worth looking at more closely. 

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