CONFIDENCE IS EVERYTHING
ANNUAL REPORT
2009
our business family Bell Sports has been the preeminent designer and marketer of branded sports helmets and accessories for mor than 50 years.
Easton Hockey ranks atop the industry in sticks and gloves and growing faster in skates than any other company.
As the industry leader for over 30 years, Easton Baseball/Softball has continued to raise the bar with innovation, originality and ingenuity.
Founded in 1929, Riddell is a premier designer, developer and marketer of helmets and protective equipment used by professional and amatuer atheletes in team sports. Founded in 1985, Giro is the yougest member of our business family. They specialize in helmets for snow sports and cycling.
Easton’s Bicycle Products Group provides leading-edge technologies in frame tubing, wheels and comonents.
w e a re p ro u d t o b e a p a r t o f t h e success of these companies.
we love your passions
f o r m o re t h a n 8 0 y e a r s w e h a v e p ro v i d e d e x c e p t i o n a l s p o r t i n g g o o d s f o r p ro s a n d a m a t u e r s a l i ke .
our passion is p ro v i d i n g y o u with exce ptional equipment so you ca n play yours.
about easton Easton Sports has been manufacturing and designing innovative sporting equipment for 80-plus years. It is one of the world’s largest and strongest sporting goods companies. Easton’s constant commitment to provide the safest and most durable sporting goods in each product category - Easton Baseball/Softball, Easton Hockey and Easton Bicycle Product Groups - make Easton a go-to name in sporting good for all levels of play, knowing they will get a high level of performance. When it comes to head protection, one of Easton-Bell’s many technological and innovative edges is that the philosophy and standards that are so high also bridge across to the other brands and divisions of the comany. This “hub of excellence” enables all brands under Easton-Bell sports, including Easton to be synergistic with their technology. So all the great protection in one brand of helmet will be sure to be in every brand across all the comanies. Throughout its history, Easton has grown greatly as a company. Building a foundation on the latest technology of the times to provide the consumer with the best protection possible. To this day Easton sports continues to be a visionary in the world of sporting goods and as always Easton plans for the future just as they have in the past. Innovate, lead and excel. EASTON HOCKEY HELMET TECHNOLOGY: Easton hockey helmets have a lot to offer. They have a tool-less adjustment and fit system, sleek profile, great interior fit and solid protection. Engineers at Easton designed these helmets with the goal in mind to help the player on and off the ice. Easton hockey helmets have drawn some of their innovative safety features from the sister companies Giro, Bell and Riddell. Other sport helmets inspired some of the technology behind the breakthrough Stealth hockey helmet. INFORMTM FIT SYSTEM: This system, used in the S17 helmet was designed to be the truest fitting hockey helmet on the market. It has the easiest to operate, micro adjust band the game has ever seen. The idea for was taken from a Giro snow helmets for atheletes in high speed situations who needed to adjust their helmet quickly and easily. Its a fact, a better fitting helmet is a more protective helmet. Easton designers even took it a step further to siplify the design to make it easy for heads of all shapes and sizes. EASTON HOCKEY: Easton hockey ranks highest in the industry in sticks and gloves and is growing faster in skates than any other company. Even though Easton Hockey has only been around for about 20 years it has quickly climbed the ladder and gained success with NHL and amatuer players. Hockey Equipment: Sticks, gloves, helmets, protective gear, skates, bags, apparel, and accessories. EASON BASEBALL/SOFTBALL: As the industry leader for over 30 years, Easton Baseball/Softball has continued to raise the bar in technology and innovation. After the creation of the very first aluminum bat in 1969, Easton continues to delived a wide range of products for every level of player and they are assured that the products they are getting are best in class. Baseball/Softball Equipment: Baseball bats, ball gloves, batting gloves, helmets, cater’s gear, apparel, bags, and accessories. EASTON CYCLING: Easton’s Bicycle Products Group has always provided leading-edge technologies in frame-tubing, wheels and component. Easton Bike is widely regarded as the industry leader thanks to the wonderful products our engineers have come up with. It is the choice of serious riders of all ages.
about our family RIDDELL This is one of Easton-Bell’s most recognized brands and is used by professional and amatuer atheletes in team sports. Being founded in 1929 it is safe to say that Riddell is a household name in team sports, but most commonly well known as being the only helmet of the NFL. Today, Riddell is the leading manufacturer of football helmets, football pads, reconditioning services and collectible helmets. Riddell also produces a number of helmet maintenence tools and accessories.
GIRO They are the youngest member of the Easton-Bell family and came into existance with the invention of the first ever lightweight adult cyling helmet in 1985. Today, Giro helmets are used by millions of riders, cyclist, skiers and snowboarders all around the world. They design premium, high-preformance protective gear for action sports and active lifestyles. Their goal is to help athelets feel their best by designing leading-edge, consumer-focused products.
BELL Bell sports has been one of the leading helmet design companies for the past 50 years. More world champions have worn Bell than any other helmet company combined. They have played a vital role in protecting sports men and women for decades. Origionally starting off as a race car helmet company in Los Angeles, Bell has done a lot of changing. They now make helmets for race biking, road biking, mountain biking and BMX biking.
EASTON-BELL SPORTS, INC. AND SUBSIDARIES CONSOLIDATED BALANCE SHEET
January 2, January 3, 2010
2010
(Amounts in thousands, except share and per share amounts)
ASSETS Current assets: Cash and cash equivalents
$33,318
$41,301
Accounts receivable, net
208,903
213,561
Inventories, net
127,915
147,163
7,922
8,183
Deferred taxes
12,607
9,128
Other current assets
10,705
7,605
401,370
426,941
Property, plant and equipment, net
46,368
45,874
Deferred financing fees, net
17,255
12,055
Intangible assets, net
290,812
303,818
Goodwill
203,541
203,456
1,299
5,501
Prepaid expenses
Total current assets
Other assets Total assets
$960,645 $997,645
LIABILITIES AND STOCKHOLDER’S EQUITY Current liabilities: Current portion of long-term debt Revolving credit facility
$
__
$12,405
70,000
Current portion of capital lease obligations
__
22
22
Accounts payable
70,910
81,245
Accrued expenses
49,256
50,397
Total current liabilities
190,188
144,069
Long-term debt, less current portion
345,715
443,383
102
123
Deferred taxes
42,104
39,794
Other noncurrent liabilities
18,699
23,252
596,808
650,621
Capital lease obligations, less current portion
Total liabilities Stockholder’s equity: Common stock: $0.01 par value, 100 shares authorized, 100 shares issued and outstanding at January 2, 2010 and January 3, 2009 Additional pain-in capital Retained earnings Accumulated other comprehensive loss Total stockholder’s equity Total liabilities and stockholder’s equity
__
__
356,788
341,197
7,275
11,373
-226
-5,546
363,837
347,024
$960,645 $997,645
EASTON-BELL SPORTS, INC. AND SUBSIDARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Fiscal Year Fiscal Year Fiscal Year Ended Ended Ended January 2, January 3, 2010
Net sales
2010
December 29, 2010
$716,330
$775,539
$724,639
Cost of sales
482,428
509,127
475,656
Gross profit
233,902
266,412
248,983
Selling, general and administrative expenses
175,038
179,187
170,022
13,406
13,407
13,220
492
589
Amortization of intangibles Restructuring and other infrequent expenses
__
Gain on the sale of property, plat and equipment
__
__
-2,339
Income from opterations
45,458
73,326
67,491
Interest from operations
44,910
41,909
41,590
Income before taxes
548
31,417
25,901
Income tax expense
4,646
18,004
11,432
-4,098
13,413
14,469
5,320
-11,296
5,511
$1,222
$2,117
$19,980
Net (loss) income Other comprehensive income: Foreign currency translation adjustment Conprehensive income
NOTES TO CONSOLIDATED FINANCIAL SATEMENTS 2009
2008
2007
$3
$499
($416)
State
1,386
1,167
641
Foreign
1,919
3,948
6,924
2,041
10,612
10,612
175
1,964
1,964
-878
-186
-186
1,338
12,390
12,390
$4,646 $18,004
$18,004
Current tax expense (benefit): Federal
Deferred tax expense (benefit): Federal State Foreign Income tax expense Provision for income taxes at the US federal statutory rate of 35%
$192
$10,996
$9,065
1,015
2,641
798
-1,423
111
173
Non-deductible equity compensation expense
1,864
1,372
996
Tax effect of other permanent items
1,197
1,771
400
FIN 48/ASC740-10 activity
2,690
State and local income taxes, net of federal income tax effect Taxes on foreign income wich differ from the US statutory rate
Other
-889
1,113
$4,646
$18,004
__ $11,432
Easton-Bell Sports, Inc. 7855 Haskell Avenue Suite 200 Van Nuys, CA 91406-1902 1-800-632-7866
www.eastonbellsports.com