Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Black Diamond (NASDAQ:BDE)

Q4 2012 Earnings Call

March 11, 2013 5:00 pm ET

Executives

Peter R. Metcalf - Co-Founder, Chief Executive Officer, President and Director

Robert N. Peay - Chief Financial Officer, Principal Accounting Officer, Secretary and Treasurer

Analysts

Joseph Altobello - Oppenheimer & Co. Inc., Research Division

Sean P. McGowan - Needham & Company, LLC, Research Division

Andrew Burns - D.A. Davidson & Co., Research Division

Camilo R. Lyon - Canaccord Genuity, Research Division

Rob Young - Wm Smith & Co.

Sean P. Naughton - Piper Jaffray Companies, Research Division

Mark E. Smith - Feltl and Company, Inc., Research Division

David M. King - Roth Capital Partners, LLC, Research Division

Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Black Diamond's Financial Results for the Fourth Quarter and Full Year ended December 31, 2012. Joining us today are Black Diamond's President and CEO, Mr. Peter Metcalf; and the company's CFO, Mr. Robert Peay. Following their remarks, we'll open the call for your questions.

Before we go further, I'd like to take a moment to read the company's Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Please note that during this conference call, the company may use words such as appears, anticipates, believes, plans, expects, intends, future and similar expressions, which constitute forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on the company's expectations and beliefs concerning future events impacting the company and therefore, involve a number of risks and uncertainties. The company cautions you that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statement. Potential risks and uncertainties that could cause the actual results of operations or a financial condition of the company to differ materially from those expressed or implied by forward-looking statements used in this conference call include, but are not limited to, the overall level of consumer spending on the company's products; general economic conditions and other factors affecting consumer confidence; disruption and volatility in the global capital and credit markets; the financial strength of the company's customers; the company's ability to implement its growth strategy; the company's ability to successfully integrate and grow acquisitions; the company's exposures to product liability or product warranty claims and other loss contingencies, the stability of the company's manufacturing facilities and foreign suppliers; the company's ability to protect trademarks and other intellectual product rights; fluctuations in price, availability and quality of raw materials and contracted products; foreign currency fluctuation; the company's ability to utilize its net operating loss carryforwards and legal, regulatory, political and economic risks in international markets.

More information on potential factors that could affect the company's financial results is included from time to time in the company's public reports filed with the Securities and Exchange Commission, including the company's annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. All forward-looking statements included in this conference call are based upon information available to the company as of the date of this conference call and speak only as the date hereof. The company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this conference call.

I'd like to remind everyone that this call will be available for replay through March 25, 2013, starting at 8:00 p.m. Eastern Time tonight. A webcast replay will also be available via the link provided in today's press release, as well as available on the company's website at www.blackdiamond-inc.com. Any redistribution, retransmission or rebroadcast of this call in any way without expressed written consent of Black Diamond Inc. is strictly prohibited.

Now I'd like to turn the call over to the Chief Executive Officer of Black Diamond, Mr. Peter Metcalf. Sir, please go ahead.

Peter R. Metcalf

Thank you, Michaela, and good afternoon, everyone, and good evening from me from the big district of Great Britain. At the close of the market today, we issued a press release announcing our financial results for the fourth quarter and the full year ended December 31, 2012. The primary purpose of today's call is to review the financial results for the fourth quarter and the full year of 2012. We also intend to provide some limited first-half 2013 guidance and toward the end of our prepared remarks, I will reiterate some of our 5-year objectives.

I'm pleased to confirm that the actual results for the fourth quarter and full year of 2012 are in line with the estimates that we provided on February 14, 2013. In fact, 2012 revenue increased 21% to a record level of $175.9 million. I'm also pleased to tell you that we believe that Black Diamond is off to a terrific start for 2013.

As I look back on 2012, I believe strongly that Black Diamond has entered 2013 in a far stronger financial and strategic position than at the same time last year. We are 12 months closer to our goal of building a global apparel brand and expect Black Diamond brand apparel to be in stores this fall. Beyond apparel, which is potentially our most significant strategic objective, the company made significant progress on almost all of its strategic objectives during 2012, including the acquisitions of POC and PIEPS and the completion of our state-of-the-art ski manufacturing facility.

During 2012, we also agreed to acquire the Japanese distribution assets of Gregory and establish our own distribution in Japan. As a result, beginning January 1 of this year, Gregory began assuming all of its own sales, marketing and distribution functions in Japan. The doors opened in mid-January for shipping, and we're pleased with how the transition is going.

In November, our all-new 43,000 square foot state-of-the-art ski factory began producing salesman samples and ramp up production for the 2013, 2014 ski season. The ski line incorporates new manufacturing processes, which we believe will result in significant performance enhancements and far superior quality control. Ultimately, we expect to reduce lead times, maintain competitive pricing and be more responsive to our customers.

In spite of a second consecutive winter season with less than ideal weather conditions and continuing economic headwinds in Europe, the company still managed to grow organically and keep pace with its long-term revenue growth objectives. Nevertheless, consolidated 2012 revenue in the second half of 2012 was still lower than we anticipated 3 quarters through 2012, and that left us with a high -- with higher inventory levels at December 31, 2012 than expected and lower operating cash in 2012 than we had anticipated.

Winter weather started off slowly in most of our channels, but we saw a noticeable pickup in revenues at the end of December. Because of the improved winter weather, while we are still assessing where both we and our dealers will land relative to inventory levels, we do believe the inventory levels will be in better shape as a result of the late winter weather both in North America and Europe.

Similar to every year, we're expecting to carry some winter product through spring and summer with the expectation of selling it next fall. We entered 2013 executing on an explicit plan to lower inventory levels across the supply chain through a strategy of aggressively moving some discounted and discontinued merchandise into the global channels and better management of the supply and demand equation. As a result, while weather-dependent, we expect to see lower levels of winter seasonal product at the end of next year.

But before I comment further, I'd like to turn the call over to our CFO, Robert Peay, who will take us through the details of our financial results for the fourth quarter and full year 2012. Following Robert's remarks, I will return to discuss some additional highlights and open the call for your question. Robert?

Robert N. Peay

Thanks, Peter, and good afternoon, everyone. Our total sales in the fourth quarter of 2012 increased 34% to $48.8 million compared to $36.3 million during the same year-ago quarter. The increase is largely attributed to the contribution of POC and PIEPS, which both were acquired in the second half of 2012, partially offset by the impact of inventory repurchased from Gregory's Japanese distributor during the fourth quarter of 2012, pursuant to the A&F acquisition agreement. This resulted in $400,000 in revenue that we did not recognize. Fourth quarter revenue was also affected by a meaningful amount of seasonal ski products sold at discounted prices.

The foreign exchange markets continued to experience volatility and Black Diamond operates across multiple currencies, primarily the U.S. dollar, the euro, the Swiss franc. Out of the 34% year-over-year sales growth for the fourth quarter, approximately 50 basis points was attributed to foreign exchange rates. On a constant dollar basis, sales still increased nearly 33.5% for the quarter. Gross margin in the fourth quarter of 2012 was 36.3% compared to 39.2% in the same period last year. Gross margin in the fourth quarter of 2012 includes $1.2 million for inventory fair value purchase accounting adjustments related to the acquisition of POC and PIEPS. Excluding this amount, adjusted gross margin on a non-GAAP term and reconciled in this afternoon's press release was 38.7% in the fourth quarter 2012, a 50-basis-point decline from a year-ago quarter, primarily due to the higher level of discount activity in response to a challenging start to the 2012 winter season.

SG&A expenses in the fourth quarter of 2012 increased 43% to $19.1 million compared to the same quarter last year, primarily due to the inclusion of POC and PIEPS and continued investments in our strategic initiatives, like apparel and infrastructure, to support both current and future growth. For the fourth quarter 2012, we reported net income of $0.5 million or $0.02 per diluted share compared to $3.5 million or $0.16 per diluted share in the same period last year.

Net income in the fourth quarter of 2012 included $0.4 million net of noncash expense items, $0.4 million in transaction-related costs, $0.1 million in restructuring costs and $0.2 million in merger and integration costs. Internally we continue to focus on adjusted net income before noncash items, a non-GAAP term, which was $1.6 million compared to $2.3 million in the fourth quarter of 2011.

On a per-share basis, adjusted net income before noncash items was point -- $0.05 per share compared to $0.10 per share in the same year-ago period, reflecting the 8.9 million shares, which we issued as a result of our public offering in February 2012.

Adjusted EBITDA in the fourth quarter of 2012 was $2.1 million compared to $2.8 million in Q4 2011 and excludes $0.5 million in noncash equity compensation, $1.2 million of inventory fair value purchase accounting adjustments and the aforementioned $0.4 million in transactional-related costs, $0.1 million in restructuring costs and $0.2 million in merger and integration costs. We define adjusted EBITDA, which is a non-GAAP term, as earnings before interest, taxes, other income, depreciation, amortization, stock-based compensation, inventory fair value purchased accounting, transaction, merger and integration and restructuring costs. Tables reconciling adjusted EBITDA and adjusted net income before noncash items to the nearest GAAP measurement are presented in our earnings release we issued today. They are also available in the Investor Relations section of our website.

Now turning to the full year, our total sales in 2012 increased 21% to a record $175.9 million compared $145.8 million for the full year 2011. The growth in sales was supported by the introduction of new and innovative products, as well as the addition of POC and PIEPS. Total sales were offset by approximately $1 million of inventory repurchased as part of the previously mentioned A&F acquisition agreement.

On a constant dollar basis, our sales increased approximately 22.2% or $32.4 million. Gross margin in 2012 was 38.2% compared to 38.7% in 2011. Gross margin in 2012 includes $2.3 million for the previously mentioned inventory fair value purchase accounting adjustments. Excluding this amount, adjusted gross margin in 2012 was 39.5%, an 80-basis-point improvement from 2011 due to the favorable mix in higher-margin products, as well as the inclusion of both POC and PIEPS.

SG&A expenses in 2012 were $62.6 million, an increase of 24% from 2011, which is due in part to incremental SG&A from POC and PIEPS, as well as significant investments in growth and infrastructure including apparel, our distribution business in Japan and our ski manufacturing facility, which is expected to begin delivery of BD skis later this year. These investments added more than 130 new jobs last year and we expect to add approximately 96 more jobs in 2013.

Net income in 2012 was $2 million or $0.06 per diluted share, which included $8.2 million of net noncash expense items, $2.2 million in transaction-related costs, $0.2 million in restructuring charges and $0.2 million in merger and integration costs. Excluding these items, adjusted net income before noncash items in 2012 increased to $12.6 million compared to $11.9 million in 2011. On a per-share basis, adjusted net income before noncash items was $0.42 per diluted share compared to $0.54 per diluted share in 2011, reflecting the previously mentioned shares issued in our 2011 public offering.

Adjusted EBITDA in 2012 increased 8% to $14.7 million compared to $13.6 million in 2011. Adjusted EBITDA in 2012 excluded $1.8 million of stock-based compensation, $2.3 million of inventory fair value purchase accounting adjustments and the aforementioned $2 million in transaction-related costs, $0.2 million in restructuring costs and $0.2 million in merger and integration costs. As we mentioned in February 2012, we expected to incur additional investment spending related to several strategic initiatives in 2012 with little or no associated revenue in 2012 such as apparel, expansion of our manufacturing footprint, which meant in-house e-manufacturing; investments in distribution, which meant establishing our Japanese distribution subsidiary; investments in e-commerce, et cetera. In 2012, we spent approximately $5 million on those investments or approximately 2.8% of revenue. In the second half of 2013 we expect these investments specifically apparel, Japanese distribution and ski manufacturing, to begin generating revenue. Furthermore, we expect real returns from these investments to begin in 2014.

Now turning to our balance sheet, we had $5.1 million of cash at December 31, 2012, compared to $2.4 million at the end of 2011. Noncash working capital increased approximately $15.6 million to $73.2 million, which is largely the result of an increase in inventory. A portion of this increase is the result of the acquisitions of POC and PIEPS, and the remaining amount is to support growth in the business. However, as we discussed on our February 14 call, North America was yet again impacted by an unseasonably warm and dry early winter, which left us with modestly higher winter seasonal inventory.

As mentioned earlier, most of this inventory is in-line inventory and will be carried over into the next season. Some items, however, are discontinued models and will be moved through our channels now and throughout the year, but are expected to be mostly sold by the start of the fall '13 season. We expect to continue to work hard to manage our working capital during 2013 and still expect to see both accounts receivable and inventory increase, but at a lower rate than our expected revenue growth for 2013. At December 31, 2012, we had $20 million outstanding on our $35 million revolving credit line with Zions Bank compared to $22.4 million at December 31, 2011. Total debt, both long and short, stood at $40.5 million, which includes $16 million of 5% subordinated notes due in 2017.

Last Friday, March 8, we entered into an amended and restated loan agreement with Zions Bank, increasing our commitment from Zions by $20 million, a total of $55 million and extended the maturity of our line of credit to March 2016. The new structure of our bank facility is now $30 million in revolving credit due in March 2016, $15 million in term note with a 10-year amortization schedule, of which $10 million is currently drawn, and an additional $10 million acquisition facility with interest-only payments for the first year and then a 5-year amortization schedule thereafter. Availability under each of the term note and the acquisition facility remain in place until March 2016. We remain very pleased with our long-term partnership with Zions Bank and believe there is still room to grow.

Just 3 weeks ago, on February 14, we provided 2013 guidance as well as insights to our strategic direction for 2014 and beyond. You may recall that we expect fiscal 2013 sales to range between $216 million and $221 million, which would represent an increase of between 23% and 26% from our 2012 sales and an increase of between 18% [ph] and 20% had we owned POC and PIEPS since January 1, 2012. For the first half of 2013, we expect for the 6 months ending June 30 to range between $90 million and $95 million in sales, which represents an increase between 15% and 21% over the same time last year.

Given our full year guidance, and now our first half guidance, this suggests we expect our second half or fall '13 to grow between 24% and 34%. The primary drivers of this growth rate are sales of apparel, sales from our Japanese distribution and sales growth from both POC and PIEPS. Without knowing for sure how foreign currency movement will impact the business in 2013, we are forecasting consolidated gross margins for fiscal 2013 to be approximately 40% to 41%. Over time, we are working towards and expect higher gross margins to result from [indiscernible] scale as well as higher margin product mix, which is expected to include apparel and higher average cost margins at both POC and PIEPS. We are enthusiastic about 2013 as a launch year for our apparel line, which we expect to be in stores this fall. And we are also looking forward to 2014 when we expect to see accelerating expanding sales growth and expanding operating margins from apparel, Japanese distribution and the integration of POC and PIEPS.

This completes the financial portion of our presentation. Now I'll turn the call back over to Peter. Peter?

Peter R. Metcalf

Thank you, Robert, and thank you for many years of dedication and service to Black Diamond. As all of you know, effective March 15, Robert will be stepping down as our CFO. Aaron Kuehne, our Vice President of Finance is stepping into the breach on an interim basis, as our Principal Accounting Office. Aaron has been with us shortly after the merger of Clarus, and Aaron has the complete confidence of our board and Audit Committee in this role. We have also retained Egon Zehnder to conduct a formal and national CFO search. Robert has agreed to assist the company with transition through the end of 2013.

As I noted in my opening remarks, 2012 was a milestone year for Black Diamond as we move closer to our boldly envisioned goal of becoming the leading portfolio of equipment and lifestyle-defining companies in the active outdoor industry. We've said we expect to launch apparel, acquire other like-minded branded companies and invest in our operational platform to support our growth expectations. We believe that we have accomplished all of these objectives during 2012, and we believe that Black Diamond enters 2013 a far stronger, more diverse and better positioned company than it was just 1 year ago. We believe that we are in the process of combining many of the world's most unique and rapidly growing outdoor equipment brands into a single global operating platform where we own and control our own distribution in North America, Europe and Japan.

Thus far, we are performing in line with our integration schedules for both POC and PIEPS. POC U.S. distribution has been consolidated into BD's existing Salt Lake City warehouse and dealer services. In addition, we have had some early wins in supply chain management and consolidation. Through the first 2 months of 2013, we are encouraged by the material snowfall and cold experienced throughout much of the world. Consumers are engaging in their winter snow sport passions, getting excited once again in buying products at retail. And naturally our winter ASAP have also increased in both North America and Europe with a significant amount of our product selling at full retail price. In many areas, our dealers appear to be more confident in their ability to move inventory, and we believe they are reasonably positioned to bring in new products. If this trend continues, we believe it should help consumer sentiment when the fall '13/winter '14 season begins. Either way, it appears to us that the global overhang of inventory at retail has improved.

Before concluding our prepared remarks and opening the call for questions, I want to reiterate some of the long-term messaging that we provided in our recent guidance call in February 14, 2013. Number one, Black Diamond is committed to an expected 5-year growth organic revenue growth of between 15% to 20% compounded, with improving gross margins and accelerating operating margins over time to levels consistent with our best-in-class peers. We expect POC and Black Diamond apparel to be our high growth drivers and positive impact in overall margin mix, while our traditional Black Diamond and Gregory hardgoods business continues to grow globally at low double-digit rates.

Secondly, with the exception of selective and opportunistic tuck-in acquisitions, our strategic focus for the foreseeable future is on the fueling, the organic growth potential of our apparel and existing brands. In May 2010, we established a 5-year acquisition target of $250 million to help investors frame the global opportunity. At the time, we did not know what that might cost and how much capital that might require. Today, given the assets that we have acquired, the distribution we have in place and the organic growth opportunities in front of us, we believe the opportunity for investors is significantly more compelling today than it was in May 2010.

Thirdly, and perhaps more importantly, we believe that a 5-year plan is self-funding and that we do not expect at this time to require any incremental equity capital to realize these growth plans.

Fourthly, we want to encourage analysts and investors to reflect these expectations through 2017 into their financial models and recognize that we are still targeting a range of $250 million in revenue for apparel in 2020, which is 3 years beyond the 5-year plan.

Fifth and final, we believe that our current stock price is not consistent with either the 5-year plan that we have just articulated or the current state of the business given the progress we have made towards our long-term objectives. As a result, we expect to be busy during 2013, meeting with existing investors and new investors in communicating this story. We start later this month at the ROTH conference at Dana Point, California on March 18.

Thank you. And at this time, I'd like to open up the call for questions to myself and Robert.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from the line of Joe Altobello from Oppenheimer.

Joseph Altobello - Oppenheimer & Co. Inc., Research Division

The first question, I guess, in terms of the sell-through, the improved sell-through that you guys saw once the winter weather got better for you guys, did you also see an improvement in underlying market conditions in areas like Europe, for example, or was that more weather-driven than macro-driven?

Peter R. Metcalf

Joe, that's a wonderful question for a guy who had to jump out of a dinner with a bunch of European retailers to get on this call. And my dinner companions this evening was the owner and -- as well as the CEO of Sports Feaster [ph], which is without question the most iconic, single-largest outdoor sporting goods retailer of a single store I think in the world and they explained to me this evening, with the most expensive real estate of any outdoor retail in the world. They're under Rio Platts [ph] and they're 100 years. They're celebrating their anniversary right now. And what they shared with me and I think it's what I've been hearing here today and I've been hearing through Europe is that though we do have economic -- an economic situation at this point in time, they feel like the business has come back to a relatively normal level. They are leaving this winter very pleased with how lean their ending up with in winter inventory, in a very good position, coming into next winter to start anew without any residual that they have in stock. What I'm hearing from the British retailers here, and these are the leading British retailers like Cotswold, [ph] Blacks, et cetera, is that they've also had a good winter, I should say, that right now we are in the coldest weekend of the winter right now. It's snowing here. And the Queen, they're excited. The economic situation here in Great Britain, they say the outdoor community has adjusted to. And there is definitely a sense of what I would call guarded optimism in certainty from the standpoint of their inventory, and none of them feel fat at this point on their inventory levels. So I think we're in a really good position. I mean, the economic situation is clearly not in our favor, but what they're pointing out is that they believe at this point the combination of a winter that hasn't left yet, combined with people's ability to adjust to anything is working in their favor and there is definitely a sense of my inventory's in control, my business is in control and I'm guardedly optimistic looking into spring here and into next winter.

Joseph Altobello - Oppenheimer & Co. Inc., Research Division

That's very good to hear. And just turning to Robert quickly, in terms of the quarter -- I'm not sure if you covered this, and I apologize if you did, but the tax benefit you guys saw in the fourth quarter, could you help us out on that? And maybe what you're expecting for a tax rate for next year?

Robert N. Peay

Thanks, Joe. As you saw in our press release, our income statement showed a rather healthy tax benefit and -- which would -- might seem counterintuitive because of the transaction cost that we incurred last year of the acquisition of POC and PIEPS is generally acquisition charges are nondeductible, at least a large portion of those. So Joe, what drove that was that our tax rate in Sweden, our statutory rate and the country's statutory rate dropped from 26% to 22%. And so this gets a little technical, but the DTLs that we put on our balance sheet as a result of purchase accounting, those liabilities are now valued less. So it's either the 26%, or at 22%, and that's what kind of drove the tax benefit for the end of the year. Also, the valuation of our NOL, we released a little bit more, about $1.3 million of additional valuation we released based on the strength of our future projections of U.S. source taxable income. So those are the 2 main drivers.

Operator

And our next question comes from the line of Sean McGowan from Needham & Company.

Sean P. McGowan - Needham & Company, LLC, Research Division

I just wanted to know if you could give us a little more color on kind of what the retailers are saying who are going to be participating in the launch of apparel, how is their appetite for product changed over the course of just the last month, the last couple of months and how are they looking forward to it from a competitive standpoint?

Peter R. Metcalf

Yes, okay. Sure. Thanks. It's Peter here, great question. I would say this. I think you were at the apparel launch, if I'm not mistaken. And the attitude and the commitment and enthusiasm shown by those in North America hasn't really changed at all. They were -- they responded very positively. They responded strategically, meaning we had shared with you and our key investors over a year ago and the communication and input we have received from our leading single store specialty and chain people was that they're looking for the next apparel brand to partner with for a decade because those they have been working with have moved to a more widely distributed model. And so they received very well both specific product price points, technicality, the style, the esthetics, the edginess of what we showed them, reaffirmed strategically the thinking behind that. I think there probably was a little bit of apprehension just from the standpoint of when we did this and they gave us their commitment. The winter had not yet materialized into where it ended up and there was excess inventory floating around. But I think most of those folks looked at it more like a momentary thunderstorm on a nice summer day than a climactic change. And at this point, with the winter having stayed with us in North America, and I should say other markets, as long as it has inventory being cleared out, that level of commitment enthusiasm for what we have shown has not only I think stayed in place, if anything, I think it has built a little bit, not because they changed fundamentally really about BD, but I think in the -- the level of anxiety about residual inventory had diminished. So right now as I had shared with you in February a couple of weeks ago, and I will share again now, is that we feel really good about what we've committed to having made, is being made. By the way, right now our people are just over in Asia, overseeing the production. Everything is on time, if anything, it will be delivered a little bit early. People are excited about it. We continue to hear as we are traveling currently and primarily in the U.S. beginning to show spring '14 getting people's preliminary feedback on that line. We're gratified to hear their enthusiasm and affirmation of the orders they placed for '14. So right now on the apparel, knock on wood a little bit, but we're continuing to get very positive feedback from folks, and that's gratifying. We also did I think after our last call, the launch with -- by invitation only out of our brand new headquarters in Japan in Yokohama, and got a response that it was every bit as good and then some as we had hoped, and it gives us great optimism on the Japanese market as well.

Sean P. McGowan - Needham & Company, LLC, Research Division

Okay, have you heard anything through the grapevine or however you might hear it, about competitive responses. I mean, I don't imagine the competition is going to sit back and just let you waltz in. So have you heard anything about competitive responses that might change or modify in any way what your plans are?

Peter R. Metcalf

I have not heard anything specific to what BD is doing that a major competitor did x, y or z because of Black Diamond specifically. But as you know, we've been pretty public about this launch for quite some time and I would be less than honest if I didn't say that we have good competition. I mean the work that the leading companies in the outdoor apparel space are doing from a standpoint of marketing, design, trying to continue their work with retailers is very good. So it's not like we're up against a bunch of lightweights. But if the question is did they do anything relative to discounting or special terms, or throwing elbows to prevent us from getting in? No, we've heard nothing like that. So let's chalk this one up to sportsmanship and mutual respect that exists within the industry.

Operator

And our next question comes from the line of Andrew Burns from D.A. Davidson.

Andrew Burns - D.A. Davidson & Co., Research Division

I just had a question on gross margin. You gave us some first half, second half guidance for revenue, but just looking at the growth drivers that caused the revenue growth to accelerate, in the back half I would think that the gross margin would be a bit more favorable in the second half relative to the first half. Is there any color there?

Peter R. Metcalf

I'll go ahead and let Robert answer that one, but thanks for your question, Andrew.

Robert N. Peay

Andrew, I think you're on target. If you look out, the growth drivers that we articulated in the back half now, apparel, Japanese distribution, ski manufacturing, those did kind of gave us a little bit more of a boost to our gross margin also if we add in POC and PIEPS. And also in the first half, we're still going through, as we mentioned, price some seasonal ski product to move. And so there could be a little bit more pressure on early margins in the Q1 than what we would see in the back half of the year. So overall, we're sticking by our year guidance of 40% to 41%. But I think in the back half, it could be a little bit higher than what we saw in the first half.

Andrew Burns - D.A. Davidson & Co., Research Division

Okay. And if I heard correctly in terms of growth in Japan, from going direct with Gregory in that platform, it sounds like the potential growth acceleration is more second half-weighted. Could you clarify that?

Robert N. Peay

Yes, Andrew, that's correct. And in part it's because we had to defer about $1 million of revenue that we would have booked in Q3 and Q4 that was deferred because of the right of return that existed with the A&F agreement. And so we bought back in-line products from A&F, and so we will now be able to take that inventory and sell it into the channel. And so apples-to-apples, revenue growth should be -- really start in fall '13 for Japanese distribution.

Peter R. Metcalf

Let me just add to that, Andrew, that A&F, being the distributor of the line, definitely despite the fact that we did take back a $1 million worth of inventory -- held on to some inventory because they got it at the price of a distributor to hold on to for their own stores, and they are a major retailer as well. So it is clear that their needs for the first quarter into the second quarter are somewhat depressed simply because they held on to enough inventory to reduce price in order to give them some momentum on margin moving into the first quarter and a little bit of the second quarter.

Andrew Burns - D.A. Davidson & Co., Research Division

Got you. And then last question, POC and PIEPS clearly some distribution opportunities in '13 and beyond. If you can leverage some of the existing Black Diamond relationships in certain markets and particularly here in the U.S., could you maybe discuss how that will progress in 2013?

Peter R. Metcalf

Yes, I'll be glad to. First thing we should say is that we have integrated, I mentioned this in my remarks, POC USA onto the BD platform relative to shipping dealer services, invoicing, all of the backroom kind of activities for POC. In addition, though POC Canada will not be integrated into this platform because of existing distribution agreements until spring '14, that's just the nature of how these things work when you have agreement with people. We are already connecting our sales management team with key accounts, with POC people in order to be able to open doors that will be fundamentally -- more of them will be open in '14 than now, simply because of existing relationships that one has in the marketplace. You need to be thoughtful of those who have helped you build your brand. That said, POC has in its markets here a lot of momentum. And a lot of that -- and that momentum is going to continue to grow because, number one, if you look at having read your -- some of your stuff, I know you do, looking at the SIA data, you saw how dramatically POC's market share grew in ski helmets this winter. That was not reflected in their sales growth at wholesale. Why was that? Why could you have such incredible growth in North America with POC at retail and very modest growth in wholesale? It was because of that inventory overhang that we were speaking to a few moments ago in my remarks, that inventory is clearly that overhang for POC, in the way of helmets, body armor and goggles, has been burned through, as you can tell from the market share gains they had. So that's another aspect of what's going to drive them there. When it comes down to Europe, specifically, POC will fundamentally be staying with -- because of the nature of the contracts they had with their distributors, they will be working fundamentally through '13 with the majority of their distributors. And it is in '14 that conversions are made, which is part of our plan. That said, we are -- we have and continue to put our salespeople, sales leadership together with the sales leadership of POC Austria, Germany and Sweden connecting and POC connecting with accounts and talking to people. And so -- and likewise, when it comes down to market share gains, we feel that POC made incredible moves forward in market share gains in Central Europe that were not reflected into wholesale at our level of sales in fall '13 -- fall '12, simply because of the amount of inventory that was left in the channels, as I shared earlier and in talking with Joe, that inventory is being cleaned up. And we believe we're moving into fall '13 with a really nice, especially for POC, clean inventory, if they were hot, to gain the market share and are in a much better position to realize growth through growing market share in fall '13.

Operator

And our next question comes from the line of Camilo Lyon from Canaccord Genuity.

Camilo R. Lyon - Canaccord Genuity, Research Division

I was hoping you could talk about POC helmets as they relate to Black Diamond helmets and if there's any sort of either cannibalization that you might expect as POC in the U.S. becomes a bigger and better known brand or if there's actually an opportunity to elevate both brands as you take learnings from one and apply it to the other.

Peter R. Metcalf

Camilo, thank you. That's a great question. We don't see any cannibalization, and it's really the latter. And the reason I say that is that Black Diamond -- part of the attraction of POC, among many things, was the fact that we are in climbing helmets. But we have not entered the sort of off-piste, backcountry ski market for a myriad of reasons, and it is a category that POC rules and dominates. At the same time, relative to climbing helmets, which is a market niche globally that continues to grow with the growth in climbing. Climbing helmets was something that we had, over the years, taken our eye off the ball a bit as we had focused on other categories. And as we began talking with the POC guys about a possible deal, we were very, very intrigued with some of their patents and IT, especially as it related to making lighter-weight helmets. During the negotiations and discussions with them, we got licensed the -- one of their patents, which is the essence of the Vapor Helmet that we launched at the trade shows last summer and are shipping at this point in time, which has been getting, I just saw some magazine reviews, some phenomenal reviews for being the lightest, hard-shell helmet on the marketplace today. They also have -- it's really perfected fit -- at the end of the day, with helmets, there's a lot of things why people buy them. Part of it is the aesthetics. Part of it is the technology. Does it keep you safer? Make -- or is it more comfortable? Does it do it with lighter weight? And POC is a leader in this regard. So we have a helmet now that I think is going to do very well for Black Diamond based on POC technology. We've had the designers of POC and Black Diamond to get together to understand fit better and how POC models helmets, and they're very cost-effective in how they do this. And we want to continue to build those relationships and that time together between POC's design team and the Black Diamond design team. And though we are going to keep the 2 brands discrete and independent, it is possible, and I'm not saying we're doing this, but it is possible that at some point, we may use some of the POC technology to also do a couple of Black Diamond-branded and Black Diamond aesthetic, backcountry ski helmets because the companies are complementary versus competitive. POC's positioning is very much relative to skiing in the, first, racing then free ride and then general alpine, not as strong in what we call true backcountry skiing. So there's opportunities there. And likewise, when it comes down to the reputation that Black Diamond has earned over 25-plus years of being very predictable and successful stewards of brands, building on the old-fashioned way through a lot of hard work, through product innovation, thoughtful merchandising, working closely with specialty brand building. People see that POC is not a flash in the pan, that it is a company that is going to be continuing its momentum. And we have retailers who have -- are expressing now interest in POC that don't currently carry it, and that is something that we attempt-- are committed to remedying in 2014. And then as -- and I think I'm comfortable saying that POC is going to launch this summer at the international bike shows both in Friedrichshofen Germany, which is the big European show; and in Las Vegas, Nevada in September, which is the big North American show. They will be launching a collection of innovative road-riding gear, protective clothing, et cetera. That, I think, is going to continue to be -- just accelerate POC's momentum. Our develop -- rapidly developing experience and knowledge of contract, this commercialization fit, fabric, et cetera. When we say our, I'm talking about Black Diamond's growing expertise. There is going to be very complementary to and supportive of POC's efforts, and those people on the commercialization side are already getting together with the goal that, by some time in '14, we'll begin to see some of those benefits or '15.

Camilo R. Lyon - Canaccord Genuity, Research Division

That sounds good. It generally appears like there's a lot of runway for POC in a lot of different perspectives. In your prepared remarks, you made a pretty directed comment in saying that you wanted to spend a lot of time this year in explaining the story to investors. You got great growth avenues that you've opened up over the last 12 to 18 months. There's a good gross margin story that's starting to unfold. What do you think the messages that hasn't been understood yet that you want to communicate to investors?

Peter R. Metcalf

I think it maybe, and this is where I hope folks like yourself, Andrew, Sean, Joe, can help us. But I think it is -- I think there's a little bit of a, and this is my own thought, maybe a little bit of a reticence fit. In order to achieve our goals, we're going to have to do multiple equity raisings, which will cause obviously dilution in order to achieve our goals. And I think the important message right now that'd be getting out to people is that, look, not only do we have 4 truly iconic, IP-rich, specialty, premium brands with great opportunities, especially 3 of those 4, we've also successfully launched BD apparel as well as we had absolutely hoped. Response has been great. And to grow those 3 major brands, one minor brand in BD apparel which ultimately will be bigger than all of them, forward, doesn't require us to dilute existing shareholders. We can do that with the combination of current working capital, retained earnings, the very competitive and significant revolver we have from Zions. And I think that what we perhaps haven't done is adequately communicate what those 4 brands and apparel and what we have with this global operating platform with manufacturing and distribution can bring and where this can go with the existing equity base. That's my thinking on it. But I'd love to hear those of yourself and some of your peers that we always respect getting your input and thoughts.

Operator

And our next question comes from the line of Rob Young from William Smith.

Rob Young - Wm Smith & Co.

If I look into 2015 and beyond relative to your 2014 operating expenses, how much do you think will need to be invested in once you get into some of those outyears? Have you gone through that analysis? I'm just trying to look at it from our modeling standpoint. I see that you'll have a tremendous amount of operating leverage come through the system once you get out past all these investment years. I just wanted to make sure that assumption is that is reasonable.

Peter R. Metcalf

Rob, this is Peter. Thanks for your question. I'm going to let Robert respond in a moment. But let me just give a couple of sentences of high-level narrative. First off is that we have modeled in detail '14. And we absolutely see, from what we can model, is a very strong uptick in operating leverage, starting in '14. We haven't spent as much time looking at '15. But we know what the trends will be with POC, Black Diamond, Gregory, PIEPS, the apparel. So we believe that will continue and can continue. A few of the questions that could use some of the additional retained earnings that we have or opportunities would be, if there were some other small, meaningful, tuck-in acquisitions or if we determine that having our own versus licensed retail made sense to us, we would consider making an appropriate level of investment into some retail stores in key, high-profile locations to build some of our brands, most likely Black Diamond. Those areas we've -- we are talking about, we do not have any specific or discrete plans at this time. But it is something that we will examine and explore during our strategic planning process that runs throughout now 2013. So that's a high-level answer to you, but I'm going to let Robert respond now.

Robert N. Peay

And Rob, maybe the place for me to begin is just kind of remind everybody what we said. So in 2012, as we shown -- showed today, our SG&A is $62.6 million. And our call in -- on Valentine's day, we said we're going to add between $20 million and $25 million incremental SG&A next year in 2013. And that's what we see as kind of the last year of heavy investment relative to our initiatives. What we said in '14 is that we would grow about 20% on the top line. We would see expansion of our gross margins and that OpEx at that time would be -- thought to be around $10 million to $12 million incrementally. Beyond that, I think when you get into 2015, you're going to see a larger company with more scale. It will be more mature. And so you -- we've talked about a growth rate of 15% to 20% compoundedly with expanding margins and better leverage. So the amount of OpEx that we're expecting in 2015 should be at the appropriate pace and level to allow us to continue to grow the business. But I would -- don't think it will be near the level of investment that we've seen for the last couple of years.

Rob Young - Wm Smith & Co.

Okay, okay. I appreciate that commentary. And then both your acquistions, in order to meet their kind of long-dated earnout agreements, growth needs to be fairly robust. And you've commented pretty extensively on how that will be achieved. But relative to the timing on that, do you expect something like an exponential growth where it -- you're not really meeting that earnout agreement growth rate over the next several months, possibly a year, and then it will exceed from that? Or is it something that's more of a linear? Or it's just going to continue to increase at -- at kind of that earnout pace.

Peter R. Metcalf

Rob, I'm Peter. If I think I understood your question, I -- if we're -- relative to POC and PIEPS, I don't think we're expecting "exponential growth." We're expecting -- or let me backtrack here a minute. I mean, I think one thing we're learning with these acquisitions, and it is a bit of a learning experience, is that the minute we announced the deal, deals that we're very excited about, that have incredible potential with brands that have momentum and great products, those who are distributors who just heard that they're going to now become agents and they can apply for that job, suddenly realized it doesn't make a lot of sense for them to bust their tush to keep working, if they're going to be transitioned out. So there's a little bit of -- for some, not for the retailer, not for the marketplace, not for the consumer, but for some of those who are -- the people responsible for making the sale at that moment, that season they may take their foot, a little bit, off the accelerator. I'm not saying that's absolutely the case for everyone by any means, but I'm saying there is some of that occurring. And so you get a momentary lag there after you do one of these deals just for that reason. However, when it comes down to our belief and what we're seeing in -- for spring 2013, how bookings are coming in for fall, the product through the pipeline, what we're hearing from retailers, we continue to be incredibly excited and bullish about these 2 companies and believe that they have very material growth opportunities that are going to be realized in '13, '14 and beyond. However, I think it's much more along the lines of what we communicated when we announced those deals. And not something exponential. We're talking about healthy, double-digit growth but not exponential growth. But over time, especially POC, PIEPS was a more quasi-branded, semi-tuck-in. But POC, between ski and the wheels, non-biking roads, free ride and ski alpine and recreational and free ride and goggles, helmets, apparel and protection, this is a brand that has got incredible opportunities in front of it. So we do believe in good, robust, double-digit growth moving forward and super excited about that and what we're seeing here in '13. But we're not talking exponential growth.

Rob Young - Wm Smith & Co.

Yes. And that's basically what I was asking. I was just wondering kind of when that -- the growth trajectory of -- in order to meet the earnout agreements would likely occur. And I think you've explained it well. And then the last question, I'm not sure if there's an average for this, but is there an average discount that you may have taken on some of the old winter inventory?

Peter R. Metcalf

I'll let Robert elaborate in a moment, but I don't think there is an average. Having been somewhat close to some of this, it really depends upon "elasticity" demand. And there's some product that you don't need to discount very much, and it can move very quickly because there's such a huge market for it. And there are some close-out product that you're not going to carry through the next season, where the elasticity of demand is just -- it requires much larger discount. From the scheme of things, when I speak about this categories or category, where you need higher discounted margins, physically here and far between. And if you think about the fact that we are guiding you guys to somewhere between $215 million and $220 million in revenue, the amount of inventory that we're talking about is just not material.

Robert N. Peay

And Rob, just to add just a little bit more color. So as you saw in our margin commentary that we did back up 50 basis points on a year-over-year basis for Q4. And in part, that was the -- we sharpened our pencil a little bit more to move some seasonal product. But we are still able to move product above cost. It's just that we took a little bit more of a haircut. And it really depended on the category. Some categories we had to discount a little bit more, and others we didn't have to discount as much.

Operator

And our next question comes from the line of Sean Naughton from Piper Jaffray.

Sean P. Naughton - Piper Jaffray Companies, Research Division

Just one quick housekeeping item and then maybe one other question. But just on the CapEx, did you guys talk about how much you're going to spend in 2013?

Peter R. Metcalf

I'm going to let Robert answer that because he's got numbers in front of him and I don't. Though I think I know, but -- and I do know, but I want Robert to answer that.

Robert N. Peay

Sean, so for 2013, we're expecting to spend roughly $5 million on global CapEx.

Sean P. Naughton - Piper Jaffray Companies, Research Division

Okay. If I remember, that's relatively similar year-over-year. Is that correct?

Robert N. Peay

Yes. It's actually going to be a little bit less than what we are projecting to do this year. So this year, we were thinking we're going to be kind of between the $5.5 million and $6 million. And I think several months ago, you asked where we are kind of looking to land. And I thought we'd be on the higher end of that. Actually, I think we're going to be on the lower end. So we'll be closer to the $5.5 million level for 2012.

Peter R. Metcalf

And by the way, we do have 2 more companies now, POC and PIEPS. So this is for all the companies versus just one or 2 -- excuse me, 2. So we got 4 companies there plus apparel.

Sean P. Naughton - Piper Jaffray Companies, Research Division

Got it. And then just on the inventory, are there -- can you just describe kind of the -- are there any pockets of inventory that you are a little concerned about? I mean it looks a little bit ahead of your growth rate for 2013, although it does sound like that the ASAP orders, you've got better here in Q1. Maybe just talk a little bit about how you feel about the overall composition of that product and the balance sheet right now.

Peter R. Metcalf

I think that, number one, from the standpoint of guiding to $215 million to $220 million worth of revenue in 2013, the numbers we're talking about are just not overly material. And I don't think they're, by any means, out of sync with any of our competitors. If anything, they may be less. But we have done over the years, I think, a pretty damn good job of how we've managed this and have had, I think, way below-average issues with DM. And then secondly, I think that some of our competitors, who are much larger, they do have their outlet stores. And a couple of well, strategically positioned outlet stores can move an amazing amount of product once people and consumers know where they're at. We don't have that luxury. So we are working with our usual suspects around the world of companies that do, do a good job of moving significant amounts of inventory between discounted closeouts, between the web and through their locations. And I think that will handle it. When it comes down to the DM, honestly, it's fundamentally in a couple of core categories, we carry a product for 2 to 3 years. And I think we shared with you that strategic situation. We had hoped that this winter would have gotten off to a much more robust and vigorous start than it did. It's only ending okay. But as you -- I think we talked about the last call, and certainly you're aware of, is that retailers in the outdoor space and ski retailers did not have an awesome, pre-Christmas period. So they didn't take as much inventory and they had stuffs left that they're clearing out. And as a net result, we have our brand-new ski line. And we're excited to buy it, and the response has been wonderful. We have the new SMX ski boot, which has gotten great responses both in Europe and in North America. But the net result is that, that ski product and those ski boots that are made anachronistic and are going to be discontinued and not carried forward into the next season, they're DM. They're discontinued, and they're not going to be sold as in-line product as of now. And so those are the kind of products that will have to take some meaningful discounts to compete against the other discounted product that's out there. But we've fairly open about -- sure about -- sharing with you overall numbers of ski versus climb versus mountain versus wheels, et cetera. And as we've said before, skis and ski boots are not a -- an overly material amount of the ski category, let alone our overall aggregate business. But there are products there that we need to move out at a discount.

Sean P. Naughton - Piper Jaffray Companies, Research Division

But overall, it doesn't seem like it's a major concern for you at this point in time or it's kind of business as usual and operating in the outdoor, weather-dependent space. This is just kind of a...

Peter R. Metcalf

Yes. I think that's a very good description of it. I mean I've been proud of the fact that over the years -- we have, in most years, been really great about having so little available. But clearly, with 2 back-to-back years that were not great, it's a bit more than what we've typically dealt with. But it's not, by any means, what I would call insurmountable where it's going to derail the business. And we're certainly not worried about it "polluting" the marketplace for Black Diamond. It's not at that scale by any means.

Operator

And our next question comes from the line of Mark Smith from Feltl and Company.

Mark E. Smith - Feltl and Company, Inc., Research Division

Guys, I think most things had been answered. But just quickly looking at timing this year, will we see most of the apparel shifting to Q3? Or will that be fairly spread out in Q3 and Q4?

Peter R. Metcalf

I -- yes. That was a good question, Mark. And we're going to start shipping probably not before September 1. That's what we've committed to retailers on. So it will be -- a big chunk of it will be in September. However, we have allowed -- it is our retail partners, retailers to have 2 orders. And they've made a commitment. We have a good working relationship with these people we work with. So you going to clearly see some of these move into -- to October. So that's when it's booked. So some of it will be the third quarter. A significant amount will be the third quarter. But a significant amount of it will be also in the beginning of the fourth quarter.

Mark E. Smith - Feltl and Company, Inc., Research Division

I guess one more. Just on the late snow, and you spoke a little bit to retailers' inventory, any difference that you see right now between apparel and hard goods retailer inventory?

Peter R. Metcalf

Yes. As you know, other than gloves and mittens, we're one of the market leaders in North America, Japan and parts of Europe, so we understand the glove and mitten situation. The apparel situation we're new to relative to launching into it, so we don't have quite the relationship with retailers as to what's the inventory overhang, et cetera. But the general sentiment of what we are hearing, and again, just having had all of -- almost 24 hours -- yes, 24 hours here in Europe and being at a meeting of the British trade and having some Germans here as well, what we're hearing is that most of them feel, at this time, that they have gotten themselves into a very, not only comfortable, but actually a pre-idyllic situation with inventory that it's continuing to be snowing and cold. Some of them have exclude discounted. But in Europe, they don't pull the trigger for discounting nearly as early as twitchy American retailers. So as I was sharing at the beginning of this call, the Schuster [ph] guys from Munich, as well as some of the British accounts I talked to, said that they didn't pull the panic button. And they are very pleased with both sell-through now and margin. So I wasn't getting into, in these conversations, specifics. We're talking generally. And it is -- again, it seems like people are very comfortable with that. That doesn't mean that there is not, for example, apparel somewhere in the supply chain with the majors that are filling their outlet stores for STP [ph] or some of the well-known distribution outlets for this kind of products for next fall. But I can't speak specifically to that on apparel, because I haven't heard it firsthand and haven't heard about it?

Operator

[Operator Instructions] And our next question comes from the line of Dave King from Roth Capital Partners.

David M. King - Roth Capital Partners, LLC, Research Division

Maybe first off, Peter, following up on your comment earlier about what's misunderstood by investors, I guess now that you have the -- I mean the Zions facility in place, I know you're mainly focused on tuck-in acquisition going forward. I guess, without having to come back to the market, how large specifically do you think your current balance sheet could accommodate? Or better, what are you comfortable with exactly?

Peter R. Metcalf

Dave, Peter. I mean, it's a great question. I mean, I think you know what the -- we just explained to you what our revolver is on that balance sheet. I think some of it comes down to what is the working capital needs of that business. Is there opportunity to do anything on the extended payout or earnout? Would they take any stock? There's a lot of sort of possibilities and what ifs. So it's really hard to say. I think what it is -- if you want just a very broad-stroke generalities, I don't think -- and I know we wouldn't be comfortable doing the POC. Will we be comfortable doing something on the size and scale of a PIEP? I think the answer would be yes, if we look at the working capital needs, how they -- how inventory is moved, what incentives might be in place for management, what savings we can get quickly from the deal, we would look at it very rigorously, as we've looked at those past 2 deals, model it appropriately. And I think the one thing that I can assure you is that we will not do a deal that, we believe, puts any risk to Black Diamond. And at the same time, if the deal looks strategically great and looks like something we can comfortably handle without putting any risk on BD or that does not present us with any kind of a handicap relative to growing POC and PIEPS and BD apparel and doing those things, we would do it. But as I said, and as I'm sure you're aware of, there's a million ways to structure a deal. Every company that you look at is different relative to their working capital needs, what you can carve out of them, what you can save and what you can't. So you have to look at it from 20,000 feet in a very holistic way versus "just price" because price alone doesn't tell you what you can afford or not afford. That said, it will be, of course, a smaller deal to the reason I just articulated.

David M. King - Roth Capital Partners, LLC, Research Division

Yes. That was extremely helpful. And then, I guess to flip it on you a little bit, you mentioned earlier that you believe the stock is undervalued, given what you'd see several years out, knowing that you're in growth mode, but at the same time with the stock being undervalued in your mind, at what point might you consider buying back stock, if at all? Or at least, just maybe you can comment on how you think about the trade-off between the incremental return, reinvesting in the business or returning cash, et cetera.

Peter R. Metcalf

Yes, good question. And let me begin by saying, I'm sharing with you my own professional opinion. The idea about buying back stock and the sort of things has not been a topic of discussion at a single board meeting, let alone with the executive team of Warren Kanders, Rob Schiller, Robert Peay and myself. But I think, based upon the myriad of discussions we have, the vision we have, our commitment to growth, these amazingly iconic and beautiful brands we have and this -- the apparel opportunity, I would hope that investors would shoot us after draw and quartered me, if we attempted to buy back stock. Because it was to say that we are so inept at grow -- taking advantage of the opportunities for growth that are in front of us. So I just don't see that as something that you or our investors will want us to do. We are absolutely committed to growth and wisely deploying our capital to get the best growth and the most growth that we can with that capital. And I think doing it in a way that the return on invested capital is something that shareholders applaud and say, "Thank God, you didn't return it to us or buy back stock."

David M. King - Roth Capital Partners, LLC, Research Division

Right. No, it's fair. I just wanted to ask the question in the context of you're thinking that stock is undervalued here and arguably, with it down that prevents certain types of deals and things like that.

Peter R. Metcalf

Yes. Again, yes, we said that we -- I mean, you've heard us, relative to what are focus is, and at the same time, we have said that we are -- we're going to continue to do strategic and opportunistic acquisitions. But our focus is on using our invested capital to grow these brands and this business globally in a way that is accretive to division that we have been so consistent in communicating, I think, with a lot of passion. I mean, the opportunity in front of us right now are huge. And we have -- we're not even 3 years into this. And I think we have -- we're really proud that we have accomplished nearly everything that we said we were going to do with the money we had. We are really well positioned. We acquired this brand. We opened up Japan. We launched the apparel successfully and built a ski factory. We've invested in our infrastructure. We're launching here, within a few months, a brand-new, transactional website for the BD brand and Gregory and other sites. I mean, we have done everything we said we were going to do. We have -- we've really positioned the company now well to continue to grow. And we're proud of the numbers we're guiding to for this year. Very, very confident and excited, and we think that as we continue to execute on what we are communicating we're going to execute on and we achieve that and investors see that we really don't need additional investment that -- I think that, that will be what will help drive the share price up as people realize that we are really creating this $0.5 billion and onward to a $1 billion beautiful portfolio of operation.

Operator

And at this time, I'm showing no further questions in my queue. I'd like to turn the conference back over to Mr. Metcalfe for closing remarks.

Peter R. Metcalf

All right, Michaela, thanks. And I want to thank everyone. So in conclusion, we are pleased to report another solid year and continue to expect compounded annual revenue growth from existing categories, which is consistent with our 5-year growth plan. We see new categories, such as apparel, and the organic growth of our recent strategic acquisitions is additive and, in the long term, could be larger than our base business today. I do look forward to speaking with all of you again soon. Thank you.

Operator

Ladies and gentlemen, this does conclude our conference for today. We thank you, all, for your participation. And at this time, you may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Black Diamond Management Discusses Q4 2012 Results - Earnings Call Transcript

Check out Seeking Alpha’s new Earnings Center »

This Transcript
All Transcripts