Sales were off by 4.8 percent to about $36.9 million for Camelbak Products in the first quarter of this year. Adding that it was pursuing “add-on acquisitions,” Compass Diversified Holdings (CODI), parent company of the brand, said the drop was exclusively due to a decline of $2.6 million in sales of hydration systems and attributed it to the timing of shipments, reduced military demand and congestion at the U.S. West Coast ports.
Conversely, sales of bottles and accessories grew by $0.8 million and $0.4 million, respectively. Bottle sales went up in the U.S. as well as abroad, led by products such as Eddy, the Podium line of insulated bottles, and the Chute ergonomic high-flow water bottle. Together, hydration systems and bottles represented 86 percent of the quarterly turnover, and military sales 19 percent.
The gross margin declined by 2.3 percentage points to 41.3 percent, mainly because of the higher value of the U.S. dollar and increased air freight charges related to the West Coast port congestion. The brand's operating earnings before amortization (Ebitda) were off to $7.5 million from $9.6 million.
Indicating that Camelbak should deliver strong results for the full year, CODI said it is working with the brand's management to broaden its international sales, expand the product range into everyday hydration and penetrate select areas of specialty retail.
All the other subsidiaries of CODI recorded higher sales, leading to an overall sales increase for the group to $257.3 million from $246.0 million. However, the operating profit declined to $2.1 million from $18.0 million, due in part to an impairment charge of $8.9 million for a medical subsidiary.
The Branded Consumer division, which includes Ergobaby and Liberty in addition to Camelbak, reported a 4.3 percent drop in revenues to $83.4 million, and its adjusted Ebitda margin fell by 0.7 percentage points to 20.7 percent.
The group suffered a net loss of $25.3 million for the quarter, against net income of $7.4 million in the year-ago period, due also to a decline of $13.4 million in the profit contribution from Fox Factory.