As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 8/28/14  Old PSG Wind-Down Ltd.            40-F        5/31/14    7:1.8M                                   Merrill Corp-MD/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 40-F        Annual Report by a Canadian Issuer                  HTML     72K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML    731K 
 3: EX-99.4     Miscellaneous Exhibit                               HTML     14K 
 4: EX-99.5     Miscellaneous Exhibit                               HTML     14K 
 5: EX-99.6     Miscellaneous Exhibit                               HTML     11K 
 6: EX-99.7     Miscellaneous Exhibit                               HTML     11K 
 7: EX-99.8     Miscellaneous Exhibit                               HTML      8K 

Exhibit 99.1

 

 

(formerly, Bauer Performance Sports Ltd.)

 

Annual Information Form

For the Fiscal Year

Ended May 31, 2014

 

Dated August 27, 2014

 

 

 

TABLE OF CONTENTS

 

EXPLANATORY NOTES		1
Forward-Looking Statements		1
Market and Industry Data		2
Trademarks, Business Names and Service Marks		3
CORPORATE STRUCTURE		4
Incorporation and Office		4
Intercorporate Relationships		4
GENERAL DEVELOPMENT OF THE BUSINESS		5
History		5
The Easton Baseball/Softball Acquisition		5
The Combat Acquisition		6
The Inaria Acquisition		6
The Cascade Acquisition		6
INDUSTRY OVERVIEW		8
Sporting Goods Industries		8
Ice Hockey		10
Roller Hockey		11
Street Hockey		11
Baseball and Softball		12
Lacrosse		13
Team and Other Apparel		14
BUSINESS OF THE COMPANY		15
Our Company		15
Our Core Strengths		17
Growth Strategies		21
Products		26
Customers		33
Research and Development		34
Global Manufacturing, Sourcing and Distribution		35
Facilities		37
Environment		37
Intellectual Property		37
Information Technology		39
Employees and Culture		39
Seasonality		39
DESCRIPTION OF CAPITAL STRUCTURE		41
General		41
Equity Shares		41
Conversion Rights		41
Liquidation Entitlement		41
Dividend Rights		41
Voting Rights		41
Variation of Rights		42
Subdivision or Consolidation		42
Sale of All or Substantially All of the Company’s Assets		42
Take-Over Bid Protection		42
DIVIDEND POLICY		43
RATINGS		43
Standard & Poor’s Ratings		43
Moody’s Ratings		43

 

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MARKET FOR SECURITIES AND TRADING PRICE AND VOLUME		44
DIRECTORS AND OFFICERS		45
Directors		45
Directors and Executive Officers		45
Biographies		46
Cease Trade Orders or Bankruptcies		49
Penalties or Sanctions		50
Conflicts of Interest		50
AUDIT COMMITTEE INFORMATION		50
Charter of the Audit Committee		50
Composition of the Audit Committee		50
Relevant Education and Experience of the Audit Committee Members		50
External Auditor Service Fee		51
RISK FACTORS		52
Risks Related to Our Business		52
Risks Related to Macroeconomic Environment		72
LEGAL PROCEEDINGS AND REGULATORY ACTIONS		75
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS		75
AUDITORS, TRANSFER AGENT AND REGISTRAR		75
MATERIAL CONTRACTS		75
The Credit Facility		75
The Vapor License Agreement		78
Nomination Rights Agreement		79
Registration Rights Agreement		79
INTERESTS OF EXPERTS		80
ADDITIONAL INFORMATION		80
APPENDIX A GLOSSARY OF TERMS		A-1
APPENDIX B CHARTER OF THE AUDIT COMMITTEE		B-1

 

iii

 

and regulatory standards, infringement of intellectual property rights of others, diminution of the goodwill associated with the EASTON and MAKO brands caused by licensed users or unauthorized users, inability to translate booking orders into realized sales, change in the mix or timing of orders placed by customers, seasonal fluctuations in the demand for our products resulting from adverse weather or other conditions, decrease in ice hockey, baseball and softball, roller hockey or lacrosse participation rates, adverse publicity related to or reduced popularity of the National Hockey League (“NHL”), Major League Baseball (“MLB”) or other professional or amateur leagues in sports in which our products are used, reliance on third-party suppliers and manufacturers, disruption of distribution chain or loss of significant customers or suppliers, imposition of new trade restrictions or existing trade restrictions becoming more burdensome, consolidation of our customer base (and the resulting possibility of lower gross margins due to negotiated lower prices), change in the sales mix towards larger customers, cost of raw materials, shipping costs and other cost pressures, risks associated with doing business abroad, inability to expand into international market segments, inability to accurately forecast demand for products, insufficient sell through of our products at retail, inventory shrinkage or excess inventory, product liability claims and product recalls, changes in compliance standards of testing and athletic governing bodies, risks associated with our third-party suppliers and manufacturers failing to manufacture products that comply with all applicable laws and regulations, inability to source merchandise profitably in the event new trade restrictions are imposed or existing trade restrictions become more burdensome, departure of senior executives or other key personnel, including senior management of Easton Baseball/Softball, litigation, including certain class action lawsuits, employment or union-related disputes, disruption of information technology systems, potential environmental liabilities, restrictive covenants in the Credit Facilities, unanticipated levels of indebtedness, inability to generate sufficient cash to service all the Company’s indebtedness, inability to successfully integrate new acquisitions, such as Easton Baseball/Softball, inability to realize growth opportunities or cost synergies that are anticipated to result from new acquisitions, such as the Easton Baseball/Softball Acquisition, undisclosed liabilities acquired pursuant to recent acquisitions, significant transaction and related costs in connection with the integration of Easton Baseball/Softball, inability to continue making strategic acquisitions, possibility that judgments may be enforced against us, volatility in the market price for Common Shares, possibility that we may be declared a passive foreign investment company for United States tax purposes, possibility that we may need additional capital in the future, assertion that the acquisition of the Bauer Hockey Business at the time of the IPO was an inversion transaction, conversions and potential future sales of Equity Shares, our current intention not to pay cash dividends, conflicts of interests among investors, fluctuations in the value of certain foreign currencies, including the Canadian dollar, Chinese renminbi, euro, Swedish krona, Taiwanese new dollar and Thai baht in relation to the U.S. dollar, inability to manage foreign derivative instruments, general adverse economic and market conditions, changes in consumer preferences and the difficulty in anticipating or forecasting those changes, changes in government regulations, including tax laws and unanticipated tax liabilities, inability of counterparties and customers to meet their financial obligations and natural disasters. These factors are not intended to represent a complete list of the factors that could affect us; however, these factors should be considered carefully.

 

The purpose of the forward-looking statements is to provide the reader with a description of management’s expectations regarding the Company’s financial performance and may not be appropriate for other purposes. Readers should not place undue reliance on forward-looking statements made herein. Furthermore, unless otherwise stated, the forward-looking statements contained in this Annual Information Form are made as of the date of this Annual Information Form, and we have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The forward-looking statements contained in this Annual Information Form are expressly qualified by this cautionary statement.

 

Market and Industry Data

 

We have obtained the market and industry data presented in this Annual Information Form from a combination of (i) internal company surveys and commissioned reports, (ii) third-party information, including information from independent industry publications and reports, such as the Sports and Fitness Industry Association (“SFIA”) and SportScan Info, (iii) publicly available sport participation surveys from national sport organizations or governing bodies, including the Canadian Hockey Association (“Hockey Canada”), the International Ice Hockey Federation (“IIHF”), USA Hockey, Inc. (“USA Hockey”), USA Baseball, the World Baseball Softball Confederation, U.S. Lacrosse, Inc. (“U.S. Lacrosse”), and the International Federation of Football Association (“FIFA”), and (iv) the estimates of the Company’s management team. As the sources that objectively and consistently report on ice hockey, roller hockey, baseball, softball, lacrosse, and soccer equipment and related apparel markets are limited, much of the industry and market data presented in this Annual Information Form is based on internally generated management estimates by the Company, including estimates based on extrapolations

 

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from third-party surveys of ice hockey, roller hockey, baseball, softball, lacrosse, and soccer equipment and related apparel markets, as well as publicly available sport participation surveys. While we believe our internal surveys and the third-party information, publicly available sport participation surveys and estimates of our management are reliable, we have not verified them, nor have they been verified by any independent sources. While we are not aware of any misstatements regarding the market and industry data presented in this Annual Information Form, such data involves risks and uncertainties and is subject to change based on various factors, including those factors discussed under “Forward-Looking Statements” and “Risk Factors”. References to market share data and market size in this Annual Information Form are based on wholesale revenues unless otherwise indicated.

 

To the extent market and industry data contained in this Annual Information Form is referenced as a “management estimate” or qualified by phrases such as “we believe” or comparable words or phrases, we have internally generated such data by using a variety of methodologies. With respect to unregistered ice hockey player participation, we have relied on a combination of available external sources and assumed registered-to-unregistered player ratios in the major markets. With respect to market size and market share data for the sports markets which we address, we have relied on our internal sales figures and have estimated the sales figures of our competitors using the following data: (i) sales data supplied by major suppliers who participate in voluntary surveys, (ii) cross references to participation rates and estimates of equipment replacement rates by consumers, (iii) available public reports from competitors (such as Reebok), largely to confirm industry trends, and (iv) retail surveys.  Certain market and industry data estimated by us are based on, or take into account, assumptions made by us in light of our experience of historical trends, current conditions, as well as other factors. Although we believe such assumptions to be appropriate and reasonable in the circumstances, there can be no assurance that such estimates and assumptions are entirely accurate or correct. The purpose of using internal estimates is to provide the reader with information concerning the industries in which we compete and our relative performance and may not be appropriate for other purposes. Accordingly, readers should not place undue reliance on internal estimates made herein. The internal estimates contained in this Annual Information Form are expressly qualified by this paragraph.

 

Trademarks, Business Names and Service Marks

 

This Annual Information Form includes trademarks, such as BAUER, SUPREME, NEXUS, MISSION, MAVERIK, CASCADE, INARIA, COMBAT, EASTON and MAKO which are protected under applicable intellectual property laws and are the property of the Company’s subsidiaries. Solely for convenience, our trademarks and business names referred to in this Annual Information Form may appear without the ™ or ® symbol, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks and business names. All other trademarks used in this Annual Information Form are the property of their respective owners or have been licensed to us. See “Business of the Company — Intellectual Property”.

 

3

 

CORPORATE STRUCTURE

 

Incorporation and Office

 

The Company was incorporated under the BCBCA on December 2, 2010, and its corporate name was changed shortly thereafter to Bauer Performance Sports Ltd. On June 17, 2014, the Company changed its corporate name from Bauer Performance Sports Ltd. to Performance Sports Group Ltd. The renaming of the Company as Performance Sports Group Ltd. is another step in the Company’s evolution as a world-class performance sports product platform and was undertaken to better reflect the growth of the Company in connection with its recent strategic acquisitions and expansion into new high performance sports.

 

The Company’s registered office is located at 666 Burrard Street, Suite 1700, Vancouver, British Columbia, V6C 2X8. The Company’s headquarters and executive officers are currently located at 100 Domain Drive, Exeter, New Hampshire 03833, United States. At the Company’s annual and special meeting of shareholders held on October 16, 2013, the Shareholders approved an amendment to the Company’s Articles to require advance notice for the nomination of directors. The Company’s Articles are available on SEDAR at www.sedar.com.

 

Intercorporate Relationships

 

The organization chart below indicates the intercorporate relationships of our Company and our wholly-owned material operating and certain other subsidiaries together with the jurisdiction of incorporation or constitution of each such subsidiary.

 

 

4

 

GENERAL DEVELOPMENT OF THE BUSINESS

 

History

 

Headquartered in Exeter, New Hampshire, we are a leading designer, developer and manufacturer of high performance sports equipment and related apparel. Our mission is to elevate player performance and protection at all levels through a combination of athlete insights and superior innovation.

 

As part of our growth strategy, we have acquired, integrated and significantly accelerated the growth of six businesses since 2008, and recently completed our seventh acquisition, Easton Baseball/Softball, in April 2014. Our most recent strategic acquisitions are described below.

 

The Easton Baseball/Softball Acquisition

 

On April 15, 2014, we completed the acquisition of the Easton baseball and softball business and the assets formerly used in Easton-Bell Sports, Inc.’s lacrosse business (“Easton Baseball/Softball”) from Easton-Bell Sports, Inc., now named BRG Sports, Inc. (“BRG Sports”), for $330 million in cash, plus a net working capital adjustment of $21.7 million (the “Easton Baseball/Softball Acquisition”).

 

In respect of the Easton Baseball/Softball Acquisition, the Company filed a Business Acquisition Report on June 12, 2014, a copy of which is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

 

We acquired Easton Baseball/Softball as part of an ongoing strategy to utilize our proven acquisition platform to expand our business into complementary categories and sports. The acquisition greatly enhances our brand portfolio, offers us another significant lever for growth, adds valuable intellectual property (including 146 patents and patents pending) and provides a significant counter-seasonal business to our existing revenue stream and working capital needs. Additionally, our R&D-focused platform will allow for cross-pollination of technologies between EASTON and COMBAT, as well as our other sports, and provide the necessary infrastructure to grow the EASTON brand.

 

We expect the acquisition to have numerous financial benefits, including being accretive to Adjusted EPS within the first year of ownership and generating significant Free Cash Flow to support our growth. The spring/summer season of baseball and softball is highly complementary to the fall/winter season of hockey, and our quarterly sources of revenue and profitability will be more balanced throughout the year as a result. The more evenly distributed seasonality of the combined business will provide more consistent working capital levels and will allow us to improve our efficiency in our manufacturing, distribution and marketing efforts.

 

As a result of the Easton Baseball/Softball Acquisition, we acquired the EASTON and MAKO brands and trademarks and entered into an intellectual property agreement to license back the use of these trademarks to BRG Sports (and their permitted successors and assigns) for use in their hockey and cycling businesses on an exclusive, perpetual, royalty-free basis. EASTON is one of the world’s leading and most iconic diamond sports brands with authentic brand equity accumulated over 40 years of designing and manufacturing high performance diamond sports products. Building upon its heritage in bats, EASTON has developed into one of the strongest and most innovative brands in baseball and softball, and holds the #1 position in diamond sports in North America with an approximately 28% market share and strong positions in multiple product categories. Easton Baseball/Softball has gained market share in recent years, as revenues grew at a 7% compound annual growth rate from 2009 to 2013 driven by innovative and higher-priced new product lines, an effective go-to-market strategy and significant brand investment.

 

The acquisition provides us with significant opportunities to build on the business’ strong foundation to further drive revenue growth opportunities in the United States and internationally. We believe EASTON’s brand equity positions it well to expand in other diamond sports equipment categories that have historically been less of a focus for the business, such as ball gloves, accessories, batting gloves and apparel. As we have done with Bauer Hockey, we expect to increase Easton Baseball/Softball’s market share in diamond sports equipment by accelerating investment in product development, instilling category management discipline and enhancing already strong connections with consumers. We also believe we can leverage our team apparel capabilities to add uniforms to Easton Baseball/Softball’s apparel business, further increasing its revenue growth potential. Another area of revenue growth opportunity is the expansion of EASTON’s presence internationally, particularly in Japan, the second largest baseball market globally.

 

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The Company initially financed the Easton Baseball/Softball Acquisition, as well as refinanced certain existing indebtedness with a $200 million secured asset-based revolving credit facility (the “ABL Facility”) and a $450 million secured term loan credit facility (the “New Term Loan Facility” and together with the “New ABL Facility”, collectively, the “Credit Facilities”). On June 25, 2014, the Company completed an underwritten initial public offering on the New York Stock Exchange (“NYSE”) and a new issue of common shares in Canada for net proceeds of approximately $119.5 million (the “US IPO”), including the exercise in full of the over-allotment option. The Company used the net proceeds of the US IPO to reduce leverage and repay approximately $119.5 million of the Company’s New Term Loan Facility. The Company’s common shares are now dual listed on the NYSE and the TSX under the trading symbol “PSG”.

 

The Combat Acquisition

 

On May 6, 2013, we completed the acquisition of substantially all of the assets of Combat Sports for an aggregate purchase price of approximately Cdn$4 million in cash. The acquisition of Combat Sports was funded from cash on hand.

 

Combat Sports has been supplying composite and hybrid composite products for both its own COMBAT brand as well as for high-end brand name companies since 1998 in the baseball and softball bat, hockey stick and lacrosse shaft markets. The business has a reputation for its premier and innovative composite technology with the latest composite advancements in performance and durability serving players from the grassroots level to the elite professional levels. Combat Sports and several of its key employees have had a long history of expertise in composite materials, including developing innovative products for NASA, the U.S. Military and several leading manufacturers. By continuing to focus resources in the areas of Combat Sports’ success — baseball, softball and advanced composite technologies — we expect to further strengthen the COMBAT brand and grow our overall portfolio of high-performing products.

 

The Inaria Acquisition

 

On October 16, 2012, we completed the acquisition of Inaria. The Company entered into a purchase agreement with Inaria and its stockholders pursuant to which we purchased substantially all of the assets of Inaria for an aggregate purchase price of approximately Cdn$7 million in cash. The Company used its former credit facility to fund the Inaria Acquisition.

 

Inaria, a Toronto-based company, was founded in 1999 and INARIA has become a growing brand in the team sports and active wear industry, providing a full-line of team apparel products, including pro-style jerseys, practice jerseys, socks, warm-up suits and training apparel for both youth sports programs and the most elite-level teams. Named after the Italian soccer phrase “in the area,” Inaria began its business with a focus on soccer uniforms and products and quickly established INARIA as a growing soccer apparel brand. The company’s expertise in developing quality products with competitive pricing and rapid turnaround time quickly propelled the brand into ice hockey and other sports. Inaria’s co-founders remain actively involved in the Company’s uniforms business. We believe the Inaria Acquisition has strengthened our position in team apparel, establishing Performance Sports Group as a “one-stop shop” in this growing segment of the market.

 

The Cascade Acquisition

 

On June 29, 2012, we completed the acquisition of Cascade. The Company entered into a purchase agreement with Cascade and its stockholders pursuant to which we purchased all of the outstanding shares of the capital stock of Cascade for an aggregate purchase price of $64 million in cash subject to adjustment. In respect of the Cascade Acquisition, the Company filed a Business Acquisition Report on August 7, 2012, a copy of which is available on SEDAR website at www.sedar.com.

 

In order to fund the Cascade Acquisition, the Company (i) completed a public offering of 3,691,500 Common Shares at a price of Cdn$7.80 per share, including the exercise in full of the over-allotment option, for gross proceeds of Cdn$28,793,700; (ii) completed a concurrent private placement of the equivalent of 642,000 Common Shares at the same price as those sold under the public offering, for gross and net proceeds of Cdn$5,007,600, which were purchased by the Kohlberg Funds (substantially all of the shares issued to the Kohlberg Funds were in the form of Proportionate Voting Shares), and (iii) entered into amendments to its former credit facilities.

 

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The Cascade Acquisition has significantly expanded our presence in the growing lacrosse market, through the addition of an industry-leading brand whose helmet and headgear products have been complementary to our existing offering of lacrosse equipment products. The Cascade Acquisition has allowed us to provide retailers with a broader range of performance sports equipment. In addition, the combined product innovation and research capabilities of Performance Sports Group have positioned us to expand our lacrosse offering.

 

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INDUSTRY OVERVIEW

 

Sporting Goods Industries

 

We design, develop, manufacture and sell performance sports equipment and related apparel for ice hockey and roller hockey, baseball and softball, lacrosse and soccer.

 

We operate in the global sporting goods industry with a primary focus on North America and Europe. We believe this global industry is growing, including in the United States where from 2009 to 2013, manufacturers’ wholesale sales of sporting goods increased from $48.3 billion in 2009 to $55.0 billion in 2013, representing a compound annual growth rate of 3%.

 

Manufacturers’ Wholesale Dollar Sales of Sporting Goods in the United States

 

 

Source: SFIA, Manufacturers’ Sales by Category Report, 2014. Sporting goods includes sports equipment and sports apparel.

 

The growing sporting goods-focused retail channel reflects resilient qualities with stable performance through the recent global economic downturn and continued broad market size growth. According to IBISWorld Inc., retail sales of U.S. sporting goods stores, including specialty retailers such as Total Hockey, Lacrosse Unlimited and Baseball Express, and “big box” retailers such as Dick’s Sporting Goods and The Sports Authority, were estimated to be $42.3 billion in 2013 and are forecasted to grow at a 2.3% compound annual growth rate to reach $47.5 billion by 2018. Specialty retail is the main retail outlet for our market and accounts for the majority of our sales. We also sell to “big box” retailers, which are exhibiting growth and expansion.

 

U.S. Sporting Goods Stores Revenue

 

 

Source: IBISWorld Inc., Industry Report, November 2013. U.S. Sporting Goods Stores includes a variety of sports equipment and apparel but excludes certain retailers that exclusively sell apparel.

 

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successfully capitalize on this trend with one-to-two year product cycles focused on innovation and driving customer replenishment purchases. Often, more advanced technology across product cycles allows us to increase average selling prices when introducing new products, further driving growth in our addressable market.

 

Ice Hockey

 

Ice Hockey Participation Rates and Demographics

 

Ice hockey is a team sport played in over 80 countries by more than an estimated six million people. While ice hockey is played around the world, the largest and most significant markets for ice hockey are Canada, the United States and a number of European countries, including the Nordic countries (principally, Sweden and Finland), Central European countries (principally, the Czech Republic, Germany, Switzerland, Austria and Slovakia) and Eastern European countries (principally, Russia).

 

Global registered hockey participation has grown, on average, 2% annually over the last eight years, and according to a 2014 report by the SFIA, ice hockey participation in the United States experienced a 5.1% average annual increase from 2008 to 2013. We believe that the global industry is currently growing at an annual rate in the low-to-mid single digits. Growth rates in Eastern European countries (principally, Russia) and women’s hockey have exceeded that of the global average.

 

Ice Hockey Equipment and Related Apparel Industry

 

The global ice hockey equipment and related apparel industry has significant barriers to entry and is stable in certain regions and growing in others, such as the United States, Eastern Europe and Russia. Ice hockey equipment and related apparel sales are driven primarily by global ice hockey participation rates (registered and unregistered). Other drivers of equipment sales include demand creation efforts, the introduction of innovative products, a shorter product replacement cycle, general macroeconomic conditions and the level of consumer discretionary spending. Management estimates that the global ice hockey equipment market (which excludes related apparel, such as performance apparel, team jerseys and socks) totaled approximately $650 million in calendar 2013. Skates and sticks are the largest contributors to equipment sales, accounting for an estimated 60% of industry sales in calendar 2013, according to management estimates.

 

The following graphs provide a breakdown of our hockey revenue mix by both product and channel.

 

Industry Revenue Mix by Product		Industry Revenue Mix by Channel

 

Source: Management estimates, 2013.

 

Management estimates that over 85% of the ice hockey equipment market is attributable to three major competitors: Bauer Hockey, Reebok (which owns both the REEBOK and CCM brands) and Easton Hockey (which is owned by BRG Sports and utilizes the EASTON brand under a trademark license from the Company), each of whom offers consumers a full range of products (skates, sticks and full protective equipment). The remaining equipment market is highly fragmented among many smaller equipment manufacturers offering specific products, catering to niche segments within the broader market. These competitors include, but are not limited to, WARRIOR, GRAF, VAUGHN and SHERWOOD/TPS.

 

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The following table shows our estimated ranking of the three major competitors referenced above, in total and by major product category:

 

Company

Total Market

Skates

Sticks

Helmets

Protective

Goalie

BAUER

#1

#1

#1

#1

#1

#2

Reebok/CCM

#2

#2

#2

#2

#2

#1

Easton Hockey

#3

#3

#3

#3

#3

n/a

 

Management estimates that the global ice hockey-related apparel market for calendar 2013 (which includes such items as performance apparel, team jerseys and socks) was approximately $390 million in size, and is growing at an annual rate which we believe exceeds that of the ice hockey equipment market. Included in the ice hockey-related apparel market is licensed apparel, which represents approximately one-third of the market. The related apparel market is more fragmented than the equipment market and includes a variety of larger and smaller participants. We expect consolidation in this market to occur in the coming years, in a manner similar to what has occurred in the ice hockey equipment industry.

 

Roller Hockey

 

Roller Hockey Participation Rates and Demographics

 

Roller hockey is a team sport played principally in the United States, particularly in warmer regions such as California. According to a 2014 SFIA report, roller hockey participation in the United States experienced a 3.4% decrease from 2008 to 2013.

 

Roller Hockey Equipment and Related Apparel Industry

 

The roller hockey equipment and related apparel industry shares similar characteristics to the ice hockey equipment and related apparel industry given the similarity of the sports. Management estimates that the wholesale roller hockey equipment market generated approximately $20 million in sales in calendar 2013. Through our Company’s MISSION and BAUER brands, we hold the number one and two market share positions in the roller hockey equipment market, respectively, and have a substantial lead over our primary competitors, including Reebok, Tour and a few competitors in niche categories such as wheels and accessories.

 

Street Hockey

 

Street Hockey Participation Rates and Demographics

 

Street hockey is a team sport played throughout the world, primarily in the largest ice hockey markets. According to management estimates and industry sources, there are approximately 93,000 registered players in Canada, approximately 48,000 registered players in the United States, and approximately 50,000 registered players in the rest of the world. Youth players represent approximately 50% of the registered participants. Management believes that registered participation represents only a small portion of the overall consumer base for street hockey products and that unregistered participants far exceed the registered participants.

 

Street Hockey Equipment Industry

 

The street hockey equipment industry shares similar characteristics to the ice hockey equipment and related apparel industry given the similarity of the sports. Management estimates that the wholesale street hockey equipment market generated approximately $25 million in sales in calendar 2013. The Company has not yet entered the street hockey market, but intends to do so in the near future.

 

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Baseball and Softball

 

Baseball and Softball Participation Rates and Demographics

 

Baseball and softball are team sports played principally in the United States, Japan, certain other Asian countries (such as South Korea) and Latin America. Global baseball/softball participation is estimated to be approximately 65 million, according to the World Baseball Softball Confederation. Baseball is experiencing growth in participation globally and remains one of the most popular team sports by participation in the United States, second only to basketball, according to SFIA. A 2014 SFIA report found that baseball/softball participation in the United States experienced a 3.7% average annual decrease from 2008 to 2013. While participation for baseball and slow-pitch softball in the United States has declined in recent years, the market continues to grow as innovation, particularly in bats, has driven rising prices.

 

Baseball and Softball Equipment and Related Apparel Industry

 

Management estimates that in calendar 2013, the North American and global baseball and softball equipment and related apparel (excluding uniforms) wholesale markets were estimated to be approximately $600 million and $1 billion in size, respectively, one-third of which is attributable to bat sales. Management estimates that the global wholesale baseball/softball-related apparel market for 2013 (which includes uniforms) was approximately $300 million in size. With 65 million participants globally, we believe the enthusiast base in these sports will experience continued growth, driven by increasing popularity of travel ball, club baseball and softball, and more frequent play.

 

The following graphs provide a breakdown of our baseball/softball revenue mix by both product and channel in North America.

 

North American Industry Revenue Mix by Product		North American Industry Revenue Mix by Channel

 

Source: Management estimates for 12 month period ending May 2014.

 

The baseball and softball equipment market is fragmented and is currently led by five major players: our EASTON brand, Hillerich & Bradsby-owned LOUISVILLE SLUGGER, Jarden-owned Rawlings Sporting Goods, Amer Sports-owned Wilson Sporting Goods and Mizuno Corp. Similar to Easton Baseball/Softball, our major competitors offer a full line of baseball and softball products and varying degrees of related apparel. In total, we compete with over a dozen brands in the baseball and softball equipment market including, in addition to those above, Amer Sports-owned DEMARINI, MARUCCI, Jarden-owned MIKEN and WORTH, NOKONA, ZETT and SSK.

 

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The following table shows our estimated ranking in North America of the five major competitors referenced above, in total and by major product category:

 

Company

Total Market

Bats

Batting Helmets

Catcher Protective

Equipment Bags

Batting Gloves

Apparel

Accessories

Ball Gloves

Easton

#1

#1

#1

#1

#1

#3

#2

#3

#6

Rawlings

#3

#3

#2

#2

#5

n/a

#1

#5

#1

Mizuno

#4

n/a

#3

#3

n/a

#4

#3

n/a

#2

Hillerich & Bradsby

#5

#4

n/a

n/a

#4

n/a

n/a

n/a

#4

Wilson

#2

#2

n/a

#4

#3

#5

#7

n/a

#3

 

Lacrosse

 

Lacrosse Participation Rates and Demographics

 

Lacrosse is a team sport played principally in the United States and Canada. According to U.S. Lacrosse, lacrosse has been one of the fastest growing team sports in the United States, with participation growing at a 10.8% from 2008 to 2013 on an average annual basis with over 750,000 registered players in the United States in calendar 2013. In Canada, we estimate that there are currently 150,000 participants. The drivers of this growth include: (i) the establishment and popularity of the National Lacrosse League and Major League Lacrosse, (ii) the rapid expansion of high school and youth programs, (iii) emerging growth outside of key lacrosse markets in the Mid-Atlantic and Northeastern United States, (iv) enhanced funding and popularity of the NCAA lacrosse programs, and (v) increased visibility of the sport in media and advertising.

 

Approximately 93% of lacrosse participants in the United States are under the age of 20, with 54% of participants in the youth (15 and under) category and 39% of participants in the high school category. Similar to ice hockey, the high representation of youth in the sport provides the industry with a more frequent product replacement cycle as players outgrow their equipment. The following graphs illustrate the growth in U.S. lacrosse participation for the periods presented and the demographic breakdown of U.S. participation for 2013:

 

U.S. Lacrosse Participation (# of Players in Thousands)		2013 U.S. Lacrosse Participation by Level

 

Source: U.S. Lacrosse, Participation Survey, 2013.

 

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Lacrosse Equipment and Related Apparel Industry

 

Management estimates that in calendar 2013, the United States lacrosse equipment market was approximately $110 million in size at wholesale while the Canadian market was estimated to be approximately $10 million in size. Management estimates that the lacrosse market will continue to grow in the range of high single digits to low double digits for the next several years. The lacrosse equipment market is made up of four primary equipment categories: sticks (shafts and heads), gloves, helmets and protective equipment. Representing approximately 35% of calendar 2013 industry-wide United States sales, sticks currently make up the largest segment of the lacrosse equipment market. Helmets currently make up approximately 25% of calendar 2013 industry-wide United States sales. Management estimates that the lacrosse apparel market in North America for calendar 2013 was approximately $30 million in size.

 

The following table shows our estimated ranking in North America of our four major competitors, in total sales:

 

Market Position:		#1			#2			#3			#4
Estimated sales ($MM)		$	40		$	30		$	25		$	10

 

The North American lacrosse equipment and related apparel market is a high growth, emerging sports equipment market underpinned by strong growth in participation rates. The lacrosse equipment market is currently led by six major brands: New Balance-owned WARRIOR and BRINE, our MAVERIK and CASCADE brands, STX, and Jarden-owned DEBEER (women’s only). The Company’s three major competitors all offer full lines of lacrosse equipment products, while Cascade’s product offering is primarily focused on helmets.

 

Team and Other Apparel

 

Team apparel and uniforms make up a large and growing market characterized by high fragmentation and competition, which provides significant competitive advantages to companies that can offer one-stop shopping for high quality products and a unified look (equipment and apparel) under authentic brands. Most of our major competitors in the sports markets that we address offer related apparel to varying degrees but since the Inaria Acquisition, we are able to offer teams, associations and clubs one-stop access for our high performing equipment and all segments of apparel: team, performance and lifestyle.

 

We currently offer all segments of apparel under the BAUER brand in hockey. We have recently launched MAVERIK-branded uniforms in lacrosse and will be looking to expand our apparel presence in lacrosse in the future. We expect to expand our apparel presence in baseball/softball using the strength of the EASTON and COMBAT brands to grow this category in the future.

 

We participate in the soccer uniform market through our INARIA brand, which offers a wide variety of soccer apparel, including uniforms, as well as related accessories. As the most popular and widely played sport in the world, global soccer participation is estimated to be approximately 265 million, according to FIFA. In 2011, similar reports estimated that there were nearly one million registered soccer players in Canada and more than 4.5 million registered players in the United States. A 2014 SFIA report found soccer (indoor and outdoor) participation in the United States to be relatively flat on an average annual basis over the last five years. The Canadian and U.S. soccer uniform market is estimated to be in excess of $300 million, including both registered and recreational players.

 

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In recent years, we have experienced strong revenue and profit growth through innovation, product development, marketing and acquisitions that have driven market share gains in all of our sports. Our scale, strong distribution and manufacturing relationships, disciplined cost management and sourcing strategies have enabled us to maintain consistent and attractive Adjusted EBITDA margins and to compete successfully. Our annual revenues have grown from $220 million in Fiscal 2008 to $446 million in Fiscal 2014, representing a compound annual growth rate of 12.5%; Adjusted EBITDA has grown from $22.9 million in Fiscal 2008 to $69.0 million in Fiscal 2014, representing a compound annual growth rate of 20.2%; and Adjusted EPS has grown from $0.15 in Fiscal 2010 to $1.00 in Fiscal 2014, representing a compound annual growth rate of 60.7% (we did not report Adjusted EPS prior to Fiscal 2010). Our Adjusted EBITDA, together with our relatively low level of capital expenditures and certain tax attributes, allow us to generate predictable and significant cash flows to invest in R&D, pursue acquisitions and other growth initiatives, and reduce our indebtedness.

 

As part of our growth strategy, we have acquired, integrated and significantly accelerated the growth of six businesses since 2008, and recently completed our seventh acquisition, Easton Baseball/Softball, in April 2014. As we have done with prior acquisitions, we will utilize our platform to accelerate Easton Baseball/Softball’s growth by increasing market share in every category of baseball and softball equipment both domestically and internationally, and to expand EASTON’s presence in apparel.

 

Our revenue, profitability and working capital needs will be significantly more balanced as a result of the seasonality of Easton Baseball/Softball’s sales, and we believe that this counter-seasonality to our existing sales will also allow us to improve the efficiency and effectiveness of our manufacturing, distribution and marketing platform. Our Adjusted EBITDA, together with our relatively low level of capital expenditures and certain tax attributes, allow us to generate cash flows to invest in R&D, pursue acquisitions and other growth initiatives, and reduce our indebtedness. Our ordinary course operations require minimal capital expenditures given that most of our products are manufactured through partners. Our capital expenditure requirements have averaged less than 2% of revenues for the past three fiscal years ended May 31, 2014. Going forward, to support our growth and key business initiatives, we anticipate moderately higher levels of capital expenditures and investment.

 

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Our Core Strengths

 

We believe the following strengths are integral to enhancing our leadership position and market share in all product categories in all our sports:

 

Strong and Authentic Brands in Attractive Markets

 

We have the #1 brands in the ice hockey, roller hockey and diamond sports (baseball and softball) equipment industries through the BAUER, MISSION and EASTON brands, respectively. BAUER is the most recognized and strongest brand in ice hockey with an estimated 54% overall worldwide market share. MISSION is the leading brand in roller hockey with an estimated 55% market share. EASTON is one of the most iconic diamond sports brand with the #1 market share in North America estimated at 28%. Easton Baseball/Softball has an opportunity to meaningfully increase its market share above 28% by growing its core bats category and expanding its position in several other large and profitable diamond sports categories where it is underpenetrated today. In the lacrosse category, our MAVERIK and CASCADE brands combined have an estimated 26% market share with our CASCADE brand continuing to be the leading helmet provider with an estimated 85% market share. Through continued rapid growth of our CASCADE and MAVERIK brands, we aim to become the market leader in the lacrosse market by 2016. Our market leadership within each sport extends across multiple product categories through a full product suite that addresses our consumers’ needs for high performance equipment and apparel for players of all ages.

 

We believe the strong brand recognition and consumer loyalty for our brands is the result of regularly bringing to market innovative, top quality equipment with superior performance, our “true to the game” authenticity, and consistent and effective brand communication. Our brand recognition in every sport creates significant barriers to entry in our markets, as many consumers believe that brands with heritage and authenticity will provide the best products to improve their game. This belief is reinforced by the numerous professional and elite-level athletes who utilize our products and who thereby create a halo effect that influences our broader group of consumers. These elite athletes include the 72% of NHL players who wore BAUER skates last season, 37 of the last 44 NCAA Division I lacrosse national championship finalist teams who wore CASCADE helmets, and numerous elite college baseball programs who utilize EASTON equipment.

 

Our brands and their broad product offerings address an attractive, highly popular team sports market that is estimated at approximately $3 billion. Despite modest participation growth in these sports, these markets exhibit strong dollar value growth due to positive underlying fundamentals. There are attractive purchasing patterns in the markets we service. A short replacement cycle is driven by our core youth consumers regularly outgrowing their equipment and parents wanting to provide their children with the highest performing products. Additionally, we deliver products to market using one to two year innovation-led product cycles that ensure a relentless flow of the latest technologies are available for consumers. Consistent innovation that improves the quality and performance of our products also allows us to raise average selling prices, further underpinning growth in the size of our markets.

 

Integrated Performance Sports Platform

 

We have achieved our leadership position and growth by leveraging our world- class performance sports products platform. Customer-facing, consumer-facing and product development functions are managed individually by sport, and by category within each sport. Back-end functions and certain R&D activities are shared across sports to drive operational synergies and efficiency. This integrated platform is supported by authentic brands, deep consumer insights, significant R&D investments, and strong intellectual property protections. We originally developed this organizational structure to promote and support the rapid growth of our ice hockey equipment business but have also used it to successfully integrate and significantly grow the new performance equipment and apparel categories and sports markets we have entered through our recent acquisitions.

 

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Each of our businesses maintains dedicated management, sales, marketing and product development teams, while leveraging highly scalable and shared resources such as R&D, sourcing & manufacturing, distribution & logistics, information technology, human resources, finance and legal. These distinct units within each business often collaborate with their counterparts across the Company. This approach ensures we benefit from our scale and capitalize on opportunities to apply key advances across our platform without compromising the functions that support our strong consumer connections, “true to the game” authenticity, high performance products and well-established retailer relationships. Our platform will provide Easton Baseball/Softball numerous revenue and profit growth opportunities as we improve the efficiency of the business through additional scale in manufacturing, distribution and product development.

 

Our category management structure allows us to drive growth opportunities in every sport by deploying a multi-disciplinary approach to product development. We have a strong product development process that is organized by product categories within each sport and additionally takes advantage of our category- based integrated R&D platform, thus allowing us to share best practices and innovation across the Company. These resources are both scalable and shareable across sports and categories. We believe this collaborative approach to product development yields superior results and products.

 

Our collaborative product development process exemplifies the potential of our integrated platform. We deploy a multi-disciplinary approach to product development that is organized by product categories within each sport and takes advantage of our category-based integrated R&D platform. This process has been successful in leveraging best practices and innovation across the Company; one of the many examples of this is where we recently cross-pollinated innovative helmet technology between BAUER and CASCADE to launch the latest CASCADE helmet with BAUER technologies and introduced customizable BAUER hockey helmets made at our lacrosse business’ facilities utilizing CASCADE technology and processes.

 

We are always innovating and consistently seek to deliver the highest performance for our athletes, even in areas where we are the clear market leader. As an example, we recently unveiled BAUER OD1N, the most technologically advanced line of equipment ever introduced to the sport of hockey. Taking two years to develop, the line includes the lightest hockey skate ever created, a fully personalized protective body suit and an ultra-lightweight goalie pad constructed with advanced materials never before used in hockey. These product developments would not have been possible in the timeframe they were achieved without the exceptionally talented team across our platform and our unique collaborative process.

 

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Diversified and Balanced Business Model

 

As a result of the successful expansion of our performance sports platform beyond hockey equipment, we have built a balanced business model that provides a consistent flow of revenue across several product categories and geographies. The growth in our multi-sport platform combined with the Easton Baseball/Softball Acquisition allows us to achieve significant diversification across sport, product categories, seasons, customers and geographies.

 

Following the recent Easton Baseball/Softball Acquisition, we expect that hockey will represent approximately 60% of our sales, with baseball and softball accounting for approximately 30% of sales and other sports contributing the remainder. Within each sport, we maintain a broad offering across all major equipment categories, with an increasing team and related-apparel offering, which limits our reliance on any one type of product, sport season or geography.

 

As illustrated below, Easton Baseball/Softball will significantly reduce seasonality, further diversify our performance sports platform and balance our revenue and profitability stream. The majority of sales for the spring/summer season of baseball and softball are shipped December through March, a perfect complement to ice hockey, where the majority of sales are shipped May through October. We believe this diversified model will generate more consistent cash flow to allow us to invest in other growth opportunities and/or pay down our debt more evenly each year. We expect that the complementary seasonality of ice hockey and diamond sports will offer us incremental benefits in physical distribution, raw material purchasing and internal manufacturing, and provide the most efficient utilization of our third party manufacturing partners’ annual production capacity.

 

Revenue Pre-Easton Baseball/Softball Acquisition		Revenue Post-Easton Baseball/Softball Acquisition

 

Source: Management estimates.

 

The Company has a global sales and distribution network in over 60 countries to service a broad and diverse customer base. With the recent Easton Baseball/Softball Acquisition, we now sell to more than 5,000 retailers in Canada, the United States, Scandinavia and Finland, and more than 60 distributors in other international markets. The majority of our sales are to independent or specialty retailers, such as Total Hockey, Pro Hockey Life, Lacrosse Unlimited and Monkey Sports. As a result we have relatively low customer concentration, as evidenced by our largest customer representing approximately 12% of sales following the Easton Baseball/Softball Acquisition. The specialty channel offers us numerous attractive qualities, including higher margins, a focus on higher performance products, superior levels of customer service that drive customer engagement with our brand, a more diversified customer base and higher barriers to entry for new brands due to the fragmented nature of the channel and associated investment to properly service it.

 

Our sales are diversified geographically, but we expect increased geographic sales concentration in the United States as a result of our acquisition of Easton Baseball/Softball. In Fiscal 2014 (excluding Easton Baseball/Softball related revenue), approximately 42% of our total sales were in the United States, approximately 33% were in Canada, and approximately 25% were in the rest of the world. The combined Company (including Easton Baseball/Softball related revenue) would have generated approximately 57% of sales in the United States, approximately 25% in Canada and approximately 18% in the rest of the world.

 

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Proven Acquisition Platform

 

We have a proven capability to identify, acquire, integrate and rapidly grow complementary businesses. We believe that our integrated performance sports platform and scale enable us to materially enhance the synergy potential and success of an acquisition by leveraging our industry-leading R&D expertise, customer relationships, marketing resources and low-cost manufacturing.

 

Since September 2008, as part of our growth strategy, we have acquired, integrated and significantly accelerated the growth of six businesses, and recently completed our seventh acquisition, Easton Baseball/Softball, in April 2014. From our base with Bauer Hockey, we acquired Mission-ITECH Hockey Inc. in September 2008, the leader in roller hockey and at the time the fourth largest ice hockey company; entered the performance apparel market through the acquisition of certain intellectual property assets from Jock Plus Hockey Inc. in November 2009; secured a lacrosse platform brand with our acquisition of Maverik in June 2010; complemented Maverik with the acquisition of Cascade, the industry-leader in lacrosse helmets, in June 2012; acquired the assets of Inaria in October 2012 to provide the capability to support all of our existing sports with team and performance apparel and enter the youth soccer apparel market; entered the diamond sports market through the acquisition of specialty bat manufacturer Combat Sports in May 2013; and gained the market-leading position in the North American baseball and softball market through the Easton Baseball/Softball Acquisition in April 2014.

 

As we expanded our performance sports platform, we remained focused on value, maintained prudent debt levels and acquired only complementary brands and businesses that have allowed us to drive significant organic revenue, market share and earnings growth in the acquired businesses. We have maintained the discipline to forgo other acquisition opportunities that did not meet our criteria. We expect that our acquisition platform will be best exemplified with the Easton Baseball/Softball Acquisition, which we believe will result in revenue growth and increased market share as we expand and enhance Easton Baseball/Softball’s product offering, go-to-market strategy, and marketing initiatives.

 

Seasoned Management Team

 

We are led by an experienced and committed management team with a successful track record of developing and marketing innovative products, integrating strategic acquisitions, and implementing successful growth strategies that continually outperform the respective market in which we compete. Under their leadership, we have expanded our market share in hockey, sourced and integrated six acquisitions since September 2008, and dramatically increased sales and earnings.

 

Led by Kevin Davis, President and Chief Executive Officer, who has been with the Company for more than 12 years and Amir Rosenthal, Chief Financial Officer, who has been with the Company for nearly six years, the senior management team has an average of nearly 20 years’ experience in the sporting goods and consumer product industries, including with Nike, Procter & Gamble, Newell Rubbermaid, Unilever and the Boston Bruins. On a company-wide basis, our dedicated and passionate employees have been with the Company for an average of more than eight years, which we believe represents a strong commitment to the Company and an enthusiasm for our sports categories.

 

Growth Strategies

 

Significantly Grow Market Share in Baseball and Softball

 

As a result of the Easton Baseball/Softball Acquisition, we now have the leading market share in the overall diamond sports equipment market with an estimated 30% market share in North America, the largest market in the world. The EASTON brand provides authentic brand equity and heritage, strong consumer connections, high-quality and innovative performance products and adds 146 patents (including patents pending) to our existing portfolio of 481 global patents while the COMBAT brand has provided us with a strong grass-roots brand and superior composite technologies.

 

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Source: Management estimates.

 

Easton Baseball/Softball Growth

 

We believe that we can successfully leverage EASTON’s authenticity and credibility to strengthen its position in its core categories of bats, helmets and catchers’ protective gear and expand its presence in other categories such as ball gloves, accessories, batting gloves and apparel in the same manner that we increased our market share in hockey from approximately 35% in 2007 to approximately 54% in 2014. We expect to leverage our performance sports platform to increase Easton Baseball/Softball’s market share in diamond sports by accelerating investment in product development, implementing category management, enhancing already strong consumer connections, expanding into team apparel and leveraging our scale in other key areas.

 

As an example of products that can be improved through our performance sports platform, there are substantial performance and protective attributes of our hockey and lacrosse helmets that do not yet exist in baseball helmets and we believe we can develop better products with higher price points, allowing us to expand market share and increase our revenues.

 

Bauer Hockey Helmet Interior		Easton Baseball Helmet Interior

 

We see potential growth in diamond sports apparel, including uniforms. Our growth in hockey, lacrosse and baseball and softball over the past several years exemplifies the benefits and potential of our category management structure, investment in R&D, and effective marketing to our consumers. In addition, we expect to grow our diamond sports business through territorial expansion.

 

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Combat Sports Growth

 

We intend to use the COMBAT brand, its dedicated and passionate team and its intellectual property assets to grow our diamond sports business. We believe Combat Sports will continue its rapid growth in bats through an expansion of marketing and grass roots initiatives and by leveraging our unique and proprietary technologies. Combat Sports has significant experience embodied in trade secrets and know how related to prototyping and manufacturing advanced composite sporting goods and other products using proprietary software, formulations, seamless construction and precision molding processes. This knowledge enables advanced composite products to be manufactured with greater quality and efficiency, and provides a significant competitive advantage over existing and potential competitors. Combat Sports’ valuable intellectual property assets have further strengthened our industry-leading R&D capabilities across our high performance sports equipment platform while providing cost efficiencies and allowing us to expand our platform in baseball and softball.

 

Continue to Grow in Hockey

 

BAUER is the most recognized brand in ice hockey equipment and has been synonymous with the sport itself for more than 85 years. We believe that this strong brand recognition is the result of consistent brand communication, our “true to the game” authenticity, and regularly bringing to market innovative top-quality equipment with superior performance. We have the leading market share in the overall ice hockey equipment market, with an estimated 54% market share in Fiscal 2014, which is in excess of all other equipment manufacturers combined.

 

The following graph sets forth our estimated overall market share of ice hockey equipment sales:

 

Overall Market Share — Ice Hockey Equipment Sales

 

 

As the result of our continued focus on category management, product development and consistent innovation, we have increased our market share substantially from approximately 35% in 2007 and hold the #1 market share position in each of our ice and roller hockey equipment categories, with the exception of goalie equipment for which we now hold the #2 market share position. For Fiscal 2014, we estimate we had more than a 65% market share in ice hockey skates and helmets, more than a 40% market share in other key ice hockey categories (with the exception of goalie equipment for which we have greater than 35% in market share) and more than a 55% market share in roller hockey.

 

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54% Market Share in Fiscal 2014

 

 

While we are already the leading player in ice hockey, we believe there is still a substantial opportunity to increase our market share. We intend to expand our market share in all categories, and are particularly focused on categories where we have a leading but less than 65% market share, such as sticks, the largest ice hockey product category. Historically, we have driven market share growth by introducing new products with performance improvements each year, and we intend to continue leveraging our world-class R&D and product development platform to develop high performance and innovative products that advance player performance and protection and distinguish us from our competitors.

 

In addition, we are utilizing Bauer Hockey’s unique position in the market to develop partnerships and initiatives to drive hockey participation growth across the world. In October 2012, Bauer Hockey, in partnership with Hockey Canada and USA Hockey, launched “Grow the Game”, a multi-faceted global initiative to add one million new players globally to the game of hockey by 2022 (double the recent industry growth rate) and increase player safety. Partnering with Hockey Canada and USA Hockey, and led by a cross-functional team, including support from Mark Messier, who joined the Bauer Hockey team in connection with the acquisition of Cascade, the initiative will take a leadership role in both growing participation and increasing player safety. The first round of pilot programs was launched in Canada this past winter and has proven to be extremely successful through innovations such as reducing the length of seasons, parent outreach and education, and cost reduction initiatives. We plan to launch an expanded program in the upcoming hockey season across Canada and are working with USA Hockey to launch a similar program in the United States. Based on our success in hockey, we see an additional opportunity to launch similar initiatives in other sports.

 

Grow Apparel Across All Sports

 

Our ice hockey, roller hockey, lacrosse and diamond sports authentic brands and product offerings provide us with an opportunity to develop and sell a comprehensive line of related apparel and accessories, including team performance and lifestyle apparel. Drawing on our experience in ice hockey, where we have successfully grown our apparel revenues at a 38% compound annual growth rate from Fiscal 2009 to Fiscal 2014, we believe we can also grow our share in each of these apparel categories in other sports.

 

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larger, more established equipment manufacturers like Bauer Hockey are able to more effectively serve the spectrum of retail channels globally, through established relationships and developed distribution capabilities.

 

Our lacrosse business exclusively sells its products through dealers and retailers, with minimal direct sales to end-consumers. In Fiscal 2014, approximately 91% of our lacrosse revenues were generated from lacrosse specialty and independent dealers, who then sell through to individuals, teams and institutions. The remaining 9% of our lacrosse revenues were from big box retailers and sporting goods retail chains, primarily on an exclusive basis. Through our grassroots and product-focused marketing approach, we have developed a diverse lacrosse customer base, with no customer representing more than 12% of total Fiscal 2014 sales.

 

Combat Sports’ sales and distribution network focuses primarily on North America. Combat Sports’ customers are made up of online stores, big box retailers, sporting goods chains and baseball specialty dealers. Baseball revenues are also generated via direct sales to end-consumers through team buy-in programs. Combat Sports’ products are geared towards the high-end baseball and softball market which is currently served by the various retailers described above. This range allows for a wide variety of customers.

 

Easton Baseball/Softball’ sales and distribution network focuses primarily on North America. Easton Baseball/Softball’s customers are made up of online stores, big box retailers, sporting goods chains and baseball specialty dealers. Easton Baseball/Softball’s products are geared towards the high-end baseball and softball market which is currently served by the various retailers described above. This range allows for a wide variety of customers.

 

Inaria sells its products directly to teams and associations. In Fiscal 2014, approximately 70% of revenues were generated in Canada. The primary soccer product being sold is a “player kit” that includes a jersey, a short and a matching sock for each member of the team or association. Each player kit is sized and personalized with team identifiers and numbering. Revenue is also generated from supplemental products such as off-field apparel, balls, bags and coaching accessories.

 

Research and Development

 

We have a disciplined, rolling, multi-year product development program through which we bring hundreds of new products to market annually across all of our sports. To support the successful execution of our new product launches, we (i) fully integrate our manufacturing partners into our R&D program, (ii) incorporate advanced materials into our product design to create lighter, more durable products, (iii) maintain a strong focus and discipline on cost management, and (iv) heavily test prototypes throughout the development phase, including utilization lab tests and on-ice/on-field trials by elite and high level players. We believe that this collaborative process yields superior equipment and performance apparel.

 

Our five-year product innovation agenda can be depicted as follows:

 

Our Five-Year Product Innovation Agenda

 

 

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Our brands were founded on and exemplify the principles of performance, innovation and quality. We constantly strive to improve product performance and reduce costs through the use of biomechanical research, high performance materials, efficient manufacturing processes and valuable consumer insights. We believe that the application of next generation manufacturing technology solidifies our position as the industry leader in ice, roller hockey and baseball/softball equipment and will continue to drive the MAVERIK and CASCADE brands in lacrosse. We have been combining relevant technologies, where applicable, across all of our sports to strengthen our equipment offerings. For example, there are substantial performance and protective attributes of our hockey and lacrosse helmets that do not yet exist in baseball helmets and we believe we can develop better products with higher price points on the strength of the EASTON brand, allowing us to expand market share and increase our revenues.

 

We work closely with athletes at all levels to provide insights that help us develop new equipment, including some of the world’s top professionals. In hockey, we have exclusive partnerships with NHL athletes such as Patrick Kane, Alexander Ovechkin, Steven Stamkos and Henrik Lundqvist who wear BAUER equipment exclusively and also work with us to provide insight and guidance to our industry leading R&D team as we develop the most advanced hockey equipment in the industry. We believe that this collaborative process yields superior ice and roller hockey equipment and by partnering with elite athletes in all of our sports will yield similar benefits for our lacrosse, baseball and softball businesses. The following table shows examples of some of our recent product launches across sports since May 2012:

 

Recent Product Launches

 

 

Global Manufacturing, Sourcing and Distribution

 

Sourcing and Manufacturing

 

We have an established comprehensive manufacturing platform with our key suppliers, primarily with facilities in Canada, China, Thailand and Vietnam, where most of our hockey equipment and related apparel is produced exclusively for us at what we believe to be low costs. We have excellent long-term relationships with our manufacturing partners and vendors, whom we fully integrate into our R&D and product development programs.

 

Bauer Hockey manufactures the majority of its hockey equipment with an exclusive vendor base. Over 90% of our overseas production is located in China and Thailand. The remainder of our hockey products are manufactured either at non-exclusive facilities or at our in-house manufacturing facility in St. Jerome, Québec. Quality control for our products manufactured in Asia is maintained from St. Jerome, Québec. The Company is in the process of constructing a new world-class research, design and development facility in Blainville, Quebec, which will provide the Company with state-of-the-art technologies, a new lab and additional resources to continue to meet the increasing demands of our growing business and athletes around the world. Management anticipates that this project will be completed in Fiscal 2015. We also have an office in Taichung, Taiwan, where we have a

 

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dedicated staff responsible for liaising with internal resources located in Thailand and China and with our vendors regarding production.

 

Our suppliers and manufacturers are contractually bound by strict security and privacy provisions to ensure the protection of our proprietary trade secrets. We have agreements with our manufacturing partners that renew automatically every two years, and many of our manufacturing relationships are greater than 10 years in length and, in some cases, over 30 years. In the event there are performance issues with our manufacturers, we retain the right to terminate any of our agreements with no more than 30 days’ notice. In our core product categories, we dual-source many products to mitigate any risk of supply disruptions. In addition, we employ strategies with our vendors to reduce the variability of material price increases over certain time periods.

 

We believe that we have one of the lowest manufacturing costs amongst our equipment competitors based on our manufacturing scale and infrastructure, coupled with our distribution network and R&D processes. We strive to obtain the lowest costs for materials and manufacturing of our products. In doing so, we seek alternative sources of supply and manufacturing capacity in existing and new markets.

 

We operate a 72,000 square feet manufacturing facility in Liverpool, New York, with multiple production lines for lacrosse and ice hockey helmets. For MAVERIK branded lacrosse products, we source primarily from suppliers in China, Vietnam, and Taiwan. For uniforms, we source raw materials and work-in-process primarily from suppliers in Asia and finish production at a facility in Toronto, Ontario. Our Combat Sports business manufactures substantially all of its finished goods at the Ottawa, Ontario manufacturing facility.

 

Easton Baseball/Softball manufactures 100% of its composite bats with an exclusive vendor located in China. The remainder of the baseball and softball products are manufactured in non-exclusive facilities that are located throughout Asia, China, Thailand, Indonesia and Vietnam. A very small percentage of Easton Baseball/Softball products are sourced through vendors based in the United States. A majority of our EASTON branded wood bats are manufactured in our Van Nuys, California facility.

 

Scalable Global Operating Platform

 

5,000+ Retailers & 60+ Distributors with Global Sales,

Distribution & Manufacturing Footprint

 

 

Distribution

 

Our ice and roller hockey products are sold in over 60 countries through a distribution network of more than 2,400 retailers and distributors worldwide. We distribute our products to retailers and other distributors through our facility in Mississauga, Ontario, as well as through third-party logistics providers in Aurora, Illinois and Boras,

 

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Sweden. Our lacrosse products and whitewater helmets are sold in 10 different countries through a distribution network of more than 600 retailers and distributors worldwide. INARIA branded soccer products are sold directly to teams, clubs and associations across North America. All products are embellished and shipped from our 40,000 square feet facility located in Toronto, Ontario. Easton Baseball/Softball and Combat Sports’ products are sold through a distribution network of more than 1,700 retailers and distributors in North America and Europe. With the Easton Baseball/Softball Acquisition, we have added the Salt Lake City, Utah distribution facility and a third-party logistics provider in Memphis, Tennessee. We anticipate that we will utilize the Salt Lake City facility for both baseball and hockey distribution, given the facility’s historical experience handling hockey equipment for BRG Sports.

 

Facilities

 

Our sales and distribution offices are located worldwide as shown in the table below.

 

Location		Type		Facility Size (Approx. Sq. Ft.)		Leased/Owned		Expiration
Exeter, New Hampshire		Global Headquarters		55,000		Leased		April 30, 2023
St. Jerome, Quebec		R&D and manufacturing		77,000		Leased		March 5, 2015
Blainville, Quebec		R&D and manufacturing		98,000		Leased		February 28, 2030
Mississauga, Ontario		Sales, marketing and distribution		145,000		Leased		September 30, 2016
Vantaa, Finland		Sales		4,600		Leased		June 30, 2015
Gothenburg, Sweden		Sales, administration and marketing		8,700		Leased		September 30, 2014
Rosenheim, Germany		Sales and marketing		3,800		Leased		May 31, 2015
Taichung, Taiwan		Asia sourcing		10,000		Leased		May 15, 2015
Irvine, California		Roller hockey sales and marketing		3,900		Leased		December 31, 2014
New York, New York		Lacrosse sales and marketing		6,000		Leased		March 31, 2016
Liverpool, New York		Lacrosse and hockey (all functions)		72,000		Leased		May 31, 2016
Toronto, Ontario		Apparel		40,000		Leased		January 6, 2017
Kent, Washington		Baseball and softball		13,600		Leased		December 31, 2014
Ottawa, Ontario		Baseball and softball		18,000		Leased		December 31, 2018
Salt Lake City, Utah		Baseball and softball		140,000		Leased		November 30, 2017
Van Nuys, California		Baseball and softball		54,000		Leased		January 1, 2016
Bentonville, Arkansas		Baseball and softball showroom		820		Leased		April 13, 2017

 

Environment

 

We are not aware of any material environmental problems with respect to any of our operations or facilities. Existing applicable environmental laws and requirements have not had any adverse financial or operational effects on our capital expenditures, earnings or competitive position and we do not anticipate that continuing compliance with such laws and requirements will have a material adverse effect upon our expenditures, earnings or competitive position in future years.

 

Intellectual Property

 

We have an extensive portfolio of intellectual property which creates a strategic competitive advantage and can be applied to new performance equipment sports categories. Our portfolio includes 627 patents (including design patents and patents pending). We protect our technologies, products and brands under the patent, copyright and trademark laws of those countries in which we do business.

 

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custom team orders are typically fulfilled within a 30 to 60 day turnaround time, so the visibility to customer orders in advance is limited.

 

The following table reflects the seasonality of net revenues for each of the quarters in the three most recent fiscal years:

 

		Percent of Fiscal Net Revenues
Fiscal Year		Three Month Period Ended August 31		Three Month Period Ended November 30		Three Month Period Ended February 28		Three Month Period Ended May 31
2014		34.5	%	26.2	%	13.9	%	25.4	%
2013		37.1	%	27.4	%	13.8	%	21.7	%
2012		38.0	%	26.8	%	13.8	%	21.4	%

 

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DESCRIPTION OF CAPITAL STRUCTURE

 

The following description of our share capital summarizes certain provisions of our Articles. These summaries do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of our Articles.

 

General

 

The Company’s authorized share capital consists of an unlimited number of Common Shares and an unlimited number of Proportionate Voting Shares. As of the date hereof, the Company has 39,653,208 issued and outstanding Common Shares and 4,325 issued and outstanding Proportionate Voting Shares, or an equivalent of 43,978,208 Common Shares (assuming the conversion of all Proportionate Voting Shares into Common Shares on the basis of 1,000 Common Shares for one Proportionate Voting Share).

 

Equity Shares

 

Except as described herein, the Common Shares and the Proportionate Voting Shares have the same rights, are equal in all respects, and are treated as if they were shares of a single class.

 

Conversion Rights

 

Common Shares may at any time, at the option of the holder, be converted into Proportionate Voting Shares on the basis of 1,000 Common Shares for one Proportionate Voting Share. Each issued and outstanding Proportionate Voting Share may at any time, at the option of the holder, be converted into 1,000 Common Shares. Except as provided for below, no fractional Equity Shares will be issued on any conversion of another class of Equity Share. See “— Take-Over Bid Protection” below.

 

Immediately at the time that none of the initial holders of Proportionate Voting Shares and their affiliates beneficially owns, controls or directs, directly or indirectly, any Proportionate Voting Shares: (i) all issued and outstanding Proportionate Voting Shares will automatically convert into Common Shares on a one to 1,000 basis; (ii) the right of holders of Common Shares to convert their Common Shares into Proportionate Voting Shares under the Articles will be terminated; (iii) all authorized and unissued Proportionate Voting Shares shall automatically convert into authorized and unissued Common Shares on a one to 1,000 basis; and (iv) the Board of Directors shall not thereafter be entitled under the Articles to issue any Proportionate Voting Shares.

 

Liquidation Entitlement

 

In the event of the liquidation, dissolution or winding-up of the Company or any other distribution of its assets among the holders of the Company’s Common Shares and Proportionate Voting Shares (“Shareholders”) for the purpose of winding-up its affairs, whether voluntarily or involuntarily, Shareholders are entitled to participate in the remaining property and assets of the Company available for distribution to Shareholders on the following basis, and otherwise without preference or distinction among or between such Equity Shares: each Proportionate Voting Share will be entitled to 1,000 times the amount distributed per Common Share. See “— Conversion Rights” above.

 

Dividend Rights

 

Each Equity Share is entitled to dividends if, as and when declared by the Board of Directors, on the following basis, and otherwise without preference or distinction among or between such Equity Shares: each Proportionate Voting Share will be entitled to 1,000 times the amount paid or distributed per Common Share. See “— Conversion Rights” above.

 

Voting Rights

 

The Common Shares carry one vote per share for all matters coming before Shareholders and the Proportionate Voting Shares carry 1,000 votes per share for all matters coming before Shareholders.

 

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DIVIDEND POLICY

 

The Company has never declared or paid any cash dividends on its Equity Shares. The Company currently intends to use its earnings to finance the expansion of its business and to reduce indebtedness. Any future determination to pay dividends on Equity Shares will be at the discretion of the Board of Directors and will depend on, among other things, the Company’s results of operations, current and anticipated cash requirements and surplus, financial condition, contractual restrictions and financing agreement covenants, solvency tests imposed by corporate law and other factors that the Board of Directors may deem relevant. See also “Description of Capital Structure —Dividend Rights”, “Risk Factors — Risks Related to Our Business — We do not currently intend to pay dividends on our Equity Shares” and “Risk Factors — Risks Related to Our Business —  We are a holding company”.

 

RATINGS

 

The below ratings are based on, among other things, information furnished to the ratings agencies noted below by the Company and information obtained by the ratings agency from publicly available sources. A rating is not a recommendation to buy, hold or sell debt instruments, and may be subject to revision or withdrawal at any time by the rating agency. A rating is not an indication of market price or liquidity, suitability for a particular investor, or a guarantee of credit quality or future credit risk. Credit ratings are intended to provide investors with (i) an independent measure of the credit quality or relative credit risk of an issue of securities; (ii) an indication of the likelihood of repayment for an issue of securities; and (iii) an indication of the capacity and willingness of the issuer to meet its financial obligations in accordance with the terms of those securities. Credit ratings accorded to corporate debt may not reflect the potential impact of all risks on the value of debt instruments, including risks related to market or other factors discussed in this Annual Information Form. See “Risk Factors”.

 

The Company has paid customary fees to Standard & Poor’s Ratings Services (“S&P”) and Moody’s Investors Service (“Moody’s”) in connection with the above mentioned ratings. The Company did not make any payments to S&P or Moody’s in respect of any other service provided to the Company by S&P and Moody’s.

 

Standard & Poor’s Ratings

 

On March 18, 2014, the Company received a corporate credit rating of “B+” (with a “Stable” outlook) from S&P. The Company obtained the rating in connection with its New Term Loan Facility, but the rating is for the Company as a whole and is not limited to the New Term Loan Facility or any one class of securities of the Company. The “B+” corporate credit rating reflects S&P’s assessment of the Company’s “aggressive” financial risk profile and “weak” business risk profile. The “Stable” outlook reflects S&P’s view that the Company will sustain adequate liquidity and continue to increase sales and EBITDA, resulting in maintenance of adjusted debt-to-EBITDA below 5x by Fiscal 2015. Concurrently, S&P assigned a “B+” issue-level rating to the Company’s New Term Loan Facility and a “4” recovery rating to the New Term Loan Facility. A “4” recovery rating to the New Term Loan Facility indicates average (30% to 50%) recovery in the event of a payment default.

 

The rating method used is described on S&P’s website at www.standardandpoors.com. S&P credit ratings are on a rating scale that ranges from “AAA” to “D”, which represents the range from highest to lowest quality. The ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (–) sign to show relative standing within the major rating categories. Obligations rated “BB”, “B”, “CCC”, and “CC” are regarded as having significant speculative characteristics. “BB” indicates the least degree of speculation and “CC” the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. According to the S&P rating system, an obligor rated “B” is considered more vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments.

 

Moody’s Ratings

 

On March 18, 2014, Moody’s assigned an initial corporate family rating of “B1” and a “B1-PD” probability of default for the Company. Concurrently, Moody’s also assigned a “B2” credit rating to the New Term Loan Facility with a “speculative grade” liquidity rating of “SGL” 2. Moody’s also assigned a “Stable” outlook. The “Stable” outlook reflects Moody’s view that the Company will steadily reduce leverage through a combination of debt repayments and modest earnings growth. The “Stable” outlook also reflects Moody’s expectation that the Company will integrate Easton Baseball/Softball without significant disruptions.

 

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Biographies

 

The following are brief profiles of the executive officers and directors of the Company, including a description of each individual’s principal occupation within the past five years.

 

Non-Executive Directors

 

Christopher W. Anderson, Director

 

Christopher Anderson has been a member of the Company’s Board of Directors since April 2008. Mr. Anderson is a Partner of Kohlberg & Company, which he joined in 1998. He is a member of the board of directors of Aurora Products Group, L.L.C., Chronos Life Group, Katy Industries, Inc., Risk Strategies Company and Troon Golf, L.L.C. Mr. Anderson received a Bachelor of Arts from Princeton University.

 

Karyn O. Barsa, Director

 

Karyn Barsa has been a member of the Company’s Board of Directors since May 2014. Ms. Barsa has led numerous global premium brands and has been a member of the board of directors of Deckers Outdoor Corporation (NYSE) since 2008. Ms. Barsa served as the Chief Executive Officer at Coyuchi, Inc. from 2009 to 2013 and has also served as the Chief Executive Officer of Investor’s Circle and Smith & Hawken, Ltd. In addition to her Chief Executive roles, Ms. Barsa served as Chief Operating Officer and Chief Financial Officer at Patagonia, Inc. and was the founder of HeadStart Custom Helmets. Ms. Barsa has also held financial positions with Kerr Glass Manufacturing Company, Wells Fargo Bank, Tacoma Boatbuilding Corporation and Midland Capital. Ms. Barsa received a Bachelor of Arts in Economics from Connecticut College and an MBA from the University of Southern California.

 

Samuel P. Frieder, Director

 

Samuel Frieder has been a member of the Company’s Board of Directors since April 2008. Mr. Frieder is the Managing Partner of Kohlberg & Company, which he joined in 1989. He is a member of the board of directors of Aurora Products Group, L.L.C., BioScrip, Inc., Chronos Life Group, Concrete Technologies Worldwide, Inc., e+ CancerCare, Katy Industries, Inc., Kellermeyer Bergensons Services, Nellson Nutraceutical, L.L.C., Nielsen & Bainbridge, Packaging Dynamics Corporation, Pittsburgh Glass Works L.L.C., Risk Strategies Company, Sabre Industries, Inc., Stanadyne Corporation, SVP Holdings, Ltd., Trico Products, Inc. and Troon Golf, L.L.C. Mr. Frieder received a Bachelor of Arts from Harvard College.

 

C. Michael Jacobi, Director

 

Michael Jacobi has been a member of the Company’s Board of Directors since October 2012. Mr. Jacobi is the president of Stable House 1, LLC, a private company engaged in real estate development. He has extensive executive and director experience with major international companies, including previously serving as President and Chief Executive Officer of Timex Corporation, a leading worldwide manufacturer of watches. He also serves as Chairman of the board of directors of Sturm, Ruger & Co., Inc. (NYSE), a company engaged in the manufacture and distribution of firearms. Mr. Jacobi previously was President and Chief Executive Officer at Katy Industries, Inc. and also currently serves on the board of directors of Webster Financial Corporation, KCAP Financial, Inc., and Corrections Corporation of America. Mr. Jacobi received a Bachelor of Science degree from the University of Connecticut and is a Certified Public Accountant.

 

Paul A. Lavoie, Director

 

Paul A. Lavoie has been a member of the Company’s Board of Directors since October 2013. Mr. Lavoie is the chairman of TAXI, a Montreal based marketing and communications company which he co-founded in 1992. Mr. Lavoie has extensive experience in international marketing, integrated brand communications, and digital, print and broadcast production. Prior to co-founding TAXI, he held the positions of Creative Director for Cossette and Art Director for J. Walter Thompson. Mr. Lavoie currently serves on two not-for-profit boards as a member of the HEC’s International Advisory Board and the Virginia Commonwealth University’s Brand Center. Mr. Lavoie attended Dawson College in Westmount, Québec.

 

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Matthew M. Mannelly, Director

 

Matthew M. Mannelly has been a member of the Company’s Board of Directors since October 2013. Mr. Mannelly is the President and CEO of Prestige Brand Holdings, Inc. and has held this position since September 2009. Mr. Mannelly has extensive experience in consumer products, packaged goods, sports and fitness and apparel. Prior to Prestige Brands, he was the Chief Executive Officer of Cannondale Bicycle Corporation. Mr. Mannelly has also held management positions in marketing and retail development for Nike, Gatorade, Quaker Oats and the U.S. Olympic Committee. Mr. Mannelly received a Master of Business Administration in Marketing from the University of North Carolina at Chapel Hill and a Bachelor of Science in Economics from Boston College.

 

Bernard McDonell, Director (Chairman)

 

Bernard McDonell has been a member of the Company’s Board of Directors since March 2011. Mr. McDonell is currently the Lead Director for First Capital Realty Ltd. (TSX), an owner, developer and manager of urban rental-centered properties and serves on the executive, audit and corporate governance committees for First Capital Realty Ltd. Mr. McDonell is also currently a Director of The Commonwell Mutual Insurance Group since January 2014. He was President of Provigo Inc., a food retailer owned by Loblaw Companies Inc. from 1999 to 2006. Mr. McDonell has also served as a Director of Investus Real Estate Inc. (TSX-V), and as Vice Chairman and CEO of Capital Wapiti Inc. (TSX-V), an industrial real estate company. Mr. McDonell received a Bachelor of Commerce from Concordia University.

 

Bob Nicholson, Director

 

Bob Nicholson has been a member of the Company’s Board of Directors since March 2011. Mr. Nicholson was recently appointed as Vice-Chairman of the Oilers Entertainment Group. OEG is a new sports and entertainment company that owns and operates a variety of sports and entertainment assets, including three minor league hockey teams and Rogers Place, which will be the new home of the Edmonton Oilers. In Mr. Nicholson’s new leadership role with OEG, Mr. Nicholson will oversee the expansion of the group’s major sponsorships and operations at Rogers Place when it opens in September 2016.  He will also serve as an Alternate Governor for the Edmonton Oilers on the NHL Board of Governors and will continue to serve as Vice-President of the IIHF.  Mr. Nicholson previously served from 1998 until June 2014 as President and Chief Executive Officer of Hockey Canada prior to which he was a senior vice-president of Hockey Canada from 1992 to 1998. As part of his responsibilities at Hockey Canada, Mr. Nicholson was involved in both the financial and operational side of the organization. Mr. Nicholson attended Providence College in Providence, Rhode Island.

 

Executive Officer Who Also Serves as a Director

 

Kevin Davis, President, Chief Executive Officer and Director

 

Kevin Davis is the President and CEO of the Company and has acted in this capacity since 2008. Mr. Davis joined the Company in 2002 and has held positions of increasing responsibility over that time, most recently as the Chief Operating Officer from 2006-2008 and CFO from 2004-2006. Prior to joining the Company, Mr. Davis held senior finance positions in the medical device industry for Pathway Medical Technologies and Boston Scientific Corporation and in consumer products with The Gillette Company. Mr. Davis received a Bachelor of Science degree from the University of Massachusetts and earned Certified Public Accountant (CPA) and Certified Management Accountant (CMA) designations while employed at Ernst & Young LLP.

 

Executive Officers Who Do Not Serve as Directors

 

Amir Rosenthal, Chief Financial Officer and Executive Vice President of Finance and Administration, and Treasurer

 

Amir Rosenthal is the Chief Financial Officer and Executive Vice President of Finance and Administration, and Treasurer. Mr. Rosenthal has acted in the capacity as Chief Financial Officer since 2008. From 2001 to 2008, Mr. Rosenthal was the Vice President, Chief Financial Officer, General Counsel and Secretary of Katy Industries, Inc. From 1989 to 2001, Mr. Rosenthal held various positions at Timex Group Limited, including Treasurer, Senior Counsel, and Counsel. Mr. Rosenthal was also Chairman of Timex Watches Limited (New Delhi, India). Mr. Rosenthal began his career with LeBoeuf, Lamb, Leiby and MacRae as an associate attorney in 1986.

 

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Mr. Rosenthal is a Director of Sturm, Ruger & Co., Inc. (NYSE), a company that manufactures high quality firearms for the commercial sporting market. Mr. Rosenthal received a Bachelor of Arts degree from Dartmouth College, a Doctorate of Jurisprudence from New York University School of Law, and a Master of Science in Finance from Rensselaer Polytechnic Institute.

 

Paul Gibson, Executive Vice President of Product Creation and Supply Chain

 

Paul Gibson is the Executive Vice President, Product Creation and Supply Chain and has held this position since 2008. Mr. Gibson is responsible for leading the Company’s Research, Design and Development, Supply Chain, and Mergers and Acquisitions organizations. From 2006 to 2010, Mr. Gibson was also responsible for Category Management. From 2001 to 2006, he held the position of Vice President, Global Manufacturing and Sourcing, which included at various times responsibility for Research, Design and Development, Logistics and Distribution, Supply Planning, Quality, and Nike Bauer’s Taiwan Production and Development Operations. From 2006 to 2008, Mr. Gibson was the Senior Vice President of Product Creation. During his prior roles with Nike Bauer spanning over 10 years, he held positions in manufacturing, sourcing and supply chain. Mr. Gibson has extensive relationships with suppliers throughout Asia and led the transition from internal manufacturing at Bauer Hockey to outsourcing products in Asia, including setting up Bauer’s Asia Production and Development Operations located in Taichung, Taiwan.

 

Clifford Hall, Executive Vice President, Easton Baseball/Softball

 

Clifford Hall has served as Executive Vice President of Baseball/Softball since April 2014. Mr. Hall brings to Easton Baseball/Softball more than 20 years of global management experience, including expertise in sales, marketing, new product development and operations. As a Senior Director with Alvarez & Marsal, a global professional services firm based in New York, Mr. Hall has also held top executive roles with Timex Group (as Chief Operating Officer), with Trane, a division of American Standard (as Chief Marketing Officer) and with The Black and Decker Corporation (as General Manager of consumer cordless business worldwide). He received a Master’s of Business Administration degree from Loyola University in Maryland.

 

Rich Wuerthele, Executive Vice President, Bauer Hockey

 

Rich Wuerthele has served as the Executive Vice President of Bauer Hockey since March 2014. Mr. Wuerthele brings to the Company more than 20 years of management experience, including expertise in sales, marketing and operations. Prior to joining the Company, Mr. Wuerthele spent 11 years with Newell Rubbermaid, most recently as President, Tools Business Segment, a global division that includes major brands such as Lenox, Irwin and Hilmor tools. Mr. Wuerthele previously held top executive roles in sales and marketing at The Black and Decker Corporation and Danaher. He received a Bachelor of Science degree in Business Management from Alfred University.

 

Angela Bass, Vice President of Global Human Resources

 

Angela Bass is the Vice President of Global Human Resources of the Company. Ms. Bass has held this position since returning to the Company in January 2012. Prior to her return, Ms. Bass served as Senior Vice President of Human Resources for the Performance + Lifestyle Group (PLG), a division of Collective Brands, Inc. As a member of the senior leadership team with responsibility for leading all aspects of the human resources function for the division, Ms. Bass led organizational initiatives across all brands and functions with a focus on talent acquisition, talent management and development, and shared services integration activities. Prior to joining PLG, she held the position of Vice President, Human Resources, for the J. Jill Group and Vice President, Global Human Resources, for Sport Brands International. Ms. Bass joined the Bauer Hockey team in 2002 as a transfer from Nike, and held the role of Director, Global Human Resources. She joined Nike in 1996 and held various human resources roles of increasing responsibility. Ms. Bass received a Bachelor of Science degree in Social Sciences from Portland State University and holds a Senior Professional in Human Resources certification.

 

Troy Mohns, Vice President of Lacrosse and New Business

 

Troy Mohns has held the position of Vice President, Lacrosse and New Business since January 2010. In his previous role as Vice President, Business Development, Mr. Mohns led the acquisition and integration of the Company’s fourth largest competitor and managed the separation from Nike, including the creation of the current

 

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