BAU Blue Star Gold Corp

Revenues Up 7% to $117.1 Million Drives Adjusted EPS of $0.20

EXETER, NEW HAMPSHIRE--(Marketwired - Jan 13, 2014) - Bauer Performance Sports Ltd. (TSX:BAU) ("BPS"), a leading developer and manufacturer of high performance sports equipment and apparel, reported financial results for its fiscal second quarter and six months ended November 30, 2013. All figures are in U.S. dollars.

Fiscal Q2 2014 Financial Highlights vs. Year-Ago

• Revenues up 7% to a record $117.1 million (up 9% in constant currency)
• Apparel revenues up 60% (lifestyle apparel up 28%; off-ice team apparel up 21%)
• Lacrosse revenues up 14% due to strong consumer reception of the CASCADE "R" helmet
• Adjusted Net Income increased 3% to a record $7.5 million or $0.20 per share

Management Commentary

"Strong global demand for our products, consistent execution in sales and marketing, and the strength of our operational platform drove another quarter of record revenues and profitability," said Kevin Davis, President and CEO of Bauer Performance Sports. "In our hockey business, we continued to see strong sell-through of our products while overall inventory levels at retail continue to improve. We believe our second quarter results further validate our multi-sport growth strategy and our ability to deliver strong results in a challenging retail environment.

"Looking ahead, we believe our global operational model will provide a strong platform for organic growth as we also pursue an acquisition strategy designed to advance Bauer Performance Sports as one of the world's leading developers of high performance sports equipment and apparel. We are enthusiastic about our growing pipeline of opportunities and fiscal 2014 is on track to be another year of record top and bottom-line performance, even in the face of recent currency headwinds."

Fiscal Q2 2014 Financial Results

Revenues in the fiscal second quarter of 2014 increased 7% to $117.1 million compared to $109.6 million in the same year-ago quarter. On a constant currency basis, revenues were up 9%. The increase was primarily due to strong growth across all apparel categories, the addition of Combat, and a 14% increase in lacrosse revenues. Apparel revenues increased 60% in the quarter due to the addition of hockey and soccer uniform sales, as well as a 28% increase in lifestyle apparel and a 21% increase in off-ice team apparel.

Adjusted Gross Profit (a non-IFRS measure) in the second quarter was virtually unchanged at $39.6 million. As a percentage of revenues, Adjusted Gross Profit was 33.8% compared to 36.2% in the year-ago quarter. The decrease in adjusted gross margin was primarily due to significant growth in the company's team business, particularly uniforms which initially carry a lower gross margin as capacity builds, and higher freight costs required to meet customer demand (see "Non-IFRS Measures" below for further discussion).

Selling, general and administrative ("SG&A") expenses in the second quarter increased 11% to $27.3 million compared to $24.6 million in the year-ago quarter, primarily due to the addition of Combat and the inclusion of a full quarter of Inaria expenses. As a percentage of revenues and excluding acquisition-related charges, costs related to share offerings and share-based payment expense, SG&A expenses remained relatively unchanged at 20.5% compared to 20.0% in the year-ago quarter.

Adjusted Net Income (a non-IFRS measure) in the second quarter increased 3% to $7.5 million, or $0.20 per diluted share, compared to Adjusted Net Income of $7.3 million, or $0.20 per diluted share, in the second quarter of 2013, demonstrating the ability of the company's diversified platform to deliver strong results.

At November 30, 2013, working capital was $222.2 million compared to $215.1 million one year ago, primarily due to the addition of Combat working capital, and total debt was $152.4 million compared to $173.9 million at November 30, 2012. The company's leverage ratio, defined as average net indebtedness divided by trailing twelve month EBITDA (a non-IFRS measure), continued to decline and stood at 2.67x as of November 30, 2013 compared to 2.69x one year ago.

Fiscal Q2 2014 Operational Highlights

• BauerWorld 2014 - the company's largest and industry-leading event with more than 600 attendees from around the world - expanded beyond hockey to include all brands across the BPS platform: BAUER (ice and roller hockey), MISSION (roller hockey), MAVERIK and CASCADE (lacrosse), COMBAT (baseball and softball), and INARIA (soccer). Key retail partners across these sports were provided with the advanced opportunity to see and try products that will be available at retail beginning spring 2014.
• BPS and Cocona Natural Technologies unveiled 37.5™ technology for hockey. The advanced, fast-drying moisture management process will debut in BAUER's hockey base layer, training apparel and protective equipment in spring 2014.
• BPS entered into a multi-year, exclusive partnership with G-Form LLC, a recognized leader in the design and development of impact protection for elite athletes and consumer products. The partnership will utilize patented technologies developed by both companies to launch FLEXORB, an innovative new material to be used in numerous protective products across the BPS platform.

Six Month Fiscal 2014 Financial Results

Revenues in the first six months of fiscal 2014 increased 5% to $271.1 million compared to $257.9 million in the same period a year ago. On a constant currency basis, revenues were up 6%.

Adjusted Gross Profit (a non-IFRS measure) in the first six months was virtually unchanged at $101.1 million. As a percentage of revenues, Adjusted Gross Profit was 37.3% compared to 39.0% in the year-ago period.

SG&A expenses increased 12% to $53.3 million compared to $47.7 million in the same period a year ago. As a percentage of revenues, and excluding acquisition-related charges and share-based payment expense, SG&A was 17.4% compared to 16.6% of revenues in the same period a year ago.

Adjusted Net Income (a non-IFRS measure) in the first six months of 2014 increased 2% to $30.7 million, or $0.83 per diluted share, compared to $30.2 million, or $0.84 per diluted share, in the first six months of fiscal 2013.

Conference Call

BPS will hold a conference call tomorrow, January 14, 2014, at 10:00 a.m. Eastern time to discuss its fiscal second quarter 2014 results.

BPS President and CEO Kevin Davis and CFO Amir Rosenthal will host the conference call, followed by a question and answer period.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay at http://public.viavid.com/index.php?id=107259 and via the Investors section at www.bauerperformancesports.com.

A replay of the conference call will be available after 1:00 p.m. Eastern time on the same day through January 28, 2014.

About Bauer Performance Sports Ltd.

Bauer Performance Sports Ltd. (TSX:BAU) is a leading developer and manufacturer of ice hockey, roller hockey, lacrosse, baseball and softball equipment, as well as related apparel. The company has the most recognized and strongest brand in the ice hockey equipment industry, and holds the top market share position in both ice and roller hockey. Its products are marketed under the BAUER, MISSION, MAVERIK, CASCADE, INARIA and COMBAT brand names and are distributed by sales representatives and independent distributors throughout the world. Bauer Performance Sports is focused on building its leadership position and growing market share in all product categories through continued innovation at every level. For more information, please visit www.bauerperformancesports.com.

Non-IFRS Measures

Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income, and Adjusted EPS are non-IFRS measures. Adjusted Gross Profit is defined as gross profit plus the following expenses which are part of cost of goods sold: (i) amortization and depreciation of intangible assets, (ii) non-cash charges to cost of goods sold resulting from fair market value adjustments to inventory as a result of business acquisitions, (iii) reserves established to dispose of obsolete inventory acquired from acquisitions and (iv) other one-time or non-cash items. Adjusted EBITDA is defined as EBITDA (net income adjusted for income tax expense, depreciation and amortization, losses related to amendments to the credit facility, gain or loss on disposal of fixed assets, net interest expense, deferred financing fees, unrealized gains/losses on derivative instruments, and realized and unrealized gains/losses related to foreign exchange revaluation) before restructuring and other one-time or non-cash charges associated with acquisitions, other one-time or non-cash items, pre-initial public offering sponsor fees, costs related to share offerings, as well as share-based payment expenses. Adjusted Net Income/Loss is defined as net income adjusted for all unrealized gains/losses related to derivative instruments and unrealized gains/losses related to foreign exchange revaluation, non-cash or incremental charges associated with acquisitions, amortization of acquisition-related intangible assets for acquisitions since the company's initial public offering, costs related to share offerings, share-based compensation expense and other non-cash or one-time items. Adjusted EPS is defined as Adjusted Net Income/Loss divided by the weighted average diluted shares outstanding.

Reconciliations of these non-IFRS measures to the relevant reported results can be found in the tables at the end of this press release and in the company's MD&A for the second quarter.

Caution Regarding Forward-Looking Statements

This press release includes forward-looking statements within the meaning of applicable securities laws, including with respect to the company's global operational model providing a strong platform for organic growth, the successful pursuit of an acquisition strategy designed to advance the company as one of the world's leading developers of high performance sports equipment and apparel, and the company achieving record top and bottom line performance for the remainder of fiscal 2014. Forward-looking statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements.

Forward-looking statements, by their nature, are based on assumptions, including those described herein and are subject to important risks and uncertainties. Many factors could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors: inability to introduce new and innovative products, intense competition in the equipment and apparel industries, inability to introduce technical innovation, inability to protect worldwide intellectual property rights and related litigation, inability to translate booking orders into realized sales, inability to successfully integrate recent acquisitions, decrease in ice hockey, roller hockey and/or lacrosse participation rates, adverse publicity, reduction in popularity of the NHL and other professional leagues in which our products are used, inability to maintain and enhance brands, reliance on third party suppliers and manufacturers, disruption of distribution chain or loss of significant customers or suppliers, cost of raw materials and shipping freight and other cost pressures, a change in the mix or timing of orders placed by customers, inability to forecast demand for products, inventory shrinkage or excess inventory, product liability claims and lawsuits, product recalls, compliance with standards of testing and athletic governing bodies, departure of senior executives or other key personnel, litigation and related matters, employment or union related matters, fluctuations in the value of certain foreign currencies in relation to the U.S. dollar, inability to manage foreign exchange derivative instruments, general economic and market conditions, changes in consumer preferences and the difficulty in anticipating or forecasting those changes, natural disasters, as well as the factors identified in the "Risk Factors" section of Bauer's Annual Information Form dated August 27, 2013 available on SEDAR at www.sedar.com.

Furthermore, unless otherwise stated, the forward-looking statements contained in this press release are made as of the date of this press release, 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.

Bauer Performance Sports Ltd.Amir RosenthalChief Financial Officer1-603-610-5802investors@bauerperformancesports.comInvestor Relations: Liolios Group Inc.Scott Liolios or Cody Slach1-949-574-3860BAU@liolios.comMedia Contact: Bauer Performance Sports Ltd.Tory MazzolaGlobal Communications Manager1-603-430-2111media@bauerperformancesports.comwww.bauerperformancesports.com

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