Good afternoon, everyone, and thank you for participating in today's conference call to discuss Black Diamond Inc's Financial Results for the Fourth Quarter and Full Year Ended December 31, 2015. Joining us today are Black Diamond Inc's CFO, Aaron Kuehne, Black Diamond's Equipment President, Mark Ritchie; and the company's Director of Investor Relations, Cody Slach. Following the remarks, we will open the call for your questions. Before we go further, I would like to turn the call over to Mr. Slach, as he reads the company's Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Cody, please go ahead.

Thanks, Camille. Please note that during this conference call, the company may use words such as appears, anticipates, believes, plans, expects, intends, future and similar expressions, which constitute forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on the company's expectations and beliefs concerning future events impacting the company, and therefore, involve a number of risks and uncertainties. The company cautions you that forward-looking statements are not guarantees and that actual result could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the company to differ materially from those expressed or implied by forward-looking statements used in this conference call include, but are not limited to, the overall level of consumer spending on the company's products; general economic conditions and other factors affecting consumer confidence, disruption and volatility in the global capital and credit markets, the financial strength of the company's customers, the company's ability to implement its reformation and growth strategy, including its ability to organically grow each of its historical product lines, the ability of the company to identify potential acquisition or investment opportunities as part of its redeployment and diversification strategy; the company's ability to successfully redeploy its capital into diversifying assets or that any such redeployment will result in the company's future profitability; the company's exposure to product liability or product warranty claims and other loss contingencies; the stability of the company's manufacturing facilities and foreign suppliers; the company's ability to protect patents, trademarks and other intellectual property rights; fluctuations in the price, availability and quality of raw materials and contracted products as well as foreign currency fluctuations; the company's ability to utilize…

Thank you, Cody, and good afternoon everyone. My name is Mark Ritchie and on January 1, I formally assumed the role of President of the Black Diamond Equipment brand. At the close of business today, Black Diamond Inc., released it's earnings for the fourth quarter and 12 months ended December 31, 2015. Following my opening remarks, our CFO, Aaron Kuehne will review the company's 2015 financial performance and its outlook for 2016. Following Aaron's remarks, I will return to the call to provide some additional commentary and we will [give] [ph] time for a question-and-answer period. During the fourth quarter of 2015, Black Diamond Inc. completed it's divestiture of POC and made the strategic decision to retain the Black Diamond Equipment and PIEPS brand and commit to a long-term holding company structure in which Black Diamond Equipment and PIEPS will remain core holding, while the Board seeks to redeploy a significant capital resources into diversifying assets. To illustrate its commitment, the Board asked me to initiate a reformation project at Black Diamond Equipment. The reformation is expected to return the operating company to its historical 2011 operating margin with a long-term focus on and commitment to increased operating cash flow. Prior to the reformation the company's strategy was to use Black Diamond Equipment as its operating platform to acquire additional technical outdoor brand and to invest in sales growth to leverage that platform. With the sale of Gregory Mountain products in 2014, the sale of POC in 2015 and now the completion of our transition service commitment, we began to eliminate platform function that had historically been staffed to provide centralized human resource, customer service, IT, supply chain and other administrative services to all of our brands. In late 2014, the company also began to repatriate its Chinese manufacturing functions to Salt Lake City. We expect those repatriation of our Asian manufacturing platform and reaffirmation project to be complete in 2016 and we expect the brand to be well positioned to achieve its profitability and cash flow objective on a run rate basis excluding corporate cost and transitional growth margin variances related to foreign currency and the repartition of manufacturing some time in 2016. Thus far the reformation project seeks to achieve the following primary initiative. Number one, significant cost reductions in North America and in Europe; number two, the relocation of our European headquarters from Basel, Switzerland to Innsbruck, Austria; and number three, a reorganization of our apparel strategy to achieve profitability at substantially lower sales target. I would now like to turn the call over to our CFO, Aaron Kuehne. Aaron?

Thank you, Mark, and good afternoon everyone. The reported results we issued in today's press release are from continuing operations, which exclude the results of POC for both the three month and 12 months period ended December 31, 2015. Sales in the fourth quarter of 2015 decreased 4% to $44.1 million compared to $46 million in the same year ago quarter. The decrease was driven by the weakening of foreign currencies against the U.S. dollar and softer product volume in Japan. Due to the recent volatile foreign exchange markets, fourth quarter sales were negatively impacted by approximately 370 basis points or $1.7 million. On a constant currency basis, Q4 sales were essentially unchanged at $45.8 million. Consolidated gross margin in the fourth quarter decreased 160 basis points to 33.5% compared to 35.1% in the same period last year. Again, foreign exchange created the 245 basis headwind, so on a constant currency basis, gross margin improved by 90 basis points to 36% due to a favorable mix of higher margin products. Overall, our sales in gross margins are impacted by unfavorable foreign currency changes on a transactional basis. The primary cost of our inventories denominated in U.S. dollars, while 42% of our global sales are denominated in foreign currencies primarily the euro, Canadian dollar, Swiss franc, British pound and Norwegian krone. We attempt to manage our foreign currency risk on a continuous basis through natural hedges and foreign currency hedge contracts. Although, we have hedges in place for the different cash flows, denominated in foreign currencies, these hedges will never be a perfect offset to the actual currency moments especially with the currency volatility we've experienced in recent quarters. These hedges also do not protect our financial statements from the translation impact we experienced from these weaker currencies. In our reported…

Thanks Aaron. Before opening the call for questions, I would like to share a little more with you about our reformation efforts primarily in Europe and with apparel. We started with the following strategic objectives. To solidify Black Diamond as the number one climbing company globally to sell more of our core products deeper into existing channels, to create new channels for longer term growth, to grow our eCommerce business globally and to return the brand to its 2011 cost structure. Towards these objectives, as Aaron mentioned, we have already eliminated significant SG&A both in North America and in Europe and we expect our European business to be fully relocated in Innsbruck in May of this year. We expect to move to Innsbruck to reduce cost, alleviate complexity and reduce structural risk. Moving our headquarters from the Swiss franc denominated city of Basel to the euro denominated city of Innsbruck better aligned our euro sales with our euro cost creating more of a natural hedge in our P&L. We also estimate Innsbruck cost of doing business is roughly 30% less than Basel. Today, we are building out the office and actively hiring and with the Innsbruck as a real asset to our brand, a great new home for the brand and for employees who will now have immediate access to the mountains in summer and winter similar to our global headquarters in Salt Lake City. To help drive these efforts, we relocated our North American brand leader Tim Bantle to be the Managing Director of our European operations and we expect him to more tightly align our European headquarters with our corporate headquarters in Salt Lake City. In spite of the office transition, Tim has already reorganized European sales management around account types, differentiating strategic accounts from regional key accounts…

Thank you, sir. [Operator Instructions] And our first question comes from Camilo Lyon with Canaccord Genuity. Please proceed.

Thank you. Good morning, gentlemen. I was hoping you could give us a little bit more detail on -- what is the apparel piece look like going forward, now, that there has been some more conservative assumptions baked into the plan. And how do you see, what kind of growth is needed to get back to the 2011 EBIT margins in -- on the apparel business. And then, some of the early, does that imply that you are just looking for more stable levels of demand in the equipment piece on Black Diamond, and was there also an embedded growth function for that piece of the business as well?

Okay. So there were a lot of pieces to that. I will do my best here. To reaffirm the primary concept, we remain fully committed to the apparel initiative. Obviously, as we've discussed previously, we've invested heavily, we've learned a lot and we've recalibrated our revenue expectations around the idea organically and profitably growing this important product category. What we are doing is distilling the product line down to the essential pieces that are aimed at the peer Black Diamond customer, climbers and backcountry skiers along with the emerging gym climber. So we are making the line more accessible from both a pricing and fit perspective and we are driving the business forward along a more natural rhythm. The goal was to have fewer key items that offer best in class value as we've done with products like the Momentum Harness and the spot headlamp so try to mimic those sorts of product placements. Though we are still committed to Helio innovative product, we recognize need for sharper price points to drive sales. So the key takeaway here is that we remain committed to apparel. Would like to comment on EBITDA and margin?

You bet. So, Camilo, as part of the reformation process that included the scaling back of our apparel initiative to be inline with what Mark just articulated. So, as we think about the overall profitability target of 10% for the combined brands of Black Diamond and PIEPS on a go forward basis, we believe that we have the appropriate operating model or cost structure in place whereby the primary focus for us relies on two remaining factors both of which actually impact gross margins and that is that of optimizing our in-house manufacturing activities getting that ramped up and having our in-house products that are manufactured which represent about 20% to 25% of our business producing the gross margins that we anticipate or expect as a result of the manufacturing repatriation as well as a more stable foreign currency environment, if you will. We were not actively managing our foreign currency exposure per se during the exploration strategic alternative process for obvious reasons, but we have been actively managing that process and addressing that process over the last several months. And as we continue to evolve the organization through the reformation process in 2016 and start to experience hopefully a more stable environment when it comes to foreign currency, we do believe that we will be able to start to move towards -- more quickly towards that 10% EBITDA target. However, it does not necessarily pin itself on, how big or little, the apparel initiative is.

Okay. And then, Aaron maybe if you could just help us understand a little bit more granularly with respect to the cadence of SG&A as the year progresses. It sounds like there are some timing -- there is some distinct timing differences that will influence how that unfolds?

Most of the timing will actually relate around the restructuring charges that we outlined at $3 million to $4 million. We've been working on the reformation process which we outlined during our Q3 call for the last several months. And so, we put a lot of this in the motion. And so, we do believe that for the most part we will have a nice rhythm to how we go about achieving these targets as it relates to SG&A. Now, obviously, there will be the typical seasonal trends that it will follow which if you look at 2015, that will provide you get indications or processes to how we expect that to roll out. That really will be around the restructuring activities as far as the different timing components.

Okay. And then, I guess finishing upon the apparel fees. Will it be enough to what began this transition last year? Big focus was improving the retail presentation and having a more robust direct to consumer piece. It sounds like there is more movement on the eCommerce portion of the direct to consumer. Is there a fundamental change in how you are viewing your presentation at retail with respect to either partners or you partnering with and/or how you're viewing the presentation of the actual product at retail, so that there is a better -- a more sort of definitive embracement of the brand?

I believe my answer is that we continue to focus on trying to optimize how we appear at retail. We are -- and as you point out, we are pushing a lot on eCommerce and direct to consumer. We are doing a lot with point of purchase fixturing in order to enhance how the product is displayed with our closest retail partners. And we do expect that that will help to differentiate the product in the market as we move forward. But, what we are seeking to do is, is to recognize where this product can really be sold. We are closely with that retail customer and begin to push the product through channels where we know it can be successful.

So that means, that there is a change in the number of wholesale partners whether up or down that you will be partnering with apparel?

I don't believe that there is any fundamental change that desires to simply focus and target the product better at what we are seeking to do, so that we can drive sale through and improve the position of the brand going forward.

Okay. So improve productivity of existing tourists basically?

Yes.

Okay. Great. I will turn over the questions to someone else. Thanks very much guys. Good luck.

Thanks Camilo.

[Operator Instructions] And our next question comes from Jim Duffy with Stifel.

Thanks. Hi, Mark and Aaron. Hope you guys are doing well? Aaron, I've a couple of questions looking for more clarity around the 10% EBITDA margin objective. You had mentioned excluded overhead cost, how much of those overhead cost, just explain a little bit about what those overhead costs are associated with, is that the Connecticut offices expense?

No. So what those relate toward the corporate overhead cost or the cost associated with being publicly traded or non-directly attributable to the operations of Black Diamond and PIEPS.

Okay. What's the number?

Approximately $4 million of cash charges.

Okay. And then, what is the D&A assumptions in that?

Yes. So for 2016, our D&A assumption is right around $3.5 million.

Okay. And that's a good run rate for 2017, assuming that's going to expand?

Right now the that we are approaching the business from a CapEx and a D&A perspective is more of a maintenance, obviously, we are making investments in new tooling and other parts of the business that continue to further our innovation and our overall operations. However, we are not expecting significant CapEx assumptions into the outgoing years. And so, the $2.5 million number that I provided as far as the 2016 guidance is a number that continue to utilize same with the D&A assumption.

Okay. Very good. And then, the point you made around lower currency volatility in the gross margin maybe I'm slow on the uptake here. But, can you explain that in more detail, does that assume some recovery in currencies to get you back to some historical gross margin or does it relate to pricing action, hedge contracts, help me think through that?

Yes. It's the latter. And so, obviously, if we were to start to see a little bit of retraction or strengthening of the foreign currencies that would help us out. But, the way that we are thinking about is that, we are obviously in a volatile marketplace right now. And, in order to help stabilize some of that, we are actively managing our foreign currency contracts to mitigate some of this exposure. So that will obviously, start to benefit us as we head into 2017 as being able to more actively manage that versus where we were in 2015 coming into 2016. But then also, it does relate to pricing opportunities as well. We recognized that out there in the marketplace foreign currency is having an impact. It is making our product more expensive, and so we need to be sensitive to that on a global basis. However, we will continue to -- we evaluate this process on a continuous basis and we will continue to do so. And where we believe that there are certain opportunities whether that be geographically or via the different product categories where we can be opportunistic. We will do so. But, we are obviously, sensitive to that component.

Got you. That's helpful. And then, final question. Can you just share some of the thought process on share repurchases versus the use of cash for acquisitions?

Yes. So we will continue to be active in the marketplace and continue to be opportunistic with our repurchases. However, the primary focus is around the redeployment strategy as we believe that is the greatest opportunity in terms of shareholder value in the maximization of our NOLs. And so, yes, we will continue to be active, we will be opportunistic. We have been. Also please keep in mind though that we are limited just to the amount that we can repurchase on a daily basis. And so we will just continue to manage through the process. But obviously, once again, our focus is on redeploying the assets into redeploying the capital into diversifying assets.

Great. Thanks for that.

Appreciate it.

At this time, this concludes our question-and-answer session. I'd now like to turn the call back over to Mr. Ritchie for closing remarks.

We like to thank everyone for listening to today's call. And we look forward to speaking with you when we report our first quarter results, which we expect in early May of 2016. Thanks again for joining us.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. And thank you for your participation.