Thwap! That's the sound of sporting goods manufacturer K2 (NYSE:KTO) hitting strong first-quarter numbers. Earnings were $0.27 per share, up from just $0.01 one year ago. Driven by growing sales of paintball equipment and accessories, K2 saw first-quarter sales surge to $277 million, up 77% over last year. That's the second straight quarter of robust sales growth.

Paintball is fast becoming an accepted "extreme" sport. According to American Sports Data, there are some 9 million paintball enthusiasts, predominantly males between the ages of 12 and 24. What started out as a novelty sport for survivalists has grown into a mainstream sports phenomenon with tournaments, magazines, and a dedicated following.

That's good news for paintball equipment manufacturers like K2, which has about 30% of the paintball equipment market through its Brass Eagle brand and its just-acquired Worr Game Products, a maker of premium paintball markers (i.e., guns).

K2 has been an acquisitive company. It bought snowboard maker RIDE (once a FoolPort denizen) a few years ago; took over Rawlings, Worth, Tubbs, and Brass Eagle last year; and added Worr and privately held Innovative Products just last week. By doing so, it has been gaining market share from competitors like Adidas-Solomon AG and Rossignol, a maker of skis and ski equipment.

To fund this growth-by-acquisition tear, K2 has been assuming a lot of debt. Total debt has grown to more than $209 million from $167 million last year, while keeping only about $21 million in cash in the bank. It also doled out an additional 6.4 million shares of K2 stock to fund those acquisitions.

Despite this, K2 has been growing owner's earnings pretty strongly. As the company acknowledges, it's a "first- and fourth-quarter company." I use a trailing 12 months structural free cash flow measure to derive $12.7 million in owner's earnings, which is more than double 2003's $6.1 million SFCF rate.

Even though K2 anticipates a flat second quarter, it's expecting the third and fourth quarters to generate a combined $0.39 in earnings per share with full-year sales at the high end of guidance of $960 million. Management indicates it's still on the prowl for further acquisitions and still has $100 million in excess debt availability to make one.

Paintball has been a huge success for K2, and the market has yet to be fully realized. On the fringes of respectability, the sport finds itself in the position of in-line skating and snowboarding a decade ago. For K2, that will allow it to cement its position as industry leader. Thwap!

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Fool contributor Rich Duprey has yet to play paintball. He does not own any stocks mentioned in this article.