Exhibit 99.1
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Contact:
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David W. Kiser
Director of Investor Relations
Columbia Sportswear Company
(503) 985-4584 |
COLUMBIA SPORTSWEAR COMPANY
REPORTS FOURTH QUARTER AND FISCAL YEAR 2005 RESULTS
Highlights:
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Fourth quarter net sales increased 4.1 percent to $314.1 million. |
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Fourth quarter diluted earnings per share were $0.97 on 37.7 million weighted
average shares, compared to $0.97 on 40.6 million weighted average shares for
the fourth quarter of
2004. |
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Fiscal 2005 net sales were $1,155.8 million, a 5.5 percent increase over 2004 results. |
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Fiscal 2005 diluted earnings per share were $3.36 on 38.9 million weighted
average shares, compared to $3.40 on 40.8 million weighted average shares for fiscal 2004. |
PORTLAND, Ore. January 26, 2006 Columbia Sportswear Company (Nasdaq: COLM), a global leader in
the active outdoor apparel and footwear industries, today announced fourth quarter net sales of
$314.1 million for the quarter ended December 31, 2005, an increase of 4.1 percent over net sales
of $301.8 million for the same period of 2004. The Company reported net income for the fourth
quarter of $36.6 million, a 7.1 percent decrease compared to net income of $39.4 million for the
same period of 2004. Diluted earnings per share for the fourth quarter of 2005 were $0.97 on 37.7
million weighted average shares, compared to diluted earnings per share of $0.97 for the fourth
quarter of 2004 on 40.6 million weighted average shares.
Compared
to the fourth quarter of 2004, Other International sales increased
17.5 percent to $51.8 million, European sales increased 14.3 percent to $50.3 million, U.S. sales increased 2.4 percent
to $185.4 million, and Canadian sales decreased 18.4 percent to $26.6 million for the fourth
quarter of 2005.
Excluding changes in currency exchange rates, consolidated net sales increased 5.0 percent,
European sales increased 21.6 percent, Other International sales increased 19.7 percent, U.S. sales
increased 2.4 percent to $185.4 million and Canadian sales decreased 22.2 percent for the fourth
quarter of 2005, compared to the same period of 2004.
For the fourth quarter of 2005, footwear sales increased 19.9 percent to $63.3 million, sportswear
sales increased 11.5 percent to $90.0 million, equipment sales increased 20.0 percent to $1.2
million, accessories sales decreased 3.2 percent to $12.2 million, and outerwear sales decreased
4.7 percent to $147.4 million, compared to the fourth quarter of 2004.
Tim Boyle, Columbias president and chief executive officer, commented, Fourth quarter sales were
driven by the continued strength of our footwear and sportswear product categories. Outerwear sales
were down in the quarter, but not to the degree initially expected, due to healthy outerwear
re-orders from U.S. retail customers late in the quarter. Favorable weather conditions
across much of the U.S., Europe and Japan enhanced retail customers re-orders and sell-through of
our weather-sensitive outerwear and footwear, generating strong margins and generally clean
inventory levels at retail during the quarter. We are encouraged by the strong current season
retail customer sell-through rates and margins and the potential impact that may have on fall 2006
orders for our compelling outerwear product offering.
Fiscal 2005 Results
For 2005, the Company reported net sales of $1,155.8 million, an increase of 5.5 percent over net
sales of $1,095.3 million for 2004. The Company reported net income for 2005 of $130.7 million, a
5.7 percent decrease compared to net income of $138.6 million for 2004. Diluted earnings per share
for 2005 were $3.36 on 38.9 million weighted average shares, compared to diluted earnings per share
of $3.40 for 2004 on 40.8 million weighted average shares.
Compared to 2004, Other International sales increased 27.1 percent to $179.7 million, European
sales increased 8.3 percent to $184.4 million, U.S. sales increased 1.5 percent to $676.9 million,
and Canadian sales decreased 1.8 percent to $114.8 million for 2005.
Excluding changes in currency exchange rates, consolidated net sales increased 4.5 percent, Other
International sales increased 25.7 percent, European sales increased 7.7 percent, and Canadian
sales decreased 9.1 percent, compared to 2004.
For 2005, sportswear sales increased 13.6 percent to $450.3 million, footwear sales increased 14.4
percent to $211.2 million, outerwear sales decreased 4.4 percent to $440.0 million, equipment sales
increased 15.2 percent to $9.1 million, and accessories sales decreased 2.0 percent to $45.2
million, compared to 2004.
Mr. Boyle commented, Columbia is committed to remaining a growth company. During the last few
years, we have made significant infrastructure investments to support future growth plans. While
we are disappointed with our 2005 revenue results, sales came in as projected, and we are generally
satisfied with our expense management. We believe the initiatives we are implementing to drive
international expansion and footwear and sportswear product category growth, as well as the
improvements being made to stabilize our North American outerwear business, position us for
continued long-term growth.
Guidance
Mr. Boyle continued, Based on our reported spring order backlog and a shift in timing of shipments
for the first quarter, we currently expect revenue growth for the first quarter of 2006 of
approximately 1 percent and net income decline of approximately 25 percent (approximately 15
percent excluding stock options expense) compared to the first quarter of 2005. This guidance does
not include projected first quarter financial performance for Montrail. We expect Montrail to be
neutral to first quarter earnings and slightly dilutive to earnings for the full year. As a
reminder, spring product sales account for a relatively small percentage of our overall business;
the bulk of our revenues and profits historically come in the second half of the year. It is
difficult for us to gauge revenue and profitability levels for the full year 2006 until we have
more visibility into the fall 2006 season. In keeping with our standard practice, we will announce
our fall 2006 backlog and give guidance for the full year in our first quarter 2006 earnings
release. Please note that these
projections are forward-looking in nature and are based on backlog and forecasts, which may change,
perhaps significantly.
The Company will host a conference call to elaborate on fourth quarter and full year 2005 results
on Thursday, January 26, 2006 at 5:00 p.m. Eastern. The call will include discussions regarding the
Companys fourth quarter 2005 performance in general, the Companys geographic and merchandise
category performance, and the Companys future opportunities. To participate, please dial
800-851-3059 in the United States (outside the United States, please dial 706-679-8430) five to ten
minutes prior to the call. The call will also be webcast live on the investor information section
of the Companys website at www.columbia.com, where it will remain available until February
9, 2006.
Founded in 1938 in Portland, Oregon, Columbia Sportswear Company is a global leader in the design,
sourcing, marketing and distribution of active outdoor apparel and footwear. As one of the largest
outerwear manufacturers in the world and the leading seller of skiwear in the United States, the
Company has developed an international reputation for quality, performance, functionality and
value. The Company manages a portfolio of outdoor brands including Columbia Sportswear, Mountain
Hardwear, Sorel, and Montrail. To learn more about Columbia, please visit the Companys website at
www.columbia.com.
This press release contains forward-looking statements, including Mr. Boyles statements regarding
anticipated revenues and earnings for the first quarter of 2006 and growth in future periods.
Actual results could differ materially from those projected in these and other forward-looking
statements as a result of a number of risks and uncertainties, including those set forth in this
press release, those described in the Companys Quarterly Report
on Form 10-Q for the quarter
ended September 30, 2005, under the heading Factors That May Affect Our Business and the Price of
Our Common Stock, and other risks and uncertainties that have been or may be described from time
to time in other reports filed by the Company, including reports on
Form 8-K, Form 10-Q, and Form 10-K.
Risks and uncertainties that may affect our future revenues and earnings include growth trends in
the industry in general; local, national, and international economic conditions; the financial
health of our customers; intense competition in the industry (which we expect to increase); the
effects of unseasonable weather on consumer demand for our products; international risks, including
foreign laws and regulations, trade disruptions, political instability in foreign markets, exchange
rate fluctuations, and changes in quotas and tariffs or other duties; business disruptions and
costs arising from disease outbreaks, disasters, acts of terrorism or military activities around
the globe; our dependence on key personnel; the effective implementation of our Kentucky
distribution center and expansion of our other distribution facilities; our ability to fully and
cost-effectively integrate acquired businesses into our existing operations; our ability to
effectively deliver our products to customers in a timely manner despite potential service
interruptions; our reliance on product acceptance by consumers; our dependence on independent
manufacturers and suppliers; the effectiveness of our sales and marketing efforts; our ability to
achieve and manage growth effectively; the operations of our own and third party computer systems;
and our ability to establish and protect our intellectual property. We do not undertake any duty to
update any of the forward-looking statements after the date of this release to conform them to
actual results or to changes in our expectations.
-table follows-
COLUMBIA SPORTSWEAR COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
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December 31, |
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2005 |
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2004 |
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Current Assets: |
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Cash and cash equivalents |
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$ |
101,091 |
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$ |
130,023 |
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Short-term investments |
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159,075 |
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160,205 |
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Accounts receivable, net |
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287,403 |
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267,653 |
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Inventories |
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185,870 |
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165,426 |
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Deferred tax assets |
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21,674 |
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22,190 |
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Prepaid expenses and other current assets |
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11,151 |
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10,536 |
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Total current assets |
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766,264 |
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756,033 |
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Property, plant and equipment, net |
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165,752 |
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155,013 |
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Intangibles and other assets |
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38,762 |
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38,398 |
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Total assets |
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$ |
970,778 |
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$ |
949,444 |
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Current Liabilities: |
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Notes Payable |
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$ |
39,727 |
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$ |
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Accounts payable |
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91,390 |
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78,309 |
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Accrued liabilities |
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50,934 |
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51,552 |
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Income taxes payable |
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23,110 |
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11,819 |
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Current portion of long-term debt |
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7,152 |
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5,216 |
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Total current liabilities |
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212,313 |
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146,896 |
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Long-term debt and other liabilities |
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7,414 |
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12,636 |
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Deferred tax liabilities |
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8,261 |
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9,662 |
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Shareholders equity |
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742,790 |
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780,250 |
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Total liabilities and shareholders equity |
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$ |
970,778 |
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$ |
949,444 |
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CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended December 31, |
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Twelve Months Ended December 31 |
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2005 |
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2004 |
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2005 |
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2004 |
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Net sales |
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$ |
314,097 |
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$ |
301,776 |
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$ |
1,155,791 |
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$ |
1,095,307 |
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Cost of sales |
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179,512 |
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167,344 |
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652,036 |
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597,373 |
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Gross profit |
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134,585 |
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134,432 |
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503,755 |
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497,934 |
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42.8 |
% |
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44.5 |
% |
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43.6 |
% |
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45.5 |
% |
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Selling, general, and administrative |
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81,837 |
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74,993 |
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322,197 |
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290,538 |
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Net licensing income |
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(1,622 |
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(960 |
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(4,408 |
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(4,032 |
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Income from operations |
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54,370 |
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60,399 |
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185,966 |
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211,428 |
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Interest (income) expense, net |
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(1,195 |
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(620 |
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(4,889 |
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(3,493 |
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Income before income tax |
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55,565 |
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61,019 |
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190,855 |
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214,921 |
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Income tax provision |
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18,935 |
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21,662 |
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60,119 |
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76,297 |
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Net income |
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$ |
36,630 |
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$ |
39,357 |
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$ |
130,736 |
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$ |
138,624 |
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Net income per share: |
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Basic |
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$ |
0.98 |
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$ |
0.98 |
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$ |
3.39 |
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$ |
3.44 |
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Diluted |
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0.97 |
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0.97 |
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3.36 |
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3.40 |
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Weighted average shares outstanding: |
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Basic |
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37,356 |
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40,024 |
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38,549 |
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40,266 |
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Diluted |
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37,658 |
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40,609 |
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38,943 |
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40,812 |
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