Exhibit 99.1
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Contact:
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Ron Parham |
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Director of Investor Relations |
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Columbia Sportswear Company |
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(503) 985-4584 |
COLUMBIA SPORTSWEAR COMPANY
REPORTS FIRST QUARTER 2008 RESULTS
Highlights:
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First quarter 2008 consolidated net sales increased 3 percent to $297.4 million,
compared to first quarter 2007 net sales of $289.6 million. |
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First quarter 2008 net income was $19.9 million, or $0.56 per diluted share, compared to
net income of $26.1 million, or $0.71 per diluted share, for the first quarter of 2007. |
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Fiscal 2008 net sales are estimated to increase approximately 2 percent, and diluted
earnings per share are expected to approximate $3.15 $3.20 for the full year. |
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Global fall 2008 order backlog was $714.4 million at March 31, 2008, a 4 percent
decrease compared to March 31, 2007. |
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The board of directors declared a quarterly dividend of $0.16 per share, payable on May
29, 2008 to shareholders of record on May 15, 2008. |
PORTLAND, Ore. April 24, 2008 Columbia Sportswear Company (NASDAQ: COLM), a global leader in
the active outdoor apparel and footwear industries, today announced net sales of $297.4 million for
the quarter ended March 31, 2008, an increase of 3 percent compared to net sales of $289.6 million
for the same period of 2007.
First quarter net income totaled $19.9 million, or $0.56 per diluted share, compared with net
income of $26.1 million, or $0.71 per diluted share, for the same period of 2007.
The 3 percent increase in first quarter 2008 net sales consisted of 20 percent growth in the Latin
America & Asia Pacific region (LAAP) to $49.0 million, and 4 percent net sales growth in Canada to
$26.9 million, partially offset by a 3 percent net sales decline in the Europe, Middle-East &
Africa region (EMEA) to $65.7 million. First quarter 2008 U.S. net sales of $155.8 million were
essentially equal to net sales in the first quarter of 2007. (See Geographical Net Sales table
below.) Changes in foreign currency exchange rates compared with the first quarter of 2007
contributed 5 percentage points of consolidated net sales growth, 4 percentage points of LAAP net
sales growth, 15 percentage points of benefit to the Canada net sales comparison, and 10 percentage
points to the EMEA net sales comparison.
Compared with the first quarter of 2007, first quarter 2008 outerwear net sales increased 16
percent to $69.6 million and accessories and equipment net sales increased 12 percent to $15.4
million. These increases were partially offset by a decrease of 1 percent in sportswear net sales
to $161.1 million and a decrease in footwear net sales of 3 percent to $51.3 million. (See
Categorical Net Sales table below.)
Compared with the first quarter of 2007, first quarter 2008 Columbia brand net sales increased 2
percent to $267.2 million, Mountain Hardwear brand net sales increased 23 percent to $21.8 million,
and Sorel brand net sales increased 6 percent to $3.7 million. These increases were
partially offset by a 20 percent decline in Montrail brand net sales to $3.9 million. Net sales of
Pacific Trail brand products were insignificant during the first quarter of both years. (See
Brand Net Sales table below.)
The company ended the quarter with $278.1 million in cash and short-term investments, compared with
$273.5 million at December 31, 2007. Inventories declined $27.8 million sequentially, or 10
percent, to $238.1 million. Compared with March 31, 2007, inventory increased 14 percent,
primarily to support the companys planned 2008 retail store openings and expanded replenishment
program.
Tim Boyle, Columbias president and chief executive officer, commented, We are pleased with our
first quarter results, the strength of our brands and the continued strength of our balance sheet.
Initial anecdotal evidence from several of our top U.S. retail partners suggests that our launch of
Omni-Shade apparel and Techlite footwear during the quarter is off to a strong start, despite
cooler than normal spring weather in many key markets. As seasonal demand improves for
warm-weather products, we expect to benefit from our cohesive marketing efforts around Omni-Shade
and Techlite.
Share Repurchase Program
During the first quarter, the company repurchased approximately 968,000 shares of common stock at
an aggregate purchase price of $40.3 million. Through March 31, 2008, the company has repurchased
a total of approximately 7.6 million shares at an aggregate purchase price of $356.3 million since
the inception of the current $400 million stock repurchase program in 2004.
Dividend
The board of directors approved a dividend of $0.16 per share, payable on May 29, 2008 to
shareholders of record on May 15, 2008.
2008 Guidance
The company expects 2008 net sales growth of approximately 2 percent compared with 2007, based
primarily on its global backlog as of March 31, 2008, its expanding U.S. retail operations, and the
estimated affect of changes in foreign currency exchange rates compared with 2007.
The company reported that as of March 31, 2008, combined 2008 order backlog for the spring and fall
seasons totaled $849.8 million, a decrease of approximately 4 percent compared with combined 2007
spring and fall order backlog of $888.7 million at March 31, 2007. Changes in currency exchange
rates contributed approximately 4 percentage points of benefit to the combined order backlog
comparison.
The companys fall 2008 order backlog at March 31, 2008 totaled $714.4 million, approximately 4
percent lower than at March 31, 2007. U.S. backlog was down high-single digits and EMEA backlog
was down mid-single digits, partially offset by double digit increases in the smaller Canada and
LAAP regions. Global fall 2008 apparel backlog experienced a mid-single digit decline, partially
offset by a mid-single digit increase in the smaller footwear backlog. Changes in currency
exchange rates contributed approximately 4 percentage points of benefit to the fall 2008 backlog
comparison.
Mr. Boyle commented, We believe our lower global backlog reflects, in part, the challenging U.S.
retail environment that has motivated many of our key retail partners to be conservative in
projecting consumer demand for the second half of the year. In addition, backlog in our Europe-
direct countries reflects disappointing sell-through of our regional fall 2007 assortment, as we
discussed in prior quarters, partially offset by the benefit of a weaker U.S. dollar against the
Euro. Our new European sales, marketing and operations teams are making steady progress
reorienting our product assortment and implementing the regional elements of our global
go-to-market strategy for the spring 2009 season. We believe these steps will lay a foundation for
renewed revenue growth in our Europe-direct business.
The company expects full year 2008 consolidated gross margins to increase approximately 50 basis
points from 2007 levels, primarily as a result of favorable foreign currency hedged rates,
increased contribution from the companys retail operations, and increases in some average selling
prices internationally.
The companys previously stated plans to invest in incremental marketing activities during 2008 in
support of key seasonal brand and product initiatives, together with initial investments and
incremental operating costs of the companys new retail stores, are expected to increase full year
2008 operating expenses as a percentage of consolidated net sales by approximately 350 basis points
compared with 2007 levels.
Based on the above projections, the company expects full year 2008 operating margins of
approximately 11.7 percent and diluted earnings per share of approximately $3.15 $3.20.
The company expects net sales in the second quarter of 2008 to increase approximately 6 percent and
expects second quarter diluted earnings per share of approximately $0.03 compared to $0.27 in last
years second quarter. The second quarter is the companys lowest volume quarter of the year,
which amplifies the effect on net income of changes in the timing of shipments and the companys
planned incremental marketing, advertising and retail expansion investments.
Mr. Boyle continued, While our primary focus is on our wholesale business and serving our
wholesale customers, we remain on pace to expand our U.S. retail footprint during 2008, including
opening several new first-line branded stores in key U.S. metropolitan markets. We believe these
and future branded stores will allow us to create stronger emotional connections with consumers by
presenting the breadth and depth of our brands and seasonal initiatives in inspiring retail
environments, increasing demand for our products and ultimately benefiting our wholesale partners
in those markets. In addition, we expect our expanding network of outlet stores in top-tier outlet
centers to improve inventory management and be accretive to earnings.
We remain firmly committed to offering consumers innovative outdoor products and focusing our
increased marketing and advertising investments around well-defined brand and seasonal initiatives.
We believe these investments, together with the evolving execution of our global go-to-market
strategy, will have an increasingly positive impact on consumer demand and sell-through in future
seasons, particularly when the current macroeconomic uncertainties begin to ease, Boyle concluded.
Conference Call
The Company will host a conference call to elaborate on first quarter 2008 results on Thursday,
April 24, 2008 at 5:00 p.m. Eastern. To participate, please dial 800-851-3059 in the United States
(outside the United States, please dial 706-679-8430), conference ID # 41508541. The call will
also be webcast live on the investor relations section of the companys website at
www.columbia.com, where it will remain available until May 15, 2008.
About Columbia Sportswear
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 a 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, Montrail and Pacific Trail. To learn more about Columbia, please visit the
companys website at www.columbia.com.
Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding anticipated
revenues, gross margins, operating margins, cash flows, earnings, and strategic initiatives for the
second quarter and full year 2008 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 Annual Report on Form 10-K for the year ended December 31, 2007, under the heading
Risk Factors, 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. Risk factors that may affect our future revenues, earnings and performance include
international risks, including changes in quotas and tariffs or other duties, political instability
in foreign markets, exchange rate fluctuations, and trade disruptions; our ability to attract and
retain key employees; unfavorable economic conditions generally and weakness in consumer
confidence; the financial health of our customers; our ability to effectively deliver our products
to customers in a timely manner; our reliance on product acceptance by consumers; the effects of
unseasonable weather (including, for example, warm weather in the winter and cold weather in the
spring, which affects demand for the companys products); our ability to integrate and manage
acquired businesses; our dependence on independent manufacturers and suppliers; the effectiveness
of our sales and marketing efforts; intense competition in the industry (which we expect to
increase); business disruptions and acts of terrorism or military activities around the globe; the
effective implementation and expansion of our distribution facilities; our ability to implement our
strategic initiatives and retail expansion plans; the operations of our computer systems and third
party computer systems; and our ability to establish and protect our intellectual property.
Although forward-looking statements help provide complete information about the company, please
keep in mind that forward-looking statements are inherently less reliable than historical
information. 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.
- Financial tables follow-
COLUMBIA SPORTSWEAR COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
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March 31, |
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2008 |
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2007 |
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Current Assets: |
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Cash and cash equivalents |
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$ |
276,245 |
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$ |
79,266 |
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Short-term investments |
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1,813 |
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189,360 |
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Accounts receivable, net |
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246,165 |
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|
234,278 |
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Inventories, net |
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238,086 |
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|
209,712 |
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Deferred income taxes |
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31,246 |
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26,761 |
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Prepaid expenses and other current assets |
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21,333 |
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12,631 |
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Total current assets |
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814,888 |
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752,008 |
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Property, plant and equipment, net |
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222,207 |
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199,827 |
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Intangibles and other non-current assets |
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70,562 |
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69,609 |
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Total assets |
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$ |
1,107,657 |
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$ |
1,021,444 |
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Current Liabilities: |
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Accounts payable |
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$ |
53,159 |
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$ |
55,950 |
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Accrued liabilities |
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60,904 |
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60,097 |
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Income taxes payable |
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5,422 |
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8,164 |
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Other current liabilities |
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163 |
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142 |
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Total current liabilities |
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119,648 |
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124,353 |
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Other long-term liabilities |
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25,182 |
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21,483 |
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Deferred income taxes |
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5,976 |
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7,964 |
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Shareholders equity |
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956,851 |
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867,644 |
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Total liabilities and shareholders equity |
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$ |
1,107,657 |
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$ |
1,021,444 |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended March 31, |
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2008 |
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2007 |
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Net sales |
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$ |
297,363 |
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$ |
289,640 |
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Cost of sales |
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166,808 |
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162,942 |
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Gross profit |
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130,555 |
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126,698 |
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43.9 |
% |
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43.7 |
% |
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Selling, general, and administrative expense |
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103,912 |
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90,361 |
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Net licensing income |
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(843 |
) |
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(996 |
) |
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Income from operations |
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27,486 |
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|
37,333 |
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Interest (income) expense, net |
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(2,262 |
) |
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(2,192 |
) |
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Income before income tax |
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29,748 |
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|
39,525 |
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Income tax expense |
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9,817 |
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|
13,439 |
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Net income |
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$ |
19,931 |
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$ |
26,086 |
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Net income per share: |
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Basic |
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$ |
0.56 |
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$ |
0.72 |
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Diluted |
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|
0.56 |
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|
0.71 |
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Weighted average shares outstanding: |
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Basic |
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35,359 |
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36,181 |
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Diluted |
|
|
35,513 |
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|
36,555 |
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COLUMBIA SPORTSWEAR COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
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Three Months Ended March 31, |
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2008 |
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2007 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net Income |
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$ |
19,931 |
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$ |
26,086 |
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Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
|
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7,867 |
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6,331 |
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Deferred income tax provision |
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(3,313 |
) |
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|
172 |
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Stock-based compensation |
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|
2,000 |
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|
|
1,749 |
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Other |
|
|
58 |
|
|
|
1,168 |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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|
58,027 |
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|
|
52,512 |
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Inventories |
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|
30,877 |
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|
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3,086 |
|
Prepaid expenses and other current assets |
|
|
(6,460 |
) |
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|
123 |
|
Accounts payable and accrued liabilities |
|
|
(48,625 |
) |
|
|
(38,197 |
) |
Other |
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|
2,008 |
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(1,619 |
) |
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Net cash provided by operating activities |
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|
62,370 |
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|
51,411 |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Net sales (purchases) of short-term investments |
|
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80,010 |
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(34,190 |
) |
Capital expenditures |
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(14,172 |
) |
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|
(6,001 |
) |
Other |
|
|
3,192 |
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|
|
196 |
|
|
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|
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Net cash provided by (used in) investing activities |
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|
69,030 |
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|
(39,995 |
) |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Repurchases of common stock |
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|
(40,260 |
) |
|
|
(125 |
) |
Cash dividends paid |
|
|
(5,605 |
) |
|
|
(5,075 |
) |
Net proceeds from (repayments on) notes payable and long-term debt |
|
|
19 |
|
|
|
(3,632 |
) |
Proceeds from issuance of common stock |
|
|
64 |
|
|
|
10,483 |
|
Other |
|
|
8 |
|
|
|
1,200 |
|
|
|
|
|
|
|
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Net cash provided by (used in) financing activities |
|
|
(45,774 |
) |
|
|
2,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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NET EFFECT OF EXCHANGE RATE CHANGES ON CASH |
|
|
(1,331 |
) |
|
|
119 |
|
|
|
|
|
|
|
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NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
84,295 |
|
|
|
14,386 |
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
|
191,950 |
|
|
|
64,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
276,245 |
|
|
$ |
79,266 |
|
|
|
|
|
|
|
|
COLUMBIA SPORTSWEAR COMPANY
(In millions, except percentage changes)
(Unaudited)
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|
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|
Three Months Ended March 31, |
|
|
|
2008 |
|
|
2007 |
|
|
% Change |
|
Geographical Net Sales to Unrelated Entities: |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
155.8 |
|
|
$ |
155.5 |
|
|
|
|
|
Europe, Middle East, & Africa |
|
|
65.7 |
|
|
|
67.6 |
|
|
|
(3 |
)% |
Latin America & Asia Pacific |
|
|
49.0 |
|
|
|
40.7 |
|
|
|
20 |
% |
Canada |
|
|
26.9 |
|
|
|
25.8 |
|
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
297.4 |
|
|
$ |
289.6 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Categorical Net Sales to Unrelated Entities: |
|
|
|
|
|
|
|
|
|
|
|
|
Outerwear |
|
$ |
69.6 |
|
|
$ |
59.8 |
|
|
|
16 |
% |
Sportswear |
|
|
161.1 |
|
|
|
163.1 |
|
|
|
(1 |
)% |
Footwear |
|
|
51.3 |
|
|
|
52.9 |
|
|
|
(3 |
)% |
Accessories & Equipment |
|
|
15.4 |
|
|
|
13.8 |
|
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
297.4 |
|
|
$ |
289.6 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Brand Net Sales to Unrelated Entities: |
|
|
|
|
|
|
|
|
|
|
|
|
Columbia |
|
$ |
267.2 |
|
|
$ |
262.9 |
|
|
|
2 |
% |
Mountain Hardwear |
|
|
21.8 |
|
|
|
17.7 |
|
|
|
23 |
% |
Sorel |
|
|
3.7 |
|
|
|
3.5 |
|
|
|
6 |
% |
Montrail |
|
|
3.9 |
|
|
|
4.9 |
|
|
|
(20 |
)% |
Pacific Trail |
|
|
0.8 |
|
|
|
0.6 |
|
|
|
33 |
% |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
297.4 |
|
|
$ |
289.6 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|
###