Exhibit 99.1
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Contact:
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David W. Kiser |
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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 RECORD FIRST QUARTER 2007 RESULTS
Highlights:
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First quarter net sales increased 11.3 percent to $289.6 million, a first quarter
record, compared to first quarter 2006 net sales of $260.2 million. |
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First quarter diluted earnings per share were $0.71 on 36.6 million weighted average
shares, compared to $0.52 on 37.3 million weighted average shares for the first quarter of
2006. |
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Global fall order backlog was $742.1 million at March 31, 2007, a 3.0 percent increase
compared to March 31, 2006. |
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Columbias board of directors approved a dividend of $0.14 per share, payable on May 31,
2007 to shareholders of record on May 17, 2007. |
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Fiscal 2007 net sales are estimated to increase approximately 5 percent, and diluted
earnings per share are expected to approximate $3.65 for the year. |
PORTLAND, Ore. April 26, 2007 Columbia Sportswear Company (NASDAQ: COLM), a global leader in
the active outdoor apparel and footwear industries, today announced first quarter net sales of
$289.6 million for the quarter ended March 31, 2007, an increase of 11.3 percent compared to net
sales of $260.2 million for the same period of 2006. Net income for the first quarter was $26.1
million, a 33.8 percent increase compared to net income of $19.5 million for the same period of
2006. Earnings per share for the first quarter of 2007 were $0.71 (diluted) on 36.6 million
weighted average shares, compared to earnings per share of $0.52 (diluted) for the first quarter of
2006 on 37.3 million weighted average shares.
Compared to the first quarter of 2006, Other International sales increased 30.9 percent to $54.2
million, U.S. sales increased 7.7 percent to $155.5 million, European sales increased 12.7 percent
to
$54.1 million, and Canadian sales decreased 2.3 percent to $25.8 million for the first quarter of
2007.
Excluding changes in currency exchange rates, consolidated net sales increased 9.6 percent, Other
International sales increased 30.4 percent, U.S. sales increased 7.7 percent, European sales
increased 2.7 percent, and Canadian sales remained essentially flat for the first quarter of 2007,
compared to the same period of 2006 (see Reconciliation of Net Sales Changes to Net Sales Changes
Excluding Changes in Currency Exchange Rates table below).
For the first quarter of 2007, sportswear sales increased 15.0 percent to $163.1 million, outerwear
sales increased 8.3 percent to $59.8 million, footwear sales increased 4.3 percent to $52.9 million
and accessories and equipment sales increased 10.4 percent to $13.8 million, compared to the first
quarter of 2006.
Tim Boyle, Columbias president and chief executive officer, commented, Our record first quarter
results reflect the continued strong demand for our sportswear category. Sportswear sales
increased in all direct and distributor markets globally, led by continued strong sportswear sales
growth domestically. The strong net sales growth combined with expanding gross and operating
margins drove exceptional growth in net earnings for the first quarter. We are pleased with the
continued strength of our spring business.
Backlog
The Company reported that as of March 31, 2007, consolidated fall and spring order backlog
increased 4.7 percent to $888.7 million compared to consolidated fall and spring order backlog of
$848.9 million at March 31, 2006. Of this total, fall order backlog at March 31, 2007 was $742.1
million, a 3.0 percent increase over fall order backlog of $720.7 million at March 31, 2006.
Excluding changes in currency exchange rates, consolidated fall and spring order backlog increased
3.2 percent, and fall order backlog increased 1.6 percent, compared to the prior year.
Boyle continued, Fall orders increased 3.0 percent at March 31, 2007, primarily due to continued
strength in U.S. sportswear orders and exceptional growth in International Distributor sportswear
orders. Global sportswear orders increased double-digits and growth in the category continues to
reduce our dependency on cold weather conditions for customer orders and retail sales of our
products. Orders for cold weather footwear and outerwear were negatively affected by extended
periods of above average temperatures and lack of precipitation in many markets last fall and
winter, but most specifically in Western Europe, where orders in all product categories decreased
substantially. Global footwear orders decreased slightly, primarily due to decreases in orders for
cold weather footwear. Global outerwear orders were essentially flat; however, we are pleased to
report that U.S. orders of Columbia brand outerwear increased double digits, despite the warm
weather conditions in the U.S. last fall, reflecting our continuing efforts to re-merchandise our
core Columbia outerwear line. U.S. Pacific Trail outerwear orders declined substantially due to
pockets of poor sell-through of fall 2006 products, an unappealing fall 2007 outerwear product
line, and challenges integrating sales operations.
Overall, weather had a negative impact on our total fall season orders, particularly in Western
Europe and for cold weather footwear. We are very pleased, however, with the progress we have made
to improve profitability. We anticipate that gross and operating margins will expand throughout
2007, despite the effect of warm weather on projected net sales and significant incremental
increases in depreciation and amortization anticipated this year. Our designers and merchants
continue to develop apparel and footwear products that are less weather sensitive and have longer
retail sales windows. These efforts will help us maintain our retail market position year-round
and reduce the weather dependency of our fall season products, commented Boyle.
Dividend
The Company announced today that the board of directors has approved a dividend of $0.14 per share,
payable on May 31, 2007 to shareholders of record on May 17, 2007.
Guidance
Mr. Boyle continued, Considering the backlog we released today, we currently anticipate second
quarter 2007 revenue growth of approximately 6 percent and diluted earnings per share of
approximately $0.18. For the full year 2007, we anticipate net sales growth of approximately 5
percent, and diluted earnings per share of approximately $3.65. 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 first quarter 2007 results on Thursday,
April 26, 2007 at 5:00 p.m. Eastern. The call will include discussions regarding the Companys
first quarter 2007 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 May 10, 2007.
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.
This press release contains forward-looking statements, including Mr. Boyles statements regarding
anticipated revenues and earnings for the second quarter and full year 2007 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, 2006, 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; 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.
-tables follow-
COLUMBIA SPORTSWEAR COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
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March 31, |
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2007 |
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2006 |
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Current Assets: |
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Cash and cash equivalents |
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$ |
79,266 |
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$ |
57,197 |
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Short-term investments |
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189,360 |
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181,835 |
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Accounts receivable, net |
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234,278 |
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216,705 |
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Inventories, net |
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209,712 |
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194,599 |
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Deferred tax asset |
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26,761 |
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22,835 |
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Prepaid expenses and other current assets |
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12,631 |
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12,882 |
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Total current assets |
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752,008 |
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686,053 |
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Property, plant and equipment, net |
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199,827 |
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176,985 |
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Intangibles and other assets |
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69,609 |
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69,606 |
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Total assets |
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$ |
1,021,444 |
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$ |
932,644 |
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Current Liabilities: |
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Notes payable |
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$ |
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$ |
15,609 |
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Accounts payable |
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55,950 |
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53,665 |
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Accrued liabilities |
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60,097 |
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49,007 |
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Income taxes payable |
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8,164 |
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8,887 |
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Current portion of long-term debt |
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142 |
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4,640 |
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Total current liabilities |
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124,353 |
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131,808 |
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Long-term debt and other liabilities |
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21,483 |
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23,026 |
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Deferred tax liability |
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7,964 |
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8,395 |
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Shareholders equity |
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867,644 |
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769,415 |
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Total liabilities and shareholders equity |
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$ |
1,021,444 |
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$ |
932,644 |
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CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended March 31, |
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2007 |
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2006 |
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Net sales |
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$ |
289,640 |
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$ |
260,211 |
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Cost of sales |
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162,942 |
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148,574 |
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Gross profit |
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126,698 |
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111,637 |
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43.7 |
% |
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42.9 |
% |
Selling, general, and administrative expense |
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90,361 |
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84,819 |
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Net licensing income |
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(996 |
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(1,005 |
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Income from operations |
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37,333 |
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27,823 |
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Interest (income) expense, net |
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(2,192 |
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(1,898 |
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Income before income tax |
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39,525 |
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29,721 |
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Income tax expense |
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13,439 |
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10,254 |
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Net income |
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$ |
26,086 |
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$ |
19,467 |
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Earnings per share: |
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Basic |
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$ |
0.72 |
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$ |
0.53 |
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Diluted |
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0.71 |
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0.52 |
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Weighted average shares outstanding: |
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Basic |
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36,181 |
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36,900 |
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Diluted |
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36,555 |
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37,339 |
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Reconciliation of Net Sales Changes to Net Sales Changes Excluding Changes in Currency
Exchange Rates
Net sales from year to year are affected by changes in selling prices and unit volume as well as
changes in currency exchange rates where we have sales in foreign locations. The Companys net
sales changes excluding the effect of changes in currency exchange rates are presented below. The
Company discloses changes in sales excluding changes in currency exchange rates because it uses the
measure to understand sales growth excluding any impact from foreign currency exchange rate
changes. In addition, the Companys foreign management teams are generally evaluated and
compensated in part based on the results of operations excluding currency exchange rate changes for
their respective regions. Amounts calculated in accordance with accounting principles generally
accepted in the United States of America, or GAAP, are denoted.
The Companys net sales excluding the effect of changes in currency exchange rates are presented
below:
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Quarter ended |
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March 31, 2007 |
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Amount |
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% |
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(millions) |
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Change |
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Consolidated: |
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Net sales change (GAAP) |
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$ |
29.4 |
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11.3 |
% |
Effect of currency exchange rate changes |
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(4.4 |
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(1.7 |
)% |
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Net sales change excluding changes in currency exchange rates |
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$ |
25.0 |
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9.6 |
% |
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United States: |
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Net sales change (GAAP) |
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$ |
11.1 |
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7.7 |
% |
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Europe: |
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Net sales change (GAAP) |
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$ |
6.1 |
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12.7 |
% |
Effect of currency exchange rate changes |
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(4.8 |
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(10.0 |
)% |
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Net sales change excluding changes in currency exchange rates |
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$ |
1.3 |
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2.7 |
% |
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Canada: |
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Net sales change (GAAP) |
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$ |
(0.6 |
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(2.3 |
)% |
Effect of currency exchange rate changes |
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0.6 |
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2.3 |
% |
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Net sales change excluding changes in currency exchange rates |
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$ |
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0.0 |
% |
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Other International: |
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Net sales change (GAAP) |
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$ |
12.8 |
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30.9 |
% |
Effect of currency exchange rate changes |
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(0.2 |
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(0.5 |
)% |
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Net sales change excluding changes in currency exchange rates |
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$ |
12.6 |
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30.4 |
% |
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