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 RECORD SECOND QUARTER 2007 RESULTS
Highlights:
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Second quarter net sales increased 3 percent to $218.6 million, a second quarter record,
compared to net sales of $211.6 million for the second quarter of 2006. |
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Second quarter diluted earnings per share were $0.27 on 36.5 million weighted average
shares, also a second quarter record, compared to $0.13 on 37.0 million weighted average
shares for the second quarter of 2006. |
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Columbias board of directors approved a dividend of $0.14 per share, payable on August
30, 2007 to shareholders of record on August 16, 2007. |
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Fiscal 2007 net sales are estimated to increase approximately 5.5 percent and fiscal
2007 diluted earnings per share guidance is increased to approximately $3.69 for the year. |
PORTLAND, Ore. July 26, 2007 Columbia Sportswear Company (NASDAQ: COLM), a global leader in
the active outdoor apparel and footwear industries, today announced net sales of $218.6 million for
the quarter ended June 30, 2007, an increase of 3 percent compared to net sales of $211.6 million
for the same period of 2006. Net income for the second quarter was $10.0 million, a 108 percent
increase compared to net income of $4.8 million for the same period of 2006. Earnings per share
for the second quarter of 2007 were $0.27 (diluted) on 36.5 million weighted average shares,
compared to earnings per share of $0.13 (diluted) for the second quarter of 2006 on 37.0 million
weighted average shares.
Compared to the second quarter of 2006, Other International net sales increased 14 percent to $58.0
million, Europe net sales increased 9 percent to $31.6 million, U.S. net sales decreased 2 percent
to $117.1 million, and Canada net sales decreased 5 percent to $11.9 million for the second quarter
of 2007 (see Geographical Net Sales table below).
Excluding changes in currency exchange rates, consolidated net sales increased 2 percent, Other
International net sales increased 14 percent, Europe net sales increased 1 percent, U.S. net sales
decreased 2 percent, and Canada net sales decreased 6 percent for the second 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 second quarter of 2007, sportswear net sales increased 11 percent to $124.4 million,
footwear net sales decreased 2 percent to $42.5 million, outerwear net sales decreased 8 percent to
$39.8 million and accessories and equipment net sales decreased 8 percent to $11.9 million,
compared to the second quarter of 2006 (see Categorical Net Sales table below).
Compared to the second quarter of 2006, Columbia brand net sales increased 3 percent to $200.1
million, Mountain Hardwear net sales increased 6 percent to $11.5 million, Sorel net sales
increased 28 percent to $3.2 million for the second quarter of 2007 and Montrail net sales decreased 8
percent to $3.5 million (see Brand Net Sales table below).
Tim Boyle, Columbias president and chief executive officer, commented, Our record second quarter
results reflect our continued focus on operating margin improvement. Second quarter gross margins
increased substantially due to various factors, including continued improvements in sportswear
margins, a higher mix of full price sales and favorable currency exchange rates. Diligent expense
management and one-time benefits to selling, general and administrative expenses also contributed
to operating margin leverage, despite significant increases in depreciation and amortization
related to installation of new equipment and systems in our Portland distribution center. Net
sales increased to a second quarter record, but were lower than expectations due to higher than
expected order cancellations in the U.S. attributable to a challenging retail environment and a
shift in timing of international distributor shipments to the third quarter.
In reviewing the second quarter results, investors should be aware that the second quarter is our
smallest revenue quarter of the year, as we conclude our spring product shipping season and begin
shipping fall products late in the quarter. Because of the comparatively low revenue levels in the
quarter, changes in shipments in any one channel, geography or category may be amplified,
continued Mr. Boyle.
Dividend and Share Repurchase
The Company announced today that the board of directors has approved a dividend of $0.14 per share,
payable on August 30, 2007 to shareholders of record on August 16, 2007. During the second
quarter, the Company repurchased approximately 271,000 shares of common stock at an aggregate
purchase price of $17.3 million. The Company has repurchased a total of approximately 6.3 million
shares at an aggregate purchase price of $301.6 million of the $400 million authorized since the
inception of the stock repurchase program in 2004.
Guidance
Mr. Boyle continued, Based on our current outlook, we anticipate third quarter 2007 revenue growth
of approximately 2 to 3 percent compared to the third quarter of 2006 and diluted earnings per
share of approximately $1.58. For the full year 2007, we anticipate net sales growth of
approximately 5.5 percent compared to 2006, and are increasing full year diluted earnings per share
guidance to approximately $3.69. 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 second quarter 2007 results on Thursday,
July 26, 2007 at 5:00 p.m. Eastern. The call will include discussions regarding the Companys
second 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 August 9, 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 third 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 Quarterly Report on Form 10-Q for the
quarter ended March 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; changes in governmental regulations and adverse conclusions of governmental
audits; 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
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June 30, |
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2007 |
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2006 |
|
Current Assets: |
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|
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Cash and cash equivalents |
|
$ |
107,948 |
|
|
$ |
47,626 |
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Short-term investments |
|
|
156,547 |
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|
|
126,169 |
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Accounts receivable, net |
|
|
184,204 |
|
|
|
163,585 |
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Inventories, net |
|
|
309,722 |
|
|
|
272,248 |
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Deferred tax asset |
|
|
28,163 |
|
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|
24,396 |
|
Prepaid expenses and other current assets |
|
|
14,657 |
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|
14,914 |
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Total current assets |
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|
801,241 |
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|
648,938 |
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Property, plant and equipment, net |
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|
200,021 |
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|
195,741 |
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Intangibles and other assets |
|
|
70,236 |
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|
69,638 |
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Total assets |
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$ |
1,071,498 |
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$ |
914,317 |
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Current Liabilities: |
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Accounts payable |
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$ |
120,383 |
|
|
$ |
113,184 |
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Accrued liabilities |
|
|
54,672 |
|
|
|
50,506 |
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Income taxes payable |
|
|
|
|
|
|
13,187 |
|
Current portion of long-term debt |
|
|
146 |
|
|
|
4,657 |
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Total current liabilities |
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175,201 |
|
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|
181,534 |
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Long-term debt and other liabilities |
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|
21,893 |
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|
7,350 |
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Deferred tax liability |
|
|
8,786 |
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|
9,014 |
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Shareholders equity |
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|
865,618 |
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|
716,419 |
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Total liabilities and shareholders equity |
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$ |
1,071,498 |
|
|
$ |
914,317 |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Three Months
Ended June 30, |
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Six
Months Ended June 30, |
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2007 |
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2006 |
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2007 |
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2006 |
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Net sales |
|
$ |
218,560 |
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$ |
211,553 |
|
|
$ |
508,200 |
|
|
$ |
471,764 |
|
Cost of sales |
|
|
127,985 |
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|
|
130,129 |
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|
|
290,927 |
|
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|
278,703 |
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Gross profit |
|
|
90,575 |
|
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|
81,424 |
|
|
|
217,273 |
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|
|
193,061 |
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|
|
|
41.4 |
% |
|
|
38.5 |
% |
|
|
42.8 |
% |
|
|
40.9 |
% |
|
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|
|
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Selling, general, and administrative expense |
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|
79,222 |
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|
77,080 |
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|
169,583 |
|
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|
161,899 |
|
Net licensing income |
|
|
(1,054 |
) |
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|
(1,119 |
) |
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|
(2,050 |
) |
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|
(2,124 |
) |
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Income from operations |
|
|
12,407 |
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|
5,463 |
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|
|
49,740 |
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|
|
33,286 |
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Interest (income) expense, net |
|
|
(2,799 |
) |
|
|
(1,915 |
) |
|
|
(4,991 |
) |
|
|
(3,813 |
) |
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Income before income tax |
|
|
15,206 |
|
|
|
7,378 |
|
|
|
54,731 |
|
|
|
37,099 |
|
|
|
|
|
|
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|
|
|
|
|
|
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Income tax expense |
|
|
5,169 |
|
|
|
2,545 |
|
|
|
18,608 |
|
|
|
12,799 |
|
|
|
|
|
|
|
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|
|
|
|
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Net income |
|
$ |
10,037 |
|
|
$ |
4,833 |
|
|
$ |
36,123 |
|
|
$ |
24,300 |
|
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Earnings per share: |
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Basic |
|
$ |
0.28 |
|
|
$ |
0.13 |
|
|
$ |
1.00 |
|
|
$ |
0.66 |
|
Diluted |
|
|
0.27 |
|
|
|
0.13 |
|
|
|
0.99 |
|
|
|
0.65 |
|
Weighted average shares outstanding: |
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|
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Basic |
|
|
36,179 |
|
|
|
36,555 |
|
|
|
36,180 |
|
|
|
36,712 |
|
Diluted |
|
|
36,548 |
|
|
|
36,965 |
|
|
|
36,552 |
|
|
|
37,134 |
|
COLUMBIA SPORTSWEAR COMPANY
(In millions, except for percent change)
(Unaudited)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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% |
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% |
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2007 |
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2006 |
|
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Change |
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2007 |
|
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2006 |
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Change |
|
Geographical Net Sales: |
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United States |
|
$ |
117.1 |
|
|
$ |
118.9 |
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|
|
(2 |
)% |
|
$ |
272.6 |
|
|
$ |
263.3 |
|
|
|
4 |
% |
Europe |
|
|
31.6 |
|
|
|
29.1 |
|
|
|
9 |
% |
|
|
85.7 |
|
|
|
77.1 |
|
|
|
11 |
% |
Canada |
|
|
11.9 |
|
|
|
12.5 |
|
|
|
(5 |
)% |
|
|
37.7 |
|
|
|
38.9 |
|
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|
(3 |
)% |
Other International |
|
|
58.0 |
|
|
|
51.1 |
|
|
|
14 |
% |
|
|
112.2 |
|
|
|
92.5 |
|
|
|
21 |
% |
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|
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Total |
|
$ |
218.6 |
|
|
$ |
211.6 |
|
|
|
3 |
% |
|
$ |
508.2 |
|
|
$ |
471.8 |
|
|
|
8 |
% |
|
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Categorical Net Sales: |
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Outerwear |
|
$ |
39.8 |
|
|
$ |
43.2 |
|
|
|
(8 |
)% |
|
$ |
99.6 |
|
|
$ |
98.4 |
|
|
|
1 |
% |
Sportswear |
|
|
124.4 |
|
|
|
112.2 |
|
|
|
11 |
% |
|
|
287.5 |
|
|
|
254.0 |
|
|
|
13 |
% |
Footwear |
|
|
42.5 |
|
|
|
43.2 |
|
|
|
(2 |
)% |
|
|
95.4 |
|
|
|
93.9 |
|
|
|
2 |
% |
Accessories & Equipment |
|
|
11.9 |
|
|
|
13.0 |
|
|
|
(8 |
)% |
|
|
25.7 |
|
|
|
25.5 |
|
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Total |
|
$ |
218.6 |
|
|
$ |
211.6 |
|
|
|
3 |
% |
|
$ |
508.2 |
|
|
$ |
471.8 |
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
Brand Net Sales: |
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Columbia |
|
$ |
200.1 |
|
|
$ |
194.1 |
|
|
|
3 |
% |
|
$ |
463.0 |
|
|
$ |
430.6 |
|
|
|
8 |
% |
Sorel |
|
|
3.2 |
|
|
|
2.5 |
|
|
|
28 |
% |
|
|
6.7 |
|
|
|
5.6 |
|
|
|
20 |
% |
Mountain Hardwear |
|
|
11.5 |
|
|
|
10.9 |
|
|
|
6 |
% |
|
|
29.2 |
|
|
|
27.0 |
|
|
|
8 |
% |
Montrail |
|
|
3.5 |
|
|
|
3.8 |
|
|
|
(8 |
)% |
|
|
8.4 |
|
|
|
8.3 |
|
|
|
1 |
% |
Pacific Trail |
|
|
0.3 |
|
|
|
0.3 |
|
|
|
|
|
|
|
0.9 |
|
|
|
0.3 |
|
|
|
200 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
218.6 |
|
|
$ |
211.6 |
|
|
|
3 |
% |
|
$ |
508.2 |
|
|
$ |
471.8 |
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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Reconciliation of Net Sales Changes to Net Sales Changes Excluding Changes in Currency
Exchange Rates (a non-GAAP financial measure)
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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|
|
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|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, 2007 |
|
|
June 30, 2007 |
|
|
|
Amount |
|
|
% |
|
|
Amount |
|
|
% |
|
|
|
(millions) |
|
|
Change |
|
|
(millions) |
|
|
Change |
|
Consolidated: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales change (GAAP) |
|
$ |
7.0 |
|
|
|
3 |
% |
|
$ |
36.4 |
|
|
|
8 |
% |
Effect of currency exchange rate changes |
|
|
(2.5 |
) |
|
|
(1 |
) |
|
|
(6.9 |
) |
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales change excluding changes in
currency exchange rates |
|
$ |
4.5 |
|
|
|
2 |
% |
|
$ |
29.5 |
|
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales change (GAAP) |
|
$ |
(1.8 |
) |
|
|
(2 |
)% |
|
$ |
9.3 |
|
|
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales change (GAAP) |
|
$ |
2.5 |
|
|
|
9 |
% |
|
$ |
8.6 |
|
|
|
11 |
% |
Effect of currency exchange rate changes |
|
|
(2.4 |
) |
|
|
(8 |
) |
|
|
(7.2 |
) |
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales change excluding changes in
currency exchange rates |
|
$ |
0.1 |
|
|
|
1 |
% |
|
$ |
1.4 |
|
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales change (GAAP) |
|
$ |
(0.6 |
) |
|
|
(5 |
)% |
|
$ |
(1.2 |
) |
|
|
(3 |
)% |
Effect of currency exchange rate changes |
|
|
(0.2 |
) |
|
|
(1 |
) |
|
|
0.4 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales change excluding changes in
currency exchange rates |
|
$ |
(0.8 |
) |
|
|
(6 |
)% |
|
$ |
(0.8 |
) |
|
|
(2 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other International: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales change (GAAP) |
|
$ |
6.9 |
|
|
|
14 |
% |
|
$ |
19.7 |
|
|
|
21 |
% |
Effect of currency exchange rate changes |
|
|
0.1 |
|
|
|
|
|
|
|
(0.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales change excluding changes in
currency exchange rates |
|
$ |
7.0 |
|
|
|
14 |
% |
|
$ |
19.6 |
|
|
|
21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
###