Columbia Sportswear Company reported fourth quarter net sales of $314.1 million, an increase of 4.1% 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% 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 97 cents on 37.7 million weighted average shares, compared to diluted earnings per share of 97 cents 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% to $51.8 million, European sales increased 14.3% to $50.3 million, U.S. sales increased 2.4% to $185.4 million, and Canadian sales decreased 18.4% to $26.6 million for the fourth quarter of 2005.
Excluding changes in currency exchange rates, consolidated net sales increased 5.0%, European sales increased 21.6%, Other International sales increased 19.7%, U.S. sales increased 2.4% to $185.4 million and Canadian sales decreased 22.2% for the fourth quarter of 2005, compared to the same period of 2004.
For the fourth quarter of 2005, footwear sales increased 19.9% to $63.3 million, sportswear sales increased 11.5% to $90.0 million, equipment sales increased 20.0% to $1.2 million, accessories sales decreased 3.2% to $12.2 million, and outerwear sales decreased 4.7% to $147.4 million, compared to the fourth quarter of 2004.
Tim Boyle, Columbia's 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 full year 2005, COLM reported net sales of $1.16 billion, an increase of 5.5% over net sales of $1.10 billion for 2004. The company reported net income for 2005 of $130.7 million, a 5.7% 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% to $179.7 million, European sales increased 8.3% to $184.4 million, U.S. sales increased 1.5% to $676.9 million, and Canadian sales decreased 1.8% to $114.8 million for 2005.
Excluding changes in currency exchange rates, consolidated net sales increased 4.5%, Other International sales increased 25.7%, European sales increased 7.7%, and Canadian sales decreased 9.1%, compared to 2004.
For 2005, sportswear sales increased 13.6% to $450.3 million, footwear sales increased 14.4% to $211.2 million, outerwear sales decreased 4.4% to $440.0 million, equipment sales increased 15.2% to $9.1 million, and accessories sales decreased 2.0% 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% and net income decline of approximately 25% (approximately 15% 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.”
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31
2005 2004 2005 2004
Net sales $314,097 $301,776 $1,155,791 $1,095,307
Cost of sales 179,512 167,344 652,036 597,373
Gross profit 134,585 134,432 503,755 497,934
42.8% 44.5% 43.6% 45.5%
Selling, general, and
administrative 81,837 74,993 322,197 290,538
Net licensing income (1,622) (960) (4,408) (4,032)
Income from operations 54,370 60,399 185,966 211,428
Interest (income) expense, net (1,195) (620) (4,889) (3,493)
Income before income tax 55,565 61,019 190,855 214,921
Income tax provision 18,935 21,662 60,119 76,297
Net income $36,630 $39,357 $130,736 $138,624
Net income per share:
Basic $0.98 $0.98 $3.39 $3.44
Diluted 0.97 0.97 3.36 3.40
