Volcom, Inc. reported a 22.2% increase in first quarter revenues to $50.8 million from $41.6 million in the first quarter of 2006.
“I am very pleased with our first quarter results,” said Richard Woolcott, Volcom's president and chief executive officer. “The Volcom brand continues to perform well at retail and I am proud of what our team has accomplished so far this year.”
Gross profit as a percentage of total revenues for the first quarter of 2007 was 52.0%, compared with 51.7% in the first quarter of 2006.
Operating income for the first quarter of 2007 increased 20.6% to $8.1 million, compared with $6.7 million for the first quarter of 2006. Operating margin was 15.9% for the first quarter of 2007, compared with 16.1% in the first quarter of 2006, and includes Volcom's continued investments in preparing to take direct control over its European operations in the second half of this year.
Net income for the first quarter of 2007 increased 23.8% to $5.5 million, or 22 cents per diluted share. This compares with $4.4 million, or 18 cents per diluted share for the first quarter of 2006.
2007 Outlook
Based on current visibility regarding the remainder of the fiscal year, the company is increasing its previously issued diluted earnings per share guidance for 2007 to a range of $1.47 to $1.50, from $1.44 to $1.47. The company is also reaffirming its 2007 revenue guidance of an increase of 34% to 36% over 2006, equating to total revenues ranging from $275 to $280 million.
For the second quarter of 2007, the company currently expects revenues to be approximately $54 million to $56 million. The company also said that it expects second quarter fully diluted earnings per share to be 21 cents to 22 cents, which includes an anticipated loss in Europe for the second quarter of approximately $0.06 per diluted share.
VOLCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except share and per share data)
Three Months Ended
March 31,
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2007 2006
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Revenues:
Product revenues $49,425 $40,513
Licensing revenues 1,393 1,083
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Total revenues 50,818 41,596
Cost of goods sold 24,411 20,074
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Gross profit 26,407 21,522
Selling, general and administrative expenses 18,345 14,836
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Operating income 8,062 6,686
Other income:
Interest income, net 1,081 737
Foreign currency gain 39 3
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Total other income 1,120 740
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Income before provision for income taxes 9,182 7,426
Provision for income taxes 3,700 3,000
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Net income $5,482 $4,426
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Net income per share:
Basic $0.23 $0.18
Diluted $0.22 $0.18
Weighted average shares outstanding:
Basic 24,273,178 24,200,256
Diluted 24,374,647 24,312,946
