Columbia Sportswear announced second quarter net sales of $152.1 million for the quarter ended June 30, 2003, an increase of 22.5 percent over net sales of $124.2 million for the same period of 2002. The Company reported record net income for the second quarter of $9.4 million, a 25.3 percent increase over net income of $7.5 million for the same period of 2002. Earnings per share for the second quarter of 2003 were $0.23 (diluted) on 40.6 million weighted average shares, compared to earnings per share of $0.19 (diluted) for the second quarter of 2002 on 40.1 million weighted average shares.
Compared to the second quarter of 2002, U.S. sales increased by 4.1 percent to $90.5 million, Canadian sales increased by 52.8 percent to $11.0 million, European sales increased by 37.8 percent to $20.4 million and Other International sales increased 97.4 percent to reach $30.2 million for the second quarter of 2003. International distributor sales, including Russia, accounted for the majority of the growth in the Other International sales category.
When measured in constant dollar terms, Canadian sales grew by 38.3 percent, European sales increased by 10.4 percent, and Other International sales increased 92.5 percent for the second quarter of 2003.
Consolidated net sales for the second quarter of 2003 increased 17.8 percent to $146.3 million in constant dollars, when compared to the same period of last year.
Outerwear sales increased 13.9 percent to $46.7 million, sportswear sales increased 13.3 percent to $68.8 million, footwear sales increased 60.8 percent to $28.3 million, and accessories sales increased 18.4 percent to $5.8 million, when compared to the second quarter of 2002. Mountain Hardwear, our newly acquired subsidiary, contributed $6.3 million in sales during the second quarter. Equipment sales, a new category consisting of tents and sleeping bags sold by Mountain Hardwear, were $2.5 million in the quarter.
Net income expanded 25.3 percent to a second quarter record $9.4 million. Net income growth was primarily the result of operating margin leverage generated from strong sales growth, particularly the expansion of our international distributor revenue base which carries minimal SG&A costs.
Tim Boyle, Columbia’s president and chief executive officer, commented, “We are excited with our solid second quarter results, demonstrating the expanding acceptance of our brands in key markets worldwide. Second quarter results were bolstered by healthy footwear and sportswear sales, categories where we see significant growth opportunities, validating our strategies to further develop these product categories and illustrating the growing global popularity of our products on a year-round basis. Based on the brand’s comparative performance during the spring 2003 season and improvements for the spring 2004 product lines, we are currently optimistic about the opportunity to grow the spring 2004 business. As is customary, we will announce our consolidated spring 2004 order backlog as a component of our third quarter release on October 23rd, 2003.”
In anticipation of continuing growth of the Company’s U.S. footwear business, and more specifically, Columbia’s migration to being a year-round footwear resource for our customers, the Company plans to construct a distribution center focused on the footwear category located in the Midwestern U.S. The facility will improve proximity to major customers and should help facilitate footwear reorders. Nearly half of the U.S. population and approximately 45 percent of retail sales would be located within two standard shipping days of a Midwest facility. The state of the art distribution center is expected to be approximately 400,000 sq. ft., cost an estimated $40 million, and begin operating in 2005. While it will be constructed with a specific focus on footwear, it will be designed and engineered to support other product lines for our brands as well.
Boyle continued, “At this point, we believe that our strategies will enable us to generate third quarter 2003 revenue growth of 9 percent to 11 percent and net income growth of 4 percent to 6 percent as compared to the third quarter of 2002. For the full year 2003, we continue to believe that our strategies will enable us to generate revenue growth of between 12 percent and 14 percent when compared to 2002 revenue, and we are raising our guidance for net income growth to 10 percent to 12 percent for the full year.”
COLUMBIA SPORTSWEAR COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
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2003 2002 2003 2002
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Net sales $152,077 $124,195 $320,948 $267,494
Cost of sales 87,358 70,101 179,485 152,249
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Gross profit 64,719 54,094 141,463 115,245
42.6% 43.6% 44.1% 43.1%
Selling, general, and
administrative 49,800 42,787 102,856 89,014
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Income from operations 14,919 11,307 38,607 26,231
Interest (income) expense, net (189) (276) (372) (167)
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Income before income tax 15,108 11,583 38,979 26,398
Income tax provision 5,665 4,047 14,617 9,899
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Net income $ 9,443 $ 7,536 $ 24,362 $ 16,499
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Net income per share:
Basic $ 0.24 $ 0.19 $ 0.61 $ 0.42
Diluted 0.23 0.19 0.60 0.41
