Columbia Sportswear Company third quarter net sales were $415.8 million, an increase of 11.4% over net sales of $373.4 million for the same period of 2003. The Company reported net income for the third quarter of 2004 of $68.6 million, a 7.9% increase over net income of $63.6 million for the same period of 2003. Earnings per share for the third quarter of 2004 were $1.68 (diluted) on 40.9 million weighted average shares, compared to earnings per share of $1.56 (diluted) for the third quarter of 2003 on
40.8 million weighted average shares.
Compared to the third quarter of 2003, U.S. sales increased 5.8
percent to $264.4 million, Other International sales increased 51.2
percent to $43.1 million, European sales increased 28.7 percent to
$58.8 million, and Canadian sales increased 0.2 percent to $49.5
million for the third quarter of 2004.
Excluding changes in currency exchange rates, Other International
sales increased 47.8 percent, European sales increased 18.9 percent,
and Canadian sales decreased 4.1 percent, for the third quarter of
2004. Consolidated net sales for the third quarter of 2004 increased
9.3 percent, excluding changes in currency exchange rates, compared to
the same period of last year.
For the third quarter of 2004, sportswear sales increased 26.0
percent to $108.4 million, footwear sales increased 35.7 percent to
$62.7 million, outerwear sales increased 1.6 percent to $224.4
million, equipment sales increased 21.4 percent to $1.7 million, and
accessories sales decreased 1.6 percent to $18.6 million compared to
the third quarter of 2003.
Tim Boyle, Columbia's president and chief executive officer,
commented, “We are pleased with our outstanding third quarter results,
driven by strong sales growth of our sportswear and footwear product
categories, and sustained sales momentum of our outerwear products in
Europe and Other International markets. These results confirm our
multiple growth strategies of leveraging our brands internationally
and further developing our product offerings as we establish our
brands globally.”
Backlog
The Company reported that as of September 30, 2004, spring backlog
increased 16.1 percent to $339.5 million, compared to spring backlog
of $292.5 million at September 30, 2003. Consolidated product backlog
at September 30, 2004 was $586.0 million, an increase of 16.5 percent
compared to consolidated product backlog of $503.0 million in the same
period of 2003.
Boyle commented, “Spring backlog growth was solid, led by strong
growth in domestic orders of sportswear and footwear products. Our
brands continue to perform well at retail, resulting in healthy future
order growth from our retail customers. We are encouraged with the
spring order growth in the United States, which drove backlog growth
for the Company, underscoring the value offered by Columbia's brands
domestically. The backlog results we reported today position us well
for continuing top-line growth for the balance of this year and into
the first quarter of 2005.”
Share Repurchase
In April 2004, Columbia's Board of Directors authorized the
Company to repurchase up to $100 million of its common stock in open
market or private transactions. During the third quarter of 2004, the
Company repurchased 653,535 shares of common stock at an aggregate
purchase price of $35.2 million. Through October 27, 2004, 798,356
shares have been repurchased by the Company for an aggregate purchase
price of $43.1 million.
Guidance
Boyle continued, “Based on our current outlook, we are raising
fourth quarter and full year guidance. We believe that our strategies
will enable us to generate fourth quarter 2004 revenue growth of 13 to
14 percent and net income growth of 17 to 20 percent compared to the
fourth quarter of 2003. Based on the current outlook for the fourth
quarter, we believe full year 2004 revenue growth of approximately 14
percent and net income growth of 14 to 15 percent compared to full
year 2003 results is achievable.”
Boyle concluded, “Based in part on the reported spring backlog,
and taking into account slightly less foreign currency translation
benefits and additional investments to support future growth, we
expect revenue growth for the first quarter of 2005 of approximately
13 percent and net income to remain flat compared to the first quarter
of 2004. As a reminder, spring accounts 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. Further out,
it is difficult for us to gauge revenue and profitability levels until
we gain more visibility into the fall 2005 season.”
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
-------- -------- -------- --------
Net sales $415,759 $373,409 $793,531 $694,357
Cost of sales 219,371 194,592 430,029 374,077
-------- -------- -------- --------
Gross profit 196,388 178,817 363,502 320,280
47.2% 47.9% 45.8% 46.1%
Selling, general, and
administrative 92,689 78,748 215,545 182,213
Net licensing income (1,594) (678) (3,072) (1,287)
-------- -------- -------- --------
Income from operations 105,293 100,747 151,029 139,354
Interest income, net (1,022) 148 (2,873) (224)
-------- -------- -------- --------
Income before income tax 106,315 100,599 153,902 139,578
Income tax provision 37,742 37,027 54,635 51,644
-------- -------- -------- --------
Net income $ 68,573 $ 63,572 $ 99,267 $ 87,934
======== ======== ======== ========
Net income per share:
Basic $ 1.70 $ 1.59 $ 2.46 $ 2.20
Diluted 1.68 1.56 2.42 2.17
Weighted average shares
outstanding:
Basic 40,254 39,984 40,347 39,894
Diluted 40,895 40,781 40,977 40,540
