Columbia Sportswear Company posted net sales of $361.8 million for the fourth quarter, increasing 15.2% from $314.1 million for the same period last year. Net income was up 4.9% for the quarter to $38.4 million from $36.6 million during last year's quarter. Diluted earnings per share were $1.06, net of $0.03 per diluted share of stock-based compensation expense, compared to 97 cents per share in the 2005 quarter.
Compared to the fourth quarter of 2005, U.S. sales increased 14.6% to $212.4 million, Other International sales increased 27.4% to $66.0 million, European sales increased 10.7% to $55.7 million, and Canadian sales increased 4.1% to $27.7 million for the fourth quarter of 2006.
Excluding changes in currency exchange rates, consolidated net sales increased 13.3%, U.S. sales increased 14.6%, Other International sales increased 24.3%, European sales increased 4.0% and Canadian sales increased 0.4% for the fourth quarter of 2006, compared to the same period of 2005.
For the fourth quarter of 2006, outerwear sales increased 22.3% to $180.3 million, sportswear sales increased 20.6% to $108.5 million, equipment sales increased 150.0% to $3.0 million, accessories sales increased 11.5% to $13.6 million, and footwear sales decreased 10.9% to $56.4 million, compared to the fourth quarter of 2005.
Tim Boyle, Columbia's president and chief executive officer, commented, “We are proud to report that our strong fourth quarter net sales were driven by healthy growth in outerwear shipments, reflecting increasing demand for Columbia-brand outerwear in the United States and Other International markets, and continued healthy demand for our sportswear products globally. This is a tribute to the improvements in merchandising and design that we made to our fall 2006 outerwear product line, particularly in light of the warm weather conditions across the globe in the fourth quarter. We are also very pleased with our strong balance sheet and working capital position as we enter 2007.”
Fiscal 2006 Results
For 2006, the company reported net sales of $1,287.7 million, an increase of 11.4% over net sales of $1,155.8 million for 2005. The company reported net income for 2006 of $123.0 million, a 5.9% decrease compared to net income of $130.7 million for 2005. Earnings per share for 2006 were $3.36 (diluted) on 36.6 million weighted average shares, net of 18 cents per diluted share of stock-based compensation expense, compared to earnings per share of $3.36 (diluted) for 2005 on 38.9 million weighted average shares.
Compared to 2005, U.S. sales increased 11.1 percent to $752.0 million, Other International sales increased 20.3% to $216.3 million, European sales increased 8.1% to $199.2 million, and Canadian sales increased 4.7% to $120.2 million for 2006.
Excluding changes in currency exchange rates, consolidated net sales increased 10.7%, U.S. sales increased 11.1%, Other International sales increased 20.3%, European sales increased 7.7%, and Canadian sales decreased 2.4%, compared to 2005.
For 2006, sportswear sales increased 13.1% to $509.1 million, outerwear sales increased 12.8% to $496.5 million, equipment sales increased 116.5% to $19.7 million, footwear sales increased 4.0% to $219.7 million, and accessories sales decreased 5.5% to $42.7 million, compared to 2005.
Mr. Boyle commented, “We are very pleased with the improvement in sales in 2006, driven by continued strong growth in sportswear, and a return to outerwear sales growth. One of our key goals in 2006 was to stabilize our North American outerwear position, while maintaining growth in our newer product categories, most specifically in our less weather sensitive sportswear product category, and we are very satisfied with the progress we made. During the year we also made acquisitions that open new distribution channels and marketing strategies, and that complement our portfolio of outdoor brands.”
“Over the past several years we have made significant investments in product design and development, and distribution capacity. These investments have been critical to support our long-term growth strategies, and have enabled us to develop and merchandise compelling market-relevant products while continuing to excel operationally for our customers. As stated previously, we are very focused on reversing the decline in the company's operating margins and improving returns on invested capital. We intend to do this through rationalization of our 2007 product lines to drive sourcing efficiencies and gross margin improvements and by taking a more measured approach to the fixed cost additions to our SG&A infrastructure,” concluded Mr. Boyle.
Dividend
The company announced today that the board of directors has approved a dividend of $0.14 per share, payable on March 1, 2007 to shareholders of record on February 15, 2007.
Guidance
Mr. Boyle continued, “Based on spring backlog, we currently anticipate Q1 2007 consolidated revenue growth of approximately 11 percent when compared to the first quarter of 2006, and EPS of approximately $0.57 to $0.59 per diluted share. 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 2007 until we have more visibility into the fall 2007 season. In keeping with our standard practice, we will announce our fall 2007 backlog and give guidance for the full year in our first quarter 2007 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, ------------------- ----------------------- 2006 2005 2006 2005 -------- -------- ---------- ---------- Net sales $361,768 $314,097 $1,287,672 $1,155,791 Cost of sales 212,022 179,512 746,617 652,036 -------- -------- ---------- ---------- Gross profit 149,746 134,585 541,055 503,755 41.4% 42.8% 42.0% 43.6% Selling, general, and administrative 96,577 81,837 366,768 322,197 Net licensing income (2,136) (1,622) (5,486) (4,408) -------- -------- ---------- ---------- Income from operations 55,305 54,370 179,773 185,966 Interest (income) expense, net (822) (1,195) (5,562) (4,889) -------- -------- ---------- ---------- Income before income tax 56,127 55,565 185,335 190,855 Income tax provision 17,740 18,935 62,317 60,119 -------- -------- ---------- ---------- Net income $ 38,387 $ 36,630 $ 123,018 $ 130,736 ======== ======== ========== ========== Net income per share: Basic $ 1.07 $ 0.98 $ 3.39 $ 3.39 Diluted 1.06 0.97 3.36 3.36 Weighted average shares outstanding: Basic 35,883 37,356 36,245 38,549 Diluted 36,301 37,658 36,644 38,943