Columbia Sportswear Company announced third quarter net sales of $373.4 million for the quarter ended September 30, 2003, an increase of 12.6 percent over net sales of $331.5 million for the same period of 2002.
The Company reported record net income for the third quarter of $63.6 million, an 11.8 percent increase over net income of $56.9 million for the same period of 2002. Earnings per share for the third quarter of 2003 were $1.56 (diluted) on 40.8 million weighted average shares, compared to earnings per share of $1.42 (diluted) for the third quarter of 2002 on 40.2 million weighted average shares.
Compared to the third quarter of 2002, U.S. sales increased by 6.7 percent to $249.8 million, Canadian sales increased by 19.0 percent to $49.4 million, European sales increased by 38.9 percent to $45.7 million and Other International sales increased 24.5 percent to reach $28.5 million for the third quarter of 2003.
Excluding changes in currency exchange rates, Canadian sales grew by 5.7 percent, European sales increased by 21.8 percent, and Other International sales increased 24.3 percent for the third quarter of 2003. Consolidated net sales for the third quarter of 2003 increased 9.3 percent to $362.3 million excluding changes in currency exchange rates, when compared to the same period of last year.
Outerwear sales increased 3.2 percent to $220.9 million, sportswear sales increased 36.7 percent to $86.0 million, footwear sales increased 21.9 percent to $46.2 million, and accessories sales increased 13.2 percent to $18.9 million, when compared to the third quarter of 2002. Mountain Hardwear, our recently acquired subsidiary, contributed $13.0 million in sales during the third quarter. Equipment sales, a new category consisting of tents and sleeping bags sold by Mountain Hardwear, were $1.4 million in the quarter.
Tim Boyle, Columbia's president and chief executive officer, commented, “We are very pleased with our outstanding financial results. Our better-than-expected third quarter sales and earnings resulted from exceptional sales growth in our sportswear product category, the continued development of our footwear product category and the sustained sales momentum of our brands in key international markets. Going forward, we expect sales velocity to continue through the fourth quarter and into the first quarter of next year. Behind the expectation of continued strength is the broad consumer demand that exists for our value-oriented, authentic product lines, supported by the global infrastructure we have created from design, to sourcing, to distribution that provides us with the platform to sustain our future growth opportunities.”
The Company reported that as of September 30, 2003, spring backlog increased 26.7 percent to $292.5 million, compared to spring backlog of $230.8 million at September 30, 2002. Consolidated product backlog at September 30, 2003 was $503.0 million, an increase of 19.1 percent when compared to consolidated product backlog of $422.2 million in the same period of 2002.
Boyle commented, “Spring backlog growth was exceptional, led by sustained footwear and sportswear growth in all major geographic regions. Our brands continue to perform extremely well at retail, resulting in strong future order growth from our retail customers. We are particularly encouraged with the spring order growth in the United States, which, when compared to the corporate average excluding changes in currency exchange rates, grew faster on a significantly larger revenue base. We believe this underscores the value offered by Columbia's brands and the improving strength of the US retail apparel market overall.”
Boyle continued, “Based on our current outlook, we are raising fourth quarter and full year guidance. We currently believe that our strategies will enable us to generate fourth quarter 2003 revenue growth of 14 to 16 percent and net income growth of 4 to 6 percent as compared to the fourth quarter of 2002. Based on the current outlook for the fourth quarter, we believe full year 2003 revenue growth of 15 percent to 16 percent and net income growth of 15 percent to 16 percent when compared to the full year 2002 results is achievable.”
Boyle concluded, “Based in part on the reported spring backlog and taking into account less foreign currency translation benefits in the future, we currently believe that for the first quarter of 2004 revenue growth of between 19 percent and 21 percent, and net income growth of 10 percent to 14 percent are achievable targets when compared to the first quarter of 2003. As a reminder, spring accounts for a relatively small percentage of our overall business; the bulk of our revenues and profits traditionally 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 2004 season. 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)
Three Months Ended Nine Months Ended
September 30, September 30,
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2003 2002 2003 2002
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Net sales $373,409 $331,504 $694,357 $598,998
Cost of sales 194,592 170,717 374,077 322,966
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Gross profit 178,817 160,787 320,280 276,032
47.9% 48.5% 46.1% 46.1%
Selling, general, and
administrative 78,070 69,646 180,926 158,660
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Income from operations 100,747 91,141 139,354 117,372
Interest (income) expense, net 148 129 (224) (38)
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Income before income tax 100,599 91,012 139,578 117,410
Income tax provision 37,027 34,130 51,644 44,029
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Net income $ 63,572 $ 56,882 $ 87,934 $ 73,381
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Net income per share:
Basic $ 1.59 $ 1.44 $ 2.20 $ 1.86
Diluted 1.56 1.42 2.17 1.83
