Columbia Sportswear Company announced record first quarter net sales of $245.7 million for the quarter ended March 31, 2005, an increase of 18.9% over net sales of $206.7 million for the same period of 2004. The company reported record net income for the first quarter of $21.3 million, a 6.5% increase over net income of $20.0 million for the same period of 2004. Earnings per share for the first quarter of 2005 were 52 cents (diluted) on 40.7 million weighted average shares, compared to earnings per share of 49 cents (diluted) for the first quarter of 2004 on 41.0 million weighted average shares.
Compared to the first quarter of 2004, U.S. sales increased 18.2% to $136.3 million, Other International sales increased 41.4% to $36.9 million, European sales increased 8.6% to $46.6 million, and Canadian sales increased 15.6% to $25.9 million for the first quarter of 2005.
Excluding changes in currency exchange rates, Other International sales increased 36.4%, European sales increased 1.9%, and Canadian sales increased 7.1% for the first quarter of 2005. Consolidated net sales for the first quarter of 2005 increased 15.9%, excluding changes in currency exchange rates, compared to the same period of last year.
Sportswear sales increased 13.0% to $132.2 million, footwear sales increased 29.7% to $49.8 million, outerwear sales increased 26.7% to $51.2 million, accessories sales increased 11.0% to $9.1 million, and equipment sales increased 25.9% to $3.4 million, compared to the first quarter of 2004.
Tim Boyle, Columbia's president and chief executive officer, commented, “Our first quarter results reflect the continued strong momentum in our spring related sportswear and footwear product categories. Net sales increased in every geographic region in which we operate and in each of our product categories, with particular strength in the U.S. market, which accounted for the majority of our overall sales growth during the quarter. We are pleased with the continued strength of our spring business.”
Backlog
The company reported that as of March 31, 2005, consolidated backlog decreased 2.4% to $758.9 million compared to consolidated backlog of $777.4 million at March 31, 2004. Of this total, fall product backlog at March 31, 2005 was $645.6 million, a 2.8% decrease when compared to fall product backlog of $664.0 million at March 31, 2004. Excluding changes in currency exchange rates, consolidated backlog decreased 4.0%, and fall product backlog decreased 4.5%, when compared to the prior year.
Boyle continued, “Fall orders declined at March 31 primarily due to significant weakness in North American outerwear orders, particularly in the U.S. market. We attribute the decrease to a variety of factors including the negative impact of poor weather conditions last fall, an increasingly competitive outerwear market, the timing of the receipt of some key customer outerwear orders and the negative impact of retail consolidation at key customers. The weakness in U.S. outerwear at March 31 was partially offset by continued strength in sportswear and international footwear orders.”
“We are focused on maintaining and growing our outerwear market position in the U.S. market and continuing to leverage the strength of our brands in the larger global sportswear and footwear markets. Our focus is to create outstanding outerwear products that provide retailers and consumers with exceptional value. Our products must be relevant and clearly segmented for our various distribution channels. We must also continue to strengthen the Columbia brand through enhanced marketing initiatives,” commented Boyle.
“The initiatives to improve outerwear sales began last year with the announced reorganizations of our outerwear and sportswear design groups into one apparel merchandising and design team organized by gender. Last fall we also instituted a European reorganization initiative with a focus on improving sales performance in the colder northern European markets where our business is currently underdeveloped and where there are significant outerwear market opportunities. We will focus on these initiatives to strengthen our global outerwear market position as we continue to execute our overall growth strategies,” continued Boyle.
Guidance
Mr. Boyle continued, “Considering the backlog we released today, we currently anticipate second quarter 2005 revenue growth of 4% to 6% and net income of approximately $3 million. For the full year 2005, we anticipate net sales growth of approximately 5%, and net income to decline 8% to 12% when compared to 2004. 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 March 31,
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2005 2004
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Net sales $ 245,706 $ 206,670
Cost of sales 138,463 112,787
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Gross profit 107,243 93,883
43.6% 45.4%
Selling, general, and
administrative 76,791 64,529
Net licensing income (716) (697)
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Income from operations 31,168 30,051
Interest (income) expense, net (1,407) (898)
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Income before income tax 32,575 30,949
Income tax provision 11,238 10,987
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Net income $ 21,337 $ 19,962
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Net income per share:
Basic $ 0.53 $ 0.50
Diluted 0.52 0.49
