The Timberland Co., which in June reached an agreement to be acquired by VF Corp., reported second quarter revenue increased 27.1 percent to $240.1
million, up 20.6 percent on a constant dollar basis. The loss in the period was $20.1 million, down from a loss of $23.5 million
for the second quarter of 2010

The revenue gains reflect strong
growth across North America, Europe, and Asia.

North America revenue increased 15.4 percent to $106.1
million compared to the prior year period, led by growth from Timberland
footwear and Timberland PRO footwear, as well as SmartWool accessories.
Europe revenue increased 37.4 percent to $91.7 million, 24.6 percent on a
constant dollar basis, led by significant growth in the wholesale channel,
growth in comparable store sales, and new store openings. Asia revenue
increased 40.0 percent to $42.3 million compared to the prior year period, and
increased 28.1 percent on a constant dollar basis, due to double-digit growth
in each of the major markets, strong growth in comparable store sales, and retail
expansion.

Global footwear revenue increased 28.2 percent to $168.7
million from the second quarter of 2010, led by strong growth in men’s footwear
in both wholesale and retail channels across all geographic regions. Apparel
and accessories revenue increased 26.8 percent to $66.0 million, reflecting
growth across all regions as well, with Europe wholesale accounts and Asia
retail stores driving growth in apparel and SmartWool driving growth in
accessories.

Global wholesale revenue was up 28.7 percent to $151.1
million compared to the prior year period, driven by double-digit growth in
North America, Europe, and Asia. Worldwide consumer direct revenue increased
24.5 percent to $89.0 million compared to the second quarter of 2010, driven by
strong comparable store sales growth and the net addition of sixteen new stores
compared to the second quarter of 2010.

Operating loss for the second quarter of 2011 was $30.9
million, compared to an operating loss of $33.3 million in the prior year
period. Gross margin declined 210 basis points to 47.4 percent, with higher
product costs more than offsetting favorable foreign exchange impacts. The company
expects higher product costs to continue through 2011; however, the company
expects a positive impact from strategic price increases in the back half of
the year. Operating expense for the second quarter of 2011 was $144.7 million,
an increase of 14.1 percent compared to the prior year period.

In the second quarter of 2011, the effective tax rate was
32.4 percent compared to 29.0 percent in the second quarter of 2010.

The company ended the quarter with $233.8 million in cash
and no debt. Accounts receivable increased 34.4 percent to $116.7 million
compared to the prior year period, driven by revenue growth and the timing of
sales. Inventory at quarter end was $251.7 million, an increase of 42.0 percent,
driven by expected growth for the business in 2011, increased product costs,
and efforts to secure product in advance of potential factory capacity
constraints.

As previously announced, the company will not be hosting a
conference call to discuss second quarter results due to the pending acquisition.