Under Armour, Inc. reported that first quarter net revenues increased 27.1% to $200.0 million compared with net revenues of $157.3 million in the first quarter of 2008. Net income jumped 38.0% to $4.0 million, or 8 cents per diluted share, in the first quarter, compared to net income of $2.9 million, or 6 cents per diluted share, in the 2008 first quarter.
Kevin Plank, chairman and CEO of Under Armour, Inc., stated, “The athletic footwear market represents an enormous growth opportunity for the Under Armour Brand. With each new category we enter, our ultimate goal is to build momentum by developing innovative footwear technology, generating support from our key retail partners, and delivering product to our core consumer that drives our credibility as a performance footwear brand. Our success with previous categories laid the groundwork for our most recent advancement – our entry into Running Footwear – and our performance in Running has paved the way to establish Under Armour as a major player in the athletic footwear market over the long-term.”
For the first quarter, operating income rose 83.7% to $7.9 million compared with $4.3 million in the prior year's period. Gross margin for the first quarter of 2009 was 45.3% compared with 47.6% in the prior year's quarter due to several factors including the higher proportion of lower gross margin footwear sales. Selling, general and administrative expenses as a percentage of net revenues decreased to 41.3% in the first quarter of 2009 compared with 44.9% in the prior year's period. Marketing expense for the first quarter of 2009 was 16.5% of net revenues versus 17.8% in the prior year's period. The company still expects to invest in marketing at the high-end of the range of 12% to 13% of net revenues for the full year.
Mr. Plank concluded, “We are pleased with our results this quarter as the investments in our footwear growth engine generated strong top line increases and effective cost management allowed us to deliver bottom line leverage on that growth. While we remain cautious in our business outlook for the year, we are focused on leveraging our position as the athletic brand of this generation to deliver long-term value for our shareholders.”
Cash and cash equivalents were $65.6 million at March 31, 2009 compared with $17.6 million at March 31, 2008. The company had no borrowings outstanding under its $200 million revolving credit facility at March 31, 2009. Inventory at quarter-end decreased 2.1% to $164.4 million compared with $167.9 million at March 31, 2008.
Brad Dickerson, Chief Financial Officer of Under Armour, Inc., stated, “We will continue to focus on the financial strength of our organization, controlling costs while prioritizing investments, and protecting our balance sheet through efforts targeted at working capital efficiency and liquidity. Progress made in the areas of cost management and inventory management will be key to the success of the organization long-term.”
Under Armour, Inc.
Quarter Ended March 31, 2009 and 2008
(Unaudited; in thousands, except per share amounts)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Quarter % of Quarter % of
Ended Net Ended Net
3/31/09 Revenues 3/31/08 Revenues
Net revenues $200,000 100.0% $157,342 100.0%
Cost of goods sold 109,449 54.7% 82,507 52.4%
Gross profit 90,551 45.3% 74,835 47.6%
Operating expenses
Selling, general and
administrative expenses 82,655 41.3% 70,536 44.9%
Income from operations 7,896 4.0% 4,299 2.7%
Interest expense, net (860) (0.5%) (90) (0.1%)
Other income, net 13 0.0% 600 0.4%
Income before income
taxes 7,049 3.5% 4,809 3.0%
Provision for income taxes 3,087 1.5% 1,939 1.2%
Net income $3,962 2.0% $2,870 1.8%
Net income available per common
share
Basic $0.08 $0.06
Diluted $0.08 $0.06
NET REVENUES BY PRODUCT CATEGORY
Quarter Quarter
Ended Ended
3/31/09 3/31/08 % Change
Apparel $132,239 $129,188 2.4%
Footwear 56,931 16,598 243.0%
Accessories 5,776 6,096 (5.2%)
Total net sales 194,946 151,882 28.4%
Licensing revenues 5,054 5,460 (7.4%)
Total net
revenues $200,000 $157,342 27.1%
