In an S-1 filed with the SEC, Volcom determined that it expects to sell its 4.2 million shares associated with its IPO for $15 to $17 per share. This range should allow the company to net approximately $60.7 million from the IPO.
In the same SEC filing, Volcom reported that first quarter revenues derived from the sales of Volcom products were $30.7 million, an increase of 49.0%, while licensing revenues were boosted by Australian and European sales. End of March backlog was $57.5 million, up 55.4% over $37.0 million at the same time in 2004.
Volcom saw sales increases in all of its operating segments, with Girls leading the charge on a 70.9% sales jump to $11.4 million. Girls now makes up 35.9% of company sales, over four full percentage points higher than last year. The Mens segment saw sales increase 39% for the quarter to $17.8 million from $12.8 million in the year-ago quarter.
The U.S. accounted for 78.6% of total revenues during the quarter with international sales originating primarily from Canada and, to a lesser extent, Japan making up the balance. International licensee revenue is not included in these sales numbers. Volcom has identified European expansion as one of the key uses for funds gained from its IPO and with less than $1 million coming in from this area, there is certainly an opportunity.
The World Trade Organizations decision to eliminate the quota system on imports from China and India helped Volcom boost gross margins 280 basis points to surpass the 50% level. VLCM said that more accurate demand forecasting and better inventory management helped push margins higher as well as a decreased need to sell products at discount or close-out prices.
The decline in the SG&A line was due entirely to leveraging fixed costs over increased revenues. Volcom expects the dollar amount of SG&A expenses to increase as they hire additional personnel and incur increased costs related to the growth of the business and its operation as a public company.
|Fiscal First Quarter Results|
|(in $ millions)||2005||2004||Change|
|Gr. Margin||51.8%||49.0%||+280 bps|