Volcom, Inc. said total consolidated revenues increased 22.4% in the fourth quarter and that it had signed a definitive agreement to purchase the assets related to the operation of the 10 existing Volcom outlet stores from a licensee.
The maker of board sports-inspired apparel said total consolidated revenues for the fourth quarter ended Dec. 31, 2010 increased 22.4% to $78.6 million, compared with $64.2 million in the fourth quarter of 2009.
“Our results for the fourth quarter and full year were on target and reflect a commendable year for the Volcom and Electric teams,” said Richard Woolcott, Volcom’s chairman and chief executive officer. “We made significant gains throughout 2010 driving revenue growth and capturing market share for our brands on a global basis as we further positioned ourselves to compete in the years ahead. Volcom and Electric have solid growth opportunities that are achievable and centered on our abilities to develop innovative, quality products rooted in our heritage sports and lifestyle. As we attack 2011, I am confident in our plan and very proud of our dedicated and growing team.”
Consolidated gross profit for the 2010 fourth quarter was $35.3 million, equal to 45.0% of total revenues, compared with $31.6 million, equal to 49.2% of total revenues, in the fourth quarter of 2009. The decrease in consolidated gross margin reflected lower gross margin in the U.S. segment, offset somewhat by higher gross margin in the company’s Electric apparel segment.
Selling, general and administrative expenses on a consolidated basis were $34.0 million in the 2010 fourth quarter versus $28.1 million in the comparable period in 2009.
Net income for the 2010 fourth quarter was $1.6 million, or 7 cents per diluted share, compared with $3.4 million, or 14 cents per diluted share, in the fourth quarter of 2009.
At year end, the company had cash, cash equivalents and short-term investments totaling $90.3 million, and no long-term debt. Total stockholders’ equity was $217.0 million at year-end.
As part of the company’s direct to consumer strategy, Volcom has signed a definitive agreement to terminate the current Volcom outlet license agreement and purchase the assets related to the operation of the 10 existing Volcom outlet stores, which are located in California (4), Nevada (3), Washington (2) and Utah (1). The company anticipates completing the transaction by mid-2011. Terms of the transaction were not disclosed.
2011 First Quarter and Full Year Financial Outlook
For the 2011 first quarter, the company currently expects total consolidated revenue of approximately $83 million to $86 million, or year-over-year growth of between 7% and 11%, and fully diluted earnings per share amounts in the range of 16 to 19 cents.
In casting its financial outlook for the full year, Volcom noted it expects total consolidated revenue to grow 135 to 15% to $366 million to $371 million, and fully diluted earnings per share in the range of $1.08 to $1.14.