Exhibit 99.1
Timberland Reports Fourth-Quarter and Full-Year 2009 Results
STRATHAM, N.H.--(BUSINESS WIRE)--February 4, 2010--The Timberland Company (NYSE: TBL) today reported fourth-quarter 2009 net income of $22.3 million and diluted earnings per share of $0.40. These results compare to fourth-quarter 2008 net income of $13.1 million and diluted earnings per share of $0.23.
Fourth-Quarter 2009 Results Summary:
- Revenue remained relatively flat at $387.8 million compared to the prior year period but was down 3.9% on a constant dollar basis, reflecting declines in the boots business partially offset by strong growth in the SmartWool® brand and performance footwear. Foreign exchange rate changes increased fourth-quarter 2009 revenue by approximately $12.3 million due to the weakening of the U.S. dollar relative to the Euro, Japanese Yen, and British Pound.
- North America revenue decreased 6.5% to $215.7 million compared to the prior year period, due to a decline in the boots business partially offset by growth in Timberland® brand apparel, SmartWool® apparel and accessories, and men’s performance footwear. Europe revenue increased 17.1% to $128.4 million versus 2008 fourth-quarter levels, and increased 8.3% on a constant dollar basis. European results reflect benefits from foreign exchange, continued strength in the boots business, growth in all categories of women’s footwear, and the net addition of 9 retail stores since the fourth quarter of 2008. Asia revenue decreased 13.4% to $43.6 million compared to the prior year period, and decreased 17.6% on a constant dollar basis, driven by declines in boots, casual footwear, apparel, and the net closure of 8 retail stores since the fourth quarter of 2008.
- Global footwear revenue decreased 2.8% to $273.4 million from the fourth quarter of 2008, as declines in the boots business in North America and Asia offset growth in the European boots business. Apparel and accessories revenue increased 2.9% to $106.8 million compared to the prior year period, due to solid growth in the SmartWool® apparel and accessories businesses.
- Worldwide consumer direct revenue increased 3.7% to $138.2 million from the fourth quarter of 2008, driven by an improvement in apparel and casual footwear, partially offset by a decline in boots. Global wholesale revenue was down 3.0% to $249.5 million compared to the prior year period, primarily due to a decline in the kids’ boots business and Timberland® apparel.
- Operating income for the fourth quarter of 2009 was $37.2 million compared to operating income of $23.1 million in the prior year period. This was driven by an increase in gross margin primarily due to supply chain cost favorability as well as benefits from foreign exchange, partially offset by increased operating expenses due to higher incentive-based compensation costs.
- In the fourth quarter of 2009 the effective tax rate was 39.9% compared to 48.9% in the fourth quarter of 2008. The tax rate for the full-year 2009 was 30.4% compared to 44.1% in 2008, due to the release of certain tax reserves.
- In connection with its stock buyback program, the Company repurchased approximately 872 thousand shares in the fourth quarter of 2009 at a cost of approximately $15 million.
- The Company ended the quarter with $289.8 million in cash and no debt. Accounts receivable decreased 11.6% to $149.2 million compared to the prior year period, due to strong collections in all regions. Inventory at quarter end was $158.5 million, down 11.8% versus 2008 fourth-quarter levels, reflecting the Company’s continued focus on working capital.
For the full-year 2009, Timberland reported net income of $56.6 million and diluted EPS of $1.01. These results compare to full-year 2008 net income of $42.9 million and diluted EPS of $0.73.
Jeffrey B. Swartz, Timberland’s President and Chief Executive Officer, stated, “In 2009 we saw solid results in our classic boot business in Europe, substantial growth in our SmartWool® brand and significant improvement during the fourth quarter in the performance footwear category, all indicative of Timberland’s strength as an authentic outdoor brand. During these difficult economic times we have worked hard to continue making great product, build our relationship with consumers around the world and maintain a strong balance sheet, all of which we believe leave us well-positioned to capture the long-term potential of the Timberland® brand.”
Note that comments made by the Company and Mr. Swartz are based on current expectations. These comments may be forward-looking, and actual results may differ materially.
As previously announced, the Company will be hosting a conference call to discuss fourth-quarter results today at 8:25 AM Eastern Time. Interested parties may listen to this call through the investor relations section of the Company’s website, www.timberland.com, or by calling 706.643.2916 and providing access code number 49850763. Replays of this conference call will be available through the investor relations section of the Company’s website.
Timberland (NYSE: TBL) is a global leader in the design, engineering and marketing of premium-quality footwear, apparel and accessories for consumers who value the outdoors and their time in it. Timberland markets products under the Timberland®, Timberland PRO®, SmartWool®, Timberland Boot Company®, howies®, Mountain Athletics® and IPATH® brands, all of which offer quality workmanship and detailing and are built to withstand the elements of nature. Timberland’s products can be found in leading department and specialty stores as well as Timberland® retail stores throughout North America, Europe, Asia, Latin America, Africa and the Middle East. More information about Timberland is available in its reports filed with the Securities and Exchange Commission (SEC).
Certain statements in this press release including, without limitation, the statement by Mr. Swartz above, may be forward looking or “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include statements regarding Timberland’s future financial results, are subject to risks, uncertainties and assumptions and are not guarantees of future financial performance or expected benefits. These risks, uncertainties and assumptions could cause Timberland’s results to be materially different from any future results or expected benefits expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions include, but are not limited to: (i) Timberland’s ability to successfully market and sell its products in a highly competitive industry and in view of changing consumer trends, consumer acceptance of products and other factors affecting retail market conditions; (ii) Timberland’s ability to execute key strategic initiatives; (iii) Timberland’s ability to procure a majority of its products from independent manufacturers; (iv) changes in foreign exchange rates; (v) Timberland’s ability to obtain adequate materials at competitive prices; and (vi) other factors, including those detailed from time to time in Timberland’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and other filings we make with the SEC. Timberland undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
This press release includes discussion of constant dollar revenue change (which excludes the impact of changes in foreign currency exchange rates), which is a non-GAAP measure. As required by SEC rules, the Company has provided reconciliations of this measure on attached tables that follow its financial statements. Additional required information regarding this non-GAAP measure is located in the Form 8-K furnished to the SEC on February 4, 2010.
THE TIMBERLAND COMPANY | |||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Dollars in Thousands) | |||||
December 31, 2009 | December 31, 2008 | ||||
Assets | |||||
Current assets | |||||
Cash and equivalents | $289,839 | $217,189 | |||
Accounts receivable, net | 149,178 | 168,666 | |||
Inventory, net | 158,541 | 179,688 | |||
Prepaid expenses | 32,863 | 37,139 | |||
Prepaid income taxes | 11,793 | 16,687 | |||
Deferred income taxes | 26,769 | 23,425 | |||
Derivative assets | 1,354 | 7,109 | |||
Total current assets | 670,337 | 649,903 | |||
Property, plant and equipment, net | 69,820 | 78,526 | |||
Deferred income taxes | 14,903 | 18,528 | |||
Goodwill and intangible assets, net | 89,885 | 91,866 | |||
Other assets, net | 14,962 | 10,576 | |||
Total assets | $859,907 | $849,399 | |||
Liabilities and Stockholders’ Equity | |||||
Current liabilities | |||||
Notes payable | $0 | $0 | |||
Accounts payable | 79,911 | 96,901 | |||
Accrued expense and other current liabilities | 125,500 | 112,090 | |||
Income taxes payable | 22,007 | 20,697 | |||
Derivative liabilities | 389 | 2,386 | |||
Total current liabilities | 227,807 | 232,074 | |||
Other long-term liabilities | 36,483 | 40,787 | |||
Stockholders’ equity | 595,617 | 576,538 | |||
Total liabilities and stockholders’ equity | $859,907 | $849,399 | |||
THE TIMBERLAND COMPANY | ||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
(Amounts in Thousands, Except Per Share Data) | ||||||||||
For the Quarter Ended | For the Year Ended | |||||||||
December 31, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||||||
Revenue | $387,760 | $390,626 | $1,285,876 | $1,364,550 | ||||||
Cost of goods sold | 191,547 | 216,708 | 682,954 | 743,817 | ||||||
Gross profit | 196,213 | 173,918 | 602,922 | 620,733 | ||||||
Operating expense | ||||||||||
Selling | 123,378 | 122,191 | 407,987 | 437,730 | ||||||
General and administrative | 35,654 | 29,475 | 116,772 | 113,011 | ||||||
Litigation settlement | - | (2,630) | - | (2,630) | ||||||
Impairment of intangible asset | - | 1,884 | 925 | 2,061 | ||||||
Restructuring and related costs | (27) | (129) | (236) | 925 | ||||||
Total operating expense | 159,005 | 150,791 | 525,448 | 551,097 | ||||||
Operating income | 37,208 | 23,127 | 77,474 | 69,636 | ||||||
Other income/(expense), net | ||||||||||
Interest income/(expense), net | (85) | 39 | 405 | 1,719 | ||||||
Other income/(expense), net | (123) | 2,526 | 3,506 | 5,455 | ||||||
Total other income/(expense), net | (208) | 2,565 | 3,911 | 7,174 | ||||||
Income before provision for income taxes | 37,000 | 25,692 | 81,385 | 76,810 | ||||||
Provision for income taxes | 14,746 | 12,554 | 24,741 | 33,904 | ||||||
Net income | $22,254 | $13,138 | $56,644 | $42,906 | ||||||
Earnings per share | ||||||||||
Basic | $0.40 | $0.23 | $1.01 | $0.73 | ||||||
Diluted | $0.40 | $0.23 | $1.01 | $0.73 | ||||||
Weighted-average shares outstanding | ||||||||||
Basic | 54,960 | 57,244 | 56,034 | 58,442 | ||||||
Diluted | 55,329 | 57,598 | 56,352 | 58,786 | ||||||
THE TIMBERLAND COMPANY | |||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(Dollars in Thousands) | |||||
For the Year Ended | |||||
December 31, 2009 | December 31, 2008 | ||||
Cash flows from operating activities: | |||||
Net income | $56,644 | $42,906 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Deferred income taxes | 450 | 2,784 | |||
Share-based compensation | 5,942 | 8,518 | |||
Depreciation and other amortization | 28,783 | 32,345 | |||
Provision for losses on accounts receivable | 3,224 | 7,575 | |||
Impairment of intangible asset | 925 | 2,061 | |||
Impairment of other long-lived assets | 3,023 | 1,154 | |||
Litigation settlement | - | (2,630) | |||
Tax expense from share-based compensation, net of excess benefit | (2,214) | (1,254) | |||
Unrealized (gain)/loss on derivatives | 333 | (131) | |||
Other non-cash charges/(credits), net | (1,381) | 2,274 | |||
Increase/(decrease) in cash from changes in operating assets and liabilities: | |||||
Accounts receivable | 18,206 | 3,847 | |||
Inventory | 24,178 | 20,789 | |||
Prepaid expenses and other assets | 1,479 | 4,963 | |||
Accounts payable | (17,762) | 11,533 | |||
Accrued expense | 11,846 | 3,809 | |||
Prepaid income taxes | 4,894 | 674 | |||
Income taxes payable | (2,093) | 7,270 | |||
Other liabilities | (626) | (767) | |||
Net cash provided by operating activities | 135,851 | 147,720 | |||
Cash flows from investing activities: | |||||
Acquisition of business and purchase price adjustments, net of cash acquired | (1,554) | 970 | |||
Additions to property, plant and equipment | (17,677) | (22,316) | |||
Other | (849) | 141 | |||
Net cash used by investing activities | (20,080) | (21,205) | |||
Cash flows from financing activities: | |||||
Common stock repurchases | (43,905) | (46,261) | |||
Issuance of common stock | 1,962 | 1,875 | |||
Excess tax benefit from stock option and employee stock purchase plans | 151 | 183 | |||
Other | (1,284) | 0 | |||
Net cash used by financing activities | (43,076) | (44,203) | |||
Effect of exchange rate changes on cash and equivalents | (45) | (8,397) | |||
Net increase in cash and equivalents | 72,650 | 73,915 | |||
Cash and equivalents at beginning of period | 217,189 | 143,274 | |||
Cash and equivalents at end of period | $289,839 | $217,189 | |||
THE TIMBERLAND COMPANY | ||||||||||||||
REVENUE ANALYSIS | ||||||||||||||
(Amounts in Thousands, Unaudited) | ||||||||||||||
For the Quarter Ended | For the Year Ended | |||||||||||||
December 31, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||||||||||
Revenue by Segment: | ||||||||||||||
North America | $215,745 | $230,628 | -6.5% | $610,164 | $652,435 | -6.5% | ||||||||
Europe | 128,389 | 109,638 | 17.1% | 529,302 | 553,044 | -4.3% | ||||||||
Asia | 43,626 | 50,360 | -13.4% | 146,410 | 159,071 | -8.0% | ||||||||
Total Revenue | $387,760 | $390,626 | -0.7% | $1,285,876 | $1,364,550 | -5.8% | ||||||||
Revenue by Product: | ||||||||||||||
Footwear | $273,440 | $281,232 | -2.8% | $931,179 | $974,326 | -4.4% | ||||||||
Apparel and Accessories | 106,842 | 103,788 | 2.9% | 328,571 | 367,032 | -10.5% | ||||||||
Royalty and Other | 7,478 | 5,606 | 33.4% | 26,126 | 23,192 | 12.7% | ||||||||
Revenue by Channel: | ||||||||||||||
Wholesale | $249,523 | $257,272 | -3.0% | $918,796 | $989,478 | -7.1% | ||||||||
Consumer Direct | 138,237 | 133,354 | 3.7% | 367,080 | 375,072 | -2.1% | ||||||||
Comparable Store Sales: | ||||||||||||||
Domestic Retail | -4.7% | -16.4% | -8.7% | -11.1% | ||||||||||
Global Retail | -0.3% | -8.4% | -2.4% | -3.7% | ||||||||||
THE TIMBERLAND COMPANY | ||||||||||
RECONCILIATION OF TOTAL COMPANY, | ||||||||||
NORTH AMERICA, EUROPE AND ASIA REVENUE CHANGES | ||||||||||
TO CONSTANT DOLLAR REVENUE CHANGES | ||||||||||
(Amounts in Thousands, Unaudited) | ||||||||||
Total Company Revenue Reconciliation: | ||||||||||
For the Quarter Ended | For the Year Ended | |||||||||
December 31, 2009 | December 31, 2009 | |||||||||
$ Change | % Change | $ Change | % Change | |||||||
Revenue decrease (GAAP) | ($2,866) | -0.7% | ($78,674) | -5.8% | ||||||
Increase/(decrease) due to foreign exchange rate changes | 12,291 | 3.2% | (29,485) | -2.2% | ||||||
Revenue decrease in constant dollars | ($15,157) | -3.9% | ($49,189) | -3.6% | ||||||
North America Revenue Reconciliation: | ||||||||||
For the Quarter Ended | For the Year Ended | |||||||||
December 31, 2009 | December 31, 2009 | |||||||||
$ Change | % Change | $ Change | % Change | |||||||
Revenue decrease (GAAP) | ($14,883) | -6.5% | ($42,271) | -6.5% | ||||||
Increase/(decrease) due to foreign exchange rate changes | 582 | 0.2% | (1,104) | -0.2% | ||||||
Revenue decrease in constant dollars | ($15,465) | -6.7% | ($41,167) | -6.3% | ||||||
Europe Revenue Reconciliation: | ||||||||||
For the Quarter Ended | For the Year Ended | |||||||||
December 31, 2009 | December 31, 2009 | |||||||||
$ Change | % Change | $ Change | % Change | |||||||
Revenue increase/(decrease) (GAAP) | $18,751 | 17.1% | ($23,742) | -4.3% | ||||||
Increase/(decrease) due to foreign exchange rate changes | 9,599 | 8.8% | (34,735) | -6.3% | ||||||
Revenue increase in constant dollars | $9,152 | 8.3% | $10,993 | 2.0% | ||||||
Asia Revenue Reconciliation: | ||||||||||
For the Quarter Ended | For the Year Ended | |||||||||
December 31, 2009 | December 31, 2009 | |||||||||
$ Change | % Change | $ Change | % Change | |||||||
Revenue decrease (GAAP) | ($6,734) | -13.4% | ($12,661) | -8.0% | ||||||
Increase due to foreign exchange rate changes | 2,110 | 4.2% | 6,354 | 4.0% | ||||||
Revenue decrease in constant dollars | ($8,844) | -17.6% | ($19,015) | -12.0% | ||||||
Constant dollar revenue changes, which exclude the impact of changes in foreign exchange rates, are not Generally Accepted Accounting Principle (“GAAP”) performance measures. We calculate constant dollar revenue changes by recalculating current year revenue using the prior year’s exchange rates and comparing it to prior year revenue reported on a GAAP basis. We provide constant dollar revenue changes for total Company, North America, Europe, and Asia revenues because we use the measures to understand the underlying growth rate of revenue excluding the impact of items that are not under management’s direct control, such as changes in foreign exchange rates. |
CONTACT:
The Timberland Company
Kaitlyn Bruder, 603-773-1655
Investor Relations