1 EXHIBIT NO. 99 FOR IMMEDIATE RELEASE CONTACT: Nan White Director, Communications (603) 773-1663 Susan Ostrow Senior Manager, Investor Relations (603) 773-1212 TIMBERLAND ANNOUNCES RECORD THIRD QUARTER REVENUE AND EARNINGS AND THE AUTHORIZATION OF A STOCK REPURCHASE PROGRAM STRATHAM, NH, October 15, 1998 -- The Timberland Company (NYSE: TBL) today reported results for the quarter ended September 25, 1998. For the third quarter of 1998, Timberland earned $29.1 million, or $2.47 per share diluted ($2.53 basic), compared with net income of $25.0 million, or $2.11 per share diluted ($2.20 basic), for the third quarter of 1997. Revenue for the third quarter of 1998 totaled $291.9 million, 6.2 percent higher than the $274.7 million reported for the third quarter of 1997. For the first nine months of 1998, Timberland earned $38.4 million, or $3.24 per share diluted ($3.35 basic), compared with net income of $29.8 million, or $2.55 per share diluted ($2.65 basic), for the same period in 1997. Revenue for the first nine months of 1998 totaled $599.7 million, a 7.5 percent increase, compared with revenue of $557.6 million reported for the prior year period. In making the announcement, Jeffrey B. Swartz, Timberland's president and chief executive officer, stated, "Timberland's performance in the third quarter marks its ninth consecutive quarter of record revenue. International sales increases drove much of our revenue growth, while an improved gross margin and lower interest expense contributed to a 16.6 percent increase in net income, compared with the third quarter of 1997. Despite a difficult U.S. retail environment, we are pleased with Timberland's 1998 progress to date, and will strive to make further progress against our ongoing objectives of profitable revenue growth and positive cash flow during the remainder of the year." The Company also announced that its Board of Directors has authorized the repurchase of up to one million shares of the Company's Class A Common Stock, from time to time, in the discretion of management, and as market and business conditions may warrant. As of September 25, 1998, the Company had 9,159,165 shares of Class A Common Stock and 2,338,162 shares of Class B Common Stock outstanding. The Company may use repurchased shares to offset shares which may be issued under the Company's stock-based employee incentive plans. The Timberland Company designs, engineers and markets premium-quality footwear, apparel and accessories for consumers who value the outdoors and their time in it. Timberland products offer quality workmanship and detailing and are built to withstand the elements of nature. Timberland is headquartered in Stratham, NH. -5- 2 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) September 25, September 26, 1998 1997 ------------- ------------- ASSETS Current Assets Cash and equivalents $ 19,341 $ 37,485 Accounts receivable, net 177,262 165,589 Inventory 189,492 168,790 Prepaid expense 11,571 9,603 Deferred and refundable income taxes 12,885 15,148 -------- -------- Total current assets 410,551 396,615 -------- -------- Net property, plant and equipment 53,618 48,482 Excess of cost over fair value of net assets acquired, net 19,639 21,323 Other assets, net 5,587 4,270 -------- -------- Total assets $489,395 $470,690 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current maturities of long-term debt $ -- $ 27,000 Accounts payable 30,113 29,324 Accrued expense 73,759 65,212 Income taxes payable 20,814 25,961 -------- -------- Total current liabilities 124,686 147,497 -------- -------- Long-term debt, less current maturities 100,000 120,000 Deferred income taxes 5,894 8,564 Stockholders' equity 258,815 194,629 -------- -------- Total liabilities and stockholders' equity $489,395 $470,690 ======== ======== -6- 3 THE TIMBERLAND COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Amounts in thousands, except per share data) For the For the Three Months Ended Nine Months Ended ------------------------ -------------------------- Sept 25, Sept 26, Sept 25, Sept 26, 1998 1997 1998 1997 -------- -------- -------- -------- Revenue $ 291,857 $274,699 $ 599,656 $557,563 Cost of goods sold 175,548 168,058 358,971 337,453 --------- -------- --------- -------- Gross profit 116,309 106,641 240,685 220,110 --------- -------- --------- -------- Operating expense Selling 56,513 52,242 139,981 126,865 General and administrative 14,205 13,691 37,804 37,260 Amortization of goodwill 422 422 1,264 1,264 --------- -------- --------- -------- Total operating expense 71,140 66,355 179,049 165,389 --------- -------- --------- -------- Operating income 45,169 40,286 61,636 54,721 --------- -------- --------- -------- Other expense (income) Interest expense 2,490 3,438 7,061 11,568 Other, net (108) 1,195 (1,838) 567 --------- -------- --------- -------- Total other expense 2,382 4,633 5,223 12,135 --------- -------- --------- -------- Income before income taxes 42,787 35,653 56,413 42,586 --------- -------- --------- -------- Provision for income taxes 13,692 10,696 18,052 12,776 --------- -------- --------- -------- Net income $ 29,095 $ 24,957 $ 38,361 $ 29,810 ========= ======== ========= ======== Earnings per share Basic $ 2.53 $ 2.20 $ 3.35 $ 2.65 ========= ======== ========= ======== Diluted $ 2.47 $ 2.11 $ 3.24 $ 2.55 ========= ======== ========= ======== Weighted average shares outstanding Basic 11,489 11,324 11,442 11,256 ========= ======== ========= ======== Diluted 11,761 11,807 11,832 11,703 ========= ======== ========= ======== -7-