Exhibit 99.1
Deckers Outdoor Corporation Reports Record First Quarter Financial
Results
GOLETA, Calif.--(BUSINESS WIRE)--April 15, 2004--Deckers Outdoor
Corporation (NASDAQ: DECK)
-- First Quarter Revenue Increases 23% to a Record $44.3 Million
-- Reports First Quarter Diluted EPS of $0.49
-- Raises Fiscal 2004 EPS Guidance to a Range of $1.42 to $1.51
Deckers Outdoor Corporation (NASDAQ: DECK) today announced record
financial results for the first quarter ended March 31, 2004.
For the first quarter, net sales increased 22.6% to $44.3 million
versus $36.1 million in the same period last year. Net earnings for
the quarter increased 28.1% to a record $5,382,000 compared to
earnings of $4,203,000 last year and diluted earnings per share
increased 32.4% to $0.49, versus diluted earnings per share of $0.37
in the first quarter of 2003.
Chief Executive Officer, Doug Otto, stated, "We are pleased as the
strong momentum we experienced in fiscal 2003 has continued into the
new year. These results have been primarily driven by robust growth in
our Teva(R) business, both domestically and abroad, and continued
increases in our UGG(R) business. We believe this performance is a
testament to the strength of these brands."
Including sales from both the wholesale divisions and the internet
and catalog retailing business, Teva sales for the first quarter
increased 18% to $37.4 million compared to $31.7 million last year and
UGG sales for the quarter increased 226% to $5.1 million from $1.6
million. Due to the seasonality of the UGG business, the first quarter
is generally a lower volume quarter, while the third and fourth
quarters are generally the highest volume quarters for UGG. Sales of
the Simple brand were $1.7 million for the quarter compared to $2.8
million for the same period last year. Sales for the internet and
catalog retailing business, which are included in the brand sales
numbers above, aggregated approximately $3.6 million for the first
quarter of 2004, up 226% from $1.1 million for the first quarter of
2003.
The gross margin for the quarter was 46.1%, compared to 45.0% for
the first quarter of 2003, largely due to the strong increase in the
higher gross margin internet and catalog retailing business, combined
with a lower volume of closeout sales in the Simple division compared
to last year. Selling, general and administrative expenses were $10.8
million or 24.3% of sales for the first quarter of 2004 compared to
$8.2 million or 22.6% of sales in the first quarter of 2002, primarily
due to increased costs of our growing internet and catalog retailing
business, increased payroll costs, higher legal costs associated with
increased efforts to protect the Company's intellectual property
rights, and increased sales commissions on the higher sales volume.
During the quarter, the Company continued to reduce the
outstanding 16.75% subordinated notes, repaying an additional $3
million in January 2004. In connection with this repayment, we
incurred approximately $0.3 million, or $0.02 per diluted share, of
expenses related to the write-off of financing costs and prepayment
fees. With this most recent repayment, the Company has now repaid $7
million of the original $14 million of 16.75% subordinated notes and
repurchased all of the $5.5 million of preferred stock. Both the notes
and the preferred stock were issued to finance the Teva acquisition in
November 2002.
Deckers has also increased its guidance for 2004. The Company
currently expects annual sales for 2004 to range from $166 million to
$174 million, up from previous guidance of $153 million to $162
million, and diluted earnings per share to range from $1.42 to $1.51,
up from the previous guidance of $1.25 to $1.35 per diluted share. The
Company currently expects annual sales in 2004 to be approximately $85
to $87 million for Teva, $9 to $11 million for Simple and $72 to $76
million for UGG. For the second quarter ending June 30, 2004, the
Company currently expects sales to range from $34 million to $35
million and diluted earnings per share to range from $0.32 to $0.34.
Mr. Otto concluded, "We have begun the 2004 fiscal year with good
brand momentum and strong financial results. We remain focused on
further leveraging our brands and fully capitalizing on our leadership
position in the marketplace."
Deckers Outdoor Corporation builds niche products into global
lifestyle brands by designing and marketing innovative, functional and
fashion-oriented footwear developed for both high performance outdoor
activities and everyday casual lifestyle use. The Company's products
are offered under the Teva(R), Simple(R) and UGG(R) brand names, which
are also its registered trademarks.
All statements in this press release that are not historical facts
are forward-looking statements, including the Company's estimates and
guidance regarding sales and earnings per share results for the second
quarter of 2004 and for the year ending December 31, 2004 and its
expectations regarding its short-term and long-term future prospects,
among others. These forward-looking statements are based on the
Company's expectations as of today, April 15, 2004. No one should
assume that any forward-looking statement made by the Company will
remain consistent with the Company's expectations after the date the
forward-looking statement is made. The Company intends to continue its
practice of not updating projections until its next quarterly results
announcement. In addition, such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements of the Company,
or industry results, to differ materially from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Many of the risks, uncertainties and other
factors are discussed in detail in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2003. Among the factors
which could affect our financial condition and results of operations
are the following: our ability to anticipate fashion trends; whether
the UGG brand will continue to grow at the rate it has experienced in
the recent past; possible shortages in top grade sheepskin, which
could interrupt product manufacturing and increase product costs; the
risk that we are unable to accurately forecast consumer demand which
may result in excess inventory to liquidate or, conversely, may result
in difficulty in filling customers' orders; the sensitivity of the
footwear industry to changes in general economic conditions; whether
we are successful in implementing our growth strategy; the success of
our customers; our ability to protect our intellectual property; our
ability to develop and patent new technologies as our existing patents
expire; the difficulty of matching inventory to future customer
demand; the risk that counterfeiting can harm our sales or our brand
image; our dependence on independent manufacturers to supply our
products; the risk that raw materials do not meet our specifications
or that the prices of raw materials may increase, which would
potentially cause a high return rate, a loss of sales or a reduction
in our gross margins; risks of international commerce resulting from
our reliance on manufacturers outside the U.S.; whether we might be
subject to certain federal regulatory fines; the risk that our
manufacturers, suppliers or licensees might fail to conform to labor
laws or to our ethical standards; the need to secure sufficient and
affordable sources of raw materials; our reliance on licensing
partners to expand our business; the challenge of managing our brands
for growth; our ability to successfully identify, develop or acquire,
and build new brands; potential fluctuations in quarterly results in
future periods, which may prevent us from meeting expectations and
have an adverse effect on the price of our common stock; dependence on
key employees; currency risk; delays and unexpected costs that can
result from customs regulations; our dependence on computer and
communications systems; the sensitivity of our sales, particularly of
the Teva(R) and UGG(R) brands, to seasonal and weather factors; our
reliance on independent distributors in international markets; legal
compliance challenges and political and economic risk in our
international markets; the effect of consolidations and restructurings
on our customers in the footwear industry; intense competition within
the footwear industry; and the threat that terrorism could disrupt
commerce in the U.S. and abroad. In addition, our stock price may be
affected by the degree of control of our company exercised by
management through its stock holdings; immediate dilution of book
value per share experienced by purchasers of the stock we issue in the
potential stock offering; management's discretion over the use of
proceeds from the offering; historical volatility in our stock price;
the potential for future sales of stock to adversely affect our stock
price; and the tendency of anti-takeover provisions of our charter
documents, our stockholder rights plan and Delaware law to dissuade
potential purchasers of the Company. Given these uncertainties,
prospective investors are cautioned not to place undue reliance on
such forward-looking statements. The Company disclaims any obligation
to update any such factors or to publicly announce the results of any
revisions to any of the forward-looking statements contained in the
Annual Report on Form 10-K for fiscal year 2003, the Quarterly Reports
on Form 10-Q for 2003 or this news release.
(Tables to follow)
DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, December 31
Assets 2004 2003
------------ ------------
Current assets:
Cash and cash equivalents $ 10,848,000 6,662,000
Trade accounts receivable, net 24,331,000 18,745,000
Inventories 17,657,000 18,004,000
Prepaid expenses and other current
assets 1,088,000 694,000
Deferred tax assets 2,137,000 2,137,000
------------ ------------
Total current assets 56,061,000 46,242,000
Property and equipment, at cost, net 3,056,000 2,969,000
Intangible assets, less applicable
amortization 70,509,000 70,572,000
Other assets 994,000 1,243,000
------------ ------------
$130,620,000 121,026,000
============ ============
Liabilities and Stockholders'
Equity
Current liabilities:
Notes payable and current installments
of long-term debt $ 4,667,000 3,792,000
Trade accounts payable 14,530,000 11,220,000
Accrued expenses 5,222,000 4,959,000
Income taxes payable 6,719,000 3,468,000
------------ ------------
Total current liabilities 31,138,000 23,439,000
------------ ------------
Long-term debt, less current installments 22,684,000 26,495,000
Deferred tax liabilities-noncurrent 568,000 568,000
Stockholders' equity:
Preferred stock ----- -----
Common stock 98,000 97,000
Additional paid-in capital 27,456,000 27,115,000
Retained earnings 48,434,000 43,052,000
Accumulated other comprehensive income
(loss) 242,000 260,000
------------ ------------
Total stockholders' equity 76,230,000 70,524,000
------------ ------------
$130,620,000 121,026,000
============ ============
DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
Three-month period ended
March 31,
------------------------------------
2004 2003
-------------- -----------
Net sales $ 44,272,000 36,102,000
Cost of sales 23,866,000 19,862,000
-------------- -----------
Gross profit 20,406,000 16,240,000
Selling, general and
administrative expenses 10,778,000 8,153,000
-------------- -----------
Earnings from operations 9,628,000 8,087,000
Other expense (income):
Interest, net 1,118,000 1,097,000
Other (6,000) (15,000)
-------------- -----------
Earnings before income tax expense 8,516,000 7,005,000
Income tax expense 3,134,000 2,802,000
-------------- -----------
Net earnings $ 5,382,000 4,203,000
============== ===========
Net earnings per share:
Basic $ 0.55 0.44
Diluted 0.49 0.37
============== ===========
Weighted-average shares:
Basic 9,747,000 9,474,000
Diluted 11,051,000 11,266,000
============== ===========
CONTACT: Deckers Outdoor Corporation
Scott Ash, Chief Financial Officer, 805/967-7611
or
Investor Relations:
Integrated Corporate Relations, Inc.
Chad A. Jacobs/Brendon Frey, 203/222-9013