Exhibit 99.1
Deckers Outdoor Corporation Reports Record Fourth Quarter
and Fiscal Year 2004 Financial Results
GOLETA, Calif.--(BUSINESS WIRE)--Feb. 24, 2005--Deckers Outdoor
Corporation (NASDAQ: DECK)
-- Fourth Quarter Revenue Increases 108% to a Record $74.2
Million
-- Fourth Quarter Diluted EPS Increases 279% to a Record $0.72
-- Raises Fiscal 2005 EPS Guidance to a Range of $2.45 to $2.55
Deckers Outdoor Corporation (NASDAQ: DECK) today announced record
financial results for the fourth quarter and fiscal year ended
December 31, 2004.
For the quarter ended December 31, 2004, net sales increased 108%
to a record of $74.2 million versus $35.7 million in the same period
last year. Net income for the quarter rose 275% to $9.2 million,
compared to net income of $2.5 million last year, and income per
diluted share increased 279% to $0.72, versus income per diluted share
of $0.19 in the fourth quarter of 2003. Income per diluted share for
the fourth quarter of 2003 was negatively impacted by $0.02 related to
the repurchase of preferred stock and the repayment of subordinated
debt during the quarter.
For the year ended December 31, 2004, net sales increased 77% to a
record $214.8 million versus $121.1 million last year. Net income
increased 179% to $25.5 million, or $2.10 per diluted share, compared
to net income of $9.2 million, or $0.77 per diluted share last year.
Chief Executive Officer, Doug Otto, stated, "We are extremely
pleased with our record fourth quarter performance as robust demand
for UGG footwear, coupled with improved deliveries from the factories
and strong retail sell-throughs, allowed us to once again exceed
expectations. Importantly, based on feedback from retailers at the
recent WSA Shoe Show we expect this positive trend for UGG to continue
going forward. In addition, we were able to further leverage our fixed
costs to drive significant gains in operating income and income per
share for the fourth quarter. These results represent a tremendous
ending to an outstanding year for our Company and we are excited as
this momentum continues into 2005."
Including sales from both the wholesale divisions and the Internet
and catalog retailing business, Teva net sales for the year ended
December 31, 2004 increased 15% to a record $88.2 million from $76.5
million in 2003; UGG net sales in 2004 increased 215% to $116.2
million versus $36.9 million last year; and, Simple net sales
increased 34% to $10.3 million compared to $7.7 million a year ago.
Net sales for the Internet and catalog retailing business, which are
included in the brand sales numbers above, aggregated approximately
$19.9 million for the year ended December 31, 2004, up 206% from $6.5
million for 2003.
Mr. Otto further stated, "During fiscal 2004, we experienced solid
growth in all three brands and made tremendous strides to expand the
breadth, depth and reach of each of our product lines. This was
evident in Teva's continued strength in the sport sandal category and
growing thong and slide business, combined with the ongoing
development of closed toe product to reach the much broader overall
rugged outdoor footwear market. We continued to experience phenomenal
growth for our entire line of UGG footwear, led by boots, slippers,
and casual footwear. The successful launch of UGG licensed handbags
and outerwear in 2004, as well as the 2005 introduction of UGG
licensed cold weather accessories, provides the ideal complement to
our footwear products and significantly enhances the true lifestyle
nature of the brand. UGG was also named Brand of the Year by Footwear
Plus and was recognized with the ACE Award for the "it" accessory of
the year by the Accessories Counsel, both tremendous honors.
Throughout 2004 we witnessed a resurgence of Simple in the
marketplace, including strong performances by the brand's clog and
sneaker offerings. We are confident we are on the right track with
Simple and that our new product and distribution initiatives will
provide further growth opportunities going forward."
"During the year, we also took a number of important steps to
improve our balance sheet and better position the company for the
long-term," continued Mr. Otto. "This was highlighted by our
successful secondary offering of Deckers common stock in May which
allowed us to repay all of our outstanding loans associated with our
acquisition of Teva and end fiscal 2004 free of long term debt and
with more than $25 million of cash."
Mr. Otto further commented, "Looking ahead, we are extremely
confident about our business both for the first half and second half
of fiscal 2005. For Teva, our Spring business is off to a great start
and we expect another record season in 2005. At the same time, the
first half of 2005 for UGG will include both carryover of Fall 2004
products as well as the shipment of UGG's first ever Spring line, with
deliveries beginning in the first quarter of 2005. Our Fall 2005 UGG
orders are coming in strong, once again led by our Classic and Ultra
boots and slipper collection, as well as demand for our newly
introduced cold weather, waterproof, Gortex (R) products and our
Metropolitan category which combines sheepskin with high grade suedes
and leathers. We will continue to expand our product offerings into
additional footwear categories and new licensed products in order to
build on UGG's growing status in the luxury goods market."
Deckers also increased its guidance for 2005. The Company now
expects net sales to range from $250 million to $260 million and
income per diluted share to range from $2.45 to $2.55, up from the
previous guidance of $220 million to $230 million and $2.15 to $2.25
per diluted share, respectively. The Company currently expects annual
net sales in 2005 to be approximately $97 to $100 million for Teva,
$13 to $15 million for Simple and $140 to $145 million for UGG. For
the first quarter ending March 31, 2005, the Company currently expects
sales to range from $63 million to $65 million and income per diluted
share to range from $0.68 to $0.70.
Mr. Otto concluded, "Fiscal 2004 was an extraordinary year for
Deckers on a number of different levels. Financially, we consistently
outperformed expectations for sales and profits; strategically we
expanded the lifestyle status of our brands; and operationally we
continued to leverage our brands while setting the path for future
growth. Our success throughout the year was directly attributable to
our powerful portfolio of leading niche brands and the hard work and
dedication of our outstanding team. And while we are proud of what we
have accomplished to date, we believe that many opportunities still
lie ahead. We move forward with a clear and compelling growth strategy
and an organization committed to delivering substantial value to our
shareholders."
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
regarding sales and income per share results for the first quarter of
2005, and for the full year ending December 31, 2005, as well as
statements regarding expected demand for UGG in 2005, the company's
overall momentum going into 2005, the growth potential for licensed
products, growth opportunities for the Company and its brands, the
Company's confidence in its business for the first and second half of
fiscal 2005, the expectations regarding the Spring 2005 Teva and Ugg
business, and the ability to evolve UGG into a luxury consumer
lifestyle brand, among others. These forward-looking statements are
inherently uncertain and are based on the Company's expectations as of
today, February 24, 2005. In addition, such forward-looking statements
involve known and unknown risks, uncertainties and other factors that
may cause the actual results to differ materially from those 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/A 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 or interruption in the supply of other
materials, which could interrupt product manufacturing and increase
product costs; the risk that our licensees will perform under their
licenses; the risk that we are unable to accurately forecast consumer
demand; the sensitivity of the footwear industry to changes in general
economic conditions; whether we are successful in continuing to
implement 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
availability of products, which can affect our ability to fulfill our
customers' orders; 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.; 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; currency risk; delays and unexpected costs that
can result from customs regulations; 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 potential impact of litigation; 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. Given these uncertainties, prospective investors are cautioned
not to place undue reliance on such forward-looking statements. The
Company intends to continue its practice of not updating projections
until its next quarterly results announcement. 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 Company's Annual Report on Form 10-K/A for the fiscal
year ended December 31, 2003, the Company's subsequent Quarterly
Reports on Form 10-Q or this news release.
DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
December 31, December 31,
Assets 2004 2003
------------ ------------
Current assets:
Cash and cash equivalents $ 25,854,000 6,662,000
Trade accounts receivable, net 41,957,000 18,745,000
Inventories 30,260,000 18,004,000
Prepaid expenses and other current assets 1,491,000 694,000
Deferred tax assets 3,240,000 2,137,000
------------ ------------
Total current assets 102,802,000 46,242,000
Property and equipment, at cost, net 2,838,000 2,969,000
Intangible assets, less applicable
amortization 70,319,000 70,572,000
Other assets 592,000 1,243,000
------------ ------------
$176,551,000 121,026,000
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current installments of
long-term debt $ ----- 3,792,000
Trade accounts payable 16,524,000 11,220,000
Accrued expenses 9,699,000 4,959,000
Income taxes payable 6,725,000 3,468,000
------------ ------------
Total current liabilities 32,948,000 23,439,000
------------ ------------
Long-term debt, less current installments ----- 26,495,000
Deferred tax liabilities-noncurrent 2,607,000 568,000
Stockholders' equity:
Preferred stock ----- -----
Common stock 122,000 97,000
Additional paid-in capital 71,959,000 27,115,000
Retained earnings 68,591,000 43,052,000
Accumulated other comprehensive income 324,000 260,000
------------ ------------
Total stockholders' equity 140,996,000 70,524,000
------------ ------------
$176,551,000 121,026,000
============ ============
DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
Three-month period ended Year ended
December 31, December 31,
------------------------ --------------------------
2004 2003 2004 2003
----------- ----------- ------------ ------------
Net sales $74,172,000 35,717,000 214,787,000 121,055,000
Cost of sales 45,286,000 21,946,000 124,354,000 69,710,000
----------- ----------- ------------ ------------
Gross profit 28,886,000 13,771,000 90,433,000 51,345,000
Selling, general
and administrative
expenses 14,684,000 8,880,000 47,971,000 32,407,000
Litigation income ----- ----- ----- (500,000)
----------- ----------- ------------ ------------
Net income from
operations 14,202,000 4,891,000 42,462,000 19,438,000
Other expense
(income):
Interest, net (25,000) 1,145,000 2,236,000 4,557,000
Other 3,000 12,000 3,000 (3,000)
----------- ----------- ------------ ------------
Net income before
income taxes 14,224,000 3,734,000 40,223,000 14,884,000
Income taxes 4,976,000 1,270,000 14,684,000 5,730,000
----------- ----------- ------------ ------------
Net income 9,248,000 2,464,000 25,539,000 9,154,000
Less preferred
stock redemption
premium ----- (438,000) ----- (438,000)
----------- ----------- ------------ ------------
Income applicable
to common
stockholders $ 9,248,000 2,026,000 25,539,000 8,716,000
=========== =========== ============ ============
Net income per
share:
Basic $ 0.78 0.21 2.32 0.91
Diluted 0.72 0.19 2.10 0.77
=========== =========== ============ ============
Weighted-average
shares:
Basic 11,894,000 9,693,000 11,005,000 9,610,000
Diluted 12,817,000 10,889,000 12,142,000 11,880,000
=========== =========== ============ ============
CONTACT: Deckers Outdoor Corporation
Scott Ash, 805-967-7611
or
Investor Relations:
Integrated Corporate Relations, Inc.
Chad A. Jacobs/Brendon Frey, 203-222-9013