Exhibit 99.1
Deckers Outdoor Corporation Reports First Quarter Financial Results
Company Reports First Quarter Sales Increased 29.6% to a Record of
$72.6 Million
First Quarter Diluted EPS Increased 70.5% to a Record of $0.75
Company Increases Fiscal 2007 Guidance Growth Targets
GOLETA, Calif.--(BUSINESS WIRE)--April 26, 2007--Deckers Outdoor
Corporation (NASDAQ: DECK) today announced financial results for the first
quarter ended March 31, 2007.
First Quarter Highlights
-- Net sales increased 29.6% to $72.6 million versus $56.0 million last
year.
-- Gross margin increased 210 basis points to 46.2% compared to 44.1% a
year ago.
-- Diluted EPS increased 70.5% to $0.75 versus $0.44 last year.
Angel Martinez, President and Chief Executive Officer, stated, "We begin
2007 with a solid first quarter highlighted by double digit sales increases for
Teva(R), UGG(R) and Simple(R). Our ability to once again exceed expectations was
primarily driven by strong full price selling for the UGG(R) brand coupled with
positive consumer reaction to our reengineered Teva(R) product line, which
underscores our ongoing efforts to revitalize the brand at retail and our
strategic decision to target a younger, more active demographic. At the same
time, Simple(R) continued to gain important shelf space at retail while further
building its leadership position in sustainable footwear. Looking ahead, we
believe we are well positioned to capitalize on our future growth opportunities
and we remain confident in our ability to achieve both our near- and long-term
objectives."
Segment Summary
Teva(R)
Teva Brand net sales for the first quarter increased 11.6% to $38.7 million
compared to $34.7 million for the same period last year. Sales were driven by
demand for new styles, particularly the performance water series featuring
higher price point products such as the Karnali Wraptor, Toachi and Sunkosi,
along with solid sell-through of men's and women's casuals including updated
versions of the Dozer.
UGG(R)
UGG Brand net sales for the first quarter increased 67.7% to $29.8 million
compared to $17.8 million for the same period a year ago. The improvement in
sales was attributable to greater demand and increased distribution for the
expanded spring line which now consists of espadrilles, sandals, flip flops and
boots.
Simple(R)
Simple Brand net sales increased 14.0% to $4.0 million for the first
quarter compared to $3.5 million for the same period last year. Simple product
sales were up year-over-year as a result of heightened brand awareness, a
broader product assortment, and the addition of several new influential
accounts, including Urban Outfitters, Bloomingdales, David Z. and Kitson.
Consumer Direct
Sales for the Consumer Direct business, which are included in the brand
sales numbers above, increased 69.7% to $11.1 million compared to $6.5 million
for the same period a year ago, mostly due to an increase in UGG Brand internet
sales. In addition, results for the first quarter of 2007 included sales from
the Company's new UGG Brand flagship store in New York City and two new retail
outlet stores in Wrentham, MA and Riverhead, NY, which were not in operation in
the first quarter of 2006.
Full-Year 2007 Outlook
-- The Company increased its full year revenue growth target to
approximately 25% over 2006, up from previous guidance of
approximately 15%.
-- The Company increased its full year diluted earnings per share growth
target to approximately 15% over 2006 before the impairment charge, up
from previous guidance of approximately 5%
-- Fiscal 2007 guidance includes approximately $5.2 million of stock
compensation expense, an increase of $3.1 million over 2006.
Second Quarter Outlook
-- The Company currently expects second quarter 2007 revenue to increase
approximately 15% and diluted earnings per share to decrease
approximately 80% compared to 2006.
The Company's conference call to review first quarter fiscal 2007 results
will be broadcast live over the internet today, Thursday, April 26, 2007 at 4:30
pm Eastern Time. The broadcast will be hosted at www.deckers.com and
www.earnings.com.
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. Teva(R), Simple(R) and UGG(R) are registered trademarks of
Deckers Outdoor Corporation.
This news release contains statements regarding our expectations, beliefs
and views about our future financial performance which are "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the use of words such as
"believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or
future or conditional verbs such as "will," "would," "should," "could," or "may"
or by the fact that such statements relate to future, and not just historical,
events or circumstances, including statements related to anticipated revenues,
expenses, earnings, operating cash flows, the outlook for the Company's markets
and the demand for its products. The forward-looking statements in this news
release regarding our future financial performance are based on currently
available information as of the date of this release, and because our business
is subject to a number of risks and uncertainties, actual operating results in
the future may differ significantly from the future financial performance
expected at the current time. Those risks and uncertainties include, among
others: our ability to anticipate fashion trends, consumer demand or inventory
needs; whether the UGG brand will continue to grow at the same rate it has
experienced in the recent past; shortages or price fluctuations of raw materials
that could interrupt product manufacturing and increase product costs; our
ability to implement our growth strategy; the success of our customers and the
risk of losing one or more of our key customers; our ability to develop and
protect our brands and intellectual property; the risk that counterfeiting can
harm our sales or our brand image; our dependence on independent manufacturers
to supply our products; the risk that retailers could postpone or cancel
existing orders; unpredictable events and circumstances and currency risks
related to our international operations; the risk of losing key personnel; and
the sensitivity of our sales to seasonal and weather conditions. Certain of
these risks and uncertainties, as well as others, are more fully described under
the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2006 which we filed with the Securities and
Exchange Commission on March 16, 2007. Readers are cautioned not to place undue
reliance on forward-looking statements contained in this news release, which
speak only as of the date of this release. The Company undertakes no obligation
to publicly release or update the results of any revisions to forward-looking
statements, which may be made to reflect new information, events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events. The risks and uncertainties highlighted herein should not
be assumed to be the only items that could affect the future performance of the
Company.
DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands)
March 31, December 31,
Assets 2007 2006
------------ ------------
Current assets:
Cash and cash equivalents $ 25,553 34,255
Short-term investments 84,234 64,637
Trade accounts receivable, net 36,400 49,571
Inventories 34,157 32,375
Prepaid expenses and other current assets 2,447 2,199
Deferred tax assets 4,386 4,386
------------ ------------
Total current assets 187,177 187,423
Restricted cash 1,000 ----
Property and equipment, at cost, net 8,224 7,770
Intangible assets, less applicable
amortization 54,322 54,399
Deferred tax assets 327 327
Other assets 53 54
------------ ------------
$ 251,103 249,973
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $ 15,279 21,053
Accrued expenses 5,064 7,204
Income taxes payable 5,492 7,478
------------ ------------
Total current liabilities 25,835 35,735
------------ ------------
Stockholders' equity:
Common stock 126 126
Additional paid-in capital 82,967 81,761
Retained earnings 141,656 131,958
Accumulated other comprehensive income 519 393
------------ ------------
Total stockholders' equity 225,268 214,238
------------ ------------
$ 251,103 249,973
============ ============
DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
(Amounts in thousands, except for per share data)
Three-month period ended
March 31,
------------------------
2007 2006
------------ -----------
Net sales
$ 72,575 56,004
Cost of sales 39,054 31,304
------------ -----------
Gross profit 33,521 24,700
Selling, general and administrative expenses 18,345 15,786
------------ -----------
Income from operations 15,176 8,914
Other (income) expense
Interest, net (989) (580)
Other 1 - - -
------------ -----------
Income before income taxes 16,164 9,494
Income taxes 6,466 3,845
------------ -----------
Net income
$ 9,698 5,649
============ ===========
Net income per share:
Basic
$ 0.77 0.45
Diluted 0.75 0.44
============ ===========
Weighted-average shares:
Basic 12,595 12,468
Diluted 12,932 12,763
============ ===========
CONTACT: Deckers Outdoor Corporation
Zohar Ziv, 805-967-7611
Chief Financial Officer and Executive Vice
President of Finance and Administration
or
Investor Relations:
Integrated Corporate Relations, Inc.
Chad A. Jacobs/Brendon Frey
203-682-8200