Under Armour Reports Fourth Quarter Net Revenues Growth of 25% and Fourth Quarter EPS Growth of 51%

  Under Armour Reports Fourth Quarter Net Revenues Growth of 25% and Fourth
                          Quarter EPS Growth of 51%

PR Newswire

BALTIMORE, Jan. 31, 2013

BALTIMORE, Jan. 31, 2013 /PRNewswire/ --

  o Fourth Quarter Net Revenues Increased 25% to $506 Million; Full Year Net
    Revenues Increased 25% to $1.835 Billion
  o Fourth Quarter Diluted EPS Increased 51% to $0.47 from $0.31; Full Year
    Diluted EPS Increased 31% to $1.21 from $0.92
  o Company Updates 2013 Net Revenues Outlook to a Range of $2.20 Billion to
    $2.22 Billion (+20% to +21%)
  o Company Updates 2013 Operating Income Outlook to a Range of $255 Million
    to $257 Million (+22% to +23%)

Under Armour, Inc. (NYSE: UA) today announced financial results for the fourth
quarter ended December 31, 2012.  Net revenues increased 25% in the fourth
quarter of 2012 to $506 million compared with net revenues of $403 million in
the prior year's period.  Net income increased 54% in the fourth quarter of
2012 to $50 million compared with $33 million in the prior year's period. 
Diluted earnings per share for the fourth quarter of 2012 were $0.47 on
weighted average common shares outstanding of 107 million compared with $0.31
per share on weighted average common shares outstanding of 105 million in the
prior year's period.    

(Logo: http://photos.prnewswire.com/prnh/20110127/NE37387LOGO )

Fourth quarter apparel net revenues increased 25% to $405 million compared
with $323 million in the same period of the prior year, driven primarily by
Fleece, which included a broader expansion of the Storm platform across the
category.  Fourth quarter footwear net revenues increased 43% to $45 million
from $31 million in the prior year's period, primarily driven by new 2012
running styles, including UA Spine, and strong sell-in of new 2013 baseball
cleats.  Fourth quarter accessories net revenues increased 16% to $43 million
from $37 million in the prior year's period.  Direct-to-Consumer net revenues,
which represented 39% of total net revenues for the fourth quarter, grew 29%
year-over-year. 

Kevin Plank, Chairman and CEO of Under Armour, Inc., stated, "We closed 2012
strongly, delivering net revenue growth of at least 20% for the eleventh
consecutive quarter in Q4 by building upon key apparel technology platforms
like Storm Fleece and Charged Cotton.  Our ability to bring practical
innovation to our consumer across a broad range of product drove our 25% net
revenue growth in 2012 and positions us well for 2013 and beyond.  With these
strong results in hand, we are well on our way toward delivering on the goal
established at our June 2011 Investor Day to more than double our net revenues
from 2010 to 2013."

Gross margin for the fourth quarter of 2012 was 50.3% compared with 51.6% in
the prior year's quarter, primarily reflecting less favorable sales mix and
higher air freight costs.  Selling, general and administrative expenses as a
percentage of net revenues were 34.2% in the fourth quarter of 2012 compared
with 37.9% in the prior year's period, largely reflecting leverage of
corporate services and marketing expenses.  Marketing expenses for the fourth
quarter of 2012 were 9.7% of net revenues compared with 10.9% in the prior
year's quarter.  Fourth quarter operating income grew 48% to $82 million
compared with $55 million in the prior year's period. 

Review of Full Year Operating Results 
For the full year 2012, net revenues increased 25% to $1.835 billion compared
with $1.473 billion in the prior year and compared with the Company's prior
outlook of $1.82 billion.  Diluted earnings per share for the full year
increased 31% to $1.21 per share on weighted average common shares outstanding
of 106 million compared with $0.92 per share on weighted average common shares
outstanding of 105 million in the prior year.

Apparel net revenues increased 23% to $1.385 billion compared with $1.122
billion in the prior year, led by the Training category which included the
expansions of both the Charged Cotton and Storm platforms.  Footwear net
revenues increased 32% to $239 million during 2012 compared to $182 million in
2011, reflecting the debut of new running styles, including UA Spine, and
strength across our cleated businesses.  Accessories net revenues increased
25% to $166 million during 2012 compared to $132 million in 2011, primarily
driven by headwear and bags.  Direct-to-Consumer net revenues, which
represented 29% of total net revenues for the year compared to 27% in 2011,
grew 34% over the prior year.

Gross margin for 2012 was 47.9% compared with 48.4% in 2011, largely
reflecting less favorable sales mix and higher air freight costs.  Selling,
general and administrative expenses as a percentage of net revenues were 36.5%
for 2012 compared with 37.3% for 2011, reflecting leverage of corporate
services and marketing expenses.  Marketing expense for 2012 was 11.2% of net
revenues compared with 11.4% in the prior year.  Operating income grew 28% to
$209 million in 2012 compared with $163 million in the prior year and compared
with the Company's prior outlook of $207 million.

Balance Sheet Highlights 
Cash and cash equivalents increased 95% to $342 million at December 31, 2012
compared with $175 million at December 31, 2011.  The Company had no
borrowings outstanding under its $300 million revolving credit facility at
December 31, 2012.  Inventory at December 31, 2012 decreased 2% to $319
million compared with $324 million at December 31, 2011.  Long-term debt
decreased to $62 million at December 31, 2012 from $78 million at December 31,
2011. 

Updated 2013 Outlook 
Based on current visibility, the Company expects 2013 net revenues in the
range of $2.20 billion to $2.22 billion, representing growth of 20% to 21%
over 2012, and 2013 operating income in the range of $255 million to $257
million, representing growth of 22% to 23% over 2012.  The Company expects an
effective tax rate of 39.0% to 39.5% for the full year, compared to an
effective tax rate of 36.7% for 2012.  The Company anticipates fully diluted
weighted average shares outstanding of approximately 108 million to 109
million for 2013.

Mr. Plank concluded, "In the year ahead, we will drive growth by
re-invigorating core categories like Baselayer, continuing to expand our
consumer base in Women's and Youth, and introducing the next wave of Under
Armour innovation through product such as Armour39 that will debut in the next
month.  We will open the next generation of Under Armour specialty retail in
mid-February in our home city of Baltimore, while we are prioritizing our
growth strategies in key markets in Europe, Asia, and Latin America.  We will
also continue to invest in the right talent, infrastructure, and processes to
ensure that we deliver balanced financial results well into the future."

Conference Call and Webcast 
The Company will provide additional commentary regarding its fourth quarter
results as well as its updated 2013 outlook during its earnings conference
call today, January 31^st, at 8:30 a.m. ET.  The call will be webcast live at
http://investor.underarmour.com/events.cfm and will be archived and available
for replay approximately three hours after the live event.  Additional
supporting materials related to the call will also be available at
http://investor.underarmour.com.  The Company's financial results are also
available online at http://investor.underarmour.com/results.cfm.

About Under Armour, Inc. 
Under Armour^® (NYSE: UA) is a leading developer, marketer, and distributor of
branded performance apparel, footwear, and accessories.  The brand's
moisture-wicking fabrications are engineered in many different designs and
styles for wear in nearly every climate to provide a performance alternative
to traditional products.  The Company's products are sold worldwide and worn
by athletes at all levels, from youth to professional, on playing fields
around the globe.  The Under Armour global headquarters is in Baltimore,
Maryland, with European headquarters in Amsterdam's Olympic Stadium, and
additional offices in Denver, Hong Kong, Toronto, and Guangzhou, China.  For
further information, please visit the Company's website at www.ua.com.

Forward Looking Statements
Some of the statements contained in this press release constitute
forward-looking statements. Forward-looking statements relate to expectations,
beliefs, projections, future plans and strategies, anticipated events or
trends and similar expressions concerning matters that are not historical
facts, such as statements regarding our future financial condition or results
of operations, our prospects and strategies for future growth, the development
and introduction of new products, and the implementation of our marketing and
branding strategies. In many cases, you can identify forward-looking
statements by terms such as "may," "will," "should," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "outlook,"  "potential" or
the negative of these terms or other comparable terminology.  The
forward-looking statements contained in this press release reflect our current
views about future events and are subject to risks, uncertainties, assumptions
and changes in circumstances that may cause events or our actual activities or
results to differ significantly from those expressed in any forward-looking
statement. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future events,
results, actions, levels of activity, performance or achievements. Readers are
cautioned not to place undue reliance on these forward-looking statements. A
number of important factors could cause actual results to differ materially
from those indicated by the forward-looking statements, including, but not
limited to: changes in general economic or market conditions that could affect
consumer spending and the financial health of our retail customers; our
ability to effectively manage our growth and a more complex business; our
ability to effectively develop and launch new, innovative and updated
products; our ability to accurately forecast consumer demand for our products
and manage our inventory in response to changing demands; increased
competition causing us to reduce the prices of our products or to increase
significantly our marketing efforts in order to avoid losing market share;
fluctuations in the costs of our products; loss of key suppliers or
manufacturers or failure of our suppliers or manufacturers to produce or
deliver our products in a timely or cost-effective manner; changes in consumer
preferences or the reduction in demand for performance apparel, footwear and
other products; our ability to accurately anticipate and respond to seasonal
or quarterly fluctuations in our operating results; our ability to effectively
market and maintain a positive brand image; the availability, integration and
effective operation of management information systems and other technology;
and our ability to attract and maintain the services of our senior management
and key employees. The forward-looking statements contained in this press
release reflect our views and assumptions only as of the date of this press
release. We undertake no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the statement is made
or to reflect the occurrence of unanticipated events.

(Tables Follow)

 

Under Armour, Inc.

For the Quarter and Year Ended December 31, 2012 and 2011

(Unaudited; in thousands, except per share amounts)

 

CONSOLIDATED STATEMENTS OF INCOME

 
               Quarter Ended                       Year Ended

               December 31,                        December 31,
                       % of Net          % of Net             % of Net             % of Net
               2012              2011              2012                 2011
                       Revenues          Revenues             Revenues             Revenues
Net revenues   $       100.0%    $       100.0%    $1,834,921 100.0%    $1,472,684 100.0%
               505,863           403,126
Cost of goods  251,628 49.7%     195,221 48.4%     955,624    52.1%     759,848    51.6%
sold
       Gross   254,235 50.3%     207,905 51.6%     879,297    47.9%     712,836    48.4%
profit
Selling,
general and
               172,643 34.2%     152,603 37.9%     670,602    36.5%     550,069    37.3%
 
administrative
expenses
       Income
from           81,592  16.1%     55,302  13.7%     208,695    11.4%     162,767    11.1%
operations
    Interest   (1,205) (0.2%)    (1,413) (0.3%)    (5,183)    (0.3%)    (3,841)    (0.3%)
expense, net
   Other
income         (634)   (0.1%)    1       0.0%      (73)       0.0%      (2,064)    (0.1%)
(expense),
net      
       Income
before income  79,753  15.8%     53,890  13.4%     203,439    11.1%     156,862    10.7%
taxes
Provision for  29,621  5.9%      21,338  5.3%      74,661     4.1%      59,943     4.1%
income taxes
       Net     $       9.9%      $       8.1%      $          7.0%      $          6.6%
income         50,132            32,552            128,778              96,919
Net income available
per common share
Basic          $                 $                 $                    $        
                0.48              0.31             1.23                 0.94
Diluted        $                 $                 $                    $        
                0.47              0.31             1.21                 0.92
Basic          104,687           103,385           104,343              103,140
Diluted        107,121           105,348           106,380              105,052

 

NET REVENUES BY PRODUCT CATEGORY

 
                      Quarter Ended               Year Ended

                      December 31,                December 31,
                      2012     2011     % Change  2012        2011      %
                                                                        Change
Apparel               $        $        25.1%     $ 1,385,350 $         23.5%
                       404,527  323,385                       1,122,031
Footwear              44,714   31,329   42.7%     238,955     181,684   31.5%
Accessories           42,601   36,798   15.8%     165,835     132,400   25.3%
     Total net sales  491,842  391,512  25.6%     1,790,140   1,436,115 24.7%
Licensing revenues    14,021   11,614   20.7%     44,781      36,569    22.5%
     Total net        $        $        25.5%     $ 1,834,921 $         24.6%
revenues               505,863  403,126                       1,472,684

 

NET REVENUES BY GEOGRAPHIC SEGMENT
                       Quarter Ended            Year Ended

                       December 31,             December 31,
                       2012    2011     %       2012        2011        %
                                        Change                          Change
North America          $       $        25.2%   $ 1,726,733 $ 1,383,346 24.8%
                       472,225  377,152
Other foreign          33,638  25,974   29.5%   108,188     89,338      21.1%
countries
     Total net         $       $        25.5%   $ 1,834,921 $ 1,472,684 24.6%
revenues               505,863  403,126

 

Under Armour, Inc.

As of December 31, 2012 and December 31, 2011

(Unaudited; in thousands)

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 
                                                               

                                             As of            As of

                                             12/31/12         12/31/11
Assets
Cash and cash equivalents                    $        341,841 $        175,384
Accounts receivable, net                     175,524          134,043
Inventories                                  319,286          324,409
Prepaid expenses and other current assets    43,896           39,643
Deferred income taxes                        23,051           16,184
     Total current assets                    903,598          689,663
Property and equipment, net                  180,850          159,135
Intangible assets, net                       4,483            5,535
Deferred income taxes                        22,606           15,885
Other long term assets                       45,546           48,992
     Total assets                            $     1,157,083  $        919,210
Liabilities and Stockholders' Equity
Accounts payable                             $        143,689 $     100,527
Accrued expenses                             85,077           69,285
Current maturities of long term debt         9,132            6,882
Other current liabilities                    14,330           6,913
     Total current liabilities               252,228          183,607
Long term debt, net of current maturities    52,757           70,842
Other long term liabilities                  35,176           28,329
     Total liabilities                       340,161          282,778
     Total stockholders' equity              816,922          636,432
     Total liabilities and stockholders'     $     1,157,083  $        919,210
equity

 

 

Under Armour, Inc.

For the Year Ended December 31, 2012 and 2011

(Unaudited; in thousands)

 
                                                   Year Ended       Year Ended
                                                   12/31/12         12/31/11
Cash flows from operating activities
Net income                                         $        128,778 $        
                                                                     96,919
Adjustments to reconcile net income to net cash
used in

   operating activities
  Depreciation and amortization                    43,082           36,301
  Unrealized foreign currency exchange rate        (2,464)          4,027
  (gains) losses
  Loss on disposal of property and equipment       524              36
  Stock-based compensation                         19,845           18,063
  Gain on bargain purchase of corporate
  headquarters (excludes transaction costs of      -                (3,300)
  $1.9 million)
  Deferred income taxes                            (12,973)         3,620
  Changes in reserves and allowances               13,916           5,536
  Changes in operating assets and liabilities:
      Accounts receivable                          (53,433)         (33,923)
      Inventories                                  4,699            (114,646)
      Prepaid expenses and other assets            (4,060)          (42,633)
      Accounts payable                             35,370           17,209
      Accrued expenses and other liabilities       21,966           23,442
      Income taxes payable and receivable          4,511            4,567
              Net cash provided by operating       199,761          15,218
              activities
Cash flows from investing activities
Purchase of property and equipment                 (50,650)         (56,228)
Purchase of corporate headquarters and related     -                (23,164)
expenditures
Purchase of long term investment                   -                (3,862)
Purchase of other assets                           (1,310)          (1,153)
Change in restricted cash                          5,029            (5,029)
              Net cash used in investing           (46,931)         (89,436)
              activities
Cash flows from financing activities
Proceeds from revolving credit facility            -                30,000
Payments on revolving credit facility              -                (30,000)
Proceeds from term loan                            -                25,000
Payments on term loan                              (25,000)         -
Proceeds from long term debt                       50,000           5,644
Payments on long term debt                         (44,330)         (7,418)
Excess tax benefits from stock-based compensation  17,868           10,260
arrangements
Proceeds from exercise of stock options and other  14,776           14,645
stock issuances
Payments of debt financing costs                   (1,017)          (2,324)
              Net cash provided by financing       12,297           45,807
              activities
Effect of exchange rate changes on cash and cash   1,330            (75)
equivalents
              Net increase (decrease) in cash and  166,457          (28,486)
              cash equivalents
Cash and cash equivalents
Beginning of period                                175,384          203,870
End of period                                      $        341,841 $      
                                                                     175,384
Non-cash investing and financing activities
Debt assumed and property and equipment acquired   $                $        
in connection with purchase of corporate               -             38,556
headquarters
Acquisition of property and equipment through      15,216           3,079
certain obligations

 

SOURCE Under Armour, Inc.

Website: http://www.ua.com
Contact: Investors: Tom Shaw, CFA, Under Armour, Inc., +1-410-843-7676, or
Media: Erin Wendell, Under Armour, Inc., +1-410-454-6570