Under Armour Reports First Quarter Net Revenues Growth of 23%; Raises Full Year Outlook - First Quarter Net Revenues Increased 23% to $472 Million - Company Raises 2013 Net Revenues Outlook to a Range of $2.21 Billion to $2.23 Billion (+21% to +22%) - Company Raises 2013 Operating Income Outlook to a Range of $256 Million to $258 Million (+23% to +24%) PR Newswire BALTIMORE, April 19, 2013 BALTIMORE, April 19, 2013 /PRNewswire-FirstCall/ --Under Armour, Inc. (NYSE: UA) today announced financial results for the first quarter ended March 31, 2013. Net revenues increased 23% in the first quarter of 2013 to $472 million compared with net revenues of $384 million in the prior year's period. Net income decreased 47% in the first quarter of 2013 to $8 million compared with $15 million in the prior year's period, largely reflecting the planned timing of marketing expenditures. Diluted earnings per share for the first quarter of 2013 were $0.07 compared with $0.14 per share in the prior year's period. (Logo: http://photos.prnewswire.com/prnh/20110127/NE37387LOGO ) First quarter apparel net revenues increased 22% to $346 million compared with $283 million in the same period of the prior year, driven primarily by the introduction of new Baselayer product and strong sales of Fleece. First quarter footwear net revenues increased 27% to $81 million from $64 million in the prior year's period, primarily driven by new running styles led by UA Spine Venom. First quarter accessories net revenues increased 22% to $36 million from $30 million in the prior year's period. Direct-to-Consumer net revenues, which represented 26% of total net revenues for the first quarter, grew 31% year-over-year. Kevin Plank, Chairman and CEO of Under Armour, Inc., stated, "In the first quarter, we drove growth in excess of 20% for the 12th consecutive quarter in total revenues and the 14th consecutive quarter in apparel revenues. This growth is the direct result of our enhanced design and innovation, including new and improved HeatGear Sonic Baselayer and the attention-grabbing UA Alter Ego line, featuring iconic superheroes such as Batman and Superman. Our Youth product is stronger than ever and we continue to see traction with our expanded Women's lines in Studio and ArmourBra. Momentum is also evident in Footwear with solid sell through of our latest product in the running platform, Spine Venom." Gross margin for the first quarter of 2013 was 45.9% compared with 45.6% in the prior year's quarter, primarily reflecting favorable year-over-year North American apparel product costs. Selling, general and administrative expenses as a percentage of net revenues were 43.1% in the first quarter of 2013 compared with 39.2% in the prior year's period, primarily reflecting the timing of marketing expenses and incentive compensation expenses. First quarter operating income declined 45% to $13 million compared with $24 million in the prior year's period. Balance Sheet Highlights Cash and cash equivalents increased 139% to $256 million at March 31, 2013 compared with $107 million at March 31, 2012. The Company had no borrowings outstanding under its $300 million revolving credit facility at March 31, 2013. Inventory at March 31, 2013 remained unchanged year-over-year at $324 million. Long-term debt decreased to $60 million at March 31, 2013 from $76 million at March 31, 2012. Updated 2013 Outlook The Company had previously anticipated 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. Based on current visibility, the Company now expects 2013 net revenues in the range of $2.21 billion to $2.23 billion, representing growth of 21% to 22% over 2012, and 2013 operating income in the range of $256 million to $258 million, representing growth of 23% to 24% over 2012. Despite deleveraging in the first quarter, the Company continues to expect a relatively unchanged marketing expense rate from the 11.2% rate in 2012. The Company continues to expect 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, and fully diluted weighted average shares outstanding of approximately 108 million to 109 million for 2013. Mr. Plank concluded, "Our strong start to 2013 was underscored by the successful debut of our first of three Brand Holidays planned for this year, which included our largest ever global marketing campaign, I WILL^®. As part of this Brand Holiday, we opened the first UA Brand House retail store in our hometown of Baltimore, launched the first-of-its kind performance monitoring system for athletes, Armour39^™ and expanded our footwear running platform led by UA Spine Venom. Combined with a heightened focus on newness and innovation throughout our 2013 product portfolio, these efforts magnify our ability to tell more impactful stories to a global audience. We are excited to share more of our vision for the future of the Brand at our upcoming Investor Day on June 5th." Conference Call and Webcast The Company will provide additional commentary regarding its first quarter results as well as its updated 2013 outlook during its earnings conference call today, April 19^th, at 8:30 a.m. ET. The call will be webcast live at http://investor.underarmour.com/events.cfmand 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 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. 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 Ended March 31, 2013 and 2012 (Unaudited; in thousands, except per share amounts) CONSOLIDATED STATEMENTS OF INCOME Quarter Ended March31, % of Net % of Net 2013 2012 Revenues Revenues Net revenues $ 471,608 100.0 % $ 384,389 100.0 % Cost of goods sold 255,057 54.1 % 209,185 54.4 % Gross profit 216,551 45.9 % 175,204 45.6 % Selling, general and 203,059 43.1 % 150,801 39.2 % administrative expenses Income from operations 13,492 2.9 % 24,403 6.3 % Interest expense, net (725) (0.2) % (1,355) (0.3) % Other income (expense), net 240 0.1 % 82 0.0 % Income before income taxes 13,007 2.8 % 23,130 6.0 % Provision for income taxes 5,193 1.1 % 8,469 2.2 % Net income $ 7,814 1.7 % $ 14,661 3.8 % Net income available per common share Basic $ 0.07 $ 0.14 Diluted $ 0.07 $ 0.14 Weighted average common shares outstanding Basic 104,898 103,847 Diluted 107,096 105,705 NET REVENUES BY PRODUCT CATEGORY Quarter Ended March31, 2013 2012 %Change Apparel $ 345,526 $ 283,331 22.0 % Footwear 80,783 63,663 26.9 % Accessories 36,082 29,635 21.8 % Total net sales 462,391 376,629 22.8 % Licensing revenues 9,217 7,760 18.8 % Total net revenues $ 471,608 $ 384,389 22.7 % NET REVENUES BY GEOGRAPHIC Quarter Ended SEGMENT March31, 2013 2012 %Change North America $ 440,868 $ 362,521 21.6 % Other foreign countries 30,740 21,868 40.6 % Total net revenues $ 471,608 $ 384,389 22.7 % Under Armour, Inc. As of March 31, 2013, December 31, 2012 and March 31, 2012 (Unaudited; in thousands) CONDENSED CONSOLIDATED BALANCE SHEETS As of As of As of 3/31/13 12/31/12 3/31/12 Assets Cash and cash equivalents $ 255,722 $ 341,841 $ 107,052 Accounts receivable, net 246,218 175,524 196,411 Inventories 323,509 319,286 324,354 Prepaid expenses and other current 37,227 43,896 47,121 assets Deferred income taxes 24,765 23,051 19,164 Total current assets 887,441 903,598 694,102 Property and equipment, net 180,591 180,850 158,482 Intangible assets, net 3,842 4,483 4,648 Deferred income taxes 26,281 22,606 15,461 Other long term assets 42,333 45,546 47,544 Total assets $ 1,140,488 $ 1,157,083 $ 920,237 Liabilities and Stockholders' Equity Accounts payable $ 127,327 $ 143,689 $ 95,844 Accrued expenses 66,969 85,077 40,970 Current maturities of long term debt 8,787 9,132 43,330 Other current liabilities 3,246 14,330 2,550 Total current liabilities 206,329 252,228 182,694 Long term debt, net of current 51,658 52,757 32,451 maturities Other long term liabilities 39,343 35,176 31,004 Total liabilities 297,330 340,161 246,149 Total stockholders' equity 843,158 816,922 674,088 Total liabilities and stockholders' $ 1,140,488 $ 1,157,083 $ 920,237 equity Under Armour, Inc. For the Quarter Ended March 31, 2013 and 2012 (Unaudited; in thousands) Quarter Quarter Ended Ended 3/31/12 3/31/13 Cash flows from operating activities Net income $ 7,814 $ 14,661 Adjustments to reconcile net income to net cash used in operating activities Depreciation and amortization 11,842 10,591 Unrealized foreign currency exchange rate (gains) 606 (1,686) losses Loss on disposal of property and equipment 56 390 Stock-based compensation 11,908 6,418 Deferred income taxes (5,668) (1,837) Changes in reserves and allowances 3,617 (1,917) Changes in operating assets and liabilities: Accounts receivable (76,018) (60,391) Inventories (4,323) 1,552 Prepaid expenses and other assets 9,559 4,538 Accounts payable (10,558) (6,052) Accrued expenses and other liabilities (11,780) (26,041) Income taxes payable and receivable (11,591) (13,274) Net cash used in operating activities (74,536) (73,048) Cash flows from investing activities Purchases of property and equipment (18,329) (8,839) Change in restricted cash — (198) Net cash used in investing activities (18,329) (9,037) Cash flows from financing activities Payments on long term debt (1,443) (1,943) Excess tax benefits from stock-based compensation 4,222 9,500 arrangements Proceeds from exercise of stock options and other stock 4,670 6,868 issuances Net cash provided by financing activities 7,449 14,425 Effect of exchange rate changes on cash and cash (703) (672) equivalents Net decrease in cash and cash equivalents (86,119) (68,332) Cash and cash equivalents Beginning of period 341,841 175,384 End of period $ 255,722 $ 107,052 Non-cash investing and financing activities Increase (decrease) in accrual for property and $ (7,380) $ 436 equipment SOURCE Under Armour, Inc. Website: http://www.underarmour.com Contact: Investors: Tom Shaw, CFA, Under Armour, Inc., Tel: 410.843.7676; Media: Erin Wendell, Under Armour, Inc., Tel: 410.454.6570
Under Armour Reports First Quarter Net Revenues Growth of 23%; Raises Full Year Outlook
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