Deckers Outdoor Corporation Reports Fourth Quarter And Fiscal 2013 Financial Results

 Deckers Outdoor Corporation Reports Fourth Quarter And Fiscal 2013 Financial
                                   Results

Fourth Quarter Sales Increased 19.2% to a Record $736.0 Million

Company Reports Fourth Quarter Diluted Earnings Per Share Increased 45.8% to a
Record $4.04

Fiscal 2013 Sales Increased 10.1% to a Record $1.557 Billion

Company Reports Fiscal 2013 Diluted Earnings Per Share Increased 21.2% to
$4.18

PR Newswire

GOLETA, Calif., Feb. 27, 2014

GOLETA, Calif., Feb. 27, 2014 /PRNewswire/ -- Deckers Outdoor Corporation
(NASDAQ: DECK), a global leader in designing, marketing, and distributing
innovative footwear, apparel and accessories, today announced financial
results for the fourth quarter and fiscal year ended December 31, 2013.

Fourth Quarter Review

  oNet sales increased 19.2% to a record $736.0 million compared to $617.3
    million for the same period last year.
  oGross margin improved 480 basis points to 51.1% compared to 46.3% for the
    same period last year.
  oDiluted earnings per share increased 45.8% to a record $4.04 compared to
    $2.77 for the same period last year.
  oUGG® brand sales increased 18.1% to $690.9 million compared to $584.8
    million for the same period last year.
  oSanuk® brand sales increased 45.2% to $22.2 million compared to $15.3
    million for the same period last year.
  oTeva® brand sales increased 13.6% to $15.5 million compared to $13.7
    million for the same period last year.
  oDirect-to-Consumer comparable sales, which include worldwide retail same
    store sales and worldwide E-Commerce sales, increased 19.0%.
  oRetail sales increased 31.4% to $178.0 million compared to $135.5 million
    for the same period last year; same store sales increased 6.1% for the
    thirteen weeks ending December 29, 2013 compared to the thirteen weeks
    ending December 30, 2012.
  oE-Commerce sales increased 33.9% to $117.3 million compared to $87.6
    million for the same period last year.
  oDomestic sales increased 14.3% to $510.7 million compared to $446.7
    million for the same period last year.
  oInternational sales increased 32.1% to $225.3 million compared to $170.6
    million for the same period last year.

Fiscal 2013  Review

  oNet sales increased 10.1% to a record $1.557 billion compared to $1.414
    billion last year.
  oGross margin improved 260 basis points to 47.3% compared to 44.7% last
    year.
  oDiluted earnings per share increased 21.2% to $4.18 compared to $3.45 last
    year.
  oUGG brand sales increased 9.7% to $1.299 billion compared to $1.184
    billion last year.
  oSanuk brand sales increased 8.2% to $101.7 million compared to $94.0
    million last year.
  oTeva brand sales increased 0.8% to $116.4 million compared to $115.5
    million last year.
  oDirect-to-Consumer comparable sales, which include worldwide retail same
    store sales and worldwide E-Commerce sales, increased 16.0%.
  oRetail sales increased 32.8% to $326.7 million compared to $246.0 million
    last year; same store sales increased 2.8% for the 52 weeks ending
    December 29, 2013 compared to the 52 weeks ending December 30, 2012.
  oE-Commerce sales increased 29.8% to $169.5 million compared to $130.6
    million last year.
  oDomestic sales increased 7.1% to $1.042 billion compared to $973.0 million
    last year.
  oInternational sales increased 16.5% to $514.3 million compared to $441.4
    million last year.

"Our strong fourth quarter performance capped off a year of solid strategic
progress," commented Angel Martinez, President, Chief Executive Officer and
Chair of the Board of Directors. "We believe that the concerted investments
we are making in our brands, distribution platforms and infrastructure are
leading to improved financial and operating results as we expand our
direct-to-consumer footprint and elevate our Omni-Channel resources. Our
sales and earnings growth were driven by strong full price selling throughout
each of our distribution channels and geographic regions. The power of the
UGG brand was on full display during the recent holiday season as consumers
responded very positively to our most complete product line ever. Looking
ahead, we expect to be well positioned to execute our consumer centric growth
strategy with compelling new product introductions, engaging store experiences
and a dynamic online offering. We are excited about the direction the Company
is headed and we are committed to capitalizing on the many expansion
opportunities that we believe are in front of us."

Division Summary

UGG Brand
UGG brand net sales for the fourth quarter increased 18.1% to $690.9 million
compared to $584.8 million for the same period last year. The increase in
sales was driven by sales gains across all primary channels, including the
sales contribution from new retail store openings and an increase in same
store sales, an increase in global E-Commerce sales, and higher domestic and
international wholesale sales. For the full year, UGG brand net sales
increased 9.7% to $1.299 billion compared to $1.184 billion last year. 

Sanuk Brand
Sanuk brand net sales for the fourth quarter increased 45.2% to $22.2 million
compared to $15.3 million for the same period last year. The increase in
sales was primarily attributable to an increase in international distributor
sales as well as higher domestic wholesale sales. For the full year, Sanuk
brand net sales increased 8.2% to $101.7 million compared to $94.0 million
last year.

Teva Brand
Teva brand net sales for the fourth quarter increased 13.6% to $15.5 million
compared to $13.7 million for the same period last year. The increase in
sales was driven primarily by higher domestic and international wholesale
sales and higher international distributor sales. For the full year, Teva
brand net sales increased 0.8% to $116.4 million compared to $115.5 million
last year.

Other Brands
Combined net sales of the Company's other brands increased 110.1% to $7.4
million for the fourth quarter compared to $3.5 million for the same period
last year. The increase was attributable to the addition of the HOKA ONE ONE®
brand and to a 100.0% increase in sales for the Ahnu® brand compared to the
same period last year. For the full year, combined net sales of the Company's
other brands increased 85.8% to $39.7 million compared to $21.3 million last
year.

Retail Stores
Sales for the global retail store business, which are included in the brand
sales numbers above, increased 31.4% to $178.0 million for the fourth quarter
compared to $135.5 million for the same period last year. This increase was
driven by 40 new stores opened after the fourth quarter of 2012 and by a same
store sales increase of 6.1% for the thirteen weeks ending December 29, 2013
compared to the thirteen weeks ending December 30, 2012. For the full year,
sales for the retail store business increased 32.8% to $326.7 million compared
to $246.0 million last year.

E-Commerce
Sales for the global E-Commerce business, which are included in the brand
sales numbers above, increased 33.9% to $117.3 million for the fourth quarter
compared to $87.6 million for the same period last year. The sales increase
was driven primarily by strong domestic and international sales for the UGG
brand, increased domestic sales of the Sanuk brand, plus the addition of new
international E-Commerce websites. For the full year, sales for the
E-Commerce business increased 29.8% to $169.5 million compared to $130.6
million last year.

Balance Sheet
At December 31, 2013, cash and cash equivalents were $237.1 million compared
to $110.2 million at December 31, 2012. The Company had $9.7 million in
outstanding borrowings under its credit facility at December 31, 2013 compared
to $33.0 million at December 31, 2012. The increase in cash and cash
equivalents and the decrease in outstanding borrowings are primarily
attributable to improved inventories and cash provided by operations,
partially offset by $79.8 million of cash payments for capital assets
primarily related to retail expansion and the Company's new headquarters
facility. 

Inventories at December 31, 2013 decreased 13.1% to $260.8 million from $300.2
million at December 31, 2012. By brand, UGG inventory decreased $43.6 million
to $204.7 million at December 31, 2013, Teva inventory increased $0.4 million
to $28.3 million at December 31, 2013, Sanuk inventory decreased $1.1 million
to $13.4 million at December 31, 2013, and the other brands' inventory
increased $4.9 million to $14.4 million at December 31, 2013.

Fiscal Year Change
The Company's Board of Directors has authorized a change in its fiscal year
end to March 31 from December 31. This change will be effective March 31,
2014. Based on the seasonality of the business and the timing of the fall
pre-book process, the change in fiscal year gives the company greater
visibility into projecting revenue growth, planning expenses, and
incorporating the results from the holiday season into product, merchandising
and marketing initiatives for the upcoming year. The Company will report
results for the three-month transition period of January 1, 2014 through March
31, 2014. The first 12-month fiscal year will run from April 1, 2014 through
March 31, 2015.

Full Calendar Year Outlook For the 12-Month Period Ending December 31, 2014

  oBased upon current visibility, the Company expects full calendar year
    revenues to increase approximately 10% over 2013 levels.
  oThe Company expects full calendar year diluted earnings per share to
    increase approximately 8% over 2013 levels. This guidance assumes a gross
    profit margin of approximately 49% and an operating margin of
    approximately 13%.
  oThe Company expects full calendar year SG&A expenses as a percentage of
    sales to be approximately 36%. Among other items, these expenses include
    increased marketing costs, investments in IT infrastructure, international
    supply chain and distribution, expenses related to management
    reorganization and costs associated with opening 40 new stores in 2013 as
    well as the addition of new store openings in 2014.
  oThe Company expects full calendar year UGG brand revenues to increase
    approximately 9% over 2013 levels.
  oThe Company expects full calendar year Teva brand revenues to increase
    approximately 5% over 2013 levels.
  oThe Company expects full calendar year Sanuk brand revenues to increase
    approximately 10% over 2013 levels.
  oCombined full calendar year net sales of the Company's other brands are
    expected to be approximately $65 million.
  oCalendar year 2014 guidance also assumes that the Company's effective tax
    rate will be approximately 29%.

First Quarter Outlook

  oThe Company currently expects first calendar quarter 2014 revenues to
    increase approximately 6% over first quarter 2013 levels, and expects to
    report a first calendar quarter 2014 diluted loss per share of
    approximately $(0.16) compared to a diluted earnings per share of $0.03
    reported in the first quarter of 2013.
  oAs a reminder, a significant amount of our operating expenses are fixed
    and spread evenly on an absolute dollar basis throughout each quarter.
    This includes the costs associated with the 28 new stores that were not
    open until the second half of 2013. Therefore, we expect our earnings to
    decline in the first half of 2014 as compared to the first half of 2013,
    which are typically our lowest volume sales quarters, and increase over
    2013 in the back half of the calendar year.

Conference Call Information
The Company's conference call to review fourth quarter 2013 results will be
broadcast live over the internet today, Thursday, February 27, 2014 at 4:30 pm
Eastern Time. The broadcast will be hosted at www.deckers.com. You can
access the broadcast by clicking on the "Investors" tab and then clicking on
the microphone icon on the right side of the screen.

About the Company
Deckers Outdoor Corporation is a global leader in designing, marketing and
distributing innovative footwear, apparel and accessories developed for both
everyday casual lifestyle use and high performance activities. The Company's
portfolio of brands includes UGG® Australia, Teva®, Sanuk®, TSUBO®, Ahnu®,
MOZO®, and HOKA ONE ONE®. Deckers Outdoor products are sold in more than 50
countries and territories through select department and specialty stores, 117
Company-owned and operated retail stores, and select online stores, including
Company-owned websites. Deckers Outdoor has a 40-year history of building
niche footwear brands into lifestyle market leaders attracting millions of
loyal consumers globally. For more information, please visit www.deckers.com.

Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of
Section27A of the Securities Act of 1933, as amended, and Section21E of the
Securities Exchange Act of 1934, as amended, that concern matters that involve
risks and uncertainties that could cause actual results to differ materially
from those anticipated or projected in the forward-looking statements. These
forward-looking statements are intended to qualify for the safe harbor from
liability established by the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact contained in
this press release, including statements regarding our future financial
performance and business strategies, are forward-looking statements. We have
attempted to identify forward-looking statements by using words such as
"anticipate," "believe," "estimate," "expect," "intend," "may," "project,"
"plan", "predict", "should," "will," and similar expressions, or the negative
of these expressions, as they relate to us, our management and our industry,
to identify forward-looking statements. We have based our forward-looking
statements on our current expectations and projections about trends affecting
our business and industry and other future events. Although we do not make
forward-looking statements unless we believe we have a reasonable basis for
doing so, we cannot guarantee their accuracy. As a result, actual results may
differ materially from the results stated in or implied by our forward-looking
statements. Some of the risks, uncertainties and assumptions that may cause
actual results to differ from these forward-looking statements include, but
are not limited to: changes in economic or market conditions; the financial
success of our customers and the risk of losing one or more of our key
customers; our ability to adequately protect our intellectual property rights
and deter counterfeiting; the sensitivity of our sales to seasonality and the
effect of weather conditions; the quality and price of raw materials, most
notably sheepskin; our ability to realize returns on our new and existing
retail stores; our ability to accurately forecast consumer demand; our ability
to anticipate fashion trends; our ability to successfully implement our growth
strategies, including enhancing the position of our brands and expanding our
distribution channels; the impairment of our goodwill and other intangible
assets; our dependence on independent manufacturers located outside of the
U.S., and the challenge of maintaining a continuous supply of quality finished
goods; risks of conducting business outside the U.S., including foreign
currency and global liquidity risks; our ability to protect sensitive customer
and company information and prevent the failure or interruption of key
business processes; our ability to attract and retain key personnel; the loss
of our warehouses; the international markets in which we sell our products are
subject to a variety of laws and political and economic risks; risks related
to international trade, import regulations and security procedures, liquidity
and market risks for our cash and cash equivalents; risks associated with our
revolving credit facility, including negative covenants that may restrict our
ability to take certain actions; tax laws applicable to our business are very
complicated and we could be subject to additional income tax liabilities; our
ability to compete effectively with our competition; the effect of existing
and future litigation on our business; and the volatility of the price of our
common stock. Certain of these risks and uncertainties are more fully
described in the section entitled "Risk Factors" in our Annual Report on Form
10-K for the fiscal year ended December 31, 2012, which we filed with the
Securities and Exchange Commission, or the SEC, on March 1, 2013, as well as
in our other filings with the SEC. In addition, actual results may differ as
a result of additional risks and uncertainties of which we are currently
unaware or which we do not currently view as material to our business.

You are cautioned not to place undue reliance on forward-looking statements
contained in this press release, which speak only as of the date of this press
release. You should read this press release with the understanding that our
future results may be materially different from what we currently expect. We
qualify all of our forward-looking statements by these cautionary statements
and we expressly disclaim any intent or obligation to update any
forward-looking statements after the date hereof to conform such statements to
actual results or to changes in our opinions or expectations, except as
required by applicable law or the rules of the NASDAQ Stock Market.

(Tables to follow)



DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands)
                                                    December 31,  December 31,
            Assets                                  2013          2012
Current assets:
     Cash and cash equivalents                    $ 237,125       110,247
     Trade accounts receivable, net                 184,013       190,756
     Inventories                                    260,791       300,173
     Prepaid expenses                               14,980        14,092
     Other current assets                           112,514       59,028
     Deferred tax assets                            19,881        17,290
         Total current assets                       829,304       691,586
Property and equipment, net                         174,066       125,370
Goodwill                                            128,725       128,725
Other intangible assets, net                        93,278        95,965
Deferred tax assets                                 15,751        13,372
Other assets                                        18,605        13,046
         Total assets                             $ 1,259,729     1,068,064
            Liabilities and Stockholders' Equity
Current liabilities:
     Short-term borrowings                        $ 9,728         33,000
     Trade accounts payable                         151,037       133,457
     Accrued payroll                                35,725        15,896
     Other accrued expenses                         74,575        59,597
     Income taxes payable                           49,453        25,067
         Total current liabilities                  320,518       267,017
Long-term liabilities                               51,092        62,246
Stockholders' equity:
 Deckers Outdoor Corporation stockholders'
 equity:
     Common stock                                   346           344
     Additional paid-in capital                     143,916       139,046
     Retained earnings                              746,500       600,811
     Accumulated other comprehensive loss           (2,643)       (1,400)
         Total stockholders' equity                 888,119       738,801
         Total liabilities and equity             $ 1,259,729     1,068,064



DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(Unaudited)
(Amounts in thousands, except for per share data)
                               Three-month period   Twelve-month period ended
                               ended
                               December 31,         December 31,
                               2013       2012      2013           2012
Net sales                    $ 736,048    617,264 $ 1,556,618      1,414,398
Cost of sales                  359,848    331,270   820,135        782,244
  Gross profit                 376,200    285,994   736,483        632,154
Selling, general and           174,701    141,880   528,586        445,206
administrative expenses
  Income from operations       201,499    144,114   207,897        186,948
Other expense, net             1,102      2,803     2,340          2,830
  Income before income taxes   200,397    141,311   205,557        184,118
Income tax expense            59,500     43,254    59,868         55,104
  Net income                  140,897    98,057    145,689        129,014
Other comprehensive (loss)
income, net of tax
  Unrealized (loss) gain on    (34)       313       (486)          (633)
  foreign currency hedging
  Foreign currency             (1,892)    (1,410)   (757)          963
  translation adjustment
       Total other
       comprehensive (loss)    (1,926)    (1,097)   (1,243)        330
       income
  Comprehensive income       $ 138,971    96,960  $ 144,446        129,344
Net income attributable to:
  Deckers Outdoor              140,897    98,057    145,689        128,866
  Corporation
  Noncontrolling interest      -          -         -              148
                             $ 140,897    98,057  $ 145,689        129,014
Comprehensive income
attributable to:
  Deckers Outdoor              138,971    96,960    144,446        129,196
  Corporation
  Noncontrolling interest      -          -         -              148
                             $ 138,971    96,960  $ 144,446        129,344
Net income per share
attributable to Deckers
 Outdoor Corporation common
stockholders:
  Basic                      $ 4.08       2.81    $ 4.23           3.49
  Diluted                    $ 4.04       2.77    $ 4.18           3.45
Weighted-average common
shares outstanding:
  Basic                       34,541     34,930    34,473         36,879
  Diluted                      34,893     35,373    34,829         37,334

SOURCE Deckers Outdoor Corporation

Website: http://www.deckers.com
Contact: Linda Pazin, VP, Investor Relations & Communications, (805) 967-7611
or Investor Relations, Brendon Frey, ICR, (203) 682-8200
 
Press spacebar to pause and continue. Press esc to stop.