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GOLETA, Calif., Feb 24, 2011 (BUSINESS WIRE) -- Deckers Outdoor Corporation (NASDAQGS: DECK) today announced record financial results for both the fourth quarter and fiscal year ended December 31, 2010.
Fourth Quarter Highlights
Fiscal 2010 Highlights
Angel Martinez, President, Chief Executive Officer and Chairman of the Board of Directors, stated: "Our outstanding fourth quarter performance demonstrated the continuing strength of the UGG brand across all channels and markets and helped push our annual sales beyond the $1 billion mark. This past holiday season was highlighted by strong demand for our most complete product line ever with sell through of several new styles and collections exceeding initial projections. We are extremely pleased that the growth strategies we have implemented resulted in record sales for both the UGG and Teva brands in 2010. More importantly, our overall business has diversified in terms of distribution, seasonality and geographies - trends we anticipate will continue, fueled by product innovation, company-owned retail expansion, and the growth of our international wholesale operations. As we have discussed previously, 2011 will be an investment year for Deckers as we strengthen the foundation for future long-term growth. While these distribution enhancements and additional expenditures will have a near-term impact on our earnings, we are confident we can deliver strong sales growth, improved margins, and greater expense leverage in the years ahead."
UGG brand net sales for the fourth quarter increased 23.8% to a record $412.8 million compared to $333.3 million for the same period last year. The sales gain was primarily attributable to an increase in full price selling at company-owned retail stores and on the Company's eCommerce websites, coupled with higher shipments to global distributors versus the same period a year ago. For the full year, UGG brand net sales increased 22.7% to a record $873.1 million compared to $711.8 million in 2009.
Teva brand net sales for the fourth quarter increased 26.2% to $13.3 million compared to $10.5 million for the same period last year. The increase in sales was primarily the result of an increase in distributor sales into the Asia region and an increase in global shipments of the fall line compared to a year ago. For the full year, Teva brand net sales increased 30.5% to $101.3 million compared to $77.7 million in 2009.
Combined net sales of the Company's other brands decreased 2.3% to $4.1 million for the fourth quarter compared to $4.2 million for the same period last year. For the full year, combined net sales increased 11.9% to $26.5 million versus $23.7 million in 2009.
Sales for the retail store business, which are included in the brand sales numbers above, increased 55.4% to $72.4 million for the fourth quarter compared to $46.6 million for the same period last year. This increase was driven by nine new stores and a same store sales increase of 11.6% for those stores that were open for the full three month periods ended December 31, 2009 and 2010. For the full year, sales for the retail store business increased 59.1% to $125.6 million compared to $79.0 million in 2009. For those stores that were open during the full year of 2009 and 2010, same store sales grew by 16.6%.
Sales for the eCommerce business, which are included in the brand sales numbers above, increased 29.8% to $59.5 million for the fourth quarter compared to $45.9 million for the same period last year. The increase in sales resulted from higher demand for the fall line of the UGG brand compared to the same period last year. For the full year, sales for the eCommerce business increased 21.3% to $91.8 million compared to $75.7 million in 2009.
At December 31, 2010, cash and cash equivalents and short-term investments increased 30.2% to $445.2 million compared to $342.0 million at December 31, 2009. Inventories at December 31, 2010 increased 46.4% to $125.0 million from $85.4 million at December 31, 2009. By brand, UGG inventory increased $24.7 million to $94.7 million at December 31, 2010, Teva inventory increased $13.4 million to $22.7 million at December 31, 2010, and other brands inventory increased $1.5 million to $7.6 million at December 31, 2010. The increase in inventories at December 31, 2010 was primarily attributable to a larger spring 2011 assortment for the UGG brand, the growth in spring orders for the UGG and Teva brands, the warehousing of spring 2011 inventory supporting our continued conversion from an international distributor model to an international wholesale model, and increased retail stores.
Full-Year 2011 Outlook
First Quarter Outlook
The Company's conference call to review fourth quarter and fiscal 2010 results will be broadcast live over the internet today, Thursday, February 24, 2011 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. The broadcast will be available for at least 30 days following the conference call. You can also access the broadcast at www.earnings.com.
Deckers Outdoor Corporation strives to be a premier lifestyle marketer that builds niche brands into global market leaders by designing and marketing innovative, functional and fashion-oriented footwear developed for both high performance outdoor activities and everyday casual lifestyle use. Teva®, Simple® Shoes, UGG® Australia, TSUBO®, and Ahnu® 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" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are intended to qualify for the safe harbor from liability established by 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, some of which may be beyond our control, actual operating results in the future may differ materially from the future financial performance expected at the current time. In addition, the results reported in this release may differ from actual results filed with the Securities and Exchange Commission (SEC) for the year ended December 31, 2010 if material events or circumstances occur between now and our SEC filing. Those risks and uncertainties include, among others: the continued decline of the global economy; the ability to realize returns on our new and existing retail stores; our ability to anticipate fashion trends; a decline in wholesaler, distributer, or direct consumer demand or inventory needs; impairment charges related to a decline in the value of our brands' intangible assets below their carrying values; shortages or price fluctuations of raw materials that could interrupt product manufacturing and increase product costs; increased costs of manufacturing in China and Vietnam and actions by foreign governments; currency fluctuations; our ability to implement our growth strategy; the success of our customers, their ability to perform and obtain credit in an adverse economic environment and the risk of losing one or more of our key customers; our ability to develop and adequately 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 and store our products; the risk that retailers could postpone or cancel existing orders; unpredictable events and circumstances and currency risks related to our international operations; volatile credit and equity markets; liquidity and market risks for our cash equivalents and short-term investments; the risk of losing key personnel or the interruption of key information technology systems; a delay, increase in cost, or interruption in the delivery of merchandise to our customers; the sensitivity of our sales to seasonal and weather conditions; and we could be subject to additional income tax liabilities. 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, 2009, which the Company filed with the SEC on March 1, 2010, and under "Risk Factors" in any subsequent filings with the SEC. 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 or valuation of the Company.
|DECKERS OUTDOOR CORPORATION|
|Condensed Consolidated Balance Sheets|
|(Amounts in thousands)|
|December 31,||December 31,|
|Cash and cash equivalents||$||445,226||315,862|
|Trade accounts receivable, net||116,663||76,427|
|Prepaid expenses and other current assets||16,846||7,510|
|Deferred tax assets||12,002||9,712|
|Total current assets||715,732||520,987|
|Property and equipment, at cost, net||47,737||35,442|
|Intangible assets, net||24,918||23,940|
|Deferred tax assets||15,121||16,704|
|Liabilities and Stockholders' Equity|
|Trade accounts payable||$||67,073||47,331|
|Other accrued expenses||17,515||12,985|
|Income taxes payable||25,166||19,685|
|Total current liabilities||144,863||100,870|
|Deckers Outdoor Corporation stockholders' equity:|
|Additional paid-in capital||137,989||125,173|
|Accumulated other comprehensive income||1,153||494|
|Total Deckers Outdoor Corporation stockholders' equity||652,987||491,358|
|Total liabilities and equity||$||808,994||599,043|
|DECKERS OUTDOOR CORPORATION|
|Condensed Consolidated Statements of Income|
|(Amounts in thousands, except for per share data)|
|Three-month period ended||Twelve-month period ended|
|Cost of sales||196,789||174,548||498,051||442,087|
|Selling, general and administrative expenses||92,598||67,825||253,850||188,843|
|Income from operations||140,737||105,616||249,088||181,247|
|Other income, net||246||34||1,021||1,976|
|Income before income taxes||140,983||105,650||250,109||183,223|
|Income tax expense||49,628||37,602||89,732||66,304|
|Net income attributable to the|
|Net income attributable to Deckers Outdoor|
|Net income per share attributable to Deckers|
|Outdoor Corporation common stockholders:|
|Weighted-average common shares:|
SOURCE: Deckers Outdoor Corporation
Chief Financial Officer
Investor Relations: ICR
Brendon Frey, 203-682-8200