- First Quarter Net Revenues Increased 36% to $642 Million
- First Quarter Diluted EPS Increased 71% to $0.06, Adjusted for the Company's Two-for-One Stock Split
- Company Raises 2014 Net Revenues Outlook to a Range of $2.88 Billion to $2.91 Billion (+24% to +25%)
- Company Raises 2014 Operating Income Outlook to a Range of $331 Million to $334 Million (+25% to +26%)
BALTIMORE, April 24, 2014-- Under Armour, Inc. (NYSE: UA)
today announced financial results for the first quarter ended March 31,
2014. Net revenues increased 36% in the first quarter of 2014 to $642 million compared with net revenues of $472 million in the prior year's period.
Net income increased 73% in the first quarter of 2014 to $14 million compared with $8 million in the prior year's period. Diluted earnings per share for the first quarter of 2014 were $0.06 per share on weighted average common shares outstanding of 217 million compared with $0.04
per share on weighted average common shares outstanding of 214 million
in the prior year's period.
Diluted earnings per share calculations for
both periods reflect the Company's two-for-one stock split effective April 14, 2014.
First quarter apparel net revenues increased 33% to $459 million compared with $346 million
in the same period of the prior year, including expanded offerings in
categories such as golf, hunting, training, studio, and basketball.
First quarter footwear net revenues increased 41% to $114 million from $81 million
in the prior year's period, led by new introductions in running
including SpeedForm Apollo. First quarter accessories net revenues
increased 43% to $52 million from $36 million
in the prior year's period, primarily driven by headwear.
Direct-to-Consumer net revenues, which represented 26% of total net
revenues for the first quarter, grew 33% year-over-year. International
net revenues, which represented 9% of total net revenues for the first
quarter, grew 79% year-over-year.
Kevin Plank,
Chairman and CEO of Under Armour, Inc., stated, "We are off to a great
start in 2014 driven by broad-based strength across our Apparel,
Footwear, and International growth drivers. Our formula for driving
newness and innovation in Apparel continues to resonate with consumers
and helped deliver over 30% growth for our largest product category.
That same model is contributing to success in Footwear, where we
accelerated growth in running and brought award-winning product to the
marketplace with the SpeedForm Apollo. Finally, we enhanced our ability
to reach the global athlete, including the recent expansion of our
brand in key Latin American markets, as well as strong gains across Europe and Asia."
Gross
margin for the first quarter of 2014 was 46.9% compared with 45.9% in
the prior year's quarter, primarily driven by supply chain enhancements
and a favorable sales mix in the Factory House outlet business.
Selling, general and administrative expenses as a percentage of net
revenues were 42.7% in the first quarter of 2014 compared with 43.1% in
the prior year's period. First quarter operating income increased to $27 million compared with $13 million in the prior year's period.
Balance Sheet Highlights
Cash and cash equivalents decreased 30% to $180 million at March 31, 2014 compared with $256 million at March 31, 2013. Inventory at March 31, 2014 increased 46% to $472 million compared with $324 million at March 31, 2013. The Company had $100 million in debt outstanding under its $300 million revolving credit facility at March 31, 2014. In support of the Company's Connected Fitness platform, the $150 million purchase of MapMyFitness in December was funded using $50 million in cash and $100 million under the revolving credit facility. Long-term debt, including current maturities, decreased to $52 million at March 31, 2014 from $60 million at March 31, 2013.
Updated 2014 Outlook
Based on current visibility, the Company expects 2014 net revenues in the range of $2.88 billion to $2.91 billion, representing growth of 24% to 25% over 2013, and 2014 operating income in the range of $331 million to $334 million, representing growth of 25% to 26% over 2013.
Mr.
Plank concluded, "This strong start to 2014 illustrates the unlimited
potential that still lies ahead for our Brand, whether it is today's
opening of our Brand House in New York City
or our product hitting shelves for the first time in Brasil. Our
opportunity requires that we remain focused on building powerful product
platforms that service athletes at home and abroad, on and off the
playing field.
In the quarters ahead, we will continue to build upon
some of our most recent platform launches like SpeedForm and ColdGear
Infrared, while also delivering the overall product innovation and
performance that athletes have come to expect from our Brand.
Through
the lens of our global Brand Holidays and leveraging our diverse array
of sports marketing and Connected Fitness assets, we are well positioned
to tell these stories in new and powerful ways."
Conference Call and Webcast
About Under Armour, Inc.
Under Armour (NYSE: UA),
the originator of performance footwear, apparel and accessories,
revolutionized how athletes across the world dress. Designed to make all
athletes better, the brand's innovative products are sold worldwide to
athletes at all levels. Under Armour's wholly owned subsidiary,
MapMyFitness, powers one of the world's largest Connected Fitness
communities. The Under Armour global headquarters is in Baltimore, Maryland.
For further information, please visit the Company's website at
www.uabiz.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 global 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 lose market share or reduce the
prices of our products or to increase significantly our marketing
efforts; 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;
our ability to further expand our business globally and to drive brand
awareness and consumer acceptance of our products in other countries;
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; our ability to
comply with trade and other regulations; the availability, integration
and effective operation of management information systems and other
technology; our ability to effectively integrate new businesses and
investments into our company; our potential exposure to litigation and
other proceedings; and our ability to attract and retain 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, 2014 and 2013
|
|
(Unaudited; in thousands, except per share amounts)
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
Quarter Ended
March 31,
|
|
|
2014
|
|
% of Net
Revenues
|
|
2013
|
|
% of Net
Revenues
|
|
Net revenues
|
|
$
|
641,607
|
|
|
100.0
|
%
|
|
$
|
471,608
|
|
|
100.0
|
%
|
|
Cost of goods sold
|
|
340,917
|
|
|
53.1
|
%
|
|
255,057
|
|
|
54.1
|
%
|
|
Gross profit
|
|
300,690
|
|
|
46.9
|
%
|
|
216,551
|
|
|
45.9
|
%
|
|
Selling, general and administrative expenses
|
|
273,834
|
|
|
42.7
|
%
|
|
203,059
|
|
|
43.1
|
%
|
|
Income from operations
|
|
26,856
|
|
|
4.2
|
%
|
|
13,492
|
|
|
2.9
|
%
|
|
Interest expense, net
|
|
(846)
|
|
|
(0.1)
|
%
|
|
(725)
|
|
|
(0.2)
|
%
|
|
Other income (expense), net
|
|
(874)
|
|
|
(0.2)
|
%
|
|
240
|
|
|
0.1
|
%
|
|
Income before income taxes
|
|
25,136
|
|
|
3.9
|
%
|
|
13,007
|
|
|
2.8
|
%
|
|
Provision for income taxes
|
|
11,598
|
|
|
1.8
|
%
|
|
5,193
|
|
|
1.1
|
%
|
|
Net income
|
|
$
|
13,538
|
|
|
2.1
|
%
|
|
$
|
7,814
|
|
|
1.7
|
%
|
|
Net income available per common share
|
|
|
|
|
|
|
Basic
|
|
$
|
0.06
|
|
|
|
|
$
|
0.04
|
|
|
|
|
Diluted
|
|
$
|
0.06
|
|
|
|
|
$
|
0.04
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
Basic
|
|
212,383
|
|
|
|
|
209,796
|
|
|
|
|
Diluted
|
|
216,912
|
|
|
|
|
214,192
|
|
|
|
|
NET REVENUES BY PRODUCT CATEGORY
|
|
|
|
|
|
|
Quarter Ended
March 31,
|
|
|
2014
|
|
2013
|
|
% Change
|
|
Apparel
|
|
$
|
459,249
|
|
|
$
|
345,526
|
|
|
32.9
|
%
|
|
Footwear
|
|
114,044
|
|
|
80,783
|
|
|
41.2
|
%
|
|
Accessories
|
|
51,553
|
|
|
36,082
|
|
|
42.9
|
%
|
|
Total net sales
|
|
624,846
|
|
|
462,391
|
|
|
35.1
|
%
|
|
Licensing and other revenues
|
|
16,761
|
|
|
9,217
|
|
|
81.8
|
%
|
|
Total net revenues
|
|
$
|
641,607
|
|
|
$
|
471,608
|
|
|
36.0
|
%
|
|
NET REVENUES BY SEGMENT
|
|
|
|
|
|
|
Quarter Ended
March 31,
|
|
|
2014
|
|
2013
|
|
% Change
|
|
North America
|
|
$
|
582,552
|
|
|
$
|
440,868
|
|
|
32.1
|
%
|
|
Other foreign countries and businesses
|
|
59,055
|
|
|
30,740
|
|
|
92.1
|
%
|
|
Total net revenues
|
|
$
|
641,607
|
|
|
$
|
471,608
|
|
|
36.0
|
%
|
|
Under Armour, Inc.
|
|
As of March 31, 2014, December 31, 2013 and March 31, 2013
|
|
(Unaudited; in thousands)
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
As of
3/31/14
|
|
As of
12/31/13
|
|
As of
3/31/13
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
179,926
|
|
|
$
|
347,489
|
|
|
$
|
255,722
|
|
|
Accounts receivable, net
|
|
331,299
|
|
|
209,952
|
|
|
246,218
|
|
|
Inventories
|
|
472,244
|
|
|
469,006
|
|
|
323,509
|
|
|
Prepaid expenses and other current assets
|
|
100,857
|
|
|
63,987
|
|
|
37,227
|
|
|
Deferred income taxes
|
|
40,831
|
|
|
38,377
|
|
|
24,765
|
|
|
Total current assets
|
|
1,125,157
|
|
|
1,128,811
|
|
|
887,441
|
|
|
Property and equipment, net
|
|
240,721
|
|
|
223,952
|
|
|
180,591
|
|
|
Goodwill
|
|
123,388
|
|
|
122,244
|
|
|
—
|
|
|
Intangible assets, net
|
|
31,571
|
|
|
24,097
|
|
|
3,842
|
|
|
Deferred income taxes
|
|
35,538
|
|
|
31,094
|
|
|
26,281
|
|
|
Other long term assets
|
|
42,641
|
|
|
47,543
|
|
|
42,333
|
|
|
Total assets
|
|
$
|
1,599,016
|
|
|
$
|
1,577,741
|
|
|
$
|
1,140,488
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
Revolving credit facility
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
$
|
—
|
|
|
Accounts payable
|
|
166,920
|
|
|
165,456
|
|
|
127,327
|
|
|
Accrued expenses
|
|
103,844
|
|
|
133,729
|
|
|
66,969
|
|
|
Current maturities of long term debt
|
|
4,812
|
|
|
4,972
|
|
|
8,787
|
|
|
Other current liabilities
|
|
11,676
|
|
|
22,473
|
|
|
3,246
|
|
|
Total current liabilities
|
|
387,252
|
|
|
426,630
|
|
|
206,329
|
|
|
Long term debt, net of current maturities
|
|
46,846
|
|
|
47,951
|
|
|
51,658
|
|
|
Other long term liabilities
|
|
56,341
|
|
|
49,806
|
|
|
39,343
|
|
|
Total liabilities
|
|
490,439
|
|
|
524,387
|
|
|
297,330
|
|
|
Total stockholders' equity
|
|
1,108,577
|
|
|
1,053,354
|
|
|
843,158
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,599,016
|
|
|
$
|
1,577,741
|
|
|
$
|
1,140,488
|
|
|
Under Armour, Inc.
|
|
|
|
For the Quarter Ended March 31, 2014 and 2013
|
|
|
|
(Unaudited; in thousands)
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
Quarter Ended
March 31,
|
|
|
2014
|
|
2013
|
|
Cash flows from operating activities
|
|
|
|
|
|
Net income
|
|
$
|
13,538
|
|
|
$
|
7,814
|
|
|
Adjustments to reconcile net income to net cash used in operating activities
|
|
|
|
|
|
Depreciation and amortization
|
|
17,320
|
|
|
11,842
|
|
|
Unrealized foreign currency exchange rate losses
|
|
655
|
|
|
606
|
|
|
Loss on disposal of property and equipment
|
|
52
|
|
|
56
|
|
|
Stock-based compensation
|
|
13,220
|
|
|
11,908
|
|
|
Deferred income taxes
|
|
(6,913)
|
|
|
(5,668)
|
|
|
Changes in reserves and allowances
|
|
2,282
|
|
|
3,617
|
|
|
Changes in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
Accounts receivable
|
|
(121,091)
|
|
|
(76,018)
|
|
|
Inventories
|
|
(3,915)
|
|
|
(4,323)
|
|
|
Prepaid expenses and other assets
|
|
(15,479)
|
|
|
9,559
|
|
|
Accounts payable
|
|
7,141
|
|
|
(10,558)
|
|
|
Accrued expenses and other liabilities
|
|
(25,841)
|
|
|
(11,780)
|
|
|
Income taxes payable and receivable
|
|
(28,505)
|
|
|
(11,591)
|
|
|
Net cash used in operating activities
|
|
(147,536)
|
|
|
(74,536)
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
Purchases of property and equipment
|
|
(39,715)
|
|
|
(18,329)
|
|
|
Purchase of business
|
|
(10,924)
|
|
|
—
|
|
|
Purchases of other assets
|
|
(261)
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
(50,900)
|
|
|
(18,329)
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
Payments on long term debt
|
|
(1,265)
|
|
|
(1,443)
|
|
|
Excess tax benefits from stock-based compensation arrangements
|
|
24,038
|
|
|
4,222
|
|
|
Proceeds from exercise of stock options and other stock issuances
|
|
8,627
|
|
|
4,670
|
|
|
Net cash provided by financing activities
|
|
31,400
|
|
|
7,449
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(527)
|
|
|
(703)
|
|
|
Net decrease in cash and cash equivalents
|
|
(167,563)
|
|
|
(86,119)
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
Beginning of period
|
|
347,489
|
|
|
341,841
|
|
|
End of period
|
|
$
|
179,926
|
|
|
$
|
255,722
|
|
|
|
|
|
|
|
Non-cash investing and financing activities
|
|
|
|
|
|
Decrease in accrual for property and equipment
|
|
$
|
(8,650)
|
|
|
$
|
(7,380)
|
|
SOURCE Under Armour, Inc.
http://www.underarmour.com
