USA: Timberland's Core Focus Pays Off With Record Results
For the third quarter of 2000, the company earned $57.5 million, or $1.35 per share diluted ($1.44 basic), compared with net income of $35.1 million, or $0.81 per share diluted ($0.83 basic), for the third quarter of 1999. Revenue for the third quarter of 2000 totaled $375.2 million, 20.7 per cent higher than the $310.9 million reported for the third quarter of 1999.
Results for the 2000 third quarter reflect the company's February acquisition of four Asian subsidiaries and its August purchase of Taiwanese assets from Inchcape Plc, its former distributor for the Asia/Pacific region. Excluding the impact of Asia, revenue for the third quarter of 2000 grew 15.2 per cent.
Domestic revenue for the third quarter of 2000 was $272.0 million, 22.4 per cent higher than the $222.1 million reported for the third quarter of 1999. International revenue for the quarter increased 16.3 per cent to $103.2 million, compared with $88.8 million for the prior-year period.
International results for 2000 reflect the Asian acquisition. Excluding this, international revenue for the 2000 third quarter decreased 3.1 per cent. On a constant dollar basis, international revenue, excluding the impact of Asia, increased 10.5 per cent. International revenue comprised 27.5 per cent of total third quarter 2000 revenue, compared with 28.6 per cent for the third quarter of 1999.
Worldwide footwear revenue for the third quarter of 2000 was $297.4 million, 18.2 per cent higher than the $251.8 million reported for the third quarter of 1999. Worldwide apparel and accessories revenue for the quarter increased 36.5 per cent to $73.6 million, compared with $53.9 million for the 1999 third quarter.
Worldwide retail revenue for the third quarter of 2000 was $74.0 million, 31.8 per cent higher than the $56.1 million reported for the third quarter of 1999. Excluding Asia, worldwide retail revenue for the quarter increased 13.4 per cent. Domestic retail revenue for the 2000 third quarter increased by 12.7 per cent to $53.6 million, compared with $47.5 million for the 1999 third quarter. Domestic comparable store sales for the quarter grew by 1.5 per cent.
For the first nine months of 2000, Timberland earned $83.2 million, or $1.95 per share diluted ($2.07 basic) before the $2.1 million after-tax extraordinary item recorded in the second quarter resulting from the prepayment of $100 million in senior notes. This result compared with net income of $45.4 million, or $1.02 per share diluted ($1.05 basic) for the first nine months of 1999. Earnings for the first nine months of 2000, including the after-tax extraordinary item, were $81.1 million, or $1.90 per share diluted ($2.01 basic). Revenue for the first nine months of 2000 was $760.9 million, 18.7 percent higher than the $640.8 million reported for the first nine months of 1999. Excluding the impact of Asia, revenue for the first nine months of 2000 grew 13.5 per cent.
In making the announcement, Jeffrey B. Swartz, Timberland's president and chief executive officer, stated: "Timberland's third quarter results reflect the company's continued focus on its core strategic objectives: (1) to build Timberland into an integrated, global lifestyle brand; (2) to develop a corporate culture focused on speed and service; and (3) to transform community.
"Sales results for the third quarter reflect strong double-digit growth across products, channels and geographies. Growth in revenue, combined with a 4.3 percentage point improvement in gross margin, and operating expense leverage, led to a 63 per cent increase in net income. At the same time, the Company made further asset management improvements. We are proud of Timberland's accomplishments to date and believe that the company is well-positioned to deliver against its full year financial objectives which include (1) delivering double-digit revenue growth; (2) growing earnings at a rate faster than revenue growth; and (3) generating strong positive cash flow for the year."
The company also announced that its Board of Directors has authorized the repurchase of up to an additional four million shares of its Class A Common Stock. This new program supplements the current four million share authorization, of which approximately 468 thousand shares remained outstanding at the end of the third quarter. As with the existing program, the new program will be conducted from time to time, in the discretion of management, and as market and business conditions may warrant. The company may use repurchased shares to offset shares which may be issued under the stock-based employee incentive plans.
The Timberland Company designs, engineers and markets premium-quality footwear, apparel and accessories. Timberland is headquartered in Stratham, NH.
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