Under Armour Reports Fourth Quarter Net Revenues Growth of 35% and Full Year Net Revenues Growth of 27%; Raises Full Year 2014 Outlook - News, Weather and Sports for Lincoln, NE; KLKNTV.com

Under Armour Reports Fourth Quarter Net Revenues Growth of 35% and Full Year Net Revenues Growth of 27%; Raises Full Year 2014 Outlook

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SOURCE Under Armour, Inc.

- Fourth Quarter Net Revenues Increased 35% to $683 Million; Full Year Net Revenues Increased 27% to $2.33 Billion

- Fourth Quarter Diluted EPS Increased 27% to $0.59; Full Year Diluted EPS Increased 24% to $1.50

- Company Raises 2014 Net Revenues Outlook to a Range of $2.84 Billion to $2.87 Billion (+22% to +23%)

- Company Raises 2014 Operating Income Outlook to a Range of $326 Million to $329 Million (+23% to +24%)

BALTIMORE, Jan. 30, 2014 /PRNewswire/ -- Under Armour, Inc. (NYSE: UA) today announced financial results for the fourth quarter ended December 31, 2013.  Net revenues increased 35% in the fourth quarter of 2013 to $683 million compared with net revenues of $506 million in the prior year's period.  Net income increased 28% in the fourth quarter of 2013 to $64 million compared with $50 million in the prior year's period.  Diluted earnings per share for the fourth quarter of 2013 increased 27% to $0.59 compared with $0.47 in the prior year's period.

(Logo: http://photos.prnewswire.com/prnh/20110127/NE37387LOGO )

Fourth quarter apparel net revenues increased 35% to $546 million compared with $405 million in the same period of the prior year, primarily driven by expanded Fleece offerings and new ColdGear Infrared products.  Fourth quarter footwear net revenues increased 24% to $55 million from $45 million in the prior year's period, led by gains in running.  Fourth quarter accessories net revenues increased 52% to $65 million from $43 million in the prior year's period, primarily driven by headwear and gloves.  Direct-to-Consumer net revenues, which represented 39% of total net revenues for the fourth quarter, grew 36% year-over-year. 

Kevin Plank, Chairman and CEO of Under Armour, Inc., stated, "By any measure, 2013 was a banner year for the UA Brand.  We surpassed $2 billion in net revenues for the year, which culminated with our 15th straight quarter of at least 20% total growth.  In addition, we completed our first acquisition, MapMyFitness, opened our first two UA Brand House retail stores, and continued to make key investments in our Women's, Footwear and International businesses to drive long-term global growth.  While we are proud of what we have accomplished to date, we firmly believe we are just getting started and that our performance in 2013 is indicative of the opportunity that lies ahead for Under Armour."

Gross margin for the fourth quarter of 2013 was 51.3% compared with 50.3% in the prior year's quarter, primarily driven by the strength of the Brand contributing to a favorable sales mix.  Selling, general and administrative expenses as a percentage of net revenues were 36.9% in the fourth quarter of 2013 compared with 34.2% in the prior year's period, primarily reflecting higher incentive compensation costs.  Fourth quarter operating income increased to $98 million compared with $82 million in the prior year's period.  

Review of Full Year Operating Results
For the full year 2013, net revenues increased 27% to $2.33 billion compared with $1.83 billion in the prior year and compared with the Company's prior outlook of $2.26 billion.  Diluted earnings per share for 2013 increased 24% to $1.50 compared with $1.21 per share in the prior year.

Apparel net revenues increased 27% to $1.76 billion compared with $1.39 billion in the prior year, led by elevated newness across product categories like HeatGear and Fleece as well as innovation platforms including Storm, ColdGear Infrared and Charged Cotton.  Footwear net revenues increased 25% to $299 million during 2013 compared to $239 million in 2012, reflecting expanded offerings in both the running and cleated businesses.  Accessories net revenues increased 30% to $216 million during 2013 compared to $166 million in 2012, primarily driven by headwear and gloves.  Direct-to-Consumer net revenues, which represented 30% of total net revenues for the year compared to 29% in 2012, grew 33% over the prior year.

Gross margin for 2013 was 48.7% compared with 47.9% in 2012, primarily driven by favorable sales mix and lower year-over-year North American apparel and accessories product costs.  Selling, general and administrative expenses as a percentage of net revenues were 37.3% for 2013 compared with 36.5% for 2012, primarily reflecting higher incentive compensation costs, partially offset by the leveraging of marketing expenses.  Operating income grew 27% to $265 million in 2013 compared with $209 million in the prior year and compared with the Company's prior outlook of $260 million.

Balance Sheet Highlights
Cash and cash equivalents increased 2% to $347 million at December 31, 2013 compared with $342 million at December 31, 2012.  Inventory at December 31, 2013 increased 47% to $469 million compared with $319 million at December 31, 2012.  The Company had $100 million in debt outstanding under its $300 million revolving credit facility at December 31, 2013.  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 $53 million at December 31, 2013 from $62 million at December 31, 2012.

Updated 2014 Outlook
Based on current visibility, the Company expects 2014 net revenues in the range of $2.84 billion to $2.87 billion, representing growth of 22% to 23% over 2013, and 2014 operating income in the range of $326 million to $329 million, representing growth of 23% to 24% over 2013.  The Company expects an effective tax rate of approximately 39.0% for the full year, compared to an effective tax rate of 37.8% for 2013.  The Company anticipates fully diluted weighted average shares outstanding of approximately 109 million to 110 million for 2014.

Mr. Plank concluded, "We have tremendous momentum across our business and we will leverage this strength to fuel our global growth ambitions in 2014.  To start,  we have recently formed partnerships with three sports programs with deep, proud heritages:  the University of Notre Dame, the U.S. Naval Academy, and the Colo Colo futbol team in Chile.  In addition, today from Grand Central Station in New York City we are providing the first glimpse of our latest Global Brand Holiday, 'This Is What Fast Feels Like,' featuring our award-winning SpeedForm Apollo running shoe and our latest apparel technology, ArmourVent.  Our commitment to invest in these and other key initiatives positions the Brand to better reach all athletes and provide solutions to their 24/7 needs." 

Conference Call and Webcast
The Company will provide additional commentary regarding its fourth quarter results as well as its updated 2014 outlook during its earnings conference call today, January 30, at 8:30 a.m. ET.  The call will be webcast live at http://investor.underarmour.com/events.cfm and 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), 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. 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 or other regulations; the availability, integration and effective operation of management information systems and other technology; our ability to effectively interpret new business 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 and Year Ended December 31, 2013 and 2012

(Unaudited; in thousands, except per share amounts)


CONSOLIDATED STATEMENTS OF INCOME













Quarter Ended
December 31,


Year Ended
December 31,



2013


% of Net

Revenues


2012


% of Net

Revenues


2013


% of Net

Revenues


2012


% of Net

Revenues

Net revenues


$

682,756



100.0

%


$

505,863



100.0

%


$

2,332,051



100.0

%


$

1,834,921


100.0

%

Cost of goods sold


332,403



48.7

%


251,628



49.7

%


1,195,381



51.3

%


955,624


52.1

%

Gross profit


350,353



51.3

%


254,235



50.3

%


1,136,670



48.7

%


879,297


47.9

%

Selling, general and administrative expenses


251,886



36.9

%


172,643



34.2

%


871,572



37.3

%


670,602


36.5

%

Income from operations


98,467



14.4

%


81,592



16.1

%


265,098



11.4

%


208,695


11.4

%

Interest expense, net


(806)



(0.1)

%


(1,205)



(0.2)

%


(2,933)



(0.1)

%


(5,183)


(0.3)

%

Other income (expense), net


(502)



(0.1)

%


(634)



(0.1)

%


(1,172)



(0.1)

%


(73)


-

%

Income before income taxes


97,159



14.2

%


79,753



15.8

%


260,993



11.2

%


203,439


11.1

%

Provision for income taxes


32,993



4.8

%


29,621



5.9

%


98,663



4.2

%


74,661


4.1

%

Net income


$

64,166



9.4

%


$

50,132



9.9

%


$

162,330



7.0

%


$

128,778


7.0

%

Net income available per common share












Basic


$

0.61





$

0.48





$

1.54





$

1.23

Diluted


$

0.59





$

0.47





$

1.50





$

1.21



Weighted average common shares outstanding












Basic


105,696





104,687





105,348






104,343

Diluted


108,326





107,121





107,979






106,380


 

NET REVENUES BY PRODUCT CATEGORY




Quarter Ended
December 31,


Year Ended
December 31,



2013


2012


% Change


2013


2012


% Change

Apparel


$

545,505



$

404,527



34.9%


$

1,762,150



$

1,385,350



27.2%

Footwear


55,367



44,714



23.8%


298,825



238,955



25.1%

Accessories


64,618



42,601



51.7%


216,098



165,835



30.3%

Total net sales


665,490



491,842



35.3%


2,277,073



1,790,140



27.2%

Licensing and other revenues


17,266



14,021



23.1%


54,978



44,781



22.8%

Total net revenues


$

682,756



$

505,863



35.0%


$

2,332,051



$

1,834,921



27.1%

 

NET REVENUES BY REPORTABLE SEGMENT




Quarter Ended
December 31,


Year Ended
December 31,



2013


2012


% Change


2013


2012


% Change

North America


$

645,118



$

472,225



36.6%


$

2,193,739



$

1,726,733



27.0%

Other foreign countries and businesses


37,638



33,638



11.9%


138,312



108,188



27.8%

Total net revenues


$

682,756



$

505,863



35.0%


$

2,332,051



$

1,834,921



27.1%

 

Under Armour, Inc.

As of December 31, 2013 and 2012

(Unaudited; in thousands)


CONDENSED CONSOLIDATED BALANCE SHEETS




As of

12/31/13


As of

12/31/12

Assets





Cash and cash equivalents


$

347,489



$

341,841


Accounts receivable, net


209,952



175,524


Inventories


469,006



319,286


Prepaid expenses and other current assets


63,987



43,896


Deferred income taxes


38,377



23,051


Total current assets


1,128,811



903,598


Property and equipment, net


223,952



180,850


Goodwill and intangible assets, net


146,341



4,483


Deferred income taxes


31,094



22,606


Other long term assets


47,543



45,546


Total assets


$

1,577,741



$

1,157,083


Liabilities and Stockholders' Equity





Revolving credit facility


$

100,000



$

-


Accounts payable


165,456



143,689


Accrued expenses


133,729



85,077


Current maturities of long term debt


4,972



9,132


Other current liabilities


22,473



14,330


Total current liabilities


426,630



252,228


Long term debt, net of current maturities


47,951



52,757


Other long term liabilities


49,806



35,176


Total liabilities


524,387



340,161


Total stockholders' equity


1,053,354



816,922


Total liabilities and stockholders' equity


$

1,577,741



$

1,157,083


 

Under Armour, Inc.

For the Year Ended December 31, 2013 and 2012

(Unaudited; in thousands)


CONSOLIDATED STATEMENTS OF CASH FLOWS




Year Ended

December 31,



2013


2012

Cash flows from operating activities





Net income


$

162,330


$

128,778

Adjustments to reconcile net income to net cash provided by operating activities





Depreciation and amortization


50,549


43,082

Unrealized foreign currency exchange rate (gains) losses


1,905


(2,464)

Loss on disposal of property and equipment


332


524

Stock-based compensation


43,184


19,845

Deferred income taxes


(18,832)


(12,973)

Changes in reserves and allowances


13,945


13,916

Changes in operating assets and liabilities, net of effects of acquisitions:





Accounts receivable


(35,960)


(53,433)

Inventories


(156,900)


4,699

Prepaid expenses and other assets


(19,049)


(4,060)

Accounts payable


14,642


35,370

Accrued expenses and other liabilities


56,481


21,966

Income taxes payable and receivable


7,443


4,511

Net cash provided by operating activities


120,070


199,761

Cash flows from investing activities





Purchases of property and equipment


(87,830)


(50,650)

Purchases of businesses, net of cash acquired


(148,097)


-

Purchases of other assets


(475)


(1,310)

Change in loans receivable


(1,700)


-

Change in restricted cash


-


5,029

Net cash used in investing activities


(238,102)


(46,931)

Cash flows from financing activities





Proceeds from revolving credit facility


100,000


-

Payments on term loan


-


(25,000)

Proceeds from long term debt


-


50,000

Payments on long term debt


(5,471)


(44,330)

Excess tax benefits from stock-based compensation arrangements


17,167


17,868

Proceeds from exercise of stock options and other stock issuances


15,099


14,776

Payments of debt financing costs


-


(1,017)

Net cash provided by financing activities


126,795


12,297

Effect of exchange rate changes on cash and cash equivalents


(3,115)


1,330

Net increase in cash and cash equivalents


5,648


166,457

Cash and cash equivalents





Beginning of period


341,841


175,384

End of period


$

347,489


$

341,841






Non-cash investing and financing activities





Increase in accrual for property and equipment


$

3,786


$

12,137










 

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