8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 1, 2007

UNDER ARMOUR, INC.

(Exact name of registrant as specified in its charter)

Maryland	000-51626	52-1990078
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

1020 Hull Street, 3 rd Floor, Baltimore, Maryland	21230
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (410) 454-6428

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 1, 2007, Under Armour, Inc. issued a press release announcing its financial results for the fourth quarter and year ended December 31, 2006. A copy of Under Armour’s press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Under Armour has scheduled a conference call for 8:30 a.m. EST on February 1, 2007 to discuss its financial results, and portions of the script for that call are attached hereto as Exhibit 99.2 and are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 99.1: Under Armour, Inc. press release announcing financial results for the fourth quarter and year ended December 31, 2006.

Exhibit 99.2: Portions of conference call script for February 1, 2007 conference call.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UNDER ARMOUR, INC.
Date: February 1, 2007	By:	/s/ WAYNE A. MARINO
		Wayne A. Marino
		Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

Under Armour, Inc. 1020 Hull Street Baltimore, MD 21230
CONTACTS Investors: Alex Miyamoto Under Armour, Inc. Tel: 410.454.6578
Financial Media: Arnold Worldwide John Isaf Tel: 617.587.8923 Tel: 617.587.8905

FOR IMMEDIATE RELEASE

UNDER ARMOUR REPORTS RECORD RESULTS FOR FOURTH QUARTER AND FULL YEAR 2006; PROVIDES OUTLOOK FOR 2007

• Fourth Quarter Net Revenues Increased 55.0% to $135.3 Million; Diluted EPS of $0.24

• Full Year Net Revenues Increased 53.2% to $430.7 Million; Diluted EPS of $0.79

• Net Income for the Year Increased 97.7% to $39.0 Million, within the Range of the Company’s Previously Provided Outlook of $38.5 Million to $39.5 Million

• Income from Operations for the Year Increased 59.6% to $57.3 Million

• Company Provides 2007 Net Revenues Outlook of $560 Million to $580 Million (+30% to +35% over 2006)

• Company Provides 2007 Income from Operations Outlook of $74.5 Million to $77.5 Million (+30% to +35% over 2006)

Baltimore, MD (February 1, 2007) – Under Armour, Inc. (NYSE: UA) today announced financial results for the fourth quarter and year ended December 31, 2006.

Net revenues increased 55.0% in the fourth quarter to $135.3 million compared to net revenues of $87.3 million in the fourth quarter of 2005. Growth in apparel revenues accounted for $35.6 million of the year-over-year increase in net revenues for the quarter. Additionally, the Company reported $9.3 million in footwear revenues, largely driven by its launch into baseball and softball cleats.

Fourth quarter net income increased 69.4% to $11.9 million compared to $7.0 million in the same period of 2005. Diluted earnings per share was $0.24, on weighted average common shares outstanding of 49.8 million compared to $0.08 per share on weighted average common shares outstanding of 44.1 million in the fourth quarter of the prior year. The Company received a $1.0 million benefit to net income, or $0.02 per diluted share, as a result of the impact of state tax credits previously disclosed by the Company.

“In the third quarter, we reported our highest revenues in our 11 year history, and in the fourth quarter, we beat that record once again,” stated Kevin A. Plank, Chairman and CEO of Under Armour, Inc. “The 55% growth in the top line for the quarter was matched with significant improvements in gross margin, and the strength of our business reflects our continued ability to connect with the athlete and to create innovative products that drive demand. We continue to grow our core product offering while at the same time leveraging our on-field authenticity to enter new product categories. Our successful launch of baseball and softball cleats is the latest manifestation of that strategy.”

Growth in apparel revenues accelerated in the quarter, increasing 43.2% over the prior year. The Compression and Training categories continued to drive revenue growth across the Men’s, Women’s, and Youth businesses as the Brand gained additional space on retail floors. Apparel revenues also benefited from an increase in average selling price as the Company expanded the breadth of its product offering.

Gross margin for the quarter increased to 50.6% compared to 48.7% in the prior year, primarily driven by benefits from the Company’s sourcing initiatives as well as an increased percentage of sales in higher margin product. Selling, general and administrative expenses were 37.5% of net revenues in the fourth quarter of 2006 compared to 34.0% in the same period of the prior year. Marketing expense for the fourth quarter was 12.6% of net revenues compared to 8.6% in the prior year due to continued opportunistic investments made to support the Brand.

Review of Full Year Operating Results

Net revenues for the year increased 53.2% to $430.7 million from $281.1 million in 2005. Net income increased 97.7% to $39.0 million compared to $19.7 million in the prior year, within the range of the Company’s previously provided outlook of $38.5 million to $39.5 million for the year. Diluted earnings per share was $0.79, on weighted average common shares outstanding of 49.6 million compared to $0.36 per share on weighted average common shares outstanding of 39.7 million in 2005. The Company received a $3.3 million benefit to net income, or $0.07 per diluted share, as a result of the impact of state tax credits previously disclosed by the Company.

Apparel revenues grew 42.5% in 2006 due to increased strength in the Men’s, Women’s, and Youth businesses. The launch into footwear contributed $26.9 million to net revenues for the full year.

Gross margin in 2006 increased to 50.1% compared to 48.3% in the prior year primarily due to the Company’s sourcing initiatives and an increase in its percentage of sales from higher margin product. Selling, general and administrative expenses were 36.8% of net revenues in 2006 compared to 35.6% in the prior year. The increase reflects the Company’s continued investments in Marketing and growth initiatives as well as increased costs associated with being a public company. The Company had previously stated its commitment to a marketing budget of 10% to 12% of net revenues for the full year. Marketing expense for the year was 11.2% of net revenues compared to 10.8% in 2005. Income from operations as a percentage of net revenues in 2006 increased to 13.3% from 12.7% in the prior year.

Mr. Plank added, “We are proud of our accomplishments in our first full year as a public company. We continue to move consumers away from cotton by educating them on the benefits of technical performance apparel. Our apparel revenue growth accelerated in 2006, growing at 43% for the year compared to 35% in the year prior. This growth has allowed us to invest in the future of our company, and we will continue to make key investments to evolve the

category of performance in apparel and footwear and to tell the performance story to consumers across the globe.”

Balance Sheet Highlights

Inventory totaled $81.0 million at December 31, 2006, compared to $53.6 million at the end of 2005. The 51.2% increase in inventory was in line with the 53.2% increase in net revenues for the year. At the end of 2006, cash and cash equivalents were $70.7 million, an increase of $7.7 million over the prior year end. Cash and cash equivalents, net of debt, were $64.4 million at December 31, 2006, for an increase of $9.8 million over the prior year end.

Outlook for 2007

The Company has previously stated its long-term growth targets of 20% to 25% for the top and bottom line. Based on the continued strength of the Brand and its ability to extend product scope and distribution, the Company believes 2007 net revenues and income from operations will exceed the long-term targets.

For 2007, the Company expects annual net revenues in the range of $560 million to $580 million, an increase of 30% to 35% over 2006. The Company expects 2007 income from operations to be in the range of $74.5 Million to $77.5 Million, an increase of 30% to 35% over 2006. Further, the Company expects the effective tax rate to increase to 40.5% from 34.0% in 2006 since the allowable state tax credits were earned and recognized in 2006. The Company anticipates fully diluted weighted average shares outstanding of approximately 50.5 million for 2007.

“While we have achieved outstanding financial performance since becoming a public company, we believe the greatest opportunity for the Brand lies ahead, which is why we continue to invest in new markets and product categories,” stated Wayne Marino, Executive Vice President and Chief Financial Officer of Under Armour, Inc. “Our business fundamentals are in place, and we will continue to invest in the company to drive our top line growth, while maintaining the necessary discipline to deliver results on the bottom line. We remain focused on creating value not only for our consumers but our shareholders as well.”

Conference Call and Webcast

Under Armour will host a conference call and webcast to discuss its financial results today, February 1^st, at 8:30 a.m. EST. This call will be webcast live at investor.underarmour.com 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 investor.underarmour.com. The Company’s financial results are also available online at investor.underarmour.com.

About Under Armour, Inc.

Under Armour^® (NYSE: UA) is a leading developer, marketer and distributor of branded performance apparel, footwear and accessories. The brand’s moisture-wicking synthetic fabrications are engineered in many different designs and styles for wear in nearly every climate to provide a performance alternative to traditional natural fiber products. The Company’s products are sold worldwide and worn by professional football, baseball, and soccer players, as well as athletes in major collegiate and Olympic sports. The Company’s global headquarters is in Baltimore, Maryland and it has offices in Denver, Amsterdam, Hong Kong, and Toronto. For further information, please visit the Company’s website at www.underarmour.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: our ability to forecast and manage our growth effectively; our ability to maintain effective internal controls; increased competition causing us to reduce the prices of our products or to increase significantly our marketing efforts in order to avoid losing market share; changes in consumer preferences or the reduction in demand for performance apparel and other products; our ability to accurately forecast consumer demand for our products; reduced demand for sporting goods and apparel generally; failure of our suppliers or manufacturers to produce or deliver our products in a timely or cost-effective manner; 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; the availability and effective operation of management information systems and other technology; our ability to attract and maintain the services of our senior management and key employees; and changes in general economic or market conditions, including as a result of political or military unrest or terrorist attacks. 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.

Quarter and Year Ended December 31, 2006 and 2005

(Unaudited; in thousands, except per share amounts)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Quarter Ended 12/31/06		% of Net Revenues		Quarter Ended 12/31/05			% of Net Revenues		Year Ended 12/31/06		% of Net Revenues		Year Ended 12/31/05			% of Net Revenues
Net revenues	$	135,283	100.0	%	$	87,303		100.0	%	$	430,689	100.0	%	$	281,053		100.0	%
Cost of goods sold		66,877	49.4	%		44,807		51.3	%		215,089	49.9	%		145,203		51.7	%
Gross profit		68,406	50.6	%		42,496		48.7	%		215,600	50.1	%		135,850		48.3	%
Operating expenses
Selling, general and administrative expenses		50,661	37.5	%		29,632		34.0	%		158,323	36.8	%		99,961		35.6	%
Income from operations		17,745	13.1	%		12,864		14.7	%		57,277	13.3	%		35,889		12.7	%
Other income (expense), net		752	0.6	%		(791	)	(0.9	)%		1,810	0.4	%		(2,915	)	(1.0	)%
Income before income taxes		18,497	13.7	%		12,073		13.8	%		59,087	13.7	%		32,974		11.7	%
Provision for income taxes		6,646	4.9	%		5,079		5.8	%		20,108	4.6	%		13,255		4.7	%
Net income		11,851	8.8	%		6,994		8.0	%		38,979	9.1	%		19,719		7.0	%
Accretion of and cumulative preferred dividends on Series A Preferred Stock		—	—			3,511		4.0	%		—	—			5,307		1.9	%
Net income available to common shareholders	$	11,851	8.8	%	$	3,483		4.0	%	$	38,979	9.1	%	$	14,412		5.1	%
Net income available per common share
Basic	$	0.25			$	0.08				$	0.83			$	0.39
Diluted	$	0.24			$	0.08				$	0.79			$	0.36
Weighted average common shares outstanding
Basic		47,387				41,079					46,983				37,199
Diluted		49,814				44,083					49,587				39,686

NET REVENUES BY PRODUCT CATEGORY

	Quarter Ended 12/31/06		Quarter Ended 12/31/05		% Change		Year Ended 12/31/06		Year Ended 12/31/05		% Change
Mens	$	82,061	$	60,051	36.7	%	$	255,681	$	189,596	34.9	%
Womens		26,109		16,730	56.1	%		85,695		53,500	60.2	%
Youth		9,750		5,543	75.9	%		31,845		18,784	69.5	%
Apparel		117,920		82,324	43.2	%		373,221		261,880	42.5	%
Footwear		9,289		—	—			26,874		—	—
Accessories		3,416		2,050	66.6	%		14,897		9,409	58.3	%
Total net sales		130,625		84,374	54.8	%		414,992		271,289	53.0	%
Licensing revenues		4,658		2,929	59.0	%		15,697		9,764	60.8	%
Total net revenues	$	135,283	$	87,303	55.0	%	$	430,689	$	281,053	53.2	%

Under Armour, Inc.

As of December 31, 2006 and December 31, 2005

(Unaudited; in thousands)

CONDENSED CONSOLIDATED BALANCE SHEETS

	As of 12/31/06		As of 12/31/05
Assets
Cash and cash equivalents	$	70,655	$	62,977
Accounts receivable, net		71,867		53,132
Inventories		81,031		53,607
Prepaid expenses, income taxes receivable and other current assets		13,254		5,252
Deferred income taxes		8,145		6,822
Total current assets		244,952		181,790
Property and equipment, net		29,923		20,865
Intangible asset, net		7,875		—
Deferred income taxes		5,180		—
Other non-current assets		1,438		1,032
Total assets	$	289,368	$	203,687
Liabilities and Stockholders’ Equity
Accounts payable, accrued expenses and income taxes payable	$	68,121	$	43,864
Current maturities of long term debt		3,442		3,808
Total current liabilities		71,563		47,672
Long term debt, net of current maturities		2,815		4,583
Deferred income taxes		—		330
Other long term liabilities		602		272
Total liabilities		74,980		52,857
Total stockholders’ equity		214,388		150,830
Total liabilities and stockholders’ equity	$	289,368	$	203,687

EX-99.2

Exhibit 99.2

UA: Fourth Quarter 2006 Earnings Call – Brad Dickerson

Thanks Kevin.

As Kevin mentioned, we saw very strong growth in our core apparel business in the fourth quarter. The acceleration we saw from the second quarter to the third quarter continued in the fourth quarter, with apparel net sales growing more than 43% driving our total net revenue growth 55% for the quarter to $135.3 million from $87.3 million in the prior year.

In addition to the accelerating growth in our core apparel business, in the fourth quarter we launched baseball and softball cleats, which helped drive an additional $9.3 million of net revenues in our Footwear Business.

For the full year, net revenues increased 53% to $430.7 million, exceeding our previously provided outlook of $410 million to $420 million.

Operating Overview

Now moving to our gross margin. For the quarter, gross margin increased 190 basis points to 50.6% compared to 48.7% in the same period last year. This increase was largely driven by our continued efforts to drive efficiencies in our sourcing, greater supplier discounts for increased volume, as well as favorable changes in the product mix that shifted a larger portion of our sales to higher margin products. Net sales from our direct-to-consumer business, which includes our web-site and retail outlet stores, grew 118% for the quarter, also having a positive impact on our gross margin. These items contributed to our total gross margin improvement which help offset the lower gross margins associated with footwear.

For the full year, gross margin increased 180 basis points to 50.1% versus 48.3% in the prior year.

SG&A for the fourth quarter totaled $50.7 million, an increase of $21.0 million compared to the same period last year. SG&A as a percentage of net

1

revenues for the quarter increased to 37.5% from 34.0% in the prior year. Increased investments in our growth initiatives, which include International and Footwear, accounted for nearly one-third of the year-over-year dollar increase in SG&A. We also recognized additional expenses related to our Sarbanes-Oxley compliance initiative. In addition, SG&A reflected lower bonus expense based on our actual results and Kevin Plank’s decision to not accept a bonus for 2006.

Within SG&A, most importantly, we continued to invest in our Brand during the quarter by increasing investments in Marketing. Marketing costs represented 12.6% of net revenues in the quarter compared to 8.6% in the prior year. However, for the full year, Marketing costs remained within our target range of 10-12% of net revenues, representing 11.2% of net revenues in 2006 compared to 10.8% in the prior year. With these increased investments over the course of the year, we were able to launch footwear with our multi-platform Click-Clack marketing campaign and back it by authentic exposure as an official supplier to the NFL. We also outfitted several high school and top college teams as official head-to-toe Under Armour teams. We followed a similar formula abroad by signing official base-layer deals with five professional European Football teams. In store, we branded our expanding footprint and broadened consumer education on the benefits of performance by increasing the number of Under Armour Concept Shops within our key retail doors. We continue to believe in the positive impact that these and other Marketing-related initiatives have on our top line.

For the full year, SG&A as a percentage of net revenues increased to 36.8% from 35.6% in the same period last year again being driven by our increased investments in Marketing and our growth initiatives.

Our operating income for the quarter was $17.7 million, compared to $12.9 million in the prior year, an increase of 38%. For the full year, our operating income increased 60% to $57.3 million.

2

The 13.1% operating margin for the fourth quarter reflects the increased Marketing and investment spending during the quarter. For the full year, we showed improvements in our operating margin as it increased 60 basis points to 13.3% of net revenues compared to 12.7% in the prior year driven by our strong top line and improvements in gross margin.

Other income for the quarter increased $1.5 million which was primarily driven by increased interest income as a result of our improved cash position.

It is important to note that both net income and EPS for the quarter benefited from a $1.0 million, or $0.02 per diluted share, state tax credit recorded in the quarter. This represents the balance of the expected full year benefit of the $3.3 million, or $0.07 per diluted share, state tax credit. It is worth noting that we do not anticipate earning any new state tax credits in 2007.

Our resulting net income for the quarter increased to $11.9 million from $7.0 million in the same period last year. Full year net income increased to $39.0 million from $19.7 million in the prior year, within the range of the outlook we provided at the end of the third quarter.

Balance Sheet Summary

Now I’d like to move on to the balance sheet where we saw positive developments across several key metrics.

Inventory at quarter-end increased 51% to $81.0 million compared to the prior year end, in-line with our net revenue growth for the quarter.

We continued to use our existing retail outlet strategy to profitably sell our excess inventory. In the fourth quarter, our outlet base remained at 11 stores. However, in 2007, we plan to expand our retail outlet strategy with the addition of 5 to 6 outlet stores during the year. We believe this

3

investment has been, and will continue to be, successful in protecting the brand, improving our liquidity, and raising gross margins and operating margins.

Net Accounts Receivable increased 35%, or $18.7 million, on a year over year basis, and grew at a slower rate than net revenues for the quarter.

Total cash and cash equivalents at the end of the quarter were $70.7 million and cash, net of debt, increased $9.8 million during the year to $64.4 million.

Our investment in capital expenditures for the quarter was approximately $7 million, which brought the total to $18 million for the year. This increase, over our previously stated cap-ex outlook of $15 to $16 million, was related to a late year initial investment of $3 million made in a warehouse management system projected to be implemented in 2007. Wayne will discuss this and our other expected 2007 capital expenditures shortly. Of the remaining investments in cap-ex for 2006, half went towards the build out of new outlet stores and additional in-store fixtures to support our brand presence at retail. We also made a sizable investment in IT during 2006 with the successful implementation of SAP.

Now I will turn it over to Wayne Marino who will take you through our outlook for 2007.

UA: Fourth Quarter 2006 Earnings Call – Wayne Marino

Outlook For 2007

Thanks Brad. I’m going to take the next few minutes to provide our outlook for 2007 as well as several key elements of our strategy going forward.

Our long term growth targets remain at 20-25% for both our top and bottom line. However, due to the strength of the Under Armour brand and our ability to extend our product scope and distribution, we believe we can grow both net revenues and income from operations between 30% and 35% for 2007.

4

We plan to accomplish this by executing our strategic growth drivers:

• Expanding our Men’s and Women’s businesses

• Ramping up our Footwear and

• Continuing to build our International business

Kevin talked earlier about some of the product and marketing stories that will help drive our core apparel business in 2007. In addition to the new categories that he mentioned, we believe our core growth in Men’s – with a broader product offering in Golf, Baseball and Running — and Women’s - specifically our Cold Gear, compression and tech-T programs — will benefit from the continued growth in our footprint within our existing distribution. We also expect to see continued progress with our Good/Better/Best merchandising strategy, new door growth in specific channels including outdoor and mountain sport, growth in our Direct business and continued square footage growth among our key accounts. We will also be investing in our core Men’s and Women’s businesses by adding capacity and efficiency in our Distribution House as well as increasing the number of Under Armour concept shops in our key accounts.

5

As Kevin mentioned, we will continue to invest in our Footwear and International businesses, by building the infrastructure to support the long-term profitability in these two businesses. A portion of the investment we are planning to make in our DH for 2007 will be to expand our capacity to warehouse footwear including expanded lines in both football and baseball and new cleated categories such as lacrosse. We are also investing in both people and R&D as we plan our expansion into non-cleated athletic footwear.

On the international front, we will continue to focus on Western Europe, with particular emphasis on the UK, France and Germany. We finished 2006 with 600 doors in Europe and are planning to more than double that number in 2007. We continue to believe that the opportunity for the Under Armour brand internationally is as large as the opportunity in the U.S. and we will make the appropriate investments in 2007 and beyond to reach that goal.

In 2007, we expect our Men’s business to grow at a pace greater than our long term growth target of 20-25% with our other businesses growing at an even faster pace. I also want to point out that although Footwear and International businesses will be investments in 2007, combined they are projected to contribute almost 20% to the year over year dollar growth in 2007.

As far as the timing of our revenues, historically, a greater percentage of our revenues have been recognized in the third and fourth quarters, and we expect 2007 revenues to reflect a similar pattern to that which occurred in 2006. I also want to point out that similar to 2006 our second quarter of 2007 is expected to be our lowest volume quarter.

When we move to the Net income and EPS line, the recognition of state tax credits in 2006 will impact the year-over-year comparability of our net income and EPS in the second half of 2007 and for the full year.

6

Now I will provide you with some further color on the assumptions behind this top level summary.

• First our Gross Margin. We anticipate continued improvement to our gross margin from our lower cost sourcing initiatives driven by increased volumes. We also anticipate that our higher margin global direct to consumer businesses will grow at a faster rate than our overall business. A portion of these improvements will be offset by our anticipated growth in our cleated footwear business, both football and baseball, which will carry initial margins lower than our existing apparel margins. This will be most evident in the first quarter, where in the prior year we did not have the impact of cleated footwear on the gross margin.

• Additionally, for 2007 we will improve our in-store marketing by shifting dollars previously given as discounts to fund in-store marketing efforts thereby creating an exciting environment for people to experience the Under Armour Brand. This shift in spending from discounts to in-store marketing will have a positive impact of 60-70bps on Gross Margin for 2007, offset by an increase in marketing costs. This change will enhance the brand’s presentation at retail.

• Taking all these factors into account, we are planning our full year 2007 gross margin to improve by 80-100 basis points over the prior year.

7

• Now moving to SG&A. For 2007, we plan to continue to invest in our growth initiatives such as footwear and International, putting the infrastructure in place to build a large, scalable business and to market the Under Armour Brand globally. For 2007, the move away from discounts and toward in-store marketing efforts that I mentioned previously, will push our marketing to the high end of the annual 10-12% range. Our fixed costs, specifically other costs, are expected to leverage for 2007. For these reasons, we are planning our full year operating expense to increase by 80-90 basis points as a percentage of net revenues for 2007. We also see the opportunity to further leverage fixed costs if volumes should increase.

• Taking all this into account, we believe our income from operations for 2007 will be in a range of $74.5 - $77.5 million.

• It’s important to note that as our business becomes more diverse in terms of product mix, gender, and sport categories, we will adjust the timing of our marketing spend to reflect this more balanced mix. For the 1^st half of 2006, we invested in marketing at the low end of our 10-12% range. For the first half of 2007, we expect to be closer to the high end 10-12% range.

• We have always earned a greater portion of our operating income in the last 2 quarters of the year. With the shift of the marketing spend, we expect an even greater percentage of our 2007 operating income to come from the back half of the year.

8

• We are forecasting our Net Interest Income to be approximately $2.0 million for the full year and our effective tax rate to increase to 40.5% before the impact of FIN 48 up from 34.0% since the allowable state tax credit was earned and recognized in 2006. We are not anticipating any new state tax credits in 2007.

• Weighted average diluted share count in 2007 is expected to be approximately 50.5 million.

Now turning to our Balance Sheet for 2007

With Inventory. Our core items such as cold gear, tech-t and compression tops and bottoms drive over 50% of our business. In 2006, we took receipt of fall merchandise earlier than we did in the prior year to support an increased number of product launches in the 3^rd quarter and this strategy paid off with over 40% growth in apparel for the 3^rd quarter in 2006. For 2007 we are planning a similar strategy where we will invest in core inventory, specifically Fleece and Cold Gear, in the second quarter to position ourselves for strong consumer demand in the back half of the year. Our fundamentals around inventory are strong and we will balance this strategy with our aggressive inventory management initiatives.

Capital expenditures:

Now moving to Cap-x. 2007 is still an investment year for Under Armour as we implement the infrastructure to support a large scalable business. We are planning to invest between $20 -22 million to accomplish this goal.

9

Over  ¹/2 of our Cap x investment will be in our Distribution House where we will add new equipment to improve our shipping velocity and expand our warehouse capacity in anticipation of future growth in our footwear business. This is in addition to the $3.0 million invested in Q4 of 2006 for a warehouse management system projected to be implemented in 2007.

On a scale similar to 2006, we plan to invest approximately $6.5 million in our in-store fixture program, and the balance of our capital will be invested in IT initiatives, expansion of our Global direct business, to include Canada and Europe, retail outlet store expansion and the balance for general corporate improvements.

Taking all this into account, we are expecting to be cash positive for the full year with fluctuations on a seasonal basis as we make investments in working capital, specifically inventory in the first half of the year.

We are excited about our story and our accomplishments to date and look forward to another year of strong results, both top and bottom line in 2007.

This concludes our prepared remarks.

Now, Kevin, Brad and I will take your questions. I ask each of you to please limit yourself to 1 or 2 questions each, so we can here from as many of you as possible.

10