Maryland | 001-33202 | 52-1990078 | ||||||||||||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
1020 Hull Street, Baltimore, Maryland | 21230 | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Class A Common Stock | UAA | New York Stock Exchange | ||||||
Class C Common Stock | UA | New York Stock Exchange | ||||||
(Title of each class) | (Trading Symbols) | (Name of each exchange on which registered) |
¨ | 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)) |
Emerging growth company | ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
Exhibit No. | Exhibit | ||||||||||
Under Armour, Inc. press release announcing financial results for the three and six months ended June 30, 2019. |
UNDER ARMOUR, INC. | ||||||||||||||
Date: July 30, 2019 | By: | /s/ David E. Bergman | ||||||||||||
David E. Bergman | ||||||||||||||
Chief Financial Officer |
Under Armour Contacts: | |||||
Lance Allega | Kelley McCormick | ||||
SVP, Investor Relations & Corporate Development | SVP, Corporate Communications | ||||
(410) 246-6810 | (410) 454-6624 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
2019 | % of Net Revenues | 2018 | % of Net Revenues | 2019 | % of Net Revenues | 2018 | % of Net Revenues | |||||||||||||||||||||||||||||||||||||||||||
Net revenues | $ | 1,191,729 | 100.0 | % | $ | 1,174,859 | 100.0 | % | $ | 2,396,451 | 100.0 | % | $ | 2,360,229 | 100.0 | % | ||||||||||||||||||||||||||||||||||
Cost of goods sold | 637,408 | 53.5 | % | 648,275 | 55.2 | % | 1,297,343 | 54.1 | % | 1,310,192 | 55.5 | % | ||||||||||||||||||||||||||||||||||||||
Gross profit | 554,321 | 46.5 | % | 526,584 | 44.8 | % | 1,099,108 | 45.9 | % | 1,050,037 | 44.5 | % | ||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 565,803 | 47.5 | % | 552,619 | 47.0 | % | 1,075,331 | 44.9 | % | 1,067,253 | 45.2 | % | ||||||||||||||||||||||||||||||||||||||
Restructuring and impairment charges | — | — | % | 78,840 | 6.7 | % | — | — | % | 116,320 | 4.9 | % | ||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | (11,482) | (1.0) | % | (104,875) | (8.9) | % | 23,777 | 1.0 | % | (133,536) | (5.7) | % | ||||||||||||||||||||||||||||||||||||||
Interest expense, net | (5,988) | (0.5) | % | (8,552) | (0.7) | % | (10,226) | (0.4) | % | (17,116) | (0.7) | % | ||||||||||||||||||||||||||||||||||||||
Other expense, net | (1,128) | (0.1) | % | (8,069) | (0.7) | % | (1,795) | (0.1) | % | (5,181) | (0.2) | % | ||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | (18,598) | (1.6) | % | (121,496) | (10.3) | % | 11,756 | 0.5 | % | (155,833) | (6.6) | % | ||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | (5,740) | (0.5) | % | (26,090) | (2.2) | % | 2,391 | 0.1 | % | (30,183) | (1.3) | % | ||||||||||||||||||||||||||||||||||||||
Loss from equity method investment | (4,491) | (0.4) | % | (138) | — | % | (4,237) | (0.2) | % | (138) | — | % | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | (17,349) | (1.5) | % | $ | (95,544) | (8.1) | % | $ | 5,128 | 0.2 | % | $ | (125,788) | (5.3) | % | ||||||||||||||||||||||||||||||||||
Basic net income (loss) per share of Class A, B and C common stock | $ | (0.04) | $ | (0.21) | $ | 0.01 | $ | (0.28) | ||||||||||||||||||||||||||||||||||||||||||
Diluted net income (loss) per share of Class A, B and C common stock | $ | (0.04) | $ | (0.21) | $ | 0.01 | $ | (0.28) | ||||||||||||||||||||||||||||||||||||||||||
Weighted average common shares outstanding Class A, B and C common stock | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | 451,066 | 444,626 | 450,411 | 443,844 | ||||||||||||||||||||||||||||||||||||||||||||||
Diluted | 451,066 | 444,626 | 453,717 | 443,844 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||||||
Apparel | $ | 739,736 | $ | 748,335 | (1.1) | % | $ | 1,514,366 | $ | 1,517,266 | (0.2) | % | ||||||||||||||||||||||||||
Footwear | 284,080 | 271,375 | 4.7 | % | 576,627 | 543,145 | 6.2 | % | ||||||||||||||||||||||||||||||
Accessories | 106,250 | 105,906 | 0.3 | % | 188,242 | 198,064 | (5.0) | % | ||||||||||||||||||||||||||||||
Total net sales | 1,130,066 | 1,125,616 | 0.4 | % | 2,279,235 | 2,258,475 | 0.9 | % | ||||||||||||||||||||||||||||||
Licensing revenues | 25,308 | 21,172 | 19.5 | % | 46,965 | 47,513 | (1.2) | % | ||||||||||||||||||||||||||||||
Connected Fitness | 31,935 | 29,112 | 9.7 | % | 62,039 | 57,938 | 7.1 | % | ||||||||||||||||||||||||||||||
Corporate Other | 4,420 | (1,041) | 524.6 | % | $ | 8,212 | $ | (3,697) | 322.1 | % | ||||||||||||||||||||||||||||
Total net revenues | $ | 1,191,729 | $ | 1,174,859 | 1.4 | % | $ | 2,396,451 | $ | 2,360,229 | 1.5 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
2019 | 2018 | % Change | 2019 | 2018 | % Change | |||||||||||||||||||||||||||||||||
North America | $ | 816,220 | $ | 843,383 | (3.2) | % | $ | 1,659,469 | $ | 1,710,928 | (3.0) | % | ||||||||||||||||||||||||||
EMEA | 145,320 | 136,942 | 6.1 | % | 279,424 | 266,530 | 4.8 | % | ||||||||||||||||||||||||||||||
Asia-Pacific | 154,113 | 125,706 | 22.6 | % | 298,398 | 241,259 | 23.7 | % | ||||||||||||||||||||||||||||||
Latin America | 39,721 | 40,757 | (2.5) | % | 88,909 | 87,271 | 1.9 | % | ||||||||||||||||||||||||||||||
Connected Fitness | 31,935 | 29,112 | 9.7 | % | 62,039 | 57,938 | 7.1 | % | ||||||||||||||||||||||||||||||
Corporate Other | 4,420 | (1,041) | 524.6 | % | 8,212 | $ | (3,697) | 322.1 | % | |||||||||||||||||||||||||||||
Total net revenues | $ | 1,191,729 | $ | 1,174,859 | 1.4 | % | $ | 2,396,451 | $ | 2,360,229 | 1.5 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||
2019 | % of Net Revenues (1) | 2018 | % of Net Revenues (1) | 2019 | % of Net Revenues (1) | 2018 | % of Net Revenues (1) | ||||||||||||||||||||||||||||||||||
North America | $ | 139,198 | 17.1 | % | $ | 132,529 | 15.7 | % | $ | 299,471 | 18.0 | % | $ | 280,714 | 16.4 | % | |||||||||||||||||||||||||
EMEA | 10,493 | 7.2 | % | (5,945) | (4.3) | % | 22,711 | 8.1 | % | 1,209 | 0.5 | % | |||||||||||||||||||||||||||||
Asia-Pacific | 19,647 | 12.7 | % | 21,391 | 17.0 | % | 39,450 | 13.2 | % | 45,513 | 18.9 | % | |||||||||||||||||||||||||||||
Latin America | (3,891) | (9.8) | % | (4,689) | (11.5) | % | (4,250) | (4.8) | % | (6,567) | (7.5) | % | |||||||||||||||||||||||||||||
Connected Fitness | 11 | — | % | 1,711 | 5.9 | % | 1,080 | 1.7 | % | 5,122 | 8.8 | % | |||||||||||||||||||||||||||||
Corporate Other | (176,940) | NM | (249,872) | NM | (334,685) | NM | (459,527) | NM | |||||||||||||||||||||||||||||||||
Income (loss) from operations | $ | (11,482) | (1.0) | % | $ | (104,875) | (8.9) | % | $ | 23,777 | 1.0 | % | $ | (133,536) | (5.7) | % |
June 30, 2019 | December 31, 2018 | June 30, 2018 | ||||||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 455,726 | $ | 557,403 | $ | 196,879 | ||||||||||||||
Accounts receivable, net | 735,181 | 652,546 | 724,945 | |||||||||||||||||
Inventories | 965,711 | 1,019,496 | 1,299,332 | |||||||||||||||||
Prepaid expenses and other current assets | 287,829 | 364,183 | 340,359 | |||||||||||||||||
Total current assets | 2,444,447 | 2,593,628 | 2,561,515 | |||||||||||||||||
Property and equipment, net | 795,499 | 826,868 | 835,427 | |||||||||||||||||
Operating lease right-of-use assets | 606,018 | — | — | |||||||||||||||||
Goodwill | 548,762 | 546,494 | 551,160 | |||||||||||||||||
Intangible assets, net | 39,527 | 41,793 | 45,880 | |||||||||||||||||
Deferred income taxes | 129,403 | 112,420 | 111,746 | |||||||||||||||||
Other long term assets | 116,252 | 123,819 | 135,424 | |||||||||||||||||
Total assets | $ | 4,679,908 | $ | 4,245,022 | $ | 4,241,152 | ||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Accounts payable | 607,382 | 560,884 | 691,163 | |||||||||||||||||
Accrued expenses | 304,063 | 340,415 | 258,567 | |||||||||||||||||
Customer refund liabilities | 241,456 | 301,421 | 303,730 | |||||||||||||||||
Operating lease liabilities | 116,219 | — | — | |||||||||||||||||
Current maturities of long term debt | — | 25,000 | 27,000 | |||||||||||||||||
Other current liabilities | 63,521 | 88,257 | 57,939 | |||||||||||||||||
Total current liabilities | 1,332,641 | 1,315,977 | 1,338,399 | |||||||||||||||||
Long term debt, net of current maturities | 591,396 | 703,834 | 752,370 | |||||||||||||||||
Operating lease liabilities, non-current | 601,665 | — | — | |||||||||||||||||
Other long term liabilities | 105,932 | 208,340 | 226,471 | |||||||||||||||||
Total liabilities | 2,631,634 | 2,228,151 | 2,317,240 | |||||||||||||||||
Total stockholders’ equity | 2,048,274 | 2,016,871 | 1,923,912 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,679,908 | $ | 4,245,022 | $ | 4,241,152 | ||||||||||||||
Six Months Ended June 30, | |||||||||||
2019 | 2018 | ||||||||||
Cash flows from operating activities | |||||||||||
Net income (loss) | $ | 5,128 | $ | (125,788) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||||||||||
Depreciation and amortization | 93,721 | 91,271 | |||||||||
Unrealized foreign currency exchange rate gain (loss) | (3,077) | 13,151 | |||||||||
Loss on disposal of property and equipment | 2,447 | 2,496 | |||||||||
Impairment charges | — | 9,660 | |||||||||
Amortization of bond premium | 127 | 127 | |||||||||
Stock-based compensation | 25,635 | 20,673 | |||||||||
Deferred income taxes | (13,890) | (35,969) | |||||||||
Changes in reserves and allowances | (10,196) | (238,005) | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (75,116) | 116,896 | |||||||||
Inventories | 62,302 | (158,430) | |||||||||
Prepaid expenses and other assets | 64,533 | (54,422) | |||||||||
Other non-current assets | 12,812 | 768 | |||||||||
Accounts payable | 57,674 | 160,164 | |||||||||
Accrued expenses and other liabilities | (48,094) | 48,939 | |||||||||
Customer refund liabilities | (60,089) | 307,192 | |||||||||
Income taxes payable and receivable | (1,210) | (12,716) | |||||||||
Net cash provided by operating activities | 112,707 | 146,007 | |||||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | (77,046) | (95,607) | |||||||||
Sale of property and equipment | — | 11,285 | |||||||||
Purchase of equity method investment | — | (39,207) | |||||||||
Purchases of other assets | (997) | (2,536) | |||||||||
Net cash used in investing activities | (78,043) | (126,065) | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from long term debt and revolving credit facility | 25,000 | 210,000 | |||||||||
Payments on long term debt and revolving credit facility | (162,817) | (348,500) | |||||||||
Employee taxes paid for shares withheld for income taxes | (3,077) | (1,759) | |||||||||
Proceeds from exercise of stock options and other stock issuances | 4,238 | 8,913 | |||||||||
Payments of debt financing costs | (2,661) | (11) | |||||||||
Other financing fees | 76 | 87 | |||||||||
Net cash used in financing activities | (139,241) | (131,270) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,463 | (2,487) | |||||||||
Net increase in cash, cash equivalents and restricted cash | (100,114) | (113,815) | |||||||||
Cash, cash equivalents and restricted cash | |||||||||||
Beginning of period | 566,060 | 318,135 | |||||||||
End of period | $ | 465,946 | $ | 204,320 |
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||||||
Total Net Revenue | |||||||||||
Net revenue growth - GAAP | 1.4 | % | 1.5 | % | |||||||
Foreign exchange impact | 1.6 | % | 1.6 | % | |||||||
Currency neutral net revenue growth - Non-GAAP | 3.0 | % | 3.1 | % | |||||||
North America | |||||||||||
Net revenue decline - GAAP | (3.2) | % | (3.0) | % | |||||||
Foreign exchange impact | 0.3 | % | 0.4 | % | |||||||
Currency neutral net revenue decline - Non-GAAP | (2.9) | % | (2.6) | % | |||||||
EMEA | |||||||||||
Net revenue growth - GAAP | 6.1 | % | 4.8 | % | |||||||
Foreign exchange impact | 4.6 | % | 4.9 | % | |||||||
Currency neutral net revenue growth - Non-GAAP | 10.7 | % | 9.7 | % | |||||||
Asia-Pacific | |||||||||||
Net revenue growth - GAAP | 22.6 | % | 23.7 | % | |||||||
Foreign exchange impact | 6.6 | % | 5.9 | % | |||||||
Currency neutral net revenue growth - Non-GAAP | 29.2 | % | 29.6 | % | |||||||
Latin America | |||||||||||
Net revenue growth (decline) - GAAP | (2.5) | % | 1.9 | % | |||||||
Foreign exchange impact | 4.0 | % | 3.8 | % | |||||||
Currency neutral net revenue growth - Non-GAAP | 1.5 | % | 5.7 | % | |||||||
Total International | |||||||||||
Net revenue growth - GAAP | 11.8 | % | 12.0 | % | |||||||
Foreign exchange impact | 5.3 | % | 5.2 | % | |||||||
Currency neutral net revenue growth - Non-GAAP | 17.1 | % | 17.2 | % |
June 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
Factory House | 165 | 161 | ||||||||||||
Brand House | 16 | 15 | ||||||||||||
North America total doors | 181 | 176 | ||||||||||||
Factory House | 86 | 61 | ||||||||||||
Brand House | 79 | 65 | ||||||||||||
International total doors | 165 | 126 | ||||||||||||
Factory House | 251 | 222 | ||||||||||||
Brand House | 95 | 80 | ||||||||||||
Total doors | 346 | 302 |
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