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): October 27, 2005

THE TIMBERLAND COMPANY

(Exact name of Registrant as Specified in Charter)

DELAWARE	1-9548	02-0312554
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

200 Domain Drive, Stratham, NH	03885
(Address of Principal Executive Offices)	(Zip Code)

(603) 772-9500
(Registrant’s telephone number, including area code)

     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 (see General Instruction A.2. below):

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

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

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

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

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition.
	Item 9.01. Financial Statements and Exhibits.
	Exhibit Index
SIGNATURES
EX-99.1 Press Release dated October 27, 2005

Item 2.02. Results of Operations and Financial Condition.

     On October 27, 2005, The Timberland Company (referred to as “Timberland”, “Company”, “we”, “our”, or “us”) issued a press release setting forth the Company’s third-quarter 2005 results. A copy of our press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

     The attached press release includes a discussion of constant dollar revenue growth and diluted earnings per share excluding restructuring costs, which are non-GAAP measures, and a reconciliation of each to a GAAP measure. We provide constant dollar revenue growth for total Company and international results because we use the measure to understand revenue growth excluding any impact from foreign exchange rate changes. We provide diluted earnings per share excluding restructuring costs because we use the measure to understand earnings excluding non-recurring costs.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

     The Company hereby furnishes as Exhibit 99.1 to this report our press release dated October 27, 2005 setting forth the Company’s third-quarter 2005 results.

Exhibit Index

Exhibit No.	Description
99.1	Press release of The Timberland Company issued on October 27, 2005 setting forth the Company’s third-quarter 2005 results.

-2-

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.

	THE TIMBERLAND COMPANY
Date: October 27, 2005	By:	/s/ John Crimmins
		Name:	John Crimmins
		Title:	Vice President, Corporate Controller and           Chief Accounting Officer

-3-

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	CONTACT:	Susan Ostrow
		Director, Investor Relations
		(603) 773-1212

TIMBERLAND REPORTS THIRD QUARTER RESULTS

STRATHAM, NH, October 27, 2005 — The Timberland Company (NYSE: TBL) today reported third quarter net income of $69.2 million and diluted earnings per share (EPS) of $1.02, compared with third quarter 2004 net income of $68.6 million and diluted EPS of $0.96. Third quarter 2005 results included previously disclosed pre-tax costs of $2.5 million related to the Company’s restructuring of its Caribbean manufacturing facilities. Third quarter 2005 EPS excluding these restructuring charges was $1.05.

• Third quarter revenue increased 2.4% over strong prior-year results to a record $505.9 million, driven by gains in international markets which offset moderate declines in the U.S. International results (+14.1% or +14.2% in constant dollars) were driven by strong constant dollar sales gains in Europe and Asia in both footwear and apparel. U.S. revenues declined 6.1%, as anticipated decreases in women’s casual footwear and boot sales offset gains in Timberland PRO^® series and kids’ footwear. Foreign exchange rate changes reduced third quarter 2005 revenue by $0.3 million or 0.1%.

• Third quarter results were supported by global gains in footwear. Global footwear revenues grew 2.8% to $399.0 million driven by growth in kids’, outdoor performance, men’s casual and Timberland PRO series categories. Apparel and accessories revenue increased 0.1% to $101.5 million, as gains in international markets offset softer U.S. retail sales results.

• Global wholesale revenue expanded 3.1% to $420.2 million, supported by strong gains in international markets. Worldwide consumer direct revenue declined 0.8% to $85.7 million, reflecting a 3.2% decrease in global comparable store sales.

• Operating profit for the quarter was $105.1 million, including restructuring costs related to the consolidation of the Company’s manufacturing operations in the Caribbean. Operating profit excluding restructuring costs was $107.6 million, 1.5% above prior-year levels. Comparable operating margins were slightly lower,

-4-

	reflecting moderate anticipated declines in gross margins versus strong prior-year performance levels. For the quarter, foreign exchange rate changes contributed approximately $6.9 million to operating profit.
•	EPS for the quarter, excluding restructuring cost impacts of $0.03 per share, increased approximately 9% versus prior year levels. EPS gains reflect operating profit gains and benefits from lower levels of shares outstanding. During the quarter, the Company bought back 1.5 million shares at a total cost of $50.3 million. In August, the Company’s Board of Directors approved a new 2.0 million share repurchase authorization. Timberland currently has 3.1 million shares remaining under existing share repurchase authorization programs.
•	Timberland ended the quarter with $117.6 million in cash and no debt outstanding. Strong operating margins and disciplined asset management supported a 31.7% annual return on capital. Timberland’s inventory at the end of the third quarter of 2005 was $242.6 million, 32.6% higher than at the end of the 2004 third quarter. As previously disclosed, third quarter 2005 reflected the Company’s conversion to new sourcing arrangements with independent suppliers, resulting in an earlier transfer of title for certain third party shipments. The Company estimates that third quarter 2004 inventory and accounts payable balances would have increased by approximately $43.5 million if similar arrangements had been in place last year. Adjusting for this impact, inventory increased 7.1% on a comparable basis.
•	For the fourth quarter of this year, the Company is targeting flat revenue growth and a high single-digit decline in operating profits, reflecting current trends in the U.S. business, the overall consumer climate and plans to invest in brand building activities for the Holiday season. For the full year, Timberland remains on track to deliver strong financial results. These financial objectives exclude previously disclosed restructuring costs related to the consolidation of manufacturing operations in the Dominican Republic and related closure of Timberland’s manufacturing facility in Puerto Rico, which Timberland estimates will be in the range of $3.0 million in the fourth quarter.

Jeffrey B. Swartz, Timberland’s President and Chief Executive Officer, stated, “Timberland delivered record revenue and profits in the third quarter as benefits from our global portfolio enabled us to offset pressure in the U.S. with continued strong expansion internationally. While we work through challenges in key businesses, such as U.S. boots, we continue on track towards delivering solid full year financial gains.”

-5-

“Looking ahead to 2006, we continue to target expansion of Timberland’s brand franchise, building on our positive momentum and growing presence in international markets. We do anticipate continued growth challenges in Timberland’s U.S. business in the first half of 2006, which will contribute to likely pressure on first half 2006 revenue and earnings. We believe our continued focus on increasing our penetration with targeted consumers, delivering innovation and value through purposeful product grounded in Timberland^® brand values, actively pursuing opportunities to leverage our enterprise capabilities through new brand platforms, and executing with distinction will enable us to address these near-term challenges and capture our full potential.”

Note that comments made by the Company and Mr. Swartz are Timberland’s performance targets, based on current expectations. These comments are forward-looking, and actual results may differ materially.

As previously announced, Timberland will be hosting a conference call to discuss third quarter results today at 8:25 AM Eastern Time. Interested parties may listen to this call through the investor relations section of the Company’s website, www.timberland.com, or by calling (617) 213-8838 and providing access code number 54249233. Replays of this conference call will be available through the investor relations section of the Company’s website.

Timberland (NYSE: TBL) is a global leader in the design, engineering and marketing of premium-quality footwear, apparel and accessories for consumers who value the outdoors and their time in it. Timberland^Ò products offer quality workmanship and detailing and are built to withstand the elements of nature. The Company’s products can be found in leading department and specialty stores as well as Timberland^® retail stores throughout North America, Europe, Asia, Latin America, South Africa and the Middle East. More information about Timberland is available in the Company’s reports filed with the Securities and Exchange Commission (SEC).

This press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include statements regarding The Timberland Company’s future financial results, are subject to risks, uncertainties and assumptions and are not guarantees of future financial performance or expected benefits.

-6-

These risks, uncertainties and assumptions could cause the results of The Timberland Company to be materially different from any future results or expected benefits expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions include, but are not limited to: (i) the Company’s ability to successfully market and sell its products in a highly competitive industry and in view of changing consumer trends, consumer acceptance of products and other factors affecting retail market conditions; (ii) changes in duty structures in countries of import and export including anti-dumping measures being considered by the European Union with respect to leather footwear imported from China and Vietnam and safety footwear imported from China and India; (iii) Timberland’s ability to procure a majority of its products from independent manufacturers; (iv) changes in foreign exchange rates; and (v) other factors, including those detailed from time to time in The Timberland Company’s filings made with the SEC. The Timberland Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

This press release also includes discussion of constant dollar revenue growth and diluted EPS excluding restructuring costs, which are non-GAAP measures. As required by SEC rules, we have provided reconciliations of these measures on attached tables that follow our financial statements. Additional required information is located in the Form 8-K furnished to the SEC on October 27, 2005.

# # #

-7-

THE TIMBERLAND COMPANY
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)

	September 30,		October 1,		December 31,
	2005		2004		2004
Assets
Current assets
Cash and equivalents	$	117,634	$	119,779	$	309,116
Accounts receivable, net		298,172		279,182		155,024
Inventory		242,622		182,979		128,311
Prepaid expense		31,994		21,335		27,659
Deferred income taxes		23,524		22,400		28,937
Derivative assets		5,122		—		—
Total current assets		719,068		625,675		649,047
Property, plant and equipment, net		77,373		75,812		78,979
Goodwill		14,163		14,163		14,163
Intangible assets		4,579		3,991		5,381
Other assets, net		10,007		9,496		9,940
Total assets	$	825,190	$	729,137	$	757,510
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	125,670	$	54,379	$	52,370
Accrued expense and other current liabilities		103,693		110,966		124,038
Income taxes payable		47,844		39,976		34,737
Derivative liabilities		—		4,264		15,047
Total current liabilities		277,207		209,585		226,192
Deferred compensation and other liabilities		15,274		11,081		12,543
Deferred income taxes		5,051		8,086		7,268
Stockholders’ equity		527,658		500,385		511,507
Total liabilities and stockholders’ equity	$	825,190	$	729,137	$	757,510

-8-

THE TIMBERLAND COMPANY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Data)

	For the Three Months Ended					For the Nine Months Ended
	September 30,			October 1,		September 30,		October 1,
	2005			2004		2005		2004
Revenue	$	505,913		$	493,933	$	1,100,393	$	1,045,920
Cost of goods sold		258,555			250,161		547,894		521,200
Gross profit		247,358			243,772		552,499		524,720
Operating expense
Selling		111,259			110,761		297,236		287,429
General and administrative		28,462			26,994		77,304		71,436
Restructuring		2,531			—		2,531		—
Total operating expense		142,252			137,755		377,071		358,865
Operating income		105,106			106,017		175,428		165,855
Other income/(expense)
Interest income, net		570			196		2,734		636
Other, net		(900	)		205		238		411
Total other income/(expense)		(330	)		401		2,972		1,047
Income before provision for income taxes		104,776			106,418		178,400		166,902
Provision for income taxes		35,624			37,778		60,656		59,250
Net income	$	69,152		$	68,640	$	117,744	$	107,652
Earnings per share
Basic	$	1.04		$	0.98	$	1.76	$	1.54
Diluted	$	1.02		$	0.96	$	1.72	$	1.50
Weighted-average shares outstanding
Basic		66,175			69,924		66,892		69,970
Diluted		67,697			71,423		68,359		71,735

Earnings per share and weighted-average shares have been restated to reflect the 2-for-1 stock split in May 2005.

-9-

THE TIMBERLAND COMPANY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)

	For the Nine Months Ended
	September 30,			October 1,
	2005			2004
Cash flows from operating activities:
Net income		117,744		$	107,652
Adjustments to reconcile net income to net cash used by operating activities:
Deferred income taxes		(3,488	)		1,323
Amortization of deferred compensation		3,791			2,357
Depreciation and other amortization		18,190			16,585
Loss on disposal of property, plant and equipment		212			86
Tax benefit from stock option plans		6,490			11,579
Increase/(decrease) in cash from changes in working capital:
Accounts receivable		(154,003	)		(154,386	)
Inventory		(116,360	)		(63,469	)
Prepaid expense		(5,881	)		4,471
Accounts payable		79,693			16,733
Accrued expense		(18,837	)		(4,354	)
Income taxes payable		13,157			(12,523	)
Other liabilities		1,754			—
Net cash used by operating activities		(57,538	)		(48,900	)
Cash flows from investing activities:
Additions to property, plant and equipment		(15,704	)		(15,577	)
Other, net		147			(1,561	)
Net cash used by investing activities		(15,557	)		(17,138	)
Cash flows from financing activities:
Common stock repurchases		(128,906	)		(74,985	)
Issuance of common stock		17,668			19,172
Net cash used by financing activities		(111,238	)		(55,813	)
Effect of exchange rate changes on cash and equivalents		(7,149	)		(173	)
Net decrease in cash and equivalents		(191,482	)		(122,024	)
Cash and equivalents at beginning of period		309,116			241,803
Cash and equivalents at end of period		117,634		$	119,779

-10-

THE TIMBERLAND COMPANY
UNAUDITED REVENUE ANALYSIS
(Amounts in Thousands)

	For the Three Months Ended									For the Nine Months Ended
	September 30,			October 1,						September 30,			October 1,
	2005			2004			Change			2005			2004			Change
Revenue by Segment:
U.S. Wholesale		220,694		$	234,287			(5.8	%)		438,036		$	450,067			(2.7	%)
U.S. Consumer Direct		46,595			50,456			(7.7	%)		119,899			122,823			(2.4	%)
Total U.S.		267,289			284,743			(6.1	%)		557,935			572,890			(2.6	%)
International		238,624			209,190			14.1	%		542,458			473,030			14.7	%
Revenue by Product:
Footwear		399,006			388,154			2.8	%		842,638			800,895			5.2	%
Apparel and Accessories		101,497			101,407			0.1	%		245,710			235,435			4.4	%
Royalty and Other		5,410			4,372			23.7	%		12,045			9,590			25.6	%
Revenue by Channel:
Wholesale		420,208			407,528			3.1	%		864,620			816,256			5.9	%
Consumer Direct		85,705			86,405			(0.8	%)		235,773			229,664			2.7	%
Comparable Store Sales:
Domestic Retail		(7.1	%)		1.3	%					(1.4	%)		1.9	%
Global Retail		(3.2	%)		0.5	%					0.7	%		1.9	%

-11-

THE TIMBERLAND COMPANY
UNAUDITED RECONCILIATION OF TOTAL AND INTERNATIONAL REVENUE INCREASES
TO CONSTANT DOLLAR REVENUE INCREASES
(Amounts in Millions)

Total Company Revenue Reconciliation:

	For the Three Months						For the Nine Months
	Ended September 30, 2005						Ended September 30, 2005
	$ Change			% Change			$ Change		% Change
Revenue increase (GAAP)	$	12.0			2.4	%	$	54.5		5.2	%
(Decrease)/increase due to foreign exchange rate changes		(0.3	)		(0.1	%)		10.8		1.0	%
Revenue increase in constant dollars	$	12.3			2.5	%	$	43.7		4.2	%

International Revenue Reconciliation:

	For the Three Months						For the Nine Months Ended
	Ended September 30, 2005						September 30, 2005
	$ Change			% Change			$ Change		% Change
Revenue increase (GAAP)	$	29.4			14.1	%	$	69.4		14.7	%
(Decrease)/increase due to foreign exchange rate changes		(0.3	)		(0.1	%)		10.8		2.3	%
Revenue increase in constant dollars	$	29.7			14.2	%	$	58.6		12.4	%

-12-

THE TIMBERLAND COMPANY
UNAUDITED RECONCILIATION OF DILUTED EPS TO
DILUTED EPS EXCLUDING RESTRUCTURING COSTS

	For the Three			For the Nine Months
	Months Ended			Ended September 30,
	September 30, 2005			2005
Diluted EPS (GAAP)	$	1.02		$	1.72
Per share impact of restructuring costs		(0.03	)		(0.03	)
Diluted EPS excluding restructuring costs	$	1.05		$	1.75

-13-