-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LC0SYdTMC/TNXTivnW9TsK7H2sJaYAjU3E1WtVwPWblrSr9ypqgkbZuQtZS4L5nl qZAtriyvN1Gbralhr/kT7Q== 0001157523-05-003581.txt : 20050421 0001157523-05-003581.hdr.sgml : 20050421 20050421071531 ACCESSION NUMBER: 0001157523-05-003581 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050421 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050421 DATE AS OF CHANGE: 20050421 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DECKERS OUTDOOR CORP CENTRAL INDEX KEY: 0000910521 STANDARD INDUSTRIAL CLASSIFICATION: RUBBER & PLASTICS FOOTWEAR [3021] IRS NUMBER: 953015862 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22446 FILM NUMBER: 05763135 BUSINESS ADDRESS: STREET 1: 495A SOUTH FAIRVIEW AVENUE CITY: GOLETA STATE: CA ZIP: 93117 BUSINESS PHONE: 8059677611 MAIL ADDRESS: STREET 1: 495-A S FAIRVIEW AVE CITY: GOLETA STATE: CA ZIP: 93117 FORMER COMPANY: FORMER CONFORMED NAME: DECKERS FOOTWEAR CORP DATE OF NAME CHANGE: 19930811 8-K 1 a4869738.txt DECKERS 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): April 21, 2005 DECKERS OUTDOOR CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation) 0-22446 95-3015862 - -------------------------------------- -------------------------------------- (Commission File Number) (IRS Employer Identification No.) 495A South Fairview Avenue, Goleta, California 93117 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (805) 967-7611 ------------------------------ None - -------------------------------------------------------------------------------- (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 April 21, 2005, Deckers Outdoor Corporation issued a press release announcing financial results for the quarter ended March 31, 2005. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein. Item 9.01. Financial Statements and Exhibits. (c) Exhibits. Exhibit No. Description ----------- ----------- 99.1 Press release, dated April 21, 2005 The information in this Current Report on Form 8-K, including the exhibit, will not be treated as "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section. This information will not be incorporated by reference into a filing under the Securities Act of 1933, or into another filing under the Exchange Act, unless that filing expressly refers to specific information in this report. 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. Deckers Outdoor Corporation Date: April 21, 2005 /s/ M. Scott Ash ---------------- M. Scott Ash, Chief Financial Officer EX-99.1 2 a4869738ex991.txt DECKERS EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Deckers Outdoor Corporation Reports Record First Quarter Financial Results; First Quarter Revenue Increases 45% to a First Quarter Record of $64.3 Million; First Quarter Diluted EPS Increases 41% to a First Quarter Record of $0.69 GOLETA, Calif.--(BUSINESS WIRE)--April 21, 2005-- -- Company Reaffirms Fiscal 2005 EPS Guidance Range of $2.45 to $2.55 Deckers Outdoor Corporation (NASDAQ: DECK) today announced record financial results for the first quarter ended March 31, 2005. For the first quarter, net sales increased 45.2% to $64.3 million versus $44.3 million in the same period last year. Net earnings for the quarter increased 65.1% to a record $8.9 million compared to earnings of $5.4 million last year and income per diluted share increased 40.8% to $0.69, versus income per diluted share of $0.49 in the first quarter of 2004. During the first quarter, Deckers' bad debt expense increased approximately $500,000 versus the same period a year ago, primarily as a result of non-payment by the Company's U.K. distributor for UGG, which it terminated in March 2005. This unanticipated bad debt expense equated to approximately $0.02 of income per diluted share in the first quarter of fiscal 2005. Chairman of the Board, Doug Otto, stated, "Once again, we were pleased to report record first quarter sales and earnings. Our strong top line performance was primarily fueled by continued growth in all three brands. Although our results were impacted by a higher than expected bad debt expense, we were still able to grow our net income by 65% to a record level for the first quarter. We remain optimistic about our future prospects, as our Fall bookings are coming in higher than previously estimated and this is reflected in our heightened outlook for the second half of the year." Including sales from both the wholesale divisions and the Internet and catalog retailing business, Teva net sales for the first quarter increased 5% to $39.4 million compared to $37.4 million last year, UGG net sales for the quarter increased 337% to $22.5 million from $5.1 million, and Simple net sales increased 41% to $2.4 million for the quarter compared to $1.7 million for the same period last year. Sales for the Internet and catalog retailing business, which are included in the brand sales numbers above, aggregated approximately $5.0 million for the first quarter of 2005, up 38% from $3.6 million for the first quarter of 2004. Mr. Otto further stated, "During the first quarter, Teva achieved its highest quarterly net sales in the Company's history, despite unseasonable weather and lower than anticipated sales overseas. UGG experienced significant growth during the quarter, primarily as a result of carryover shipments of our 2004 Fall and Holiday product as well as the initial deliveries of our first Spring line. For Simple, sales were driven by strength in sneakers, sandals and clogs, as we benefited from expanded distribution and increased shelf space for the brand." The gross margin for the quarter was 46.0%, compared to 46.1% for the first quarter of 2004. Selling, general and administrative expenses were $15.2 million or 23.6% of sales for the first quarter of 2005 compared to $10.8 million or 24.3% of sales in the first quarter of 2004. This $4.4 million increase resulted primarily from $2.3 million of costs associated with the increased revenue, $0.8 of increased marketing costs, $0.5 million of increased bad debt expenses and $0.4 million related to the initial compliance with Section 404 of the Sarbanes-Oxley Act of 2002. The continued leverage of our selling, general and administrative expenses resulted in a 70 basis point improvement in our operating margin to 22.4% of sales for the first quarter of 2005 compared to 21.7% for the same period last year. In order to better meet demand and ensure more timely deliveries to its retail partners in the second half of fiscal 2005 and to support the anticipated growth for the UGG Fall and Winter season this year, the Company made the strategic decision to receive Fall and Winter UGG products earlier than it did a year ago. As a result, inventories as of March 31, 2005 were up by $27.8 million as compared to March 31, 2004. The Company is comfortable with its current inventory position and expects inventories to return to normalized levels by year-end. Deckers updated its 2005 sales and earnings guidance. For the fiscal year 2005, the Company remains comfortable with its previously issued guidance of net sales between $250 million and $260 million and income per diluted share between $2.45 and $2.55. Due to the unseasonable weather and lower international expectations, the Company currently expects second quarter net sales to range from $40 million to $41 million and income per diluted share to range from $0.28 to $0.30. However, as a result of the better than expected Fall bookings for UGG, the Company expects to make up the sales and earnings shortfall in the second half of fiscal 2005, primarily in the third quarter. For fiscal 2005, the Company now expects annual net sales to be approximately $92 million to $95 million for Teva, $10 million to $12 million for Simple and $148 million to $153 million for UGG. Mr. Otto concluded, "Looking ahead, we remain confident about the vitality of our brands and the growth opportunities for our Company. We are committed to leveraging the strength of our assets in order to further build on our leadership position in the marketplace and believe we have the right personnel and well-developed infrastructure in place to successfully execute our strategy. We believe our new President, Angel Martinez, will make significant contributions to our business in 2005 and in future years." Deckers Outdoor Corporation builds niche products into global lifestyle brands by designing and marketing innovative, functional and fashion-oriented footwear developed for both high performance outdoor activities and everyday casual lifestyle use. The Company's products are offered under the Teva(R), Simple(R) and UGG(R) brand names, which are also its registered trademarks. All statements in this press release that are not historical facts are forward-looking statements, including statements about the Company's future prospects, the Company's estimates regarding sales and income per diluted share results for the second quarter of 2005, expectations for the full year ending December 31, 2005, expectations regarding increased sales and earnings in the second half of 2005 and the third quarter of 2005, as well as sales expectations for each of the brands in 2005, among others. These forward-looking statements are inherently uncertain and are based on the Company's expectations as of today, April 21, 2005. In addition, such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from those expressed or implied by such forward-looking statements. Many of the risks, uncertainties and other factors are discussed in detail in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2004. Among the factors which could affect our financial condition and results of operations are the following: our ability to anticipate fashion trends; whether the UGG brand will continue to grow at the rate it has experienced in the recent past; possible shortages in top grade sheepskin or interruption in the supply of other materials, which could interrupt product manufacturing and increase product costs; the risk that our licensees will perform under their licenses; the risk that we are unable to accurately forecast consumer demand; the risk that retailers could postpone or cancel existing orders; the sensitivity of the footwear industry to changes in general economic conditions; whether we are successful in continuing to implement our growth strategy; the success of our customers; our ability to protect our intellectual property; our ability to develop and patent new technologies as our existing patents expire; the difficulty of matching inventory to future customer demand; the risk that counterfeiting can harm our sales or our brand image; our dependence on independent manufacturers to supply our products; the availability of products, which can affect our ability to fulfill our customers' orders; the risk that raw materials do not meet our specifications or that the prices of raw materials may increase, which would potentially cause a high return rate, a loss of sales or a reduction in our gross margins; risks of international commerce resulting from our reliance on manufacturers outside the U.S.; the risk that our manufacturers, suppliers or licensees might fail to conform to labor laws or to our ethical standards; the need to secure sufficient and affordable sources of raw materials; our reliance on licensing partners to expand our business; the challenge of managing our brands for growth; currency risk; delays and unexpected costs that can result from customs regulations; the sensitivity of our sales, particularly of the Teva(R) and UGG(R) brands, to seasonal and weather factors; our reliance on independent distributors in international markets; legal compliance challenges and political and economic risk in our international markets; the potential impact of litigation; the effect of consolidations and restructurings on our customers in the footwear industry; intense competition within the footwear industry; the threat that terrorism could disrupt commerce in the U.S. and abroad; our ability to defend attacks on the validity of our intellectual property; and our ability to register and protect our intellectual property in expanding product and geographic markets. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. The Company intends to continue its practice of not updating projections until its next quarterly results announcement. The Company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, the Company's Quarterly Reports on Form 10-Q, the Company's Current Reports on Form 8-K or this news release. (Tables to follow) DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) March 31, December 31, Assets 2005 2004 ------------ ------------ Current assets: Cash and cash equivalents $ 17,634,000 10,379,000 Short-term investments ----- 15,475,000 Trade accounts receivable, net 39,206,000 40,226,000 Inventories 45,446,000 30,260,000 Prepaid expenses and other current assets 1,256,000 1,491,000 Deferred tax assets 3,240,000 3,240,000 ------------ ------------ Total current assets 106,782,000 101,071,000 Property and equipment, at cost, net 3,787,000 2,838,000 Intangible assets, less applicable amortization 70,242,000 70,319,000 Other assets 582,000 592,000 ------------ ------------ $181,393,000 174,820,000 ============ ============ Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable $ 13,669,000 16,524,000 Accrued expenses 5,379,000 7,968,000 Income taxes payable 8,533,000 6,725,000 ------------ ------------ Total current liabilities 27,581,000 31,217,000 ------------ ------------ Deferred tax liabilities-noncurrent 2,607,000 2,607,000 Stockholders' equity: Preferred stock ----- ----- Common stock 123,000 122,000 Additional paid-in capital 73,317,000 71,959,000 Retained earnings 77,478,000 68,591,000 Accumulated other comprehensive income 287,000 324,000 ------------ ------------ Total stockholders' equity 151,205,000 140,996,000 ------------ ------------ $181,393,000 174,820,000 ============ ============ DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Income (Unaudited) Three-month period ended March 31, -------------------------- 2005 2004 ----------- ----------- Net sales $64,263,000 44,272,000 Cost of sales 34,696,000 23,866,000 ----------- ----------- Gross profit 29,567,000 20,406,000 Selling, general and administrative expenses 15,168,000 10,778,000 ----------- ----------- Income from operations 14,399,000 9,628,000 Other expense (income): Interest, net (69,000) 1,118,000 Other 1,000 (6,000) ----------- ----------- Income before income taxes 14,467,000 8,516,000 Income taxes 5,580,000 3,134,000 ----------- ----------- Net income $ 8,887,000 5,382,000 =========== =========== Net income per share: Basic $ 0.72 0.55 Diluted 0.69 0.49 =========== =========== Weighted-average shares: Basic 12,285,000 9,747,000 Diluted 12,922,000 11,051,000 =========== =========== CONTACT: Deckers Outdoor Corporation Scott Ash, 805-967-7611 or Integrated Corporate Relations, Inc. Chad A. Jacobs or Brendon Frey, 203-682-8200 -----END PRIVACY-ENHANCED MESSAGE-----