-----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, JOGAYDC/b4aIGfLY+UJahC/FieAENKbtvHgjmntuRs7VEUQ8zwQgB1DljLEIuC6i XqsDuSBMGaSppl2t9muHfQ== 0001157523-06-010419.txt : 20061026 0001157523-06-010419.hdr.sgml : 20061026 20061026160521 ACCESSION NUMBER: 0001157523-06-010419 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061026 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061026 DATE AS OF CHANGE: 20061026 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: 061166005 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 a5259616.txt DECKERS OUTDOOR CORPORATION 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 26, 2006 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 ---------------------------- - -------------------------------------------------------------------------------- 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 October 26, 2006, Deckers Outdoor Corporation issued a press release announcing its financial results for the quarter ended September 30, 2006 and held a conference call regarding its financial results for the quarter ended September 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information in this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description ----------- ----------- 99.1 Press release, dated October 26, 2006 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: October 26, 2006 /s/ Zohar Ziv ------------- Zohar Ziv, Chief Financial Officer and Executive Vice President of Finance and Administration INDEX TO EXHIBITS Exhibit No. Description ----------- ----------- 99.1 Press release, dated October 26, 2006 EX-99.1 2 a5259616ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Deckers Outdoor Corporation Reports Record Third Quarter Financial Results - Company Reports Third Quarter Sales Increased 19.0% to a Third Quarter Record of $82.3 Million - - Third Quarter Diluted EPS Increased 31.7% to a Third Quarter Record of $0.83 - - Company Raises Fiscal 2006 Outlook - GOLETA, Calif.--(BUSINESS WIRE)--Oct. 26, 2006--Deckers Outdoor Corporation (NASDAQGS: DECK) today announced financial results for the third quarter ended September 30, 2006. Third Quarter Highlights -- Net sales increased 19.0% to $82.3 million versus $69.2 million last year; ahead of previous guidance range of $71 million to $74 million. -- Gross margin increased 320 basis points to 45.2% compared to 42.0% a year ago. -- Diluted EPS was $0.83; ahead of previous guidance range of $0.51 to $0.54. -- Cash and short-term investments increased to $45.3 million compared to $19.1 million a year ago. -- Inventories decreased to $51.5 million versus $66.8 million a year ago. "Our strong third quarter performance was gratifying, as UGG sales once again outpaced our expectations," commented President and Chief Executive Officer, Angel Martinez. "These results reflect the effective execution of our strategy to diversify the product line, increase the breadth and depth of each collection, expand our target demographic, and underscore the growing lifestyle status of the brand. At the same time, our ability to control costs, primarily labor and materials, resulted in significant gross margin expansion for the quarter. However, we expect gross margins to return to more normalized levels in 2007. We are excited about our prospects and committed to capitalizing on the many opportunities that still lie ahead for all three of our brands." Third Quarter Segment Summary Teva Teva net sales for the third quarter increased to $10.0 million compared to $9.7 million for the same period last year. Teva's performance was driven by a positive reaction to a limited introduction of closed toe footwear combined with solid sales of the traditional sandal offering. UGG UGG net sales for the third quarter increased 18.4% to $67.9 million versus $57.3 million for the same period a year ago. Sales were fueled by robust consumer demand for the new Fall styles, including fashion boots, casuals, men's and kids, coupled with a strong reorder business for core styles. Simple Simple net sales increased 108.8% to $4.4 million for the third quarter compared to $2.1 million for the same period last year. Simple's core sandal and sneaker product lines were the largest contributors. Additionally, the Green Toe collection experienced strong retail sell-through across all channels of distribution and in all geographic regions. Consumer Direct Sales for the Consumer Direct business, which are included in the brand sales numbers above, increased 72.8% to $5.8 million compared to $3.4 million for the same period a year ago. Results for the third quarter of 2006 include sales from the Company's two new retail outlet stores, which were not in operation in the third quarter of 2005. Full-Year 2006 Outlook -- The Company raises full year sales guidance to range of $287 million to $290 million versus previous expectation of $272 million to $278 million. -- The Company raises full year diluted EPS to range of $2.75 to $2.78 compared to previous expectation of $2.39 to $2.45. -- Fiscal 2006 guidance includes approximately $1.9 million of stock compensation expense which includes $0.6 million of additional stock compensation expense related to the adoption of Statement of Financial Accounting Standards No. 123R, effective January 1, 2006. In addition, the guidance includes approximately $9.0 million related to the previously announced increase in selling, general and administrative expenses as part of the strategic initiatives to support future growth. Fourth Quarter Outlook -- The Company raises fourth quarter sales guidance to range of $107 million to $110 million and diluted EPS of $1.27 to $1.30 versus previous expectations of $103 to $106 million and $1.23 to $1.26, respectively. -- Fourth quarter guidance includes approximately $3.0 million of expenses associated with the approximate $9.0 million increase in selling, general and administrative expenses for fiscal 2006, as mentioned above. The Company's conference call to review third quarter fiscal 2006 results will be broadcast live over the Internet today, Thursday, October 26, 2006 at 4:30 pm Eastern Time. The broadcast will be hosted at www.deckers.com and www.earnings.com. 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. Certain expectations and projections regarding the future performance of Deckers Outdoor Corporation discussed in this news release are forward-looking and are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including statements related to anticipated revenues, expenses, earnings, operating cash flows, the outlook for the Company's markets and the demand for its products. These expectations and projections are based on currently available competitive, financial and economic data along with the Company's operating plans as of today, October 26, 2006, and are subject to future events and uncertainties. No one should assume that any forward-looking statement made by the Company will remain consistent with the Company's expectations after the date the forward-looking statement is made. Management cautions the reader that the following factors, among others, could cause the Company's actual consolidated results of operations and financial position to differ materially from those expressed in forward-looking statements: our ability to anticipate fashion trends; whether the UGG brand will continue to grow at the same rate it has experienced in the recent past; shortages of top grade sheepskin could interrupt product manufacturing and increase product costs; the risk that we are unable to accurately forecast consumer demand and inventory needs; whether we are successful in continuing to implement our growth strategy; the success of our customers; the risk of losing one or more key customers; our ability to protect our intellectual property; the risk that counterfeiting can harm our sales or our brand image; our ability to develop and patent new technologies; our dependence on independent manufacturers to supply our products; the risk that retailers could postpone or cancel existing orders; future changes in the price of raw materials; the effect of future increases in the cost of petroleum and other energy prices on the costs of production; unpredictable events and circumstances related to our international operations; the adverse affect on our business if our independent manufacturers, designated suppliers or our licensees might violate labor laws or fail to conform to our ethical standards; risks associated with recruiting licensing partners and their ability to meet our expectations; the challenge of managing our brands for growth; our ability to successfully build new brands; unpredictable fluctuations in our quarterly sales and operating results; the risk of losing key personnel; currency risk; the sensitivity of our sales to seasonal and weather conditions; risks associated with international markets which are subject to a variety of laws and political and economic risks that may adversely impact our business; delays and unexpected costs that can result from customs regulations; our dependence on computer and communication systems; fluctuating economic conditions; increased levels of competition in the footwear industry; concentration of ownership in the retail industry; the risk that world events, such as terrorism, could disrupt international commerce; volatility of our stock price; the risk that future sales of our common stock could adversely affect our stock price; and the prevention or delay of changes in control due to anti-takeover provisions. Please refer to the Company's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to publicly release or update the results of any revisions to forward-looking statements, which may be made to reflect new information, events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The risks highlighted herein should not be assumed to be the only items that could affect the future performance of the Company. DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) (Amounts in thousands) September 30, December 31, Assets 2006 2005 ------------- ------------ Current assets: Cash and cash equivalents $ 17,141 50,749 Short-term investments 28,110 2,500 Trade accounts receivable, net 49,937 40,918 Inventories 51,530 33,374 Prepaid expenses and other current assets 2,239 1,364 Deferred tax assets 5,949 5,949 ------------- ------------ Total current assets 154,906 134,854 Property and equipment, at cost, net 5,983 4,711 Intangible assets, less applicable amortization 69,777 70,009 Other assets 52 52 ------------- ------------ $ 230,718 209,626 ============= ============ Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable $ 10,304 14,506 Accrued expenses 6,628 6,095 Income taxes payable 9,336 7,133 ------------- ------------ Total current liabilities 26,268 27,734 ------------- ------------ Deferred tax liabilities-noncurrent 4,337 4,337 Stockholders' equity: Common stock 125 124 Additional paid-in capital 80,350 76,788 Retained earnings 119,415 100,436 Accumulated other comprehensive income 223 207 ------------- ------------ Total stockholders' equity 200,113 177,555 ------------- ------------ $ 230,718 209,626 ============= ============ DECKERS OUTDOOR CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Income (Unaudited) (Amounts in thousands, except for per share data) Three-month Nine-month period period ended ended September 30, September 30, ---------------------------------- 2006 2005 2006 2005 ------- ------- -------- -------- Net sales $82,322 69,193 180,047 173,797 Cost of sales 45,149 40,123 99,133 99,191 ------- ------- -------- -------- Gross profit 37,173 29,070 80,914 74,606 Selling, general and administrative expenses 19,865 15,052 50,684 41,512 ------- ------- -------- -------- Income from operations 17,308 14,018 30,230 33,094 Other (income) expense : Interest, net (673) 167 (1,940) 104 Other 30 --- 13 (3) ------- ------- -------- -------- Income before income taxes 17,951 13,851 32,157 32,993 Income taxes 7,352 5,701 13,178 13,224 ------- ------- -------- -------- Net income $10,599 8,150 18,979 19,769 ======= ======= ======== ======== Net income per share: Basic $ 0.85 0.66 1.52 1.60 Diluted 0.83 0.63 1.48 1.54 ======= ======= ======== ======== Weighted-average shares: Basic 12,531 12,358 12,503 12,333 Diluted 12,831 12,856 12,805 12,872 ======= ======= ======== ======== CONTACT: Deckers Outdoor Corporation Zohar Ziv Chief Financial Officer and Executive Vice President of Finance and Administration 805-967-7611 or Investor Relations: Integrated Corporate Relations, Inc. Chad A. Jacobs/Brendon Frey 203-682-8200 -----END PRIVACY-ENHANCED MESSAGE-----