Company Reports First Quarter Sales Increased 16.2% to a Record of $155.9 Million

GOLETA, Calif.--(BUSINESS WIRE)--April 22, 2010--Deckers Outdoor Corporation (NASDAQGS: DECK) today announced financial results for the first quarter ended March 31, 2010.

Angel Martinez, President, Chief Executive Officer and Chairman of the Board of Directors, stated: “Our first quarter earnings performance was much stronger than expected, driven by higher sales of the UGG brand combined with double digit growth of the Teva brand. Both our direct-to-consumer business, highlighted by same store sales growth of 28.2%, and our overall domestic wholesale business were above plan, as consumer response to the UGG brand’s diverse assortment of spring boots, sandals, and new sneaker collection was very positive. At the same time, the Teva brand delivered its strongest quarter in several years, fueled by sales of our expanded spring line of open and closed toe styles. These results are a validation of Teva’s resurgence as an outdoor market leader and underscore our efforts to lessen the brand’s dependence on weather. The sell-through performance of our entire brand portfolio this spring has been very encouraging and has led to improved orders for the fall season, evidenced by our heightened outlook for the full year. We move forward with strong momentum across our business, and with $357 million in cash and no debt, we are well capitalized to execute our future growth strategies.”

UGG brand net sales for the first quarter increased 14.2% to $104.4 million compared to $91.4 million for the same period last year. The sales increase was primarily attributable to strong sell-through of the spring line at company-owned retail stores, coupled with increased shipments of spring product to domestic wholesale accounts.

Teva brand net sales increased 21.4% to $43.2 million for the first quarter compared to $35.6 million for the same period last year. The increase in sales was the result of strong domestic and international demand for the expanded spring line of open and closed toe footwear, as well as from the Company assuming control of direct distribution in the Benelux region.

Combined net sales of the Company’s other brands were $8.4 million for the first quarter of 2010 compared to $7.3 million for the same period last year.

Sales for the eCommerce business, which are included in the brand sales numbers above, increased 13.8% to $18.4 million for the first quarter compared to $16.2 million for the same period last year.

Sales for the retail store business, which are included in the brand sales numbers above, increased 66.1% to $23.1 million for the first quarter compared to $13.9 million for the same period last year, driven by five new stores and a same store sales increase of 28.2% for those stores that were open for the full three month periods ended March 31, 2009 and 2010.

The Company’s conference call to review first quarter fiscal 2010 results will be broadcast live over the internet today, Thursday, April 22, 2010 at 4:30 pm Eastern Time. The broadcast will be hosted at www.deckers.com and www.earnings.com.

Deckers Outdoor Corporation strives to be a premier lifestyle marketer that builds niche brands into global market leaders by designing and marketing innovative, functional and fashion-oriented footwear developed for both high performance outdoor activities and everyday casual lifestyle use. Teva®, Simple® Shoes, UGG® Australia, TSUBO®, and Ahnu® are registered trademarks of Deckers Outdoor Corporation.

This news release contains statements regarding our expectations, beliefs and views about our future financial performance which are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the use of words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or future or conditional verbs such as "will," "would," "should," "could," or "may" or by the fact that such statements relate to future, and not just historical, events or circumstances, including statements related to anticipated revenues, expenses, earnings, operating cash flows, the outlook for the Company's markets and the demand for its products. The forward-looking statements in this news release regarding our future financial performance are based on currently available information as of the date of this release, and because our business is subject to a number of risks and uncertainties, some of which may be beyond our control, actual operating results in the future may differ materially from the future financial performance expected at the current time. In addition, the results reported in this release may differ from actual results filed with the SEC for the quarter ended March 31, 2010 if material events or circumstances occur between now and our SEC filing. Those risks and uncertainties include, among others: the continued decline of the global economy; the ability to realize returns on our new and existing retail stores; our ability to anticipate fashion trends; a decline in wholesaler, distributor, or direct consumer demand or inventory needs; impairment charges related to a decline in the value of our brands’ intangible assets below their carrying values; shortages or price fluctuations of raw materials that could interrupt product manufacturing and increase product costs; increased costs of manufacturing in China and actions by the Chinese government; currency fluctuations; our ability to implement our growth strategy; the success of our customers, their ability to perform and obtain credit in an adverse economic environment and the risk of losing one or more of our key customers; our ability to develop and protect our brands and intellectual property; the risk that counterfeiting can harm our sales or our brand image; our dependence on independent manufacturers to supply our products; the risk that retailers could postpone or cancel existing orders; unpredictable events and circumstances and currency risks related to our international operations; volatile credit and equity markets; liquidity and market risks for our cash equivalents and short-term investments; the risk of losing key personnel or the interruption of key information technology systems; a delay, increase in cost, or interruption in the delivery of merchandise to our customers; the sensitivity of our sales to seasonal and weather conditions; and we could be subject to additional income tax liabilities. Certain of these risks and uncertainties, as well as others, are more fully described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, which the Company filed with the Securities and Exchange Commission on March 1, 2010, and under “Risk Factors” in any subsequent filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements contained in this news release, which speak only as of the date of this release. 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 and uncertainties highlighted herein should not be assumed to be the only items that could affect the future performance or valuation of the Company.


DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands)


			March 31,	December 31,
Assets			2010	2009

Current assets:
Cash and cash equivalents		$	357,328	315,862
Restricted cash			200	300
Short-term investments			-	26,120
Trade accounts receivable, net			54,582	76,427
Inventories			68,824	85,356
Prepaid expenses and other current assets			7,369	7,210
Deferred tax assets			9,712	9,712
	Total current assets		498,015	520,987

Restricted cash			213	400
Property and equipment, at cost, net			36,144	35,442
Intangible assets, net			25,993	23,940
Deferred tax assets			16,704	16,704
Other assets			1,852	1,570

	Total assets	$	578,921	599,043

Liabilities and Stockholders' Equity

Current liabilities:
Trade accounts payable		$	29,458	47,331
Accrued payroll			10,353	20,869
Other accrued expenses			10,087	12,985
Income taxes payable			10,038	19,685
	Total current liabilities		59,936	100,870

Long-term liabilities			5,769	6,269

Stockholders' equity:
Deckers Outdoor Corporation stockholders' equity:
Common stock			129	129
Additional paid-in capital			129,020	125,431
Retained earnings			383,199	365,304
Accumulated other comprehensive income			77	494
	Total Deckers Outdoor Corporation stockholders' equity		512,425	491,358
Noncontrolling interest			791	546
	Total equity		513,216	491,904

	Total liabilities and equity	$	578,921	599,043


DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
(Amounts in thousands, except for per share data)



			Three-month period ended
			March 31,
			2010		2009

Net sales		$	155,927		134,226
Cost of sales			78,020		75,313
	Gross profit		77,907		58,913

Selling, general and administrative expenses			49,086		39,587
	Income from operations		28,821		19,326

Other (income) expense, net:
	Interest income		(19	)	(596	)
	Interest expense		18		17
	Other, net		(64	)	(19	)
Income before income taxes			28,886		19,924

Income tax expense			10,746		7,571

Net income			18,140		12,353
Less: Net income attributable to the
	noncontrolling interest		(245	)	(13	)

Net income attributable to Deckers Outdoor
	Corporation	$	17,895		12,340

Net income attributable to Deckers Outdoor
Corporation common stockholders per share:
	Basic	$	1.39		0.94
	Diluted	$	1.37		0.93

Weighted-average common shares:
	Basic		12,877		13,090
	Diluted		13,020		13,201


DECKERS OUTDOOR CORPORATION
AND SUBSIDIARIES
Reconciliation of Non-GAAP Measures
(Unaudited)
(Amounts in thousands, except for per share data)


		Three-month	Twelve-month
		period ended	period ended
		June 30, 2009	December 31, 2009

Income before income taxes	$	4,464	183,223
Add back impairment charges		1,000	1,000

Income before income taxes, excluding impairment charges		5,464	184,223

Income tax expense (1)		2,076	66,666

Net income excluding impairment charges		3,388	117,557

Less: Net loss (income) attributable to the noncontrolling interest		112	(133)

Net income excluding impairment charges attributable to
Deckers Outdoor Corporation	$	3,500	117,424

Net income excluding impairment charges attributable to
Deckers Outdoor Corporation common stockholders per share:
Basic	$	0.27	9.03
Diluted	$	0.26	8.94

Weighted-average shares:
Basic		13,116	13,008
Diluted		13,210	13,131

(1) The non-GAAP income tax expense assumes the same effective tax rate as the GAAP income tax expense for the periods presented.

Use of Non-GAAP Financial Measures

To supplement the actual and forecast results in accordance with U.S. generally accepted accounting principles (GAAP), for the applicable periods, the Company also used non-GAAP measures of net income and earnings per share, which are adjusted from the GAAP-based results to exclude non-cash impairment charges. This adjustment is not in accordance with or an alternative for GAAP. This adjustment is provided to enhance an overall understanding of the Company's financial performance for the applicable periods and are indicators management uses for planning and forecasting future periods.

The excluded items represent non-cash impairment charges associated with the write-down of the Company's TSUBO trademarks because management does not believe these expenses are indicative of the Company's core business. Even though such items have occurred in the past and may recur in future periods, it is driven by events that are not directly related to the Company's ongoing core business operations. These financial measures are not to be considered in isolation from, or as a substitute for, financial results prepared in accordance with GAAP.

CONTACT:
Deckers Outdoor Corporation:
Tom George, 805-967-7611
Chief Financial Officer
or
Investor Relations:
ICR
Chad Jacobs/Brendon Frey, 203-682-8200