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, 2016
DECKERS OUTDOOR CORPORATION |
(Exact name of registrant as specified in its charter) |
Delaware |
(State or other jurisdiction of incorporation) |
000-22446 | 95-3015862 |
(Commission File Number) | (IRS Employer Identification No.) |
250 Coromar Drive, Goleta, California | 93117 |
(Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code (805) 967-7611
(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 (see General Instruction A.2. below):
⃞ 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 27, 2016, Deckers Outdoor Corporation issued a press release announcing its financial results for the three months ended September 30, 2016 and held a conference call regarding these financial results. A copy of the press release is furnished hereto as Exhibit 99.1.
The information in this Form 8-K and the exhibit 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. |
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Exhibit No. |
Description |
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99.1 |
Press Release, dated October 27, 2016 |
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.
Date: |
October 27, 2016 |
Deckers Outdoor Corporation |
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/s/ Thomas A. George |
Thomas A. George |
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Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
Description |
99.1 |
Press Release, dated October 27, 2016 |
Exhibit 99.1
Deckers Brands Reports Second Quarter Fiscal 2017 Financial Results
GOLETA, Calif.--(BUSINESS WIRE)--October 27, 2016--Deckers Brands (NYSE: DECK), a global leader in designing, marketing and distributing innovative footwear, apparel and accessories, today announced financial results for the second fiscal quarter ended September 30, 2016.
Throughout this release, references to Non-GAAP financial measures exclude certain restructuring charges. Additional information regarding these Non-GAAP financial measures is set forth under the heading "Non-GAAP Financial Measures" below.
“We are pleased with the results of our second quarter and the progress on our plans for the year,” said Dave Powers, President and Chief Executive Officer. “Despite a challenging consumer environment, we delivered earnings per share results that were higher than last year and at the top end of our expectations. Looking ahead, our teams are prepared for the upcoming selling season, and we are excited about our fall and holiday product and marketing plans.”
Second Quarter Fiscal 2017 Financial Review
Brand Summary
Channel Summary (included in the brand sales numbers above)
Geographic Summary (included in the brand and channel sales numbers above)
Balance Sheet
At September 30, 2016, cash and cash equivalents were $110.0 million compared to $99.8 million at September 30, 2015. The Company had $310.4 million in outstanding borrowings at September 30, 2016 compared to $349.7 million at September 30, 2015.
Company-wide inventories at September 30, 2016 decreased (2.9)% to $578.0 million from $595.0 million at September 30, 2015. By brand, UGG inventory decreased (4.1)% to $512.4 million at September 30, 2016, Teva inventory decreased (9.1)% to $17.8 million at September 30, 2016, Sanuk inventory decreased (2.7)% to $18.6 million at September 30, 2016, and the other brands inventory increased 34.0% to $29.2 million at September 30, 2016.
Full Year Fiscal 2017 Outlook for the Twelve Month Period Ending March 31, 2017
Third Quarter Fiscal 2017 Outlook for the Three Month Period Ending December 31, 2016
Non-GAAP Financial Measures
We present certain Non-GAAP financial measures in this press release, including Non-GAAP gross margin, Non-GAAP SG&A expenses, Non-GAAP operating income and Non-GAAP diluted earnings per share, to provide information that may assist investors in understanding our financial results and assessing our prospects for future performance. We believe these Non-GAAP financial measures are important indicators of our operating performance because they exclude items that are unrelated to, and may not be indicative of, our core operating results, such as restructuring charges relating to retail store closures and office consolidations. In particular, we believe that the exclusion of certain costs and charges allows for a more meaningful comparison of our results from period to period. These Non-GAAP measures, as we calculate them, may not necessarily be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to Deckers. These Non-GAAP financial results are not intended to represent, and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. To the extent we utilize such Non-GAAP financial measures in the future, we expect to calculate them using a consistent method from period to period. A reconciliation of each of the financial measures to the most directly comparable GAAP measures has been provided under the heading “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures” in the financial statement tables included below.
Conference Call Information
The Company’s conference call to review the results for the second quarter 2017 will be broadcast live today, Thursday, October 27, 2016 at 4:30 pm Eastern Time and hosted at www.deckers.com. You can access the broadcast by clicking on the “Investor Information” tab and then clicking on the microphone icon at the top of the page.
About Deckers Brands
Deckers Brands is a global leader in designing, marketing and distributing innovative footwear, apparel and accessories developed for both everyday casual lifestyle use and high performance activities. The Company’s portfolio of brands includes UGG®, Koolaburra®, HOKA ONE ONE®, Teva® and Sanuk®. Deckers Brands products are sold in more than 50 countries and territories through select department and specialty stores, Company-owned and operated retail stores, and select online stores, including Company-owned websites. Deckers Brands has a 40-year history of building niche footwear brands into lifestyle market leaders attracting millions of loyal consumers globally. For more information, please visit www.deckers.com.
Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of the federal securities laws, which statements are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements other than statements of historical fact contained in this press release, including statements regarding our anticipated financial performance, including our projected net sales, margins, expenses and earnings per share, as well as statements regarding our product and brand strategies, marketing plans and market opportunities. We have attempted to identify forward-looking statements by using words such as "anticipate," "believe," “could,” "estimate," "expect," "intend," "may," “plan,” “predict,” "project," "should," "will," or “would,” and similar expressions or the negative of these expressions.
Forward-looking statements represent our management’s current expectations and predictions about trends affecting our business and industry and are based on information available as of the time such statements are made. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy or completeness. Forward-looking statements involve numerous known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements predicted, assumed or implied by the forward-looking statements. Some of the risks and uncertainties that may cause our actual results to materially differ from those expressed or implied by these forward-looking statements are described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2016, as well as in our other filings with the Securities and Exchange Commission.
Except as required by applicable law or the listing rules of the New York Stock Exchange, we expressly disclaim any intent or obligation to update any forward-looking statements, or to update the reasons actual results could differ materially from those expressed or implied by these forward-looking statements, whether to conform such statements to actual results or changes in our expectations, or as a result of the availability of new information.
DECKERS OUTDOOR CORPORATION | |||||||||||||||||||
AND SUBSIDIARIES | |||||||||||||||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
(Amounts in thousands, except for per share data) | |||||||||||||||||||
Three-month period ended | Six-month period ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Net sales | $ | 485,944 | $ | 486,855 | $ | 660,337 | $ | 700,660 | |||||||||||
Cost of sales | 269,519 | 272,742 | 367,660 | 399,951 | |||||||||||||||
Gross profit | 216,425 | 214,113 | 292,677 | 300,709 | |||||||||||||||
Selling, general and administrative expenses | 162,402 | 162,900 | 316,973 | 313,204 | |||||||||||||||
Income (loss) from operations | 54,023 | 51,213 | (24,296 | ) | (12,495 | ) | |||||||||||||
Other expense, net | 1,551 | 1,371 | 2,113 | 2,345 | |||||||||||||||
Income (loss) before income taxes | 52,472 | 49,842 | (26,409 | ) | (14,840 | ) | |||||||||||||
Income tax expense (benefit) | 13,167 | 13,465 | (6,796 | ) | (3,890 | ) | |||||||||||||
Net income (loss) | 39,305 | 36,377 | (19,613 | ) | (10,950 | ) | |||||||||||||
Other comprehensive (loss) income, net of tax | |||||||||||||||||||
Unrealized (loss) gain on foreign currency hedging | (890 | ) | 1,027 | 2,019 | (436 | ) | |||||||||||||
Foreign currency translation adjustment | (856 | ) | (1,091 | ) | 2,843 | 1,675 | |||||||||||||
Total other comprehensive (loss) income | (1,746 | ) | (64 | ) | 4,862 | 1,239 | |||||||||||||
Comprehensive income (loss) | $ | 37,559 | $ | 36,313 | $ | (14,751 | ) | $ | (9,711 | ) | |||||||||
Net income (loss) per share: | |||||||||||||||||||
Basic | $ | 1.23 | $ | 1.12 | $ | (0.61 | ) | $ | (0.33 | ) | |||||||||
Diluted | $ | 1.21 | $ | 1.11 | $ | (0.61 | ) | $ | (0.33 | ) | |||||||||
Weighted-average common shares outstanding: | |||||||||||||||||||
Basic | 32,057 | 32,511 | 32,041 | 32,812 | |||||||||||||||
Diluted | 32,422 | 32,775 | 32,041 | 32,812 | |||||||||||||||
DECKERS OUTDOOR CORPORATION | ||||||||||
AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(Unaudited) | ||||||||||
(Amounts in thousands) | ||||||||||
September 30, | March 31, | |||||||||
Assets | 2016 | 2016 | ||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 110,047 | $ | 245,956 | ||||||
Trade accounts receivable, net | 300,159 | 160,154 | ||||||||
Inventories | 578,027 | 299,911 | ||||||||
Other current assets | 86,796 | 79,744 | ||||||||
Total current assets | 1,075,029 | 785,765 | ||||||||
Property and equipment, net | 246,723 | 237,246 | ||||||||
Other noncurrent assets | 250,849 | 255,057 | ||||||||
Total assets | $ | 1,572,601 | $ | 1,278,068 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities: | ||||||||||
Short-term borrowings | $ | 278,026 | $ | 67,475 | ||||||
Trade accounts payable | 202,917 | 100,593 | ||||||||
Other current liabilities | 64,918 | 70,430 | ||||||||
Total current liabilities | 545,861 | 238,498 | ||||||||
Long-term liabilities: | ||||||||||
Mortgage payable | 32,366 | 32,631 | ||||||||
Other liabilities | 37,100 | 39,468 | ||||||||
Total long-term liabilities | 69,466 | 72,099 | ||||||||
Total stockholders' equity | 957,274 | 967,471 | ||||||||
Total liabilities and stockholders' equity | $ | 1,572,601 | $ | 1,278,068 | ||||||
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures |
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DECKERS BRANDS - GAAP to Non-GAAP Reconciliation | |||||||||||||
For the Three Months Ended September 30, 2016 | |||||||||||||
(in thousands, except per share data) | |||||||||||||
(unaudited) | |||||||||||||
Three-month period ended September 30, 2016 | |||||||||||||
Non-GAAP | |||||||||||||
GAAP Measures | Restructuring | Measures | |||||||||||
(As Reported) | Charges (1) | (Excluding Items) (2) | |||||||||||
Net sales | $ | 485,944 | $ | 485,944 | |||||||||
Cost of sales | 269,519 |
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269,519 | ||||||||||
Gross profit | 216,425 | 216,425 | |||||||||||
Selling, general and administrative expenses | 162,402 | (903 | ) | 161,499 | |||||||||
Income (loss) from operations | 54,023 | 903 | 54,926 | ||||||||||
Other expense, net | 1,551 | 1,551 | |||||||||||
Income (loss) before income taxes | 52,472 | 53,375 | |||||||||||
Income tax expense (benefit) | 13,167 | 13,394 | |||||||||||
Net income (loss) | $ | 39,305 | $ | 39,981 | |||||||||
Net income (loss) per share: | |||||||||||||
Basic | $ | 1.23 | $ | 1.25 | |||||||||
Diluted | $ | 1.21 | $ | 1.23 | |||||||||
Weighted-average common shares outstanding: | |||||||||||||
Basic | 32,057 | 32,057 | |||||||||||
Diluted | 32,422 | 32,422 | |||||||||||
(1) Amounts as of September 30, 2016 reflect charges related to restructuring costs as a result of retail store closures and office consolidations. |
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(2) The tax rate applied to the Non-GAAP measures is 25.1%, which is the same as the GAAP tax rate for the fiscal quarter ended September 30, 2016. |
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Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures |
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DECKERS BRANDS - GAAP to Non-GAAP Reconciliation | |||||||||||||||
For the Six Months Ended September 30, 2016 | |||||||||||||||
(in thousands, except per share data) | |||||||||||||||
(unaudited) | |||||||||||||||
Six-month period ended September 30, 2016 | |||||||||||||||
Non-GAAP | |||||||||||||||
GAAP Measures | Restructuring | Measures | |||||||||||||
(As Reported) | Charges (1) | (Excluding Items) (2) | |||||||||||||
Net sales | $ | 660,337 | $ | 660,337 | |||||||||||
Cost of sales | 367,660 | 367,660 | |||||||||||||
Gross profit | 292,677 | 292,677 | |||||||||||||
Selling, general and administrative expenses | 316,973 | (2,635 | ) | 314,338 | |||||||||||
Income (loss) from operations | (24,296 | ) | 2,635 | (21,661 | ) | ||||||||||
Other expense, net | 2,113 | 2,113 | |||||||||||||
Income (loss) before income taxes | (26,409 | ) | (23,774 | ) | |||||||||||
Income tax expense (benefit) | (6,796 | ) | (6,118 | ) | |||||||||||
Net income (loss) | $ | (19,613 | ) | $ | (17,656 | ) | |||||||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | (0.61 | ) | $ | (0.55 | ) | |||||||||
Diluted | $ | (0.61 | ) | $ | (0.55 | ) | |||||||||
Weighted-average common shares outstanding: | |||||||||||||||
Basic | 32,041 | 32,041 | |||||||||||||
Diluted | 32,041 | 32,041 | |||||||||||||
(1) Amounts as of September 30, 2016 reflect charges related to restructuring costs as a result of retail store closures and office consolidations. |
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(2) The tax rate applied to the Non-GAAP measures is 25.7%, which is the same as the GAAP tax rate for the six-month period ended September 30, 2016. |
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CONTACT:
Deckers Brands
Steve Fasching, VP, Strategy & Investor
Relations
805-967-7611