COSTA MESA, Calif.–(BUSINESS WIRE) —
Volcom, Inc. (NASDAQ:VLCM – News) today announced financial results for the first quarter ended March 31, 2010.
For the 2010 first quarter, total consolidated revenues were $77.4 million, compared with $68.3 million in the first quarter of 2009.
Total revenues in the company’s U.S. segment, which includes revenues from the U.S., Canada, Japan and most other international territories outside of Europe, as well as the company’s branded retail stores, were $48.2 million, compared with $42.4 million in the prior-year period. Total revenues in the company’s Europe segment were $23.6 million, compared with $21.7 million in the same period in 2009. Total revenues in the company’s Electric segment were $5.6 million, compared with $4.2 million in 2009.
“Our results for the quarter were stronger than we had anticipated, representing a solid start to the year and continued strength for both the Volcom and Electric brands,” said Richard Woolcott, Volcom’s chairman and chief executive officer.
“Combined with great product, focused marketing and solid distribution, we believe we are well positioned to capitalize on the many opportunities before us and pave the way for continued growth and success.”
Consolidated gross profit for the 2010 first quarter was $42.0 million, equal to 54.2% of total revenues, compared with $34.4 million, equal to 50.3% of total revenues, in the first quarter of 2009.
Selling, general and administrative expenses on a consolidated basis were $31.0 million in the 2010 first quarter versus $28.0 million in the comparable period in 2009.
Net income for the 2010 first quarter was $7.5 million, equal to $0.31 per diluted share, compared with $4.2 million, or $0.17 per diluted share, in the first quarter of 2009
At March 31, 2010 the company had cash, cash equivalents and short-term investments totaling $109 million, and no long-term debt.
2010 Second Quarter Financial Outlook
For the 2010 second quarter, the company currently expects total consolidated revenues of approximately $59 million to $62 million and per share amounts to range from a loss of $0.02 to earnings of $0.02.
Conference Call Information
The company will host a conference call today at approximately 4:30 p.m. ET to discuss its financial results and outlook in further detail. The conference call will be available to interested parties through a live audio Internet broadcast at www.volcom.com. A telephone playback of the conference call also will be available through 11:59 p.m. ET, Thursday, May 6. Listeners should call (877) 941-6009 (domestic) or (480) 629-9770 (international) and use reservation number 4282599.
About Volcom, Inc.
Volcom is an innovative designer, marketer and distributor of premium quality young mens and womens clothing, accessories and related products. The Volcom brand, symbolized by The Stone, is athlete-driven, creative and forward thinking. Volcom has consistently followed its motto of “youth against establishment,” and the brand is inspired by the energy of youth culture. Volcom branded products are sold throughout the United States and internationally. Volcom’s news announcements and SEC filings are available through the company’s website at www.volcom.com.
Safe Harbor Statement
Certain statements in this press release and oral statements made from time to time by representatives of the company are forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995, including statements in connection with or related to any discussion of or reference to Volcom’s future operations, opportunities or financial performance. In particular, statements regarding the company’s guidance and future financial performance contained under the section entitled 2010 Second Quarter Financial Outlook and Mr. Woolcott’s comments regarding the company being “well positioned to capitalize on the many opportunities before us” and his comments regarding “continued growth and success.”
These forward-looking statements are based on management’s current expectations but they involve a number of risks and uncertainties. Volcom’s actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, including, without limitation, further softening of the retail environment, sales of our products by key retailers, including Pacific Sunwear and Zumiez, changes in fashion trends and consumer preferences, general economic conditions, the impact of sourcing costs, and additional factors which are detailed in our filings with the Securities and Exchange Commission, including the Risk Factors contained in the company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) and the subsequently filed Quarterly Reports on Form 10-Q, all of which are available at www.sec.gov.
Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Volcom is under no obligation, and expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.
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VOLCOM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
VOLCOM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except share and per share data)
Three Months Ended
March 31,2010 2009
Revenues:
Product revenues $ 76,834 $ 67,944
Licensing revenues 586 375
Total revenues 77,420 68,319
Cost of goods sold 35,425 33,937
Gross profit 41,995 34,382
Selling, general and administrative expenses 31,008 28,034
Operating income 10,987 6,348
Other income:
Interest income, net 109 33
Foreign currency (loss) gain (10 ) 118
Total other income 99 151
Income before provision for income taxes 11,086 6,499
Provision for income taxes 3,552 2,279
Net income $ 7,534 $ 4,220
Net income per share:
Basic $ 0.31 $ 0.17
Diluted $ 0.31 $ 0.17
Weighted average shares outstanding:
Basic 24,356,857 24,347,857
Diluted 24,376,971 24,357,044
VOLCOM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
March 31, 2010 December 31, 2009
Assets
Current assets:
Cash and cash equivalents $ 63,992 $ 76,180
Short-term investments 45,000 35,000
Accounts receivable — net of allowances 59,679 53,792
Inventories 26,233 33,250
Prepaid expenses and other current assets 5,204 4,353
Income taxes receivable — 725
Deferred income taxes 7,915 7,700
Total current assets 208,023 211,000
Property and equipment — net 25,640 26,348
Investments in unconsolidated investees 330 330
Deferred income taxes 3,541 3,545
Intangible assets — net 9,562 9,784
Goodwill 1,254 1,291
Other assets 792 735
Total assets $ 249,142 $ 253,033
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 10,627 $ 22,788
Accrued expenses and other current liabilities 10,123 9,957
Income taxes payable 2,691 —
Current portion of capital lease obligations 20 50
Total current liabilities 23,461 32,795
Other long-term liabilities 1,200 1,203
Income taxes payable – non-current 68 68
Stockholders’ equity:
Common stock 24 24
Additional paid-in capital 92,731 92,192
Retained earnings 131,213 123,679
Accumulated other comprehensive income 445 3,072
Total stockholders’ equity 224,413 218,967
Total liabilities and stockholders’ equity $ 249,142 $ 253,033
VOLCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended
March 31, 2010 2009
Cash flows from operating activities:
Net income $ 7,534 $ 4,220
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 1,517 1,765
Provision for doubtful accounts (217 ) 1,113
Loss on disposal of property and equipment 3 4
Stock-based compensation 550 246
Deferred income taxes (201 ) (78 )
Changes in operating assets and liabilities:
Accounts receivable (8,010 ) (473 )
Inventories 6,532 4,135
Prepaid expenses and other current assets (904 ) 392
Income taxes receivable/payable 3,488 2,273
Other assets (69 ) 37
Accounts payable (11,608 ) (4,802 )
Accrued expenses 140 (2,792 )
Other long-term liabilities 14 (30 )
Net cash (used in) provided by operating activities (1,231 ) 6,010
Cash flows from investing activities:
Purchase of property and equipment (1,005 ) (734 )
Business acquisitions, net of cash acquired — (794 )
Purchase of short-term investments (20,000 ) (24,944 )
Sale of short-term investments 10,000 —
Net cash used in investing activities (11,005 ) (26,472 )
Cash flows from financing activities:
Principal payments on capital lease obligations (4 ) (18 )
Net cash used in financing activities (4 ) (18 )
Effect of exchange rate changes on cash 52 814
Net decrease in cash and cash equivalents (12,188 ) (19,666 )
Cash and cash equivalents — Beginning of period 76,180 79,613
Cash and cash equivalents — End of period $ 63,992 $ 59,947
VOLCOM, INC. AND SUBSIDIARIES
OPERATING SEGMENT INFORMATION (UNAUDITED)
(in thousands)
Three Months Ended
March 31, 2010 2009
Total revenues:
United States $ 48,179 $ 42,420
Europe 23,626 21,678
Electric 5,615 4,221
Consolidated $ 77,420 $ 68,319
Gross profit:
United States $ 24,224 $ 20,275
Europe 14,277 11,807
Electric 3,494 2,300
Consolidated $ 41,995 $ 34,382
Operating income (loss):
United States $2,744 $1,471
Europe 7,977 5,792
Electric 266 (915)
Consolidated $10,987 $6,348
