Baltimore, MD (July 28, 2009) - Under Armour, Inc. (NYSE: UA) today announced financial results for the second quarter ended June 30, 2009. Net revenues increased 5.1% in the second quarter of 2009 to $164.6 million compared with net revenues of $156.7 million in the second quarter of 2008. Net income increased 4.7% year-over-year to $1.4 million in the second quarter of 2009. Diluted earnings per share for the second quarter of 2009 was $0.03 on weighted average common shares outstanding of 50.6 million compared with $0.03 per share on weighted average common shares outstanding of 50.3 million in the second quarter of the prior year.
Second quarter apparel net revenues increased 16.5% to $112.0 million compared with $96.2 million in the same period of the prior year, driven by double-digit rate of growth in the Men's, Women's, and Youth apparel businesses. Footwear net revenues in the second quarter of 2009 were $37.5 million compared with net revenues of $46.0 million in the second quarter of 2008. The Company had previously indicated that Training footwear revenues were expected to decline year-over-year in the second quarter of 2009 following the May 2008 launch of Performance Training Footwear. Direct-to-consumer net revenues grew 36.6% year-over-year during the second quarter.
Kevin Plank, Chairman and CEO of Under Armour, Inc., stated, "Our results this quarter demonstrate our continued ability to successfully manage our business. We delivered 16% growth in apparel while maintaining our premium price positioning and exerted financial discipline around spending and investments. We are proud of what we have accomplished but will continue to hold ourselves to a higher standard."
For the second quarter, operating income rose 3.3% to $3.4 million compared with $3.3 million in the prior year's period. Gross margin for the second quarter of 2009 was 45.1% compared with 45.3% in the prior year's quarter. Selling, general and administrative expenses as a percentage of net revenues decreased to 43.0% in the second quarter of 2009 compared with 43.2% in the prior year's period. Marketing expense for the second quarter of 2009 was 12.9% of net revenues versus 14.4% in the prior year's period.
For the first six months of 2009, net revenues increased 16.1% to $364.6 million compared with $314.0 million in the prior year. Net income for the first six months of 2009 increased 27.2% to $5.4 million compared with $4.2 million in the same period of 2008. Diluted earnings per share for the first six months of 2009 was $0.11 on weighted average common shares outstanding of
50.5 million compared with $0.08 per share on weighted average common shares outstanding of 50.3 million in the prior year.
Balance Sheet Highlights
Cash and cash equivalents increased $66.2 million to $79.5 million at June 30, 2009 compared with $13.3 million at June 30, 2008. The Company had no borrowings outstanding under its $200 million revolving credit facility at June 30, 2009. Net accounts receivable decreased 16.8% to $85.4 million at June 30, 2009 compared with $102.7 million at June 30, 2008. Inventory at quarter-end decreased 1.4% to $181.4 million compared with $183.9 million at June 30, 2008.
Outlook for 2009
Based on improved visibility, the Company is providing an initial outlook for 2009. The Company remains cautious on the outlook for consumer spending for the balance of the year. Based on current projections, the Company anticipates full year net revenues of approximately $810 million. Diluted earnings per share for the year is anticipated to be $0.80 to $0.82. Selling, general, and administrative expenses for 2009 are still expected to grow in the low-teens on a percentage basis year-over-year.
Mr. Plank, concluded, "We have a powerful brand that resonates with consumers, a growth platform with enormous long-term opportunity, and a strengthening balance sheet. In 2009, we will continue to make key investments in our growth drivers, increase the level of expertise of our team, and become better operators. An incredible path lies ahead for our brand, and through innovation and execution we will deliver our message of performance to athletes across the globe."
Conference Call and Webcast
The Company will provide additional commentary regarding its second quarter results and 2009 outlook during its earnings conference call today, July 28th, at 8:30 a.m. ET. The call will be webcast live at http://investor.underarmour.com/events.cfm and will be archived and available for replay approximately three hours after the live event. Additional supporting materials related to the call will also be available at http://investor.underarmour.com. The Company's financial results are also available online at http://investor.underarmour.com/results.cfm.
About Under Armour, Inc.
Under Armour® (NYSE: UA) is a leading developer, marketer, and distributor of branded performance apparel, footwear, and accessories. The brand's moisture-wicking synthetic fabrications are engineered in many different designs and styles for wear in nearly every climate to provide a performance alternative to traditional natural fiber products. The Company's products are sold worldwide and worn by athletes at all levels, from youth to professional, on playing fields around the globe. The Under Armour global headquarters is in Baltimore, Maryland, with European headquarters in Amsterdam's Olympic Stadium, and additional offices in Denver, Hong Kong, Toronto, and Guangzhou, China. For further information, please visit the Company's website at www.underarmour.com.
Forward Looking Statements
Some of the statements contained in this press release constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts, such as statements regarding our future financial condition or results of operations, our prospects and strategies for future growth, the development and introduction of new products, and the implementation of our marketing and branding strategies. In many cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "outlook," "potential" or the negative of these terms or other comparable terminology. The forward-looking statements contained in this press release reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause events or our actual activities or results to differ significantly from those expressed in any forward-looking statement. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future events, results, actions, levels of activity, performance or achievements. Readers are cautioned not to place undue reliance on these forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements, including, but not limited to: changes in general economic or market conditions that could affect consumer spending and the financial health of our retail customers; our ability to forecast and manage our growth effectively; our ability to effectively develop and launch new or updated products; our ability to accurately forecast consumer demand for our products; our ability to obtain the financing required to grow our business, particularly when credit and capital markets are unstable; increased competition causing us to reduce the prices of our products or to increase significantly our marketing efforts in order to avoid losing market share; changes in consumer preferences or the reduction in demand for performance apparel and other products; reduced demand for sporting goods and apparel generally; loss of key suppliers or manufacturers or failure of our suppliers or manufacturers to produce or deliver our products in a timely or cost-effective manner; our ability to accurately anticipate and respond to seasonal or quarterly fluctuations in our operating results; our ability to effectively market and maintain a positive brand image; the availability, integration and effective operation of management information systems and other technology; and our ability to attract and maintain the services of our senior management and key employees. The forward-looking statements contained in this press release reflect our views and assumptions only as of the date of this press release. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.