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Outdoor financials: Columbia 3Q profit attributed to high shoe sales and int'l revenue, plus Phoenix, Johnson Outdoors, Wellman, Cabela's, West Marine, GSI

Outdoor financials: Columbia 3Q profit attributed to high shoe sales and international revenue. Phoenix 3Q organic growth flat. Johnson family offers mo' money to buy out Johnson Outdoors. Wellman 3Q down due to lower material margins. Cabela's has busy earnings week. West Marine 3Q shook by hurricanes. GSI reports 3Q.

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Columbia 3Q profit attributed to high shoe sales and international revenue
Columbia Sportswear (NasdaqNM: COLM) reported that third-quarter profit rose 8 percent on high shoe sales and increased international revenue. The company earned $68.6 million, or $1.68 per share, up from $63.6 million, or $1.56 per share, a year ago, beating analyst estimates of $1.64 per share.

Revenue rose 11.4 percent to $415.8 million from 2003’s $373.4 million. Net income was $68.6 million, a 7.9 percent increase over net income of $63.6 million in 2003. Compared to the third quarter of 2003, U.S. sales increased 5.8 percent to $264.4 million, and other international sales increased 51.2 percent to $43.1 million. European sales were particularly high, increasing 28.7 percent to $58.8 million, and Canadian sales increasing 0.2 percent to $49.5 million for the third quarter of 2004.

Shoe sales rose 36 percent to $62.7 million and sportswear sales rose 26 percent to $108.4 million. Outerwear sales increased 1.6 percent to $224.4 million, equipment sales increased 21.4 percent to $1.7 million, and accessories sales decreased 1.6 percent to $18.6 million compared to 2003.

Columbia reported that as of Sept. 30, 2004, spring backlog increased 16.1 percent to $339.5 million, compared to spring backlog of $292.5 million in 2003. Consolidated product backlog was $586.0 million, an increase of 16.5 percent compared to 2003’s consolidated product backlog of $503.0 million. “Spring backlog growth was solid, led by strong growth in domestic orders of sportswear and footwear products,” CEO Tim Boyle said.

With a stronger outlook for the holiday shopping season, Columbia also said it expects 2004 revenue growth of about 14 percent and net income growth of 14 percent to 15 percent.

Phoenix 3Q organic growth flat, lowers 2004 guidance
For the third-quarter ending Sept. 25, 2004, Phoenix Footwear Group’s (AMEX: PXG) net sales increased $12.2 million, or 110.9 percent, to $23.2 million from $11.0 million for the third quarter of 2003. This increase includes $6.7 million of new revenue associated with the Altama brand acquisition, completed during the third quarter. Excluding Altama, Phoenix’s Trotters, SoftWalk, H.S. Trask and Royal Robbins brands generated flat organic growth during the third quarter as compared to the 2003 quarter.

Gross margin in the third quarter was 42.4 percent of net sales, compared to 41.3 percent in the third quarter of 2003. The increase in gross margin was primarily related to Phoenix’s 2003 brand acquisitions, an improved product sales mix and reduced closeout sales. Selling, general and administrative expenses for the third quarter of 2004 were $6.9 million or 29.8 percent of net sales, versus $3.0 million or 27.3 percent in 2003. This increase is related to increased operating costs associated with supporting a higher sales volume, recently acquired brands and increased sales, and design and management compensation expenses.

While organic growth for the third quarter was flat, nine-month net sales for the company’s Trotters, SoftWalk, H.S. Trask, and Royal Robbins brands increased 3.6 percent. The company also lowered its 2004 guidance, saying it expects overall revenues of $70 million to $75 million for the full year 2004, compared to its prior guidance of $79 million to $89 million.

Johnson family offers mo’ money to buy out Johnson Outdoors
Members of the Johnson family have raised their offer to buy out the Johnson Outdoors (Nasdaq: JOUT) company from $18 a share to $20.10 per share. The board of directors has approved the merger agreement with JO Acquisition Corp., a newly formed entity established by members of the family of the late Samuel C. Johnson, including Helen P. Johnson-Leipold, chairman and CEO of Johnson Outdoors. Under the terms of the proposed merger, public shareholders of Johnson Outdoors would receive the new share price in cash, and the members of the Johnson family would acquire 100 percent ownership of Johnson Outdoors. The merger completion is expected in the first quarter of 2005, subject to customary conditions and approvals. William Blair & Company, L.L.C. served as financial advisor to the special committee of the Johnson Outdoors board of directors, while Valuemetrics Capital, L.L.C. advised JO Acquisition Corp.

Wellman 3Q down due to lower material margins, plans 6 cent price hike
Wellman, Inc. (NYSE: WLM) reported a net loss for the quarter ended Sept. 30, 2004, of $10.7 million, or $0.34 per diluted share, compared to a 2003 net loss of $7.5 million, or $0.24 per diluted share. For the first nine months of 2004, Wellman reported a net loss of $46.4 million, or $1.47 per diluted share, compared to a net loss of $1.5 million, or $0.05 per diluted share, for the same period in 2003.

Tom Duff, Wellman’s chairman and CEO, said, “The disappointing results for the quarter were primarily attributable to lower volumes and raw material margins in both of our business segments. Volumes decreased from second quarter levels due to competitive pressures and a seasonally slow third quarter. Margins decreased because we were unable to raise prices quickly enough to keep pace with the greater than expected increases in our raw material costs.”

In 2003, Wellman announced cost reduction programs, that are expected to be implemented through 2005, that would reduce annual controllable costs by approximately $35 million by the end of 2004 and by $41 million to $46 million at the end of 2005, compared to annualized second quarter 2003 levels.

One day after its conference call, Wellman announced, not too unexpectedly, that it is increasing the price of all polyester staple fiber product by $0.03 per pound, starting with Nov. 28 shipments. Then, effective Jan. 2, 2005, it will increase the price another $0.03 per pound. These two increases will be on all shipments to the apparel, home furnishings, nonwovens, industrial and fiberfill markets. “Polyester raw material costs continue to rise on a monthly basis, setting new record highs,” Joe Tucker, vice president of the fibers and recycled products group, said. “The industry has also experienced sharp increases in energy costs. These two increases are necessary to offset these raw material and energy cost increases.”

Cabela’s has busy earnings week
In addition to announcing its third-quarter results, Cabela’s (NYSE: CAB) filed with securities regulators for a secondary offering of 12 million shares of common stock. The retailer said the shares are being offered by selling stockholders, and the company will receive no proceeds from the offering. It also posted a higher quarterly profit, driven by growth at newly opened stores that offset a 3 percent same-store sales decline. Net income for the third quarter ending Oct. 2, 2004, rose to $16.5 million, or 25 cents per share, from $10.2 million or, 19 cents per share, a year ago. Total revenue rose to $383.8 million from $331.2 million. The retailer is negotiating with the Coors Brewing Company to build a 200,000-square-foot store in Wheat Ridge, Colo., that would open in mid-2006 and employ 450 people. Two stores — one in Texas and one in Utah — are set to open in 2005.

West Marine 3Q shook up by hurricane season
Battered by numerous challenges, third-quarter net income for West Marine, Inc. (Nasdaq:WMAR) was $6.2 million, compared to net income of $8.1 million, or $0.39 per share, a year ago. Reported earnings were $0.29 per share for the third quarter ended Oct. 2, 2004, with the retailer saying they would have been $0.32 per share if not for a $1.2 million, or $0.03 per share, charge for accelerated amortization of loan costs. Net sales for the third quarter were $183.1 million, a decrease of 4.6 percent versus sales of $191.9 million last year. Comparable store net sales for the third quarter decreased 7.7 percent compared to the same period a year ago. West Marine said contributing factors to the low numbers were: the calendar shift from 53 weeks in 2003 to 52 weeks in 2004, rising fuel prices that may have detrimentally affected sales nationwide due to reduced boating participation, and four hurricanes that had a more pronounced and widespread impact than it had anticipated. West Marine is a specialty retailer of boating supplies and apparel with 365 stores.

GSI reports 3Q
GSI Commerce Inc. (Nasdaq: GSIC), an e-commerce provider for retailers and manufacturers, reported that its third-quarter net revenues increased 44 percent to $68.6 million and reported a net loss of $3.0 million, or $0.07 per share, decreasing the company’s net loss by $2.5 million or $0.07 per share compared to last year. Net revenues in third quarter 2003 were $47.5 million. Net merchandise sales were $100.2 million for the third quarter of fiscal 2004, a 90 percent increase compared to net merchandise sales of $52.8 million for the third quarter of fiscal 2003.

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