Outdoor financials: Columbia Sportswear's Q4 profit falls 59 percent, plus Johnson Outdoors, Under Armour, Eddie Bauer, Sport Chalet, LaCrosse, Jarden

Columbia Sportswear's Q4 profit fell 59 percent, Johnson Outdoors' sales dropped 8.2 percent for Q1, Under Armour's Q4 profit plummeted 51 percent, Eddie Bauer said it would cut nearly 200 jobs, Sport Chalet reviewed options with a financial advisor, LaCrosse's Q4 and FY '08 profit took a hit, and Jarden appointed Deutsche Bank to manage its senior credit facility.

Columbia Sportswear’s Q4 profit falls 59 percent

For both the fourth quarter and FY ’08, Columbia Sportswear (Nasdaq: COLM) saw its profit and sales drop from the previous year, saying it was the result of weak consumer spending and overseas revenue that was hurt by the stronger dollar. The company’s brand portfolio includes Mountain Hardwear, Columbia, Montrail and Sorel.

For the three months ended Dec. 31, net income dropped 59 percent to $18.6 million, or $0.55 per share, compared with $45.7 million, or $1.26 per share, in the year-earlier period.

Sales slipped to $354.9 million from $376.8 million. The company noted that about 40 percent of its sales come from outside the United States.

Compared to last year, fourth-quarter outerwear net sales declined 6 percent to $171.7 million, sportswear net sales declined 8 percent to $106.8 million, footwear net sales declined 1 percent to $59.8 million, and accessories and equipment sales declined 6 percent to $16.6 million.

Among its brands, Columbia brand net sales decreased 7 percent to $305.6 million for the quarter. That was partially offset by a 15-percent increase in Sorel brand net sales to $22.8 million and a 1-percent increase in Mountain Hardwear brand sales to $24.2 million. Combined, the company said net sales of Montrail and Pacific Trail brand products did not comprise a significant percentage of sales in the fourth quarter of either year.

For FY ’08, the company’s net income declined to $95 million, or $2.74 per share, from $144.5 million, or $3.96 per share, in the year-earlier period. Sales slid to $1.32 billion from $1.36 billion.

For the year, Columbia brand net sales decreased 4 percent to $1.16 billion, Mountain Hardwear net sales increased 15 percent to $95 million, Sorel net sales increased 5 percent to $48.1 million, and combined Montrail and Pacific Trail net sales decreased 23 percent to $12.7 million, compared with 2007.

Looking ahead, Columbia expects first-quarter earnings per share of $0.04 to $0.08, compared with $0.56 in the year-earlier period. It also anticipates sales of $261.7 million to $267.7 million – down 10 percent to 12 percent from the year-ago period’s $297.4 million.

Columbia blamed “expectations of increased order cancellations and the negative effect of deteriorating consumer spending on sales at our retail stores” for the guidance.

Also, its board of directors approved a dividend of $0.16 per share, payable on March 5 to shareholders of record on Feb. 19.

Shares dropped $3.34, or 10.4 percent, to close at $28.72 on Jan. 30.

Johnson Outdoors sales down 8.2 percent for Q1

Johnson Outdoors (Nasdaq: JOUT) reported an 8.2-percent drop in first-quarter net sales. The company was hit by disappointing 2008 holiday retail sales and declines in consumer spending which, it said, are making retailers even more focused on keeping their inventories down.

For the quarter ended Jan. 2, sales were $69.8 million compared to $76.0 million for the prior year quarter. Unfavorable currency translation had a negative 3.1 percent impact on revenues during the quarter.

Loss from continuing operations of $6.9 million, or $0.76 per diluted share for the first quarter of 2009, compared unfavorably to a loss from continuing operations of $3.6 million, or $0.40 in the prior year quarter.

Among its first quarter results, watercraft sales fell 18 percent below the prior year primarily due to softening paddlesports markets and a 5-percent impact from unfavorable currency translation. Outdoor gear sales jumped 41 percent ahead of last year driven by double-digit growth in all categories. Marine electronics revenues were 3.9 percent below last year primarily due to continued declines in the marine market, and diving revenues were down 28 percent.

Total company operating loss during the quarter was $5.2 million compared to an operating loss of $4.6 million in the prior year quarter.

The company’s debt to total capitalization stood at 39 percent at the end of the first quarter versus 29 percent last year. Debt, net of cash, was $41.1 million compared to $44.8 million at the end of the prior year quarter. Depreciation and amortization was $2.4 million year-to-date, compared to $2.2 million during the prior year-to-date period. Capital spending totaled $2.0 million during the first fiscal quarter compared with $2.4 million in the 2008 first fiscal quarter.

“Strict controls enabled significant progress in managing working capital down this quarter, even as sales declined. Additional steps are being taken to further improve operating efficiency and enhance our ability to manage cash effectively throughout a prolonged economic downturn,” said David Johnson, vice president and CFO, in a statement.

Johnson Outdoors is parent to Old Town, Ocean Kayak, Necky, Extrasport and Eureka, among others.

Under Armour’s Q4 profit plummets 51 percent

Under Armour (NYSE: UA) said its fourth-quarter profit dove 51 percent rattled by a stronger dollar, tough economy and higher expenses.

Earnings were $8.3 million, or $0.17 per share, from $16.9 million, or $0.34 per share, last year. Sales rose 3 percent to $179.3 million from $174.8 million.

The company said fourth-quarter sales in its apparel business were impacted by a slowdown in the U.S. wholesale business primarily due to lower levels of at-once orders and increased cancellations and returns on a year-over-year basis. Net revenues in the direct-to-consumer channel grew 47.4 percent during the fourth quarter, helping to offset the impact of the wholesale channel, it added.

Selling, general and administrative expenses rose to $68.1 million from $62.6 million in the prior year, mostly because of costs to expand its direct-to-consumer channel.

For the fourth quarter, operating income totaled $22.9 million compared with $28.3 million in the prior year’s period. Gross margin for the fourth quarter of 2008 was 50.7 percent compared with 52.0 percent in the prior year’s quarter partially impacted by the higher proportion of lower gross margin footwear sales.

For the year, profit declined 27 percent to $38.2 million, or $0.77 per share, from $52.6 million, or $1.05 per share, a year ago. Sales rose 20 percent to $725.2 million from $606.6 million.

Operating income for the year totaled $76.9 million compared with $86.3 million in 2007. Gross margin for 2008 was 48.9 percent compared with 50.3 percent in the prior year.

Additionally, Under Armour debuted its new running footwear line on Jan. 31, saying it spent about $15 million to support the launch.

Also, the company has entered into a new three-year revolving credit facility with PNC Bank as the lead arranger. The new facility provides for an initial commitment of $180 million and replaces the existing $100 million facility.

Eddie Bauer to cut nearly 200 jobs

After already making several cost-cutting measures recently, Eddie Bauer Holdings (Nasdaq: EBHI) said it is now eliminating 193 jobs — roughly 15 percent of its non-retail staff — to deal with the economic downturn.

The cuts will be made at its corporate headquarters in Seattle, its information technology center in Chicago, a distribution center in Columbus, Ohio, and a call center in Saint John, Canada.

The company said the move is part of previously announced plans to cut $10 million to $15 million out of its 2009 operating costs, which follow a $45 million to $50 million cut in fiscal 2008.

CEO Neil Fiske said in a statement that the company is “proactively managing its cost structure and expenditures in 2009 in the face of the continuing economic downturn.”

The company’s other cost-cutting measures include limiting capital spending, freezing salaries, adjusting certain benefit programs and reducing the size of its board and their compensation. Fiske’s salary was also cut by 10 percent for the remainder of 2009.

Sport Chalet reviews options with financial advisor

Sport Chalet (Nasdaq: SPCHA and SPCHB) has retained Wedbush Morgan Securities as a financial advisor to evaluate its “strategic alternatives” amidst the challenges posed by the “unprecedented macroeconomic difficulties” in its core market areas of California, Nevada and Arizona.

The company said the review process may include such alternatives as raising additional capital, amending or replacing the company’s current bank credit facility, further reducing expenses, or continuing to execute its current operating plan.

No timetable has been set for completion of the review. Sport Chalet said it has no commitment or agreement with respect to a sale of the company.

Additionally, Sport Chalet said it and its wholly owned subsidiary, Sport Chalet Value Services LLC, entered into a second amendment with Bank of America, which has agreed to extend the period during which it will forbear from exercising its rights with respect to certain defaults by the company under its credit facility from Jan. 31 to March 2.

LaCrosse’s Q4 and FY ’08 profit takes a hit

Blaming widespread decline in retail sales, LaCrosse Footwear (Nasdaq: BOOT) saw its fourth-quarter profit halved despite an 8-percent sales gain on strong at-once demand in the outdoor market and military sales.

For the fourth quarter ended Dec. 31, LaCrosse reported net income of $1.2 million or $0.18 per diluted share in the fourth quarter of 2008, compared to $2.4 million or $0.38 per diluted share in the fourth quarter of 2007. Consolidated net sales were $35.1 million, up 8 percent from $32.7 million in the fourth quarter of 2007.

For FY ’08, net income was $6.2 million or $0.96 per diluted share, compared to $7.3 million or $1.15 per diluted share in 2007. Consolidated net sales were $128.0 million, up 8 percent from $118.2 million in 2007.

The company said the results for 2008 include increased expenses of $2.2 million related to an investment in its new European subsidiary.

Sales to the outdoor market were $14.9 million for the fourth quarter of 2008, down 3 percent from $15.4 million for the same period of 2007. For the full year, sales to the outdoor market were $53.1 million, down 7 percent from $57.3 million last year.

Sales to the work market were $20.2 million for the fourth quarter of 2008, up 17 percent from $17.2 million for the same period of 2007. For the full year, sales to the work market were $74.9 million, up 23 percent from $60.9 million in 2007.

For the fourth quarter of 2008, gross margins were 38.6 percent of net sales, compared to 40.1 percent in the same period of 2007. For the full year, gross margins were 39.6 percent of net sales, compared to 39.7 percent in 2007.

LaCrosse’s inventory at the end of 2008 increased 5.5 percent from the end of 2007, reflecting additional inventory for its new European subsidiary and for recent military orders.

The company’s board approved a quarterly dividend of $0.125 per share of common stock payable on March 18 to shareholders of record on Feb. 22.

Jarden appoints Deutsche Bank to manage senior credit facility

Jarden Corp. (NYSE: JAH) said it has settled its outstanding claims against Lehman Brothers related to the bankruptcy of Lehman and the subsequent defaults of Lehman Commercial Paper, an affiliate of Lehman Brothers, as agent and revolving lender under Jarden’s senior credit facility.

As part of the settlement, Jarden has replaced Lehman Commercial Paper with Deutsche Bank AG New York Branch as administrative agent. Deutsche Bank will replace Lehman in all of its other administrative capacities under the credit facility.

The settlement and amendment include repayment of Lehman’s outstanding revolving credit loans to Jarden, termination of Lehman’s commitment to make additional loans, and a release of all claims related to the credit agreement and certain defaults by an affiliate of Lehman. The settlement has been approved by the bankruptcy court overseeing Lehman’s bankruptcy filing.

Lehman accounted for less than 10 percent of Jarden’s total availability under its revolving credit facility.

Jarden is parent of Coleman, Marmot and K2, among others.

–Compiled by Wendy Geister

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