PORTLAND, Ore., Feb. 9 — Columbia Sportswear Company(R)(Nasdaq: COLM) a global leader in the active outdoor apparel industry, today announced record fourth quarter net sales of $111.2 million for the period ended December 31, 1998, an increase of 16.9% over net sales of $95.1 million for the same period of 1997. The Company reported net income for the period of $7.2 million, a 56.5% increase when compared to the Company’s pro forma net income of $4.6 million for the same period of 1997. Earnings per share for the fourth quarter of 1998 were $0.28 (diluted), on 25.6 million weighted average shares outstanding for the period compared to pro forma earnings per share of $0.24 (diluted) on 19.1 million weighted average shares outstanding for the fourth quarter of 1997. Growth in sales and earnings for the period were primarily attributable to continued strength in the Company’s European and Canadian operations.
For 1998, the Company reported record net sales of $427.3 million, anincrease of 20.9% over net sales of $353.5 million for 1997. The Companyreported net income for 1998 of $32.7 million, a 34.0% increase when compared to the Company’s pro forma net income of $24.4 million for 1997. Including a one-time tax benefit of $2.0 million which occurred in the first quarter of 1998, earnings per share for 1998 were $1.36 (diluted), on 24.1 million weighted average shares outstanding for the period, compared to pro forma earnings per share of $1.28 (diluted) on 19.1 million weighted average shares outstanding for 1997.
For 1998, the Company’s domestic, Canadian and international sales increased 17.1%, 24.6%, and 48.5%, respectively, over 1997. Strong domestic sell-through of spring sportswear in the first and second quarters, and strength in the Company’s European and Canadian operations in the third and fourth quarters contributed to sales growth for the year. These factors also positively affected earnings for 1998 compared to 1997, as did the recording of a one-time $2.0 million deferred income tax benefit upon conversion to a C corporate status in conjunction with the Company’s initial public offering in the first quarter of 1998.
Tim Boyle, Columbia’s president and chief executive officer, commented,”We are pleased to close 1998 strongly despite the unseasonably warm weather in many parts of the country. Our outerwear inventory position coming out of fall 1998 is appropriate and we are currently booking business for fall 1999. However, given the warm weather during the fourth quarter we are experiencing a slower than normal ordering pattern from our domestic customers for the fall 1999 season. Although it is too early to know with certainty where our fall business will end up, we feel that it is prudent for us to plan for the domestic portion of the fall business for 1999 to trend flat with 1998′s domestic fall business. Nevertheless, we believe that there is a potential for some sales growth since customers are booking orders later this year. Given the potential for slower than previously anticipated growth, we have recognized that there must be an even greater focus on continually reviewing and controlling expenses. Accordingly, we have started a process of examiningour expense line items and have taken the initiative to further improve cost controls as we move into 1999. Notwithstanding potential pressure on the domestic fall business for 1999 we remain optimistic about the sales growth prospects in Europe in all product categories as well as our footwear and sportswear divisions globally.”