Oakley, Inc. (NYSE:OO) Chairman and Chief Executive Officer Jim Jannard led an upbeat, celebratory annual shareholders’ meeting Friday, June 9, at the company’s Southern California headquarters.
“I feel good being back in the business full-time and, more importantly, to have Oakley back into a strong growth mode,” Jannard said, referring to his October 1999 decision to assume the CEO role and to the company’s renewed financial momentum in 2000.
“I appreciate the shareholders who have hung with us over the past four years during which Oakley has evolved from a leading sunglass company into a true world brand with a diverse product line,” continued Jannard. “By aggressively and fearlessly pursuing new categories in addition to sunglasses, we’ve effectively removed the limits to our growth potential for the foreseeable future and made our intermediate term revenue goal of $1 billion more attainable.”
“Most of the major financial investments required to make that transition are now behind us and we are clearly reaping the benefits. Each of our new product engines — footwear, apparel, watches and accessories — are now contributing, or poised to contribute meaningfully. Together they are adding to Oakley’s heritage as a designer and manufacturer of technically superior performance products that appeal to consumers who like to live on the edge.”
“Oakley is not a company for the faint of heart,” Jannard continued. “I realize we make our shareholders nervous at times, particularly when we decide to venture into new categories and confront the steep, expensive part of the learning curve. We did it in 1985, moving from motorcycle grips into sunglasses, and again during the past two years as we moved beyond eyewear into footwear, apparel, watches and accessories. But a big part of the reason we’ve been successful for 25 years is that we’re not afraid to take chances, to try new things, to look at established product categories with fresh, optically correct vision. In fact, if the day ever comes when we stop making you nervous, then I’ll start to get nervous.”
“None of this is possible without the leadership of the rest of the management team and the tireless efforts of each of the other 1200 members of the worldwide Oakley team,” Jannard concluded. “Together, we’re very excited about what the future holds and hope all our current shareholders decide to stick with us for another four years.”
Oakley’s Chief Operating Officer Link Newcomb highlighted the company’s recent strong financial performance. “Toward the end of 1999 we began experiencing renewed momentum which has resulted in three consecutive quarters of sales and per-share earnings growth of more than 25 percent and 40 percent, respectively,” said Newcomb. “This year we’ve developed new styles with broader consumer appeal and timed their introduction to capitalize on the key summer selling season. As a result, the Oakley brand has gained significant market share in a U.S. sunglass market that is healthier than at any time in the past four years. In addition, the company’s international sales have grown by an average of 27 percent over the past 5 quarters and now account for over 45 percent of total sales on a trailing-12-month basis.
“Orders for our expanded fall 2000 footwear line have exceeded our expectations and two weeks ago we commenced shipments to key retailers,” Newcomb continued. “We remain on plan to contain footwear operating losses to less than $500,000 in the first half of 2000 and are confident we will achieve profitability in the second half of the year.”
“The investment community has noticed our improved performance and Oakley shareholders have been rewarded with a stock price increase of more than 100 percent since February, despite the bearish stock market environment. The creativity and intensity behind our new products reflect our desire to continue producing results that drive further increases in our share price,” Newcomb concluded..
Oakley President Colin Baden gave the assembly of approximately 250 shareholders an overview of the company’s most recent product introductions and sneak previews of several product concepts currently under development in each of the company’s product categories. “Our successes of the past year have only made us crave for more inventive, sculptural ideas to challenge the consumer’s imagination,” said Baden. “In 2001 we’ll introduce products that redefine entire categories and offer provocative updates to some of our most popular existing styles. Each of our new products will be supported by heightened levels of strategic brand messaging including print advertising, in-store merchandising, direct marketing and the priceless benefit of elite athletes using our products in actual competition.”