The Timberland Company (NYSE: TBL) today reported results for the quarter ended September 27, 2002. For the third quarter of 2002, Timberland earned $49.2 million, or $1.30 per share diluted ($1.33 basic), compared with net income of $48.5 million, or $1.22 per share diluted ($1.25 basic), for the third quarter of 2001. Revenue for the third quarter of 2002 totaled $416.6 million, 5.2 percent higher than the $396.2 million reported for the third quarter of 2001. Timberland ended the quarter with $20.0 million in cash and no debt outstanding. Over the last twelve months, the Company has improved its net cash position by $69.3 million while investing $92.4 million in share repurchases.
Domestic revenue for the third quarter of 2002 was $273.1 million, 2.0 percent lower than the $278.6 million reported for the third quarter of 2001. International revenue for the quarter increased 22.0 percent to $143.5 million, compared with $117.6 million for the prior-year period. On a constant dollar basis, international revenue increased 13.7 percent. International revenue comprised 34.4 percent of total third quarter 2002 revenue, compared with 29.7 percent for the third quarter of 2001.
Worldwide footwear revenue for the third quarter of 2002 was $315.3 million, 3.4 percent higher than the $305.0 million reported for the third quarter of 2001. Worldwide apparel and accessories revenue for the quarter increased 10.4 percent to $95.9 million, compared with $86.9 million for the 2001 third quarter.
Worldwide wholesale revenue for the third quarter of 2002 was $343.7 million, 7.3 percent higher than the $320.4 million reported for the third quarter of 2001. Worldwide retail revenue for the quarter decreased 3.7 percent to $73.0 million, compared to the $75.8 million reported for the third quarter of 2001. U.S. consumer direct revenue for the 2002 third quarter decreased 13.4 percent to $45.4 million, compared with $52.4 million for the 2001 third quarter. Domestic comparable store sales for the quarter decreased by 12.3 percent.
For the first nine months of 2002, Timberland earned $68.0 million, or $1.77 per share diluted ($1.81 basic), compared with net income of $76.5 million, or $1.89 per share diluted ($1.95 basic) for the first nine months of 2001. Earnings for the first nine months of 2002 included a $4.9 million after-tax gain ($0.13 per share diluted) related to the Company's adoption of Statement of Financial Accounting Standards 141. Net income for the first nine months of 2002, excluding this cumulative effect of change in accounting principle, was $63.1 million, or $1.64 per share diluted ($1.68 basic).
Revenue for the first nine months of 2002 was $833.9 million, 1.0 percent lower than the $842.5 million reported for the first nine months of 2001.
Jeffrey B. Swartz, Timberland's President and Chief Executive Officer, stated, ''We are pleased to have driven record revenues, improved earnings, and strong cash management in the third quarter, despite challenging market conditions. These results reflect solid progress on key strategic fronts — including expanding our international operations, strengthening our U.S. footwear business, extending our brand reach through the development of our apparel and accessories businesses, and continuing to advance our efforts to make a positive difference in our community.''
''While Timberland was able to deliver solid results in the third quarter, consistent with our goals for performance improvement, fourth quarter financial results will be negatively impacted by external factors currently affecting our business. We anticipate that higher transportation costs and potential lost revenues associated with the recent work stoppage in western U.S. ports – in combination with soft economic trends – will likely limit fourth quarter revenue to prior-year levels and lower operating profit margins by approximately 300 basis points, compared with the prior-year period. Looking ahead to fiscal 2003, while we are pleased with our strategic progress and remain committed to our long-term goals of double-digit revenue growth and improved operating margins – we believe that mid single-digit revenue growth represents a more appropriate goal for our business until there are clearer signals of improvement in overall market conditions. Despite these near-term challenges, we're confident that our strategy to become a leading global lifestyle brand — and focus on capturing Timberland's broad range of growth opportunities — will position the Company to deliver strong financial results to our shareholders.''
Note that comments made by Mr. Swartz are Timberland's performance targets, based on current expectations. These comments are forward-looking, and actual results may differ materially.
As previously announced, Timberland will be hosting a conference call to discuss third quarter results today at 8:25 AM Eastern Time. Interested parties may listen to this call through the investor relations section of the Company's website, www.timberland.com, or by calling (913) 981-5517. Replays of this conference call will be available through the Company's website until 5:00 PM Eastern Time on Thursday, October 24, 2002.
Timberland (NYSE: TBL) is a global leader in the design, engineering and marketing of premium-quality footwear, apparel, and accessories for consumers who value the outdoors and their time in it. Timberland(R) products offer quality workmanship and detailing and are built to withstand the elements of nature. The Company's products can be found in leading department and specialty stores as well as Timberland retail stores throughout North America, Europe, Asia, Latin America, and the Middle East. More information about Timberland is available in the Company's reports filed with the Securities and Exchange Commission.