BALTIMORE, July 26, 2018 /PRNewswire/ -- Under Armour, Inc.
(NYSE: UA, UAA) today announced financial results for the second
quarter ended June 30, 2018. The
company reports its financial performance in accordance with
accounting principles generally accepted in the United States of America ("GAAP"). This
press release refers to "currency neutral" and "adjusted" amounts,
which are non-GAAP financial measures described below under the
"Non-GAAP Financial Information" paragraph. References to adjusted
financial measures exclude the impact of the company's
restructuring plans and the related tax effects, as well as
adjustments to our one-time impacts of the 2017 U.S. tax reform
legislation, which we refer to as the U.S. Tax Act. Reconciliations
of non-GAAP amounts to the most directly comparable financial
measure calculated in accordance with GAAP are presented in
supplemental financial information furnished with this release. All
per share amounts are reported on a diluted basis.
"Through the first half of 2018, we are making progress toward
our transformation of running a more operationally excellent
company while amplifying the power of the Under Armour brand," said
Under Armour Chairman and CEO Kevin
Plank. "The ongoing improvements in our structure, systems
and go-to-market process across our global business better position
us to drive a more consistent, predictable path to deliver for our
consumers, customers and shareholders over the long-term."
Second Quarter Review
- Revenue was up 8 percent to $1.2
billion (up 7 percent currency neutral).
-
- Revenue to wholesale customers increased 9 percent to
$710 million and direct-to-consumer
revenue was up 7 percent to $414
million. The direct-to-consumer business represented 35
percent of global revenue in the quarter.
- North America revenue
increased 2 percent to $843 million
(up 1 percent currency neutral) and the international business
continued to deliver strong growth with a 28 percent increase to
$302 million (up 24 percent currency
neutral), representing 26 percent of total revenue. Within the
international business, revenue in EMEA was up 31 percent (up 25
percent currency neutral), up 34 percent in Asia-Pacific (up 28 percent currency neutral)
and up 7 percent in Latin America
(up 12 percent currency neutral).
- Apparel revenue increased 10 percent to $747 million, driven by strength in training and
running. Footwear revenue was up 15 percent to $271 million with strength in running and team
sports. Accessories revenue decreased 14 percent to $106 million due to softer demand.
- Gross margin decreased approximately 110 basis points to 44.8
percent due to inventory management initiatives and a $6 million impact related to restructuring
efforts. Adjusted gross margin decreased 60 basis points to 45.3
percent driven predominantly by inventory management
initiatives.
- Selling, general and administrative expenses increased 10
percent to $553 million, or 47.0
percent of revenue driven by continued investments in our
direct-to-consumer, footwear, and international businesses, along
with a reserve related to a commercial dispute.
- Restructuring and impairment charges were $79 million.
- Operating loss was $105 million.
Adjusted operating loss was $20
million.
- Net loss was $96 million.
Excluding the impact of the restructuring plan, adjusted net loss
was $34 million.
- Diluted loss per share was $0.21.
Adjusted diluted loss per share was $0.08.
- Inventory increased 11 percent to $1.3
billion.
- Cash and cash equivalents increased 19 percent to $197 million.
2018 Restructuring Plan
On February 13, the company
announced a 2018 restructuring plan, which detailed expectations to
incur total estimated pre-tax restructuring and related charges of
approximately $110 million to
$130 million. After further review,
the company has identified approximately $80
million of additional restructuring initiatives and now
expects to incur approximately $190
million to $210 million of
pre-tax restructuring and related charges in 2018. In the second
quarter, we recognized pre-tax costs totaling $85 million consisting of $64 million in cash related charges and
$21 million in non-cash charges.
Based on the updated restructuring plan, in 2018 the company
expects to incur:
- Up to $155 million in cash
related charges, consisting of up to $75
million in facility and lease terminations and up to
$80 million in contract termination
and other restructuring charges; and,
- Up to $55 million in non-cash
charges comprised of up to $20
million of inventory related charges and up to $35 million of asset related impairments.
Plank concluded, "As we work through our multi-year
transformation, we continue to proactively attack underperforming
areas of our business including our SG&A cost structure and
inventory. All of this will help create a better and stronger Under
Armour through even greater operational efficiencies. We are
unwavering in building our global brand and confident we're on the
right track."
Updated Fiscal 2018 Outlook
- Net revenue is now expected to increase approximately 3 percent
to 4 percent reflecting a low to mid-single-digit decline in
North America and international
growth of greater than 25 percent. From a product perspective,
apparel is expected to grow at a mid-single digit rate, footwear at
a low-single digit rate, and accessories is expected to decline at
a low-single digit rate.
- Gross margin is now expected to be flat to down slightly versus
the prior year rate of 45.0 percent. Adjusted gross margin is now
expected to improve slightly compared to 2017 as benefits from
product costs and lower planned promotional activity are offset by
increased inventory management actions.
- Operating loss is now expected in the range of $50 million to $60
million. Excluding the impact of the restructuring plan,
adjusted operating income is expected to be $130 million to $160
million.
- Interest and other expense net is expected to be approximately
$45 million.
- Excluding the impact of the restructuring efforts,
adjusted diluted earnings per share is expected to be in the range
of $0.14 to $0.19.
- Capital expenditures are now planned at approximately
$200 million.
Conference Call and Webcast
Under Armour will hold its second quarter 2018 conference call
and webcast today at approximately 8:30 a.m.
Eastern Time. The call will be webcast live at
http://investor.underarmour.com and will be archived and available
for replay approximately three hours after the live event.
U.S. Tax Act
The U.S. Tax Act was enacted into law on December 22, 2017. The legislation contained
several key tax provisions that affect Under Armour and, as
required, the company included reasonable estimates of the income
tax effects of the changes in tax law and tax rate in the company's
2017 financial results. These changes included a one-time mandatory
transition tax on accumulated foreign earnings and a re-measuring
of deferred tax assets which impacted our fourth quarter and full
year of 2017. During the second quarter of 2018, the company
revised its reasonable estimate made in the company's 2017
financial results for the re-measuring of deferred tax assets due
to the U.S. Tax Act. Since the U.S. Tax Act was passed late in the
fourth quarter of 2017, and ongoing guidance and additional
accounting interpretations are expected over the next 12 months,
the company considers the accounting of the transition tax,
deferred tax re-measurements, and other items to be provisional.
The company expects to finalize its one-time estimates related to
the U.S. Tax Act within the one-year measurement period allowed by
the SEC.
Non-GAAP Financial Information
This press release refers to "currency neutral" and "adjusted"
results as well as "adjusted" forward looking estimates of the
company's fiscal 2018 outlook. Currency neutral financial
information is calculated to exclude the impact of changes in
foreign currency. Management believes this information is useful to
investors to facilitate a comparison of the company's results of
operations period-over-period. Adjusted gross margin, adjusted
operating income (loss), adjusted net loss, adjusted diluted loss
per share and adjusted effective tax rate exclude the impact of
restructuring and other related charges and the impact of the U.S.
Tax Act, as applicable. Management believes this information is
useful to investors because it provides enhanced visibility into
the company's actual and expected underlying results excluding the
impact of its restructuring plans and recent significant changes in
U.S. tax laws. These non-GAAP financial measures should not be
considered in isolation and should be viewed in addition to, and
not as an alternative for, the company's reported results prepared
in accordance with GAAP. Additionally, the company's non-GAAP
financial information may not be comparable to similarly titled
measures reported by other companies.
About Under Armour, Inc.
Under Armour, Inc., headquartered in Baltimore, Maryland is a leading inventor,
marketer and distributor of branded performance athletic apparel,
footwear and accessories. Designed to make all athletes better, the
brand's innovative products are sold worldwide to consumers with
active lifestyles. The company's Connected Fitness™
platform powers the world's largest digitally
connected health and fitness community. For further
information, please visit www.uabiz.com.
Forward Looking Statements
Some of the statements contained in this press release
constitute forward-looking statements. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts, such as
statements regarding our future financial condition or results of
operations, our prospects and strategies for future growth, our
anticipated charges and restructuring costs and the timing of these
measures, the impact of recent tax reform legislation on our
results of operations, the development and introduction of new
products, the implementation of our marketing and branding
strategies, and the future benefits and opportunities from
significant investments. In many cases, you can identify
forward-looking statements by terms such as "may," "will,"
"should," "expects," "plans," "assumes," "anticipates," "believes,"
"estimates," "predicts," "outlook," "potential" or the
negative of these terms or other comparable terminology. The
forward-looking statements contained in this press release reflect
our current views about future events and are subject to risks,
uncertainties, assumptions and changes in circumstances that may
cause events or our actual activities or results to differ
significantly from those expressed in any forward-looking
statement. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
future events, results, actions, levels of activity, performance or
achievements. Readers are cautioned not to place undue reliance on
these forward-looking statements. A number of important factors
could cause actual results to differ materially from those
indicated by the forward-looking statements, including, but not
limited to: changes in general economic or market conditions that
could affect overall consumer spending or our industry; changes to
the financial health of our customers; our ability to successfully
execute our long-term strategies; our ability to successfully
execute any restructuring plans and realize expected benefits; our
ability to effectively drive operational efficiency in our
business; our ability to manage the increasingly complex operations
of our global business; our ability to comply with existing trade
and other regulations, and the potential impact of new trade and
tax regulations on our profitability; our ability to effectively
develop and launch new, innovative and updated products; our
ability to accurately forecast consumer demand for our products and
manage our inventory in response to changing demands; any
disruptions, delays or deficiencies in the design, implementation
or application of our new global operating and financial reporting
information technology system; increased competition causing us to
lose market share or reduce the prices of our products or to
increase significantly our marketing efforts; fluctuations in the
costs of our products; loss of key suppliers or manufacturers or
failure of our suppliers or manufacturers to produce or deliver our
products in a timely or cost-effective manner, including due to
port disruptions; our ability to further expand our business
globally and to drive brand awareness and consumer acceptance of
our products in other countries; our ability to accurately
anticipate and respond to seasonal or quarterly fluctuations in our
operating results; our ability to successfully manage or realize
expected results from acquisitions and other significant
investments or capital expenditures; risks related to foreign
currency exchange rate fluctuations; our ability to effectively
market and maintain a positive brand image; the availability,
integration and effective operation of information systems and
other technology, as well as any potential interruption of such
systems or technology; risks related to data security or privacy
breaches, including the 2018 data security issue related to our
Connected Fitness business; our ability to raise additional capital
required to grow our business on terms acceptable to us; our
potential exposure to litigation and other proceedings; and our
ability to attract key talent and retain the services of our senior
management and key employees. The forward-looking statements
contained in this press release reflect our views and assumptions
only as of the date of this press release. We undertake no
obligation to update any forward-looking statement to reflect
events or circumstances after the date on which the statement is
made or to reflect the occurrence of unanticipated events.
Under Armour,
Inc.
|
For the Three and Six
Months Ended June 30, 2018 and 2017
|
(Unaudited; in
thousands, except per share amounts)
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended June
30,
|
|
|
2018
|
|
% of Net
Revenues
|
|
2017
|
|
% of Net
Revenues
|
|
2018
|
|
% of Net
Revenues
|
|
2017
|
|
% of Net
Revenues
|
Net
revenues
|
|
$
|
1,174,859
|
|
|
100.0%
|
|
$
|
1,091,192
|
|
|
100.0%
|
|
$
|
2,360,229
|
|
|
100.0%
|
|
$
|
2,211,036
|
|
|
100.0%
|
Cost of goods
sold
|
|
648,275
|
|
|
55.2%
|
|
589,999
|
|
|
54.1%
|
|
1,310,192
|
|
|
55.5%
|
|
1,201,907
|
|
|
54.4%
|
Gross
profit
|
|
526,584
|
|
|
44.8%
|
|
501,193
|
|
|
45.9%
|
|
1,050,037
|
|
|
44.5%
|
|
1,009,129
|
|
|
45.6%
|
Selling, general and
administrative
expenses
|
|
552,619
|
|
|
47.0%
|
|
502,880
|
|
|
46.1%
|
|
1,067,253
|
|
|
45.2%
|
|
1,003,280
|
|
|
45.4%
|
Restructuring and
impairment
charges
|
|
78,840
|
|
|
6.7%
|
|
3,098
|
|
|
0.3%
|
|
116,320
|
|
|
4.9%
|
|
3,098
|
|
|
0.1%
|
Income (loss) from
operations
|
|
(104,875)
|
|
|
(8.9)%
|
|
(4,785)
|
|
|
(0.4)%
|
|
(133,536)
|
|
|
(5.7)%
|
|
2,751
|
|
|
0.1%
|
Interest expense,
net
|
|
(8,552)
|
|
|
(0.7)%
|
|
(7,841)
|
|
|
(0.7)%
|
|
(17,116)
|
|
|
(0.7)%
|
|
(15,662)
|
|
|
(0.7)%
|
Other expense,
net
|
|
(8,069)
|
|
|
(0.7)%
|
|
(2,884)
|
|
|
(0.3)%
|
|
(5,181)
|
|
|
(0.2)%
|
|
(313)
|
|
|
—%
|
Loss before income
taxes
|
|
(121,496)
|
|
|
(10.3)%
|
|
(15,510)
|
|
|
(1.4)%
|
|
(155,833)
|
|
|
(6.6)%
|
|
(13,224)
|
|
|
(0.6)%
|
Income tax expense
(benefit)
|
|
(26,090)
|
|
|
(2.2)%
|
|
(3,202)
|
|
|
(0.3)%
|
|
(30,183)
|
|
|
(1.3)%
|
|
1,357
|
|
|
0.1%
|
Loss from equity
method investment
|
|
138
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
138
|
|
|
—%
|
|
—
|
|
|
—%
|
Net
loss
|
|
(95,544)
|
|
|
(8.1)%
|
|
(12,308)
|
|
|
(1.1)%
|
|
(125,788)
|
|
|
(5.3)%
|
|
(14,581)
|
|
|
(0.7)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per
share of Class A,
B and C common stock
|
|
$
|
(0.21)
|
|
|
|
|
$
|
(0.03)
|
|
|
|
|
$
|
(0.28)
|
|
|
|
|
$
|
(0.03)
|
|
|
|
Diluted net loss per
share of Class
A, B and C common stock
|
|
$
|
(0.21)
|
|
|
|
|
$
|
(0.03)
|
|
|
|
|
$
|
(0.28)
|
|
|
|
|
$
|
(0.03)
|
|
|
|
Weighted average
common shares outstanding Class A, B and C common
stock
|
Basic
|
|
444,626
|
|
|
|
|
440,423
|
|
|
|
|
443,844
|
|
|
|
|
439,894
|
|
|
|
Diluted
|
|
444,626
|
|
|
|
|
440,423
|
|
|
|
|
443,844
|
|
|
|
|
439,894
|
|
|
|
Under Armour,
Inc.
|
For the Three and Six
Months Ended June 30, 2018 and 2017
|
(Unaudited; in
thousands)
|
|
NET REVENUES BY
PRODUCT CATEGORY
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended June
30,
|
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
% Change
|
Apparel
|
|
$
|
747,294
|
|
|
$
|
680,653
|
|
|
9.8%
|
|
$
|
1,513,569
|
|
|
$
|
1,396,090
|
|
8.4%
|
Footwear
|
|
271,375
|
|
|
236,925
|
|
|
14.5%
|
|
543,145
|
|
|
506,583
|
|
7.2%
|
Accessories
|
|
105,906
|
|
|
122,588
|
|
|
(13.6)%
|
|
198,064
|
|
|
211,686
|
|
(6.4)%
|
Total net
sales
|
|
1,124,575
|
|
|
1,040,166
|
|
|
8.1%
|
|
2,254,778
|
|
|
2,114,359
|
|
6.6%
|
Licensing
revenues
|
|
21,172
|
|
|
25,110
|
|
|
(15.7)%
|
|
47,513
|
|
|
49,315
|
|
(3.7)%
|
Connected
Fitness
|
|
29,112
|
|
|
25,916
|
|
|
12.3%
|
|
57,938
|
|
|
47,362
|
|
22.3%
|
Total net
revenues
|
|
$
|
1,174,859
|
|
|
$
|
1,091,192
|
|
|
7.7%
|
|
$
|
2,360,229
|
|
|
$
|
2,211,036
|
|
6.7%
|
|
NET REVENUES BY
SEGMENT
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended June
30,
|
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
% Change
|
North
America
|
|
$
|
843,383
|
|
|
$
|
829,805
|
|
|
1.6 %
|
|
$
|
1,710,928
|
|
|
$
|
1,701,076
|
|
0.6%
|
EMEA
|
|
135,901
|
|
|
103,896
|
|
|
30.8%
|
|
262,833
|
|
|
206,751
|
|
27.1%
|
Asia-Pacific
|
|
125,706
|
|
|
93,574
|
|
|
34.3%
|
|
241,259
|
|
|
179,392
|
|
34.5%
|
Latin
America
|
|
40,757
|
|
|
38,001
|
|
|
7.3%
|
|
87,271
|
|
|
76,455
|
|
14.1%
|
Connected
Fitness
|
|
29,112
|
|
|
25,916
|
|
|
12.3%
|
|
57,938
|
|
|
47,362
|
|
22.3%
|
Total net
revenues
|
|
$
|
1,174,859
|
|
|
$
|
1,091,192
|
|
|
7.7%
|
|
$
|
2,360,229
|
|
|
$
|
2,211,036
|
|
6.7%
|
|
INCOME (LOSS) FROM
OPERATIONS
|
|
|
|
Quarter Ended June
30,
|
|
Six Months Ended June
30,
|
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
North
America
|
|
$
|
(93,192)
|
|
|
$
|
(5,417)
|
|
|
1,620.4%
|
|
$
|
(136,688)
|
|
|
$
|
(2,150)
|
|
|
6,257.6%
|
EMEA
|
|
(10,155)
|
|
|
(4,616)
|
|
|
120.0%
|
|
(13,782)
|
|
|
(3,028)
|
|
|
355.2%
|
Asia-Pacific
|
|
18,657
|
|
|
15,249
|
|
|
22.3%
|
|
39,898
|
|
|
35,365
|
|
|
12.8%
|
Latin
America
|
|
(21,791)
|
|
|
(8,093)
|
|
|
(169.3)%
|
|
(27,661)
|
|
|
(15,952)
|
|
|
(73.4)%
|
Connected
Fitness
|
|
1,606
|
|
|
(1,908)
|
|
|
184.2%
|
|
4,696
|
|
|
(11,484)
|
|
|
140.9%
|
Income (loss) from
operations
|
|
$
|
(104,875)
|
|
|
$
|
(4,785)
|
|
|
2,091.7%
|
|
$
|
(133,537)
|
|
|
$
|
2,751
|
|
|
(4,954.1)%
|
Under Armour,
Inc.
|
As of June 30, 2018,
December 31, 2017 and June 30, 2017
|
(Unaudited; in
thousands)
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
June 30,
2018
|
|
December 31,
2017
|
|
June 30,
2017
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
196,879
|
|
|
$
|
312,483
|
|
|
$
|
165,685
|
|
Accounts receivable,
net
|
|
724,945
|
|
|
609,670
|
|
|
602,795
|
|
Inventories
|
|
1,299,332
|
|
|
1,158,548
|
|
|
1,168,786
|
|
Prepaid expenses and
other current assets
|
|
340,359
|
|
|
256,978
|
|
|
229,204
|
|
Total current
assets
|
|
2,561,515
|
|
|
2,337,679
|
|
|
2,166,470
|
|
Property and
equipment, net
|
|
835,427
|
|
|
885,774
|
|
|
875,005
|
|
Goodwill
|
|
551,160
|
|
|
555,674
|
|
|
580,446
|
|
Intangible assets,
net
|
|
45,880
|
|
|
46,995
|
|
|
59,866
|
|
Deferred income
taxes
|
|
111,746
|
|
|
82,801
|
|
|
125,358
|
|
Other long term
assets
|
|
135,424
|
|
|
97,444
|
|
|
87,099
|
|
Total
assets
|
|
$
|
4,241,152
|
|
|
$
|
4,006,367
|
|
|
$
|
3,894,244
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Revolving credit
facility, current
|
|
$
|
—
|
|
|
$
|
125,000
|
|
|
$
|
150,000
|
|
Accounts
payable
|
|
691,163
|
|
|
561,108
|
|
|
483,210
|
|
Accrued
expenses
|
|
258,567
|
|
|
296,841
|
|
|
232,680
|
|
Customer refund
liability
|
|
303,730
|
|
|
—
|
|
|
—
|
|
Current maturities of
long term debt
|
|
27,000
|
|
|
27,000
|
|
|
27,000
|
|
Other current
liabilities
|
|
57,939
|
|
|
50,426
|
|
|
43,649
|
|
Total current
liabilities
|
|
1,338,399
|
|
|
1,060,375
|
|
|
936,539
|
|
Long term debt, net
of current maturities
|
|
752,370
|
|
|
765,046
|
|
|
777,717
|
|
Other long term
liabilities
|
|
226,471
|
|
|
162,304
|
|
|
156,217
|
|
Total
liabilities
|
|
2,317,240
|
|
|
1,987,725
|
|
|
1,870,473
|
|
Total stockholders'
equity
|
|
1,923,912
|
|
|
2,018,642
|
|
|
2,023,771
|
|
Total liabilities
and stockholders' equity
|
|
$
|
4,241,152
|
|
|
$
|
4,006,367
|
|
|
$
|
3,894,244
|
|
Under Armour,
Inc.
|
For the Six Months
Ended June 30, 2018 and 2017
|
(Unaudited; in
thousands)
|
|
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
|
(125,786)
|
|
|
$
|
(14,581)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in operating
activities
|
|
|
|
Depreciation and
amortization
|
91,271
|
|
|
83,367
|
|
Unrealized foreign
currency exchange rate (gains) losses
|
13,151
|
|
|
(29,393)
|
|
Loss on disposal of
property and equipment
|
191
|
|
|
715
|
|
Impairment
charges
|
11,965
|
|
|
—
|
|
Amortization of bond
premium
|
127
|
|
|
127
|
|
Stock-based
compensation
|
20,673
|
|
|
24,776
|
|
Excess tax deficiency
from stock-based compensation arrangements
|
—
|
|
|
1,062
|
|
Deferred income
taxes
|
(35,969)
|
|
|
13,735
|
|
Changes in reserves
and allowances
|
(238,005)
|
|
|
(8,581)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
116,896
|
|
|
33,787
|
|
Inventories
|
(158,430)
|
|
|
(227,190)
|
|
Prepaid expenses and
other assets
|
(54,422)
|
|
|
(12,541)
|
|
Other non-current
assets
|
768
|
|
|
451
|
|
Accounts
payable
|
160,164
|
|
|
84,391
|
|
Accrued expenses and
other liabilities
|
48,939
|
|
|
33,426
|
|
Customer refund
liability
|
307,190
|
|
|
—
|
|
Income taxes payable
and receivable
|
(12,716)
|
|
|
(46,320)
|
|
Net cash provided by
(used in) operating activities
|
146,007
|
|
|
(62,769)
|
|
Cash flows from
investing activities
|
|
|
|
Purchases of property
and equipment
|
(95,607)
|
|
|
(167,273)
|
|
Sale of property and
equipment
|
11,285
|
|
|
—
|
|
Purchases of other
assets
|
(2,536)
|
|
|
—
|
|
Purchase of equity
method investment
|
(39,207)
|
|
|
—
|
|
Net cash used in
investing activities
|
(126,065)
|
|
|
(167,273)
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from long
term debt and revolving credit facility
|
210,000
|
|
|
380,000
|
|
Payments on long term
debt and revolving credit facility
|
(348,500)
|
|
|
(243,500)
|
|
Employee taxes paid
for shares withheld for income taxes
|
(1,759)
|
|
|
(2,474)
|
|
Proceeds from
exercise of stock options and other stock issuances
|
8,913
|
|
|
6,638
|
|
Payments of debt
financing costs
|
(11)
|
|
|
—
|
|
Other financing
fees
|
87
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
(131,270)
|
|
|
140,664
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
(2,487)
|
|
|
4,593
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(113,815)
|
|
|
(84,785)
|
|
Cash, cash
equivalents and restricted cash
|
|
|
|
Beginning of
period
|
318,135
|
|
|
250,470
|
|
End of
period
|
$
|
204,320
|
|
|
$
|
165,685
|
|
Under Armour,
Inc.
|
For the Three months
ended June 30, 2018
|
(Unaudited)
|
|
The table below
presents the reconciliation of net revenue growth calculated in
accordance with GAAP to
currency neutral net revenue which is a non-GAAP measure. See
"Non-GAAP Financial Information"
above for further information regarding the Company's use of
non-GAAP financial measures.
|
|
CURRENCY NEUTRAL
NET REVENUE GROWTH/(DECLINE) RECONCILIATION
|
|
|
|
Three months
ended June 30,
|
Total Net
Revenue
|
|
|
Net revenue growth -
GAAP
|
|
7.7%
|
Foreign exchange
impact
|
|
(1.2)%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
6.5%
|
|
|
|
North
America
|
|
|
Net revenue growth -
GAAP
|
|
1.6%
|
Foreign exchange
impact
|
|
(0.3)%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
1.3%
|
|
|
|
EMEA
|
|
|
Net revenue growth -
GAAP
|
|
30.8%
|
Foreign exchange
impact
|
|
(5.6)%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
25.2%
|
|
|
|
Asia-Pacific
|
|
|
Net revenue growth -
GAAP
|
|
34.3%
|
Foreign exchange
impact
|
|
(6.5)%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
27.8%
|
|
|
|
Latin
America
|
|
|
Net revenue growth -
GAAP
|
|
7.3%
|
Foreign exchange
impact
|
|
5.1%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
12.4%
|
|
|
|
Total
International
|
|
|
Net revenue growth -
GAAP
|
|
28.4%
|
Foreign exchange
impact
|
|
(4.2)%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
24.2%
|
Under Armour,
Inc.
|
For the Three months
ended June 30, 2018
|
(Unaudited)
|
|
The tables below
present the reconciliation of the Company's consolidated statement
of operations presented in accordance with
GAAP to certain adjusted non-GAAP financial measures discussed in
this press release. See "Non-GAAP Financial Information"
above for further information regarding the Company's use of
non-GAAP financial measures.
|
|
ADJUSTED GROSS
MARGIN RECONCILIATION
|
|
|
|
Quarter Ended June
30, 2018
|
Gross
margin
|
|
44.8%
|
Add: Impact of
restructuring
|
|
0.5%
|
Adjusted gross
margin
|
|
45.3%
|
|
ADJUSTED OPERATING
LOSS RECONCILIATION
|
|
|
|
Quarter Ended June
30, 2018
|
Loss from
operations
|
|
$
|
(105)
|
Add: Impact of
restructuring
|
|
85
|
Adjusted operating
loss
|
|
$
|
(20)
|
|
ADJUSTED NET LOSS
RECONCILIATION
|
|
|
|
Quarter Ended June
30, 2018
|
Net loss
|
|
$
|
(96)
|
Add: Impact of
restructuring
|
|
62
|
Adjusted net
loss
|
|
$
|
(34)
|
|
ADJUSTED DILUTED
LOSS PER SHARE RECONCILIATION
|
|
|
|
Quarter Ended June
30, 2018
|
Diluted net loss per
share
|
|
$
|
(0.21)
|
Add: Estimated impact
of restructuring
|
|
0.13
|
Adjusted diluted loss
per share
|
|
$
|
(0.08)
|
|
ADJUSTED EFFECTIVE
TAX RATE RECONCILIATION
|
|
|
|
Quarter Ended June
30, 2018
|
Effective tax
rate
|
|
21.5%
|
Less: Impact of US
tax reform
|
|
(3.1)%
|
Less: Impact of
restructuring
|
|
(10.0)%
|
Adjusted effective
tax rate
|
|
8.4%
|
Under Armour,
Inc.
|
Outlook for the Year
Ending December 31, 2018
|
|
The tables below
present the reconciliation of the Company's fiscal 2018 outlook for
income from operations
calculated in accordance with GAAP to adjusted operating income.
This adjusted amount is a non-GAAP financial
measure. See "Non-GAAP Financial Information" above for further
information regarding the Company's use of non-
GAAP financial measures.
|
|
ADJUSTED OPERATING
INCOME RECONCILIATION
|
|
|
|
Year Ending December
31, 2018
|
(in
millions)
|
|
Low End
|
|
High End
|
Loss from
operations
|
|
$
|
(60)
|
|
|
$
|
(50)
|
|
Add: Estimated impact
of restructuring (1)
|
|
190
|
|
|
190
|
|
Adjusted operating
income
|
|
$
|
130
|
|
|
$
|
140
|
|
|
(1) The estimated
impact of restructuring plan presented above assumes the low end of
the Company's estimated range of 2018 restructuring and related
charges.
|
|
The company is not
able to provide a reconciliation of the non-GAAP adjusted effective
tax rate or adjusted diluted earnings per share to the GAAP
effective tax rate or diluted earnings per share for its 2018
outlook. As a result of the 2018 restructuring plan, the company's
GAAP net income for fiscal year 2018 is expected to be a net loss,
and therefore the GAAP effective tax rate is subject to significant
variability. Given this variability, the company cannot provide a
meaningful outlook of the GAAP effective tax rate or diluted loss
per share without unreasonable effort. These non-GAAP measures
exclude the impact of the 2018 restructuring plan.
|
Under Armour,
Inc.
|
For the Three months
ended June 30, 2018 and 2017
|
|
BRAND HOUSE AND
FACTORY HOUSE DOOR COUNT
|
|
|
As of June
30,
|
|
|
2018
|
|
2017
|
Factory
House
|
|
161
|
|
160
|
Brand
House
|
|
15
|
|
19
|
North
America total doors
|
|
176
|
|
179
|
|
|
|
|
|
Factory
House
|
|
61
|
|
45
|
Brand
House
|
|
65
|
|
44
|
International total doors
|
|
126
|
|
89
|
|
|
|
|
|
Factory
House
|
|
222
|
|
205
|
Brand
House
|
|
80
|
|
63
|
Total
doors
|
|
302
|
|
268
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/under-armour-reports-second-quarter-2018-results-300686887.html
SOURCE Under Armour, Inc.