BALTIMORE, Feb. 10, 2021 /PRNewswire/ -- Under
Armour, Inc. (NYSE: UA, UAA) today announced unaudited financial
results for the fourth quarter and fiscal year ended December 31, 2020. 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 2020 restructuring plan and related
impairment charges, impairments associated with certain long-lived
assets and goodwill and related tax effects, and with respect to
certain measures, the non-cash amortization of debt discount on the
company's convertible debt, deal-costs and gain associated with the
sale of MyFitnessPal and related tax effects. The
reconciliation of non-GAAP amounts to the most directly comparable
financial measure calculated according to GAAP is presented in
supplemental financial information furnished with this release. All
per share amounts are reported on a diluted basis.
"Improving brand strength and consistent operational execution
delivered better than expected results in the fourth quarter," said
Under Armour President and CEO Patrik
Frisk. "Our global team was exceptionally resilient and
disciplined amid a highly challenging year which included the
COVID-19 pandemic and for Under Armour, a comprehensive
restructuring effort including further operating model
refinements."
Frisk concluded, "As we continue to navigate uncertainty around
the pandemic, we remain focused on execution and the efforts
necessary to stabilize our business further and improve our ability
to deliver sustainable shareholder value over the long-term."
Fourth Quarter 2020 Review
- Revenue was down 3 percent to $1.4 billion.
-
- Wholesale revenue decreased 12 percent to $662 million and direct-to-consumer revenue
increased 11 percent to $655 million,
driven by 25 percent growth in eCommerce.
- North America revenue
decreased 6 percent to $924 million
and international revenue increased 7 percent to $448 million (up 4 percent currency neutral).
Within the international business, revenue decreased 11 percent in
EMEA (down 14 percent currency neutral), increased 26 percent in
Asia-Pacific (up 21 percent
currency neutral), and increased 2 percent in Latin America (up 8 percent currency
neutral).
- Apparel revenue decreased 4 percent to $931 million. Footwear revenue declined 7 percent
to $241 million. Accessories revenue
increased 32 percent to $145
million.
- Gross margin increased 210 basis points to 49.4
percent compared to the prior year. Excluding the
restructuring efforts, adjusted gross margin increased 300
basis points to 50.3 percent, driven primarily by benefits
from channel mix, supply chain initiatives and regional mix.
- Selling, general & administrative
expenses decreased 4 percent to $586 million, or 41.7 percent of revenue.
- Restructuring and impairment charges were
$52 million consisting of
$50 million of restructuring and
related impairment charges and $2
million of long-lived asset impairments.
- Operating income was $56
million. Adjusted operating income was
$120 million.
- Interest expense, net was $15
million, driven by convertible senior notes that the company
issued earlier in the year. Excluding the non-cash amortization of
debt discount, adjusted interest expense, net was
$10 million.
- Other income (expense), net was $179 million, driven by a $182 million gain due to selling the company's
MyFitnessPal platform. Excluding the gain
on sale, adjusted other expense net was
$3 million.
- Net income was $184
million. Adjusted net income was $55 million.
- Diluted earnings per share was $0.40. Adjusted diluted earnings per
share was $0.12.
- Inventory was relatively flat at $896 million.
- Cash and Liquidity
-
- The company ended the quarter with Cash and Cash
Equivalents of $1.5 billion,
including $199 million in net cash
proceeds from the MyFitnessPal platform sale.
- No borrowings were outstanding under the company's $1.1 billion revolving credit facility at the end
of the fourth quarter.
Full Year 2020 Review
- Revenue was down 15 percent to $4.5 billion.
-
- Wholesale revenue decreased 25 percent to $2.4 billion and direct-to-consumer revenue
increased 2 percent to $1.8 billion,
driven by 40 percent growth in eCommerce, which represented 47
percent of total direct-to-consumer revenue.
- North America revenue
decreased 19 percent to $2.9 billion
and international revenue decreased 4 percent to $1.4 billion. Within the international business,
revenue decreased 4 percent in EMEA (down 5 percent currency
neutral), decreased 1 percent in Asia-Pacific (down 2 percent currency
neutral), and decreased 16 percent in Latin America (down 10 percent currency
neutral).
- Apparel revenue decreased 17 percent to $2.9 billion. Footwear revenue declined 14
percent to $934 million. Accessories
revenue was relatively flat at $414
million.
- Gross margin increased 140 basis points to 48.3
percent. Excluding restructuring efforts, adjusted gross
margin increased 170 basis points to 48.6 percent, driven
predominantly by channel mix and supply chain initiatives offset by
pricing related to discounting within the direct-to-consumer
channel.
- Selling, general & administrative expenses decreased
3 percent to $2.2 billion, or 48.5
percent of revenue.
- Restructuring and impairment charges were $602 million consisting of $461 million in restructuring and related
impairment charges and $141 million
from impairments of long-lived assets and goodwill.
- Operating loss was $613
million. Adjusted operating income was $537 thousand.
- Net loss was $549 million.
Adjusted net loss was $120
million.
- Diluted loss per share was $1.21. Adjusted diluted loss per share was
$0.26.
2020 Restructuring Plan
The company previously announced a $550
million to $600 million
restructuring plan designed to rebalance its cost base to improve
profitability and cash flow. The company recognized $473 million of pre-tax charges for the full
year, including $62 million in the
fourth quarter. Of the $473 million
recognized, there were $125 million
in cash related charges and $348
million in non-cash related charges. As previously
disclosed, the company anticipates recognizing additional charges
related to this plan in the first half of 2021.
Initial 2021 Outlook
Based on current visibility, including ongoing impacts related
to COVID-19, key points related to Under Armour's full-year 2021
outlook include:
- Revenue is expected to be up at a high-single-digit
percentage rate, reflecting a high single-digit growth rate in
North America and a high-teens
growth rate in the international business.
- Gross margin is expected to be up slightly versus
the prior year adjusted gross margin rate of 48.6 with
benefits from pricing and supply chain efficiency, being largely
offset by the sale of MyFitnessPal, which was a high gross
margin business.
- Operating income is expected to reach $5 million to $25
million. Excluding the impact of continued restructuring
efforts, adjusted operating income is expected to reach
$130 million to $150 million.
- Diluted loss per share is expected to be about
$0.18 to $0.20 and adjusted diluted earnings per
share is expected to be in the range of $0.12 to $0.14.
However, due to ongoing uncertainty related to COVID-19 and its
potential effect on global markets, there could be other material
impacts on the company's full-year business results in 2021.
COVID-19 Update
As Under Armour continues to monitor the potential global
impacts of COVID-19, the company remains focused on protecting its
teammates' and consumers' health and safety while working with its
suppliers, partners, and customers to minimize potential
disruptions. In compliance with public health authorities and
guidance from government entities, Under Armour will continue to
modify its business practices to help moderate the spread of
COVID-19. These adaptations may include reduced capacity and
temporary closing of retail locations, distribution centers and
offices; observing travel restrictions; employing social distancing
and safety measures; and obeying quarantine requirements.
The following provides additional information on Under Armour's
state of operations as of January 31,
2021:
- The majority of the company's supply chain and distribution
network was operational.
- The majority of global locations (direct-to-consumer and
mono-branded partner stores) where Under Armour is sold were open;
however, not all are operating at full capacity due to various
restrictions. By region:
-
- Approximately 95 percent of North American stores were
open.
- Approximately 70 percent of EMEA stores were open.
- Approximately 95 percent of Asia-Pacific stores were open.
- Approximately 70 percent of Latin American stores were
open.
- Globally, while traffic trends within the company's owned
retail locations remain challenged, conversion trends remain
strong. Additionally, the company experienced significant eCommerce
growth around the world during the fourth quarter and full-year
2020.
As uncertainty related to COVID-19 persists, Under Armour
expects ongoing disruption to its business operations, potentially
materially impacting results.
Completed Sale of MyFitnessPal Platform
As previously announced on December 18,
2020, Under Armour completed the sale of the MyFitnessPal
business to Francisco Partners for $345
million, inclusive of the achievement of potential earn-out
payments.
Fiscal Year End Change
Under Armour's Board of Directors has authorized a change in its
fiscal year-end from December 31 to March
31, effective for the fiscal year beginning April 1, 2022. Given Under Armour's largest
quarters are currently realized in the July
1 through December 31 period, the company believes that this
change will provide greater alignment with our business cycle and
financial reporting. There will be no change to fiscal 2021, which
is expected to be reported in February of 2022. Following a three
month-transition period (January 1 –
March 31, 2022), Under Armour's
fiscal 2023 will run from April 1,
2022, through March 31, 2023.
Consequently, there will be no fiscal 2022.
Conference Call and Webcast
Under Armour will hold its fourth quarter and full-year
conference call and webcast today at approximately 8:30 a.m. Eastern Time. The call will be webcast
live at https://about.underarmour.com/investor-relations/financials
and will be archived and available for replay about three hours
after the live event.
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 2021 outlook. Currency neutral financial
information is calculated to exclude the impact of changes in
foreign currency exchange rates. Management believes this
information is useful to investors to compare the company's results
of operations period-over-period. Adjusted financial measures
exclude the impact of the company's 2020 restructuring plan and
related impairment charges, impairments associated with certain
long-lived assets and goodwill, and related tax effects. Management
believes this information is useful to investors because it
enhances visibility into its actual underlying results, excluding
these impacts. Adjusted interest expense, adjusted other expense,
adjusted net income (loss) and adjusted diluted income (loss) per
share also exclude the non-cash amortization of debt discount on
the company's convertible senior notes, the deal costs and gain
recognized in connection with the company's sale
of MyFitnessPal and related tax effects.
Management believes the non-cash portion of the interest expense,
which represents the accretion of the bifurcated equity component
of the convertible senior notes' conversion option, is not core to
the company's operations given the intent and ability to settle in
shares of the company's Class C common stock. Similarly, deal costs
and gain recognized in connection with the MyFitnessPal sale
are not core to the company's operations, given dispositions are
infrequent and non-recurring. These supplemental non-GAAP financial
measures should not be considered in isolation and should be
contemplated in addition to, and not as an alternative for, the
company's reported results prepared per 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 athletic performance apparel,
footwear and accessories. Designed to empower human performance,
Under Armour's innovative products and experiences are engineered
to make athletes better. For further information, please visit
http://about.underarmour.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, the
impact of the COVID-19 pandemic on our business and results of
operations, our plans to reduce our operating expenses, anticipated
charges and restructuring costs, projected savings related to our
restructuring plans and the timing thereof, 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," "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: the
impact of the COVID-19 pandemic on our industry and our business,
financial condition and results of operations; changes in
general economic or market conditions that could affect overall
consumer spending or our industry; 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 raw materials and
commodities we use in our products and our supply
chain; changes to the financial health of our
customers; our ability to successfully execute our long-term
strategies; our ability to effectively drive operational
efficiency in our business and successfully execute any potential
restructuring plans and realize their expected benefits; our
ability to effectively develop and launch new, innovative and
updated products; our ability to accurately forecast consumer
shopping preferences and consumer demand for our products and
manage our inventory in response to changing demands; loss of
key customers, suppliers or manufacturers or failure of our
suppliers or manufacturers to produce or deliver our products in a
timely or cost-effective manner; 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
manage the increasingly complex operations of our global
business; our ability to successfully manage or realize
expected results from significant transactions and
investments; 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; any disruptions, delays or deficiencies in the
design, implementation or application of our new global operating
and financial reporting information technology system; our
ability to attract key talent and retain the services of our senior
management and key employees; our ability to access capital
and financing required to manage our business on terms acceptable
to us; our ability to accurately anticipate and respond to
seasonal or quarterly fluctuations in our operating
results; risks related to foreign currency exchange rate
fluctuations; our ability to comply with existing trade and
other regulations, and the potential impact of new trade, tariff
and tax regulations on our profitability; risks related to
data security or privacy breaches; and our potential exposure
to litigation and other proceedings. 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 Months
and Year Ended December 31, 2020, and 2019
|
(Unaudited; in
thousands, except per share amounts)
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2020
|
|
% of Net
Revenues
|
|
2019
|
|
% of Net
Revenues
|
|
2020
|
|
% of Net
Revenues
|
|
2019
|
|
% of Net
Revenues
|
Net
revenues
|
|
$
|
1,403,766
|
|
|
100.0
|
%
|
|
$
|
1,441,225
|
|
|
100.0
|
%
|
|
$
|
4,474,667
|
|
|
100.0
|
%
|
|
$
|
5,267,132
|
|
|
100.0
|
%
|
Cost of goods
sold
|
|
710,144
|
|
|
50.6
|
%
|
|
759,698
|
|
|
52.7
|
%
|
|
2,314,572
|
|
|
51.7
|
%
|
|
2,796,599
|
|
|
53.1
|
%
|
Gross
profit
|
|
693,622
|
|
|
49.4
|
%
|
|
681,527
|
|
|
47.3
|
%
|
|
2,160,095
|
|
|
48.3
|
%
|
|
2,470,533
|
|
|
46.9
|
%
|
Selling, general and
administrative expenses
|
|
585,778
|
|
|
41.7
|
%
|
|
607,454
|
|
|
42.1
|
%
|
|
2,171,934
|
|
|
48.5
|
%
|
|
2,233,763
|
|
|
42.4
|
%
|
Restructuring and
impairment charges
|
|
51,998
|
|
|
3.7
|
%
|
|
—
|
|
|
—
|
%
|
|
601,599
|
|
|
13.4
|
%
|
|
—
|
|
|
—
|
%
|
Income (loss) from
operations
|
|
55,846
|
|
|
4.0
|
%
|
|
74,073
|
|
|
5.1
|
%
|
|
(613,438)
|
|
|
(13.7)
|
%
|
|
236,770
|
|
|
4.5
|
%
|
Interest expense,
net
|
|
(15,008)
|
|
|
(1.1)
|
%
|
|
(5,359)
|
|
|
(0.4)
|
%
|
|
(47,259)
|
|
|
(1.1)
|
%
|
|
(21,240)
|
|
|
(0.4)
|
%
|
Other income
(expense), net
|
|
178,646
|
|
|
12.7
|
%
|
|
(3,464)
|
|
|
(0.2)
|
%
|
|
168,153
|
|
|
3.8
|
%
|
|
(5,688)
|
|
|
(0.1)
|
%
|
Income (loss)
before income taxes
|
|
219,484
|
|
|
15.6
|
%
|
|
65,250
|
|
|
4.5
|
%
|
|
(492,544)
|
|
|
(11.0)
|
%
|
|
209,842
|
|
|
4.0
|
%
|
Income tax expense
(benefit)
|
|
34,690
|
|
|
2.5
|
%
|
|
38,289
|
|
|
2.7
|
%
|
|
49,387
|
|
|
1.1
|
%
|
|
70,024
|
|
|
1.3
|
%
|
Income (loss) from
equity method investment
|
|
(340)
|
|
|
—
|
%
|
|
(42,265)
|
|
|
(2.9)
|
%
|
|
(7,246)
|
|
|
(0.2)
|
%
|
|
(47,679)
|
|
|
(0.9)
|
%
|
Net income
(loss)
|
|
$
|
184,454
|
|
|
13.1
|
%
|
|
$
|
(15,304)
|
|
|
(1.1)
|
%
|
|
$
|
(549,177)
|
|
|
(12.3)
|
%
|
|
$
|
92,139
|
|
|
1.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share of
Class A, B and C common stock
|
|
$
|
0.41
|
|
|
|
|
$
|
(0.03)
|
|
|
|
|
$
|
(1.21)
|
|
|
|
|
$
|
0.20
|
|
|
|
Diluted net income
(loss) per share of
Class A, B and C common stock
|
|
$
|
0.40
|
|
|
|
|
$
|
(0.03)
|
|
|
|
|
$
|
(1.21)
|
|
|
|
|
$
|
0.20
|
|
|
|
Weighted average
common shares outstanding Class A, B and C common
stock
|
Basic
|
|
454,811
|
|
|
|
|
451,629
|
|
|
|
|
454,089
|
|
|
|
|
450,964
|
|
|
|
Diluted
|
|
457,869
|
|
|
|
|
451,629
|
|
|
|
|
454,089
|
|
|
|
|
454,274
|
|
|
|
Under Armour,
Inc.
|
For the Three Months
and Year Ended December 31, 2020, and 2019
|
(Unaudited; in
thousands)
|
|
NET REVENUES BY
PRODUCT CATEGORY
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
Apparel
|
|
$
|
931,376
|
|
|
$
|
970,296
|
|
|
(4.0)
|
%
|
|
$
|
2,882,562
|
|
|
$
|
3,470,285
|
|
|
(16.9)
|
%
|
Footwear
|
|
240,869
|
|
|
259,328
|
|
|
(7.1)
|
%
|
|
934,333
|
|
|
1,086,551
|
|
|
(14.0)
|
%
|
Accessories
|
|
145,170
|
|
|
109,948
|
|
|
32.0
|
%
|
|
414,082
|
|
|
416,354
|
|
|
(0.5)
|
%
|
Total net
sales
|
|
1,317,415
|
|
|
1,339,572
|
|
|
(1.7)
|
%
|
|
4,230,977
|
|
|
4,973,190
|
|
|
(14.9)
|
%
|
Licensing
revenues
|
|
54,535
|
|
|
62,208
|
|
|
(12.3)
|
%
|
|
105,779
|
|
|
138,775
|
|
|
(23.8)
|
%
|
Connected
Fitness
|
|
33,213
|
|
|
34,993
|
|
|
(5.1)
|
%
|
|
135,813
|
|
|
136,378
|
|
|
(0.4)
|
%
|
Corporate Other
(1)
|
|
(1,397)
|
|
|
4,452
|
|
|
(131.4)
|
%
|
|
$
|
2,098
|
|
|
$
|
18,789
|
|
|
(88.8)
|
%
|
Total net
revenues
|
|
$
|
1,403,766
|
|
|
$
|
1,441,225
|
|
|
(2.6)
|
%
|
|
$
|
4,474,667
|
|
|
$
|
5,267,132
|
|
|
(15.0)
|
%
|
NET REVENUES BY
SEGMENT
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2020
|
|
2019
|
|
% Change
|
|
2020
|
|
2019
|
|
% Change
|
North
America
|
|
$
|
923,731
|
|
|
$
|
982,964
|
|
|
(6.0)
|
%
|
|
$
|
2,944,978
|
|
|
$
|
3,658,353
|
|
|
(19.5)
|
%
|
EMEA
|
|
161,156
|
|
|
180,732
|
|
|
(10.8)
|
%
|
|
598,296
|
|
|
621,137
|
|
|
(3.7)
|
%
|
Asia-Pacific
|
|
230,811
|
|
|
183,047
|
|
|
26.1
|
%
|
|
628,657
|
|
|
636,343
|
|
|
(1.2)
|
%
|
Latin
America
|
|
56,252
|
|
|
55,037
|
|
|
2.2
|
%
|
|
164,825
|
|
|
196,132
|
|
|
(16.0)
|
%
|
Connected
Fitness
|
|
33,213
|
|
|
34,993
|
|
|
(5.1)
|
%
|
|
135,813
|
|
|
136,378
|
|
|
(0.4)
|
%
|
Corporate Other
(1)
|
|
(1,397)
|
|
|
4,452
|
|
|
(131.4)
|
%
|
|
2,098
|
|
|
$
|
18,789
|
|
|
(88.8)
|
%
|
Total net
revenues
|
|
$
|
1,403,766
|
|
|
$
|
1,441,225
|
|
|
(2.6)
|
%
|
|
$
|
4,474,667
|
|
|
$
|
5,267,132
|
|
|
(15.0)
|
%
|
INCOME (LOSS) FROM
OPERATIONS
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2020
|
% of Net
Revenues (2)
|
|
2019
|
% of Net
Revenues (2)
|
|
2020
|
% of Net
Revenues (2)
|
|
2019
|
|
% of Net
Revenues (2)
|
North
America
|
|
$
|
223,005
|
|
24.1
|
%
|
|
$
|
196,742
|
|
20.0
|
%
|
|
$
|
474,584
|
|
16.1
|
%
|
|
$
|
733,442
|
|
|
20.0
|
%
|
EMEA
|
|
16,752
|
|
10.4
|
%
|
|
9,039
|
|
5.0
|
%
|
|
60,592
|
|
10.1
|
%
|
|
53,739
|
|
|
8.7
|
%
|
Asia-Pacific
|
|
30,042
|
|
13.0
|
%
|
|
23,525
|
|
12.9
|
%
|
|
2
|
|
—
|
%
|
|
97,641
|
|
|
15.3
|
%
|
Latin
America
|
|
7,966
|
|
14.2
|
%
|
|
857
|
|
1.6
|
%
|
|
(42,790)
|
|
(26.0)
|
%
|
|
(3,160)
|
|
|
(1.6)
|
%
|
Connected
Fitness
|
|
3,043
|
|
9.2
|
%
|
|
9,037
|
|
25.8
|
%
|
|
17,063
|
|
12.6
|
%
|
|
17,140
|
|
|
12.6
|
%
|
Corporate
Other
|
|
(224,962)
|
|
NM
|
|
|
(165,127)
|
|
NM
|
|
|
(1,122,889)
|
|
NM
|
|
|
(662,032)
|
|
|
NM
|
|
Income (loss)
from
operations
|
|
$
|
55,846
|
|
4.0
|
%
|
|
$
|
74,073
|
|
5.1
|
%
|
|
$
|
(613,438)
|
|
(13.7)
|
%
|
|
$
|
236,770
|
|
|
4.5
|
%
|
|
(1) Corporate
Other consists of foreign currency hedge gains and losses related
to revenues generated by entities within our geographic operating
segments but managed through our central foreign exchange risk
management program.
|
|
(2) Operating
income (loss) percentage is calculated based on total segment net
revenues. Additionally, the operating income (loss) percentage for
Corporate Other is not presented as a meaningful metric
(NM).
|
Under Armour,
Inc.
|
As of
December 31, 2020, and December 31, 2019
|
(Unaudited; in
thousands)
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
December 31,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,517,361
|
|
|
$
|
788,072
|
|
Accounts receivable,
net
|
|
527,340
|
|
|
708,714
|
|
Inventories
|
|
895,974
|
|
|
892,258
|
|
Prepaid expenses and
other current assets
|
|
282,300
|
|
|
313,165
|
|
Total current
assets
|
|
3,222,975
|
|
|
2,702,209
|
|
Property and
equipment, net
|
|
658,678
|
|
|
792,148
|
|
Operating lease
right-of-use assets
|
|
536,660
|
|
|
591,931
|
|
Goodwill
|
|
502,214
|
|
|
550,178
|
|
Intangible assets,
net
|
|
13,295
|
|
|
36,345
|
|
Deferred income
taxes
|
|
23,930
|
|
|
82,379
|
|
Other long-term
assets
|
|
72,876
|
|
|
88,341
|
|
Total
assets
|
|
$
|
5,030,628
|
|
|
$
|
4,843,531
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Accounts
payable
|
|
$
|
575,954
|
|
|
$
|
618,194
|
|
Accrued
expenses
|
|
378,859
|
|
|
374,694
|
|
Customer refund
liabilities
|
|
203,399
|
|
|
219,424
|
|
Operating lease
liabilities
|
|
162,561
|
|
|
125,900
|
|
Other current
liabilities
|
|
92,503
|
|
|
83,797
|
|
Total current
liabilities
|
|
1,413,276
|
|
|
1,422,009
|
|
Long term
debt
|
|
1,003,556
|
|
|
592,687
|
|
Operating lease
liabilities, non-current
|
|
839,414
|
|
|
580,635
|
|
Other long-term
liabilities
|
|
98,389
|
|
|
98,113
|
|
Total
liabilities
|
|
3,354,635
|
|
|
2,693,444
|
|
Total stockholders'
equity
|
|
1,675,993
|
|
|
2,150,087
|
|
Total liabilities
and stockholders' equity
|
|
$
|
5,030,628
|
|
|
$
|
4,843,531
|
|
Under Armour,
Inc.
|
For the Year Ended
December 31, 2020, and 2019
|
(Unaudited; in
thousands)
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$
|
(549,177)
|
|
|
$
|
92,139
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities
|
|
|
|
Depreciation and
amortization
|
164,984
|
|
|
186,425
|
|
Unrealized foreign
currency exchange rate gain (loss)
|
(9,295)
|
|
|
(2,073)
|
|
Loss on disposal of
property and equipment
|
3,740
|
|
|
4,640
|
|
Impairment
charges
|
470,543
|
|
|
39,000
|
|
Amortization of bond
premium
|
12,070
|
|
|
254
|
|
Gain on sale of
MyFitnessPal platform
|
(179,318)
|
|
|
—
|
|
Stock-based
compensation
|
42,070
|
|
|
49,618
|
|
Deferred income
taxes
|
43,992
|
|
|
38,132
|
|
Changes in reserves
and allowances
|
10,347
|
|
|
(26,096)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
167,614
|
|
|
(45,450)
|
|
Inventories
|
15,306
|
|
|
149,519
|
|
Prepaid expenses and
other assets
|
18,603
|
|
|
24,334
|
|
Other non-current
assets
|
(259,735)
|
|
|
19,966
|
|
Accounts
payable
|
(40,673)
|
|
|
59,458
|
|
Accrued expenses and
other liabilities
|
318,532
|
|
|
(18,987)
|
|
Customer refund
liabilities
|
(19,250)
|
|
|
(80,710)
|
|
Income taxes payable
and receivable
|
2,511
|
|
|
18,862
|
|
Net cash provided by
operating activities
|
212,864
|
|
|
509,031
|
|
Cash flows from
investing activities
|
|
|
|
Sale of MyFitnessPal
platform
|
198,916
|
|
|
—
|
|
Purchase of
businesses
|
(40,280)
|
|
|
—
|
|
Purchases of property
and equipment
|
(92,291)
|
|
|
(145,802)
|
|
Purchases of other
assets
|
—
|
|
|
(1,311)
|
|
Net cash used in
investing activities
|
66,345
|
|
|
(147,113)
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from long
term debt and revolving credit facility
|
1,288,753
|
|
|
25,000
|
|
Payments on long term
debt and revolving credit facility
|
(800,000)
|
|
|
(162,817)
|
|
Purchase of capped
call
|
(47,850)
|
|
|
—
|
|
Employee taxes paid
for shares withheld for income taxes
|
(3,675)
|
|
|
(4,235)
|
|
Proceeds from
exercise of stock options and other stock issuances
|
4,744
|
|
|
7,472
|
|
Payments of debt
financing costs
|
(5,219)
|
|
|
(2,553)
|
|
Other financing
fees
|
100
|
|
|
63
|
|
Net cash (used in)
provided by financing activities
|
436,853
|
|
|
(137,070)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
16,445
|
|
|
5,100
|
|
Net increase in cash,
cash equivalents and restricted cash
|
732,507
|
|
|
229,948
|
|
Cash, cash
equivalents and restricted cash
|
|
|
|
Beginning of
period
|
796,008
|
|
|
566,060
|
|
End of
period
|
$
|
1,528,515
|
|
|
$
|
796,008
|
|
Under Armour,
Inc.
|
For the Three Months
and Year Ended December 31, 2020
|
(Unaudited)
|
|
The table below
presents the reconciliation of net revenue growth (decline)
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
December 31, 2020
|
Year Ended
December 31, 2020
|
Total Net
Revenue
|
|
|
|
Net revenue growth -
GAAP
|
|
(2.6)
|
%
|
(15.0)
|
%
|
Foreign exchange
impact
|
|
(0.8)
|
%
|
—
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
(3.4)
|
%
|
(15.0)
|
%
|
|
|
|
|
North
America
|
|
|
|
Net revenue growth
(decline) - GAAP
|
|
(6.0)
|
%
|
(19.5)
|
%
|
Foreign exchange
impact
|
|
—
|
%
|
0.1
|
%
|
Currency neutral net
revenue growth (decline) - Non-GAAP
|
|
(6.0)
|
%
|
(19.4)
|
%
|
|
|
|
|
EMEA
|
|
|
|
Net revenue growth -
GAAP
|
|
(10.8)
|
%
|
(3.7)
|
%
|
Foreign exchange
impact
|
|
(3.2)
|
%
|
(1.5)
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
(14.0)
|
%
|
(5.2)
|
%
|
|
|
|
|
Asia-Pacific
|
|
|
|
Net revenue growth -
GAAP
|
|
26.1
|
%
|
(1.2)
|
%
|
Foreign exchange
impact
|
|
(5.3)
|
%
|
(0.3)
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
20.8
|
%
|
(1.5)
|
%
|
|
|
|
|
Latin
America
|
|
|
|
Net revenue growth -
GAAP
|
|
2.2
|
%
|
(16.0)
|
%
|
Foreign exchange
impact
|
|
6.2
|
%
|
5.6
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
8.4
|
%
|
(10.4)
|
%
|
|
|
|
|
Total
International
|
|
|
|
Net revenue growth -
GAAP
|
|
7.0
|
%
|
(4.3)
|
%
|
Foreign exchange
impact
|
|
(2.9)
|
%
|
—
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
4.1
|
%
|
(4.3)
|
%
|
Under Armour,
Inc.
|
For the Three Months
and Year Ended December 31, 2020
|
(Unaudited; in
thousands, except per share amounts)
|
|
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
|
|
|
|
Three Months
Ended
December 31, 2020
|
Year Ended
December 31, 2020
|
Gross
margin
|
|
49.4
|
%
|
48.3
|
%
|
Add: Impact of
restructuring and related impairment charges
|
|
0.9
|
%
|
0.3
|
%
|
Adjusted gross
margin
|
|
50.3
|
%
|
48.6
|
%
|
ADJUSTED OPERATING
INCOME RECONCILIATION
|
|
|
|
Three Months
Ended
December 31, 2020
|
Year Ended
December 31, 2020
|
Income (loss) from
operations
|
|
$
|
55,846
|
|
$
|
(613,438)
|
|
Add: Impact of
restructuring and related impairment charges (1)
|
|
62,486
|
|
472,744
|
|
Add: Impact of
impairment charges
|
|
1,888
|
|
141,231
|
|
Adjusted income from
operations
|
|
$
|
120,220
|
|
$
|
537
|
|
|
(1) The impact of
restructuring and related impairment charges is comprised of
$12,376, included in cost of goods sold, as well as $460,368
related to restructuring and related impairment
charges.
|
ADJUSTED NET
INCOME RECONCILIATION
|
|
|
|
Three Months
Ended
December 31, 2020
|
Year Ended
December 31, 2020
|
Net income
(loss)
|
|
$
|
184,454
|
|
$
|
(549,177)
|
|
Add: Impact of
restructuring and impairment charges
|
|
40,744
|
|
451,305
|
|
Add: Impact of
impairment charges
|
|
1,785
|
|
141,231
|
|
Add: Impact of
amortization of debt discount
|
|
4,548
|
|
11,274
|
|
Add: Impact of
deal-related costs and gain on sale of MyFitnessPal
platform
|
|
(177,019)
|
|
(174,805)
|
|
Adjusted net income
(loss)
|
|
$
|
54,512
|
|
$
|
(120,172)
|
|
ADJUSTED DILUTED
EARNINGS PER SHARE RECONCILIATION
|
|
|
|
Three Months
Ended
December 31, 2020
|
Year Ended
December 31, 2020
|
Diluted net income
(loss) per share
|
|
$
|
0.40
|
|
$
|
(1.21)
|
|
Add: Impact of
restructuring and related impairment charges
|
|
0.09
|
|
0.99
|
|
Add: Impact of
impairment charges
|
|
0.01
|
|
0.32
|
|
Add: Impact of
amortization of debt discount
|
|
0.01
|
|
0.02
|
|
Add: Impact of
deal-related costs and gain on sale of MyFitnessPal
platform
|
|
(0.39)
|
|
(0.38)
|
|
Adjusted diluted
income (loss) per share
|
|
$
|
0.12
|
|
$
|
(0.26)
|
|
Under Armour,
Inc.
|
Outlook for the Three
Months Ended March 31, 2021, and Year Ended December 31,
2021
|
(Unaudited; in
millions, except per share amounts)
|
|
|
The table below
presents the reconciliation of the Company's fiscal 2021 outlook
for income from operations calculated in accordance with GAAP to
adjusted operating income, which 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
|
|
(in
millions)
|
|
Three Months Ended
March 31, 2021
|
|
Year Ended December
31, 2021
|
Income (loss) from
operations
|
|
$
|
(60)
|
|
$
|
(75)
|
|
|
$
|
5
|
|
$
|
25
|
|
Add: Estimated impact
of restructuring and related impairment charges (1)
|
|
90
|
|
110
|
|
|
125
|
|
125
|
|
Adjusted income
(loss) from operations
|
|
$
|
30
|
|
$
|
35
|
|
|
$
|
130
|
|
$
|
150
|
|
ADJUSTED DILUTED
EARNINGS PER SHARE RECONCILIATION
|
|
|
|
Year Ended December
31, 2021
|
Diluted net income
(loss) per share
|
|
$
|
(0.20)
|
|
$
|
(0.18)
|
|
Add: Impact of
restructuring and related impairment charges (1)
|
|
0.27
|
|
0.27
|
|
Add: Impact of
amortization of debt discount
|
|
0.05
|
|
0.05
|
|
Adjusted diluted
income per share
|
|
$
|
0.12
|
|
$
|
0.14
|
|
|
(1) The estimated
impact of restructuring plan presented above assumes approximately
the high-end of the Company's estimated remaining range of
restructuring and related charges, which is approximately $80 to
$130 million.
|
|
In connection with
the Company's fourth quarter and full-year conference call and
webcast, the Company will discuss its projected adjusted diluted
earnings per share for the three months ended March 31, 2021. As a
result of its 2020 restructuring plan, the Company currently
expects to record income tax expense on pre-tax losses for fiscal
2021. Therefore, the income tax expense for the three months ended
March 31, 2021, is subject to significant variability based on the
actual quarterly pre-tax results, and a meaningful estimated range
of GAAP-based income tax expense cannot be provided. The GAAP-based
income tax expense for the first quarter of Fiscal 2021 could range
from $2 million to $95 million based on facts and circumstances.
Given this variability, there is substantial uncertainty associated
with accurately projecting the Company's GAAP-based income tax
expense and GAAP-based diluted earnings per share for the three
months ended March 31, 2021. Accordingly, a reconciliation to the
Company's adjusted diluted earnings per share has not been
provided, as it believes the reconciliation is not
meaningful.
|
|
The Company's net
income for the three months ended March 31, 2021, is expected to be
impacted by approximately $90 to $110 million of restructuring and
related impairment charges, and approximately $5 million of
non-cash amortization of debt discount on its convertible debt,
both of which are excluded for purposes of calculating adjusted net
income.
|
Under Armour,
Inc.
|
As of December 31,
2020, and 2019
|
|
BRAND HOUSE AND
FACTORY HOUSE DOOR COUNT
|
|
|
|
December
31,
|
|
|
2020
|
|
2019
|
Factory
House
|
|
176
|
|
169
|
Brand
House
|
|
18
|
|
19
|
North
America total doors
|
|
194
|
|
188
|
|
|
|
|
|
Factory
House
|
|
134
|
|
104
|
Brand
House
|
|
111
|
|
96
|
International total doors
|
|
245
|
|
200
|
|
|
|
|
|
Factory
House
|
|
310
|
|
273
|
Brand
House
|
|
129
|
|
115
|
Total
doors
|
|
439
|
|
388
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/under-armour-reports-fourth-quarter-and-full-year-2020-results-provides-initial-2021-outlook-301225466.html
SOURCE Under Armour, Inc.