BALTIMORE, Feb. 13, 2018 /PRNewswire/ -- Under Armour,
Inc. (NYSE: UA, UAA) today announced financial results for the
fourth quarter ended December 31, 2017. 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 recent 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.
"After years of rapid growth and building a globally recognized
brand, the dynamic landscape of 2017 was a catalyst for us to begin
strategically transforming Under Armour into an operationally
excellent company," said Under Armour Chairman and CEO Kevin Plank. "A year into this journey, our
fourth quarter and full year results demonstrate that the tough
decisions we're making are generating the stability necessary to
create a more consistent and predictable path to deliver long-term
value to our shareholders."
Fourth Quarter 2017 Review
- Revenue was up 5 percent to $1.4
billion (up 4 percent currency neutral).
-
- Revenue to wholesale customers declined 1 percent to
$733 million and direct-to-consumer
revenue was up 11 percent to $575
million. Direct-to-consumer represented 42 percent of global
revenue in the quarter.
- Consistent with previous expectations, revenue in North America was down 4 percent. Strong
international momentum continued with revenue up 47 percent (up 43
percent currency neutral), representing 23 percent of total
revenue. Within our international business, revenue in EMEA was up
45 percent (up 37 percent currency neutral), up 56 percent in
Asia-Pacific (up 55 percent
currency neutral) and up 36 percent in Latin America (up 34 percent currency
neutral).
- Apparel revenue increased 2 percent to $952 million, as growth in men's training and
global football was tempered by declines in the team sports and
outdoor categories. Footwear revenue was up 9 percent to
$246 million, driven by strength in
running, offset by team sports and basketball. Accessories revenue
increased 6 percent to $111 million
led by men's training and running.
- Gross margin declined 150 basis points to 43.2 percent
as benefits from changes in foreign currency rates and product
costs were more than offset by pricing and other inventory
management initiatives, and channel mix. Adjusted gross
margin, which excludes a $1
million impact from restructuring efforts, was 43.3
percent.
- Selling, General and administrative expenses increased
40.7 percent to $591 million, or 43.3
percent of revenue, primarily due to third to fourth quarter timing
shifts in marketing execution and lower incentive compensation in
the prior period, as well as continued investments in the
direct-to-consumer, footwear and international businesses.
- Restructuring and impairment charges were $36 million.
- Operating loss was $37
million. Adjusted operating income was $0 million
- Net loss was $88 million
in the fourth quarter. Excluding both a one-time charge related to
the U.S. Tax Act, and the impact of the restructuring plan,
adjusted net loss was $1
million.
- Diluted earnings per share was negative $0.20. Adjusted earnings per share was
$0.00.
- Inventory increased 26 percent to $1.2 billion driven by a mid-teen percentage rate
increase in North America and
nearly 50 percent growth in the international business.
- Cash and cash equivalents increased 25 percent to
$312 million.
Full Year 2017 Review
- Revenue was up 3 percent to $5.0
billion.
-
- Revenue to wholesale customers declined 3 percent to
$3.0 billion and direct-to-consumer
revenue was up 14 percent to $1.7
billion. Direct-to-consumer represented 35 percent of global
revenue in 2017.
- North America revenue was down
5 percent. Continued international strength contributed to a 46
percent increase in revenue (up 47 percent currency neutral),
representing 22 percent of total revenue. Full year revenue in EMEA
was up 42 percent (up 43 percent currency neutral), up 61 percent
in Asia-Pacific (up 63 percent
currency neutral) and up 28 percent in Latin America (up 26 percent currency
neutral).
- Apparel revenue increased 2 percent to $3.3 billion, as strength in men's training and
golf was moderated by declines in outdoor and team sports. Footwear
revenue was up 3 percent to $1.0
billion, driven by strength in running and men's training
mitigated by basketball and youth. Accessories revenue increased 10
percent to $446 million led by
strength in men's training.
- Gross margin declined 140 basis points to 45.0 percent
as inventory management initiatives more than offset favorable
channel mix. Adjusted gross margin, which excludes a
$5 million impact from restructuring
efforts, was 45.1 percent.
- Selling, general, and administrative expenses was up 14
percent to $2.1 billion, representing
41.9 percent of revenue, an increase driven by continued
investments in demand creation, and the direct-to-consumer,
footwear and international businesses.
- Restructuring and impairment charges were $124 million in 2017.
- Operating income was $28
million. Adjusted operating income was $157 million.
- Net loss was $48 million
in 2017. Excluding both the fourth quarter one-time charge related
to the U.S. Tax Act, and the impact of the restructuring
plan, adjusted net income was $87
million.
- Diluted earnings per share was negative $0.11. Adjusted diluted earnings per share
was $0.19.
2017 and 2018 Restructuring Plans
On October 31, 2017, the company
provided an update that it expected its restructuring plan
(announced on August 1, 2017) would
include approximately $140 to
$150 million of pre-tax
restructuring, impairment and related charges to be substantially
completed in 2017. In the fourth quarter of 2017, it
recognized pre-tax costs totaling $37
million comprised of $14
million in cash related charges and $23 million in non-cash charges. For the full
year, $129 million of pre-tax charges
were realized including $39 million
in cash related charges and $90
million in non-cash related charges.
After additional review, the company has announced an additional
2018 restructuring plan identifying further opportunities to
optimize operations. In conjunction with this plan, approximately
$110 to $130
million of pre-tax restructuring and related charges are
expected to be incurred, including:
- Up to $105 million in cash
related charges, consisting of up to $55
million in facility and lease terminations and up to
$50 million in contract termination
and other restructuring charges; and,
- Up to $25 million in non-cash
charges comprised of up to $10
million of inventory related charges and up to $15 million of asset related impairments.
Based on the restructuring efforts in 2017 and 2018, the company
anticipates a minimum of $75 million
in savings annually from these efforts in 2019 and beyond.
Full Year 2018 Outlook
Key points related to Under Armour's full year 2018 outlook
include:
- Net revenue is expected to be up at a low single-digit
percentage rate reflecting a mid-single-digit decline in
North America and international
growth of greater than 25 percent.
- Gross margin is expected to increase approximately 50
basis points to 45.5 percent due to benefits from lower planned
promotional activity, product costs, channel mix and changes in
foreign currency.
- Operating income is expected to reach $20 million to $30
million. Excluding the impact of continued restructuring
efforts, adjusted operating income is expected to be
$130 to $160
million.
- Interest and other expense net is planned at
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; and,
- Capital expenditures are planned at approximately
$225 million compared with
$275 million in 2017.
Conference Call and Webcast
Under Armour will hold its fourth quarter 2017 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 new legislation contains
several key tax provisions that affect Under Armour and, as
required, the company has 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 include a one-time
mandatory transition tax on accumulated foreign earnings and a
re-measuring of deferred tax assets, resulting in an increase to
the company's provision for income taxes of $39 million and a decrease to diluted earnings
per share of $0.09 for both the
fourth quarter and full year of 2017. Since the U.S. Tax Act was
passed late in the fourth quarter of 2017, and ongoing guidance and
additional accounting interpretation 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
based on potential future guidance. The company expects to finalize
its estimates 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 operating income, adjusted
gross margin, adjusted effective tax rate, adjusted net income and
adjusted diluted earnings per share 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 innovator,
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, projected annualized savings related to our restructuring
plans, 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 effectively manage our growth and
a more complex global business; our ability to successfully execute
our restructuring plans and realize their expected benefits; our
ability to effectively drive operational efficiency in our
business; any disruptions, delays or deficiencies in the design or
implementation of our new global operating and financial reporting
information technology system; 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
successfully manage or realize expected results from acquisitions
and other significant investments or capital expenditures; our
ability to effectively develop and launch new, innovative and
updated products; increased competition causing us to lose market
share or reduce the prices of our products or to increase
significantly our marketing efforts; our ability to accurately
forecast consumer demand for our products and manage our inventory
in response to changing demands; 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; 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
in such systems or technology; risks related to data security or
privacy breaches; 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 Quarter Ended
and Year Ended December 31, 2017 and 2016
|
(Unaudited; in
thousands, except per share amounts)
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
Quarter Ended
December 31, 2017
|
|
Year Ended December
31,
|
|
|
2017
|
|
% of Net
Revenues
|
|
2016
|
|
% of Net
Revenues
|
|
2017
|
|
% of Net
Revenues
|
|
2016
|
|
% of Net
Revenues
|
Net
revenues
|
|
$
|
1,365,361
|
|
|
100.0
|
%
|
|
$
|
1,305,277
|
|
|
100.0
|
%
|
|
$
|
4,976,553
|
|
|
100.0
|
%
|
|
$
|
4,825,335
|
|
|
100.0
|
%
|
Cost of goods
sold
|
|
775,658
|
|
|
56.8
|
%
|
|
721,573
|
|
|
55.3
|
%
|
|
2,737,830
|
|
|
55.0
|
%
|
|
2,584,724
|
|
|
53.6
|
%
|
Gross
Profit
|
|
589,703
|
|
|
43.2
|
%
|
|
583,704
|
|
|
44.7
|
%
|
|
2,238,723
|
|
|
45.0
|
%
|
|
2,240,611
|
|
|
46.4
|
%
|
Selling, general and
administrative
expenses
|
|
590,839
|
|
|
43.3
|
%
|
|
419,804
|
|
|
32.2
|
%
|
|
2,086,831
|
|
|
41.9
|
%
|
|
1,823,140
|
|
|
37.8
|
%
|
Restructuring and
impairment charges
|
|
35,952
|
|
|
2.6
|
%
|
|
—
|
|
|
—
|
%
|
|
124,049
|
|
|
2.5
|
%
|
|
—
|
|
|
—
|
%
|
Income (loss) from
operations
|
|
(37,088)
|
|
|
(2.7)
|
%
|
|
163,900
|
|
|
12.6
|
%
|
|
27,843
|
|
|
0.6
|
%
|
|
417,471
|
|
|
8.6
|
%
|
Interest expense,
net
|
|
(9,301)
|
|
|
(0.7)
|
%
|
|
(7,958)
|
|
|
(0.6)
|
%
|
|
(34,538)
|
|
|
(0.7)
|
%
|
|
(26,434)
|
|
|
(0.5)
|
%
|
Other expense,
net
|
|
(2,231)
|
|
|
(0.2)
|
%
|
|
(1,731)
|
|
|
(0.1)
|
%
|
|
(3,614)
|
|
|
(0.1)
|
%
|
|
(2,755)
|
|
|
(0.1)
|
%
|
Income (loss)
before income taxes
|
|
(48,620)
|
|
|
(3.6)
|
%
|
|
154,211
|
|
|
11.8
|
%
|
|
(10,309)
|
|
|
(0.2)
|
%
|
|
388,282
|
|
|
8.0
|
%
|
Income tax
expense
|
|
39,300
|
|
|
2.9
|
%
|
|
50,981
|
|
|
3.9
|
%
|
|
37,951
|
|
|
0.8
|
%
|
|
131,303
|
|
|
2.7
|
%
|
Net income
(loss)
|
|
(87,920)
|
|
|
(6.4)
|
%
|
|
103,230
|
|
|
7.9
|
%
|
|
(48,260)
|
|
|
(1.0)
|
%
|
|
256,979
|
|
|
5.3
|
%
|
Adjustment
payment to Class C capital stockholders
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
59,000
|
|
|
1.2
|
%
|
Net income (loss)
available to all stockholders
|
|
$
|
(87,920)
|
|
|
(6.4)
|
%
|
|
$
|
103,230
|
|
|
7.9
|
%
|
|
$
|
(48,260)
|
|
|
(1.0)
|
%
|
|
$
|
197,979
|
|
|
4.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share of Class A and B common stock
|
|
$
|
(0.20)
|
|
|
|
|
$
|
0.24
|
|
|
|
|
$
|
(0.11)
|
|
|
|
|
$
|
0.45
|
|
|
|
Basic net income
(loss) per share of Class C common stock
|
|
$
|
(0.20)
|
|
|
|
|
$
|
0.24
|
|
|
|
|
$
|
(0.11)
|
|
|
|
|
$
|
0.72
|
|
|
|
Diluted net income
(loss) per
share of Class A and B
common stock
|
|
$
|
(0.20)
|
|
|
|
|
$
|
0.23
|
|
|
|
|
$
|
(0.11)
|
|
|
|
|
$
|
0.45
|
|
|
|
Diluted net income
(loss) per share of Class C common stock
|
|
$
|
(0.20)
|
|
|
|
|
$
|
0.23
|
|
|
|
|
$
|
(0.11)
|
|
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding Class A and B common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
219,637
|
|
|
|
|
218,220
|
|
|
|
|
219,254
|
|
|
|
|
217,707
|
|
|
|
Diluted
|
|
219,637
|
|
|
|
|
222,802
|
|
|
|
|
219,254
|
|
|
|
|
221,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding Class C common stock
|
Basic
|
|
222,189
|
|
|
|
|
220,040
|
|
|
|
|
221,475
|
|
|
|
|
218,623
|
|
|
|
Diluted
|
|
222,189
|
|
|
|
|
224,777
|
|
|
|
|
221,475
|
|
|
|
|
222,904
|
|
|
|
Under Armour,
Inc.
|
For the Quarter Ended
and Year Ended December 31, 2017 and 2016
|
(Unaudited; in
thousands)
|
|
NET REVENUES BY
PRODUCT CATEGORY
|
|
|
|
Quarter Ended
December 31, 2017
|
|
Year Ended December
31,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
Apparel
|
|
$
|
951,666
|
|
|
$
|
928,546
|
|
|
2.5
|
%
|
|
$
|
3,287,121
|
|
|
$
|
3,229,142
|
|
|
1.8
|
%
|
Footwear
|
|
246,204
|
|
|
224,850
|
|
|
9.5
|
%
|
|
1,037,840
|
|
|
1,010,693
|
|
|
2.7
|
%
|
Accessories
|
|
110,666
|
|
|
104,348
|
|
|
6.1
|
%
|
|
445,838
|
|
|
406,614
|
|
|
9.6
|
%
|
Total net
sales
|
|
1,308,536
|
|
|
1,257,744
|
|
|
4.0
|
%
|
|
4,770,799
|
|
|
4,646,449
|
|
|
2.7
|
%
|
Licensing
revenues
|
|
32,936
|
|
|
29,926
|
|
|
10.1
|
%
|
|
116,575
|
|
|
99,849
|
|
|
16.8
|
%
|
Connected
Fitness
|
|
23,889
|
|
|
18,267
|
|
|
30.8
|
%
|
|
89,179
|
|
|
80,447
|
|
|
10.9
|
%
|
Intersegment
eliminations
|
|
—
|
|
|
(660)
|
|
|
(100.0)
|
%
|
|
—
|
|
|
(1,410)
|
|
|
(100.0)
|
%
|
Total net
revenues
|
|
$
|
1,365,361
|
|
|
$
|
1,305,277
|
|
|
4.6
|
%
|
|
$
|
4,976,553
|
|
|
$
|
4,825,335
|
|
|
3.1
|
%
|
|
NET REVENUES BY
SEGMENT
|
|
|
|
Quarter Ended
December 31, 2017
|
|
Year Ended December
31,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
North
America
|
|
$
|
1,024,241
|
|
|
$
|
1,072,400
|
|
|
(4.5)
|
%
|
|
$
|
3,802,406
|
|
|
$
|
4,005,314
|
|
|
(5.1)
|
%
|
EMEA
|
|
135,314
|
|
|
93,025
|
|
|
45.5
|
%
|
|
469,997
|
|
|
330,584
|
|
|
42.2
|
%
|
Asia-Pacific
|
|
123,935
|
|
|
79,622
|
|
|
55.7
|
%
|
|
433,647
|
|
|
268,607
|
|
|
61.4
|
%
|
Latin
America
|
|
57,982
|
|
|
42,623
|
|
|
36.0
|
%
|
|
181,324
|
|
|
141,793
|
|
|
27.9
|
%
|
Connected
Fitness
|
|
23,889
|
|
|
18,267
|
|
|
30.8
|
%
|
|
89,179
|
|
|
80,447
|
|
|
10.9
|
%
|
Intersegment
eliminations
|
|
—
|
|
|
(660)
|
|
|
100.0
|
%
|
|
—
|
|
|
(1,410)
|
|
|
100.0
|
%
|
Total net
revenues
|
|
$
|
1,365,361
|
|
|
$
|
1,305,277
|
|
|
4.6
|
%
|
|
$
|
4,976,553
|
|
|
$
|
4,825,335
|
|
|
3.1
|
%
|
|
OPERATING INCOME
(LOSS) BY SEGMENT
|
|
|
|
Quarter Ended
December 31, 2017
|
|
Year Ended December
31,
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
North
America
|
|
$
|
(43,945)
|
|
|
$
|
157,341
|
|
|
(127.9)
|
%
|
|
$
|
20,179
|
|
|
$
|
408,424
|
|
|
(95.1)
|
%
|
EMEA
|
|
3,986
|
|
|
3,070
|
|
|
29.8
|
%
|
|
17,976
|
|
|
11,420
|
|
|
57.4
|
%
|
Asia-Pacific
|
|
12,989
|
|
|
13,941
|
|
|
(6.8)
|
%
|
|
82,039
|
|
|
68,338
|
|
|
20.0
|
%
|
Latin
America
|
|
(10,910)
|
|
|
(6,141)
|
|
|
(77.7)
|
%
|
|
(37,085)
|
|
|
(33,891)
|
|
|
(9.4)
|
%
|
Connected
Fitness
|
|
792
|
|
|
(4,311)
|
|
|
118.4
|
%
|
|
(55,266)
|
|
|
(36,820)
|
|
|
(50.1)
|
%
|
Income (loss) from
operations
|
|
$
|
(37,088)
|
|
|
$
|
163,900
|
|
|
(122.6)
|
%
|
|
$
|
27,843
|
|
|
$
|
417,471
|
|
|
(93.3)
|
%
|
Under Armour,
Inc.
|
As of
December 31, 2017 and December 31, 2016
|
(Unaudited; in
thousands)
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
December 31,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
312,483
|
|
|
$
|
250,470
|
|
Accounts receivable,
net
|
|
609,670
|
|
|
622,685
|
|
Inventories
|
|
1,158,548
|
|
|
917,491
|
|
Prepaid expenses and
other current assets
|
|
256,978
|
|
|
174,507
|
|
Total current
assets
|
|
2,337,679
|
|
|
1,965,153
|
|
Property and
equipment, net
|
|
885,774
|
|
|
804,211
|
|
Goodwill
|
|
555,674
|
|
|
563,591
|
|
Intangible assets,
net
|
|
46,995
|
|
|
64,310
|
|
Deferred income
taxes
|
|
82,801
|
|
|
136,862
|
|
Other long term
assets
|
|
97,444
|
|
|
110,204
|
|
Total
assets
|
|
$
|
4,006,367
|
|
|
$
|
3,644,331
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Revolving credit
facility, current
|
|
$
|
125,000
|
|
|
$
|
—
|
|
Accounts
payable
|
|
561,108
|
|
|
409,679
|
|
Accrued
expenses
|
|
296,841
|
|
|
208,750
|
|
Current maturities of
long term debt
|
|
27,000
|
|
|
27,000
|
|
Other current
liabilities
|
|
50,426
|
|
|
40,387
|
|
Total current
liabilities
|
|
1,060,375
|
|
|
685,816
|
|
Long term debt, net
of current maturities
|
|
765,046
|
|
|
790,388
|
|
Other long term
liabilities
|
|
162,304
|
|
|
137,227
|
|
Total
liabilities
|
|
1,987,725
|
|
|
1,613,431
|
|
Total stockholders'
equity
|
|
2,018,642
|
|
|
2,030,900
|
|
Total liabilities
and stockholders' equity
|
|
$
|
4,006,367
|
|
|
$
|
3,644,331
|
|
Under Armour,
Inc.
|
For the Quarter Ended
December 31, 2017
|
(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
|
|
|
|
Quarter Ended
December 31, 2017
|
Total Net
Revenue
|
|
|
Net revenue growth -
GAAP
|
|
4.6
|
%
|
Foreign exchange
impact
|
|
(1.0)
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
3.6
|
%
|
|
|
|
North
America
|
|
|
Net revenue decline -
GAAP
|
|
(4.5)
|
%
|
Foreign exchange
impact
|
|
(0.3)
|
%
|
Currency neutral net
revenue decline - Non-GAAP
|
|
(4.8)
|
%
|
|
|
|
EMEA
|
|
|
Net revenue growth -
GAAP
|
|
45.5
|
%
|
Foreign exchange
impact
|
|
(8.5)
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
37.0
|
%
|
|
|
|
Asia-Pacific
|
|
|
Net revenue growth -
GAAP
|
|
55.7
|
%
|
Foreign exchange
impact
|
|
(1.1)
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
54.6
|
%
|
|
|
|
Latin
America
|
|
|
Net revenue growth -
GAAP
|
|
36.0
|
%
|
Foreign exchange
impact
|
|
(2.2)
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
33.8
|
%
|
|
|
|
Total
International
|
|
|
Net revenue growth -
GAAP
|
|
47.4
|
%
|
Foreign exchange
impact
|
|
(4.5)
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
42.9
|
%
|
Under Armour,
Inc.
|
For the Year Ended
December 31, 2017
|
(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
|
|
|
|
Year Ended December
31, 2017
|
Total Net
Revenue
|
|
|
Net revenue growth -
GAAP
|
|
3.1
|
%
|
Foreign exchange
impact
|
|
—
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
3.1
|
%
|
|
|
|
North
America
|
|
|
Net revenue decline -
GAAP
|
|
(5.1)
|
%
|
Foreign exchange
impact
|
|
(0.1)
|
%
|
Currency neutral net
revenue decline - Non-GAAP
|
|
(5.2)
|
%
|
|
|
|
EMEA
|
|
|
Net revenue growth -
GAAP
|
|
42.2
|
%
|
Foreign exchange
impact
|
|
0.3
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
42.5
|
%
|
|
|
|
Asia-Pacific
|
|
|
Net revenue growth -
GAAP
|
|
61.4
|
%
|
Foreign exchange
impact
|
|
1.6
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
63.0
|
%
|
|
|
|
Latin
America
|
|
|
Net revenue growth -
GAAP
|
|
27.9
|
%
|
Foreign exchange
impact
|
|
(1.8)
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
26.1
|
%
|
|
|
|
Total
International
|
|
|
Net revenue growth -
GAAP
|
|
46.4
|
%
|
Foreign exchange
impact
|
|
0.4
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
46.8
|
%
|
Under Armour,
Inc.
|
For the Quarter Ended
December 31, 2017
|
(Unaudited)
|
|
The table below
presents 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.
|
|
|
Quarter Ended
December 31, 2017
|
|
|
GAAP
|
|
Impact of
Restructuring Plan
|
|
Impact of U.S. Tax
Act
|
|
Adjusted
(Non-GAAP)
|
Net
revenues
|
|
$
|
1,365,361
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,365,361
|
|
Cost of goods
sold
|
|
775,658
|
|
|
(1,480)
|
|
|
—
|
|
|
774,178
|
|
Gross
Profit
|
|
589,703
|
|
|
1,480
|
|
|
—
|
|
|
591,183
|
|
Gross
Margin
|
|
43.2
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
43.3
|
%
|
Selling, general and
administrative
expenses
|
|
590,839
|
|
|
—
|
|
|
—
|
|
|
590,839
|
|
Restructuring and
impairment charges
|
|
35,952
|
|
|
(35,952)
|
|
|
—
|
|
|
—
|
|
Income (loss) from
operations
|
|
(37,088)
|
|
|
37,432
|
|
|
—
|
|
|
344
|
|
Interest expense,
net
|
|
(9,301)
|
|
|
—
|
|
|
—
|
|
|
(9,301)
|
|
Other expense,
net
|
|
(2,231)
|
|
|
—
|
|
|
—
|
|
|
(2,231)
|
|
Income (loss) before
income taxes
|
|
(48,620)
|
|
|
37,432
|
|
|
—
|
|
|
(11,188)
|
|
Income tax expense
(benefit)
|
|
39,300
|
|
|
(11,076)
|
|
(a)
|
(38,833)
|
|
|
(10,609)
|
|
Effective Income Tax
Rate
|
|
(80.8)
|
%
|
|
(171.5)
|
%
|
|
347.1
|
%
|
|
94.8
|
%
|
Net income
(loss)
|
|
$
|
(87,920)
|
|
|
$
|
48,508
|
|
|
$
|
38,833
|
|
|
$
|
(579)
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share of Class A and B common stock
|
|
$
|
(0.20)
|
|
|
$
|
0.11
|
|
|
$
|
0.09
|
|
|
$
|
—
|
|
Diluted net income
(loss) per share of Class C common stock
|
|
$
|
(0.20)
|
|
|
$
|
0.11
|
|
|
$
|
0.09
|
|
|
$
|
—
|
|
|
(a) - The adjustment
to fourth quarter income tax expense (benefit) includes true-ups to
prior quarters' income tax expense (benefit) as a result of changes
in the estimated annual effective tax rate.
|
Under Armour,
Inc.
|
For the Year Ended
December 31, 2017
|
(Unaudited)
|
|
The table below
presents 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.
|
|
Year Ended
December 31, 2017
|
|
|
GAAP
|
|
Impact of
Restructuring Plan
|
|
Impact of U.S. Tax
Act
|
|
Adjusted
(Non-GAAP)
|
Net
revenues
|
|
$
|
4,976,553
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,976,553
|
|
Cost of goods
sold
|
|
2,737,830
|
|
|
(5,077)
|
|
|
—
|
|
|
2,732,753
|
|
Gross
Profit
|
|
2,238,723
|
|
|
5,077
|
|
|
—
|
|
|
2,243,800
|
|
Gross
Margin
|
|
45.0
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
45.1
|
%
|
Selling, general and
administrative
expenses
|
|
2,086,831
|
|
|
—
|
|
|
—
|
|
|
2,086,831
|
|
Restructuring and
impairment charges
|
|
124,049
|
|
|
(124,049)
|
|
|
—
|
|
|
—
|
|
Income (loss) from
operations
|
|
27,843
|
|
|
129,126
|
|
|
—
|
|
|
156,969
|
|
Interest expense,
net
|
|
(34,538)
|
|
|
—
|
|
|
—
|
|
|
(34,538)
|
|
Other expense,
net
|
|
(3,614)
|
|
|
—
|
|
|
—
|
|
|
(3,614)
|
|
Income (loss) before
income taxes
|
|
(10,309)
|
|
|
129,126
|
|
|
—
|
|
|
118,817
|
|
Income tax expense
(benefit)
|
|
37,951
|
|
|
32,572
|
|
|
(38,833)
|
|
|
31,690
|
|
Effective Income Tax
Rate
|
|
(368.1)
|
%
|
|
427.5
|
%
|
|
(32.7)
|
%
|
|
26.70
|
%
|
Net income
(loss)
|
|
$
|
(48,260)
|
|
|
$
|
96,554
|
|
|
$
|
38,833
|
|
|
$
|
87,127
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share of Class A and B common stock
|
|
$
|
(0.11)
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
|
$
|
0.19
|
|
Diluted net income
(loss) per share of Class C common stock
|
|
$
|
(0.11)
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
|
$
|
0.19
|
|
Under Armour,
Inc.
|
Outlook For the Year
Ended December 31, 2018
|
|
The table below
presents the reconciliation of the Company's fiscal 2018 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
|
|
|
|
Year Ended December
31, 2018
|
(in
millions)
|
|
Low End
|
|
High End
|
Income from
operations
|
|
$
|
20
|
|
|
$
|
30
|
|
Add: Estimated impact
of restructuring(1)
|
|
110
|
|
|
110
|
|
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 insignificant, and therefore the GAAP effective tax
rate is subject to a significant variability. Given this
variability, the company cannot provide a meaningful outlook of the
GAAP effective tax rate or diluted earnings per share without
unreasonable effort. These non-GAAP measures exclude the
impact of the 2018 restructuring plan.
BRAND HOUSE AND
FACTORY HOUSE DOOR COUNT
|
|
|
|
As of December
31,
|
|
|
2017
|
|
2016
|
Factory
House
|
|
162
|
|
151
|
Brand
House
|
|
19
|
|
18
|
North
America total doors
|
|
181
|
|
169
|
|
|
|
|
|
Factory
House
|
|
57
|
|
37
|
Brand
House
|
|
57
|
|
35
|
International total doors
|
|
114
|
|
72
|
|
|
|
|
|
Factory
House
|
|
219
|
|
188
|
Brand
House
|
|
76
|
|
53
|
Total
doors
|
|
295
|
|
241
|
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SOURCE Under Armour, Inc.