BALTIMORE, Oct. 30, 2018 /PRNewswire/ -- Under Armour,
Inc. (NYSE: UA, UAA) today announced financial results for the
third quarter ended September 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.
"Our third quarter results demonstrate that our multi-year
transformation is on track," said Under Armour Chairman and CEO
Kevin Plank. "As we work through
this chapter, we are staying sharply focused on our brand by
connecting even more deeply with our consumers while delivering
industry-leading, innovative products and premium experiences.
Coupled with increasingly greater business discipline and resulting
efficiencies, we continue to gain confidence in our long-term path
and ability to deliver for our consumers, customers and
shareholders."
Third Quarter Review
- Revenue was up 2 percent to $1.4
billion (up 3 percent currency neutral).
-
- Wholesale revenue increased 4 percent to $914 million and direct-to-consumer revenue was
flat at $465 million, representing 32
percent of total revenue.
- North America revenue
decreased 2 percent to $1.1 billion
(down 1 percent currency neutral) and the international business
increased 15 percent to $351 million
(up 17 percent currency neutral), representing 24 percent of total
revenue. Within the international business, revenue was up 15
percent in EMEA (up 16 percent currency neutral), up 15 percent in
Asia-Pacific (up 16 percent
currency neutral) and up 16 percent in Latin America (up 23 percent currency
neutral).
- Apparel revenue increased 4 percent to $978 million with growth in training, golf and
team sports. Footwear revenue was flat at $285 million. Accessories revenue decreased 6
percent to $116 million driven by
declines in outdoor and training.
- Gross margin increased 10 basis points to 46.1 percent compared
to the prior year including a $5
million impact related to restructuring efforts. Excluding
restructuring efforts in both periods, adjusted gross margin
increased 20 basis points to 46.5 percent compared to the prior
year driven predominantly by product cost improvements and lower
promotional activity offset by channel mix.
- Selling, general & administrative expenses increased 5
percent to $528 million, or 36.6
percent of revenue driven by continued investments in the
direct-to-consumer, footwear and international businesses.
- Restructuring and impairment charges were $19 million.
- Operating income was $119
million. Adjusted operating income was $143 million.
- Net income was $75 million or
$0.17 per diluted share. Adjusted net
income was $112 million or
$0.25 per diluted share.
- Inventory decreased 1 percent to $1.2
billion.
- Cash and cash equivalents decreased 35 percent to $169 million.
2018 Restructuring Plan
The company expects to incur approximately $200 to $220
million in pre-tax restructuring and related charges in
connection with its previously announced 2018 restructuring plan.
Through the third quarter of 2018, the company has recognized
pre-tax costs of $154 million,
inclusive of $24 million of pre-tax
costs recognized in the third quarter.
Updated Fiscal 2018 Outlook
- Revenue is expected to increase approximately 3 to 4 percent
reflecting a low single-digit decline in North America and international growth of
approximately 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 now expected to decline at a
mid-single-digit rate.
- Gross margin is expected be flat to down slightly versus the
prior year rate of 45.0 percent. Adjusted gross margin is expected
to improve slightly compared to 2017 as benefits from product costs
and lower planned promotional activity are offset primarily by
inventory management actions.
- Operating loss is now expected to be approximately $50 to $55 million
versus the previously expected $60
million loss. On an adjusted basis, operating income is now
expected to reach the $150 to
$165 million range versus the
previous $140 to $160 million range.
- Interest and other expense net is now expected to be
approximately $50 million, up
slightly from the previous $45
million expectation due to foreign currency headwinds.
- Due to a one-time tax benefit related to an intercompany asset
sale, the full year adjusted effective tax rate is now expected to
be 13 to 15 percent versus the previous expectation of 25 to 27
percent. This equates to approximately $0.02 of diluted earnings per share benefit in
2018.
- Excluding the impact of the restructuring efforts,
adjusted diluted earnings per share is now expected to be in the
range of $0.19 to $0.22 versus the previous expectation of
$0.16 to $0.19.
- Capital expenditures are now planned at approximately
$175 million versus the previous
$200 million expectation.
- Year-end inventory for 2018 is expected to be flat to down
slightly.
Conference Call and Webcast
Under Armour will hold its third 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 third quarter of 2018, the company revised
its reasonable estimate made in the company's 2017 financial
results for the one-time mandatory transition tax on accumulated
foreign earnings and 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 were expected over the
subsequent 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, adjusted net income, adjusted diluted earnings
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,
tariff 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
Nine Months Ended September 30, 2018 and 2017
|
(Unaudited; in
thousands, except per share amounts)
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
% of Net
Revenues
|
|
2017
|
|
% of Net
Revenues
|
|
2018
|
|
% of Net
Revenues
|
|
2017
|
|
% of Net
Revenues
|
Net
revenues
|
|
$
|
1,442,976
|
|
100.0
|
%
|
|
$
|
1,408,991
|
|
100.0
|
%
|
|
$3,803,205
|
|
100.0
|
%
|
|
$
|
3,620,028
|
|
100.0
|
%
|
Cost of goods
sold
|
|
777,769
|
|
53.9
|
%
|
|
760,265
|
|
54.0
|
%
|
|
2,087,961
|
|
54.9
|
%
|
|
1,962,172
|
|
54.2
|
%
|
Gross
profit
|
|
665,207
|
|
46.1
|
%
|
|
648,726
|
|
46.0
|
%
|
|
1,715,244
|
|
45.1
|
%
|
|
1,657,856
|
|
45.8
|
%
|
Selling, general and
administrative expenses
|
|
527,640
|
|
36.6
|
%
|
|
501,548
|
|
35.6
|
%
|
|
1,594,893
|
|
41.9
|
%
|
|
1,504,828
|
|
41.6
|
%
|
Restructuring and
impairment charges
|
|
18,601
|
|
1.3
|
%
|
|
84,998
|
|
6.0
|
%
|
|
134,920
|
|
3.5
|
%
|
|
88,097
|
|
2.4
|
%
|
Income (loss) from
operations
|
|
118,966
|
|
8.2
|
%
|
|
62,180
|
|
4.4
|
%
|
|
(14,569)
|
|
(0.4)
|
%
|
|
64,931
|
|
1.8
|
%
|
Interest expense,
net
|
|
(9,151)
|
|
(0.6)
|
%
|
|
(9,575)
|
|
(0.7)
|
%
|
|
(26,266)
|
|
(0.7)
|
%
|
|
(25,237)
|
|
(0.7)
|
%
|
Other expense,
net
|
|
(4,294)
|
|
(0.3)
|
%
|
|
(1,069)
|
|
(0.1)
|
%
|
|
(9,475)
|
|
(0.2)
|
%
|
|
(1,383)
|
|
—
|
%
|
Income (loss)
before income taxes
|
|
105,521
|
|
7.3
|
%
|
|
51,536
|
|
3.7
|
%
|
|
(50,310)
|
|
(1.3)
|
%
|
|
38,311
|
|
1.1
|
%
|
Income tax expense
(benefit)
|
|
30,874
|
|
2.1
|
%
|
|
(2,706)
|
|
(0.2)
|
%
|
|
691
|
|
—
|
%
|
|
(1,349)
|
|
—
|
%
|
Income from equity
method investment
|
|
619
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
481
|
|
—
|
%
|
|
—
|
|
—
|
%
|
Net income
(loss)
|
|
$
|
75,266
|
|
5.2
|
%
|
|
$
|
54,242
|
|
3.8
|
%
|
|
$
|
(50,520)
|
|
(1.3)
|
%
|
|
$
|
39,660
|
|
1.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share of Class A, B and C common stock
|
|
$
|
0.17
|
|
|
|
$
|
0.12
|
|
|
|
$
|
(0.11)
|
|
|
|
$
|
0.09
|
|
|
Diluted net income
(loss) per share of Class A, B and C common stock
|
|
$
|
0.17
|
|
|
|
$
|
0.12
|
|
|
|
$
|
(0.11)
|
|
|
|
$
|
0.09
|
|
|
Weighted average
common shares outstanding Class A, B and C common
stock
|
Basic
|
|
447,070
|
|
|
|
441,275
|
|
|
|
444,931
|
|
|
|
440,360
|
|
|
Diluted
|
|
451,035
|
|
|
|
448,439
|
|
|
|
444,931
|
|
|
|
448,261
|
|
|
Under Armour,
Inc.
|
For the Three and
Nine Months Ended September 30, 2018 and 2017
|
(Unaudited; in
thousands)
|
|
NET REVENUES BY
PRODUCT CATEGORY
|
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
Apparel
|
|
$
|
978,411
|
|
$
|
939,364
|
|
4.2
|
%
|
|
$
|
2,491,980
|
|
$
|
2,335,454
|
|
6.7
|
%
|
Footwear
|
|
284,856
|
|
285,052
|
|
(0.1)
|
%
|
|
828,001
|
|
791,637
|
|
4.6
|
%
|
Accessories
|
|
116,186
|
|
123,487
|
|
(5.9)
|
%
|
|
314,250
|
|
335,172
|
|
(6.2)
|
%
|
Total net
sales
|
|
1,379,453
|
|
1,347,903
|
|
2.3
|
%
|
|
3,634,231
|
|
3,462,263
|
|
5.0
|
%
|
Licensing
revenues
|
|
31,363
|
|
34,324
|
|
(8.6)
|
%
|
|
78,876
|
|
83,639
|
|
(5.7)
|
%
|
Connected
Fitness
|
|
32,160
|
|
26,764
|
|
20.2
|
%
|
|
90,098
|
|
74,126
|
|
21.5
|
%
|
Total net
revenues
|
|
$
|
1,442,976
|
|
$
|
1,408,991
|
|
2.4
|
%
|
|
$
|
3,803,205
|
|
$
|
3,620,028
|
|
5.1
|
%
|
|
NET REVENUES BY
SEGMENT
|
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
North
America
|
|
$
|
1,059,535
|
|
$
|
1,077,088
|
|
(1.6)
|
%
|
|
$
|
2,770,463
|
|
$
|
2,778,165
|
|
(0.3)
|
%
|
EMEA
|
|
147,594
|
|
127,932
|
|
15.4
|
%
|
|
410,427
|
|
334,683
|
|
22.6
|
%
|
Asia-Pacific
|
|
149,388
|
|
130,320
|
|
14.6
|
%
|
|
390,647
|
|
309,712
|
|
26.1
|
%
|
Latin
America
|
|
54,299
|
|
46,887
|
|
15.8
|
%
|
|
141,570
|
|
123,342
|
|
14.8
|
%
|
Connected
Fitness
|
|
32,160
|
|
26,764
|
|
20.2
|
%
|
|
90,098
|
|
74,126
|
|
21.5
|
%
|
Total net
revenues
|
|
$
|
1,442,976
|
|
$
|
1,408,991
|
|
2.4
|
%
|
|
$
|
3,803,205
|
|
$
|
3,620,028
|
|
5.1
|
%
|
|
INCOME (LOSS) FROM
OPERATIONS
|
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
% Change
|
|
2018
|
|
2017
|
|
% Change
|
North
America
|
|
$
|
77,465
|
|
$
|
65,827
|
|
17.7
|
%
|
|
$
|
(59,221)
|
|
$
|
64,124
|
|
(192.4)
|
%
|
EMEA
|
|
15,548
|
|
16,977
|
|
(8.4)
|
%
|
|
1,766
|
|
13,990
|
|
(87.4)
|
%
|
Asia-Pacific
|
|
33,851
|
|
34,173
|
|
(0.9)
|
%
|
|
73,749
|
|
69,050
|
|
6.8
|
%
|
Latin
America
|
|
(9,806)
|
|
(10,223)
|
|
4.1
|
%
|
|
(37,467)
|
|
(26,175)
|
|
(43.1)
|
%
|
Connected
Fitness
|
|
1,908
|
|
(44,574)
|
|
104.3
|
%
|
|
6,604
|
|
(56,058)
|
|
111.8
|
%
|
Income (loss) from
operations
|
|
$
|
118,966
|
|
$
|
62,180
|
|
91.3
|
%
|
|
$
|
(14,569)
|
|
$
|
64,931
|
|
(122.4)
|
%
|
Under Armour,
Inc.
|
As of
September 30, 2018, December 31, 2017 and
September 30, 2017
|
(Unaudited; in
thousands)
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
|
September 30,
2017
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
168,682
|
|
$
|
312,483
|
|
$
|
258,002
|
Accounts receivable,
net
|
|
867,074
|
|
609,670
|
|
733,292
|
Inventories
|
|
1,173,115
|
|
1,158,548
|
|
1,180,653
|
Prepaid expenses and
other current assets
|
|
378,159
|
|
256,978
|
|
284,895
|
Total current
assets
|
|
2,587,030
|
|
2,337,679
|
|
2,456,842
|
Property and
equipment, net
|
|
821,078
|
|
885,774
|
|
868,250
|
Goodwill
|
|
551,208
|
|
555,674
|
|
559,318
|
Intangible assets,
net
|
|
43,792
|
|
46,995
|
|
48,646
|
Deferred income
taxes
|
|
86,436
|
|
82,801
|
|
97,147
|
Other long term
assets
|
|
137,625
|
|
97,444
|
|
100,162
|
Total
assets
|
|
$
|
4,227,169
|
|
$
|
4,006,367
|
|
$
|
4,130,365
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Revolving credit
facility, current
|
|
$
|
75,000
|
|
$
|
125,000
|
|
$
|
270,000
|
Accounts
payable
|
|
499,467
|
|
561,108
|
|
482,897
|
Accrued
expenses
|
|
303,399
|
|
296,841
|
|
266,074
|
Customer refund
liability
|
|
303,457
|
|
—
|
|
—
|
Current maturities of
long term debt
|
|
25,000
|
|
27,000
|
|
27,000
|
Other current
liabilities
|
|
93,416
|
|
50,426
|
|
54,455
|
Total current
liabilities
|
|
1,299,739
|
|
1,060,375
|
|
1,100,426
|
Long term debt, net
of current maturities
|
|
703,455
|
|
765,046
|
|
771,382
|
Other long term
liabilities
|
|
218,054
|
|
162,304
|
|
157,861
|
Total
liabilities
|
|
2,221,248
|
|
1,987,725
|
|
2,029,669
|
Total stockholders'
equity
|
|
2,005,921
|
|
2,018,642
|
|
2,100,696
|
Total liabilities
and stockholders' equity
|
|
$
|
4,227,169
|
|
$
|
4,006,367
|
|
$
|
4,130,365
|
Under Armour,
Inc.
|
For the Nine Months
Ended September 30, 2018 and 2017
|
(Unaudited; in
thousands)
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$
|
(50,520)
|
|
$
|
39,660
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities
|
|
|
|
Depreciation and
amortization
|
$
|
135,029
|
|
$
|
128,488
|
Unrealized foreign
currency exchange rate (gains) losses
|
9,350
|
|
(30,429)
|
Loss on disposal of
property and equipment
|
3,378
|
|
1,518
|
Impairment
charges
|
9,930
|
|
55,116
|
Amortization of bond
premium
|
190
|
|
190
|
Stock-based
compensation
|
32,445
|
|
34,409
|
Excess tax benefit
(deficiency) from stock-based compensation arrangements
|
(3)
|
|
356
|
Deferred income
taxes
|
(9,965)
|
|
42,705
|
Changes in reserves
and allowances
|
(239,073)
|
|
43,793
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(23,846)
|
|
(138,267)
|
Inventories
|
(30,390)
|
|
(243,696)
|
Prepaid expenses and
other assets
|
(97,519)
|
|
(23,195)
|
Other non-current
assets
|
(1,596)
|
|
(12,554)
|
Accounts
payable
|
(37,353)
|
|
86,481
|
Accrued expenses and
other liabilities
|
113,297
|
|
75,526
|
Customer refund
liability
|
304,685
|
|
—
|
Income taxes payable
and receivable
|
778
|
|
(86,274)
|
Net cash provided by
(used in) operating activities
|
118,817
|
|
(26,173)
|
Cash flows from
investing activities
|
|
|
|
Purchases of property
and equipment
|
$
|
(121,439)
|
|
$
|
(225,924)
|
Sale of property and
equipment
|
11,285
|
|
—
|
Purchases of other
assets
|
(4,861)
|
|
(1,648)
|
Purchase of equity
method investment
|
(39,208)
|
|
—
|
Net cash used in
investing activities
|
(154,223)
|
|
(227,572)
|
Cash flows from
financing activities
|
|
|
|
Proceeds from long
term debt and revolving credit facility
|
$
|
465,000
|
|
$
|
665,000
|
Payments on long term
debt and revolving credit facility
|
(580,000)
|
|
(415,250)
|
Employee taxes paid
for shares withheld for income taxes
|
(2,743)
|
|
(2,586)
|
Proceeds from
exercise of stock options and other stock issuances
|
10,739
|
|
9,717
|
Payments of debt
financing costs
|
(11)
|
|
—
|
Other financing
fees
|
306
|
|
—
|
Net cash provided by
(used in) financing activities
|
(106,709)
|
|
256,881
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
520
|
|
7,416
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
(141,595)
|
|
10,552
|
Cash, cash
equivalents and restricted cash
|
|
|
|
Beginning of
period
|
318,135
|
|
252,725
|
End of
period
|
$
|
176,540
|
|
$
|
263,277
|
Under Armour,
Inc.
|
For the Three months
ended September 30, 2018
|
(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
September 30, 2018
|
Total Net
Revenue
|
|
|
Net revenue growth -
GAAP
|
|
2.4
|
%
|
Foreign exchange
impact
|
|
0.5
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
2.9
|
%
|
|
|
|
North
America
|
|
|
Net revenue decline -
GAAP
|
|
(1.6)
|
%
|
Foreign exchange
impact
|
|
0.2
|
%
|
Currency neutral net
revenue decline- Non-GAAP
|
|
(1.4)
|
%
|
|
|
|
EMEA
|
|
|
Net revenue growth -
GAAP
|
|
15.4
|
%
|
Foreign exchange
impact
|
|
0.1
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
15.5
|
%
|
|
|
|
Asia-Pacific
|
|
|
Net revenue growth -
GAAP
|
|
14.6
|
%
|
Foreign exchange
impact
|
|
0.9
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
15.5
|
%
|
|
|
|
Latin
America
|
|
|
Net revenue growth -
GAAP
|
|
15.8
|
%
|
Foreign exchange
impact
|
|
7.6
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
23.4
|
%
|
|
|
|
Total
International
|
|
|
Net revenue growth -
GAAP
|
|
15.1
|
%
|
Foreign exchange
impact
|
|
1.6
|
%
|
Currency neutral net
revenue growth - Non-GAAP
|
|
16.7
|
%
|
Under Armour,
Inc.
|
For the Three months
ended September 30, 2018
|
(Unaudited; in
millions)
|
|
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
September 30, 2018
|
Gross
margin
|
|
46.1 %
|
Add: Impact of
restructuring
|
|
0.4 %
|
Adjusted gross
margin
|
|
46.5
%
|
|
ADJUSTED OPERATING
INCOME RECONCILIATION
|
|
|
|
Three Months
Ended
September 30, 2018
|
Income from
operations
|
|
$
|
119
|
Add: Impact of
restructuring
|
|
24
|
Adjusted operating
income
|
|
$
|
143
|
|
ADJUSTED NET
INCOME RECONCILIATION
|
|
|
|
Three Months
Ended
September 30, 2018
|
Net income
|
|
$
|
75
|
Add: Impact US tax
reform
|
|
2
|
Add: Impact of
restructuring
|
|
35
|
Adjusted net
income
|
|
$
|
112
|
|
ADJUSTED DILUTED
EARNINGS PER SHARE RECONCILIATION
|
|
|
|
Three Months
Ended
September 30, 2018
|
Diluted net income
per share
|
|
$
|
0.17
|
Add: Impact US tax
reform
|
|
—
|
Add: Impact of
restructuring
|
|
0.08
|
Adjusted diluted
income per share
|
|
$
|
0.25
|
|
ADJUSTED EFFECTIVE
TAX RATE RECONCILIATION
|
|
|
|
Three Months
Ended
September 30, 2018
|
Effective tax
rate
|
|
29.3 %
|
Less: Impact of US
tax reform
|
|
(1.6) %
|
Less: Impact of
restructuring
|
|
(13.7) %
|
Adjusted effective
tax rate
|
|
14.0 %
|
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
|
|
(in
millions)
|
|
Year Ending December
31, 2018
|
|
Loss from
operations
|
|
$
|
(50)
|
|
$
|
(55)
|
|
Add: Estimated impact
of restructuring
|
|
200
|
|
220
|
|
Adjusted operating
income
|
|
$
|
150
|
|
$
|
165
|
|
|
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.
|
As of September 30,
2018 and 2017
|
|
BRAND HOUSE AND
FACTORY HOUSE DOOR COUNT
|
|
|
|
September
30,
|
|
|
2018
|
|
2017
|
Factory
House
|
|
162
|
|
160
|
Brand
House
|
|
15
|
|
19
|
North
America total doors
|
|
177
|
|
179
|
|
|
|
|
|
Factory
House
|
|
68
|
|
50
|
Brand
House
|
|
65
|
|
51
|
International total doors
|
|
133
|
|
101
|
|
|
|
|
|
Factory
House
|
|
230
|
|
210
|
Brand
House
|
|
80
|
|
70
|
Total
doors
|
|
310
|
|
280
|
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SOURCE Under Armour, Inc.