“Last year was an important year for Volcom,” said Richard Woolcott, Volcom’s president and chief executive officer. “We achieved solid revenue growth of approximately 31%, driven by great product, diversified distribution and the successful launch of our new European operation. We kicked off 2008 with the acquisition of Electric Visual, one of the hottest eyewear brands in action sports, and we are executing our plan for diversification and growth in 2008 and beyond.”
In the 2007 fourth quarter, gross profit as a percentage of total revenues was 43.4%, compared with 47.2% in the fourth quarter of 2006, primarily reflecting greater than expected off-price sales due to a soft retail environment during the quarter. For the year, gross profit as a percentage of total revenues was 48.4%, compared with 49.7% in 2006.
Operating income for the fourth quarter of 2007 decreased 8.3% to $10.7 million, compared with $11.7 million for the fourth quarter of 2006. Operating margin for the fourth quarter of 2007 was 15.5%, compared with 20.6% in the fourth quarter of 2006.
Operating income for 2007 increased 16.1% to $50.6 million, compared with $43.6 million for 2006. Operating margin was 18.8% for 2007, compared with 21.2% in 2006.
Net income for the fourth quarter of 2007 decreased to $7.1 million, or $0.29 per diluted share, compared with $7.6 million, or $0.31 per diluted share for the fourth quarter of 2006. Net income for the full year 2007 increased 16% to $33.3 million, or $1.37 per diluted share. This compares with $28.7 million, or $1.18 per diluted share in 2006.
2008 Financial Outlook
Given the company’s current visibility into its business in 2008 amid the present soft retail environment, Volcom expects total consolidated revenue of between $339 million to $344 million. This estimate includes the financial contribution from the acquisition of Electric Visual Evolution in January, as well as a full year’s contribution from the company’s European operation, which was up and running at full capacity in the third quarter of 2007. Earnings per diluted share are expected to be in the range of $1.50 to $1.53. As previously reported, it is anticipated that Electric will be earnings neutral to Volcom in 2008.
For the 2008 first quarter, the company anticipates total consolidated revenues of approximately $69 million to $70 million, representing an increase of approximately 36% to 38%. Fully diluted earnings per share are expected to be in the range of $0.20 to $0.21.
The company will host a conference call today at approximately 4:30 p.m. EST to discuss its financial results and outlook in further detail. The conference call will be available to interested parties through a live audio Internet broadcast at volcom.com.
About Volcom, Inc.
Volcom is an innovative designer, marketer and distributor of premium quality young mens and womens clothing, accessories and related products. The Volcom brand, symbolized by The Stone , is athlete-driven, creative and forward thinking. Volcom has consistently followed its motto of “youth against establishment,” and the brand is inspired by the energy of youth culture. Volcom branded products are sold throughout the
United States and internationally. Volcom’s news announcements and SEC filings are available through the company’s website at volcom.com.
Friday, February 22nd 2008 @ 09:25 AM.
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