In among the other news reported today during Volcom’s third quarter results report was the announcement that the Board of Directors has approved a special $1 a share dividend for shareholders (and those holding unvested shares of restricted common stock).
The payout will be made on November 19, 2010 to stockholders of record on November 8, 2010. “The aggregate amount of payments to be made in connection with the special dividend will be approximately $24.4 million.”
This is the kind of stuff companies do just to jack with us. Sure, all the big shareholders (Wooly has 2.7 million or so) and the employees who have unvested shares will get a nice little payout. But here’s what we’re thinking: if we get a dollar a share for all the Volcom stock we own (which is, of course, zero). We could buy some shares on November 3 (the ex-dividend date is November 4), hold it until November 8 to qualify for the dividend, and then sell it back on Tuesday. If the share price goes up during the time, even better. The downside, as always, is if the share price goes down during that week then the dividend won’t even pay for itself. Oh, the way they toy with us.
Those interested in all the financial nitty gritty (things were up a bit over last year) from the rest of VeeCo’s announcement today can follow the jump.
Volcom, Inc. (VLCM 18.87, +0.00, +0.01%) today announced financial results for the third quarter ended September 30, 2010.
For the 2010 third quarter, total consolidated revenues were $104.7 million, compared with $93.9 million in the third quarter of 2009. Total revenues in the company’s U.S. segment, which includes revenues from the U.S., Canada, Japan and most other international territories outside of Europe, as well as the company’s branded retail stores, were $64.5 million, compared with $56.8 million in the prior-year period. Total revenues in the company’s Europe segment were $28.7 million, compared with $30.2 million in the same period in 2009. Total revenues in the company’s Electric segment were $8.9 million, compared with $6.9 million in 2009. Total revenues in the company’s Australia segment were $2.6 million.
“Our results for the third quarter are in line with our plan and reinforce our strategy to gain market share on a global level,” said Richard Woolcott, Volcom’s chairman and chief executive officer. “During the first nine-months of this year, we have experienced solid revenue growth in our mens and boys categories, and our business with our core retailers remains very healthy. In other activities, we have launched major branding initiatives, acquired our Australian licensee, acquired distribution operations in Spain, and launched our e-commerce business. We are encouraged by the momentum thus far and I am proud of our team’s focus and dedication to building Volcom into a world brand.”
Woolcott also noted that given the company’s continued cash flow from operations, strong balance sheet and no long-term debt, Volcom’s Board of Directors has determined that a special cash dividend was appropriate and supports the company’s commitment to providing shareholder value.
Consolidated gross profit for the 2010 third quarter was $51.9 million, equal to 49.6% of total revenues, compared with $48.5 million, equal to 51.6% of total revenues, in the third quarter of 2009.
Selling, general and administrative expenses on a consolidated basis were $33.9 million in the 2010 third quarter versus $28.8 million in the comparable period in 2009.
Net income for the 2010 third quarter was $13.1 million, or $0.53 per diluted share, compared with $13.3 million, or $0.54 per diluted share, in the third quarter of 2009.
At September 30, 2010 the company had cash, cash equivalents and short-term investments totaling $105 million, and no long-term debt.
Special Dividend
The company also announced that on October 27, the Board of Directors approved a special cash dividend of $1.00 per share payable on each share of the company’s outstanding common stock, including any unvested shares of restricted common stock. The special dividend will be payable on November 19, 2010 to stockholders of record at the close of business on November 8, 2010. In accordance with NASDAQ rules, the company’s common stock will start trading on an ex-dividend basis beginning November 4, 2010. The aggregate amount of payments to be made in connection with the special dividend will be approximately $24.4 million.
2010 Fourth Quarter Financial Outlook
For the 2010 fourth quarter, the company currently expects total consolidated revenues of approximately $76 million to $79 million, and fully diluted earnings per share amounts in the range of $0.04 to $0.07.
Giving effect to the company’s current outlook for the 2010 fourth quarter, Volcom’s full year consolidated revenue expectation is between $321 million and $324 million. This translates to diluted earnings per share for 2010 in the range of $0.89 to $0.92.
Conference Call Information
The company will host a conference call today at approximately 4:30 p.m. ET 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 www.volcom.com. A telephone playback of the conference call also will be available through 11:59 p.m. ET, Friday, November 5. Listeners should call (800) 642-1687 (domestic) or (706) 645-9291 (international) and use reservation number 15128955.
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 www.volcom.com.
Safe Harbor Statement
Certain statements in this press release and oral statements made from time to time by representatives of the company are forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995, including statements in connection with or related to any discussion of or reference to Volcom’s future operations, opportunities or financial performance. In particular, statements regarding the company’s guidance and future financial performance contained under the section entitled 2010 Fourth Quarter Financial Outlook are forward-looking statements. These forward-looking statements are based on management’s current expectations but they involve a number of risks and uncertainties. Volcom’s actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, including, without limitation, further softening of the retail environment, sales of our products by key retailers, including Pacific Sunwear and Zumiez, changes in fashion trends and consumer preferences, general economic conditions, the impact of sourcing costs, and additional factors which are detailed in our filings with the Securities and Exchange Commission, including the Risk Factors contained in the company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) and the subsequently filed Quarterly Reports on Form 10-Q, all of which are available at www.sec.gov. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Volcom is under no obligation, and expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.
(tables follow)
VOLCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- -------------------------------
2010 2009 2010 2009
--------------- --------------- --------------- ---------------
Revenues:
Product revenues $ 104,213 $ 93,356 $ 243,196 $ 215,103
Licensing revenues 445 560 1,426 1,348
---------- ---------- ---------- ----------
Total revenues 104,658 93,916 244,622 216,451
Cost of goods sold 52,797 45,433 120,933 107,232
---------- ---------- ---------- ----------
Gross profit 51,861 48,483 123,689 109,219
Selling, general and administrative expenses 33,884 28,825 94,657 82,710
---------- ---------- ---------- ----------
Operating income 17,977 19,658 29,032 26,509
Other income:
Interest income, net 66 127 272 229
Gain on investment in unconsolidated investee 39 -- 39 --
Foreign currency gain 1,256 222 1,179 991
---------- ---------- ---------- ----------
Total other income 1,361 349 1,490 1,220
---------- ---------- ---------- ----------
Income before provision for income taxes 19,338 20,007 30,522 27,729
Provision for income taxes 6,285 6,750 9,868 9,381
---------- ---------- ---------- ----------
Net income $ 13,053 $ 13,257 $ 20,654 $ 18,348
=== ========== === ========== === ========== === ==========
Net income per share:
Basic $ 0.54 $ 0.54 $ 0.85 $ 0.75
Diluted $ 0.53 $ 0.54 $ 0.85 $ 0.75
Weighted average shares outstanding:
Basic 24,396,899 24,354,208 24,377,222 24,350,725
Diluted 24,431,095 24,367,464 24,421,970 24,361,034
VOLCOM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
September 30, 2010 December 31, 2009
-------------------- ------------------
Assets
Current assets:
Cash and cash equivalents $ 104,950 $ 76,180
Short-term investments --- 35,000
Accounts receivable -- net of allowances 81,821 53,792
Inventories 37,024 33,250
Prepaid expenses and other current assets 9,404 4,353
Income taxes receivable --- 725
Deferred income taxes 8,212 7,700
--------- --------
Total current assets 241,411 211,000
--------- --------
Property and equipment -- net 26,543 26,348
Investment in unconsolidated investee --- 330
Deferred income taxes 3,535 3,545
Intangible assets -- net 10,235 9,784
Goodwill 1,341 1,291
Other assets 1,134 735
--------- --------
Total assets $ 284,199 $ 253,033
========= ========= ======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 24,328 $ 22,788
Accrued expenses and other current liabilities 15,168 9,957
Income taxes payable 3,422 ---
Current portion of capital lease obligations 17 50
--------- --------
Total current liabilities 42,935 32,795
--------- --------
Long-term capital lease obligations 27 ---
Other long-term liabilities 1,257 1,203
Income taxes payable - non-current 23 68
Stockholders' equity:
Common stock 24 24
Additional paid-in capital 94,279 92,192
Retained earnings 144,334 123,679
Accumulated other comprehensive income 1,320 3,072
--------- --------
Total stockholders' equity 239,957 218,967
--------- --------
Total liabilities and stockholders' equity $ 284,199 $ 253,033
========= ========= ======== ========
VOLCOM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Nine Months Ended
September 30,
-----------------------------
2010 2009
------- -------
Cash flows from operating activities:
Net income $ 20,654 $ 18,348
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 4,645 5,034
Gain on investment in unconsolidated investee (39) --
Provision for doubtful accounts 173 2,434
Excess tax benefits related to exercise of stock options (51) --
Loss on disposal of property and equipment 35 3
Stock-based compensation 1,514 1,246
Deferred income taxes (487) (963)
Changes in operating assets and liabilities, net of effects of
acquisition:
Accounts receivable (24,562) (13,574)
Inventories 376 5,032
Prepaid expenses and other current assets (4,149) (407)
Income taxes receivable/payable 4,182 6,683
Other assets (351) 31
Accounts payable 800 (5,445)
Accrued expenses and other current liabilities 4,035 1,040
Other long-term liabilities 72 (96)
------- ------- -
Net cash provided by operating activities 6,847 19,366
------- -------
Cash flows from investing activities:
Purchase of property and equipment (4,286) (3,406)
Business acquisitions, net of cash acquired (2,304) (897)
Purchase of short-term investments (20,000) (64,933)
Sale of short-term investments 55,000 24,944
Proceeds from sale of property and equipment 38 6
------- -------
Net cash provided by (used in) investing activities 28,448 (44,286)
------- ------- -
Cash flows from financing activities:
Principal payments capital lease obligations (12) (65)
Proceeds from exercise of stock options 523 --
Excess tax benefits related to exercise of stock options 51 --
------- -------
Net cash provided by (used in) financing activities 562 (65)
------- ------- -
Effect of exchange rate changes on cash (7,087) 4,701
------- - -------
Net increase (decrease) in cash and cash equivalents 28,770 (20,284)
Cash and cash equivalents -- Beginning of period 76,180 79,613
------- -------
Cash and cash equivalents -- End of period $ 104,950 $ 59,329
===== ======= = =======
VOLCOM, INC. AND SUBSIDIARIES
OPERATING SEGMENT INFORMATION (UNAUDITED)
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ --------------------------
2010 2009 2010 2009
------------ ----------- ----------- -------
Total revenues:
United States $ 64,487 $ 56,769 $ 163,513 $ 142,839
Europe 28,672 30,250 57,420 57,814
Electric 8,911 6,897 21,101 15,798
Australia 2,588 --- 2,588 ---
------- ------ ------- -------
Consolidated $ 104,658 $ 93,916 $ 244,622 $ 216,451
=== ======= === ====== == ======= == =======
Gross profit:
United States $ 29,261 $ 28,350 $ 77,409 $ 69,874
Europe 15,971 16,016 32,611 30,457
Electric 5,466 4,117 12,506 8,888
Australia 1,163 --- 1,163 ---
------- ------ ------- -------
Consolidated $ 51,861 $ 48,483 $ 123,689 $ 109,219
=== ======= === ====== == ======= == =======
Operating income (loss):
United States $ 6,354 $ 9,017 $ 11,624 $ 13,801
Europe 9,653 9,730 14,725 13,306
Electric 1,885 911 2,598 (598)
Australia 85 --- 85 ---
------- ------ ------- -------
Consolidated $ 17,977 $ 19,658 $ 29,032 $ 26,509
=== ======= === ====== == ======= == =======
SOURCE: Volcom, Inc.
I can tell you what wolly should say.
We have done a great job at branching out into other outlets. While we still have used our original slogan” Youth against establishment”, we continue to be for the establishment. We now open up anyone who turns in an order, we no longer require reps to check out stores before opening them. We no longer care if we have a dealer a block away, who has been with us for 10 years.
We are doing everything we can to sell more product, we don’t care if it is being discounted, as long as we make money on it!
In regards to stock price, this is our number one concern, because I need more money, yes I have worked hard to build the brand, I now have decided to cash out, and sell out, so I need the price as high as possible.
Oh and I lied about our core business. It is deteriorating rapidly due to the over distribution of our brand. We are following the quik model.
thank you very much to the specialty retailers who have helped me build the brand, I realize you were part of the building process, and that you helped finance my company in the beginning, but I no longer care, so sorry.
Opps wait, I gave you stone age in return. Like kids know the difference
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