Outdoor financials: Timberland 3Q profit up, revenue down, plus Quiksilver lowers sale price of Rossignol, Jarden, Cabela's, Big 5, Outdoor Channel, Liberty/Backcountry.com

Timberland's 3Q profit rose while revenue dropped, Quiksilver lowered the sale price of Rossignol, Jarden's Q3 profit climbed on strong sales of outdoor equipment, Cabela's said its Q3 net income dropped, Big 5's Q3 net income plummeted, the Outdoor Channel's Q3 revenue rose 18.2 percent, and Liberty reported its Q3 revenue.
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Timberland 3Q profit up, revenue down

Timberland (NYSE: TBL) said its profit rose more than 18 percent in the third quarter but revenue dropped as North American consumers continued to pull back on their spending.

Timberland said net income rose to $30.7 million, or $0.52 per share, up from $25.9 million, or $0.42 a share, a year ago.

Revenue fell 2.2 percent to $423.6 million, partially offset by strong growth in Timberland PRO series footwear and SmartWool socks and apparel

Timberland said apparel and accessories revenue declined 11.7 percent to $102.7 million, driven by anticipated declines in its brand apparel as a result of the company's transition to a licensing model for its North American wholesale business.

Worldwide footwear revenue rose 1 percent to $313.5 million, driven by strength in the Timberland PRO series and gains in boots in Europe and Asia. But there were declines in the men's casual and outdoor performance categories, the company said.

In North America, revenue dropped 8.8 percent to $184.5 million because of soft consumer spending. European revenue rose 4.4 percent to $199.9 million, with strength in footwear offsetting drops in apparel.

The company said weaker consumer spending would put more pressure on margins this year.

It noted that it still anticipates mid-single-digit revenue declines for the full year, given the economic slump spreading worldwide. The company also lowered its expectations for operating margins, saying it now expects flat to modest declines in operating margins for the year.

Quiksilver lowers sale price of Rossignol

Quiksilver (NYSE: ZQK) said the previously announced sale of the "Rossignol Group" is expected to close in early November, but at a lower price in light of recent challenges in the global credit markets.

The revised transaction reduces the cash payment to Quiksilver from EUR 75 million (USD $97.9 million) to EUR 30 million (USD $39.1 million). It also reduced the seller’s note from EUR 25 million (USD $32.6 million) to EUR 10 million (USD $13.0 million).

"In this time of unprecedented challenge in the global credit markets, price concessions were required to achieve a final sale of Rossignol," said Robert McKnight Jr., Quiksilver's chairman and CEO, in a statement.

Also part of the amendments, Quiksilver will continue to distribute Rossignol apparel through the 2008/2009 winter season, enabling the company to realize an additional EUR 5 million (USD $6.5 million) to EUR 10 million (USD $13.0 million) benefit from the collection of in-season receivables.

The parties may also extend the Rossignol apparel license and distribution arrangement upon mutual agreement, it added. Together, these revisions to the transaction will cause a corresponding increase to the loss that Quiksilver said it expects to recognize upon the sale of Rossignol.

"We remain convinced that the timely close of this transaction is in the best interest of Quiksilver's stakeholders. I'm delighted that we can now fully concentrate our efforts on our core apparel and footwear brands Quiksilver, Roxy and DC," McKnight added in an official release.

Additionally, Quiksilver said it had secured an amendment to its EUR 70 million (USD $91.3 million) line of credit in Europe. Under terms of the amendment, Quiksilver reimbursed its European bank group EUR 15 million (USD $19.5 million) on Oct. 31 and the remaining EUR 55 million (USD $71.8 million) will be extended until March 14, 2009.

Quiksilver added that it expects to have approximately $100 million of available liquidity after the close of the Rossignol sale, net of payments due upon close of the transaction and net of other debt obligations due in fiscal 2008.



(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of Oct. 31.)




Jarden Q3 profit climbs on strong sales of outdoor equipment


Jarden Corp. (NYSE: JAH), parent of Coleman and the K2 portfolio, said its third-quarter profit soared on strong sales including outdoor equipment.

For the quarter ended Sept. 30, net income jumped to $63.8 million, or $0.83 per share, from $21.2 million, or $0.28 per share, in the prior year quarter. Excluding one-time costs and gains, the company said it earned $0.98 per share.

Revenue rose 10 percent to $1.46 billion from $1.32 billion. The company said its brands were relevant to consumers "in these tough economic times."

Cabela's Q3 net income drops, lowers FY '08 guidance

Cabela's (NSYE: CAB) said third-quarter profit fell 27 percent amid a difficult retail environment. Same-store sales fell 9 percent during the quarter.

Net income fell to $9.7 million, or $0.15 per share, from $13.2 million, or $0.20 per share, in the previous third period.

Revenue rose 12 percent to $611.8 million from $546.8 million.

"The challenging macro-environment, general consumer concerns about the economy and the unprecedented events in the financial markets impacted sales trends in our business during the quarter," said Dennis Highby, Cabela's president and CEO, in a statement.

The company lowered its fiscal-year guidance, saying it now expects 2008 earnings per share to decline in the low- to mid-teen percentage from a year ago, from previous guidance of mid-single-digit percentage growth. It also anticipates revenue to grow in the high single-digit percentage range, from earlier guidance of growth in the mid-teen-percentage range.

Cabela's said it is working on improving profit, cutting costs and "aggressively" managing inventory.

Big 5's Q3 net income plummets

Big 5 Sporting Goods' (Nasdaq: BGFV) third-quarter net income was cut in half from last year hit by slower customer traffic amidst a consumer environment that continues to be challenging.

Net income for the third quarter of fiscal 2008 was $4.5 million, or $0.21 per diluted share, compared to net income of $8.4 million, or $0.37 per diluted share, for the third quarter of fiscal 2007.

Net sales were $223.2 million, compared to net sales of $231.3 million for the same period in 2007. Same-store sales dropped 6.6 percent.

Gross profit was $74.3 million compared to $79.4 million last year. The company's gross profit margin was 33.3 percent versus 34.3 percent in the third quarter of the prior year.

Selling and administrative expense as a percentage of net sales was 29.6 percent in the fiscal 2008 third quarter versus 27.7 percent in the third quarter of the prior year, primarily due to lower sales levels and higher store-related expenses reflecting an increased store count.

Since the company assumes that sales will continue to be impacted by a challenging consumer environment, Big 5's guidance for the fourth quarter anticipates a decline in same store sales in the mid- to high-single digit range and earnings per diluted share in the range of $0.07 to $0.17. For the FY 2008, it expects a decline in same-store sales in the mid- to high-single digit range and earnings per diluted share in the range of $0.55 to $0.65.

During the third quarter of fiscal 2008, Big 5 opened three new stores and closed a store that was relocated during the second quarter. It ended the third quarter with 372 stores in operation. The company anticipates opening nine new stores during the fiscal 2008 fourth quarter, bringing its total new store openings for the full year to 18.

The company's board of directors also declared a quarterly cash dividend of $0.09 per share of outstanding common stock, which will be paid on Dec. 15 to stockholders of record as of Nov. 28.



Outdoor Channel Q3 revenue up 18.2 percent


Outdoor Channel Holdings (Nasdaq: OUTD) said its total revenues increased 18.2 percent for the third quarter boosted by a 32-percent increase in ad sales.

For the quarter ended Sept. 30, total revenues from continuing operations amounted to $15.0 million, compared with $12.7 million in the corresponding period a year ago.

Advertising revenue rose 32.3 percent to $10.5 million from $7.9 million in the prior-year period. Subscriber fees were $4.5 million, down 5.4 percent from $4.7 million.

It posted net income of $2.4 million, or $0.09 per diluted share, compared to $1.5 million, or $0.06 per diluted share, in the prior-year period.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was $5.4 million for the 2008 third quarter, compared with $3.1 million in the prior-year period.

Nielsen Media Research, provider of television audience measurement and advertising information services worldwide, estimated that Outdoor Channel had approximately 29.6 million cable and satellite subscribers for November 2008.

Liberty reports Q3 revenue; to make payments as swap arrangements end

Liberty Media Corp. (Nasdaq: LCAPA, LINTA and LMDIA) reported third-quarter results for its three groups: Liberty Capital, Liberty Interactive and Liberty Entertainment. Backcountry.com is part of Liberty Interactive.

Total third-quarter revenue for Liberty Interactive was $1.641 billion compared to $1.686 billion in the same period the year before. Domestic revenue was down to $1.073 billion from $1.174 billion last year. International revenue was up to $568 million versus $512 million.

Also, Liberty Media reported it would pay a total of $220.7 million to counterparties that ended two swap arrangements. The swap deals, which involved parts of its exchangeable and senior debt, were terminated when Liberty's bond prices dropped. The declining bond prices set off some triggers that allowed the counterparties to exit the arrangements.

Liberty said it would pay one counterparty $197.3 million for the exchangeable swap deal's termination, using cash on hand and a drawdown on a Liberty Capital existing credit agreement. The company said it plans to enter a new $150 million exchangeable debt swap agreement.

Liberty will also pay $23.4 million to settle its senior debt swap, retiring $124.8 million face amount of debt.

The company also plans to use about $300 million to buy Liberty Interactive's senior debt due 2029 and senior debt due 2030 through a modified Dutch auction tender offer.

--Compiled by Wendy Geister

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