<PAGE> 1
EXHIBIT 99.1
Approved: Gary H. Schoenfeld
President and
Chief Executive Officer
(562) 565-8267
FOR IMMEDIATE RELEASE
Contact: Chad A. Jacobs/Thomas M. Ryan
Integrated Corporate Relations
(203) 222-9013
VANS, INC. REPORTS RECORD SECOND QUARTER SALES AND EARNINGS
--TOTAL REVENUES INCREASE 25%, COMP STORE SALES INCREASE 16.8%--
--SPRING BOOKINGS IN U.S. UP MORE THAN 20%--
Santa Fe Springs, California, December 18, 2000 --Vans, Inc. (Nasdaq: VANS)
today announced record financial results for the second quarter of fiscal 2001
ended November 25, 2000.
Net sales for the quarter increased 24.6% to $73.2 million versus $58.8 million
last year with net income up 10.5% to $2.9 million versus $2.7 million and
diluted earnings per share of $0.20 versus $0.19, in line with consensus
estimates. For the first six months of fiscal 2001, sales increased 22.7% to
$173.9 million versus $141.7 million last year and net income increased 22.6% to
$10.5 million versus $8.6 million with an 18.3% increase in diluted earnings per
share to $0.71 compared to $0.60.
"We continue to be pleased with the performance and strengthening of the VANS
brand on a global basis," said Gary H. Schoenfeld, President and Chief Executive
Officer of Vans. "Highlights during the quarter included particularly strong
performance in our retail stores, very positive response to the direction and
execution of both our Women's and Outdoor categories, the successful opening of
our sixth VANS skatepark in Houston, Texas, and being named Footwear News
Company of the Year."
Mr. Schoenfeld continued, "From a financial perspective, the 18% decline in the
euro compared to the second quarter last year significantly masked the true
strength of our business. On a constant dollar basis, the Company's sales for
the quarter would have been approximately $74.6 million, up 27%, with a similar
growth rate in earnings per share to approximately $0.24 compared to $0.19 last
year."
For the second quarter, total U.S. sales, including sales through Vans' U.S.
retail stores, increased 28.4% to $52.1 million, versus $40.6 million for the
same period a year ago. Sales through the Company's U.S. retail stores increased
42.5% to $24.7 million in the second quarter of fiscal 2001, from $17.3 million
for the same period a year ago. Comparable store sales for the second quarter
were up 16.8% versus the same period last year, the twenty-fourth consecutive
quarter of such increase. U.S. wholesale sales in the second quarter increased
17.9% to $27.4 million, versus $23.3 million a year ago. Total international
sales were $21.1 million, up 16.2 % from $18.2 million a year ago. On a constant
dollar basis, international sales would have been up 24%.
"Our retail stores substantially exceeded plan with a comp store gain of 16.8%
and our wholesale business continues to perform well," Mr. Schoenfeld said. "We
believe the growth in our business reflects a number of factors including the
leading position of our brand, the strengthening of our product merchandising,
the updated image and remodeling of our stores, and the passion and energy of
our people."
--more--
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Page 2 -- Vans, Inc. Reports Record Second Quarter Sales and Earnings
Gross margins for the quarter were 43.6% vs. 44.5% with the comparative decline
directly attributable to the fall of the euro. Inventory was $61.7 million at
November 25, 2000, versus $49.4 million a year ago.
Both for the third quarter ending February 24, 2001, and the fiscal year ending
May 31, 2001, the Company expects total sales to increase approximately 15% to
20% over the respective periods last year.* The Company also continues to be
comfortable with the First Call consensus earnings per share estimates of $0.16
for the third quarter, up 33% year-over-year, driven by higher sales and gross
margins, and $1.02 for the year, an increase of more than 20% year-over- year.*
Inventories are projected to decline at the end of the third quarter of fiscal
2001 by $5 million to $7 million compared to the end of the second quarter.**
The Company's internal targets for fiscal 2002 reflect continued earnings per
share growth of 20%.*
Mr. Schoenfeld concluded, "Our success as a company continues to be demonstrated
in a number of different ways including: our retail stores with above-plan
double-digit comps continuing into the first three weeks of this third quarter,
Spring bookings for the U.S. up more than 20%, two more Vans Skate Parks under
construction near Denver and Philadelphia, the growing prominence of the VANS
Triple Crown Series,(TM) and the broadening of our footwear into Outdoor and our
Women's Skate and Cali(TM) categories."*
"Similarly gratifying has been our continued ability to achieve near-term
financial goals while pursuing these additional growth initiatives even during
this period of unusually volatile European currencies," Mr. Schoenfeld said. "We
remain focused on building the premier sports and lifestyle company for the
youth market and the opportunities that lie ahead."*
Vans, Inc. is a leading branded lifestyle company for the youth market. Vans
reaches its 10 to 24 year-old target consumers through the sponsorship of Core
Sports,(TM) such as skateboarding, snowboarding, surfing and wakeboarding, and
through major entertainment events and venues, such as the VANS Triple Crown(TM)
Series, the VANS Warped Tour,(TM) the VANS World Amateur Skateboarding
Championships, the world's largest VANS skate parks, and the VANS High Cascade
Snowboard Camp,(TM) located on Mt. Hood. The Company operates 140 retail stores
in the U.S. and Europe, and designs, markets and distributes active-casual
footwear, clothing and accessories, performance footwear for Core Sports, (TM)
snowboard boots, step-in snowboard boot bindings, and outerwear worldwide. Vans'
Internet address is www.vans.com.
*These are forward-looking statements about the Company's sales and earnings for
the balance of fiscal 2001 and for fiscal 2002. Actual sales and earnings
results for the Company may vary significantly and could be impacted by a number
of important factors, including but not limited to: (i) the ongoing
consolidation of the retail segment of the footwear industry; (ii) the
occurrence of downward trends in the U.S. economy, foreign economies and the
footwear industry, or the occurrence of events that adversely affect the world
economy in general; (iii) changes in the fashion preferences of the Company's
target customers and the Company's ability to anticipate and respond to such
changes; (iv) increasing competition in all lines of the Company's business from
both large, well-established companies with significant financial resources and
brand recognition, and smaller niche competitors who market exclusively to the
Company's target customers; (v) the cancellation of orders which could alter
bookings numbers; (vi) the fluctuation of foreign currencies in relation to the
U.S. dollar, including particularly, the impact of the euro on the Company's
growing European business; and (vii) whether future skate parks opened by the
Company will be as successful as the Company's current parks. Many of these
factors, and others, are discussed more extensively in the Risk Factors section
of the Company's Annual
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Page 3 -- Vans, Inc. Reports Record Second Quarter Sales and Earnings
Report on Form 10-K for the year ended May 31, 2000, as amended, which is filed
with the Securities and Exchange Commission.
**This is a forward-looking statement regarding the Company's projected
inventory level at the end of the third quarter of fiscal 2001. The Company's
actual inventory levels could vary significantly due to a number of important
factors including, but not limited to (i) cancellations or customer-requested
delays of orders, (ii) changes in lead times for deliveries from factories, and
(iii) transportation delays relating to shipping.
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Page 4 -- Vans, Inc. Reports Record Second Quarter Sales and Earnings
VANS, INC.
Condensed Consolidated Financial Summary
Second Quarter and Six Months Fiscal Year 2001
(In thousands, except per share amounts)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- --------------------------
NOV 25, NOV 27, NOV 25, NOV 27,
2000 1999 2000 1999
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
Net sales $ 73,234 $ 58,768 $ 173,855 $ 141,683
Cost of goods 41,310 32,600 97,676 80,187
--------- --------- --------- ---------
Gross profit 31,924 26,168 76,179 61,496
--------- --------- --------- ---------
Gross profit
percentage 43.6% 44.5% 43.8% 43.4%
EXPENSES:
Selling and
distribution 19,161 14,655 38,747 29,702
Marketing, advertising
and promotion 4,465 3,668 12,481 11,203
General and
administrative 2,625 2,421 6,327 5,412
Other income (323) (320) (679) (737)
Goodwill amortization 408 337 779 671
Net interest and
debt expense 628 706 1,355 1,095
--------- --------- --------- ---------
26,964 21,467 59,010 47,346
--------- --------- --------- ---------
Expenses and other
items as a percentage
of sales 36.8% 36.5% 33.9% 33.4%
Earnings before
income taxes 4,960 4,701 17,169 14,150
Income tax expense 1,686 1,598 5,837 4,811
Minority interest 328 437 789 738
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NET EARNINGS $ 2,946 $ 2,666 $ 10,543 $ 8,601
========= ========= ========= =========
EARNINGS PER SHARE INFORMATION:
Basic:
Weighted average
Shares outstanding 14,029 13,538 13,890 13,512
Net earnings
per basic share $ 0.21 $ 0.20 $ 0.76 $ 0.64
========= ========= ========= =========
Diluted:
Weighted average
Shares outstanding 14,955 14,270 14,832 14,241
Net earnings
per diluted share $ 0.20 $ 0.19 $ 0.71 $ 0.60
========= ========= ========= =========
</TABLE>
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Page 5 -- Vans, Inc. Reports Record Second Quarter Sales and Earnings
VANS, INC.
Condensed Consolidated Financial Summary
Second Quarter and Six Months Fiscal Year 2001
(In thousands of dollars)
BALANCE SHEETS
<TABLE>
<CAPTION>
Nov 25, Nov 27,
2000 1999
--------- ---------
<S> <C> <C>
ASSETS:
Current assets
Cash $ 11,920 $ 11,557
Trade receivables - net 38,228 36,211
Inventory 61,721 49,384
Deferred income taxes 2,865 1,628
Other 7,994 8,877
-------- --------
Total current assets 122,728 107,657
Property, plant and
equipment - net 34,982 27,358
Intangible assets 25,339 24,020
Other 3,025 2,830
-------- --------
Total assets $186,074 $161,865
======== ========
LIABILITIES:
Short-term borrowings $ 22,986 $ 24,439
Current liabilities 20,193 15,251
Restructuring Reserve 204 628
Other long-term liabilities 17,646 15,266
-------- --------
Total liabilities 61,029 55,584
Minority interest (a) 2,799 1,263
Shareholders' equity 122,246 105,018
-------- --------
Total liabilities and
shareholders' equity $186,074 $161,865
======== ========
</TABLE>
SALES BY DISTRIBUTION CHANNEL
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------- ---------------------
Nov 25, Nov 27, Nov 25, Nov 27,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
U.S.:
Wholesale $ 27,422 $ 23,267 $ 74,201 $ 58,393
Retail 24,690 17,325 50,681 37,046
-------- -------- -------- --------
Total U.S. 52,112 40,592 124,882 95,439
Total International 21,122 18,176 48,973 46,244
-------- -------- -------- --------
Total Sales $ 73,234 $ 58,768 $173,855 $141,683
======== ======== ======== ========
</TABLE>
FOOTNOTE:
(a) During the second quarter of fiscal 2001, the Company acquired an additional
20% of the Common Stock of Global Accessories Limited in exchange for Common
Stock of the Company. This transaction was effective September 30, 2000,
bringing the Company's ownership to 100%.
