• Operating profit for the quarter was $13.6 million, down from $40.1 million in the prior year period. Operating profit excluding restructuring costs was $20.1 million, down $20.4 million versus comparable prior year levels.
Profit declines were driven by anticipated pressures on gross margins and increased costs related to investments in support of growth strategies, including global business expansion and development of Timberland's brand portfolio.
• Timberland repurchased approximately 348 thousand shares in the first quarter at a total cost of $10.0 million. It ended the quarter with $119.7 million in cash and no debt.
Inventory at quarter end was $183.5 million, up 4.9% versus 2006 first-quarter levels, primarily reflecting increased product costs and inventory associated with new brands such as Howies and GoLite. Accounts receivable increased 4.0% to $199.7 million, impacted by later timing of sales in the quarter.
• The Company remains committed to improving performance in its boots and kids' businesses, supported by a disciplined product supply and distribution strategy that is aligned with the premium position the Company seeks to maintain with consumers.
Jeffrey B. Swartz, Timberland's President and Chief Executive Officer, stated, “While near-term hurdles remain, we are committed to our strategy for the long-term growth of the Timberland brand and enterprise.
We continue to broaden our portfolio with acquisitions such as SmartWool, GoLite, Howies and IPATH so that we can reach more consumers than ever before; we are more focused than ever on creating authentic and relevant product for our targeted consumers; and we are streamlining our business operations in order to drive greater efficiencies.
While I am not satisfied with where we stand, I am encouraged by the strength of our new management structure, our strategic focus and the resolve of our employees and believe that we are positioning ourselves to make important progress in the future
marketing@alchempro.com
