Columbia Sportswear Co. shares jumped Tuesday after the company reported record first-quarter sales and its largest acquisition ever.
The Portland-based company will acquire fast-growing California-based prAna for $190 million in cash. The company makes sustainable apparel for yoga and outdoor activities, including climbing. It will remain based in Carlsbad and operate as a Columbia subsidiary.
The company had compound annual growth of more than 30 percent between 2010 and 2013, according to Columbia. It was founded in 1992 and employs roughly 165. CEO Scott Kerslake will remain with the company and report to Columbia CEO Tim Boyle.
In a conference call with analysts, Boyle said Columbia will encourage prAna's "personality" and it will be managed independently of Columbia. The deal is expected to close in the second fiscal quarter. The company is controlled by private equity firm Steelpoint Capital Partners.
Columbia also reported a record $424 million in first-quarter sales, 22 percent higher than the same quarter last year and well above the $398 million expected by Wall Street analysts. Net income increased 120 percent to $22.3 million, or $0.63 per share, also above analyst expectations of $0.33 per share.
"Our outstanding first quarter results reflect robust demand for the Columbia and Sorel brands, especially across U.S. wholesale and direct-to-consumer channels, and the successful launch of our China joint venture," CEO Tim Boyle said in a news release.
Additional highlights of the release:
- The company had a record $568 million in cash and equivalents as of March 31.
- Inventory was 11 percent lower, reflecting cooler weather and increased demand for Columbia products.
- Columbia raised fiscal 2014 guidance. It expects net sales to climb 16 percent to 18 percent and 25 percent growth in operating income.
"Our financial strength is enabling us to invest with confidence in our existing brands, our performance-based innovations, and our global operations in order to fuel sustainable, profitable growth."
Columbia announced earnings after the market closed. Shares (NASDAQ: COLM) jumped more than 6 percent in after-hours trading to $87.19, putting shares near a 52-week high.
The company's other recent acquisitions include Sorel (2000), Mountain Hardwear (2003), Montrail (2006), Pacific Trail (2006) and OutDry (2010).
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