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Declines in Timberland casual footwear & women boots biz
06 Feb '09
5 min read
In the fourth quarter of 2008, the effective tax rate was 48.9% compared to 24.3% in the fourth quarter of 2007. The tax rate for the fourth quarter of 2008 was impacted by a non-deductible loss from a significant unanticipated decline in the market value of certain company-owned life insurance assets and the impact of the non-cash intangible asset impairment charge.
These unanticipated items increased the Company's fourth quarter 2008 tax expense by approximately $1.8 million. During the fourth quarter of 2007, the Company released approximately $8 million of specific tax reserves related to the closure of certain audits during the quarter.
Timberland ended the quarter with $217.2 million in cash and no debt. Inventory at quarter end was $179.7 million, down 11.0% versus 2007 fourth-quarter levels, reflecting the Company's disciplined inventory management in the face of challenging market conditions. Accounts receivable decreased 10.3% to $168.7 million, compared to the prior year.
The Company anticipates that 2009 will continue to be challenging due to uncertainty around consumer spending patterns and the financial health of the retail industry, in general, conditions that make forecasting difficult. Given the volatile nature of current economic conditions, the Company believes there is not sufficient visibility to set expectations for the performance of the business at this time.
Jeffrey B. Swartz, Timberland's President and Chief Executive Officer, stated, "To say that the fourth quarter of 2008 was challenging would grossly understate the conditions that global consumer product companies were and are facing. And yet at Timberland, I feel like the current market conditions offer us opportunity. We have strategies in place to reinvigorate our brand and strengthen our position in the global market and a strong balance sheet with $217 million in cash and no debt."
"The strength of our balance sheet gives us the financial capability to continue to invest behind our strategies and positions us to capitalize on the opportunities that will develop for powerful brands as consumer markets begin to stabilize and improve."
These unanticipated items increased the Company's fourth quarter 2008 tax expense by approximately $1.8 million. During the fourth quarter of 2007, the Company released approximately $8 million of specific tax reserves related to the closure of certain audits during the quarter.
Timberland ended the quarter with $217.2 million in cash and no debt. Inventory at quarter end was $179.7 million, down 11.0% versus 2007 fourth-quarter levels, reflecting the Company's disciplined inventory management in the face of challenging market conditions. Accounts receivable decreased 10.3% to $168.7 million, compared to the prior year.
The Company anticipates that 2009 will continue to be challenging due to uncertainty around consumer spending patterns and the financial health of the retail industry, in general, conditions that make forecasting difficult. Given the volatile nature of current economic conditions, the Company believes there is not sufficient visibility to set expectations for the performance of the business at this time.
Jeffrey B. Swartz, Timberland's President and Chief Executive Officer, stated, "To say that the fourth quarter of 2008 was challenging would grossly understate the conditions that global consumer product companies were and are facing. And yet at Timberland, I feel like the current market conditions offer us opportunity. We have strategies in place to reinvigorate our brand and strengthen our position in the global market and a strong balance sheet with $217 million in cash and no debt."
"The strength of our balance sheet gives us the financial capability to continue to invest behind our strategies and positions us to capitalize on the opportunities that will develop for powerful brands as consumer markets begin to stabilize and improve."
Timberland Company
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