COSTA MESA, Ca - Volcom, Inc. announced that for the second quarter ended June 30, 2006, total revenues increased 28.0% to $46.1 million, compared with $35.9 million in the second quarter of 2005. Gross profit as a percentage of total revenues for the second quarter was 49.8%, compared with 52.1% in the second quarter of 2005.
"Our brand continues to perform well at retail, as is evident in our second quarter results," said Richard Woolcott, Volcom's president and chief executive officer. "We remain focused on leveraging this strength while staying true to our core principles of quality, integrity and creativity. In terms of the future, I believe we're in a great position and I am excited about the growth and brand development before us."
Operating income for the second quarter of 2006 increased 26.8% to $9.7 million, compared with $7.6 million for the second quarter of 2005. Operating margin was 21.0% for the second quarter of 2006, compared with 21.3% in the second quarter of 2005.
Net income for the second quarter of 2006 increased 41.0% to $6.5 million, compared with $4.6 million for the second quarter of 2005. This increase in net income reflects the continued strong growth of the company's revenues and the sustained leveraging of the company's selling, general and administrative expenses.
2006 Outlook
Based on current visibility regarding the remainder of the fiscal year, the company reiterated its previously issued diluted earnings per share guidance for 2006 of a range of $1.12 to $1.14. The company's 2006 earnings per share guidance includes non-cash stock-based compensation expense of approximately $0.02 cents per share. The company also reaffirmed its 2006 revenue guidance of an increase of 25% to 27% over 2005, equating to total revenues of a range of $200 to $203 million. For the third quarter of 2006, the company currently expects revenues to increase 16% to 17% over the prior year period. The company also said that it expects third quarter fully diluted earnings per share to be $0.38 to $0.39.
In putting forth this outlook, the company reminds investors of the complexity of accurately assessing future revenue growth given the difficulty in predicting fashion trends and consumer preferences, boardsports popularity and participation rates, sales to key retailers and general economic conditions that could affect the business environment.
Fully diluted shares outstanding for the full year of 2006 are expected to be approximately 24.4 million.
About Volcom, Inc.
Volcom is an innovative designer, marketer and distributor of premium quality young mens and womens clothing, accessories and related products. The Volcom brand, symbolized by The Stone, is athlete-driven, creative and forward thinking. Volcom has consistently followed its motto of "youth against establishment," and the brand is inspired by the energy of youth culture. Volcom branded products are sold throughout the United States and internationally.
Lucas Magoon winnner of the 2006 Volcom PBRJ Finals at Mammoth Mountain