Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q2 2021 Earnings Presentation
21 slides from Columbia Sportswear's earnings presentation, Aug 2, 2021
Slide 1: CFO Commentary and Financial Review Q2'21
Exhibit 99.2 & Columbia “ Se Sportswear Company. CFO Commentary and Financial Review Q2’21 August 2, 2021
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes. This presentation contains forward-looking statements within the meaning of the federal securities laws regarding Co
Slide 3: Abbreviations and definitions
DTC DTC.com DTC B&M y/y U.S. LAAP EMEA SG&A EPS bps direct-to-consumer DTC e-commerce DTC brick & mortar year-over-year United States Latin America and Asia Pacific Europe, Middle East and Africa selling, general & administrative earnings per share basis points “+” or “up” “-” or “down” LSD% MSD% HS
Slide 4: We connect active people with their passions
Slide 5: Strategic Priorities
STRATEGIC PRIORITIES We are committed to driving sustainable and profitable long-term growth and investing in our strategic priorities to: @ - DRIVE GLOBAL BRAND AWARENESS AND SALES. GROWTH THROUGH INCREASED, FOCUSED DEMAND ENHANCE CONSUMER EXPAND AND IMPROVE EXPERIENCE AND DIGITAL GLOBAL DTC OPERAT
Slide 6: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Our goal is to maintain our strong balance sheet and disciplined approach to capital allocation. Dependent upon market conditions and our strategic priorities, our capital allocation approach includes: INVEST INORGANIC GROWTH OPPORTUNITIES TO DRIVE LONG-TERM PROFITABLE
Slide 7: Q2'21 Financial Results and Comparisons to Q2'20
Q2’21 FINANCIAL RESULTS AND COMPARISONS TO Q2'20 /, 6.2% $0.61 Cc d t Compared toa +79% *(22.2)% ° $(0.77) loss per - share Net Sales Gross Margin Operating Margin Diluted EPS Q2’21 Highlights: + Record Q2’21 and H1'21 net sales, gross margin, operating income and diluted earnings per share, exceede
Slide 8: Q2'21 vs Q2'20 results summary table
• • • Q2'21 Q2'20 Change Net sales $566.4 $316.6 +79% Gross margin 51.6% 46.2% +540 bps SG&A percent of net sales 46.2% 68.7% -2,250 bps Operating income (loss) $35.0 -$70.3 +$105.3 Operating margin 6.2% -22.2% +2,840 bps Net income (loss) $40.7 -$50.7 +$91.4 Diluted EPS $0.61 -$0.77 +$1.38
Slide 9: Q2'21 Net Sales Overview
‘Q2'21-NET-SALES. OVERVIEW =) Q2'21 PERCENTAGE CHANGE VS. Q2’20 AND Q2’21 NET SALES (unless otherwise noted) | CATEGORY BRAND CHANNEL PERFORMANCE PERFORMANCE PERFORMANCE APPAREL, ACCESSORIES Columbia &. WHOLESALE: & EQUIPMENT: +86% (483% cc.) $F +82% H79%c0) P+74% U71% ce) F +89% (186% cc.) S484M $2
Slide 10: Q2'21 Geographical Net Sales Performance
~a2'21 GEOGRAPHICAL NET-SALES PERFORMANCE CANADA +170% (+140% c.c.) $21M US: +107% (+107% c.c.) $379M EMEA +52% (+46% c.c.) $88M LAAP +16% (+11% c.c.) $78M < Percentage change details and primary drivers: U.S. Wholesale: up low-140%, later shipment of Spring 2021 orders out of Q1’21 into Q2’21 and h
Slide 11: Q2'21 Gross Margin Bridge
Q2'2l GROSS-MARGIN BRIDG Q2’21 gross margin expanded 540bps y/y to 51.6% — Gross Margin expansion primarily reflects: Tailwinds + Channel Profitability: favorable DTC product margins driven by lower promotional levels Channel Profitability: increased wholesale product margin driven by strong retail
Slide 12: Q2'21 SG&A Expense Bridge
The y/y increase in SG&A expenses was primarily 22’21 SG&A increased 20% y/y to $261.8) driven by: SG&A Expense Increases * Global Retail: increased expenses relative to prior year temporary store closures Demand Creation: higher variable spending with sales growth and incremental strategic investme
Slide 13: Balance Sheet Overview
BALANCE SHEET OVERVIEW Balance Sheet as of June 30, 2021 Cash, Cash Equivalents and Short-term Investments S82 1M Cash, cash equivalents and short-term investments totaled $820.9M, compared to $475.8M at June 30, 2020. The Company had no borrowings, compared to short- term borrowings of $2.8M at Jun
Slide 14: Cash Flow & Capital Allocation Overview
CASH FLOW & CAPITAL ALLOCATION OVERVIEW Cash Flow for the Six Months Ended June 30, 2021 Net Cash Flow from Operations Net cash flow from operating activities was $117.2M, compared to net cash used in operating activities of $37.3M for the same period in 2020. Capital Expenditures Capital expenditur
Slide 15: COVID-19 and supply chain update
The Company's top priority throughout the pandemic remains to protect the health and safety of our employees, their families, our customers and our communities. We are continually adapting business operations to adhere to evolving local and regional guidelines and safety protocols across all areas o
Slide 16: 2021 Financial Outlook
I the Company's 2021 Financial Outlook and the underlying assumptions are forward-looking in nature, and the forward-looking statements reflect our expectations as of BF august 2, 2021 and are subject to significant risks and business uncertainties, including those factors described under “Forward-L
Slide 17: Anticipated net sales growth drivers
ipated net sales growth primarily reflects: + Allbrands are anticipated to grow in 2021 led by the Columbia and SOREL brands. + Allfour geographic segments are anticipated to grow in 2021. Within our LAAP region, LAP distributor markets and Japan are anticipated to have slower recovery curves. + Fro
Slide 18: Full Year 2021 Financial Outlook Assumptions and Second Half 2021 Commentary
“FULL YEAR 2025:FINANCIAL OUTLOOK ASSUMPTIONS “AND:SECOND HALF 2021:GOMMENTARY The effective income tax rate may be affected by unanticipated impacts from changes in international, federal or state tax policies, changes in the Company's geographic mix of pre-tax income, other discrete events, as wel
Slide 19: Appendix
Slide 20: Second Quarter 2021 Constant-Currency Reconciliation
SECOND QUARTER 2021 CONSTANT-CURRENCY RECONCILIATION COLUMBIA SPORTSWEAR COMPANY Reconciliation of GAAP to Non-GAAP Financial Measures Net Sales Growth - Constant-currency Basis (Unaudited) Three Months Ended June 30, ‘Adustfor Constant Constant Reported Foreign currency ——=Repored——Rapoted——_carran
Slide 21: First Half Free Cash Flow Reconciliation
FIRST HALF FREE CASH FLOW RECONCILIATION COLUMBIA SPORTSWEAR COMPANY Reconciliation of GAAP to Non-GAAP Financial Measures Net cash provided by (used in) operating activities to free cash flow (Unaudited) Six Months Ended June 30, {in millions) 2021 2020 Net cash provided by (used in) operating acti