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VF Corporation, a global leader in branded lifestyle apparel, today announced results for the fourth quarter and full year 2009. All per share amounts are presented on a diluted basis.
Fourth quarter revenues rose to $1,915.4 million from $1,912.2 million in the fourth quarter of 2008. Net income in the current quarter was $66.9 million or $.60 per share, compared with $115.9 million or $1.05 per share in the 2008 quarter. Excluding a $114.4 million after-tax, noncash charge related to the impairment of goodwill and intangible assets as described below, fourth quarter net income increased to $181.3 million and earnings per share increased to $1.62. The current quarter also included a $.12 per share impact from higher pension expense and a $.01 per share benefit from foreign currency translation. In 2008, fourth quarter earnings included a $.30 per share charge related to cost reduction actions. Excluding the 2008 charge and adjusting 2009 earnings for the higher pension, foreign currency and impairment impacts, earnings per share in 2009 would have increased by 28%.
"Today's results speak to the strength and resiliency of VF's business model and diversified brand portfolio," said Eric C. Wiseman, Chairman and Chief Executive Officer. "Our focus on prudent brand investment, disciplined cost control, and inventory management has enabled us to deliver exceptionally strong performance in an exceptionally difficult environment. We look forward to resuming growth this year, fueled by investments to accelerate growth in our fastest growing brands."
For the full year 2009, revenues were $7,220.3 million, down 6% from $7,642.6 million in 2008. Foreign currency translation accounted for two percentage points of the decline. Net income was $461.3 million or $4.13 per share, compared with $602.7 million or $5.42 per share in 2008. Excluding the fourth quarter impairment charge, net income in 2009 declined to $575.7 million and earnings per share were $5.16. Higher pension expense and foreign currency impacted earnings per share in 2009 by $.48 and $.18, respectively. Excluding the $.30 per share charge in the fourth quarter of 2008 and adjusting 2009 earnings for the higher pension, foreign currency and impairment impacts noted above, earnings per share in 2009 would have increased by 2%.
Noncash Impairment Charge
As a result of our review of goodwill and intangible assets that we conduct during the fourth quarter of each year in connection with our strategic planning process and preparation of our annual financial statements, we recorded a $122.0 million pre-tax noncash impairment charge to reduce the carrying value of the goodwill and intangible assets related to our Nautica(R), Reef(R) and lucy(R) brands, acquired in 2003, 2005 and 2007, respectively. On an after-tax basis, the charge totaled $114.4 million, which decreased fourth quarter earnings per share by $1.02 and full year earnings per share by $1.03. "While we continue to believe that each brand has opportunities for improved performance, we concluded that the fair value of our investments in these businesses has declined as we have not achieved the forecasted growth and cash flows originally projected at the dates of acquisition," said Mr. Wiseman.
Fourth Quarter Business Review
Outdoor & Action Sports: Fourth quarter revenues in our Outdoor & Action Sports coalition grew 8%, with operating income and margins each reaching record levels for the period. Global revenues of The North Face(R) and Vans(R) brands grew 7% and 14%, respectively. Total coalition revenues in our Americas businesses rose 4%, while international revenues were up 9% in constant dollars, led by exceptionally strong growth in Asia. Total direct-to-consumer revenues for our Outdoor & Action Sports coalition rose 21% in the quarter.
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