The Timberland Company on Thursday reported fourth-quarter 2007 net income of $24.1 million and diluted earnings per share (EPS) of $0.40. Fourth quarter diluted EPS was $0.52 when adjusted to exclude restructuring and related costs.These results compare to fourth-quarter 2006 net income of $36.2 million and diluted EPS of $0.58, or $0.61 when adjusted to exclude restructuring and related costs.Two thousand and seven was a disappointing year for Timberland, and the results that we delivered to shareholders are below standard and unacceptable for an authentic brand with a deep and unique connection to consumers, said Jeffrey B. Swartz, Timberlands president and CEO. However, during the year we made difficult decisions to simplify our business, including licensing our North American apparel business, closing underperforming retail stores globally and streamlining our global operations; actions that should enhance profitability going forward.Now we begin 2008 with a clear sense of where our strategy has missed the mark and a plan to address the challenges we are confronting as we rebuild Timberlands strong relationship with consumers, said Swart We believe we are well positioned to compete in a challenging and uncertain business environment as we ended the year with no debt and a strong balance sheet.
The Company plans to invest incrementally in consumer-facing marketing spend, international expansion and other growth initiatives resulting in a recalibrated operating expense base for 2008 in the range of $550 million.Revenue fell 9.3 percent to $442.7 million as declines in boots and kids footwear and decreases in Timberland apparel revenue in the U.S. offset strong gains in SmartWool products, timberland outlet and Timberland PRO(R) series footwear.Foreign exchange rate changes increased fourth-quarter 2007 revenues by approximately $13 million, or 2.6 percent, due to the strength of the Euro and the British Pound, and increased operating income by approximately $3 million.International revenue increased 5 percent to $184.1 million, but decreased 2.2 percent on a constant dollar basis. U.S. revenues declined 17.3 percent to $258.6 million, as soft retail conditions added to pressures on boots and kids sales.