UA DCF 3
Transcript of UA DCF 3
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2006 2007 2008 2009
Cash flows from operating activities
Net income 38,979 52,558 38,229 46,785
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 9,824 14,622 21,347 28,249
Unrealized foreign currency exchange rate (gains) losses 161 -2,567 5,459 -5,222
Loss on disposal of property and equipment 115 15 37Stock-based compensation 1,982 4,182 8,466 12,910
Gain on bargain purchase of corporate headquarters (excludes transaction costs of $1.9 million)
Deferred income taxes -6,721 -4,909 -2,818 -5,212
Changes in reserves and allowances 3,832 4,551 8,711 1,623
Changes in operating assets and liabilities:
Accounts receivable -20,828 -24,222 2,634 3,792
Inventories -26,504 -83,966 -19,497 32,998
Prepaid expenses and other assets -3,997 -2,067 -7,187 1,870
Accounts payable 8,203 11,873 16,957 -4,386
Accrued expenses and other liabilities 10,681 11,825 -5,316 11,656
Income taxes payable and receivable -5,026 3,492 2,516 -6,059
Net cash provided by operating activities 10,701 -14,628 69,516 119,041
Cash flows from investing activities
Purchase of property and equipment -15,115 -33,959 -38,594 -19,845
Purchase of corporate headquarters and related expenditures
Purchase of intangible assets -125 -600
Purchase of trust owned life insurance policies -2,893 -35
Purchase of long term investment 21
Purchases of other assets -89,650 -62,860 Change in restricted cash
89,650 62,860
Net cash used in investing activities -15,115 -34,084 -42,066 -19,880
Cash flows from financing activities
Proceeds from revolving credit facility 40,000
Payments on revolving credit facility -15,000 -25,000
Proceeds from term loan
Proceeds from long term debt 2,119 11,841 13,214 7,649
Payments on long term debt -2,413 -2,973 -6,490 -7,656
Payments on capital lease obligations -1,840 -794 -464 -361Excess tax benefits from stock-based compensation arrangem 11,260 6,892 2,131 5,127
Proceeds from exercise of stock options and other stock issua 3,544 3,182 1,990 5,128
Payments of debt financing costs -260 -1,354
169
Net cash provided by (used in) financing activities 12,579 18,148 35,381 -16,467
Effect of exchange rate changes on cash and cash equivalents -487 497 -1,377 2,561
Net increase (decrease) in cash and cash equivalents 7,678 -30,067 61,454 85,255
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Cash and cash equivalents
Beginning of year 62,977 70,655 40,588 102,042
End of year 70,655 40,588 102,042 187,297
Non-cash financing and investing activitiesDebt assumed in connection with purchase of corporate headquarters
Other supplemental information
Cash paid for income taxes 20,522 30,502 29,561 40,834
Cash paid for interest 531 525 1,444 1,273
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2010 2011
68,477 96,919 NCC
-28,278 -67,186 31,287 72,256 16,637 13,299
31,321 36,301 -28,278 -67,186 31,287 72,256 -18,363 -81,701
1,280 4,027 0.04314 0.084371
44 3616,227 18,063
-3,300
-10,337 3,620
2,322 5,536
-32,320 -33,923
-65,239 -114,646
-4,099 -42,633
16,158 17,209
21,330 23,442
4,950 4,567
50,114 15,218 10,701 -14,628 69,516 119,041 50,114 15,218
-30,182 -56,228
-23,164
-11,125 -3,862
-478 -1,153 -5,029
-41,785 -89,436
30,000
-30,000
25,000
5,262 5,644
-9,446 -7,418
-97
4,189 10,260
7,335 14,645
-2,324
7,243 45,807
1,001 -75
16,573 -28,486
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187,297 203,870
203,870 175,384
38,556
38,773 56,940
992 2,305
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6,336
-15,331
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2006 2007 2008 2009 2010
Net revenues 430,689 606,561 725,244 856,411 1,063,927
Cost of goods sold 215,089 301,517 370,296 443,386 533,420
Gross profit 215,600 305,044 354,948 413,025 530,507
Selling, general and administrative expenses 158,682 218,779 278,023 327,752 418,152
Income from operations 56,918 86,265 76,925 85,273 112,355
Interest expense, net -850 -2,344 -2,258
Other expense, net 2,169 2,778 -6,175 -511 -1,178
Income before income taxes 59,087 89,043 69,900 82,418 108,919
Provision for income taxes 20,108 36,485 31,671 35,633 40,442
Net income 38,979 52,558 38,229 46,785 68,477
Net income available per common share
Basic 0.83 1.09 0.78 0.94 1.35
Diluted 0.79 1.05 0.76 0.92 1.34
Weighted average common shares outstanding
Basic 46,983 48,021 49,086 49,848 50,798
Diluted 49,587 49,959 50,342 50,650 51,282
profit margin 9% 9% 5% 5% 6%
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2011
1,472,684 29,923 52,332 73,548 72,926 76,127 159,135
759,848 0.07 0.09 0.10 0.09 0.07 0.11
712,836
550,069
162,767
-3,841
-2,064
156,862
59,943
96,919
1.88
1.85
51,570
52,526
7% 7%
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2.419368
0.09
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2006 2007 2008 2009 2010 2011
Assets
Current assets
Cash and cash equivalents 70,655 40,588 102,042 187,297 203,870 175,384
Accounts receivable, net 71,867 93,515 81,302 79,356 102,034 134,043
Inventories 81,031 166,082 182,232 148,488 215,355 324,409
Prepaid expenses and other current ass 8,944 11,028 18,023 19,989 19,326 39,643Income tax receivables 4,310 614
Deferred income taxes 8,145 10,418 12,824 12,870 15,265 16,184
Total current assets 244,952 322,245 396,423 448,000 555,850 689,663
Property and equipment, net 29,923 52,332 73,548 72,926 76,127 159,135
Intangible assets, net 7,875 6,470 5,470 5,681 3,914 5,535
Deferred income taxes 5,180 8,173 8,687 13,908 21,275 15,885
Other long term assets 1,438 1,393 3,427 5,073 18,212 48,992
Total assets 289,368 390,613 487,555 545,588 675,378 919,210
Liabilities and Stockholders Equity
Current liabilities
Revolving credit facility 25,000
Accounts payable 42,718 55,012 72,435 68,710 84,679 100,527
Accrued expenses 25,403 36,111 25,905 40,885 55,138 69,285
Current maturities of long term debt 2,648 4,111 7,072 9,178 6,865 6,882
794 465 361 97
Other current liabilities 2,337 1,292 2,465 6,913
Total current liabilities 71,563 95,699 133,110 120,162 149,147 183,607
Long term debt, net of current maturiti 1,893 9,298 13,061 10,948 9,077 70,842Other long term liabilities 602 4,673 10,190 14,481 20,188 28,329
Capital lease obligations 922 458 97
Total liabilities 74,980 110,128 156,458 145,591 178,412 282,778
Commitments and contingencies (see Note 8)
Stockholders equity
Class A Common Stock, $.0003 1/3 par 12 12 12 13 13 13
Class B Convertible Common Stock, $.0 4 4 4 4 4 4
Additional paid-in capital 148,562 162,362 174,725 197,342 224,887 268,223Retained earnings 66,376 117,782 156,011 202,188 270,021 366,164
Accumulated other comprehensive inco -463 -182 405 464 2,041 2,028
Unearned compensation -103 507 -60 -14
Total stockholders equity 214,388 280,485 331,097 399,997 496,966 636,432
Total liabilities and stockholders equity 289,368 390,613 487,555 545,588 675,378 919,210
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WC
173,389 226,546 263,313 327,838 406,703 506,056
0.402585 0.373493 0.363068 0.382805 0.382266 0.343628
0.374641
106,053,000
0.107887
0.307632
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2010 results 2011 targets 2011 results
2011 vs 2010
results
Net revenue 1.064 billion 1.2 billion 1.473 billion 38%
Operating Inc 112 mm 120-160mm 163mm 45%
Op inc % 10.60% 10.5%-11.5% 11.10% 0.005%
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Scenario Summary
Current Values: WACC Sensitivity s2 s3
Changing Cells:
$B$4 20.00% 20.00% 22.00% 25.00%
$B$9 6.50% 4.00% 6.50% 6.50%
$B$11 4.00% 4.00% 4.00% 5.79%Result Cells:
$B$56 36.35 39.04 40.33 42.63
Notes: Current Values column represents values of changing cells at
time Scenario Summary Report was created. Changing cells for each
scenario are highlighted in gray.
41.32
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s4 s5 s6 s7
25.00% 20.00% 25.00% 20.00%
6.50% 6.50% 4.00% 6.50%
4.00% 3.00% 5.79% 4.00%
46.81 38.28 45.78 36.35
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Inputs
Beta_equity 1.82
Growth Rates:
UA 20.00%
Industry 15.00%
Sector 13.00%
S&P 500 10.30%Economy 3.50%
RF_10yr 6.50%
Excess period 5
Risk Premium 4.00%
Cost of equity 13.78%
Cost of debt 3.50%
Tax rate - Cedc 10-Q 38.00%
Profit margin 7%
operating argin % 11%
NCC % of rev 8%
Working Cap % of rev 37%
Share price 56
Shares outstanding 104,460,000
MV of equity 5,849,760,000
MV of debt 106,053,000
D/V 0.017806637 They have a revolving credit line which is
E/V 0.982193363 This is one area which im confused about.
WACC 13.57%
FCFF 2006 2007Period
Revenue 430,689,000 606,561,000
NI 38,979,000 52,558,000
CFO 10,701,000 -14,628,000
Operating income 59,087,000 89,043,000
NCC -28,278,000 -67,186,000
Interest expense 0 0
After-tax int exp
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FCInv - Cap expenditures
Working Capital 173,389,000 226,546,000
Increase in WC
FCFF
PV of FCFF
Sum of FCFF (628,083,779)
Enterprise value 61,579,221Value to comm equity (44,473,779)
Intrinsic value (0.43) 56.00 price
Expected value 41.32 x
s
value
Projected P/E (0.45) 59.57 total profit
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onrecourse
Using book value the d/e is about 10%
2008 2009 2010 2011 2012-2 -1 0
725,244,000 856,411,000 1,063,927,000 1,472,684,000 1,767,220,800
38,229,000 46,785,000 68,477,000 96,919,000 123,705,456
69,516,000 119,041,000 50,114,000 15,218,000 130,041,289
69,900,000 82,418,000 108,919,000 156,862,000 201,816,615
31,287,000 72,256,000 -18,363,000 -81,701,000 6,335,833
850000 2,344,000 2,258,000 3,841,000 3,841,000
2,381,420
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16,000,000 65,000,000
263,313,000 327,838,000 406,703,000 506,056,000 662,072,960
36,767,000 64,525,000 78,865,000 99,353,000 156,016,960
33,276,000 55,969,280 (27,351,040) (97,753,580) (88,594,250)
-88,594,250
1.9 1.9 1.9 1.9 1.9
55 55 55 55 55
(0.43) 41.32 45 50.00 53.10
53.53 11.78 8.10 3.10 (0.00)
5,352.57 1,178.20 810.00 310.00 (0.00)
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2013 2014 2015 2016 Residual1 2 3 4
2,120,664,960 2,544,797,952 3,053,757,542 3,664,509,051
148,446,547 178,135,857 213,763,028 256,515,634
155,415,964 185,802,215 222,196,022 265,791,927
242,179,938 290,615,926 348,739,111 418,486,934
6,969,417 7,666,358 8,432,994 9,276,294
3,841,000 3,841,000 3,841,000 3,841,000
2,381,420 2,381,420 2,381,420 2,381,420
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65,000,000 65,000,000 65,000,000 65,000,000
794,487,552 953,385,062 1,144,062,074 1,372,874,489
132,414,592 158,897,510 190,677,012 228,812,415
(39,617,208) (35,713,875) (31,099,570) (25,639,068) (732,544,791)
-34,882,512 -27,687,565 -21,228,830 -15,409,828 -440,280,794
1.9 1.9
55 55
52.00 55.00
1.10 (1.90)
110.00 (190.00)
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Inputs
Beta_equity 1.82
Growth Rates:
UA 25.00%
Industry 15.00%
Sector 13.00%
S&P 500 10.30%Economy 3.00%
RF_10yr 4.00% He had 6.5% - I think that is alittle to high
Excess period 5
Risk Premium 4.00%
Cost of equity 11.28%
Cost of debt 3.50%
Tax rate - Cedc 10-Q 38.00%
Profit margin 7%
operating margin % 11%
NCC % of rev 8%
Working Cap % of rev 37% 30%
Share price 57
Shares outstanding 104,460,000
MV of equity 5,954,220,000
MV of debt 106,053,000
D/V 0.017499707 They have a revolving credit line which is no
E/V 0.982500293 This is one area which im confused about. Us
WACC 11.12%
FCFF 2011 2012Period -1 0
Revenue 1,472,684,000 1,840,855,000
NI 96,919,000 128,859,850
CFO 15,218,000 135,195,683
Operating income 156,862,000 210,225,641
NCC -81,701,000 6,335,833
Interest expense 3,841,000 3,841,000
After-tax int exp 2,381,420
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FCInv - Cap expenditures 159,000,000 65,000,000
Working Capital 506,056,000 657,872,800
Increase in WC 99,353,000 151,816,800
FCFF (240,753,580) (79,239,697)
PV of FCFF -79,239,697
Sum of FCFF 4,078,492,096
Enterprise value 4,768,155,096Value to comm equity 4,662,102,096
Intrinsic value 44.63
Projected P/E 36.18 28.94
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recourse
ing book value the d/e is about 10%
25% 20%
Excess Growth Period
2013 2014 2015 2016 20171 2 3 4 5
2,301,068,750 2,876,335,938 3,595,419,922 4,494,274,902 5,393,129,883
161,074,813 201,343,516 251,679,395 314,599,243 377,519,092
168,044,229 209,009,874 260,112,389 323,875,537 387,723,015
262,782,051 328,477,564 410,596,955 513,246,194 615,895,433
6,969,417 7,666,358 8,432,994 9,276,294 10,203,923
3,841,000 3,841,000 3,841,000 3,841,000 3,841,000
2,381,420 2,381,420 2,381,420 2,381,420 2,381,420
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68,250,000 71,662,500 75,245,625 79,007,906 82,958,302
862,074,166 1,077,592,708 1,346,990,885 1,683,738,606 2,020,486,327
204,201,366 215,518,542 269,398,177 336,747,721 336,747,721
(102,025,717) (75,789,748) (82,149,993) (89,498,671) (29,601,588)
-91,815,323 -61,379,236 -59,872,041 -58,700,071 -17,471,997
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15% 10% 5% 3.50%
Second Period - Slowed Growth Perpetuity
2018 2019 2020 Residual6 7 8
6,202,099,365 6,822,309,302 7,163,424,767
434,146,956 477,561,651 501,439,734
445,371,271 489,908,398 515,021,155
708,279,748 779,107,722 818,063,108
11,224,315 12,346,747 13,581,421
3,841,000 3,841,000 3,841,000
2,381,420 2,381,420 2,381,420
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87,106,217 91,461,527 96,034,604
2,323,559,276 2,555,915,204 2,683,710,964
303,072,949 232,355,928 127,795,760
57,573,525 168,472,363 293,572,211 9,785,740,370 For the model, we k
30,581,295 80,531,768 126,287,109 4,209,570,288
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ep profit margin at 7% thorugh 2nd period and residual- this is something I should look at-it is most likely sic
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optomistic
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Inputs
Beta_equity 1.82
Growth Rates:
UA 25.00%
Industry 15.00%
Sector 13.00%
S&P 500 10.30%Economy 3.50%
RF_10yr 2.00%
Excess period 5
Risk Premium 4.00%
Cost of equity 9.28%
Cost of debt 3.50%
Tax rate - Cedc 10-Q 38.00%
Profit margin 7%
operating margin % 11%
NCC % of rev 8%
Working Cap % of rev 37% 30%
Share price 57
Shares outstanding 104,460,000
MV of equity 5,954,220,000
MV of debt 106,053,000
D/V 0.017499707 They have a revolving credit line which is no
E/V 0.982500293 This is one area which im confused about. Us
WACC 9.16%
FCFF 2011 2012Period -1 0
Revenue 1,472,684,000 1,840,855,000
NI 96,919,000 128,859,850
CFO 15,218,000 135,195,683
Operating income 156,862,000 210,225,641
NCC -81,701,000 6,335,833
Interest expense 3,841,000 3,841,000
After-tax int exp 2,381,420
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FCInv - Cap expenditures 16,000,000 65,000,000
Working Capital 506,056,000 657,872,800
Increase in WC 99,353,000 151,816,800
FCFF (97,753,580) (79,239,697)
PV of FCFF -79,239,697
Sum of FCFF 4,053,335,519
Enterprise value 4,742,998,519Value to comm equity 4,636,945,519
Intrinsic value 44.39
Ours Analyst Projections
EPS 2011 0.93 0.93
EPS 2012 1.23 1.19
EPS 2013 1.54 1.54
Projected P/E 35.98 47.90
Forward P/E 28.79 37.01
Implied growth 2012 32.96% 28.26%
Implied growth 2013 25.00% 29.41%
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recourse
ing book value the d/e is about 10%
25% 20%
Excess Growth Period
2013 2014 2015 2016 20171 2 3 4 5
2,301,068,750 2,876,335,938 3,595,419,922 4,494,274,902 5,393,129,883
161,074,813 201,343,516 251,679,395 314,599,243 377,519,092
168,044,229 209,009,874 260,112,389 323,875,537 387,723,015
262,782,051 328,477,564 410,596,955 513,246,194 615,895,433
6,969,417 7,666,358 8,432,994 9,276,294 10,203,923
3,841,000 4,033,050 4,033,050 4,033,050 4,033,050
2,381,420 2,500,491 2,500,491 2,500,491 2,500,491
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68,250,000 71,662,500 75,245,625 79,007,906 82,958,302
862,074,166 1,077,592,708 1,346,990,885 1,683,738,606 2,020,486,327
204,201,366 215,518,542 269,398,177 336,747,721 336,747,721
(102,025,717) (75,670,677) (82,030,922) (89,379,600) (29,482,517)
-93,468,167 -63,509,071 -63,072,465 -62,958,545 -19,025,449
44.39 9% 10% 12%
20% 42.08 39.40 34.67
22% 43.67 40.85 35.87
25% 44.86 41.92 36.70
28.26% 43.88 40.94 35.75
29.41% 42.79 39.91 34.81
Average 37.94
WACC
Growth Rate
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15% 10% 5% 3.50%
Second Period - Slowed Growth Perpetuity
2018 2019 2020 Residual6 7 8
6,202,099,365 6,822,309,302 7,163,424,767
434,146,956 477,561,651 501,439,734
445,371,271 489,908,398 515,021,155
708,279,748 779,107,722 818,063,108
11,224,315 12,346,747 13,581,421
4,033,050 4,033,050 4,033,050
2,500,491 2,500,491 2,500,491
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87,106,217 91,461,527 96,034,604
2,323,559,276 2,555,915,204 2,683,710,964
303,072,949 232,355,928 127,795,760
57,692,596 168,591,434 293,691,282 8,391,179,488
34,107,077 91,309,086 145,721,494 4,163,471,256
13.58%
31.43
32.47
33.15
32.21
31.33
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1.1% 3.5% 3.0% 2.5% 2.1% 1.8%
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1.5% 1.4% 1.3% 1.3%
2.0%
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Nike comparison
1977 1978 1979 1980 1981 1982 1983
sales 28711 71001 149830 269775 457742 693582 867212
% growth 147% 111% 80% 70% 52% 25%
0.807677
net income 1522 3856 9723 12505 25955 49036 57004
%growth 153% 152% 29% 108% 89% 16%
% of sales 5% 5% 6% 5% 6% 7% 7%
ppe net 10166 16172 39731
% growth 59% -100% #DIV/0!
%of sales 4% 4% 0% 5%
working capital 2645 5351 13266 29624 74687 112170 209871
% growth 102% 148% 123% 152% 50% 87%% of sales 9% 8% 9% 11% 16% 16% 24%
92%
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1984 1985 1986 1987 1988 1989 1990 1991 1992
919806 956371 1069222 877257 1203440 1710803 2235244 3003000 3405000
6% 4% 12% -18% 37% 42% 31% 34% 13%
43%
40690 10270 59211 35879 101695 167047 242958 287000 329000
-29% -75% 477% -39% 183% 64% 45% 18% 15%
4% 1% 6% 4% 8% 10% 11% 10% 10%
55915 50748 39834 48480 57703 89900 159000 292000 346000
41% -9% -22% 22% 19% 56% 77% 84% 18%
6% 5% 4% 6% 5% 5% 7% 10% 10%
234247 217849 278784 325200 298816 422000 564000 666000 967000
12% -7% 28% 17% -8% 41% 34% 18% 45%25% 23% 26% 37% 25% 25% 25% 22% 28%
13%
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1993 1994 1995 1996 1997 1998 1999 2000 2001
3930000 3789000 4760000 6470000 9186000 9553000 8776000 8995000 9488000
15% -4% 26% 36% 42% 4% -8% 2% 5%
365000 298000 399000 553000 795000 399000 451000 579000 589000
11% -18% 34% 39% 44% -50% 13% 28% 2%
9% 8% 8% 9% 9% 4% 5% 6% 6%
378000 406000 554000 642000 922000 1153000 1265000 1583000 1618000
9% 7% 36% 16% 44% 25% 10% 25% 2%
10% 11% 12% 10% 10% 12% 14% 18% 17%
1165000 1209000 938000 1246000 1964000 1829000 1818000 1456000 1839000
20% 4% -22% 33% 58% -7% -1% -20% 26%30% 32% 20% 19% 21% 19% 21% 16% 19%
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2002 2003 2004 2005 2006 2007 2008 2009 2010
9893000 10697000 12253000 13739000 14954000 16325000 18627000 19176000 19014000
4% 8% 15% 12% 9% 9% 14% 3% -1%
663000 474000 945000 1211000 1392000 1491000 1883000 1487000 1907000
13% -29% 99% 28% 15% 7% 26% -21% 28%
7% 4% 8% 9% 9% 9% 10% 8% 10%
1614000 1620000 1586000 1605000 1657000 1678000 1891000 1957000 1931000
0% 0% -2% 1% 3% 1% 13% 3% -1%
16% 15% 13% 12% 11% 10% 10% 10% 10%
2321000 2767000 3503000 4352000 4736000 5492000 5518000 6457000 7595000
26% 19% 27% 24% 9% 16% 0% 17% 18%23% 26% 29% 32% 32% 34% 30% 34% 40%
0.344121
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2011 Average
20862000
10% 25% if you exclude the first six years of growth of 92% growth,
2133000
12%
10% 7.3%
2115000
10%
10% 9%
7339000
-3%35% 24%
40%
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nike has averaged 13%.
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US maket share approach
1 Damadarian Approach
Inputs (2011)
Enter revenues in current year = 1,472,684,000$
Enter size of overall market in current year = 47,200,000,000$
Enter expected growth rate in overall market = 0.025
Enter expected market share in 5 years = 0.064
Enter expected market share in 10 years = 0.096
Output
Expected revenues in year 5 = 3,417,757,930$
Expected compounded growth rate; Yr 1-5 = 0.18338578
Expected revenues in year 10 = 5,800,319,087$
Expected compounded growth rate: Yr 6-10 = 0.111583565
Expected compounded growth rate: Yr 1-10: 0.14692292
2 Take a backing out approach
what % of market share will UA need to get the projected
Used the data of sports apparel (use UA and its competitors)
Sports apparel industry
Market Share
3 Conclusion
1. In this model, UA is projected to double market share in five years; and tripl
2. In the right link, it states that the US Sports apparel market is growing at .8%
3. In this model, a 2.5% market growth rate was assumed- substantially optomi
http://www.marketresearch.com/AM-Mindpower-Solutions-v3771/Athletic-Apparel-Footwear-Outlook-Evolving-6846675/%20-%20claims%20that%20US%20sports%20apparel%20industry%20is%20growing%20at%20.8%25http://www.marketresearch.com/AM-Mindpower-Solutions-v3771/Athletic-Apparel-Footwear-Outlook-Evolving-6846675/%20-%20claims%20that%20US%20sports%20apparel%20industry%20is%20growing%20at%20.8%25 -
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what we have modeled Difference
4,500,000,000 (1,082,242,071)$
7,100,000,000 (1,299,680,913)$
should we weight this to apparel?
Nike UA ADDYY COLM
24,000,000,000$ 1,500,000,000$ 18,000,000,000$ 1,700,000,000$
50.8% 3.2% 38.1% 3.6%
market share in 10 years
. http://www.marketresearch.com/AM-Mindpower-Solutions-v3771/Athletic-Apparel-Footwe
istic
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The US & Global Industryanalysis models show
what UA needs to sustainits equity
How will UA continue growing market shareagainst strong incumbents
UA has increased inmarket share substantiallysince it started in the late
90's
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LULU SKINs(private) Total
1,000,000,000$ 1,000,000,000$ 47,200,000,000$
2.1% 2.1%
r-Outlook-Evolving-6846675/ - claims that US sports apparel industry is growing at .8%
Nike: has a selectionof cool to warm
compression at priceoint of 30 - 65
UA : Multiplecompression gear
offerings from $30 -$70
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Sports ApparelMarket
US = $47Bil
Global = $122bil
Reebok:compression shirtsstarting at $20.98
Many low price pointproducers: $10 and
up
Addid
UA 2015 & 2020 market share
In what waysother than itsbrand can UA
differentiate?
competitorshave stronger
globaldistribution
No patents onmaterials
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Skins: a privatecompany that is
established globally.Prices range from
$70 - $250
as: $55-$65
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Global Market share approach
1 Damadarian Approach
Inputs (2011)
Enter revenues in current year = 1,472,684,000
Enter size of overall market in current year = 1.22E+11Enter expected growth rate in overall market = 0.032
Enter expected market share in 5 years = 0.024142361
Enter expected market share in 10 years = 0.036213541
Output
Expected revenues in year 5 = 3,447,768,128$
Expected compounded growth rate; Yr 1-5 = 0.185456702
Expected revenues in year 10 = 6053796195
Expected compounded growth rate: Yr 6-10 = 0.119174868
Expected compounded growth rate: Yr 1-10: -0.259428838
2 Understanding UA global athlethic apparel market share 2011
1.2%
Given UA's global psotion relative to competitors without any competitive advantage, it is
http://www.reportlinker.com/ci02121/Sport-Clothing-and-Accessories.html - reports that
3 Conclusions
1. It should first be noted that in our fcff model, UA needs to reach the goals by 2020 (8 ye
2. UA current global market share is 1.2%, I project them doubling market share in five yea
http://www.reportlinker.com/ci02121/Sport-Clothing-and-Accessories.html%20-%20reports%20that%20sports%20apparel%20industry%20will%20be%20126bil%20by%202015http://www.reportlinker.com/ci02121/Sport-Clothing-and-Accessories.html%20-%20reports%20that%20sports%20apparel%20industry%20will%20be%20126bil%20by%202015 -
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should perform sensitivity on expected growth rate of the market-also a scenario analysis
what we have Difference
4500000000 (1,052,231,872)$
7100000000 (1,046,203,805)$
difficult to see there market share increasing greatly
sports apparel industry will be 126bil by 2015
ars). In this model, they are given 10 years to get there.
rs, and tripling market in 10 years
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2008 American Apparel & Footware Association stats
US Apparel imports (Page 21)
(In Number of Units)
2002 2003 2004
Other man-made fiber apparel Kg. 81,919,102$ 89,610,203$ 102,679,775$% growth 9.4% 14.6%
Page 13
Profile of US Apparel consumption (Wholesale market; page 13)
(In millions of Garments)
1997 1998 1999
15,578$ 16,092$ 17,654$
% growth 3.3% 9.7%
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2005 2006 2007 2008 average
121,842,944$ 125,406,023$ 130,629,894$ 130,271,231$18.7% 2.9% 4.2% -0.3% 8.2%
2000 2001 2002 2003 2004 2005
18,690$ 17,967$ 18,193$ 18,990$ 19,052$ 20,397$
5.9% -3.9% 1.3% 4.4% 0.3% 7.1%
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It would be nice to know the past 3 years given the downtrend
2006 2007 2008 average
20,481$ 20,137.60 19,507.80
0.4% -1.7% -3.1% 2.1%