The Timberland Company (NYSE: TBL) today reported first-quarter 2009 net income of $15.9 million and earnings per share of $0.27. These results compare to first-quarter 2008 net income of $18.0 million and earnings per share of $0.30.

First-Quarter 2009 Results Summary:

• Revenue declined 12.9% to $296.6 million for the quarter, reflecting declines in Timberland^® brand apparel, in part due to the transition to a licensing model for the Company’s North American wholesale apparel business, and declines in Timberland^® branded casual footwear, partially offset by continued growth in SmartWool^® brand products. Foreign exchange rate changes decreased first-quarter 2009 revenue by approximately $22 million, or 6.4%, due to the strengthening of the U.S. dollar.
• North America revenue declined 13.0% to $119.9 million, reflecting soft consumer spending in the U.S. Europe revenue decreased 15.0% to $140.0 million but was down only 1.7% on a constant dollar basis. European results reflect declines in the apparel and casual footwear businesses, partially offset by strong sales of men’s and women’s boots. Asia revenue decreased 2.9% to $36.8 million, and decreased 6.2% on a constant dollar basis driven by declines in the apparel business and the casual footwear business, partially offset by strengthening of the men’s boots business.
• Global footwear revenue decreased 10.5% to $211.6 million, primarily due to declines in the casual footwear business, which offset strength in the boots business in the European and Asian markets. Apparel and accessories revenue decreased 19.7% to $78.7 million, due to softness in the European market as well as the Company’s transition to a licensing model for its North American wholesale apparel business.
• Global wholesale revenue decreased 14.4% to $218.6 million. Worldwide consumer direct revenue decreased 8.1% to $78.0 million, reflecting the adverse impact of a stronger U.S. dollar and a difficult worldwide retail environment, especially in North America.
• Operating income for the first quarter of 2009 was $18.2 million, compared to $23.2 million in the prior year period. The 2009 first quarter included a $0.9 million non-cash intangible asset impairment charge. In the quarter, foreign exchange rate changes decreased operating income by approximately $1 million due to the strengthening of the U.S. dollar.
• In the first quarter of 2009, the effective tax rate was 11.0% compared to 39.0% in the first quarter of 2008. During the first quarter of 2009, the Company recorded a net non-cash tax benefit of $6.4 million, which was reflected in income tax expense. The benefit resulted from the reversal of tax reserves for the completion of certain tax audits for our 2006 to 2007 tax years.
• In connection with its stock buyback program, Timberland repurchased approximately 1 million shares in the first quarter of 2009 at a total cost of $10.0 million.
• Timberland ended the quarter with $159.2 million in cash and no debt. Inventory at quarter end was $162.8 million, down 9.7% versus 2008 first-quarter levels, reflecting the Company’s focus on maintaining clean inventory levels in the face of challenging market conditions. Accounts receivable decreased 14.6% to $172.3 million, compared to the prior year.

The Company anticipates that 2009 will continue to be challenging due to the uncertainty around consumer spending patterns and the financial health of the retail industry. Given the volatile nature of current economic conditions, the Company believes there is not sufficient visibility to set expectations for the performance of the business.

Jeffrey B. Swartz, Timberland’s President and Chief Executive Officer, stated, "As 2009 begins to unfold, we are seeing consumers becoming more selective in their purchases, and turning increasingly to trusted authentic brands like Timberland. The Timberland brand heritage, known for quality, durability and values—coupled with our long held financial conservatism—provides a strong foundation that gives us stability in this difficult economic environment. This foundation allows us to continue to stay committed to our brand-invigorating strategies and positions us well for growth when the economy recovers.”

Note that comments made by the Company and Mr. Swartz are based on current expectations. These comments may be forward-looking, and actual results may differ materially.

As previously announced, Timberland will be hosting a conference call to discuss first-quarter results today at 8:25 AM Eastern Time. Interested parties may listen to this call through the investor relations section of the Company’s website, www.timberland.com, or by calling 706.643.2916 and providing access code number 80624230. Replays of this conference call will be available through the investor relations section of the Company’s website.

Timberland (NYSE: TBL) is a global leader in the design, engineering and marketing of premium-quality footwear, apparel and accessories for consumers who value the outdoors and their time in it. Timberland markets products under the Timberland^®, Timberland PRO^®, SmartWool^®, Timberland Boot Company™, howies^®, Mountain Athletics^® and IPATH^® brands, all of which offer quality workmanship and detailing and are built to withstand the elements of nature. The Company’s products can be found in leading department and specialty stores as well as Timberland^® retail stores throughout North America, Europe, Asia, Latin America, Africa and the Middle East. More information about Timberland is available in the Company’s reports filed with the Securities and Exchange Commission (SEC).

Certain statements in this press release may be forward looking in nature or “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include statements regarding Timberland’s future financial results, are subject to risks, uncertainties and assumptions and are not guarantees of future financial performance or expected benefits. These risks, uncertainties and assumptions could cause Timberland’s results to be materially different from any future results or expected benefits expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions include, but are not limited to: (i) Timberland’s ability to successfully market and sell its products in a highly competitive industry and in view of changing consumer trends, consumer acceptance of products and other factors affecting retail market conditions; (ii) Timberland’s ability to execute key strategic initiatives; (iii) Timberland’s ability to procure a majority of its products from independent manufacturers; (iv) changes in foreign exchange rates; (v) Timberland’s ability to obtain adequate materials at competitive prices; and (vi) other factors, including those detailed from time to time in Timberland’s most recent Annual Report on Form 10-K and other filings we make with the SEC. Timberland undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

This press release also includes discussion of constant dollar revenue change (which excludes the impact of changes in foreign currency exchange rates), which is a non-GAAP measure. As required by SEC rules, the Company has provided reconciliations of this measure on attached tables that follow its financial statements. Additional required information regarding this non-GAAP measure is located in the Form 8-K furnished to the SEC on April 30, 2009.

Constant dollar revenue changes, which exclude the impact of changes in foreign exchange rates, are not Generally Accepted Accounting Principle (“GAAP”) performance measures. We provide constant dollar revenue changes for total Company, North America, Europe, and Asia revenues because we use the measures to understand the underlying growth rate of revenue excluding the impact of items that are not under management’s direct control, such as changes in foreign exchange rates.

The Timberland Company
Karen Blomquist, 603-773-1655
Senior Manager, Investor Relations