##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 X
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended April 2, 2010
 OR
 __
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-9548
 The Timberland Company
 
 Delaware
    
    02-0312554(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)200 Domain Drive, Stratham, New Hampshire
    
    
    03885(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code:
    
    (603) 772-9500
  x o
  o o
 
 Large Accelerated Filer x
    
    Accelerated Filer oNon-Accelerated Filer o (Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
  o þ




---



##### 



THE TIMBERLAND COMPANY
 FORM 10-Q
 TABLE OF CONTENTS
 Page(s)Part I - Financial InformationItem 1. Financial StatementsUnaudited Condensed Consolidated Balance Sheets -

April 2, 2010, December 31, 2009 and April 3, 2009
    
    
    4Unaudited Condensed Consolidated Statements of Operations -

For the Quarters Ended April 2, 2010 and April 3, 2009
    
    
    5Unaudited Condensed Consolidated Statements of Cash Flows -

For the Quarters Ended April 2, 2010 and April 3, 2009
    
    
    6Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    7-19Item 2. Managements Discussion and Analysis of Financial 
Condition and Results of Operations
    
    
    19-27Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    28Part II - Other InformationItem 1A. Risk Factors
    
    
    28Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 6. Exhibits
    
    
    30Signatures
    
    
    31Exhibit Index
    
    
    32Exhibits
    
    
    33-41EX-10.1EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



Cautionary Note Regarding Forward-Looking Statements
  Forward-looking Information
  
 
 
 
 
 




---



##### Table of Contents




 
 
 
 
 




---



##### Table of Contents



Part I - FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 THE TIMBERLAND COMPANY
 
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
  April 2,
    
    
    December 31,
    
    
    April 3,2010
    
    
    2009
    
    
    2009AssetsCurrent assetsCash and equivalents
    
    
    $238,540
    
    
    
    $289,839
    
    
    
    $159,195Accounts receivable, net of allowance for doubtful accounts of $12,299
at April 2, 2010, $12,175 at December 31, 2009 and $13,239 at April
3, 2009
    
    
    157,615
    
    
    
    149,178
    
    
    
    172,280Inventory, net
    
    
    136,941
    
    
    
    158,541
    
    
    
    162,783Prepaid expense
    
    
    29,374
    
    
    
    32,863
    
    
    
    37,576Prepaid income taxes
    
    
    14,389
    
    
    
    11,793
    
    
    
    16,752Deferred income taxes
    
    
    24,448
    
    
    
    26,769
    
    
    
    21,974Derivative assets
    
    
    5,444
    
    
    
    1,354
    
    
    
    4,886Total current assets
    
    
    606,751
    
    
    
    670,337
    
    
    
    575,446Property, plant and equipment, net
    
    
    66,245
    
    
    
    69,820
    
    
    
    74,576Deferred income taxes
    
    
    15,379
    
    
    
    14,903
    
    
    
    17,204Goodwill
    
    
    44,353
    
    
    
    44,353
    
    
    
    43,870Intangible assets, net
    
    
    44,648
    
    
    
    45,532
    
    
    
    46,512Other assets, net
    
    
    13,652
    
    
    
    14,962
    
    
    
    10,423Total assets
    
    
    $791,028
    
    
    
    $859,907
    
    
    
    $768,031Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    
    $44,265
    
    
    
    $79,911
    
    
    
    $56,159Accrued expensePayroll and related
    
    
    21,509
    
    
    
    43,512
    
    
    
    18,966Other
    
    
    66,913
    
    
    
    81,988
    
    
    
    61,309Income taxes payable
    
    
    20,279
    
    
    
    21,959
    
    
    
    17,841Deferred income taxes
    
    
    261
    
    
    
    48
    
    
    
    184Derivative liabilities
    
    
    60
    
    
    
    389
    
    
    
    1,212Total current liabilities
    
    
    153,287
    
    
    
    227,807
    
    
    
    155,671Other long-term liabilities
    
    
    37,796
    
    
    
    36,483
    
    
    
    33,398Commitments and contingenciesStockholders equityPreferred Stock, $.01 par value; 2,000,000 shares authorized; none issued
    
    
    -
    
    
    
    -
    
    
    
    -Class A Common Stock, $.01 par value (1 vote per share); 120,000,000
shares authorized; 74,872,066 shares issued at April 2, 2010, 74,570,388
shares issued at December 31, 2009 and 73,997,343 shares issued at April 3,
2009
    
    
    749
    
    
    
    746
    
    
    
    740Class B Common Stock, $.01 par value (10 votes per share); convertible
into Class A shares on a one-for-one basis; 20,000,000 shares authorized;
10,889,160 shares issued and outstanding at April 2, 2010, 11,089,160 shares
issued and outstanding at December 31, 2009 and 11,529,160 shares issued and
outstanding at April 3, 2009
    
    
    109
    
    
    
    111
    
    
    
    115Additional paid-in capital
    
    
    268,982
    
    
    
    266,457
    
    
    
    261,901Retained earnings
    
    
    1,000,430
    
    
    
    974,683
    
    
    
    933,916Accumulated other comprehensive income
    
    
    11,572
    
    
    
    15,048
    
    
    
    7,635Treasury Stock at cost; 32,177,071 Class A shares at April 2, 2010,
31,131,253 Class A shares at December 31, 2009 and 28,685,386 Class A shares
at
April 3, 2009
    
    
    (681,897
    )
    
    
    (661,428
    )
    
    
    (625,345
    )Total stockholders equity
    
    
    599,945
    
    
    
    595,617
    
    
    
    578,962Total liabilities and stockholders equity
    
    
    $791,028
    
    
    
    $859,907
    
    
    
    $768,031
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.




---



##### Table of Contents



THE TIMBERLAND COMPANY
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  For the Quarter EndedApril 2, 2010
    
    
    April 3, 2009Revenue
    
    
    $317,042
    
    
    
    $296,648Cost of goods sold
    
    
    159,059
    
    
    
    159,959Gross profit
    
    
    157,983
    
    
    
    136,689Operating expenseSelling
    
    
    92,696
    
    
    
    92,268General and administrative
    
    
    25,899
    
    
    
    25,417Impairment of intangible asset
    
    
    -
    
    
    
    925Restructuring
    
    
    -
    
    
    
    (104
    )Total operating expense
    
    
    118,595
    
    
    
    118,506Operating income
    
    
    39,388
    
    
    
    18,183Other income/(expense), netInterest income
    
    
    74
    
    
    
    440Interest expense
    
    
    (140
    )
    
    
    (121
    )Other, net
    
    
    (133
    )
    
    
    (663
    )Total other income/(expense), net
    
    
    (199
    )
    
    
    (344
    )Income before provision for income taxes
    
    
    39,189
    
    
    
    17,839Provision for income taxes
    
    
    13,442
    
    
    
    1,962Net income
    
    
    $25,747
    
    
    
    $15,877Earnings per shareBasic
    
    
    $      .48
    
    
    
    $      .28Diluted
    
    
    $      .47
    
    
    
    $      .27Weighted-average shares outstandingBasic
    
    
    54,166
    
    
    
    57,108Diluted
    
    
    54,643
    
    
    
    57,802
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.




---



##### Table of Contents



THE TIMBERLAND COMPANY
 
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  For the Quarter EndedApril 2, 2010
    
    
    April 3, 2009Cash flows from operating activities:Net income
    
    
    $25,747
    
    
    
    $15,877Adjustments to reconcile net income to net cash used by operating activities:Deferred income taxes
    
    
    1,352
    
    
    
    2,215Share-based compensation
    
    
    1,558
    
    
    
    811Depreciation and other amortization
    
    
    6,545
    
    
    
    7,141Provision for losses on accounts receivable
    
    
    1,468
    
    
    
    1,912Impairment of intangible asset
    
    
    -
    
    
    
    925Tax benefit/(expense) from share-based compensation, net of excess benefit
    
    
    (55
    )
    
    
    (295
    )Unrealized (gain)/loss on derivatives
    
    
    (163
    )
    
    
    34Other non-cash charges/(credits), net
    
    
    (258
    )
    
    
    828Increase/(decrease) in cash from changes in operating assets and
liabilities, net of the effect of business combinations:Accounts receivable
    
    
    (13,003
    )
    
    
    (7,925
    )Inventory
    
    
    20,618
    
    
    
    16,656Prepaid expense and other assets
    
    
    3,723
    
    
    
    (1,652
    )Accounts payable
    
    
    (37,065
    )
    
    
    (40,269
    )Accrued expense
    
    
    (34,145
    )
    
    
    (31,261
    )Prepaid income taxes
    
    
    (2,596
    )
    
    
    (65
    )Income taxes payable
    
    
    (325
    )
    
    
    (9,040
    )Other liabilities
    
    
    284
    
    
    
    (201
    )Net cash used by operating activities
    
    
    (26,315
    )
    
    
    (44,309
    )Cash flows from investing activities:Acquisition of business, net of cash acquired
    
    
    -
    
    
    
    (1,516
    )Additions to property, plant and equipment
    
    
    (2,818
    )
    
    
    (2,838
    )Other
    
    
    23
    
    
    
    (61
    )Net cash used by investing activities
    
    
    (2,795
    )
    
    
    (4,415
    )Cash flows from financing activities:Common stock repurchases
    
    
    (19,512
    )
    
    
    (9,127
    )Issuance of common stock
    
    
    719
    
    
    
    670Excess tax benefit from share-based compensation
    
    
    303
    
    
    
    99Other
    
    
    (451
    )
    
    
    (170
    )Net cash used by financing activities
    
    
    (18,941
    )
    
    
    (8,528
    )Effect of exchange rate changes on cash and equivalents
    
    
    (3,248
    )
    
    
    (742
    )Net decrease in cash and equivalents
    
    
    (51,299
    )
    
    
    (57,994
    )Cash and equivalents at beginning of period
    
    
    289,839
    
    
    
    217,189Cash and equivalents at end of period
    
    
    $238,540
    
    
    
    $159,195Supplemental disclosures of cash flow information:Interest paid
    
    
    $173
    
    
    
    $156Income taxes paid
    
    
    $14,484
    
    
    
    $8,311
 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.




---



##### Table of Contents



THE TIMBERLAND COMPANY
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  Note 1. Summary of Significant Accounting Policies
 Basis of Presentation
    New Accounting Pronouncements
  Note 2. Fair Value Measurements




---



##### Table of Contents



DescriptionLevel 1
    
    Level 2
    
    Level 3
    
    Impact of Netting
    
    April 2, 2010Assets:Cash equivalents:Time deposits
    
    $
    -
    
    
    $
    65,006
    
    
    $
    -
    
    
    $
    -
    
    
    $
    65,006Mutual funds
    
    $
    -
    
    
    $
    55,776
    
    
    $
    -
    
    
    $
    -
    
    
    $
    55,776Foreign exchange forward contracts:Derivative assets
    
    $
    -
    
    
    $
    5,464
    
    
    $
    -
    
    
    $
    (20)
    
    
    $
    5,444Cash surrender value
of life insurance
    
    $
    -
    
    
    $
    7,478
    
    
    $
    -
    
    
    $
    -
    
    
    $
    7,478Liabilities:Foreign exchange forward contracts:Derivative liabilities
    
    $
    -
    
    
    $
    80
    
    
    $
    -
    
    
    $
    (20)
    
    
    $
    60DescriptionLevel 1
    
    Level 2
    
    Level 3
    
    Impact of Netting
    
    December 31, 2009Assets:Cash equivalentsTime deposits
    
    $
    -
    
    
    $
    70,041
    
    
    $
    -
    
    
    $
    -
    
    
    $
    70,041Mutual funds
    
    $
    -
    
    
    $
    95,871
    
    
    $
    -
    
    
    $
    -
    
    
    $
    95,871Foreign exchange forward contracts:Derivative assets
    
    $
    -
    
    
    $
    1,768
    
    
    $
    -
    
    
    $
    (230)
    
    
    $
    1,538Cash surrender value
of life insurance
    
    $
    -
    
    
    $
    8,036
    
    
    $
    -
    
    
    $
    -
    
    
    $
    8,036Liabilities:Foreign exchange forward contracts:Derivative liabilities
    
    $
    -
    
    
    $
    621
    
    
    $
    -
    
    
    $
    (230)
    
    
    $
    391




---



##### Table of Contents



Note 3. Derivatives
   Cash Flow Hedges




---



##### Table of Contents



Notional AmountCurrency

    
    April 2, 2010
    
    
    December 31, 2009
    
    
    April 3, 2009Pound Sterling
    
    
    $22,093
    
    
    
    $20,657
    
    
    
    $19,198Euro
    
    
    64,743
    
    
    
    64,398
    
    
    
    63,824Japanese Yen
    
    
    17,075
    
    
    
    16,083
    
    
    
    21,510Total
    
    
    $103,911
    
    
    
    $101,138
    
    
    
    $104,532
 Other Derivative Contracts
   Notional AmountCurrency
    
    April 2, 2010
    
    
    December 31, 2009
    
    
    April 3, 2009Pound Sterling
    
    
    $(18,873
    )
    
    
    $(12,922
    )
    
    
    $(15,985
    )Euro
    
    
    11,310
    
    
    
    14,122
    
    
    
    13,053Japanese Yen
    
    
    11,721
    
    
    
    8,013
    
    
    
    17,071Canadian Dollar
    
    
    6,439
    
    
    
    8,204
    
    
    
    6,661Norwegian Kroner
    
    
    4,779
    
    
    
    2,335
    
    
    
    1,971Swedish Krona
    
    
    2,779
    
    
    
    1,969
    
    
    
    2,120Total
    
    
    $18,155
    
    
    
    $21,721
    
    
    
    $24,891




---



##### Table of Contents



Fair Value of Derivative Instruments
  Asset
Derivatives
    
    Liability
DerivativesFair
Value
    

Fair ValueApril 2,
    
    December 31,
    
    April 3,
    
    April 2,
    
    December 31,
    
    April 3,Balance
Sheet
Location
    
    2010
    
    2009
    
    2009
    
    2010
    
    2009
    
    2009Derivatives designated as
hedge instruments:Derivative assets
    
    $
    5,246
    
    
    $
    1,313
    
    
    $
    4,803
    
    
    $
    20
    
    
    $
    224
    
    
    $
    75Derivative liabilities
    
    
    -
    
    
    
    6
    
    
    
    -
    
    
    
    7
    
    
    
    335
    
    
    
    1,068Other assets, net
    
    
    -
    
    
    
    184
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Other long-term liabilities
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    2
    
    
    
    -$
    5,246
    
    
    $
    1,503
    
    
    $
    4,803
    
    
    $
    27
    
    
    $
    561
    
    
    $
    1,143Derivatives not designated
as hedge instruments:Derivative assets
    
    
    $218
    
    
    
    $265
    
    
    $
    170
    
    
    $
    -
    
    
    $
    -
    
    
    $
    12Derivative liabilities
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    53
    
    
    
    60
    
    
    
    144$218
    
    
    
    $265
    
    
    $
    170
    
    
    $
    53
    
    
    $
    60
    
    
    $
    156Total derivatives
    
    $
    5,464
    
    
    $
    1,768
    
    
    $
    4,973
    
    
    $
    80
    
    
    $
    621
    
    
    $
    1,299
 The Effect of Derivative Instruments on the Statements of Operations for the Quarters Ended
April 2, 2010 and April 3, 2009
 Amount of 
Gain/(Loss)Amount of Gain/(Loss)
    
    Location of Gain/(Loss)
    
    Reclassified fromRecognized in OCI on
    
    Reclassified from
    
    Accumulated OCI intoDerivatives in
    

Derivatives, Net of Taxes
    
    Accumulated OCI into
    
    IncomeCash Flow
    
    (Effective Portion)
    
    Income
    
    (Effective Portion)Hedging Relationships
    
    2010
    
    2009
    
    (Effective Portion)
    
    2010
    
    2009Foreign exchange forward contracts
    
    $
    4,958
    
    
    $
    3,477
    
    
    Cost of goods sold
    
    $
    1,333
    
    
    $
    7,316




---



##### Table of Contents



Amount of Gain/(Loss)Recognized inDerivatives not Designated
    
    Location of Gain/(Loss)
Recognized
    
    Income on Derivativesas Hedging Instruments
    
    In Income on Derivatives
    
    2010
    
    2009Foreign exchange forward contracts
    
    Other, net
    
    $
    (2,167
    )
    
    $
    2,424
 Note 4. Share-Based Compensation
  For the Quarter EndedApril 2, 2010
    
    April 3, 2009Cost of goods sold
    
    
    $82
    
    
    
    $89Selling expense
    
    
    499
    
    
    
    468General and administrative expense
    
    
    977
    
    
    
    254Total share-based compensation
    
    
    $1,558
    
    
    
    $811
 Long Term Incentive Programs
 2010 Executive Long Term Incentive Program




---



##### Table of Contents



2009 Executive Long Term Incentive Program
    2010 LTIP
    
    2009 LTIPFor the Quarter
    
    For the QuarterEnded April 2,
    
    Ended April 3,2010
    
    2009Expected volatility
    
    
    47.6
    %
    
    
    41.8
    %Risk-free interest rate
    
    
    2.7
    %
    
    
    1.9
    %Expected life (in years)
    
    
    6.2
    
    
    
    6.5Expected dividends
    
    
    -
    
    
    
    -




---



##### Table of Contents



Weighted-Weighted-
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicShares
    
    Price
    
    Term
    
    ValueOutstanding at January 1, 2010
    
    
    -
    
    
    $
    -Settled
    
    
    599,619
    
    
    
    9.52Exercised
    
    
    -
    
    
    
    -Expired or forfeited
    
    
    (9,548
    )
    
    
    9.34Outstanding at April 2, 2010
    
    
    590,071
    
    
    $
    9.53
    
    
    
    8.9
    
    
    $
    7,071Vested or expected to vest at
April 2, 2010
    
    
    526,983
    
    
    $
    9.51
    
    
    
    8.9
    
    
    $
    6,322Exercisable at April 2, 2010
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
  Stock Options
  For the Quarter EndedApril 2, 2010
    
    April 3, 2009Expected volatility
    
    
    48.4
    %
    
    
    42.4
    %Risk-free interest rate
    
    
    2.4
    %
    
    
    2.1
    %Expected life (in years)
    
    
    5.0
    
    
    
    7.5Expected dividends
    
    
    -
    
    
    
    -




---



##### Table of Contents



Weighted-Weighted-
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    IntrinsicShares
    
    Price
    
    Term
    
    ValueOutstanding at January 1, 2010
    
    
    3,908,270
    
    
    $
    25.05Granted
    
    
    6,000
    
    
    
    19.45Exercised
    
    
    (58,347
    )
    
    
    12.33Expired or forfeited
    
    
    (50,336
    )
    
    
    23.46Outstanding at April 2, 2010
    
    
    3,805,587
    
    
    $
    25.26
    
    
    
    5.15
    
    
    $
    7,701Vested or expected to vest at

April 2, 2010
    
    
    3,771,399
    
    
    $
    25.37
    
    
    
    5.11
    
    
    $
    7,434Exercisable at April 2, 2010
    
    
    3,347,103
    
    
    $
    26.89
    
    
    
    4.65
    
    
    $
    3,927
  Nonvested Shares and Restricted Stock Units
  Weighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    AverageStock
    
    Grant Date
    
    Stock
    
    Grant DateAwards
    
    Fair Value
    
    Units
    
    Fair ValueNonvested at January 1, 2010
    
    
    86,102
    
    
    $
    15.59
    
    
    
    297,758
    
    
    $
    13.74Awarded
    
    
    -
    
    
    
    -
    
    
    
    2,000
    
    
    
    19.45Vested
    
    
    (30,061
    )
    
    
    10.25
    
    
    
    (43,331
    )
    
    
    14.70Forfeited
    
    
    -
    
    
    
    -
    
    
    
    (7,327
    )
    
    
    14.48Nonvested at April 2, 2010
    
    
    56,041
    
    
    $
    18.46
    
    
    
    249,100
    
    
    $
    13.59Expected to vest at April 2, 2010
    
    
    56,041
    
    
    $
    18.46
    
    
    
    233,311
    
    
    $
    13.57
  Note 5. Earnings Per Share (EPS)




---



##### Table of Contents



For the Quarter EndedApril 2, 2010
    
    April 3, 2009Weighted-
    
    Per-
    
    
    
    
    
    Weighted-
    
    Per-Net
    
    Average
    
    Share
    
    Net
    
    Average
    
    ShareIncome
    
    Shares
    
    Amount
    
    Income
    
    Shares
    
    AmountBasic EPS
    
    $
    25,747
    
    
    
    54,166
    
    
    
    $.48
    
    
    $
    15,877
    
    
    
    57,108
    
    
    
    $.28Effect of dilutive
securities:Stock options and
employee stock
purchase plan
shares
    
    
    -
    
    
    
    289
    
    
    
    (.01
    )
    
    
    -
    
    
    
    16
    
    
    
    -Nonvested shares
    
    
    -
    
    
    
    188
    
    
    
    -
    
    
    
    -
    
    
    
    678
    
    
    
    (.01
    )Diluted EPS
    
    $
    25,747
    
    
    
    54,643
    
    
    
    $.47
    
    
    $
    15,877
    
    
    
    57,802
    
    
    
    $.27
  For the Quarter EndedApril 2, 2010
    
    April 3, 2009Anti-dilutive securities
    
    
    2,918
    
    
    
    4,031
 Note 6. Comprehensive Income
  For the Quarter EndedApril 2, 2010
    
    
    April 3, 2009Net income
    
    
    $25,747
    
    
    
    $15,877Change in cumulative translation adjustment
    
    
    (7,478
    )
    
    
    (3,770
    )Change in fair value of cash flow hedges, net of taxes
    
    
    4,054
    
    
    
    (1,138
    )Change in other adjustments, net of taxes
    
    
    (52
    )
    
    
    -Comprehensive income
    
    
    $22,271
    
    
    
    $10,969
  April 2, 2010
    
    
    December 31, 2009
    
    
    April 3, 2009Cumulative translation adjustment
    
    
    $6,175
    
    
    
    $13,653
    
    
    
    $4,006Fair value of cash flow hedges, net
of taxes of $261
at April 2, 2010, $47 at December
31, 2009 and $183
at April 3, 2009
    
    
    4,958
    
    
    
    904
    
    
    
    3,491Other
adjustments, net of taxes of $99 at April 2, 2010,
$147 at December 31, 2009
and $7 at April 3, 2009
    
    
    439
    
    
    
    491
    
    
    
    138Total
    
    
    $11,572
    
    
    
    $15,048
    
    
    
    $7,635
 Note 7. Business Segments and Geographic Information




---



##### Table of Contents



For the Quarters Ended April 2, 2010 and April 3, 2009
 UnallocatedNorth America
    
    
    Europe
    
    
    Asia
    
    
    Corporate
    
    
    Consolidated2010Revenue
    
    
    $121,858
    
    
    
    $151,630
    
    
    
    $43,554
    
    
    $
    -
    
    
    
    $317,042Operating income/(loss)
    
    
    21,642
    
    
    
    37,268
    
    
    
    6,847
    
    
    
    (26,369
    )
    
    
    39,388Income/(loss) before income taxes
    
    
    21,642
    
    
    
    37,268
    
    
    
    6,847
    
    
    
    (26,568
    )
    
    
    39,189Total assets
    
    
    214,537
    
    
    
    328,995
    
    
    
    61,491
    
    
    
    186,005
    
    
    
    791,028Goodwill
    
    
    36,876
    
    
    
    7,477
    
    
    
    -
    
    
    
    -
    
    
    
    44,3532009Revenue
    
    
    $119,858
    
    
    
    $139,529
    
    
    
    $37,261
    
    
    $
    -
    
    
    
    $296,648Operating income/(loss)
    
    
    9,561
    
    
    
    29,890
    
    
    
    1,890
    
    
    
    (23,158
    )
    
    
    18,183Income/(loss) before income taxes
    
    
    9,561
    
    
    
    29,890
    
    
    
    1,890
    
    
    
    (23,502
    )
    
    
    17,839Total assets
    
    
    239,796
    
    
    
    273,040
    
    
    
    72,989
    
    
    
    182,206
    
    
    
    768,031Goodwill
    
    
    36,876
    
    
    
    6,994
    
    
    
    -
    
    
    
    -
    
    
    
    43,870




---



##### Table of Contents



For the Quarter EndedApril 2, 2010
    
    April 3, 2009Footwear
    
    $
    225,561
    
    
    $
    211,641Apparel and accessories
    
    
    85,689
    
    
    
    78,664Royalty and other
    
    
    5,792
    
    
    
    6,343Total
    
    $
    317,042
    
    
    $
    296,648
 Note 8. Inventory, net
  April 2, 2010
    
    December 31, 2009
    
    April 3, 2009Materials
    
    $
    8,442
    
    
    $
    7,944
    
    
    $
    7,978Work-in-process
    
    
    1,165
    
    
    
    740
    
    
    
    1,189Finished goods
    
    
    127,334
    
    
    
    149,857
    
    
    
    153,616Total
    
    $
    136,941
    
    
    $
    158,541
    
    
    $
    162,783
 Note 9. Acquisition
 ® ®
 Note 10. Income Taxes




---



##### Table of Contents



Note 11. Stockholders Equity
     Note 12. Litigation
  13. Subsequent Event
  
 Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Critical Accounting Policies




---



##### Table of Contents



Overview
 â
 ®
  
    
    First quarter revenue increased 6.9%, or 3.2% on a constant dollar basis.
    
    Gross margin increased 370 basis points to 49.8%.
    
    Operating income increased $21.2 million to $39.4 million.
    
    Net income increased from $15.9 million to $25.7 million.
    
    Diluted earnings per share increased to $0.47 from $0.27.
    
    Cash at the end of the quarter was $238.5 million with no debt outstanding.
 Results of Operations for the Quarter Ended April 2, 2010 as Compared to the Quarter Ended
April 3, 2009




---



##### Table of Contents



Revenue
 Products  ®
 Channels
   Gross Profit
   Operating Expense




---



##### Table of Contents



Operating Income/(Loss)
  Other Income/(Expense) and Taxes




---



##### Table of Contents



Segments Review
    For the Quarter EndedApril 2,
    
    April 3,2010
    
    2009
    
    % ChangeNorth America
    
    $
    121.9
    
    
    $
    119.8
    
    
    
    1.7
    %Europe
    
    
    151.6
    
    
    
    139.5
    
    
    
    8.7Asia
    
    
    43.5
    
    
    
    37.3
    
    
    
    16.9$
    317.0
    
    
    $
    296.6
    
    
    
    6.9
   For the Quarter EndedApril 2,

    
    
    
    
    
    April 3,2010
    
    
    
    
    
    2009North America
    
    $
    21.6
    
    
    
    17.8
    %
    
    $
    9.6
    
    
    
    8.0
    %Europe
    
    
    37.3
    
    
    
    24.6
    
    
    
    29.9
    
    
    
    21.4Asia
    
    
    6.9
    
    
    
    15.7
    
    
    
    1.9
    
    
    
    5.1Unallocated Corporate
    
    
    (26.4
    )
    
    
    (8.3
    )
    
    
    (23.2
    )
    
    
    (7.8
    )$
    39.4
    
    
    
    12.4
    
    
    $
    18.2
    
    
    
    6.1
 North America
 ®




---



##### Table of Contents



Europe
   Asia
   Corporate Unallocated
  Reconciliation of Total Company, Europe and Asia Revenue Increases/(Decreases) To Constant
Dollar Revenue Increases/(Decreases)
  For the QuarterEnded April 2, 2010$ Change(millions)
    
    % ChangeRevenue increase (GAAP)
    
    $
    20.4
    
    
    
    6.9
    %Increase due to foreign exchange rate changes
    
    
    10.8
    
    
    
    3.7
    %Revenue increase in constant dollars
    
    
    $9.6
    
    
    
    3.2
    %




---



##### Table of Contents



For the QuarterEnded April 2, 2010$ Change(millions)
    
    % ChangeRevenue increase (GAAP)
    
    $
    12.1
    
    
    
    8.7
    %Increase due to foreign exchange rate changes
    
    
    8.4
    
    
    
    6.1
    %Revenue increase in constant dollars
    
    $
    3.7
    
    
    
    2.6
    %
  For the QuarterEnded April 2, 2010$ Change(millions)
    
    % ChangeRevenue increase (GAAP)
    
    $
    6.3
    
    
    
    16.9
    %Increase due to foreign exchange rate changes
    
    
    1.6
    
    
    
    4.3
    %Revenue increase in constant dollars
    
    $
    4.7
    
    
    
    12.6
    %
  Accounts Receivable and Inventory
   Liquidity and Capital Resources




---



##### Table of Contents








---



##### Table of Contents



Off-Balance Sheet Arrangements  Letters of Credit
   New Accounting Pronouncements
  
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




---



##### Table of Contents



Item 4. CONTROLS AND PROCEDURES
    
 Part
II - OTHER INFORMATION
 
 Item 1A. RISK FACTORS




---



##### Table of Contents



Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 ISSUER PURCHASES OF EQUITY SECURITIES(1)
 For
the Three Fiscal Months Ended April 2,
2010Total Number
    
    Maximum Numberof Shares
    
    of SharesPurchased as Part
    
    That May YetTotal Number
    
    
    
    
    
    of Publicly
    
    Be Purchasedof Shares
    
    Average Price
    
    Announced
    
    Under the PlansPeriod*
    
    Purchased **
    
    Paid per Share
    
    Plans or Programs
    
    or ProgramsJanuary 1  January 29
    
    
    -
    
    
    $
    -
    
    
    
    -
    
    
    
    7,324,259January 30  February 26
    
    
    409,865
    
    
    
    17.99
    
    
    
    409,865
    
    
    
    6,914,394February 27  April 2
    
    
    612,528
    
    
    
    20.64
    
    
    
    612,528
    
    
    
    6,301,866Q1 Total
    
    
    1,022,393
    
    
    $
    19.58
    
    
    
    1,022,393
 Footnote (1)
 ApprovedAnnouncement
    
    Program
    
    ExpirationDate
    
    Size (Shares)
    
    DateProgram 1
    
    
    03/10/2008
    
    
    
    6,000,000
    
    
    NoneProgram 2
    
    
    12/09/2009
    
    
    
    6,000,000
    
    
    None
  * Fiscal month
** Based on trade date - not settlement date




---



##### Table of Contents



Item 6. EXHIBITS




---



##### Table of Contents



SIGNATURES
  THE TIMBERLAND COMPANY
(Registrant)By:
    
    /s/ JEFFREY B. SWARTZDate: May 6, 2010
    
    
    
    Jeffrey B. SwartzChief Executive OfficerBy:
    
    /s/ CARRIE W. TEFFNERDate: May 6, 2010
    
    
    
    Carrie W. TeffnerChief Financial Officer




---



##### Table of Contents



EXHIBIT INDEX
 Exhibit
    
    DescriptionExhibit 10.1
    
    The Timberland Company 2010 Executive Long Term Incentive
Program, filed herewith.Exhibit 31.1
    
    Principal Executive Officer Certification Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, filed herewith.Exhibit 31.2
    
    Principal Financial Officer Certification Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002, filed herewith.Exhibit 32.1
    
    Chief Executive Officer Certification Pursuant to Section
1350, Chapter 63 of Title 18, United States Code, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
furnished herewith.Exhibit 32.2
    
    Chief Financial Officer Certification Pursuant to Section
1350, Chapter 63 of Title 18, United States Code, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
furnished herewith.