Under Armour Inc., a private Baltimore company that mushroomed from a basement start-up a few years ago into a force that transformed the sportswear industry, informed federal regulators yesterday of its intent to begin selling public stock.
The company filed papers with the Securities and Exchange Commission requesting to sell as much as $100 million in common stock in an initial public offering.
Kevin A. Plank, Under Armour's founder and chief executive officer, would continue to control the company under the plan.
Plank, a 1997 University of Maryland marketing graduate, had the idea of a T-shirt that wouldn't retain moisture while he was playing college football, and his quest to combat perspiration turned into an inspiration.
Under Armour's success prompted major sportswear companies such as Nike Inc. and Reebok Ltd. to develop similar lines. The company's gear, identified by a U-shaped logo, showed up in movies and video games. Its slogan, "Protect This House," won advertising awards and was chanted by fans at Ravens football games and other sporing events.
Baltimore civic and business leaders, eager to promote so-called new economy companies to replace some of the disappearing heavy industries that defined the region for a century, delighted in Under Armour's success because of its attraction for young consumers along with older ones.
Under Armour has had considerable success as a private company, with its annual sales soaring to $242 million this year, up from $5 million in 2000. But analysts said the company had reached its limit with its current financing. Going public would generate cash to pay off debt, buy back stock and finance a much greater expansion.
"They have pretty much pushed the net capacity as far as it would go, and that's going to limit the amount of growth they can have," said Irv DeGraw, an assistant professor of finance at Washington College in Chestertown. "They've been successful at what they can do. Now they'll be able to really push the envelope, and to do that they're going to need a lot of capital."
In an interview with USA Today last year, Plank said he admired the clothier Ralph Lauren because it was able to expand beyond its signature line even into paint without cheapening its cachet. He hoped, he said, to build the same mystical brand association for Under Armour - a product that seemed to imbue deeper meaning for consumers beyond the actual merchandise.
Under Armour's line includes shorts, outerwear and gloves. Sales to men dominate, but the company created a women's line last year. It also plans to start a line of shoes soon.
In 2003, it entered a five-year, $2.6 million deal that made the University of Maryland the first college football team to wear uniforms designed by the company.
The company's popularity extends beyond the sports world. Under a deal with Warner Bros., Under Armour supplied gear for the football movies Any Given Sunday and The Replacements. Its apparel is also featured in two new video games, Tom Clancy's Ghost Recon 2: Summit Strike and Tiger Woods PGA Tour 2006. One of its top customers is the U.S. military.
Sports-related companies are often identified with a star athlete. Under Armour's most visible figure is a former University of Maryland player, Eric Ogbogu, who isn't as well known nationally for his play with the Dallas Cowboys as he is for shouting "We must protect this house!" in the company's TV spots.
U.S. national soccer star and Olympic gold medalist Heather Mitts is featured in ads to promote Under Armour's women's line.
Company officials wouldn't comment yesterday on the filing, saying they were restricted by the "quiet period" under SEC rules for companies intending to sell new shares.
In federal documents, the company disclosed that it plans to use $12 million of the $100 million it hopes to raise to buy back Class A stock from Rosewood Capital, a venture investment firm in San Francisco. An additional $25 million would go to pay off debt. The rest of the money would be used in the business, including possible acquisitions.
Neither the price per share nor the number of the shares to be sold were released yesterday.
Plank began the company in the basement of his grandmother's home in Washington in 1996, motivated by his frustrations with sweaty T-shirts as a special teams captain of the University of Maryland's football team.
After visiting New York's garment district and experimenting with fabrics, he devised a T-shirt made of a material that wicked sweat from the body. Makers of outdoor gear had used a form of the material before Plank fashioned it for sports use.
Plank persuaded Georgia Tech to buy 500 of his shirts. Other college teams, then entire pro sports leagues followed.
"They really started off very much with a word-of-mouth kind of approach," said John Horan, publisher of Sporting Goods Intelligence. "It's rare that a company gets the kind of buzz going that they did. You have to have the right product and something that is different."