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Crocs Inc. Reports Fourth Quarter and Year End 2015 Financial Results

NIWOT, Colo., Feb. 29, 2016 (GLOBE NEWSWIRE) -- Crocs Inc. (NASDAQ:CROX) today reported financial results for the fourth quarter and year ended December 31, 2015. 

Fourth Quarter Highlights:

  • Revenue was $208.7 million, in-line with guidance. On a constant currency basis, revenue increased 7.0% compared to the prior year period.
  • Net loss attributable to common stockholders on a GAAP basis was $73.9 million or a loss of $1.01 per share.
  • Excluding certain charges not related to our core business, the company reported a non-GAAP adjusted net loss attributable to common shareholders of $52.9 million.

Full Year Highlights:

  • Revenue was $1,090.6 million.  On a constant currency basis revenue was down 1.9% compared to the prior year.
  • Net loss attributable to common stockholders on a GAAP basis was $98.0 million or a loss of $1.30 per share.
  • Excluding certain charges not related to our core business, non-GAAP adjusted net loss attributable to common shareholders was $40.1 million.

Gregg Ribatt, Chief Executive Officer, said: “We continue to make meaningful progress positioning our business for long-term sustainable success despite some near-term challenges. Revenue on a constant currency basis, excluding store closures and discontinued product lines, grew at 12.2% in the quarter compared with a year ago. Our overall results reflect the impact of higher clearance sales as we made the decision in the quarter to increase our promotional cadence, given the overall retail environment.  While we still face foreign exchange headwinds from the stronger U.S. Dollar and macroeconomic challenges, we are making progress in our transformation efforts.  I believe we are reaching an inflection point and we will see the benefits of our actions increasingly as 2016 progresses.”

Fourth Quarter Operating Results

In the fourth quarter of 2015, the company reported a GAAP net loss attributable to common stockholders of $73.9 million or $1.01 per share, compared with a net loss of $56.9 million or $0.70 per diluted share in the same quarter of the prior year.

As outlined in detail in the non-GAAP reconciliations set forth later in this press release, the company recorded $21.0 million of certain charges not related to our core business (of which $14.6 million were non-cash charges) in the fourth quarter of 2015 compared with $26.8 million in non-recurring and special charges (of which $15.3 million were non-cash charges) in the fourth quarter of 2014.  Excluding these items, the company reported on a comparable basis, non-GAAP adjusted net loss attributable to common shareholders of $52.9 million in the quarter versus non-GAAP adjusted net loss attributable to common shareholders of $30.0 million in the fourth quarter 2014.

Full Year 2015 Operating Results

For the full year, the company reported a GAAP net loss attributable to common stockholders of $98.0 million or $1.30 per diluted share, compared with a net loss attributable to common stockholders of $19.0 million or $0.22 per diluted share in 2014.

As outlined in detail in the non-GAAP reconciliations set forth later in this press release, the company recorded $57.9 million of certain charges not related to our core business (of which $24.5 million were non-cash charges) for the year ended 2015 compared with $69.0 million (of which $27.7 million were non-cash charges) for the year ended 2014. Excluding these items, the company reported on a comparable basis, non-GAAP adjusted net loss attributable to common shareholders of $40.1 million in the year versus non-GAAP adjusted net loss of $50.0 million in 2014.

Balance Sheet

Cash and cash equivalents at December 31, 2015 were $143.3 million compared with $267.5 million at December 31, 2014. The year-over-year change in cash and cash equivalents was primarily driven by the repurchase of 6.5 million shares for approximately $85.9 million.  Inventory was $168.2 million compared with $171.0 million at December 31, 2014.

Stock Repurchase

The company repurchased 918.0 thousand shares of common stock in the fourth quarter of 2015 at an average price of $10.86.  The company ended the quarter at 72.9 million common shares outstanding and fourth quarter weighted average shares outstanding was 73.5 million.

Financial Outlook

The company expects first quarter 2016 revenue in the $260 to $270 million range compared to $262.2 million last year.

Conference Call Information

A teleconference call to discuss fourth quarter 2015 results is scheduled for today, Monday, February 29, 2016, at 4:30 pm EST.  The call participation number is (888) 771-4371. A recording of the conference call will be available two hours after the completion of the call at (888) 843-7419. International participants can dial (847) 585-4405 to take part in the conference call and can access a replay of the call at (630) 652-3042. All of the above calls will require the input of the conference identification number 41827513. The call also will be streamed on the Crocs website, www.crocs.com.  An audio recording of the conference call will be available at www.crocs.com through March 29, 2016.

About Crocs, Inc.

Crocs, Inc. is a world leader in innovative casual footwear for men, women and children. Crocs offers a broad portfolio of all-season products, while remaining true to its core molded footwear heritage. All Crocs™ shoes feature Croslite™ material, a proprietary, revolutionary technology that gives each pair of shoes the soft, comfortable, lightweight, non-marking and odor-resistant qualities that Crocs fans know and love. Crocs celebrates the fun of being a little different and encourages fans to "Find Your Fun" in every colorful pair of shoes. Since its inception in 2002, Crocs has sold more than 300 million pairs of shoes in more than 65 countries around the world.

Visit www.crocs.com for additional information.

The matters regarding the future discussed in this news release include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding prospects, investments in our business and outlook. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances, or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: macroeconomic issues, including, but not limited to, the current global financial conditions; the effect of competition in our industry; our ability to effectively manage our future growth or declines in revenue; changing fashion trends; our ability to maintain and expand revenues and gross margin; our ability to accurately forecast consumer demand for our products; our ability to successfully implement our strategic plans; our ability to develop and sell new products; our ability to obtain and protect intellectual property rights; the effect of potential adverse currency exchange rate fluctuations and other international operating risks; and other factors described in our most recent annual report on Form 10-K under the heading “Risk Factors” and our subsequent filings with the Securities and Exchange Commission. Readers are encouraged to review that section and all other disclosures appearing in our filings with the Securities and Exchange Commission.

All information in this document speaks as of February 29, 2016.  We do not undertake any obligation to update publicly any forward-looking statements, including, without limitation, any estimate regarding revenues or earnings, whether as a result of the receipt of new information, future events, or otherwise.


CROCS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
($ thousands, except per share data)
                         
    Three Months Ended
December 31,
  Year Ended
December 31,
    2015   2014   2015   2014
                         
                         
Revenues   $   208,678     $   206,473     $   1,090,630     $   1,198,223  
Cost of sales       135,934         128,570         579,825         603,893  
Restructuring charges       -         1,373         -         3,985  
Gross profit       72,744         76,530         510,805         590,345  
Selling, general and administrative expenses       129,280         131,468         559,095         565,712  
Restructuring charges       1,274         6,637         8,728         20,532  
Asset impairment charges       7,771         2,997         15,306         8,827  
Income (loss) from operations       (65,581 )       (64,572 )       (72,324 )       (4,726 )
Foreign currency transaction loss, net       (701 )       (607 )       (3,332 )       (4,885 )
Interest income       215         360         967         1,664  
Interest expense       (319 )       (121 )       (969 )       (806 )
Other income, net       920         (184 )       914         204  
Income (loss) before income taxes       (65,466 )       (65,124 )       (74,744 )       (8,549 )
Income tax benefit (expense)       (4,707 )       12,030         (8,452 )       3,623  
Net income (loss)   $   (70,173 )   $   (53,094 )   $   (83,196 )   $   (4,926 )
                         
Dividends on Series A convertible preferred stock       (3,000 )       (3,068 )       (11,833 )       (11,301 )
Dividend equivalents on Series A convertible preferred shares related to redemption value accretion and beneficial conversion feature       (769 )       (705 )       (2,978 )       (2,735 )
Net income (loss) attributable to common stockholders   $   (73,942 )   $   (56,867 )   $   (98,007 )   $   (18,962 )
                         
Net income (loss) per common share:                        
Basic   $   (1.01 )   $   (0.70 )   $   (1.30 )   $   (0.22 )
Diluted   $   (1.01 )   $   (0.70 )   $   (1.30 )   $   (0.22 )


CROCS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(UNAUDITED)

In addition to financial measures presented on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”), we present “adjusted selling, general, and administrative expenses”, “adjusted cost of sales”, “adjusted net income (loss) attributable to common stockholders”, and “revenue adjusted for business model changes”, which are non-GAAP financial measures. Adjusted results exclude the impact of items that management believes affect the comparability or underlying business trends in our consolidated financial statements in the periods presented.

The metric “revenue adjusted for business model changes” is used by management to assess period-over-period change in the performance of our continuing operations as compared to the same quarter of the previous year.  This metric is calculated on a constant currency basis and removes the impact of store closures and eliminated product lines from prior period results.  We believe this metric is useful in analyzing business trends related to our ongoing operations by excluding products and locations that have been eliminated and by removing foreign currency translation adjustments, which can mask the underlying performance of the business.

We also present certain information related to our current period results of operations through “constant currency”, which is a non-GAAP financial measure and should be viewed as a supplement to our results of operations and presentation of reportable segments under U.S. GAAP. Constant currency represents current period results that have been restated using prior year average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.

Management uses adjusted results to assist in comparing business trends from period to period on a consistent non-GAAP basis in communications with the Board, stockholders, analysts, and investors concerning our financial performance. We believe that these non-GAAP measures are useful to investors and other users of our consolidated financial statements as an additional tool for evaluating operating performance. We believe they also provide a useful baseline for analyzing trends in our operations. Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.


CROCS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(UNAUDITED - Continued)
                         
    Three Months Ended December 31,   Year Ended December 31,
    2015   2014   2015   2014
                         
    (in thousands)
Selling, general and administrative expenses reconciliation:                        
GAAP selling, general and administrative expenses   $   129,280     $   131,468     $   559,095     $   565,712  
ERP implementation and other contract termination fees (1)       (3,470 )       (2,160 )       (12,569 )       (13,268 )
Reorganization charges (2)       (4,265 )       (3,175 )       (8,391 )       (8,872 )
Legal settlements and disbursement (3)       (207 )       (446 )       (7,895 )       (2,646 )
Bad debt expense related to South Africa (4)       (613 )       -         (613 )       -  
Non-GAAP selling, general and administrative expenses   $   120,725     $   125,687     $   529,627     $   540,926  
                         
                         
    Three Months Ended December 31,   Year Ended December 31,
    2015   2014   2015   2014
                         
    (in thousands)
Cost of sales reconciliation:                        
GAAP cost of sales:   $   135,934     $   128,570     $   579,825     $   603,893  
Inventory write-down (5)       (3,108 )       (6,168 )       (3,108 )       (7,064 )
Statutory audits (7)       -         -         (1,000 )       -  
Reorganization charges (2)       -         (3,891 )       -         (3,806 )
Contract termination fees (1)       (324 )       -         (324 )       -  
Non-GAAP cost of sales   $   132,502     $   118,511     $   575,393     $   593,023  
                         
                         
    Three Months Ended December 31,   Year Ended December 31,
    2015   2014   2015   2014
                         
    (in thousands)
Net loss attributable to common stockholders reconciliation:                        
GAAP net loss attributable to common stockholders reconciliation:   $   (73,942 )   $   (56,867 )   $   (98,007 )   $   (18,962 )
Impairment charges related to South Africa (4)       5,747         -         5,747         -  
ERP implementation and other contract termination fees (1)       3,794         2,160         12,893         13,268  
Reorganization charges (2)       4,265         7,066         8,391         12,678  
Inventory write-down (5)       3,108         6,168         3,108         7,064  
Retail asset impairment charges (6)       2,024         2,997         9,559         8,827  
Restructuring charges (2)       1,274         8,010         8,728         24,517  
Legal settlements and disbursement (3)       207         446         7,895         2,646  
Statutory audits (7)       -         -         1,000         -  
Bad debt expense related to South Africa (4)       613         -         613         -  
                         
Non-GAAP net loss attributable to common stockholders   $   (52,910 )   $   (30,020 )   $   (40,073 )   $   50,038  
                                         
 
(1)  This represents operating expenses related to the implementation of our new enterprise resource planning ("ERP") system and the termination of certain IT contracts for better alignment with strategic initiatives as well as fees associated with the termination of certain royalty and other contracts.
(2)  This relates to severance expenses, bonuses, store closure costs, consulting fees and other expenses related to recent restructuring and reorganization activities and our investment agreement with Blackstone.
(3)  Expenses in 2015 relate primarily to legal expenses for matters surrounding disbursements to invalid vendors and California wage settlements. Expenses in 2014 relate primarily to other legal settlements.
(4)  Certain bad debt and impairment expenses were incurred in 2015 relating to the planned sale of operations in South Africa.
(5)  This relates to a write-off of obsolete inventory with a market value lower than cost. During the three months and year ended December 31, 2015, the inventory write-down charge recorded related to the planned sale of operations in the South Africa.
(6)  This represents retail asset impairment charges for certain underperforming locations in our Americas, Asia Pacific and Europe segments.
(7)  This represents an estimated liability associated with a prior period audit by U.S. Customs and Border Protections.


CROCS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(UNAUDITED)
               
  Three Months Ended
December 31,
  Year Ended
December 31,
               
  (in thousands)
GAAP revenues, for the period ended December 31, 2014 $   206,473       $   1,198,223    
Less: constant currency adjustment (1)     (12,360 )         (87,661 )  
Less: decrease associated with store closures     (5,813 )         (34,894 )  
Less: decrease associated with eliminated product lines     (2,368 )         (11,921 )  
               
Non-GAAP revenues, adjusted for business model changes $   185,932       $   1,063,747    
               
GAAP revenues, for the period ended December 31, 2015 $   208,678       $   1,090,630    
               
Percentage change     12.2   %       2.5   %
               
               
  Three Months Ended
December 31,
  Year Ended
December 31,
               
  (in thousands)  
GAAP revenues, for the period ended December 31, 2013 $   228,673       $   1,192,680    
Less: constant currency adjustment (1)     (10,506 )         (15,612 )  
Less: decrease associated with store closures     (5,218 )         (22,027 )  
Less: decrease associated with eliminated product lines     (2,750 )         (15,483 )  
               
Non-GAAP revenues, adjusted for business model changes $   210,199       $   1,139,558    
               
GAAP revenues, for the period ended December 31, 2014 $   206,473       $   1,198,223    
               
Percentage change     (1.8 ) %       5.1   %
                       
(1) Constant currency is a non-GAAP measure utilized by management in which current period results have been restated using prior year average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends by excluding the impact of foreign currency exchange rate fluctuations.

 

CROCS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ thousands, except number of shares)
             
    December 31, 2015   December 31, 2014
ASSETS            
Current assets:            
Cash and cash equivalents   $   143,341     $   267,512  
Accounts receivable, net of allowances of $49,364 and $32,392, respectively       83,616         101,217  
Inventories       168,192         171,012  
Deferred tax assets, net       -         4,190  
Income tax receivable       10,233         9,332  
Other receivables       14,233         11,989  
Prepaid expenses and other assets       26,334         30,156  
Total current assets       445,949         595,408  
Property and equipment, net       49,490         68,288  
Intangible assets, net       82,297         97,337  
Goodwill       1,973         2,044  
Deferred tax assets, net       6,608         17,886  
Other assets       21,703         25,968  
Total assets   $   608,020     $   806,931  
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current liabilities:            
Accounts payable   $   63,336     $   42,923  
Accrued expenses and other liabilities       91,835         80,216  
Deferred tax liabilities, net       -         11,869  
Accrued restructuring       738         4,511  
Income taxes payable       6,416         9,078  
Current portion of long-term borrowings and capital lease obligations       4,772         5,288  
Total current liabilities       167,097         153,885  
Long-term income tax payable       4,547         8,843  
Long-term borrowings and capital lease obligations       1,627         6,381  
Long-term accrued restructuring       230         348  
Other liabilities       12,890         12,277  
Total liabilities       186,391         181,734  
Commitments and contingencies            
Series A convertible preferred stock, par value $0.001 per share, 1,000,000 shares authorized, 200,000 shares issued and outstanding, redemption amount and liquidation preference of $203,000 and $203,067 as of December 31, 2015 and December 31, 2014, respectively       175,657         172,679  
             
Stockholders’ equity:            
Preferred stock, par value $0.001 per share, 4,000,000 shares authorized, none outstanding       -         -  
Common stock, par value $0.001 per share, 250,000,000 shares authorized, 93,101,007 and  72,851,418 shares issued and outstanding, respectively, as of December 31, 2015 and 92,325,201 and 78,516,566 shares issued and outstanding, respectively, as of December 31, 2014       94         92  
Treasury stock, at cost, 20,249,589 and 13,808,635 shares as of December 31, 2015 and December 31, 2014, respectively       (283,913 )       (200,424 )
Additional paid-in capital       353,241         345,732  
Retained earnings       227,463         325,470  
Accumulated other comprehensive loss       (50,913 )       (18,352 )
Total stockholders’ equity       245,972         452,518  
Total liabilities, commitments and contingencies and stockholders’ equity   $   608,020     $   806,931  


The following tables summarize our total revenue by channel for the three and twelve months ended December 31, 2015 and 2014:

                                     
    Three Months Ended
December 31,
  Change     Constant Currency Change (1)  
    2015   2014   $   %     $   %  
                                     
    (in thousands)  
Wholesale:                                    
Americas   $ 35,581   $ 39,628   $   (4,047 )     (10.2 ) %   $   (1,763 )     (4.4 ) %
Asia Pacific     37,166     29,149       8,017       27.5           10,045       34.5    
Europe     17,412     21,514       (4,102 )     (19.1 )         (1,260 )     (5.9 )  
Other businesses     125     187       (62 )     (33.2 )         (112 )     (59.9 )  
Total wholesale     90,284     90,478       (194 )     (0.2 )         6,910       7.6    
Retail:                                    
Americas     44,912     47,129       (2,217 )     (4.7 )         (1,761 )     (3.7 )  
Asia Pacific     28,703     29,852       (1,149 )     (3.8 )         850       2.8    
Europe     8,126     10,465       (2,339 )     (22.4 )         (849 )     (8.1 )  
Total retail     81,741     87,446       (5,705 )     (6.5 )         (1,760 )     (2.0 )  
E-commerce:                                    
Americas     22,160     16,995       5,165       30.4           5,327       31.3    
Asia Pacific     10,412     7,467       2,945       39.4           3,405       45.6    
Europe     4,081     4,087       (6 )     (0.1 )         546       13.4    
Total e-commerce     36,653     28,549       8,104       28.4           9,278       32.5    
Total revenues   $ 208,678   $ 206,473   $   2,205       1.1   %   $   14,428       7.0   %
                                     
                                     
Revenues:                                    
Americas   $ 102,653   $ 103,752   $   (1,099 )     (1.1 ) %   $   1,803       1.7   %
Asia Pacific     76,281     66,468       9,813       14.8           14,300       21.5    
Europe     29,619     36,066       (6,447 )     (17.9 )         (1,563 )     (4.3 )  
Total segment revenues     208,553     206,286       2,267       1.1           14,540       7.0    
Other businesses     125     187       (62 )     (33.2 )         (112 )     (59.9 )  
Total consolidated revenues   $ 208,678   $ 206,473   $   2,205       1.1   %   $   14,428       7.0   %
 
(1) Reflects year over year change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. See “Use of Non-GAAP Financial Measures” above for more information.


    Year Ended
December 31,
  Change     Constant Currency Change (1)  
    2015   2014   $   %     $   %  
                                     
    (in thousands)  
Wholesale:                                    
Americas   $ 210,887   $ 228,615   $   (17,728 )     (7.8 ) %   $   (10,241 )     (4.5 ) %
Asia Pacific     255,897     290,610       (34,713 )     (11.9 )         (16,194 )     (5.6 )  
Europe     123,131     147,561       (24,430 )     (16.6 )         1,886       1.3    
Other businesses     1,096     794       302       38.0           194       24.4    
Total wholesale     591,011     667,580       (76,569 )     (11.5 )         (24,355 )     (3.6 )  
Retail:                                    
Americas     197,306     206,053       (8,747 )     (4.2 )         (6,652 )     (3.2 )  
Asia Pacific     136,320     159,464       (23,144 )     (14.5 )         (11,552 )     (7.2 )  
Europe     44,873     60,309       (15,436 )     (25.6 )         (3,012 )     (5.0 )  
Total retail     378,499     425,826       (47,327 )     (11.1 )         (21,216 )     (5.0 )  
E-commerce:                                    
Americas     68,017     55,247       12,770       23.1           13,434       24.3    
Asia Pacific     32,274     23,836       8,438       35.4           10,256       43.0    
Europe     20,829     25,734       (4,905 )     (19.1 )         (380 )     (1.5 )  
Total e-commerce     121,120     104,817       16,303       15.6           23,310       22.2    
Total revenues   $ 1,090,630   $ 1,198,223   $   (107,593 )     (9.0 ) %   $   (22,261 )     (1.9 ) %
                                     
                                     
Revenues:                                    
Americas   $ 476,210   $ 489,915   $   (13,705 )     (2.8 ) %   $   (3,459 )     (0.7 ) %
Asia Pacific     424,491     473,910       (49,419 )     (10.4 )         (17,490 )     (3.7 )  
Europe     188,833     233,604       (44,771 )     (19.2 )         (1,506 )     (0.6 )  
Total segment revenues     1,089,534     1,197,429       (107,895 )     (9.0 )         (22,455 )     (1.9 )  
Other businesses     1,096     794       302       38.0           194       24.4    
Total consolidated revenues   $ 1,090,630   $ 1,198,223   $   (107,593 )     (9.0 ) %   $   (22,261 )     (1.9 ) %
 
(1) Reflects year over year change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. See “Use of Non-GAAP Financial Measures” above for more information.

 

CROCS, INC. SUBSIDIARIES
RETAIL STORE COUNTS (UNAUDITED)
                 
    September 30,
2015
  Opened   Closed   December 31,
2015
Company-operated retail locations                
Type                
Kiosk/store in store   98   2   2   98
Retail stores   279   5   9   275
Outlet stores   180   6   -   186
Total   557   13   11   559
Operating segment                
Americas   198   1   3   196
Asia Pacific   256   12   7   261
Europe   103   -   1   102
Total   557   13   11   559


    December 31,
2014
  Opened   Closed   December 31,
2015
Company-operated retail locations                
Type                
Kiosk/store in store   100   11   13   98
Retail stores   311   15   51   275
Outlet stores   174   16   4   186
Total   585   42   68   559
Operating segment                
Americas   210   4   18   196
Asia Pacific   258   36   33   261
Europe   117   2   17   102
Total   585   42   68   559


CROCS, INC. AND SUBSIDIARIES  
RETAIL  
(STORES ONLY)  
COMPARABLE STORE SALES  
(UNAUDITED)  
         
  Constant Currency (2)   Constant Currency (2)  
  Three Months Ended   Three Months Ended  
  December 31, 2015   December 31, 2014  
Comparable store sales (1)        
Americas (3.4 ) % (3.3 ) %
Asia Pacific 4.8   % (2.5 ) %
Europe 5.7   % 1.1   %
Global 0.1   % (2.4 ) %
         
         
         
         
  Constant Currency (2)   Constant Currency (2)  
  Year Ended   Year Ended  
  December 31, 2015   December 31, 2014  
Comparable store sales (1)        
Americas (3.2 ) % (4.4 ) %
Asia Pacific (4.5 ) % (4.7 ) %
Europe 3.0   % 0.7   %
Global (2.8 ) % (3.7 ) %
 
(1)  Comparable store status is determined on a monthly basis. Comparable store sales begin in the thirteenth month of a store’s operation. Stores in which selling square footage has changed more than 15% as a result of a remodel, expansion or reduction are excluded until the thirteenth month in which they have comparable prior year sales. Temporarily closed stores are excluded from the comparable store sales calculation during the month of closure. Location closures in excess of three months are excluded until the thirteenth month post re-opening. Comparable store sales exclude the impact of our e-commerce channel revenues and are calculated on a currency neutral basis using historical quarterly average currency rates.
         
(2) Reflects quarter-over-quarter and year-over-year change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. Constant currency is a measure utilized by management in which current period results have been restated using prior year average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends by excluding the impact of foreign currency exchange rate fluctuations. We do not suggest that investors should consider this non-GAAP measure in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.


CROCS, INC. AND SUBSIDIARIES  
DIRECT TO CONSUMER  
(INCLUDES RETAIL AND E-COMMERCE)  
COMPARABLE STORE SALES  
(UNAUDITED)  
         
  Constant Currency (2)   Constant Currency (2)  
  Three Months Ended   Three Months Ended  
  December 31, 2015   December 31, 2014  
Comparable store sales (1)        
Americas 6.3 % (2.7 ) %
Asia Pacific 15.2 % 10.1   %
Europe 13.9 % (5.4 ) %
Global 9.8 % 0.5   %
         
         
         
  Constant Currency (2)   Constant Currency (2)  
  Year Ended   Year Ended  
  December 31, 2015   December 31, 2014  
Comparable store sales (1)        
Americas 3.3 % (3.8 ) %
Asia Pacific 3.0 % 0.6   %
Europe 7.8 % (0.6 ) %
Global 3.9 % (1.9 ) %
         
(1)  This includes both e-commerce and retail comparable store sales. Comparable store status is determined on a monthly basis. Comparable store sales begin in the thirteenth month of a store’s operation. Stores in which selling square footage has changed more than 15% as a result of a remodel, expansion or reduction are excluded until the thirteenth month in which they have comparable prior year sales. Temporarily closed stores are excluded from the comparable store sales calculation during the month of closure. Location closures in excess of three months are excluded until the thirteenth month post re-opening. E-commerce revenue is based on same site sales period over period. Comparable store sales and e-commerce channel revenues and are calculated on a currency neutral basis using historical quarterly average currency rates.
         
(2) Reflects quarter-over-quarter and year-over-year change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. Constant currency is a measure utilized by management in which current period results have been restated using prior year average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends by excluding the impact of foreign currency exchange rate fluctuations. We do not suggest that investors should consider this non-GAAP measure in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.
 
Investor Contact: Brendon Frey, ICR
(203) 682-8200
Brendon.Frey@icrinc.com

Media Contact: Katy Michael/Crocs Inc.
(303) 848-7000
kmichael@crocs.com

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