For: Crocs, Inc.
Company Contact: Caryn Ellison/Chief Financial Officer
Tia Williams Mattson/Public Relations Manager
(303) 468-4260
Investor/Media Contact: Integrated Corporate Relations, Inc.
Investors: Chad Jacobs/Brendon Frey
Media: Michael Fox
(203) 682-8200
CROCS, INC. REPORTS FISCAL 2005 FOURTH QUARTER AND YEAR-END FINANCIAL RESULTS
NIWOT, COLORADO – March 2, 2006 – Crocs, Inc. (NASDAQ: CROX) today reported its results of operations for the fourth quarter and fiscal year ended December 31, 2005.
For the quarter ended December 31, 2005, revenues were $33.6 million compared to revenues of $5.4 million for the three months ended December 31, 2004. Net income for the three months ended December 31, 2005 was $4.1 million, or $0.12 per fully diluted share, compared to a net loss of $1.0 million, or $(0.04) per share, for the three months ended December 31, 2004. Net income includes non-cash stock-based compensation expense of $1.3 million for the three months ended December 31, 2005 and $357,000 for the comparable period of 2004.
For the fiscal year ended December 31, 2005, revenues were $108.6 million, compared to revenues of $13.5 million for the year ended December 31, 2004. Net income for 2005 was $16.7 million, or $0.51 per fully diluted share, compared to a net loss of $1.6 million, or $(0.07) per share, for 2004. Net income includes non-cash stock-based compensation expense of $4.7 million for 2005 compared to $1.8 million for 2004.
Ron Snyder, President and Chief Executive Officer of Crocs Inc., commented “We are pleased with our fourth quarter performance which represents a strong finish to a breakout year for our company. Fiscal 2005 was highlighted by significant financial improvements across the board, including dramatic increases in revenues, margins, and net income. We also made important progress expanding our geographic reach and diversifying the breadth and depth of our product offering. In 2006 we will continue to focus on executing our strategic plan and building on the positive momentum behind our brand.”
Gross profit for the three months ended December 31, 2005 was $17.8 million, compared to gross profit of $2.4 million for the three months ended December 31, 2004, and selling, general and administrative expense was $10.9 million for the three months ended December 31, 2005, compared to $3.5 million for the three months ended December 31, 2004.
For the fiscal year ended December 31, 2005, gross profit was $60.8 million, compared to gross profit of $6.4 million for 2004, and selling, general and administrative expense was $33.9 million for 2005, compared to $7.9 million for 2004.
On February 13, 2006, the company completed an initial public offering of 11,385,000 shares of common stock at a price to the public of $21.00 per share, of which 4,950,000 shares were sold by the company and 6,435,000 were sold by certain selling shareholders, including 1,485,000 shares that were sold by the selling shareholders pursuant to the underwriters’ over-allotment option. Upon completing the offering, the company and the selling shareholders received net proceeds of approximately $96.9 million and $126.0 million, respectively. The company intends to use the proceeds to repay amounts outstanding under its U.S. credit facility and Canadian credit facility and bank loans and for working capital and general corporate purposes.
Ron Snyder commented, “We were very pleased to have successfully completed our initial public offering and we look forward to beginning a new chapter in our company’s history.”
Ron Snyder concluded, “Our 2005 results, which reflect our growing brand recognition and the increasing consumer demand for our products, are a testament to the hard work and dedication of our entire organization. Looking ahead, we believe our unique position in the marketplace, coupled with our proprietary technologies and broad demographic appeal provides us with multiple long-term growth opportunities, both domestically and overseas. We move forward extremely excited about our prospects for the future.”
About Crocs, Inc.
Crocs, Inc. is a rapidly growing designer, manufacturer and marketer of footwear for men, women and children under the crocs brand. All of our footwear products incorporate our proprietary closed-cell resin material, which we believe represents a substantial innovation in footwear comfort and functionality. Our proprietary closed-cell resin, which we refer to as Croslite™ enables us to produce a soft and lightweight, non-marking, slip- and odor-resistant shoe. These unique properties make crocs footwear ideal for casual wear, as well as for recreational uses such as boating, hiking, fishing and gardening, and have enabled us to successfully market our products to a broad range of consumers. crocs come in a wide array of colors and styles are sold in more than 6,500 North American retail locations and at our e-tailing website, www.CROCS.com.
Forward Looking Statements
The matters regarding the future discussed in this news release include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. 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: our limited operating history; our significant recent expansion; changing fashion trends; our reliance on market acceptance of the small number of products we sell; our ability to develop and sell new products; our limited manufacturing capacity and distribution channels; our reliance on third party manufacturing and logistics providers for the production and distribution of our products; our reliance on a single-source supply for certain raw materials; our management and information systems infrastructure; our ability to obtain and protect intellectual property rights; the effect of competition in our industry; the potential effects of seasonality on our sales; our ability to attract, assimilate and retain management talent; and other factors described in the prospectus for our initial public offering under the heading “Risk Factors.” Readers are encouraged to review that section and all other disclosures appearing in our filings with the Securities and Exchange Commission.
Tables to Follow
The following table presents Crocs’ pro forma net loss per share, calculated as if the Company’s reorganization as a corporation had occurred at the beginning of the year ended December 31, 2004 and the Company’s initial public offering had been completed as of the beginning of each period presented. The table illustrates the adjustments made to the weighted average shares of common stock outstanding set forth above in order to determine the pro forma common shares outstanding for each period. The pro forma net loss per share presented for each period was calculated by dividing the net loss for such period set forth above by the pro forma common shares outstanding, determined as shown below.