Third Quarter Revenue Increased to $215.6 Million
Gross Margin Improved from 50.7% to 55.1%
Cash Increased 88% to $143.1 Million
2011 Spring / Summer Backlog up 60%
NIWOT, Colo., Nov 04, 2010 (BUSINESS WIRE) --
Crocs, Inc. (NASDAQ: CROX) today reported financial results for the
third quarter ended September 30, 2010.
Revenue for the third quarter of 2010 increased 30% to $215.6 million,
over recurring revenue of $165.7 million reported in the third quarter
of 2009. Recurring revenue is a non-GAAP measure that excludes impaired
product sales of $11.5 million in the third quarter of 2009. On a GAAP
basis, third quarter revenue increased 22% year-over-year.
Net income for the third quarter 2010 improved to $25.0 million, or
$0.28 per diluted share compared to net income of $22.1 million, or
$0.25 per diluted share in the third quarter 2009.
Excluding a one-time tax benefit of $3.0 million, or $0.03 per diluted
share, and other non-recurring charges, non-GAAP net income was $22.1
million or $0.25 per diluted share in the third quarter 2010. This
compares to third quarter 2009 equivalent non-GAAP net income of $1.8
million, or $0.02 per diluted share.
Year-over-year third quarter changes in the Company's channel revenue
streams, as reported, were as follows:
-
Wholesale sales increased 16% to $123.9 million;
-
Retail sales increased 35% to $72.5 million;
-
Internet sales increased 19% to $19.2 million.
Changes in the Company's regional revenue streams, as reported, during
the same quarterly periods were as follows:
-
Americas increased 31% to $104 million;
-
Asia increased 16% to $79 million;
-
Europe increased 9% to $32.6 million.
Gross profit for the third quarter of 2010 increased 32% to $118.8
million, or 55.1% as a percentage of sales, from $89.9 million, or 50.7%
of sales in same period last year. Selling, General, & Administrative
expenses (including foreign exchange, restructuring, impairment, and
charitable contributions) increased 13% to $91.4 million versus $80.9
million a year ago. As a percentage of sales, SG&A decreased to 42.4%
from 45.7% in the third quarter of 2009.
Balance Sheet
The Company's cash and cash equivalents as of September 30, 2010
increased 88% to $143.1 million compared to $76.0 million at September
30, 2009. The Company had no bank debt at September 30, 2010.
Inventory grew 25% to $142.5 million at September 30, 2010 from $113.7
million at September 30, 2009. The increase is a result of multiple
factors including a 37% increase in backlog as of September 30, 2010, an
increase of 44 retail locations over the third quarter 2009, strong new
product sell through and the support of 21% higher anticipated fourth
quarter revenue. For the quarter ended September 30, 2010, our inventory
turnover was 3.0 on an annualized basis.
The Company ended the third quarter of 2010 with accounts receivable of
$81.3 million compared to $65.8 million at September 30, 2009.
John McCarvel, President and Chief Executive Officer, commented, "Our
improved operating results continued to be driven by growing consumer
demand for our expanded product assortment. After a strong summer
selling season we began shipping significantly more of our
back-to-school and fall products to our global network of wholesale
accounts and distributors versus a year ago. We witnessed similar trends
in our consumer direct channel where weekly sell-through rates of our
new products exceeded internal projections. Our sales performance
year-to-date has been very encouraging and helped fuel the 60%
significant increase in our spring / summer 2011 backlog."
Guidance
For the fourth quarter of 2010, the Company expects revenue of
approximately $165 million, a 21% increase over fourth quarter 2009. The
company expects fourth quarter inventory to decrease approximately 10%
from the third quarter 2010. The Company expects diluted earnings per
share for the fourth quarter 2010 to increase to approximately $0.02 per
diluted share versus a diluted loss per share of ($0.13) for the fourth
quarter 2009.
Conference Call Information
A conference call to discuss Crocs' third quarter 2010 financial results
is scheduled for today (November 4, 2010) at 5:00 PM Eastern Time. A
webcast of the call will take place simultaneously and can be accessed
by clicking the 'Investor Relations' link under the Company section on www.crocs.com
or at www.earnings.com.
To listen to the broadcast, your computer must have Windows Media Player
installed. If you do not have Windows Media Player, go to www.earnings.com
prior to the call, where you can download the software for free.
About Crocs, Inc.
A world leader in innovative casual footwear for men, women and
children, Crocs, Inc. (NASDAQ: CROX), offers several distinct shoe
collections with more than 120 styles to suit every lifestyle. As
lighthearted as they are lightweight, Crocs(TM) footwear provides profound
comfort and support for any occasion and every season.All Crocs(TM)
branded shoes feature Croslite(TM) material, a proprietary, revolutionary
technology that produces soft, non-marking, and odor-resistant shoes
that conform to your feet.
Crocs(TM) products are sold in 129 countries. Every day, millions of
Crocs(TM) shoe lovers around the world enjoy the exceptional form,
function, versatility and feel-good qualities of these shoes while at
work, school and play.
Visit www.crocs.com
for additional information.
Forward-looking statements
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
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 crisis; 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 management
and information systems infrastructure; our ability to repatriate cash
held in foreign locations in a timely and cost-effective manner; our
ability to develop and sell new products; our ability to obtain and
protect intellectual property rights; the effect of competition in our
industry; and the effect of potential adverse currency exchange rate
fluctuations; 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.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 |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (In thousands, except share and per share data) |
| (Unaudited) |
|
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2010 |
|
2009 |
|
|
|
2010 |
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
215,605
|
|
|
$
|
177,141
|
|
|
|
|
$
|
610,503
|
|
|
$
|
509,756
|
|
|
Cost of sales
|
|
|
|
96,797
|
|
|
|
87,291
|
|
|
|
|
|
273,072
|
|
|
|
269,115
|
|
|
Gross profit
|
|
|
|
118,808
|
|
|
|
89,850
|
|
|
|
|
|
337,431
|
|
|
|
240,641
|
|
|
Selling, general and administrative expenses
|
|
|
|
92,192
|
|
|
|
77,995
|
|
|
|
|
|
261,017
|
|
|
|
240,654
|
|
|
Foreign Currency Transaction gains, net
|
|
|
|
(908
|
)
|
|
|
(1,032
|
)
|
|
|
|
|
(2,329
|
)
|
|
|
(1,247
|
)
|
|
Restructuring charges
|
|
|
|
-
|
|
|
|
17
|
|
|
|
|
|
2,539
|
|
|
|
5,916
|
|
|
Impairment charges
|
|
|
|
-
|
|
|
|
1,722
|
|
|
|
|
|
141
|
|
|
|
25,447
|
|
|
Charitable contributions expense
|
|
|
|
78
|
|
|
|
2,178
|
|
|
|
|
|
496
|
|
|
|
7,296
|
|
|
|
Income (loss) from operations
|
|
|
|
27,446
|
|
|
|
8,970
|
|
|
|
|
|
75,567
|
|
|
|
(37,425
|
)
|
|
Interest expense
|
|
|
|
153
|
|
|
|
155
|
|
|
|
|
|
445
|
|
|
|
1,412
|
|
|
Gain on charitable contributions
|
|
|
|
(19
|
)
|
|
|
(810
|
)
|
|
|
|
|
(135
|
)
|
|
|
(2,833
|
)
|
|
Other (income) expense
|
|
|
|
137
|
|
|
|
(125
|
)
|
|
|
|
|
87
|
|
|
|
(833
|
)
|
|
Income (loss) before income taxes
|
|
|
|
27,175
|
|
|
|
9,750
|
|
|
|
|
|
75,170
|
|
|
|
(35,171
|
)
|
|
Income tax (benefit) expense
|
|
|
|
2,179
|
|
|
|
(12,318
|
)
|
|
|
|
|
12,173
|
|
|
|
(4,541
|
)
|
|
Net income (loss)
|
|
|
$
|
24,996
|
|
|
$
|
22,068
|
|
|
|
|
$
|
62,997
|
|
|
$
|
(30,630
|
)
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.29
|
|
|
$
|
0.26
|
|
|
|
|
$
|
0.73
|
|
|
|
($0.36
|
)
|
|
Diluted
|
|
|
$
|
0.28
|
|
|
$
|
0.25
|
|
|
|
|
$
|
0.72
|
|
|
|
($0.36
|
)
|
|
| CROCS, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In thousands, except share data) |
| (Unaudited) |
|
|
|
|
September 30, 2010 |
|
|
December 31, 2009 |
|
|
September 30, 2009 |
| ASSETS |
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
143,057
|
|
|
|
$
|
77,343
|
|
|
|
$
|
76,021
|
|
|
Restricted cash
|
|
|
|
577
|
|
|
|
|
1,144
|
|
|
|
|
245
|
|
|
Accounts receivable, net
|
|
|
|
81,303
|
|
|
|
|
50,458
|
|
|
|
|
65,794
|
|
|
Inventories
|
|
|
|
142,531
|
|
|
|
|
93,329
|
|
|
|
|
113,703
|
|
|
Deferred tax assets, net
|
|
|
|
7,973
|
|
|
|
|
7,358
|
|
|
|
|
12,088
|
|
|
Income tax receivable
|
|
|
|
9,597
|
|
|
|
|
8,611
|
|
|
|
|
8,248
|
|
|
Other Receivables
|
|
|
|
11,008
|
|
|
|
|
16,140
|
|
|
|
|
7,580
|
|
|
Prepaid expenses and other current assets
|
|
|
|
13,699
|
|
|
|
|
12,871
|
|
|
|
|
13,567
|
|
|
Total current assets
|
|
|
|
409,745
|
|
|
|
|
267,254
|
|
|
|
|
297,246
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
65,882
|
|
|
|
|
71,084
|
|
|
|
|
70,738
|
|
|
Restricted cash
|
|
|
|
1,675
|
|
|
|
|
1,506
|
|
|
|
|
2,358
|
|
|
Intangible assets, net
|
|
|
|
42,416
|
|
|
|
|
35,984
|
|
|
|
|
34,501
|
|
|
Deferred tax assets, net
|
|
|
|
18,859
|
|
|
|
|
18,479
|
|
|
|
|
22,507
|
|
|
Marketable Securities
|
|
|
|
1,040
|
|
|
|
|
866
|
|
|
|
|
-
|
|
|
Other assets
|
|
|
|
15,054
|
|
|
|
|
14,565
|
|
|
|
|
15,623
|
|
|
Total assets
|
|
|
$
|
554,671
|
|
|
|
$
|
409,738
|
|
|
|
$
|
442,973
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
66,763
|
|
|
|
$
|
23,434
|
|
|
|
$
|
37,432
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
65,216
|
|
|
|
|
53,589
|
|
|
|
|
55,443
|
|
|
Accrued restructuring charges
|
|
|
|
1,844
|
|
|
|
|
2,616
|
|
|
|
|
3,149
|
|
|
Income taxes payable
|
|
|
|
18,188
|
|
|
|
|
6,377
|
|
|
|
|
16,308
|
|
|
Note payable, current portion of long-term debt and capital lease
obligations
|
|
|
|
1,861
|
|
|
|
|
640
|
|
|
|
|
628
|
|
|
Total current liabilities
|
|
|
|
153,872
|
|
|
|
|
86,656
|
|
|
|
|
112,960
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt and capital lease obligations
|
|
|
|
1,235
|
|
|
|
|
912
|
|
|
|
|
1,391
|
|
|
Deferred tax liabilities, net
|
|
|
|
2,085
|
|
|
|
|
2,192
|
|
|
|
|
5,355
|
|
|
Long-term restructuring
|
|
|
|
-
|
|
|
|
|
520
|
|
|
|
|
580
|
|
|
Other liabilities
|
|
|
|
32,532
|
|
|
|
|
31,838
|
|
|
|
|
30,043
|
|
|
Total liabilities
|
|
|
|
189,724
|
|
|
|
|
122,118
|
|
|
|
|
150,329
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Common shares, par value $0.001 per share; 250,000,000 shares
authorized, 87,705,254 and 87,136,697 shares issued and outstanding,
respectively, at September 30, 2010 and 86,224,760 and 85,659,581
shares issued and outstanding, respectively, at December 31, 2009
and 86,167,242 and 85,643,242 shares issued and outstanding,
respectively, at September 30, 2009.
|
|
|
|
87
|
|
|
|
|
85
|
|
|
|
|
85
|
|
|
|
Treasury Stock, at cost, 568,557 and 565,179 and 524,000 shares,
respectively
|
|
|
|
(23,610
|
)
|
|
|
|
(25,260
|
)
|
|
|
|
(25,022
|
)
|
|
Additional paid-in capital
|
|
|
|
273,418
|
|
|
|
|
266,472
|
|
|
|
|
259,205
|
|
|
Retained earnings
|
|
|
|
85,152
|
|
|
|
|
22,155
|
|
|
|
|
33,603
|
|
|
Accumulated other comprehensive income
|
|
|
|
29,900
|
|
|
|
|
24,168
|
|
|
|
|
24,773
|
|
|
Total stockholders' equity
|
|
|
|
364,947
|
|
|
|
|
287,620
|
|
|
|
|
292,644
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
554,671
|
|
|
|
$
|
409,738
|
|
|
|
$
|
442,973
|
|
|
|
| Crocs, Inc. |
| Reconciliation of GAAP Measures to Non-GAAP Measures |
| (In thousands, except share and per share data) |
| (Unaudited) |
|
|
|
The Company prepares and reports its financial statements in
accordance with U.S. Generally Accepted Accounting Principles
("GAAP"). Internally, management monitors the operating
performance of its business using non-GAAP metrics similar to
those below. These non-GAAP measures exclude the effects of
non-recurring revenues from impaired inventory sales and a
one-time tax benefit resulting from the restructuring of our
international operations. In management's opinion, these non-GAAP
measures are important indicators of the continuing operations of
our business and provide better comparability between reporting
periods because they exclude items that may not be indicative of
current period results and provide a better baseline for analyzing
trends in our operations. The Company does not, nor does it
suggest that investors should, consider such non-GAAP financial
measures in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. The Company believes
the disclosure of the effects of these items increases the
reader's understanding of the underlying performance of the
business and that such non-GAAP financial measures provide
investors with an additional tool to evaluate our financial
results and assess our prospects for future performance.
|
|
|
|
|
| Non-GAAP Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 months ended |
|
|
|
3 months ended |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2010 |
|
|
|
September 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
|
215,605
|
|
|
|
|
177,141
|
|
|
|
|
|
|
|
|
|
|
|
Effect on revenue from sales of previously impaired units
|
|
|
-
|
|
|
|
|
(11,480
|
)
|
(1)
|
|
|
|
|
|
|
|
|
|
Non-GAAP revenue
|
|
|
215,605
|
|
|
|
|
165,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 months ended |
|
|
|
3 months ended |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2010 |
|
|
|
September 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
|
118,808
|
|
|
|
|
89,850
|
|
|
|
|
|
|
|
|
|
|
|
Effect on gross profit from sales of previously impaired units
|
|
|
-
|
|
|
|
|
(9,644
|
)
|
(1)
|
|
|
|
|
|
|
|
|
|
Restructuring charges included in cost of goods sold
|
|
|
91
|
|
|
|
|
459
|
|
(2)
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit
|
|
|
118,899
|
|
|
|
|
80,665
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 months ended
September 30, 2010
|
|
|
|
GAAP Diluted EPS to
Non-GAAP Diluted EPS
|
|
|
|
3 months ended
September 30, 2009
|
|
|
|
GAAP Diluted EPS to
Non-GAAP Diluted EPS
|
|
GAAP net income/(loss)
|
|
|
24,996
|
|
|
|
|
0.28
|
|
|
|
|
22,068
|
|
|
|
|
0.25
|
|
|
One-time tax benefit
|
|
|
(3,000
|
)
|
|
|
|
|
|
|
|
(14,400
|
)
|
(3)
|
|
|
|
|
|
Effect on gross profit from sales of previously impaired units
|
|
|
-
|
|
|
|
|
|
|
|
|
(9,644
|
)
|
(1)
|
|
|
|
|
|
Asset impairment
|
|
|
-
|
|
|
|
|
|
|
|
|
1,722
|
|
(2)
|
|
|
|
|
|
Total restructuring charges
|
|
|
91
|
|
|
|
|
|
|
|
|
476
|
|
(2)
|
|
|
|
|
|
Tax impact on above adjustments:(4) |
|
|
(17
|
)
|
(4)
|
|
|
|
|
|
|
1,593
|
|
(4)
|
|
|
|
|
|
Non-GAAP net (loss) income
|
|
|
22,070
|
|
|
|
|
0.25
|
|
|
|
|
1,815
|
|
|
|
|
0.02
|
|
|
|
|
(1) This pro forma adjustment in the GAAP to Non-GAAP
reconciliations above represents the revenue from impaired units at
selling prices higher than our previously estimated net realizable
value for those units. Because the amounts presented represent a
substantial change to our previous estimate, management believes
that excluding these revenues in evaluating our results of
operations provides important information for the reader of our
financial statements as these items are not anticipated to be
recurring to the extent or magnitude they occurred during prior
quarters.
|
|
|
|
(2) This proforma adjustment in the GAAP to Non-GAAP reconciliations
above represents non-recurring restructuring and asset impairment
charges.
|
|
|
|
(3) Represents benefits from the restructuring of our international
operations and cost sharing arrangements which resulted in one-time
benefits from a reduction in certain tax accruals during the periods
presented.
|
|
|
|
(4) The assumed tax rates used for the three months ended September
30, 2010 and 2009 were 19.1% and 21.4%, respectively.
|
SOURCE: Crocs, Inc.
Investors
ICR, Inc.
Brendon Frey, 203-682-8200
brendon.frey@icrinc.com
or
Media
Crocs, Inc.
Shelley Weibel, 303-848-7000
sweibel@crocs.com