NIWOT, Colo.--(BUSINESS WIRE)--Apr. 24, 2013--
Crocs Inc. (NASDAQ: CROX) reported today financial results for the first
quarter of 2013.
First Quarter 2013 Highlights
-
Record revenue of $311.7 million
-
Gross Margin of 53.2 percent
-
Net income of $29.0 million
-
Earnings per diluted share of $0.33
“Our record revenue performance in the first quarter of 2013
demonstrates the benefit of innovative products, the success of our
multi channel strategy and the global reach of our business. During the
quarter we saw strong sell-in of our spring and summer line into our
wholesale accounts globally and solid initial sell-through in our own
retail channel, all of which contributed to a 17 percent constant
currency revenue growth during the quarter,” said John McCarvel,
President and Chief Executive Officer. “As we look into the core of the
spring summer selling season, we are confident that our product line-up,
including a combination of new collections and core products will
continue to drive revenues forward.
“The Asia Pacific segment of our business was a key component of our
success during the quarter. While weather did impact consumers in North
America and Europe, and Europe also dealt with ongoing macro-economic
issues, we did see early signs of recovery in Japan.”
First Quarter Results
For first quarter 2013, the company had a net income of $29.0 million or
$0.33 per diluted share, compared with net income of $28.3 million or
$0.31 per diluted share in the prior year period. First quarter 2013
results included total expenses of $1.8 million relating to the
implementation of a new ERP system including non-cash accelerated
depreciation and cash expenses for program management, training and
other non-capitalized costs. Adjusting for these non-operating items,
the company had Non-GAAP net income1 of $30.8 million in the
quarter or $0.35 per diluted share.
Revenue for the first quarter of 2013 increased 14.7% to $311.7 million
compared with revenue of $271.8 million reported in the first quarter of
2012. On a constant currency basis revenue increased 16.6% for the first
quarter of 2013.
Margins
Gross profit for the first quarter of 2013 increased 14.5% to $165.8
million, or 53.2% as a percentage of sales, compared with $144.8
million, or 53.3% as a percentage of sales in the prior year period.
Selling, General, & Administrative expenses (SG&A) increased 22.9% to
$128.2 million compared with $104.3 million a year ago. As a percentage
of sales, SG&A increased to 41.1% from 38.4% compared with the first
quarter of 2012. The increase in SG&A is largely attributable to our
year-over-year increase in retail stores and partially attributable to
our previously announced increase in marketing spending in 2013, which
totaled approximately $2.7 million during the quarter.
First Quarter Revenue Results
The following tables detail the company’s first quarter 2013 and 2012
revenues:
|
|
|
Three Months Ended March 31,
|
|
Change
|
|
Constant Currency Change(1) |
|
($ thousands)
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
$
|
|
%
|
|
Channel revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholesale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
81,604
|
|
$
|
69,056
|
|
$
|
12,548
|
|
|
18.2
|
%
|
|
$
|
13,287
|
|
|
19.2
|
%
|
|
Asia Pacific
|
|
|
69,554
|
|
|
51,052
|
|
|
18,502
|
|
|
36.2
|
|
|
|
17,942
|
|
|
35.1
|
|
|
Japan
|
|
|
22,527
|
|
|
27,843
|
|
|
(5,316
|
)
|
|
(19.1
|
)
|
|
|
(1,610
|
)
|
|
(5.8
|
)
|
|
Europe
|
|
|
46,533
|
|
|
42,616
|
|
|
3,917
|
|
|
9.2
|
|
|
|
4,080
|
|
|
9.6
|
|
|
Other businesses
|
|
|
65
|
|
|
125
|
|
|
(60
|
)
|
|
(48.0
|
)
|
|
|
(61
|
)
|
|
(48.8
|
)
|
|
Total Wholesale
|
|
|
220,283
|
|
|
190,692
|
|
|
29,591
|
|
|
15.5
|
|
|
|
33,638
|
|
|
17.6
|
|
|
Consumer-direct:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
35,904
|
|
|
35,546
|
|
|
358
|
|
|
1.0
|
|
|
|
555
|
|
|
1.6
|
|
|
Asia Pacific
|
|
|
19,597
|
|
|
15,739
|
|
|
3,858
|
|
|
24.5
|
|
|
|
3,807
|
|
|
24.2
|
|
|
Japan
|
|
|
5,901
|
|
|
4,842
|
|
|
1,059
|
|
|
21.9
|
|
|
|
2,002
|
|
|
41.3
|
|
|
Europe
|
|
|
9,689
|
|
|
4,445
|
|
|
5,244
|
|
|
118.0
|
|
|
|
5,143
|
|
|
115.7
|
|
|
Total Retail
|
|
|
71,091
|
|
|
60,572
|
|
|
10,519
|
|
|
17.4
|
|
|
|
11,507
|
|
|
19.0
|
|
|
Internet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
|
11,921
|
|
|
12,705
|
|
|
(784
|
)
|
|
(6.2
|
)
|
|
|
(744
|
)
|
|
(5.9
|
)
|
|
Asia Pacific
|
|
|
1,306
|
|
|
860
|
|
|
446
|
|
|
51.9
|
|
|
|
442
|
|
|
51.4
|
|
|
Japan
|
|
|
1,931
|
|
|
1,688
|
|
|
243
|
|
|
14.4
|
|
|
|
561
|
|
|
33.2
|
|
|
Europe
|
|
|
5,124
|
|
|
5,281
|
|
|
(157
|
)
|
|
(3.0
|
)
|
|
|
(173
|
)
|
|
(3.3
|
)
|
|
Total Internet
|
|
|
20,282
|
|
|
20,534
|
|
|
(252
|
)
|
|
(1.2
|
)
|
|
|
86
|
|
|
0.4
|
|
|
Total revenues:
|
|
$
|
311,656
|
|
$
|
271,798
|
|
$
|
39,858
|
|
|
14.7
|
%
|
|
$
|
45,231
|
|
|
16.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Change
|
|
Constant Currency Change(1) |
|
($ thousands)
|
|
2013
|
|
2012
|
|
$
|
|
%
|
|
$
|
|
%
|
|
Regional Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
|
$
|
129,429
|
|
$
|
117,307
|
|
$
|
12,122
|
|
|
10.3
|
%
|
|
$
|
13,098
|
|
|
11.2
|
%
|
|
Asia Pacific
|
|
|
90,457
|
|
|
67,651
|
|
|
22,806
|
|
|
33.7
|
|
|
|
22,191
|
|
|
32.8
|
|
|
Japan
|
|
|
30,359
|
|
|
34,373
|
|
|
(4,014
|
)
|
|
(11.7
|
)
|
|
|
953
|
|
|
2.8
|
|
|
Europe
|
|
|
61,346
|
|
|
52,342
|
|
|
9,004
|
|
|
17.2
|
|
|
|
9,050
|
|
|
17.3
|
|
|
Other businesses
|
|
|
65
|
|
|
125
|
|
|
(60
|
)
|
|
(48.0
|
)
|
|
|
(61
|
)
|
|
(48.8
|
)
|
|
Total Revenues
|
|
$
|
311,656
|
|
$
|
271,798
|
|
$
|
39,858
|
|
|
14.7
|
%
|
|
$
|
45,231
|
|
|
16.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Current period results have been restated using
2012 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.
|
|
|
Other Financial Information
Comparable Store Sales Results2
Comparable store sales on a constant currency basis for the first
quarter of 2013 compared to the first quarter 2012 were as follows:
Global decreased 5.2%, Americas decreased 10.3%, Asia Pacific increased
7.3%, Japan decreased 5.8% and Europe decreased 7.3%. John McCarvel
continued “while the unfavorable weather patterns in North America and
Europe impacted our same store sales in the first quarter, we were
pleased to see the early season success in Asia and the nascent signs of
recovery in Japan. The first quarter on average represents just over 15%
of retail sales for the year, therefore we remain confident that we can
achieve modest year-over-year comparable store sales growth similar to
2012 growth rates.”
Balance Sheet
Cash and cash equivalents at March 31, 2013 decreased 21.0% compared
with year end 2012 and increased 12.6% compared with March 31, 2012.
During the first quarter of 2012 we repurchased approximately 834,000
shares of common stock for an aggregate of approximately $12.5 million
in cash. Inventories at March 31, 2013 were $177.8 million, up 7.9%
compared with year end 2012 and up 5.2% compared with inventories at
March 31, 2012.
Backlog
Backlog at March 31, 2013 was $292.9 million, up 1.5% compared with
$288.7 in the prior year period. On a constant currency basis backlog at
March 31, 2013 was up 5.0% compared to the prior year period.
Financial Outlook
For the second quarter of 2013, the company expects revenue between $360
million and $370 million and diluted earnings per share between $0.60
and $0.63. This outlook includes $(0.02) per share of ERP implementation
expense and reflects an impact of $(0.04) for currency translation.
Conference Call Information
A conference call to discuss Crocs’ first quarter 2013 results is
scheduled for today (April 24, 2013) 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
and at www.earnings.com.
An audio replay of the webcast will be available on the Crocs website
for one year.
Interested parties are advised to log on to the live webcast at least
fifteen minutes prior to the call in order to download the necessary
software.
About Crocs, Inc.
Crocs, Inc. is a world leader in innovative casual footwear for men,
women and children. Crocs offers several distinct shoe collections with
more than 300 four-season footwear styles. 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 fans “Get
Crocs Inside” every pair of shoes, from the iconic clog to new sneakers,
sandals, boots and heels. Since its inception in 2002, Crocs has sold
more than 200 million pairs of shoes in more than 90 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 future revenue and earnings,
backlog, future orders, prospects, outlook and product pipeline. 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 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; our ability to
open and operate additional retail locations; 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 April 24, 2013. 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 INCOME (UNAUDITED)
FOR THE THREE
MONTHS ENDED MARCH 31, 2013 AND 2012
(In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
($ thousands, except per share data)
|
|
2013
|
|
2012
|
|
Revenues
|
|
$
|
311,656
|
|
|
$
|
271,798
|
|
|
Cost of sales
|
|
|
145,807
|
|
|
|
126,999
|
|
|
Gross profit
|
|
|
165,849
|
|
|
|
144,799
|
|
|
Selling, general and administrative expenses
|
|
|
128,199
|
|
|
|
104,290
|
|
|
Asset impairment
|
|
|
-
|
|
|
|
713
|
|
|
Income from operations
|
|
|
37,650
|
|
|
|
39,796
|
|
|
Foreign currency transaction losses, net
|
|
|
2,600
|
|
|
|
4,276
|
|
|
Other income, net
|
|
|
(334
|
)
|
|
|
(598
|
)
|
|
Interest expense
|
|
|
209
|
|
|
|
47
|
|
|
Income before income taxes
|
|
|
35,175
|
|
|
|
36,071
|
|
|
Income tax expense
|
|
|
6,214
|
|
|
|
7,725
|
|
|
Net income
|
|
$
|
28,961
|
|
|
$
|
28,346
|
|
|
Net income per common share:
|
|
|
|
|
|
Basic
|
|
$
|
0.33
|
|
|
$
|
0.32
|
|
|
Diluted
|
|
$
|
0.33
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
CROCS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
AS OF MARCH 31, 2013 AND DECEMBER
31, 2012
(In thousands, except share amounts)
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
($ thousands, except number of shares)
|
|
2013
|
|
2012
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
232,673
|
|
|
$
|
294,348
|
|
|
Accounts receivable, net of allowances of $14,425 and $13,315,
respectively
|
|
|
177,360
|
|
|
|
92,278
|
|
|
Inventories
|
|
|
177,814
|
|
|
|
164,804
|
|
|
Deferred tax assets, net
|
|
|
5,868
|
|
|
|
6,284
|
|
|
Income tax receivable
|
|
|
8,320
|
|
|
|
5,613
|
|
|
Other receivables
|
|
|
17,621
|
|
|
|
24,821
|
|
|
Prepaid expenses and other current assets
|
|
|
27,047
|
|
|
|
24,967
|
|
|
Total current assets
|
|
|
646,703
|
|
|
|
613,115
|
|
|
Property and equipment, net
|
|
|
85,746
|
|
|
|
82,241
|
|
|
Intangible assets, net
|
|
|
61,532
|
|
|
|
59,931
|
|
|
Deferred tax assets, net
|
|
|
33,722
|
|
|
|
34,112
|
|
|
Other assets
|
|
|
49,135
|
|
|
|
40,239
|
|
|
Total assets
|
|
$
|
876,838
|
|
|
$
|
829,638
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
85,145
|
|
|
$
|
63,976
|
|
|
Accrued expenses and other current liabilities
|
|
|
85,663
|
|
|
|
81,371
|
|
|
Deferred tax liabilities, net
|
|
|
2,440
|
|
|
|
2,405
|
|
|
Income taxes payable
|
|
|
11,535
|
|
|
|
8,147
|
|
|
Current portion of long-term borrowings and capital lease obligations
|
|
|
2,250
|
|
|
|
2,039
|
|
|
Total current liabilities
|
|
|
187,033
|
|
|
|
157,938
|
|
|
Long term income tax payable
|
|
|
35,333
|
|
|
|
36,343
|
|
|
Long-term borrowings and capital lease obligations
|
|
|
7,112
|
|
|
|
4,596
|
|
|
Other liabilities
|
|
|
13,546
|
|
|
|
13,361
|
|
|
Total liabilities
|
|
|
243,024
|
|
|
|
212,238
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
Preferred shares, par value $0.001 per share, 5,000,000 shares
authorized, none outstanding
|
|
|
-
|
|
|
|
-
|
|
|
Common shares, par value $0.001 per share, 250,000,000 shares
authorized, 91,327,712 and
88,102,196 shares issued and
outstanding, respectively, at March 31, 2013 and 91,047,297
and
88,662,845 shares issued and outstanding, respectively, at
December 31, 2012
|
|
|
92
|
|
|
|
91
|
|
|
Treasury stock, at cost, 3,225,516 and 2,384,452 shares, respectively
|
|
|
(56,837
|
)
|
|
|
(44,214
|
)
|
|
Additional paid-in capital
|
|
|
311,916
|
|
|
|
307,823
|
|
|
Retained earnings
|
|
|
362,973
|
|
|
|
334,012
|
|
|
Accumulated other comprehensive income
|
|
|
15,670
|
|
|
|
19,688
|
|
|
Total stockholders’ equity
|
|
|
633,814
|
|
|
|
617,400
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
876,838
|
|
|
$
|
829,638
|
|
|
|
|
|
|
|
|
|
|
|
CROCS, INC. AND SUBSIDIARIES
UNAUDITED NON-GAAP NET
INCOME RECONCILIATIONS
FOR THE THREE MONTHS ENDED MARCH 31,
2013 AND 2012
(In thousands, except per share amounts)
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 the
non-GAAP metrics constant currency and Non-GAAP net income. Constant
currency excludes the effects of foreign exchange rate fluctuations by
restating current period results using the prior year average exchange
rates. Non-GAAP net income excludes the impact of new enterprise
resource planning system (“ERP”) implementation expenses, non-recurring
tax benefits, the accelerated depreciation and amortization of our
current ERP system and certain legal and other contingency accruals. In
management’s opinion, these non-GAAP measures are used by, and are
useful to, investors and other users of our financial statements in
evaluating operating performance by providing better comparability
between reporting periods because they exclude items that may not be
indicative of overall business trends 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.
The following is a reconciliation of our net income, the most directly
comparable U.S. GAAP measure, to Non-GAAP net income:
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income:
|
|
2013
|
|
2012
|
|
GAAP net income
|
|
$
|
28,961
|
|
$
|
28,346
|
|
New ERP implementation (1) |
|
|
1,131
|
|
|
--
|
|
Depreciation and amortization (2) |
|
|
722
|
|
|
-
|
|
Non-GAAP adjusted net income
|
|
$
|
30,814
|
|
$
|
28,346
|
|
|
|
|
|
|
|
Non-GAAP adjusted net income per diluted share
|
|
$
|
0.35
|
|
$
|
0.31
|
|
|
|
|
|
|
|
(1) This proforma adjustment in the GAAP to Non-GAAP
reconciliations above represents expenses related to the
implementation of a new ERP system.
|
|
|
|
|
|
|
|
(2) This proforma adjustment in this GAAP to Non-GAAP
reconciliation represents the add-back of accelerated depreciation
and amortization on tangible and intangible items related to our
current ERP system and supporting platforms that will no longer be
utilized once the implementation of a new ERP is complete.
|
|
|
|
CROCS, INC. AND SUBSIDIARIES
RETAIL STORE COUNTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
March 31,
|
|
Company-operated retail locations:
|
|
2013
|
|
Opened
|
|
Closed
|
|
2012
|
|
Type:
|
|
|
|
|
|
|
|
|
|
Kiosk/Store in Store
|
|
116
|
|
36
|
|
(65
|
)
|
|
145
|
|
Retail Stores
|
|
295
|
|
116
|
|
(19
|
)
|
|
198
|
|
Outlet Stores
|
|
136
|
|
43
|
|
(4
|
)
|
|
97
|
|
Total
|
|
547
|
|
195
|
|
(88
|
)
|
|
440
|
|
Geography:
|
|
|
|
|
|
|
|
|
|
Americas
|
|
203
|
|
46
|
|
(34
|
)
|
|
191
|
|
Asia Pacific
|
|
195
|
|
63
|
|
(50
|
)
|
|
182
|
|
Japan
|
|
46
|
|
17
|
|
-
|
|
|
29
|
|
Europe
|
|
103
|
|
69
|
|
(4
|
)
|
|
38
|
|
Total
|
|
547
|
|
195
|
|
(88
|
)
|
|
440
|
|
|
|
|
|
|
|
|
|
|
1 Non-GAAP net income is a financial measure not calculated
in accordance with U.S. Generally Accepted Accounting Principles
(non-GAAP). See the non-GAAP reconciliations set forth later in this
press release for additional information.
2 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 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 thirteen month post re-opening. Current period
results have been restated using 2012 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.
Source: Crocs Inc.
Crocs Inc.
Investor Contact:
William I. Kent,
303-848-7000
wkent@crocs.com
or
Media
Contact:
Katy Lachky, 303-848-7000
klachky@crocs.com