Crocs, Inc. (NASDAQ: CROX): -- Second Quarter Revenues More than
Triple to $85.6 Million vs. $25.8 Million Last Year -- Company
Reports 2Q06 Diluted EPS Including Share-based Compensation of
$0.39 vs. $0.10 Last Year -- Company Issues Third Quarter 2006
Guidance Crocs, Inc. (NASDAQ: CROX) today reported its results of
operations for the second quarter ended June 30, 2006. Revenues for
the second quarter ended June 30, 2006 increased 231.8% to $85.6
million compared to revenues of $25.8 million for the second
quarter ended June 30, 2005. Revenue for the six months ended June
30, 2006 increased 255.6% to $130.5 million compared to revenues of
$36.7 million for the six months ended June 30, 2005. Net income
attributable to common stockholders for the second quarter of
fiscal 2006 was $15.7 million, or $0.39 per diluted share, compared
to net income attributable to common stockholders of $3.3 million,
or $0.10 per diluted share, for the second quarter of fiscal 2005.
Second quarter net income attributable to common stockholders
includes non-cash share-based compensation expense, net of tax
effect, of $1.5 million compared to $685,000 for the comparable
period of 2005. Excluding the non-cash share-based compensation
expense, non-GAAP net income was $17.2 million and non-GAAP net
income per diluted common share was $0.43 for the second quarter
ended June 30, 2006. Net income attributable to common stockholders
for the six months ended June 30, 2006 was $22.1 million, or $0.56
per diluted share, compared to net income attributable to common
stockholders of $5.3 million, or $0.16 per diluted share, for the
six months ended June 30, 2005. -0- *T Three months ended Six
months ended June 30, June 30, ------------------
------------------ (In thousands, except per share data) 2006 2005
2006 2005 --------- -------- --------- -------- Revenues $85,635
$25,769 $130,477 $36,727 GAAP net income attributable to common
stockholders $15,666 $3,282 $22,074 $5,254 Non-GAAP net income,
excluding share-based compensation, net of tax effect $17,198
$3,967 $24,636 $7,415 GAAP net income per diluted common share
$0.39 $0.10 $0.56 $0.16 Non-GAAP net income per diluted common
share, excluding share- based compensation $0.43 $0.12 $0.63 $0.22
*T Ron Snyder, President and Chief Executive Officer of Crocs,
Inc., commented "Our second quarter results were much stronger than
we anticipated due to increased demand for our footwear both
domestically and overseas. Importantly, sales were driven by robust
demand for our core product, as well as positive consumer reaction
to our new styles, such as Athens, Off-Road and Scutes. At the same
time, we drove improvements in operating leverage, which allowed us
to generate a significant improvement in our bottom line." Gross
profit for the three months ended June 30, 2006 was $47.0 million,
or 54.8% of revenues, compared to gross profit of $14.0 million, or
54.2% of revenues for the three months ended June 30, 2005. Gross
profit for the six months ended June 30, 2006 was $70.6 million, or
54.1% of revenues, compared to gross profit of $20.8 million, or
56.7% of revenues for the six months ended June 30, 2005. Selling,
general and administrative expenses for the three months ended June
30, 2006 was $23.3 million, or 27.2% of revenues, compared to $8.6
million, or 33.2% of revenues in the corresponding period a year
ago. Selling, general and administrative expenses for the six
months ended June 30, 2006 was $37.0 million, or 28.4% of revenues,
compared to $13.2 million, or 35.6% of revenues in the
corresponding period a year ago. For the third quarter ending
September 30, 2006, the Company currently anticipates total
revenues to be in the range of $87.0 to $90.0 million and projects
its net income per diluted share to range from $0.38 to $0.40,
including share-based compensation expense. Mr. Snyder concluded,
"The first six months of 2006 have been marked by a number of
important accomplishments for Crocs. Financially, we reported
significant improvements in revenues, net income, and income per
diluted share, as well as completed a very successful initial
public offering. Operationally, we made strategic investments in
our infrastructure, particularly in the areas of manufacturing,
shipping and warehousing in order to better serve our retail
partners and to fully capitalize on the growing demand for our
products. Strategically, we have further diversified our business
with the introduction of new products and the addition of new
channels of distribution. We are very pleased with the progress we
have made across the board and we look forward to building on our
positive momentum going forward." Non-GAAP Disclosures This press
release includes certain non-GAAP financial measures with respect
to net income and diluted earnings per common share, excluding the
impact of share-based compensation expense. The Company's
management uses these measures to monitor and evaluate operating
results and trends and to gain an understanding of the comparative
operating performance of the Company. The Company believes these
measures enable investors to assess the Company's performance on
the same basis applied by management and to ease comparisons of the
Company's operating performance from period to period and among
other companies that separately identify share-based compensation
expenses. Conference Call Information A conference call to discuss
second quarter fiscal 2006 financial results is scheduled for today
(Thursday, August 3) at 4:30 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.viavid.net. To listen to the broadcast,
your computer must have Windows Media Player installed. If you do
not have Windows Media Player, go to the latter site prior to the
call, where you can download the software for free. 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(TM)
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.
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,
including statements related to our expectations regarding our
total revenues and net income per diluted share for the third
quarter ending September 30, 2006. 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 our 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 statement, including, without limitation, any
estimate regarding revenues or earnings, whether as a result of the
receipt of new information, future events, or otherwise. -0- *T
Crocs, Inc. Consolidated Statements of Operations (In thousands,
except share and per share data) (unaudited) THREE MONTHS ENDED SIX
MONTHS ENDED June 30, June 30, 2006 2005 2006 2005(1) Revenues $
85,635 $ 25,769 $ 130,477 $ 36,727 Cost of Sales 38,665 11,800
59,828 15,919 Gross Profit 46,970 13,969 70,649 20,808 Selling,
general and administrative expenses 23,312 8,552 36,978 13,225
Income from operations 23,658 5,417 33,671 7,583 Interest expense
92 165 391 202 Other expense (income), net: (366) 6 (662) 23 Income
before income taxes 23,932 5,246 33,942 7,358 Income tax expense
8,266 1,896 11,835 1,968 Net income 15,666 3,350 22,107 5,390
Dividends on redeemable convertible preferred shares 0 68 33 136
Net income attributable to common stockholders 15,666 3,282 22,074
5,254 Net income per share: Basic $ 0.41 $ 0.13 $ 0.62 $ 0.16
Diluted $ 0.39 $ 0.10 $ 0.56 $ 0.16 Weighted average common shares:
Basic 38,286,877 25,217,641 35,608,875 25,197,004 Diluted
40,427,703 33,497,743 39,351,248 33,289,163 (1) Our Statement of
Operations for the six month period ended June 30, 2005 has been
restated to reflect the effect of adjustments to our share-based
compensation. See the notes to our Form 10-Q filing for the quarter
ended June 30, 2006 for further information, which will be filed by
August 14, 2006. Crocs, Inc. Consolidated Balance Sheets (In
thousands, except share and per share data) (unaudited) June 30,
December 31, 2006 2005 ASSETS Current assets: Cash and cash
equivalents $ 67,017 $ 4,787 Accounts receivable, net 47,252 17,641
Inventories, net 40,839 28,494 Deferred tax assets 1,636 1,939
Prepaid expenses and other current assets 3,345 3,492 Total current
assets 160,089 56,353 Property and equipment, net 19,924 14,765
Goodwill 351 336 Other intangibles, net 7,523 5,311 Deferred tax
assets, net 1,532 1,084 Other assets 777 183 Total assets $190,196
$ 78,032 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 15,466 $ 20,829 Accrued liabilities and other
liabilities 16,101 8,178 Income taxes payable 5,214 8,697 Notes
payable and current installments of long-term debt 864 8,601 Total
current liabilities 37,645 46,305 Long-term debt 1,742 3,422
Deferred tax liability 1,884 1,772 Other liabilities 286 319 Total
liabilities 41,557 51,818 Commitments and contingencies Redeemable
common shares, 8,410,320 shares issued and outstanding at December
31, 2005 - 1,800 Redeemable convertible preferred shares, par value
$0.001 per share; 8,000,000 shares authorized 7,452,492 shares
issued and outstanding in 2005 - preferences in liquidation of
$5,500 - 5,500 Stockholders' equity: Common shares, par value
$0.001 per share; 125,000,000 and 25,000,000 shares authorized,
38,411,687 and 17,449,699 shares issued and outstanding 38 17
Additional paid-in-capital 117,202 13,976 Deferred compensation
(8,186) (12,364) Retained earnings 38,772 16,697 Accumulated other
comprehensive income 813 588 Total stockholders' equity 148,639
18,914 Total liabilities and stockholders' equity $190,196 $ 78,032
Crocs, Inc. Reconciliation of Non-GAAP Financial Results (In
thousands, except share and per share data) (unaudited) THREE
MONTHS ENDED SIX MONTHS ENDED June 30, June 30, 2006 2005 2006
2005(1) GAAP Net income attributable to common stockholders $15,666
$ 3,282 $ 22,074 $ 5,254 Plus: Share-based compensation, net of tax
1,532 685 2,562 2,161 --------- ---------- -------- ---------
Non-GAAP net income 17,198 3,967 24,636 7,415 --------- ----------
-------- --------- Non-GAAP net income per share: Diluted $ 0.43 $
0.12 $ 0.63 $ 0.22 Weighted average common shares: Diluted
40,427,703 33,497,743 39,351,248 33,289,163 (1) Our Statement of
Operations for the six month period ended June 30, 2005 has been
restated to reflect the effect of adjustments to our share-based
compensation. See the notes to our Form 10-Q filing for the quarter
ended June 30, 2006 for further information, which will be filed by
August 14, 2006. *T
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