CROX Crocs Inc

Crocs, Inc. (NASDAQ: CROX) today reported strong financial results for the quarter and fiscal year ended December 31, 2007. Revenues for the quarter ended December 31, 2007 increased 99.1% to $224.8 million compared to $112.9 million for the quarter ended December 31, 2006. For the quarter ended December 31, 2007 domestic sales rose approximately 47% to $115.8 million compared to $78.8 million a year ago and international sales increased 221% to $109 million from $34 million a year ago. Net income for the quarter ended December 31, 2007 increased 84.1% to $38.3 million, or $0.45 per diluted share, compared to $20.8 million, or $0.26 per diluted share, for the quarter ended December 31, 2006. Net income per diluted share for the quarters ended December 31 2007 and 2006 are adjusted to reflect the two-for-one stock split that took effect in June 2007. Gross profit for the fourth quarter of 2007 was $125.8 million, or 56.0% of revenues, compared to $65.1 million, or 57.7% of revenues for the fourth quarter of 2006. Selling, general and administrative expenses for the quarter ended December 31, 2007 were $71.9 million, or 32.0% of revenues, compared to $34.9 million, or 30.9% of revenues in the quarter ended December 31, 2006. Ron Snyder, President and Chief Executive Officer of Crocs, Inc. commented �For the eighth quarter in a row Crocs delivered industry leading revenue growth, net income growth and EPS growth. Our more than 99% revenue gain in the fourth quarter highlights the ongoing strong demand for Crocs branded footwear. We experienced better than expected sell through of our fall line across men�s, women�s, and children�s in each of our markets. To meet the higher than anticipated orders over the holiday period we delivered a meaningful amount of Mammoths by air-freight, which impacted our gross margin. However, we were still able to grow diluted earnings per share by 73% in the fourth quarter. As we approach the spring and summer selling seasons, our bookings are strong compared to December 31, 2006, our inventories are on plan and we believe we are well positioned to achieve our short and long-term growth objectives.� Revenues for the year ended December 31, 2007 increased 138.9% to $847.4 million compared to $354.7 million for the year ended December 31, 2006. For the year ended December 31, 2007, domestic sales rose approximately 82% to $440 million from $242 million and international sales increased 264% to $408 million from $112 million a year ago. Net income for the year ended December 31, 2007 increased 161.2% to $168.2 million, or $2.00 per diluted share, compared to $64.4 million, or $0.81 per diluted share for the year ended December 31, 2006. Net income per diluted share amounts for 2007 and 2006 are adjusted to reflect the two-for-one stock split that took effect in June 2007. Gross profit for 2007 was $497.6 million, or 58.7% of revenues, compared to $200.6 million, or 56.5% of revenues for 2006. Selling, general and administrative expenses for the year ended December 31, 2007 were $259.9 million, or 30.7% of revenues, compared to $105.2 million, or 29.7% of revenues in the year ended December 31, 2006. �We are very pleased to have completed a landmark year in our Company�s development with record sales and profits and several important strategic advances,� continued Mr. Snyder. �2007 was highlighted by the evolution of our product line, our significant expansion overseas, key investments in our operating platform, and the growing popularity of the Crocs brand in various markets throughout the world. At the same time, we acquired and developed other businesses and diversified into additional categories which we believe will provide us with compelling new growth vehicles for the future. We move forward focused on enhancing our global position and building a stronger, more financially robust company.� Guidance For the year ending December 31, 2008, Crocs reiterated its previously issued growth targets and expects revenues of approximately $1.16 billion and net income per diluted share of approximately $2.70. For the six-months ending June 30, 2008, the Company expects revenues to increase approximately 50% over the six-month period ended June 30, 2007. Balance Sheet At December 31, 2007, Crocs had inventories of $248.4 million compared to $195.3 as of September 30, 2007. Accounts receivables were $152.9 million as of December 31, 2007 compared to $160.6 million as of September 30, 2007. Mr. Snyder concluded, �Since introducing our first shoe just five years ago, we have rapidly grown our portfolio to approximately 250 different styles, extended our reach into more than 90 countries, and achieved almost $850 million in annual sales. That said, we believe that we are still in the early stages of our development and see considerable opportunity to grow our domestic business through product innovation, category expansion, and increased retail floor space. Internationally, our sales accelerated over the past 12-months in Europe and Japan thanks to our many brand building initiatives, which gives us confidence as we prepare to launch a broader assortment of footwear and continue with our strategic investments in growing markets. We remain optimistic about our many long-term growth prospects and dedicated to creating greater value for our shareholders.� Conference Call Information A conference call to discuss fourth quarter and fiscal 2007 year-end financial results is scheduled for today (February 19, 2008) 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 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 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 retailer of footwear for men, women and children under the Crocs� brand. All Crocs� brand shoes feature Crocs� proprietary closed-cell resin, Croslite�, which represents a substantial innovation in footwear. The Croslite� material enables us to produce soft, comfortable, lightweight, superior-gripping, non-marking and odor-resistant shoes. These unique elements make Crocs� footwear ideal for casual wear, as well as for professional and recreational uses such as boating, hiking, hospitality and gardening. The versatile use of the material has enabled us to successfully market our products to a broad range of consumers. In 2006, the company acquired Jibbitz LLC, a unique accessory brand with colorful snap-on products specifically suited for Crocs shoes. Today, more than 1,600 Jibbitz designs are available to consumers for personalizing and customizing their Crocs� footwear. Please visit www.crocs.com for additional information. 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 future prospects, inventory and strategic advances and our expectations regarding our growth, international expansion, bookings, worldwide popularity and product development. 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 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. Crocs, Inc. Consolidated Statements of Operations (In thousands, except share and per share data) (unaudited) � � THREE MONTHS ENDED � TWELVE MONTHS ENDED December 31, December 31, 2007 � 2006 2007 � 2006 � Revenues $ 224,800 $ 112,904 $ 847,350 $ 354,728 Cost of sales 98,973 47,809 349,701 154,158 Gross profit 125,827 65,095 497,649 200,570 � � Selling, general and administrative expenses 71,926 34,879 259,882 105,224 Income from operations 53,901 30,216 237,767 95,346 � Interest expense 132 35 438 567 Other income, net (923) (537) (2,997) (1,847) Income before income taxes 54,692 30,718 240,326 96,626 � Income tax expense 16,408 9,933 72,098 32,209 � Net income 38,284 20,785 168,228 64,417 � Dividends on redeemable convertible preferred shares - - - 33 Net income attributable to common stockholders 38,284 20,785 168,228 64,384 � Net income per share: Basic $ 0.47 $ 0.27 $ 2.08 $ 0.87 Diluted $ 0.45 $ 0.26 $ 2.00 $ 0.81 � Weighted average common shares: Basic 81,937,028 78,301,000 80,759,077 74,598,400 Diluted 85,240,020 82,240,722 84,194,883 80,170,512 Crocs, Inc. Consolidated Balance Sheets (In thousands, except share and per share data) (unaudited) � � December 31, � December 31, 2007 2006 ASSETS Current assets: Cash and cash equivalents $ 36,335 $ 42,656 Restricted cash 300 2,890 Short-term investments - 22,325 Accounts receivable, net 152,919 65,588 Inventories, net 248,391 86,210 Deferred tax assets 13,507 3,690 Prepaid income tax - 4,715 Prepaid expenses and other current assets 17,865 9,617 � Total current assets 470,331 237,691 � Property and equipment, net 88,184 34,849 Restricted Cash 1,014 - Goodwill 23,759 11,552 Other intangibles, net 31,634 12,210 Deferred tax assets, net 67 1,280 Other assets 12,168 1,875 Total assets $ 626,143 $ 299,457 � LIABILITIES AND STOCKHOLDERS' EQUITY � Current liabilities: Accounts payable $ 82,979 $ 43,794 Accrued expenses and other liabilities 57,246 31,109 Deferred tax liabilities 24 - Income taxes payable 16,596 12,465 Notes payable and current installments of long-term debt 7,107 541 � Total current liabilities 163,952 87,909 � Long-term debt 9 116 Deferred tax liabilities 2,414 1,688 Other liabilities 8,789 1,486 � Total liabilities 175,164 91,199 � � Stockholders' equity: Common shares, par value $0.001 per share; 250,000,000 authorized, 82,198,426 and 78,681,418 shares issued and outstanding in 2007 and 2006 83 77 Treasury Stock, at cost, 524,000 shares as of December 31, 2007 (25,022) Additional paid-in-capital 218,802 131,796 Deferred compensation (2,402) (5,702) Retained earnings 249,309 81,081 Accumulated other comprehensive income 10,209 1,006 Total stockholders' equity 450,979 208,258 � Total liabilities and stockholders' equity $ 626,143 $ 299,457