Crocs, Inc. (NASDAQ: CROX) today reported financial results for the
quarter ended March 31, 2008. Revenues for the quarter ended March
31, 2008 increased 39.8% to $198.5 million compared to $142.0
million for the quarter ended March 31, 2007. For the quarter ended
March 31, 2008 domestic sales rose approximately 11.7% to $92.6
million compared to $83.0 million for the same period a year ago,
and international sales increased 79.5% to $105.9 million from
$59.0 million for the quarter ended March 31, 2007. The Company
reported a net loss of $4.5 million, or ($0.05) per share, compared
to net income of $24.9 million, or $0.31 per diluted share for the
quarter ended March 31, 2007. On a Non-GAAP basis, excluding a
portion of the $12.1 million after-tax charge associated with the
shutdown of the Company�s Canadian manufacturing operations, the
Company reported net income of $7.6 million, or $0.09 per diluted
share in the first quarter of 2008. Net loss per share and net
income per diluted share for the quarters ended March 31, 2008 and
2007 are adjusted to reflect the two-for-one stock split that took
effect in June 2007. Gross profit for the first quarter of 2008 was
$84.2 million, or 42.4% of revenues, compared to $84.5 million, or
59.5% of revenues for the first quarter of 2007. Selling, general
and administrative expenses for the quarter ended March 31, 2007
were $77.0 million, or 38.8% of revenues, compared to $47.3
million, or 33.3% of revenues in the quarter ended March 31, 2007.
Ron Snyder, President and Chief Executive Officer of Crocs, Inc.
commented: �As we previously announced, our first quarter domestic
sales came in below our original projections due to a combination
of factors, including slower traffic at many of our retail partners
and colder than normal temperatures that delayed the start to the
spring selling season. Overseas, we experienced significant sales
increases in Europe and Asia which were up 109.2% and 92.5% from
the first quarter of last year, respectively; however this was not
enough to offset the shortfall in our U.S. business. While we are
disappointed with our start to the new year, we remain confident
about the strength of our brand, optimistic about our future
prospects, and committed to executing our long-term strategic
plan.� Guidance For the year ending December 31, 2008, Crocs
reaffirmed its previously revised outlook of revenue growth between
15% and 20% over 2007 levels with diluted earnings per share in the
range of approximately $1.54 to $1.64, including the total pre-tax
charges of approximately $20 million, or $0.16 per diluted share
associated with the shutdown of the Company�s Canadian
manufacturing operations. Excluding the charge, fiscal 2008 diluted
earnings per share are expected to be between $1.70 and $1.80. For
the quarter ending June 30, 2008, the Company reiterated that it
expects revenues to increase approximately 10% to 15% over the
corresponding period of 2007 with diluted earnings per share in the
range of $0.42 to $0.47 including a portion of the aforementioned
pre-tax charges associated with the shutdown of the Company�s
Canadian manufacturing operations equaling approximately $4
million, or $0.03 per diluted share. Excluding this charge, the
Company expects second quarter 2008 diluted earnings per share in
the range of $0.45 to $0.50. Conference Call Information A
conference call to discuss first quarter fiscal 2008 financial
results is scheduled for today (May 7, 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, future sales in
earnings, 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 March 31, 2008 � 2007 �
Revenues $ 198,540 � $ 142,002 Cost of sales 113,305 57,517 Gross
profit 85,235 84,485 � � Selling, general and administrative
expenses 76,977 � 47,327 Restructuring charges 3,849 � - Asset
impairment charges 10,813 � - Income (loss) from operations (6,404
) 37,158 � Interest expense 374 � 63 Other expense (income), net
(362 ) (516 ) Income (loss) before income taxes (6,416 ) � 37,611 �
Income tax expense (benefit) (1,889 ) 12,666 � Net income (loss)
(4,527 ) � 24,945 � Net income (loss) per share: Basic $ (0.05 ) �
$ 0.32 Diluted $ (0.05 ) � $ 0.31 � Weighted average common shares:
Basic 82,488,601 79,263,962 Diluted 82,488,601 (1) � 82,439,648 �
(1) As the Company reported a net loss for the quarterended March
31, 2008, the dilutive effect of stockoptions and awards did not
enter into the computationof diluted earnings per share because
their inclusionwould have been anti-dilutive. � Crocs, Inc.
Consolidated Balance Sheets (In thousands, except share and per
share data) (unaudited) � March 31, December 31, 2008 2007 ASSETS
Current assets: Cash and cash equivalents $ 29,593 $ 36,335
Restricted cash 3,305 300 Accounts receivable, net 154,622 152,919
Inventories, net 265,515 248,391 Deferred tax assets 13,719 12,140
Prepaid income taxes 4,336 - Prepaid expenses and other current
assets 23,434 17,865 Assets held for sale 927 - � Total current
assets 495,451 467,950 � Property and equipment, net 90,898 88,184
Restricted cash - 1,014 Goodwill 22,975 23,759 Other intangibles,
net 34,013 31,634 Deferred tax assets, net 21,412 8,051 Other
assets 8,916 6,833 Total assets $ 673,665 $ 627,425 � LIABILITIES
AND STOCKHOLDERS' EQUITY � Current liabilities: Accounts payable $
76,074 $ 82,979 Accrued restructuring charges 3,765 - Accrued
expenses and other liabilities 54,162 57,246 Deferred tax
liabilities 659 265 Income taxes payable 17,997 19,851 Notes
payable and current installments of long-term debt 42,789 7,107 �
Total current liabilities 195,446 167,448 � Long-term debt - 9
Deferred tax liabilities 6,236 1,858 Other liabilities 18,576
13,997 � Total liabilities 220,258 183,312 � � Stockholders'
equity: Common shares, par value $0.001 per share; 250,000,000
authorized, 82,663,803and 82,682,047 shares issued and outstanding,
in 2008 and 79,830,578 and 78,681,418shares issued and outstanding
in 2007 84 83 Treasury Stock, at cost, 524,000 shares as of
December 31, 2007 (25,022 ) � (25,022 ) Additional paid-in-capital
222,036 211,936 Deferred compensation (1,719 ) � (2,402 ) Retained
earnings 244,784 249,309 Accumulated other comprehensive income
13,244 10,209 Total stockholders' equity 453,407 471,537 � Total
liabilities and stockholders' equity $ 673,665 $ 654,849
Reconciliation of Non-GAAP Performance Measures (Amounts in
thousands, except per share data) for the three months ended March
31, 2008 (unaudited) � � GAAP - based loss per share $ (0.05 ) �
Inventory write down 0.02 Asset impairment charges 0.09
Restructuring charges 0.03 � Non-GAAP earnings per diluted share
0.09 � � � 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.
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