Crocs, Inc. (NASDAQ: CROX) today reported financial results for
the first quarter ended March 31, 2011.
Revenue for the first quarter of 2011 increased 35.9% to $226.7
million compared to revenue of $166.9 million reported in the first
quarter of 2010. Net income for the first quarter of 2011 increased
276.1% to $21.5 million, or $0.24 per diluted share compared to net
income of $5.7 million, or $0.07 per diluted share in the first
quarter 2010.
John McCarvel, President and Chief Executive Officer, stated:
“We were very pleased to achieve record first quarter sales along
with significantly improved earnings over the year ago period. The
contributions to our recent performance have been broad based and
reflect the positive benefits of our multi-channel and
international business model. In 2011, we have experienced solid
demand for our products led by several new collections throughout
each of our geographic regions. The collaborative efforts of our
sales, marketing and merchandising teams is visible in our retail
stores, at our wholesale accounts and on the internet, and is
helping transform Crocs into a year round footwear brand. After a
strong start to the year we head into our peak selling season with
positive momentum and a clear strategy in place to capitalize on
the many opportunities in front of us.”
Year-over year first quarter changes in the Company’s channel
revenue streams were as follows:
- Wholesale sales increased 36.9% to
$164.6 million;
- Retail sales increased 32.5% to $45.5
million;
- Internet sales increased 35.3% to $16.7
million.
Year-over year first quarter changes in the Company’s regional
revenue streams were as follows:
- Americas increased 35.0% to $100.2
million;
- Asia increased 32.8% to $72.6
million;
- Europe increased 42.5% to $53.8
million.
Gross profit for the first quarter of 2011 increased 37.5% to
$119.2 million, or 52.6% as a percentage of sales, from $86.7
million, or 52.0% of sales in same period last year. Selling,
General, & Administrative expenses (including foreign exchange,
restructuring, impairment, and charitable contributions) increased
17.7% to $91.0 million versus $77.3 million a year ago. As a
percentage of sales, SG&A decreased to 40.1% from 46.3% in the
first quarter of 2010.
Balance Sheet
Cash and cash equivalents at March 31, 2011 increased 114.7% to
$115.5 million compared to $53.8 million at March 31, 2010.
Inventories at March 31, 2011 were $153.8 million, up from $107.2
million at March 31, 2010. The increase in inventories at March 31,
2011 was primarily attributable to the global growth in wholesale
orders and the increase in company-operated retail stores. The
Company ended the first quarter of 2011 with accounts receivable of
$123.0 million compared to $97.4 million at March 31, 2010.
Guidance
For the second quarter of 2011, the Company expects revenue of
approximately $280 million, a 23% increase over second quarter
2010. The Company expects diluted earnings per share for the second
quarter 2011 to be approximately $0.43.
Conference Call Information
A conference call to discuss Crocs’ first quarter 2011 financial
results is scheduled for today (April 28, 2011) 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 250 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 90 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
include, but not limited to, statements regarding future revenue,
margin and earnings; backlog and future orders; expansion of our
business; and product diversification. 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. 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)
Three Months Ended March 31, ($ thousands,
except per share amounts) 2011 2010
Revenues $ 226,708 $ 166,852 Cost of sales 107,502
80,148 Gross profit 119,206 86,704 Selling, general
and administrative expenses 88,614 74,778
Foreign currency transaction losses
(gains), net
1,315 (292 ) Restructuring charges - 2,539 Asset impairment 32 141
Charitable contributions expense 997 143
Income (loss) from operations 28,248 9,395 Interest expense
188 129 Gain on charitable contributions (257 ) (84 ) Other
(income) expense 328 241 Income (loss)
before income taxes 27,989 9,109 Income tax (benefit) expense
6,485 3,392 Net income (loss) $ 21,504
$ 5,717 Net income (loss) per common share: Basic $
0.24 $ 0.07 Diluted $ 0.24 $ 0.07
CROCS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, December 31, March 31,
($ thousands, except number of shares) 2011
2010 2010 ASSETS Current assets: Cash
and cash equivalents $ 115,499 $ 145,583 $ 53,800
Accounts receivable, net of allowance for
doubtful accounts of $12,613 and $10,249 and $9,555,
respectively
123,022 64,260 97,421 Inventories 153,844 121,155 107,183 Deferred
tax assets, net 13,372 15,888 7,352 Income tax receivable 7,845
9,062 11,467 Other receivables 15,039 11,637 12,337
Prepaid expenses and other current
assets
15,096 13,429 13,420 Total current assets
443,717 381,014 302,980 Property and equipment, net 69,455
70,014 68,054 Intangible assets, net 46,232 45,461 38,597 Deferred
tax assets, net 34,862 34,711 18,484 Other assets 19,121
18,281 19,151 Total assets $ 613,387 $ 549,481
$ 447,266
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities: Accounts payable $ 68,141 $ 35,669
$ 56,187 Accrued expenses and other current liabilities 61,680
59,049 47,955 Accrued restructuring charges 293 439 3,638 Deferred
tax liabilities, net 15,242 17,620 10 Income taxes payable 18,050
23,084 8,923 Note payable, current portion of long-term debt and
capital lease obligations 7,305 1,901 1,366
Total current liabilities 170,711 137,762 118,079 Deferred
tax liabilities, net 1,111 847 2,058 Long-term income tax payable
30,498 29,861 27,707 Other liabilities 4,896 4,905
5,582 Total liabilities 207,216 173,375
153,426 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,
88,941,335 and 88,410,942 shares issued and outstanding,
respectively, at March 31, 2011 and 88,600,860 and 88,065,859
shares issued and outstanding, respectively, at December 31, 2010
and 86,297,253 and 85,704,194 shares issued and outstanding,
respectively, at March 31, 2010. 89 88 86 Treasury stock, at cost,
530,393 and 535,001 and 593,059 shares, respectively. (21,788 )
(22,008 ) (25,344 ) Additional paid-in capital 281,166 277,293
268,757 Retained earnings 111,385 89,881 27,872 Accumulated other
comprehensive income 35,319 30,852 22,469
Total stockholders’ equity 406,171 376,106 293,840
Total liabilities and stockholders’ equity $ 613,387
$ 549,481 $ 447,266
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