Crocs, Inc. (NASDAQ: CROX) today reported financial results for
the second quarter ended June 30, 2011.
Revenue for the second quarter of 2011 increased 29.6% to $295.6
million compared to revenue of $228.0 million reported in the
second quarter of 2010. Net income for the second quarter of 2011
increased 71.9% to $55.5 million, or $0.61 per diluted share
compared to net income of $32.3 million, or $0.37 per diluted share
in the second quarter 2010. The Company benefited from
modifications in tax treaties in its international businesses which
together with other tax planning resulted in an effective tax rate
below 15% for the quarter.
John McCarvel, President and Chief Executive Officer, stated:
“Our second quarter results demonstrate the progress we have made
evolving Crocs into an innovative footwear leader. We achieved our
highest quarterly revenue and unit volume in the Company’s history
as revenues surpassed $295 million and we sold over 14 million
pair. Our performance was fueled by demand for our most diverse
product line ever and included double-digit growth in each of our
distribution channels and geographic regions. As a result, we
experienced significant operating expense leverage and a
substantial increase in profitability versus a year ago. Looking
ahead to the back half of 2011, we expect our momentum to continue
through summer and back to school. We are also optimistic about our
prospects for the fall and holiday given the 41.9% increase in our
backlog which totaled $168.1 million at the end of the second
quarter .”
Year-over year second quarter changes in the Company’s channel
revenue streams were as follows:
- Wholesale sales increased 25.5% to
$175.8 million;
- Retail sales increased 38.1% to $91.8
million; and
- Internet sales increased 30.1% to $28.1
million.
Year-over year second quarter changes in the Company’s regional
revenue streams were as follows:
- Asia increased 37.5% to $121.9
million;
- Americas increased 15.9% to $121.4
million; and
- Europe increased 50.4% to $52.2
million.
Gross profit for the second quarter of 2011 increased 29.0% to
$170.2 million, or 57.6% as a percentage of sales, from $131.9
million, or 57.8% of sales in same period last year. Selling,
General, & Administrative expenses increased 14.5% to $107.6
million versus $94.0 million a year ago. As a percentage of sales,
SG&A decreased to 36.4% from 41.2% in the second quarter of
2010.
Balance Sheet
Cash and cash equivalents at June 30, 2011 increased 85.8% to
$180.0 million compared to $96.9 million at June 30, 2010.
Inventories at June 30, 2011 were $156.5 million, up from $113.6
million at June 30, 2010. The increase in inventories at June 30,
2011 was primarily attributable to the global growth in wholesale
orders, an increase in company-operated retail stores, and an
increase in mixture of higher content products and seasonal changes
in product mix. The Company ended the second quarter of 2011 with
accounts receivable of $115.7 million compared to $94.0 million at
June 30, 2010.
Guidance
For the third quarter of 2011, the Company expects revenue of
approximately $280 million, a 30% increase over the third quarter
of 2010. The Company expects diluted earnings per share for the
third quarter of 2011 to be approximately $0.40.
Conference Call Information
A conference call to discuss Crocs’ second quarter 2011
financial results is scheduled for today (July 27, 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 are not limited to, statements regarding future
revenue, and earnings; backlog and future orders; prospects 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. 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
June 30,
Six Months Ended
June 30,
($ thousands, except per share amounts) 2011
2010 2011 2010 Revenues $
295,585 $ 228,046 $ 522,293 $ 394,898 Cost of sales (125,367
) (96,127 ) (232,869 ) (176,275 ) Gross profit
170,218 131,919 289,424 218,623 Selling, general and administrative
expenses (107,647 ) (94,047 ) (196,261 ) (168,825 ) Foreign curency
transaction losses gains (losses), net 3,042 1,129 1,727 1,421
Restructuring charges - - - (2,539 ) Asset impairment - - (32 )
(141 ) Charitable contributions expense (839 ) (275 )
(1,836 ) (418 ) Income (loss) from operations 64,774
38,726 93,022 48,121 Interest expense (241 ) (163 ) (429 ) (292 )
Gain on charitable contributions 353 32 610 116 Other (income)
expense (108 ) 291 (436 ) 50
Income (loss) before income taxes 64,778 38,886 92,767
47,995 Income tax (expense) benefit (9,272 ) (6,602 )
(15,757 ) (9,994 ) Net income (loss) $ 55,506
$ 32,284 $ 77,010 $ 38,001 Net income (loss)
per common share: Basic
$0.62
$0.38 $0.87 $0.44 Diluted $0.61
$0.37 $0.85 $0.43
CROCS, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) ($ thousands,
except number of shares)
June 30,2011
December 31,2010
June 30,2010
ASSETS Current assets: Cash and cash equivalents $ 179,979 $
145,583 $ 96,867
Accounts receivable, net of allowance for
doubtful accounts of $13,528 and $10,249 and $9,555,
respectively
115,651 64,260 93,974 Inventories 156,464 121,155 113,553 Deferred
tax assets, net 13,822 15,888 7,569 Income tax receivable 10,620
9,062 11,297 Other receivables 17,127 11,637 11,715 Prepaid
expenses and other current assets 20,292 13,429
14,867 Total current assets 513,955 381,014 349,842
Property and equipment, net 69,337 70,014 66,731 Intangible assets,
net 48,164 45,461 41,335 Deferred tax assets, net 32,429 34,711
17,403 Other assets 19,629 18,281 21,742 Total
assets $ 683,514 $ 549,481 $ 497,053
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable $ 66,186 $ 35,669 $ 51,841 Accrued expenses and
other current liabilities 71,269 59,488 62,512 Deferred tax
liabilities, net 15,337 17,620 9 Income taxes payable 16,076 23,084
20,120 Note payable, current portion of long-term debt and capital
lease obligations 3,257 1,901 1,556 Total
current liabilities 172,125 137,762 136,038 Deferred tax
liabilities, net 1,909 847 1,867 Long-term income tax payable
35,429 29,861 27,890 Other liabilities 5,046 4,905
5,450 Total liabilities 214,509 173,375
171,245
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, 89,919,925 and 89,390,187 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 87,079,451 and 86,482,574
shares issued and outstanding, respectively, at June 30, 2010.
90 88 87 Treasury stock, at cost, 529,738 and 535,001 and 596,877
shares, respectively. (21,213 ) (22,008 ) (24,963 ) Additional
paid-in capital
286,968
277,293 272,146 Retained earnings
166,891
89,881 60,156 Accumulated other comprehensive income 36,269
30,852 18,382 Total stockholders’ equity 469,005
376,106 325,808 Total liabilities and
stockholders’ equity $ 683,514 $ 549,481 $ 497,053
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