Crocs, Inc. (NASDAQ: CROX) today reported financial results for
the third quarter ended September 30, 2011.
Revenue for the third quarter of 2011 increased 27.5% to $274.9
million compared to revenue of $215.6 million in the third quarter
of 2010. Net income for the third quarter of 2011 increased 20.8%
to $30.2 million, or $0.33 per diluted share compared to net income
of $25.0 million, or $0.28 per diluted share in the third quarter
2010 which included a one-time tax benefit of $3.0 million, or
$0.03 per diluted share.
John McCarvel, President and Chief Executive Officer, stated:
“We continued to experience strong global demand versus the prior
year period, particularly in Asia. The performance of our spring /
summer 2011 product line and the composition of our backlog at
September 30, 2011 underscores the progress we have made
diversifying Crocs beyond its clog origins. We still remain
confident that our long-term brand and growing selection of
sneakers, casual shoes, and boots have the ability to penetrate the
cold weather selling season in each of our geographic regions.
While these are competitive categories with established leaders, we
believe we can continue to capture market share and further reduce
the seasonality of our business over the long-term.”
Year-over year third quarter changes in the Company’s channel
revenue streams were as follows:
- Wholesale sales increased 24.3% to
$154.0 million;
- Retail sales increased 31.4% to $95.3
million; and
- Internet sales increased 33.7% to $25.6
million.
Year-over year third quarter changes in the Company’s regional
revenue streams were as follows:
- Asia increased 40.6% to $111.2
million;
- Americas increased 18.0% to $122.7
million; and
- Europe increased 25.9% to $41.0
million.
Gross profit for the third quarter of 2011 increased 23.9% to
$147.2 million, or 53.5% as a percentage of sales, from $118.8
million, or 55.1% of sales in same period last year. Selling,
General, & Administrative expenses increased 21.0% to $111.6
million versus $92.2 million a year ago. As a percentage of sales,
SG&A decreased to 40.6% from 42.8% in the third quarter of
2010.
Balance Sheet
Cash and cash equivalents at September 30, 2011 increased 54.1%
to $220.4 million compared to $143.1 million at September 30, 2010.
Inventories at September 30, 2011 were $151.1 million, up from
$142.5 million at September 30, 2010.
Backlog
Backlog at September 30, 2011 increased 30.3% to $296.8 million
compared to backlog of $227.8 million at September 30, 2010.
Guidance
For the fourth quarter of 2011, the Company expects revenue to
be in the range of $200 to $205 million and diluted earnings per
share to be between $0.03 and $0.05.
Mr. McCarvel concluded, “Our fourth quarter guidance reflects
recent softness in our European business due to the current
macroeconomic conditions. While we expect Europe to remain
challenging as we move into 2012, we are pleased with the strength
of our spring 2012 backlog in Asia and the Americas. We believe
strong 33% growth in our consolidated spring backlog sets us up for
continued growth into next year. The response from retailers to our
new product introductions has been very positive in Asia and the
Americas and we believe it will provide us with good momentum to
start the New Year.”
Conference Call Information
A conference call to discuss Crocs’ third quarter 2011 financial
results is scheduled for today (October 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, 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 SUBSIDIARIESCONDENSED CONSOLIDATED
STATEMENTS OF INCOME(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
($ thousands, except per share amounts)
2011 2010 2011
2010 Revenues $ 274,897 $ 215,605 $ 797,189 $ 610,503
Cost of sales (127,722) (96,797) (360,591)
(273,072) Gross profit 147,175 118,808 436,598 337,431
Selling, general and administrative expenses (111,597) (92,192)
(307,858) (261,017)
Foreign currency transaction losses gains
(losses), net
2,060 908 3,787 2,329 Restructuring charges - - - (2,539) Asset
impairment (495) - (527) (141) Charitable contributions expense
(75) (78) (1,911) (496) Income (loss)
from operations 37,068 27,446 130,089 75,567 Interest expense (204)
(153) (632) (445) Gain on charitable contributions 61 19 671 135
Other (income) expense (98) (137) (534)
(87) Income (loss) before income taxes 36,827 27,175 129,594 75,170
Income tax (expense) benefit (6,620) (2,179)
(22,377) (12,173) Net income (loss) $ 30,207 $ 24,996 $
107,217 $ 62,997 Net income (loss) per common share: Basic $ 0.34 $
0.29 $ 1.21 $ 0.73 Diluted $ 0.33 $ 0.28 $ 1.18 $ 0.72
CROCS,
INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited)
($ thousands, except number of
shares)
September 30,
2011
December 31,
2010
September 30,
2010
ASSETS Current assets: Cash and cash equivalents $ 220,388 $
145,583 $ 143,057
Accounts receivable, net of allowance for
doubtful accounts of $14,457, $10,249 and $10,896,
respectively.
95,305 64,260 81,303 Inventories 151,109 121,155 142,531 Deferred
tax assets, net 14,134 15,888 7,973 Income tax receivable 16,460
9,062 9,597 Other receivables 18,488 11,637 11,008 Prepaid expenses
and other current assets 18,654 13,429 14,276 Total current assets
534,538 381,014 409,745 Property and equipment, net 66,115
70,014 65,882 Intangible assets, net 47,372 45,461 42,416 Deferred
tax assets, net 31,423 34,711 18,859 Other assets 24,806 18,281
17,769 Total assets $ 704,254 $ 549,481 $ 554,671
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable $ 57,354 $ 35,669 $ 66,763 Accrued expenses and
other current liabilities 75,563 59,488 67,051 Deferred tax
liabilities, net 15,237 17,620 9 Income taxes payable 22,373 23,084
18,188 Note payable, current portion of long-term debt and capital
lease obligations 1,232 1,901 1,861 Total current liabilities
171,759 137,762 153,872 Deferred tax liabilities, net 1,070
847 2,085 Long-term income tax payable 35,427 29,861 28,518 Other
liabilities 5,749 4,905 5,249 Total liabilities 214,005 173,375
189,724 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, 90,232,212 and
89,725,726 shares issued and outstanding, respectively, at
September 30, 2011 and 88,600,860 and 88,065,859 shares issued and
outstanding, respectively, at December 31, 2010 and 87,705,254 and
87,136,697 shares issued and outstanding, respectively at September
30, 2010. 90 88 87 Treasury stock, at cost, 506,486, 535,001 and
568,557 shares, respectively. (20,103) (22,008) (23,610) Additional
paid-in capital 291,609 277,293 273,418 Retained earnings 197,098
89,881 85,152 Accumulated other comprehensive income 21,555 30,852
29,900 Total stockholders’ equity 490,249 376,106 364,947 Total
liabilities and stockholders’ equity $ 704,254 $ 549,481 $ 554,671
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