New Credit Facility for Crocs - Analyst Blog
December 29 2011 - 5:15AM
Zacks
Niwot, Colorado-based Crocs
Inc. (CROX), a shoe manufacturer, in a bid to enhance the
company’s financial flexibility, has entered into a new five-year
unsecured revolving credit agreement with PNC Bank, a member of
The PNC Financial Services Group, Inc (PNC).
The new $70 million revolving
credit line facility is expected to mature in December 2016 and
other investment bankers, including JP Morgan Chase Bank and Wells
Fargo Bank are also participating in this agreement.
The credit agreement replaces the
company's existing asset backed revolving credit facility worth $30
million, scheduled to mature in September 2014. The $30 million
credit was also financed by PNC Bank. We believe that the new
credit facility will supplement the company’s available fund and
extend the maturity period of its debt.
Under the new credit facility, the
company will be able to borrow funds at various levels of interest
rates. The company will utilize this fund for future growth based
on sustained upside in wholesale, higher product-driven average
selling price, direct channel development and geographic
expansion.
Crocs ended its third quarter 2011
with cash and cash equivalents of $220.4 million, compared with
$145.6 million at the end of December 2010. Net Deferred tax
liabilities, stood at $16.3 million compared with $18.5 million at
the end of December 2010.
The company’s cash position appears
to be strong and Crocs anticipates that its current cash and cash
equivalent balance will be sufficient to meet the business
requirement for the next twelve months.
Though the company faces certain
seasonal challenges in the fourth-quarter, management expects 2012
to reflect strong growth based on investment in new retail stores,
continued kiosk transitions and shift toward a global, 12-month
brand.
Crocs, which competes with
Deckers Outdoor Corp (DECK) and Nike
Inc (NKE), currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating. We are also maintaining
our long-term Neutral recommendation on the stock.
CROCS INC (CROX): Free Stock Analysis Report
DECKERS OUTDOOR (DECK): Free Stock Analysis Report
PNC FINL SVC CP (PNC): Free Stock Analysis Report
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