NIWOT, Colo.--(BUSINESS WIRE)--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 | ||||||