Crocs Inc. Reports Record First Quarter Revenue of $311.7 Million Business Wire NIWOT, Colo. -- April 24, 2013 Crocs Inc. (NASDAQ: CROX) reported today financial results for the first quarter of 2013. First Quarter 2013 Highlights *Record revenue of $311.7 million *Gross Margin of 53.2 percent *Net income of $29.0 million *Earnings per diluted share of $0.33 “Our record revenue performance in the first quarter of 2013 demonstrates the benefit of innovative products, the success of our multi channel strategy and the global reach of our business. During the quarter we saw strong sell-in of our spring and summer line into our wholesale accounts globally and solid initial sell-through in our own retail channel, all of which contributed to a 17 percent constant currency revenue growth during the quarter,” said John McCarvel, President and Chief Executive Officer. “As we look into the core of the spring summer selling season, we are confident that our product line-up, including a combination of new collections and core products will continue to drive revenues forward. “The Asia Pacific segment of our business was a key component of our success during the quarter. While weather did impact consumers in North America and Europe, and Europe also dealt with ongoing macro-economic issues, we did see early signs of recovery in Japan.” First Quarter Results For first quarter 2013, the company had a net income of $29.0 million or $0.33 per diluted share, compared with net income of $28.3 million or $0.31 per diluted share in the prior year period. First quarter 2013 results included total expenses of $1.8 million relating to the implementation of a new ERP system including non-cash accelerated depreciation and cash expenses for program management, training and other non-capitalized costs. Adjusting for these non-operating items, the company had Non-GAAP net income^1 of $30.8 million in the quarter or $0.35 per diluted share. Revenue for the first quarter of 2013 increased 14.7% to $311.7 million compared with revenue of $271.8 million reported in the first quarter of 2012. On a constant currency basis revenue increased 16.6% for the first quarter of 2013. Margins Gross profit for the first quarter of 2013 increased 14.5% to $165.8 million, or 53.2% as a percentage of sales, compared with $144.8 million, or 53.3% as a percentage of sales in the prior year period. Selling, General, & Administrative expenses (SG&A) increased 22.9% to $128.2 million compared with $104.3 million a year ago. As a percentage of sales, SG&A increased to 41.1% from 38.4% compared with the first quarter of 2012. The increase in SG&A is largely attributable to our year-over-year increase in retail stores and partially attributable to our previously announced increase in marketing spending in 2013, which totaled approximately $2.7 million during the quarter. First Quarter Revenue Results The following tables detail the company’s first quarter 2013 and 2012 revenues: Three Months Ended Change Constant Currency March 31, Change^(1) ($ thousands) 2013 2012 $ % $ % Channel revenues: Wholesale: Americas $ 81,604 $ 69,056 $ 12,548 18.2 % $ 13,287 19.2 % Asia Pacific 69,554 51,052 18,502 36.2 17,942 35.1 Japan 22,527 27,843 (5,316 ) (19.1 ) (1,610 ) (5.8 ) Europe 46,533 42,616 3,917 9.2 4,080 9.6 Other businesses 65 125 (60 ) (48.0 ) (61 ) (48.8 ) Total Wholesale 220,283 190,692 29,591 15.5 33,638 17.6 Consumer-direct: Retail: Americas 35,904 35,546 358 1.0 555 1.6 Asia Pacific 19,597 15,739 3,858 24.5 3,807 24.2 Japan 5,901 4,842 1,059 21.9 2,002 41.3 Europe 9,689 4,445 5,244 118.0 5,143 115.7 Total Retail 71,091 60,572 10,519 17.4 11,507 19.0 Internet: Americas 11,921 12,705 (784 ) (6.2 ) (744 ) (5.9 ) Asia Pacific 1,306 860 446 51.9 442 51.4 Japan 1,931 1,688 243 14.4 561 33.2 Europe 5,124 5,281 (157 ) (3.0 ) (173 ) (3.3 ) Total Internet 20,282 20,534 (252 ) (1.2 ) 86 0.4 Total revenues: $ 311,656 $ 271,798 $ 39,858 14.7 % $ 45,231 16.6 % Three Months Ended Change Constant Currency March 31, Change^(1) ($ thousands) 2013 2012 $ % $ % Regional Revenue: Americas $ 129,429 $ 117,307 $ 12,122 10.3 % $ 13,098 11.2 % Asia Pacific 90,457 67,651 22,806 33.7 22,191 32.8 Japan 30,359 34,373 (4,014 ) (11.7 ) 953 2.8 Europe 61,346 52,342 9,004 17.2 9,050 17.3 Other businesses 65 125 (60 ) (48.0 ) (61 ) (48.8 ) Total Revenues $ 311,656 $ 271,798 $ 39,858 14.7 % $ 45,231 16.6 % ^(1) Current period results have been restated using 2012 average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations. Other Financial Information Comparable Store Sales Results^2 Comparable store sales on a constant currency basis for the first quarter of 2013 compared to the first quarter 2012 were as follows: Global decreased 5.2%, Americas decreased 10.3%, Asia Pacific increased 7.3%, Japan decreased 5.8% and Europe decreased 7.3%. John McCarvel continued “while the unfavorable weather patterns in North America and Europe impacted our same store sales in the first quarter, we were pleased to see the early season success in Asia and the nascent signs of recovery in Japan. The first quarter on average represents just over 15% of retail sales for the year, therefore we remain confident that we can achieve modest year-over-year comparable store sales growth similar to 2012 growth rates.” Balance Sheet Cash and cash equivalents at March 31, 2013 decreased 21.0% compared with year end 2012 and increased 12.6% compared with March 31, 2012. During the first quarter of 2012 we repurchased approximately 834,000 shares of common stock for an aggregate of approximately $12.5 million in cash. Inventories at March 31, 2013 were $177.8 million, up 7.9% compared with year end 2012 and up 5.2% compared with inventories at March 31, 2012. Backlog Backlog at March 31, 2013 was $292.9 million, up 1.5% compared with $288.7 in the prior year period. On a constant currency basis backlog at March 31, 2013 was up 5.0% compared to the prior year period. Financial Outlook For the second quarter of 2013, the company expects revenue between $360 million and $370 million and diluted earnings per share between $0.60 and $0.63. This outlook includes $(0.02) per share of ERP implementation expense and reflects an impact of $(0.04) for currency translation. Conference Call Information A conference call to discuss Crocs’ first quarter 2013 results is scheduled for today (April 24, 2013) 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 and at www.earnings.com. An audio replay of the webcast will be available on the Crocs website for one year. Interested parties are advised to log on to the live webcast at least fifteen minutes prior to the call in order to download the necessary software. About Crocs, Inc. Crocs, Inc. is a world leader in innovative casual footwear for men, women and children. Crocs offers several distinct shoe collections with more than 300 four-season footwear styles. All Crocs™ shoes feature Croslite™ material, a proprietary, revolutionary technology that gives each pair of shoes the soft, comfortable, lightweight, non-marking and odor-resistant qualities that Crocs fans know and love. Crocs fans “Get Crocs Inside” every pair of shoes, from the iconic clog to new sneakers, sandals, boots and heels. Since its inception in 2002, Crocs has sold more than 200 million pairs of shoes in more than 90 countries around the world. Visit www.crocs.com for additional information. 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, outlook 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. All information in this document speaks as of April 24, 2013. 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) FOR THE THREE MONTHSENDED MARCH 31, 2013 AND 2012 (In thousands, except per share amounts) Three Months Ended March 31, ($ thousands, except per share data) 2013 2012 Revenues $ 311,656 $ 271,798 Cost of sales 145,807 126,999 Gross profit 165,849 144,799 Selling, general and administrative expenses 128,199 104,290 Asset impairment - 713 Income from operations 37,650 39,796 Foreign currency transaction losses, net 2,600 4,276 Other income, net (334 ) (598 ) Interest expense 209 47 Income before income taxes 35,175 36,071 Income tax expense 6,214 7,725 Net income $ 28,961 $ 28,346 Net income per common share: Basic $ 0.33 $ 0.32 Diluted $ 0.33 $ 0.31 CROCS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) AS OF MARCH 31, 2013 AND DECEMBER 31, 2012 (In thousands, except share amounts) March 31, December 31, ($ thousands, except number of shares) 2013 2012 ASSETS Current assets: Cash and cash equivalents $ 232,673 $ 294,348 Accounts receivable, net of allowances of $14,425 177,360 92,278 and $13,315, respectively Inventories 177,814 164,804 Deferred tax assets, net 5,868 6,284 Income tax receivable 8,320 5,613 Other receivables 17,621 24,821 Prepaid expenses and other current assets 27,047 24,967 Total current assets 646,703 613,115 Property and equipment, net 85,746 82,241 Intangible assets, net 61,532 59,931 Deferred tax assets, net 33,722 34,112 Other assets 49,135 40,239 Total assets $ 876,838 $ 829,638 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 85,145 $ 63,976 Accrued expenses and other current liabilities 85,663 81,371 Deferred tax liabilities, net 2,440 2,405 Income taxes payable 11,535 8,147 Current portion of long-term borrowings and 2,250 2,039 capital lease obligations Total current liabilities 187,033 157,938 Long term income tax payable 35,333 36,343 Long-term borrowings and capital lease 7,112 4,596 obligations Other liabilities 13,546 13,361 Total liabilities 243,024 212,238 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, 91,327,712 and 88,102,196 shares issued and outstanding, 92 91 respectively, at March 31, 2013 and 91,047,297 and 88,662,845 shares issued and outstanding, respectively, at December 31, 2012 Treasury stock, at cost, 3,225,516 and 2,384,452 (56,837 ) (44,214 ) shares, respectively Additional paid-in capital 311,916 307,823 Retained earnings 362,973 334,012 Accumulated other comprehensive income 15,670 19,688 Total stockholders’ equity 633,814 617,400 Total liabilities and stockholders’ equity $ 876,838 $ 829,638 CROCS, INC. AND SUBSIDIARIES UNAUDITED NON-GAAP NET INCOME RECONCILIATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012 (In thousands, except per share amounts) The Company prepares and reports its financial statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Internally, management monitors the operating performance of its business using the non-GAAP metrics constant currency and Non-GAAP net income. Constant currency excludes the effects of foreign exchange rate fluctuations by restating current period results using the prior year average exchange rates. Non-GAAP net income excludes the impact of new enterprise resource planning system (“ERP”) implementation expenses, non-recurring tax benefits, the accelerated depreciation and amortization of our current ERP system and certain legal and other contingency accruals. In management’s opinion, these non-GAAP measures are used by, and are useful to, investors and other users of our financial statements in evaluating operating performance by providing better comparability between reporting periods because they exclude items that may not be indicative of overall business trends and provide a better baseline for analyzing trends in our operations. The Company does not, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company believes the disclosure of the effects of these items increases the reader’s understanding of the underlying performance of the business and that such non-GAAP financial measures provide investors with an additional tool to evaluate our financial results and assess our prospects for future performance. The following is a reconciliation of our net income, the most directly comparable U.S. GAAP measure, to Non-GAAP net income: Three Months Ended March 31, Reconciliation of GAAP Net Income to Non-GAAP Adjusted 2013 2012 Net Income: GAAP net income $ 28,961 $ 28,346 New ERP implementation ^(1) 1,131 -- Depreciation and 722 - amortization ^(2) Non-GAAP adjusted net income $ 30,814 $ 28,346 Non-GAAP adjusted net income $ 0.35 $ 0.31 per diluted share ^(1) This proforma adjustment in the GAAP to Non-GAAP reconciliations above represents expenses related to the implementation of a new ERP system. ^(2) This proforma adjustment in this GAAP to Non-GAAP reconciliation represents the add-back of accelerated depreciation and amortization on tangible and intangible items related to our current ERP system and supporting platforms that will no longer be utilized once the implementation of a new ERP is complete. CROCS, INC. AND SUBSIDIARIES RETAIL STORE COUNTS March 31, March 31, Company-operated retail locations: 2013 Opened Closed 2012 Type: Kiosk/Store in Store 116 36 (65 ) 145 Retail Stores 295 116 (19 ) 198 Outlet Stores 136 43 (4 ) 97 Total 547 195 (88 ) 440 Geography: Americas 203 46 (34 ) 191 Asia Pacific 195 63 (50 ) 182 Japan 46 17 - 29 Europe 103 69 (4 ) 38 Total 547 195 (88 ) 440 ^1 Non-GAAP net income is a financial measure not calculated in accordance with U.S. Generally Accepted Accounting Principles (non-GAAP). See the non-GAAP reconciliations set forth later in this press release for additional information. ^2 Comparable store status is determined on a monthly basis. Comparable store sales begin in the thirteenth month of a store's operation. Stores in which selling square footage has changed more than 15% as a result of a remodel, expansion or reduction are excluded until the thirteenth month they have comparable prior year sales. Temporarily closed stores are excluded from the comparable store sales calculation during the month of closure. Location closures in excess of three months are excluded until the thirteen month post re-opening. Current period results have been restated using 2012 average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations. Contact: Crocs Inc. Investor Contact: William I. Kent, 303-848-7000 email@example.com or Media Contact: Katy Lachky, 303-848-7000 firstname.lastname@example.org
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Crocs Inc. Reports Record First Quarter Revenue of $311.7 Million
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