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Crocs Inc. Reports Record First Quarter Revenue of $311.7 Million

  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
wkent@crocs.com
or
Media Contact:
Katy Lachky, 303-848-7000
klachky@crocs.com
 
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