Crocs Inc. Reports Third Quarter Financial Results and Announces 15 Million Share Increase in Share Repurchase Authorization

 Crocs Inc. Reports Third Quarter Financial Results and Announces 15 Million
               Share Increase in Share Repurchase Authorization

PR Newswire

NIWOT, Colo., Oct. 30, 2013

NIWOT, Colo., Oct. 30, 2013 /PRNewswire/ -- Crocs Inc. (NASDAQ: CROX) reported
today financial results for the third quarter of 2013.

(Logo: http://photos.prnewswire.com/prnh/20130912/LA78683LOGO-b)

Third Quarter 2013 Highlights:

  oRevenue of $288.5 million
  oGross Margin of 53.2 percent
  oNet income of $13.0 million
  oEarnings per diluted share of $0.15
  oNon-GAAP adjusted net income^1 per diluted share of $0.18
  oGlobal cash balance increased by $43.1 million in the quarter

"During the third quarter we saw strong performance in our Asia Pacific region
and marked improvement in all channels of our European business," said John
McCarvel, President and Chief Executive Officer. "This positive performance
was counterbalanced by weakness in the Americas and Japan where all sales
channels performed below our expectations. The underperformance was
especially acute in the Americas where we were impacted by wholesale accounts
trimming at once orders to remain lean on inventory coupled with weak consumer
confidence affecting our consumer-direct performance."

Share Repurchase Authorization

On October 29, 2013, the company's board of directors approved the repurchase
of up to an additional 15.0 million shares under the company's existing stock
repurchase authorization. This brings the total shares available for
repurchase by the company under the existing authorization to approximately
17.8 million shares, or approximately 20 percent of the common outstanding
shares at September 30, 2013. The number, price and timing of repurchases
will be at the company's sole discretion and will be evaluated depending on
market conditions, liquidity needs or other factors. The company's board of
directors may suspend, modify or terminate the program at any time without
prior notice.

Third Quarter Results

Revenue for the third quarter of 2013 was $288.5 million compared with revenue
of $295.6 million reported in the third quarter of 2012. On a constant
currency basis revenue increased 0.9% for the third quarter of 2013.

For third quarter of 2013, the company had net income of $13.0 million or
$0.15 per diluted share, compared with net income of $45.1 million or $0.49
per diluted share in the prior year period.

Adjusting for the impact of the $3.1 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, the company
had Non-GAAP adjusted net income of $16.1 million in the quarter or $0.18 per
diluted share.

Margins

Gross profit for the third quarter of 2013 was $153.6 million, or 53.2% as a
percentage of sales, compared with $160.7 million, or 54.4% as a percentage of
sales in the prior year period. The year- over-year decrease in gross profit
as a percentage of sales was primarily related to lower wholesale and internet
revenue in the Americas and Japan. Selling, General & Administrative ("SG&A")
expenses increased 12.4% to $135.7 million compared with $120.7 million a year
ago, due primarily to increases in retail store space, marketing expenses, and
the company's ERP project. As a percentage of sales, SG&A increased to 47.0%
compared with 40.8% in the third quarter of 2012.

     Non-GAAP adjusted net income is a financial measure not calculated in
^(1) 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.

Revenue Results – Channel and Regional

The following tables detail the company's three and nine months 2013 and 2012
revenues:

                  Three Months Ended    Change                Constant Currency
                  September 30,                               Change^(1)
($ thousands)     2013       2012       $           %         $           %
Channel
revenues:
 Wholesale:
 Americas      $ 45,134   $ 56,445   $ (11,311)  (20.0) %  $ (10,504)  (18.6) %
 Asia Pacific    43,268     42,291     977       2.3         1,352     3.2
 Japan           24,536     34,685     (10,149)  (29.3)      (3,807)   (11.0)
  Europe          27,414     22,667     4,747     20.9        3,463     15.3
  Other           37         161        (124)     (77.0)      (118)     (73.3)
businesses
 Total         140,389    156,249    (15,860)  (10.2)      (9,614)   (6.2)
Wholesale

Consumer-direct:
Retail:
  Americas      59,839     58,798     1,041     1.8         1,369     2.3
                  33,469     28,549     4,920     17.2        5,013     17.6
AsiaPacific
   Japan         12,397     13,277     (880)     (6.6)       2,285     17.2
   Europe        18,995     11,550     7,445     64.5        6,985     60.5
             124,700    112,174    12,526    11.2        15,652    14.0
TotalRetail
 Internet:
   Americas      11,221     16,705     (5,484)   (32.8)      (5,414)   (32.4)
   Asia          2,669      2,124      545       25.7        573       27.0
Pacific
   Japan         2,051      2,769      (718)     (25.9)      (192)     (6.9)
   Europe        7,494      5,548      1,946     35.1        1,548     27.9
  Total       23,435     27,146     (3,711)   (13.7)      (3,485)   (12.8)
Internet
Total revenues:   $ 288,524  $ 295,569  $ (7,045)   (2.4)  %  $ 2,553     0.9    %
                  Three Months Ended    Change                Constant Currency
                  September 30,                               Change^(1)
($ thousands)     2013       2012       $           %         $           %
Regional
Revenue:
 Americas        $ 116,194  $ 131,948  $ (15,754)  (11.9) %  $ (14,549)  (11.0) %
 Asia Pacific      79,406     72,964     6,442     8.8         6,938     9.5
 Japan             38,984     50,731     (11,747)  (23.2)      (1,714)   (3.4)
 Europe            53,903     39,765     14,138    35.6        11,996    30.2
 Other             37         161        (124)     (77.0)      (118)     (73.3)
businesses
Total revenues:   $ 288,524  $ 295,569  $ (7,045)   (2.4)  %  $ 2,553     0.9    %



     Current period results have been restated using 2012 average foreign
^(1) exchange rates for the comparative period to enhance the visibility of
     the underlying business trends excluding the impact of foreign currency
     exchange rate fluctuations.



                  Nine Months Ended     Change                Constant Currency
                  September 30,                               Change^(1)
($ thousands)     2013       2012       $           %         $          %
Channel
revenues:
 Wholesale:
  Americas    $ 195,827  $ 187,870  $ 7,957     4.2    %  $ 9,824    5.2    %
  Asia          180,205    147,628    32,577    22.1        31,374   21.3
Pacific
  Japan         78,116     101,863    (23,747)  (23.3)      (6,645)  (6.5)
  Europe        107,689    97,773     9,916     10.1        8,166    8.4
  Other         200        333        (133)     (39.9)      (135)    (40.5)
businesses
   Total       562,037    535,467    26,570    5.0         42,584   8.0
Wholesale

Consumer-direct:
  Retail:
  Americas      156,784    149,296    7,488     5.0         8,167    5.5
  Asia          93,937     79,290     14,647    18.5        14,195   17.9
Pacific
   Japan         30,625     31,476     (851)     (2.7)       6,131    19.5
  Europe        46,734     25,158     21,576    85.8        21,076   83.8
   Total       328,080    285,220    42,860    15.0        49,569   17.4
Retail
  Internet:
  Americas      39,267     46,700     (7,433)   (15.9)      (7,298)  (15.6)
                7,553      5,322      2,231     41.9        2,181    41.0
AsiaPacific
  Japan         6,074      6,997      (923)     (13.2)      404      5.8
 Europe        20,996     18,603     2,393     12.9        1,786    9.6
   Total       73,890     77,622     (3,732)   (4.8)       (2,927)  (3.8)
Internet
Total revenues:   $ 964,007  $ 898,309  $ 65,698    7.3    %  $ 89,226   9.9    %
                  Nine Months Ended     Change                Constant Currency
                  September 30,                               Change^(1)
($ thousands)     2013       2012       $           %         $          %
Regional
Revenue:
 Americas        $ 391,878  $ 383,866  $ 8,012     2.1    %  $ 10,693   2.8    %
 Asia Pacific      281,695    232,240    49,455    21.3        47,750   20.6
 Japan             114,815    140,336    (25,521)  (18.2)      (110)    (0.1)
 Europe            175,419    141,534    33,885    23.9        31,028   21.9
 Other             200        333        (133)     (39.9)      (135)    (40.5)
businesses
Total revenues:   $ 964,007  $ 898,309  $ 65,698    7.3    %  $ 89,226   9.9    %



     Current period results have been restated using 2012 average foreign
^(1) 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

Comparable store sales on a constant currency basis for the three months ended
September 30, 2013 compared with the prior year period were as follows:

                                    Constant Currency     Constant Currency
                                    Three Months Ended    Three Months Ended
Comparable store sales growth ^(1)  September 30, 2013    September 30, 2012
                                    ^(2)                  ^(2)
Americas                            (8.3)              %  5.5                %
Asia Pacific                        6.0                   (2.2)
Japan                               (16.3)                (15.1)
Europe                              8.8                   0.9
Total                               (4.2)              %  1.0                %



Comparable store sales on a constant currency basis for the nine months ended
September 30, 2013 compared with the prior year period were as follows:

                                    Constant Currency     Constant Currency
                                    Nine Months Ended     Nine Months Ended
Comparable store sales growth ^(1)  September 30, 2013    September 30, 2012
                                    ^(2)                  ^(2)
Americas                            (5.1)              %  3.7                %
Asia Pacific                        7.2                   5.9
Japan                               (16.1)                (11.2)
Europe                              3.1                   7.5
Total                               (2.4)              %  3.1                %

     Current period results have been restated using 2012 average foreign
^(1) exchange rates for the comparative period to enhance the visibility of
     the underlying business trends excluding the impact of foreign currency
     exchange rate fluctuations.
     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
^(2) 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.

Balance Sheet

Cash and cash equivalents at September 30, 2013 were $332.5 million, an
increase of 13.0% compared with December 31, 2012. Inventories at September
30, 2013 were $176.1 million, up 6.9% compared with inventory at December 31,
2012.

Backlog

Backlog at September 30, 2013 was $398.6 million compared with $395.5 million
in the prior year period. On a constant currency basis backlog at September
30, 2013 was an estimated 4% higher than the prior year period.

Financial Outlook

For the fourth quarter of 2013, the company expects revenue between $220
million and $225 million and a loss between $(0.20) and $(0.23) per share.
This outlook includes $(0.03) 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' third quarter 2013 results is scheduled
for today (October 30, 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, investments in our business, 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 October 30, 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)
                                    Three Months Ended    Nine Months Ended
                                    September 30,         September 30,
($ thousands, except per share      2013       2012       2013       2012
data)
Revenues                          $ 288,524  $ 295,569  $ 964,007  $ 898,309
Cost of sales                       134,943    134,826    443,710    396,682
 Gross profit                      153,581    160,743    520,297    501,627
Selling, general and                  135,674    120,729    414,119    349,737
administrative expenses
Asset impairment                      -          -          202        819
 Income from operations            17,907     40,014     105,976    151,071
Foreign currency transaction          1,043      21         4,457      2,670
losses, net
Interest income                       (853)      (151)      (1,676)    (1,057)
Interest expense                      44         377        519        556
Other (income) expense, net         13         71         180        (690)
 Income before income taxes        17,660     39,696     102,496    149,592
Income tax expense (benefit)          4,624      (5,384)    25,143     14,642
 Net income                        $ 13,036   $ 45,080   $ 77,353   $ 134,950
Net income per common share:
 Basic                           $ 0.15     $ 0.50     $ 0.88     $ 1.50
 Diluted                           $ 0.15     $ 0.49     $ 0.87     $ 1.48





CROCS,INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                                   September 30,  December 31,
($thousands, except number of shares)             2013           2012
ASSETS
Current assets:
 Cash and cash equivalents                      $   332,491    $  294,348
 Accounts receivable, net of allowances of           120,079       92,278
$14,626 and $13,315, respectively
 Inventories                                        176,118       164,804
 Deferred tax assets, net                           5,647         6,284
 Income tax receivable                              16,666        5,613
 Other receivables                                  17,201        24,821
 Prepaid expenses and other current assets          30,869        24,967
  Total current assets                          699,071       613,115
Property and equipment, net                           94,233        82,241
Intangible assets, net                                69,081        59,931
Deferred tax assets, net                              33,529        34,112
Other assets                                          50,672        40,239
  Total assets                              $   946,586    $  829,638
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                               $   66,198     $  63,976
 Accrued expenses and other current                  99,277        81,371
liabilities
 Deferred tax liabilities, net                      2,383         2,405
 Income taxes payable                               27,868        8,147
 Current portion of long-term borrowings and         4,262         2,039
capital lease obligations
  Total current liabilities                     199,988       157,938
Long term income tax payable                          32,457        36,343
Long-term borrowings and capital lease                 9,345         4,596
obligations
Other liabilities                                     14,571        13,361
  Total liabilities                             256,361       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, 91,643,474 and
88,426,104 shares issued and outstanding,              92            91
respectively, at September 30, 2013 and
91,047,297 and 88,662,845 shares issued and
outstanding, respectively, at December31,2012
 Treasury stock, at cost, 3,217,370 and              (56,198)      (44,214)
2,384,452 shares, respectively
 Additional paid-in capital                         319,516       307,823
 Retained earnings                                  411,365       334,012
 Accumulated other comprehensive income             15,450        19,688
 Total stockholders' equity                    690,225       617,400
 Total liabilities and stockholders'        $   946,586    $  829,638
equity





CROCS, INC. AND SUBSIDIARIES
NON-GAAP NET INCOME RECONCILIATIONS (UNAUDITED)
(In thousands)
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 adjusted 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 adjusted net
income excludes the impact of new enterprise resource planning system ("ERP")
implementation expenses, a one-time net expense related to the resolution of a
statutory tax audit in Brazil and the accelerated depreciation and
amortization of our current ERP system. 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 adjusted net income:

                          Three Months Ended September     Nine Months Ended
                          30,                              September 30,
Reconciliation of GAAP
Net Income to Non-GAAP    2013               2012          2013      2012
Adjusted Net Income:
GAAP net income           $    13,036        $   45,080    $ 77,353  $ 134,950
New ERP                       2,137             -           4,246     -
implementation ^(1)
Brazil tax credits            -                 -           6,094     -
^(2)
Depreciation and              952               -           2,587     -
amortization ^(3)
Non-GAAP adjusted net     $    16,125        $   45,080    $ 90,280  $ 134,950
income
Non-GAAP adjusted net
income per diluted        $    0.18          $   0.49      $ 1.02    $ 1.48
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 the GAAP to Non-GAAP reconciliations above
represents a one-time net expense related to the resolution of a statutory tax
audit in Brazil. In April 2013, the State of Sao Paulo, Brazil government
("Brazil") assessed sales taxes, interest and penalties for the period April
2009 to May 2011. We had previously tendered these taxes using Brazil
obligations purchased from third parties at a discount. On May 22, 2013, we
applied for amnesty in order to receive a significant reduction in penalties
and interest, agreed to amend our 2009 through 2012 tax returns to remove the
Brazil obligations, and agreed to settle the assessment in cash to Brazil. In
June 2013, cash payment was made to Brazil, in full satisfaction of the Brazil
assessment. Brazil is making court-ordered payments to holders of the Brazil
obligations along with accrued interest. The Company anticipates that the
Brazil obligations (plus accrued interest) will be paid by Brazil in
accordance with the court-orders. The Company is carrying the Brazil
obligations at the original discounted cost to the Company and intends to hold
the Brazil obligations until paid by Brazil. The net impact of the above is a
$6.1 million charge to operating income, and the carrying balance of the
Brazil obligations in investments is $3.5 million.
^(3) 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

(UNAUDITED)
                              September 30,                      September 30,
Company-operated retail       2012           Opened  Closed  2013
locations:
Type:
 Kiosk/Store in Store      133            26        (37)      122
 Retail Stores             245            95        (25)      315
 Outlet Stores             121            40        (4)       157
 Total                  499            161       (66)      594
Operating segment:
 Americas                  189            45        (26)      208
 Asia Pacific               197            59        (35)      221
 Japan                      36             15        (1)       50
 Europe                    77             42        (4)       115
 Total                  499            161       (66)      594



CROCS, INC. AND SUBSIDIARIES

BACKLOG

(UNAUDITED)
                               September 30,
($ thousands)                  2013                        2012
Americas                       $       120,913             $      137,999
Asia Pacific                           150,350                    136,382
Japan                                  52,000                     70,655
Europe                                 75,338                     50,433
Total backlog^(1)              $       398,601             $      395,469
^(1) We receive a significant portion of orders as preseason orders, generally
four to six months prior to shipment date. We provide customers with price
incentives to participate in such preseason programs to enable us to better
plan our production schedule, inventory and shipping needs. Unfulfilled
customer orders as of any date are referred to as backlog and represent orders
scheduled to be shipped at a future date. Backlog as of a particular date is
affected by a number of factors, including seasonality, manufacturing schedule
and the timing of product shipments. Further, the mix of future and immediate
delivery orders can vary significantly period over period. Due to these
factors and since the unfulfilled orders can be canceled at any time prior to
shipment by our customers, backlog may not be a reliable measure of future
sales and comparisons of backlog from period to period may be misleading. In
addition, our historical cancellation experience may not be indicative of
future cancellation rates. While all orders in the backlog are subject to
cancellation by customers, we expect that the majority of these orders will be
fulfilled within one year.



SOURCE Crocs, Inc.

Website: http://www.crocs.com
Contact: Investor Contact, William I. Kent/Crocs Inc., (303) 848-7000,
wkent@crocs.com, or Media Contact, Katy Michael/Crocs Inc., (303) 848-7000,
kmichael@crocs.com
 
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