Crocs, Inc. Announces Financial Partnership with Blackstone, Expands Share Repurchase Plan, Announces CEO Retirement

  Crocs, Inc. Announces Financial Partnership with Blackstone, Expands Share
                  Repurchase Plan, Announces CEO Retirement

Blackstone agrees to purchase $200 million of Convertible Preferred Stock

Share Repurchase Authorization Increased to $350 Million

John McCarvel Announces Retirement

Company Reaffirms Low End of Prior Fourth Quarter Guidance

Expects Revenue of Approximately $220 million and Loss of 23 cents per Diluted

PR Newswire

NIWOT, Colo., Dec. 29, 2013

NIWOT, Colo., Dec. 29, 2013 /PRNewswire/ -- Crocs, Inc. (NASDAQ: CROX) today
announced that an investment fund affiliated with Blackstone has agreed to
purchase $200 million of newly issued series A convertible preferred stock
(the "Preferred Stock").


In connection with the investment, Crocs intends to revise its capital
structure to accommodate a $350 million stock repurchase program approved by
its board of directors. This includes using the net proceeds of approximately
$180 million from the Preferred Stock as well as excess cash to fund the
repurchase plan. "We will add $200 million of long-term non-publicly traded
preferred equity and the stock repurchase program, when completed, will reduce
our publicly traded common stock float by approximately 30% (at today's market
price), while maintaining a strong net cash position on our balance sheet. We
expect these initiatives to reduce volatility in both our common stock price
and our shareholder base and provide a strong foundation to unlock long-term
value for our shareholders," said Jeff Lasher, Crocs chief financial officer.
"We've been unable to repurchase stock while negotiating this transaction, but
we now expect to do so beginning in the first quarter of 2014. We intend to
be patient, methodical and opportunistic as we execute this expanded buyback

The Preferred Stock will have a 6.0% cash dividend rate and is convertible
into shares of common stock at a conversion price of $14.50 per share. This
conversion price represents a 9% premium to the closing price of $13.33 per
share on December 27, 2013, and a 10% premium to the 30-day average closing
price of $13.19 per share. On an as-converted basis, the Preferred Stock will
represent 13.8 million common shares, or approximately 13% of the
fully-diluted common shares outstanding after giving effect to the issuance.

At any time after three years from the issuance date, if the closing price of
Crocs common stock equals or exceeds $29.00 (i.e., 200% of the conversion
price) for a period of 20 consecutive trading days, then the shares of
Preferred Stock will, upon notice from Crocs, convert into shares of common
stock. At any time after eight years from the issuance date, Crocs will have
the right to redeem, and the holders of the Preferred Stock will have the
right to require Crocs to repurchase, all or any portion of the Preferred
Stock at 100% of the stated value plus any accrued but unpaid dividends.

Consummation of the investment is subject to the satisfaction of customary
closing conditions, including expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act, and is expected to close in
January 2014.

John McCarvel also announced his intention to retire as president, chief
executive officer and board member on or about April 30, 2014. "It has been
an honor to be part of the Crocs global team for the past decade and to lead
it since 2010," Mr. McCarvel said. "We've made tremendous progress as a
company over these past 10 years – from a one-season, one-shoe, and
one-country brand to a diversified, four-season global footwear leader that is
on solid financial footing. The investment by Blackstone is a vote of
confidence in our company and our brand, and Crocs will benefit from
Blackstone's financial, consumer, retail and brand experience and
relationships." The board has begun an outside search for Mr. McCarvel's

"John's contributions to this company are immeasurable," said Thomas J. Smach,
Crocs chairman of the board. "As our CEO, he led a turnaround of Crocs and
established it as a profitable, diversified company with more than $1 billion
in annual revenue, strong cash flows, and a robust balance sheet with more
than $300 million in net cash. Under his leadership, Crocs has grown into a
global branded company that employs 4,500 people and sells over 55 million
shoes per year in more than 90 different countries. On behalf of the
company's employees and directors, I would like to extend our appreciation and
gratitude to John and wish him and his family continued success as he pursues
his personal endeavors."

With its investment, Blackstone will be entitled to two seats on the Crocs
board of directors. "We expect Blackstone to contribute a great deal of value
to our board through its financial, consumer, retail and brand experience and
its global footprint," Mr. Smach said. "While Blackstone's investment will
represent only 13% as-converted ownership at closing, we believe our company,
shareholders, and employees will benefit from 100% of the firm's focus,
resources, expertise and efforts to create shareholder value. We believe this
transaction provides a fantastic opportunity for our shareholders to
participate alongside Blackstone and benefit from its efforts to realize very
attractive future returns."

Prakash Melwani, Senior Managing Director and Chief Investment Officer of
Blackstone's Private Equity Group said, "Blackstone sees tremendous
opportunity in the Crocs brand and global franchise. The company has the
infrastructure and products to enable continued growth across the wide range
of geographies and channels through which it operates. We believe our
consumer and retail investing experience coupled with the network of
value-added resources within Blackstone will make us a strong partner for
Crocs. We look forward to working with the Crocs Board to deliver compelling
long-term value to the company's shareholders."

"The partnership with Blackstone provides access to new resources and
additional experience that we believe will positively and meaningfully impact
the company's future performance," Mr. Smach added. "As we look forward, 2014
will be a significant transition period for the company. We will recruit a
new CEO who will work with the reconstituted board to refine our short-term
and long-term strategic plans, which will include a sharper focus on earnings
growth with less emphasis on top-line growth. We will focus on improving
financial performance, particularly in the Americas and Japan, as well as
enhancing our global retail execution. As we increasingly focus on profitable
growth and retail excellence, we may moderate the pace of our investments in
new retail stores; however, we remain focused on creating long-term value for
Crocs shareholders. Over time, we intend to further elevate our brand
positioning by enhancing our consumer-driven marketing and distribution
strategies and capabilities."

Fourth Quarter Guidance

Crocs also updated its fourth quarter 2013 outlook and currently expects
revenue to be at the low end of the previously provided guidance range of $220
million and $225 million, and diluted loss per share to be at the low end
(meaning the higher loss) of the previously provided guidance range of ($0.20)
and ($0.23). Excluded from this outlook are all costs and expenses associated
with the Blackstone transaction, the tax expense associated with the
repatriation of excess foreign cash, charges associated with separation
agreements, retail store impairments, other asset impairments and legal
reserves. We expect these aggregate charges in the fourth quarter to be in a
range of $47 million to $52 million, which is an additional loss per diluted
share of $0.45 to $0.50. The cash portion of the aggregate charges in the
fourth quarter is estimated to be in a range of $20 million to $25 million.
While not currently estimable, we expect additional restructuring charges may
be necessary in 2014 as we refine our strategic plan.


Moelis & Company LLC is acting as financial advisor and Perkins Coie LLP is
acting as legal counsel for Crocs. Piper Jaffray & Co. is acting as financial
advisor and Simpson Thacher & Bartlett LLP is acting as legal counsel for
Blackstone in connection with the investment.

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 for additional information.

About Blackstone
Blackstone (NYSE:BX) is one of the world's leading investment and advisory
firms. Blackstone seeks to create positive economic impact and long-term value
for its investors, the companies they invest in, the companies they advise and
the broader global economy. Blackstone does this through the commitment of
their extraordinary people and flexible capital. Their alternative asset
management businesses include the management of private equity funds, real
estate funds, hedge fund solutions, credit-oriented funds and closed-end
mutual funds. Blackstone also provides various financial advisory services,
including financial and strategic advisory, restructuring and reorganization
advisory and fund placement services. Further information is available at

Special Note Regarding 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 are not limited
to, statements regarding the investment by Blackstone, its expected closing
date and benefits and future revenue, earnings, charges and outlook. 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: successful
closing of the investment by Blackstone and achievement of its potential
benefits, 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

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.

SOURCE Crocs, Inc.

Contact: Media, Katy Michael, Crocs, Inc., (303) 848-7000,;
or Investors, Will Kent/Crocs, Inc., (303) 848-7000,
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