Crocs, Inc. Reports 2010 Third Quarter Financial Results
Title: Crocs, Inc. Reports 2010 Third Quarter Financial ResultsDescription: Investor Contact: Brendon Frey/ICR, Inc.
(203) 682-8200
brendon.frey@icrinc.com
Media Contact: Shelley Weibel/Crocs, Inc.
(303) 848-7000
sweibel@crocs.com
Crocs, Inc. Reports 2010 Third Quarter Financial Results
Third Quarter Revenue Increased to $215.6 Million
Gross Margin Improved from 50.7% to 55.1%
Cash Increased 88% to $143 Million
2011 Spring / Summer Backlog up 60%
NIWOT, COLORADO – November 4, 2010 – Crocs, Inc. (NASDAQ: CROX) today reported financial
results for the third quarter ended September 30, 2010.
Revenue for the third quarter of 2010 increased 30% to $215.6 million, over recurring revenue of $165.7
million reported in the third quarter of 2009. Recurring revenue is a non-GAAP measure that excludes
impaired product sales of $11.5 million in the third quarter of 2009. On a GAAP basis, third quarter
revenue increased 22% year-over-year.
Net income for the third quarter 2010 improved to $25.0 million, or $0.28 per diluted share compared to
net income of $22.1 million, or $0.25 per diluted share in the third quarter 2009.
Excluding a one-time tax benefit of $3.0 million, or $0.03 per diluted share, non-GAAP net income was
$22.0 million, or $0.25 per diluted share in the third quarter 2010. This compares to third quarter 2009
equivalent non-GAAP net income of $1.8 million, or $0.02 per diluted share.
Year-over-year third quarter changes in the Company’s channel revenue streams, as reported, were as
follows:
• Wholesale sales increased 16% to $123.9 million;
• Retail sales increased 35% to $72.5 million;
• Internet sales increased 19% to $19.2 million.
Changes in the Company’s regional revenue streams, as reported, during the same quarterly periods
were as follows:
• Americas increased 31% to $104 million;
• Asia increased 16% to $79 million;
• Europe increased 9% to $32.6 million.
Gross profit for the third quarter of 2010 increased 32% to $118.8 million, or 55.1% as a percentage of
sales, from $89.9 million, or 50.7% of sales in same period last year. Selling, General, & Administrative
expenses (including foreign exchange, restructuring, impairment, and charitable contributions) increased
13% to $91.4 million versus $80.9 million a year ago. As a percentage of sales, SG&A decreased to
42.4% from 45.7% in the third quarter of 2009.
Balance Sheet
The Company’s cash and cash equivalents as of September 30, 2010 increased 88% to $143.1 million
compared to $76.0 million at September 30, 2009. The Company had no bank debt at September 30,
2010.
Inventory grew 25% to $142.5 million at September 30, 2010 from $113.7 million at September 30, 2009,
representing 3.0 inventory turnover in the current quarter. The increase is a result of multiple factors
including a 60% increase in backlog, an increase of 44 retail locations over Q3 2009, strong new product
sell through and the support of 21% higher anticipated Q4 revenue.
The Company ended the third quarter of 2010 with accounts receivable of $81.3 million compared to
$65.8 million at September 30, 2009.
John McCarvel, President and Chief Executive Officer, commented, “Our improved operating results
continued to be driven by growing consumer demand for our expanded product assortment. After a
strong summer selling season we began shipping significantly more of our back-to-school and fall
products to our global network of wholesale accounts and distributors versus a year ago. We witnessed
similar trends in our consumer direct channel where weekly sell-through rates of our new products
exceeded internal projections. Our sales performance year-to-date has been very encouraging and
helped fuel the significant increase in our spring / summer 2011 backlog.”
Guidance
For the fourth quarter of 2010, the Company expects revenue of approximately $165 million, a 21%
increase over fourth quarter 2009. The company expects Q4 inventory to decrease approximately 10%
from Q3 2010. The Company expects diluted earnings per share for the fourth quarter 2010 to increase to
approximately $0.02 per diluted share versus a diluted loss per share of ($0.13) for the fourth quarter
2009.
Conference Call Information
A conference call to discuss Crocs’ third quarter 2010 financial results is scheduled for today (November
4, 2010) 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 120 styles to suit every lifestyle. As
lighthearted as they are lightweight, Crocs™ footwear provides profound comfort and support for any
occasion and every season. All Crocs™ branded shoes feature Croslite™ material, a proprietary,
revolutionary technology that produces soft, non-marking, and odor-resistant shoes that conform to your
feet.
Crocs™ products are sold in 129 countries. Every day, millions of Crocs™ 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 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 crisis; 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 management
and information systems infrastructure; our ability to repatriate cash held in foreign locations in a timely
and cost-effective manner; our ability to develop and sell new products; our ability to obtain and protect
intellectual property rights; the effect of competition in our industry; and the effect of potential adverse
currency exchange rate fluctuations; 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.
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