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8-K - FORM 8-K - LACROSSE FOOTWEAR INCv59643e8vk.htm
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contacts:
         
David Carlson
Executive Vice President and
Chief Financial Officer
LaCrosse Footwear, Inc.
503-262-0110 ext. 1331
      Michael Newman
Investor Relations
StreetConnect, Inc.
800-654-3517
BOOT@stct.com
LACROSSE FOOTWEAR REPORTS SECOND QUARTER RESULTS
Strong Growth Across Wholesale, Direct and International Sales Channels;
Sales to the Outdoor Market Up 18% Year-Over-Year
Portland, Ore.—July 21, 2011 — LaCrosse Footwear, Inc. (Nasdaq: BOOT), a leading provider of premium, branded footwear for work and outdoor users, today reported results for the second quarter ended June 25, 2011.
For the second quarter of 2011, LaCrosse reported net sales of $27.1 million, up 2% from $26.6 million in the second quarter of 2010. For the first half of of 2011, net sales were $52.2 million, compared to $60.8 million in the same period of 2010. Excluding the government channel, the Company’s combined sales to its wholesale, direct and international channels increased 13% in both the second quarter and the first half of 2011 compared to the same periods in 2010.
For the second quarter of 2011, the net loss was $0.2 million or ($0.03) per diluted share, compared to net income of $0.1 million or $0.02 per diluted share in the second quarter of 2010. For the first half of 2011, the net loss was $0.8 million or ($0.13) per diluted share, compared to net income of $1.8 million or $0.27 per diluted share in the same period of 2010.
Sales to the work market were $17.6 million in the second quarter of 2011, down 5% from the same period of 2010, reflecting a reduction of contract orders from the U.S. military and the Company’s decision in 2010 to discontinue its work apparel products. Excluding the contract military and the work apparel sales, work sales in the second quarter of 2011 increased 17% from the same period in 2010. Sales to the outdoor market were $9.4 million in the second quarter of 2011, up 18% from the same period of 2010. The increase in outdoor sales primarily reflects strong demand for hunting and hiking products.
Gross margins for the second quarter of 2011 were 38.5% of net sales, compared to 40.9% in the same period of 2010. The year-over-year decrease in gross margins primarily reflects an increase in closeout sales of discontinued work apparel products. Operating expenses were $10.6 million in the second quarter of 2011, down 1% from the same period in 2010, primarily related to a reduction in compensation expense, partially offset by increased investments in marketing and product development initiatives.
The Company’s inventories were $53.4 million at the end of the second quarter of 2011, up from $26.4 million at the end of the same period in 2010. The year-over-year increase in inventory reflects low

 


 

inventory levels in the second quarter of 2010 due to supply constraints and a strategic decision in 2011 to enhance the availability of core products in order to address future at-once demand, the growth of the Company’s wholesale distribution network and preparedness for its U.S. military business.
“Aside from continuing quarterly fluctuations in U.S. military orders, our business is performing well, with strong growth across our wholesale, direct and international channels,” said Joseph P. Schneider, president and CEO of LaCrosse Footwear, Inc. “Our sales to the outdoor market continue to be very robust, as our relationships with major retailers have continued to strengthen and we expand into their new retail stores. We see strong demand for both our core work and outdoor products, and our newest products for Fall 2011 are being very well received, including our innovative retooling of classic Danner designs in our new Stumptown series.
“As we move into the second half of 2011, we are executing our strategic plan and benefitting from the key investments and initiatives that we’ve made in recent years. Our stronger sales organization and distribution infrastructure continues to deepen our wholesale channel relationships, both in the U.S. and internationally. Our enhanced e-commerce platforms continue to expand our direct business, and our talented development team continues to introduce a wide range of innovative new products for Spring 2012.”
“While the contract military business remains quite competitive and unpredictable, we have established LaCrosse as a trusted partner to various branches of the U.S. military that can fulfill their time-sensitive needs for high-performance, all-terrain, all-weather boots. We continue to believe that our overall business is best evaluated on an annual basis and that LaCrosse is well-positioned to capture market share over the long term.”
Based on the Company’s financial outlook, the Board of Directors today announced the approval of a quarterly dividend of $0.125 per share of common stock. The third quarter dividend will be paid on September 18, 2011 to shareholders of record as of the close of business on August 22, 2011. The Board of Directors, while not declaring future dividends to be paid, has established a quarterly dividend policy reflecting its intent to declare and pay a quarterly dividend of $0.125 per share of common stock.
Second Quarter 2011 Conference Call
LaCrosse will host a conference call to discuss its financial results today, July 21, 2011 at 2:00 PM Pacific (5:00 PM Eastern). A broadcast of the conference call and accompanying slideshow presentation will be available at www.lacrossefootwearinc.com under “Investor Events” or by calling 800-762-8779 or +1 480-629-9818. A 48-hour replay will be available by calling 800-406-7325 or +1 303-590-3030 (Access Code: 4452259).
About LaCrosse Footwear, Inc.
LaCrosse Footwear, Inc. is a leading developer and marketer of branded, premium and innovative footwear for work and outdoor users. The Company’s trusted Danner® and LaCrosse® brands are sold to a network of specialty retailers and distributors in the United States, Canada, Europe and Asia. Work consumers include people in law enforcement, transportation, mining, oil and gas exploration and extraction, construction, Government services and other occupations that require high-performance and protective footwear as a critical tool for the job. Outdoor consumers include people active in hunting, outdoor cross-training, hiking and other outdoor recreational activities. For more information about LaCrosse Footwear products, please

 


 

visit our Internet websites at www.lacrossefootwear.com and www.danner.com. For additional investor information, see our corporate website at www.lacrossefootwearinc.com.
Forward-Looking Statements
All statements, other than statements of historical facts, included in this release, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and other terms of similar meaning, typically identify such forward-looking statements. Forward- looking statements include without limitation, statements regarding the anticipated success of new products, our ability to continue to innovate new products, our ability to capture market share in the future, our expectations concerning future demand for our products, and the Board of Directors’ intent to declare and pay dividends in future periods. The Company assumes no obligation to update or revise any forward-looking statements to reflect the occurrence or non-occurrence of future events or circumstances.
The forward-looking statements included in this release are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties. Risk factors and other uncertainties which may adversely impact the outcome of such forward-looking statements include the potential impact on our earnings and results of operations of U.S. government policies concerning drawdown of troop deployments in various global regions and the risk factors set forth in our 2010 Annual Report on Form 10-K, as supplemented by our quarterly reports on Form 10-Q for 2011.

 


 

LaCrosse Footwear, Inc.
Condensed Consolidated Statements of Operations

(Amounts in thousands, except per share amounts)
(Unaudited)
                                 
    Quarter Ended     First Half Year Ended  
    June 25,     June 26,     June 25,     June 26,  
    2011     2010     2011     2010  
Net sales
  $ 27,056     $ 26,553     $ 52,244     $ 60,780  
Cost of goods sold
    16,646       15,690       31,397       36,149  
 
                       
Gross profit
    10,410       10,863       20,847       24,631  
Operating expenses
    10,603       10,668       21,987       21,705  
 
                       
Operating income (loss)
    (193 )     195       (1,140 )     2,926  
Non-operating expense, net
    (113 )     (33 )     (238 )     (55 )
 
                       
Income (loss) before income taxes
    (306 )     162       (1,378 )     2,871  
Income tax provision (benefit)
    (121 )     61       (543 )     1,108  
 
                       
Net income (loss)
  $ (185 )   $ 101     $ (835 )   $ 1,763  
 
                       
 
                               
Net income (loss) per common share:
                               
Basic
  $ (0.03 )   $ 0.02     $ (0.13 )   $ 0.28  
Diluted
  $ (0.03 )   $ 0.02     $ (0.13 )   $ 0.27  
 
                               
Weighted average number of common shares outstanding:
                               
Basic
    6,501       6,430       6,493       6,401  
Diluted
    6,501       6,632       6,493       6,577  
 
                               
Supplemental Product Line Information
                               
Work Market Sales
  $ 17,636     $ 18,585     $ 33,692     $ 44,953  
Outdoor Market Sales
    9,420       7,968       18,552       15,827  
 
                       
 
  $ 27,056     $ 26,553     $ 52,244     $ 60,780  
 
                       

 


 

LaCrosse Footwear, Inc.
Condensed Consolidated Balance Sheets

(Amounts in thousands)
(Unaudited)
                         
    June 25,     December 31,     June 26,  
    2011     2010     2010  
Assets:
                       
Current Assets:
                       
Cash and cash equivalents
  $ 622     $ 4,274     $ 17,317  
Trade and other accounts receivable, net
    15,358       22,834       16,260  
Inventories, net
    53,400       40,071       26,410  
Prepaid expenses and other
    1,156       1,321       1,191  
Deferred tax assets
    1,754       1,614       1,450  
 
                 
Total current assets
    72,290       70,114       62,628  
 
                       
Property and equipment, net
    16,002       16,154       12,135  
Goodwill
    10,753       10,753       10,753  
Other assets
    235       249       347  
 
                 
Total assets
  $ 99,280     $ 97,270     $ 85,863  
 
                 
 
                       
Liabilities and Shareholders’ Equity:
                       
Current Liabilities:
                       
Short-term borrowings
  $ 13,404     $     $  
Accounts payable
    10,470       16,477       12,872  
Accrued compensation
    1,806       4,261       2,850  
Other accruals
    1,928       3,356       1,773  
 
                 
Total current liabilities
    27,608       24,094       17,495  
 
                       
Long-term debt
    201       263       300  
Deferred revenue
    549       566       150  
Deferred lease obligations
    811       782       722  
Compensation and benefits
    3,939       4,385       4,306  
Deferred tax liabilities
    3,142       2,732       2,181  
 
                 
Total liabilities
    36,250       32,822       25,154  
 
                 
 
                       
Total shareholders’ equity
    63,030       64,448       60,709  
 
                       
 
                 
Total liabilities and shareholders’ equity
  $ 99,280     $ 97,270     $ 85,863  
 
                 

 


 

LaCrosse Footwear, Inc.
Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)
(Unaudited)
                 
    First Half Year Ended  
    June 25,     June 26,  
    2011     2010  
Cash flows from operating activities:
               
Net income (loss)
  $ (835 )   $ 1,763  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
               
Depreciation and amortization
    1,783       1,468  
Stock-based compensation expense
    404       349  
Deferred income taxes
    270       (98 )
Loss on disposal of property and equipment
    97       4  
Changes in operating assets and liabilities:
               
Trade and other accounts receivable
    7,503       5,322  
Inventories
    (13,242 )     435  
Accounts payable
    (5,791 )     3,517  
Accrued expenses and other
    (4,073 )     (2,816 )
 
           
Net cash provided by (used in) operating activities
    (13,884 )     9,944  
 
           
 
               
Cash flows from investing activities:
               
Purchases of property and equipment
    (2,048 )     (3,865 )
 
           
 
               
Cash flows from financing activities:
               
Net proceeds from short-term borrowings
    13,404        
Net proceeds from long-term debt
          300  
Cash dividends paid
    (1,625 )     (8,007 )
Purchase of treasury stock
          (59 )
Proceeds from exercise of stock options
    480       1,369  
 
           
Net cash provided by (used in) financing activities
    12,259       (6,397 )
 
           
 
               
Effect of foreign currency exchange rate changes on cash and cash equivalents
    21       (104 )
 
           
 
               
Net decrease in cash and cash equivalents
    (3,652 )     (422 )
 
               
Cash and cash equivalents:
               
Beginning of period
    4,274       17,739  
 
           
End of period
  $ 622     $ 17,317  
 
           
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