Attached files
| file | filename |
|---|---|
| 8-K - CROCS, INC. 8-K - Crocs, Inc. | a50354237.htm |
Exhibit 99.1
Crocs, Inc. Reports 2012 Second Quarter Results
Company
sets record quarterly revenue and diluted earnings per share
Company
raises full year EPS outlook
NIWOT, Colo.--(BUSINESS WIRE)--July 25, 2012--Crocs, Inc. (NASDAQ: CROX) today reported financial results for the second quarter ended June 30, 2012. Revenue for the second quarter of 2012 increased 12.0% to $330.9 million, over revenue of $295.6 million reported in the second quarter of 2011. This represents the highest three month revenue level in the company’s history. Net income for the second quarter 2012 was $61.5 million, or $0.68 per diluted share, compared to net income of $55.5 million, or $0.61 per diluted share, in the second quarter of 2011.
Sales growth during the quarter was driven by Asia and Americas which was partially offset by a modest decrease in Europe. Geographically, revenue increased 10.9% for the Americas, increased 20.5% for Asia and decreased 5.2% for Europe.
From a channel perspective, wholesale sales increased 7.3% to $188.5 million, over sales of $175.8 million in the second quarter of 2011. Retail sales increased 22.6% to $112.5 million, over sales of $91.8 million in the second quarter of 2011. The company ended the quarter with 484 retail store locations, which compares to 397 locations a year ago. Global same store sales for the second quarter of 2012 increased 1.8% on a currency neutral basis. Internet sales increased 6.6% to $29.9 million, over sales of $28.1 million in the second quarter of 2011.
John McCarvel, President and Chief Executive Officer, stated: “We’re pleased with our ability to deliver profitability that exceeded our second quarter projections despite some challenges in certain areas of our business. Conditions in Europe, including currency headwinds, and slower than expected retail sales in the Americas resulted in slightly lower growth than expected. We are very encouraged by continued strong growth of Asia, sell through of our products in key wholesale accounts, our international retail performance, all driven by customer enthusiasm for our new products.”
Margins
Gross profit for the second quarter of 2012 increased 15.2% to $196.1 million, or 59.3% as a percentage of sales, from $170.2 million, or 57.6% as a percentage of sales in the same period last year. Selling, General, & Administrative expenses (SG&A) increased 15.0% to $124.7 million versus $108.5 million a year ago. As a percentage of sales, SG&A was 37.7% compared to 36.7% in the second quarter of 2011.
Balance Sheet
Cash and cash equivalents at June 30, 2012 increased 54.9% to $278.8 million compared to $180.0 million at June 30, 2011. Inventories at June 30, 2012 were $166.0 million, up 6.1% compared to inventories at June 30, 2011 of $156.5 million.
Backlog
Backlog at June 30, 2012 increased 2.7% to $172.6 million compared to backlog of $168.1 million at June 30, 2011. On a constant currency basis, backlog is up approximately 6% over 2011.
Guidance
For the third quarter of 2012, the Company expects revenue of $300 million and diluted earnings per share to be between $0.42 and $0.44.
John McCarvel, continued: “Based on our year to date results, the increasing count of retail stores and the strength of our wholesale business, we are projecting that we will finish 2012 with US dollar revenue growth of about 14% over 2011, which on a constant currency growth represents 17.5%, inline with our previous guidance. For the first half of the year, we earned $0.99 per diluted share and we now project earnings to be between $1.50 and $1.54 per diluted share for the full year. We believe the diversification in our business model, global presence and product breadth provides the platform for continued sales growth and earnings expansion.”
Conference Call Information
A conference call to discuss Crocs’ 2012 second quarter financial results is scheduled for today (July 25, 2012) 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.
Celebrating its 10th anniversary in 2012, 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. The brand celebrated reaching $1 billion in annual sales in 2011.
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 include, but are not limited to, statements regarding future revenue and earnings, backlog, future orders, prospects 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. 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 | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| ($ thousands, except per share data) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Revenues | $ | 330,942 | $ | 295,585 | $ | 602,740 | $ | 522,293 | ||||||||
| Cost of sales | 134,857 | 125,367 | 261,856 | 232,869 | ||||||||||||
| Gross profit | 196,085 | 170,218 | 340,884 | 289,424 | ||||||||||||
| Selling, general and administrative expenses | 124,718 | 108,486 | 229,009 | 198,097 | ||||||||||||
| Asset impairment | 106 | - | 819 | 32 | ||||||||||||
| Income (loss) from operations | 71,261 | 61,732 | 111,056 | 91,295 | ||||||||||||
| Foreign currency transaction (gains) losses, net | (1,627 | ) | (2,623 | ) | 2,649 | (1,252 | ) | |||||||||
| Other (income) expense, net | (1,069 | ) | (664 | ) | (1,668 | ) | (649 | ) | ||||||||
| Interest expense | 132 | 241 | 179 | 429 | ||||||||||||
| Income (loss) before income taxes | 73,825 | 64,778 | 109,896 | 92,767 | ||||||||||||
| Income tax expense (benefit) | 12,301 | 9,272 | 20,026 | 15,757 | ||||||||||||
| Net income (loss) | $ | 61,524 | $ | 55,506 | $ | 89,870 | $ | 77,010 | ||||||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic | $ | 0.68 | $ | 0.62 | $ | 1.00 | $ | 0.87 | ||||||||
| Diluted | $ | 0.68 | $ | 0.61 | $ | 0.99 | $ | 0.85 | ||||||||
| CROCS, INC. AND SUBSIDIARIES | ||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (Unaudited) | ||||||||||||
| June 30, | December 31, | June 30, | ||||||||||
| ($ thousands, except number of shares) | 2012 | 2011 | 2011 | |||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 278,827 | $ | 257,587 | $ | 179,979 | ||||||
| Accounts receivable, net of allowances of $18,858, $15,508 and $13,528, respectively | 132,331 | 84,760 | 115,651 | |||||||||
| Inventories | 166,013 | 129,627 | 156,464 | |||||||||
| Deferred tax assets, net | 7,809 | 7,047 | 13,822 | |||||||||
| Income tax receivable | 4,133 | 5,828 | 10,620 | |||||||||
| Other receivables | 22,938 | 20,295 | 17,127 | |||||||||
| Prepaid expenses and other current assets | 27,654 | 20,199 | 20,292 | |||||||||
| Total current assets | 639,705 | 525,343 | 513,955 | |||||||||
| Property and equipment, net | 68,585 | 67,684 | 69,337 | |||||||||
| Intangible assets, net | 47,360 | 48,641 | 48,164 | |||||||||
| Deferred tax assets, net | 30,849 | 30,375 | 32,429 | |||||||||
| Other assets | 29,221 | 23,410 | 19,629 | |||||||||
| Total assets | $ | 815,720 | $ | 695,453 | $ | 683,514 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 62,965 | $ | 66,517 | $ | 66,186 | ||||||
| Accrued expenses and other current liabilities | 86,336 | 76,506 | 71,269 | |||||||||
| Deferred tax liabilities, net | 3,480 | 2,889 | 15,337 | |||||||||
| Income taxes payable | 21,781 | 8,273 | 16,076 | |||||||||
| Bank borrowings and capital lease obligations - current | 61 | 1,118 | 3,257 | |||||||||
| Total current liabilities | 174,623 | 155,303 | 172,125 | |||||||||
| Long term income tax payable | 41,945 | 41,665 | 35,429 | |||||||||
| Other liabilities | 15,472 | 6,705 | 6,955 | |||||||||
| Total liabilities | 232,040 | 203,673 | 214,509 | |||||||||
| Commitments and contingencies (Note 11) | ||||||||||||
| 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, 90,727,610 and 90,205,424 shares issued and outstanding, respectively, at June 30, 2012; 90,306,432 and 89,807,146 shares issued and outstanding, respectively, at December 31, 2011; and 89,919,925 and 89,390,187 shares issued and outstanding, respectively, at June 30, 2011 | 91 | 90 | 90 | |||||||||
| Treasury stock, at cost, 522,186, 499,286 and 529,738 shares, respectively | (19,930 | ) | (19,759 | ) | (21,213 | ) | ||||||
| Additional paid-in capital | 301,262 | 293,959 | 286,968 | |||||||||
| Retained earnings | 292,538 | 202,669 | 166,891 | |||||||||
| Accumulated other comprehensive income | 9,719 | 14,821 | 36,269 | |||||||||
| Total stockholders’ equity | 583,680 | 491,780 | 469,005 | |||||||||
| Total liabilities and stockholders’ equity | $ | 815,720 | $ | 695,453 | $ | 683,514 | ||||||
| Three Months Ended | Constant | Six Months Ended | Constant | ||||||||||||||||||||||||||||
| June 30, | Currency |
June 30, |
Currency | ||||||||||||||||||||||||||||
| ($ thousands) | 2012 | 2011 | % Change | % Change (1) |
|
2012 | 2011 | % Change | % Change (1) | ||||||||||||||||||||||
| Channel revenues: | |||||||||||||||||||||||||||||||
| Wholesale: | |||||||||||||||||||||||||||||||
| Americas | 62,369 | 55,535 | 12.3 | % | 14.9 | % | 131,425 | 117,423 | 11.9 | % | 13.7 | % | |||||||||||||||||||
| Asia | 93,620 | 83,594 | 12.0 | % | 11.5 | % | 172,515 | 140,448 | 22.8 | % | 21.8 | % | |||||||||||||||||||
| Europe | 32,490 | 36,496 | (11.0 | %) | (0.5 | %) | 75,107 | 82,263 | (8.7 | %) | (1.6 | %) | |||||||||||||||||||
| Other businesses | 47 | 125 | (62.4 | %) | (57.6 | %) |
|
|
172 | 184 | (6.5 | %) | (1.6 | %) | |||||||||||||||||
| Total Wholesale | $ | 188,526 | $ | 175,750 | 7.3 | % | 10.1 | % |
|
$ |
379,219 | $ | 340,318 | 11.4 | % | 13.3 | % | ||||||||||||||
| Consumer-direct: | |||||||||||||||||||||||||||||||
| Retail | |||||||||||||||||||||||||||||||
| Americas | 54,952 | 50,574 | 8.7 | % | 9.3 | % | 90,498 | 78,997 | 14.6 | % | 15.1 | % | |||||||||||||||||||
| Asia | 48,359 | 34,912 | 38.5 | % | 40.9 | % | 68,941 | 49,056 | 40.5 | % | 41.9 | % | |||||||||||||||||||
| Europe | 9,163 | 6,264 | 46.3 | % | 58.7 | % |
|
|
13,608 | 9,183 | 48.2 | % | 58.3 | % | |||||||||||||||||
| Total Retail | 112,474 | 91,750 | 22.6 | % | 24.7 | % | 173,047 | 137,236 | 26.1 | % | 27.5 | % | |||||||||||||||||||
| Internet | |||||||||||||||||||||||||||||||
| Americas | 17,290 | 15,286 | 13.1 | % | 13.3 | % | 29,995 | 25,185 | 19.1 | % | 19.3 | % | |||||||||||||||||||
| Asia | 4,878 | 3,394 | 43.7 | % | 44.7 | % | 7,425 | 5,019 | 47.9 | % | 47.1 | % | |||||||||||||||||||
| Europe | 7,774 | 9,405 | (17.3 | %) | (7.1 | %) |
|
|
13,054 | 14,535 | (10.2 | %) | (2.0 | %) | |||||||||||||||||
| Total Internet | 29,942 | 28,085 | 6.6 | % | 10.3 | % | 50,474 | 44,739 | 12.8 | % | 15.5 | % | |||||||||||||||||||
| Total Revenues | $ | 330,942 | $ | 295,585 | 12.0 | % | 14.6 | % |
|
$ |
602,740 | $ | 522,293 | 15.4 | % | 17.2 | % | ||||||||||||||
| Three Months Ended | Constant | Six Months Ended | Constant | ||||||||||||||||||||||||||||
| June 30, | Currency | June 30, | Currency | ||||||||||||||||||||||||||||
| ($ thousands) | 2012 | 2011 | % Change | % Change (1) | 2012 | 2011 | % Change | % Change (1) | |||||||||||||||||||||||
| Regional Revenue: | |||||||||||||||||||||||||||||||
| Americas | 134,611 | 121,395 | 10.9 | % | 12.4 | % | 251,918 | 221,605 | 13.7 | % | 14.8 | % | |||||||||||||||||||
| Asia | 146,857 | 121,900 | 20.5 | % | 20.9 | % | 248,881 | 194,523 | 27.9 | % | 27.5 | % | |||||||||||||||||||
| Europe | 49,427 | 52,165 | (5.2 | %) | 5.4 | % | 101,769 | 105,981 | (4.0 | %) | 3.5 | % | |||||||||||||||||||
| Other businesses | 47 | 125 | (62.4 | %) | (57.6 | %) | 172 | 184 | (6.5 | %) | (1.6 | %) | |||||||||||||||||||
| Total Revenues | $ | 330,942 | $ | 295,585 | 12.0 | % | 14.6 | % |
|
$ |
602,740 | $ | 522,293 | 15.4 | % | 17.2 | % | ||||||||||||||
| (1) Current period results have been restated using 2011 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. |
| Company-operated retail locations: | June 30, 2011 | December 31, 2011 | Opened | Closed | June 30, 2012 | |||||||||
| Geography: | ||||||||||||||
| Americas | 192 | 197 | 15 | (15 | ) | 197 | ||||||||
| Asia | 175 | 198 | 55 | (20 | ) | 233 | ||||||||
| Europe | 30 | 35 | 19 | - | 54 | |||||||||
| Total company-operated retail locations | 397 | 430 | 89 | (35 | ) | 484 | ||||||||
| Type: | ||||||||||||||
| Kiosk | 66 | 57 | 2 | (14 | ) | 45 | ||||||||
| Store in Store | 97 | 101 | 23 | (16 | ) | 108 | ||||||||
| Retail stores | 153 | 180 | 44 | (4 | ) | 220 | ||||||||
| Outlet stores | 81 | 92 | 20 | (1 | ) | 111 | ||||||||
| Total company-operated retail locations | 397 | 430 | 89 | (35 | ) | 484 | ||||||||
| Constant Currency | Constant Currency | |||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||
| Comparable store sales growth (1) | June 30, 2012 (2) | June 30, 2012 (2) | ||||||||||||
| Americas | (1.2 |
)% |
|
2.6 | % | |||||||||
| Asia | 5.2 | 6.5 | ||||||||||||
| Europe | 9.5 | 13.3 | ||||||||||||
| Total | 1.8 |
% |
|
4.6 | % | |||||||||
| (1) Comparable store status is determined on a monthly basis. Comparable store sales begin in the thirteen 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. Locations closures in excess of three months are excluded until the thirteen month post re-opening. |
| (2) Current period results have been restated using 2011 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:
Investor:
Kevin Kim/Crocs, Inc.
303-848-7000
kkim@crocs.com
Brendon
Frey/ICR, Inc.
203-682-8200
brendon.frey@icrinc.com
or
Media:
Katy
Lachky/Crocs, Inc.
303-848-7000
klachky@crocs.com