Crocs, Inc. Reports 2010 First Quarter Financial Results
Returns to First Quarter Profitability with Diluted EPS of $0.07
First Quarter Revenue Improves 24% Over Prior Year First Quarter
Gross Margin Improves to 52%
Investor Contact: Brendon Frey/ICR, Inc.
(203) 682-8200
brendon.frey@icrinc.com
Media Contact: Tia Mattson/Crocs, Inc.
(303) 848-7199
tia@crocs.com
NIWOT, COLORADO – May 6, 2010 – Crocs, Inc. (NASDAQ: CROX) today reported financial results for the first quarter ended March 31, 2010.
Revenue for the first quarter of 2010 increased 23.7% to $166.9 million compared to revenue of $134.9 million in the year ago period. First quarter 2010 net income was $5.7 million with diluted earnings per share of $0.07, compared to a first quarter 2009 net loss of $22.4 million, or a loss per diluted share of ($0.27).
Year-over-year first quarter changes in the Company’s channel revenue streams were as follows:
• Wholesale sales increased 26.1% to $120.2 million;
• Retail sales increased 23.3% to $34.4 million; and
• Internet sales increased 5.1% to $12.3 million.
Changes in the Company’s regional revenue streams during the same quarterly periods were as follows:
• Europe increased 34.3% to $38.0 million;
• Asia increased 40.3% to $54.7 million; and
• Americas increased 9.8% to $74.2 million.
Balance Sheet
The Company’s cash and cash equivalents as of March 31, 2010 increased to $53.8 million compared to $50.9 million at March 31, 2009. The Company had no bank debt at March 31, 2010.
Inventory decreased to $107.2 million at March 31, 2010 from $131.2 million at March 31, 2009, resulting in inventory turnover of 3.2 times in the current quarter.
The Company ended the first quarter of 2010 with accounts receivable of $97.4 million compared to $60.6 million at March 31, 2009. Days sales outstanding increased from 40.4 days for the three months ended March 31, 2009 to 52.5 days for the three months ended March 31, 2010.
“Our return to first quarter profitability underscores the resiliency of Crocs as a brand and as a company,” commented John McCarvel, President and Chief Executive Officer. “Revenues improved across all channels and across each region this quarter driven by strong customer reception to our products. We also turned a critical corner in our wholesale channel this quarter, where revenues were up in all regions for the first time in more than a year. Margins also improved as we benefitted from our cost-savings initiatives undertaken in 2009. Our strategy to return to profitable growth in 2010 has not changed and this positive start to the year positions us well to execute against that plan.”
Guidance
The Company expects to generate between $210 million and $220 million in revenue during its 2010 second quarter. This represents projected growth of between 20% and 26% over the non-GAAP revenue of $174.0 million reported in the second quarter of 2009, which excludes $23.7 million in previously-impaired sales the Company has stated would be non-recurring.
The Company expects second quarter 2010 diluted earnings per share to be between $0.18 and $0.22. This guidance assumes an effective tax rate of 30%.
Conference Call Information
A conference call to discuss Crocs’ first quarter 2010 financial results is scheduled for today (May 6, 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.
In discussing financial results and guidance on the conference call, the Company may refer to certain non-GAAP measures. Reconciliations of any such non-GAAP measures to the most directly comparable financial measures in accordance with GAAP can be found on the Company’s website at www.crocs.com in the “Company” section under “Investor Relations.”