CROCS, INC. REPORTS 2010 SECOND QUARTER FINANCIAL RESULTS
Company Exceeds Guidance with Diluted EPS of $0.37
Second Quarter Revenue Improves to $228 Million
Gross Margin Increases from 51.1% to 57.8%
Operating Margin Improves to 16.9%
Crocs, Inc. (NASDAQ: CROX - News) today reported financial results for the second quarter ended June 30, 2010.
Revenue for the second quarter of 2010 increased 31% to $228.0 million, over adjusted revenue of $174.1 million reported in the second quarter of 2009, which excluded $23.7 million in previously impaired product sales that the Company has stated would be non-recurring. On a GAAP basis, second quarter revenue increased 15% year-over-year.
Second quarter 2010 net income was $32.3 million with diluted earnings per share of $0.37, compared to a second quarter 2009 net loss of $30.3 million, or a loss per diluted share of ($0.36).
Year-over-year second quarter changes in the Company’s channel revenue streams were as follows:
Wholesale sales increased 12% to $140.0 million;
Retail sales increased 20% to $66.4 million; and
Internet sales increased 24% to $21.6 million.
Changes in the Company’s regional revenue streams during the same quarterly periods were as follows:
Americas increased 23% to $104.8 million;
Asia increased 11% to $88.6 million; and
Europe increased 7% to $34.6 million.
Gross profit for the second quarter of 2010 increased 30% to $131.9 million, or 57.8% as a percentage of sales, compared to $101.1 million, or 51.1% of sales in the year ago period. Selling, General, & Administrative expenses (including foreign exchange, restructuring, impairment, and charitable contributions) decreased 25.8% to $93.2 million or 40.9% of sales, versus $125.6 million, or 63.5% of sales in the second quarter of 2009.
The Company’s cash and cash equivalents as of June 30, 2010 increased 25% to $96.9 million compared to $77.5 million at June 30, 2009. The Company had no bank debt at June 30, 2010.
Inventory increased 2% to $113.6 million at June 30, 2010 from $111.6 million at June 30, 2009, resulting in inventory turnover of 3.5 times in the current quarter.
The Company ended the second quarter of 2010 with accounts receivable of $94.0 million compared to $67.1 million at June 30, 2009.
“We are very pleased with our second quarter results, which show further strengthening of our global wholesale and consumer direct businesses” commented John McCarvel, President and Chief Executive Officer. “We believe sales are being driven by product innovation, improved service, and brand building initiatives as well as new distribution from the expansion of our company-operated stores and key wholesale accounts. Importantly, our updated business model is generating enhanced profitability and higher cash flow. We are encouraged with our recent performance and believe we have the right strategies in place along with the balance sheet strength to capitalize on the global opportunities still in front of us.”
For the third quarter of 2010, the Company expects revenue of approximately $205 million, a 24% increase over third quarter 2009 adjusted revenue of $165.7 million, which excludes $11.5 million in impaired product sales that the Company has stated would be non-recurring. On a GAAP basis, the company expects third quarter 2010 revenue to grow approximately 16% year-over-year.
The Company expects diluted earnings per share for the third quarter 2010 to increase to approximately $0.22 to $0.24 versus $0.09 in third quarter 2009, which excludes last year’s one time tax benefit of $0.16.
Conference Call Information
A conference call to discuss Crocs’ second quarter 2010 financial results is scheduled for today (August 5, 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 - News), 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 125 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.