Crocs, Inc. (NASDAQ: CROX) today announced that, based upon preliminary
performance results through June 30, 2008, it expects its second quarter
2008 revenue to be in the approximate range of $218 million to $223
million and expects diluted earnings per share in the range of $0.03 to
$0.07, including a portion of the previously announced pre-tax charge
associated with the shutdown of the Company’s
Canadian manufacturing operations equaling approximately $1.4 million,
or $0.01 per diluted share. These revised estimates compare to its
previous guidance of revenues of approximately $247 million to $258
million and expected diluted earnings per share between $0.42 and $0.47,
which included the charge associated with the shutdown of the Canadian
manufacturing operations. Despite lower revenue expectations for the
second quarter, the Company still anticipates inventories as of June 30,
2008 to decrease approximately 10% to 15% from $266 million in the first
quarter, and receivable days sales outstanding to improve approximately
20%-25% as compared to March 31, 2008.
Ron Snyder, President and Chief Executive Officer of Crocs, Inc.
commented, “The domestic marketplace proved to
be more challenging during the second quarter than we had originally
anticipated. While we did experience solid sell-through with many of our
major accounts, retailers across the board were extremely cautious with
their level of reorders, choosing to operate with leaner inventories
versus a year ago. Our international markets continued to perform better
than the U.S., with Asia up roughly 65% and Europe up approximately 13%,
however this was below our initial projections. Although we made
important progress reducing costs in our manufacturing and distribution
platform, primarily shutting down our Canadian facility and lowering our
headcount, it was not enough to offset the lower than projected sales
volumes. At the same time, we continue with our global brand building
initiatives and while the increase in marketing, retail and advertising
spend negatively impacted our near-term profitability we believe this is
a key component to our long-term success.”
Crocs also revised its outlook for the fiscal year ending December 31,
2008. For fiscal 2008, revenues are now expected be down modestly
compared to 2007 levels with diluted earnings per share of approximately
break-even, including the total pre-tax charge of approximately $20
million, or $0.16 per diluted share associated with the shutdown of the
Company’s Canadian manufacturing operations.
For the third quarter ending September 30, 2008, the Company expects
revenues to be in the range of $195 million to $205 million and diluted
earnings per share of approximately $0.01 to $0.05.
Mr. Snyder concluded, “We are obviously
disappointed with the economic situation in the U.S. and parts of
Europe, however, we remain confident about the long-term prospects of
this business. We are currently in the process of sizing our business to
be profitable on lower projected sales volumes and these cost actions
will continue through the end of the year. Operationally, we are
implementing several strategic programs aimed at enhancing our supply
chain, further reducing costs and improving working capital. We believe
that many of our markets are underpenetrated and should provide
meaningful growth opportunities for our products well into the future.
While in the U.S. we are focused on expanding consumer awareness, shelf
space and distribution for our new collections of footwear. Our entire
organization is committed to executing our business plan and returning
greater value to our shareholders.”
Crocs will host a conference call to discuss its revised outlook
tomorrow, July 25, 2008 at 8:30 am ET. A live broadcast will be
available by clicking the ‘Investor Relations’
link under the Company section at www.crocs.com
and at www.earnings.com. An audio
replay of the webcast will be archived on the Crocs website for two
weeks. Please logon to either website at least fifteen minutes prior to
the webcast in order to download the necessary software.
Crocs expects to report actual fiscal 2008 second quarter results on or
about August 7, 2008.
About Crocs, Inc:
Crocs, Inc. is a rapidly growing designer, manufacturer and retailer
of footwear for men, women and children under the Crocs™
brand.
All Crocs™ brand shoes feature Crocs’
proprietary closed-cell resin, Croslite™,
which represents a substantial innovation in footwear. The Croslite™
material enables us to produce soft, comfortable, lightweight,
superior-gripping, non-marking and odor-resistant shoes. These unique
elements make Crocs™ footwear ideal for
casual wear, as well as for professional and recreational uses such as
boating, hiking, hospitality and gardening. The versatile use of the
material has enabled us to successfully market our products to a broad
range of consumers.
In 2006, the company acquired Jibbitz LLC, a unique accessory brand
with colorful snap-on products specifically suited for Crocs shoes.
Today, more than 1,600 Jibbitz designs are available to consumers for
personalizing and customizing their Crocs™
footwear.
Please visit www.crocs.com for
additional information.
Forward Looking Statements
The matters regarding the future discussed in this news release include
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995, including statements related to our
preliminary results, future prospects, inventory and strategic advances
and our expectations regarding our growth, international expansion,
bookings, worldwide popularity and product development. 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: our limited operating history; our significant recent
expansion; changing fashion trends; our reliance on market acceptance of
the small number of products we sell; our ability to develop and sell
new products; our limited manufacturing capacity and distribution
channels; our reliance on third party manufacturing and logistics
providers for the production and distribution of our products; our
reliance on a single-source supply for certain raw materials; our
management and information systems infrastructure; our ability to obtain
and protect intellectual property rights; the effect of competition in
our industry; the effects of seasonality on our sales; our ability to
attract, assimilate and retain management talent; and other factors
described in our 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. The final results for the second
quarter of 2008 may differ from the preliminary results discussed above.
We do not undertake any obligation to update publicly any forward
looking statement, including, without limitation, any estimate regarding
revenues or earnings, whether as a result of the receipt of new
information, future events, or otherwise.
