Crocs, Inc. Reports Record Fiscal 2007 Fourth Quarter and Full Year Financial Results

Business Wire, Feb 19, 2008

Fourth Quarter Revenues Increased 99.1% to $224.8 Million vs. $112.9 in Fiscal 2006

Fourth Quarter Diluted EPS Increased 73.1% to $0.45 vs. $0.26 in Fiscal 2006

Fiscal 2007 Revenues Increased 138.9% to $847.4 Million vs. $354.7 Million in Fiscal 2006

Fiscal 2007 Diluted EPS Increased 146.9% to $2.00 vs. $0.81 in Fiscal 2006

NIWOT, Colo. -- Crocs, Inc. (NASDAQ: CROX) today reported strong financial results for the quarter and fiscal year ended December 31, 2007.

Revenues for the quarter ended December 31, 2007 increased 99.1% to $224.8 million compared to $112.9 million for the quarter ended December 31, 2006. For the quarter ended December 31, 2007 domestic sales rose approximately 47% to $115.8 million compared to $78.8 million a year ago and international sales increased 221% to $109 million from $34 million a year ago. Net income for the quarter ended December 31, 2007 increased 84.1% to $38.3 million, or $0.45 per diluted share, compared to $20.8 million, or $0.26 per diluted share, for the quarter ended December 31, 2006. Net income per diluted share for the quarters ended December 31 2007 and 2006 are adjusted to reflect the two-for-one stock split that took effect in June 2007. Gross profit for the fourth quarter of 2007 was $125.8 million, or 56.0% of revenues, compared to $65.1 million, or 57.7% of revenues for the fourth quarter of 2006. Selling, general and administrative expenses for the quarter ended December 31, 2007 were $71.9 million, or 32.0% of revenues, compared to $34.9 million, or 30.9% of revenues in the quarter ended December 31, 2006.

Ron Snyder, President and Chief Executive Officer of Crocs, Inc. commented "For the eighth quarter in a row Crocs delivered industry leading revenue growth, net income growth and EPS growth. Our more than 99% revenue gain in the fourth quarter highlights the ongoing strong demand for Crocs branded footwear. We experienced better than expected sell through of our fall line across men's, women's, and children's in each of our markets. To meet the higher than anticipated orders over the holiday period we delivered a meaningful amount of Mammoths by air-freight, which impacted our gross margin. However, we were still able to grow diluted earnings per share by 73% in the fourth quarter. As we approach the spring and summer selling seasons, our bookings are strong compared to December 31, 2006, our inventories are on plan and we believe we are well positioned to achieve our short and long-term growth objectives."

Revenues for the year ended December 31, 2007 increased 138.9% to $847.4 million compared to $354.7 million for the year ended December 31, 2006. For the year ended December 31, 2007, domestic sales rose approximately 82% to $440 million from $242 million and international sales increased 264% to $408 million from $112 million a year ago. Net income for the year ended December 31, 2007 increased 161.2% to $168.2 million, or $2.00 per diluted share, compared to $64.4 million, or $0.81 per diluted share for the year ended December 31, 2006. Net income per diluted share amounts for 2007 and 2006 are adjusted to reflect the two-for-one stock split that took effect in June 2007. Gross profit for 2007 was $497.6 million, or 58.7% of revenues, compared to $200.6 million, or 56.5% of revenues for 2006. Selling, general and administrative expenses for the year ended December 31, 2007 were $259.9 million, or 30.7% of revenues, compared to $105.2 million, or 29.7% of revenues in the year ended December 31, 2006.

"We are very pleased to have completed a landmark year in our Company's development with record sales and profits and several important strategic advances," continued Mr. Snyder. "2007 was highlighted by the evolution of our product line, our significant expansion overseas, key investments in our operating platform, and the growing popularity of the Crocs brand in various markets throughout the world. At the same time, we acquired and developed other businesses and diversified into additional categories which we believe will provide us with compelling new growth vehicles for the future. We move forward focused on enhancing our global position and building a stronger, more financially robust company."

Guidance

For the year ending December 31, 2008, Crocs reiterated its previously issued growth targets and expects revenues of approximately $1.16 billion and net income per diluted share of approximately $2.70.

For the six-months ending June 30, 2008, the Company expects revenues to increase approximately 50% over the six-month period ended June 30, 2007.

Balance Sheet

At December 31, 2007, Crocs had inventories of $248.4 million compared to $195.3 as of September 30, 2007. Accounts receivables were $152.9 million as of December 31, 2007 compared to $160.6 million as of September 30, 2007.

Mr. Snyder concluded, "Since introducing our first shoe just five years ago, we have rapidly grown our portfolio to approximately 250 different styles, extended our reach into more than 90 countries, and achieved almost $850 million in annual sales. That said, we believe that we are still in the early stages of our development and see considerable opportunity to grow our domestic business through product innovation, category expansion, and increased retail floor space. Internationally, our sales accelerated over the past 12-months in Europe and Japan thanks to our many brand building initiatives, which gives us confidence as we prepare to launch a broader assortment of footwear and continue with our strategic investments in growing markets. We remain optimistic about our many long-term growth prospects and dedicated to creating greater value for our shareholders."