Crocs, Inc. reported fourth quarter 2009 revenues increased 7.9% to $136.0 million compared to revenues of $126.1 million in the year ago period. The company reported a net loss of $11.4 million in the fourth quarter of 2009 with diluted loss per share of 13 cents, compared to a fourth quarter 2008 net loss of $34.7 million, or 42 cents.

Fourth quarter 2009 net loss includes the effects of the following:

  • $0.6 million loss from foreign currency exchange rate fluctuations during the 2009 fourth quarter and
  • $3.6 million in impairment and restructuring charges and net charitable contributions.

On a non-GAAP basis, the Company’s fourth quarter 2009 net loss after taxes and excluding foreign currency exchange losses, charitable contributions and certain one-time items was $3.5 million, or ($0.04) per diluted share.

Year-over-year fourth quarter changes in the Company’s channel revenue streams were as follows:

  • Retail sales increased 25.9% to $43.8 million;
  • Internet sales increased 20.6% to $15.3 million; and
  • Wholesale sales decreased 2.1% to $77.0 million.

Changes in the Company’s regional segment revenue streams during the same quarterly periods were as follows:

  • Europe increased 51.2% to $16.5 million;
  • Asia increased 15.5% to $50.5 million; and
  • Americas decreased 3.4% to $68.9 million

Revenues for the year ended December 31, 2009 decreased 10.5% to $645.8 million compared to revenues of $721.6 million in 2008. The Company reported a net loss of $42.1 million for fiscal 2009 with a diluted loss per share of ($0.49), compared to a net loss of $185.1 million, or ($2.24) per diluted share in fiscal 2008.

Balance Sheet

The Company’s cash and cash equivalents as of December 31, 2009 increased 49.5% to $77.3 million compared to $51.7 million at December 31, 2008. The Company had no bank debt at December 31, 2009.

Inventory decreased 34.8% to $93.3 million at December 31, 2009 from $143.2 million at December 31, 2008 resulting in inventory turnover of 2.9 times. Inventory turnover is calculated by annualizing the current period cost of goods sold and dividing by the average between the prior period and current period inventory balance.

The Company ended the fourth quarter of 2009 with accounts receivable of $50.5 million compared to $35.3 million at December 31, 2008 as a result of higher sales in the quarter. Days sales outstanding increased from 25.8 days for the three months ended December 31, 2008 to 34.1 days for the three months ended December 31, 2009.

Net capital expenditures in the fourth quarter and full year 2009 were $9.6 million and $29.8 million, respectively, compared to $14.4 million and $76.2 million in the fourth quarter and full year 2008.

“The past year was marked by significant operational changes that helped stabilize our business and reshaped the outlook for our Company,” commented John Duerden, President and Chief Executive Officer of Crocs. “I believe the brand remains strong and continues to attract a large and loyal consumer following. In the near term, our focus remains on reinvigorating the top line, controlling costs and introducing fun and innovative footwear. In 2010, we will re-engage the consumer through more targeted and effective advertising programs and through further development of our direct and indirect distribution channels. While there is still more work ahead of us, the progress we made during the past 12 months strengthening our balance sheet, right-sizing our cost structure and tightening our distribution have already yielded positive results, have strengthened the core of our business and provide a solid platform for future profitable growth.”

Guidance

The Company expects to generate between $155 million and $160 million in revenue during its 2010 first quarter, with diluted earnings per share at approximately break even. This guidance assumes an effective tax rate of 30%.

CROCS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)

 


 
 Three Months Ended

December 31,

 
 Twelve Months Ended

December 31,


2009
 
 2008
2009
 
 2008









 

Revenues

$
136,011


$
126,092


$
645,767


$
721,589

Cost of sales

 
75,743
 

 
70,048
 

 
344,806
 

 
487,623
 

Gross profit


60,268



56,044



300,961



233,966

Selling, general and administrative expenses


70,835



97,575



310,927



368,800

Restructuring charges


1,653



895



7,623



7,664

Impairment charges


638



484



26,085



45,784

Charitable contributions expense

 
214
 

 
–
 

 
7,510
 

 
–
 

Income (loss) from operations


(13,072
)


(42,910
)


(51,184
)


(188,282
)

Interest expense


83



408



1,495



1,793

Gain on charitable contributions


(330
)


–



(3,163
)


–

Other (income) expense

 
625
 

 
217
 

 
(895
)

 
(565
)

Income (loss) before income taxes


(13,450
)


(43,535
)


(48,621
)


(189,510
)

Income tax (benefit) expense

 
(2,002
)

 
(8,834
)

 
(6,543
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