Crocs Posts Triple-Digit Q1 Sales and Earnings Increases

Crocs, Inc. reported that revenues for the first quarter were $44.8 million, up 307% from $11.0 million for the first quarter of last year. Net income increased 220% for the first quarter to $6.4 million, or 17 cents per diluted common share, compared to net income of $2.0 million, or 6 cents per diluted common share, for the first quarter of fiscal 2005. First quarter net income includes a non-cash share-based compensation expense, net of tax effect, of $1.1 million compared to $779,000 for the comparable period of 2005. Excluding the non-cash share-based compensation expense, non-GAAP net income was $7.5 million and Non-GAAP net income per diluted common share was $0.20 for the first quarter ended March 31, 2006.

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                                                   Three months ended
                                                        March 31,
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(In thousands, except per share data)                 2006     2005
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Revenues                                             $44,844  $10,958
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GAAP net income attributable to common stockholders   $6,407   $1,972
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Non-GAAP net income, excluding share-based
 compensation, net of tax effect                      $7,461   $2,751
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GAAP net income per diluted common share               $0.17    $0.06
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Non-GAAP net income per diluted common share,
 excluding share-based compensation                    $0.20    $0.08
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Ron Snyder, President and Chief Executive Officer of Crocs Inc., commented “Our first quarter performance, which exceeded both internal and external expectations, was driven by robust demand for the Crocs brand across the board. During the quarter we continued to gain additional shelf space and open new doors within our current account base, while at the same time, increasing our penetration in strategic channels of distribution. We also introduced several new styles of footwear and the feedback from our retail partners has been extremely positive, which bodes well as we look to further evolve our product line. We are pleased with our strong start to fiscal 2006, and we remain very encouraged about both our near-term and long-term prospects.”

Gross profit for the three months ended March 31, 2006 was $23.7 million, or 52.8% of sales, compared to gross profit of $6.8 million, or 62.4% of sales for the three months ended March 31, 2005. Selling, general and administrative expense was $13.7 million, or 30.6% of sales, compared to $4.7 million, or 42.6% of sales in the corresponding period a year ago.

Crocs currently anticipates its fiscal 2006 total revenues to be in the range of $200 to $205 million and projects its net income per diluted common share for fiscal 2006 to range from $0.77 to $0.79. For the second quarter ended June 30, 2006, the Company currently anticipates total revenues to be in the range of $53 to $55 million and projects its net income per diluted common share to range from $0.21 to $0.22. It is important to note that the Company's net income per diluted common share outlook for fiscal and the second quarter 2006 includes its estimated share-based compensation expense.

Ron Snyder concluded, “Our brand equity and awareness continue to expand as we diversify our portfolio of products, increase our marketing and advertising, and broaden our reach both here and abroad. While we have grown rapidly in a relatively short period of time, we believe that the broad appeal for Crocs and our exciting new product offerings, coupled with our aggressive global expansion plan provide us with significant growth prospects for the future. We are focused on fully capitalizing on the many opportunities that we have created in the marketplace and remain committed to executing a strategy that will result in long-term growth and increased shareholder value.”

                     Crocs, Inc.
                 Consolidated Statements of Operations
            (In thousands, except share and per share data)


                                                  THREE MONTHS ENDED
                                                       March 31,
                                                   2006       2005(1)
                                                     (unaudited)

Revenues                                     $    44,844  $    10,958
Cost of Sales                                     21,163        4,119
Gross Profit                                      23,681        6,839


Selling, general and administrative expense       13,689        4,673
Income from operations                             9,992        2,166

Interest expense                                     279           37
Other expense (income), net:                        (287)          17
Income before income taxes                        10,000        2,112

Income tax expense                                 3,560           72

Net income                                         6,440        2,040

Dividends on redeemable convertible
 preferred shares                                     33           68
Net income attributable to common
 stockholders                                      6,407        1,972

Net income per share:
Basic                                        $      0.19  $      0.08
Diluted                                      $      0.17  $      0.06

Weighted average common shares:
Basic                                         32,897,743   25,176,137
Diluted                                       38,259,456   33,078,266