LaCrosse Footwear, Inc. said its net income rose 47% in the second quarter on a 12% increase in consolidated net sales, which rose to $27.8 million from $24.9 million in the second quarter of 2007.
Sales to the outdoor market were $10.5 million for the second quarter of 2008, down 11% from $11.8 million for the same period of 2007. For the first half of 2008, sales to the outdoor market were $17.3 million, down 13.5% compared to $20.0 million for the same period of 2007.
Sales to the work market were $17.4 million for the second quarter of 2008, up 32% from $13.2 million for the same period of 2007. For the first half of 2008, sales to the work market were $35.2 million, up 23% from $28.6 million for the same period of 2007. The growth in work market sales reflects shipments related to previously announced military orders and continued penetration into a variety of targeted, niche work boot markets. During the second quarter of 2008, the company shipped approximately $1.8 million of orders to the United States Marine Corps and the U.S. Army.
The company strengthened its year-over-year gross margins. For the second quarter of 2008, its gross margin was 40.4% of net sales, up 120 basis points from 39.2% in the same period of 2007, reflecting price increases in recent periods and reductions in sales returns, discounts and allowances.
LaCrosses total operating expenses were $8.9 million, or 32% of net sales, in the second quarter of 2008, compared to $8.3 million, or 33% of net sales, in the second quarter of 2007. The company continued to grow sales faster than operating expenses, while increasing its investments in its sales and product development activities. In addition, LaCrosses inventory decreased 3% at the end of the second quarter of 2008 compared to the end of the same period in 2007, reflecting improved inventory management.
During the quarter, LaCrosse paid a quarterly cash dividend of twelve and one-half cents ($0.125) per share of common stock, totaling $0.8 million. LaCrosse ended the second quarter of 2008 with cash and cash equivalents of $13.3 million, up from $10.3 million at the end of the previous quarter.
“We are pleased with our results for the second quarter, despite continuing challenges in the retail environment,” said Joseph P. Schneider, president and CEO of LaCrosse Footwear, Inc. “The growth in our work business continued to be driven by shipments to various branches of the United States military and niche work markets. During the second quarter, we announced an additional $3 million delivery order related to our Mountain Cold Weather Boot contract with the United States Marine Corps, which we expect to ship in the second half 2008. Our success in this channel reflects the militarys increased demand for our expert-grade boots, as well as our sustained efforts to work closely with our customers and gain a rich understanding of their specific needs under tough combat conditions.”
“In line with our long-term strategy to diversify and strengthen our sales channels, today we announced the establishment of a new European sales office in order to expand our international business where we see significant opportunities for future growth. In addition, we intend to build a new world-class distribution facility in the Midwest to improve operating efficiencies, increase speed of delivery and better serve our customers. At the same time, we have continued to improve our gross margin and profitability, better manage our inventories, leverage our operating expenses, generate steady cash flow from operations and pay dividends, while continuing to introduce exciting new products and invest in growing our business.”
