LaCrosse Footwear, Inc. said sales plunged 26.3 percent to $25.2 million in the first quarter ended March 26 as a drop in military sales overwhelmed a 14 percent growth in wholesale, direct and international sales and strong demand for its hiking and other outdoor footwear.
The lower sales resulted in a net loss was $700,000, or 10 cents per diluted share in the quarter , compared to net income of $1.7 million, or 25 cents per diluted share a year earlier. Sales to the work market were $16.1 million, down 39% from the same period of 2010, reflecting a reduction of orders from the U.S. military.
Sales to the outdoor market were $9.1 million for the first quarter of 2011, up 16% from the same period of 2010. The increase in outdoor sales primarily reflects strong demand for hiking and hunting products. Gross margins for the first quarter of 2011 were 41.4% of net sales, up from 40.2% in the same period of 2010. The year-over-year increase in gross margins primarily reflects the success of the company's new products and the strong growth of its wholesale and direct business.
Operating expenses were $11.4 million in the first quarter of 2011, up 3% from the same period in 2010, reflecting increased investments in marketing and product development activities. The company's inventories were $46.9 million at the end of the first quarter of 2011, up from $21.9 million at the end of the same period in 2010. The increase in inventory reflects a strategic decision to enhance availability of core products in order to address future at-once demand, the growth of the company's wholesale distribution network and preparedness of our U.S. military business.
“While we continue to see quarterly fluctuations of U.S. military orders, we achieved strong growth across our wholesale, direct and international channels, as well as continued penetration into various branches of the U.S. government,” said Joseph P. Schneider, president and CEO of LaCrosse Footwear, Inc. “Our sales to the outdoor market were particularly robust, as our relationships with major retailers continue to strengthen and we expand into new retail stores. Our newest products have been very well received and we see strong demand for both our core work and outdoor products.
“As we move into the second quarter of 2011, we are encouraged by the significant growth in our wholesale backlog, by the enthusiastic response of our customers to our innovative new products for Fall 2011 and by the effectiveness of our new sales and marketing efforts. Today we also announced another order from the United States Marine Corps which will be delivered during the second quarter of 2011, who turned to us to fulfill an immediate need for high-performance, all-terrain boots as a result of the recent recall of boots supplied by another manufacturer.
“While we expect to see ongoing quarter-to-quarter fluctuations, we believe that our business overall can best be evaluated on an annual basis and LaCrosse is well-positioned to continue to capture market share over the long term.”
Based on the company's financial outlook, the board of directors announced the approval of a quarterly dividend of 12.5 cents per share of common stock. The second quarter dividend will be paid on June 18, 2011 to shareholders of record as of the close of business on May 22, 2011. The board of directors, while not declaring future dividends to be paid, has established a quarterly dividend policy reflecting its intent to declare and pay a quarterly dividend of 12.5 cents per share of common stock.
LaCrosse Footwear, Inc.
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)
|Cost of goods sold||ï¿½||14,751||ï¿½||ï¿½||20,459||ï¿½|
|Operating income (loss)||(947||)||2,731|
|Income (loss) before income taxes||(1,072||)||2,709|
|Income tax provision (benefit)||ï¿½||(422||)||ï¿½||1,047||ï¿½|
|Net income (loss)||$||(650||)||$||1,662||ï¿½|
|Net income (loss) per common share:|
|Weighted average number of common shares outstanding:|
|Supplemental Product Line Information|
|Work Market Sales||$||16,056||$||26,363|
|Outdoor Market Sales||ï¿½||9,132||ï¿½||ï¿½||7,864||ï¿½|