LaCrosse Footwear, Inc. reported sales grew 1.9 percent in the second quarter, to $27.1 million from $26.6 million a year ago. Sales to the Outdoor Market were up 18 percent, offsetting a 5 percent decline to the Work Market.
For the first half of 2011, net sales were $52.2 million, compared to $60.8 million in the same period of 2010. Excluding the government channel, the company’s combined sales to its wholesale, direct and international channels increased 13 percent in both the second quarter and the first half of 2011 compared to the same periods in 2010.
For the second quarter of 2011, the net loss was $0.2 million or 3 cents per share, compared to net income of $0.1 million, or 2 cents, in the second quarter of 2010. For the first half of 2011, the net loss was $0.8 million or 13 cents, per diluted share, compared to net income of $1.8 million or 27 cents per diluted share in the same period of 2010.
Sales to the work market were $17.6 million in the second quarter of 2011, down 5 percent from the same period of 2010, reflecting a reduction of contract orders from the U.S. military and the company’s decision in 2010 to discontinue its work apparel products. Excluding the contract military and the work apparel sales, work sales in the second quarter of 2011 increased 17 percent from the same period in 2010. Sales to the outdoor market were $9.4 million in the second quarter of 2011, up 18 percent from the same period of 2010. The increase in outdoor sales primarily reflects strong demand for hunting and hiking products.
Gross margins for the second quarter of 2011 were 38.5 percent of net sales, compared to 40.9 percent in the same period of 2010. The year-over-year decrease in gross margins primarily reflects an increase in closeout sales of discontinued work apparel products. Operating expenses were $10.6 million in the second quarter of 2011, down 1% from the same period in 2010, primarily related to a reduction in compensation expense, partially offset by increased investments in marketing and product development initiatives.
The company’s inventories were $53.4 million at the end of the second quarter of 2011, up from $26.4 million at the end of the same period in 2010. The year-over-year increase in inventory reflects low inventory levels in the second quarter of 2010 due to supply constraints and a strategic decision in 2011 to enhance the availability of core products in order to address future at-once demand, the growth of the company’s wholesale distribution network and preparedness for its U.S. military business.
“Aside from continuing quarterly fluctuations in U.S. military orders, our business is performing well, with strong growth across our wholesale, direct and international channels,” said Joseph P. Schneider, president and CEO of LaCrosse Footwear, Inc. “Our sales to the outdoor market continue to be very robust, as our relationships with major retailers have continued to strengthen and we expand into their new retail stores. We see strong demand for both our core work and outdoor products, and our newest products for Fall 2011 are being very well received, including our innovative retooling of classic Danner designs in our new Stumptown series.
“As we move into the second half of 2011, we are executing our strategic plan and benefiting from the key investments and initiatives that weve made in recent years. Our stronger sales organization and distribution infrastructure continues to deepen our wholesale channel relationships, both in the U.S. and internationally. Our enhanced e-commerce platforms continue to expand our direct business, and our talented development team continues to introduce a wide range of innovative new products for Spring 2012.
“While the contract military business remains quite competitive and unpredictable, we have established LaCrosse as a trusted partner to various branches of the U.S. military that can fulfill their time-sensitive needs for high-performance, all-terrain, all-weather boots. We continue to believe that our overall business is best evaluated on an annual basis and that LaCrosse is well-positioned to capture market share over the long term.”
Based on the company’s financial outlook, the Board of Directors today announced the approval of a quarterly dividend of $0.125 per share of common stock. The third quarter dividend will be paid on September 18, 2011 to shareholders of record as of the close of business on August 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 $0.125 per share of common stock.
LaCrosse Footwear, Inc.
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)
(Unaudited)
Quarter Ended First Half Year Ended
June 25, June 26, June 25, June 26,
2011 2010 2011 2010
—— —— —— ——
Net sales $ 27,056 $ 26,553 $ 52,244 $ 60,780
Cost of goods sold 16,646 15,690 31,397 36,149
—— —— —— ——
Gross profit 10,410 10,863 20,847 24,631
Operating expenses 10,603 10,668 21,987 21,705
—— —— —— ——
Operating income (loss) (193) 195 (1,140) 2,926
Non-operating expense, net (113) (33) (238) (55)
—— — —— — —— — —— —
Income (loss) before income taxes (306) 162 (1,378) 2,871
Income tax provision (benefit) (121) 61 (543) 1,108
—— — —— —— — ——
Net income (loss) $ (185) $ 101 $ (835) $ 1,763
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Net income (loss) per common share:
Basic $ (0.03) $ 0.02 $ (0.13) $ 0.28
Diluted $ (0.03) $ 0.02 $ (0.13) $ 0.27
Weighted average number of common shares outstanding:
Basic 6,501 6,430 6,493 6,401
Diluted 6,501 6,632 6,493 6,577
Supplemental Product Line Information
Work Market Sales $ 17,636 $ 18,585 $ 33,692 $ 44,953
Outdoor Market Sales 9,420 7,968 18,552 15,827
—— —— —— ——
$ 27,056 $ 26,553 $ 52,244 $ 60,780
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