LaCrosse Footwear, Inc. reported consolidated net sales of $40.3 million for the third quarter ended Sept. 27, up 9% from $36.9 million in the third quarter of 2007. For the first three quarters, consolidated net sales were $92.8 million, up 9% from $85.5 million in the same period of 2007.
Net income was $2.8 million, or 43 cents per diluted share, compared to $3.3 million or 52 cents in the same quarter a year ago. Results for the third quarter of 2008 include expenses of approximately $1.2 million related to the establishment and operation of the companys new European subsidiary. For the first three quarters of 2008, net income was $5.0 million or 78 cents per diluted share, up 2% from $4.9 million or 77 cents per diluted share for the same period in 2007.
Sales to the outdoor market were $20.8 million for the third quarter of 2008, compared to $21.8 million for the same period of 2007. For the first three quarters of 2008, sales to the outdoor market were $38.1 million compared to $41.8 million for the same period of 2007. While the company saw strong at-once demand in certain segments and geographies of the outdoor market, the overall decline in outdoor sales reflected the sluggish retail environment.
Sales to the work market were $19.4 million for the third quarter of 2008, up 29% from $15.1 million for the same period of 2007. For the three quarters of 2008, sales to the work market were $54.7 million, up 25% from $43.7 million for the same period of 2007. During the third quarter of 2008, the growth in work market sales reflects shipments of approximately $3.2 million to the United States Marine Corps and the U.S. Army, related to previously announced delivery orders. In addition to strong military business, the company continued to penetrate into a variety of targeted, niche work boot markets.
LaCrosses total operating expenses were $11.2 million, or 28% of net sales, in the third quarter of 2008, compared to $9.5 million, or 26% of net sales, in the third quarter of 2007. The $1.8 million year-over-year increase in operating expenses reflects costs from the Companys new European subsidiary, as well as increased sales and product development activities.
At the end of the third quarter of 2008, LaCrosses inventory increased $0.7 million or 2% from the end of the same period in 2007, reflecting additional inventory for the companys new European subsidiary and for recent military orders.
The company ended the third quarter of 2008 with cash and cash equivalents of $4.3 million, compared to $4.7 million at the end of the third quarter of 2007.
“We are pleased with our performance and execution for the third 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, such as energy-related industries, mining and railroads.
LaCrosse Footwear, Inc. | |||||||||||||
Condensed Consolidated Statements of Income | |||||||||||||
(Unaudited) | |||||||||||||
| (amounts in thousands except per share data) | Quarter Ended | Three Quarters Ended | |||||||||||
| Sept. 27, | Sept. 29, | Sept. 27, | Sept. 29, | ||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||||
| Net sales | $ | 40,265 | $ | 36,876 | $ | 92,807 | $ | 85,496 | |||||
| Cost of goods sold | 24,478 | 22,464 | 55,717 | 51,705 | |||||||||
| Gross profit | 15,787 | 14,412 | 37,090 | 33,791 | |||||||||
Selling and administrative expenses | 11,234 | 9,465 | 29,140 | 26,580 | |||||||||
| Operating income | 4,553 | 4,947 | 7,950 | 7,211 | |||||||||
| Non-operating income (expense) | (54 | ) | 48 | 57 | 262 | ||||||||
| Income before income taxes | 4,499 | 4,995 | 8,007 | 7,473 | |||||||||
| Income tax expense | 1,731 | 1,684 | 3,024 | 2,582 | |||||||||
| Net income | $ | 2,768 | $ | 3,311 | $ | 4,983 | $ | 4,891 | |||||
| Net income per common share: | |||||||||||||
| Basic | $ | 0.44 | $ | 0.54 | $ | 0.80 | $ | 0.80 | |||||
| Diluted | $ | 0.43 | $ | 0.52 | $ | 0.78 | $ | 0.77 | |||||
| Supplemental product line information: | |||||||||||||
| Work Market Sales | $ | 19,438 | $ | 15,080 | $ | 54,682 | $ | 43,658 | |||||
| Outdoor Market Sales | 20,827 | 21,796 | 38,125 | 41,838 | |||||||||
| $ | 40,265 | $ | 36,876 | $ | 92,807 | $ | 85,496 | ||||||
