LaCrosse Footwear reported consolidated net sales for the fourth quarter of 2004 were $28.7 million, up 5% from $27.3 million in the fourth quarter of 2003. For
the full year 2004, net sales were $105.5 million, up 10% from $95.7 million in 2003. Consolidated net income was $2.2 million, or 37 cents per share, in the fourth quarter of 2004, up 96% from $1.1 million, or 19 cents per share, in the
fourth quarter of 2003. For the full year 2004, consolidated net income was $7.0 million, or $1.15 per share, up 165% from $2.6 million, or 44 cents per share, in 2003.
The company has successfully increased sales of both its work (formerly called “occupational”) and outdoor (formerly “recreational”) footwear. Worksales were $15.7 million for the fourth quarter and $60.7 million for the full
year 2004, up from $14.5 million and $51.9 million, respectively, for the same
periods in 2003. The growth in work sales for the year spanned multiple
product categories, including boots for public safety, general work, and
firefighting. Outdoor sales were $13.0 million for the fourth quarter and
$44.8 million for the full year 2004, up from $12.8 million and $43.8 million,
respectively, for the same periods in 2003. The growth in outdoor sales for
the year included stronger penetration into the outdoor rugged/casual and
hunting markets.
Work sales in the fourth quarter of 2004 included $2.2 million from
General Services Administration (GSA) delivery orders for uniform boots and
$0.3 million from the discontinued PVC boot line. The Company has fulfilled
its GSA delivery orders to date and PVC boots will no longer contribute
revenue in coming periods. A table at the end of this article provides the
historic quarterly revenue contributions for GSA and PVC, as well as the
comparison of work and outdoor sales.
The company continued to improve its overall gross margin, which was 36.1%
of net sales for the fourth quarter of 2004, up from 31.1% for the same period
of 2003, an increase of 500 basis points. The continued margin improvement
reflects the increased sales of the company’s new higher-margin products and
improved factory utilization due to increased production volume. Selling and
administrative expenses increased 8.9% from the fourth quarter of 2003, due
primarily to increased incentive compensation and investments in sales and
marketing efforts.
Continued improvements in systems, forecasting and management processes
helped enable the company to lower its inventory by $7.1 million from the end
of 2003 and increase inventory turns by 22%. As a result of improved
profitability and asset management, operating cash flow for the year was
$15.5 million, which allowed LaCrosse Footwear to eliminate its funded debt and
achieve a cash balance of $7.1 million at the end of 2004.
“We are pleased with our growth in sales, gross margins and earnings for
the quarter and the year,” said Joseph P. Schneider, President and CEO of
LaCrosse Footwear, Inc. “During 2004, we turned an important corner,
refocusing on profitable sales growth and increasing our brand equity in both
the work and outdoor footwear markets. The increase in sales was driven
primarily by the success of our innovative new products, such as our Quad
Comfort(TM) line of LaCrosse work boots and our Danner Pronghorn(TM) hunting
boots, selected “Best of the Best” for 2004 by Field & Stream magazine. We
also did an excellent job of fulfilling the GSA requirements efficiently and
on schedule.”
“Our business restructuring in recent years has resulted in significantly
improved operating efficiencies. We have trimmed less profitable parts of our
business and benefited from new higher-margin products. We also managed to
control costs and reallocate our expenses to focus on key strategic areas of
our business, such as investing in more information technology for our
corporate and customer support systems. Our improved overall execution is
reflected in our strong bottomline performance, and we have used the positive
cash flows to eliminate our debt and strengthen our balance sheet.”
“As we move into 2005, we believe LaCrosse Footwear is well positioned to
execute our growth strategy. To drive future growth, we are now investing in
our product development, marketing and sales organizations. We are applying
more resources to better leverage our distribution channels, diversify our
revenue base with innovative new products and penetrate deeper into a variety
of targeted markets. Our long-term objective is to become the premier work
and outdoor footwear company in the world. We are pleased with our progress
and excited about the road ahead.”
During 2004, the Company utilized its remaining federal net operating loss
carryforwards. As a result, the effective tax rate was approximately 4% for
fiscal 2004. The Company expects income tax expense of approximately 35% on
earnings in 2005 and approximately 37% in 2006 and beyond.
LaCrosse Footwear, Inc.
SELECTED FINANCIAL DATA
(Amounts in thousands, except per share amounts)Condensed Consolidated
Statements of Operations Quarter Ended Year Ended
31-Dec-04 31-Dec-03 31-Dec-04 31-Dec-03Net sales $28,660 $27,325 $105,470 $95,687
Cost of goods sold 18,324 18,823 69,822 66,201
Gross profit 10,336 8,502 35,648 29,486
Operating expenses 7,735 7,102 28,008 25,820
Operating income 2,601 1,400 7,640 3,666
Non-operating expenses, net (47) (265) (398) (1,036)
Income before income taxes 2,554 1,135 7,242 2,630
Income tax expense 331 -- 269 --Net income $2,223 $1,135 $6,973 $2,630
Net income per
common share, basic $0.38 $0.19 $1.18 $0.45
Net income per
common share, diluted $0.37 $0.19 $1.15 $0.44Weighted average shares outstanding:
Basic 5,903 5,875 5,891 5,874
Diluted 6,090 6,006 6,070 5,939Dec 31, Sept 25, Jun 26, Mar 27,
Quarter Ended 2004 2004 2004 2004Work Sales $15,651 $15,812 $12,056 $17,141
Outdoor Sales $13,009 $18,672 $6,544 $6,585
Total Sales $28,660 $34,484 18,600 $23,726
GSA Delivery Orders $2,195 $2,845 $451 $4,267
PVC Sales $326 $1,584 $1,463 $1,735
Dec 31, Sept 27, June 28, Mar 29,
Quarter Ended 2003 2003 2003 2003Work Sales $14,508 $11,594 $11,470 $14,292
Outdoor Sales $12,817 $18,306 $7,118 $5,582
Total Sales $27,325 $29,900 $18,588 $19,874
GSA Delivery Orders $170 -- -- --
PVC Sales $1,689 $1,590 $1,743 $2,136
