Crocs Inc. Reports 2012 Fourth Quarter & Full Year Financial Results

Crocs Inc. Reports 2012 Fourth Quarter & Full Year Financial Results

  • Record Full Year 2012 Revenue of $1.12 Billion

  • Full Year 2012 Diluted EPS of $1.44

  • Excluding Non-Operating Items the Company Generated $0.04 of Diluted EPS in the Fourth Quarter of 2012

NIWOT, Colo.--(BUSINESS WIRE)-- Crocs Inc. (NAS: CROX) reported today financial results for the fourth quarter and full year ended December 31, 2012.


Full Year 2012 Highlights

  • Revenue increased 12 percent to $1.12 billion or 14 percent on a constant currency basis compared with the prior year period

  • Gross Margin increased to 54.1 percent, an increase of 50 basis points compared with the prior year period

  • Net income, excluding non-operating items and one-time tax benefits, increased 17 percent compared with the prior year period

"Our strong performance in 2012 reflects our ongoing investment in our multi channel strategy. We saw revenue growth during 2012 of 14% on a constant currency basis, while also approaching a record 50 million units and increasing average selling prices," said John McCarvel, President and Chief Executive Officer. "Looking forward into 2013, our customers are eagerly anticipating delivery of our spring summer line in the next few weeks, including the Huarache collection, which we expect to be the thirtieth member of our million pair seller club, our molded boat shoes, and our women's wedge line. We believe our focus on bringing innovative, colorful, comfortable and fun products to the marketplace allows us to grow our business thoughtfully and provide long-term value to our stockholders."

Full Year 2012 Results

Net income for the year ended December 31, 2012 was $131.3 million, or $1.44 per diluted share, compared with net income of $112.8 million, or $1.24 per diluted share, in 2011. Non-GAAP net income1, adjusted for a tax benefit in the third quarter of 2012, contingency accruals of $5.9 million in the fourth quarter of 2012 and $1.8 million of expense related to the implementation of a new enterprise resource planning (ERP) system, for the full year 2012 was $127.7 million or $1.40 per diluted share compared with Non-GAAP net income of $109.2 million or $1.20 per diluted share in the same period last year.

Revenue for 2012 was $1.12 billion, up 12.2% over 2011. On a constant currency basis, revenue increased 14.0% for the full year 2012.

Gross profit for 2012 was $608.0 million, or 54.1% as a percentage of sales, compared with $536.4 million, or 53.6% as a percentage of sales in the same period last year. SG&A increased 13.7% to $460.4 million compared with $404.8 million a year ago. As a percentage of sales, SG&A was 41.0% compared with 40.4% for the full year 2011.

Operating income for the full year 2012 was $146.2 million compared with $131.1 million in the prior year.

Full Year Revenue Results

The following tables detail the company's full year 2012 and 2011 revenues:

Twelve Months Ended

December 31,

Change

Constant Currency Change(1)

($ thousands)

2012

2011

$

%

$

%

Channel revenues:

Wholesale:

Americas

$

235,988

$

214,062

$

21,926

10.2

%

$

25,920

12.1

%

Asia

298,350

259,104

39,246

15.1

38,984

15.0

Europe

110,947

124,995

(14,048

)

(11.2

)

(5,168

)

(4.1

)

Other businesses

574

191

383

200.5

406

212.4

Total Wholesale

645,859

598,352

47,507

7.9

60,142

10.1

Consumer-direct:

Retail

Americas

196,711

174,840

21,871

12.5

22,691

13.0

Asia

143,062

111,650

31,412

28.1

32,543

29.1

Europe

35,052

20,167

14,885

73.8

16,093

79.8

Total Retail

374,825

306,657

68,168

22.2

71,327

23.3

Internet

Americas

63,153

59,175

3,978

6.7

4,069

6.9

Asia

15,999

11,012

4,987

45.3

5,049

45.8

Europe

23,465

25,707

(2,242

)

(8.7

)

(163

)

(0.6

)

Total Internet

102,617

95,894

6,723

7.0

8,955

9.3

Total Revenues

$

1,123,301

$

1,000,903

$

122,398

12.2

%

$

140,424

14.0

%

Twelve Months Ended

December 31,

Change

Constant Currency Change(1)

($ thousands)

2012

2011

$

%

$

%

Regional Revenue:

Americas

$

495,852

$

448,077

$

47,775

10.7

%

$

52,680

11.8

%

Asia

457,411

381,766

75,644

19.8

76,576

20.1

Europe

169,464

170,869

(1,404

)

(0.8

)

10,762

6.3

Other businesses

574

191

383

200.5

406

212.4

Total Revenues

$

1,123,301

$

1,000,903

$

122,398

12.2

%

$

140,424

14.0

%

(1) Current period results have been restated using 2011 average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends excluding the impact of foreign currency exchange rate fluctuations.

Fourth Quarter Results

For fourth quarter 2012, the company had a net loss of $3.6 million or $0.04 per diluted share, compared with net income of $5.6 million or $0.06 per diluted share in the prior year period. Fourth quarter 2012 results included non-cash expenses of $5.9 million for contingency accruals, which adversely impacted selling, general and administrative (SG&A) expenses by $2.2 million and cost of goods sold by $3.7 million. In addition, in the 2012 period, the company had total expenses of $1.5 million relating to its implementation of a new ERP system including non-cash accelerated depreciation and cash expenses for program management, training and other non-capitalized costs. Adjusting for these non-operating items, the company had Non-GAAP net income of $3.8 million in the quarter or $0.04 per diluted share.

"For the fourth quarter we are pleased with our 11 percent constant currency revenue growth which was ahead of our prior guidance, and our $3.8 million net income, after adjustments," said John McCarvel. "We saw good reception of our fall holiday products during the season and we continued to position the brand for greater success in the back half of the year. For the quarter we saw gross margins after adjustments for special items in line with the prior year."

Revenue for the fourth quarter of 2012 increased 10.4% to $225.0 million compared with revenue of $203.7 million reported in the fourth quarter of 2011. On a constant currency basis revenue increased 10.9% for the fourth quarter of 2012.

Gross profit for the fourth quarter of 2012 was $106.4 million, or 47.3% as a percentage of sales, compared with $99.8 million, or 49.0% as a percentage of sales in the same period last year. Gross Margins in the fourth quarter of 2012 were negatively impacted by the aforementioned $3.7 million contingency accrual.

Fourth Quarter Revenue Results

The following tables detail the company's fourth quarter 2012 and 2011 revenues:

Three Months Ended

December 31,

Change

Constant Currency Change(1)

($ thousands)

2012

2011

$

%

$

%

Channel revenues:

Wholesale:

Americas

$

48,118

$

41,209

$

6,909

16.8

%

$

7,725

18.7

%

Asia

48,859

47,370

1,489

3.1

1,693

3.6

Europe

13,174

15,389

(2,215

)

(14.4

)

(1,800

)

(11.7

)

Other businesses

241

88

153

173.9

156

177.4

Total Wholesale

110,392

104,056

6,336

6.1

7,774

7.4

Consumer-direct:

Retail

Americas

47,415

43,436

3,979

9.2

4,122

9.5

Asia

32,296

26,349

5,947

22.6

5,623

21.3

Europe

9,894

4,334

5,560

128.3

5,054

116.6

Total Retail

89,605

74,119

15,486

20.9

14,799

20.0

Internet

Americas

16,453

18,979

(2,526

)

(13.3

)

(2,514

)

(13.2

)

Asia

3,680

2,340

1,340

57.3

1,366

58.4

Europe

4,862

4,219

643

15.2

812

19.2

Total Internet

24,995

25,538

(543

)

(2.1

)

(336

)

(1.3

)

Total Revenues

$

224,992

$

203,713

$

21,279

10.4

%

$

22,237

10.9

%

Three Months Ended

December 31,

Change

Constant Currency Change(1)

($ thousands)

2012

2011

$