Cold weather & hunting products of LaCrosse in demand
LaCrosse Footwear, Inc., a leading provider of premium, branded footwear for work and outdoor users, reported results for the first quarter ended March 27, 2010.
For the first quarter of 2010, LaCrosse reported net sales of $34.2 million, up 32% from $25.9 million in the first quarter of 2009. Sales to the work market were $26.3 million for the first quarter of 2010, up 38% from $19.0 million for the same period of 2009. The growth in the work market sales reflects very strong demand from various areas of the U.S. government, as well as increasing demand from various niche work markets. Sales to the outdoor market were $7.9 million for the first quarter of 2010, up 15% from $6.9 million for the same period in 2009, reflecting an improved retail environment and increasing demand for the LaCrosse brand's cold weather and hunting products.
The strong growth in sales and margins resulted in significant earnings growth. Net income was $1.7 million or $0.25 per diluted share in the first quarter of 2010, up from a net loss of $0.7 million or ($0.11) per diluted share in the first quarter of 2009.
Gross margin for the first quarter of 2010 was 40.2% of net sales, compared to 37.9% in the same period of 2009, primarily reflecting improved manufacturing efficiencies in the Company's domestic manufacturing facility. LaCrosse's operating expenses were $11.0 million in the first quarter 2010, up 2% from the first quarter 2009. The modest year-over-year increase reflects the Company's reallocation of operating expenditures in order to expand its domestic sales, marketing and product development efforts, as well as increased incentive compensation expense recognized due to higher quarterly profits.
The Company continued to strengthen its balance sheet. At the end of the first quarter 2010, LaCrosse had record cash and cash equivalents of $19.7 million, up from $12.1 million at the end of the first quarter 2009, after paying dividends of $9.6 million to its shareholders since the first quarter of 2009. The Company reduced its inventory by $6.1 million or 22% from the first quarter of 2009, reflecting stronger than anticipated overall demand in the first quarter and an inventory reduction in preparation for significant new core products for Fall 2010.
“We're very pleased with our strong sales and earnings growth in the first quarter of 2010, driven by increased demand across our different channels and markets,” said Joseph P. Schneider, president and CEO of LaCrosse Footwear, Inc. “We saw very strong demand from various branches of the U.S. government due to the continued strengthening of our customer relationships throughout the government channel and our strong execution in exceeding their delivery timetables. We also saw much stronger at-once demand from our wholesale channel partners during the first quarter, reflecting the improved consumer spending environment and success of our core products.
“During 2010, we continue to expect quarter-to-quarter fluctuations in the timing of government channel orders. Yet the general trends across our different channels look significantly more positive than a year ago and our new products are being very well received by our customers. In preparation for future growth, we recently announced our plans for a new production facility in Portland that will significantly increase our capacity to efficiently meet growing worldwide demand and extend our great tradition of superior craftsmanship.”