Crocs to close Canadian manufacturing operations

16 Apr '08

3 min read

Crocs Inc announced that, based upon preliminary performance results through March 31, 2008, it expects its first quarter 2008 revenue to be in the approximate range of $195 million to $200 million and expects a loss per diluted share in the range of ($0.05) to $0.00, both of which are below its previous guidance of expected revenues of $225 million and expected diluted earnings per share of $0.46 established in February.

At the same time, Crocs lowered its outlook for the fiscal year ending December 31, 2008. The Company also announced it has made the strategic decision to close its Canadian manufacturing operations in order to consolidate its production at its lower cost Company-owned and third-party facilities.

The Company's revised revenue expectations of $195 million to $200 million represents an increase of approximately 37% to 41% over the prior year, with domestic sales expected to increase 13%, European sales expected to increase approximately 90%, and Asia sales are expected to be up approximately 75%.

The Company's expected loss per diluted share in the range of ($0.05) to $0.00, includes a portion of the one-time, pre-tax charge associated with the shutdown of the Company's Canadian manufacturing operations equaling approximately $16 million, or $0.13 per diluted share.

Excluding this charge, the Company expects first quarter 2008 diluted earnings per share in the range of $0.08 to $0.13. Based on its lower revenue expectations for the first quarter, the Company now expects inventories as of March 31, 2008 to increase approximately 5% to 10% as compared to December 31, 2007.

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