LaCrosse Footwear clocks positive growth rates for 2008

11 Feb '09

5 min read

LaCrosse Footwear Inc reported results for the fourth quarter and full year ended December 31, 2008.

For the fourth quarter of 2008, LaCrosse reported consolidated net sales of $35.1 million, up 8% from $32.7 million in the fourth quarter of 2007. For the full year 2008, consolidated net sales were $128.0 million, up 8% from $118.2 million in 2007.

Net income was $1.2 million or $0.18 per diluted share in the fourth quarter of 2008, compared to $2.4 million or $0.38 per diluted share in the fourth quarter of 2007. For the full year 2008, net income was $6.2 million or $0.96 per diluted share, compared to $7.3 million or $1.15 per diluted share in 2007.

The results for 2008 include increased expenses of $2.2 million related to the Company's strategic investment in its new European subsidiary, which represented an important step in LaCrosse's plans to expand its international sales and channels over the long term.

Sales to the work market were $20.2 million for the fourth quarter of 2008, up 17% from $17.2 million for the same period of 2007. For the full year 2008, sales to the work market were $74.9 million, up 23% from $60.9 million in 2007. The strong annual growth in work sales reflects increased shipments to the government channel, including $9.6 million to the United States Marine Corps and the U.S. Army, related to previously announced delivery orders. In addition, the Company continued to penetrate into a variety of targeted, niche work markets.

Sales to the outdoor market were $14.9 million for the fourth quarter of 2008, down 3% from $15.4 million for the same period of 2007. For the full year of 2008, sales to the outdoor market were $53.1 million, down 7% from $57.3 million in 2007. While the Company continued to see growth in at-once demand in certain segments and geographies of the outdoor market, the overall decline in outdoor sales reflected the widespread decline in retail sales during 2008.

The Company continued to maintain strong gross margins. For the fourth quarter of 2008, gross margins were 38.6% of net sales, compared to 40.1% in the same period of 2007. The decline in gross margins for the fourth quarter of 2008 reflects increased discounts and allowances, as well as the impact of the product mix associated with increased shipments to the government channel. For the full year, gross margins were 39.6% of net sales, compared to 39.7% in 2007.

LaCrosse's total operating expenses were $11.4 million or 32.4% of net sales in the fourth quarter of 2008, compared to $9.3 million or 28.6% of net sales in the fourth quarter of 2007. The increase in quarterly operating expenses reflects $1.2 million in additional costs for the Company's new European subsidiary, and an increase of $0.9 million for additional sales, merchandising and product development activities.

LaCrosse's inventory at the end of 2008 increased 5.5% from the end of 2007, reflecting additional inventory for the Company's new European subsidiary and for recent military orders. During 2008, LaCrosse paid a total of $9.3 million in dividends to its shareholders and $3.2 million in cash for the inventories and operations of its former European distributor. At the end of 2008, LaCrosse had cash and cash equivalents of $13.7 million, compared to $15.4 million at the end of 2007.

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