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Crocs Inc. Reports Fourth Quarter and Year End 2015 Financial Results

NIWOT, Colo., Feb. 29, 2016 (GLOBE NEWSWIRE) -- Crocs Inc. (NASDAQ:CROX) today reported financial results for the fourth quarter and year ended December 31, 2015.

Fourth Quarter Highlights:

  • Revenue was $208.7 million, in-line with guidance. On a constant currency basis, revenue increased 7.0% compared to the prior year period.
  • Net loss attributable to common stockholders on a GAAP basis was $73.9 million or a loss of $1.01 per share.
  • Excluding certain charges not related to our core business, the company reported a non-GAAP adjusted net loss attributable to common shareholders of $52.9 million.

Full Year Highlights:

  • Revenue was $1,090.6 million. On a constant currency basis revenue was down 1.9% compared to the prior year.
  • Net loss attributable to common stockholders on a GAAP basis was $98.0 million or a loss of $1.30 per share.
  • Excluding certain charges not related to our core business, non-GAAP adjusted net loss attributable to common shareholders was $40.1 million.

Gregg Ribatt, Chief Executive Officer, said: “We continue to make meaningful progress positioning our business for long-term sustainable success despite some near-term challenges. Revenue on a constant currency basis, excluding store closures and discontinued product lines, grew at 12.2% in the quarter compared with a year ago. Our overall results reflect the impact of higher clearance sales as we made the decision in the quarter to increase our promotional cadence, given the overall retail environment. While we still face foreign exchange headwinds from the stronger U.S. Dollar and macroeconomic challenges, we are making progress in our transformation efforts. I believe we are reaching an inflection point and we will see the benefits of our actions increasingly as 2016 progresses.”

Fourth Quarter Operating Results

In the fourth quarter of 2015, the company reported a GAAP net loss attributable to common stockholders of $73.9 million or $1.01 per share, compared with a net loss of $56.9 million or $0.70 per diluted share in the same quarter of the prior year.

As outlined in detail in the non-GAAP reconciliations set forth later in this press release, the company recorded $21.0 million of certain charges not related to our core business (of which $14.6 million were non-cash charges) in the fourth quarter of 2015 compared with $26.8 million in non-recurring and special charges (of which $15.3 million were non-cash charges) in the fourth quarter of 2014. Excluding these items, the company reported on a comparable basis, non-GAAP adjusted net loss attributable to common shareholders of $52.9 million in the quarter versus non-GAAP adjusted net loss attributable to common shareholders of $30.0 million in the fourth quarter 2014.

Full Year 2015 Operating Results

For the full year, the company reported a GAAP net loss attributable to common stockholders of $98.0 million or $1.30 per diluted share, compared with a net loss attributable to common stockholders of $19.0 million or $0.22 per diluted share in 2014.

As outlined in detail in the non-GAAP reconciliations set forth later in this press release, the company recorded $57.9 million of certain charges not related to our core business (of which $24.5 million were non-cash charges) for the year ended 2015 compared with $69.0 million (of which $27.7 million were non-cash charges) for the year ended 2014. Excluding these items, the company reported on a comparable basis, non-GAAP adjusted net loss attributable to common shareholders of $40.1 million in the year versus non-GAAP adjusted net loss of $50.0 million in 2014.

Balance Sheet

Cash and cash equivalents at December 31, 2015 were $143.3 million compared with $267.5 million at December 31, 2014. The year-over-year change in cash and cash equivalents was primarily driven by the repurchase of 6.5 million shares for approximately $85.9 million. Inventory was $168.2 million compared with $171.0 million at December 31, 2014.

Stock Repurchase

The company repurchased 918.0 thousand shares of common stock in the fourth quarter of 2015 at an average price of $10.86. The company ended the quarter at 72.9 million common shares outstanding and fourth quarter weighted average shares outstanding was 73.5 million.

Financial Outlook

The company expects first quarter 2016 revenue in the $260 to $270 million range compared to $262.2 million last year.

Conference Call Information

A teleconference call to discuss fourth quarter 2015 results is scheduled for today, Monday, February 29, 2016, at 4:30 pm EST. The call participation number is (888) 771-4371. A recording of the conference call will be available two hours after the completion of the call at (888) 843-7419. International participants can dial (847) 585-4405 to take part in the conference call and can access a replay of the call at (630) 652-3042. All of the above calls will require the input of the conference identification number 41827513. The call also will be streamed on the Crocs website, www.crocs.com. An audio recording of the conference call will be available at www.crocs.com through March 29, 2016.

About Crocs, Inc.

Crocs, Inc. is a world leader in innovative casual footwear for men, women and children. Crocs offers a broad portfolio of all-season products, while remaining true to its core molded footwear heritage. All Crocs™ shoes feature Croslite™ material, a proprietary, revolutionary technology that gives each pair of shoes the soft, comfortable, lightweight, non-marking and odor-resistant qualities that Crocs fans know and love. Crocs celebrates the fun of being a little different and encourages fans to "Find Your Fun" in every colorful pair of shoes. Since its inception in 2002, Crocs has sold more than 300 million pairs of shoes in more than 65 countries around the world.

Visit www.crocs.com for additional information.

The matters regarding the future discussed in this news release include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding prospects, investments in our business and outlook. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances, or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: macroeconomic issues, including, but not limited to, the current global financial conditions; the effect of competition in our industry; our ability to effectively manage our future growth or declines in revenue; changing fashion trends; our ability to maintain and expand revenues and gross margin; our ability to accurately forecast consumer demand for our products; our ability to successfully implement our strategic plans; our ability to develop and sell new products; our ability to obtain and protect intellectual property rights; the effect of potential adverse currency exchange rate fluctuations and other international operating risks; and other factors described in our most recent annual report on Form 10-K under the heading “Risk Factors” and our subsequent filings with the Securities and Exchange Commission. Readers are encouraged to review that section and all other disclosures appearing in our filings with the Securities and Exchange Commission.

All information in this document speaks as of February 29, 2016. We do not undertake any obligation to update publicly any forward-looking statements, including, without limitation, any estimate regarding revenues or earnings, whether as a result of the receipt of new information, future events, or otherwise.


CROCS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
($ thousands, except per share data)
Three Months Ended
December 31,
Year Ended
December 31,
2015 2014 2015 2014
Revenues $ 208,678 $ 206,473 $ 1,090,630 $ 1,198,223
Cost of sales 135,934 128,570 579,825 603,893
Restructuring charges - 1,373 - 3,985
Gross profit 72,744 76,530 510,805 590,345
Selling, general and administrative expenses 129,280 131,468 559,095 565,712
Restructuring charges 1,274 6,637 8,728 20,532
Asset impairment charges 7,771 2,997 15,306 8,827
Income (loss) from operations (65,581) (64,572) (72,324) (4,726)
Foreign currency transaction loss, net (701) (607) (3,332) (4,885)
Interest income 215 360 967 1,664
Interest expense (319) (121) (969) (806)
Other income, net 920 (184) 914 204
Income (loss) before income taxes (65,466) (65,124) (74,744) (8,549)
Income tax benefit (expense) (4,707) 12,030 (8,452) 3,623
Net income (loss) $ (70,173) $ (53,094) $ (83,196) $ (4,926)
Dividends on Series A convertible preferred stock (3,000) (3,068) (11,833) (11,301)
Dividend equivalents on Series A convertible preferred shares related to redemption value accretion and beneficial conversion feature (769) (705) (2,978) (2,735)
Net income (loss) attributable to common stockholders $ (73,942) $ (56,867) $ (98,007) $ (18,962)
Net income (loss) per common share:
Basic $ (1.01) $ (0.70) $ (1.30) $ (0.22)
Diluted $ (1.01) $ (0.70) $ (1.30) $ (0.22)


CROCS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(UNAUDITED)

In addition to financial measures presented on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”), we present “adjusted selling, general, and administrative expenses”, “adjusted cost of sales”, “adjusted net income (loss) attributable to common stockholders”, and “revenue adjusted for business model changes”, which are non-GAAP financial measures. Adjusted results exclude the impact of items that management believes affect the comparability or underlying business trends in our consolidated financial statements in the periods presented.

The metric “revenue adjusted for business model changes” is used by management to assess period-over-period change in the performance of our continuing operations as compared to the same quarter of the previous year. This metric is calculated on a constant currency basis and removes the impact of store closures and eliminated product lines from prior period results. We believe this metric is useful in analyzing business trends related to our ongoing operations by excluding products and locations that have been eliminated and by removing foreign currency translation adjustments, which can mask the underlying performance of the business.

We also present certain information related to our current period results of operations through “constant currency”, which is a non-GAAP financial measure and should be viewed as a supplement to our results of operations and presentation of reportable segments under U.S. GAAP. Constant currency represents current period results that have been restated using prior year 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.

Management uses adjusted results to assist in comparing business trends from period to period on a consistent non-GAAP basis in communications with the Board, stockholders, analysts, and investors concerning our financial performance. We believe that these non-GAAP measures are useful to investors and other users of our consolidated financial statements as an additional tool for evaluating operating performance. We believe they also provide a useful baseline for analyzing trends in our operations. Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.


CROCS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(UNAUDITED - Continued)
Three Months Ended December 31, Year Ended December 31,
2015 2014 2015 2014
(in thousands)
Selling, general and administrative expenses reconciliation:
GAAP selling, general and administrative expenses $ 129,280 $ 131,468 $ 559,095 $ 565,712
ERP implementation and other contract termination fees (1) (3,470) (2,160) (12,569) (13,268)
Reorganization charges (2) (4,265) (3,175) (8,391) (8,872)
Legal settlements and disbursement (3) (207) (446) (7,895) (2,646)
Bad debt expense related to South Africa (4) (613) - (613) -
Non-GAAP selling, general and administrative expenses $ 120,725 $ 125,687 $ 529,627 $ 540,926
Three Months Ended December 31, Year Ended December 31,
2015 2014 2015 2014
(in thousands)
Cost of sales reconciliation:
GAAP cost of sales: $ 135,934 $ 128,570 $ 579,825 $ 603,893
Inventory write-down (5) (3,108) (6,168) (3,108) (7,064)
Statutory audits (7) - - (1,000) -
Reorganization charges (2) - (3,891) - (3,806)
Contract termination fees (1) (324) - (324) -
Non-GAAP cost of sales $ 132,502 $ 118,511 $ 575,393 $ 593,023
Three Months Ended December 31, Year Ended December 31,
2015 2014 2015 2014
(in thousands)
Net loss attributable to common stockholders reconciliation:
GAAP net loss attributable to common stockholders reconciliation: $ (73,942) $ (56,867) $ (98,007) $ (18,962)
Impairment charges related to South Africa (4) 5,747 - 5,747 -
ERP implementation and other contract termination fees (1) 3,794 2,160 12,893 13,268
Reorganization charges (2) 4,265 7,066 8,391 12,678
Inventory write-down (5) 3,108 6,168 3,108 7,064
Retail asset impairment charges (6) 2,024 2,997 9,559 8,827
Restructuring charges (2) 1,274 8,010 8,728 24,517
Legal settlements and disbursement (3) 207 446 7,895 2,646
Statutory audits (7) - - 1,000 -
Bad debt expense related to South Africa (4) 613 - 613 -
Non-GAAP net loss attributable to common stockholders $ (52,910) $ (30,020) $ (40,073) $ 50,038
(1) This represents operating expenses related to the implementation of our new enterprise resource planning ("ERP") system and the termination of certain IT contracts for better alignment with strategic initiatives as well as fees associated with the termination of certain royalty and other contracts.
(2) This relates to severance expenses, bonuses, store closure costs, consulting fees and other expenses related to recent restructuring and reorganization activities and our investment agreement with Blackstone.
(3) Expenses in 2015 relate primarily to legal expenses for matters surrounding disbursements to invalid vendors and California wage settlements. Expenses in 2014 relate primarily to other legal settlements.
(4) Certain bad debt and impairment expenses were incurred in 2015 relating to the planned sale of operations in South Africa.
(5) This relates to a write-off of obsolete inventory with a market value lower than cost. During the three months and year ended December 31, 2015, the inventory write-down charge recorded related to the planned sale of operations in the South Africa.
(6) This represents retail asset impairment charges for certain underperforming locations in our Americas, Asia Pacific and Europe segments.
(7) This represents an estimated liability associated with a prior period audit by U.S. Customs and Border Protections.


CROCS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(UNAUDITED)
Three Months Ended
December 31,
Year Ended
December 31,
(in thousands)
GAAP revenues, for the period ended December 31, 2014$ 206,473 $ 1,198,223
Less: constant currency adjustment (1) (12,360) (87,661)
Less: decrease associated with store closures (5,813) (34,894)
Less: decrease associated with eliminated product lines (2,368) (11,921)
Non-GAAP revenues, adjusted for business model changes$ 185,932 $ 1,063,747
GAAP revenues, for the period ended December 31, 2015$ 208,678 $ 1,090,630
Percentage change 12.2 % 2.5 %
Three Months Ended
December 31,
Year Ended
December 31,
(in thousands)
GAAP revenues, for the period ended December 31, 2013$ 228,673 $ 1,192,680
Less: constant currency adjustment (1) (10,506) (15,612)
Less: decrease associated with store closures (5,218) (22,027)
Less: decrease associated with eliminated product lines (2,750) (15,483)
Non-GAAP revenues, adjusted for business model changes$ 210,199 $ 1,139,558
GAAP revenues, for the period ended December 31, 2014$ 206,473 $ 1,198,223
Percentage change (1.8)% 5.1 %
(1) Constant currency is a non-GAAP measure utilized by management in which current period results have been restated using prior year average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends by excluding the impact of foreign currency exchange rate fluctuations.

CROCS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ thousands, except number of shares)
December 31, 2015 December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents $ 143,341 $ 267,512
Accounts receivable, net of allowances of $49,364 and $32,392, respectively 83,616 101,217
Inventories 168,192 171,012
Deferred tax assets, net - 4,190
Income tax receivable 10,233 9,332
Other receivables 14,233 11,989
Prepaid expenses and other assets 26,334 30,156
Total current assets 445,949 595,408
Property and equipment, net 49,490 68,288
Intangible assets, net 82,297 97,337
Goodwill 1,973 2,044
Deferred tax assets, net 6,608 17,886
Other assets 21,703 25,968
Total assets $ 608,020 $ 806,931
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 63,336 $ 42,923
Accrued expenses and other liabilities 91,835 80,216
Deferred tax liabilities, net - 11,869
Accrued restructuring 738 4,511
Income taxes payable 6,416 9,078
Current portion of long-term borrowings and capital lease obligations 4,772 5,288
Total current liabilities 167,097 153,885
Long-term income tax payable 4,547 8,843
Long-term borrowings and capital lease obligations 1,627 6,381
Long-term accrued restructuring 230 348
Other liabilities 12,890 12,277
Total liabilities 186,391 181,734
Commitments and contingencies
Series A convertible preferred stock, par value $0.001 per share, 1,000,000 shares authorized, 200,000 shares issued and outstanding, redemption amount and liquidation preference of $203,000 and $203,067 as of December 31, 2015 and December 31, 2014, respectively 175,657 172,679
Stockholders’ equity:
Preferred stock, par value $0.001 per share, 4,000,000 shares authorized, none outstanding - -
Common stock, par value $0.001 per share, 250,000,000 shares authorized, 93,101,007 and 72,851,418 shares issued and outstanding, respectively, as of December 31, 2015 and 92,325,201 and 78,516,566 shares issued and outstanding, respectively, as of December 31, 2014 94 92
Treasury stock, at cost, 20,249,589 and 13,808,635 shares as of December 31, 2015 and December 31, 2014, respectively (283,913) (200,424)
Additional paid-in capital 353,241 345,732
Retained earnings 227,463 325,470
Accumulated other comprehensive loss (50,913) (18,352)
Total stockholders’ equity 245,972 452,518
Total liabilities, commitments and contingencies and stockholders’ equity $ 608,020 $ 806,931


The following tables summarize our total revenue by channel for the three and twelve months ended December 31, 2015 and 2014:

Three Months Ended
December 31,
Change Constant Currency Change (1)
2015 2014 $ % $ %
(in thousands)
Wholesale:
Americas $35,581 $39,628 $ (4,047) (10.2)% $ (1,763) (4.4)%
Asia Pacific 37,166 29,149 8,017 27.5 10,045 34.5
Europe 17,412 21,514 (4,102) (19.1) (1,260) (5.9)
Other businesses 125 187 (62) (33.2) (112) (59.9)
Total wholesale 90,284 90,478 (194) (0.2) 6,910 7.6
Retail:
Americas 44,912 47,129 (2,217) (4.7) (1,761) (3.7)
Asia Pacific 28,703 29,852 (1,149) (3.8) 850 2.8
Europe 8,126 10,465 (2,339) (22.4) (849) (8.1)
Total retail 81,741 87,446 (5,705) (6.5) (1,760) (2.0)
E-commerce:
Americas 22,160 16,995 5,165 30.4 5,327 31.3
Asia Pacific 10,412 7,467 2,945 39.4 3,405 45.6
Europe 4,081 4,087 (6) (0.1) 546 13.4
Total e-commerce 36,653 28,549 8,104 28.4 9,278 32.5
Total revenues $208,678 $206,473 $ 2,205 1.1 % $ 14,428 7.0 %
Revenues:
Americas $102,653 $103,752 $ (1,099) (1.1)% $ 1,803 1.7 %
Asia Pacific 76,281 66,468 9,813 14.8 14,300 21.5
Europe 29,619 36,066 (6,447) (17.9) (1,563) (4.3)
Total segment revenues 208,553 206,286 2,267 1.1 14,540 7.0
Other businesses 125 187 (62) (33.2) (112) (59.9)
Total consolidated revenues $208,678 $206,473 $ 2,205 1.1 % $ 14,428 7.0 %
(1) Reflects year over year change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. See “Use of Non-GAAP Financial Measures” above for more information.


Year Ended
December 31,
Change Constant Currency Change (1)
2015 2014 $ % $ %
(in thousands)
Wholesale:
Americas $210,887 $228,615 $ (17,728) (7.8)% $ (10,241) (4.5)%
Asia Pacific 255,897 290,610 (34,713) (11.9) (16,194) (5.6)
Europe 123,131 147,561 (24,430) (16.6) 1,886 1.3
Other businesses 1,096 794 302 38.0 194 24.4
Total wholesale 591,011 667,580 (76,569) (11.5) (24,355) (3.6)
Retail:
Americas 197,306 206,053 (8,747) (4.2) (6,652) (3.2)
Asia Pacific 136,320 159,464 (23,144) (14.5) (11,552) (7.2)
Europe 44,873 60,309 (15,436) (25.6) (3,012) (5.0)
Total retail 378,499 425,826 (47,327) (11.1) (21,216) (5.0)
E-commerce:
Americas 68,017 55,247 12,770 23.1 13,434 24.3
Asia Pacific 32,274 23,836 8,438 35.4 10,256 43.0
Europe 20,829 25,734 (4,905) (19.1) (380) (1.5)
Total e-commerce 121,120 104,817 16,303 15.6 23,310 22.2
Total revenues $1,090,630 $1,198,223 $ (107,593) (9.0)% $ (22,261) (1.9)%
Revenues:
Americas $476,210 $489,915 $ (13,705) (2.8)% $ (3,459) (0.7)%
Asia Pacific 424,491 473,910 (49,419) (10.4) (17,490) (3.7)
Europe 188,833 233,604 (44,771) (19.2) (1,506) (0.6)
Total segment revenues 1,089,534 1,197,429 (107,895) (9.0) (22,455) (1.9)
Other businesses 1,096 794 302 38.0 194 24.4
Total consolidated revenues $1,090,630 $1,198,223 $ (107,593) (9.0)% $ (22,261) (1.9)%
(1) Reflects year over year change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. See “Use of Non-GAAP Financial Measures” above for more information.

CROCS, INC. SUBSIDIARIES
RETAIL STORE COUNTS (UNAUDITED)
September 30,
2015
Opened Closed December 31,
2015
Company-operated retail locations
Type
Kiosk/store in store 98 2 2 98
Retail stores 279 5 9 275
Outlet stores 180 6 - 186
Total 557 13 11 559
Operating segment
Americas 198 1 3 196
Asia Pacific 256 12 7 261
Europe 103 - 1 102
Total 557 13 11 559


December 31,
2014
Opened Closed December 31,
2015
Company-operated retail locations
Type
Kiosk/store in store 100 11 13 98
Retail stores 311 15 51 275
Outlet stores 174 16 4 186
Total 585 42 68 559
Operating segment
Americas 210 4 18 196
Asia Pacific 258 36 33 261
Europe 117 2 17 102
Total 585 42 68 559


CROCS, INC. AND SUBSIDIARIES
RETAIL
(STORES ONLY)
COMPARABLE STORE SALES
(UNAUDITED)
Constant Currency (2) Constant Currency (2)
Three Months Ended Three Months Ended
December 31, 2015 December 31, 2014
Comparable store sales (1)
Americas(3.4)%(3.3)%
Asia Pacific4.8 %(2.5)%
Europe5.7 %1.1 %
Global0.1 %(2.4)%
Constant Currency (2) Constant Currency (2)
Year Ended Year Ended
December 31, 2015 December 31, 2014
Comparable store sales (1)
Americas(3.2)%(4.4)%
Asia Pacific(4.5)%(4.7)%
Europe3.0 %0.7 %
Global(2.8)%(3.7)%
(1) Comparable store status is determined on a monthly basis. Comparable store sales begin in the thirteenth month of a store’s operation. Stores in which selling square footage has changed more than 15% as a result of a remodel, expansion or reduction are excluded until the thirteenth month in which they have comparable prior year sales. Temporarily closed stores are excluded from the comparable store sales calculation during the month of closure. Location closures in excess of three months are excluded until the thirteenth month post re-opening. Comparable store sales exclude the impact of our e-commerce channel revenues and are calculated on a currency neutral basis using historical quarterly average currency rates.
(2) Reflects quarter-over-quarter and year-over-year change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. Constant currency is a measure utilized by management in which current period results have been restated using prior year average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends by excluding the impact of foreign currency exchange rate fluctuations. We do not suggest that investors should consider this non-GAAP measure in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.


CROCS, INC. AND SUBSIDIARIES
DIRECT TO CONSUMER
(INCLUDES RETAIL AND E-COMMERCE)
COMPARABLE STORE SALES
(UNAUDITED)
Constant Currency (2) Constant Currency (2)
Three Months Ended Three Months Ended
December 31, 2015 December 31, 2014
Comparable store sales (1)
Americas6.3%(2.7)%
Asia Pacific15.2%10.1 %
Europe13.9%(5.4)%
Global9.8%0.5 %
Constant Currency (2) Constant Currency (2)
Year Ended Year Ended
December 31, 2015 December 31, 2014
Comparable store sales (1)
Americas3.3%(3.8)%
Asia Pacific3.0%0.6 %
Europe7.8%(0.6)%
Global3.9%(1.9)%
(1) This includes both e-commerce and retail comparable store sales. Comparable store status is determined on a monthly basis. Comparable store sales begin in the thirteenth month of a store’s operation. Stores in which selling square footage has changed more than 15% as a result of a remodel, expansion or reduction are excluded until the thirteenth month in which they have comparable prior year sales. Temporarily closed stores are excluded from the comparable store sales calculation during the month of closure. Location closures in excess of three months are excluded until the thirteenth month post re-opening. E-commerce revenue is based on same site sales period over period. Comparable store sales and e-commerce channel revenues and are calculated on a currency neutral basis using historical quarterly average currency rates.
(2) Reflects quarter-over-quarter and year-over-year change as if the current period results were in “constant currency,” which is a non-GAAP financial measure. Constant currency is a measure utilized by management in which current period results have been restated using prior year average foreign exchange rates for the comparative period to enhance the visibility of the underlying business trends by excluding the impact of foreign currency exchange rate fluctuations. We do not suggest that investors should consider this non-GAAP measure in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP.

Investor Contact: Brendon Frey, ICR (203) 682-8200 Brendon.Frey@icrinc.com Media Contact: Katy Michael/Crocs Inc. (303) 848-7000 kmichael@crocs.com

Source:Crocs, Inc.