Year-over-Year Sales Up 11% and Earnings Up 54%; Continued Increases in Gross Margin and Cash
PORTLAND, Ore., April 30 /PRNewswire-FirstCall/ -- LaCrosse Footwear, Inc. (NASDAQ:BOOT), a leading provider of branded work and outdoor footwear, today reported results for the first quarter of 2007.
For the first quarter of 2007, LaCrosse reported consolidated net sales of $23.7 million, up 11% from $21.4 million in the first quarter of 2006. Net income was $0.6 million or $0.10 per diluted share in the first quarter of 2007, up 54% from $0.4 million or $0.06 per diluted share in the first quarter of 2006.
Sales to the work market were $15.4 million for the first quarter of 2007, up 13% from $13.6 million for the same period of 2006. Year-over-year growth in work sales reflects continued penetration into a variety of general and specialized work and uniform boot markets, as well as the early success of the Company's new line of high-performance safety apparel. Sales to the outdoor market were $8.3 million for the first quarter of 2007, up 7% from $7.8 million for the same period of 2006. Year-over-year growth in the outdoor market primarily reflects continued penetration into the hunting and rugged outdoor boot markets.
The Company's gross margin was a record 40.6% of net sales for the first quarter of 2007, up from 39.2% in the same period of 2006, an increase of 140 basis points. The year-over-year gross margin improvement was primarily the result of a price increase at the beginning of the first quarter of 2007 and fewer closeout sales during the quarter.
LaCrosse's total operating expenses were $8.8 million in the first quarter of 2007, down 5% sequentially from $9.2 million in the previous quarter, and up 12% from $7.8 million in the first quarter of 2006. The year-over-year increase primarily reflects the strategic expansion of our product development and sales teams, and costs related to our new Portland distribution center and offices.
As a result of anticipated lower seasonal demand in the first quarter, the Company reduced its inventory levels at March 31, 2007 by approximately $0.3 million or 1% from December 31, 2006. At the end of the first quarter of 2007, LaCrosse had cash and cash equivalents of $15.6 million, up 23% from $12.7 million at the end of 2006 and up 39% from $11.2 million at the end of the first quarter of 2006.
"We are pleased with our execution and financial performance for the first quarter, which is typically our slowest seasonal period," said Joseph P. Schneider, president and CEO of LaCrosse Footwear, Inc. "Our sales and earnings growth continued to be driven by the success of our new products and our ability to meet at-once demand allowed us to capitalize on favorable weather conditions in the latter half of the quarter. We continue to increase our brand equity and capture market share in work and outdoor markets that are quality and performance driven. Moreover, we are very encouraged by the positive customer response to our new fall lines of Danner and LaCrosse products." "We further improved our gross margins and strengthened our balance sheet by remaining focused on target markets where our premium products, innovative technology and outstanding customer service create opportunities for sustainable and profitable growth. We also believe the significant investments in our organization and business infrastructure that we made in recent years are beginning to pay off, as we start to moderate operating expense increases and leverage our operating model." LaCrosse will host a conference call today, April 30, 2007, to discuss its financial results at 2:00 PM Pacific (5:00 PM Eastern). A broadcast of the conference call will be available at http://www.lacrossefootwearinc.com/ under "Investor Events" or by calling 800-218-0713 or +1 303-262-2138. A 48-hour replay will be available by calling 800-405-2236 or +1 303-590-3000 (Reservation No. 11085620). A replay will also be available on the Company's Web site.
About LaCrosse Footwear, Inc.
LaCrosse Footwear, Inc. is a leading developer and marketer of branded, premium and innovative footwear for expert work and outdoor users. The Company's trusted Danner(R) and LaCrosse(R) brands are distributed domestically through a nationwide network of specialty retailers and distributors, and internationally through distributors and retailers in Asia, Europe and Canada. Work customers include people in law enforcement, agriculture, firefighting, construction, industry, military services and other occupations that need high-performance and protective footwear as a critical tool for the job. Outdoor customers include people active in hunting, outdoor cross training, hiking and other outdoor recreational activities. For more information about LaCrosse Footwear products, please visit our Internet websites at http://www.lacrossefootwear.com/ and http://www.danner.com/. For additional investor information, see our corporate website at http://www.lacrossefootwearinc.com/.
Forward-Looking Statements All statements, other than statements of historical facts, included in this release, including without limitation, statements regarding our future financial position, business strategy, budgets, projected costs, goals and plans and objectives of management for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," will," "expect," "intend," "estimate," "anticipate," "project," "believe," "continue," or "target" or the negative thereof or variations thereon or similar terminology. All forward-looking statements made in this release are based on information presently available to our management. Although we believe that the expectations reflected in forward-looking statements have a reasonable basis, we can give no assurance that these expectations will prove to be correct. Forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by the statements. These risks and uncertainties include, but are not limited to: -- We conduct a significant portion of our manufacturing activities and a
certain portion of our net sales occurs outside the U.S., and,
therefore, we are subject to the risks of international commerce. -- The majority of our third party manufacturers are concentrated in
China. Any adverse political, or governmental relations, including
duties, and quotas, internally within China or externally with the
United States could result in material adverse disruptions in our
supply of product to customers. -- We are subject to risk associated with foreign currency fluctuations
(particularly with respect to the Euro and Chinese Renminbi). Such
currency fluctuations may have an adverse effect on our product costs
and ultimately on demand for our products. -- If we do not accurately forecast consumer demand, we may have excess
inventory to liquidate or have greater difficulty filling our
customers' orders, either of which could adversely affect our business. -- The continued consolidation of retailers, and their capital
requirements to fund growth, increases and concentrates our credit
risk. -- Our business is substantially affected by the weather, and sustained
periods of warm and/or dry weather can negatively impact our sales. -- A decline in consumer spending due to unfavorable economic conditions
could hinder our product revenues and earnings. -- Because we depend on third party manufacturers, we face challenges in
maintaining a timely supply of goods to meet sales demand, and we may
experience delay or interruptions in our supply chain, and any
shortfall or delay in the supply of our products may decrease our sales
and have an adverse impact on our customer relationships. -- Failure to efficiently import foreign sourced products could result in
decreased margins, cancelled orders and unanticipated inventory
accumulation. -- Labor disruptions or disruptions due to natural disasters or casualty
losses at one of our three distribution facilities or our domestic
manufacturing facility could have a material adverse effect on our
operations. -- Our financial success may be limited by the strength of our
relationships with our retail customers and by the success of such
retail customers. -- We face significant competition and if we are unable to compete
effectively, sales of our products may decline and our business could
be harmed.
You should consider these important factors in evaluating any statement contained in this release and/or made by us or on our behalf. For more information concerning these factors and other risks and uncertainties that could materially affect our consolidated financial results, please refer to Part I, Item 1A - Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as may be updated or amended in our 2007 quarterly reports on Form 10-Q, which information is incorporated herein by reference. The Company undertakes no obligation to update or revise forward- looking statements to reflect the occurrence of future events or circumstances.
LaCrosse Footwear, Inc. Condensed Consolidated Statements of Income
(Amounts in thousands, except per share amounts)
(Unaudited) Quarter Ended
March 31, April 1,
2007 2006 Net sales $23,691 $21,401
Cost of goods sold 14,081 13,017
Gross profit 9,610 8,384
Operating expenses 8,780 7,821
Operating income 830 563
Non-operating income 121 50
Income before income taxes 951 613
Income tax expense 347 221
Net income $604 $392 Net income per common share:
Basic $0.10 $0.07
Diluted $0.10 $0.06
Weighted average number of common
shares outstanding:
Basic 6,055 5,998
Diluted 6,292 6,182 Supplemental Information Work Market Sales $15,417 $13,645
Outdoor Market Sales 8,274 7,756
$23,691 $21,401
LaCrosse Footwear, Inc. Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited) March 31, December 31, April 1,
2007 2006 2006
Assets:
Current Assets:
Cash and cash equivalents $15,573 $12,702 $11,179
Trade accounts receivable, net 16,041 19,912 13,721
Inventories 21,722 22,038 20,668
Prepaid expenses and other 1,006 987 871
Deferred tax assets 1,257 1,223 1,404
Total current assets 55,599 56,862 47,843 Property and equipment, net 5,410 5,442 3,029
Goodwill 10,753 10,753 10,753
Other assets 471 476 783
Total assets $72,233 $73,533 $62,408
Liabilities and Shareholders' Equity:
Current Liabilities:
Accounts payable $5,441 $5,427 $3,335
Accrued compensation 1,066 3,183 1,080
Other accruals 1,609 1,575 1,639
Total current liabilities 8,116 10,185 6,054 Long-term debt 478 506 --
Deferred revenue 159 169 --
Compensation and benefits 3,838 4,041 4,022
Deferred tax liabilities 1,308 1,288 1,168
Total liabilities 13,899 16,189 11,244 Total shareholders' equity 58,334 57,344 51,164 Total liabilities and
shareholders' equity $72,233 $73,533 $62,408
LaCrosse Footwear, Inc. Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited) Quarter Ended
March 31, April 1,
2007 2006 Cash flows from operating activities:
Net income $604 $392
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 411 408
Stock-based compensation expense 166 165
Deferred income taxes (14) (53)
Changes in assets and liabilities:
Trade accounts receivable 3,871 2,963
Inventories 316 4,197
Accounts payable 14 (2,067)
Accrued expenses and other (2,269) (707)
Net cash provided by operating activities 3,099 5,298 Cash flows used in investing activities:
Purchases of property and equipment (412) (362) Cash flows from financing activities:
Proceeds from exercise of stock options 184 130 Net increase in cash and cash equivalents 2,871 5,066 Cash and cash equivalents:
Beginning of period 12,702 6,113
Ending of period $15,573 $11,179
DATASOURCE: LaCrosse Footwear, Inc.
CONTACT: David Carlson, Executive Vice President and Chief Financial Officer, +1-503-262-0110, ext. 1331, or Erin Patterson, Public Relations Manager, +1-503-262-0110, ext. 1393, or , both of LaCrosse Footwear, Inc.; or Michael Newman, Investor Relations of StreetConnect, Inc., +800-654-3517, or , for LaCrosse Footwear, Inc.
Web site: http://www.lacrossefootwearinc.com/
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