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LaCrosse Footwear Reports First Quarter Results

LaCrosse Footwear, Inc. (Nasdaq: BOOT), a leading provider of premium, branded footwear for work and outdoor users, today reported results for the first quarter ended March 31, 2012.

For the first quarter of 2012, LaCrosse reported net sales of $33.3 million, up 32% from $25.2 million in the first quarter of 2011. The Company’s first quarter 2012 sales results benefitted from its fiscal calendar which provided four additional business days compared to the first quarter of 2011. Net income was $0.6 million or $.08 per diluted share in the first quarter of 2012, up from a net loss of $0.7 million or ($.10) per diluted share in the first quarter of 2011.

Sales to the work market were $24.0 million for the first quarter of 2012, up 50% from the same period of 2011, reflecting fulfillment of a previously announced U.S. military order and growing demand from a variety of non-military government and other niche work markets. Excluding the Company’s contract military and discontinued work apparel sales, core work sales in the first quarter of 2012 increased 9% from the same period in 2011.

Sales to the outdoor market were $9.3 million for the first quarter of 2012, up 2% from the same period of 2011. Overall outdoor sales were negatively impacted by unseasonably warm and dry weather conditions, offset by growing demand for the Company’s new hiking and lifestyle products.

Gross margins for the first quarter of 2012 were 37.9% of net sales, compared to 41.4% in the same period of 2011. The year-over-year decline in gross margins primarily reflects an increase in U.S. military business and closeout sales. Operating expenses were $11.6 million in the first quarter of 2012, up 2% from the same period in 2011, reflecting increased investments in product development activities. The Company’s inventories were $43.1 million at the end of the first quarter of 2012, down 8% from the end of the same period in 2011.

“We’re pleased with our performance in the first quarter of 2012, particularly the continued sales growth for our core work products and the success of our newest outdoor products,” said Joseph P. Schneider, President and CEO of LaCrosse Footwear, Inc. “During the quarter, we completed delivery of the large military contract that began in the fourth quarter of 2011 and saw increased sales of our tactical law enforcement boots and other innovative products to a variety of government customers. We also continued to penetrate into niche work market segments, such as mining, oil and gas exploration, and agriculture.”

“Despite the adverse impact of unusually warm and dry weather during the winter, we’ve made good progress in reinvigorating our outdoor product line with our innovative new hiking and lifestyle boots to extend the appeal of our brands across a broader demographic. We also continued to build relationships with new major retailers in North America, gradually expand our international distribution and grow our direct channels. We believe LaCrosse is well-positioned to continue to capture market share and grow profitably over the long term.”

Based on the Company’s financial outlook, the Board of Directors today announced the approval of a quarterly dividend of $0.125 per share of common stock. The second quarter dividend will be paid on June 18, 2012 to shareholders of record as of the close of business on May 22, 2012. The Board of Directors, while not declaring future dividends to be paid, has established a quarterly dividend policy reflecting its intent to declare and pay a quarterly dividend of $0.125 per share of common stock.

First Quarter 2012 Conference Call

LaCrosse will host a conference call to discuss its financial results today, April 26, 2012 at 2:00 PM Pacific (5:00 PM Eastern). A broadcast of the conference call and accompanying slideshow presentation will be available at www.lacrossefootwearinc.com under “Investor Events” or by calling 877-941-8609 or +1 480-629-9835. A 48-hour replay will be available by calling 800-406-7325 or +1 303-590-3030 (Access Code: 4522735).

About LaCrosse Footwear, Inc.

LaCrosse Footwear, Inc. is a leading developer and marketer of branded, premium and innovative footwear for work and outdoor users. The Company’s trusted Danner® and LaCrosse® brands are sold to a network of specialty retailers and distributors in North America, Europe and Asia. Work consumers include people in law enforcement, transportation, mining, oil and gas exploration and extraction, construction, government services and other occupations that require high-performance and protective footwear as a critical tool for the job. Outdoor consumers include people active in hunting, outdoor cross-training, hiking and other outdoor recreational activities, as well as consumers attracted to footwear reflecting an outdoor lifestyle. For more information about LaCrosse Footwear products, please visit our Internet websites at www.lacrossefootwear.com and www.danner.com. For additional investor information, see our corporate website at www.lacrossefootwearinc.com.

Forward-Looking Statements

All statements, other than statements of historical facts, included in this release, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “plan,” “expect,” “aim,” “believe,” “project,” “target,” “anticipate,” “intend,” “estimate,” “will,” “should,” “could” and other terms of similar meaning, typically identify such forward-looking statements. Forward- looking statements include without limitation, statements regarding the anticipated success of new products, our ability to broaden awareness and demand for our brands, our ability to capture market share in the future, our future success based on building relationships with new major retailers in North America and expanding our international and direct channels of distribution, and the Board of Directors’ intent to declare and pay dividends in future periods. The forward-looking statements included in this release are based on certain assumptions and expectations of future events and trends that are subject to risks and uncertainties. Risk factors and other uncertainties which may adversely impact the outcome of such forward-looking statements include the risk factors set forth in our 2011 Annual Report on Form 10-K, as supplemented by our quarterly reports on Form 10-Q for 2012. The Company assumes no obligation to update or revise any forward-looking statements to reflect the occurrence or non-occurrence of future events or circumstances.

LaCrosse Footwear, Inc.

Condensed Consolidated Statements of Operations

(Amounts in thousands, except per share amounts)

(Unaudited)

       
Quarter Ended
March 31, March 26,
    2012

 

    2011  
 
Net sales $   33,285 $   25,188
Cost of goods sold     20,654     14,751  
Gross profit 12,631 10,437
Operating expenses     11,577     11,384  
Operating income (loss) 1,054 (947 )
Non-operating expense     (123 )     (125 )
Income (loss) before income taxes 931 (1,072 )
Income tax provision (benefit)     371     (422 )
Net income (loss) $   560 $   (650 )
 
Net income (loss) per common share:
Basic $ 0.09 $ (0.10 )
Diluted $ 0.08 $ (0.10 )
 
Weighted average number of common shares outstanding:
Basic 6,508 6,485
Diluted 6,608 6,485
 
Supplemental Product Line Information
 
Work Market Sales $ 24,010 $ 16,056
Outdoor Market Sales     9,275     9,132  
$   33,285 $   25,188  
 
LaCrosse Footwear, Inc.
Condensed Consolidated Balance Sheets

(Amounts in thousands)

(Unaudited)

     
March 31, December 31, March 26,
  2012   2011   2011
Assets:
Current Assets:
Cash and cash equivalents $ 402 $ 774 $ 527
Trade and other accounts receivable, net 18,059 22,726 15,666
Inventories 43,070 48,648 46,869
Prepaid expenses and other 1,276 1,398 984
Deferred tax assets   1,711   1,771   1,675
Total current assets 64,518 75,317 65,721
 
Property and equipment, net 16,353 16,143 16,000
Goodwill 10,753 10,753 10,753
Other assets   271   222   243
Total assets $ 91,895 $ 102,435 $ 92,717
 
 
Liabilities and Shareholders' Equity:
Current Liabilities:
Short-term borrowings $ 8,643 $ 16,869 $ 6,247
Accounts payable 6,593 7,463 10,553
Accrued compensation 1,977 1,789 1,301
Other accruals   1,640   2,939   1,994
Total current liabilities 18,853 29,060 20,095
 
Long-term debt 107 138 225
Deferred revenue 565 550 548
Deferred lease obligations 923 895 813
Compensation and benefits 6,981 7,214 4,146
Deferred tax liabilities   1,189   1,450   3,053
Total liabilities   28,618   39,307   28,880
 
Total shareholders' equity 63,277 63,128 63,837
     

Total liabilities and shareholders' equity

$ 91,895 $ 102,435 $ 92,717
 

LaCrosse Footwear, Inc.

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)
(Unaudited)
   
Quarter Ended
March 31, March 26,
  2012     2011  
Cash flows from operating activities:
Net income (loss) $ 560 $ (650 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 945 883
Stock-based compensation expense 201 257
Deferred income taxes (200 ) 260
Loss on disposal of property and equipment - 74
Changes in operating assets and liabilities:
Trade and other accounts receivable 4,684 7,190
Inventories 5,669 (6,724 )
Accounts payable (798 ) (5,993 )
Accrued expenses and other   (1,263 )   (4,163 )
Net cash provided by (used in) operating activities   9,798     (8,866 )
 
Cash flows from investing activities:
Purchases of property and equipment   (1,243 )   (791 )
 
Cash flows from financing activities:
Net proceeds from (reductions in) short-term borrowings (8,226 ) 6,247
Cash dividends paid (814 ) (812 )
Proceeds from exercise of stock options   53     451  
Net cash provided by (used in) financing activities   (8,987 )   5,886  
 

Effect of foreign currency exchange rate changes on cash and cash equivalents

  60     24  
 
Net decrease in cash and cash equivalents (372 ) (3,747 )
 
Cash and cash equivalents:
Beginning of period   774     4,274  
End of period $ 402   $ 527  

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