CROCS
Crocs – What are they?
Clog design Comfortable Waterproof (used on boats) Light Bright colors Competitors include Nike, Sketchers and
Decker
Styles and Gear
62% of sale from
Cayman and
Beach Styles
25 models in a wide variety of colors and patterns
Branded Apparel, Fury, Ocean Minded,
Jibbitz
Celebrities Wear Crocs
Crocs Timeline
2002 Crocs is founded
by 3 friends sailing in the Caribbean; 1st pair of
shoes sold
2003 Total Rev $1.2 Mil
2004 Former Flextron
ics Executi
ve Ronald Snyder
is named Preside
nt; Acquire
s Finproject NA
2005 Ronald
Snyder is named
CEO and enacts global market
penetration strategy
Feb 2006 Crocs goes
public; Total
Market Cap of $1 Bil
2006 Global Supply chain
brought in house; Crocs
owned manufacturing
(Mexico & Italy) &
compounding (Canada, China & Mexico) facilities opened
Oct 2006 Acquires
Fury Sports
Manufacturer
2006 Year
end Rev of $355
Mil; Total
Market Cap of $1.7 Bil
Jan 2007 Acquires Ocean
Minded, LLC
Designer &
Manufacturer of
Sandals
SWOT Analysis
Strengths Croslite proprietary resin
Odor free & water resistant Molds to wearer’s foot Capable of modular assembly
Executive team and firm vision
Superior supply chain management
If the products sell extremely well, we will build more in
season, and will be back on the shelves in a few weeks…. We’re not going to wait with a hot new product until next
year, when hopefully the same
trend is alive.
CEO Ronald Snyder
Supply Chain Management
Manufacturing
20% of footwear products produced in-house in North America and Italy
3rd party manufactures in China, Italy, Romania, and USA provide the balance
Crocs’ owned compounding facilities in Canada, China, and Mexico
Supply Chain Management
Distribution / Warehousing
Facilities in Colorado, Canada, China, Italy, Hawaii, Mexico & Europe
Warehousing and distribution centers added to manufacturing facilities
Supply Chain Management
Sales
11,000 domestic & 8,000 international retail stores
Direct sales through internet and mall kiosks
Tradition retail sales through large retail chains and boutique shops
SWOT Analysis
Weaknesses
2 suppliers of resin ingredient for Croslite material
Rapid expansion of operations could impact service, product quality, increase costs 136 employees as of 06/2004 and 2,900 as
12/2006
Divided customer opinion over looks
SWOT Analysis
Opportunities
Expand Fury or other similar product lines
Increased vertical integration
Manage backlog more efficiently
SWOT Analysis
Threats
Styles and fashion changes (fad) Backlog of orders becomes
problematic Could result in cancelled orders, decrease
in revenue Increased from $6.7M in 2005 to $74.6M
2006 Increased competition, counterfeiting
and lawsuits
Strategy
Increase Vertical Integration Utilize additional suppliers of resin
Bring additional manufacturing in-house to maintain high degree of flexibility and minimize backlog A single facility accounts for 55% of footwear
products Continue to expand warehousing /
manufacturing / distribution all in one centers
Strategy
Limit over diversification of product lines Focus on high margin products Improve current information system to
handle rapid operations expansion and financial controls
Protect intellectual property rights and trademarks
Develop stand alone retail stores similar to Apple’s model for increased brand recognition
Acquire or develop a different brand to diversify
Strategy Financing
CROCS’ 2006 IPO Proceeds
Aggregate Offering Proceeds $104 million
Underwriting Commissions $7 million
Other Expenses $2.5 million
Net Proceeds $94.5 million
Repaid LOC Facility $14.1 million
Upgraded Info Technology $8.7 million
Capital Expenditures $23.8 million
Acquisitions $15.4 million
IPO Proceeds Available $32.5 million
Solvency Ratios Liability to Assets
30% LT Debt to Equity
0.06% Liquidity Ratios
Quick Ratio 1.49 CFO /Avg. CL 18%
Finance utlizing LT Debt and $20 million from the remaining IPO proceeds. Maintain strong cash position to counter increased weakness in CFO.
Crocs Today
20062900 Employees 4157 employees
25 footwear models 250 footwear models
20.5% of footwear manufactured internally
21% of footwear manufactured internally
2 suppliers of key resin input used to create croslite material
Multiple suppliers and 3rd party broker of key resin input used to create croslite material
0 stand alone outlets and retail stores; 83 Kiosks
430 global kiosks, outlets, and retail stores accounting for 31% of footwear sales
96.5% of sales due to footwear 96.3% of sales due to footwear
$355 million in total revenue $1 billion in total revenue
Market Capitalization $1.7 billion Market Capitalization $1.8 billion
2011
Crocs Stock Performance
Any Questions?
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