Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-51754 | |
Entity Registrant Name | CROCS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-2164234 | |
Entity Address, Address Line One | 13601 Via Varra | |
Entity Address, City or Town | Broomfield | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80020 | |
City Area Code | 303 | |
Local Phone Number | 848-7000 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | CROX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 61,575,215 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Entity Central Index Key | 0001334036 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 660,148 | $ 460,098 |
Cost of sales | 335,224 | 206,879 |
Gross profit | 324,924 | 253,219 |
Selling, general and administrative expenses | 206,247 | 128,533 |
Income from operations | 118,677 | 124,686 |
Foreign currency gains (losses), net | 480 | (504) |
Interest income | 102 | 27 |
Interest expense | (19,252) | (1,632) |
Other income (expense), net | (947) | 11 |
Income before income taxes | 99,060 | 122,588 |
Income tax expense | 26,300 | 24,190 |
Net income | $ 72,760 | $ 98,398 |
Net income per common share: | ||
Basic (in dollars per share) | $ 1.22 | $ 1.50 |
Diluted (in dollars per share) | $ 1.19 | $ 1.47 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 59,823 | 65,458 |
Diluted (in shares) | 60,896 | 66,848 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 72,760 | $ 98,398 |
Other comprehensive loss: | ||
Foreign currency translation losses, net | (10,151) | (10,628) |
Total comprehensive income | $ 62,609 | $ 87,770 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 171,969 | $ 213,197 |
Restricted cash - current | 34 | 65 |
Accounts receivable, net of allowances of $23,041 and $20,715, respectively | 375,750 | 182,629 |
Inventories | 407,589 | 213,520 |
Income taxes receivable | 24,536 | 22,301 |
Other receivables | 16,599 | 12,252 |
Prepaid expenses and other assets | 42,061 | 22,605 |
Total current assets | 1,038,538 | 666,569 |
Property and equipment, net of accumulated depreciation and amortization of $85,601 and $83,745, respectively | 135,649 | 108,398 |
Intangible assets, net of accumulated amortization of $112,011 and $108,167, respectively | 1,895,980 | 28,802 |
Goodwill | 642,467 | 1,600 |
Deferred tax assets, net | 547,733 | 567,201 |
Restricted cash | 3,365 | 3,663 |
Right-of-use assets | 199,805 | 160,768 |
Other assets | 7,123 | 8,067 |
Total assets | 4,470,660 | 1,545,068 |
Current liabilities: | ||
Accounts payable | 202,919 | 162,145 |
Accrued expenses and other liabilities | 185,969 | 166,887 |
Income taxes payable | 67,310 | 16,279 |
Current borrowings | 25,173 | 0 |
Current operating lease liabilities | 49,414 | 42,932 |
Total current liabilities | 530,785 | 388,243 |
Long-term deferred tax liability | 329,950 | 0 |
Long-term income taxes payable | 226,188 | 219,744 |
Long-term borrowings | 2,851,256 | 771,390 |
Long-term operating lease liabilities | 181,065 | 149,237 |
Other liabilities | 2,246 | 2,372 |
Total liabilities | 4,121,490 | 1,530,986 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, par value $0.001 per share, 5.0 million shares authorized including 1.0 million authorized as Series A Convertible Preferred Stock, none outstanding | 0 | 0 |
Common stock, par value $0.001 per share, 250.0 million shares authorized, 109.2 million and 105.9 million issued, 61.6 million and 58.3 million outstanding, respectively | 109 | 106 |
Treasury stock, at cost, 47.7 million and 47.6 million shares, respectively | (1,690,312) | (1,684,262) |
Additional paid-in capital | 774,562 | 496,036 |
Retained earnings | 1,351,800 | 1,279,040 |
Accumulated other comprehensive loss | (86,989) | (76,838) |
Total stockholders’ equity | 349,170 | 14,082 |
Total liabilities and stockholders’ equity | $ 4,470,660 | $ 1,545,068 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts receivable, net of allowance | $ 23,041 | $ 20,715 |
Less: Accumulated depreciation and amortization | 85,601 | 83,745 |
Intangible assets, net of accumulated amortization | $ 112,011 | $ 108,167 |
Preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock issued (in shares) | 109,200,000 | 105,900,000 |
Common stock outstanding (in shares) | 61,600,000 | 58,300,000 |
Treasury stock (in shares) | 47,700,000 | 47,600,000 |
Series A convertible preferred stock | ||
Preferred stock authorized (in shares) | 1,000,000 | 1,000,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2020 | 65,856 | 39,132 | ||||
Beginning balance at Dec. 31, 2020 | $ 290,633 | $ 105 | $ (688,849) | $ 482,385 | $ 553,346 | $ (56,354) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 8,054 | 8,054 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units (in shares) | 481 | 139 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes | (10,226) | $ 1 | $ (10,462) | 235 | ||
Repurchases of common stock (in shares) | (1,112) | 1,112 | ||||
Repurchases of common stock | (50,000) | $ (84,615) | 34,615 | |||
Net income | 98,398 | 98,398 | ||||
Other comprehensive loss | (10,628) | (10,628) | ||||
Ending balance (in shares) at Mar. 31, 2021 | 65,225 | 40,383 | ||||
Ending balance at Mar. 31, 2021 | 326,231 | $ 106 | $ (783,926) | 525,289 | 651,744 | (66,982) |
Beginning balance (in shares) at Dec. 31, 2021 | 58,330 | 47,583 | ||||
Beginning balance at Dec. 31, 2021 | 14,082 | $ 106 | $ (1,684,262) | 496,036 | 1,279,040 | (76,838) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 8,275 | 8,275 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units (in shares) | 390 | 75 | ||||
Exercises of stock options, issuance of restricted stock awards, and vests of restricted stock units, net of shares withheld for taxes | (6,192) | $ (6,050) | (142) | |||
Share issuance at Acquisition (in shares) | 2,852 | |||||
Share issuance at Acquisition | 270,396 | $ 3 | 270,393 | |||
Net income | 72,760 | 72,760 | ||||
Other comprehensive loss | (10,151) | (10,151) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 61,572 | 47,658 | ||||
Ending balance at Mar. 31, 2022 | $ 349,170 | $ 109 | $ (1,690,312) | $ 774,562 | $ 1,351,800 | $ (86,989) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 72,760 | $ 98,398 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 7,895 | 8,054 |
Operating lease cost | 14,231 | 14,832 |
Share-based compensation | 8,275 | 8,054 |
Other non-cash items | 9,695 | (1,844) |
Changes in operating assets and liabilities, net of acquired assets and liabilities: | ||
Accounts receivable | (130,661) | (81,186) |
Inventories | (28,124) | (23,795) |
Prepaid expenses and other assets | (14,584) | 16,599 |
Accounts payable, accrued expenses and other liabilities | 6,490 | 6,332 |
Right-of-use assets and operating lease liabilities | (14,742) | (15,294) |
Cash provided by (used in) operating activities | (68,765) | 30,150 |
Cash flows from investing activities: | ||
Purchases of property, equipment, and software | (39,786) | (7,983) |
Acquisition of HEYDUDE, net of cash acquired | (2,031,765) | 0 |
Other | 85 | 0 |
Cash used in investing activities | (2,071,466) | (7,983) |
Cash flows from financing activities: | ||
Proceeds from notes issuance | 0 | 350,000 |
Proceeds from borrowings | 2,240,163 | 40,000 |
Repayments of borrowings | (85,000) | (220,000) |
Deferred debt issuance costs | (49,486) | (7,531) |
Repurchases of common stock | 0 | (50,000) |
Repurchases of common stock for tax withholding | (6,288) | (10,462) |
Other | 95 | 236 |
Cash provided by financing activities | 2,099,484 | 102,243 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (810) | (2,437) |
Net change in cash, cash equivalents, and restricted cash | (41,557) | 121,973 |
Cash, cash equivalents, and restricted cash—beginning of period | 216,925 | 139,273 |
Cash, cash equivalents, and restricted cash—end of period | 175,368 | 261,246 |
Non-Cash Investing and Financing Activities: | ||
Accrued purchases of property, equipment, and software | 9,369 | 15,502 |
Share issuance at acquisition | 270,396 | 0 |
Adjustment Holdback Amount | $ 8,500 | $ 0 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unless otherwise noted in this report, any description of the “Company,” “Crocs,” “we,” “us,” or “our” includes Crocs, Inc. and our consolidated subsidiaries within our reportable operating segments and corporate operations. We are engaged in the design, development, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for women, men, and children. We strive to be the global leader in the sale of molded footwear characterized by functionality, comfort, color, and lightweight design. On February 17, 2022, we acquired (the “Acquisition”) 100% of the equity of a privately-owned casual footwear brand business (“HEYDUDE”), pursuant to a securities purchase agreement (the “SPA”) entered into on December 22, 2021. HEYDUDE is engaged in the business of distributing and selling casual footwear under the brand name “HEYDUDE.” Our reportable operating segments include: (i) North America for the Crocs Brand, operating throughout the United States and Canada; (ii) Asia Pacific for the Crocs Brand, operating throughout Asia, Australia, and New Zealand; (iii) Europe, Middle East, Africa, and Latin America (“EMEALA”) for the Crocs Brand; and (iv) the HEYDUDE Brand. See Note 14 — Operating Segments and Geographic Information for additional information. The accompanying unaudited condensed consolidated interim financial statements include our accounts and those of our wholly-owned subsidiaries, and reflect all adjustments which are necessary for a fair statement of the financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Such unaudited condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated interim financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021 (“Annual Report”) and have been prepared on a consistent basis with the accounting policies described in Note 1 of the Notes to the Audited Consolidated Financial Statements included in our Annual Report. Our accounting policies did not change during the three months ended March 31, 2022, other than with respect to the new accounting pronouncements adopted as described in Note 2 — Recent Accounting Pronouncements and our business combination policy as described in Note 16 — Acquisition of HEYDUDE. Reclassifications We have reclassified certain amounts in Note 14 — Operating Segments and Geographic Information to conform to current period presentation. Use of Estimates U.S. GAAP requires us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions used to determine certain amounts that affect the financial statements are reasonable, based on information available at the time they are made. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, customer rebates, sales returns, impairment assessments and charges, recoverability of long-lived assets, deferred tax assets, valuation allowances, uncertain tax positions, income tax expense, share-based compensation expense, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, depreciation and amortization, and purchase price allocation for the Acquisition, as described in Note 16 — Acquisition of HEYDUDE, are reasonable based on information available at the time they are made. To the extent there are differences between these estimates and actual results, our condensed consolidated financial statements may be materially affected. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS New Accounting Pronouncement Adopted Business Combinations In October 2021, the FASB issued new guidance primarily related to the accounting for contract assets and liabilities from contracts with customers in a business combination. The standard will be effective for annual reporting periods beginning after December 31, 2022, including interim reporting periods within those periods, with early adoption permitted. On January 1, 2022, we early adopted this guidance on a prospective basis. The adoption did not have a material effect on our consolidated financial statements. New Accounting Pronouncement Not Yet Adopted New pronouncements issued but not effective until after March 31, 2022 are not expected to have a material impact on our condensed consolidated financial statements. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | ACCRUED EXPENSES AND OTHER LIABILITIES Amounts reported in ‘Accrued expenses and other liabilities’ in the condensed consolidated balance sheets were: March 31, 2022 December 31, 2021 (in thousands) Accrued compensation and benefits $ 41,487 $ 62,945 Professional services 30,412 33,997 Fulfillment, freight, and duties 43,780 15,629 Sales/use and value added taxes payable 19,772 13,049 Return liabilities 11,380 10,342 Accrued rent and occupancy 5,622 7,431 Royalties payable and deferred revenue 8,434 7,425 Accrued legal fees 7,249 5,872 Other 17,833 10,197 Total accrued expenses and other liabilities $ 185,969 $ 166,887 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES Right-of-Use Assets and Operating Lease Liabilities Amounts reported in the condensed consolidated balance sheets were: March 31, 2022 December 31, 2021 (in thousands) Assets: Right-of-use assets $ 199,805 $ 160,768 Liabilities: Current operating lease liabilities $ 49,414 $ 42,932 Long-term operating lease liabilities 181,065 149,237 Total operating lease liabilities $ 230,479 $ 192,169 Lease Costs and Other Information Lease-related costs reported within ‘Cost of sales’ and ‘Selling, general and administrative expenses’ in our condensed consolidated statements of operations were: Three Months Ended March 31, 2022 2021 (in thousands) Operating lease cost $ 14,231 $ 14,832 Short-term lease cost 2,632 1,441 Variable lease cost 4,552 3,648 Total lease costs $ 21,415 $ 19,921 Other information related to leases, including supplemental cash flow information, consists of: Three Months Ended March 31, 2022 2021 (in thousands) Cash paid for operating leases $ 14,500 $ 15,426 Right-of-use assets obtained in exchange for operating lease liabilities 13,888 35,552 The weighted average remaining lease term and discount rate related to our lease liabilities as of March 31, 2022 were 7.2 years and 3.6%, respectively. As of March 31, 2021, the weighted average remaining lease term and discount rate related to our lease liabilities were 7.0 years and 4.2%, respectively. Maturities The maturities of our operating lease liabilities were: As of March 31, 2022 (in thousands) 2022 (remainder of year) $ 38,637 2023 50,403 2024 33,252 2025 22,820 2026 20,504 Thereafter 97,909 Total future minimum lease payments 263,525 Less: imputed interest (33,046) Total operating lease liabilities $ 230,479 Leases That Have Not Yet Commenced As of March 31, 2022, we had significant obligations for a lease not yet commenced related to the upcoming move of our corporate headquarters within Broomfield, Colorado. The total contractual commitment related to this lease, with regular payments expected to begin in November 2023 and continue through September 2033, is approximately $44 million. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements All of our derivative instruments are classified as Level 2 of the fair value hierarchy and are reported in the condensed consolidated balance sheets within either ‘Prepaid expenses and other assets’ or ‘Accrued expenses and other liabilities’ at March 31, 2022 and December 31, 2021. The fair values of our derivative instruments were an immaterial asset at March 31, 2022 and an immaterial liability at December 31, 2021. See Note 6 — Derivative Financial Instruments for more information. The carrying amounts of our cash, cash equivalents, and current restricted cash, accounts receivable, accounts payable, and current accrued expenses and other liabilities approximate their fair value as recorded due to the short-term maturity of these instruments. Our borrowing instruments are recorded at their carrying values in the condensed consolidated balance sheets, which may differ from their respective fair values. During the three months ended March 31, 2021, we entered into a credit agreement for an aggregate term loan B facility in the principal amount of $2 billion (the “Term Loan B Facility”), as described in more detail in Note 7 — Borrowings. The Term Loan B Facility is classified as Level 1 of the fair value hierarchy. The Notes (as defined below) are also classified as Level 1 of the fair value hierarchy and are reported in our condensed consolidated balance sheet at face value, less unamortized issuance costs. The carrying and fair values of our revolving credit facilities approximate their carrying values at March 31, 2022 and December 31, 2021 based on interest rates currently available to us for similar borrowings. The carrying value and fair value of our borrowing instruments as of March 31, 2022 and December 31, 2021 were: March 31, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Term Loan B Facility $ 2,000,000 $ 1,955,000 $ — $ — 2029 Notes 350,000 311,281 350,000 346,281 2031 Notes 350,000 296,625 350,000 341,250 Revolving credit facilities 235,000 235,000 85,000 85,000 Non-Financial Assets and Liabilities Our non-financial assets, which primarily consist of property and equipment, right-of-use assets, goodwill, and other intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value. The fair values of these assets are determined, as required, based on Level 3 measurements, including estimates of the amount and timing of future cash flows based upon historical experience, expected market conditions, and management’s plans. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS We transact business in various foreign countries and are therefore exposed to foreign currency exchange rate risk that impacts the reported U.S. Dollar amounts of revenues, expenses, and certain foreign currency monetary assets and liabilities. In order to manage exposure to fluctuations in foreign currency and to reduce the volatility in earnings caused by fluctuations in foreign exchange rates, we may enter into forward contracts to buy and sell foreign currency. By policy, we do not enter into these contracts for trading purposes or speculation. Counterparty default risk is considered low because the forward contracts that we enter into are over-the-counter instruments transacted with highly-rated financial institutions. We were not required to and did not post collateral as of March 31, 2022 or December 31, 2021. Our derivative instruments are recorded at fair value as a derivative asset or liability in the condensed consolidated balance sheets. We report derivative instruments with the same counterparty on a net basis when a master netting arrangement is in place. Changes in fair value are recognized within ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of operations. For the condensed consolidated statements of cash flows, we classify cash flows from derivative instruments at settlement in the same category as the cash flows from the related hedged items within ‘Cash provided by (used in) operating activities.’ Results of Derivative Activities The fair values of derivative assets and liabilities, net, all of which are classified as Level 2, reported within either ‘Accrued expenses and other liabilities’ or ‘Prepaid expenses and other assets’ in the condensed consolidated balance sheets, were: March 31, 2022 December 31, 2021 Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities (in thousands) Forward foreign currency exchange contracts $ 1,917 $ (569) $ 724 $ (938) Netting of counterparty contracts (569) 569 (724) 724 Foreign currency forward contract derivatives $ 1,348 $ — $ — $ (214) The notional amounts of outstanding foreign currency forward exchange contracts presented below report the total U.S. Dollar equivalent position and the net contract fair values for each foreign currency position. March 31, 2022 December 31, 2021 Notional Fair Value Notional Fair Value (in thousands) Euro $ 27,741 $ (211) $ 43,723 $ (296) Singapore Dollar 43,323 (180) 25,795 104 Indian Rupee 17,299 190 21,198 162 Japanese Yen 11,126 436 14,201 (112) British Pound Sterling 10,468 67 12,910 80 South Korean Won 14,359 (18) 10,379 (86) Other currencies 15,122 1,064 19,481 (66) Total $ 139,438 $ 1,348 $ 147,687 $ (214) Latest maturity date April 2022 January 2022 Amounts reported in ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of operations include both realized and unrealized gains (losses) from foreign currency transactions and derivative contracts and were: Three Months Ended March 31, 2022 2021 (in thousands) Foreign currency transaction losses $ (917) $ (851) Foreign currency forward exchange contracts gains 1,397 347 Foreign currency gains (losses), net $ 480 $ (504) |
BORROWINGS
BORROWINGS | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
BORROWINGS | BORROWINGS Our long-term borrowings were as follows: Maturity Stated Interest Rate Effective Interest Rate March 31, 2022 December 31, 2021 (in thousands) Notes issuance of $350.0 million 2029 4.250 % 4.64 % $ 350,000 $ 350,000 Notes issuance of $350.0 million 2031 4.125 % 4.35 % 350,000 350,000 Term Loan B Facility 2029 2,000,000 — Revolving credit facilities 235,000 85,000 Total face value of long-term borrowings 2,935,000 785,000 Less: Unamortized issuance costs 63,744 13,610 Current portion of long-term borrowings (1) 20,000 — Total long-term borrowings $ 2,851,256 $ 771,390 (1) Represents the current portion of the borrowing on the Term Loan B facility. At March 31, 2022 and December 31, 2021, $13.0 million and $10.4 million, respectively, of accrued interest related to our borrowings was reported in ‘Accounts payable’ in the condensed consolidated balance sheets. Senior Revolving Credit Facility In July 2019, the Company and certain of its subsidiaries (the “Borrowers”) entered into a Second Amended and Restated Credit Agreement (as amended, the “Credit Agreement”), with the lenders named therein and PNC Bank, National Association, as a lender and administrative agent for the lenders. In February 2022, we amended the Credit Agreement, which, as amended to date, provides for a revolving credit facility of $600.0 million, which can be increased by an additional $400.0 million subject to certain conditions (the “Revolving Facility”). Borrowings under the Credit Agreement bear interest at a variable interest rate based on (A) a Base Rate (defined as the highest of (i) the Overnight Bank Funding Rate (as defined in the Credit Agreement), plus 0.25%, (b) the Prime Rate (as defined in the Credit Agreement), and (c) the Daily Simple SOFR (as defined in the Credit Agreement), plus 1.00%), plus an applicable margin ranging from 0.25% to 0.875% based on our leverage ratio or 1.35% to 1.975% for the Daily Simple SOFR based on the leverage ratio, or (B) the Term SOFR Rate (as defined in the Credit Agreement), plus an applicable margin ranging from 1.35% to 1.975% based on our leverage ratio for one-month interest periods and 1.40% to 2.025% based on our leverage ratio for three month interest periods. Borrowings under the Credit Agreement are secured by all of the assets of the Borrowers and guaranteed by certain other subsidiaries of the Borrowers. The Credit Agreement requires us to maintain a minimum interest coverage ratio of 3.00 to 1.00, and a maximum leverage ratio of (i) 4.00 to 1.00 from the quarter ended March 31, 2022 through, and including, the quarter ending December 31, 2023, (ii) 3.75 to 1.00 for the quarter ending March 31, 2024, (iii) 3.50 to 1.00 for the quarter ending June 30, 2024, and (iv) 3.25 to 1.00 for the quarter ending September 30, 2024 and thereafter (subject to adjustment in certain circumstances). The Credit Agreement permits, among other things, (i) stock repurchases subject to certain restrictions, including after giving effect to such stock repurchases, the maximum leverage ratio does not exceed certain levels; and (ii) certain acquisitions so long as there is borrowing availability under the Credit Agreement of at least $40.0 million. As of March 31, 2022, we were in compliance with all financial covenants under the Credit Agreement. As of March 31, 2022, the total commitments available from the lenders under the Revolving Facility were $600.0 million. At March 31, 2022, we had $235.0 million in outstanding borrowings, which are due when the Revolving Facility matures in July 2024, and $0.3 million in outstanding letters of credit under the Revolving Facility, which reduces amounts available for borrowing under the Revolving Facility. As of March 31, 2022 and December 31, 2021, we had $364.7 million and $414.7 million, respectively, of available borrowing capacity under the Revolving Facility. Term Loan B Facility On February 17, 2022, the Company entered into a credit agreement (the “Term Loan B Credit Agreement”) with Citibank, N.A., as administrative agent and lender, to among other things, finance a portion of the cash consideration for the Acquisition. The Term Loan B Credit Agreement provides for an aggregate term loan B facility in the principal amount of $2.0 billion (the “Term Loan B Facility”), which is secured by substantially all of the Company’s and each subsidiary guarantor’s assets on a pari passu basis with their obligations arising from the Credit Agreement and is scheduled to mature on February 17, 2029, subject to certain exceptions set forth in the Term Loan B Credit Agreement. Subject to certain conditions, including, without limitation, satisfying certain leverage ratios, the Company may, at any time, on one or more occasions, add one or more new classes of term facilities and/or increase the principal amount of the loans of any existing class by requesting one or more incremental term facilities. Each term loan borrowing which is an alternate base rate borrowing will bear interest at a rate per annum equal to the Alternate Base Rate (as defined in the Term Loan B Credit Agreement), plus 2.50%. Each term loan borrowing which is a term benchmark borrowing will bear interest at a rate per annum equal to the Adjusted Term SOFR Rate (as defined in the Term Loan B Credit Agreement) plus 3.50%. Outstanding principal of the Term Loan B Facility is payable on the last business day of each March, June, September and December, beginning June 30, 2022, in a quarterly aggregate principal amount of $5.0 million, with the entire remaining principal amount due on February 17, 2029, the maturity date. As of March 31, 2022, the Term Loan B Facility was fully drawn, and there was no available borrowing capacity under the Term Loan B Facility. The Term Loan B Credit Agreement also contains customary affirmative and negative covenants, incurrence financial covenants, representations and warranties, events of default and other provisions. As of March 31, 2022, we were in compliance with all financial covenants under the Term Loan B Credit Agreement. Asia Revolving Credit Facilities During the three months ended March 31, 2022, we had two revolving credit facilities in Asia, the revolving credit facility with China Merchants Bank Company Limited, Shanghai Branch (the “CMBC Facility”) which provides up to 10.0 million RMB, or $1.6 million at current exchange rates, and matures in January 2023, and the revolving credit facility with Citibank (China) Company Limited, Shanghai Branch (the “Citibank Facility”), which provides up to an equivalent of $10.0 million. As of March 31, 2022, we had borrowings outstanding of $0.5 million on the CMBC Facility, which are due in January 2023 and borrowings outstanding of $4.7 million on the Citibank Facility, which are due in May 2022. We had no borrowings under our Asia revolving facilities during the year ended December 31, 2021 or outstanding at December 31, 2021. Senior Notes Issuance In March 2021, the Company completed the issuance and sale of $350.0 million aggregate principal amount of 4.250% Senior Notes due March 15, 2029 (the “2029 Notes”), pursuant to the indenture related thereto (as amended and/or supplemented to date, the “2029 Notes Indenture”). Additionally, in August 2021, the Company completed the issuance and sale of $350.0 million aggregate principal amount of 4.125% Senior Notes due August 15, 2031 (the “2031 Notes”), pursuant to the indenture related thereto (as amended and/or supplemented to date, “the 2031 Notes Indenture” and, together with the 2029 Notes Indenture, the “Indentures” and, each, an “Indenture”). Interest on each of the 2029 Notes and the 2031 Notes (collectively, the “Notes”) is payable semi-annually. The Company will have the option to redeem all or any portion of the 2029 Notes, at once or over time, at any time on or after March 15, 2024, at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably on an annual basis to par and accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company will also have the option to redeem some or all of the 2029 Notes at any time before March 15, 2024 at a redemption price of 100% of the principal amount to be redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, at any time before March 15, 2024, the Company may redeem up to 40% of the aggregate principal amount of the 2029 Notes at a redemption price of 104.250% of the principal amount with the proceeds from certain equity issuances, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company will have the option to redeem all or any portion of the 2031 Notes, at once or over time, at any time on or after August 15, 2026, at a redemption price equal to 100% of the principal amount thereof, plus a premium declining ratably on an annual basis to par and accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company will also have the option to redeem some or all of the 2031 Notes at any time before August 15, 2026 at a redemption price of 100% of the principal amount to be redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, at any time before August 15, 2024, the Company may redeem up to 40% of the aggregate principal amount of the 2031 Notes at a redemption price of 104.125% of the principal amount with the proceeds from certain equity issuances, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Notes rank pari passu in right of payment with all of the Company’s existing and future senior debt, including the Credit Agreement, and are senior in right of payment to any of the Company’s future debt that is, by its term, expressly subordinated in right of payment to the Notes. The Notes are unconditionally guaranteed by each of the Company’s restricted subsidiaries that is a borrower or guarantor under the Credit Agreement and by each of the Company’s wholly-owned restricted subsidiaries that guarantees any debt of the Company or any guarantor under any syndicated credit facility or capital markets debt in an aggregate principal amount in excess of $25.0 million. The Indentures contain covenants that, among other things, limit the ability of the Company and its restricted subsidiaries to incur additional debt or issue certain preferred stock; pay dividends or repurchase or redeem capital stock or make other restricted payments; declare or pay dividends or other payments; incur liens; enter into certain types of transactions with the Company’s affiliates; and consolidate or merge with or into other companies. As of March 31, 2022, we were in compliance with all financial covenants under the Notes. |
COMMON STOCK REPURCHASE PROGRAM
COMMON STOCK REPURCHASE PROGRAM | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
COMMON STOCK REPURCHASE PROGRAM | COMMON STOCK REPURCHASE PROGRAM During the three months ended March 31, 2022, to prioritize repayments of debt, including debt incurred to finance a part of the Acquisition, we did not repurchase shares of our common stock. During the three months ended March 31, 2021, we repurchased 1.1 million shares of our common stock at a cost of $50.0 million, including commissions. This includes 0.5 million shares received in January 2021 at the conclusion of the purchase period for an accelerated share repurchase agreement we entered into in November 2020. As of March 31, 2022, we had remaining authorization to repurchase approximately $1,050.0 million of our common stock, subject to restrictions under our Notes, Credit Agreement, and Term Loan B Credit Agreement. |
REVENUES
REVENUES | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Revenues by channel and brand were: Three Months Ended March 31, 2022 Crocs Brand HEYDUDE Brand Total (in thousands) Channel: Wholesale $ 344,258 $ 86,919 $ 431,177 Direct-to-consumer (1) 200,967 28,004 228,971 Total revenues $ 545,225 $ 114,923 $ 660,148 Three Months Ended March 31, 2021 Crocs Brand HEYDUDE Brand Total (in thousands) Channel: Wholesale $ 290,039 $ — $ 290,039 Direct-to-consumer (1) 170,059 — 170,059 Total revenues $ 460,098 $ — $ 460,098 (1) Direct-to-consumer revenues consist of sales generated through our company-operated retail stores, company-operated e-commerce websites, and third-party e-commerce marketplaces. For information on revenues by reportable operating segment, see Note 14 — Operating Segments and Geographic Information. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Our share-based compensation awards are issued under the 2020 Equity Incentive Plan (“2020 Plan”) and a predecessor plan, the 2015 Equity Incentive Plan (“2015 Plan”). Any awards that expire or are forfeited under the 2015 Plan become available for issuance under the 2020 Plan. Share-based compensation expense reported in our condensed consolidated statements of operations was: Three Months Ended March 31, 2022 2021 (in thousands) Cost of sales $ 111 $ 86 Selling, general and administrative expenses 8,164 7,968 Total share-based compensation expense $ 8,275 $ 8,054 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax expense and effective tax rates were: Three Months Ended March 31, 2022 2021 (in thousands, except effective tax rate) Income before income taxes $ 99,060 $ 122,588 Income tax expense 26,300 24,190 Effective tax rate 26.5 % 19.7 % The increase in the effective tax rate for the three months ended March 31, 2022, compared to the same period in 2021, was primarily driven by the prior year realization of deferred tax assets which were subject to a valuation allowance which did not reoccur in the current year. Our effective income tax rate, for each period presented, also differs from the federal U.S. statutory rate due differences in income tax rates between U.S. and foreign jurisdictions. We had unrecognized tax benefits of $212.1 million and $218.4 million at March 31, 2022 and December 31, 2021, respectively, and we do not expect any significant changes in tax benefits in the next twelve months. Our tax rate is volatile and may increase or decrease with changes in, among other things, the amount of income or loss by jurisdiction, our ability to utilize net operating losses and foreign tax credits, changes in tax laws, and the movement of liabilities established pursuant to accounting guidance for uncertain tax positions as statutes of limitations expire, positions are effectively settled, or when additional information becomes available. There are proposed or pending tax law changes in various jurisdictions and other changes to regulatory environments in countries in which we do business that, if enacted, may have an impact on our effective tax rate, including federal corporate tax increases currently contemplated in the U.S. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic and diluted earnings per common share (“EPS”) for the three months ended March 31, 2022 and 2021 were: Three Months Ended March 31, 2022 2021 (in thousands, except per share data) Numerator: Net income $ 72,760 $ 98,398 Denominator: Weighted average common shares outstanding - basic 59,823 65,458 Plus: Dilutive effect of stock options and unvested restricted stock units 1,073 1,390 Weighted average common shares outstanding - diluted 60,896 66,848 Net income per common share: Basic $ 1.22 $ 1.50 Diluted $ 1.19 $ 1.47 In the three months ended March 31, 2022 and 2021, immaterial outstanding shares issued under share-based compensation awards were anti-dilutive and, therefore, excluded from the calculation of diluted EPS. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Purchase Commitments As of March 31, 2022, we had purchase commitments to third-party manufacturers, primarily for materials and supplies used in the manufacture of our products, for an aggregate of $585.5 million. We expect to fulfill our commitments under these agreements in the normal course of business, and as such, no liability has been recorded. Other We are regularly subject to, and are currently undergoing, audits by various tax authorities in the United States and several foreign jurisdictions, including customs duties, import, and other taxes for prior tax years. During our normal course of business, we may make certain indemnities, commitments, and guarantees under which we may be required to make payments. We cannot determine a range of estimated future payments and have not recorded any liability for indemnities, commitments, and guarantees in the accompanying condensed consolidated balance sheets. See Note 15 — Legal Proceedings for further details regarding potential loss contingencies related to government tax audits and other current legal proceedings. |
OPERATING SEGMENTS AND GEOGRAPH
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION | OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION Crocs, Inc. has four reportable operating segments. For the Crocs Brand, we have three reportable operating segments based on the geographic nature of our operations: North America, Asia Pacific, and EMEALA. Beginning in the three months ended March 31, 2022, our HEYDUDE Brand is also a reportable segment. Each of the reportable operating segments derives its revenues from the sale of footwear and accessories to external customers. Additionally, Crocs ‘Brand corporate’ costs represent operating expense that includes product creation, design, and marketing expenses centrally managed for the Crocs Brand, as well as certain royalty income. Crocs Brand corporate costs are included within the Crocs Brand for presentation purposes to align with the way management views the Company. ‘Enterprise corporate’ costs include global corporate costs associated with both brands, including legal, information technology, human resources, and finance, as well as costs associated with global digital operations. Each segment’s performance is evaluated based on segment results without allocating Brand corporate or Enterprise corporate expenses. Segment profits or losses include adjustments to eliminate inter-segment sales. Reconciling items between segment income from operations and income from operations consist of unallocated brand and enterprise corporate and other expenses, as well as inter-segment eliminations. We do not report asset information by segment because that information is not used to evaluate performance or allocate resources between segments. The following tables set forth information related to reportable operating segments: Three Months Ended March 31, 2022 2021 (in thousands) Revenues: North America (1) $ 319,450 $ 267,267 Asia Pacific 95,847 82,592 EMEALA (1) 129,921 110,201 Brand corporate (2) 7 38 Total Crocs Brand 545,225 460,098 HEYDUDE Brand (3) 114,923 — Total consolidated revenues $ 660,148 $ 460,098 Income from operations: North America (1) $ 129,611 $ 112,693 Asia Pacific 30,106 22,115 EMEALA (1) 34,927 40,019 Brand corporate (2) (30,709) (20,008) Total Crocs Brand 163,935 154,819 HEYDUDE Brand (3) 15,658 — Reconciliation of total segment income from operations to income before income taxes: Enterprise corporate (2) (60,916) (30,133) Income from operations 118,677 124,686 Foreign currency gains (losses), net 480 (504) Interest income 102 27 Interest expense (19,252) (1,632) Other income (expense), net (947) 11 Income before income taxes $ 99,060 $ 122,588 Depreciation and amortization: North America (1) $ 2,220 $ 925 Asia Pacific 523 287 EMEALA (1) 724 184 Brand corporate (2) 186 2,749 Total Crocs Brand 3,653 4,145 HEYDUDE Brand (3) 2,444 — Enterprise corporate (2) 1,798 3,909 Total consolidated depreciation and amortization $ 7,895 $ 8,054 (1) In the first quarter of 2022, certain revenues and expenses associated with our Latin America businesses previously reported in our ‘Americas’ segment were shifted into the ‘EMEA’ segment to better align with how we manage our distributor business. To reflect this change, we renamed our ‘Americas’ segment to ‘North America’ and renamed our ‘EMEA’ segment to ‘EMEALA.’ Additionally, in the second quarter of 2021, certain marketing expenses previously reported within ‘Unallocated corporate and other’ were shifted to the Americas, Asia Pacific, and EMEA segments (see footnote (2) for more information on the current year presentation of costs previously reported in ‘Unallocated corporate and other’). As a result of these changes, the previously reported amounts for revenues, income from operations, and depreciation and amortization for the three months ended March 31, 2021 have been revised to conform to current period presentation. See the ‘Impacts of segment composition change’ and ‘Impacts of marketing expense allocations’ tables below for more information. (2) In the first quarter of 2022, as a result of the Acquisition, all costs previously reported in “Unallocated corporate and other” were recast between ‘Brand corporate’ costs associated with the Crocs Brand and ‘Enterprise corporate’ costs, each of which is defined in the section preceding the above table. As a result of these changes, the previously reported amounts for income from operations and depreciation and amortization for the three months ended March 31, 2021 have been revised to conform to current period presentation. See the ‘Impacts of brand vs. enterprise recast’ table below for more information. (3) We acquired HEYDUDE on February 17, 2022 and added the HEYDUDE brand as a new operating segment. Therefore, the amounts shown above represent results during the period from the Acquisition Date through March 31, 2022, and there are no comparative amounts for the three months ended March 31, 2021. Impacts of segment composition change associated with Latin America: Three Months Ended March 31, 2021 (in thousands) Impact on revenues: Americas (now “North America”) $ (9,142) EMEA (now “EMEALA”) 9,142 Impact on income from operations: Americas (now “North America”) $ (3,374) EMEA (now “EMEALA”) 3,374 Impact on depreciation and amortization: Americas (now “North America”) $ (18) EMEA (now “EMEALA”) 18 Impacts of marketing expense allocations: Three Months Ended March 31, 2021 (in thousands) Impacts on income from operations: Americas (now “North America”) $ (2,277) Asia Pacific (1,178) EMEA (now “EMEALA”) (468) Total impact on segment income from operations $ (3,923) Unallocated corporate and other (now in “Brand corporate”) $ 3,923 Impacts of brand vs. enterprise recast: Three Months Ended March 31, 2021 (in thousands) Impacts on income from operations: Brand corporate $ (20,008) Enterprise corporate (30,133) Unallocated corporate and other 50,141 Impacts on depreciation and amortization: Brand corporate $ 2,749 Enterprise corporate 3,909 Unallocated corporate and other (6,658) |
LEGAL PROCEEDINGS
LEGAL PROCEEDINGS | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | LEGAL PROCEEDINGS For legal claims and disputes, we have accrued estimated losses of $0.8 million within ‘Accrued expenses and other liabilities’ in the condensed consolidated balance sheet as of March 31, 2022. As we are able, we estimate reasonably possible losses or a range of reasonably possible losses. As of March 31, 2022, we estimated that reasonably possible losses associated with these claims and other disputes could potentially exceed amounts accrued by an immaterial amount. Although we are subject to other litigation from time to time in the ordinary course of business, including employment, intellectual property, and product liability claims, we are not party to any other pending legal proceedings that we believe would reasonably have a material adverse impact on our business, financial results, and cash flows. |
ACQUISITION OF HEYDUDE
ACQUISITION OF HEYDUDE | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITION OF HEYDUDE | ACQUISITION OF HEYDUDE On February 17, 2022, (the “Acquisition Date”), we acquired 100% of the equity of HEYDUDE, pursuant to the SPA. HEYDUDE is engaged in the business of distributing and selling casual footwear under the brand name “HEYDUDE.” The Acquisition allows us to diversify and expand our business by adding a second brand to the Crocs portfolio. The aggregate preliminary purchase price at the closing of the Acquisition was $2.3 billion. We paid aggregate consideration of $2.05 billion in cash (the “Cash Consideration”), subject to adjustment based on, among other things, the cash, indebtedness, transaction expenses, and working capital of the companies comprising HEYDUDE and their respective subsidiaries as of the Acquisition Date, and issued 2,852,280 shares of the Company’s common stock to one of the sellers (the “Equity Consideration Shares”). The Equity Consideration Shares are subject to a lock-up period beginning on the Acquisition Date and continuing to, and including, the date that is 12 months after the Acquisition Date, provided that (a) on the date that is six months after the Acquisition Date, 50% of the Equity Consideration Shares will be released from the lock-up, and (b) on the date that is twelve months after the Acquisition Date, the remaining 50% of the Equity Consideration Shares will be released from the lock-up. The Cash Consideration was financed via the Company’s entry into the $2.0 billion Term Loan B Facility and $50.0 million of borrowings under the Revolving Facility. As a result of the Acquisition, HEYDUDE has become wholly owned by Crocs. Accordingly, the results of HEYDUDE are included in our condensed consolidated financial statements from the Acquisition Date and are reported in the HEYDUDE operating segment. HEYDUDE contributed revenue of $114.9 million and income from operations of $15.7 million to our condensed consolidated statement of operations from the Acquisition Date through March 31, 2022. Purchase Price Allocation The Acquisition was accounted for in accordance with the ASC Topic 805 Business Combinations . As a result, we have applied acquisition accounting, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their estimated fair values as of the Acquisition Date. For certain assets and liabilities, those fair values were consistent with historical carrying values. The fair value of inventory was determined using both a market approach and a cost approach. With respect to intangible assets, the estimated fair value was based on the Multi Period Excess Earnings approach for the trademark and the distributor method for the customer relationships. These models used primarily Level 2 and Level 3 inputs, including an estimate of future revenues, future cash flows, and discount rates. The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the Acquisition Date: February 17, 2022 (in thousands) Cash and cash equivalents $ 6,232 Accounts receivable, net 69,031 Inventories 171,270 Prepaid expenses and other assets 2,977 Intangible assets 1,870,000 Goodwill 640,497 Right-of-use assets 2,844 Accounts payable (28,388) Accrued expenses and other liabilities (39,618) Income taxes payable (32,947) Long-term deferred tax liability (329,778) Long-term income taxes payable (12,384) Operating lease liabilities (2,843) Net assets acquired $ 2,316,893 The purchase consideration for the Acquisition is preliminary. Valuation by management of certain assets and liabilities, is still in process and therefore, the actual fair values may vary significantly from these preliminary estimates. Final valuations are expected to be completed within one year of the Acquisition Date. Intangible Assets The components of intangible assets acquired in connection with the Acquisition were as follows: Weighted-Average Useful Life Amortization Method Estimated Fair Value (in thousands) Customer relationships 15 Straight-line $ 300,000 Trademark Indefinite — 1,570,000 Total intangible assets $ 1,870,000 As a result of the increase in fair value of the identifiable intangible assets, the deferred tax liability was increased by $331.0 million. Goodwill The excess of the purchase price over the fair value of the acquired business's net assets represents goodwill. The goodwill amount of $640.5 million largely consists of the acquired workforce and economies of scale resulting from the Acquisition. The total goodwill amount acquired was assigned to the HEYDUDE operating segment. None of the goodwill will be deductible for income tax purposes. Escrow and Holdback Amounts Additionally, $125.0 million of the Cash Consideration (the “Escrow Amount”) was placed in an escrow account to partially secure the indemnification obligations of the sellers, which will be released to the sellers, less any amounts that have been released to compensate the Company as provided in the SPA, after the date that is 18 months after the Acquisition Date. No liabilities have been recorded related to the Escrow Amount. Further, $8.5 million of the Cash Consideration (the “Adjustment Holdback Amount”) was held back and retained as security (but not as the sole source of recovery) for any downward adjustments to the purchase price made in accordance with the SPA. The Adjustment Holdback Amount is included in ‘Accounts payable’ in our condensed consolidated balance sheet. Acquisition-related Costs Costs incurred to complete the Acquisition are expensed as incurred and included in ‘Selling, general, and administrative expenses’ in our condensed consolidated statement of operations. During the three months ended March 31, 2022, there were approximately $20.6 million of acquisition-related costs recognized. These costs represent legal, professional, and transaction fees. Unaudited Pro Forma Information The following unaudited pro forma financial information for the three months ended March 31, 2022 and 2021 combines the historical results of Crocs and HEYDUDE, assuming that the companies were combined as of January 1, 2021 and include business combination accounting effects from the Acquisition, including amortization charges from acquired intangible assets, adjustments to the fair value of inventory, interest expense on the financing transactions used to fund the Acquisition, and Acquisition-related transaction costs and tax-related effects. The pro forma information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the Acquisition had taken place on January 1, 2021. Three Months Ended March 31, 2022 2021 (in thousands) Revenues $ 750,477 $ 573,599 Net income 115,092 6,712 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Unless otherwise noted in this report, any description of the “Company,” “Crocs,” “we,” “us,” or “our” includes Crocs, Inc. and our consolidated subsidiaries within our reportable operating segments and corporate operations. We are engaged in the design, development, worldwide marketing, distribution, and sale of casual lifestyle footwear and accessories for women, men, and children. We strive to be the global leader in the sale of molded footwear characterized by functionality, comfort, color, and lightweight design. |
Segment Reporting | Our reportable operating segments include: (i) North America for the Crocs Brand, operating throughout the United States and Canada; (ii) Asia Pacific for the Crocs Brand, operating throughout Asia, Australia, and New Zealand; (iii) Europe, Middle East, Africa, and Latin America (“EMEALA”) for the Crocs Brand; and (iv) the HEYDUDE Brand. See Note 14 — Operating Segments and Geographic Information for additional information. |
Principles of Consolidation | The accompanying unaudited condensed consolidated interim financial statements include our accounts and those of our wholly-owned subsidiaries, and reflect all adjustments which are necessary for a fair statement of the financial position, results of operations, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Such unaudited condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.These unaudited condensed consolidated interim financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021 (“Annual Report”) and have been prepared on a consistent basis with the accounting policies described in Note 1 of the Notes to the Audited Consolidated Financial Statements included in our Annual Report. |
Reclassifications | Reclassifications We have reclassified certain amounts in Note 14 — Operating Segments and Geographic Information to conform to current period presentation. |
Use of Estimates | Use of Estimates U.S. GAAP requires us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions used to determine certain amounts that affect the financial statements are reasonable, based on information available at the time they are made. Management believes that the estimates, judgments, and assumptions made when accounting for items and matters such as, but not limited to, the allowance for doubtful accounts, customer rebates, sales returns, impairment assessments and charges, recoverability of long-lived assets, deferred tax assets, valuation allowances, uncertain tax positions, income tax expense, share-based compensation expense, the assessment of lower of cost or net realizable value on inventory, useful lives assigned to long-lived assets, depreciation and amortization, and purchase price allocation for the Acquisition, as described in Note 16 — Acquisition of HEYDUDE, are reasonable based on information available at the time they are made. To the extent there are differences between these estimates and actual results, our condensed consolidated financial statements may be materially affected. |
New Accounting Pronouncement Adopted | New Accounting Pronouncement Adopted Business Combinations In October 2021, the FASB issued new guidance primarily related to the accounting for contract assets and liabilities from contracts with customers in a business combination. The standard will be effective for annual reporting periods beginning after December 31, 2022, including interim reporting periods within those periods, with early adoption permitted. On January 1, 2022, we early adopted this guidance on a prospective basis. The adoption did not have a material effect on our consolidated financial statements. New Accounting Pronouncement Not Yet Adopted New pronouncements issued but not effective until after March 31, 2022 are not expected to have a material impact on our condensed consolidated financial statements. |
Fair Value of Non-Financial Assets and Liabilities | Non-Financial Assets and Liabilities Our non-financial assets, which primarily consist of property and equipment, right-of-use assets, goodwill, and other intangible assets, are not required to be carried at fair value on a recurring basis and are reported at carrying value. The fair values of these assets are determined, as required, based on Level 3 measurements, including estimates of the amount and timing of future cash flows based upon historical experience, expected market conditions, and management’s plans. |
Derivatives Financial Instruments | Our derivative instruments are recorded at fair value as a derivative asset or liability in the condensed consolidated balance sheets. We report derivative instruments with the same counterparty on a net basis when a master netting arrangement is in place. Changes in fair value are recognized within ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of operations. For the condensed consolidated statements of cash flows, we classify cash flows from derivative instruments at settlement in the same category as the cash flows from the related hedged items within ‘Cash provided by (used in) operating activities.’ |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Amounts reported in ‘Accrued expenses and other liabilities’ in the condensed consolidated balance sheets were: March 31, 2022 December 31, 2021 (in thousands) Accrued compensation and benefits $ 41,487 $ 62,945 Professional services 30,412 33,997 Fulfillment, freight, and duties 43,780 15,629 Sales/use and value added taxes payable 19,772 13,049 Return liabilities 11,380 10,342 Accrued rent and occupancy 5,622 7,431 Royalties payable and deferred revenue 8,434 7,425 Accrued legal fees 7,249 5,872 Other 17,833 10,197 Total accrued expenses and other liabilities $ 185,969 $ 166,887 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Rights-of-Use Assets and Operating Lease Liabilities | Amounts reported in the condensed consolidated balance sheets were: March 31, 2022 December 31, 2021 (in thousands) Assets: Right-of-use assets $ 199,805 $ 160,768 Liabilities: Current operating lease liabilities $ 49,414 $ 42,932 Long-term operating lease liabilities 181,065 149,237 Total operating lease liabilities $ 230,479 $ 192,169 |
Schedule of Lease Costs and Other Information | Lease-related costs reported within ‘Cost of sales’ and ‘Selling, general and administrative expenses’ in our condensed consolidated statements of operations were: Three Months Ended March 31, 2022 2021 (in thousands) Operating lease cost $ 14,231 $ 14,832 Short-term lease cost 2,632 1,441 Variable lease cost 4,552 3,648 Total lease costs $ 21,415 $ 19,921 Other information related to leases, including supplemental cash flow information, consists of: Three Months Ended March 31, 2022 2021 (in thousands) Cash paid for operating leases $ 14,500 $ 15,426 Right-of-use assets obtained in exchange for operating lease liabilities 13,888 35,552 |
Schedule of Maturities of Operating Lease Liabilities | The maturities of our operating lease liabilities were: As of March 31, 2022 (in thousands) 2022 (remainder of year) $ 38,637 2023 50,403 2024 33,252 2025 22,820 2026 20,504 Thereafter 97,909 Total future minimum lease payments 263,525 Less: imputed interest (33,046) Total operating lease liabilities $ 230,479 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of the Company's Outstanding Borrowings | The carrying and fair values of our revolving credit facilities approximate their carrying values at March 31, 2022 and December 31, 2021 based on interest rates currently available to us for similar borrowings. The carrying value and fair value of our borrowing instruments as of March 31, 2022 and December 31, 2021 were: March 31, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Term Loan B Facility $ 2,000,000 $ 1,955,000 $ — $ — 2029 Notes 350,000 311,281 350,000 346,281 2031 Notes 350,000 296,625 350,000 341,250 Revolving credit facilities 235,000 235,000 85,000 85,000 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Derivative Assets and Liabilities | The fair values of derivative assets and liabilities, net, all of which are classified as Level 2, reported within either ‘Accrued expenses and other liabilities’ or ‘Prepaid expenses and other assets’ in the condensed consolidated balance sheets, were: March 31, 2022 December 31, 2021 Derivative Assets Derivative Liabilities Derivative Assets Derivative Liabilities (in thousands) Forward foreign currency exchange contracts $ 1,917 $ (569) $ 724 $ (938) Netting of counterparty contracts (569) 569 (724) 724 Foreign currency forward contract derivatives $ 1,348 $ — $ — $ (214) |
Schedule of Derivative Financial Instruments Notional Amounts on Outstanding Positions | The notional amounts of outstanding foreign currency forward exchange contracts presented below report the total U.S. Dollar equivalent position and the net contract fair values for each foreign currency position. March 31, 2022 December 31, 2021 Notional Fair Value Notional Fair Value (in thousands) Euro $ 27,741 $ (211) $ 43,723 $ (296) Singapore Dollar 43,323 (180) 25,795 104 Indian Rupee 17,299 190 21,198 162 Japanese Yen 11,126 436 14,201 (112) British Pound Sterling 10,468 67 12,910 80 South Korean Won 14,359 (18) 10,379 (86) Other currencies 15,122 1,064 19,481 (66) Total $ 139,438 $ 1,348 $ 147,687 $ (214) Latest maturity date April 2022 January 2022 |
Schedule of Gain (Losses) from Foreign Currency Transactions and Derivative Contracts | Amounts reported in ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of operations include both realized and unrealized gains (losses) from foreign currency transactions and derivative contracts and were: Three Months Ended March 31, 2022 2021 (in thousands) Foreign currency transaction losses $ (917) $ (851) Foreign currency forward exchange contracts gains 1,397 347 Foreign currency gains (losses), net $ 480 $ (504) |
BORROWINGS (Tables)
BORROWINGS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Other Term Borrowings | Our long-term borrowings were as follows: Maturity Stated Interest Rate Effective Interest Rate March 31, 2022 December 31, 2021 (in thousands) Notes issuance of $350.0 million 2029 4.250 % 4.64 % $ 350,000 $ 350,000 Notes issuance of $350.0 million 2031 4.125 % 4.35 % 350,000 350,000 Term Loan B Facility 2029 2,000,000 — Revolving credit facilities 235,000 85,000 Total face value of long-term borrowings 2,935,000 785,000 Less: Unamortized issuance costs 63,744 13,610 Current portion of long-term borrowings (1) 20,000 — Total long-term borrowings $ 2,851,256 $ 771,390 (1) Represents the current portion of the borrowing on the Term Loan B facility. |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenues Disaggregated by Region and by Channel | Revenues by channel and brand were: Three Months Ended March 31, 2022 Crocs Brand HEYDUDE Brand Total (in thousands) Channel: Wholesale $ 344,258 $ 86,919 $ 431,177 Direct-to-consumer (1) 200,967 28,004 228,971 Total revenues $ 545,225 $ 114,923 $ 660,148 Three Months Ended March 31, 2021 Crocs Brand HEYDUDE Brand Total (in thousands) Channel: Wholesale $ 290,039 $ — $ 290,039 Direct-to-consumer (1) 170,059 — 170,059 Total revenues $ 460,098 $ — $ 460,098 (1) Direct-to-consumer revenues consist of sales generated through our company-operated retail stores, company-operated e-commerce websites, and third-party e-commerce marketplaces. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense | Share-based compensation expense reported in our condensed consolidated statements of operations was: Three Months Ended March 31, 2022 2021 (in thousands) Cost of sales $ 111 $ 86 Selling, general and administrative expenses 8,164 7,968 Total share-based compensation expense $ 8,275 $ 8,054 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense and Effective Tax Rates | Income tax expense and effective tax rates were: Three Months Ended March 31, 2022 2021 (in thousands, except effective tax rate) Income before income taxes $ 99,060 $ 122,588 Income tax expense 26,300 24,190 Effective tax rate 26.5 % 19.7 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | Basic and diluted earnings per common share (“EPS”) for the three months ended March 31, 2022 and 2021 were: Three Months Ended March 31, 2022 2021 (in thousands, except per share data) Numerator: Net income $ 72,760 $ 98,398 Denominator: Weighted average common shares outstanding - basic 59,823 65,458 Plus: Dilutive effect of stock options and unvested restricted stock units 1,073 1,390 Weighted average common shares outstanding - diluted 60,896 66,848 Net income per common share: Basic $ 1.22 $ 1.50 Diluted $ 1.19 $ 1.47 |
OPERATING SEGMENTS AND GEOGRA_2
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Information Related to Reportable Operating Segments | The following tables set forth information related to reportable operating segments: Three Months Ended March 31, 2022 2021 (in thousands) Revenues: North America (1) $ 319,450 $ 267,267 Asia Pacific 95,847 82,592 EMEALA (1) 129,921 110,201 Brand corporate (2) 7 38 Total Crocs Brand 545,225 460,098 HEYDUDE Brand (3) 114,923 — Total consolidated revenues $ 660,148 $ 460,098 Income from operations: North America (1) $ 129,611 $ 112,693 Asia Pacific 30,106 22,115 EMEALA (1) 34,927 40,019 Brand corporate (2) (30,709) (20,008) Total Crocs Brand 163,935 154,819 HEYDUDE Brand (3) 15,658 — Reconciliation of total segment income from operations to income before income taxes: Enterprise corporate (2) (60,916) (30,133) Income from operations 118,677 124,686 Foreign currency gains (losses), net 480 (504) Interest income 102 27 Interest expense (19,252) (1,632) Other income (expense), net (947) 11 Income before income taxes $ 99,060 $ 122,588 Depreciation and amortization: North America (1) $ 2,220 $ 925 Asia Pacific 523 287 EMEALA (1) 724 184 Brand corporate (2) 186 2,749 Total Crocs Brand 3,653 4,145 HEYDUDE Brand (3) 2,444 — Enterprise corporate (2) 1,798 3,909 Total consolidated depreciation and amortization $ 7,895 $ 8,054 (1) In the first quarter of 2022, certain revenues and expenses associated with our Latin America businesses previously reported in our ‘Americas’ segment were shifted into the ‘EMEA’ segment to better align with how we manage our distributor business. To reflect this change, we renamed our ‘Americas’ segment to ‘North America’ and renamed our ‘EMEA’ segment to ‘EMEALA.’ Additionally, in the second quarter of 2021, certain marketing expenses previously reported within ‘Unallocated corporate and other’ were shifted to the Americas, Asia Pacific, and EMEA segments (see footnote (2) for more information on the current year presentation of costs previously reported in ‘Unallocated corporate and other’). As a result of these changes, the previously reported amounts for revenues, income from operations, and depreciation and amortization for the three months ended March 31, 2021 have been revised to conform to current period presentation. See the ‘Impacts of segment composition change’ and ‘Impacts of marketing expense allocations’ tables below for more information. (2) In the first quarter of 2022, as a result of the Acquisition, all costs previously reported in “Unallocated corporate and other” were recast between ‘Brand corporate’ costs associated with the Crocs Brand and ‘Enterprise corporate’ costs, each of which is defined in the section preceding the above table. As a result of these changes, the previously reported amounts for income from operations and depreciation and amortization for the three months ended March 31, 2021 have been revised to conform to current period presentation. See the ‘Impacts of brand vs. enterprise recast’ table below for more information. (3) We acquired HEYDUDE on February 17, 2022 and added the HEYDUDE brand as a new operating segment. Therefore, the amounts shown above represent results during the period from the Acquisition Date through March 31, 2022, and there are no comparative amounts for the three months ended March 31, 2021. Impacts of segment composition change associated with Latin America: Three Months Ended March 31, 2021 (in thousands) Impact on revenues: Americas (now “North America”) $ (9,142) EMEA (now “EMEALA”) 9,142 Impact on income from operations: Americas (now “North America”) $ (3,374) EMEA (now “EMEALA”) 3,374 Impact on depreciation and amortization: Americas (now “North America”) $ (18) EMEA (now “EMEALA”) 18 Impacts of marketing expense allocations: Three Months Ended March 31, 2021 (in thousands) Impacts on income from operations: Americas (now “North America”) $ (2,277) Asia Pacific (1,178) EMEA (now “EMEALA”) (468) Total impact on segment income from operations $ (3,923) Unallocated corporate and other (now in “Brand corporate”) $ 3,923 Impacts of brand vs. enterprise recast: Three Months Ended March 31, 2021 (in thousands) Impacts on income from operations: Brand corporate $ (20,008) Enterprise corporate (30,133) Unallocated corporate and other 50,141 Impacts on depreciation and amortization: Brand corporate $ 2,749 Enterprise corporate 3,909 Unallocated corporate and other (6,658) |
ACQUISITION OF HEYDUDE (Tables)
ACQUISITION OF HEYDUDE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the Acquisition Date: February 17, 2022 (in thousands) Cash and cash equivalents $ 6,232 Accounts receivable, net 69,031 Inventories 171,270 Prepaid expenses and other assets 2,977 Intangible assets 1,870,000 Goodwill 640,497 Right-of-use assets 2,844 Accounts payable (28,388) Accrued expenses and other liabilities (39,618) Income taxes payable (32,947) Long-term deferred tax liability (329,778) Long-term income taxes payable (12,384) Operating lease liabilities (2,843) Net assets acquired $ 2,316,893 |
Schedule of Intangible Assets Acquired in Connection with the Acquisition | The components of intangible assets acquired in connection with the Acquisition were as follows: Weighted-Average Useful Life Amortization Method Estimated Fair Value (in thousands) Customer relationships 15 Straight-line $ 300,000 Trademark Indefinite — 1,570,000 Total intangible assets $ 1,870,000 |
Schedule of Pro Forma Information | The pro forma information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the Acquisition had taken place on January 1, 2021. Three Months Ended March 31, 2022 2021 (in thousands) Revenues $ 750,477 $ 573,599 Net income 115,092 6,712 |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Feb. 17, 2022 |
HEYDUDE | |
Business Acquisition [Line Items] | |
Percentage of voting interests acquired | 100.00% |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES - Schedule Of Accrued Expenses & Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued compensation and benefits | $ 41,487 | $ 62,945 |
Professional services | 30,412 | 33,997 |
Fulfillment, freight, and duties | 43,780 | 15,629 |
Sales/use and value added taxes payable | 19,772 | 13,049 |
Return liabilities | 11,380 | 10,342 |
Accrued rent and occupancy | 5,622 | 7,431 |
Royalties payable and deferred revenue | 8,434 | 7,425 |
Accrued legal fees | 7,249 | 5,872 |
Other | 17,833 | 10,197 |
Total accrued expenses and other liabilities | $ 185,969 | $ 166,887 |
LEASES - Right-of-Use Assets an
LEASES - Right-of-Use Assets and Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Right-of-use assets | $ 199,805 | $ 160,768 |
Liabilities: | ||
Current operating lease liabilities | 49,414 | 42,932 |
Long-term operating lease liabilities | 181,065 | 149,237 |
Total operating lease liabilities | $ 230,479 | $ 192,169 |
LEASES - Lease Costs and Other
LEASES - Lease Costs and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Operating lease cost | $ 14,231 | $ 14,832 |
Short-term lease cost | 2,632 | 1,441 |
Variable lease cost | 4,552 | 3,648 |
Total lease costs | 21,415 | 19,921 |
Cash paid for operating leases | 14,500 | 15,426 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 13,888 | $ 35,552 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Mar. 31, 2021 |
Lessee, Lease, Description [Line Items] | ||
Weighted average remaining lease term | 7 years 2 months 12 days | 7 years |
Weighted average discount rate (percent) | 3.60% | 4.20% |
COLORADO | ||
Lessee, Lease, Description [Line Items] | ||
Expected payments on leases not yet commenced | $ 44 |
LEASES - Maturities of Company'
LEASES - Maturities of Company's Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2022 (remainder of year) | $ 38,637 | |
2023 | 50,403 | |
2024 | 33,252 | |
2025 | 22,820 | |
2026 | 20,504 | |
Thereafter | 97,909 | |
Total future minimum lease payments | 263,525 | |
Less: imputed interest | (33,046) | |
Total operating lease liabilities | $ 230,479 | $ 192,169 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Assets and Liabilities at Fair Value (Details) - USD ($) | Mar. 31, 2022 | Feb. 17, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Line of Credit | Term Loan B Facility | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Principal credit amount | $ 5,000,000 | $ 2,000,000,000 | $ 2,000,000,000 | |
Carrying Value | Line of Credit | Term Loan B Facility | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Outstanding borrowings | 2,000,000,000 | $ 0 | ||
Carrying Value | Line of Credit | Revolving credit facilities | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Outstanding borrowings | 235,000,000 | 85,000,000 | ||
Carrying Value | 2029 Notes | Senior Notes | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Outstanding borrowings | 350,000,000 | 350,000,000 | ||
Carrying Value | 2031 Notes | Senior Notes | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Outstanding borrowings | 350,000,000 | 350,000,000 | ||
Fair Value | Line of Credit | Term Loan B Facility | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Outstanding borrowings | 1,955,000,000 | 0 | ||
Fair Value | Line of Credit | Revolving credit facilities | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Outstanding borrowings | 235,000,000 | 85,000,000 | ||
Fair Value | 2029 Notes | Senior Notes | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Outstanding borrowings | 296,625,000 | 341,250,000 | ||
Fair Value | 2031 Notes | Senior Notes | ||||
Fair Value and Carrying Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Outstanding borrowings | $ 311,281,000 | $ 346,281,000 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Fair Value of Derivative Assets and Liabilities (Details) - Level 2 - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Foreign Currency Derivatives | ||
Derivative asset, gross forward foreign currency exchange contracts | $ 1,917 | $ 724 |
Derivative asset, netting of counterparty contracts | (569) | (724) |
Derivative asset, net foreign currency forward contract derivatives | 1,348 | 0 |
Derivative liability, gross forward foreign currency exchange contracts | (569) | (938) |
Derivative liability, netting of counterparty contracts | 569 | 724 |
Derivative liability, net foreign currency forward contract derivatives | $ 0 | $ (214) |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Summary of Derivative Financial Instruments Notional Amounts on Outstanding Positions (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Derivatives - Fair Value [Line Items] | ||
Notional | $ 139,438 | $ 147,687 |
Fair Value | 1,348 | (214) |
Euro | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 27,741 | 43,723 |
Fair Value | (211) | (296) |
Singapore Dollar | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 43,323 | 25,795 |
Fair Value | (180) | 104 |
Indian Rupee | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 17,299 | 21,198 |
Fair Value | 190 | 162 |
Japanese Yen | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 11,126 | 14,201 |
Fair Value | 436 | (112) |
British Pound Sterling | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 10,468 | 12,910 |
Fair Value | 67 | 80 |
South Korean Won | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 14,359 | 10,379 |
Fair Value | (18) | (86) |
Other currencies | ||
Derivatives - Fair Value [Line Items] | ||
Notional | 15,122 | 19,481 |
Fair Value | $ 1,064 | $ (66) |
DERIVATIVE FINANCIAL INSTRUME_5
DERIVATIVE FINANCIAL INSTRUMENTS - Gains / Losses on Foreign Currency Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Foreign currency transaction losses | $ (917) | $ (851) |
Foreign currency forward exchange contracts gains | 1,397 | 347 |
Foreign currency gains (losses), net | $ 480 | $ (504) |
BORROWINGS - Schedule of the Co
BORROWINGS - Schedule of the Company's Borrowings (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2021 | Mar. 31, 2021 |
Debt Instrument [Line Items] | ||||
Total face value of long-term borrowings | $ 2,935,000,000 | $ 785,000,000 | ||
Unamortized issuance costs | 63,744,000 | 13,610,000 | ||
Current borrowings | 25,173,000 | 0 | ||
Total long-term borrowings | 2,851,256,000 | 771,390,000 | ||
Senior Notes | 2029 Notes | ||||
Debt Instrument [Line Items] | ||||
Note issuance cost | $ 350,000,000 | $ 350,000,000 | ||
Stated Interest Rate | 4.25% | 4.25% | ||
Effective Interest Rate | 4.64% | |||
Total face value of long-term borrowings | $ 350,000,000 | 350,000,000 | ||
Senior Notes | 2031 Notes | ||||
Debt Instrument [Line Items] | ||||
Note issuance cost | $ 350,000,000 | $ 350,000,000 | ||
Stated Interest Rate | 4.125% | 4.125% | ||
Effective Interest Rate | 4.35% | |||
Total face value of long-term borrowings | $ 350,000,000 | 350,000,000 | ||
Line of Credit | Term Loan B Facility | ||||
Debt Instrument [Line Items] | ||||
Total face value of long-term borrowings | 2,000,000,000 | 0 | ||
Current borrowings | 20,000,000 | 0 | ||
Line of Credit | Revolving credit facilities | ||||
Debt Instrument [Line Items] | ||||
Total face value of long-term borrowings | $ 235,000,000 | $ 85,000,000 |
BORROWINGS - Narrative (Details
BORROWINGS - Narrative (Details) ¥ in Millions | Feb. 17, 2022USD ($) | Jul. 31, 2019USD ($) | Mar. 31, 2022USD ($)facility | Dec. 31, 2021USD ($) | Mar. 31, 2022CNY (¥) | Mar. 31, 2021USD ($) |
Revolving Credit Facilities and Bank Borrowings | ||||||
Number of credit facility | facility | 2 | |||||
Revolving credit facilities | Senior Revolving Credit Facility | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Borrowing capacity | $ 600,000,000 | |||||
Additional borrowing under credit agreement | $ 400,000,000 | |||||
Minimum interest coverage ratio | 3 | |||||
Minimum borrowing availability for certain acquisitions | $ 40,000,000 | |||||
Commitments available under credit facility | $ 600,000,000 | |||||
Borrowings outstanding | 235,000,000 | |||||
Outstanding letters of credit | 300,000 | |||||
Available borrowing capacity | 364,700,000 | $ 414,700,000 | ||||
Revolving credit facilities | Senior Revolving Credit Facility | From Quarter Ended March 31, 2022 to Quarter Ended December 31, 2023 | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Maximum leverage coverage ratio | 4 | |||||
Revolving credit facilities | Senior Revolving Credit Facility | From Quarter Ended March 31, 2024 | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Maximum leverage coverage ratio | 3.75 | |||||
Revolving credit facilities | Senior Revolving Credit Facility | From Quarter Ended June 30, 2024 | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Maximum leverage coverage ratio | 3.50 | |||||
Revolving credit facilities | Senior Revolving Credit Facility | From Quarter Ended September 30, 2024 | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Maximum leverage coverage ratio | 3.25 | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Federal Funds Open Rate | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 0.25% | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 1.00% | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | Minimum | Debt Instrument, Redemption, Period One | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 1.35% | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | Minimum | Debt Instrument, Redemption, Period Two | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 1.40% | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | Maximum | Debt Instrument, Redemption, Period One | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 1.975% | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | Maximum | Debt Instrument, Redemption, Period Two | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 2.025% | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Base Rate | Minimum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 0.25% | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Base Rate | Maximum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 0.875% | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Simple Secured Overnight Financing Rate (SOFR) | Minimum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 1.35% | |||||
Revolving credit facilities | Senior Revolving Credit Facility | Simple Secured Overnight Financing Rate (SOFR) | Maximum | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 1.975% | |||||
Revolving credit facilities | CMBC Revolving Credit Facility | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Commitments available under credit facility | 1,600,000 | ¥ 10 | ||||
Borrowings outstanding | 500,000 | |||||
Revolving credit facilities | Citybank Revolving Credit Facility | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Commitments available under credit facility | 10,000,000 | |||||
Borrowings outstanding | 4,700,000 | |||||
Revolving credit facilities | Asia Pacific Revolving Credit Facility | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Borrowings outstanding | 0 | |||||
Borrowings from credit facility | 0 | |||||
Term Loan B Facility | Line of Credit | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Borrowing capacity | $ 2,000,000,000 | 5,000,000 | $ 2,000,000,000 | |||
Available borrowing capacity | 0 | |||||
Term Loan B Facility | Secured Overnight Financing Rate (SOFR) | Line of Credit | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 3.50% | |||||
Term Loan B Facility | Base Rate | Line of Credit | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Margin on variable rate (percent) | 2.50% | |||||
Accounts Payable | ||||||
Revolving Credit Facilities and Bank Borrowings | ||||||
Accrued interest | $ 13,000,000 | $ 10,400,000 |
BORROWINGS - Senior Notes Issua
BORROWINGS - Senior Notes Issuance (Details) - Senior Notes - USD ($) | 1 Months Ended | ||
Aug. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2022 | |
2029 Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 350,000,000 | $ 350,000,000 | |
Stated Interest Rate | 4.25% | 4.25% | |
2029 Notes | Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage | 100.00% | ||
2029 Notes | Debt Instrument, Redemption, Period Two | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage | 100.00% | ||
2029 Notes | Debt Instrument, Redemption, Period Three | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage | 104.25% | ||
Percentage of principal amount redeemable | 40.00% | ||
2031 Notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 350,000,000 | $ 350,000,000 | |
Stated Interest Rate | 4.125% | 4.125% | |
Guarantor | $ 25,000,000 | ||
2031 Notes | Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage | 100.00% | ||
2031 Notes | Debt Instrument, Redemption, Period Two | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage | 100.00% | ||
2031 Notes | Debt Instrument, Redemption, Period Three | |||
Debt Instrument [Line Items] | |||
Redemption price, percentage | 104.125% | ||
Percentage of principal amount redeemable | 40.00% |
COMMON STOCK REPURCHASE PROGR_2
COMMON STOCK REPURCHASE PROGRAM (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Class of Stock [Line Items] | |||
Number of shares in accelerated share repurchase | 500,000 | ||
Common Stock | |||
Class of Stock [Line Items] | |||
Stock repurchased during period (in shares) | 0 | 1,100,000 | |
Stock repurchased during period | $ 50 | ||
Remaining authorization to repurchase common stock | $ 1,050 |
REVENUES - Disaggregated Revenu
REVENUES - Disaggregated Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 660,148 | $ 460,098 |
Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 431,177 | 290,039 |
Directly-to-consumer | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 228,971 | 170,059 |
Crocs Brand | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 545,225 | 460,098 |
Crocs Brand | Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 344,258 | 290,039 |
Crocs Brand | Directly-to-consumer | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 200,967 | 170,059 |
HEYDUDE Brand | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 114,923 | 0 |
HEYDUDE Brand | Wholesale | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 86,919 | 0 |
HEYDUDE Brand | Directly-to-consumer | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 28,004 | $ 0 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 8,275 | $ 8,054 |
Cost of sales | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | 111 | 86 |
Selling, general and administrative expenses | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total share-based compensation expense | $ 8,164 | $ 7,968 |
INCOME TAXES - Summary of Tax E
INCOME TAXES - Summary of Tax Expense and Effective Tax Rates (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 99,060 | $ 122,588 |
Income tax expense | $ 26,300 | $ 24,190 |
Effective tax rate | 26.50% | 19.70% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Unrecognized tax benefits | $ 212.1 | $ 218.4 |
EARNINGS PER SHARE - Summary of
EARNINGS PER SHARE - Summary of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income | $ 72,760 | $ 98,398 |
Denominator: | ||
Weighted average common shares outstanding - basic (in shares) | 59,823 | 65,458 |
Plus: dilutive effect of stock options and unvested restricted stock units (in shares) | 1,073 | 1,390 |
Weighted average common shares outstanding - diluted (in shares) | 60,896 | 66,848 |
Net income per common share: | ||
Basic (in dollars per share) | $ 1.22 | $ 1.50 |
Diluted (in dollars per share) | $ 1.19 | $ 1.47 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) $ in Millions | Mar. 31, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase commitments with third party manufacturers | $ 585.5 |
OPERATING SEGMENTS AND GEOGRA_3
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Narrative (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Crocs, Inc | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 4 |
Crocs Brand | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 3 |
OPERATING SEGMENTS AND GEOGRA_4
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Information Related to Reportable Operating Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | $ 660,148 | $ 460,098 |
Income from operations | 118,677 | 124,686 |
Foreign currency gains (losses), net | 480 | (504) |
Interest income | 102 | 27 |
Interest expense | (19,252) | (1,632) |
Other income (expense), net | (947) | 11 |
Income before income taxes | 99,060 | 122,588 |
Total consolidated depreciation and amortization | 7,895 | 8,054 |
Total Crocs Brand | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 545,225 | 460,098 |
HEYDUDE Brand | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 114,923 | 0 |
Reportable Operating Segments | North America | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 319,450 | 267,267 |
Income from operations | 129,611 | 112,693 |
Total consolidated depreciation and amortization | 2,220 | 925 |
Reportable Operating Segments | Asia Pacific | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 95,847 | 82,592 |
Income from operations | 30,106 | 22,115 |
Total consolidated depreciation and amortization | 523 | 287 |
Reportable Operating Segments | EMEALA | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 129,921 | 110,201 |
Income from operations | 34,927 | 40,019 |
Total consolidated depreciation and amortization | 724 | 184 |
Reportable Operating Segments | Total Crocs Brand | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 545,225 | 460,098 |
Income from operations | 163,935 | 154,819 |
Total consolidated depreciation and amortization | 3,653 | 4,145 |
Reportable Operating Segments | HEYDUDE Brand | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 114,923 | 0 |
Income from operations | 15,658 | 0 |
Total consolidated depreciation and amortization | 2,444 | 0 |
Brand corporate | Brand corporate | ||
Segment Reporting Information [Line Items] | ||
Total consolidated revenues | 7 | 38 |
Income from operations | (30,709) | (20,008) |
Total consolidated depreciation and amortization | 186 | 2,749 |
Enterprise corporate | ||
Segment Reporting Information [Line Items] | ||
Income from operations | (60,916) | (30,133) |
Total consolidated depreciation and amortization | $ 1,798 | $ 3,909 |
OPERATING SEGMENTS AND GEOGRA_5
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Impact of Segment Composition associated with Latin America (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 660,148 | $ 460,098 |
Depreciation and amortization | 7,895 | 8,054 |
Marketing Expense | ||
Segment Reporting Information [Line Items] | ||
Impact on income from operations: | (3,923) | |
Rebranding And Recast | ||
Segment Reporting Information [Line Items] | ||
Impact on income from operations: | 50,141 | |
Depreciation and amortization | 6,658 | |
Reportable Operating Segments | North America | ||
Segment Reporting Information [Line Items] | ||
Revenues | 319,450 | 267,267 |
Depreciation and amortization | 2,220 | 925 |
Reportable Operating Segments | North America | Other Businesses Expense | ||
Segment Reporting Information [Line Items] | ||
Revenues | (9,142) | |
Impact on income from operations: | (3,374) | |
Depreciation and amortization | (18) | |
Reportable Operating Segments | North America | Marketing Expense | ||
Segment Reporting Information [Line Items] | ||
Impact on income from operations: | (2,277) | |
Reportable Operating Segments | Asia Pacific | ||
Segment Reporting Information [Line Items] | ||
Revenues | 95,847 | 82,592 |
Depreciation and amortization | 523 | 287 |
Reportable Operating Segments | Asia Pacific | Marketing Expense | ||
Segment Reporting Information [Line Items] | ||
Impact on income from operations: | (1,178) | |
Reportable Operating Segments | EMEALA | ||
Segment Reporting Information [Line Items] | ||
Revenues | 129,921 | 110,201 |
Depreciation and amortization | 724 | 184 |
Reportable Operating Segments | EMEALA | Other Businesses Expense | ||
Segment Reporting Information [Line Items] | ||
Revenues | 9,142 | |
Impact on income from operations: | 3,374 | |
Depreciation and amortization | 18 | |
Reportable Operating Segments | EMEALA | Marketing Expense | ||
Segment Reporting Information [Line Items] | ||
Impact on income from operations: | (468) | |
Brand corporate | Marketing Expense | ||
Segment Reporting Information [Line Items] | ||
Impact on income from operations: | 3,923 | |
Brand corporate | Rebranding And Recast | ||
Segment Reporting Information [Line Items] | ||
Impact on income from operations: | (20,008) | |
Depreciation and amortization | 2,749 | |
Enterprise corporate | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization | $ 1,798 | 3,909 |
Enterprise corporate | Rebranding And Recast | ||
Segment Reporting Information [Line Items] | ||
Impact on income from operations: | (30,133) | |
Depreciation and amortization | $ 3,909 |
OPERATING SEGMENTS AND GEOGRA_6
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION - Impacts of brand vs enterprise recast (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Depreciation and amortization | $ 7,895 | $ 8,054 |
Rebranding And Recast | ||
Segment Reporting Information [Line Items] | ||
Impact of Marketing Expense Allocations | 50,141 | |
Depreciation and amortization | 6,658 | |
Unallocated corporate and other | Rebranding And Recast | ||
Segment Reporting Information [Line Items] | ||
Impact of Marketing Expense Allocations | (20,008) | |
Depreciation and amortization | 2,749 | |
Unallocated corporate and other | Brand corporate | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization | 186 | 2,749 |
Enterprise corporate | ||
Segment Reporting Information [Line Items] | ||
Depreciation and amortization | $ 1,798 | 3,909 |
Enterprise corporate | Rebranding And Recast | ||
Segment Reporting Information [Line Items] | ||
Impact of Marketing Expense Allocations | (30,133) | |
Depreciation and amortization | $ 3,909 |
LEGAL PROCEEDINGS (Details)
LEGAL PROCEEDINGS (Details) $ in Millions | Mar. 31, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingency, accrual | $ 0.8 |
ACQUISITION OF HEYDUDE - Narrat
ACQUISITION OF HEYDUDE - Narrative (Details) - USD ($) | Feb. 17, 2022 | Mar. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 642,467,000 | $ 642,467,000 | $ 1,600,000 | ||
Escrow Amount | |||||
Business Acquisition [Line Items] | |||||
Escrow deposit | $ 125,000,000 | ||||
Adjustment Holdback Amount | |||||
Business Acquisition [Line Items] | |||||
Escrow deposit | 8,500,000 | ||||
Term Loan B Facility | Line of Credit | |||||
Business Acquisition [Line Items] | |||||
Borrowing capacity | $ 2,000,000,000 | 5,000,000 | 5,000,000 | $ 2,000,000,000 | |
HEYDUDE | |||||
Business Acquisition [Line Items] | |||||
Percentage of voting interests acquired | 100.00% | ||||
Consideration transferred | $ 2,300,000,000 | ||||
Cash consideration | $ 2,050,000,000 | ||||
Equity consideration shares, percentage | 50.00% | ||||
Revenue of acquiree since acquisition date, actual | 114,900,000 | ||||
Income from acquiree | 15,700,000 | ||||
Goodwill | $ 640,497,000 | ||||
Acquisition-related costs | 20,600,000 | ||||
Deferred tax liability related to intangible assets | $ 331,000,000 | $ 331,000,000 | |||
HEYDUDE | Term Loan B Facility | Line of Credit | |||||
Business Acquisition [Line Items] | |||||
Borrowing capacity | 2,000,000,000 | ||||
HEYDUDE | Revolving credit facilities | Line of Credit | |||||
Business Acquisition [Line Items] | |||||
Borrowing capacity | $ 50,000,000 | ||||
HEYDUDE | Common Stock | |||||
Business Acquisition [Line Items] | |||||
Equity interest issued (in shares) | 2,852,280 |
ACQUISITION OF HEYDUDE - Schedu
ACQUISITION OF HEYDUDE - Schedule of Asset Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Feb. 17, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 642,467 | $ 1,600 | |
HEYDUDE | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 6,232 | ||
Accounts receivable, net | 69,031 | ||
Inventories | 171,270 | ||
Prepaid expenses and other assets | 2,977 | ||
Intangible assets | 1,870,000 | ||
Goodwill | 640,497 | ||
Right-of-use assets | 2,844 | ||
Accounts payable | (28,388) | ||
Accrued expenses and other liabilities | (39,618) | ||
Income taxes payable | (32,947) | ||
Long-term deferred tax liability | (329,778) | ||
Long-term income taxes payable | (12,384) | ||
Operating lease liabilities | (2,843) | ||
Net assets acquired | $ 2,316,893 |
ACQUISITION OF HEYDUDE - Sche_2
ACQUISITION OF HEYDUDE - Schedule of Intangible Assets (Details) - HEYDUDE $ in Thousands | Feb. 17, 2022USD ($) |
Business Acquisition [Line Items] | |
Total intangible assets | $ 1,870,000 |
Trademark | |
Business Acquisition [Line Items] | |
Indefinite-lived intangible assets acquired | $ 1,570,000 |
Customer relationships | |
Business Acquisition [Line Items] | |
Weighted-Average Useful Life | 15 years |
Finite-lived intangible assets acquired | $ 300,000 |
ACQUISITION OF HEYDUDE - Profor
ACQUISITION OF HEYDUDE - Proforma Information (Details) - HEYDUDE - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Business Acquisition [Line Items] | ||
Revenues | $ 750,477 | $ 573,599 |
Net income | $ 115,092 | $ 6,712 |