May Crocs Shoes Be Extinct Soon?

[The Instructor]

Crocs auditor raises a red flag
Posted Mar 19th 2009 7:00AM by Zac Bissonnette

Not so long ago, Crocs Inc. (NASDAQ: CROX) was riding high as its rubberized clog-like sandal shoes were the hottest thing in retail.

Now the fad has died, sales have fallen through the floor, the economy has tanked and worst of all, the company's auditors have "expressed substantial doubt" about the "company's ability to continue as a going concern." Here's the full-text from the company's newly filed 10-K:

The accompanying consolidated financial statements for the year ended December 31, 2008 were prepared under the assumption that we will continue to operate as a going concern. The report of our registered independent public accounting firm on our consolidated financial statements for the year ended December 31, 2008 includes an explanatory paragraph concerning conditions that raise substantial doubt about our ability to continue as a going concern. We incurred losses of $185.1 million in the year ended December 31, 2008 and experienced a decline in revenues from $847.4 million for the year ended December 31, 2007 to $721.6 million for the year ended December 31, 2008. Continued operations are dependent on our ability to secure adequate financing and maintain a reasonable level of liquidity such that we can timely pay our obligations when due. As of December 31, 2008, we had $22.4 million in borrowings under our loan agreement with the Union Bank of California, N.A. ("Revolving Credit Facility"), which currently has a maturity date of April 2, 2009, and we had $51.6 million in cash and cash equivalents.

The stock tanked on the news yesterday and it's hard to see Crocs' operating results rebounding anytime soon. But here's the thing: Even after the huge loss, Crocs has a book value of $287 million. The current assets are $279 million with total liabilities of $169 million, giving the company a net current asset value of $110 million. The market cap is just $95 million -- and you also get the company's brand and property, plant and equipment.

The issue for Crocs is liquidity in a tight debt market, not solvency. Given that, Crocs appears to be a very strong acquisition target for a strategic buyer who could cut overhead dramatically. But with the company bleeding cash, there is a certain urgency to getting a deal done. The company's board of directors needs to act quickly to find a bigger, better-financed white knight and preserve what's left of Crocs' shareholder value.

The company's days as a hot growth stock that was destined to be the next blue chip are over, but there may be some upside here, if the company will do the right thing. The auditor's "going concern" notice may be just what's needed.

http://www.bloggingstocks.com/2009/03/1 ... -red-flag/

[The Instructor]

I hope not!

They have been the best thing for my heel spur.

I tried three different orthopedic inserts and none of them worked.

I wore Crocs and by the third day, the heel spur pain was gone!

I love my Crocs!!

[orange-n-brown 365]

wow my daughter works in a pair they are great for working in restaurants and her golf shoes are crocs also! she loves them.. I cannot wear them I must be allergic to the material it burns my feet...I'd love to be able to wear them they are so comfy!!

[The Instructor]

Wear socks with them.

I do and I don't care what anyone thinks about it either!

[The Instructor]

http://www.crocs.com/products/deal/

[orange-n-brown 365]

I tried that also.. and it still burned.. remember the jelly shoes?? they did the same thing.. thanks for the suggestion though

[The Instructor]

I can't wear leather shoes that touch my skin such as sandals.

I bought a leather sofa and couldn't sit on it.

I bought a car with leather seats and had to put a towel down so my legs didn't break out.

I have to do the same thing with my leather desk chair.

I wanted to buy a leather chair and ottoman from my brother but they broke me out too.

I just can't believe that leather does this to me but it sure does.

So, the Crocs work great for me in the summer. I am surprised they don't break me out too.

[Orange and Brown]

My son loves his crocs. He wears them until they are smooth on bottem and the strap breaks. He has been through 4 or 5 pairs.

[abuck76]

Gotta have my crocs..........

[Irontonian]

Just bought DD some today, buying me a pair too. I have never tried them but I heard they are great. They have the NCAA crocs for sale on the website (www.crocs.com).

[The Instructor]

If you sign up for their e-mail list, you can get coupons and such.

[Irontonian]

If you sign up for their e-mail list, you can get coupons and such.

Thanks instructor,
Going to do that right now!!!

[godsgeneral]

I can proudly say that I have never worn a pair of Crocs. I can also say with much confidence that I never will.

[The Instructor]

If you have a heel spur, you would wear Crocs.

They were the only thing that stopped the pain.

It was terrible. The doctor wanted to do surgery to remove it.

I had worn three different shoe inserts and none of them worked.

I never dreamed wearing Crocs would stop the pain. I just started wearing them for comfort in the summer since I can't wear sandals made of leather.

If the heel spur starts hurting, I put on Crocs and it feels better within a few hours.

[godsgeneral]

Maybe you're right.

I believe Crocs are another fading fashion, like stonewashed jeans or bellbottom pants. They will be a "Retro" fashion in the future.