Crocs, Inc 8-K/A, filed May 5, 2022

Crocs, Inc. (CROX)

8-K/A 2022-05-05 For: 2022-02-17

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Added on April 07, 2026

About this 8-K/A

Crocs, Inc filed this 8-K/A on May 5, 2022, reporting on events of February 17, 2022.

Items reported

Item 9.01: Financial statements and exhibits

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Exhibit No.						Description
23.1						Consent of Ernst and Young.

23.2						Consent of Deloitte & Touche LLP.

99.1						Audited combined financial statements for Full Fortune Intellectual Limited, Full Fortune Worldwide Limited, and Full Fortune Online Limited as of and for the year ended March 31, 2021.

99.2						Audited combined financial statements for Happy One LLC and Lucky Top Inc. as of and for the twelve months ended December 31, 2021.

99.3						Unaudited interim combined financial statements for Full Fortune Intellectual Limited, Full Fortune Worldwide Limited, and Full Fortune Online Limited as of and for the nine months ended December 31, 2021.

99.4						Unaudited pro forma condensed combined financial statements and related notes as of and for the year ended December 31, 2021.

104						Cover Page Interactive Data File (embedded within the Inline XBRL document).


	CROCS, INC.

Date: May 5, 2022	By:	/s/ Daniel P. Hart
		Daniel P. Hart
		Executive Vice President, Chief Legal and Risk Officer


			Pages

REPORT OF INDEPENDENT AUDITORS			1

AUDITED COMBINED FINANCIAL STATEMENTS
Combined balance sheet			2
Combined statement of comprehensive income			3
Combined statement of changes in stockholders' equity			4
Combined statement of cash flows			5
Notes to combined financial statements			6 - 15


	Notes	As of March 31, 2021
		US$
ASSETS
Current assets:
Cash and cash equivalents		37,563,915
Accounts receivable		18,230,198
Prepaid expenses and other assets		1,693,677
Total current assets		57,487,790
Non-current assets:
Intangible assets	3	3,026,426
Total non-current assets		3,026,426

Total assets		60,514,216

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		1,444,733
Accrued expenses and other liabilities		1,509,365
Amount due to a related party	4	2,057
Income tax payable		9,399,477
Total current liabilities		12,355,632
Commitments and contingencies	7
Non-current liabilities:
Deferred tax liabilities	6	99,872
Total non-current liabilities		99,872

Total liabilities		12,455,504
Stockholders’ equity:
Common stock		3,840
Retained earnings		48,054,872
Total stockholders’ equity		48,058,712

Total liabilities and stockholders’ equity		60,514,216


	Notes	For the year ended March 31, 2021
		US$

Revenues		150,322,925
Cost of sales		(91,311,870)
Gross profit		59,011,055
Selling and administrative expenses		(1,932,240)
Other income, net	5	495,406
Income before income taxes		57,574,221
Income taxes	6	(9,499,349)
Net income and total comprehensive income		48,074,872



	Note	Common stock	Retained earnings	Total stockholders’ equity
		US$	US$	US$

Balance as of April 1, 2020		2,560	—	2,560
Issuance of ordinary shares		1,280	—	1,280
Net income		—	48,074,872	48,074,872
Dividends	4	—	(20,000)	(20,000)
Balance as of March 31, 2021		3,840	48,054,872	48,058,712


	Notes	For the year ended March 31, 2021
		US$
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		48,074,872
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income tax expense		99,872

Changes in operating assets and liabilities:
Accounts receivable		(18,230,198)
Prepaid expenses and other assets		(1,693,677)
Accounts payable		1,444,733
Accrued expenses and other liabilities	3	1,009,365
Amount due to a related party	4	2,560
Amount due from a related party	4	2,057
Income tax payable		9,399,477

Net cash provided by operating activities		40,109,061

CASH FLOW FROM INVESTING ACTIVITIES
Addition to intangible assets	3	(2,526,426)
Net cash used in investing activities		(2,526,426)

CASH FLOW FROM FINANCING ACTIVITIES
Issuance of ordinary shares		1,280
Payment of dividends	4	(20,000)
Net cash used in financing activities		(18,720)

NET INCREASE IN CASH AND CASH EQUIVALENTS		37,563,915
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		—
CASH AND CASH EQUIVALENTS AT THE END OF YEAR		37,563,915


						For the year ended March 31, 2021
						US$

Foreign exchange difference, net						468,507
Other gain						26,880
Bank interest income						19
						495,406


						For the year ended March 31, 2021
						US$

Current income tax expense						9,399,477
Deferred income tax expense						99,872
Total income tax expense						9,499,349


						As of March 31, 2021
						US$

Non-current deferred tax liabilities
Intangible assets arising from asset acquisition						99,872
Net deferred tax liabilities						99,872


						US$
Within 1 year						240,671
After 1 year but within 2 years						88,711
						329,382


Financial Statements:
Independent Auditor’s Report			F- 2
Combined Statement of Operations for the Twelve Months Ended December 31, 2021			F- 4

Combined Balance Sheet as of December 31, 2021			F- 5
Statement of Combined Equity for the Twelve Months Ended December 31, 2021			F- 6
Combined Statement of Cash Flows for the Twelve Months Ended December 31, 2021			F- 7
Notes to Combined Financial Statements			F- 8


	Twelve Months Ended December 31,
	2021
Revenues	$	561,895
Cost of sales	330,990
Gross profit	230,905
Selling, general and administrative expenses	81,786

Income from operations	149,119


Interest expense	(1,230)
Other income, net	11
Income before income taxes	147,900
Income tax expense	35,102
Net income	$	112,798


	December 31,
	2021
ASSETS
Current assets:
Cash and cash equivalents	$	64,870

Accounts receivable, net of allowances of $85	65,414
Inventories	97,589

Other receivables	172
Prepaid expenses and other assets	1,199
Income taxes receivable	2,780
Total current assets	232,024
Property and equipment, net	314


Deferred tax assets, net	3,329



Total assets	$	235,667

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	105,388
Accrued expenses and other liabilities	33,840



Total current liabilities	139,228
Long-term income taxes payable	4,922



Total liabilities	144,150
Commitments and contingencies - Note 8
Combined equity:




Retained earnings	91,517


Total liabilities and equity	$	235,667


	Common Stock			Retained Earnings		Total Combined Equity
	Shares	Amount



















Balance at January 1, 2021	1,000	$	—	$	(14,281)	$	(14,281)



Dividends declared	—	—		(7,000)		(7,000)
Net income	—	—		112,798		112,798

Balance at December 31, 2021	1,000	$	—	$	91,517	$	91,517


	December 31,
	2021
	(in thousands)
Office equipment	$	575
Machinery and equipment	248
Leasehold improvements	147
Vehicles	9
Property and equipment	979
Less: Accumulated depreciation and amortization	(665)
Property and equipment, net	$	314


	December 31,
	2021
	(in thousands)
Fulfillment, freight, and duties	$	17,690
Sales and use taxes payable	7,519
Accrued commissions	2,708
Return liabilities	2,689
Deferred revenue	2,080


Other	1,154
Total accrued expenses and other liabilities	$	33,840


	Twelve Months Ended December 31, 2021

	(in thousands)
Channel:
Wholesale	$	280,484
E-commerce	281,411
Total revenues	$	561,895


	Twelve Months Ended December 31,
	2021
	(in thousands)
Income tax expense and rate attributable to:
Federal income tax rate	$	31,058	21.0	%
State income tax rate	1,434		1.0	%
Uncertain tax positions	2,838		1.9	%
Non-deductible / non-taxable items	(229)		(0.2)	%









Effective income tax expense and rate	$	35,101	23.7	%


	Twelve Months Ended December 31,
	2021
Cash flows from operating activities:
Net income	$	112,798
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	629







Deferred taxes	(1,879)

Changes in operating assets and liabilities:
Accounts receivable, net of allowances	(15,724)
Inventories	(47,790)
Prepaid expenses and other assets	(811)
Accounts payable	32,944
Accrued expenses and other liabilities	21,499

Income taxes	(2,462)
Cash provided by operating activities	99,204
Cash flows from investing activities:
Purchases of property and equipment	(436)


Cash used in investing activities	(436)
Cash flows from financing activities:

Proceeds from borrowings	36,050
Repayments of borrowings	(52,050)

Dividends paid	(32,893)



Cash used in financing activities	(48,893)


Net change in cash and cash equivalents	49,875
Cash and cash equivalents — beginning of year	14,995
Cash and cash equivalents — end of year	$	64,870

Cash paid for interest	$	1,230
Cash paid for income taxes	39,464


	Year Ended December 31,
	2021
	(in thousands)
Unrecognized tax benefit as of January 1	$	1,087
Additions in tax positions taken in prior period	—
Reductions in tax positions taken in prior period	—
Additions in tax positions taken in current period	3,147
Settlements	—
Lapse of statute of limitations	—

Unrecognized tax benefit as of December 31	$	4,234




As of December 31,
2022	$	1,504
2023	1,301
2024	38



Total future minimum lease payments	$	2,843


			Pages

REVIEW REPORT OF INDEPENDENT AUDITORS			1

UNAUDITED FINANCIAL INFORMATION
Combined balance sheets			2
Combined statements of comprehensive income			3
Combined statements of changes in stockholders' equity			4
Combined statements of cash flows			5
Notes to combined financial statements			6 - 11


		As of
	Notes	December 31, 2021	March 31, 2021	December 31, 2020
		US$	US$	US$
ASSETS
Current assets:
Cash and cash equivalents		34,440,229	37,563,915	1,901,486
Accounts receivable, net		97,159,015	18,230,198	48,568,330
Inventories		178,249	—	—
Amount due from related parties	4	211	—	—
Prepaid expenses and other assets		4,106,027	1,693,677	51,052
Total current assets		135,883,731	57,487,790	50,520,868
Non-current assets:
Intangible assets		3,107,639	3,026,426	3,011,012
Total non-current assets		3,107,639	3,026,426	3,011,012
Total assets		138,991,370	60,514,216	53,531,880

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		10,247,026	1,444,733	2,618,368
Accrued expenses and other liabilities		4,428,045	1,509,365	3,938,326
Amount due to related parties	4	253,892	2,057	4,142,182
Income tax payable		22,268,067	9,399,477	6,996,778
Total current liabilities		37,197,030	12,355,632	17,695,654
Commitments and contingencies	7
Non-current liabilities:
Deferred tax liabilities	5	202,424	99,872	99,363
Total non-current liabilities		202,424	99,872	99,363
Total liabilities		37,399,454	12,455,504	17,795,017

Stockholders’ equity:
Common stock		3,840	3,840	2,560
Retained earnings		101,588,076	48,054,872	35,734,303
Total stockholders’ equity		101,591,916	48,058,712	35,736,863

Total liabilities and stockholders’ equity		138,991,370	60,514,216	53,531,880


		Nine months ended
	Note	December 31, 2021	December 31, 2020
		US$	US$

Revenues		235,038,239	108,451,122
Cost of sales		(153,046,783)	(64,573,519)
Gross profit		81,991,456	43,877,603
Selling and administrative expenses		(4,157,733)	(1,091,328)
Other income, net		670,623	44,169
Income before income taxes		78,504,346	42,830,444
Income taxes	5	(12,971,142)	(7,096,141)
Net income and total comprehensive income		65,533,204	35,734,303


	Historical Crocs		Historical, as adjusted, HEYDUDE (Note 1)		Debt Financing Adjustments (Note 3)			Transaction Accounting Adjustments (Note 3)			Pro Forma Combined

ASSETS
Current assets:
Cash and cash equivalents	$	213,197	$	99,310	$	2,000,995	A	$	(2,131,076)	A,O	$	182,426
Restricted cash — current	65		—		—			—			65
Accounts receivable, net of allowances	182,629		65,888		—			—			248,517
Inventories	213,520		67,424		—			103,846		C	384,790
Income taxes receivable	22,301		2,780		—			—			25,081
Other receivables	12,252		172		—			—			12,424
Prepaid expenses and other assets	22,605		5,305		—			—			27,910
Total current assets	666,569		240,879		2,000,995			(2,027,230)			881,213
Property and equipment, net	108,398		314		—			(314)		D	108,398
Intangible assets, net	28,802		3,108		—			1,866,892		E	1,898,802
Goodwill	1,600		—		—			703,123		(1)	704,723
Deferred tax assets, net	567,201		3,329		—			—			570,530
Restricted cash	3,663		—		—			—			3,663
Right-of-use assets	160,768		2,844		—			—			163,612
Other assets	8,067		—		—			—			8,067
Total assets	$	1,545,068	$	250,474	$	2,000,995		$	542,471		$	4,339,008

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	162,145	$	18,950	$	—		$	8,500	B	$	189,595
Accrued expenses and other liabilities	166,887		38,522		—			22,126		M	227,535
Income taxes payable	16,279		22,268		—			—			38,547
Current operating lease liabilities	42,932		1,178		—			—			44,110
Total current liabilities	388,243		80,918		—			30,626			499,787
Long-term income taxes payable	219,744		4,922		—			—			224,666
Long-term borrowings	771,390		—		2,000,995		A	—			2,772,385
Long-term operating lease liabilities	149,237		1,666		—			—			150,903
Long-term deferred tax liability	—		202		—			331,018		F	331,220
Other liabilities	2,372		—		—			—			2,372
Total liabilities	1,530,986		87,708		2,000,995			361,644			3,981,333
Stockholders’ equity:
Common stock	106		4		—			(1)		G,H	109
Treasury stock	(1,684,262)		—		—			—			(1,684,262)
Additional paid-in capital	496,036		—		—			365,716		H	861,752
Retained earnings	1,279,040		162,762		—			(184,888)		G,M	1,256,914
Accumulated other comprehensive loss	(76,838)		—		—			—			(76,838)
Total stockholders’ equity	14,082		162,766		—			180,827			357,675
Total liabilities and stockholders’ equity	$	1,545,068	$	250,474	$	2,000,995		$	542,471		$	4,339,008


	Historical Crocs		Historical, as adjusted, HEYDUDE (Note 1)		Debt Financing Adjustments (Note 3)			Transaction Accounting Adjustments (Note 3)			Pro Forma Combined

Revenues	$	2,313,416	$	580,678	$	—		$	—		$	2,894,094
Cost of sales	893,196		268,278		—			103,532		I,J	1,265,006
Gross profit	1,420,220		312,400		—			(103,532)			1,629,088
Selling, general and administrative expenses	737,156		86,784		—			41,811		J,M	865,751
Income from operations	683,064		225,616		—			(145,343)			763,337
Foreign currency losses, net	(140)		—		—			—			(140)
Interest income	775		—		—			—			775
Interest expense	(21,647)		(1,230)		(87,941)		K	—			(110,818)
Other income, net	1,797		1,133		—			—			2,930
Income before income taxes	663,849		225,519		(87,941)			(145,343)			656,084
Income tax (benefit) expense	(61,845)		50,476		(15,567)		L	(25,729)		L	(52,665)
Net income	$	725,694	$	175,043	$	(72,374)		$	(119,614)		$	708,749
Net income per common share:
Basic	$	11.62									$	10.85
Diluted	$	11.39									$	10.65
Weighted average common shares outstanding:
Basic	62,464							2,852		N	65,316
Diluted	63,718							2,852		N	66,570


	Historical US Acquired Companies		Historical HK Acquired Companies		Reclassification Adjustments and Policy Alignment (Note 4)			Intercompany Eliminations (Note 4)			Historical, as adjusted, HEYDUDE

ASSETS
Current assets:
Cash and cash equivalents	$	64,870	$	34,440	$	—		$	—		$	99,310
Restricted cash — current	—		—		—			—			—
Accounts receivable, net of allowances	65,414		97,159		—			(96,685)		CC	65,888
Inventories	97,589		178		—			(30,343)		DD	67,424
Income taxes receivable	2,780		—		—			—			2,780
Other receivables	172		—		—			—			172
Prepaid expenses and other assets	1,199		4,106		—			—			5,305
Total current assets	232,024		135,883		—			(127,028)			240,879
Property and equipment, net	314		—		—			—			314
Intangible assets, net	—		3,108		—			—			3,108
Goodwill	—		—		—			—			—
Deferred tax assets, net	3,329		—		—			—			3,329
Restricted cash	—		—		—			—			—
Right-of-use assets	—		—		2,844		AA	—			2,844
Other assets	—		—		—			—			—
Total assets	$	235,667	$	138,991	$	2,844		$	(127,028)		$	250,474
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	105,388	$	10,247	$	—		$	(96,685)	CC	$	18,950
Accrued expenses and other liabilities	33,840		4,428		254		BB	—			38,522
Income taxes payable	—		22,268		—			—			22,268
Current operating lease liabilities	—		—		1,178		AA	—			1,178
Amount due to related parties	—		254		(254)		BB	—			—
Total current liabilities	139,228		37,197		1,178			(96,685)			80,918
Long-term income taxes payable	4,922		—		—			—			4,922
Long-term borrowings	—		—		—			—			—
Long-term operating lease liabilities	—		—		1,666		AA	—			1,666
Long-term deferred tax liability	—		202		—			—			202
Other liabilities	—		—		—			—			—
Total liabilities	144,150		37,399		2,844			(96,685)			87,708
Commitments and contingencies											—
Stockholders’ equity:
Common stock	—		4		—			—			4
Treasury stock	—		—		—			—			—
Additional paid-in capital	—		—		—			—			—
Retained earnings	91,517		101,588		—			(30,343)		DD	162,762
Accumulated other comprehensive loss	—		—		—			—			—
Total stockholders’ equity	91,517		101,592		—			(30,343)			162,766
Total liabilities and stockholders’ equity	$	235,667	$	138,991	$	2,844		$	(127,028)		$	250,474


	Amounts
Cash and cash equivalents (see Note 3 TM O)	$	6,232
Accounts receivable, net	66,060
Inventories	171,270
Income taxes receivable	2,780
Prepaid expenses and other assets	5,305
Deferred tax assets, net	3,329
Intangible assets	1,870,000
Goodwill	703,123
Right-of-use assets	2,844
Accounts payable	(18,950)
Accrued expenses and other liabilities	(38,522)
Income taxes payable	(22,268)
Current operating lease liabilities	(1,178)
Long-term deferred tax liability	(331,220)
Long-term income taxes payable	(4,922)
Operating lease liabilities	(1,666)
Net assets acquired	$	2,412,217


Proceeds from revolving credit facility	$	50,000
Proceeds from term loan B credit facility	2,000,000
Issuance costs and debt discount	(49,005)
Increase in cash and cash equivalents due to debt financing	$	2,000,995

Cash payment for HEYDUDE	$	(2,037,998)
Decrease in cash and cash equivalents due to transaction accounting adjustments	$	(2,037,998)


	Carrying value		Fair value adjustment		Preliminary fair value

	(in thousands)
Inventories	$	67,424	$	103,846	$	171,270


	Historical HEYDUDE Intangibles, net (in thousands)		Preliminary fair value (in thousands)		Net recognition (elimination) of intangible assets (in thousands)		Remaining useful life (in years)	Amortization per year

Trademark	$	—	$	1,570,000	$	1,570,000	Indefinite	$	—
Customer relationships	—		300,000		300,000		15	20,000
Intangible assets	3,108		—		(3,108)		—	—
Total	$	3,108	$	1,870,000	$	1,866,892	—	$	20,000


	Amounts

	(in thousands)
Interest related to term loan B credit facility	$	80,000
Interest related to draw on revolving facility	940
Amortization of deferred financing fees	7,001
Total adjustment to interest expense	$	87,941