Outdoor financials: Crocs' accounting firm doubts company's viability, plus Dick's Sporting Goods, Quiksilver

Crocs' accounting firm doubts company's viability, Analysts initiate coverage of Dick's Sporting Goods at 'buy', and Quiksilver rating docked by S&P.

Crocs' accounting firm doubts company's viability

In a Form 10-K filing with the SEC, Deloitte & Touche, the accounting firm auditing Crocs (Nasdaq: CROX), said it had "substantial doubt about the company's ability to continue as a going concern." It cited "the maturity of the company's revolving credit facility on April 2, 2009, and losses from operations" as raising that doubt.

Crocs said it had $22.4 million outstanding under the revolving credit facility with Union Bank of California as of Dec. 31, adding that it can no longer borrow under the facility.

Crocs said in the filing that its "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."

Crocs added that it's in discussions with lending institutions to secure an asset-backed borrowing arrangement to replace its current revolving credit facility, but it may need an extension of the deadline with its current lenders.

The company said it is considering other sources for capital to meet ongoing needs.

In FY '08, Crocs posted a loss of $185.1 million versus a $168.2 million profit in FY '07. Revenue in '08 declined to $721.6 million from $847.4 million a year earlier. It reported $80.5 million in inventory write-downs and $45.8 million in impairment charges in 2008. Sales costs rose to $486.7 million from $349.7 million in 2007.

In a statement with its Form 10-K filing, Crocs said, "The company took significant cost cutting measures during 2008 and intends to continue its cost cutting actions throughout 2009." It noted the closure of manufacturing operations in Canada and Brazil and non-retail staff reductions of about 2,000 people.

Crocs reported having $51.6 million in cash and cash equivalents as of Dec. 31.

Analysts initiate coverage of Dick's Sporting Goods at 'buy'

Analysts at Sterne Agee & Leach initiated coverage on Dick's Sporting Goods with a "buy" rating, saying the company is well positioned to weather the economic downturn.

Analysts Sam Poser and Kenneth Stumphauzer wrote in a note that Dick's Sporting Goods is likely to maintain earnings power despite declines in sales. Despite suffering as consumers limit their spending, the analysts said that Dick's Sporting Goods' reaction to the economic pressures, such as limiting store growth, tightening inventory and focusing on higher margin products will benefit them in the long term.

"We believe that changes in strategy and mix, even if caused by the current poor environment, are likely to be more a blessing than a curse," they wrote.

After the news, shares of Dick's Sporting Goods rose $0.76 to close at $13.82 on Mar. 17.

Quiksilver rating docked by S&P

Standard & Poor's Ratings Services lowered its ratings on Quiksilver (NYSE: ZQK) as the company works toward a deal to improve its liquidity and capital structure.

S&P lowered Quiksilver's ratings to "B-" from "B+" and placed them on "CreditWatch," which means the ratings could be cut further or raised after the credit agency's review is complete.

"Our resolution of the CreditWatch listing will focus on Quiksilver's ability to meet its near-term debt obligations, maintain adequate liquidity, and improve its operating business trends and financial metrics," S&P said in a statement. "If the company can complete a refinancing or strategic transaction, then we may review the ratings for an upgrade."

Last week, Quiksilver said it extended the maturity of its EUR 55 million (USD $71 million) line of credit to June 30 from March 14 to give the company more time to complete a strategic or refinancing deal. As of Jan. 31, the company had about $1.4 billion in adjusted debt.

--Compiled by Wendy Geister

For more information about any public company on this page or its financial reports, as well as to view stock prices updated every 15 minutes, visit the SNEWS® Stock Market Updates. Click on: www.snewsnet.com/cgi-bin/snews/stock_report.html.


Outdoor financials: Sun Capital takes Kellwood bid to shareholders, plus Quiksilver, Under Armour, Dick's Sporting Goods, Jarden, Cabela's, Hibbett Sports, Crocs

Sun Capital takes Kellwood bid to shareholders Investment firm Sun Capital Securities Group said it is now taking its $542.3 million cash bid offer for Kellwood (NYSE: KWD) straight to the company's shareholders. Kellwood has already rejected Sun Capital's overtures twice in ...read more

Outdoor financials: Kellwood swings to Q2 loss, lowers 2007 outlook, plus Quiksilver, Forzani, Crocs, Dick's

Kellwood swings to Q2 loss, lowers 2007 outlook Kellwood (NYSE: KWD) said it swung to a loss in its second quarter due to heavy charges and slightly lower sales in both the women's and men's sportswear divisions. The company owns a multitude of mainstream and outdoor brands ...read more

Outdoor financials: Jarden board approves shareholder rights plan, plus Dick's Sporting Goods, Quiksilver, Hibbett Sports

Jarden board approves shareholder rights plan The board of directors of Jarden Corp. (NYSE: JAH) has approved the adoption of a stockholder rights plan designed to protect shareholders in the event of a takeover attempt. The plan grants a dividend of one stock right for each ...read more

Outdoor financials: Analyst firm bullish on Crocs

Analyst firm bullish on Crocs Sterne Agee initiated coverage on Crocs (Nasdaq: CROX) with a buy rating, saying it expects third-quarter earnings to meet or top the company’s guidance. Sterne Agee set a price target of $19 on the stock, implying an upside of nearly 29 percent from ...read more

Outdoor financials: Crocs swings to net loss in Q3, plus Sport Chalet, Dick's Sporting Goods

Crocs swings to net loss in Q3 Crocs (Nasdaq: CROX) said its sales and profits for the third quarter were rocked by "the extremely challenging retail environments in the United States and Europe." Net loss for the three months ended Sept. 30 was $148.0 million, or $1.79 per ...read more

Outdoor financials: Q1 retail sales up 15 percent for Forzani Group, plus Quiksilver, Dick's, Crocs

Q1 retail sales up 15 percent for Forzani Group Canada's Forzani Group (TSX: FGL), parent of the National Sports, Coast Mountain Sports and Sport Chek retail chains, said its profit is in the black benefiting from better sales in the first quarter. For the quarter, it earned CDN ...read more

Outdoor financials: Dick's Sporting Goods reports Q4 loss on charges, plus Quiksilver, L.L. Bean, Collective Brands

Dick's reports Q4 loss on charges Dick's Sporting Goods (NYSE: DKS) swung to a fourth-quarter loss hit by write-downs mostly related to its February 2007 acquisition of the Golf Galaxy chain. For the quarter ended Jan. 31, it reported a loss of $104.4 million, or $0.93 per ...read more

Outdoor financials: Analyst upgrades VF due to brand growth opportunities, plus Dick's Sporting Goods, Timberland, Collective Brands, Crocs, Liberty Media

Analyst upgrades VF due to brand growth opportunities Crediting strong U.S. business amid current economic challenges, analyst Jim Duffy of Thomas Weisel Partners upgraded VF Corp. (NYSE: VFC), saying he was encouraged by growth opportunities for brands such as Reef, Kipling and ...read more

Outdoor financials: Dick's Sporting Goods shares hit 52-week low, plus LaCrosse, Columbia Sportswear, Luxottica, Quiksilver

Dick's Sporting Goods shares hit 52-week low Shares of Dick's Sporting Goods (NYSE: DKS) hit a new 52-week low amid a difficult retail environment. Shares fell $0.32 to close at $18.05, after earlier trading to a new low of $17.84. The stock had traded between $18.33 and $36.77 ...read more