Crocs Results Presentation Deck
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APPENDIX
NON-GAAP RECONCILIATION (CONT'D)
Reconciliation of GAAP to Non-GAAP Financial Guidance:
Third Quarter 2022:
Non-GAAP operating margin reconciliation:
GAAP operating margin
Non-GAAP adjustments, primarily associated with the HEYDUDE integration and duplicate rent (1)
Non-GAAP operating margin
Full Year 2022:
Non-GAAP operating margin and operating income reconciliation:
GAAP operating margin and operating income
Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition (1)
Non-GAAP operating margin and operating income
Non-GAAP effective tax rate reconciliation:
GAAP effective tax rate
Non-GAAP adjustments associated with amortization of intellectual property(2)
Non-GAAP effective tax rate
Non-GAAP diluted earnings per share reconciliation:
GAAP diluted earnings per share
Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition and amortization of intellectual property (1)(2)
Non-GAAP diluted earnings per share
Approximately:
24% to 25%
1%
25% to 26%
Approximately:
($ in millions, except per share data)
22% to 23%
4%
26% to 27%
25%
(3)%
22%
$7.50 to $8.30
$2.00
$9.50 to $10.30
$750 to $815
$130
$880 to $945
(1) In the third quarter of 2022, we expect to incur $10 million in SG&A, primarily associated with HEYDUDE integration costs and duplicate rent associated with our upcoming move to a new headquarters. For the full year 2022, we expect to
incur $55 million in SG&A, primarily associated with the HEYDUDE acquisition and integration, and a total $75 million in cost of sales, primarily related to the write up of HEYDUDE inventory costs to fair market value at the close of
acquisition.
(2) In the fourth quarter of 2020, and subsequently in the fourth quarter of 2021, we made changes to our international legal structure, including an intra-entity transfer of certain intellectual property rights, primarily to align with current and
future international operations. This adjustment represents the amortization of the deferred tax asset related to these intellectual property rights in this period and the tax impact of cost of sales and SG&A non-GAAP adjustments.
Our long-term guidance for "Non-GAAP Operating Margin" and "Non-GAAP Tax Rate" are non-GAAP financial measures that exclude or otherwise has been adjusted for special items from our U.S. GAAP financial statements, such as
inventory write-offs, duplicate rent costs, bad debt expense, and the HEYDUDE acquisition. We consider these items to be necessary adjustments for purposes of evaluating our ongoing business performance and are often considered
non-recurring. Such adjustments are subjective and involve significant management judgment. We are unable to reconcile Crocs Brand 2026E and HEYDUDE Brand 2024E non-GAAP operating margin and Crocs brand non-GAAP tax
rate guidance measures to their nearest U.S. GAAP measures without unreasonable efforts because we are unable to predict with a reasonable degree of certainty the actual impact of the special and other non-core items. By their very
nature, special and other non-core items are difficult to anticipate with precision because they are generally associated with unexpected and unplanned events that impact our company and its financial results. Therefore, we are unable to
provide a reconciliation of these measures
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