Crocs Investor Presentation Deck
NON-GAAP RECONCILIATION (cont'd)
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL GUIDANCE
First Quarter 2022:
Non-GAAP operating margin reconciliation:
GAAP operating margin
Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition (1)
Non-GAAP operating margin
Full Year 2022:
Non-GAAP operating margin reconciliation:
GAAP operating margin
Non-GAAP adjustments, primarily associated with the HEYDUDE acquisition (1)
Non-GAAP operating margin
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
Non-GAAP diluted earnings per share
Approximately:
10%
12%
22%
Approximately:
22%
4%
26%
25%
(3%)
22%
$7.70 to $8.25
$2.00
$9.70 to $10.25
(1) In the first quarter of 2022, we expect to incur $30M in SG&A costs, primarily associated with the HEYDUDE acquisition, and an additional $40 million of non-cash costs in cost of sales, primarily related to the write up of HEYDUDE inventory costs to
fair market value at the close of the acquisition. For the full year 2022, we expect to incur $60M in SG&A costs, primarily associated with the HEYDUDE acquisition, and an additional $75M of non-cash costs 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.
Our long-term guidance for "Non-GAAP Operating Margin" is a non-GAAP financial measure that excludes 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 2026E and HEYDUDE 2024E non-GAAP operating margin 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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