Crocs facing possible fines, unpaid duties of $36 million
The U.S. Customs and Border Protection agency estimated that Niwot-based Crocs owed the money after doing an audit of company financial statements from 2006 to 2010, according to the report, a regulatory document filed with the U.S. Securities and Exchange Commission.
Crocs (Nasdaq: CROX) said the amount was “erroneous” and suggested the amount owed was considerably less, according to the regulatory document. A final report from the customs agency is not expected to be filed until the middle of the year.
In a separate audit by the Mexico Federal Tax Authority from January 2006 to July 2011, there were two separate disputes, according to the regulatory document. One of the disputes is about taxes on the company’s capital equipment and finished goods; the other is on raw materials.
The capital equipment and finished goods audit was completed and “no major discrepancies” were found, according to the regulatory document. Crocs believes the proposed penalty on raw materials for the time period in question is “unfounded and without merit,” according to the document.
Crocs expects the matter to be resolved in two or three years in the Mexican courts, according to the regulatory document.
Crocs’ spokeswoman Shelley Weibel said the company’s policy is not to discuss audits beyond what was provided in the regulatory document.
In the regulatory filing, Crocs also reported that it has spent $5.9 million related to all legal matters for the year.
Crocs is known for its colorful plastic shoes. The company posted record revenue of $1.1 billion for the year, a 12 percent gain from 2011 revenue, according to an earnings report released Thursday, Feb. 29.
Crocs also posted revenue of $224.9 million for the most recent quarter ended Dec. 31, up from $203.71 million for the same quarter in 2011. The company posted gross profit of $106.4 million for the most recent quarter ended Dec. 31, up from $99.8 million for the same quarter in 2011.
Crocs’ stock was trading down 13 cents at $15.30 per share in afterhours trading on Monday, Feb. 25.
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