Good afternoon ladies and gentlemen and welcome to the Crocs Inc. fiscal 2008 second quarter earnings call. Before we begin I would like to also remind everyone of the company’s Safe Harbor language. Please note that some of the information provided in this call will be forward-looking statements within the meaning of the Securities Laws. These statements concern plans, forecasts, guidance, projections, expectations and estimates and adjusted for future operations. The company cautions you that a number of risks and uncertainties could cause Crocs’ actual results to differ materially from those described on this call. Crocs has explained some of those risks and uncertainties in the risk factor section of the Annual Report described on this call Form 10-K and its other documents filed with the SEC and you are encouraged to read that section and all other disclosures appearing on our filings with the SEC. Crocs intends that all of its forward-looking statements in this call will be protected by the Safe Harbor provisions of the Securities Exchange Act of 1934. Crocs is not obligated to update its forward-looking statements to reflect the impact of future events. I would now like to turn the conference over to President and Chief Executive Officer, Ron Snyder; please go ahead sir.

Good afternoon and thank you for joining us to discuss our second quarter results. With me on the call today is Russ Hammer, our Chief Financial Officer. As you know from our guidance revisions, our second quarter sales came in below our initial projections primarily due to weaker then expected demand here in the US for our core products. At the same time we did experience some softness in Europe, namely the UK, which also impacted our top line performance. Although we have made recent progress reducing costs at our manufacturing and distribution platforms, it was not enough to offset the lower then expected sales volumes during the quarter. As a result gross margins were 40.5% versus 58.8% a year ago and below our forecast of approximately 55%. In addition operating expenses were higher then planned due to severance costs, retail expansion and IP litigation. For the second quarter sales were $222.8 million, compared to $224.3 million a year ago. Diluted EPS for the quarter was $0.03 which includes a $0.03 charge associated with the shutdown of our Canadian manufacturing facility and asset impairment charges on tooling. The first six months of this year have been difficult as we dealt with a challenging retail environment, unfavorable weather, an increase in competition, and a slowdown in sell-through rates of core styles here in the US. That said there were also a number of positives. First, our international business continues to perform well. We now sell in over 100 countries with sales from outside the US accounting for 58% of total revenues in the second quarter. Sales in Asia rose 69% from the same period last year, driven by ongoing strong demand for our products in Japan, China, Korea, and the [inaudible] countries. Australia and Southeast Asian pre-books for Q3 are particularly…

Thanks Ron, sales for the second quarter were $222.8 million compared to the sales of $224.3 million in the second quarter of 2007. For the quarter international sales increased 20% to $130.1 million from $108.9 million a year ago. Revenue for Asia was $63 million, Europe was $55.6 million, Canada/Mexico was $10.2 million and the balance of $1.4 million was from other international locations. Domestic sales were $92.6 million representing approximately 40% of our global business. Footwear sales accounted for approximately 91% of revenue and represented 10.9 million units for an average selling price of $18.39. Sales of our classics represented 29% of footwear sales. Gross profit for the second quarter of fiscal 2008 was $90.3 million including restructuring charges or 40.5% of sales compared to $131.9 million or 58.8% of sales in the second quarter of 2007. This decrease in margin was primarily attributable to lower sales volume then planned and higher costs associated with under utilized capacity in our company-owned manufacturing facilities and distribution centers. SG&A for the second quarter was $89.9 million compared to $63.5 million in the corresponding period last year. This increase was primarily the result of increased legal, marketing, as well as increased retail expenditures. As a percentage of revenues, selling, general and administrative expenses increased to 40.4% in the three months ended June 30, 2008 from 28.3% in the three months ended June 30, 2007. We reported a pre-tax operating loss of $2.9 million in the second quarter compared to pre-tax operating income of $68.5 million a year ago. Net income was $2.1 million or $0.03 per diluted share compared to net income of $48.6 million or $0.58 per diluted share in the second quarter of 2007. Included in net income are charges totaling $0.03 associated with the shutdown of our Canadian facility…

Thanks Russ, over the next two quarters we will focused on right sizing our operations to better align with our projected volumes. This will include reductions in our worldwide headcount, the shut down of our Canadian facility which should be completed by the end of the third quarter, right sizing our distribution and infrastructure facilities and delaying certain capital expenditures. We are also enacting a 25% cut in executive management salaries through the end of the year and foregoing executive bonuses for 2008. at the same time we’ll be implementing new initiatives aimed at broadening consumer awareness of our new products and strategically increasing our presence in the marketplace, including new point-of-sale materials and more affective in-store marketing. Our plan is to focus on our key accounts that have the resources and the real estate to merchandise a larger assortment of Crocs footwear beyond just a handful of styles. Therefore we do expect that our US door count will come down by year end. We are also accelerating our retail store rollouts. In the quarter we opened an additional 54 retail locations including outlets, retail stores, third party stores, and kiosks primarily in Asia and Europe. Here in the US we currently have five full price stores, 12 outlets, 128 kiosks and expect to end the year with 14 additional outlet stores and three additional full price retail stores as we open new stores in Portland, Panama City, Florida, and Chicago. Our recent store opening in Waikiki has proven to be quite successful with initial results averaging over 500 pairs per day in the first couple of weeks of operation. At the same we’ll be closing some of our underperforming kiosks as we concentrate our resources on our stores which can obviously display a much broader selection of merchandise. In…

(Operator Instructions) Your first question comes from the line of Reed Anderson – DA Davidson & Co. Reed Anderson – DA Davidson & Co.: As we think about inventory and you are doing a good job getting that going in the right direction, and also receivables, but based on what you know today, what kind of inventory level either on a dollar basis or on a percentage makes sense as we look towards the end of this year?

Our inventory as you said, we’ve made very strong progress in the second quarter and we’re already off to a good start in the third quarter, we expect third quarter will continue to improve and probably be in the $200 million to $210 million range and then we continue to make that type of improvement into the fourth quarter as well. Reed Anderson – DA Davidson & Co.: On the receivables side, have you made a lot of the progress there or is there more you can squeeze out of that as well?

We’ll continue to make improvement on our receivables as well. We’ve been tightening up with all of our customer accounts and just managing our terms with them. So we’ll continue to make progress there. Reed Anderson – DA Davidson & Co.: You were talking about working with the key accounts, new POS, new in-store, as you think about what you term key accounts, what percentage of your business at least in the US might that—people like a Dicks or a TSA or a major department store, what might they account for, the key accounts?

Just over 50% of our doors today and I think what we’re doing now is we’ve seen tremendous results from the accounts, either our own retail or our retail partners, in those that have enough of our collection. So that’s where we’re focused now. We’re going to get better fixturing, we’re going to get more presence in stores, and consumers will be able to find our products where many can’t now. So that’s where we’re focusing. We’re still going to have a lot of the smaller retailers and we’ll have specific collections for those but we’re really focusing on that maybe 50% to 60% of the doors here in the US that have the space and the wherewithal to display our products. Reed Anderson – DA Davidson & Co.: What would be the timing of implementing the changes you’re thinking about over the next couple of quarters? Will we see it all by the end of September or is it going to drift into the fourth quarter too?

No, we’re continuing to work with the retailers and build out through this quarter, through next quarter and even into next spring. We have a pretty exciting line up of products that we just introduced at the recent shoe show that is very segmented, we have sports products, we have style products, and we have lifestyle products. And they go to different retail partners. Reed Anderson – DA Davidson & Co.: On the tax rate, it was kind of funky in the quarter, how should we think about that either for the balance of the year or for the full year?

So obviously we have a loss benefit that we’re taking—we’re still profitable in the Europe and Asia markets right now but with our global tax rate and our global tax strategy its low on these profits so we actually recognize the benefit of US losses with that large tax break. And as we forecasted for the year of approximately to breakeven on EPS we’ll continue to see that benefit. Reed Anderson – DA Davidson & Co.: So what might the full year tax rate look like?

It’ll be pretty comparable to what we have right now. Reed Anderson – DA Davidson & Co.: On a year-to-date basis?

Correct.

Your next question comes from the line of Jim Duffy - Thomas Weisel Partners

I hear what you’re saying about operating margin targets by mid 2009, what type of revenue and SG&A run rate does that assume on an annual basis?

We haven’t projected fully our—we don’t have projections yet out for 2009 but that would project fairly flat—we’re assuming in cost reductions and activities that we have underway right now, that we’d have flat sales or maybe even down sales from where they are today. So we’re taking out costs, we’re sizing the business back to where it was at that level.

So I guess what I’m hearing is that the strategy is to plan the business for a smaller revenue run rate and try to take costs out to right size it to get to an appropriate margin structure. I hear that from you but I’m also hearing some growth initiatives like opening more retail and things like that and I’m just struggling to piece the two together. For instance why does it make sense to open more retail now?

Because the results in our retail operations, and this is a global picture, are much better then in our wholesale channel. Our retail margins and operating profits in Asia are quite high. We’re doing very, very well in the stores we’ve opened in the outlet stores in the US. In Europe we’re actually working with a lot of partners, third party partners, where we’re selling to them just as a normal account but they are full fledged Crocs stores where we do the design of them and everything. So we have a strategy where it makes for us to open up our own store where the margins are going to be quite high, we’ll do that, or in a city that we want to promote our brands. We’ll open them ourselves and in smaller cities we’ll work with third party partners or smaller countries. So that’s the strategy there.

So it sounds like some realigning of the account base in the US so maybe US revenues go backwards, offset some by growth in international markets, is that an appropriate characterization?

Yes.

Your next question comes from the line of Jeff Klinefelter - Piper Jaffray

Regarding the percentage of doors that qualify for that segmentation strategy that you introduced, what percentage of your sales is account for by those 50% to 60% of doors?

Probably 80% to 90%. So you could tell from that that we have a lot of small doors that we started with and those that can’t move with us and display enough of our collections or at least hit some minimums we’ll probably be eliminating.

Is the similar strategy going to be employed in Europe as well for your current door base?

Yes it is. In Europe this year what’s happened is many of the doors were new so they were taking just our classic and core products, and they didn’t get enough, we didn’t get enough product out there in Europe this year and it wasn’t because our guys weren’t working on it, it was because the stores wanted to go with what they heard sold well. Now we’re working with those stores in better merchandising, more merchandising and taking more of our products so the same type thing will happen where we probably shed some doors but probably not too many in Europe.

How do you, as you’re looking at that segmentation strategy, how do you prioritize, is it by access to product or by price, by style, is it a matrix of projects, just give us a little insight into how we’ll see the product differentiated at the stores?

I think what we’ll see is—you’ll see better presentations. I think one of the problems we’ve had is some of our retailers that have some of the older fixtures or older point of purchase advertising, its just old and stale, so it doesn’t look like there’s new products. So we have a whole group now focused on better presentations in stores, better presentations for some of our newer products, making sure consumers know that we have these great new products that are selling well where they are well displayed. We just want them to be well displayed in more shops.

On Europe and Asia, can you talk about your differences in strategy in those two markets now having gone through this rationalization period in the US?

In Asia we already have much more of our product presented at retail and I think that’s why we’re seeing such rapid growth in the Asian market. Our retail internet business in Asia going into this quarter is about a third of the business so it’s really growing rapidly and that’s 150 doors of our own retail and some internet versus 6,000 doors in the wholesale side of our business there. So a third of the business is represented by 150 doors. That’s a pretty dramatic number and you can see when our product is well displayed we sell a lot of it. So we’re going to continue to rollout stores with both partners and ourselves in Asia. In Europe as I said, we’re opening a lot more partner stores there, not really adding too many company-owned stores. So that’s where we’re going to continue to employ there and we’ll continue to grow our door count in some of the markets in Eastern Europe where we haven’t penetrated much and Russia and the Baltic’s, we’re going to get more aggressive in some of the Northern European countries next year. But right now we’re doing quite well in Germany, its one of our best stories of this year and as we said, Spain continues to do well. France and Italy are probably underperforming from where we thought they’d be.

Can you give us the door count at quarter end, both US and international?

Its flat off the prior quarter, we haven’t really added doors. We’ve been focused on our existing doors.

Your final question comes from the line of Keith Burn - Wachovia Keith Burn – Wachovia: I was just wondering for current shareholders who’ve been in the stock for so long and watched insider sales, where is the buyback or some insider sales? Show some loyalty to the people who have suffered in the last few months in this company.

As I mentioned on the call, we’re looking at our cash very closely. We’ve been focusing on our working capital. Our first priority is to pay down our debt which we’re aggressively doing and we are as we stated on the pre-guidance call looking at our share buyback strategy here in the next few months and you’ll hear more about that shortly. Keith Burn – Wachovia: What about individual people who’ve sold over the last two years who have not stepped up to the plate? We saw one person buy stock? We’re trading at pretty bleak levels and people have sold stock at a lot higher prices and I think it would be a good signal to shareholders. I’m looking at Ron right here.

I’m sure individuals in the company will look at it very closely.

And there appear to be no further questions at this time; I’ll turn things back to management for any closing remarks.

Thank you very much.