Please stand by. Thank you for standing by, everyone. Welcome to the Crocs, Incorporated fiscal 2010 third quarter earnings conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time. I would like to remind everyone that this conference is being recorded. Earlier this afternoon, Crocs announced its third quarter 2010 financial results. A copy of the press release can be found on the company's website at www.crocs.com. Reconciliations of the non-GAAP measures mentioned on the call today can be found on the Investor Relations section of the Crocs website. The company would like to remind everyone that some of the information provided in this call will be forward-looking and accordingly are subject to the Safe Harbor provisions of federal security laws. The statement concern plans, beliefs, forecasts, guidance, projections, expectations, and estimates for future operations. Crocs cautions you that these statements are subject to a number of risks and uncertainties described in the Risk Factors section of the company's 2009 Annual Report on Form 10-K, filed on February 25th, 2010 with the Securities and Exchange Commission. Accordingly, actual results could differ materially from those described on this call. Those listening to the call are advised to refer to Crocs' Annual Report on Form 10-K, as well as other documents filed with the SEC for additional discussion of these risk factors. Crocs intends that all of its forward-looking statements in this call will be protected by the Safe Harbor provisions of the Securities and Exchange Act of 1934. Crocs is not obligated to update its forward-looking statements to reflect the impact of future events. Now at this time, I would like to turn the call over to Mr. John McCarvel, Chief Executive Officer of Crocs. Please go ahead, sir.

Thank you, operator. Welcome to everyone for joining us on our third quarter earnings call. With me today is Russ Hammer, our Chief Financial Officer. We are pleased to have delivered another quarter with solid results. Our recent success has been broad-based from six to the progress we have made, diversifying our business in terms of products and collection, distribution channel geographies. All areas of the business are contributing to our growth with the performance of our new credit feeling our current momentum. Our result of past quarter in a year-to-date have been very encouraging and we are ahead of where we thought we would be at this time. Our 2010 was about returning the company to profitable growth. We did not plan to achieve these levels of sales and earnings at this point in the company’s development. Importantly, the out performance has been across the board with sales, tracking ahead of the expectation in each of our distribution channel. Wholesale, retail and internet and the geographic region in America, Asia and in Europe. In the U.S, this past quarter, we had a productive summer and back-to-school selling season. Our wholesale partners reporting very good weekly sales through, pharmacies of our Spring-Summer collections throughout June and August. And this trend was repeated with our new back to school line later in the quarter. After a small changed last year, we doubled the numbers of SKU for back-to-school and featured three of them and a TV ads campaign that ran on Cartoon Network, Nickelodeon, E-Network amongst other. We’re very pleased with our first attempt to capitalize on this key selling period. And we look to build on a performance with a broader, assortment on products next year. Makes a wholesale backlog for Spring, 2011 has more than double which exists spread…

Thanks, John. Good afternoon, ladies and gentleman and thank you for joining us. Total revenues for the third quarter increased 30% to $215.6 million over adjusted revenue of $165.7 million we reported in the third quarter of last year, which excludes $11.5 million and previously impaired sales and we stated would be non-recurring. On a GAAP basis, revenue increased 22% year-over-year. By channel, wholesale sales rose 16% million to $123.9 million. Retail sales were up 35% to $72.5 million and Internet sales increased 19% to $19.2 million. We ended the third quarter of 2010 with 354 company operated retail locations, compared to 310 this time a year ago. Now, by geographic region. Sales in Americas rose 31% to $104.8 million from $79.3 million a year ago. Asia sales increased 16% to $79 million compared to $68 million a year ago. Sales in Europe increased 9% to $32.6 million versus $29.9 million a year ago. For Q3 2010, 62% of our sales came from outside the United States. This reflects the strong global reach of the Crocs brand. Our average selling price for the third quarter 2010 increased to $18.23 from $17.59 a year ago. Our product mix continue to diversify over the same period last year with 31% of Q2 sales coming from new 2010 products, including the popular Crocs-brand collection. Classic and Core represented 10%, and 18% of Q3, 2010 sales respectively. As our mix shifts towards a higher percentage of new products with higher price points, we expect that our ASPs will continue to increase in future periods. Gross profit increased 32% to a $118.8 million, compared to $89.9 million with the gross margin up 440 basis points to 55.1% from 50.7% a year ago. The increase in gross profit is result of our effective cost reduction actions…

Thanks, Russ. As I stated earlier, we are ahead of schedule in the multi year turnaround, we outlined back in the spring of 2009. Well, there is more work to be done and still a fair amount of seasonality in our business. Based on our backlog of $228 million on September 30th, we expecting a better holiday selling season than a year ago as evidence our chief guidance for the fourth quarter. Our backlog as of October 31st is $262 million which is up 60% from 2009 and we will begin 2011 with a good year of momentum. Our recently improved results, combined with a future order have vote for their confidence, we have done the right to entry or the right pieces in place to drive this business forward over the long term. We will continue to invest and the things that have perpetuated our recovery, beginning with the product design and development. Building on many successes from our 2010 collection, our 2011 product portfolio will comprise several new style and innovated collection that we believe over the brands appeal and attract new consumers to Crocs. We would also continuing to expand our customer direct business which has been a key component not only in decorating our top-line but in creating a stronger more and more emotional connection with consumers worldwide. We anticipate ending 2010 with approximately 400 company-owned retail locations and our initial plans for 2011 include roughly 25% location growth. The majority of our new locations will be outside of the U.S and will include a combination of full priced stores, shop-n-shop and outlet stores. At the same time, we are preparing to increase the number of e-commerce site and key markets around the world. Finally, we remain committed to making ongoing investments to our systems and processes in order to provide the customer support and service that is expected of world class brand like Crocs. Thanks to IT upgrades, in our warehouses for the entry e-commerce and retail point of sale platforms we are in a much better position to managed and service out global customers and consumers. Going forward, we will take advantage of these new technologies to drive greater efficiency improved profitability throughout our organization. With that, we will now be happy to answer any questions operator?

(Operator Instructions) And we’ll go first to Jeff Klinefelter with Piper Jaffray.

Yes. Thanks guys. Congratulations, and it sounds like a very encouraging outlook. John, could you talk a little bit more about the bookings, the pre-book that you're looking and going into 2011. Maybe, putting into context that dollar value versus last year. Should we think about this as 60% of your business being wholesale, that is your business running up roughly 60%, a majority of that shipping in the first quarter. How should we think about that flowing into the first couple of quarters next year?

Okay. Thanks Jeff well. so what we would like to think about is about $42 million of what we have in backlog at the end of October will shipped in the fourth quarter. What we have remaining in backlog about 60%, will shipped to a wholesale customers in Q1, 40% would shipped to customers in Q2.

Okay.

And, keep in mind here. Jeff, that majority of orders that we have announced there from our major wholesale customers and we’ll still continue to book orders for product for delivering Q1 and Q2 with our smaller independent account.

Okay. So, in terms of retail, the retail side of the business. You don't want to get too focused on comp, but what sort of promotional environment are you guys looking at as we go into the fourth quarter? I know last year, I believe it was particularly promotional with some of the chain businesses that you sell to. What is back into this Q4 guidance at this point in terms of that the -- the retail direct business? John McCarvel - Crocs, Inc. - President & CEO: Really not at this point time and anticipating the same discount levels that we saw last year in retail environment – it’s our retail. We can’t inspire over the next eight weeks before the Christmas holiday. But, right now it’s not our expectation that will see discounting other way that we did. Our approach this season is a little bit different, we have new products that we have introduced, most of this year than in previous year and we’ve also introduce into the market at just this week. Our turning line would shipped as well as our central line of products that are sold in our retail and outlets starting next week and on an internet site staring after there this week.

Okay. Just a couple of other quick ones. The gross margin rate for Q3 relative to, obviously a great year-over-year gain, down sequentially from Q2. Could you put in context again, now you've got three quarters in for this year. How we should think about modeling gross margin on forward? Are we still thinking about, sort of -- -roughly the mid-50s level? Is the retail mix changing that? Q3 and Q4, I imagine, are more affected by Fall versus Spring margin rates within the product category?

So we said on the last call, that you should think about to Q3 and Q4 kind of Q3 being in the mid 50’s range which is right where we came in it, we guided to the lower end of the 50’s for Q4 which is consistent what we have seen in our business overtime last year Q4 2009 gross margin were about 44% and after that we don’t see the same level of discounting right now as we did before. So, we feel comfortable on the low end of the 50’s as we had discussed in the last call. I think on the free books going for- for next year we think that we have returns to the seasonality the normal see what margins going up in Q1 and Q2 as we are going to our prime selling seasons.

And moving on now to Jim Duffy with Stifel Nicolaus.

Thanks. Good afternoon. Very encouraging, spring quarter backlog. Russel or John, could you help us on a go-forward basis, how you think about your business -- the wholesale side of the business with respect to pre-book versus in-season business?

I think Jim as we touched on a last quarter we have desire at comfort level that we would really like to see our pre book business running at 65%to 70% range and it remains that target with our sales force and I think comfort zone that we discussed on last call that we feel that is best for the Crocs business.

Okay. That's hopeful. And then, John, the retail growth that you mentioned for 2011, is that unit growth number or should we think about that as square footage growth? You mentioned a -- majority of the growth to come internationally those are smaller stores, correct? John McCarvel - Crocs, Inc. - President & CEO: What we said was is that we would expand our retail footprint plan about a 100 new locations next year an three or four different types of formats and Asia was the more shop and shops storage some outlets this year and some retail full priced retail in the US that we are going to see very investment some conversions still, a carts and kiosks into full priced stores and then Europe it would be in investment on that on three various spectrum.

Okay. Ant then with respect to the backlog, what type of ASP increase. did you see in the backlog?

You know, Jim, at this time, we feel in the middle of our planning session and we will give you guys more color on 2011 on a February call. But then I mentioned as I did mentioned I said we used to continually introduce new products at higher than ASP levels overtime our trade is increase our ASP. We’ll give you more color on that and we’ve going to start planning cycle here on the next call.

.: Jim Chartier - Monness, Crespi, Hardt & Co: Good afternoon. My first question, I was wondering if you could just talk a little more about the India strategy. What you're doing there, will you see a big growth in India in 2011 or is it more 2012?

Yeah I think growth in the booked countries come a little bit more methodically and India’s no exception and so India’s strategy has really been to take some of our older products bids. So that did well into the Asian or into the Indian footwear, market place and to actually manufacture some of those products under what we call it approx basics program of our old core products into that market at a slightly lower price point and slow despite a lower cost point that we think opens up the Indian market of little bit further to cross. I don’t think we anticipate in 2011 or 2012 significant or the material growth in the Indian market. Jim Chartier - Monness, Crespi, Hardt & Co.: Okay. And then, can you give us an idea of what the impact on third-quarter gross margin was from the higher labor costs?

Higher labor cost in terms of? Jim Chartier - Monness, Crespi, Hardt & Co: In China, on the manufacturing slot. I think you start to feel the impact in the third-quarter?

We saw nominal impact in third quarter we are going to see more of it in the fourth quarter as we said about 5% really with they will fall into the products being affected by the price increases. Jim Chartier - Monness, Crespi, Hardt & Co: Okay. And then what's a good go-forward tax rate to use?

So on taxes Jim the go for tax rate that we gave you last time going into next year up 25% is the good rate to use that for fourth quarter 15% is the good level to use.

And we’ll move now to Sam Poser with Sterne Agee.

Good afternoon. Just a few questions. With the stores -- with the backlog firstly, you said Jeff asked you about -- you mentioned $42 million will be shipped in the fourth quarter. I didn't catch the rest of that, what is the total dollar amount of the backlog?

$262 million

All right, say that again?

262

Okay, and so break out is about $42 million is Q4 and then Q1 and Q2? I'm sorry?

60% of that is scheduled to ship in Q1, roughly 48% ship in Q2.

Of the balance?

Right, Correct

Okay. And then just on the store opening. I mean I know you don't give comps because you feels it's a moving target, but what about being able to give us some square footage and margin and some square footage information to be able to at least sort of gauge productivity, and so on?

Sam, it really does create a bit of a difficult model. Because what revenue per square foot looks like in kiosk business like in a full retail store and Boston is completely different. And when we try to do the some repair we just feel the comp-data can be confusing.

I'm not looking for comp-data; I'm looking for just data. I mean, if we know that you are growing stores and you were doing a $100 in square foot in the stores and you open up five new stores, and all of a sudden you're doing $95 a square foot in the store, it isn't as productive. It doesn't matter the size or anything is the total square footage to productivity. And the margin part of it. I mean, I understand your opening and closing a lot of stores so the comp may not be the best judgment. But a square footage number would be a gauge for productivity that would be pretty straightforward I would say.

This time I think while we are in the strategy that we have been explaining converting carts and kiosk for four stores if the very misleading calculation because you’re taking very high square footage copying cards and kiosk and converting. So I think while we were in that conversion mode which is a very long term we have been added for two years and it will quite take us another couple of years it’s very misleading to look at that, that data as we said you think the right thing to do is look at our store gross location and our revenue which drives a higher margin on the business as John mentioned earlier.

Well I mean So you were open 25% store growth next year. Does that mean you pickup 25% revenue next year on a flat comp or how should we think about that? That seems more like a shot in the dark when I get squared number.

I think the store growth that we mentioned and then as we said were in the middle of our planning cycle right now so as we come to our February call and we complete our call cycle we will give you more color on our retail growth.

We want to communicate in the best possible way so you can understand what’s happening in our business. And when we find a consistent methodology message there we are going to communicate that to you.

Okay, and then one last question or a couple last questions. Included in your backlog you have the vendor manage program going on for Sports Authority. And then you're selling some other goods to some of the more mass-channel now. Are those in the backlog or not?

Crocs, authority is on a pay-on-hand basis so that is not in backlog that revenue recognized as Crocs has sold the backlog is comprised of our made to orders some our customers throughout the world.

Lastly, you said on the 10-Q you have broken out Classics Core and new on a year-over-year basis, saying that Classics are 10.4% versus 15.7% last year. Core 17.9% versus 34.7%, and new 31.2% versus 27%. Maybe I'm not all there but that doesn't add up to a 100. What's the rest of the sales?

Significantly rest of the in mind sales that they are not qualified.

That's not new either?

Not new 2010 product that we are that we are going to reduce them, for example Santa Cruz is not a new product in 2010.

Got you. Thank you very much. Good luck.

(Operator Instructions) Now I am going to load Reed Anderson with D.A. Davidson

Hi Guys. A couple questions. I'm just going to ask kind of this a retail piece, a little different way, and we can move on if it doesn't work. If you're looking at where your thinking is today and in positioning the various channels, etcetera. Does it make sense to think that your retail business, based on what you pointed out, would probably grow may be at or above the overall company's growth? And might be one of your faster growth channels next year, is that a fair assumption, or can we not make that at this point?

We think so there is a combination of factors that better driving to continue to investment to retail what we think would drive retail growth that’s why we are doing it I mean we are very bullish on the product collection that we are bringing to market in 2011 our point of sales system and merchandising planning systems we have worked on it installed in 2010 will give us what we think would be greater sell through numbers and 2011 so yes we think that we will see in our own stores an uplift just based on enthusiasm for the product on the wave of bring to market next year both in spring summer 11 is as well as we are equally excited about someone new products that will bring for next year.

That's perfect, that's very helpful. And then just shifting gears a little bit. You talk about SKU count has been helpful here too. But, you've done it in a thoughtful way with collections and etc. Just where are we today John from a SKU count standpoint. And what does that look like from a growth projector, maybe in to the next? Just some ball-park thoughts.

Ballpark thought on more so probably think about it some dial today we have heard about 250 different styles of products we do take certain styles and customizes them for SN use to go into different channel. We are slowly methodically retiring some of the older products that has been in line. We have gone through a different methodology when it come to building some of those products where consumers is looking for their old favorites. So we still want those available to a retail person and online that we think we see probably 20% growth in styles year-over-year.

Great. I am curious if you look at your Internet business. And it continues to grow nicely, as well. And I'm just curious if the more established Internet platforms are also growing, obviously they probably wouldn't be growing at the higher rate. Or if you're seeing those starts to just kind of level off a little bit versus bringing on new platforms etc.

I think we are really proud of where we are in and we feel we are ahead of the market for most of the other footwear that manufacturers are today. We have developed a sophisticated internet platform of digital marketing e-commerce, social marketing, all integrated together. And we believe that this is our largest and probably more sophisticated flagship store I think our marketing strategy start’s to evolve and change a little bit next year as we have now about 2.5 million of loyal craft customers classified in our database and we are able to integrate those consumers we are in Facebook pages, we have a vitamin C program of brand ambassador. We have a fund program going on right now with Zoopa, which is if we go out and do Zoopa and search for Crocs it is a very fun advertising that people are doing trading there own advertisement for products. So we think of the internet, e-commerce platform really drive very strong messaging branding marketing for Crocs that is not only a revenue, revenue driven today not on revenue driven on the e-commerce site itself.

One more. You know Russ, looking into next year my thought was that we wouldn't see a lot of gross margin moving around I mean you're kind of at where you wanted to be. There's probably niches factors and cost factors that play in there. But, generally speaking does that make sense if we look at year-over-year? Or are there things I should be thinking about?

Yes I think we have been in the past art, art long range next one or two years in that load of mid fifties on our margin as we did finish our planning process here we will give you more color on that in February 12.

Over now to Steven Martin with Slater Capital Management

Hi guys. Congratulations, what a great turnaround. You mentioned that TSA isn't in the backlog. How should we consider that business, they were very underrepresented this past year and you were catching up. With that business, would you expect a business be up in mind with the rest of the backlog?

I don’t know you know see that’s a hard one for us to call just one time we got to step back at the beginning of 2010 with each other we started to reengage we put select products and some select stores in 2010 so little bit part to read the data right now sometimes I think when people don’t feel they can find proxy and TSA they stop looking for them there and so that, that has a little bit of impact on, on where the consumer shops. So I think in all our channels we track about the calls before each channel which is nice for productive, each channel is only 10 to 15% of our overall wholesale business and so yes it is TSA as an important customer of ours in a relationship that we want to build but it’s not really impact for the overall UFO sale business or to our overall business.

Okay in talking about customers, you discussed with us all, the possibility of a Target-like deal or somebody in that channel. Is there anything further to discuss or is that still in the works?

We actually will provide Target with a Jibbitz branded shoe that will replace similar Flip-Flop and cord type products that they were selling from no-name type of manufacturer. So it’s a nice merchandizing of a Jibbitz shoe with all the Jibbitz accessories. Those shoes will be sold at a lower price point and are not made with our core graphite material, but still has the safe toughness and durability we think you get from Crox product today. And those will be available in some Target stores starting in the first quarter.

Will that come through as gross margin or is that going to blend down your gross margin?

No it should blend it in at an equal rate. These are products that are purchased and shipped ex-factory in China

Okay and one last question. The Croslite too, you started producing with it?

Actually we will products starting in the first part of next year now, based on kind of our output and use of material

Okay, because I was going to ask how you were experiencing it, but I guess we'll have to wait until next quarter?

There is really no different from the product we built. We built lots of prototypes and we have worn them and tested the attributes of the material is equally better or even better in some cases.

All right, one last one. Unless I missed it, did you say anything about what you were thinking about the $140 million in cash?

We didn’t say anything but our idea is to build it.

For any particular purpose in mind?

No, not at the present time. I think when you look at us relative to other brands, that we weather these ups and downs in the consumer market, we feel that we would be better positioned to have additional cash. So we aren’t touching that right now, just to continue to do the things that we are doing with business and investing capital as required and hopefully just continue to build cash for a short period of time here.

(Operator Instructions) We will take a follow-up question from Jeff Klinefelter with Piper Jaffray

Yes, just a couple of quick follow-ups. On that pre- book, John, the 60% are backlog or rather the 60% increase going into next year. Can you give a little color on how that's what's between your major three major geographic regions?

Sure, Ruff will give that to you.

For the 260 million that John mentioned its roughly about 95 million in the Americas and about 45 million in Europe and about a 125 million in Malaysia.

And we can go back and dig this up, what percentage-wise if it's 60% in total, can you give it the rate increase across those three? Year-over-year?

Sure, in the Americas last year it was around 47 million.

Okay.

Europe was about 36 million and Asia was about 83 million. I think it is important to note that in the first year where we were selling over 50 bucks. And in that 260 million of that 42% of the backlog

I'm sorry, I missed that last point ,

42% of the backlog was spring summer kind of products.

And just one last thing on inventory for planning purposes our expectations going forward, would you see running your inventory, once you adjust for this owned and manufacturing in Mexico balancing that facility. Would you expect inventory to grow in line with like, future sales growth? Or would you keep it below to your sales growth? How should we think about that going into next year?

We think its going go low to sales growth, and out internal target is to continue to turn inventory 3.5 times or better and planning for 2011.

(Operator instructions) We have no further questions at this time, Mr. McCarvel. So I will turn the conference back to your.

Okay, thank you operator. Well, clearly this has been another good quarter. We appreciate your support and we look forward to talking to you on the next call. Thank you.

And this does conclude our conference call for today. We’d like to thank you for joining us.