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| 8-K - K-SWISS INC. 8-K - K SWISS INC | a6712566.htm |
Exhibit 99.1
K-Swiss Reports First Quarter Results
WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--May 6, 2011--K•Swiss Inc. (NASDAQ: KSWS) today announced results for the first quarter ended March 31, 2011.
Financial Results
Net loss for the first quarter of 2011 was $9,842,000, or $0.28 per diluted share, compared with a net loss of $4,698,000, or $0.13 per diluted share, for the prior-year period.
For the first quarter of 2011, total worldwide revenues increased 10.2% to $72,620,000 compared with $65,870,000 in the prior-year period. Domestic revenues increased 31.4% to $31,459,000 in the first quarter, and international revenues decreased 1.8% to $41,161,000 for the same period.
Futures Orders
Worldwide futures orders with start ship dates from April through September 2011 increased 45.0% to $105,156,000 at March 31, 2011. Domestic futures orders increased 62.0% to $47,164,000 at March 31, 2011, from $29,115,000 the previous year. International futures orders increased 33.6% to $57,992,000 at March 31, 2011, from $43,414,000 the previous year.
Steven Nichols, Chairman of the Board and President, stated, “We are seeing the first fruits of 2010’s investments with sizable year-over-year increases in both our domestic and international futures orders and sequential improvement in revenues. The continued momentum at K•Swiss and the initial brand positioning success at Palladium are encouraging signs.”
2011 Guidance
For 2011, the Company expects full year consolidated revenues to be 25% to 35% above 2010. Consolidated gross margin is expected to be approximately 39%, which is comparable to 2010. Selling, general and administrative expenses are expected to be $150 million to $155 million due to continued support of the Company’s marketing initiatives. These expenditures will be continually evaluated and could change over time, including the possibility of even greater marketing expenditures depending on available branding opportunities.
Investor Conference Call and Web Simulcast
K•Swiss will conduct a conference call on its first quarter 2011 results today, at 11:00 a.m. ET. The number to call for this interactive teleconference is (212) 231-2939. A replay of this conference call will be available until May 13, 2011, by dialing (402) 977-9140 and entering the passcode, 21520650.
The Company will also provide an online Web simulcast and rebroadcast of this conference call. The live broadcast of K•Swiss’ quarterly conference call will be available online at www.streetevents.com and www.earnings.com today, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue through May 13, 2011.
Founded more than forty years ago in Van Nuys, California, K•Swiss introduced the first all-leather tennis shoe, the K•Swiss “Classic” in 1966. Since its inception, K•Swiss has rooted itself in California Sport with an aim to be the most inspiring and innovative sports brand in the market. Today the Company offers performance and lifestyle footwear and apparel for several categories under its California Sports umbrella including Tennis Heritage, California Fit (Running, Triathlon and Fitness) and California Youth. K•Swiss also designs, develops and markets footwear under the Palladium brand and owns the FORM Athletics brand. For more information about K•Swiss, visit www.kswiss.com.
Certain matters discussed in this press release are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not limited to: the ability to adequately replace lost manufacturing capacity in Thailand, non-achievement of the assumptions discussed herein, general and regional economic conditions, availability of credit, industry trends, merchandise trends, including market acceptance of the Company’s product offerings, customer demand, competition, the impact of terrorism and/or a potential global conflict on the worldwide economy, dependence on large customers and credit concentrations and order cancellations and reduced sales resulting from a deepening of the current worldwide recession. A complete description of these factors, as well as others which could affect the Company's business, is set forth in the Company's periodic filings, including its Form 10-Q for the quarter ended March 31, 2011, which is currently on file with the SEC. Futures orders as of any date, represents orders scheduled to be shipped within the next six months. Futures orders as of a certain date do not include orders scheduled to be shipped on or prior to that date. The mix of “futures” and “at-once” orders can vary significantly from quarter to quarter and year to year and, therefore, “futures” are not necessarily indicative of revenues for subsequent periods.
| K•Swiss Inc. Consolidated Statements of Loss | ||||||||
| (In thousands, except earnings per share data) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
| Revenues | $ | 72,620 | $ | 65,870 | ||||
| Cost of goods sold | 44,094 | 37,224 | ||||||
| Gross profit | 28,526 | 28,646 | ||||||
| Selling, general and administrative expenses | 40,783 | 35,323 | ||||||
| Operating loss | (12,257 | ) | (6,677 | ) | ||||
| Other income | 3,000 | - | ||||||
| Interest (expense) income, net | (61 | ) | 139 | |||||
| Loss before income taxes | (9,318 | ) | (6,538 | ) | ||||
| Income tax expense (benefit) | 524 | (1,840 | ) | |||||
| Net loss | $ | (9,842 | ) | $ | (4,698 | ) | ||
| Basic loss per share | $ | (0.28 | ) | $ | (0.13 | ) | ||
| Diluted loss per share | $ | (0.28 | ) | $ | (0.13 | ) | ||
| Weighted average number of shares outstanding | ||||||||
| Basic | 35,391 | 35,142 | ||||||
| Diluted | 35,391 | 35,142 | ||||||
| K•Swiss Inc. Condensed Balance Sheets | ||||||||
| (In thousands) | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 31,716 | $ | 98,260 | ||||
| Restricted cash and cash equivalents and restricted investments available for sale | 22,722 | 23,000 | ||||||
| Investments available for sale | 50,741 | 61,856 | ||||||
| Accounts receivable, net | 49,420 | 40,481 | ||||||
| Inventories | 80,427 | 41,152 | ||||||
| Prepaid expenses and other current assets | 5,028 | 3,241 | ||||||
| Income taxes receivable | - | 13,821 | ||||||
| Deferred income taxes | - | 2,875 | ||||||
| Total current assets | 240,054 | 284,686 | ||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | 20,093 | 21,629 | ||||||
| OTHER ASSETS | ||||||||
| Intangible assets | 18,352 | 14,888 | ||||||
| Deferred income taxes | 4,502 | 11,664 | ||||||
| Other | 10,102 | 9,687 | ||||||
| Total other assets | 32,956 | 36,239 | ||||||
| $ | 293,103 | $ | 342,554 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Bank lines of credit | $ | 6,113 | $ | 5,298 | ||||
| Current portion of long-term debt | 307 | 368 | ||||||
| Trade accounts payable | 20,881 | 13,108 | ||||||
| Accrued income taxes payable | 67 | 299 | ||||||
| Accrued liabilities | 17,720 | 13,920 | ||||||
| Total current liabilities | 45,088 | 32,993 | ||||||
| OTHER LIABILITIES | ||||||||
| Long-term debt | 193 | 473 | ||||||
| Other liabilities | 14,508 | 13,720 | ||||||
| Contingent purchase price | 6,070 | - | ||||||
| Total other liabilities | 20,771 | 14,193 | ||||||
| STOCKHOLDERS' EQUITY | 227,244 | 295,368 | ||||||
| $ | 293,103 | $ | 342,554 | |||||
CONTACT:
K•Swiss Inc.
George Powlick, 818-706-5100
Chief
Financial Officer