e10vq

0000950123-11-074918.txt : 20110809 0000950123-11-074918.hdr.sgml : 20110809 20110809133323 ACCESSION NUMBER: 0000950123-11-074918 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20110630 FILED AS OF DATE: 20110809 DATE AS OF CHANGE: 20110809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SKECHERS USA INC CENTRAL INDEX KEY: 0001065837 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 954376145 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-14429 FILM NUMBER: 111019964 BUSINESS ADDRESS: STREET 1: 228 MANHATTAN BEACH BLVD CITY: MANHATTAN BEACH STATE: CA ZIP: 90266 BUSINESS PHONE: 3103183100 MAIL ADDRESS: STREET 1: 228 MANHATTAN BEACH BLVD CITY: MANHATTAN BEACH STATE: CA ZIP: 90266 10-Q 1 v57884e10vq.htm FORM 10-Q e10vq

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-14429

SKECHERS U.S.A., INC.

(Exact name of registrant as specified in its charter)


Delaware		95-4376145
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

228 Manhattan Beach Blvd.
Manhattan Beach, California		90266
(Address of Principal Executive Office)		(Zip Code)

(310) 318-3100
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

THE NUMBER OF SHARES OF CLASS A COMMON STOCK OUTSTANDING AS OF AUGUST 1, 2011: 38,587,554.
THE NUMBER OF SHARES OF CLASS B COMMON STOCK OUTSTANDING AS OF AUGUST 1, 2011: 11,296,970.

SKECHERS U.S.A., INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income			4
Condensed Consolidated Statements of Cash Flows			5
Notes to Condensed Consolidated Financial Statements			6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			14

Item 3. Quantitative and Qualitative Disclosures About Market Risk			25

Item 4. Controls and Procedures			25

PART II — OTHER INFORMATION

Item 1. Legal Proceedings			26

Item 1A. Risk Factors			30

Item 6. Exhibits			33

Signatures			34
EX-31.1
EX-31.2
EX-32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I — FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SKECHERS U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par values)


	June 30,		December 31,
	2011		2010
ASSETS
Current Assets:
Cash and cash equivalents	$	250,782	$	233,558
Trade accounts receivable, net		275,958		266,057
Other receivables		10,375		9,650

Total receivables		286,333		275,707
Inventories, net		325,815		398,588
Prepaid expenses and other current assets		70,072		53,791
Deferred tax assets		11,720		11,720

Total current assets		944,722		973,364
Property and equipment, at cost, less accumulated depreciation and amortization		367,152		293,802
Intangible assets, less accumulated amortization		6,587		7,367
Deferred tax assets		12,323		12,323
Other assets, at cost		17,679		17,938

TOTAL ASSETS	$	1,348,463	$	1,304,794


LIABILITIES AND EQUITY

Current Liabilities:
Current installments of long-term borrowings	$	9,893	$	11,984
Short-term borrowings		46,096		18,346
Accounts payable		245,185		246,595
Accrued expenses		19,259		30,385

Total current liabilities		320,433		307,310
Long-term borrowings, excluding current installments		81,075		51,650
Deferred tax liabilities		77		0

Total liabilities		401,585		358,960
Commitments and contingencies
Stockholders’ equity:
Preferred Stock, $.001 par value; 10,000 authorized; none issued and outstanding		0		0
Class A Common Stock, $.001 par value; 100,000 shares authorized; 37,146 and 36,894 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively respectively		37		37
Class B Common Stock, $.001 par value; 100,000 shares authorized; 11,297 and 11,311 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively respectively		11		11
Additional paid-in capital		313,380		303,877
Accumulated other comprehensive income		13,209		4,265
Retained earnings		581,905		600,013

Skechers U.S.A., Inc. equity		908,542		908,203
Non-controlling interests		38,336		37,631

Total equity		946,878		945,834

TOTAL LIABILITIES AND EQUITY	$	1,348,463	$	1,304,794

See accompanying notes to unaudited condensed consolidated financial statements.

SKECHERS U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(Unaudited)
(In thousands, except per share data)


	Three-Months Ended June 30,						Six-Months Ended June 30,
	2011			2010			2011			2010
Net sales	$	434,351		$	504,859		$	910,585		$	997,623
Cost of sales		291,021			267,214			574,645			522,560

Gross profit		143,330			237,645			335,940			475,063
Royalty income		1,376			875			3,024			1,260

		144,706			238,520			338,964			476,323


Operating expenses:
Selling		53,099			52,437			90,659			86,746
General and administrative		139,965			127,299			281,948			249,786

		193,064			179,736			372,607			336,532

Earnings (loss) from operations		(48,358	)		58,784			(33,643	)		139,791


Other income (expense):
Interest income		756			436			1,343			1,864
Interest expense		(2,352	)		(118	)		(4,317	)		(833	)
Other, net		(944	)		1,611			(595	)		1,820

		(2,540	)		1,929			(3,569	)		2,851

(Loss) earnings before income taxes		(50,898	)		60,713			(37,212	)		142,642
Income tax (benefit) expense		(20,846	)		20,396			(19,313	)		46,202

Net (loss) earnings		(30,052	)		40,317			(17,899	)		96,440
Less: Net (loss) earnings attributable to non-controlling interests		(136	)		80			209			(93	)

Net (loss) earnings attributable to Skechers U.S.A., Inc.	$	(29,916	)	$	40,237		$	(18,108	)	$	96,533


Net (loss) earnings per share attributable to Skechers U.S.A., Inc.:
Basic	$	(0.62	)	$	0.85		$	(0.38	)	$	2.05

Diluted	$	(0.62	)	$	0.82		$	(0.38	)	$	1.97


Weighted average shares used in calculating earnings (loss) per share attributable to Skechers U.S.A., Inc.:
Basic		48,341			47,422			48,292			47,107

Diluted		48,341			49,130			48,292			48,955


Comprehensive (loss) income:
Net (loss) earnings	$	(29,916	)	$	40,237		$	(18,108	)	$	96,533
(Loss) gain on foreign currency translation adjustment, net of tax		4,671			(6,147	)		8,943			(10,415	)

Total comprehensive (loss) income	$	(25,245	)	$	34,090		$	(9,165	)	$	86,118

See accompanying notes to unaudited condensed consolidated financial statements.

SKECHERS U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	Six-Months Ended June 30,
	2011			2010
Cash flows from operating activities:
Net (loss) earnings	$	(18,108	)	$	96,533
Adjustments to reconcile net (loss) earnings to net cash provided by (used in) operating activities:
Non-controlling interest in subsidiaries		209			(93	)
Depreciation of property and equipment		15,088			10,870
Amortization of deferred financing costs		652			741
Amortization of intangible assets		790			892
Provision for bad debts and returns		5,748			3,135
Non-cash stock compensation		7,242			6,665
Loss on disposal of equipment		232			50
Deferred income taxes		75			(12	)
(Increase) decrease in assets:
Receivables		(8,271	)		(91,260	)
Inventories		73,875			3,718
Prepaid expenses and other current assets		(15,973	)		(2,215	)
Other assets		65			(22,555	)
Increase (decrease) in liabilities:
Accounts payable		1,871			(5,058	)
Accrued expenses		(11,428	)		(9,381	)

Net cash provided by (used in) operating activities		52,067			(7,970	)

Cash flows from investing activities:
Capital expenditures		(92,881	)		(29,721	)
Maturities of investments		0			30,000
Intangible additions		0			(31	)

Net cash (used in) provided by investing activities		(92,881	)		248

Cash flows from financing activities:
Net proceeds from the issuances of stock through employee stock purchase plan and the exercise of stock options		2,042			10,772
Increase in long-term borrowings		36,751			0
Payments on long-term debt		(9,390	)		(281	)
Increase (decrease) in short-term borrowings		27,705			(61	)
Contribution from non-controlling interest of consolidated entity		115			1,000
Excess tax benefits from stock-based compensation		219			5,758

Net cash provided by financing activities		57,442			17,188

Net increase in cash and cash equivalents		16,628			9,466
Effect of exchange rates on cash and cash equivalents		596			(1,875	)
Cash and cash equivalents at beginning of the period		233,558			265,675

Cash and cash equivalents at end of the period	$	250,782		$	273,266


Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	2,439		$	1,512
Income taxes		7,588			53,343

Non-cash transactions:
Land contribution from noncontrolling interest of consolidated entity		0			30,000
Note payable contribution from noncontrolling interest of consolidated entity		0			14,567

See accompanying notes to unaudited condensed consolidated financial statements.

SKECHERS U.S.A., INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2011 and 2010

(Unaudited)

(1) GENERAL

Basis of Presentation

The accompanying condensed consolidated financial statements of Skechers U.S.A., Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2011.

Use of Estimates

The preparation of the condensed consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Non-controlling interests

The Company has interests in certain joint ventures which are consolidated into its financial statements. Non-controlling interest was a loss of $0.1 million and income of $0.1 million for the three months ended June 30, 2011 and 2010, respectively, which represents the share of net earnings or loss that is attributable to our joint venture partners. Non-controlling interest was income of $0.2 million and a loss of $0.1 million for the six months ended June 30, 2011 and 2010, respectively.

The Company has determined that its joint venture with HF Logistics I, LLC (“HF”) is a variable interest entity (“VIE”) and that the Company is the primary beneficiary. The VIE is consolidated into the condensed consolidated financial statements and the carrying amounts and classification of assets and liabilities was as follows (in thousands):


	June 30, 2011		December 31, 2010
Current assets	$	4,311	$	6,058
Noncurrent assets		129,320		107,723

Total assets	$	133,631	$	113,781


Current liabilities	$	55,791	$	36,364
Noncurrent liabilities		17,766		17,359

Total liabilities	$	73,557	$	53,723

The assets of these joint ventures are restricted in that they are not available for our general business use outside the context of the joint venture. The holders of the liabilities of each joint venture have no recourse to Skechers U.S.A., Inc. The Company does not have a significant variable interest in any unconsolidated VIE’s.

Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income,” (“ASU 2011-05”). ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in equity. ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This new guidance is to be applied retrospectively. ASU 2011-05 is effective for annual periods beginning after December 15, 2011. We do not expect that the adoption of this standard update will have a material impact on the Company’s consolidated financial statements.

(2) REVENUE RECOGNITION

The Company recognizes revenue on wholesale sales when products are shipped and the customer takes title and assumes risk of loss, collection of relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. This generally occurs at time of shipment. The Company recognizes revenue from retail sales at the point of sale. Allowances for estimated returns, discounts, doubtful accounts and chargebacks are provided for when related revenue is recorded. Related costs paid to third-party shipping companies are recorded as a cost of sales.

Royalty income is earned from licensing arrangements. Upon signing a new licensing agreement, we receive up-front fees, which are generally characterized as prepaid royalties. These fees are initially deferred and recognized as revenue as earned (i.e., as licensed sales are reported to the company or on a straight-line basis over the term of the agreement). The first calculated royalty payment is based on actual sales of the licensed product. Typically, at each quarter-end we receive correspondence from our licensees indicating the actual sales for the period. This information is used to calculate and accrue the related royalties based on the terms of the agreement.

(3) OTHER COMPREHENSIVE (LOSS) INCOME

In addition to net (loss) earnings, other comprehensive (loss) income includes changes in foreign currency translation adjustments and income (loss) attributable to non-controlling interests. The Company operates internationally through several foreign subsidiaries. Assets and liabilities of the foreign operations denominated in local currencies are translated at the rate of exchange at the balance sheet date. Revenues and expenses are translated at the weighted average rate of exchange during the period of translation. The resulting translation adjustments along with translation adjustments related to intercompany loans of a long-term nature are included in the translation adjustment in other comprehensive income (loss).

The activity in other comprehensive (loss) income, net of income taxes, was as follows (in thousands):


	Three-Months Ended June 30,						Six-Months Ended June 30,
Comprehensive income (loss)	2011			2010			2011			2010
Net (loss) earnings	$	(30,052	)	$	40,317		$	(17,899	)	$	96,440
Gain (loss) on foreign currency translation adjustment, net of tax		4,781			(6,120	)		9,324			(10,350	)

Comprehensive (loss) income		(25,271	)		34,197			(8,575	)		86,090
Comprehensive income (loss) attributable to non-controlling interest		26			(107	)		(590	)		28

Comprehensive (loss) income attributable to parent	$	(25,245	)	$	34,090		$	(9,165	)	$	86,118

(4) SHARE-BASED COMPENSATION

For stock-based awards we have recognized compensation expense based on the grant date fair value. Share-based compensation expense was $3.5 million and $3.4 million for the three months ended June 30, 2011 and 2010, respectively. Share-based compensation expense was $7.2 million and $6.7 million for the six months ended June 30, 2011 and 2010, respectively.

Stock options granted pursuant to the 1998 Stock Option, Deferred Stock and Restricted Stock Plan and the 2007 Incentive Award Plan (the “Equity Incentive Plans”) were as follows:


				Weighted		Weighted Average	Aggregate
				Average		Remaining	Intrinsic
	Shares			Exercise Price		Contractual Term	Value
Outstanding at December 31, 2010		451,308		$	11.26
Granted		0			0
Exercised		(98,503	)		9.08
Cancelled		(85,058	)		23.23

Outstanding at June 30, 2011		267,747			8.26	1.4 years	$	1,664,273


Exercisable at June 30, 2011		267,747			8.26	1.4 years	$	1,664,273

A summary of the status and changes of our nonvested shares related to our Equity Incentive Plans as of and for the six months ended June 30, 2011 is presented below:


				Weighted Average
				Grant-Date Fair
	Shares			Value
Nonvested at December 31, 2010		1,493,329		$	18.97
Granted		10,000			21.00
Vested		(46,667	)		31.37
Cancelled		(12,333	)		17.44

Nonvested at June 30, 2011		1,444,329			18.77

As of June 30, 2011, there was $18.3 million of unrecognized compensation cost related to nonvested common shares. The cost is expected to be amortized over a weighted average period of 1.4 years.

(5) EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share represents net earnings (loss) divided by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share represents the weighted average number of common shares and potential common shares, if dilutive, that would arise from the exercise of stock options and nonvested shares using the treasury stock method.

The following is a reconciliation of net earnings (loss) and weighted average common shares outstanding for purposes of calculating basic earnings (loss) per share (in thousands, except per share amounts):


	Three-Months Ended June 30,					Six-Months Ended June 30,
Basic earnings (loss) per share	2011			2010		2011			2010
Net earnings (loss) attributable to Skechers U.S.A., Inc.	$	(29,916	)	$	40,237	$	(18,108	)	$	96,533
Weighted average common shares outstanding		48,341			47,422		48,292			47,107
Basic earnings (loss) per share attributable to Skechers U.S.A., Inc.	$	(0.62	)	$	0.85	$	(0.38	)	$	2.05

The following is a reconciliation of net earnings (loss) and weighted average common shares outstanding for purposes of calculating diluted earnings (loss) per share (in thousands, except per share amounts):


	Three-Months Ended June 30,					Six-Months Ended June 30,
Diluted earnings (loss) per share	2011			2010		2011			2010
Net earnings (loss) attributable to Skechers U.S.A., Inc.	$	(29,916	)	$	40,237	$	(18,108	)	$	96,533


Weighted average common shares outstanding		48,341			47,422		48,292			47,107
Dilutive effect of stock options		0			1,708		0			1,848

Weighted average common shares outstanding		48,341			49,130		48,292			48,955


Diluted earnings (loss) per share attributable to Skechers U.S.A., Inc.	$	(0.62	)	$	0.82	$	(0.38	)	$	1.97

Options to purchase 851 shares and 38,938 shares of Class A common stock were not included in the computation of diluted earnings (loss) per share for the three months and six months ended June 30, 2011, respectively, because their effect would have been anti-dilutive. There were no options excluded from the computation of diluted earnings per share for the three months and six months ended June 30, 2010, respectively.

(6) INCOME TAXES

The Company’s effective tax rates for the second quarter and first six months of 2011 were 41.0% and 51.9%, respectively, compared to the effective tax rates of 33.6% and 32.4% for the second quarter and first six months of 2010, respectively. Income tax benefit for the three months ended June 30, 2011 was $20.8 million compared to expense of $20.4 million for the same period in 2010. Income tax benefit for the six months ended June 30, 2011 was $19.3 million compared to expense of $46.2 million for the same period in 2010.

(7) LINE OF CREDIT, SHORT-TERM AND LONG-TERM BORROWINGS

The Company and its subsidiaries had $1.6 million of outstanding letters of credit and short-term borrowings of $46.1 million as of June 30, 2011 and $18.3 million at December 31, 2010.

Long-term debt is as follows (in thousands):


	June 30,		December 31,
	2011		2010
Note payable to bank, due in monthly installments of $531.4 (includes principal and interest), fixed rate interest at 3.54%, secured by property, balloon payment of $12,635 due December 2015	$	36,814	$	39,325
Note payable to bank, due in monthly installments of $483.9 (includes principal and interest), fixed rate interest at 3.19%, secured by property, balloon payment of $11,670 due June 2016		36,344		0
Note payable to bank, due in monthly installments of $57.6 (includes principal and interest), fixed rate interest at 7.89%, secured by property, balloon payment of $6,889 paid in January 2011		0		6,900
Loan from HF Logistics I, LLC		17,766		17,358
Capital lease obligations		44		51

Subtotal		90,968		63,634
Less current installments		9,893		11,984

Total long-term debt	$	81,075	$	51,650

(8) LITIGATION

The Company recognizes legal fees in connection with loss contingencies and other related matters as incurred.

The Company occasionally becomes involved in litigation arising from the normal course of business, and management is unable to estimate the extent of any liability that may arise from unanticipated future litigation. The Company has no reason to believe that there was a reasonable possibility or a probability the Company may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of litigation is inherently uncertain and assessments and decisions on defense and settlement can change significantly in a short period of time. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Company in the same reporting period for amounts in excess of management’s expectations, the Company’s consolidated financial statements of a particular reporting period could be materially adversely affected.

(9) STOCKHOLDERS’ EQUITY

During the three months and six months ended June 30, 2011, 13,640 shares of Class B common stock were converted into shares of Class A common stock, respectively. During the three months and six months ended June 30, 2010, 852,225 and 1,014,105 shares of Class B common stock were converted into shares of Class A common stock, respectively.

The following table reconciles equity attributable to non-controlling interest (in thousands):


	Six-Months Ended June 30,
	2011		2010
Non-controlling interest, January 1	$	37,631	$	3,448
Net earnings (loss) attributable to non-controlling interest		209		(93	)
Foreign currency translation adjustment		381		70
Capital contribution by non-controlling interest		115		31,000

Non-controlling interest, June 30	$	38,336	$	34,425

(10) SEGMENT AND GEOGRAPHIC REPORTING INFORMATION

Company’s segments. Net sales, gross profit and identifiable assets and additions to property and equipment for the domestic wholesale segment, international wholesale, retail, and the e-commerce segment on a combined basis were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net sales
Domestic wholesale	$	217,241	$	317,788	$	428,775	$	591,747
International wholesale		105,002		77,779		274,413		201,128
Retail		106,573		102,344		196,363		189,586
E-commerce		5,535		6,948		11,034		15,162

Total	$	434,351	$	504,859	$	910,585	$	997,623


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Gross margins
Domestic wholesale	$	37,608	$	134,643	$	103,855	$	257,983
International wholesale		39,826		32,017		112,643		86,003
Retail		63,120		67,331		113,859		123,113
E-commerce		2,776		3,654		5,583		7,964

Total	$	143,330	$	237,645	$	335,940	$	475,063


	June 30, 2011		December 31, 2010
Identifiable assets
Domestic wholesale	$	883,705	$	891,671
International wholesale		333,258		300,153
Retail		131,323		112,774
E-commerce		177		196

Total	$	1,348,463	$	1,304,794


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Additions to property and equipment
Domestic wholesale	$	42,993	$	15,409	$	78,784	$	16,742
International wholesale		851		2,154		1,824		2,592
Retail		5,658		5,509		12,273		10,387

Total	$	49,502	$	23,072	$	92,881	$	29,721

Geographic Information:

The following summarizes our operations in different geographic areas for the period indicated (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net sales (1)
United States	$	313,345	$	416,122	$	607,398	$	776,833
Canada		11,715		11,851		27,517		27,875
Other international (2)		109,291		76,886		275,670		192,915

Total	$	434,351	$	504,859	$	910,585	$	997,623


	June 30, 2011		December 31, 2010
Long-lived assets
United States	$	349,515	$	276,457
Canada		1,374		1,590
Other international (2)		16,263		15,755

Total	$	367,152	$	293,802


(1)		The Company has subsidiaries in Canada, United Kingdom, Germany, France, Spain, Portugal, Italy, Netherlands, Brazil, and Chile that generate net sales within those respective countries and in some cases the neighboring regions. The Company has joint ventures in China, Hong Kong, Malaysia, Singapore, and Thailand that generate net sales from those countries. The Company also has a subsidiary in Switzerland that generates net sales from that country in addition to net sales to our distributors located in numerous non-European countries. Net sales are attributable to geographic regions based on the location of the Company subsidiary.

(2)		Other international consists of Switzerland, United Kingdom, Germany, France, Spain, Portugal, Italy, Netherlands, China, Hong Kong, Malaysia, Singapore, Thailand, Brazil, Chile, and Vietnam.

(11) BUSINESS AND CREDIT CONCENTRATIONS

The Company generates the majority of its sales in the United States; however, several of its products are sold into various foreign countries, which subjects the Company to the risks of doing business abroad. In addition, the Company operates in the footwear industry, which is impacted by the general economy, and its business depends on the general economic environment and levels of consumer spending. Changes in the marketplace may significantly affect management’s estimates and the Company’s performance. Management performs regular evaluations concerning the ability of customers to satisfy their obligations and provides for estimated doubtful accounts. Domestic accounts receivable, which generally do not require collateral from customers, were equal to $163.1 million and $164.4 million before allowances for bad debts, sales returns and chargebacks at June 30, 2011 and December 31, 2010, respectively. Foreign accounts receivable, which in some cases are collateralized by letters of credit, were equal to $135.8 million and $121.4 million before allowance for bad debts, sales returns and chargebacks at June 30, 2011 and December 31, 2010, respectively. The Company’s credit losses attributable to write-offs for the three months ended June 30, 2011 and 2010 were $1.8 million and $0.2 million, respectively. The Company’s credit losses attributable to write-offs for the six months ended June 30, 2011 and 2010 were $2.5 million and $1.6 million, respectively.

Assets located outside the U.S. consist primarily of cash, accounts receivable, inventory, property and equipment, and other assets. Net assets held outside the United States were $356.8 million and $322.0 million at June 30, 2011 and December 31, 2010, respectively.

The Company’s net sales to its five largest customers accounted for approximately 25.2% and 31.3% of total net sales for the three months ended June 30, 2011 and 2010, respectively. The Company’s net sales to its five largest customers accounted for approximately 20.1% and 28.2% of total net sales for the six months ended June 30, 2011 and 2010, respectively. No customer accounted for more than 10% of our net sales during the three months ended June 30, 2011. One customer accounted for 10.9% of our net sales during the three months ended June 30, 2010. No customer accounted for more than 10% of our net sales during the six months ended June 30, 2011 and 2010, respectively. No customer accounted for more than 10% of our outstanding accounts receivable balance at June 30, 2011 and December 31, 2010, respectively.

The Company’s top five manufacturers produced the following for the three and six months ended June 30, 2011 and 2010, respectively:


	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Manufacturer #1		31.7	%		36.8	%		30.8	%		34.6	%
Manufacturer #2		11.2	%		14.2	%		11.4	%		13.3	%
Manufacturer #3		7.6	%		9.4	%		8.6	%		10.1	%
Manufacturer #4		6.8	%		8.1	%		6.7	%		8.6	%
Manufacturer #5		6.3	%		4.6	%		6.3	%		4.7	%


		63.6	%		73.1	%		63.8	%		71.3	%

The majority of the Company’s products are produced in China. The Company’s operations are subject to the customary risks of doing business abroad, including, but not limited to, currency fluctuations and revaluations, custom duties and related fees, various import controls and other monetary barriers, restrictions on the transfer of funds, labor unrest and strikes and, in certain parts of the world, political instability. The Company believes it has acted to reduce these risks by diversifying manufacturing among various factories. To date, these business risks have not had a material adverse impact on the Company’s operations.

(12) RELATED PARTY TRANSACTIONS

On July 29,2010, the Company formed Skechers Foundation (the “Foundation”), which is a 501(c)(3) non-profit entity that does not have any shareholders or members. The Foundation is not a subsidiary of and is not otherwise affiliated with the Company, and the Company does not have a financial interest in the Foundation. However, two officers and directors of the Company, Michael Greenberg who is its President and David Weinberg who is its Chief Operating Officer and Chief Financial Officer, are also officers and directors of the Foundation. The Company contributed $250,000 and $750,000 to the Foundation to use for various charitable causes during the three months and six months ended June 30, 2011, respectively.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and Notes thereto in Item 1 of this report and our company’s annual report on Form 10-K for the year ended December 31, 2010.

We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. The discussion also provides information about the financial results of the various segments of our business to provide a better understanding of how those segments and their results affect the financial condition and results of operations of our company as a whole.

This quarterly report on Form 10-Q may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which can be identified by the use of forward-looking language such as “intend,” “may,” “will,” “believe,” “expect,” “anticipate” or other comparable terms. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements, and reported results shall not be considered an indication of our company’s future performance. Factors that might cause or contribute to such differences include:

	•		international, national and local general economic, political and market conditions including the recent global economic recession and the uncertain pace of recovery in our markets;

	•		our ability to maintain our brand image and to anticipate, forecast, identify, and respond to changes in fashion trends, consumer demand for the products and other market factors;

	•		our ability to remain competitive among sellers of footwear for consumers, including in the highly competitive performance footwear market;

	•		our ability to sustain, manage and forecast our costs and proper inventory levels;

	•		the loss of any significant customers, decreased demand by industry retailers and the cancellation of order commitments;

	•		our ability to continue to manufacture and ship our products that are sourced in China, which could be adversely affected by various economic, political or trade conditions, or a natural disaster in China;

	•		our ability to predict our quarterly revenues, which have varied significantly in the past and can be expected to fluctuate in the future due to a number of reasons, many of which are beyond our control; and

	•		other factors referenced or incorporated by reference in our company’s annual report on Form 10-K for the year ended December 31, 2010 under the captions “Item 1A: Risk Factors” and “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The risks included here are not exhaustive. Other sections of this report may include additional factors that could adversely impact our business, financial condition and results of operations. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and we cannot predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements, which reflect our opinions only as of the date of this quarterly report, as a prediction of actual results. We undertake no obligation to publicly release any revisions to the forward-looking statements after the date of this document, except as otherwise required by reporting requirements of applicable federal and states securities laws.

FINANCIAL OVERVIEW

Our net loss and gross margins for the first six months of 2011 were negatively impacted by several factors, including (i) an excess supply of footwear in the toning market from all manufacturers, including our competitors, which led to (ii) sales of lower margin toning product through our domestic wholesale channel and (iii) lower retail margins due to sales price markdowns in order to reduce excess inventory levels of toning product. During the second quarter in an effort to eliminate excess inventory, we aggressively reduced our toning inventory by selling two million pairs of our original Shape-ups at a loss of $21.0 million. We also recorded a $4.4 million reserve for additional toning product, which we believe reflects net realizable value of the remaining toning inventory. We anticipate our domestic revenues and margins will be lower for 2011 compared to 2010 as a result of the reduced demand and lower pricing of product in the toning category. We continue to closely monitor our inventory position of toning product, which we expect to continue to decline in the second half of 2011. We believe that new styles and lines of footwear that we will be launching later this year will have an offsetting positive impact on our results of operations in the second half of 2011 and into 2012.

We have four reportable segments — domestic wholesale sales, international wholesale sales, retail sales, which includes domestic and international retail sales, and e-commerce sales. We evaluate segment performance based primarily on net sales and gross profit. The largest portion of our revenue is derived from the domestic wholesale segment. Net loss for the three months ended June 30, 2011 was $29.9 million, or $0.62 per diluted share.

Revenue as a percentage of net sales was as follows:


	Three-Months Ended June 30,
	2011			2010
Percentage of revenues by segment
Domestic wholesale		50.0	%		62.9	%
International wholesale		24.2	%		15.4	%
Retail		24.5	%		20.3	%
E-commerce		1.3	%		1.4	%

Total		100	%		100	%

As of June 30, 2011, we owned 261 domestic retail stores and 44 international retail stores, and we have established our presence in most of what we believe to be the major domestic retail markets. During the first six months of 2011, we opened 13 domestic concept stores, five domestic outlet stores, two domestic warehouse stores, and one international concept store and we closed one domestic concept store, one domestic warehouse store, and one international concept store. We annually review all of our stores for impairment, or more frequently if triggering events occur which may be an indicator of impairment, and we carefully review our under-performing stores and consider the potential for non-renewal of leases upon completion of the current term of the applicable lease.

During the remainder of 2011, we intend to focus on: (i) completing our domestic distribution center, (ii) managing our inventory and expense structure to be in line with expected sales levels (iii) growing our international business, (iv) strategically expanding our retail distribution channel by opening another 15 to 20 stores, including several international company-owned stores, and (v) increasing the product count for all customers by delivering trend-right styles at reasonable prices.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated, selected information from our results of operations (in thousands) and as a percentage of net sales:


	Three-Months Ended June 30,										Six-Months Ended June 30,
	2011					2010					2011					2010
Net sales	$	434,351		100.0	%	$	504,859		100.0	%	$	910,585		100.0	%	$	997,623		100.0	%
Cost of sales		291,021		67.0			267,214		52.9			574,645		63.1			522,560		52.4

Gross profit		143,330		33.0			237,645		47.1			335,940		36.9			475,063		47.6
Royalty income		1,376		0.3			875		0.1			3,024		0.3			1,260		0.1

		144,706		33.3			238,520		47.2			338,964		37.2			476,323		47.7

Operating expenses:
Selling		53,099		12.2			52,437		10.4			90,659		10.0			86,746		8.7
General and administrative		139,965		32.2			127,299		25.2			281,948		30.9			249,786		25.0

		193,064		44.4			179,736		35.6			372,607		40.9			336,532		33.7

Earnings (loss) from operations		(48,358	)	(11.1	)		58,784		11.6			(33,643	)	(3.7	)		139,791		14.0
Interest income		756		0.1			436		0.1			1,343		0.2			1,864		0.2
Interest expense		(2,352	)	(0.5	)		(118	)	0			(4,317	)	(0.5	)		(833	)	(0.1	)
Other, net		(944	)	(0.2	)		1,611		0.3			(595	)	(0.1	)		1,820		0.2

Earnings (loss) before income taxes		(50,898	)	(11.7	)		60,713		12.0			(37,212	)	(4.1	)		142,642		14.3
Income tax (benefit) expense		(20,846	)	(4.8	)		20,396		4.0			(19,313	)	(2.1	)		46,202		4.6

Net (loss) earnings		(30,052	)	(6.9	)		40,317		8.0			(17,899	)	(2.0	)		96,440		9.7
Less: Net (loss) income attributable to non-controlling interests		(136	)	0			80		0			209		0			(93	)	0

Net (loss) earnings attributable to Skechers U.S.A., Inc.	$	(29,916	)	(6.9	)%	$	40,237		8.0	%	$	(18,108	)	(2.0	)%	$	96,533		9.7	%

THREE MONTHS ENDED JUNE 30, 2011 COMPARED TO THREE MONTHS ENDED JUNE 30, 2010

Net sales

Net sales for the three months ended June 30, 2011 were $434.4 million, a decrease of $70.5 million, or 14.0%, as compared to net sales of $504.9 million for the three months ended June 30, 2010. The decrease in net sales was primarily attributable to lower sales in our domestic wholesale segment due to reduced sales of toning products partially offset by higher sales in our international wholesale segment.

Our domestic wholesale net sales decreased $100.6 million, or 31.6%, to $217.2 million for the three months ended June 30, 2011 from $317.8 million for the three months ended June 30, 2010. The largest decrease in our domestic wholesale segment came in our women’s and men’s toning divisions. The average selling price per pair within the domestic wholesale segment decreased to $19.22 per pair for the three months ended June 30, 2011 from $24.87 per pair in the same period last year, primarily as a result of selling two million pairs of our original Shape-ups at a loss of $21.0 million. The decrease in the domestic wholesale segment’s net sales came on an 11.5% unit sales volume decrease to 11.3 million pairs for the three months ended June 30, 2011 from 12.8 million pairs for the same period in 2010.

Our international wholesale segment sales increased $27.2 million, or 35.0%, to $105.0 million for the three months ended June 30, 2011 compared to sales of $77.8 million for the three months ended June 30, 2010. Our international wholesale sales consist of direct subsidiary sales — those we make to department stores and specialty retailers — and sales to our distributors, who in turn sell to retailers in various international regions where we do not sell directly. Direct subsidiary sales increased $12.8 million, or 22.7%, to $68.8 million for the three months ended June 30, 2011 compared to net sales of $56.0 million for the three months ended June 30, 2010. The largest sales increases during the quarter came from our subsidiaries in Italy and Spain. Our distributor sales increased $14.5 million to $36.2 million for the three months ended June 30, 2011, a 66.6% increase from sales of $21.7 million for the three months ended June 30, 2010. This was primarily attributable to increased sales to our distributors in Japan and the United Arab Emirates (“UAE”).

Our retail segment sales increased $4.3 million to $106.6 million for the three months ended June 30, 2011, a 4.1% increase over sales of $102.3 million for the three months ended June 30, 2010. The increase in retail sales was attributable to a net increase of 43 domestic and international stores compared to the same period in 2010. For the three months ended June 30, 2011, we realized negative comparable store sales of 10.2% in our domestic retail stores and positive comparable store sales of 0.3% in our international retail stores. The comparable store sales decline domestically was principally driven by reduced demand for our toning product as well as reduced average retail pricing as described above. During the three months ended June 30, 2011, we opened ten new domestic concept stores, four domestic outlet stores, two domestic warehouse stores, and we closed one domestic concept store and one domestic warehouse store. Our domestic retail sales decreased 0.6% for the three months ended June 30, 2011 compared to the same period in 2010 as the result of negative comparable store sales partially offset by a net increase of 33 domestic stores. Our international retail sales increased 42.4% for the three months ended June 30, 2011 compared to the same period in 2010 attributable to a net increase of 10 international stores.

Our e-commerce sales decreased $1.4 million from $6.9 million for the three months ended June 30, 2010 to $5.5 million for the three months ended June 30, 2011, a 20.3% decrease. Our e-commerce sales made up approximately 1% of our consolidated net sales for each of the three-month periods ended June 30, 2011 and 2010.

Gross profit

Gross profit for the three months ended June 30, 2011 decreased $94.3 million to $143.3 million as compared to $237.6 million for the three months ended June 30, 2010. Gross profit as a percentage of net sales, or gross margin, decreased to 33.0% for the three months ended June 30, 2011 from 47.1% for the same period in the prior year. Our domestic wholesale segment gross profit decreased $97.0 million, or 72.1%, to $37.6 million for the three months ended June 30, 2011 compared to $134.6 million for the three months ended June 30, 2010. Domestic wholesale margins decreased to 17.3% in the three months ended June 30, 2011 from 42.4% for the same period in the prior year. The decrease in domestic wholesale margins was primarily attributable to the sell-through of toning product to reduce this excess inventory. During the second quarter we sold two million pairs of our original Shape-ups at a loss of $21.0 million as well as recorded a $4.4 million reserve for our remaining toning product.

Gross profit for our international wholesale segment increased $7.8 million, or 24.4%, to $39.8 million for the three months ended June 30, 2011 compared to $32.0 million for the three months ended June 30, 2010. Gross margins were 37.9% for the three months ended June 30, 2011 compared to 41.2% for the three months ended June 30, 2010. The decrease in gross margins for the international wholesale segment was attributable to increased distributor sales, which achieved lower gross margins than our international wholesale sales through our foreign subsidiaries. Gross margins for our direct subsidiary sales were 45.4% for the three months ended June 30, 2011 as compared to 46.9% for the three months ended June 30, 2010. Gross margins for our distributor sales were 23.8% for the three months ended June 30, 2011 as compared to 26.4% for the three months ended June 30, 2010.

Gross profit for our retail segment decreased $4.2 million, or 6.3%, to $63.1 million for the three months ended June 30, 2011 as compared to $67.3 million for the three months ended June 30, 2010. Gross margins for all stores were 59.2% for the three months ended June 30, 2011 as compared to 65.8% for the three months ended June 30, 2010. Gross margins for our domestic stores were 59.5% for the three months ended June 30, 2011 as compared to 65.7% for the three months ended June 30, 2010. Gross margins for our international stores were 57.7% for the three months ended June 30, 2011 as compared to 66.4% for the three months ended June 30, 2010. The decrease in domestic and international retail margins was primarily because of lower average selling prices that resulted from increased competition and the sell-through of our excess toning inventory.

Our cost of sales includes the cost of footwear purchased from our manufacturers, royalties, duties, quota costs, inbound freight (including ocean, air and freight from the dock to our distribution centers), broker fees and storage costs. Because we include expenses related to our distribution network in general and administrative expenses while some of our competitors may include expenses of this type in cost of sales, our gross margins may not be comparable, and we may report higher gross margins than some of our competitors in part for this reason.

Selling expenses

Selling expenses increased by $0.7 million, or 1.3%, to $53.1 million for the three months ended June 30, 2011 from $52.4 million for the three months ended June 30, 2010. As a percentage of net sales, selling expenses were 12.2% and 10.4% for the three months ended June 30, 2011 and 2010, respectively. The increase in selling expenses was primarily the result of higher sales commission rates on our toning products and sales representative sample costs.

Selling expenses consist primarily of the following: sales representative sample costs, sales commissions, trade shows, advertising and promotional costs, which may include television, print ads, ad production costs and point-of-purchase (POP) costs.

General and administrative expenses

General and administrative expenses increased by $12.7 million, or 9.9%, to $140.0 million for the three months ended June 30, 2011 from $127.3 million for the three months ended June 30, 2010. As a percentage of sales, general and administrative expenses were 32.2% and 25.2% for the three months ended June 30, 2011 and 2010, respectively. The increase in general and administrative expenses was primarily attributable to increased research and development costs for new products of $2.7 million, increased rent expense of $2.5 million attributable to an additional 43 stores from the prior year, increased outside professional fees of $2.3 million, and increased depreciation expense of $2.1 million. In addition, the expenses related to our distribution network, including purchasing, receiving, inspecting, allocating, warehousing and packaging of our products, totaled $30.2 million and $25.7 million for the three months ended June 30, 2011 and 2010, respectively.

General and administrative expenses consist primarily of the following: salaries, wages and related taxes and various overhead costs associated with our corporate staff, stock-based compensation, domestic and international retail operations, non-selling related costs of our international operations, costs associated with our domestic and European distribution centers, professional fees related to legal, consulting and accounting, insurance, depreciation and amortization, and expenses related to our distribution network, which includes the functions of purchasing, receiving, inspecting, allocating, warehousing and packaging our products. These costs are included in general and administrative expenses and are not allocated to segments.

Interest income

Interest income was $0.8 million for the three months ended June 30, 2011 compared to $0.4 million for the same period in 2010.

Interest expense

Interest expense was $2.4 million for the three months ended June 30, 2011 compared to $0.1 million for the same period in 2010. The increase was attributable to increased interest paid to our foreign manufacturers.

Income taxes

Our effective tax rate was 41.0% and 33.6% for the three months ended June 30, 2011 and 2010, respectively. Income tax benefit for the three months ended June 30, 2011 was $20.8 million compared to expense of $20.4 million for the same period in 2010.

After the first quarter of 2011, estimating a reliable annual effective tax rate for our company for the year became increasingly difficult because of the uncertainty in forecasting taxable income or loss for the remainder of the year for each of our domestic and international operations. Such forecasts may vary significantly from quarter to quarter and even small changes in forecasts or actual results for either our domestic or international operations can result in significant changes in our estimated annual effective tax rate. Since forecasting an annual effective tax rate under these circumstances would not provide a meaningful estimate, we believe that the actual year-to-date effective tax

rate is the best estimate of the annual tax rate in accordance with ASC 740-270. Our income tax benefit has been calculated utilizing our actual effective tax rate for the six month period ended June 30, 2011.

Non-controlling interest in net income and loss of consolidated subsidiaries

Non-controlling interest for the three months ended June 30, 2011 decreased $0.2 million to a loss of $0.1 million as compared to income of $0.1 million for the same period in 2010. Non-controlling interest represents the share of net earnings (loss) that is attributable to our joint venture partners.

SIX MONTHS ENDED JUNE 30, 2011 COMPARED TO SIX MONTHS ENDED JUNE 30, 2010

Net sales

Net sales for the six months ended June 30, 2011 were $910.6 million, a decrease of $87.0 million, or 8.7%, as compared to net sales of $997.6 million for the six months ended June 30, 2010. The decrease in net sales was primarily attributable to lower sales in our domestic wholesale segment due to reduced sales of toning products partially offset by higher sales in our international wholesale segment.

Our domestic wholesale net sales decreased $162.9 million, or 27.5%, to $428.8 million for the six months ended June 30, 2011, from $591.7 million for the six months ended June 30, 2010. The largest decrease in our domestic wholesale segment came in our women’s and men’s toning divisions. The average selling price per pair within the domestic wholesale segment decreased to $19.52 per pair for the six months ended June 30, 2011 from $24.28 per pair in the same period last year, as a result of the sell-through of our excess toning inventory. The decrease in the domestic wholesale segment’s net sales came on a 9.9% unit sales volume decrease to 22.0 million pairs for the six months ended June 30, 2011 from 24.4 million pairs for the same period in 2010.

Our international wholesale segment sales increased $73.3 million, or 36.4%, to $274.4 million for the six months ended June 30, 2011, compared to sales of $201.1 million for the six months ended June 30, 2010. Direct subsidiary sales increased $44.0 million, or 28.4%, to $199.3 million for the six months ended June 30, 2011 compared to net sales of $155.3 million for the six months ended June 30, 2010. The largest sales increases during the six months came from our subsidiaries in Italy, United Kingdom, Brazil, and Spain. Our distributor sales increased $29.3 million to $75.1 million for the six months ended June 30, 2011, a 63.9% increase from sales of $45.8 million for the six months ended June 30, 2010. This was primarily attributable to increased sales to our distributors in Japan, the United Arab Emirates (“UAE”), and Korea.

Our retail segment sales increased $6.8 million to $196.4 million for the six months ended June 30, 2011, a 3.6% increase over sales of $189.6 million for the six months ended June 30, 2010. The increase in retail sales was attributable to a net increase of 43 domestic and international stores compared to the same period in 2010. For the six months ended June 30, 2011, we realized negative comparable store sales of 10.7% in our domestic retail stores and positive comparable store sales of 2.9% in our international retail stores. The comparable store sales decline domestically was principally driven by reduced demand for our toning product as well as reduced average retail pricing as described above. During the six months ended June 30, 2011, we opened 13 new domestic concept stores, five domestic outlet stores, two domestic warehouse stores, one international concept store, and we closed one domestic concept store, one domestic warehouse store, and one international concept store. Our domestic retail sales decreased 1.4% for the six months ended June 30, 2011 compared to the same period in 2010 as the result of negative comparable store sales partially offset by a net increase of 33 domestic stores. Our international retail sales increased 46.3% for the six months ended June 30, 2011 compared to the same period in 2010 attributable to positive comparable store sales and a net increase of 10 international stores.

Our e-commerce sales decreased $4.2 million from $15.2 million for the six months ended June 30, 2010 to $11.0 million for the six months ended June 30, 2011, a 27.2% decrease. Our e-commerce sales made up approximately 1% of our consolidated net sales in the six months ended June 30, 2011 compared to approximately 2% during the same period in the prior year.

Gross profit

Gross profit for the six months ended June 30, 2011 decreased $139.2 million to $335.9 million as compared to $475.1 million for the six months ended June 30, 2010. Gross profit as a percentage of net sales, or gross margin, decreased to 36.9% for the six months ended June 30, 2011 from 47.6% for the same period in the prior year. Our domestic wholesale segment gross profit decreased $154.1 million, or 59.7%, to $103.9 million for the six months ended June 30, 2011 compared to $258.0 million for the six months ended June 30, 2010. Domestic wholesale margins decreased to 24.2% in the six months ended June 30, 2011 from 43.6% for the same period in the prior year. The decrease in domestic wholesale margins was attributable to the sell-through of our excess toning inventory resulting from the oversupply of products from all manufacturers, including our competitors, in the toning market. During the six months ended June 30, 2011, we reduced our excess toning inventory by selling two million pairs of our original Shape-ups at a loss of $21.0 million and recorded an additional $4.4 million reserve for our remaining toning product.

Gross profit for our international wholesale segment increased $26.6 million, or 31.0%, to $112.6 million for the six months ended June 30, 2011 compared to $86.0 million for the six months ended June 30, 2010. Gross margins were 41.1% for the six months ended June 30, 2011 compared to 42.8% for the six months ended June 30, 2010. The decrease in gross margins for the international wholesale segment was attributable to increased distributor sales, which achieved lower gross margins than our international wholesale sales through our foreign subsidiaries. Gross margins for our direct subsidiary sales were 46.9% for the six months ended June 30, 2011 as compared to 47.1% for the six months ended June 30, 2010. Gross margins for our distributor sales were 25.5% for the six months ended June 30, 2011 as compared to 28.0% for the six months ended June 30, 2010.

Gross profit for our retail segment decreased $9.2 million, or 7.5%, to $113.9 million for the six months ended June 30, 2011 as compared to $123.1 million for the six months ended June 30, 2010. Gross margins for all stores were 58.0% for the six months ended June 30, 2011 as compared to 64.9% for the six months ended June 30, 2010. Gross margins for our domestic stores were 58.5% for the six months ended June 30, 2011 as compared to 65.1% for the six months ended June 30, 2010. Gross margins for our international stores were 54.9% for the six months ended June 30, 2011 as compared to 64.0% for the six months ended June 30, 2010. The decrease in domestic and international retail margins was primarily attributable to lower average selling prices of our toning inventory.

Selling expenses

Selling expenses increased by $4.0 million, or 4.5%, to $90.7 million for the six months ended June 30, 2011 from $86.7 million for the six months ended June 30, 2010. As a percentage of net sales, selling expenses were 10.0% and 8.7% for the six months ended June 30, 2011 and 2010, respectively. The increase in selling expenses was primarily attributable to higher advertising expenses of $2.3 million for the six months ended June 30, 2011.

General and administrative expenses

General and administrative expenses increased by $32.1 million, or 12.9%, to $281.9 million for the six months ended June 30, 2011 from $249.8 million for the six months ended June 30, 2010. As a percentage of sales, general and administrative expenses were 30.9% and 25.0% for the six months ended June 30, 2011 and 2010, respectively. The increase in general and administrative expenses was primarily attributable to higher rent expense of $6.0 million attributable to an additional 43 stores from the prior year, increased outside professional fees of $5.8 million, increased depreciation expense of $4.1 million, and increased research and development costs for new products of $2.5 million. In addition, the expenses related to our distribution network, including purchasing, receiving, inspecting, allocating, warehousing and packaging of our products, totaled $66.8 million and $58.8 million for the six months ended June 30, 2011 and 2010, respectively.

Interest income

Interest income was $1.3 million for the six months ended June 30, 2011 compared to $1.9 million for the same period in 2010. The decrease in interest income was primarily attributable to interest received on refunds of customs and duties payments for the six months ended June 30, 2010.

Interest expense

Interest expense was $4.3 million for the six months ended June 30, 2011 compared to $0.8 million for the same period in 2010. The increase was attributable to increased interest paid to our foreign manufacturers.

Income taxes

Our effective tax rate was 51.9% and 32.4% for the six months ended June 30, 2011 and 2010, respectively. Income tax benefit for the six months ended June 30, 2011 was $19.3 million compared to expense of $46.2 million for the same period in 2010.

After the first quarter of 2011, estimating a reliable annual effective tax rate for our company for the year became increasingly difficult because of the uncertainty in forecasting taxable income or loss for the remainder of the year for each of our domestic and international operations. Such forecasts may vary significantly from quarter to quarter and even small changes in forecasts or actual results for either our domestic or international operations can result in significant changes in our company’s estimated annual effective tax rate. Since forecasting an annual effective tax rate under these circumstances would not provide a meaningful estimate, we believe that the actual year-to-date effective tax rate is the best estimate of the annual tax rate in accordance with ASC 740-270. Our income tax benefit has been calculated utilizing our actual effective tax rate for the six month period ended June 30, 2011.

Non-controlling interest in net income and loss of consolidated subsidiaries

Non-controlling interest for the six months ended June 30, 2011 increased $0.3 million to income of $0.2 million as compared to a loss of $0.1 million for the same period in 2010.

LIQUIDITY AND CAPITAL RESOURCES

Our working capital at June 30, 2011 was $624.3 million, a decrease of $41.8 million from working capital of $666.1 million at December 31, 2010. Our cash and cash equivalents at June 30, 2011 were $250.8 million compared to $233.6 million at December 31, 2010. The increase in cash and cash equivalents of $17.2 million was the result of reduced inventory levels of $73.9 million and increased borrowings of $64.4 million, partially offset by capital expenditures of $92.9 million and a net loss of $18.1 million.

For the six months ended June 30, 2011, net cash provided by operating activities was $52.1 million as compared to net cash used of $8.0 million for the six months ended June 30, 2010. The increase in net cash provided by operating activities in the six months ended June 30, 2011 as compared to the same period in the prior year was primarily the result of reduced inventory levels.

Net cash used in investing activities was $92.9 million for the six months ended June 30, 2011 as compared to net cash provided by investing activities of $0.2 million for the six months ended June 30, 2010. The decrease in net cash provided by investing activities in the six months ended June 30, 2011 as compared to the same period in the prior year was the result of increased capital expenditures and the maturity of short-term investments in the prior year. Capital expenditures for the six months ended June 30, 2011 were approximately $92.9 million, which consisted of $36.0 million of development costs for our new distribution center, $38.4 million in warehouse equipment upgrades, and $12.3 million for new store openings and remodels. Capital expenditures for the six months ended June 30, 2010 were $29.7 million, which primarily consisted of new store openings and remodels and development costs for our new distribution center. Excluding the costs of our new distribution center and distribution equipment, we expect our ongoing capital expenditures for the remainder of 2011 to be approximately

$10 million to $15 million, which includes opening an additional 15 to 20 retail stores along with store remodels. We are currently in the process of designing and purchasing the equipment to be used in our new distribution center and estimate the cost of this equipment to be approximately $85.0 million, of which $77.7 million was incurred as of June 30, 2011. We expect to spend the remaining balance during the second half of 2011. In January 2010, we entered into a joint venture agreement to build our new 1.8 million square foot distribution facility in Rancho Belago, California, which we expect to occupy when completed in 2011. We believe our operating cash flows, current cash, available lines of credit and current financing arrangements should be adequate to fund these capital expenditures, although we may seek additional funding for all or a portion of these expenditures.

Net cash provided by financing activities was $57.4 million during the six months ended June 30, 2011 compared to $17.2 million during the six months ended June 30, 2010. The increase in cash provided by financing activities in the six months ended June 30, 2011 as compared to the same period in the prior year was primarily attributable to increased borrowings.

On December 29, 2010, we entered into a master loan and security agreement (the “Master Agreement”), by and between us and Banc of America Leasing & Capital, LLC, and an Equipment Security Note (together with the Master Agreement, the “Loan Documents”), by and among us, Banc of America Leasing & Capital, LLC, and Bank of Utah, as agent (“Agent”). We used the proceeds to refinance certain equipment already purchased and to purchase new equipment for use in our Rancho Belago distribution facility. Borrowings made pursuant to the Master Agreement may be in the form of one or more equipment security notes (each a “Note,” and, collectively, the “Notes”) up to a maximum limit of $80.0 million and each for a term of 60 months. The Note entered into on the same date as the Master Agreement represents a borrowing of approximately $39.3 million. Interest will accrue at a fixed rate of 3.54% per annum. On June 30, 2011, we entered into another Note agreement for approximately $36.3 million. Interest will accrue at a fixed rate of 3.19% per annum. As of June 30, 2011, the total outstanding amount on these notes was $73.2 million. We paid commitment fees of $825,000 on this loan, which are being amortized over the five-year life of the facility.

On April 30, 2010, we entered into a construction loan agreement (the “Loan Agreement”), by and between HF Logistics-SKX, LLC and Bank of America, N.A. as administrative agent and as lender (“Bank of America” or the “Administrative Agent”) and Raymond James Bank, FSB. The proceeds from the Loan Agreement are being used to construct our domestic distribution facility in Rancho Belago, California. Borrowings made pursuant to the Loan Agreement may be made up to a maximum limit of $55.0 million and the loan matures on April 30, 2012, which may be extended for six months if certain conditions are met. Borrowings bear interest based on LIBOR. We had $43.6 million outstanding under this facility, which is included in short-term borrowings on June 30, 2011. We paid commitment fees of $737,500 on this loan, which are being amortized over the life of the facility.

On January 30, 2010, we entered into a joint venture agreement with HF Logistics I, LLC through Skechers R.B., LLC, a wholly-owned subsidiary, regarding the ownership and management of HF Logistics-SKX, LLC, a Delaware limited liability company. The purpose of the JV was to acquire and to develop real property consisting of approximately 110 acres situated in Rancho Belago, California, and to construct approximately 1.8 million square feet of buildings and other improvements to lease to us as a distribution facility. The term of the JV is fifty years. The parties are equal fifty percent partners. In April 2010, we made an initial cash capital contribution of $30 million and HF made an initial capital contribution of land to the JV. Additional capital contributions, if necessary, would be made on an equal basis by Skechers R.B., LLC and HF. We have completed our assessment of the joint venture and have determined it to be a variable interest entity (“VIE”) and that Skechers is the primary beneficiary, and therefore consolidate the operations of the joint venture into our financial statements.

On June 30, 2009, we entered into a $250.0 million secured credit agreement, (the “Credit Agreement”) with a syndicate of seven banks that replaced the previous $150 million credit agreement. On November 5, 2009, March 4, 2010 and May 3, 2011, we entered into three successive amendments to the Credit Agreement (collectively, the “Amended Credit Agreement”). The Amended Credit Agreement matures in June 2015. The credit agreement permits us and certain of our subsidiaries to borrow up to $250.0 million based upon a borrowing base of eligible accounts receivable and inventory, which amount can be increased to $300.0 million at our request and upon satisfaction of certain conditions including obtaining the commitment of existing or prospective lenders willing to

provide the incremental amount. Borrowings bear interest at our election based on LIBOR or a Base Rate (defined as the greatest of the base LIBOR plus 1.00%, the Federal Funds Rate plus 0.5% or one of the lenders’ prime rate), in each case, plus an applicable margin based on the average daily principal balance of revolving loans under the credit agreement (1.00%, 1.25% or 1.50% for Base Rate loans and 2.00%, 2.25% or 2.50% for LIBOR loans). We pay a monthly unused line of credit fee of 0.375% or 0.5% per annum, which varies based on the average daily principal balance of outstanding revolving loans and undrawn amounts of letters of credit outstanding during such month. The Amended Credit Agreement further provides for a limit on the issuance of letters of credit to a maximum of $50.0 million. The Amended Credit Agreement contains customary affirmative and negative covenants for secured credit facilities of this type, including a fixed charge coverage ratio that applies when excess availability is less than $40.0 million. In addition, the Amended Credit Agreement places limits on additional indebtedness that we are permitted to incur as well as other restrictions on certain transactions. We paid syndication and commitment fees of $6.7 million on this facility, which are being amortized over the remaining four-year life of the facility.

We had outstanding short-term and long-term borrowings of $137.1 million as of June 30, 2011, of which $73.2 million relates to notes payable for warehouse equipment for our new distribution center which are secured by the equipment, $43.6 million relates to our construction loan for our new distribution center, $17.8 million relates to a note for development costs paid by and due to HF for our new distribution center, and the remaining balance relates to our joint venture in China.

We believe that anticipated cash flows from operations, available borrowings under our secured line of credit, existing cash balances and current financing arrangements will be sufficient to provide us with the liquidity necessary to fund our anticipated working capital and capital requirements through June 30, 2012. However, in connection with our current strategies, we will incur significant working capital requirements and capital expenditures. Our future capital requirements will depend on many factors, including, but not limited to, the global recession and the pace of recovery in our markets, costs associated with moving to a new distribution facility, the levels at which we maintain inventory, sale of excess inventory at discounted prices, the market acceptance of our footwear, the success of our international operations, the levels of advertising and marketing required to promote our footwear, the extent to which we invest in new product design and improvements to our existing product design, any potential acquisitions of other brands or companies, and the number and timing of new store openings. To the extent that available funds are insufficient to fund our future activities, we may need to raise additional funds through public or private financing of debt or equity. Recently, we have been successful in raising additional funds through financing activities however, we cannot be assured that additional financing will be available to us or that, if available, it can be obtained on past terms which have been favorable to our stockholders and us. Failure to obtain such financing could delay or prevent our current business plans, which could adversely affect our business, financial condition and results of operations. In addition, if additional capital is raised through the sale of additional equity or convertible securities, dilution to our stockholders could occur.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes. As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. For a detailed discussion of the our critical accounting policies, please refer to our annual report on Form 10-K for the year ended December 31, 2010 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 1, 2011. Our critical accounting policies and estimates did not change materially during the quarter ended June 30, 2011.

QUARTERLY RESULTS AND SEASONALITY

While sales of footwear products have historically been seasonal in nature with the strongest sales generally occurring in the second and third quarters, we believe that changes in our product offerings have somewhat mitigated the effect of this seasonality.

We have experienced, and expect to continue to experience, variability in our net sales and operating results on a quarterly basis. Our domestic customers generally assume responsibility for scheduling pickup and delivery of purchased products. Any delay in scheduling or pickup which is beyond our control could materially negatively impact our net sales and results of operations for any given quarter. We believe the factors which influence this variability include (i) the timing of our introduction of new footwear products, (ii) the level of consumer acceptance of new and existing products, (iii) general economic and industry conditions that affect consumer spending and retail purchasing, (iv) the timing of the placement, cancellation or pickup of customer orders, (v) increases in the number of employees and overhead to support growth, (vi) the timing of expenditures in anticipation of increased sales and customer delivery requirements, (vii) the number and timing of our new retail store openings and (viii) actions by competitors. Because of these and other factors, the operating results for any particular quarter are not necessarily indicative of the results for the full year.

INFLATION

We do not believe that the rates of inflation experienced in the United States over the last three years have had a significant effect on our sales or profitability. However, we cannot accurately predict the effect of inflation on future operating results. Although higher rates of inflation have been experienced in a number of foreign countries in which our products are manufactured, we do not believe that inflation has had a material effect on our sales or profitability. While we have been able to offset our foreign product cost increases by increasing prices or changing suppliers in the past, we cannot assure you that we will be able to continue to make such increases or changes in the future.

EXCHANGE RATES

Although we currently invoice most of our customers in U.S. dollars, changes in the value of the U.S. dollar versus the local currency in which our products are sold, along with economic and political conditions of such foreign countries, could adversely affect our business, financial condition and results of operations. Purchase prices for our products may be impacted by fluctuations in the exchange rate between the U.S. dollar and the local currencies of the contract manufacturers, which may have the effect of increasing our cost of goods in the future. In addition, the weakening of an international customer’s local currency and banking market may negatively impact such customer’s ability to meet their payment obligations to us. We regularly monitor the creditworthiness of our international customers and make credit decisions based on both prior sales experience with such customers and their current financial performance, as well as overall economic conditions. While we currently believe that our international customers have the ability to meet all of their obligations to us, there can be no assurance that they will

continue to be able to meet such obligations. During 2010 and the first six months of 2011, exchange rate fluctuations did not have a material impact on our inventory costs. We do not engage in hedging activities with respect to such exchange rate risk.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative securities that require fair value presentation per ASC 815-25.

Market risk is the potential loss arising from the adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates. Changes in interest rates and changes in foreign currency exchange rates have and will have an impact on our results of operations.

Interest rate fluctuations. The interest rate charged on our secured line of credit facility is based on the prime rate of interest, and changes in the prime rate of interest will have an effect on the interest charged on outstanding balances. No amounts relating to this secured line of credit facility are currently outstanding at June 30, 2011. We had $46.1 million of outstanding short-term borrowings subject to changes in interest rates; however, we do not expect any changes will have a material impact on our financial condition or results of operations.

Foreign exchange rate fluctuations. We face market risk to the extent that changes in foreign currency exchange rates affect our non-U.S. dollar functional currency foreign subsidiaries’ revenues, expenses, assets and liabilities. In addition, changes in foreign exchange rates may affect the value of our inventory commitments. Also, inventory purchases of our products may be impacted by fluctuations in the exchange rates between the U.S. dollar and the local currencies of the contract manufacturers, which could have the effect of increasing the cost of goods sold in the future. We manage these risks by primarily denominating these purchases and commitments in U.S. dollars. We do not engage in hedging activities with respect to such exchange rate risks.

Assets and liabilities outside the United States are located in the United Kingdom, France, Germany, Spain, Portugal, Switzerland, Italy, Canada, Belgium, the Netherlands, Brazil, Chile, China, Hong Kong, Singapore, Malaysia Thailand and Vietnam. Our investments in foreign subsidiaries with a functional currency other than the U.S. dollar are generally considered long-term. Accordingly, we do not hedge these net investments. The fluctuation of foreign currencies resulted in a cumulative foreign currency translation gain of $8.9 million and loss of $10.4 million for the six months ended June 30, 2011 and 2010, respectively, that are deferred and recorded as a component of accumulated other comprehensive income in stockholders’ equity. A 200 basis point reduction in each of these exchange rates at June 30, 2011 would have reduced the values of our net investments by approximately $7.1 million.

ITEM 4. CONTROLS AND PROCEDURES

Attached as exhibits to this quarterly report on Form 10-Q are certifications of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This Controls and Procedures section includes information concerning the controls and controls evaluation referred to in the certifications.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The term “disclosure controls and procedures” refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods. We have established disclosure controls and procedures to ensure that material information relating to Skechers and its consolidated subsidiaries is made known to the officers who certify our financial reports as well as other members of senior management and the Board of Directors to allow timely decisions regarding required disclosures. As of the end of the period covered by this quarterly report on Form 10-Q, we carried out an evaluation under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based upon that

evaluation, our CEO and CFO concluded that our disclosure controls and procedures are effective in timely alerting them, at the reasonable assurance level, to material information related to our company that is required to be included in our periodic reports filed with the SEC under the Exchange Act.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in our internal control over financial reporting during the three months ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements as a result of error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls’ effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements as a result of error or fraud may occur and not be detected.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Our claims and advertising for our toning products including for our Shape-ups are subject to the requirements of, and routinely come under review by regulators including the U.S. Federal Trade Commission (“FTC”), states’ Attorneys General and government and quasi-government regulators in foreign countries. We are currently responding to requests for information regarding our claims and advertising from regulatory and quasi-regulatory agencies in the United States and several other countries and are fully cooperating with those requests. While we believe that our claims and advertising with respect to our core toning products are supported by scientific tests, expert opinions and other relevant data, and while we have been successful in defending our claims and advertising in several different countries, we have discontinued using certain test results and we periodically review and update our claims and advertising. The regulatory inquiries may conclude in a variety of outcomes, including the closing of the inquiry with no further regulatory action, settlement of any issues through changes in our claims and advertising, settlement of any issues through payment to the regulatory entity, or litigation.

Based on our current discussions with the FTC staff, we do not believe that the pending inquiry will likely end in a closure letter assuring no further regulatory action. The FTC inquiry currently is at the staff level. If the need arises, we plan to vigorously defend the company’s position directly to the Director of the FTC’s Bureau of Consumer Protection and the FTC Commissioners. It is still too early in the process to predict the outcome of any pending inquiries or a reasonable range of potential losses and whether such an outcome will have a material effect on our advertising, promotional claims, business, results of operations or financial position.

The toning footwear category, including our Shape-ups products, has also been the subject of some media attention arising from a number of consumer complaints and allegations of injury while wearing Shape-ups. We believe our products are safe and are defending ourselves from these media stories and injury allegations. It is too early, however, to predict the outcome of the ongoing inquiries and whether such an outcome will have a material effect on our advertising, promotional claims, business, results of operations or financial position.

Asics Corporation and Asics America Corporation v. Skechers U.S.A., Inc. — On May 11, 2010, Asics Corporation and Asics America Corporation (collectively, “Asics”) filed an action against our company in the United States District Court for the Central District of California, SACV 10-00636 CJC/MLG, alleging trademark infringement, unfair competition, and trademark dilution under both federal and California law and false advertising under California law arising out of our alleged use of stripe designs similar to Asics trademarks. The complaint seeks, among other things, permanent and preliminary injunctive relief, compensatory damages, profits, treble and punitive damages, and attorneys fees. The matter is in the early discovery phase. While it is too early to predict the outcome of the litigation and whether an adverse result would have a material adverse impact on our operations or financial position, we believe we have meritorious defenses and counterclaims, vehemently deny the allegations and intend to defend the case vigorously.

Tamara Grabowski v. Skechers U.S.A., Inc. — On June 18, 2010, Tamara Grabowski filed an action against our company in the United States District Court for the Southern District of California, Case No. 10 CV 1300 JM (WVG), on her behalf and on behalf of all others similarly situated. The complaint, as subsequently amended, alleges that our advertising for Shape-ups violates California’s Unfair Competition Law and the California Consumer Legal Remedies Act, and constitutes a breach of express warranty (the “Grabowski action”). The complaint seeks certification of a nationwide class, damages, restitution and disgorgement of profits, declaratory and injunctive relief, corrective advertising, and attorneys’ fees and costs. On March 7, 2011, the court stayed the action on the ground that the outcomes in pending appeals in two unrelated actions will significantly affect whether a class should be certified. While it is too early to predict the outcome of the litigation or a reasonable range of potential losses and whether an adverse result would have a material adverse impact on our results of operations or financial position, we believe we have meritorious defenses, vehemently deny the allegations, believe that class certification is not warranted and intend to defend the case vigorously.

Sonia Stalker v. Skechers U.S.A., Inc. — On July 2, 2010, Sonia Stalker filed an action against our company in the Superior Court of the State of California for the County of Los Angeles, on her behalf and on behalf of all others similarly situated, alleging that our advertising for Shape-ups violates California’s Unfair Competition Law and the California Consumer Legal Remedies Act. The complaint, as subsequently amended, seeks certification of a nationwide class, actual and punitive damages, restitution, declaratory and injunctive relief, corrective advertising, and attorneys’ fees and costs. On July 23, 2010, we removed the case to the United States District Court for the Central District of California, and it is now pending as Sonia Stalker v. Skechers USA, Inc., CV 10-5460 SJO (JEM). On August 23, 2010, we filed a motion to dismiss the action or transfer it to the United States District Court for the Southern District of California, in view of the prior pending Grabowski action. On August 27, 2010, plaintiff moved to certify the class, which motion we have opposed. On January 21, 2011, the court stayed the action for the separate reasons that the Grabowski action was filed first and takes priority under the first-to-file doctrine and that the outcomes in pending appeals in two unrelated actions will significantly affect the outcome of plaintiff’s motion for class certification and the resolution of this action. While it is too early to predict the outcome of the litigation or a reasonable range of potential losses and whether an adverse result would have a material adverse impact on our results of operations or financial position, we believe we have meritorious defenses, vehemently deny the allegations, believe that class certification is not warranted and intend to defend the case vigorously.

Venus Morga v. Skechers U.S.A., Inc. — On August 25, 2010, Venus Morga filed an action against our company in the United States District Court for the Southern District of California, Case No. 10 CV 1780 JM (WVG), on her behalf and on behalf of all others similarly situated. The complaint, as subsequently amended, alleges that our advertising for Shape-ups violates California’s Unfair Competition Law and the California Consumer Legal Remedies Act, and constitutes a breach of express warranty. The complaint seeks certification of a nationwide class, damages, restitution and disgorgement of profits, declaratory and injunctive relief, corrective advertising, and attorneys’ fees and costs. On March 7, 2011, the court stayed the action on the ground that the outcomes in pending appeals in two unrelated actions will significantly affect whether a class should be certified. While it is too early to predict the outcome of the litigation or a reasonable range of potential losses and whether an adverse result would

have a material adverse impact on our results of operations or financial position, we believe we have meritorious defenses, vehemently deny the allegations, believe that class certification is not warranted and intend to defend the case vigorously.

Tamia Richmond v. Skechers U.S.A., Inc. and HKM Productions, Inc. — On August 31, 2010, Tamia Richmond filed a lawsuit against our company and HKM Productions in California Superior Court, County of Los Angeles, Case No. BC444730. The complaint alleged, among other things, that we had used Ms. Richmond’s image and likeness in certain unauthorized forms of media. We subsequently settled the matter and, on July 13, 2011, Ms. Richmond filed a dismissal with prejudice with the court. The settlement will not have a material adverse impact on our results of operations or financial position.

Patty Tomlinson v. Skechers U.S.A., Inc. — On January 13, 2011, Patty Tomlinson filed a lawsuit against our company in Circuit Court in Washington County, Arkansas, Case No. CV11-121-7. The complaint alleges, on her behalf and on behalf of all others similarly situated, that our advertising for Shape-ups violates Arkansas’ Deceptive Trade Practices Act, constitutes a breach of certain express and implied warranties, and is resulting in unjust enrichment (the “Tomlinson action”). The complaint seeks certification of a statewide class, compensatory damages, prejudgment interest, and attorneys’ fees and costs. On February 18, 2011, we removed the case to the United States District Court for the Western District of Arkansas, and it is now pending as Patty Tomlinson v. Skechers U.S.A., Inc., CV 11-05042 JLH. On March 16, 2011, we filed a motion to dismiss the action or transfer it to the United States District Court for the Southern District of California, in view of the prior pending Grabowski action. On March 21, 2011, Ms. Tomlinson moved to remand the action back to Arkansas state court, which motion we opposed. On May 25, 2011, the court ordered the case remanded to Arkansas state court and denied our motion to dismiss or transfer as moot, but has stayed remand pending completion of appellate review. We have sought appellate review by the Eighth Circuit Court of Appeals and, if necessary, will pursue a petition for certiorari to the United States Supreme Court. While it is too early to predict the outcome of the litigation or a reasonable range of potential losses and whether an adverse result would have a material adverse impact on our results of operations or financial position, we believe we have meritorious defenses, vehemently deny the allegations, believe that class certification is not warranted and intend to defend the case vigorously.

Terena Lovston v. Skechers U.S.A., Inc. — On May 13, 2011, Terena Lovston filed a lawsuit against our company in Circuit Court in Lonoke County, Arkansas, Case No. CV-11-321. The complaint alleges, on her behalf and on behalf of all others similarly situated, that our advertising for our toning footwear products violates Arkansas’ Deceptive Trade Practices Act, and is resulting in unjust enrichment. The complaint seeks certification of a statewide class and compensatory damages. On June 3, 2011, we removed the case to the United States District Court for the Eastern District of Arkansas, and it is now pending as Terena Lovston v. Skechers U.S.A., Inc., 4:11- cv-00460-DPM. On June 6, 2011, we filed a motion to dismiss the action or transfer it to the United States District Court for the Southern District of California, in view of the prior pending Grabowski action. On July 19, 2011, the court indicated its intent to remand the case to Arkansas state court but stayed remand pending further briefing by the parties. On August 5, 2011, the court issued an order staying the case pending completion of the appellate process in the Tomlinson action. While it is too early to predict the outcome of the litigation or a reasonable range of potential losses and whether an adverse result would have a material adverse impact on our results of operations or financial position, we believe we have meritorious defenses, vehemently deny the allegations, believe that class certification is not warranted and intend to defend the case vigorously.

Skechers U.S.A., Inc. and Skechers U.S.A., Inc. II v. Elon A. Pollack, Elon A. Pollack, a Professional Corporation dba Law Offices of Elon A. Pollock, and Stein, Shostak, Shostak, Pollack & O’Hara, LLP — On March 3, 2011, we filed a complaint against Elon A. Pollack, Elon A. Pollack, a Professional Corporation dba Law Offices of Elon A. Pollock, and Stein, Shostak, Shostak, Pollack & O’Hara, LLP (collectively, the “Defendants”) in Superior Court of the State of California in Los Angeles County, Case No. YC064333. In our complaint, we alleged, among other things, that the Defendants had breached their duties of care, loyalty and fidelity to us by negligently and carelessly providing legal representation, and that the Defendants had engaged in self-dealing and breaches of their fiduciary duties to us. We are seeking actual and consequential damages, declaratory relief, interest, punitive damages, and attorneys’ fees and costs. On April 29, 2010, the Defendants filed a cross complaint against us, which alleges breach of written contract for failure to pay certain contingency fees, entitlement to contingency fees based on the principal of quantum meruit, breach of implied covenant of good faith and fair dealing, and fraud and intentional misrepresentation. The Defendants seek damages under the retainer agreement, the reasonable value of

their services, as well as consequential and incidental damages, interest, punitive damages, and attorneys’ fees and costs. While it is too early to predict the outcome of the litigation and whether an adverse result would have a material adverse impact on our operations or financial position, we believe we have meritorious defenses and counterclaims, vehemently deny the allegations and intend to defend the case vigorously.

Skechers U.S.A., Inc. and Skechers U.S.A., Inc. II v. Larrie Corporation (M) Sdn Bhd — On March 17, 2011, we filed a complaint against Larrie Corporation (M) Sdn Bhd (“Larrie”) in the High Court of Malaya at Kuala Lumpur (Commercial Division), Case No. D-22IP-12-2011. In our complaint, we alleged that Larrie passed off footwear bearing marks that resemble our trademarks, and unlawfully interfered with our trade in Malaysia. We are seeking declaratory and injunctive relief, economic damages including profits, interest, and attorneys’ fees and costs. On May 4, 2011, Larrie filed a defense and counterclaim against us, which alleges that Larrie is entitled to the exclusive right to use an “S” logo in Malaysia in connection with footwear, that we have unlawfully interfered with Larrie’s business, and that we have maliciously commenced this lawsuit and made false and malicious allegations. Larrie seeks declaratory and injunctive relief, general damages, aggravated and/or exemplary damages, interest, and attorneys’ fees and costs. While it is too early to predict the outcome of the litigation and whether an adverse result would have a material adverse impact on our operations or financial position, we believe we have meritorious defenses and counterclaims, vehemently deny the allegations and intend to defend the case vigorously.

Holly and Timothy Ward v. Skechers U.S.A., Inc., Skechers U.S.A., Inc. II and Skechers Fitness Group — On February 10, 2011, Holly and Timothy Ward filed a lawsuit against our company in United States District Court, Southern District of Ohio, Case No. 1:11-cv-00080-MPB. The complaint alleges, among other things, that Shape-ups are defective and unreasonably dangerous, that we were negligent in their design and manufacture, that we failed to provide consumers with adequate warnings, and that the shoes do not conform to the representations that we made about them. Ms. Ward is seeking economic damages for past and future medical expenses, past and future impairment of earning capacity, pain and suffering, loss of enjoyment of life, and attorneys’ fees and costs. Mr. Ward is seeking damages for his loss of consortium, and attorneys’ fees and costs. While it is too early to predict the outcome of the litigation and whether an adverse result would have a material adverse impact on our operations or financial position, we believe we have meritorious defenses and counterclaims, vehemently deny the allegations and intend to defend the case vigorously.

Allison Drury v. Skechers U.S.A., Inc., Skechers U.S.A., Inc. II and Skechers Fitness Group — On April 4, 2011, Allison Drury filed a lawsuit against our company in United States District Court, Western District of Kentucky, Louisville Division, Case No. 3:11-cv-00201-CRS. The complaint alleges, among other things, that Shape-ups are defective and unreasonably dangerous, that we were negligent in their design and manufacture, that we failed to provide consumers with adequate warnings, that we breached express and implied warranties, and that we made false, misleading and deceptive representations about the benefits of the shoes and thereby engaged in fraud and violations of the Kentucky Consumer Protection Act. Ms. Drury is seeking economic damages for past and future medical expenses, past and future loss of income, pain and suffering, loss of enjoyment of life, and attorneys’ fees and costs, as well as punitive damages. While it is too early to predict the outcome of the litigation and whether an adverse result would have a material adverse impact on our operations or financial position, we believe we have meritorious defenses, vehemently deny the allegations and intend to defend the case vigorously.

Nellie Barker v. Skechers U.S.A., Inc. and J.C. Penney Company, Inc. — On April 25, 2011, Nellie Barker filed a lawsuit against our company and J.C. Penney in Superior Court of the State of California in Orange County, Case No. 30-2011-00469782. The complaint alleges, among other things, that Shape-ups are defective and unreasonably dangerous, that we were negligent in their design and manufacture, that we failed to provide consumers with adequate warnings, and that we made false, misleading and deceptive representations about the benefits of the shoes. Ms. Barker is seeking general damages, economic damages for past and future medical expenses, past and future loss of income, interest, punitive and exemplary damages, and attorneys’ fees and costs. While it is too early to predict the outcome of the litigation and whether an adverse result would have a material adverse impact on our operations or financial position, we believe we have meritorious defenses, vehemently deny the allegations and intend to defend the case vigorously.

Melissa and Richard Kearnely v. Skechers U.S.A., Inc., Skechers U.S.A., Inc. II and Skechers Fitness Group — On May 13, 2011, Melissa and Richard Kearnely filed a lawsuit against our company in United States District Court, Eastern District of Kentucky, London Division, Case No. 6:11-cv-139-GFVT. The complaint alleges, among other

things, that Shape-ups are defective and unreasonably dangerous, that we were negligent in their design and manufacture, that we failed to provide consumers with adequate warnings, that we breached express and implied warranties, and that we made false, misleading and deceptive representations about the benefits of Shape-ups and thereby engaged in fraud and violations of the Kentucky Consumer Protection Act. Ms. Kearnely is seeking economic damages for past and future medical expenses, past and future loss of income, pain and suffering, loss of enjoyment of life, and attorneys’ fees and costs, as well as punitive damages. Mr. Kearnely is seeking damages for his loss of consortium, and attorneys’ fees and costs. While it is too early to predict the outcome of the litigation and whether an adverse result would have a material adverse impact on our operations or financial position, we believe we have meritorious defenses, vehemently deny the allegations and intend to defend the case vigorously.

Donna Burkett v. Skechers U.S.A., Inc. — On May 26, 2011, Donna Burkett filed a lawsuit against us in Circuit Court in Jefferson County, Alabama, Case No. CV-2011-901878.00. The complaint alleges, among other things, that Shape-ups are defective and unreasonably dangerous, that we were negligent and wanton in their design and manufacture, and that we failed to provide consumers with adequate warnings. Ms. Burkett is seeking compensatory and punitive damages, and attorneys’ fees and costs. While it is too early to predict the outcome of the litigation and whether an adverse result would have a material adverse impact on our operations or financial position, we believe we have meritorious defenses, vehemently deny the allegations and intend to defend the case vigorously.

We occasionally become involved in litigation arising from the normal course of business, and we are unable to determine the extent of any liability that may arise from unanticipated future litigation. We have no reason to believe that there was a reasonable possibility or a probability our company may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of litigation is inherently uncertain and assessments and decisions on defense and settlement can change significantly in a short period of time. Therefore, although we consider the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against us in the same reporting period for amounts in excess of our expectations, our consolidated financial statements of a particular reporting period could be materially adversely affected.

ITEM 1A. RISK FACTORS

The information presented below updates the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2010 and should be read in conjunction with the risk factors and other information disclosed in our 2010 annual report that could have a material effect on our business, financial condition and results of operations.

We Depend Upon A Relatively Small Group Of Customers For A Large Portion Of Our Sales.

During the six months ended June 30, 2011 and 2010, our net sales to our five largest customers accounted for approximately 20.1% and 28.2% of total net sales, respectively. No customer accounted for more than 10% of our net sales during the six months ended June 30, 2011 or 2010. No customer accounted for more than 10% of outstanding accounts receivable balance at June 30, 2011. One customer accounted for 15.1% of our outstanding accounts receivable balance at June 30, 2010. Although we have long-term relationships with many of our customers, our customers do not have a contractual obligation to purchase our products and we cannot be certain that we will be able to retain our existing major customers. Furthermore, the retail industry regularly experiences consolidation, contractions and closings which may result in our loss of customers or our inability to collect accounts receivable of major customers. If we lose a major customer, experience a significant decrease in sales to a major customer or are unable to collect the accounts receivable of a major customer, our business could be harmed.

We Rely On Independent Contract Manufacturers And, As A Result, Are Exposed To Potential Disruptions In Product Supply.

Our footwear products are currently manufactured by independent contract manufacturers. During the six months ended June 30, 2011 and 2010, the top five manufacturers of our manufactured products produced approximately 63.8% and 71.3% of our total purchases, respectively. One manufacturer accounted for 30.8% of total purchases for the six months ended June 30, 2011, and the same manufacturer accounted for 34.6% of total purchases for the same period in 2010. A second manufacturer accounted for 11.4% of our total purchases during

the six months ended June 30, 2011 and the same manufacturer accounted for 13.3% of total purchases for the same period in 2010. A third manufacturer accounted for 8.6% of total purchases during the six months ended June 30, 2011 and the same manufacturer accounted for 10.1% of total purchases for the same period in 2010. We do not have long-term contracts with manufacturers and we compete with other footwear companies for production facilities. We could experience difficulties with these manufacturers, including reductions in the availability of production capacity, failure to meet our quality control standards, failure to meet production deadlines or increased manufacturing costs. This could result in our customers canceling orders, refusing to accept deliveries or demanding reductions in purchase prices, any of which could have a negative impact on our cash flow and harm our business.

If our current manufacturers cease doing business with us, we could experience an interruption in the manufacture of our products. Although we believe that we could find alternative manufacturers, we may be unable to establish relationships with alternative manufacturers that will be as favorable as the relationships we have now. For example, new manufacturers may have higher prices, less favorable payment terms, lower manufacturing capacity, lower quality standards or higher lead times for delivery. If we are unable to provide products consistent with our standards or the manufacture of our footwear is delayed or becomes more expensive, our business would be harmed.

One Principal Stockholder Is Able To Exert Significant Influence Over All Matters Requiring A Vote Of Our Stockholders And His Interests May Differ From The Interests Of Our Other Stockholders.

As of June 30, 2011, Robert Greenberg, Chairman of the Board and Chief Executive Officer, beneficially owned 29.8% of our outstanding Class B common shares and members of Mr. Greenberg’s immediate family beneficially owned an additional 15.6% of our outstanding Class B common shares. The remainder of our outstanding Class B common shares is held in two irrevocable trusts for the benefit of Mr. Greenberg and his immediate family members, and voting control of such shares resides with the independent trustee. The holders of Class A common shares and Class B common shares have identical rights except that holders of Class A common shares are entitled to one vote per share while holders of Class B common shares are entitled to ten votes per share on all matters submitted to a vote of our stockholders. As a result, as of June 30, 2011, Mr. Greenberg beneficially owned approximately 22.2% of the aggregate number of votes eligible to be cast by our stockholders, and together with shares beneficially owned by other members of his immediate family, they beneficially owned approximately 35.0% of the aggregate number of votes eligible to be cast by our stockholders. Therefore, Mr. Greenberg is able to exert significant influence over all matters requiring approval by our stockholders. Matters that require the approval of our stockholders include the election of directors and the approval of mergers or other business combination transactions. Mr. Greenberg also has significant influence over our management and operations. As a result of such influence, certain transactions are not likely without the approval of Mr. Greenberg, including proxy contests, tender offers, open market purchase programs or other transactions that can give our stockholders the opportunity to realize a premium over the then-prevailing market prices for their shares of our Class A common shares. Because Mr. Greenberg’s interests may differ from the interests of the other stockholders, Mr. Greenberg’s significant influence on actions requiring stockholder approval may result in our company taking action that is not in the interests of all stockholders. The differential in the voting rights may also adversely affect the value of our Class A common shares to the extent that investors or any potential future purchaser view the superior voting rights of our Class B common shares to have value.

The Toning Footwear Category Has Come Under Public and Regulatory Scrutiny That May Have A Negative Impact On Our Business And Results Of Operations.

The relatively new toning footwear product category, including our own Shape-ups products, has come under significant scrutiny in the past year, including highly publicized negative professional opinions, some negative publicity and media attention, personal injury lawsuits and attorneys publicly marketing their services to consumers who were allegedly aggrieved by the marketing of our toning products or injured by Shape-ups. The negative publicity and media attention has ranged from questioning the validity of our advertising and promotional claims to the allegations of personal injury lawsuits and overall safety of these products. We believe that Shape-ups and our other toning products are safe but are not able to predict what effect this negative publicity will have on sales of

toning footwear generally and our Shape-ups products in particular, whether such publicity will continue, and what the overall effect will be on our business and our results of operations.

It Is Difficult To Predict The Effect Of Regulatory Inquiries About Advertising And Promotional Claims Related To Our Products In The Fitness Footwear Market.

The toning footwear market is a relatively new product category dominated by a handful of competitors who design, market and advertise their products to promote benefits associated with wearing the footwear. Advertising promoting benefits associated with these products routinely comes under review from regulators including the U.S. Federal Trade Commission (“FTC”), states’ Attorneys General and government and quasi-government regulators in foreign countries. As noted under “Legal Proceedings” in Part I, Item 3 of this quarterly report, we have received requests for information relating to our advertising claims for Shape-ups and other toning products. These inquiries may conclude in a variety of outcomes, including the closing of the inquiry with no further regulatory action, settlement of any issues through changes in our claims and advertising, settlement of any issues through payment to the regulatory entity, or litigation. Based on our current discussions with the FTC, we do not believe that pending inquiry likely will end in a closure letter that assures no further regulatory action. We continue to defend our claims and advertising with respect to our core toning products vigorously before the FTC and other regulators, and we are not able to predict the outcome of these inquiries and what, if any, effect, they may have on our advertising, promotional claims, business, or results of operations.

ITEM 6. EXHIBITS


Exhibit
Number		Description

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**		XBRL Instance Document.

101.SCH**		XBRL Taxonomy Extension Schema Document.

101.CAL**		XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB**		Taxonomy Extension Label Linkbase Document.

101.PRE**		XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF**		XBRL Taxonomy Extension Definition Linkbase Document.


*		In accordance with Item 601(b)(32)(ii) of Regulation S-K, this exhibit shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

**		Furnished, not filed, herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: August 9, 2011	SKECHERS U.S.A., INC.
	By:	/S/ DAVID WEINBERG
		David Weinberg
		Chief Financial Officer

EX-31.1 2 v57884exv31w1.htm EX-31.1 exv31w1

Exhibit 31.1

CERTIFICATION

I, Robert Greenberg, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the three months ended June 30, 2011 of Skechers U.S.A., Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2011



	/S/ ROBERT GREENBERG
	Robert Greenberg
	Chief Executive Officer

EX-31.2 3 v57884exv31w2.htm EX-31.2 exv31w2

Exhibit 31.2

CERTIFICATION

I, David Weinberg, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the three months ended June 30, 2011 of Skechers U.S.A., Inc.;

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2011



	/S/ DAVID WEINBERG
	David Weinberg
	Chief Financial Officer

EX-32.1 4 v57884exv32w1.htm EX-32.1 exv32w1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Skechers U.S.A, Inc. (the “Company”) on Form 10-Q for the three months ended June 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ ROBERT GREENBERG
Robert Greenberg
Chief Executive Officer
(Principal Executive Officer)
August 9, 2011

/s/ DAVID WEINBERG
David Weinberg
Chief Financial Officer
(Principal Financial and Accounting Officer)
August 9, 2011

A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS BEEN
PROVIDED TO THE COMPANY AND WILL BE RETAINED BY THE COMPANY AND FURNISHED TO
THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.

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<div style="font-family: 'Times New Roman',Times,serif"> <div align="left"> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b> </div> <div align="center" style="font-size: 10pt"><b></b></div> <div align="center" style="font-size: 10pt"><b></b></div> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(1) GENERAL</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Basis of Presentation</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The accompanying condensed consolidated financial statements of Skechers U.S.A., Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2011. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Use of Estimates</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The preparation of the condensed consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Non-controlling interests</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company has interests in certain joint ventures which are consolidated into its financial statements. Non-controlling interest was a loss of $0.1 million and income of $0.1 million for the three months ended June 30, 2011 and 2010, respectively, which represents the share of net earnings or loss that is attributable to our joint venture partners. Non-controlling interest was income of $0.2 million and a loss of $0.1 million for the six months ended June 30, 2011 and 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company has determined that its joint venture with HF Logistics I, LLC (“HF”) is a variable interest entity (“VIE”) and that the Company is the primary beneficiary. The VIE is consolidated into the condensed consolidated financial statements and the carrying amounts and classification of assets and liabilities was as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>December 31, 2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Current assets </div></td> <td> </td> <td align="left">$</td> <td align="right">4,311</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">6,058</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Noncurrent assets </div></td> <td> </td> <td> </td> <td align="right">129,320</td> <td> </td> <td> </td> <td> </td> <td align="right">107,723</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total assets </div></td> <td> </td> <td align="left">$</td> <td align="right">133,631</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">113,781</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Current liabilities </div></td> <td> </td> <td align="left">$</td> <td align="right">55,791</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">36,364</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Noncurrent liabilities </div></td> <td> </td> <td> </td> <td align="right">17,766</td> <td> </td> <td> </td> <td> </td> <td align="right">17,359</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total liabilities </div></td> <td> </td> <td align="left">$</td> <td align="right">73,557</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">53,723</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The assets of these joint ventures are restricted in that they are not available for our general business use outside the context of the joint venture. The holders of the liabilities of each joint venture have no recourse to Skechers U.S.A., Inc. The Company does not have a significant variable interest in any unconsolidated VIE’s. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Recent Accounting Pronouncements</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income,” (“ASU 2011-05”). ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in equity. ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This new guidance is to be applied retrospectively. ASU 2011-05 is effective for annual periods beginning after December 15, 2011. We do not expect that the adoption of this standard update will have a material impact on the Company’s consolidated financial statements. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(2) REVENUE RECOGNITION</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company recognizes revenue on wholesale sales when products are shipped and the customer takes title and assumes risk of loss, collection of relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. This generally occurs at time of shipment. The Company recognizes revenue from retail sales at the point of sale. Allowances for estimated returns, discounts, doubtful accounts and chargebacks are provided for when related revenue is recorded. Related costs paid to third-party shipping companies are recorded as a cost of sales. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Royalty income is earned from licensing arrangements. Upon signing a new licensing agreement, we receive up-front fees, which are generally characterized as prepaid royalties. These fees are initially deferred and recognized as revenue as earned (i.e., as licensed sales are reported to the company or on a straight-line basis over the term of the agreement). The first calculated royalty payment is based on actual sales of the licensed product. Typically, at each quarter-end we receive correspondence from our licensees indicating the actual sales for the period. This information is used to calculate and accrue the related royalties based on the terms of the agreement. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(3) OTHER COMPREHENSIVE (LOSS) INCOME</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In addition to net (loss) earnings, other comprehensive (loss) income includes changes in foreign currency translation adjustments and income (loss) attributable to non-controlling interests. The Company operates internationally through several foreign subsidiaries. Assets and liabilities of the foreign operations denominated in local currencies are translated at the rate of exchange at the balance sheet date. Revenues and expenses are translated at the weighted average rate of exchange during the period of translation. The resulting translation adjustments along with translation adjustments related to intercompany loans of a long-term nature are included in the translation adjustment in other comprehensive income (loss). </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The activity in other comprehensive (loss) income, net of income taxes, was as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three-Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six-Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Comprehensive income (loss)</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net (loss) earnings </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(30,052</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">40,317</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(17,899</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">96,440</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Gain (loss) on foreign currency translation adjustment, net of tax </div></td> <td> </td> <td> </td> <td align="right">4,781</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6,120</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">9,324</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,350</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive (loss) income </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(25,271</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">34,197</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(8,575</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">86,090</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Comprehensive income (loss) attributable to non-controlling interest </div></td> <td> </td> <td> </td> <td align="right">26</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(107</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(590</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">28</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive (loss) income attributable to parent </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(25,245</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">34,090</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(9,165</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">86,118</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(4) SHARE-BASED COMPENSATION</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     For stock-based awards we have recognized compensation expense based on the grant date fair value. Share-based compensation expense was $3.5 million and $3.4 million for the three months ended June 30, 2011 and 2010, respectively. Share-based compensation expense was $7.2 million and $6.7 million for the six months ended June 30, 2011 and 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Stock options granted pursuant to the 1998 Stock Option, Deferred Stock and Restricted Stock Plan and the 2007 Incentive Award Plan (the “Equity Incentive Plans”) were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Weighted Average</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Aggregate</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Remaining</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Intrinsic</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Shares</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Exercise Price</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Contractual Term</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Value</b></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2010 </div></td> <td> </td> <td> </td> <td align="right">451,308</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">11.26</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Exercised </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(98,503</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">9.08</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Cancelled </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(85,058</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">23.23</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at June 30, 2011 </div></td> <td> </td> <td> </td> <td align="right">267,747</td> <td> </td> <td> </td> <td> </td> <td align="right">8.26</td> <td> </td> <td> </td> <td colspan="3" align="center">1.4 years</td> <td> </td> <td align="right">$</td> <td align="right">1,664,273</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Exercisable at June 30, 2011 </div></td> <td> </td> <td> </td> <td align="right">267,747</td> <td> </td> <td> </td> <td> </td> <td align="right">8.26</td> <td> </td> <td> </td> <td colspan="3" align="center">1.4 years</td> <td> </td> <td align="right">$</td> <td align="right">1,664,273</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     A summary of the status and changes of our nonvested shares related to our Equity Incentive Plans as of and for the six months ended June 30, 2011 is presented below: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted Average</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Grant-Date Fair</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Nonvested at December 31, 2010 </div></td> <td> </td> <td> </td> <td align="right">1,493,329</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">18.97</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">10,000</td> <td> </td> <td> </td> <td> </td> <td align="right">21.00</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Vested </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(46,667</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">31.37</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Cancelled </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(12,333</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">17.44</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Nonvested at June 30, 2011 </div></td> <td> </td> <td> </td> <td align="right">1,444,329</td> <td> </td> <td> </td> <td> </td> <td align="right">18.77</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     As of June 30, 2011, there was $18.3 million of unrecognized compensation cost related to nonvested common shares. The cost is expected to be amortized over a weighted average period of 1.4 years. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(5) EARNINGS (LOSS) PER SHARE</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Basic earnings (loss) per share represents net earnings (loss) divided by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share represents the weighted average number of common shares and potential common shares, if dilutive, that would arise from the exercise of stock options and nonvested shares using the treasury stock method. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following is a reconciliation of net earnings (loss) and weighted average common shares outstanding for purposes of calculating basic earnings (loss) per share (in thousands, except per share amounts): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three-Months Ended June 30,</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six-Months Ended June 30,</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Basic earnings (loss) per share</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net earnings (loss) attributable to Skechers U.S.A., Inc. </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(29,916</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">40,237</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(18,108</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">96,533</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted average common shares outstanding </div></td> <td> </td> <td> </td> <td align="right">48,341</td> <td> </td> <td> </td> <td> </td> <td align="right">47,422</td> <td> </td> <td> </td> <td> </td> <td align="right">48,292</td> <td> </td> <td> </td> <td> </td> <td align="right">47,107</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Basic earnings (loss) per share attributable to Skechers U.S.A., Inc. </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(0.62</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">0.85</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(0.38</td> <td nowrap="nowrap">)</td> <td> </td> <td align="right">$</td> <td align="right">2.05</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following is a reconciliation of net earnings (loss) and weighted average common shares outstanding for purposes of calculating diluted earnings (loss) per share (in thousands, except per share amounts): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three-Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six-Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Diluted earnings (loss) per share</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net earnings (loss) attributable to Skechers U.S.A., Inc. </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(29,916</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">40,237</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(18,108</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">96,533</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted average common shares outstanding </div></td> <td> </td> <td> </td> <td align="right">48,341</td> <td> </td> <td> </td> <td> </td> <td align="right">47,422</td> <td> </td> <td> </td> <td> </td> <td align="right">48,292</td> <td> </td> <td> </td> <td> </td> <td align="right">47,107</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Dilutive effect of stock options </div></td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> <td> </td> <td> </td> <td align="right">1,708</td> <td> </td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> <td> </td> <td> </td> <td align="right">1,848</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted average common shares outstanding </div></td> <td> </td> <td> </td> <td align="right">48,341</td> <td> </td> <td> </td> <td> </td> <td align="right">49,130</td> <td> </td> <td> </td> <td> </td> <td align="right">48,292</td> <td> </td> <td> </td> <td> </td> <td align="right">48,955</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Diluted earnings (loss) per share attributable to Skechers U.S.A., Inc. </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(0.62</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">0.82</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(0.38</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">1.97</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Options to purchase 851 shares and 38,938 shares of Class A common stock were not included in the computation of diluted earnings (loss) per share for the three months and six months ended June 30, 2011, respectively, because their effect would have been anti-dilutive. There were no options excluded from the computation of diluted earnings per share for the three months and six months ended June 30, 2010, respectively. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(6) INCOME TAXES</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s effective tax rates for the second quarter and first six months of 2011 were 41.0% and 51.9%, respectively, compared to the effective tax rates of 33.6% and 32.4% for the second quarter and first six months of 2010, respectively. Income tax benefit for the three months ended June 30, 2011 was $20.8 million compared to expense of $20.4 million for the same period in 2010. Income tax benefit for the six months ended June 30, 2011 was $19.3 million compared to expense of $46.2 million for the same period in 2010. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(7) LINE OF CREDIT, SHORT-TERM AND LONG-TERM BORROWINGS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company and its subsidiaries had $1.6 million of outstanding letters of credit and short-term borrowings of $46.1 million as of June 30, 2011 and $18.3 million at December 31, 2010. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Long-term debt is as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Note payable to bank, due in monthly installments of $531.4 (includes principal and interest), fixed rate interest at 3.54%, secured by property, balloon payment of $12,635 due December 2015 </div></td> <td> </td> <td align="left">$</td> <td align="right">36,814</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">39,325</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Note payable to bank, due in monthly installments of $483.9 (includes principal and interest), fixed rate interest at 3.19%, secured by property, balloon payment of $11,670 due June 2016 </div></td> <td> </td> <td> </td> <td align="right">36,344</td> <td> </td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Note payable to bank, due in monthly installments of $57.6 (includes principal and interest), fixed rate interest at 7.89%, secured by property, balloon payment of $6,889 paid in January 2011 </div></td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> <td> </td> <td> </td> <td align="right">6,900</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Loan from HF Logistics I, LLC </div></td> <td> </td> <td> </td> <td align="right">17,766</td> <td> </td> <td> </td> <td> </td> <td align="right">17,358</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Capital lease obligations </div></td> <td> </td> <td> </td> <td align="right">44</td> <td> </td> <td> </td> <td> </td> <td align="right">51</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Subtotal </div></td> <td> </td> <td> </td> <td align="right">90,968</td> <td> </td> <td> </td> <td> </td> <td align="right">63,634</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Less current installments </div></td> <td> </td> <td> </td> <td align="right">9,893</td> <td> </td> <td> </td> <td> </td> <td align="right">11,984</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total long-term debt </div></td> <td> </td> <td align="left">$</td> <td align="right">81,075</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">51,650</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(8) LITIGATION</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company recognizes legal fees in connection with loss contingencies and other related matters as incurred. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company occasionally becomes involved in litigation arising from the normal course of business, and management is unable to estimate the extent of any liability that may arise from unanticipated future litigation. The Company has no reason to believe that there was a reasonable possibility or a probability the Company may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of litigation is inherently uncertain and assessments and decisions on defense and settlement can change significantly in a short period of time. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Company in the same reporting period for amounts in excess of management’s expectations, the Company’s consolidated financial statements of a particular reporting period could be materially adversely affected. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(9) STOCKHOLDERS’ EQUITY</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the three months and six months ended June 30, 2011, 13,640 shares of Class B common stock were converted into shares of Class A common stock, respectively. During the three months and six months ended June 30, 2010, 852,225 and 1,014,105 shares of Class B common stock were converted into shares of Class A common stock, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table reconciles equity attributable to non-controlling interest (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six-Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Non-controlling interest, January 1 </div></td> <td> </td> <td align="left">$</td> <td align="right">37,631</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">3,448</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Net earnings (loss) attributable to non-controlling interest </div></td> <td> </td> <td> </td> <td align="right">209</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(93</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Foreign currency translation adjustment </div></td> <td> </td> <td> </td> <td align="right">381</td> <td> </td> <td> </td> <td> </td> <td align="right">70</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Capital contribution by non-controlling interest </div></td> <td> </td> <td> </td> <td align="right">115</td> <td> </td> <td> </td> <td> </td> <td align="right">31,000</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Non-controlling interest, June 30 </div></td> <td> </td> <td align="left">$</td> <td align="right">38,336</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">34,425</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(10) SEGMENT AND GEOGRAPHIC REPORTING INFORMATION</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We have four reportable segments — domestic wholesale sales, international wholesale sales, retail sales, and e-commerce sales. Management evaluates segment performance based primarily on net sales and gross profit. All other costs and expenses of the Company are analyzed on an aggregate basis, and these costs are not allocated to the Company’s segments. Net sales, gross profit and identifiable assets and additions to property and equipment for the domestic wholesale segment, international wholesale, retail, and the e-commerce segment on a combined basis were as follows (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net sales </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic wholesale </div></td> <td> </td> <td align="left">$</td> <td align="right">217,241</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">317,788</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">428,775</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">591,747</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International wholesale </div></td> <td> </td> <td> </td> <td align="right">105,002</td> <td> </td> <td> </td> <td> </td> <td align="right">77,779</td> <td> </td> <td> </td> <td> </td> <td align="right">274,413</td> <td> </td> <td> </td> <td> </td> <td align="right">201,128</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retail </div></td> <td> </td> <td> </td> <td align="right">106,573</td> <td> </td> <td> </td> <td> </td> <td align="right">102,344</td> <td> </td> <td> </td> <td> </td> <td align="right">196,363</td> <td> </td> <td> </td> <td> </td> <td align="right">189,586</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">E-commerce </div></td> <td> </td> <td> </td> <td align="right">5,535</td> <td> </td> <td> </td> <td> </td> <td align="right">6,948</td> <td> </td> <td> </td> <td> </td> <td align="right">11,034</td> <td> </td> <td> </td> <td> </td> <td align="right">15,162</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">434,351</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">504,859</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">910,585</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">997,623</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gross margins </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic wholesale </div></td> <td> </td> <td align="left">$</td> <td align="right">37,608</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">134,643</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">103,855</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">257,983</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International wholesale </div></td> <td> </td> <td> </td> <td align="right">39,826</td> <td> </td> <td> </td> <td> </td> <td align="right">32,017</td> <td> </td> <td> </td> <td> </td> <td align="right">112,643</td> <td> </td> <td> </td> <td> </td> <td align="right">86,003</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retail </div></td> <td> </td> <td> </td> <td align="right">63,120</td> <td> </td> <td> </td> <td> </td> <td align="right">67,331</td> <td> </td> <td> </td> <td> </td> <td align="right">113,859</td> <td> </td> <td> </td> <td> </td> <td align="right">123,113</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">E-commerce </div></td> <td> </td> <td> </td> <td align="right">2,776</td> <td> </td> <td> </td> <td> </td> <td align="right">3,654</td> <td> </td> <td> </td> <td> </td> <td align="right">5,583</td> <td> </td> <td> </td> <td> </td> <td align="right">7,964</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">143,330</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">237,645</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">335,940</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">475,063</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>December 31, 2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Identifiable assets </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic wholesale </div></td> <td> </td> <td align="left">$</td> <td align="right">883,705</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">891,671</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International wholesale </div></td> <td> </td> <td> </td> <td align="right">333,258</td> <td> </td> <td> </td> <td> </td> <td align="right">300,153</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retail </div></td> <td> </td> <td> </td> <td align="right">131,323</td> <td> </td> <td> </td> <td> </td> <td align="right">112,774</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">E-commerce </div></td> <td> </td> <td> </td> <td align="right">177</td> <td> </td> <td> </td> <td> </td> <td align="right">196</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">1,348,463</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,304,794</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Additions to property and equipment </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic wholesale </div></td> <td> </td> <td align="left">$</td> <td align="right">42,993</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">15,409</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">78,784</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">16,742</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International wholesale </div></td> <td> </td> <td> </td> <td align="right">851</td> <td> </td> <td> </td> <td> </td> <td align="right">2,154</td> <td> </td> <td> </td> <td> </td> <td align="right">1,824</td> <td> </td> <td> </td> <td> </td> <td align="right">2,592</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retail </div></td> <td> </td> <td> </td> <td align="right">5,658</td> <td> </td> <td> </td> <td> </td> <td align="right">5,509</td> <td> </td> <td> </td> <td> </td> <td align="right">12,273</td> <td> </td> <td> </td> <td> </td> <td align="right">10,387</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">49,502</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">23,072</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">92,881</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">29,721</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">Geographic Information: </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">The following summarizes our operations in different geographic areas for the period indicated (in thousands): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net sales (1) </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">United States </div></td> <td> </td> <td align="left">$</td> <td align="right">313,345</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">416,122</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">607,398</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">776,833</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Canada </div></td> <td> </td> <td> </td> <td align="right">11,715</td> <td> </td> <td> </td> <td> </td> <td align="right">11,851</td> <td> </td> <td> </td> <td> </td> <td align="right">27,517</td> <td> </td> <td> </td> <td> </td> <td align="right">27,875</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other international (2) </div></td> <td> </td> <td> </td> <td align="right">109,291</td> <td> </td> <td> </td> <td> </td> <td align="right">76,886</td> <td> </td> <td> </td> <td> </td> <td align="right">275,670</td> <td> </td> <td> </td> <td> </td> <td align="right">192,915</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">434,351</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">504,859</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">910,585</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">997,623</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>December 31, 2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-lived assets </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">United States </div></td> <td> </td> <td align="left">$</td> <td align="right">349,515</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">276,457</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Canada </div></td> <td> </td> <td> </td> <td align="right">1,374</td> <td> </td> <td> </td> <td> </td> <td align="right">1,590</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other international (2) </div></td> <td> </td> <td> </td> <td align="right">16,263</td> <td> </td> <td> </td> <td> </td> <td align="right">15,755</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">367,152</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">293,802</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96%"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(1)</td> <td> </td> <td>The Company has subsidiaries in Canada, United Kingdom, Germany, France, Spain, Portugal, Italy, Netherlands, Brazil, and Chile that generate net sales within those respective countries and in some cases the neighboring regions. The Company has joint ventures in China, Hong Kong, Malaysia, Singapore, and Thailand that generate net sales from those countries. The Company also has a subsidiary in Switzerland that generates net sales from that country in addition to net sales to our distributors located in numerous non-European countries. Net sales are attributable to geographic regions based on the location of the Company subsidiary.</td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(2)</td> <td> </td> <td>Other international consists of Switzerland, United Kingdom, Germany, France, Spain, Portugal, Italy, Netherlands, China, Hong Kong, Malaysia, Singapore, Thailand, Brazil, Chile, and Vietnam.</td> </tr> </table> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(11) BUSINESS AND CREDIT CONCENTRATIONS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company generates the majority of its sales in the United States; however, several of its products are sold into various foreign countries, which subjects the Company to the risks of doing business abroad. In addition, the Company operates in the footwear industry, which is impacted by the general economy, and its business depends on the general economic environment and levels of consumer spending. Changes in the marketplace may significantly affect management’s estimates and the Company’s performance. Management performs regular evaluations concerning the ability of customers to satisfy their obligations and provides for estimated doubtful accounts. Domestic accounts receivable, which generally do not require collateral from customers, were equal to $163.1 million and $164.4 million before allowances for bad debts, sales returns and chargebacks at June 30, 2011 and December 31, 2010, respectively. Foreign accounts receivable, which in some cases are collateralized by letters of credit, were equal to $135.8 million and $121.4 million before allowance for bad debts, sales returns and chargebacks at June 30, 2011 and December 31, 2010, respectively. The Company’s credit losses attributable to write-offs for the three months ended June 30, 2011 and 2010 were $1.8 million and $0.2 million, respectively. The Company’s credit losses attributable to write-offs for the six months ended June 30, 2011 and 2010 were $2.5 million and $1.6 million, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Assets located outside the U.S. consist primarily of cash, accounts receivable, inventory, property and equipment, and other assets. Net assets held outside the United States were $356.8 million and $322.0 million at June 30, 2011 and December 31, 2010, respectively. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s net sales to its five largest customers accounted for approximately 25.2% and 31.3% of total net sales for the three months ended June 30, 2011 and 2010, respectively. The Company’s net sales to its five largest customers accounted for approximately 20.1% and 28.2% of total net sales for the six months ended June 30, 2011 and 2010, respectively. No customer accounted for more than 10% of our net sales during the three months ended June 30, 2011. One customer accounted for 10.9% of our net sales during the three months ended June 30, 2010. No customer accounted for more than 10% of our net sales during the six months ended June 30, 2011 and 2010, respectively. No customer accounted for more than 10% of our outstanding accounts receivable balance at June 30, 2011 and December 31, 2010, respectively. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company’s top five manufacturers produced the following for the three and six months ended June 30, 2011 and 2010, respectively: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Manufacturer #1 </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">31.7</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">36.8</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">30.8</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">34.6</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Manufacturer #2 </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">11.2</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">14.2</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">11.4</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">13.3</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Manufacturer #3 </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">7.6</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">9.4</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">8.6</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">10.1</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Manufacturer #4 </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">6.8</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">8.1</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">6.7</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">8.6</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Manufacturer #5 </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">6.3</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">4.6</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">6.3</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">4.7</td> <td nowrap="nowrap">%</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">63.6</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">73.1</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">63.8</td> <td nowrap="nowrap">%</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">71.3</td> <td nowrap="nowrap">%</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The majority of the Company’s products are produced in China. The Company’s operations are subject to the customary risks of doing business abroad, including, but not limited to, currency fluctuations and revaluations, custom duties and related fees, various import controls and other monetary barriers, restrictions on the transfer of funds, labor unrest and strikes and, in certain parts of the world, political instability. The Company believes it has acted to reduce these risks by diversifying manufacturing among various factories. To date, these business risks have not had a material adverse impact on the Company’s operations. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(12) RELATED PARTY TRANSACTIONS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On July 29,<sup style="font-size: 85%; vertical-align: text-top"> </sup>2010, the Company formed Skechers Foundation (the “Foundation”), which is a 501(c)(3) non-profit entity that does not have any shareholders or members. The Foundation is not a subsidiary of and is not otherwise affiliated with the Company, and the Company does not have a financial interest in the Foundation. However, two officers and directors of the Company, Michael Greenberg who is its President and David Weinberg who is its Chief Operating Officer and Chief Financial Officer, are also officers and directors of the Foundation. The Company contributed $250,000 and $750,000 to the Foundation to use for various charitable causes during the three months and six months ended June 30, 2011, respectively. </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Basis of Presentation</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The accompanying condensed consolidated financial statements of Skechers U.S.A., Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2011. </div> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Use of Estimates</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The preparation of the condensed consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. </div> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Non-controlling interests</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company has interests in certain joint ventures which are consolidated into its financial statements. Non-controlling interest was a loss of $0.1 million and income of $0.1 million for the three months ended June 30, 2011 and 2010, respectively, which represents the share of net earnings or loss that is attributable to our joint venture partners. Non-controlling interest was income of $0.2 million and a loss of $0.1 million for the six months ended June 30, 2011 and 2010, respectively. </div> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Recent Accounting Pronouncements</i> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income,” (“ASU 2011-05”). ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in equity. ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This new guidance is to be applied retrospectively. ASU 2011-05 is effective for annual periods beginning after December 15, 2011. We do not expect that the adoption of this standard update will have a material impact on the Company’s consolidated financial statements. </div> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three-Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six-Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Comprehensive income (loss)</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net (loss) earnings </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(30,052</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">40,317</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(17,899</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">96,440</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Gain (loss) on foreign currency translation adjustment, net of tax </div></td> <td> </td> <td> </td> <td align="right">4,781</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(6,120</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">9,324</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(10,350</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive (loss) income </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(25,271</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">34,197</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(8,575</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">86,090</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Comprehensive income (loss) attributable to non-controlling interest </div></td> <td> </td> <td> </td> <td align="right">26</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(107</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(590</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">28</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive (loss) income attributable to parent </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(25,245</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">34,090</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(9,165</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">86,118</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Weighted</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Weighted Average</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Aggregate</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Average</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Remaining</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Intrinsic</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Shares</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Exercise Price</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Contractual Term</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Value</b></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2010 </div></td> <td> </td> <td> </td> <td align="right">451,308</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">11.26</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Exercised </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(98,503</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">9.08</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Cancelled </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(85,058</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">23.23</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at June 30, 2011 </div></td> <td> </td> <td> </td> <td align="right">267,747</td> <td> </td> <td> </td> <td> </td> <td align="right">8.26</td> <td> </td> <td> </td> <td colspan="3" align="center">1.4 years</td> <td> </td> <td align="right">$</td> <td align="right">1,664,273</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Exercisable at June 30, 2011 </div></td> <td> </td> <td> </td> <td align="right">267,747</td> <td> </td> <td> </td> <td> </td> <td align="right">8.26</td> <td> </td> <td> </td> <td colspan="3" align="center">1.4 years</td> <td> </td> <td align="right">$</td> <td align="right">1,664,273</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>  </table> </div> </div> </div>   <div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted Average</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Grant-Date Fair</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Nonvested at December 31, 2010 </div></td> <td> </td> <td> </td> <td align="right">1,493,329</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">18.97</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">10,000</td> <td> </td> <td> </td> <td> </td> <td align="right">21.00</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Vested </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(46,667</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">31.37</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Cancelled </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(12,333</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">17.44</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Nonvested at June 30, 2011 </div></td> <td> </td> <td> </td> <td align="right">1,444,329</td> <td> </td> <td> </td> <td> </td> <td align="right">18.77</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>  </table> </div> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Note payable to bank, due in monthly installments of $531.4 (includes principal and interest), fixed rate interest at 3.54%, secured by property, balloon payment of $12,635 due December 2015 </div></td> <td> </td> <td align="left">$</td> <td align="right">36,814</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">39,325</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Note payable to bank, due in monthly installments of $483.9 (includes principal and interest), fixed rate interest at 3.19%, secured by property, balloon payment of $11,670 due June 2016 </div></td> <td> </td> <td> </td> <td align="right">36,344</td> <td> </td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Note payable to bank, due in monthly installments of $57.6 (includes principal and interest), fixed rate interest at 7.89%, secured by property, balloon payment of $6,889 paid in January 2011 </div></td> <td> </td> <td> </td> <td align="right">0</td> <td> </td> <td> </td> <td> </td> <td align="right">6,900</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Loan from HF Logistics I, LLC </div></td> <td> </td> <td> </td> <td align="right">17,766</td> <td> </td> <td> </td> <td> </td> <td align="right">17,358</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Capital lease obligations </div></td> <td> </td> <td> </td> <td align="right">44</td> <td> </td> <td> </td> <td> </td> <td align="right">51</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Subtotal </div></td> <td> </td> <td> </td> <td align="right">90,968</td> <td> </td> <td> </td> <td> </td> <td align="right">63,634</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Less current installments </div></td> <td> </td> <td> </td> <td align="right">9,893</td> <td> </td> <td> </td> <td> </td> <td align="right">11,984</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total long-term debt </div></td> <td> </td> <td align="left">$</td> <td align="right">81,075</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">51,650</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div> </div>

<div align="left" style="font-size: 10pt; font-family: 'Times New Roman',Times,serif"> <div style="font-family: 'Times New Roman',Times,serif"> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net sales </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic wholesale </div></td> <td> </td> <td align="left">$</td> <td align="right">217,241</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">317,788</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">428,775</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">591,747</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International wholesale </div></td> <td> </td> <td> </td> <td align="right">105,002</td> <td> </td> <td> </td> <td> </td> <td align="right">77,779</td> <td> </td> <td> </td> <td> </td> <td align="right">274,413</td> <td> </td> <td> </td> <td> </td> <td align="right">201,128</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retail </div></td> <td> </td> <td> </td> <td align="right">106,573</td> <td> </td> <td> </td> <td> </td> <td align="right">102,344</td> <td> </td> <td> </td> <td> </td> <td align="right">196,363</td> <td> </td> <td> </td> <td> </td> <td align="right">189,586</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">E-commerce </div></td> <td> </td> <td> </td> <td align="right">5,535</td> <td> </td> <td> </td> <td> </td> <td align="right">6,948</td> <td> </td> <td> </td> <td> </td> <td align="right">11,034</td> <td> </td> <td> </td> <td> </td> <td align="right">15,162</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">434,351</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">504,859</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">910,585</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">997,623</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gross margins </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic wholesale </div></td> <td> </td> <td align="left">$</td> <td align="right">37,608</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">134,643</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">103,855</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">257,983</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International wholesale </div></td> <td> </td> <td> </td> <td align="right">39,826</td> <td> </td> <td> </td> <td> </td> <td align="right">32,017</td> <td> </td> <td> </td> <td> </td> <td align="right">112,643</td> <td> </td> <td> </td> <td> </td> <td align="right">86,003</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retail </div></td> <td> </td> <td> </td> <td align="right">63,120</td> <td> </td> <td> </td> <td> </td> <td align="right">67,331</td> <td> </td> <td> </td> <td> </td> <td align="right">113,859</td> <td> </td> <td> </td> <td> </td> <td align="right">123,113</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">E-commerce </div></td> <td> </td> <td> </td> <td align="right">2,776</td> <td> </td> <td> </td> <td> </td> <td align="right">3,654</td> <td> </td> <td> </td> <td> </td> <td align="right">5,583</td> <td> </td> <td> </td> <td> </td> <td align="right">7,964</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">143,330</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">237,645</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">335,940</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">475,063</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>June 30, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>December 31, 2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Identifiable assets </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic wholesale </div></td> <td> </td> <td align="left">$</td> <td align="right">883,705</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">891,671</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International wholesale </div></td> <td> </td> <td> </td> <td align="right">333,258</td> <td> </td> <td> </td> <td> </td> <td align="right">300,153</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retail </div></td> <td> </td> <td> </td> <td align="right">131,323</td> <td> </td> <td> </td> <td> </td> <td align="right">112,774</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">E-commerce </div></td> <td> </td> <td> </td> <td align="right">177</td> <td> </td> <td> </td> <td> </td> <td align="right">196</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">1,348,463</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">1,304,794</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="52%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Six Months Ended June 30,</b></td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Additions to property and equipment </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Domestic wholesale </div></td> <td> </td> <td align="left">$</td> <td align="right">42,993</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">15,409</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">78,784</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">16,742</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">International wholesale </div></td> <td> </td> <td> </td> <td align="right">851</td> <td> </td> <td> </td> <td> </td> <td align="right">2,154</td> <td> </td> <td> </td> <td> </td> <td align="right">1,824</td> <td> </td> <td> </td> <td> </td> <td align="right">2,592</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Retail </div></td> <td> </td> <td> </td> <td align="right">5,658</td> <td> </td> <td> </td> <td> </td> <td align="right">5,509</td> <td> </td> <td> </td> <td> </td> <td align="right">12,273</td> <td> </td> <td> </td> <td> </td> <td align="right">10,387</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">49,502</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">23,072</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">92,881</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">29,721</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div> </div>

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Less: Net (loss) earnings attributable to non-controlling interests Net income (loss) attributable to noncontrolling interest Non-controlling interest in subsidiaries Net Income (Loss), Including Portion Attributable to Noncontrolling Interest Net (loss) earnings Net (loss) earnings Income tax (benefit) expense Income Tax Expense (Benefit) Income tax expense (Loss) earnings before income taxes Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Cumulative Effects of Changes in Accounting Principles, Noncontrolling Interest Earnings before income taxes Other income (expense) Nonoperating Income (Expense) Other Nonoperating Income (Expense) Other, net Other, net Interest Expense Interest expense Interest Expense, Total Investment Income, Interest Interest income Operating Income (Loss) Earnings (loss) from operations Operating expenses Operating Expenses General and Administrative Expense General and administrative Royalty Revenue Royalty income Gross Profit Gross profit Gross profit, Total Condensed Consolidated Balance Sheets [Abstract] Statement [Table] Class of Stock [Axis] Class of Stock [Domain] Common Stock [Member] Statement [Line Items] Supplemental Cash Flow Information [Abstract] Supplemental disclosures of cash flow information: Net Cash Provided by (Used in) Financing Activities [Abstract] Cash flows from financing activities: Net Cash Provided by (Used in) Investing Activities [Abstract] Cash flows from investing activities: Net Cash Provided by (Used in) Operating Activities [Abstract] Cash flows from operating activities: Adjustments to reconcile net (loss) earnings to net cash provided by (used in) operating activities: Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] Increase (Decrease) in Operating Assets [Abstract] (Increase) decrease in assets: Increase (Decrease) in Operating Liabilities [Abstract] Increase (decrease) in liabilities: Income Taxes Paid Income taxes Interest Paid Interest Effect of Exchange Rate on Cash and Cash Equivalents Effect of Exchange Rate on Cash and Cash Equivalents, Total Effect of exchange rates on cash and cash equivalents Net increase in cash and cash equivalents Cash and Cash Equivalents, Period Increase (Decrease) Net increase in cash and cash equivalents Net Cash Provided by (Used in) Financing Activities Net cash provided by financing activities Excess Tax Benefit from Share-based Compensation, Financing Activities Excess tax benefits from stock-based compensation Excess tax benefits from stock-based compensation Proceeds from Noncontrolling Interests Contribution from non-controlling interest of consolidated entity Proceeds from (Repayments of) Short-term Debt Proceeds from (Repayments of) Short-term Debt, Total Increase (decrease) in short-term borrowings Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options Proceeds from Issuance of Shares under Incentive and Share-based Compensation Plans, Including Stock Options, Total Net proceeds from the issuances of stock through employee stock purchase plan and the exercise of stock options Net Cash Provided by (Used in) Investing Activities Net cash (used in) provided by investing activities Payments to Acquire Property, Plant, and Equipment Capital expenditures Payments to Acquire Property, Plant, and Equipment, Total Net Cash Provided by (Used in) Operating Activities Net cash provided by (used in) operating activities Increase (Decrease) in Accrued Liabilities Accrued expenses Accrued expenses Increase (Decrease) in Accounts Payable Increase (Decrease) in Accounts Payable, Total Accounts payable Increase (Decrease) in Other Operating Assets Other assets Other assets Increase (Decrease) in Prepaid, Deferred Expense and Other Assets Prepaid expenses and other current assets Increase (Decrease) in Prepaid, Deferred Expense and Other Assets, Total Prepaid expenses and other current assets Increase (Decrease) in Inventories Inventories Increase (Decrease) in Inventories, Total Inventories Deferred Income Tax Expense (Benefit) Deferred Income Tax Expense (Benefit), Total Deferred income taxes Share-based Compensation Share-based Compensation, Total Non-cash stock compensation Amortization of Intangible Assets Amortization of intangible assets Amortization of Financing Costs Amortization of deferred financing costs Depreciation Depreciation, Total Depreciation of property and equipment Document and Entity Information [Abstract] Document and Entity Information. Revenue Recognition [Abstract] Revenue Recognition. Other Comprehensive (Loss) Income Comprehensive Income Note [Text Block] OTHER COMPREHENSIVE (LOSS) INCOME Share-Based Compensation [Abstract] Disclosure of Compensation Related Costs, Share-based Payments [Text Block] SHARE-BASED COMPENSATION Earnings Per Share [Text Block] EARNINGS PER SHARE (LOSS) Income Tax Disclosure [Text Block] INCOME TAXES Income Taxes [Abstract] Debt Disclosure [Text Block] LINE OF CREDIT, SHORT-TERM AND LONG-TERM BORROWINGS Stockholders' Equity Note Disclosure [Text Block] STOCKHOLDERS' EQUITY Stockholders' Equity [Abstract] Litigation [Abstract] Litigation. Business and Credit Concentrations [Abstract] Business and Credit Concentrations. Business and Credit Concentrations [Text Block] BUSINESS AND CREDIT CONCENTRATIONS Business and Credit Concentrations. Segment and Geographic Reporting Information [Abstract] Segment reporting information Segment And Geographic Reporting Information. Segment Reporting Disclosure [Text Block] SEGMENT AND GEOGRAPHIC REPORTING INFORMATION Preferred Stock, par value Preferred Stock, Par or Stated Value Per Share Preferred Stock, shares authorized Preferred Stock, Shares Authorized Preferred Stock, shares issued Preferred Stock, Shares Issued Preferred Stock, Shares Issued, Total Preferred Stock, shares outstanding Preferred Stock, Shares Outstanding Preferred Stock, Shares Outstanding, Ending Balance Preferred Stock, Shares Outstanding, Beginning Balance Common Stock, Par or Stated Value Per Share Common Stock, par value Common Stock, shares authorized Common Stock, Shares Authorized Common Stock, shares issued Common Stock, Shares, Issued Common Stock, Shares, Issued, Total Common Stock, shares outstanding Common Stock, Shares, Outstanding Common Stock, Shares, Outstanding, Ending Balance Common Stock, Shares, Outstanding, Beginning Balance Entity Registrant Name Entity Central Index Key Document Type Document Period End Date Amendment Flag Document Fiscal Year Focus Document Fiscal Period Focus Current Fiscal Year End Date Entity Well-known Seasoned Issuer Entity Voluntary Filers Entity Current Reporting Status Entity Filer Category Entity Public Float Entity Common Stock, Shares Outstanding Condensed Consolidated Statements of Cash Flows [Abstract] Long-term Debt and Capital Lease Obligations, Current Less current installments Long-term Debt and Capital Lease Obligations, Current, Total Current installments of long-term borrowings Long-term Debt and Capital Lease Obligations Total long-term debt Total long-term debt Long-term borrowings, excluding current installments Common Stock, Value, Outstanding Common Stock Additional Paid in Capital, Common Stock Additional Paid in Capital, Common Stock, Ending Balance Additional Paid in Capital, Common Stock, Beginning Balance Additional paid-in capital Sales Revenue, Goods, Net Net sales, Total Net sales, Total Net sales Cost of Goods Sold Cost of sales Cost of sales Selling and Marketing Expense Selling and Marketing Expense, Total Selling Gain (Loss) on foreign currency translation adjustment, net of tax Other Comprehensive Income, Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities Payments on long-term debt Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities, Total General [Abstract] General. 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Assets, Noncurrent Noncurrent assets Liabilities, Noncurrent Noncurrent liabilities Comprehensive Income, Net of Tax, Attributable to Noncontrolling Interest Comprehensive (loss) income attributable to non-controlling interest Comprehensive income (loss) attributable to noncontrolling interest General (Tables) [Abstract] General Tables Abstract. General (Details) [Abstract] General Details Abstract. General (Textuals) [Abstract] General Textuals Abstract. General (Textuals) [Abstract] General Policies [Abstract] Schedule of Variable Interest Entities [Text Block] Carrying amounts and classification of assets and liabilities Variable Interest, Carrying Amount [Abstract] Carrying amounts and classification of assets and liabilities Comprehensive Income, Net of Tax, Including Portion Attributable to Noncontrolling Interest Comprehensive (loss) income Legal Entity [Axis] Entity [Domain] Variable Interest Entity, Primary Beneficiary [Member] Corporate Joint Venture [Member] Stock Compensation (Tables) [Abstract] Stock compensation. Stock Compensation (Details) [Abstract] Stock Compensation. Stock Options Granted Pursuant To Equity Incentive Plan Abstract Stock options granted pursuant to Equity Incentive Plan. Stock options granted pursuant to Equity Incentive Plan Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period Granted, Shares Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period Exercised, Shares Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period Cancelled, Shares Cancelled, Shares Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Outstanding Options Outstanding, Shares, End of Period Outstanding, Shares, Beginning of Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price Outstanding, Weighted average exercise price, End of Period Outstanding, Weighted average exercise price, Beginning of Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number Exercisable, Shares Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price Exercisable, Weighted average exercise price Share Based Compensation Arrangement By Share Based Payment Award Options Exercised In Period Weighted Average Exercise Price Exercised, Weighted average exercise price Share Based Compensation arrangement by share based payment award options exercised in period Weighted Average Exercise Price. Share Based Compensation Arrangement By Share Based Payment Award Option Outstanding Weighted Average Remaining Contractual Term Share Based Payment Award Option Outstanding Weighted Average Remaining Contractual Term. Outstanding, Weighted average remaining contractual term Share Based Compensation Arrangement By Share Based Payment Award Option Exercisable Weighted Average Remaining Contractual Term Exercisable, Weighted average remaining contractual term Share Based Compensation Arrangement By Share Based Payment Award Option Exercisable Weighted Average Remaining Contractual Term. Share Based Compensation Arrangement By Share Based Payment Award Option Exercisable Intrinsic Value Share Based Compensation Arrangement By Share Based Payment Award Options Exercisable Intrinsic Value. Exercisable, Aggregate intrinsic value Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number Nonvested, Shares, End of Period Nonvested, Shares, Beginning of Period Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value Nonvested, Weighted average grant - date fair value, End of period Nonvested, Weighted average grant - date fair value, Beginning of period Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period Granted, Shares Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value Granted, Weighted average grant - date fair value Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period Vested, Shares Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value Vested, Weighted average grant - date fair value Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period Cancelled, Shares Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Cancelled In Period Weighted Average Grant Date Fair Value Cancelled, Weighted average grant - date fair value Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Cancelled In Period. Stock Compensation (Textuals) [Abstract] Stock Compensation (Textuals) [Abstract] Stock Compensation. Allocated Share-based Compensation Expense Allocated Share-based Compensation Expense, Total Share-based compensation expense Employee Service Share-based Compensation, Unrecognized Compensation Costs on Nonvested Awards Unrecognized compensation cost related to nonvested common shares Employee Service Share-based Compensation, Unrecognized Compensation Costs on Nonvested Awards, Weighted Average Period of Recognition Unrecognized compensation cost weighted average amortization period Schedule of Earnings Per Share, Basic, by Common Class [Text Block] Basic earnings (loss) per share Schedule of Earnings Per Share, Diluted, by Common Class [Text Block] Diluted earnings (loss) per share EX-101.PRE 9 skx-20110630_pre.xml EX-101 PRESENTATION LINKBASE DOCUMENT EX-101.DEF 10 skx-20110630_def.xml EX-101 DEFINITION LINKBASE DOCUMENT XML 11 R3.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Thousands, except Per Share data	Jun. 30, 2011	Dec. 31, 2010
Stockholders' equity:
Preferred Stock, par value	$ 0.001	$ 0.001
Preferred Stock, shares authorized	10,000	10,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Class A
Stockholders' equity:
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	100,000	100,000
Common Stock, shares issued	37,146	36,894
Common Stock, shares outstanding	37,146	36,894
Class B
Stockholders' equity:
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	100,000	100,000
Common Stock, shares issued	11,297	11,311
Common Stock, shares outstanding	11,297	11,311

XML 12 R4.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) [Abstract]
Net sales	$ 434,351	$ 504,859	$ 910,585	$ 997,623
Cost of sales	291,021	267,214	574,645	522,560
Gross profit	143,330	237,645	335,940	475,063
Royalty income	1,376	875	3,024	1,260
Operating income	144,706	238,520	338,964	476,323
Operating expenses:
Selling	53,099	52,437	90,659	86,746
General and administrative	139,965	127,299	281,948	249,786
Operating expenses	193,064	179,736	372,607	336,532
Earnings (loss) from operations	(48,358)	58,784	(33,643)	139,791
Other income (expense):
Interest income	756	436	1,343	1,864
Interest expense	(2,352)	(118)	(4,317)	(833)
Other, net	(944)	1,611	(595)	1,820
Other income (expense)	(2,540)	1,929	(3,569)	2,851
(Loss) earnings before income taxes	(50,898)	60,713	(37,212)	142,642
Income tax (benefit) expense	(20,846)	20,396	(19,313)	46,202
Net (loss) earnings	(30,052)	40,317	(17,899)	96,440
Less: Net (loss) earnings attributable to non-controlling interests	(136)	80	209	(93)
Net (loss) earnings attributable to Skechers U.S.A., Inc.	(29,916)	40,237	(18,108)	96,533
Net (loss) earnings per share attributable to Skechers U.S.A., INc.
Basic	$ (0.62)	$ 0.85	$ (0.38)	$ 2.05
Diluted	$ (0.62)	$ 0.82	$ (0.38)	$ 1.97
Weighted average shares used in calculating earnings (loss) per share attributable to Skechers U.S.A, Inc.:
Basic	48,341	47,422	48,292	47,107
Diluted	48,341	49,130	48,292	48,955
Comprehensive (loss) income:
Net (loss) earnings	(29,916)	40,237	(18,108)	96,533
Gain (Loss) on foreign currency translation adjustment, net of tax	4,671	(6,147)	8,943	(10,415)
Total comprehensive (loss) income	$ (25,245)	$ 34,090	$ (9,165)	$ 86,118

XML 13 R23.htm IDEA: XBRL DOCUMENT

Line of Credit Short-Term and Long-Term Borrowings ( Tables)

6 Months Ended

Jun. 30, 2011

Line of Credit Short-Term and Long-Term Borrowings (Tables) [Abstract]

Long-term debt


	June 30,		December 31,
	2011		2010
Note payable to bank, due in monthly installments of $531.4 (includes principal and interest), fixed rate interest at 3.54%, secured by property, balloon payment of $12,635 due December 2015	$	36,814	$	39,325
Note payable to bank, due in monthly installments of $483.9 (includes principal and interest), fixed rate interest at 3.19%, secured by property, balloon payment of $11,670 due June 2016		36,344		0
Note payable to bank, due in monthly installments of $57.6 (includes principal and interest), fixed rate interest at 7.89%, secured by property, balloon payment of $6,889 paid in January 2011		0		6,900
Loan from HF Logistics I, LLC		17,766		17,358
Capital lease obligations		44		51

Subtotal		90,968		63,634
Less current installments		9,893		11,984

Total long-term debt	$	81,075	$	51,650

XML 14 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information (USD $) In Millions, except Share data	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Aug. 01, 2011 Class A	Aug. 01, 2011 Class B
Entity Registrant Name	SKECHERS USA INC
Entity Central Index Key	0001065837
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$ 1,322
Entity Common Stock, Shares Outstanding			38,587,554	11,296,970

XML 15 R26.htm IDEA: XBRL DOCUMENT

Business and Credit Concentrations (Tables)

6 Months Ended

Jun. 30, 2011

Business and Credit Concentrations Tables Abstract

Company's top five manufacturers produced


	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Manufacturer #1		31.7	%		36.8	%		30.8	%		34.6	%
Manufacturer #2		11.2	%		14.2	%		11.4	%		13.3	%
Manufacturer #3		7.6	%		9.4	%		8.6	%		10.1	%
Manufacturer #4		6.8	%		8.1	%		6.7	%		8.6	%
Manufacturer #5		6.3	%		4.6	%		6.3	%		4.7	%


		63.6	%		73.1	%		63.8	%		71.3	%

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Line of Credit, Short-Term and Long-Term Borrowings

6 Months Ended

Jun. 30, 2011

Line of Credit, Short-Term and Long-Term Borrowings [Abstract]

LINE OF CREDIT, SHORT-TERM AND LONG-TERM BORROWINGS

(7) LINE OF CREDIT, SHORT-TERM AND LONG-TERM BORROWINGS

The Company and its subsidiaries had $1.6 million of outstanding letters of credit and short-term borrowings of $46.1 million as of June 30, 2011 and $18.3 million at December 31, 2010.

Long-term debt is as follows (in thousands):


	June 30,		December 31,
	2011		2010
Note payable to bank, due in monthly installments of $531.4 (includes principal and interest), fixed rate interest at 3.54%, secured by property, balloon payment of $12,635 due December 2015	$	36,814	$	39,325
Note payable to bank, due in monthly installments of $483.9 (includes principal and interest), fixed rate interest at 3.19%, secured by property, balloon payment of $11,670 due June 2016		36,344		0
Note payable to bank, due in monthly installments of $57.6 (includes principal and interest), fixed rate interest at 7.89%, secured by property, balloon payment of $6,889 paid in January 2011		0		6,900
Loan from HF Logistics I, LLC		17,766		17,358
Capital lease obligations		44		51

Subtotal		90,968		63,634
Less current installments		9,893		11,984

Total long-term debt	$	81,075	$	51,650

XML 18 R27.htm IDEA: XBRL DOCUMENT

General (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Carrying amounts and classification of assets and liabilities
Current assets	$ 944,722	$ 973,364
Total assets	1,348,463	1,304,794
Current liabilities	320,433	307,310
Total liabilities	401,585	358,960
Variable Interest Entity, Primary Beneficiary [Member]
Carrying amounts and classification of assets and liabilities
Current assets	4,311	6,058
Noncurrent assets	129,320	107,723
Total assets	133,631	113,781
Current liabilities	55,791	36,364
Noncurrent liabilities	17,766	17,359
Total liabilities	$ 73,557	$ 53,723

XML 19 R25.htm IDEA: XBRL DOCUMENT

Segment and Geographic Reporting Information (Tables)

6 Months Ended

Jun. 30, 2011

Segment and Geographic Reporting Information (Tables) [Abstract]

Segment reporting information


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net sales
Domestic wholesale	$	217,241	$	317,788	$	428,775	$	591,747
International wholesale		105,002		77,779		274,413		201,128
Retail		106,573		102,344		196,363		189,586
E-commerce		5,535		6,948		11,034		15,162

Total	$	434,351	$	504,859	$	910,585	$	997,623


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Gross margins
Domestic wholesale	$	37,608	$	134,643	$	103,855	$	257,983
International wholesale		39,826		32,017		112,643		86,003
Retail		63,120		67,331		113,859		123,113
E-commerce		2,776		3,654		5,583		7,964

Total	$	143,330	$	237,645	$	335,940	$	475,063


	June 30, 2011		December 31, 2010
Identifiable assets
Domestic wholesale	$	883,705	$	891,671
International wholesale		333,258		300,153
Retail		131,323		112,774
E-commerce		177		196

Total	$	1,348,463	$	1,304,794


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Additions to property and equipment
Domestic wholesale	$	42,993	$	15,409	$	78,784	$	16,742
International wholesale		851		2,154		1,824		2,592
Retail		5,658		5,509		12,273		10,387

Total	$	49,502	$	23,072	$	92,881	$	29,721

Geographic Information


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net sales (1)
United States	$	313,345	$	416,122	$	607,398	$	776,833
Canada		11,715		11,851		27,517		27,875
Other international (2)		109,291		76,886		275,670		192,915

Total	$	434,351	$	504,859	$	910,585	$	997,623


	June 30, 2011		December 31, 2010
Long-lived assets
United States	$	349,515	$	276,457
Canada		1,374		1,590
Other international (2)		16,263		15,755

Total	$	367,152	$	293,802


(1)		The Company has subsidiaries in Canada, United Kingdom, Germany, France, Spain, Portugal, Italy, Netherlands, Brazil, and Chile that generate net sales within those respective countries and in some cases the neighboring regions. The Company has joint ventures in China, Hong Kong, Malaysia, Singapore, and Thailand that generate net sales from those countries. The Company also has a subsidiary in Switzerland that generates net sales from that country in addition to net sales to our distributors located in numerous non-European countries. Net sales are attributable to geographic regions based on the location of the Company subsidiary.

(2)		Other international consists of Switzerland, United Kingdom, Germany, France, Spain, Portugal, Italy, Netherlands, China, Hong Kong, Malaysia, Singapore, Thailand, Brazil, Chile, and Vietnam.

XML 20 R17.htm IDEA: XBRL DOCUMENT

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2011
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	(12) RELATED PARTY TRANSACTIONS On July 29,2010, the Company formed Skechers Foundation (the “Foundation”), which is a 501(c)(3) non-profit entity that does not have any shareholders or members. The Foundation is not a subsidiary of and is not otherwise affiliated with the Company, and the Company does not have a financial interest in the Foundation. However, two officers and directors of the Company, Michael Greenberg who is its President and David Weinberg who is its Chief Operating Officer and Chief Financial Officer, are also officers and directors of the Foundation. The Company contributed $250,000 and $750,000 to the Foundation to use for various charitable causes during the three months and six months ended June 30, 2011, respectively.

- Definition

This element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References+ Details

XML 21 R8.htm IDEA: XBRL DOCUMENT

Other Comprehensive (Loss) Income

6 Months Ended

Jun. 30, 2011

Other Comprehensive (Loss) Income

OTHER COMPREHENSIVE (LOSS) INCOME

(3) OTHER COMPREHENSIVE (LOSS) INCOME

The activity in other comprehensive (loss) income, net of income taxes, was as follows (in thousands):


	Three-Months Ended June 30,						Six-Months Ended June 30,
Comprehensive income (loss)	2011			2010			2011			2010
Net (loss) earnings	$	(30,052	)	$	40,317		$	(17,899	)	$	96,440
Gain (loss) on foreign currency translation adjustment, net of tax		4,781			(6,120	)		9,324			(10,350	)

Comprehensive (loss) income		(25,271	)		34,197			(8,575	)		86,090
Comprehensive income (loss) attributable to non-controlling interest		26			(107	)		(590	)		28

Comprehensive (loss) income attributable to parent	$	(25,245	)	$	34,090		$	(9,165	)	$	86,118

- Definition

This label may include the following: 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income. Components of comprehensive income include: (1) foreign currency translation adjustments; (2) gains and losses on foreign currency transactions that are designated as, and are effective as, economic hedges of a net investment in a foreign entity; (3) gains and losses on intercompany foreign currency transactions that are of a long-term-investment nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements; (4) change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value; (5) unrealized holding gains and losses on available-for-sale securities and that resulting from transfers of debt securities from the held-to-maturity category to the available-for-sale category; (6) a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost; and (7) the net gain or loss and net prior service cost or credit for pension plans and other postretirement benefit plans.

+ References+ Details

XML 22 R35.htm IDEA: XBRL DOCUMENT

Segment and Geographic Reporting Information (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Segment reporting information
Net sales, Total	$ 434,351	$ 504,859	$ 910,585	$ 997,623
Gross profit, Total	143,330	237,645	335,940	475,063
Identifiable assets, Total	1,348,463		1,348,463		1,304,794
Additions to property and equipment, Total	49,502	23,072	92,881	29,721
Net sales
United States	313,345	416,122	607,398	776,833
Net Sales, Total	434,351	504,859	910,585	997,623
Long-lived assets
United States	349,515		349,515		276,457
Long-lived assets, Total	367,152		367,152		293,802
Domestic wholesale [Member]
Segment reporting information
Net sales, Total	217,241	317,788	428,775	591,747
Gross profit, Total	37,608	134,643	103,855	257,983
Identifiable assets, Total	883,705		883,705		891,671
Additions to property and equipment, Total	42,993	15,409	78,784	16,742
International wholesale [Member]
Segment reporting information
Net sales, Total	105,002	77,779	274,413	201,128
Gross profit, Total	39,826	32,017	112,643	86,003
Identifiable assets, Total	333,258		333,258		300,153
Additions to property and equipment, Total	851	2,154	1,824	2,592
Retail [Member]
Segment reporting information
Net sales, Total	106,573	102,344	196,363	189,586
Gross profit, Total	63,120	67,331	113,859	123,113
Identifiable assets, Total	131,323		131,323		112,774
Additions to property and equipment, Total	5,658	5,509	12,273	10,387
E-commerce [Member]
Segment reporting information
Net sales, Total	5,535	6,948	11,034	15,162
Gross profit, Total	2,776	3,654	5,583	7,964
Identifiable assets, Total	177		177		196
Canada [Member]
Net sales
Foreign Countries	11,715	11,851	27,517	27,875
Long-lived assets
Foreign Countries	1,374		1,374		1,590
Other international [Member]
Net sales
Foreign Countries	109,291	76,886	275,670	192,915
Long-lived assets
Foreign Countries	$ 16,263		$ 16,263		$ 15,755

XML 23 R14.htm IDEA: XBRL DOCUMENT

Stockholders' Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

(9) STOCKHOLDERS’ EQUITY

The following table reconciles equity attributable to non-controlling interest (in thousands):


	Six-Months Ended June 30,
	2011		2010
Non-controlling interest, January 1	$	37,631	$	3,448
Net earnings (loss) attributable to non-controlling interest		209		(93	)
Foreign currency translation adjustment		381		70
Capital contribution by non-controlling interest		115		31,000

Non-controlling interest, June 30	$	38,336	$	34,425

- Definition

Disclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References+ Details

XML 24 R19.htm IDEA: XBRL DOCUMENT

General (Tables)

6 Months Ended

Jun. 30, 2011

General (Tables) [Abstract]

Carrying amounts and classification of assets and liabilities


	June 30, 2011		December 31, 2010
Current assets	$	4,311	$	6,058
Noncurrent assets		129,320		107,723

Total assets	$	133,631	$	113,781


Current liabilities	$	55,791	$	36,364
Noncurrent liabilities		17,766		17,359

Total liabilities	$	73,557	$	53,723

- Definition

Disclosure of variable interest entities (VIE), including, but not limited to the nature, purpose, size, and activities of the VIE, the carrying amount and classification of consolidated assets that are collateral for the VIE's obligations, lack of recourse if creditors (or beneficial interest holders) of a consolidated VIE have no recourse to the general credit of the primary beneficiary. An enterprise that holds a significant variable interest in a VIE but is not the primary beneficiary may disclose the nature of its involvement with the VIE and when that involvement began, the nature, purpose, size, and activities of the VIE and the enterprise's maximum exposure to loss as a result of its involvement with the VIE.

+ References+ Details

XML 25 R15.htm IDEA: XBRL DOCUMENT

Segment and Geographic Reporting Information

6 Months Ended

Jun. 30, 2011

Segment and Geographic Reporting Information [Abstract]

SEGMENT AND GEOGRAPHIC REPORTING INFORMATION

(10) SEGMENT AND GEOGRAPHIC REPORTING INFORMATION

We have four reportable segments — domestic wholesale sales, international wholesale sales, retail sales, and e-commerce sales. Management evaluates segment performance based primarily on net sales and gross profit. All other costs and expenses of the Company are analyzed on an aggregate basis, and these costs are not allocated to the Company’s segments. Net sales, gross profit and identifiable assets and additions to property and equipment for the domestic wholesale segment, international wholesale, retail, and the e-commerce segment on a combined basis were as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net sales
Domestic wholesale	$	217,241	$	317,788	$	428,775	$	591,747
International wholesale		105,002		77,779		274,413		201,128
Retail		106,573		102,344		196,363		189,586
E-commerce		5,535		6,948		11,034		15,162

Total	$	434,351	$	504,859	$	910,585	$	997,623


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Gross margins
Domestic wholesale	$	37,608	$	134,643	$	103,855	$	257,983
International wholesale		39,826		32,017		112,643		86,003
Retail		63,120		67,331		113,859		123,113
E-commerce		2,776		3,654		5,583		7,964

Total	$	143,330	$	237,645	$	335,940	$	475,063


	June 30, 2011		December 31, 2010
Identifiable assets
Domestic wholesale	$	883,705	$	891,671
International wholesale		333,258		300,153
Retail		131,323		112,774
E-commerce		177		196

Total	$	1,348,463	$	1,304,794


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Additions to property and equipment
Domestic wholesale	$	42,993	$	15,409	$	78,784	$	16,742
International wholesale		851		2,154		1,824		2,592
Retail		5,658		5,509		12,273		10,387

Total	$	49,502	$	23,072	$	92,881	$	29,721

Geographic Information:

The following summarizes our operations in different geographic areas for the period indicated (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Net sales (1)
United States	$	313,345	$	416,122	$	607,398	$	776,833
Canada		11,715		11,851		27,517		27,875
Other international (2)		109,291		76,886		275,670		192,915

Total	$	434,351	$	504,859	$	910,585	$	997,623


	June 30, 2011		December 31, 2010
Long-lived assets
United States	$	349,515	$	276,457
Canada		1,374		1,590
Other international (2)		16,263		15,755

Total	$	367,152	$	293,802


(1)		The Company has subsidiaries in Canada, United Kingdom, Germany, France, Spain, Portugal, Italy, Netherlands, Brazil, and Chile that generate net sales within those respective countries and in some cases the neighboring regions. The Company has joint ventures in China, Hong Kong, Malaysia, Singapore, and Thailand that generate net sales from those countries. The Company also has a subsidiary in Switzerland that generates net sales from that country in addition to net sales to our distributors located in numerous non-European countries. Net sales are attributable to geographic regions based on the location of the Company subsidiary.

(2)		Other international consists of Switzerland, United Kingdom, Germany, France, Spain, Portugal, Italy, Netherlands, China, Hong Kong, Malaysia, Singapore, Thailand, Brazil, Chile, and Vietnam.

XML 26 R32.htm IDEA: XBRL DOCUMENT

Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Income Taxes (Textuals) [Abstract]
Effective income tax rate	41.00%	33.60%	51.90%	32.40%
Income tax (benefit) expense	$ (20,846)	$ 20,396	$ (19,313)	$ 46,202

XML 27 R13.htm IDEA: XBRL DOCUMENT

Litigation	6 Months Ended
Litigation	Jun. 30, 2011
Litigation [Abstract]
LITIGATION	(8) LITIGATION The Company recognizes legal fees in connection with loss contingencies and other related matters as incurred. The Company occasionally becomes involved in litigation arising from the normal course of business, and management is unable to estimate the extent of any liability that may arise from unanticipated future litigation. The Company has no reason to believe that there was a reasonable possibility or a probability the Company may have incurred a material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of litigation is inherently uncertain and assessments and decisions on defense and settlement can change significantly in a short period of time. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Company in the same reporting period for amounts in excess of management’s expectations, the Company’s consolidated financial statements of a particular reporting period could be materially adversely affected.

XML 28 R6.htm IDEA: XBRL DOCUMENT

General

6 Months Ended

Jun. 30, 2011

General [Abstract]

GENERAL

(1) GENERAL

Basis of Presentation

The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2011.

Use of Estimates

Non-controlling interests


	June 30, 2011		December 31, 2010
Current assets	$	4,311	$	6,058
Noncurrent assets		129,320		107,723

Total assets	$	133,631	$	113,781


Current liabilities	$	55,791	$	36,364
Noncurrent liabilities		17,766		17,359

Total liabilities	$	73,557	$	53,723

Recent Accounting Pronouncements

XML 29 R9.htm IDEA: XBRL DOCUMENT

Share-Based Compensation

6 Months Ended

Jun. 30, 2011

Share-Based Compensation [Abstract]

SHARE-BASED COMPENSATION

(4) SHARE-BASED COMPENSATION

Stock options granted pursuant to the 1998 Stock Option, Deferred Stock and Restricted Stock Plan and the 2007 Incentive Award Plan (the “Equity Incentive Plans”) were as follows:


				Weighted		Weighted Average	Aggregate
				Average		Remaining	Intrinsic
	Shares			Exercise Price		Contractual Term	Value
Outstanding at December 31, 2010		451,308		$	11.26
Granted		0			0
Exercised		(98,503	)		9.08
Cancelled		(85,058	)		23.23

Outstanding at June 30, 2011		267,747			8.26	1.4 years	$	1,664,273


Exercisable at June 30, 2011		267,747			8.26	1.4 years	$	1,664,273

A summary of the status and changes of our nonvested shares related to our Equity Incentive Plans as of and for the six months ended June 30, 2011 is presented below:


				Weighted Average
				Grant-Date Fair
	Shares			Value
Nonvested at December 31, 2010		1,493,329		$	18.97
Granted		10,000			21.00
Vested		(46,667	)		31.37
Cancelled		(12,333	)		17.44

Nonvested at June 30, 2011		1,444,329			18.77

As of June 30, 2011, there was $18.3 million of unrecognized compensation cost related to nonvested common shares. The cost is expected to be amortized over a weighted average period of 1.4 years.

XML 30 R31.htm IDEA: XBRL DOCUMENT

Earnings (Loss) Per Share (Details) (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Basic earnings (loss) per share
Net earnings (loss) attributable to Skechers U.S.A., Inc.	$ (29,916)	$ 40,237	$ (18,108)	$ 96,533
Weighted average common shares outstanding	48,341	47,422	48,292	47,107
Basic earnings (loss) per share attributable to Skechers U.S.A., Inc.	$ (0.62)	$ 0.85	$ (0.38)	$ 2.05
Diluted earnings (loss) per share
Net earnings (loss) attributable to Skechers U.S.A., Inc.	$ (29,916)	$ 40,237	$ (18,108)	$ 96,533
Weighted average common shares outstanding	48,341	47,422	48,292	47,107
Dilutive effect of stock options	0	1,708	0	1,848
Weighted average common shares outstanding	48,341	49,130	48,292	48,955
Diluted earnings (loss) per share attributable to Skechers U.S.A., Inc.	$ (0.62)	$ 0.82	$ (0.38)	$ 1.97
Class A
Earnings Per Share (Textuals) [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	851	0	38,938	0

XML 31 R10.htm IDEA: XBRL DOCUMENT

Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2011

Earnings (Loss) Per Share [Abstract]

EARNINGS PER SHARE (LOSS)

(5) EARNINGS (LOSS) PER SHARE


	Three-Months Ended June 30,					Six-Months Ended June 30,
Basic earnings (loss) per share	2011			2010		2011			2010
Net earnings (loss) attributable to Skechers U.S.A., Inc.	$	(29,916	)	$	40,237	$	(18,108	)	$	96,533
Weighted average common shares outstanding		48,341			47,422		48,292			47,107
Basic earnings (loss) per share attributable to Skechers U.S.A., Inc.	$	(0.62	)	$	0.85	$	(0.38	)	$	2.05


	Three-Months Ended June 30,					Six-Months Ended June 30,
Diluted earnings (loss) per share	2011			2010		2011			2010
Net earnings (loss) attributable to Skechers U.S.A., Inc.	$	(29,916	)	$	40,237	$	(18,108	)	$	96,533


Weighted average common shares outstanding		48,341			47,422		48,292			47,107
Dilutive effect of stock options		0			1,708		0			1,848

Weighted average common shares outstanding		48,341			49,130		48,292			48,955


Diluted earnings (loss) per share attributable to Skechers U.S.A., Inc.	$	(0.62	)	$	0.82	$	(0.38	)	$	1.97

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General (Details Textual) (USD $) In Thousands	3 Months Ended		6 Months Ended
General (Details Textual) (USD $) In Thousands	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
General (Textuals) [Abstract]
Non-controlling interest in subsidiaries	$ (136)	$ 80	$ 209	$ (93)
Corporate Joint Venture [Member]
General (Textuals) [Abstract]
Non-controlling interest in subsidiaries	$ (100)	$ 100	$ 200	$ (100)

XML 34 R33.htm IDEA: XBRL DOCUMENT

Line of Credit, Short-Term and Long-Term Borrowings (Details) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Long-term debt
Long-term debt	$ 90,968,000	$ 63,634,000
Less current installments	9,893,000	11,984,000
Total long-term debt	81,075,000	51,650,000
Additional Line of Credit Short-Term and Long-Term Borrowings (Textuals) [Abstract]
Outstanding letters of credit	1,600,000
Short-term borrowings	46,096,000	18,346,000
Note payable to bank one [Member]
Long-term debt
Long-term debt	36,814,000	39,325,000
Line of Credit Short-Term and Long-Term Borrowings (Textuals) [Abstract]
Monthly Repayment Installment Of Note Payable	531,400
Fixed interest rate of note payable	3.54%
Baloon payment required under note payable	12,635,000
Note payable to bank two [Member]
Long-term debt
Long-term debt	36,344,000	0
Line of Credit Short-Term and Long-Term Borrowings (Textuals) [Abstract]
Monthly Repayment Installment Of Note Payable	483,900
Fixed interest rate of note payable	3.19%
Baloon payment required under note payable	11,670,000
Note payable to bank three [Member]
Long-term debt
Long-term debt	0	6,900,000
Line of Credit Short-Term and Long-Term Borrowings (Textuals) [Abstract]
Monthly Repayment Installment Of Note Payable	57,600
Fixed interest rate of note payable	7.89%
Baloon payment required under note payable	6,889,000
Loan From HF Logistics [Member]
Long-term debt
Long-term debt	17,766,000	17,358,000
Capital lease obligations [Member]
Long-term debt
Long-term debt	$ 44,000	$ 51,000

XML 35 R30.htm IDEA: XBRL DOCUMENT

Share-Based Compensation (Details) (USD $)	3 Months Ended		6 Months Ended
Share-Based Compensation (Details) (USD $)	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Stock options granted pursuant to Equity Incentive Plan
Outstanding, Shares, Beginning of Period			451,308
Outstanding, Weighted average exercise price, Beginning of Period			$ 11.26
Granted, Shares			0
Granted, Weighted average exercise price			$ 0.00
Exercised, Shares			(98,503)
Exercised, Weighted average exercise price			$ 9.08
Cancelled, Shares			(85,058)
Cancelled, Weighted average exercise price			$ 23.23
Outstanding, Shares, End of Period	267,747		267,747
Outstanding, Weighted average exercise price, End of Period	$ 8.26		$ 8.26
Outstanding, Weighted average remaining contractual term	1.4		1.4
Outstanding, Aggregate intrinsic value	$ 1,664,273		$ 1,664,273
Exercisable, Shares	267,747		267,747
Exercisable, Weighted average exercise price	$ 8.26		$ 8.26
Exercisable, Weighted average remaining contractual term	1.4		1.4
Exercisable, Aggregate intrinsic value	1,664,273		1,664,273
Summary of nonvested shares related to Equity Incentive Plan
Nonvested, Shares, Beginning of Period			1,493,329
Nonvested, Weighted average grant - date fair value, Beginning of period			$ 18.97
Granted, Shares			10,000
Granted, Weighted average grant - date fair value			$ 21.00
Vested, Shares			(46,667)
Vested, Weighted average grant - date fair value			$ 31.37
Cancelled, Shares			(12,333)
Cancelled, Weighted average grant - date fair value			$ 17.44
Nonvested, Shares, End of Period	1,444,329		1,444,329
Nonvested, Weighted average grant - date fair value, End of period	$ 18.77		$ 18.77
Stock Compensation (Textuals) [Abstract]
Share-based compensation expense	3,500,000	3,400,000	7,200,000	6,700,000
Unrecognized compensation cost related to nonvested common shares	$ 18,300,000		$ 18,300,000
Unrecognized compensation cost weighted average amortization period			1.4

XML 36 R18.htm IDEA: XBRL DOCUMENT

General (Policies)	6 Months Ended
General (Policies)	Jun. 30, 2011
General Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements of Skechers U.S.A., Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2011.
Use of Estimates	Use of Estimates The preparation of the condensed consolidated financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Non-controlling interests	Non-controlling interests The Company has interests in certain joint ventures which are consolidated into its financial statements. Non-controlling interest was a loss of $0.1 million and income of $0.1 million for the three months ended June 30, 2011 and 2010, respectively, which represents the share of net earnings or loss that is attributable to our joint venture partners. Non-controlling interest was income of $0.2 million and a loss of $0.1 million for the six months ended June 30, 2011 and 2010, respectively.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income,” (“ASU 2011-05”). ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of changes in equity. ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. This new guidance is to be applied retrospectively. ASU 2011-05 is effective for annual periods beginning after December 15, 2011. We do not expect that the adoption of this standard update will have a material impact on the Company’s consolidated financial statements.

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M``!02P$"'@,4````"``[;`D_5_\VN[00``!#Y```%``8```````!````I('* M;P```L``00E#@``!#D! M``!02P$"'@,4````"``[;`D_NY].0M$2``"#8`$`%``8```````!````I(', M@````L``00E#@``!#D! M``!02P$"'@,4````"``[;`D_74O"TT%,``!@?@0`%``8```````!````I('K MDP```L``00E#@``!#D! M``!02P$"'@,4````"``[;`D_8UYFFO`L``00E#@``!#D! M``!02P$"'@,4````"``[;`D_L`7VMW@-``!5F@``$``8```````!````I(&_ M#`$` XML 38 R11.htm IDEA: XBRL DOCUMENT v2.3.0.11

Income Taxes
6 Months Ended

Jun. 30, 2011

Income Taxes [Abstract]

INCOME TAXES

(6) INCOME TAXES

The Company’s effective tax rates for the second quarter and first six months of 2011 were 41.0% and 51.9%, respectively, compared to the effective tax rates of 33.6% and 32.4% for the second quarter and first six months of 2010, respectively. Income tax benefit for the three months ended June 30, 2011 was $20.8 million compared to expense of $20.4 million for the same period in 2010. Income tax benefit for the six months ended June 30, 2011 was $19.3 million compared to expense of $46.2 million for the same period in 2010.

XML 39 R21.htm IDEA: XBRL DOCUMENT

Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2011

Stock Compensation (Tables) [Abstract]

Stock options granted pursuant to Equity Incentive Plan


				Weighted		Weighted Average	Aggregate
				Average		Remaining	Intrinsic
	Shares			Exercise Price		Contractual Term	Value
Outstanding at December 31, 2010		451,308		$	11.26
Granted		0			0
Exercised		(98,503	)		9.08
Cancelled		(85,058	)		23.23

Outstanding at June 30, 2011		267,747			8.26	1.4 years	$	1,664,273


Exercisable at June 30, 2011		267,747			8.26	1.4 years	$	1,664,273

Summery of nonvested shares related to Equity Incentive Plan


				Weighted Average
				Grant-Date Fair
	Shares			Value
Nonvested at December 31, 2010		1,493,329		$	18.97
Granted		10,000			21.00
Vested		(46,667	)		31.37
Cancelled		(12,333	)		17.44

Nonvested at June 30, 2011		1,444,329			18.77

XML 40 R29.htm IDEA: XBRL DOCUMENT

Other Comprehensive (Loss) Income (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Comprehensive (loss) income:
Net (loss) earnings	$ (30,052)	$ 40,317	$ (17,899)	$ 96,440
Gain (Loss) on foreign currency translation adjustment, net of tax	4,671	(6,147)	8,943	(10,415)
Comprehensive (loss) income	(25,271)	34,197	(8,575)	86,090
Comprehensive (loss) income attributable to non-controlling interest	26	(107)	(590)	28
Total comprehensive (loss) income	$ (25,245)	$ 34,090	$ (9,165)	$ 86,118

- Definition

Change in the balance sheet adjustment that results from the process of translating subsidiary financial statements and foreign equity investments into functional currency of the reporting entity for the period being reported, net of tax. If an entity's functional currency is a foreign currency, translation adjustments result from the process of translating that entity's financial statements into the reporting currency. Includes gain (loss) on foreign currency forward exchange contracts. Includes foreign currency transactions designated as hedges of net investment in a foreign entity and intercompany foreign currency transactions that are of a long-term nature, when the entities to the transaction are consolidated, combined, or accounted for by the equity method in the reporting enterprise's financial statements. Includes the gain or loss on a derivative instrument or nonderivative financial instrument that may give rise to a foreign currency transaction gain or loss under FAS 52 and that have been designated and have qualified as hedging instruments for hedges of the foreign currency exposure of a net investment in a foreign operation.

+ References+ Details

XML 41 R5.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net (loss) earnings	$ (18,108)	$ 96,533
Adjustments to reconcile net (loss) earnings to net cash provided by (used in) operating activities:
Non-controlling interest in subsidiaries	209	(93)
Depreciation of property and equipment	15,088	10,870
Amortization of deferred financing costs	652	741
Amortization of intangible assets	790	892
Provision for bad debts and returns	5,748	3,135
Non-cash stock compensation	7,242	6,665
Loss on disposal of equipment	232	50
Deferred income taxes	75	(12)
(Increase) decrease in assets:
Receivables	(8,271)	(91,260)
Inventories	73,875	3,718
Prepaid expenses and other current assets	(15,973)	(2,215)
Other assets	65	(22,555)
Increase (decrease) in liabilities:
Accounts payable	1,871	(5,058)
Accrued expenses	(11,428)	(9,381)
Net cash provided by (used in) operating activities	52,067	(7,970)
Cash flows from investing activities:
Capital expenditures	(92,881)	(29,721)
Maturities of investments	0	30,000
Intangible additions	0	(31)
Net cash (used in) provided by investing activities	(92,881)	248
Cash flows from financing activities:
Net proceeds from the issuances of stock through employee stock purchase plan and the exercise of stock options	2,042	10,772
Increase in long term borrowing	36,751	0
Payments on long-term debt	(9,390)	(281)
Increase (decrease) in short-term borrowings	27,705	(61)
Contribution from non-controlling interest of consolidated entity	115	1,000
Excess tax benefits from stock-based compensation	219	5,758
Net cash provided by financing activities	57,442	17,188
Net increase in cash and cash equivalents	16,628	9,466
Effect of exchange rates on cash and cash equivalents	596	(1,875)
Cash and cash equivalents at beginning of the period	233,558	265,675
Cash and cash equivalents at end of the period	250,782	273,266
Cash paid during the period for:
Interest	2,439	1,512
Income taxes	7,588	53,343
Non-cash transactions:
Land contribution from noncontrolling interest of consolidated entity	0	30,000
Note payable contribution from noncontrolling interest of consolidated entity	$ 0	$ 14,567

XML 42 R22.htm IDEA: XBRL DOCUMENT

Earnings (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2011

Earnings (Loss) Per Share (Tables) [Abstract]

Basic earnings (loss) per share


	Three-Months Ended June 30,					Six-Months Ended June 30,
Basic earnings (loss) per share	2011			2010		2011			2010
Net earnings (loss) attributable to Skechers U.S.A., Inc.	$	(29,916	)	$	40,237	$	(18,108	)	$	96,533
Weighted average common shares outstanding		48,341			47,422		48,292			47,107
Basic earnings (loss) per share attributable to Skechers U.S.A., Inc.	$	(0.62	)	$	0.85	$	(0.38	)	$	2.05

Diluted earnings (loss) per share


	Three-Months Ended June 30,					Six-Months Ended June 30,
Diluted earnings (loss) per share	2011			2010		2011			2010
Net earnings (loss) attributable to Skechers U.S.A., Inc.	$	(29,916	)	$	40,237	$	(18,108	)	$	96,533


Weighted average common shares outstanding		48,341			47,422		48,292			47,107
Dilutive effect of stock options		0			1,708		0			1,848

Weighted average common shares outstanding		48,341			49,130		48,292			48,955


Diluted earnings (loss) per share attributable to Skechers U.S.A., Inc.	$	(0.62	)	$	0.82	$	(0.38	)	$	1.97

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Stockholder's Equity (Tables)

6 Months Ended

Jun. 30, 2011

Stockholders Equity (Tables) [Abstract]

Equity attributable to noncontrolling interest


	Six-Months Ended June 30,
	2011		2010
Non-controlling interest, January 1	$	37,631	$	3,448
Net earnings (loss) attributable to non-controlling interest		209		(93	)
Foreign currency translation adjustment		381		70
Capital contribution by non-controlling interest		115		31,000

Non-controlling interest, June 30	$	38,336	$	34,425

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Revenue Recognition	6 Months Ended
Revenue Recognition	Jun. 30, 2011
Revenue Recognition [Abstract]
REVENUE RECOGNITION	(2) REVENUE RECOGNITION The Company recognizes revenue on wholesale sales when products are shipped and the customer takes title and assumes risk of loss, collection of relevant receivable is reasonably assured, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. This generally occurs at time of shipment. The Company recognizes revenue from retail sales at the point of sale. Allowances for estimated returns, discounts, doubtful accounts and chargebacks are provided for when related revenue is recorded. Related costs paid to third-party shipping companies are recorded as a cost of sales. Royalty income is earned from licensing arrangements. Upon signing a new licensing agreement, we receive up-front fees, which are generally characterized as prepaid royalties. These fees are initially deferred and recognized as revenue as earned (i.e., as licensed sales are reported to the company or on a straight-line basis over the term of the agreement). The first calculated royalty payment is based on actual sales of the licensed product. Typically, at each quarter-end we receive correspondence from our licensees indicating the actual sales for the period. This information is used to calculate and accrue the related royalties based on the terms of the agreement.

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Business and Credit Concentrations

6 Months Ended

Jun. 30, 2011

Business and Credit Concentrations [Abstract]

BUSINESS AND CREDIT CONCENTRATIONS

(11) BUSINESS AND CREDIT CONCENTRATIONS

The Company’s top five manufacturers produced the following for the three and six months ended June 30, 2011 and 2010, respectively:


	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Manufacturer #1		31.7	%		36.8	%		30.8	%		34.6	%
Manufacturer #2		11.2	%		14.2	%		11.4	%		13.3	%
Manufacturer #3		7.6	%		9.4	%		8.6	%		10.1	%
Manufacturer #4		6.8	%		8.1	%		6.7	%		8.6	%
Manufacturer #5		6.3	%		4.6	%		6.3	%		4.7	%


		63.6	%		73.1	%		63.8	%		71.3	%

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Stockholder's Equity (Details) (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Equity attributable to noncontrolling interest
Non-controlling interest, January 1			$ 37,631	$ 3,448
Non-controlling interest in subsidiaries	(136)	80	209	(93)
Foreign currency translation adjustment			381	70
Capital contribution by noncontrolling interest			115	31,000
Non-controlling interest, June 30	$ 38,336	$ 34,425	$ 38,336	$ 34,425
Stockholder's Equity (Textuals) [Abstract]
Certain Class B stockholders converted into Class A	13,640	852,225	13,640	1,014,105

XML 47 R20.htm IDEA: XBRL DOCUMENT

Other Comprehensive (Loss) Income (Tables)

6 Months Ended

Jun. 30, 2011

Other Comprehensive (Loss) Income (Tables) [Abstract]

Other comprehensive Other comprehensive income (loss) income


	Three-Months Ended June 30,						Six-Months Ended June 30,
Comprehensive income (loss)	2011			2010			2011			2010
Net (loss) earnings	$	(30,052	)	$	40,317		$	(17,899	)	$	96,440
Gain (loss) on foreign currency translation adjustment, net of tax		4,781			(6,120	)		9,324			(10,350	)

Comprehensive (loss) income		(25,271	)		34,197			(8,575	)		86,090
Comprehensive income (loss) attributable to non-controlling interest		26			(107	)		(590	)		28

Comprehensive (loss) income attributable to parent	$	(25,245	)	$	34,090		$	(9,165	)	$	86,118

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Current Assets:
Cash and cash equivalents	$ 250,782	$ 233,558
Trade accounts receivable, net	275,958	266,057
Other receivables	10,375	9,650
Total receivables	286,333	275,707
Inventories, net	325,815	398,588
Prepaid expenses and other current assets	70,072	53,791
Deferred tax assets	11,720	11,720
Total current assets	944,722	973,364
Property and equipment, at cost, less accumulated depreciation and amortization	367,152	293,802
Intangible assets, less accumulated amortization	6,587	7,367
Deferred tax assets	12,323	12,323
Other assets, at cost	17,679	17,938
TOTAL ASSETS	1,348,463	1,304,794
Current Liabilities:
Current installments of long-term borrowings	9,893	11,984
Short-term borrowings	46,096	18,346
Accounts payable	245,185	246,595
Accrued expenses	19,259	30,385
Total current liabilities	320,433	307,310
Long-term borrowings, excluding current installments	81,075	51,650
Deferred tax liabilities	77	0
Total liabilities	401,585	358,960
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $.001 par value; 10,000 authorized; none issued and outstanding	0	0
Additional paid-in capital	313,380	303,877
Accumulated other comprehensive income	13,209	4,265
Retained earnings	581,905	600,013
Skechers U.S.A., Inc. equity	908,542	908,203
Non-controlling interests	38,336	37,631
Total equity	946,878	945,834
TOTAL LIABILITIES AND EQUITY	1,348,463	1,304,794
Class A
Stockholders' equity:
Common Stock	37	37
Class B
Stockholders' equity:
Common Stock	$ 11	$ 11

XML 49 R36.htm IDEA: XBRL DOCUMENT

Business and Credit Concentrations (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Concentration Risk [Line Items]
Total Manufacturers Produced	63.60%	73.10%	63.80%	71.30%
Business and Credit Concentration (Textuals) [Abstract]
Domestic accounts receivable which do not require collateral from customers	$ 163.1		$ 163.1		$ 164.4
Foreign accounts receivable which are collateralized by letters of credit	135.8		135.8		121.4
Losses due to company's credit write-offs	1.8	0.2	2.5	1.6
Net assets held outside the United States	$ 356.8		$ 356.8		$ 322.0
Company's net sales to its five largest customers	25.20%	31.30%	20.10%	28.20%
Number of customers accounting for more than 10% of sales	0	1	0	0
Number of customers accounting for more than 10% of accounts receivable	0	1
Percentage of outstanding accounts receivable held by one customer		15.10%		15.10%
Percentage Of Net Sales Accounted By One Customer		10.90%		10.90%
Companies Top Five Manufacturers Produced
Concentration Risk [Line Items]
Manufacturer #1	31.70%	36.80%	30.80%	34.60%
Manufacturer #2	11.20%	14.20%	11.40%	13.30%
Manufacturer #3	7.60%	9.40%	8.60%	10.10%
Manufacturer #4	6.80%	8.10%	6.70%	8.60%
Manufacturer #5	6.30%	4.60%	6.30%	4.70%

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Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2011
Income Taxes [Abstract]
INCOME TAXES	(6) INCOME TAXES The Company’s effective tax rates for the second quarter and first six months of 2011 were 41.0% and 51.9%, respectively, compared to the effective tax rates of 33.6% and 32.4% for the second quarter and first six months of 2010, respectively. Income tax benefit for the three months ended June 30, 2011 was $20.8 million compared to expense of $20.4 million for the same period in 2010. Income tax benefit for the six months ended June 30, 2011 was $19.3 million compared to expense of $46.2 million for the same period in 2010.

Related Party Transactions (Details) (USD $)	3 Months Ended	6 Months Ended
Related Party Transactions (Details) (USD $)	Jun. 30, 2011	Jun. 30, 2011
Related Party Transactions (Textuals) [Abstract]
Contribution to Sketchers Foundation for various charitable purposes	$ 250,000	$ 750,000