10-Q 1 0001.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities --- Exchange Act of 1934 For the period ended June 30, 2000 ------------------------------------------------------ OR ___ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to -------------- ----------------------------- Commission File number 0-18490 ------- K-SWISS INC. -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 95-4265988 -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 31248 Oak Crest Drive, Westlake Village, CA 91361 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) 818-706-5100 -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) ________________________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report.) 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 X No _____ ----- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Shares of common stock outstanding at July 18, 2000: Class A 7,165,785 Class B 3,013,978 1 PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ------ K-SWISS INC. CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands)
June 30, December 31, 2000 1999 -------- ------------ (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 68,465 $ 53,119 Accounts receivable, less allowance for doubtful accounts of $1,909 and $1,740 as of June 30, 2000 and December 31, 1999, respectively 31,546 27,950 Inventories 31,729 44,164 Prepaid expenses and other 1,227 4,051 Deferred taxes 1,671 1,946 -------- -------- Total current assets 134,638 131,230 PROPERTY, PLANT AND EQUIPMENT, net 8,810 8,848 OTHER ASSETS Intangible assets 4,067 4,179 Other 2,518 2,515 -------- -------- 6,585 6,694 -------- -------- $150,033 $146,772 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Bank lines of credit $ 641 $ 353 Current maturities of subordinated debentures 500 500 Trade accounts payable 7,020 4,588 Accrued liabilities 10,342 12,001 -------- -------- Total current liabilities 18,503 17,442 OTHER LIABILITIES 8,252 10,196 DEFERRED TAXES 7,565 7,104 STOCKHOLDERS' EQUITY Preferred Stock-authorized 2,000,000 shares of $.01 par value; none issued and outstanding - - Common Stock: Class A-authorized 18,000,000 shares of $.01 par value; 11,012,884 shares issued, 7,165,452 shares outstanding and 3,847,432 shares held in treasury at June 30, 2000 and 11,006,155 shares issued, 7,727,223 shares outstanding and 3,278,932 shares held in treasury at December 31, 1999 110 110 Class B-authorized 10,000,000 shares of $.01 par value; issued and outstanding 3,013,978 shares at June 30, 2000 and December 31, 1999 30 30 Additional paid-in capital 40,080 40,017 Treasury stock (44,128) (36,766) Retained earnings 120,120 109,122 Accumulated other comprehensive earnings - Foreign currency translation (499) (483) -------- -------- 115,713 112,030 -------- -------- $150,033 $146,772 ======== ========
The accompanying notes are an integral part of these statements. 2 K-SWISS INC. CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS (Amounts in thousands, except per share amounts) (Unaudited) SIX MONTHS THREE MONTHS ENDED JUNE 30, ENDED JUNE 30, ----------------- ----------------- 2000 1999 2000 1999 ---- ---- ---- ---- Revenues $122,464 $155,750 $51,006 $67,173 Cost of goods sold 73,702 87,082 29,264 36,880 -------- -------- ------- ------- Gross profit 48,762 68,668 21,742 30,293 Selling, general and administrative expenses 31,534 36,019 16,006 19,394 -------- -------- ------- ------- Operating profit 17,228 32,649 5,736 10,899 Interest income, net 1,662 618 946 345 -------- -------- ------- ------- Earnings before income taxes 18,890 33,267 6,682 11,244 Income tax expense 7,582 13,245 2,711 4,508 -------- -------- ------- ------- NET EARNINGS $ 11,308 $ 20,022 $ 3,971 $ 6,736 ======== ======== ======= ======= Earnings per common share (Note 3) Basic $ 1.08 $ 1.83 $ .38 $ .61 ======== ======== ======= ======= Diluted $ 1.04 $ 1.75 $ .37 $ .58 ======== ======== ======= ======= Net earnings $ 11,308 $ 20,022 $ 3,971 $ 6,736 Other comprehensive (loss) earnings, net of tax - Foreign currency translation adjustments (16) (38) (45) 20 -------- -------- ------- ------- Comprehensive earnings $ 11,292 $ 19,984 $ 3,926 $ 6,756 ======== ======== ======= ======= The accompanying notes are an integral part of these statements. 3 K-SWISS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) SIX MONTHS ENDED JUNE 30, ---------------- 2000 1999 ------- ------- Net cash provided by operating activities $23,348 $ 9,347 Cash flows from investing activities: Purchase of property, plant and equipment (640) (1,101) Proceeds from sale of property 9 23 ------- ------- Net cash used in investing activities (631) (1,078) Cash flows from financing activities: Net borrowings under bank lines of credit 322 172 Purchase of treasury stock (7,362) (5,645) Proceeds from stock options exercised 35 5,731 Payment of dividends (310) (334) ------- ------- Net cash used in financing activities (7,315) (76) Effect of exchange rate changes on cash (56) (44) ------- ------- Net increase in cash and cash equivalents 15,346 8,149 Cash and cash equivalents at beginning of period 53,119 37,360 ------- ------- Cash and cash equivalents at end of period $68,465 $45,509 ======= ======= Supplemental disclosure of cash flow information: Non-cash investing and financing activities: Income tax benefit of options exercised $ 28 $ 8,932 Cash paid during the period for: Interest $ 47 $ 54 Income taxes $ 4,259 $ 2,027 The accompanying notes are an integral part of these statements. 4 K-SWISS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the consolidated financial position of K-Swiss Inc. (the "Company") as of June 30, 2000 and the results of its operations and its cash flows for the six and three months ended June 30, 2000 and 1999. The results of operations and cash flows for the six and three months ended June 30, 2000 are not necessarily indicative of the results to be expected for any other interim period or the full year. These consolidated financial statements should be read in combination with the audited consolidated financial statements and notes thereto for the year ended December 31, 1999. Certain reclassifications have been made in the six and three months ended June 30, 1999 presentation to conform to the six and three months ended June 30, 2000 presentation. 2. The federal income tax returns of the Company for the years ended 1990, 1991 and 1992 are under examination by the Internal Revenue Service ("IRS"). In May 1998, the IRS issued its final report proposing additional taxes of an aggregate of approximately $1,561,000 plus penalties and interest for these years. The Company is protesting the IRS assessment. Also, the federal income tax returns of the Company for the years ended 1993, 1995 and 1996 are currently under examination by the IRS. The IRS has issued a preliminary examination report covering the 1993 fiscal year proposing adjustments to income of approximately $3,426,000 for this year. Although no assurance can be given regarding the outcome of such examinations, the Company believes that any taxes which might become payable as a result of these examinations would not result in additional expense recognized in the financial statements other than interest and penalties, if any, as the Company has recorded deferred income taxes on the untaxed portion of unremitted earnings of a foreign subsidiary. Therefore, management believes that resolution of the IRS examinations should not have a material adverse impact on the Company's financial position and results of operations. 3. The following is a reconciliation of the number of shares (denominator) used in the basic and diluted earnings per share computations (shares in thousands):
Six Months Ended June 30, Three Months Ended June 30, ----------------------------- --------------------------------- 2000 1999 2000 1999 ------------- ---------- ------------ -------------- Per Per Per Per Share Share Share Share Shares Amount Shares Amount Shares Amount Shares Amount ------ ------ ------ ------ ------ ------ ------ ------ Basic EPS 10,498 $1.08 10,970 $1.83 10,334 $ .38 11,113 $ .61 Effect of dilutive stock options 397 (.04) 484 (.08) 439 (.01) 509 (.03) ------ ----- ------ ----- ------ ----- ------ ----- Diluted EPS 10,895 $1.04 11,454 $1.75 10,773 $ .37 11,622 $ .58 ====== ===== ====== ===== ====== ===== ====== =====
The following options were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares: Six and Three Months Ended June 30, -------------------- 2000 --------------------- Options to purchase shares of common stock (in thousands) 99 Exercise prices $17.06 - $47.38 Expiration dates April 2009 - October 2009 5 4. The Company's predominant business is the design, development and distribution of athletic footwear. The Company is organized into three geographic regions: the United States, Europe and other international operations. The following tables summarize segment information (in thousands):
SIX MONTHS THREE MONTHS ENDED JUNE 30, ENDED JUNE 30, -------------- -------------- 2000 1999 2000 1999 ---- ---- ---- ---- Revenues from unrelated entities: United States $109,872 $143,900 $46,239 $ 62,913 Europe 8,383 7,267 2,669 1,830 Other International 4,209 4,583 2,098 2,430 -------- -------- ------- -------- $122,464 $155,750 $51,006 $ 67,173 ======== ======== ======= ======== Inter-geographic revenues: United States $ 539 $ 2,445 $ 199 $ 2,089 Europe 14 1,803 14 1,800 Other International 2,320 2,664 1,023 1,500 -------- -------- ------- -------- $ 2,873 $ 6,912 $ 1,236 $ 5,389 ======== ======== ======= ======== Total revenues: United States $110,411 $146,345 $46,438 $ 65,002 Europe 8,397 9,070 2,683 3,630 Other International 6,529 7,247 3,121 3,930 Less inter-geographic revenues (2,873) (6,912) (1,236) (5,389) -------- -------- ------- -------- $122,464 $155,750 $51,006 $ 67,173 ======== ======== ======= ======== Operating profit (loss): United States $ 21,135 $ 36,599 $ 8,545 $ 12,014 Europe (250) (46) (794) (555) Other International 383 2,776 379 1,442 Less corporate expenses and eliminations (4,040) (6,680) (2,394) (2,002) -------- -------- ------- -------- $ 17,228 $ 32,649 $ 5,736 $ 10,899 ======== ======== ======= ========
June 30, December 31, 2000 1999 ---- ---- Identifiable assets: United States $ 70,977 $ 82,114 Europe 6,780 6,777 Other International 17,496 17,213 Corporate assets and eliminations (1) 54,780 40,668 --------- -------- $ 150,033 $146,772 ========= ========
(1) Corporate assets include cash and cash equivalents and intangible assets. 6 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF ----- FINANCIAL CONDITION AND RESULTS OF OPERATIONS Note Regarding Forward-Looking Statements and Analyst Reports "Forward-looking statements", within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), include certain written and oral statements made, or incorporated by reference, by the Company or its representatives in this report, other reports, filings with the Securities and Exchange Commission ("the S.E.C."), press releases, conferences or otherwise. Such forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain the words "believe", "anticipate", "expect", "estimate", "intend", "plan", "project", "will be", "will continue", "will likely result", or any variations of such words with similar meaning. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Investors should carefully review the risk factors set forth in other reports or documents the Company files with the S.E.C., including Forms 10-Q, 10-K and 8-K. Some of the other risks and uncertainties that should be considered include, but are not limited to, the following: international, national and local general economic and market conditions (including the current Asian economic situation); the size and growth of the overall athletic footwear and apparel markets; the size of the Company's competitors; intense competition among designers, marketers, distributors and sellers of athletic footwear and apparel for consumers and endorsers; market acceptance of the Company's new training shoe line; market acceptance of non- performance product in Europe; demographic changes; changes in consumer preferences; popularity of particular designs, categories of products, and sports; seasonal and geographic demand for the Company's products; the size, timing and mix of purchases of the Company's products; fluctuations and difficulty in forecasting operating results, including, without limitation, the fact that advance "futures" orders may not be indicative of future revenues due to the changing mix of futures and at-once orders; the ability of the Company to continue, manage or forecast its growth and inventories; new product development and commercialization; the ability to secure and protect trademarks, patents, and other intellectual property; performance and reliability of products; customer service; adverse publicity; the loss of significant customers or suppliers; dependence on distributors; business disruptions; increased costs of freight and transportation to meet delivery deadlines; changes in business strategy or development plans; general risks associated with doing business outside the United States, including, without limitation, import duties, tariffs, quotas and political and economic instability; changes in government regulations; liability and other claims asserted against the Company; the ability to attract and retain qualified personnel; and other factors referenced or incorporated by reference in this report and other reports. The Company operates in a very competitive and rapidly changing environment. New risk factors can arise and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on the Company's 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 as a prediction of actual results. Investors should also be aware that while the Company does, from time to time, communicate with securities analysts, it is against the Company's policy to disclose to them any material non-public information or other confidential commercial information. Accordingly, investors should not assume that the Company agrees with any statement or report issued by any analyst irrespective of the content of the statement or report. Furthermore, the Company has a policy against issuing or confirming financial forecasts or projections issued by others. Thus, to the extent that reports issued by securities analysts or others contain any projections, forecasts or opinions, such reports are not the responsibility of the Company. 7 Results of Operations The following table sets forth, for the periods indicated, the percentage of certain items in the consolidated statements of earnings relative to revenues. SIX MONTHS THREE MONTHS ENDED JUNE 30 ENDED JUNE 30, ------------- -------------- 2000 1999 2000 1999 ---- ---- ---- ---- Revenues 100.0% 100.0% 100.0% 100.0% Cost of goods sold 60.2 55.9 57.4 54.9 Gross profit 39.8 44.1 42.6 45.1 Selling, general and administrative expenses 25.8 23.1 31.4 28.9 Interest income, net 1.4 0.4 1.9 0.5 Earnings before income taxes 15.4 21.4 13.1 16.7 Income tax expense 6.2 8.5 5.3 6.7 Net earnings 9.2 12.9 7.8 10.0 Revenues decreased to $51,006,000 for the quarter ended June 30, 2000 from $67,173,000 for the quarter ended June 30, 1999, a decrease of $16,167,000 or 24.1%. Revenues decreased to $122,464,000 for the six months ended June 30, 2000 from $155,750,000 for the six months ended June 30, 1999, a decrease of $33,286,000 or 21.4%. The decreases for the quarter and six months ended June 30, 2000 were the result of a decrease in the volume of footwear sold partially offset by higher average wholesale prices per pair. The volume of footwear sold decreased to 1,811,000 and 4,449,000 pair for the quarter and six months ended June 30, 2000 from 2,540,000 and 5,732,000 pair for the quarter and six months ended June 30, 1999. The decrease in the volume of footwear sold for the quarter ended June 30, 2000 was primarily the result of decreased sales of the Classic, children's and tennis/court categories of shoes of 22.5%, 36.6% and 44.9%, respectively, partially offset by sales of the training category, a new category for the Company. The average wholesale price per pair increased to $27.21 and $26.39 for the quarter and six months ended June 30, 2000 from $25.39 and $25.87 for the quarter and six months ended June 30, 1999, increases of 7.2% and 2.0%, respectively. The increase in the average wholesale price per pair for the quarter and six months ended June 30, 2000, is primarily attributable to the introduction of new styles in the Classic and training categories at higher average wholesale prices, and a decrease in the children's category which carries a lower average wholesale price. Domestic revenues decreased 26.5% to $46,239,000 for the quarter ended June 30, 2000 from $62,913,000 for the quarter ended June 30, 1999. Domestic revenues decreased 23.7% to $109,872,000 for the six months ended June 30, 2000 from $143,900,000 for the six months ended June 30, 1999. International revenues increased 11.9% to $4,767,000 for the quarter ended June 30, 2000 from $4,260,000 for the quarter ended June 30, 1999. International revenues increased 6.3% to $12,592,000 for the six months ended June 30, 2000 from $11,850,000 for the six months ended June 30, 1999. International revenues, as a percentage of total revenues, increased to 9.4% and 10.3% for the quarter and six months ended June 30, 2000 as compared with 6.3% and 7.6% for the quarter and six months ended June 30, 1999. Gross profit margins, as a percentage of revenues, decreased to 42.6% for the quarter ended June 30, 2000, from 45.1% for the quarter ended June 30, 1999. Gross profit margins, as a percentage of revenues, decreased to 39.8% from 44.1% for the six months ended June 30, 2000 and 1999, respectively. Gross profit margins decreased for the quarter ended June 30, 2000 primarily due to changes in the geographic mix of sales as well as less favorable operating efficiencies in the Company's sourcing operations due to lower contract manufacturing volume during the quarter. Gross profit margins decreased for the six months ended June 30, 2000 primarily due to close-out sales, which carry lower margins. In addition, gross profit margins also decreased due to changes in the geographic and product mix of sales. Selling, general and administrative expenses decreased to $16,006,000 (31.4% of revenues) and $31,534,000 (25.8% of revenues) for the quarter and six months ended June 30, 2000, respectively, from $19,394,000 (28.9% of revenues) and $36,019,000 (23.1% of revenues) for the quarter and six months ended June 30, 1999, respectively, decreases of $3,388,000 and $4,485,000 or 17.5% and 12.5%, respectively. The decreases in these expenses for the quarter ended June 30, 2000 were primarily the result of decreases in advertising costs, bonus expense and commissions. In the quarter ended June 30, 2000, the Company decided to suspend for the remainder of 2000 the reversal provisions of the Company's EVA bonus system which resulted in higher than expected selling, general and administrative expenses for the second quarter of 2000. The decreases in these selling, general and administrative expenses for the six months ended June 30, 2000 were primarily the result of reductions of the accruals for an employee incentive bonus system due to diminished financial performance in the first three months of 2000 compared to the first three months of 1999 plus the Company's decision in the second quarter of 2000 to suspend the reversal provisions of the Company's EVA bonus system, along with decreased commissions, partially offset by an increase in advertising costs. 8 Net interest income was $946,000 (1.9% of revenues) and $1,662,000 (1.4% of revenues) for the quarter and six months ended June 30, 2000, respectively, compared to $345,000 (0.5% of revenues) and $618,000 (0.4% of revenues) for the quarter and six months ended June 30, 1999, respectively, increases of $601,000 and $1,044,000, respectively. The increase in net interest income was primarily due to higher average balances and rates for the quarter and six months ended June 30, 2000 as compared to the quarter and six months ended June 30, 1999. The Company's effective tax rate increased to 40.1% of earnings before income tax from 39.8% for the six months ended June 30, 2000 and 1999, respectively. Net earnings decreased 41.0% to $3,971,000 for the quarter ended June 30, 2000 from $6,736,000 for the quarter ended June 30, 1999. Net earnings decreased 43.5% to $11,308,000 for the six months ended June 30, 2000 from $20,022,000 for the six months ended June 30, 1999. At June 30, 2000 and 1999, domestic futures orders with start ship dates from July through December 2000 and 1999 were approximately $65,113,000 and $115,313,000, respectively, a decrease of 43.5%. At June 30, 2000 and 1999, international futures orders with start ship dates from July through December 2000 and 1999 were approximately $7,406,000 and $6,514,000, respectively, an increase of 13.7%. At June 30, 2000 and 1999 total futures orders with start ship dates from July through December 2000 and 1999 were approximately $72,519,000 and $121,827,000, respectively, a decrease of 40.5%. The 40.5% decrease in total futures orders is comprised of a 26.8% decrease in the third quarter futures orders and a 62.8% decrease in the fourth quarter futures orders. "Backlog", as of any date, represents orders scheduled to be shipped within the next six months. Backlog does not include orders scheduled to be shipped on or prior to the date of determination of backlog. These orders are not necessarily indicative of revenues for subsequent periods because: (1) the mix of "futures" and "at-once" orders can vary significantly from quarter to quarter and year to year and (2) the rate of customer order cancellations can also vary from quarter to quarter and year to year. Liquidity and Capital Resources The Company generated cash of $23,348,000 and $9,347,000 from its operating activities during the six months ended June 30, 2000 and 1999, respectively. Cash provided by operations for the six months ended June 30, 2000 as compared to the six months ended June 30, 1999 varied primarily due to changes in net earnings, accounts receivable, inventories, accounts payable and accrued liabilities. The Company had a net outflow of cash from its investing activities for the six months ended June 30, 2000 and 1999 due to the purchase of property, plant and equipment. The Company had a net outflow of cash from its financing activities for the six months ended June 30, 2000 primarily due to the purchase of treasury stock. In October 1999, the Company announced the completion of its April 1998 $20 million stock repurchase program and a new authorization by the Board of Directors for the Company to repurchase through December 2003 up to an additional $25 million of its Class A Common Stock from time to time on the open market, as market conditions warrant. The Company adopted this program because it believes repurchasing its shares can be a good use of excess cash depending on the Company's array of alternatives. Currently, the Company has made purchases under all stock repurchase programs from August 1996 through July 20, 2000 (the date of filing of this Form 10-Q) of 3,847,432 shares at an aggregate cost totaling approximately $44,128,000. No other material capital commitments exist at June 30, 2000. Depending on the Company's future growth rate, funds may be required by operating activities. The Company maintains an agreement with a bank whereby the Company may borrow, in the form of a secured revolving credit facility, up to $30,000,000. This facility currently expires in July 2001. Substantially all of the Company's assets (other than real estate) are pledged as security for this facility. The credit facility provides for interest to be paid at the prime rate less 3/4% or, at the Company's discretion and with certain restrictions, other market based rates. The Company pays a commitment fee of 1/8% of the unused line for availability of the credit facility. The Company must meet certain restrictive financial covenants as agreed upon in the facility. With continued use of its revolving credit facility and internally generated funds, the Company believes its present and currently anticipated sources of capital are sufficient to sustain its anticipated capital needs for the remainder of 2000. The Company's working capital increased $2,347,000 to $116,135,000 at June 30, 2000 from $113,788,000 at December 31, 1999. 9 PART II - OTHER INFORMATION ITEM 1: Legal Proceedings. ----------------- None. ITEM 2: Changes in Securities. --------------------- None. ITEM 3: Defaults Upon Senior Securities. ------------------------------- None. ITEM 4: Submission of Matters to a Vote of Security Holders. --------------------------------------------------- (a) The Annual Meeting of Stockholders was held May 18, 2000. (b) The following directors were elected to serve until the 2001 Annual Meeting of Stockholders or until their successors have been duly elected and qualified: Class A Directors Class B Directors ----------------- ----------------- Stephen Fine Steven Nichols Martyn Wilford George Powlick Lawrence Feldman Jonathan K. Layne (c) Of the 6,233,367 shares of Class A Common Stock represented at the meeting, the Class A Directors named in (b) above were elected by the following votes: No. Of Votes Received --------------------- Name For Withheld Authority ---------- --------- ------------------ Stephen Fine 6,178,863 44,504 Martyn Wilford 6,139,114 84,253 Of the 2,884,926 shares of Class B Common Stock represented at the meeting, the Class B Directors named in (b) above were elected by the following votes: No. Of Votes Received --------------------- Name For Withheld Authority ---------- ---------- ------------------ Steven Nichols 28,849,260 - George Powlick 28,849,260 - Lawrence Feldman 28,849,260 - Jonathan K. Layne 28,849,260 - (d) At the Annual Meeting, the Company's stockholders adopted and approved the Company's Economic Value Added Bonus Plan and related performance goals. The number of votes cast for and against such proposal were as follows: No. Of Votes Received Class A and Class B ------------------- In Favor 34,737,702 Opposed 108,799 Abstain 226,126 10 ITEM 5: Other Information. ----------------- None. ITEM 6: Exhibits and Reports on Form 8-K: -------------------------------- (a) Exhibits 10.31 Employment Agreement between the Registrant and Steven B. Nichols dated as of May 18, 2000. 27 - Financial Data Schedule (b) Reports on Form 8-K There were no reports filed on Form 8-K during the second quarter of 2000. 11 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. K-Swiss Inc. Date: July 19, 2000 By: /s/ George Powlick -------------------------- George Powlick, Vice President Finance and Chief Financial Officer 12 EXHIBIT INDEX -------------
Exhibit Page ------- ---- 10.31 Employment Agreement between the Registrant and Steven B. Nichols Dated as of May 18, 2000 27 Financial Data Schedule
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