-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LeBnwyf0mIBZQEl3Uht6t7I8uDjVokTYLSQ+/eUYYZLy60bbMa0xQXyYwZ4jMUGL DmhXAY2395VlgWsdIloVSg== 0001157523-03-005759.txt : 20031023 0001157523-03-005759.hdr.sgml : 20031023 20031023094500 ACCESSION NUMBER: 0001157523-03-005759 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031023 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031023 FILER: COMPANY DATA: COMPANY CONFORMED NAME: K SWISS INC CENTRAL INDEX KEY: 0000862480 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 954265988 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-18490 FILM NUMBER: 03953147 BUSINESS ADDRESS: STREET 1: 31248 OAK CREST DRIVE CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 BUSINESS PHONE: 8187065100 MAIL ADDRESS: STREET 1: 31248 OAK CREST DR CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 8-K 1 a4499735.txt K-SWISS 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Act of 1934 Date of Report (Date of earliest event reported) October 23, 2003 K-SWISS INC. (Exact name of registrant as specified in its charter) Delaware 0-18490 95-4265988 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) 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) N/A - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Item 7. Financial Statements and Exhibits. (c) Exhibits. Exhibit Number Description of Exhibit -------------- ---------------------- 99.1 Press release issued October 23, 2003. Item 12. Results of Operations and Financial Condition. On October 23, 2003, K-Swiss Inc. (the "Company") issued a press release discussing its results of operations and financial condition for the third quarter 2003. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information in this Current Report, including Exhibit 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended. 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: October 22, 2003 By: /s/ GEORGE POWLICK ------------------------------------- George Powlick, Vice President Finance and Chief Financial Officer and Director EXHIBIT INDEX ------------- Exhibit Description - ------ ----------- 99.1 Press Release dated October 23, 2003. EX-99 3 a4499735_ex991.txt K-SWISS EXHIBIT 99.1 Exhibit 99.1 K-Swiss Reports Record Third Quarter Results; Will Seek Stockholder Approval at Special Stockholders Meeting to Increase Stock Authorization If Authorization Received, Announces Intention to Declare Two-for-One Stock Split and Double its Quarterly Cash Dividend; Board Approves Additional $25 Million Stock Repurchase Authorization WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--Oct. 23, 2003-- K-Swiss Inc. (NASDAQ/NM:KSWS) today announced record results for the third quarter ended September 30, 2003. Financial Highlights Net earnings and net earnings per diluted share for the third quarter of 2003 increased 84.8% and 90.5%, respectively, to $15,106,000, or $0.80 per diluted share, compared with $8,173,000, or $0.42 per diluted share, in the prior-year period. Net earnings and net earnings per diluted share for the nine months ended September 30, 2003, increased 73.0% and 80.2%, respectively, to $41,369,000, or $2.18 per diluted share, compared with $23,909,000, or $1.21 per diluted share, at September 30, 2002. For the third quarter of 2003, total worldwide revenues increased 49.0% to $121,568,000 compared with $81,604,000 in the prior-year period. Domestic revenues increased 52.6% to $105,459,000 in the third quarter, and international revenues increased 29.1% to $16,109,000. Total worldwide revenues for the first nine months of 2003 increased 47.3% to $349,332,000 compared with $237,143,000 in the first nine months of 2002. Domestic revenues increased 49.3% to $304,377,000 in the first nine months of 2003, while international revenues increased 35.4% to $44,955,000. Futures Orders Worldwide futures orders with start ship dates from October 2003 through March 2004 increased 46.9% to $193,962,000 at September 30, 2003, compared with $132,043,000 at September 30, 2002. Domestic futures orders increased 46.4% to $171,252,000 at September 30, 2003, from $116,981,000 at September 30, 2002. International futures orders increased 50.8% to $22,710,000 at September 30, 2003, from $15,063,000 the previous year. Stock Repurchase Program The Company purchased 175,000 shares of Class A Common Stock during the third quarter of 2003 for a total expenditure of approximately $6,414,000 as part of its stock repurchase program. There remains authorization to repurchase $1,715,000 of stock under the Company's existing stock repurchase program. Since August 1996, K-Swiss has purchased under all of its repurchase programs a total of 11.5 million shares of Class A Common Stock for a total expenditure of $108.6 million. The Company announced the Board of Directors authorized a new stock repurchase program to repurchase up to $25 million of the Company's Class A Common Stock. This program is in addition to the Company's October 2002 $25 million stock repurchase program that, as noted above, is almost completed. Under the new stock repurchase program, the Company may purchase through December 31, 2008, as market conditions warrant and from time to time on the open market, up to $25 million of its Class A Common Stock. K-Swiss also issued guidance for the fourth quarter of 2003. The Company expects revenues to be approximately $75 to $80 million and earnings per diluted share to be in the range of $0.37 to $0.42. The Company expects full year revenues to be approximately $425 to $430 million and expects to report full year earnings per diluted share of approximately $2.55 to $2.60. The Company's estimates for the fourth quarter and the year are based upon the following assumptions: gross margins will be in the range of 43% to 44% for the year; SG&A will not rise above $107 million for the year; cancellations will be moderate; and the Company's growth initiatives with respect to National Geographic and Royal Elastics will not exceed a net loss of $0.53 per share for the entire year ($0.45 of which has been recognized during the first nine months of 2003). Commenting on the record third quarter results and outlook for the fourth quarter, Steven Nichols, Chairman of the Board and President, stated, "The enduring strength and appeal of the K-Swiss brand were once again very evident in our better-than-expected results for the quarter. While we are pleased with the continued growth of the K-Swiss brand, market share gains and improvements in our European and Asian operations, we are mindful of the temptation in today's market to give too much credence to short-term results or trends. Companies and investors alike can become enamored of their lofty performance and lose sight of long-term objectives. At K-Swiss we are constantly focused on long-term decisions and long-term value creation - whether it is through prudent investments in aggressive marketing of the K-Swiss brand, investments in new brands and product offerings or raising the value of our stockholders' investment through stock repurchases and dividend increases." Special Meeting of Stockholders The Company announced the Board of Directors intends to call a special meeting of stockholders to be held in early to mid- December 2003 to seek stockholder approval to increase the authorized shares of the Company's Class A and Class B Common Stock from 36 and 10 million to 90 and 18 million, respectively. If stockholders approve the increased authorization, the Board of Directors intends immediately after the special meeting of stockholders to declare a two-for-one stock split for the Company's Class A and Class B Common Stock and to declare a 100% increase in the regular quarterly cash dividend from the present $0.02 per quarter to $0.02 per quarter on a split-adjusted basis. Assuming the requisite stockholder approval is obtained, the Company expects these actions to be completed in December 2003. Investor Conference Call and Web Simulcast K-Swiss will conduct a conference call on its third quarter 2003 earnings release on October 23, 2003, at 10:00 am EDT. The number to call for this interactive teleconference is (913) 981-4900. A replay of this conference call will be available until October 30, 2003, by dialing (719) 457-0820 and entering the passcode, 635537. The Company will also provide an online Web simulcast and rebroadcast of this conference call. The live broadcast of K-Swiss' quarterly conference call will be available online at www.streetevents.com and www.fulldisclosure.com on October 23, 2003, beginning at 10:00 a.m. EDT. The online replay will follow shortly after the call and continue through November 6, 2003. K-Swiss Inc. designs, develops and markets an array of athletic footwear for high performance sports use, fitness activities and casual wear under the K-Swiss brand. The Company also designs and manufactures footwear under the Royal Elastics and National Geographic brands. Royal Elastics, a wholly owned subsidiary, is the leading innovator of slip-on, laceless footwear. National Geographic Footwear, under an exclusive license from the National Geographic Society, offers outdoor-oriented and casual footwear. Certain matters discussed in this press release are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not limited to: non-achievement of the assumptions discussed herein, general and regional economic conditions, industry trends, merchandise trends, including market acceptance of the Company's training shoe and new Limited Edition lines, National Geographic brand and Royal Elastics brand, market acceptance of the Company's casual product in Europe, customer demand, competition, the impact of terrorism and/or a potential global conflict on the worldwide economy, dependence on large customers and credit concentrations and order cancellations and reduced sales resulting from a slower worldwide economy. A complete description of these factors, as well as others which could affect the Company's business, is set forth in the Company's periodic filings, including its Form 10-Q for the quarter ended September 30, 2003, which is currently on file with the SEC. "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. The mix of "future" and "at-once" orders can vary significantly from quarter to quarter and year to year and, therefore, "futures" are not necessarily indicative of revenues for subsequent periods. K-Swiss Inc. Consolidated Statements of Earnings (In thousands, except earnings per share data) Three Months Ended Nine Months Ended September 30, September 30, ------------------- ------------------- (Unaudited) (Unaudited) 2003 2002 2003 2002 -------- -------- -------- -------- Revenues $121,568 $81,604 $349,332 $237,143 Cost of goods sold 68,742 44,134 196,198 131,013 -------- -------- -------- -------- Gross profit 52,826 37,470 153,134 106,130 Selling, general and administrative expenses 27,926 24,093 85,064 67,159 -------- -------- -------- -------- Operating profit 24,900 13,377 68,070 38,971 Interest income, net 37 159 276 610 -------- -------- -------- -------- Earnings before income taxes 24,937 13,536 68,346 39,581 Income tax expense 9,831 5,363 26,977 15,672 -------- -------- -------- -------- Net earnings $15,106 $8,173 $41,369 $23,909 ======== ======== ======== ======== Basic earnings per share $0.85 $0.45 $2.34 $1.30 ======== ======== ======== ======== Diluted earnings per share $0.80 $0.42 $2.18 $1.21 ======== ======== ======== ======== Weighted average number of shares outstanding Basic 17,692 18,220 17,707 18,421 Diluted 18,975 19,520 18,946 19,718 K-Swiss Inc. Condensed Balance Sheets (In thousands) September 30, 2003 2002 -------- -------- ASSETS (Unaudited) CURRENT ASSETS Cash and cash equivalents $68,739 $65,431 Accounts receivable, net 70,849 47,794 Inventories 58,811 36,128 Prepaid expenses and other 1,932 3,149 Deferred taxes 4,737 1,876 -------- -------- Total current assets 205,068 154,378 PROPERTY, PLANT AND EQUIPMENT, NET 8,293 7,815 OTHER ASSETS Intangible assets 7,299 8,173 Other 4,764 3,580 -------- -------- 12,063 11,753 -------- -------- $225,424 $173,946 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Trade accounts payable $18,678 $7,653 Accrued liabilities 23,610 17,119 -------- -------- Total current liabilities 42,288 24,772 OTHER LIABILITIES 11,455 7,433 DEFERRED TAXES 4,372 6,317 STOCKHOLDERS' EQUITY 167,309 135,424 -------- -------- $225,424 $173,946 ======== ======== CONTACT: K-Swiss Inc., Westlake Village George Powlick, 818-706-5100 -----END PRIVACY-ENHANCED MESSAGE-----