-----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, DmibvZFxaK8IJugGbmPHEktElx+j98NEOIvrpV/BdMhes0yxr1L+bam8fXZMJW90 jlsV3dmPxCDuNXB6u4bh2g== 0001157523-04-006958.txt : 20040728 0001157523-04-006958.hdr.sgml : 20040728 20040728072209 ACCESSION NUMBER: 0001157523-04-006958 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040728 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040728 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: 04934478 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 a4689760.txt K-SWISS 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) July 28, 2004 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 July 28, 2004. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On July 28, 2004, K-Swiss Inc. (the "Company") issued a press release announcing its results of operations and financial condition for the three and six months ended June 30, 2004. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information in this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished under Item 12 "Results of Operations and Financial Condition." Such information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing, registration statement or other document under the Securities Act of 1933, as amended. 2 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 28, 2004 By: /s/ GEORGE POWLICK ---------------------------------------- George Powlick, Vice President Finance and Chief Financial Officer and Director 3 EXHIBIT INDEX Exhibit Description - ------- ----------- 99.1 Press Release dated July 28, 2004. 4 EX-99.1 2 a4689760ex991.txt NEWS RELEASE Exhibit 99.1 K-Swiss Reports Second Quarter Results WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--July 28, 2004--K-Swiss Inc. (NASDAQ/NM:KSWS) today announced results for the second quarter ended June 30, 2004. Financial Highlights Net earnings and net earnings per diluted share for the second quarter of 2004 increased 4.5% and 6.1%, respectively, to $13,188,000, or $0.35 per diluted share, compared with $12,619,000, or $0.33 per diluted share, in the prior-year period. Net earnings and net earnings per diluted share for the six months ended June 30, 2004, increased 33.1% and 34.8%, respectively, to $34,956,000, or $0.93 per diluted share, compared with $26,263,000, or $0.69 per diluted share, at June 30, 2003. For the second quarter of 2004, total worldwide revenues decreased 3.3% to $107,904,000 compared with $111,629,000 in the prior-year period. Domestic revenues decreased 9.7% to $88,496,000 in the second quarter, and international revenues increased 42.1% to $19,408,000. Total worldwide revenues for the first six months of 2004 increased 14.3% to $259,924,000 compared with $227,438,000 in the first six months of 2003. Domestic revenues increased 9.7% to $218,071,000 in the first half of 2004, while international revenues increased 45.6% to $41,853,000. Futures Orders Worldwide futures orders with start ship dates from July through December 2004 increased 3.9% to $164,956,000 at June 30, 2004, compared with $158,731,000 at June 30, 2003. Domestic futures orders decreased 4.1% to $134,858,000 at June 30, 2004, from $140,581,000 at June 30, 2003. International futures orders increased 65.8% to $30,098,000 at June 30, 2004, from $18,150,000 the previous year. Stock Repurchase Program The Company purchased 525,000 shares of Class A Common Stock during the second quarter of 2004 for a total expenditure of approximately $10,160,000 as part of its stock repurchase program. There remains authorization to repurchase $12,297,000 of stock under the Company's existing stock repurchase program. Since August 1996, K-Swiss has purchased a total of 23.7 million shares of Class A Common Stock for a total expenditure of $123.0 million. K-Swiss also issued guidance for the third quarter of 2004 and revised guidance for 2004. The Company expects revenues for the third quarter of 2004 to be approximately $117 to $123 million and earnings per diluted share to be in the range of $0.33 to $0.37. The Company expects full year revenues to be approximately $450 to $460 million and expects to report full year earnings per diluted share of approximately $1.39 to $1.47. The Company's estimates for the third quarter and the year reflect the continued investments in marketing, sales and product development for the Royal Elastics brand as well as the expansion of European operations. They are based upon the following assumptions: gross margins will be between 44% and 45% for the year; SG&A will not rise above $117 million for the year; cancellations will be moderate; and the Company's growth initiatives with respect to Royal Elastics will not exceed a net loss of $0.15 per share for the entire year. Steven Nichols, Chairman of the Board and President, stated, "Domestic sales decreased almost 10% in the second quarter as our brand has begun to adjust to the competitive balance in the current retail environment. We have instituted several initiatives aimed at reinvigorating our momentum. Conversely, growth in our international operations during the quarter was strong with sales increases in every geographic region. Europe and the Asia region were notable highlights with sales increases of 41% and 59%, respectively. We expect that the encouraging initial results from MoonStar's plan for rejuvenating the K-Swiss brand in Japan as our new distributor will lead to continued growth in Asia." The per share results reported herein reflect the effect of the two-for-one stock split which was distributed on December 26, 2003, to stockholders of record on December 22, 2003. Discontinued operations are comprised of the results of the National Geographic brand. Investor Conference Call and Web Simulcast K-Swiss will conduct a conference call on its second quarter 2004 earnings release on July 28, 2004, at 10:00 am EDT. The number to call for this interactive teleconference is (913) 981-5507. A replay of this conference call will be available until August 4, 2004, by dialing (719) 457-0820 and entering the passcode, 614981. 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 July 28, 2004, beginning at 10:00 a.m. EDT. The online replay will follow shortly after the call and continue through August 11, 2004. 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 brand. Royal Elastics, a wholly owned subsidiary, is the leading innovator of slip-on, laceless 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, 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 June 30, 2004, 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 Six Months Ended June 30, June 30, ------------------ ------------------ (Unaudited) (Unaudited) 2004 2003 2004 2003 -------- -------- -------- -------- Revenues $107,904 $111,629 $259,924 $227,438 Cost of goods sold 58,151 60,328 140,405 121,921 -------- -------- -------- -------- Gross profit 49,753 51,301 119,519 105,517 Selling, general and administrative expenses 28,307 28,649 62,514 55,180 -------- -------- -------- -------- Operating profit 21,446 22,652 57,005 50,337 Interest income, net 173 177 300 364 -------- -------- -------- -------- Earnings from continuing operations before income taxes 21,619 22,829 57,305 50,701 Income tax expense 8,431 9,003 22,349 19,975 -------- -------- -------- -------- Earnings from continuing operations 13,188 13,826 34,956 30,726 Loss from discontinued operations -- (1,207) -- (4,463) -------- -------- -------- -------- Net earnings $13,188 $12,619 $34,956 $26,263 ======== ======== ======== ======== Basic earnings per share $0.38 $0.36 $0.99 $0.74 ======== ======== ======== ======== Diluted earnings per share $0.35 $0.33 $0.93 $0.69 ======== ======== ======== ======== Weighted average number of shares outstanding Basic 35,005 35,295 35,190 35,428 Diluted 37,365 37,811 37,676 37,831 K-Swiss Inc. Condensed Balance Sheets (In thousands) June 30, ------------------ 2004 2003 -------- -------- ASSETS (Unaudited) CURRENT ASSETS Cash and cash equivalents $88,983 $51,726 Accounts receivable, net 73,253 76,258 Inventories 72,655 59,721 Prepaid expenses and other 2,148 2,198 Deferred taxes 3,947 4,197 -------- -------- Total current assets 240,986 194,100 PROPERTY, PLANT AND EQUIPMENT, NET 8,346 8,438 OTHER ASSETS Intangible assets 5,746 7,297 Other 4,996 4,363 -------- -------- 10,742 11,660 -------- -------- $260,074 $214,198 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Bank lines of credit $ -- $ -- Trade accounts payable 23,849 19,242 Accrued liabilities 19,286 23,245 -------- -------- Total current liabilities 43,135 42,487 OTHER LIABILITIES 14,146 9,184 DEFERRED TAXES 4,265 5,650 STOCKHOLDERS' EQUITY 198,528 156,877 -------- -------- $260,074 $214,198 ======== ======== CONTACT: K-Swiss Inc. George Powlick, 818-706-5100 -----END PRIVACY-ENHANCED MESSAGE-----