-----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, QXgqerWjhn/ny6DAyw8P0FjgaExbDUX7tYNcChacFJLfPe/yUS6hMsdp1uA8/Bdf CzshhT76QN1L0ChnOeRY1g== 0001157523-05-006674.txt : 20050728 0001157523-05-006674.hdr.sgml : 20050728 20050728072042 ACCESSION NUMBER: 0001157523-05-006674 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050728 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050728 DATE AS OF CHANGE: 20050728 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: 05978993 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 a4940632.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) July 28, 2005 ------------- 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.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On July 28, 2005, 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, 2005. A copy of the press release is attached as Exhibit 99.1 to this report. The information in this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished under Item 2.02 "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, or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference in any filing, registration statement or other document filed under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. Item 9.01. Financial Statements and Exhibits. (c) Exhibits. Exhibit Number Description of Exhibit -------------- ---------------------- 99.1 Press release issued July 28, 2005. 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, 2005 By: /s/ GEORGE POWLICK ----------------------------------- George Powlick, Vice President Finance, Chief Operating Officer, Chief Financial Officer and Director 3 EXHIBIT INDEX ------------- Exhibit Description - ------- ----------- 99.1 Press Release dated July 28, 2005. 4 EX-99.1 2 a4940632ex99_1.txt EXHIBIT 99.1 - PRESS RELEASE Exhibit 99.1 K-Swiss Reports Record Second Quarter Results WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--July 28, 2005--K-Swiss Inc. (NASDAQ/NM:KSWS) today announced results for the second quarter ended June 30, 2005. Financial Highlights Net earnings and net earnings per diluted share for the second quarter of 2005 increased 27.1% and 34.3%, respectively, to $16,765,000, or $0.47 per diluted share, compared with $13,188,000, or $0.35 per diluted share, in the prior-year period. Net earnings and net earnings per diluted share for the six months ended June 30, 2005, increased 22.0% and 28.0%, respectively, to $42,629,000, or $1.19 per diluted share, compared with $34,956,000, or $0.93 per diluted share, at June 30, 2004. For the second quarter of 2005, total worldwide revenues increased 17.2% to $126,474,000 compared with $107,904,000 in the prior-year period. Domestic revenues increased 7.5% to $95,099,000 in the second quarter, and international revenues increased 61.7% to $31,375,000. Total worldwide revenues for the first six months of 2005 increased 7.6% to $279,617,000 compared with $259,924,000 in the first six months of 2004. Domestic revenues decreased 2.5% to $212,691,000 in the first half of 2005, while international revenues increased 59.9% to $66,926,000. Futures Orders Worldwide futures orders with start ship dates from July through December increased 12.3% to $185,181,000 at June 30, 2005, compared with $164,956,000 at June 30, 2004. Domestic futures orders increased 1.9% to $137,464,000 at June 30, 2005, from $134,858,000 at June 30, 2004. International futures orders increased 58.5% to $47,717,000 at June 30, 2005, from $30,098,000 the previous year. Stock Repurchase Program The Company purchased approximately 381,000 shares of Class A Common Stock during the second quarter of 2005 for a total expenditure of approximately $12,205,000 as part of its stock repurchase program. At June 30, 2005, there remains authorization to repurchase approximately 4,208,000 shares under the Company's existing stock repurchase program. Since August 1996, K-Swiss has purchased a total of 25.2 million shares of Class A Common Stock for a total expenditure of $160.3 million. K-Swiss also issued guidance for the third quarter of 2005 and full year 2005. The Company expects revenues for the third quarter of 2005 to be approximately $133 to $138 million and earnings per diluted share to be in the range of $0.42 to $0.47. The Company expects full year revenues to be approximately $500 to $515 million and expects to report full year earnings per diluted share of approximately $1.85 to $1.95. The Company's estimates for the third quarter of 2005 and full year 2005 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 45% and 46%; SG&A will not rise above $39 million for the quarter (the majority of the year-over-year increase in SG&A is marketing related) and $136 million for the year; customer order cancellations will be moderate; and the Company's growth initiatives with respect to Royal Elastics will not exceed a net loss of $0.07 to $0.08 per share for the year. Steven Nichols, Chairman of the Board and President, stated, "The highlights for this quarter were continued strong international operations, particularly in Europe, and better-than-expected domestic at-once sales. We are also on schedule for the launch of L.A.M.B. footwear this month in high-end boutiques and better department stores and have sustained momentum in our Classics with important domestic and international customers. While we are pleased with the record second quarter results, the magnitude of the year-over-year increase was enhanced by the easier comparison due to the implementation of our direct delivery shipping program to customers in the second quarter of 2004 that moved about $10 million of sales from the second quarter to the third quarter of 2004. Conversely this situation makes the current third quarter comparison to the prior year more difficult." Investor Conference Call and Web Simulcast K-Swiss will conduct a conference call on its second quarter 2005 earnings release on July 28, 2005, at 10:00 a.m. EDT. The number to call for this interactive teleconference is (913) 981-5510. A replay of this conference call will be available until August 4, 2005, by dialing (719) 457-0820 and entering the passcode, 8187384. The Company will also provide an online Web simulcast and rebroadcast of this conference call. The live broadcast of K-Swiss' quarterly conference call will be available online at www.streetevents.com and www.earnings.com on July 28, 2005, beginning at 10:00 a.m. EDT. The online replay will follow shortly after the call and continue through August 11, 2005. 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, 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, 2005, 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 "futures" and "at-once" orders can vary significantly from quarter to quarter and year to year and, therefore, "futures" are not necessarily indicative of revenues for subsequent periods. K-Swiss Inc. Consolidated Statements of Earnings (In thousands, except earnings per share data) Three Months Ended Six Months Ended June 30, June 30, ------------------- ------------------- (Unaudited) (Unaudited) 2005 2004 2005 2004 -------- -------- -------- -------- Revenues $126,474 $107,904 $279,617 $259,924 Cost of goods sold 67,648 58,151 148,808 140,405 -------- -------- -------- -------- Gross profit 58,826 49,753 130,809 119,519 Selling, general and administrative expenses 34,946 28,307 67,285 62,514 -------- -------- -------- -------- Operating profit 23,880 21,446 63,524 57,005 Interest income, net 665 173 1,183 300 -------- -------- -------- -------- Earnings before income taxes 24,545 21,619 64,707 57,305 Income tax expense 7,780 8,431 22,078 22,349 -------- -------- -------- -------- Net earnings $16,765 $13,188 $42,629 $34,956 ======== ======== ======== ======== Basic earnings per share $0.49 $0.38 $1.24 $0.99 ======== ======== ======== ======== Diluted earnings per share $0.47 $0.35 $1.19 $0.93 ======== ======== ======== ======== Weighted average number of shares outstanding Basic 34,096 35,005 34,315 35,190 Diluted 35,552 37,365 35,800 37,676 K-Swiss Inc. Condensed Balance Sheets (In thousands) June 30, 2005 2004 -------- -------- ASSETS (Unaudited) CURRENT ASSETS Cash and cash equivalents $134,577 $88,983 Accounts receivable, net 78,783 73,253 Inventories 65,792 72,655 Prepaid expenses and other 4,286 2,148 Deferred taxes 3,869 3,947 -------- -------- Total current assets 287,307 240,986 PROPERTY, PLANT AND EQUIPMENT, NET 8,419 8,346 OTHER ASSETS Intangible assets 4,700 5,746 Deferred taxes 5,331 -- Other 5,630 4,996 -------- -------- 15,661 10,742 -------- -------- $311,387 $260,074 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Bank lines of credit $3,750 $-- Trade accounts payable 22,997 23,849 Accrued liabilities 23,938 19,286 -------- -------- Total current liabilities 50,685 43,135 OTHER LIABILITIES 15,108 14,146 DEFERRED TAXES -- 4,265 STOCKHOLDERS' EQUITY 245,594 198,528 -------- -------- $311,387 $260,074 ======== ======== CONTACT: K-Swiss Inc., Westlake Village George Powlick, 818-706-5100 -----END PRIVACY-ENHANCED MESSAGE-----