Note K - Commitments And Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies Disclosure [Text Block]

NOTE K - COMMITMENTS AND CONTINGENCIES

The Company leases its principal warehouse facility through January 2015.  In addition, certain property and equipment is leased primarily on a month-to-month basis.  Rent expense for operating leases was approximately $7,661,000, $6,550,000 and $5,724,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

The Company has entered into endorsement agreements with athletes that are sponsored by the Company through April 2014.  The Company has entered into licensing agreements which require the Company to pay minimum royalties through June 2014.

Future minimum rental payments under leases, future minimum endorsement fees under endorsement agreements and future minimum royalties under licensing agreements at December 31, 2011 are as follows (in thousands):

	Year ending December 31,
	2012		2013		2014		2015		Thereafter		Total
Rental payments	$	6,692	$	4,815	$	3,913	$	2,208	$	6,211	$	23,839
Endorsement fees		4,609		2,875		37		0		0		7,521
Royalty fees		990		560		30		0		0		1,580
Total	$	12,291	$	8,250	$	3,980	$	2,208	$	6,211	$	32,940

The Company has product purchase obligations of approximately $24,356,000 at December 31, 2011.  The Company generally orders product four to five months in advance of sales based primarily on advance futures orders received from customers.  Product purchase obligations represent open purchase orders to purchase products in the ordinary course of business that are enforceable and legally binding.

The Company has outstanding letters of credit totaling approximately $280,000 at December 31, 2011.  These letters of credit collateralize the Company’s obligations to third parties for the purchase of inventory.  The letters of credit outstanding at December 31, 2011 have original terms from eleven to twelve months.  The fair value of these letters of credit approximates the fees currently charged for similar agreements and is not significant at December 31, 2011 and 2010.

The Company may owe a CPP, that is equal to €3,000,000 plus up to €500,000 based on an amount calculated in accordance with a formula driven by Palladium’s EBITDA for the twelve months ended December 31, 2012.  At December 31, 2011, the CPP calculated in accordance with this formula was $3,739,000 (or approximately €2,886,000), which approximated the fair value of this liability.

The Company is, from time to time, a party to litigation which arises in the normal course of its business operations.  The Company does not believe that it is presently a party to litigation which will have a material adverse effect on its business or operations.