Note O - Segment Information

12 Months Ended

Dec. 31, 2011

Segment Reporting Disclosure [Text Block]

NOTE O – SEGMENT INFORMATION

The Company’s predominant business is the design, development and distribution of athletic footwear.  The Company has identified its footwear products business to be its only segment as substantially all of the Company’s revenues are from the sales of footwear products.  The Company is organized into three geographic regions:  the United States, Europe, Middle East and Africa (“EMEA”) and Other International operations.  The Company’s Other International geographic region includes the Company’s operations in Asia.  The following tables summarize information by geographic region of the Company’s footwear segment (in thousands):

	2011			2010			2009
Revenues from unrelated entities (1):
United States	$	116,781		$	92,178		$	101,181
EMEA		88,092			71,720			91,719
Other International		63,484			52,868			47,829
Total revenues from unrelated entities	$	268,357		$	216,766		$	240,729
Inter-geographic revenues:
United States	$	5,680		$	4,281		$	4,796
EMEA		1,470			6			12
Other International		212			132			105
Total inter-geographic revenues	$	7,362		$	4,419		$	4,913
Total revenues:
United States	$	122,461		$	96,459		$	105,977
EMEA		89,562			71,726			91,731
Other International		63,696			53,000			47,934
Less inter-geographic revenues		(7,362	)		(4,419	)		(4,913	)
Total revenues	$	268,357		$	216,766		$	240,729
Operating (loss)/profit:
United States	$	(41,206	)	$	(36,900	)	$	(14,094	)
EMEA		(16,075	)		(10,939	)		(3,045	)
Other International		9,570			5,323			5,573
Less corporate expenses (2)		(16,842	)		(15,261	)		(22,838	)
Eliminations		563			1,730			(2,558	)
Total operating loss	$	(63,990	)	$	(56,047	)	$	(36,962	)
Interest income:
United States	$	437		$	859		$	1,932
EMEA		33			16			16
Other International		66			56			58
Total interest income		536			931			2,006
Interest expense:
United States	$	50		$	369		$	665
EMEA		267			127			274
Other International		0			0			17
Total interest expense		317			496			956
Interest income, net	$	219		$	435		$	1,050
Income tax expense/(benefit):
United States	$	2,433		$	7,497		$	(9,227	)
EMEA		704			182			(142	)
Other International		614			253			(294	)
Total income tax expense/(benefit)	$	3,751		$	7,932		$	(9,663	)
Provision for depreciation and amortization:
United States	$	2,563		$	2,545		$	3,100
EMEA		498			553			885
Other International		550			559			174
Total provision for depreciation and amortization	$	3,611		$	3,657		$	4,159
Capital expenditures:
United States	$	1,184		$	853		$	421
EMEA		1,056			503			810
Other International		464			1,021			213
Total capital expenditures	$	2,704		$	2,377		$	1,444

	2011		2010
Long-lived assets (3):
United States	$	16,719	$	18,271
EMEA		1,519		993
Other International		1,355		1,431
Total long-lived assets	$	19,593	$	20,695

(1) Revenue is attributable to geographic regions based on the location of the Company subsidiary.

(2) Corporate expenses include expenses such as salaries and related expenses for executive management and support departments such as accounting and treasury, information technology and legal which benefit the entire corporation and are not segment/region specific.  The increase in corporate expenses for the year ended December 31, 2011 compared to the year ended December 31, 2010 was due to a K•Swiss goodwill impairment charge recognized during the year ended December 31, 2011, offset by decreases in legal and data processing expenses.  The decrease in legal expenses was a result of decreases in expenses incurred to defend the Company’s trademarks.  The decrease in data processing expenses was a result of decreases in on-going maintenance expense for the Company’s SAP computer software system.  The decrease in corporate expenses for the year ended December 31, 2010 compared to the year ended December 31, 2009 was a result of decreases in data processing expenses and compensation expenses.  The decrease in data processing expenses was a result of decreases in on-going maintenance expense for the Company’s SAP computer software system due to the completion of the SAP implementation in certain international regions in the fourth quarter of 2008.  The decrease in compensation expenses, which include bonus/incentive related expenses and employee recruiting and relocation expenses, resulted primarily from a decrease in stock option compensation expenses.  In addition, there was no impairment charge recognized during the year ended December 31, 2010, whereas for the year ended December 31, 2009, an impairment charge on the goodwill and intangible assets related to Palladium was recognized.

(3) Long-lived assets consist of property, plant and equipment, net.