Note N - Segment Information

12 Months Ended

Dec. 31, 2012

Segment Reporting Disclosure [Text Block]

NOTE N – 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):

	2012			2011			2010
Revenues from unrelated entities (1):
United States	$	75,872		$	116,781		$	92,178
EMEA		86,883			88,092			71,720
Other International		60,096			63,484			52,868
Total revenues from unrelated entities	$	222,851		$	268,357		$	216,766
Inter-geographic revenues:
United States	$	5,846		$	5,680		$	4,281
EMEA		47			1,470			6
Other International		177			212			132
Total inter-geographic revenues	$	6,070		$	7,362		$	4,419
Total revenues:
United States	$	81,718		$	122,461		$	96,459
EMEA		86,930			89,562			71,726
Other International		60,273			63,696			53,000
Less inter-geographic revenues		(6,070	)		(7,362	)		(4,419	)
Total revenues	$	222,851		$	268,357		$	216,766
Operating (loss)/profit:
United States	$	(20,581	)	$	(41,206	)	$	(36,900	)
EMEA		(2,986	)		(16,075	)		(10,939	)
Other International		4,737			9,570			5,323
Less corporate expenses (2)		(12,132	)		(16,842	)		(15,261	)
Eliminations		192			563			1,730
Total operating loss	$	(30,770	)	$	(63,990	)	$	(56,047	)
Interest income:
United States	$	66		$	437		$	859
EMEA		21			33			16
Other International		52			66			56
Total interest income		139			536			931
Interest expense:
United States	$	805		$	50		$	369
EMEA		145			267			127
Other International		1			0			0
Total interest expense		951			317			496
Interest (expense)/income, net	$	(812	)	$	219		$	435
Income tax expense:
United States	$	1,764		$	2,433		$	7,497
EMEA		1,121			704			182
Other International		312			614			253
Total income tax expense	$	3,197		$	3,751		$	7,932
Provision for depreciation and amortization:
United States	$	2,606		$	2,563		$	2,545
EMEA		489			498			553
Other International		575			550			559
Total provision for depreciation and amortization	$	3,670		$	3,611		$	3,657
Capital expenditures:
United States	$	532		$	1,184		$	853
EMEA		401			1,056			503
Other International		595			464			1,021
Total capital expenditures	$	1,528		$	2,704		$	2,377

	2012		2011
Long-lived assets (3):
United States	$	14,570	$	16,719
EMEA		1,470		1,519
Other International		1,362		1,355
Total long-lived assets	$	17,402	$	19,593

(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 decrease in corporate expenses for the year ended December 31, 2012 compared to the year ended December 31, 2011 was due to decreases in compensation and data processing expenses during the year ended December 31, 2012 and to a K•Swiss goodwill impairment charge recognized during the year ended December 31, 2011.  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 compensation expenses for the year ended December 31, 2012, which include bonus/incentive related expenses and employee recruiting and relocation expenses, resulted primarily from a reduction of salary related expenses and interest expense related to the Company’s deferred compensation plan which was terminated in 2011, offset by an increase in stock option compensation expense.  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.

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