K-Swiss Inc. reported that total worldwide revenues decreased 23.7% to $70,633,000 for the third quarter of 2009 compared with $92,629,000 in the prior-year period. Domestic revenues decreased 33.0% to $23,987,000 in the third quarter, and international revenues decreased 18.0% to $46,646,000.


Total worldwide revenues for the first nine months of 2009 decreased 27.5% to $198,709,000, compared with $273,915,000, in the first nine months of 2008. Domestic revenues decreased 25.7% to $83,094,000, and international revenues decreased 28.7% to $115,615,000.

The net loss for the third quarter of 2009 was $2,884,000, or 8 cents per diluted share, compared with net earnings of $1,066,000 or 3 cents per diluted share, in the prior-year period.


Net loss for the nine months ended September 30, 2009, was $15,474,000, or 44 cents per diluted share, compared with net earnings of $34,599,000, or 98 cents per diluted share, in the nine months ended September 30, 2008. Results for the nine-month 2009 period includes a pre-tax non-operating loss of $2.6 million, or 8 cents per diluted share (after tax), from the acquisition of the remaining interest in Palladium SAS in June 2009, and a pre-tax gain of $1.4 million, or 3 cents per diluted share (after tax), from the sale of Royal Elastics in April 2009. Earnings for the nine-month 2008 period includes a pre-tax gain of $30,000,000, or 52 cents per diluted share (after tax), related to the settlement of litigation.

The sale of Royal Elastics on April 30, 2009, is accounted for as a discontinued operation in the company’s financial results and is excluded from futures orders data for the current and prior-year periods.


Futures Orders
Worldwide futures orders with start ship dates from October 2009 through March 2010 were $67,996,000 at September 30, 2009, compared with $100,076,000 at September 30, 2008. Domestic futures orders decreased 36.8% to $23,121,000 at September 30, 2009, from $36,583,000 the previous year. International futures orders decreased 29.3% to $44,875,000 at September 30, 2009, from $63,493,000 the previous year.


Earnings Guidance
The company expects full-year revenues to be approximately $230 million to $240 million and expects to report a full-year loss per diluted share of approximately 70 cents to 80 cents. Full-year SG&A expenses are currently projected to be approximately $119 million, but are expected to fluctuate based on strategic decisions made during the year as well as general trends in the retail marketplace.


Steven Nichols, chairman of the board and president, stated, “The third quarter results were in line with our expectations, as we worked through remaining inventories, scaled up the sales of Palladium and continued investing in Classic, running, and tennis development. We have said all year that we are not looking for the short-term fix to our revenue and backlog trends. Our strategy is slow and steady with a long-term focus on making performance shoes that will end up in everyday footwear and re-establishing the revenue and margin growth we enjoyed for nearly two decades. We remain committed to ensuring the success of this strategy.”