KSwiss total worldwide revenues were $107.2 million compared with $133.1 million in the prior-year period. Domestic revenues decreased 36.3% to $52.0 million and international revenues increased 7.4% to $55.2 million. Net earnings and net earnings per diluted share for the third quarter of 2007 were $12.8 million, or 36 cents per diluted share, compared with $21.0 million or 59 cents per diluted share, in the prior-year period.
Net earnings and net earnings per diluted share for the nine months ended September 30, 2007, were $38,477,000, or $1.08 per diluted share, compared with $66,194,000, or $1.87 per diluted share, for the prior-year period. Net earnings and net earnings per diluted share for the three and nine months ended September 30, 2007, includes a one-time other income item of $5,232,000, or $0.12 per diluted share, which consists of a reversal of an estimate of the underpayment of payroll withholding liabilities in a foreign jurisdiction from January 1, 1993 through December 31, 2005.
Total worldwide revenues for the first nine months of 2007 were $332,265,000 compared with $407.3 million in the first nine months of 2006. Domestic revenues decreased 36.9% to $168.1 million, while international revenues increased 16.4% to $164.2 million.
Futures Orders
Worldwide futures orders with start ship dates from October through March were $145.0 million at September 30, 2007, compared with $171.9 million at September 30, 2006. Domestic futures orders decreased 38.9% to $56.7 million from $92.9 million the previous year. International futures orders increased 11.7% to $88.2 million from $79.0 million the previous year.
Stock Repurchase Program
The Company did not purchase shares of Class A Common Stock during the third quarter of 2007. At September 30, 2007, there remains authorization to repurchase approximately 4,061,000 shares under the Company's existing stock repurchase program. Since August 1996, KSwiss has purchased a total of 25.3 million shares of Class A Common Stock for a total expenditure of $164.6 million.
Earnings Guidance
KSwiss also issued guidance for the fourth quarter of 2007 and full-year 2007. The Company expects revenues for the fourth quarter of 2007 to be approximately $73 to $81 million and earnings per diluted share to be in the range of break even to nine cents. The Company expects full-year revenues to be approximately $405 to $413 million and expects to report full-year earnings per diluted share of approximately $1.08 to $1.17.
The Company's estimates for the fourth quarter of 2007 and full-year 2007 reflect a significant decline in domestic revenues; substantial investments in product development and marketing for the KSwiss brand; continued expansion of international operations; and continued investment in the Royal Elastics brand. The estimates are based upon the following assumptions: gross margins will be approximately 46%; SG&A will not rise above $37 million for the fourth quarter of 2007 and $154 million for the full-year 2007; the annual tax rate will be approximately 21%; customer order cancellations will be moderate; and the Company's growth initiatives with respect to Royal Elastics will not exceed a net loss of 10 cents per share for the full year.
Steven Nichols, Chairman of the Board and President, stated, “Investing in our growth for 2008 and 2009 was the top priority in the third quarter and will continue to be the main focus of the company for the next several quarters. Our domestic footwear business remains very challenging for us with no positive trends to speak of in domestic backlog and international growth appears to be slowing. We will continue to manage the company for the long term while aggressively investing the necessary dollars to prime future growth opportunities.”
