K-Swiss Inc. narrowed its loss for the second quarter to $11.6 million, or 33 cents a share, from $20.0 million, or 56 cents, a year ago. For the second quarter, total worldwide revenues decreased 31.5
percent to $44.8 million compared with $65.3 million in the prior-year
period. Domestic revenues decreased 42.1 percent to $18.7 million in the
second quarter, and international revenues decreased 20.9 percent to
$26.0 million for the same period.
Net loss for the six months
ended June 30, 2012, was $18,337,000, or $0.52 per diluted share,
compared with a net loss of $29,868,000, or $0.84 per diluted share, for
the six months ended June 30, 2011.
Total worldwide revenues for the first
six months of 2012 decreased 17.2 percent to $114,070,000 from
$137,738,000 for the first six months of 2011. Domestic revenues
decreased 37.9 percent to $39,560,000 in the first half of 2012, and
international revenues increased 0.6 percent to $74,510,000.
The operations of FORM Athletics are accounted for as a discontinued operation in the Company's financial results and are excluded from futures orders data for the prior-year periods.
Futures Orders
Worldwide futures orders with start ship dates from July to December 2012 decreased 21.8 percent to $70,283,000 at June 30, 2012, from $89,907,000 the previous year. Domestic futures orders decreased 41.8 percent to $21,532,000 at June 30, 2012, from $37,016,000 the previous year. International futures orders decreased 7.8 percent to $48,751,000 at June 30, 2012, from $52,891,000 the previous year.
Steven Nichols, Chairman of the Board and President, stated, “The past several years, domestic K-Swiss has suffered from declining future orders and sales. We have been aggressively addressing these trends with new product initiatives. While there was a positive impact from these initiatives in our June 30, 2012 backlog, it was not evident due to the declining trends in the overall domestic business. We are starting to see some overall positive results in our early domestic K-Swiss first quarter 2013 futures bookings. Additionally, we continue to execute on our focus initiatives for 2012, which are to reduce inventory and costs as well as drive improved performance from our Palladium brand.”
2012 Guidance
For 2012, the Company is presently forecasting full year consolidated revenues to be approximately $215 million to $220 million. Consolidated gross margin is expected to be approximately 36 percent to 37 percent. Selling, general and administrative expenses are expected to be about $107 to $109 million.
K-Swiss Inc. Consolidated Statements of Loss
(In thousands, except loss per share data)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
2012 2011 2012 2011
-------------- -------------- -------------- --------------
(unaudited) (unaudited)
Revenues $ 44,752 $ 65,297 $ 114,070 $ 137,738
Cost of goods sold 31,207 42,863 74,268 86,782
------- ------- ------- -------
Gross profit 13,545 22,434 39,802 50,956
Selling, general and administrative expenses 24,863 38,710 56,226 78,263
------- ------- ------- -------
Operating loss (11,318) (16,276) (16,424) (27,307)
Other income - - - 3,000
Interest income/(expense), net 652 (86) (43) (147)
------- ------- -- ------- -- ------- --
Loss before income taxes and discontinued operations (10,666) (16,362) (16,467) (24,454)
Income tax expense 965 1,038 1,870 1,562
------- ------- ------- -------
Loss from continuing operations (11,631) (17,400) (18,337) (26,016)
Loss from discontinued operations, less applicable income tax - (2,626) - (3,852)
------- ------- -- ------- ------- --
Net loss $ (11,631) $ (20,026) $ (18,337) $ (29,868)
== ======= == == ======= == == ======= == == ======= ==
Basic loss per share $ (0.33) $ (0.56) $ (0.52) $ (0.84)
== ======= == == ======= == == ======= == == ======= ==
Diluted loss per share $ (0.33) $ (0.56) $ (0.52) $ (0.84)
== ======= == == ======= == == ======= == == ======= ==
Weighted average number of shares outstanding
Basic 35,601 35,475 35,601 35,433
Diluted 35,601 35,475 35,601 35,433
