Press Release:
WESTLAKE VILLAGE, Calif.–(BUSINESS WIRE)–K•Swiss Inc. (KSWS) today announced results for the second quarter ended June 30, 2012. 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.
Financial Results
Net loss for the second quarter of 2012 was $11,631,000, or $0.33 per diluted share, compared with a net loss of $20,026,000, or $0.56 per diluted share, for the prior-year 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.
For the second quarter of 2012, total worldwide revenues decreased 31.5% to $44,752,000 compared with $65,297,000 in the prior-year period. Domestic revenues decreased 42.1% to $18,748,000 in the second quarter, and international revenues decreased 20.9% to $26,004,000 for the same period.
Total worldwide revenues for the first six months of 2012 decreased 17.2% to $114,070,000 from $137,738,000 for the first six months of 2011. Domestic revenues decreased 37.9% to $39,560,000 in the first half of 2012, and international revenues increased 0.6% to $74,510,000.
Futures Orders
Worldwide futures orders with start ship dates from July to December 2012 decreased 21.8% to $70,283,000 at June 30, 2012, from $89,907,000 the previous year. Domestic futures orders decreased 41.8% to $21,532,000 at June 30, 2012, from $37,016,000 the previous year. International futures orders decreased 7.8% 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% to 37%. Selling, general and administrative expenses are expected to be about $107 to $109 million.
Founded more than forty years ago in Van Nuys, California, K•Swiss introduced the first all-leather tennis shoe, the K•Swiss “Classic” in 1966. Since its inception, K•Swiss has rooted itself in California Sport with an aim to be the most inspiring and innovative sports brand in the market. Today the Company offers performance and lifestyle footwear and apparel for several categories under its California Sports umbrella including Tennis Heritage, California Fit (Running, Triathlon and Fitness) and California Youth. K•Swiss also designs, develops and markets footwear under the Palladium brand. For more information about K•Swiss, visit www.kswiss.com.
