K-Swiss Reports First Quarter Results, Updates Guidance For 2001

WESTLAKE VILLAGE, CA - K-Swiss Inc. (Nasdaq/NM: KSWS) announced results consistent with its publicly issued guidance for the first quarter ended March 31, 2001.
Net earnings for the first quarter of 2001 were $6,613,000, or $0.63 per diluted share, compared with net earnings of $7,337,000, or $0.67 per diluted share, in the prior-year period.
For the first quarter of 2001, total worldwide revenues were $68,249,000 compared with $71,458,000 in the prior-year period. Domestic revenues decreased 6.5 percent to $59,395,000 in the first quarter, and international revenues increased 12.1 percent to $8,854,000.
Worldwide futures orders with start ship dates from April through September 2001 were $94,250,000 at March 31, 2001 compared with $89,763,000 at March 31, 2000. Domestic futures orders increased 0.9 percent to $82,910,000 at March 31, 2001 from $82,184,000 at March 31, 2000. International futures orders increased 49.6 percent to $11,340,000 at March 31, 2001 from $7,579,000 the previous year.
Inventories at March 31, 2001 increased 22.1 percent to $34,887,000 compared with $28,561,000 at March 31, 2000. Accounts receivable at March 31, 2001 decreased 14.4 percent to $39,312,000 compared with $45,921,000 at March 31, 2000.
The company purchased 84,600 shares of Class A Common Stock year to date for a total expenditure of approximately $2.0 million as part of its stock repurchase program. Since August 1996, K-Swiss has purchased a total of 4.2 million shares of Class A Common Stock for a total expenditure of $51.4 million.
Steven Nichols, chairman of the board and president, states, "We are pleased with the initial results of our strategic initiatives to rejuvenate the Classic category, evolve the Training line, introduce a new direction for Limited Edition and expand our presence in Europe. The increase in both our domestic and international backlogs as well as the strong sell through figures at retail for several of our offerings during the quarter convince us that we are headed in the right direction. We still have much room for improvement and will continue to focus on our product and geographic-based strategies to return K-Swiss to higher levels of performance."
K-Swiss also issued updated guidance for the year ended December 31, 2001 and for the second quarter ended June 30, 2001. The company stated it is comfortable with an earnings per diluted share range of $1.90 to $2.00 based upon the following assumptions: new Limited Edition product will be accepted in the marketplace; gross margins will remain between 39 percent to 40 percent for the year, including the affect of leather price increases; SG&A will rise only modestly for the year; cancellations will not be material; and the new Training product will be successful both domestically and internationally.
Based upon these assumptions and extrapolation of backlog data, the company expects revenues for the second quarter of 2001 will be in the range of approximately $51 to $54 million and earnings per diluted share will be in the range of $0.27 to $0.34. K-Swiss currently expects earnings per diluted share for the third quarter to approximately be equal to last year and the fourth quarter to be higher than the comparable 2000 period.