K-Swiss Reports Fourth Quarter Results.WESTLAKE Westlake, city (1990 pop. 27,018), Cuyahoga co., NE Ohio, a suburb of Cleveland; inc. as a city 1956. A growing city, its various manufactures include ink and plastics. VILLAGE, Calif. -- K-Swiss Inc. (NASDAQ/NM:KSWS) today announced results for the fourth quarter and year ended December December: see month. 31, 2005. Financial Highlights Net earnings for the fourth quarter of 2005 were $11,557,000, or $0.33 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with $15,614,000, or $0.43 per diluted share, in the prior-year period. Net earnings and net earnings per diluted share for the year ended December 31, 2005, increased 5.6% and 7.7%, respectively, to $75,248,000, or $2.11 per diluted share, compared with $71,251,000, or $1.96 per diluted share, at December 31, 2004. In the fourth quarter of 2004, pursuant to the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act of 2004, the Company repatriated dividends of $22,700,000 related to foreign subsidiary earnings which were not considered indefinitely in·def·i·nite adj. Not definite, especially: a. Unclear; vague. b. Lacking precise limits: an indefinite leave of absence. c. invested. The Company received an 85% dividends received deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. for eligible dividends, resulting in a tax benefit of $3,518,000 for the fourth quarter of 2004 and a lower effective tax rate of 28.7% for the year ended December 31, 2004. The repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. yielded a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. benefit of $0.20 per share for both periods. For the fourth quarter of 2005, total worldwide revenues increased 4.5% to $92,289,000 compared with $88,356,000 in the prior-year period. Domestic revenues decreased 5.9% to $64,327,000 in the fourth quarter, and international revenues increased 40.0% to $27,962,000. Total worldwide revenues for 2005 increased 5.1% to $508,574,000 compared with $484,079,000 in 2004. Domestic revenues decreased 4.3% to $380,478,000 in 2005, while international revenues increased 47.8% to $128,096,000. Futures Orders Worldwide futures orders with start ship dates from January January: see month. through June June: see month. 2006 decreased 2.8% to $217,895,000 at December 31, 2005, compared with $224,233,000 at December 31, 2004. Domestic futures orders decreased 12.7% to $148,698,000 at December 31, 2005, from $170,291,000 at December 31, 2004. International futures orders increased 28.3% to $69,197,000 at December 31, 2005, from $53,942,000 the previous year. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program The Company purchased approximately 30,000 shares of Class A Common Stock during the fourth quarter of 2005 for a total expenditure of approximately $1,000,000 as part of its stock repurchase program. At December 31, 2005, there remains authorization The right or permission to use a system resource; the process of granting access. See access control. to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. approximately 4,111,000 shares under the Company's existing stock repurchase program. Since August 1996, K-Swiss has purchased a total of 25.3 million shares of Class A Common Stock for a total expenditure of $163.3 million. Earnings Guidance K-Swiss also issued guidance for the first quarter of 2006 and full year 2006. The Company expects revenues for the first quarter of 2006 to be approximately $148 to $153 million and earnings per diluted share to be in the range of $0.63 to $0.68. The Company expects full year revenues to be approximately $480 to $500 million and expects to report full year earnings per diluted share of approximately $1.70 to $1.85. The Company's estimates for the first quarter of 2006 and full year 2006 reflect the continued investments in marketing, sales and product development for the Royal Elastics brand as well as the expansion of European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations. The estimates are based upon the following assumptions: gross margins will be approximately 46%; SG&A will not rise above $37 million for the first quarter of 2006 or $139 million for the full year 2006; customer order cancellations will be moderate; and the Company's growth initiatives with respect to Royal Elastics will not exceed a net loss of $0.08 per share for the full year. Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. Nichols Nich·ols , Mike Originally Michael Igor Peschkowsky. Born 1931. German-born American stage and film director whose credits include The Odd Couple (1965) and the motion pictures Who's Afraid of Virginia Woolf? (1966) and , Chairman of the Board and President, stated, "We are pleased with the better-than-expected revenues and earnings in the fourth quarter. Despite the large one-time gain from the Jobs Creation Act tax repatriation in 2004, we were able to deliver respectable year-over-year growth on continued improvement in margins and strong international sales. "In 2006, we do not expect as rosy ros·y adj. ros·i·er, ros·i·est 1. a. Having the characteristic pink or red color of a rose. b. Flushed with a healthy glow: rosy cheeks. 2. an outlook as we have enjoyed of late. Based on early indications of third quarter order patterns, we expect year-over-year declines in domestic sales during the second half of the year. We are taking steps to reignite Verb 1. reignite - ignite anew, as of something burning; "The strong winds reignited the cooling embers" ignite, light - cause to start burning; subject to fire or great heat; "Great heat can ignite almost any dry matter"; "Light a cigarette" the growth in our domestic business. However, given the timing of the development cycle, the impact from these changes would not be felt until later." Investor Conference Call and Web Simulcast K-Swiss will conduct a conference call on its fourth quarter 2005 earnings release on February February: see month. 9, 2006, at 11:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . The number to call for this interactive teleconference is (913) 981-5509. A replay of this conference call will be available until February 16, 2006, by dialing (719) 457-0820 and entering the passcode, 8904628. The Company will also provide an online Web simulcast and rebroadcast of this conference call. The live broadcast of K-Swiss' quarterly conference call will be available online at www.streetevents.com and www.earnings.com on February 9, 2006, beginning at 11:00 a.m. EST. The online replay will follow shortly after the call and continue through February 23, 2006. K-Swiss Inc. designs, develops and markets an array of athletic footwear Footwear consists of garments worn on the feet. It is worn for a variety of reasons, including protection against the environment, hygiene and adornment. Usually, socks and other hosiery are worn between the feet and the footwear, except for sandals and flip flops (thongs). for high performance sports use, fitness activities and casual wear under the K-Swiss brand. The Company also designs and manufactures footwear under the Royal Elastics brand. Royal Elastics, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , is the leading innovator of slip-on slip-on n. A garment easily donned or removed. slip  -on adj. , laceless footwear.
Certain matters discussed in this press release are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not limited to: non-achievement of the assumptions discussed herein, general and regional economic conditions, industry trends, merchandise trends, including market acceptance of the Company's training shoe training shoe Noun same as trainer (sense 4) and new Limited Edition lines, and Royal Elastics brand, market acceptance of the Company's casual product in Europe, customer demand, competition, the impact of terrorism and/or a potential global conflict on the worldwide economy, dependence on large customers and credit concentrations and order cancellations and reduced sales resulting from a slower worldwide economy. A complete description of these factors, as well as others which could affect the Company's business, is set forth in the Company's periodic filings, including its Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005, which is currently on file with the SEC. "Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. " as of any date, represents orders scheduled to be shipped within the next six months. Backlog does not include orders scheduled to be shipped on or prior to the date of determination of backlog. The mix of "futures" and "at-once" orders can vary significantly from quarter to quarter and year to year and, therefore, "futures" are not necessarily indicative of revenues for subsequent periods.
K-Swiss Inc. Consolidated Statements of Earnings
(In thousands, except earnings per share data)
Three Months Ended Year Ended
December 31, December 31,
------------------- -------------------
(Unaudited)
2005 2004 2005 2004
-------- -------- -------- --------
Revenues $92,289 $88,356 $508,574 $484,079
Cost of goods sold 49,304 48,404 271,212 262,859
-------- -------- -------- --------
Gross profit 42,985 39,952 237,362 221,220
Selling, general and
administrative expenses 28,766 28,342 130,144 122,262
-------- -------- -------- --------
Operating profit 14,219 11,610 107,218 98,958
Interest income, net 1,242 486 3,333 1,038
-------- -------- -------- --------
Earnings before income taxes 15,461 12,096 110,551 99,996
Income tax expense (benefit) 3,904 (3,518) 35,303 28,745
-------- -------- -------- --------
Net earnings $11,557 $15,614 $75,248 $71,251
======== ======== ======== ========
Basic earnings per share $0.34 $0.45 $2.20 $2.04
======== ======== ======== ========
Diluted earnings per share $0.33 $0.43 $2.11 $1.96
======== ======== ======== ========
Weighted average number of
shares outstanding
Basic 34,163 34,473 34,220 34,917
Diluted 35,430 36,073 35,626 36,433
K-Swiss Inc. Condensed Balance Sheets
(In thousands)
December 31,
2005 2004
-------- --------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $197,464 $144,857
Accounts receivable, net 42,411 49,411
Inventories 61,164 64,901
Prepaid expenses and other current assets 7,446 7,710
Deferred taxes 4,224 4,654
-------- --------
Total current assets 312,709 271,533
PROPERTY, PLANT AND EQUIPMENT, NET 8,016 8,228
OTHER ASSETS
Intangible assets 4,700 4,700
Deferred taxes 4,810 5,305
Other 5,963 5,111
-------- --------
15,473 15,116
-------- --------
$336,198 $294,877
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank lines of credit $-- $6,750
Trade accounts payable 19,654 22,262
Accrued liabilities 27,232 23,952
-------- --------
Total current liabilities 46,886 52,964
OTHER LIABILITIES 13,991 15,083
STOCKHOLDERS' EQUITY 275,321 226,830
-------- --------
$336,198 $294,877
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