K-Swiss Losses Widen

Losses widened tenfold at K-Swiss Inc. in the third quarter.

The Westlake Village, Calif.-based firm suffered falling sales and futures orders in overseas markets.

For the period ended Sept. 30, K-Swiss reported a net loss of $28.3 million, or 80 cents a share, compared with a loss of $2.9 million, or 8 cents, for the year-ago period.

Total revenue decreased 13 percent to $61.6 million, from $70.6 million. Even though domestic revenue increased 13 percent to $27.1 million, international sales slipped 26 percent to $34.5 million.

The company also incurred an income-tax expense of $14 million in the third quarter, as opposed to the $1.6 million income tax benefit it received in the prior year.

“While the results over the last couple of years have been dismal, there are an increasing number of ‘green shoots’ of promise that [will] come in 2011,” Steven Nichols, chairman and president of K-Swiss, said in a company statement.

Among them are domestic futures orders, which increased 51 percent to $34.9 million in the quarter.

International futures orders inched up 0.3 percent to $45 million, and total worldwide futures orders rose 18 percent to $79.9 million.

“[This] could be an acknowledgement that our three years of investing in innovative product and brand positioning might pay off,” said Nichols.

The firm ended the quarter with cash and cash equivalents of $44.1 million, a third of what it had last year, while accounts payable increased 61 percent to $15.3 million.

K-Swiss has no significant long-term debt and expects full-year 2010 consolidated revenue to be 5 percent to 10 percent less than in 2009.

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