US: K Swiss losses widen in first half
K Swiss Inc has reported widening losses in its second quarter and first half on the back of falling revenues and one time charges.
The company said that net loss for the second quarter of 2010 was US$14.5m, compared with a net loss of $11.5m for the prior-year period.
The company said that results for the second quarter of 2010 include a one-time charge of $3.3m for recognition of the net present value of the EUR3m future purchase price of Palladium SAS, which was revised in May 2010.
Net loss for the six month period was $19.2m compared with a net loss of $12.6m for the first six months of last year.
For the second quarter of 2010, total worldwide revenues decreased 13.3% to $46.8m. Domestic revenues fell 21% to $22.7m. International revenues decreased 4.6% to $24.1m for the same period.
Total worldwide revenues for the first six months of 2010 decreased 12% to $112.7m. Domestic revenues fell 21.1% to $46.6m and international revenues decreased 4.2% to $66.1m,
In May 2010, the company announced that its contract manufacturer in Thailand, one of only three manufacturers used by the company in its global supply chain, ceased operations in April 2010. This manufacturer was scheduled to produce approximately 700,000 pairs during the second and third quarters of 2010.
“The company has secured temporary production capacity in other facilities to partially replace this lost capacity and by October 2010, the lost capacity will be fully replaced,” K Swiss said today.
Steven Nichols, chairman of the board and president, said: “The progress we are making to propel the K Swiss and Palladium brands forward through investments in innovation and marketing remains largely underneath the surface in our reported results so far. We are having more measurable impacts to date where it matters the most in preparing for 2011 and beyond – increasing awareness of our California heritage, gaining acceptance and recognition for our running product and building on our base in tennis. The acquisition of FORM Athletics and the formation of K Swiss Orange County are part of the natural evolution of our positioning of K Swiss as the California Sports Company.”
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