US: Palladium acquisition helps K-Swiss Q3 results
The acquisition of French shoe company Palladium SAS has helped athletic footwear maker K-Swiss Inc to post better-than-expected third quarter results - but stripping out the purchase it said its figures reflect the "deteriorating global outlook."
For the three months to 30 September, the Westlake Village, California based company swung to a net loss of $100,000, or $0.00 per share, from a profit of $12.8m, or $0.36 per share, a year earlier.
Total worldwide revenues fell 10.7% to $95.82m from $107.25m, dragged down by a 29% plunge in domestic revenues to $36.92m. International sales were up 6.6% to $58.9m.
The Palladium fashion footwear brand, which K-Swiss bought for US$8.33m on 1 July, added $9.95m in international sales.
Despite the inclusion of a $30m or $0.52 per share trademark infringement gain, nine-month net earnings fell 13.2% to $33.4m, or $0.95 per share, from $38.5m, or $1.08 per share, in the prior-year period.
Total worldwide revenues for the nine months dropped 14.6% to $283.89m from $332.267m, with domestic revenues down 31.9% and international sales up 3.2%.
Steven Nichols, chairman of the board and president, said: "Excluding Palladium, our financial results and backlog confirm the deteriorating global outlook for K-Swiss in 2008 and 2009.
He added: "The uncertainty caused by the credit markets disruption and likely recession present substantial challenges."
Worldwide futures orders, an indication of future sales, with start ship dates from October 2008 through March 2009 were down 29% to $102.85m from $145.03m a year earlier.
Domestic futures orders fell 34.9% to $37.0m and international futures orders dropped 25.4% to $65.85m.
K-Swiss, whose brands include K-Swiss and Royal Elastics, said it expects fourth quarter revenues to be $45m to $60m and the loss per share in the range of $0.10 to $0.35.
But it lifted its full-year revenue forecast to $329m to $344, from earlier estimates of $300m to $320m, and said earnings per share will be $0.60 to $0.85, up from earlier forecasts of $0.50 to $0.65.
The figures are based on a significant decline in domestic revenues and a slowdown in its international operations.
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