David Weinberg Chief Financial Officer SKECHERS USA, Inc. (310) 318-3100
Investor Relations:
Andrew Greenebaum
Integrated Corporate Relations
(310) 395-2215
SKECHERS USA ANNOUNCES RECORD SECOND QUARTER 2005 REVENUES — Net Sales Increase 12.5 Percent to $263.9 Million; — Diluted Earnings Per Share Rise 81.0 Percent to $0.38
MANHATTAN BEACH, CA. – July 27, 2005 – SKECHERS USA, Inc. (NYSE: SKX), a global leader in lifestyle footwear, today announced financial results for the second quarter ended June 30, 2005.
Net sales for the second quarter of 2005 rose 12.5 percent to $263.9 million compared to $234.7 million in the second quarter of 2004. Net earnings for the quarter were $15.9 million versus net earnings of $8.3 million in the second quarter of 2004. Net earnings per diluted share were $0.38 on 44,120,000 diluted shares outstanding, above First Call consensus of $0.25 per diluted share, and 81.0% higher than net earnings per diluted share of $0.21 in the second quarter of 2004.
“Much like our record first quarter 2005 sales, our reported second quarter net sales of $263.9 million represent our highest second quarter revenues in the Company’s history,” began David Weinberg, chief financial officer of SKECHERS USA, Inc. “This marks the sixth consecutive quarter of year-over-year top-line quarterly increases, a clear testament to the continued strength of our brands.”
For the six-month period ended June 30, 2005, net sales were $510.1 million compared to net sales of $456.2 million in the first six months of 2004. Net earnings were $26.2 million, compared to net earnings of $15.4 million in the first six months of 2004. Net earnings per diluted share in the first six months of 2005 were $0.62 versus net earnings per share of $0.39 for the same period last year.
Gross profit for the second quarter of 2005 was $111.5 million compared to $95.2 million in the second quarter of 2004. Gross margin was 42.3 percent compared to 40.6 percent in the second quarter of 2004. Gross profit for the first six months of 2005 reached $212.0 million, or 41.6 percent of sales versus $184.9 million, or 40.5 percent of sales in the first six months of 2004.
Weinberg continued: “Our record second quarter net sales were the result of growth in key SKECHERS men’s, women’s and children’s lines, and our new fashion brands, including 310 Motoring and Red by Marc Ecko – both of which experienced their first full year of shipping. With our product on target and in demand, we saw double-digit sales increases in our domestic wholesale and retail businesses, as well as growth in our international wholesale business and Company-owned international retail stores. Due to this increased demand of our in-line product and strong sell-throughs, we also experienced very strong margins. The growth from all our key divisions and our improved margins give us continued confidence as we head into the second half of the year.”
Robert Greenberg, SKECHERS’ chief executive officer, said: “We are very pleased with our consecutive quarters of record growth and see this as a strong indicator for the remainder of the year as we continue to build on the strength and success of both SKECHERS and our newer lifestyle brands. We believe that signing both Carrie Underwood, the new American Idol winner and rising star, for SKECHERS and the multi-platinum hip-hop artist The Game for 310 Motoring will help increase awareness of both brands when consumers see the advertising in the second half of 2005. During our pre-line meetings with major accounts earlier this month, we consistently heard enthusiastic feedback as we shared preliminary images of our new marketing campaigns as well as Holiday 2005 and Spring 2006 product. Given our new marketing plans, new products and early response from retailers, we are excited about next week’s WSA trade show. We believe our company is savvier than ever. Our products and marketing are on target in all our divisions, which we believe should result in continued year-over-year improvements.”
The Company now expects third quarter 2005 net sales to be in the range of $270 million to $280 million and net earnings per diluted share of $0.25 to $0.30.
Note that statements made by Mr. Weinberg and Mr. Greenberg may involve future goals and targets, based upon current expectations and current plans. These comments are forward looking, plans may change and actual results may differ materially.
SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a diverse range of footwear for men, women and children under 12 unique brand names. The Company has also granted select third party licenses for SKECHERS-branded apparel, swimwear and hosiery. SKECHERS footwear is available in the United States via department and specialty stores, Company-owned SKECHERS retail stores and its e-commerce website, as well as in over 100 countries and territories through the Company’s global network of distributors and Canadian and European subsidiaries. Please visit www.skechers.com or call the Company’s information line at 877-INFO-SKX.
This announcement may contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which can be identified by the use of forward-looking terminology such as “may,” “will,” “believe,” “expect,” “anticipate” or other comparable terminology. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected in forward-looking statements and reported results shall not be considered an indication of the Company’s future performance. Factors that might cause or contribute to such differences include international, national and local general economic, political and market conditions; intense competition among sellers of footwear for consumers; changes in fashion trends and consumer demands; popularity of particular designs and categories of products; the level of sales during the spring, back-to-school or holiday selling seasons; the inability to anticipate, identify, interpret or forecast changes in fashion trends, consumer demand for the Company’s products and the various market factors described above; the ability of the Company to maintain its brand image; the ability to sustain, manage or forecast the Company’s growth and inventories; the ability to secure and protect trademarks, patents and other intellectual property; the loss of significant customers, decreased demand by industry retailers and cancellation of order commitments; potential disruptions in manufacturing related to overseas sourcing and concentration of production in China, including, without limitation, difficulties associated with electrical shortages or work stoppages that may lead to production delays; increased costs of freight and transportation to meet delivery deadlines; business disruptions due to energy shortages or natural disasters such as an earthquake in California where our domestic warehouse, headquarters and a substantial number of our retail stores are located; changes in business strategy or development plans; the ability to obtain additional capital to fund operations, finance growth and service debt obligations; the ability to attract and retain qualified personnel; compliance with recent legislation regarding corporate governance, including the Sarbanes-Oxley Act of 2002; and other factors referenced or incorporated by reference in the Company’s annual report onForm 10-K for the year ended December 31, 2004 and for the Company’sForm 10-Q for the quarter ended March 31, 2005.
###
1
SKECHERS U.S.A., INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands)
June 30,
December 31,
2005
2004
ASSETS
Current Assets:
Cash and cash equivalents
$
150,925
$
137,653
Trade accounts receivable, net
175,096
120,463
Other receivables
5,345
2,726
Total receivables
180,441
123,189
Inventories
164,063
149,757
Prepaid expenses and other current assets
8,711
10,139
Deferred tax assets
3,865
3,865
Total current assets
508,005
424,603
Property and equipment, at cost less accumulated depreciation and amortization
78,192
82,564
Intangible assets, less applicable amortization
1,367
1,641
Deferred tax assets
4,906
4,906
Other assets, at cost
4,168
4,939
TOTAL ASSETS
$
596,638
$
518,653
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current installments of long-term borrowings
$
6,578
$
3,123
Accounts payable
148,861
93,694
Accrued expenses
11,314
13,903
Total current liabilities
166,753
110,720
Long-term borrowings, excluding current installments
107,821
113,038
Stockholders’ equity
322,064
294,895
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
596,638
$
518,653
2
SKECHERS U.S.A., INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited) (In thousands, except per share data)
Three Months Ended June 30,
Six Months Ended June 30,
2005
2004
2005
2004
Net sales
$
263,928
$
234,704
$
510,147
$
456,192
Cost of sales
152,392
139,467
298,175
271,248
Gross profit
111,536
95,237
211,972
184,944
Royalty income
1,990
1,219
3,074
2,607
113,526
96,456
215,046
187,551
Operating expenses:
Selling
20,973
20,738
39,146
36,828
General and administrative
65,282
59,288
131,612
120,329
86,255
80,026
170,758
157,157
Earnings from operations
27,271
16,430
44,288
30,394
Other income (expense):
Interest, net
(1,627
)
(2,272
)
(3,197
)
(4,309
)
Other, net
(204
)
(157
)
1,347
(223
)
(1,831
)
(2,429
)
(1,850
)
(4,532
)
Earnings before income taxes
25,440
14,001
42,438
25,862
Income tax expense
9,523
5,659
16,254
10,474
Net earnings
$
15,917
$
8,342
$
26,184
$
15,388
Net earnings per share:
Basic
$
0.40
$
0.22
$
0.66
$
0.40
Diluted
$
0.38
$
0.21
$
0.62
$
0.39
Weighted average shares:
Basic
39,580
38,440
39,484
38,285
Diluted
44,120
43,220
44,256
42,829
3
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
