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K•Swiss plans to reduce inventory levels in 2009
Mar '09
K•Swiss Inc announced results for the fourth quarter ended December 31, 2008.

Financial Highlights
Net loss for the fourth quarter of 2008 was $13,714,000, or $0.39 per diluted share, compared with net earnings of $596,000, or $0.02 per diluted share, in the prior-year period. Net earnings and net earnings per diluted share for the year ended December 31, 2008, were $20,885,000, or $0.59 per diluted share, compared with $39,073,000, or $1.10 per diluted share, in the year ended December 31, 2007.

For the fourth quarter of 2008, total worldwide revenues decreased 28.0% to $56,279,000 compared with $78,167,000 in the prior-year period. Domestic revenues decreased 20.4% to $27,313,000 in the fourth quarter, and international revenues decreased 34.0% to $28,966,000. Total worldwide revenues for 2008 decreased 17.1% to $340,160,000, compared with $410,432,000, in 2007. Domestic revenues decreased 29.9% to $141,801,000 in 2008, while international revenues decreased 4.7% to $198,359,000.

Palladium Acquisition
The Company acquired Palladium SAS on July 1, 2008. Included above were Palladium's international net sales of $1,544,000, and $11,492,000, respectively, for the fourth quarter and year ended December 31, 2008, and net loss of $1,468,000 for the fourth quarter and net income of $181,000 for the year ended December 31, 2008.

Futures Orders
Worldwide futures orders with start ship dates from January through June 2009 were $93,610,000 at December 31, 2008, compared with $147,805,000 at December 31, 2007. Domestic futures orders decreased 37.2% to $31,881,000 at December 31, 2008, from $50,758,000 the previous year. International futures orders decreased 36.4% to $61,729,000 at December 31, 2008, from $97,047,000 the previous year.

Common Stock Dividend
K•Swiss also announced that the Board of Directors has elected to suspend the Company's common stock dividend for the foreseeable future to preserve liquidity and enhance the strength of its balance sheet. Suspension of the dividend is expected to conserve approximately $7.0 million of capital annually.

Earnings Guidance
Effectively immediately, K•Swiss has revised its guidance practice to focus on annual guidance in light of the significant volatility associated with quarterly projections. The extent and variability of the economic factors cited below call for measuring the Company's performance over a longer term rather than on a quarter-by-quarter basis.

For 2009, the Company expects full-year revenues to be approximately $210 million to $250 million and expects to report a full-year loss per diluted share of approximately $0.30 to $0.60. Full-year SG&A expenses are currently projected to be approximately $130 million, but are expected to fluctuate based on strategic decisions made during the year as well as general trends in the retail marketplace. The full-year tax benefit rate is presently estimated to be 30%, which could vary based on the global distribution of results.

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