<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
---
Exchange Act of 1934 For the period ended September 30, 2000
---------------------------------
OR
___ Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from_________to_____________
Commission File number 0-18490
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K-SWISS INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-4265988
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
31248 Oak Crest Drive, Westlake Village, CA 91361
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
818-706-5100
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No _____
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares of common stock outstanding at October 18, 2000:
Class A 7,025,419
Class B 3,003,978
1
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
------
K-SWISS INC.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 70,727 $ 53,119
Accounts receivable, less allowance for doubtful
accounts of $804 and $1,740 as of September 30, 2000
and December 31, 1999, respectively 36,336 27,950
Inventories 28,271 44,164
Prepaid expenses and other 2,762 4,051
Deferred taxes 1,392 1,946
-------- --------
Total current assets 139,488 131,230
PROPERTY, PLANT AND EQUIPMENT, net 8,651 8,848
OTHER ASSETS
Intangible assets 4,020 4,179
Other 2,553 2,515
-------- --------
6,573 6,694
-------- --------
$ 154,712 $ 146,772
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank lines of credit $ 749 $ 353
Current maturities of subordinated debentures 500 500
Trade accounts payable 6,449 4,588
Accrued liabilities 10,597 12,001
-------- --------
Total current liabilities 18,295 17,442
OTHER LIABILITIES 8,468 10,196
DEFERRED TAXES 7,866 7,104
STOCKHOLDERS' EQUITY
Preferred Stock-authorized 2,000,000 shares of
$.01 par value; none issued and outstanding - -
Common Stock:
Class A-authorized 18,000,000 shares of $.01 par value;
11,041,751 shares issued, 7,079,819 shares outstanding and
3,961,932 shares held in treasury at September 30, 2000 and
11,006,155 shares issued, 7,727,223 shares outstanding and
3,278,932 shares held in treasury at December 31, 1999 110 110
Class B-authorized 10,000,000 shares of $.01 par value; issued
and outstanding 3,003,978 shares at September 30, 2000 and
3,013,978 shares at December 31, 1999 30 30
Additional paid-in capital 40,413 40,017
Treasury stock (46,279) (36,766)
Retained earnings 126,315 109,122
Accumulated other comprehensive earnings -
Foreign currency translation (506) (483)
-------- --------
120,083 112,030
-------- --------
$ 154,712 $ 146,772
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
K-SWISS INC.
CONSOLIDATED STATEMENTS OF EARNINGS
AND COMPREHENSIVE EARNINGS
(Amounts in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
------------------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $182,930 $235,884 $60,466 $80,134
Cost of goods sold 109,179 132,707 35,477 45,625
-------- -------- ------- -------
Gross profit 73,751 103,177 24,989 34,509
Selling, general and administrative
expenses 46,869 55,462 15,335 19,443
-------- -------- ------- -------
Operating profit 26,882 47,715 9,654 15,066
Interest income, net 2,496 1,101 834 483
-------- -------- ------- -------
Earnings before income taxes 29,378 48,816 10,488 15,549
Income tax expense 11,724 19,457 4,142 6,212
-------- -------- ------- -------
NET EARNINGS $ 17,654 $ 29,359 $ 6,346 $ 9,337
======== ======== ======= =======
Earnings per common share (Note 3)
Basic $ 1.70 $ 2.66 $ .63 $ .84
======== ======== ======= =======
Diluted $ 1.63 $ 2.55 $ .59 $ .80
======== ======== ======= =======
Net earnings $ 17,654 $ 29,359 $ 6,346 $ 9,337
Other comprehensive (loss) income, net of tax -
Foreign currency translation adjustments (23) (31) (7) 7
-------- -------- ------- -------
Comprehensive net earnings $ 17,631 $ 29,328 $ 6,339 $ 9,344
======== ======== ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
K-SWISS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
NINE MONTHS ENDED
SEPTEMBER 30,
------------------
2000 1999
------- --------
Net cash provided by operating activities $27,819 $ 25,888
Cash flows from investing activities:
Purchase of property, plant and equipment (826) (1,686)
Proceeds from sale of property 12 16
------- --------
Net cash used in investing activities (814) (1,670)
Cash flows from financing activities:
Net borrowings under bank lines of credit 395 1,827
Purchase of treasury stock (9,513) (12,989)
Proceeds from stock options exercised 141 5,785
Payment of dividends (461) (501)
------- --------
Net cash used in financing activities (9,438) (5,878)
Effect of exchange rate changes on cash 41 (26)
------- --------
Net increase in cash and cash equivalents 17,608 18,314
Cash and cash equivalents at beginning of period 53,119 37,360
------- --------
Cash and cash equivalents at end of period $70,727 $ 55,674
======= ========
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Income tax benefit of options exercised $ 256 $ 9,000
Cash paid during the period for:
Interest $ 76 $ 71
Income taxes $ 9,474 $ 12,968
The accompanying notes are an integral part of these statements.
4
<PAGE>
K-SWISS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the consolidated
financial position of K-Swiss Inc. (the "Company") as of September 30, 2000
and the results of its operations and its cash flows for the nine and three
months ended September 30, 2000 and 1999. The results of operations and
cash flows for the nine and three months ended September 30, 2000 are not
necessarily indicative of the results to be expected for any other interim
period or the full year. These consolidated financial statements should be
read in combination with the audited consolidated financial statements and
notes thereto for the year ended December 31, 1999.
2. The federal income tax returns of the Company for the years ended 1990,
1991 and 1992 are under examination by the Internal Revenue Service
("IRS"). In May 1998, the IRS issued its final report proposing additional
taxes of an aggregate of approximately $1,561,000 plus penalties and
interest for these years. The Company is protesting the IRS assessment.
Also, the federal income tax returns of the Company for the years ended
1993, 1995 and 1996 are currently under examination by the IRS. In August
2000, the IRS issued its final report proposing additional taxes for the
years ended 1993, 1995, and 1996 of an aggregate of approximately
$4,985,000 plus penalties and interest for these years. Although no
assurance can be given regarding the outcome of such examinations, the
Company believes that a majority of taxes which might become payable as a
result of these examinations would not result in additional expense
recognized in the financial statements other than interest and penalties,
if any, as the Company has recorded deferred income taxes on the untaxed
portion of unremitted earnings of a foreign subsidiary. Therefore,
management believes that resolution of the IRS examinations should not have
a material adverse impact on the Company's financial position and results
of operations.
3. The following is a reconciliation of the number of shares (denominator)
used in the basic and diluted earnings per share computations (shares in
thousands):
<TABLE>
<CAPTION>
Nine Months Ended September 30, Three Months Ended September 30,
--------------------------------- ----------------------------------
2000 1999 2000 1999
-------------- ---------------- --------------- ----------------
Per Per Per Per
Share Share Share Share
Shares Amount Shares Amount Shares Amount Shares Amount
------ ------ ------ ------- ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Basic EPS 10,375 $1.70 11,036 $ 2.66 10,132 $ .63 11,164 $ . 84
Effect of dilutive
stock options 430 (.07) 493 (.11) 553 (.04) 521 (.04)
------ ----- ------ ------ ------ ----- ------ -------
Diluted EPS 10,805 $1.63 11,529 $ 2.55 10,685 $ .59 11,685 $ . 80
====== ===== ====== ====== ====== ===== ====== =======
</TABLE>
The following options were not included in the computation of diluted EPS
because the options' exercise price was greater than the average market
price of the common shares:
<TABLE>
<CAPTION>
Nine Months Three Months
Ended September 30, Ended September 30,
------------------- -------------------
2000 2000
------------------- -------------------
<S> <C> <C>
Options to purchase shares
of common stock (in thousands) 99 69
Exercise price $17.06-$47.38 $29.63-$47.38
Expiration date April 2009- April 2009-
October 2009 September 2009
</TABLE>
5
<PAGE>
The following options were not included in the computation of diluted EPS
because the options' exercise price was greater than the average market
price of the common shares:
<TABLE>
<CAPTION>
Nine Months Three Months
Ended September 30, Ended September 30,
------------------- -------------------
1999 1999
------ ------
<S> <C> <C>
Options to purchase shares
of common stock (in thousands) 1 1
Exercise prices $47.38 $47.38
Expiration dates May 2009 May 2009
</TABLE>
4. The Company's predominant business is the design, development and
distribution of athletic footwear. The Company is organized into three
geographic regions: the United States, Europe and other international
operations. Certain reclassifications have been made in the 2000 and 1999
presentations. The following tables summarize segment information (in
thousands):
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
-------------------- ---------------------
2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues from unrelated entities:
United States $163,190 $217,914 $53,318 $ 74,014
Europe 11,972 10,546 3,589 3,279
Other International 7,768 7,424 3,559 2,841
-------- -------- ------- --------
$182,930 $235,884 $60,466 $ 80,134
======== ======== ======= ========
Inter-geographic revenues:
United States $ 863 $ 773 $ 324 $ 236
Europe 29 21 15 9
Other International 3,295 2,909 975 245
-------- -------- ------- --------
$ 4,187 $ 3,703 $ 1,314 $ 490
======== ======== ======= ========
Total revenues:
United States $164,053 $218,687 $53,642 $ 74,250
Europe 12,001 10,567 3,604 3,288
Other International 11,063 10,333 4,534 3,086
Less inter-geographic revenues (4,187) (3,703) (1,314) (490)
-------- -------- ------- --------
$182,930 $235,884 $60,466 $ 80,134
======== ======== ======= ========
Operating profit (loss):
United States $ 34,297 $ 53,677 $13,049 $ 17,078
Europe (1,003) (752) (432) (706)
Other International 404 3,305 21 529
Less corporate expenses and
eliminations (6,816) (8,515) (2,984) (1,835)
-------- -------- ------- --------
$ 26,882 $ 47,715 $ 9,654 $ 15,066
======== ======== ======= ========
</TABLE>
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
---- ----
<S> <C> <C>
Identifiable assets:
United States $ 72,166 $ 82,114
Europe 6,227 6,777
Other International 18,615 17,213
Corporate assets and
eliminations (1) 57,704 40,668
-------- --------
$154,712 $146,772
======== ========
</TABLE>
(1) Corporate assets include cash and cash equivalents and intangible assets.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
-------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Notes Regarding Forward-Looking Statements and Analyst Reports
"Forward-looking statements", within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act"), include certain written
and oral statements made, or incorporated by reference, by the Company or its
representatives in this report, other reports, filings with the Securities and
Exchange Commission ("the S.E.C."), press releases, conferences or otherwise.
Such forward-looking statements include, without limitation, any statement that
may predict, forecast, indicate, or imply future results, performance, or
achievements, and may contain the words "believe", "anticipate", "expect",
"estimate", "intend", "plan", "project", "will be", "will continue", "will
likely result", or any variations of such words with similar meaning. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results may differ materially from those expressed or forecasted in any
such forward-looking statements. Investors should carefully review the risk
factors set forth in other reports or documents the Company files with the
S.E.C., including Forms 10-Q, 10-K and 8-K. Some of the other risks and
uncertainties that should be considered include, but are not limited to, the
following: international, national and local general economic and market
conditions (including the current Asian economic situation); the size and growth
of the overall athletic footwear and apparel markets; the size of the Company's
competitors; intense competition among designers, marketers, distributors and
sellers of athletic footwear and apparel for consumers and endorsers; market
acceptance of the Company's new training shoe line; market acceptance of non-
performance product in Europe; demographic changes; changes in consumer
preferences; popularity of particular designs, categories of products, and
sports; seasonal and geographic demand for the Company's products; the size,
timing and mix of purchases of the Company's products; fluctuations and
difficulty in forecasting operating results, including, without limitation, the
fact that advance "futures" orders may not be indicative of future revenues due
to the changing mix of futures and at-once orders; the ability of the Company to
continue, manage or forecast its growth and inventories; new product development
and commercialization; the ability to secure and protect trademarks, patents,
and other intellectual property; performance and reliability of products;
customer service; adverse publicity; the loss of significant customers or
suppliers; dependence on distributors; business disruptions; increased costs of
freight and transportation to meet delivery deadlines; changes in business
strategy or development plans; general risks associated with doing business
outside the United States, including, without limitation, import duties,
tariffs, quotas and political and economic instability; changes in government
regulations; liability and other claims asserted against the Company; the
ability to attract and retain qualified personnel; and other factors referenced
or incorporated by reference in this report and other reports.
The Company operates in a very competitive and rapidly changing
environment. New risk factors can arise and it is not possible for management to
predict all such risk factors, nor can it assess the impact of all such risk
factors on the Company's business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results.
Investors should also be aware that while the Company does, from time
to time, communicate with securities analysts, it is against the Company's
policy to disclose to them any material non-public information or other
confidential commercial information. Accordingly, investors should not assume
that the Company agrees with any statement or report issued by any analyst
irrespective of the content of the statement or report. Furthermore, the Company
has a policy against issuing or confirming financial forecasts or projections
issued by others. Thus, to the extent that reports issued by securities analysts
or others contain any projections, forecasts or opinions, such reports are not
the responsibility of the Company.
7
<PAGE>
Results of Operations
The following table sets forth, for the periods indicated, the percentage of
certain items in the consolidated statements of earnings relative to revenues.
<TABLE>
<CAPTION>
NINE MONTHS THREE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
--------------------- ---------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 59.7 56.3 58.7 56.9
Gross profit 40.3 43.7 41.3 43.1
Selling, general and administrative
expenses 25.6 23.5 25.4 24.3
Interest income, net 1.4 0.5 1.4 0.6
Earnings before income taxes 16.1 20.7 17.3 19.4
Income tax expense 6.4 8.3 6.8 7.7
Net earnings 9.7 12.4 10.5 11.7
</TABLE>
Revenues decreased to $60,466,000 for the quarter ended September 30, 2000 from
$80,134,000 for the quarter ended September 30, 1999, a decrease of $19,668,000
or 24.5%. Revenues decreased to $182,930,000 for the nine months ended September
30, 2000 from $235,884,000 for the nine months ended September 30, 1999, a
decrease of $52,954,000 or 22.4%. The decrease for the quarter ended September
30, 2000 was the result of a decrease in the volume of footwear sold at slightly
lower average wholesale prices per pair. The decrease for the nine months ended
September 30, 2000 was the result of a decrease in the volume of footwear sold
partially offset by higher average wholesale prices per pair. The volume of
footwear sold decreased to 2,200,000 and 6,649,000 pair for the quarter and nine
months ended September 30, 2000 from 2,897,000 and 8,629,000 pair for the
quarter and nine months ended September 30, 1999. The decrease in the volume of
footwear sold for the quarter ended September 30, 2000 was primarily the result
of decreased sales of the Classic, children's and tennis/court categories of
shoes of 27.6%, 24.7% and 45.4%, respectively, partially offset by sales of the
training category, a new category for the Company. The average wholesale price
per pair was $26.67 and $26.48 for the quarter and nine months ended September
30, 2000 compared with $26.77 and $26.18 for the quarter and nine months ended
September 30, 1999, respectively.
Domestic revenues decreased 28.0% to $53,318,000 for the quarter ended September
30, 2000 from $74,014,000 for the quarter ended September 30, 1999. Domestic
revenues decreased 25.1% to $163,190,000 for the nine months ended September 30,
2000 from $217,914,000 for the nine months ended September 30, 1999.
International revenues increased 16.8% to $7,148,000 for the quarter ended
September 30, 2000 from $6,120,000 for the quarter ended September 30, 1999.
International revenues increased 9.8% to $19,740,000 for the nine months ended
September 30, 2000 from $17,970,000 for the nine months ended September 30,
1999. The increase in international revenues for the nine months ended
September 30, 2000 was primarily due to an increase in sales within Europe and
certain Asian countries. International revenues, as a percentage of total
revenues, increased to 11.8% for the quarter and 10.8% for the nine months ended
September 30, 2000 as compared with 7.6% for the quarter and nine months ended
September 30, 1999.
Gross profit margins, as a percentage of revenues, decreased to 41.3% for the
quarter ended September 30, 2000, from 43.1% for the quarter ended September 30,
1999. Gross profit margins, as a percentage of revenues, decreased to 40.3% from
43.7% for the nine months ended September 30, 2000 and 1999, respectively.
Gross profit margins, for the three and nine months ended September 30, 2000,
fluctuated primarily due to changes in the product mix of sales.
Selling, general and administrative expenses decreased to $15,335,000 (25.4% of
revenues) and $46,869,000 (25.6% of revenues) for the quarter and nine months
ended September 30, 2000, respectively, from $19,443,000 (24.3% of revenues) and
$55,462,000 (23.5% of revenues) for the quarter and nine months ended September
30, 1999, respectively, decreases of $4,108,000 and $8,593,000 or 21.1% and
15.5%, respectively. The decreases in these expenses for the quarter and nine
months ended September 30, 2000 were primarily the result of decreases in
advertising costs, bonus expense and commissions.
Net interest income was $834,000 (1.4% of revenues) and $2,496,000 (1.4% of
revenues) for the quarter and nine months ended September 30, 2000,
respectively, compared to $483,000 (0.6% of revenues) and $1,101,000 (0.5% of
revenues) for the quarter and nine months ended September 30, 1999,
respectively, increases of $351,000 and $1,395,000, respectively. The increase
in net interest income was primarily due to higher average balances and rates
for the quarter and nine months ended September 30, 2000 as compared to the
quarter and nine months ended September 30, 1999.
8
<PAGE>
The Company's effective tax rate remained at 39.9% of earnings before income tax
for both the nine months ended September 30, 2000 and 1999. The income tax
benefit of options exercised of $256,000 and $9,000,000 for the nine months
ended September 30, 2000 and 1999, respectively, was credited to additional
paid-in capital and therefore did not impact the effective tax rate.
Net earnings decreased 32.0% to $6,346,000 for the quarter ended September 30,
2000 from $9,337,000 for the quarter ended September 30, 1999. Net earnings
decreased 39.9% to $17,654,000 for the nine months ended September 30, 2000 from
$29,359,000 for the nine months ended September 30, 1999.
At September 30, 2000 and 1999, domestic futures orders with start ship dates
from October 2000 and 1999 through March 2001 and 2000 were approximately
$78,280,000 and $105,054,000, respectively, a decrease of 25.5%. At September
30, 2000 and 1999, international futures orders with start ship dates from
October 2000 and 1999 through March 2001 and 2000 were approximately $8,462,000
and $8,073,000, respectively, an increase of 4.8%. At September 30, 2000 and
1999 total futures orders with start ship dates from October 2000 and 1999
through March 2001 and 2000 were approximately $86,742,000 and $113,127,000,
respectively, a decrease of 23.3%. The 23.3% decrease in total futures orders
is comprised of a 37.1% decrease in the fourth quarter 2000 futures orders and
an 11.6% decrease in the first quarter 2001 futures orders. "Backlog", as of
any date, represents orders scheduled to be shipped within the next six months.
Backlog does not include orders scheduled to be shipped on or prior to the date
of determination of backlog. These orders are not necessarily indicative of
revenues for subsequent periods because: (1) the mix of "futures" and "at-once"
orders can vary significantly from quarter to quarter and year to year and (2)
the rate of customer order cancellations can also vary from quarter to quarter
and year to year.
Liquidity and Capital Resources
The Company generated cash of $27,819,000 and $25,888,000 from its operating
activities during the nine months ended September 30, 2000 and 1999,
respectively. Cash provided by operations for the nine months ended September
30, 2000 as compared to the nine months ended September 30, 1999 varied
primarily due to changes in net earnings, inventories, accounts payable and
accrued liabilities.
The Company had a net outflow of cash from its investing activities for the nine
months ended September 30, 2000 and 1999 due to the purchase of property, plant
and equipment.
The Company had a net outflow of cash from its financing activities for the nine
months ended September 30, 2000 primarily due to the purchase of treasury stock.
In October 1999, the Company announced the completion of its April 1998 $20
million stock repurchase program and a new authorization by the Board of
Directors for the Company to repurchase through December 2003 up to an
additional $25 million of its Class A Common Stock from time to time on the open
market, as market conditions warrant. The Company adopted this program because
it believes repurchasing its shares can be a good use of excess cash depending
on the Company's array of alternatives. Currently, the Company has made
purchases under all stock repurchase programs from August 1996 through October
19, 2000 (the date of filing of this Form 10-Q) of 4,016,332 shares at an
aggregate cost totaling approximately $47,563,000.
The Company maintains an agreement with a bank whereby the Company may borrow,
in the form of a secured revolving credit facility, up to $30,000,000. This
facility currently expires in July 2001. Substantially all of the Company's
assets (other than real estate) are pledged as security for this facility. The
credit facility provides for interest to be paid at the prime rate less 3/4% or,
at the Company's discretion and with certain restrictions, other market based
rates. The Company pays a commitment fee of 1/8% of the unused line for
availability of the credit facility. The Company must meet certain restrictive
financial covenants as agreed upon in the facility.
The Company's European offices have agreements with a bank whereby they can
borrow up to $4,500,000 in the form of secured revolving credit facilities.
These facilities are made available until terminated by either party.
No other material capital commitments exist at September 30, 2000. Depending on
the Company's future growth rate, funds may be required by operating activities.
With continued use of its revolving credit facility and internally generated
funds, the Company believes its present and currently anticipated sources of
capital are sufficient to sustain its anticipated capital needs for the
remainder of 2000.
The Company's working capital increased $7,405,000 to $121,193,000 at September
30, 2000 from $113,788,000 at December 31, 1999.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 1: Legal Proceedings.
-----------------
None.
ITEM 2: Changes in Securities.
---------------------
None.
ITEM 3: Defaults Upon Senior Securities.
-------------------------------
None.
ITEM 4: Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
None.
ITEM 5: Other Information.
-----------------
None.
ITEM 6: Exhibits and Reports on Form 8-K:
--------------------------------
(a) Exhibits
27 - Financial Data Schedule
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the third quarter
of 2000.
10
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
K-Swiss Inc.
Date: October 19, 2000 By: /s/ George Powlick
-----------------------------------
George Powlick,
Vice President Finance and
Chief Financial Officer
11
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Page
------- ----
27 Financial Data Schedule
12
