UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of Earliest Event Reported):
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February 11, 2015
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SKECHERS U.S.A., INC.
__________________________________________
(Exact name of registrant as specified in its charter)
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Delaware
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001-14429
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95-4376145
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_____________________
(State or other jurisdiction
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_____________
(Commission
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______________
(I.R.S. Employer
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of incorporation)
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File Number)
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Identification No.)
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228 Manhattan Beach Boulevard, Manhattan Beach, California
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90266
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_________________________________
(Address of principal executive offices)
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___________
(Zip Code)
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Registrants telephone number, including area code:
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(310) 318-3100
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Not Applicable
______________________________________________
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On February 11, 2015, the Company issued a press release announcing its results of operations and financial condition for the three months and twelve months ended December 31, 2014. A copy of the press release is attached hereto as exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibit is furnished as part of this report:
99.1 Press Release dated February 11, 2015.
The information in this current report and the exhibit attached hereto is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The Information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended. The furnishing of the Information in this Current Report is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the Information this Current Report contains is material investor information that is not otherwise publicly available.
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 hereunto duly authorized.
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SKECHERS U.S.A., INC.
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February 11, 2015
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By:
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/s/ David Weinberg
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Name: David Weinberg
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Title: Chief Operating Officer
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Exhibit Index
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Exhibit No.
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Description
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99.1
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Press Release dated February 11, 2015.
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For Immediate Release
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Company Contact:
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David Weinberg
Chief Operating Officer,
Chief Financial Officer
SKECHERS USA, Inc.
(310) 318-3100 |
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Investor Relations:
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Andrew Greenebaum
(310) 829-5400 |
SKECHERS ANNOUNCES FOURTH QUARTER AND
FISCAL YEAR 2014 FINANCIAL RESULTS
Record Annual Sales of $2.378 Billion
Fourth Quarter 2014 Net Sales Increased 26.4 Percent to $569.7 Million
Fourth Quarter 2014 Net Earnings of $21.9 Million
Fourth Quarter 2014 Diluted Earnings Per Share of $0.43
MANHATTAN BEACH, CA. February 11, 2015 SKECHERS USA, Inc. (NYSE:SKX) today announced financial
results for the fourth quarter and fiscal year ended December 31, 2014.
Net sales for the fourth quarter of 2014 were $569.7 million compared to $450.7 million in the
fourth quarter of 2013. Gross profit for the fourth quarter of 2014 was $257.6 million or 45.2
percent of net sales compared to $200.6 million or 44.5 percent of net sales in the fourth quarter
of 2013. Earnings from operations in the fourth quarter of 2014 were $33.0 million compared to
earnings from operations of $17.1 million in the fourth quarter of 2013.
Skechers fourth quarter revenues of over $569 million set a new record for the period, and
followed a record third quarter 2014, which was the highest quarterly sales in the Companys
history. This momentum led to record annual revenues of $2.378 billion for 2014, an approximately
29 percent increase compared to 2013 sales of $1.846 billion, began David Weinberg, SKECHERS chief
operating officer and chief financial officer. The outstanding fourth quarter growth was the
result of double-digit improvements in our domestic and international wholesale and Skechers
Company-owned retail businesses, all of which benefited from our universally appealing mens,
womens and kids product. We are also pleased to note that within our domestic wholesale business,
our average price per pair increased by 7.4 percent in the quarter, and within our international
wholesale business, we experienced double-digit growth in many key countries that were negatively
impacted by currency issues, both further testaments to the strength of our brand and product.
Net earnings for the fourth quarter of 2014 were $21.9 million compared to net earnings of $14.2
million in the fourth quarter of 2013. Net earnings per diluted share in the fourth quarter of 2014
were $0.43 based on 51.4 million weighted average shares outstanding compared to $0.28 based on
50.7 million weighted average shares outstanding in the fourth quarter of 2013. During the fourth
quarter of 2014, the Companys net earnings were negatively impacted by approximately $7.0 million,
or $0.14 per diluted share of which $4.7 million, or $0.09 per diluted share was the result of
negative foreign currency translations and transactions and $2.3 million, or $0.05 per
diluted share, was the result of foreign and domestic bad debt write-offs. The Companys effective
tax rate for the year-ended December 31, 2014, was 20.5 percent, which was below the forecasted
rate of 22.6 percent at the close of the third quarter 2014. The decrease in its effective tax rate
was due to increased international sales and profitability combined with slightly decreased
domestic profitability. The Company expects improved international sales and profitability to
continue to have a positive impact on its 2015 effective tax rate, which is forecasted to be
between 20 percent and 25 percent.
Fiscal year 2014 net sales were $2.378 billion compared to net sales of $1.846 billion in 2013.
Gross profit for 2014 was $1.072 billion or 45.1 percent of net sales compared to $818.8 million or
44.4 percent of net sales in 2013. Earnings from operations for 2014 were $209.1 million compared
to $93.6 million in 2013.
Net earnings for 2014 were $138.8 million compared to $54.8 million in 2013. Net earnings per
diluted share for fiscal year 2014 were $2.72 based on 51.0 million weighted average shares
outstanding compared to $1.08 based on 50.6 million weighted average shares outstanding in the
prior year.
Robert Greenberg, SKECHERS chief executive officer, commented: Just a year ago, we were honored as
the 2013 Brand of the Year for GO (Footwear News) and 2013 Running Design Excellence and Childrens
Design Excellence (Footwear Plus), and now we are 2014 Company of the Year (Footwear News and
Footwear Plus), and the No. 2 footwear brand and the No. 1 walking brand in America. This speaks
volumes to the product we have developed and delivered, the global marketing support behind it, and
the many other achievements and milestones made throughout the year. In the fourth quarter alone,
we signed world renowned drummer Ringo Starr to a global marketing agreement for our growing mens
footwear line, launched our first Demi Lovato campaignwhich spurred a flurry of social media
engagement around the world, and saw Meb cross the finish line first among the Americans at the New
York Marathon. We also announced the opening of our 1,000th Skechers retail store,
completed the initial phase of the automation of our European Distribution Center equipment and
moved up our Fall 2015 buy meetings with our key domestic accounts to October and November, which
allowed us to meet the increased order rate for our new product. This in turn positively impacted
our international partners as they have been able to place orders for the coming season earlier,
which will allow us to deliver more product in a timely manner. In the first quarter of 2015, we
decided to convert three distribution partners doing business in 14 Central Eastern European
countries to wholly-owned subsidiaries, enabling us to leverage the success we are experiencing
across Europe. With our womens footwear reaching an expanding audience thanks to both the fresh
styling and our advertising campaign featuring Demi Lovato, our mens footwear collectively
achieving the highest percentage gains, and new innovations in our childrens footwearincluding
Game Kicks, the shoe with an electronic memory game built inwe believe the demand for our footwear
is at an all-time high. We are looking forward to delivering new product in the Spring, expanding
the Skechers retail store base to an estimated 1,250 stores by the end of 2015, and continuing to
see strong double-digit and, in some cases, triple-digit gains in Europe, the Americas, the
Asia-Pacific region and the Middle East. We believe there are still tremendous growth opportunities
for Skechers in 2015 and beyond.
David Weinberg continued: 2014 was an excellent year for Skechers, and we expect the momentum to
continue in 2015 based on domestic and international Skechers retail stores comps of 17 percent in
January, year-over-year worldwide backlogs up 60 percent at December 31, 2014, and the steady
demand for our product including expansion in new doors and existing doors. With continued
investments in our infrastructure for the coming years, including equipment automation upgrades at
our European Distribution Center and establishment of a Company-operated distribution center in
Chile, $466.7 million in cash and inventories in-line with expected sales, we believe we are
prepared for growth in 2015. We believe the best is yet to come, and are looking forward to the
first quarter of 2015, which we expect will be a new quarterly sales record of $690 million to $710
million and earnings per share of $0.95-$1.05.
About SKECHERS USA, Inc.
SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops and markets a
diverse range of lifestyle footwear for men, women and children, as well as performance footwear
for men and women. SKECHERS footwear is available in the United States and over 100 countries and
territories worldwide via department and specialty stores, more than 1,000 SKECHERS retail stores,
and the Companys e-commerce website. The Company manages its international business through a
network of global distributors, joint venture partners in Asia, and 12 wholly-owned subsidiaries in
Brazil, Canada, Chile, Japan and throughout Europe. For more information, please visit skechers.com
and follow us (facebook.com/SKECHERS) and Twitter (twitter.com/SKECHERSUSA).
This announcement contains forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, without limitation, the Companys future growth, financial results and
operations, its development of new products, future demand for its products and growth
opportunities, its planned opening of new stores, advertising and marketing initiatives, and the
expansion and automation plans for the Companys European Distribution Center. Forward-looking
statements can be identified by the use of forward looking language such as believe,
anticipate, expect, estimate, intend, plan, project, will be, will continue, will
result, could, may, might, or any variations of such words with similar meanings. Any such
statements are subject to risks and uncertainties that could cause actual results to differ
materially from those projected in forward-looking statements. Factors that might cause or
contribute to such differences include international, national and local general economic,
political and market conditions including the ongoing global economic slowdown and market
instability; entry into the highly competitive performance footwear market; sustaining, managing
and forecasting costs and proper inventory levels; losing any significant customers, decreased
demand by industry retailers and cancellation of order commitments due to the lack of popularity of
particular designs and/or categories of products; maintaining brand image and intense competition
among sellers of footwear for consumers; anticipating, identifying, interpreting or forecasting
changes in fashion trends, consumer demand for the products and the various market factors
described above; sales levels during the spring, back-to-school and holiday selling seasons; and
other factors referenced or incorporated by reference in the Companys annual report on Form 10-K
for the year ended December 31, 2013, and its Form 10-Q for the quarter ended September 30, 2014.
The risks included here are not exhaustive. The Company operates in a very competitive and rapidly
changing environment. New risks emerge from time to time and the companies cannot predict all such
risk factors, nor can the companies assess the impact of all such risk factors on their respective
businesses 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, you should not place undue reliance on forward-looking statements as a prediction of
actual results. Moreover, reported results should not be considered an indication of future
performance.
###
1
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
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December 31, |
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December 31, |
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2014 |
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2013 |
ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
466,685 |
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$ |
372,011 |
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Trade accounts receivable, net |
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272,103 |
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225,941 |
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Other receivables |
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16,510 |
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10,599 |
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Total receivables |
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288,613 |
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236,540 |
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Inventories |
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453,837 |
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358,168 |
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Prepaid expenses and other current assets |
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57,015 |
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26,094 |
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Deferred tax assets |
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18,864 |
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22,115 |
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Total current assets |
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1,285,014 |
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1,014,928 |
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Property, plant and equipment, at cost, less accumulated
depreciation and amortization |
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373,183 |
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361,755 |
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Goodwill and other intangible assets, less accumulated amortization |
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1,630 |
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2,377 |
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Deferred tax assets |
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2,044 |
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9,950 |
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Other assets, at cost |
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13,047 |
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19,560 |
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Total non-current assets |
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389,904 |
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393,642 |
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TOTAL ASSETS |
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$ |
1,674,918 |
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$ |
1,408,570 |
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LIABILITIES AND EQUITY |
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Current Liabilities: |
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Current installments of long-term borrowings |
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$ |
101,407 |
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$ |
12,028 |
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Accounts payable |
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352,815 |
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258,183 |
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Short-term borrowings |
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1,810 |
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87 |
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Accrued expenses |
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49,705 |
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40,124 |
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Total current liabilities |
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505,737 |
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310,422 |
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Long-term borrowings, net of current installments |
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15,081 |
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116,488 |
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Other long-term liabilities |
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19,993 |
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1,740 |
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Total non-current liabilities |
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35,074 |
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118,228 |
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Total liabilities |
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540,811 |
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428,650 |
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Stockholders equity: |
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Skechers U.S.A., Inc. equity |
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1,075,249 |
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930,322 |
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Noncontrolling interests |
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58,858 |
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49,598 |
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Total equity |
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1,134,107 |
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979,920 |
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TOTAL LIABILITIES AND EQUITY |
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$ |
1,674,918 |
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$ |
1,408,570 |
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2
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
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Three Months Ended December 31, |
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Twelve Months Ended December 31, |
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2014 |
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2013 |
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2014 |
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2013 |
Net sales |
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$ |
569,722 |
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$ |
450,737 |
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$ |
2,377,561 |
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$ |
1,846,361 |
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Cost of sales |
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312,093 |
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250,092 |
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1,305,656 |
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1,027,569 |
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Gross profit |
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257,629 |
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200,645 |
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1,071,905 |
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818,792 |
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Royalty income |
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2,178 |
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|
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2,890 |
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9,106 |
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7,734 |
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|
|
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|
|
|
|
|
|
|
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259,807 |
|
|
|
203,535 |
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|
|
1,081,011 |
|
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|
826,526 |
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Operating expenses: |
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Selling |
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40,198 |
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33,496 |
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181,018 |
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153,491 |
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General and administrative |
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186,598 |
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152,977 |
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690,923 |
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579,426 |
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|
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226,796 |
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|
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186,473 |
|
|
|
871,941 |
|
|
|
732,917 |
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|
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Income from operations |
|
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33,011 |
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|
|
17,062 |
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|
|
209,070 |
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|
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93,609 |
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Other income (expense): |
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Interest, net |
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(3,093 |
) |
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(2,696 |
) |
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(11,629 |
) |
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(11,049 |
) |
Other, net |
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(1,230 |
) |
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|
2,111 |
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(6,062 |
) |
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(345 |
) |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,323 |
) |
|
|
(585 |
) |
|
|
(17,691 |
) |
|
|
(11,394 |
) |
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|
|
|
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|
|
|
|
|
|
|
|
|
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Earnings before income tax expense |
|
|
28,688 |
|
|
|
16,477 |
|
|
|
191,379 |
|
|
|
82,215 |
|
Income tax expense |
|
|
2,833 |
|
|
|
376 |
|
|
|
39,184 |
|
|
|
21,347 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net earnings |
|
|
25,855 |
|
|
|
16,101 |
|
|
|
152,195 |
|
|
|
60,868 |
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Less: Net earnings attributable to noncontrolling interests |
|
|
3,935 |
|
|
|
1,936 |
|
|
|
13,385 |
|
|
|
6,080 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net earnings attributable to Skechers U.S.A., Inc. |
|
$ |
21,920 |
|
|
$ |
14,165 |
|
|
$ |
138,810 |
|
|
$ |
54,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share attributable to Skechers U.S.A., Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Basic |
|
$ |
0.43 |
|
|
$ |
0.28 |
|
|
$ |
2.74 |
|
|
$ |
1.09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.43 |
|
|
$ |
0.28 |
|
|
$ |
2.72 |
|
|
$ |
1.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in calculating earnings per
share attributable to Skechers U.S.A., Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
50,697 |
|
|
|
50,463 |
|
|
|
50,613 |
|
|
|
50,363 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
51,355 |
|
|
|
50,653 |
|
|
|
51,026 |
|
|
|
50,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
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