K-Swiss Inc. (
KSWS)
Q4 2009 Earnings Call Transcript
February 18, 2010 11:00 a.m. ET
Executives
Steven B. Nichols - Chairman, President and Chief Executive Officer
George Powlick - Vice President, Finance, Chief Administrative Officer, Secretary and Chief Financial Officer
Analysts
Jeff Van Sinderen - B. Riley & Company, Inc.
Sam Poser - Sterne, Agee & Leach
Christopher Svezia - Susquehanna Financial Group
Mimi Bartow - Telsey Advisory Group
Michael A. Cancelleri - Mont Pelerin Capital
Presentation
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the K-Swiss Fourth Quarter 2009 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please the one, followed by the four on your telephone, if at anytime during the conference, you need to reach an operator, please press star zero. As a reminder, this conference is being recorded Thursday, February 18, 2010.
I would now like to turn the conference over to Mr. Steven Nichols, Chairman, President and Chief Executive Officer. Please go ahead,
Steven B. Nichols
Thank you. And good morning, everyone. With me today is George Powlick, our Chief Financial Officer. We appreciate you being on the call this morning. Before I would begin, I would like to have George cover the Safe Harbor language. George?
George Powlick
Certain matters discussed in this press release are subject to certain risks and uncertainties that could cause actual results to differ materially including but not limited to non-achievement of the assumptions discussed herein, general and regional economic conditions, availability of credit, industry trends, merchandise trends including market acceptance of the company’s product offerings, customer demand, competition, the impact of terrorism, and/or potential global conflict on the worldwide economy, and order cancellations and reduced sales resulting from the slower worldwide economy.
A complete description of these factors as well as others which could affect the company’s business is set forth in the company’s periodic filings including its Form 10-K for the year ended December 31, 2009, which is currently on file with the SEC.
Backlog as of any date represents scheduled orders scheduled to be shipped within the next six months. Backlog does not include orders scheduled to be shipped on or prior to the data determination of backlog. The mix of future and at once orders can vary significantly from quarter-to-quarter and year-to-year and, therefore, futures are not necessarily indicative of revenues for subsequent periods.
Steven B. Nichols
Our preference would certainly be to report progress to you on a positive year-over-year basis. At this point in the cycle with the strategic priorities we set for 2010, we have to be content with reporting sequential progress and new milestones in the development of marketing of the K-Swiss and Palladium brands.
We can expect to see more of the same from us in 2010 in terms of tightly controlling overhead costs, inventory, distribution, as well as, allocating even more of our resources to developing technologies behind a new running and tennis shoes and locking up an increased number of personalities and sponsorship opportunities.
The advertising and marketing investment for 2010 is expected to reach an all-time high as a percentage of revenues for us as well as well above our investment in 2009 as we look to reposition the K-Swiss brand as the California Sports Company.
The breakdown of sales by product category for the fourth quarter 2009 was as follows, performance, 19%, lifestyles 67%, other 14%.
