SKECHERS Announces First Quarter 2013 Financial Results

  SKECHERS Announces First Quarter 2013 Financial Results

  *Net Sales Increase 28.6 Percent to $451.6 Million
  *Earnings from Operations of $15.3 Million
  *Net Earnings of $6.7 Million
  *Diluted Earnings Per Share of $0.13

Business Wire

MANHATTAN BEACH, Calif. -- May 15, 2013

SKECHERS USA, Inc. (NYSE:SKX), a global leader in footwear, today announced
financial results for the first quarter 2013. The Company’s newly appointed
registered public accounting firm – BDO USA, LLP – has completed its review of
the Company’s condensed consolidated financial statements for the quarter
ended March 31, 2013 for inclusion in the filing of the corresponding
Quarterly Report on Form 10-Q in accordance with Public Company Accounting
Oversight Board (PCAOB) Statement on Auditing Standards AU 722, Interim
Financial Information.

First quarter 2013 net sales were $451.6 million compared to $351.3 million in
the first quarter of 2012.  Gross profit for the first quarter of 2013 was
$192.7 million or 42.7 percent of net sales compared to $155.7 million or 44.3
percent of net sales in the first quarter of last year. Earnings from
operations for the first quarter of 2013 were $15.3 million versus a loss from
operations of $4.4 million for the first quarter of 2012.

“We believe the first quarter 2013 sales increase of more than 28 percent over
the same period last year is an indication of the increased demand for our
brand and our diverse product offering, which now includes the growing
Skechers Performance Division. Additional indicators of the strength of our
business are the 47 percent increase in pairs sold in our domestic wholesale
channel and the 12.2 percent increase in comparable sales in our domestic and
international SKECHERS stores, which are the first to receive our new
product,"  stated David Weinberg, chief operating officer and chief financial
officer. "Further, the sales growth was the result of double digit
improvements in each of our business channels: domestic wholesale,
international wholesale, company-owned retail stores, and e-commerce.”

Net earnings in the first quarter of 2013 were $6.7 million compared to a net
loss of $3.7 million for the first quarter of 2012. Diluted net earnings per
share were $0.13 based on 50,492,000 weighted average shares outstanding
compared to a diluted loss per share of $0.07 based on 49,265,000 weighted
average shares outstanding. It is important to note that the combination of
two items negatively impacted earnings per share by $0.08 during the three
month period ended March 31, 2013. First, a foreign currency translation
pre-tax loss of $3.0 million occurred when the Company’s short-term
intercompany investments in its foreign subsidiaries were translated into U.S.
dollars. Also during the first quarter, the Company agreed to a pre-tax $2.5
million credit to an account that had purchased a significant portion of its
excess toning inventory in 2011. The Company determined this was appropriate
due to various issues relating to market conditions, pricing and the amount of
toning inventory in the market place.

Robert Greenberg, SKECHERS chief executive officer, commented: “SKECHERS’
strong sales are the result of the efforts of the many talented individuals
from all sides of our business – product, marketing, sales, retail,
international and logistics. Each year we strive to bring more innovation to
our product offering, and be more efficient in delivering it to the right
partners around the world. I believe that now, more than ever before, we have
a well-balanced collection of product with relevant styles in each of our 15
showrooms. We offer consumers choices unlike any other footwear company: we
are an award-winning performance brand, an in-demand kids brand, a brand for
occupational service professionals, and a lifestyle brand with winter boots,
summer sandals, memory foam sneakers and everyday casuals. Our consistent
marketing efforts also sets us apart and drives sales. Along with a
much-talked about Super Bowl commercial for Skechers GOrun 2, we aired 17
unique commercials for Spring during the first quarter, and backed it up with
print, online, outdoor and in-store campaigns. Many of these same campaigns
are translated and air in countries around the world – from Japan to Germany,
from Panama to Russia to support our growing international business. We see
the success of these campaigns with dedicated SKECHERS window displays – from
Australia to Spain, from Turkey to the U.K. And we see it in our account
meetings in our corporate offices in Manhattan Beach and as we visit stores
across the U.S. We believe the enthusiasm for our brand is stronger than ever,
and based on the growth in each category, we believe this excitement is across
our diverse product platform. We are looking forward to the coming
back-to-school season and what we believe will be a strong year for SKECHERS.”

Mr. Weinberg continued: "We ended 2012 with a very positive quarter, and we
have begun 2013 with another strong quarter. Our expenses and fresh inventory
are in line with our current business. While our cash did decline from year
end, we believe this is primarily a timing issue, and our cash balance is now
over $350 million. With Easter falling in the first quarter (this year) and
the potential for back-to-school deliveries shifting into the third quarter,
we expect growth to be significantly stronger in the third quarter than in the
second quarter 2013. Based on the strong acceptance of the brand and the
current demand for our product, we believe we are well positioned for growth."

SKECHERS USA, Inc., based in Manhattan Beach, California, designs, develops
and markets a diverse range of footwear for men, women and children under the
SKECHERS name. 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 subsidiaries in Canada,
Brazil, Chile, Japan, and across Europe, as well as through joint ventures in
Asia. For more information, please visit, and follow us on
Facebook ( and Twitter (

This announcement may contain forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include, without limitation,
any statement that may predict, forecast, indicate or simply state future
results, performance or achievements, and 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 the resignation of the Company’s former independent
registered public accounting firm, and its withdrawal of its audit reports
with respect to certain of the Company’s historical financial statements;
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 Company’s annual
report on Form 10-K for the year ended December 31, 2012. 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

(In thousands)
                                                    March 31,     December 31,

                                                    2013          2012
Current Assets:
Cash and cash equivalents                           $ 264,661     $  325,826
Trade accounts receivable, net                        283,442        213,697
Other receivables                                    7,119         7,491
Total receivables                                     290,561        221,188
Inventories                                           253,659        339,012
Prepaid expenses and other current assets             26,646         27,755
Deferred tax assets                                  26,532        26,531
Total current assets                                  862,059        940,312
Property, plant and equipment, at cost, less          361,400        362,446
accumulated depreciation and amortization
Goodwill and other intangible assets, less            3,016          3,242
applicable amortization
Deferred tax assets                                   15,261         16,387
Other assets, at cost                                20,316        17,833
Total non-current assets                             399,993       399,908
TOTAL ASSETS                                        $ 1,262,052   $  1,340,220
Current Liabilities:
Current installments of long-term borrowings        $ 11,754      $  11,668
Short-term borrowings                                 3,044          2,425
Accounts payable                                      162,024        241,525
Accrued expenses                                     30,455        36,923
Total current liabilities                             207,277        292,541
Long-term borrowings, excluding current               125,545        128,517
Deferred tax liabilities                             72            73
Total non-current liabilities                        125,617       128,590
Total liabilities                                     332,894        421,131
Stockholders’ equity:
Skechers U.S.A., Inc. equity                          883,093        875,969
Noncontrolling interests                             46,065        43,120
Total equity                                         929,158       919,089
TOTAL LIABILITIES AND EQUITY                        $ 1,262,052   $  1,340,220

(In thousands, except per share data)
                                                  Three Months Ended March 31,
                                                  2013            2012
Net sales                                         $  451,621       $ 351,274
Cost of sales                                       258,889       195,578 
Gross profit                                         192,732         155,696
Royalty income, net                                 1,770         1,136   
                                                    194,502       156,832 
Operating expenses:
Selling                                              37,696          30,349
General and administrative                          141,468       130,877 
                                                    179,164       161,226 
Earnings (loss) from operations                      15,338          (4,394  )
Other income (expense):
Interest, net                                        (2,549   )      (2,721  )
Other, net                                          (2,923   )     (140    )
Total other income (expense)                        (5,472   )     (2,861  )
Earnings (loss) before income tax expense            9,866           (7,255  )
Income tax expense (benefit)                        2,278         (3,845  )
Net earnings (loss)                                  7,588           (3,410  )
Less: Net earnings attributable to                  908           256     
noncontrolling interests
Net earnings (loss) attributable to Skechers      $  6,680        $ (3,666  )
U.S.A., Inc.
Net earnings (loss) per share attributable to
Skechers U.S.A., Inc.:
Basic                                             $  0.13         $ (0.07   )
Diluted                                           $  0.13         $ (0.07   )
Weighted average shares used in calculating
earnings (loss) per share attributable to
Skechers U.S.A., Inc.:
Basic                                               50,295        49,265  
Diluted                                             50,492        49,265  


Company Contact:
David Weinberg
Chief Operating Officer
Chief Financial Officer
(310) 318-3100
Investor Relations:
Andrew Greenebaum
(310) 829-5400
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