K-Swiss Reports Second Quarter Results

K•Swiss Inc. (NASDAQ: KSWS) today announced results for the second quarter ended June 30, 2011.

Financial Results

Net loss for the second quarter of 2011 was $20,026,000, or $0.56 per diluted share, compared with a net loss of $14,545,000, or $0.41 per diluted share, for the prior-year period. Net loss for the six months ended June 30, 2011, was $29,868,000, or $0.84 per diluted share, compared with a net loss of $19,243,000, or $0.55 per diluted share, for the six months ended June 30, 2010.

For the second quarter of 2011, total worldwide revenues increased 40.0% to $65,542,000 from $46,831,000 in the prior-year period. Domestic revenues increased 43.5% to $32,576,000 in the second quarter, and international revenues increased 36.6% to $32,966,000 for the same period. Total worldwide revenues for the first six months of 2011 increased 22.6% to $138,162,000 from $112,701,000 for the first six months of 2010. Domestic revenues increased 37.3% to $64,035,000 in the first half of 2011, and international revenues increased 12.2% to $74,127,000.

Futures Orders

Worldwide futures orders with start ship dates from July through December 2011 increased 39.2% to $89,915,000 at June 30, 2011. Domestic futures orders increased 47.9% to $37,016,000 at June 30, 2011, from $25,034,000 the previous year. International futures orders increased 33.7% to $52,899,000 at June 30, 2011, from $39,567,000 the previous year.

Steven Nichols, Chairman of the Board and President, stated, “We are encouraged by what we see with increases in revenues and backlog and growth of our Performance category. The crucial selling season for K•Swiss and Palladium brands is starting shortly. That will reveal how our marketing efforts and products perform.”

2011 Guidance

For 2011, the Company expects full year consolidated revenues to be 25% to 30% above 2010. Consolidated gross margin is expected to be approximately 37.5%, compared to 39.2% in 2010. Selling, general and administrative expenses are expected to be $155 million to $160 million due to continued support of the Company’s marketing initiatives.

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