UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number
SKECHERS U.S.A., INC.
(Exact name of registrant as specified in its charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Office) |
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(Zip Code) |
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(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading symbol |
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Name of each exchange on which registered |
Class A Common Stock, par value $0.001 per share |
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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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of April 30, 2021,
As of April 30, 2021,
SKECHERS U.S.A., INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
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Item 1. |
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3 |
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4 |
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Condensed Consolidated Statements of Comprehensive Income (Unaudited) |
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6 |
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7 |
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Notes to Condensed Consolidated Financial Statements (Unaudited) |
8 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 |
Item 3. |
19 |
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Item 4. |
19 |
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PART II – OTHER INFORMATION |
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Item 1. |
20 |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
20 |
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Item 6. |
21 |
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22 |
2
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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As of March 31, |
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As of December 31, |
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(in thousands, except par values) |
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2021 |
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2020 |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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Trade accounts receivable, less allowances of $ |
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Other receivables |
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Total receivables |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets ($ |
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Property, plant and equipment, net |
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Operating lease right-of-use assets |
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Deferred tax assets |
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Long-term investments |
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Goodwill |
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Other assets, net |
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Total non-current assets ($ |
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TOTAL ASSETS |
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$ |
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$ |
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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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$ |
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$ |
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Short-term borrowings |
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Accounts payable |
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Operating lease liabilities |
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Accrued expenses |
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Total current liabilities ($ |
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Long-term borrowings, excluding current installments |
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Long-term operating lease liabilities |
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Deferred tax liabilities |
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Other long-term liabilities |
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Total non-current liabilities ($ |
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Total liabilities |
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Commitments and contingencies (Note 10) |
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Stockholders’ equity |
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Preferred Stock, $ |
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Class A Common Stock, $ |
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Class B Common Stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Retained earnings |
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Skechers U.S.A., Inc. equity |
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Noncontrolling interests |
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Total stockholders' equity |
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TOTAL LIABILITIES AND EQUITY |
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$ |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
3
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
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Three Months Ended March 31, |
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(in thousands, except per share data) |
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2021 |
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2020 |
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Sales |
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$ |
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$ |
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Cost of sales |
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Gross profit |
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Royalty income |
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Operating expenses |
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Selling |
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General and administrative |
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Selling, general and administrative |
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Earnings from operations |
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Other income (expense) |
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Interest income |
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Interest expense |
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( |
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( |
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Other, net |
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( |
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Total other income (expense) |
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( |
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Earnings before income tax expense |
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Income tax expense |
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Net earnings |
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Less: Net earnings (loss) attributable to noncontrolling interests |
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( |
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Net earnings attributable to Skechers U.S.A., Inc. |
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$ |
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$ |
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Net earnings per share attributable to Skechers U.S.A., Inc. |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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Weighted-average shares used in calculating net earnings per share attributable to Skechers U.S.A, Inc. |
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Basic |
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Diluted |
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See accompanying notes to unaudited condensed consolidated financial statements.
4
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(Unaudited)
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Three Months Ended March 31, |
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(in thousands) |
2021 |
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2020 |
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Net earnings |
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$ |
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$ |
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Other comprehensive income, net of tax |
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Loss on foreign currency translation adjustment |
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( |
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( |
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Comprehensive income |
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Less: Comprehensive income (loss) attributable to noncontrolling interests |
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( |
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Comprehensive income attributable to Skechers U.S.A., Inc. |
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$ |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
5
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
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SHARES |
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AMOUNT |
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ACCUMULATED |
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CLASS A |
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CLASS B |
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CLASS A |
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CLASS B |
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ADDITIONAL |
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OTHER |
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SKECHERS |
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NON |
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TOTAL |
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COMMON |
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COMMON |
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COMMON |
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COMMON |
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PAID-IN |
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COMPREHENSIVE |
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RETAINED |
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U.S.A., INC. |
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CONTROLLING |
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STOCKHOLDERS' |
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(in thousands) |
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STOCK |
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STOCK |
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STOCK |
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STOCK |
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CAPITAL |
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LOSS |
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EARNINGS |
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EQUITY |
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INTEREST |
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EQUITY |
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Balance at December 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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Net earnings |
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— |
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— |
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— |
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— |
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— |
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— |
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Foreign currency translation adjustment |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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( |
) |
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( |
) |
Contribution from noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Purchase of noncontrolling interest |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
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( |
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( |
) |
Net unrealized gain on derivative contract |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares issued under the incentive award plan |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Conversion of Class B Common Stock into Class A Common Stock |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance at March 31, 2021 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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Balance at December 31, 2019 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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$ |
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Net earnings |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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Foreign currency translation adjustment |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
) |
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( |
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( |
) |
Distributions to noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Noncontrolling interest of acquired businesses |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares issued under the incentive award plan |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares redeemed for employee tax withholdings |
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( |
) |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
) |
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— |
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( |
) |
Balance at March 31, 2020 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
6
SKECHERS U.S.A., INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Three Months Ended March 31, |
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(in thousands) |
|
2021 |
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2020 |
|
||
Cash flows from operating activities |
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Net earnings |
|
$ |
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$ |
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Adjustments to reconcile net earnings to net cash from operating activities |
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Depreciation and amortization |
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Provision for bad debts and returns |
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Stock compensation |
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Deferred income taxes |
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( |
) |
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( |
) |
Net settlement gain |
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— |
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( |
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Net foreign currency adjustments |
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Changes in operating assets and liabilities |
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Receivables |
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( |
) |
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( |
) |
Inventory |
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( |
) |
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Other assets |
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Accounts payable |
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( |
) |
Other liabilities |
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( |
) |
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( |
) |
Net cash used in operating activities |
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( |
) |
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( |
) |
Cash flows from investing activities |
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Capital expenditures |
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( |
) |
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( |
) |
Purchases of investments |
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( |
) |
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( |
) |
Proceeds from sales and maturities of investments |
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Net cash used in investing activities |
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( |
) |
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( |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Repayments on long-term borrowings |
|
|
( |
) |
|
|
( |
) |
Proceeds from long-term borrowings |
|
|
|
|
|
|
|
|
Proceeds from (repayments on) short-term borrowings, net |
|
|
( |
) |
|
|
|
|
Payments for employee taxes related to stock compensation |
|
|
— |
|
|
|
( |
) |
Purchase of noncontrolling interest |
|
|
( |
) |
|
|
— |
|
Contributions from noncontrolling interests |
|
|
|
|
|
|
— |
|
Distributions to noncontrolling interests |
|
|
— |
|
|
|
( |
) |
Net cash provided by financing activities |
|
|