##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 001-14429
 SKECHERS U.S.A., INC.
 (Exact name of registrant as specified in its charter)
 Delaware
(State or Other Jurisdiction of Incorporation or Organization)
    
    95-4376145
(I.R.S. Employer Identification No.)228 Manhattan Beach Blvd.Manhattan Beach, California
    
    90266(Address of Principal Executive Office)
    
    (Zip Code)
 (310) 318-3100
(Registrants Telephone Number, Including Area Code)
 þ o
  o þ o
 o þ




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##### 



SKECHERS U.S.A., INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
  
 PART I  FINANCIAL INFORMATIONItem 1.
    
    Condensed Consolidated Financial Statements (Unaudited):Condensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Earnings and Comprehensive Income
    
    
    4Condensed Consolidated Statements of Cash Flows
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4.
    
    Controls and Procedures
    
    
    25PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    26Item 1A.
    
    Risk Factors
    
    
    26Item 6.
    
    Exhibits
    
    
    27Signatures
    
    
    28EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 KECHERS U.S.A., INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 (In thousands)
 September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    121,158
    
    
    $
    160,485Short-term investments
    
    
    103,075
    
    
    
    60,000Trade accounts receivable, less allowances of $12,486 in 2007 and $10,558 in 2006
    
    
    206,312
    
    
    
    177,740Other receivables
    
    
    9,063
    
    
    
    8,035Total receivables
    
    
    215,375
    
    
    
    185,775Inventories
    
    
    186,819
    
    
    
    200,877Prepaid expenses and other current assets
    
    
    18,432
    
    
    
    15,321Deferred tax assets
    
    
    9,490
    
    
    
    9,490Total current assets
    
    
    654,349
    
    
    
    631,948Property and equipment, at cost, less accumulated depreciation and amortization
    
    
    96,916
    
    
    
    87,645Intangible assets, less accumulated amortization
    
    
    193
    
    
    
    633Deferred tax assets
    
    
    11,984
    
    
    
    11,984Other assets, at cost
    
    
    6,526
    
    
    
    4,843TOTAL ASSETS
    
    $
    769,968
    
    
    $
    737,053LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Current installments of long-term borrowings
    
    
    423
    
    
    
    576Accounts payable
    
    
    126,902
    
    
    
    161,150Accrued expenses
    
    
    14,580
    
    
    
    19,435Total current liabilities
    
    
    141,905
    
    
    
    181,1614.50% convertible subordinated notes
    
    
    
    
    
    
    89,969Long-term borrowings, excluding current installments
    
    
    16,567
    
    
    
    16,836Total liabilities
    
    
    158,472
    
    
    
    287,966Commitments and contingenciesStockholders equity:Preferred
Stock, $.001 par value; 10,000 authorized; none issued and outstanding
    
    
    
    
    
    
    Class A
Common Stock, $.001 par value; 100,000 shares authorized; 32,875 and
28,103shares issued and outstanding at September 30, 2007 and December 31, 2006,
respectively
    
    
    33
    
    
    
    28Class B
Common Stock, $.001 par value; 60,000 shares authorized; 12,852 and
13,768shares issued and outstanding at September 30, 2007 and December 31, 2006,
respectively
    
    
    13
    
    
    
    14Additional paid-in capital
    
    
    256,215
    
    
    
    156,374Accumulated other comprehensive income
    
    
    13,559
    
    
    
    11,200Retained earnings
    
    
    341,676
    
    
    
    281,471Total stockholders equity
    
    
    611,496
    
    
    
    449,087TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    769,968
    
    
    $
    737,053
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SKECHERS U.S.A., INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
 (Unaudited)
 (In thousands, except per share data)
 Three-Months Ended September 30,
    
    
    Nine-Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    395,033
    
    
    $
    331,126
    
    
    $
    1,092,140
    
    
    $
    900,874Cost of sales
    
    
    223,363
    
    
    
    184,823
    
    
    
    619,403
    
    
    
    505,461Gross profit
    
    
    171,670
    
    
    
    146,303
    
    
    
    472,737
    
    
    
    395,413Royalty income
    
    
    998
    
    
    
    1,359
    
    
    
    3,392
    
    
    
    2,912172,668
    
    
    
    147,662
    
    
    
    476,129
    
    
    
    398,325Operating expenses:Selling
    
    
    37,657
    
    
    
    35,703
    
    
    
    105,448
    
    
    
    86,951General and administrative
    
    
    98,431
    
    
    
    77,476
    
    
    
    274,888
    
    
    
    222,212136,088
    
    
    
    113,179
    
    
    
    380,336
    
    
    
    309,163Earnings from operations
    
    
    36,580
    
    
    
    34,483
    
    
    
    95,793
    
    
    
    89,162Other income (expense):Interest income
    
    
    2,547
    
    
    
    2,109
    
    
    
    7,432
    
    
    
    6,179Interest expense
    
    
    (837
    )
    
    
    (2,361
    )
    
    
    (3,589
    )
    
    
    (6,975
    )Other, net
    
    
    298
    
    
    
    69
    
    
    
    129
    
    
    
    3282,008
    
    
    
    (183
    )
    
    
    3,972
    
    
    
    (468
    )Earnings before income taxes
    
    
    38,588
    
    
    
    34,300
    
    
    
    99,765
    
    
    
    88,694Income tax expense
    
    
    13,844
    
    
    
    12,101
    
    
    
    36,173
    
    
    
    32,281Net earnings
    
    $
    24,744
    
    
    $
    22,199
    
    
    $
    63,592
    
    
    $
    56,413Net earnings per share:Basic
    
    $
    0.54
    
    
    $
    0.54
    
    
    $
    1.41
    
    
    $
    1.38Diluted
    
    $
    0.53
    
    
    $
    0.49
    
    
    $
    1.37
    
    
    $
    1.27Weighted average shares:Basic
    
    
    45,721
    
    
    
    41,316
    
    
    
    45,095
    
    
    
    40,897Diluted
    
    
    46,654
    
    
    
    46,199
    
    
    
    46,769
    
    
    
    45,936Comprehensive income:Net earnings
    
    $
    24,744
    
    
    $
    22,199
    
    
    $
    63,592
    
    
    $
    56,413Foreign currency translation adjustment, net of tax
    
    
    3,261
    
    
    
    (26
    )
    
    
    2,359
    
    
    
    2,904Total comprehensive income
    
    $
    28,005
    
    
    $
    22,173
    
    
    $
    65,951
    
    
    $
    59,317
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SKECHERS U.S.A., INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (In thousands)
 Nine-Months Ended September 30,2007
    
    
    2006Cash flows from operating activities:Net earnings
    
    $
    63,592
    
    
    $
    56,413Adjustments to reconcile net earnings to net cash provided by operating activities:Depreciation and amortization of property and equipment
    
    
    12,499
    
    
    
    12,280Amortization of deferred financing costs
    
    
    95
    
    
    
    574Amortization of intangible assets
    
    
    322
    
    
    
    378Provision for bad debts and returns
    
    
    3,197
    
    
    
    5,261Tax benefits from stock-based compensation
    
    
    3,130
    
    
    
    3,054Non-cash stock compensation
    
    
    874
    
    
    
    1,608Loss on disposal of equipment
    
    
    248
    
    
    
    71(Increase) decrease in assets:Receivables
    
    
    (30,140
    )
    
    
    (41,075
    )Inventories
    
    
    14,313
    
    
    
    (40,845
    )Prepaid expenses and other current assets
    
    
    (3,020
    )
    
    
    (10,701
    )Other assets
    
    
    (1,505
    )
    
    
    473Increase (decrease) in liabilities:Accounts payable
    
    
    (34,735
    )
    
    
    30,972Accrued expenses
    
    
    (8,280
    )
    
    
    (8,433
    )Net cash provided by operating activities
    
    
    20,590
    
    
    
    10,030Cash flows used in investing activities:Capital expenditures
    
    
    (26,199
    )
    
    
    (19,129
    )Purchases of short-term investments
    
    
    (160,050
    )
    
    
    (48,074
    )Maturities of short-term investments
    
    
    116,975
    
    
    
    Net cash used in investing activities
    
    
    (69,274
    )
    
    
    (67,203
    )Cash flows from financing activities:Net proceeds from the issuances of stock through employee stock purchase plan and
the exercise of stock options
    
    
    6,774
    
    
    
    13,668Payments on long-term debt
    
    
    (425
    )
    
    
    (809
    )Excess tax benefits from stock-based compensation
    
    
    320
    
    
    
    3,054Net cash provided by financing activities
    
    
    6,669
    
    
    
    15,913Net decrease in cash and cash equivalents
    
    
    (42,015
    )
    
    
    (41,260
    )Effect of exchange rates on cash and cash equivalents
    
    
    2,688
    
    
    
    1,051Cash and cash equivalents at beginning of the period
    
    
    160,485
    
    
    
    197,007Cash and cash equivalents at end of the period
    
    $
    121,158
    
    
    $
    156,798Supplemental disclosures of cash flow information:Interest paid
    
    $
    3,675
    
    
    $
    5,554Income taxes paid
    
    
    39,701
    
    
    
    41,428
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SKECHERS U.S.A., INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (1) GENERAL
 Basis of Presentation
   Use of Estimates
  (2) SHORT-TERM INVESTMENTS
  (3) REVENUE RECOGNITION
  i.e.
 6




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(4) OTHER COMPREHENSIVE INCOME
  (5) STOCK COMPENSATION
   WEIGHTED
    
    WEIGHTED AVERAGE
    
    AGGREGATEAVERAGE
    
    REMAINING
    
    INTRINSICSHARES
    
    EXERCISE PRICE
    
    CONTRACTUAL TERM
    
    VALUEOutstanding at December 31, 2006
    
    
    2,485,585
    
    
    $
    11.74Granted
    
    
    
    
    
    
    Exercised
    
    
    (430,147
    )
    
    
    12.72Forfeited
    
    
    (21,713
    )
    
    
    16.95Outstanding at September 30, 2007
    
    
    2,033,725
    
    
    
    11.48
    
    
    4.1 years
    
    $
    21,886,003Exercisable at September 30, 2007
    
    
    2,019,725
    
    
    
    11.47
    
    
    4.1 years
    
    $
    21,759,528
  WEIGHTED AVERAGEGRANT-DATE FAIRSHARES
    
    VALUENonvested at December 31, 2006
    
    
    17,333
    
    
    $
    16.38Granted
    
    
    2,500
    
    
    
    29.26Vested
    
    
    (4,666
    )
    
    
    17.00Nonvested at September 30, 2007
    
    
    15,167
    
    
    
    18.32
 (6) EARNINGS PER SHARE
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Three-Months Ended
    
    Nine-Months EndedSeptember 30,
    
    September 30,Basic earnings per share
    
    2007
    
    2006
    
    2007
    
    2006Net earnings
    
    $
    24,744
    
    
    $
    22,199
    
    
    $
    63,592
    
    
    $
    56,413Weighted average common shares outstanding
    
    
    45,721
    
    
    
    41,316
    
    
    
    45,095
    
    
    
    40,897Basic earnings per share
    
    $
    0.54
    
    
    $
    0.54
    
    
    $
    1.41
    
    
    $
    1.38
  Three-Months Ended
    
    
    Nine-Months EndedSeptember 30,
    
    
    September 30,Diluted earnings per share
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Net earnings
    
    $
    24,744
    
    
    $
    22,199
    
    
    $
    63,592
    
    
    $
    56,413After tax effect of interest expense on 4.50%
convertible subordinated notes
    
    
    
    
    
    
    655
    
    
    
    359
    
    
    
    1,932Earnings for purposes of computing diluted
earnings per share
    
    $
    24,744
    
    
    $
    22,854
    
    
    $
    63,951
    
    
    $
    58,345Weighted average common shares outstanding
    
    
    45,721
    
    
    
    41,316
    
    
    
    45,095
    
    
    
    40,897Dilutive effect of stock options
    
    
    933
    
    
    
    1,417
    
    
    
    1,193
    
    
    
    1,573Weighted average shares to be issued assuming
conversion of 4.50% convertible subordinated
notes
    
    
    
    
    
    
    3,466
    
    
    
    481
    
    
    
    3,466Weighted average common shares outstanding
    
    
    46,654
    
    
    
    46,199
    
    
    
    46,769
    
    
    
    45,936Diluted earnings per share
    
    $
    0.53
    
    
    $
    0.49
    
    
    $
    1.37
    
    
    $
    1.27
  (7) INCOME TAXES
  8




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Accounting for Uncertainty in Income Taxes  an interpretation of
FASB Statement 109
    (8) LINE OF CREDIT
  (9) LITIGATION
  9




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(10) STOCKHOLDERS EQUITY
  (11) SEGMENT AND GEOGRAPHIC REPORTING INFORMATION
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net SalesDomestic wholesale
    
    $
    237,531
    
    
    $
    208,240
    
    
    $
    670,450
    
    
    $
    582,536International wholesale
    
    
    75,007
    
    
    
    55,274
    
    
    
    206,338
    
    
    
    140,500Retail
    
    
    78,269
    
    
    
    64,856
    
    
    
    203,665
    
    
    
    169,804E-commerce
    
    
    4,226
    
    
    
    2,756
    
    
    
    11,687
    
    
    
    8,034Total
    
    $
    395,033
    
    
    $
    331,126
    
    
    $
    1,092,140
    
    
    $
    900,874
 Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Gross ProfitDomestic wholesale
    
    $
    91,757
    
    
    $
    83,276
    
    
    $
    262,182
    
    
    $
    231,120International wholesale
    
    
    29,820
    
    
    
    20,466
    
    
    
    78,713
    
    
    
    52,360Retail
    
    
    48,081
    
    
    
    41,212
    
    
    
    125,916
    
    
    
    107,948E-commerce
    
    
    2,012
    
    
    
    1,349
    
    
    
    5,926
    
    
    
    3,985Total
    
    $
    171,670
    
    
    $
    146,303
    
    
    $
    472,737
    
    
    $
    395,413
 September 30, 2007
    
    
    December 31, 2006Identifiable AssetsDomestic wholesale
    
    $
    589,642
    
    
    $
    563,956International wholesale
    
    
    107,073
    
    
    
    108,210Retail
    
    
    73,072
    
    
    
    64,634E-commerce
    
    
    181
    
    
    
    253Total
    
    $
    769,968
    
    
    $
    737,053
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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Additions to Property and EquipmentDomestic wholesale
    
    $
    3,153
    
    
    $
    5,591
    
    
    $
    10,865
    
    
    $
    12,296International wholesale
    
    
    435
    
    
    
    198
    
    
    
    1,168
    
    
    
    628Retail
    
    
    5,309
    
    
    
    3,348
    
    
    
    14,166
    
    
    
    6,205Total
    
    $
    8,897
    
    
    $
    9,137
    
    
    $
    26,199
    
    
    $
    19,129
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net Sales (1)United States
    
    $
    313,312
    
    
    $
    270,241
    
    
    $
    868,478
    
    
    $
    746,350Canada
    
    
    11,877
    
    
    
    7,895
    
    
    
    30,662
    
    
    
    19,972Other International (2)
    
    
    69,844
    
    
    
    52,990
    
    
    
    193,000
    
    
    
    134,552Total
    
    $
    395,033
    
    
    $
    331,126
    
    
    $
    1,092,140
    
    
    $
    900,874
 September 30, 2007
    
    
    December 31, 2006Long-Lived AssetsUnited States
    
    $
    94,085
    
    
    $
    81,161Canada
    
    
    443
    
    
    
    764Other International (2)
    
    
    2,388
    
    
    
    5,720Total
    
    $
    96,916
    
    
    $
    87,645
 
 (1)
    
    The Company has subsidiaries in Canada, United Kingdom, Germany, France, Spain, Italy,
Netherlands, Brazil, Thailand and Malaysia that generate net sales within those respective
countries and in some cases the neighboring regions. The Company also has a subsidiary in
Switzerland that generates net sales to that region in addition to net sales to our
distributors located in numerous non-European countries. Net sales are attributable to
geographic regions based on the location of the Company subsidiary.(2)
    
    Other international consists of Switzerland, United Kingdom, Germany, France, Spain, Italy,
Netherlands, Brazil, Thailand and Malaysia. (12) BUSINESS AND CREDIT CONCENTRATIONS
   12




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     14




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Three-Months Ended September 30,2007
    
    2006Percentage of revenues by segmentDomestic wholesale
    
    
    60.1
    %
    
    
    62.9
    %International wholesale
    
    
    19.0
    %
    
    
    16.7
    %Retail
    
    
    19.8
    %
    
    
    19.6
    %E-commerce
    
    
    1.1
    %
    
    
    0.8
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
     Three-Months Ended September 30,
    
    
    Nine-Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net sales
    
    $
    395,033
    
    
    
    100.0
    %
    
    $
    331,126
    
    
    
    100.0
    %
    
    $
    1,092,140
    
    
    
    100.0
    %
    
    $
    900,874
    
    
    
    100.0
    %Cost of sales
    
    
    223,363
    
    
    
    56.5
    
    
    
    184,823
    
    
    
    55.8
    
    
    
    619,403
    
    
    
    56.7
    
    
    
    505,461
    
    
    
    56.1Gross profit
    
    
    171,670
    
    
    
    43.5
    
    
    
    146,303
    
    
    
    44.2
    
    
    
    472,737
    
    
    
    43.3
    
    
    
    395,413
    
    
    
    43.9Royalty income
    
    
    998
    
    
    
    0.2
    
    
    
    1,359
    
    
    
    0.4
    
    
    
    3,392
    
    
    
    0.3
    
    
    
    2,912
    
    
    
    0.3172,668
    
    
    
    43.7
    
    
    
    147,662
    
    
    
    44.6
    
    
    
    476,129
    
    
    
    43.6
    
    
    
    398,325
    
    
    
    44.2Operating expenses:Selling
    
    
    37,657
    
    
    
    9.5
    
    
    
    35,703
    
    
    
    10.8
    
    
    
    105,448
    
    
    
    9.7
    
    
    
    86,951
    
    
    
    9.7General and administrative
    
    
    98,431
    
    
    
    24.9
    
    
    
    77,476
    
    
    
    23.4
    
    
    
    274,888
    
    
    
    25.1
    
    
    
    222,212
    
    
    
    24.7136,088
    
    
    
    34.4
    
    
    
    113,179
    
    
    
    34.2
    
    
    
    380,336
    
    
    
    34.8
    
    
    
    309,163
    
    
    
    34.4Earnings from operations
    
    
    36,580
    
    
    
    9.3
    
    
    
    34,483
    
    
    
    10.4
    
    
    
    95,793
    
    
    
    8.8
    
    
    
    89,162
    
    
    
    9.8Interest income, net
    
    
    1,710
    
    
    
    0.4
    
    
    
    (252
    )
    
    
    (0.1
    )
    
    
    3,843
    
    
    
    0.3
    
    
    
    (796
    )
    
    
    (0.1
    )Other, net
    
    
    298
    
    
    
    0.1
    
    
    
    69
    
    
    
    
    
    
    
    129
    
    
    
    
    
    
    
    328
    
    
    
    0.1Earnings before income taxes
    
    
    38,588
    
    
    
    9.8
    
    
    
    34,300
    
    
    
    10.3
    
    
    
    99,765
    
    
    
    9.1
    
    
    
    88,694
    
    
    
    9.8Income taxes
    
    
    13,844
    
    
    
    3.5
    
    
    
    12,101
    
    
    
    3.6
    
    
    
    36,173
    
    
    
    3.3
    
    
    
    32,281
    
    
    
    3.5Net earnings
    
    $
    24,744
    
    
    
    6.3
    %
    
    $
    22,199
    
    
    
    6.7
    %
    
    $
    63,592
    
    
    
    5.8
    %
    
    $
    56,413
    
    
    
    6.3
    %
 15




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Net sales
 i.e.
    16




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Gross profit
     Licensing
  Selling expenses
  17




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##### Table of Contents



General and administrative expenses
   Interest income
  Interest expense
  Income taxes
  18




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##### Table of Contents



Net sales
     Gross profit
  19




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##### Table of Contents



Licensing
  Selling expenses
  General and administrative expenses
  20




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##### Table of Contents



Interest income
  Interest expense
  Income taxes
      21




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22




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Accounting for Uncertainty in Income
Taxes Accounting for Income Taxes
  The Fair Value Option for Financial Assets and Financial Liabilities, Including
an amendment of FASB Statement No. 115
 Fair Value Measurements
   23




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   Interest rate fluctuations
 Foreign exchange rate fluctuations
 24




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ITEM 4. CONTROLS AND PROCEDURES
        25




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PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  We depend upon a relatively small group of customers for a large portion of our sales.
  We rely on independent contract manufacturers and, as a result, are exposed to potential
disruptions in product supply.
   26




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One principal stockholder is able to control substantially all matters requiring a vote of our
stockholders and his interests may differ from the interests of our other stockholders.
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description10.1
    
    Lease Agreement dated September 25, 2007 between the Registrant and HF Logistics I,
LLC, regarding distribution facility in Moreno Valley, California (incorporated by reference to exhibit number 10.1
of the Registrants Form 8-K filed with the Securities and Exchange Commission on September 27, 2007).31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer and the Chief Financial
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. ***
 
 ***
    
    In accordance with Item 601(b)(32)(ii) of Regulation S-K, this exhibit shall not be deemed
filed for the purposes of Section 18 of the Exchange Act or otherwise subject to the
liability of that section, nor shall it be deemed incorporated by reference in any filing
under the Securities Act of 1933, as amended, or the Exchange Act. 27




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SIGNATURES
  Date: November 9, 2007
    SKECHERS U.S.A., INC.By:
    /S/ FREDERICK H. SCHNEIDERFrederick H. SchneiderChief Financial Officer
(Principal Financial and Accounting Officer) 28