KSwiss Inc. Reports Operating Results (10-K)
Kswiss Inc. has a market cap of $394.6 million; its shares were traded at around $11.19 with and P/S ratio of 1.6. Hedge Fund Gurus that owns KSWS: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns KSWS: Third Avenue Management, Third Avenue Management, Diamond Hill Capital of Diamond Hill Capital Management Inc, Chuck Royce of Royce& Associates.
Highlight of Business Operations: In July 2008, we purchased a 57% equity interest in Palladium for a total purchase price of 5,350,000, or approximately $8,448,000 (including a loan of 3,650,000, or approximately $5,764,000). In June 2009, we purchased the remaining 43% equity interest in Palladium for 5,000,000 (or $7,034,000) plus a variable future purchase price, i.e. the Contingent Purchase Price (CPP), the terms of which were amended in May 2010. In May 2010, we revised the terms of the remaining future purchase price to be equal to the net present value of 3,000,000 plus up to 500,000 based on an amount calculated in accordance with a formula driven by Palladiums EBITDA for the twelve months ended December 31, 2012. The 500,000 CPP will be determined each quarter based on the current quarters projection of Palladiums EBITDA for the twelve months ended December 31 of the current year. Excluding the initial recognition of the CPP, any change in CPP is based on the
In July 2010, we entered into a Membership Interest Purchase Agreement with Form Athletics, LLC (Form Athletics) and its Members to purchase Form Athletics for $1,600,000 in cash and additional cash consideration to certain Members of Form Athletics in an amount equal to Form Athletics EBITDA for the twelve months ended December 31, 2012 (Form CPP). The fair value of the Form CPP will be determined each quarter based on the net present value of the current quarters projection of Form Athletics EBITDA for the twelve months ended December 31, 2012. Any subsequent changes to the Form CPP will be recognized as interest income or interest expense during the applicable quarter. The fair value of the Form CPP at December 31, 2010 was $2,110,000. The acquisition of Form Athletics was recorded as a 100% purchase acquisition and the Form CPP liability was recognized and accordingly, the results of operations of the acquired business are included in the Consolidated Financial Statements from the date of acquisition.
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