SKECHERS USA, Inc. (NYSE:SKX), today announced that KPMG, LLP resigned
yesterday, April 8, 2013, as independent auditor of Skechers due to
misconduct by KPMG’s lead Audit Engagement Partner on the Skechers
account. In connection with its resignation, KPMG has publicly stated
that it has “no reason to believe that the financial statements of
Skechers have been materially misstated.”
David Weinberg, Skechers Chief Operating Officer and Chief Financial
Officer, stated, “KPMG has advised us that that they have no reason to
believe that there were any misstatements in our financial statements,
and we firmly believe that there has been no misstatements of our
results or financial condition. Nonetheless, it is an unfortunate
development at a time when we are preparing to release earnings for the
First Quarter of 2013, a quarter which, like the Fourth Quarter of 2012,
we believe will show significant growth and the continuing strength and
viability of our business. We are working diligently to replace KPMG as
quickly and efficiently as possible as we look forward to releasing
positive results for the first quarter of 2013 later this month.”
Upon resignation, Skechers was informed by KPMG that KPMG’s lead Audit
Engagement Partner on the Skechers account is under federal
investigation for providing non-public information of his clients to a
third party in exchange for money. The third party then used that
information to trade stocks of several West Coast companies. KPMG told
Skechers that the KPMG audit partner under investigation is cooperating
with the authorities and admitted that Skechers was one of its clients
whose non-public information was provided to a third party in exchange
for money. KPMG further advised Skechers that, as a result of these
developments, KPMG has determined that its independence has been
impaired and it must resign as Skechers auditors immediately and
withdraw its auditors’ reports for the fiscal years 2011 and 2012.
KPMG advised the Company it resigned as Skechers’ independent accountant
solely due to the impairment of KPMG's independence resulting from its
now former partner's alleged unlawful activities and not for any reason
related to Skechers’ financial statements, its accounting practices, the
integrity of Skechers' management or for any other reason.
None of KPMG's audit reports on Skechers’ financial statements for the
fiscal years ended December 31, 2011 and 2012 or KPMG's audit reports on
the effectiveness of internal control over financial reporting as of
December 31, 2011 and 2012 contained an adverse opinion or a disclaimer
of opinion, nor was any such report qualified or modified as to
uncertainty, audit scope or accounting principles. In addition, at no
point during the two fiscal years ended December 31, 2012 and the
subsequent interim period through April 8, 2013 were there any (1)
disagreements with KPMG on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or
procedures, which disagreement(s), if not resolved to the satisfaction
of KPMG, would have caused it to make reference to the subject matter of
the disagreement(s) in connection with its reports, or (2) "reportable
events" as such term is defined in Item 304(a)(1)(v) of Regulation S-K.
Skechers has immediately started to search for replacement auditors in
an effort to have them in place as soon as possible. Skechers is unable
to provide an estimate of when the re-audit of fiscal years 2011 and
2012 will be completed.
ABOUT SKECHERS USA, INC.
SKECHERS USA, Inc. (SKX),
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, and over 100 countries and territories through the
Company’s global network of distributors and subsidiaries in Brazil,
Canada, Chile, Japan, and across Europe, as well as through joint
ventures in Asia. For more information, please visit www.skechers.com,
and follow us on Facebook (www.facebook.com/SKECHERS)
and Twitter (twitter.com/SKECHERSUSA).
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
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 performance.