K SWISS INC

Consolidated Statements of Cash Flows (Dollar amounts in thousands) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities:
Net loss from continuing operations	$ (34,779,000)	$ (64,522,000)	$ (66,864,000)
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities:
Depreciation/amortization (Note N)	3,670,000	3,611,000	3,657,000
Impairment of goodwill (Note E)	0	2,986,000	0
Change in contingent purchase price (Note O)	(1,095,000)	50,000	3,689,000
Net loss on disposal of property, plant and equipment	66,000	33,000	7,000
Deferred income taxes	650,000	1,000,000	8,469,000
Stock-based compensation	1,031,000	851,000	1,738,000
Decrease/(Increase) in accounts receivable	5,713,000	(7,417,000)	3,555,000
Decrease/(Increase) in inventories	21,673,000	(24,083,000)	(17,661,000)
Decrease in income taxes receivable	770,000	0	13,052,000
Decrease/(Increase) in prepaid expenses and other assets	1,258,000	7,981,000	(2,442,000)
Increase/(Decrease) in accounts payable and accrued liabilities	471,000	(6,307,000)	7,783,000
Net cash used in operating activities from continuing operations	(572,000)	(85,817,000)	(45,017,000)
Net cash used in discontinued operations	0	(3,848,000)	(1,718,000)
Net cash used in operating activities	(572,000)	(89,665,000)	(46,735,000)
Cash flows from investing activities:
Change in restricted cash and cash equivalents	13,249,000	(5,614,000)	14,435,000
Purchase of investments available for sale and restricted investments available for sale	0	(6,310,000)	(87,961,000)
Proceeds from the maturity or sale of investments available for sale and restricted investments available for sale	11,028,000	74,706,000	37,073,000
Purchase of intangible assets (Note E)	(35,000)	0	0
Purchase of Form Athletics (Note P)	0	0	(1,600,000)
Purchase of property, plant and equipment (Note N)	(1,528,000)	(2,704,000)	(2,377,000)
Proceeds from disposal of property, plant and equipment	13,000	41,000	29,000
Net cash provided by/(used in) investing activities	22,727,000	60,119,000	(40,401,000)
Cash flows from financing activities:
Borrowings under bank lines of credit and capital leases	19,763,000	31,507,000	42,875,000
Repayments on bank lines of credit, long-term debt and capital leases	(28,422,000)	(22,452,000)	(46,111,000)
Proceeds from stock options exercised	5,000	1,062,000	1,247,000
Net cash (used in)/provided by financing activities	(8,654,000)	10,117,000	(1,989,000)
Effect of exchange rate changes on cash	509,000	(1,034,000)	(1,374,000)
Net increase/(decrease) in cash and cash equivalents	14,010,000	(20,463,000)	(90,499,000)
Cash and cash equivalents at beginning of period	28,701,000	49,164,000	139,663,000
Cash and cash equivalents at end of period	42,711,000	28,701,000	49,164,000
On July 23, 2010, the Company purchased the capital stock of Form Athletics. In connection with the acquisition, the assets acquired and liabilities assumed were as follows (Note P):
Fair value of assets acquired			39,000
Fair value of liabilities assumed			(18,000)
Form Athletics contingent purchase price			(2,110,000)
Excess fair value over purchase price			3,689,000
Cash paid on acquisition			1,600,000
Cash paid during the period for:
Interest	147,000	269,000	131,000
Income taxes	$ 1,020,000	$ 656,000	$ 1,093,000