Skechers USA (NYSE:SKX) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.
Jeff Van Sinderen – B. Riley & Co.: Good afternoon and let me say congratulations on the revenue growth in Q1. David, maybe you can just talk a little bit more about the shift or about your feeling that orders may fall more in Q3 than Q2. Is that a function at all of retailers telling you that they think back-to-school is going to be later this year, are they shifting delivery dates for that or maybe you can just give us a little more color on that?
David Weinberg – EVP, COO, and CFO: Well, it’s two-fold. That has to deal with both our distributors and domestic wholesale obviously. We did move some business into Q1 both domestic, I believe because of Easter and/or distributor base. If you remember back, we had significant increases in inventory which people speculated about at December 31, because everybody wanted to take them in earlier and we had brought in significant inventory saying we’re getting ready for the season, which was going to start earlier this year than in prior years which turned out to be true. So that’s part of the movement from Q2 into Q1. Now for the back half, our distributors primarily are not as strong in Q2 and haven’t taken so much inventory into Q1 and distributing it through their base especially with places like Korea and Venezuela and Columbia having more difficulty and then some in Eastern Europe. We think that digest through and continue to grow for a new season in third quarter, which is primarily their strongest season. I think what happened domestically is while we fully expect to continue to grow, it won’t be at the same level for domestic wholesale as it was at the end of last year and the first quarter. I think what happened was that spring started of slow and now people are chasing it and we can’t get deliveries as early enough as June as they’d like. So, what we’re gearing up to is, we’re not sure how that June, July shift will work. We think most of the – a lot of our customers came late and we’ll get more product in July. Most of them seemed fully willing to accept it in June, if it becomes available, which becomes a production issue. So, there is a possibility for certainly picking it up, but more likely given our inventory control and as hard as we are over a significant amount of our products to catch up completely before July, maybe difficult. So, with the conservative attack would be to plan on moving it into July which should be fine and show that – any of those. If we count June, July together, we will still show significant growth. Unfortunately for us it does slip over a quarter-end. So sometimes you have to take June as it is. So, between those we’ll still show some growth in Q2, but with that, we’ve had significant growth in Q4 and Q1 and anticipate significant growth in Q3. So, that’s just the timing of the calendar and the way our international business came in this year.
Jeff Van Sinderen – B. Riley & Co.: But, if we’re talking about domestic, it sounds like you still have pretty strong order trends in domestic business, but some of it is just sort of a push out a little bit of a production fitting delivery schedule?
David Weinberg – EVP, COO, and CFO: Yeah. It’s very true. I think because of the macro situation, a lot of customers didn’t believe how hot we really were and our ordering patterns came in later as well which is why the move into June. While we had up orders for the first quarter, we had significant growth in April and May will turn out to be – I’m sure the largest May we’ve had outside of 2010 in the history of the Company, because people are just running that late overall not realizing how hot we were and what may otherwise be a very not so hot marketplace at retail for footwear. Anyway, so I think that just the timing, perception and big customers of ours that domestically have, well trying to build the supplies early for Easter and then pushing back closer to need and not realizing how short we are going to be as this stuff came into the market place.
Jeff Van Sinderen – B. Riley & Co.: Then you also mentioned I think the sandal business has been tough for just about everybody due to the weather, I’m just wondering if there are other pressure points in gross margin. I know there were some shifts going on and obviously you had the 50 basis point from the toning product. But is there anything else to read into they are either associated with sandals or puts and takes in terms of product margin in the quarter?
David Weinberg – EVP, COO, and CFO: No, I don’t think so. I think if you put the 50 basis points back we are pretty much where we had planned to be we would have been at 43.25 give or take and for as big distributor pieces we had this time and we’re holding up well. The stores continue to increase their margins little bit at a time while they continue to comp-up so we get a double benefit from them the stores are really the best indicator and they seem to be – we mentioned they accelerated in April from first quarter which was double digits and it looks like now they are even increasing on a comp-store basis on a percentage basis in May, going into Memorial Day. So if Memorial Day has the same increases, percentage wise as we’ve seem to grow from April and May, than product maybe even shorter as we get into Q3.
Jeff Van Sinderen – B. Riley & Co.: So let me ask you this I know there has been at least in my channel checks it seems like your sneaker product has been pretty hot. Is there anything to talk about there in terms of maybe how much of your business that is or we should be thinking about in terms of concentration of that business for back to school for fall…
David Weinberg – EVP, COO, and CFO: It’s not a concentration business, and obviously it will do better as weather gets better, but it’s a nice addition, but it’s not overwhelming, it’s not like our Performance product of GOwalk or on that order of magnitude yet around the world although it continues to grow. So it’s too early to worry about that particular product as a concentration point.
Scott Krasik – BB&T Capital Markets: So just to drill down on the sales shift a little further. So what does your domestic backlog, what’s it running at right now, what’s your international backlog running at right now?
David Weinberg – EVP, COO, and CFO: Our international backlog is relatively flat. Our domestic backlog is obviously up some. It was slightly less than double-digits going into this quarter from March, but it’s significantly increased since then. We had a good April and we’ll have an even bigger May. I don’t think it’s a question of backlog to where they stand. The backlogs are significant. I think it’s a timing issue between first, second and third quarter.
Scott Krasik – BB&T Capital Markets: I guess, I’m just trying to get to figure out, I mean, you’ve give us some parameters around Q2, so I’m just trying to figure out how meaningful the sales growth been in the wholesale channel could be in Q3?
David Weinberg – EVP, COO, and CFO: It will be certainly less than it was in Q3. Chris you going to say Q2, so I’ll do it my way. Q2 will certainly be less than Q3, Q4 and Q1. Q3 I think could be as strong as Q4 and Q1 depending on how well Memorial Day goes. We’ve had a number of retailers, call us and tell us how short they were going into Mother’s Day and if it continues to come out of Mother’s Day stronger and gets stronger through Memorial Day then a lot of good things can happen for us between now and the end of back-to-school, certainly for the balance of 2013…
Scott Krasik – BB&T Capital Markets: So, you are looking for mega growth here in Q3 again?
David Weinberg – EVP, COO, and CFO: Aren’t I always?
Scott Krasik – BB&T Capital Markets: Then just on the gross margin, if you add back the $2.5 million credit to wholesale – to domestic wholesale, I think your gross margin would have been about 36%. Traditionally, Q3 is actually a little bit higher than Q1 in domestic wholesale gross margin. Is there any reason why it shouldn’t be this?
David Weinberg – EVP, COO, and CFO: It usually is because when the product is more substantial, shoes may come with slightly higher margins. I think that would depend on the breakdown between performance and kid shoes et cetera around the world. But, yeah, I would anticipate some uptick for Q3.
Scott Krasik – BB&T Capital Markets: Then anything – I mean, from last year I’m sure you’re off price sales or close-out sales will be higher because you were so clean last year for the back half. But, I mean, is it going to be abnormally high or the inventory is still clean, lean enough that you are chasing?
David Weinberg – EVP, COO, and CFO: The inventory is still really clean. I mean if you think about it, I mean off stores like anybody else and we’ve ensured product. We were only $39 million year-over-year and we were up $100 million in the top-line and are building for some big increases for Q3. So, unless there is a shift in some product or we have some rough, we don’t anticipate significant leftover inventory. I mean there’s always some, but it shouldn’t be anything major, not yet anyway.
Scott Krasik – BB&T Capital Markets: Justly lastly, I mean, it looks like you have a higher distribution cost related to the sales, so that was variable. Did you have $5 million of other higher distribution cost that weren’t sales related? I’m just trying to read through the Q?
David Weinberg – EVP, COO, and CFO: We had – I don’t think it was $5 million. We probably had about…
Scott Krasik – BB&T Capital Markets: Or $4 million maybe?
David Weinberg – EVP, COO, and CFO: $2 million – $2.5 million and outside the United States increases, because Japan didn’t exist last year and now we have a third party in Japan it’s fairly expensive place to run and for most of the first quarter the end was very strong. So it sort of complicated that calculation and also in Brazil where we were growing. I think you might add that, we – our bonus plan kicked back in this year and there is probably another $1million change or close to somewhere between $1 million and $1.5 million in bonuses that were issued this year that didn’t exist obviously last year. So the two of those together are probably in that $3.5 million, $4 million you are looking for.