Andrew Greenebaum – Integrated Corporation Relations David Weinberg – Chief Operating Officer, Executive Vice President & Director Frederick H. Schneider – Chief Financial Officer

Unidentified Analyst – Susquehanna Financial Group Scott Krasik – C.L. King & Associates Sam Poser – Sterne, Agee & Leach Jeff Mintz – Wedbush Morgan Securities, Inc. Sasha Kostadinov – Shaker Investments Adam J. Comora – EnTrust Capital Scott Krasik – C. L. King & Associates

Good afternoon ladies and gentlemen and thank you for standing by. Welcome to the Skechers U.S.A. first quarter 2008 earnings conference call. During today’s presentation all parties will be in a listen only mode. Following the presentation the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Wednesday, April 23, 2008. I would now like to turn the conference over to Andrew Greenebaum, of ICR. Please go ahead sir.

Good afternoon. Thank you everyone for attending Skechers first quarter 2008 results conference call. I’ll now read the Safe Harbor statement. Certain statements contained herein including without limitation statements addressing beliefs, plans, objectives, estimates or expectations of the company or future results or events may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. Forward-looking statements involve known and unknown risks including but are not limited to the general economic and business condition and conditions in the retail industry. There can be no assurance that the actual future results performance or achievements expressed or implied by such forward-looking statements will occur. Users of forward-looking statements are encouraged to review the company’s latest annual report on Form 10K, filings on Form 10Q, management’s discussion and analysis in the company’s latest annual report to stockholders, the company’s filings on Form 8K and other federal securities law filings for a description of the other important factors that may affect the company’s businesses, results, operations and financial conditions. Now, I’ll turn it over to Skechers Chief Operating Officer, David Weinberg.

Good afternoon and thank you for joining us today to review Skechers first quarter 2008 results. As always we will open the call to questions following our prepared comments. First quarter of 2008 net sales was $384.9 million an increase of more than 11% over last year and the highest first quarter net sales ever and the second highest quarterly sales in the company’s history. Net income for the quarter was $32.8 million versus net income of $23.9 million in the first quarter of 2007 a 37.4% improvement over last year and the highest quarterly net income in the company’s history. Diluted net earnings per share were $0.70 for the first quarter of 2008 significantly above our previously given guidance of $0.57 to $0.62. We are pleased with our new record first quarter revenues and quarterly earnings particularly given the challenging US retail environment. The record revenue and earnings were primarily the result of very strong growth across our international businesses which represent 27% of our total sales for the quarter. Our domestic wholesale, retail and ecommerce divisions also grew year-over-year. Our strategy is to continue our brand and product momentum across our US wholesale business and our leading subsidiaries to further build our brand in our other international subsidiaries including our newest in Brazil, to deliver the right products to our distributors, to establish our new operations in China and to continue to grow our retail business. Our focus resulted in the following successes in the first quarter 2008: high double digit sales growth in our international subsidiary business; double digit sales growth in our international Skechers retail division; sales growth in our domestic wholesale and retail division; double digit growth in our ecommerce division; and double digit improvement in our key Skechers men’s and women’s lines. Our key financial achievements in the first quarter include: record quarter sales and our 7th consecutive quarter of sales over $300 million; record quarterly earnings of $32.8 million and diluted net earnings per share of $0.70; backlog up over March, 2007; improvement of our gross margins by 150 basis points year-over-year to 44.7% for the first quarter of 2008 versus 43.2% for the same period last year and even further improved balance sheets with over $259 million in cash and long term investments representing $5.55 a share; current and on plant inventory in line with our sales and backlog growth; and our tax rate reduced to 33.8% which we believe is appropriate for the full year. We have continued to aggressively grow sales and further solidify the position of our brands in the marketplace. We believe the sales momentum we are seeing will continue into the second quarter based on our backlogs and sell throughs. While we are encouraged by our key indicators in our extend three lines with key accounts in January and February, we remain somewhat cautious about the coming year due to the challenging economic environment. Now, I would like to expand our first quarter 2008 achievements in our three operating segments: domestic wholesale; international; and retail. For the first quarter domestic wholesale net sales increased by 3.5% from the same period last year. We are gratified with this growth given the soft retail environment and believe this is a testament to our ability to consistently deliver trend right styles at an affordable price which we believe is imperative during the challenging economic times. We feel our aggressive advertising efforts both on TV and in print had a positive impact on our sales as our top sellers for the quarter are the same styles featured in our marketing campaign. This is true for men’s, women’s and kids styles and across several product lines. For Skechers we have three men’s, four women’s, four children’s and one Skechers work commercials. These cover our Skechers’ Sport, Skechers’ U.S.A., Skechers’ Active and Cali Gear by Skechers line for adults. For kids these commercials are for Airators by Skechers, Skechers’ Bungees, Skechers’ Super Z Strap and Cali Gear by Skechers Kids Style. We also support our men’s and women’s line with various print campaigns that appear in magazines as diverse as Time, Seventeen and Maxim. For our fashion lines we have effective print and television campaigns for almost everyone of our brands Unlimited by Mark Ecko, Red by Mark Ecko, Zoo York and 310. Additionally, Red by Mark Ecko has the power of two of the hottest young movie, television and recording stars, Ashley Tisdale and Vanessa Hudgens both of High School Musical fame. Our newest brand BEBE Sports Footwear is backed by the beautiful Eva Longoria-Parker who appeared in the BEBE Sports print campaign. We believe that continuous marketing support we provide and the diversity of our trend right product offering has enabled us to grow our domestic wholesale business in the quarter. We are pleased that our key line Skechers’ Active and Skechers’ Sports for Men and Women had double digit sales growth. Turning to our fashion and street line, on a comparable basis we saw double digit growth in our Kid Street fashion division which is comprised of multiple boys and girls lines. We also saw growth in Mark Nathan line which includes Siren for women and [bags] for men. We had solid sales in our men’s and women’s Mark Ecko footwear and our men’s Zoo York footwear though the lines did not show growth from last year. We restructured the distribution of our Mark Ecko footwear line to better position the brand for profitability. While this has not resulted in higher sales overall, the sell throughs and margins have improved. Zoo York for women is continuing to grow since its launch in the third quarter of last year. As we stated, we’re not immune to the current economic environment but we believe we are extremely well positioned given our multiple unique line comprised over more than 2,500 trend right and reasonably priced styles. We are able to successfully meet the needs of the diverse consumer base of the United States by marketing our products through multiple mediums and through a variety of department, family footwear, specialty and independent and athletic stores. We believe our fashionable product, broad diversification and willingness to support our business through both marketing and execution makes us the right brand for our retail customers and consumers. Now, moving on to international; international wholesale improved by 39% for the first quarter which we believe is an indicator of the continued strength of Skechers and the opportunities available to the company to continue to gain market share on a global basis. The strong growth in our international wholesale business is from our subsidiaries in Europe, Canada and Brazil. For the quarter our subsidiary sale improved by 70% which is in line with the growth we experienced from them in the fourth quarter giving us further belief that our international sales have solid positive momentum. Five of our seven European subsidiaries had very strong double digit growth while the other two France and Switzerland had triple digit growth. We are particularly pleased with the growth in France and Italy, two regions we feel have underperformed in the past. We feel Brazil has great potential and are encouraged by the strong performance this quarter. We believe our product and marketing efforts are working and we look forward to continued growth in all areas. From a product standpoint the improved sales across our subsidiaries were the result of the continued growth of our Skechers men’s, women’s and kid’s line as well as the significant growth in the Mark Ecko footwear lines which are now in their first full year of sales. We believe that our brands are in great position in our subsidiary markets in terms of shelf space, reputation and image. Our distributor sales which are approximately 25% of our international wholesale sales were down by 10% for the quarter. This decrease was primarily due to some inventory issues in Central and South America which are being rectified and bookings are improving. We have seen very strong growth in Skechers in Eastern Europe and in the Middle East and growth in our fashion lines in Israel, Canada, Greece, Taiwan, Chili and South Korea. As we mentioned during our fourth quarter year end conference call we re-launched our brand in South Korea during the first quarter with a new distributor and are pleased with both our initial sales and position in the market. We are very encouraged by our backlog and believe our distributor sales will improve for the remainder of the year. To support their Skechers’ businesses many of our key distribution partners have Skechers’ retail stores in regions where they sell our footwear. At quarter end 64 Skechers’ retail stores were open in 24 countries from 17 of our distribution partners including a store in South Korea. Six additional stores are planned for this year. In addition to our distributor owned stores we have five concept stores and one outlet in China through our joint venture. We are off to a strong start in China which just launched in the first quarter and are already seeing shops opening in key malls in Beijing, Shanghai, Guangdong and Zhejiang. We believe China with more than 1.3 billion people had tremendous potential and will begin impacting our international sales later this year. At the quarter end international was 27% of our total sales. We continue to believe international can be at least 30 to 35% of our total sales in the near future and there are many opportunities to grow our Skechers and fashion lines around the world. In regards to retail our combined retail sales for our company owned domestic and international stores were up nearly 7% for the first quarter. The improved annual sales are due to a net 35 store increase from the prior year partially offset by a mid single digit decrease in net comp sales. At quarter end there were a total of 195 domestic and international company owned retail stores. Total domestic retail sales increased almost 6% from the first quarter of 2007. At the close of the quarter we had 179 company owned and operated retail stores in the United States. Four Skechers stores opened in the first quarter including two concept stores in Arizona and one in Reno. We closed one store in the first quarter in Richmond, Virginia. International retail sales improved 20% from the first quarter of 2007. The positive international sales were the result of double digit improvement in nearly every region. We currently have 16 company owned and operated international Skechers stores including nine in Europe, three in Canada and four in Asia. We are pleased with the strong sales in our stores and believe this is in direct response to the growing awareness and acceptance of our brands in these regions. We plan to continue to strategically grow our retail business in 2008 with the addition of 25 to 30 Skechers domestic stores and pursue opportunistic international retail locations which include the opening of our first store in Scotland later this week. Now, I’d like to have Fred go over the financial results. Frederick H. Schneider: Now, turning to our first quarter 2008 numbers in detail. As previously mentioned first quarter net sales were $384.9 million compared to $344.9 million last year, an increase of 11.6%. This increase is due to the double digit sales growth in our international businesses. First quarter gross profit was $172.2 million or 44.7% of sales compared to last year’s gross profit of $149 million or 43.2% of sales. Operating expenses as a percentage of sales decreased 30 basis point to 32.4% in the first quarter of 2008 compared to 32.7% in the prior year due to positive operating leverage from our higher sales, better investment in selling expenses which was partially offset by an increase in general administrative expenses. First quarter selling expenses decreased to $25.5 million compared to $26.8 million in the prior year. The year-over-year decrease in selling expenses to 6.6% from 7.8% is primarily due to a reduction in tradeshow and POP expenses partially offset by an increase in media spend. General and administrative expenses were $99.2 million compared to $86 million last year. Our general administrative costs increased 90 basis points to 25.8% of sales compared to 24.9% in last year’s first quarter. The increase was primarily due to the increase of 35 company owned retail stores in the prior year’s first quarter as well as increased salary, warehousing and distribution costs related to international. Net income for the first quarter was $32.8 million compared to net income of $23.9 million in the prior year period. Diluted earnings per share were $0.70 on approximately 46.6 million shares outstanding compared to diluted earnings per share of $0.52 on approximately 46.8 million shares outstanding during the first quarter of last year. Our balance sheet continues to be very strong. At March 31, 2008 cash and long term investments totaled over $259 million. While we are cautiously optimistic that the liquidity will be restored for our auction rate securities, in the short term we felt it was prudent to classify them to a long term asset during the quarter. Trade and accounts receivable at quarter end were $237 million and our DSOs at March 31, 2008 were 48 days versus 53 days at March 31, 2007. Inventory at quarter end was $178.4 million representing a year-over-year increase of $9.3 million. We continue to believe we are prudently managing our inventory position. Working capital decreased 18.8% to $425.6 million at quarter end primarily because of the reclassification of our auction rate securities to long term assets. Long term debt was $15.4 million which is primarily related to mortgages on certain real estate. Shareholders’ equity at the end of the first quarter increased 5.5% to $650.9 million or $14.20 a share versus $626.7 million as of December 31, 2007. Capital expenditures in the quarter as of March 31, 2008 were approximately $14 million as compared to approximately $8 million in the prior year. We expect our capital expenditures for the remainder of 2008 to be approximately $37 million which includes the opening of 25 to 30 new stores, store remodels and the purchase of additional real estate. Now, I would like to turn it back to David for guidance.

We are pleased with our record first quarter revenues and highest ever quarterly earnings particularly given the challenging US retail environment. As I mentioned our focus for 2008 is to continue to build on our momentum in our wholesale business in the US and our leading subsidiaries, to further grow our brand in our other subsidiaries including our newest in Brazil, to deliver the right product to our distributors, to establish our new operations in China and to continue to grow our retail business. Though only a few weeks into the quarter we are pleased with our initial sales and believe we will have a solid second quarter given this and our healthy backlog. While we are encouraged by our key indicators we remain cautious about the coming year and therefore are providing a broader guidance range for the second quarter. This guidance reflects the difficult retail environment which has resulted in many retailers requesting products shipping closer to their needs. We now expect second quarter 2008 net sales to be in the range of $350 to $365 million and diluted earnings per share in the range of $0.30 to $0.38 on approximately 47 million diluted shares outstanding using a tax rate of 33.8%. We will continue to support all of our brands with aggressive marketing efforts to ensure we are top of the line with consumers and that our footwear achieves strong sell throughs. We are also continuing to support the company with necessary investments and improvements to grow to the next level in the coming years. This includes our new corporate headquarters which is scheduled to open this summer. The new distribution centers which are currently planned for mid to late 2009 and the acquisition of some additional property across from our new corporate headquarter which will ultimately serve as a campus and additional office space. Again while we are not immune to the current retail and economic environment and are carefully planning our worldwide business we believe our brands will remain strong in the domestic market and we will continue to experience growth around the world. We remain very focused on profitably growing our business in the coming year. And now I would like to turn the call over to the Operator to begin the question-and-answer portion of the conference call.

(Operator Instructions) Our first question comes from Unidentified Analyst with Susquehanna Financial Group. Unidentified Analyst – Susquehanna Financial Group: David, just on the first quarter, can you quantify possibly on the margin – just the sales came in at the low end of your guidance. Just a break out on the gross margin how much was merchandise margin improvement and how much was from foreign exchange? If you could give any color that would be helpful.

To break it down as best we can, domestic wholesale remained relatively flat year-over-year so the big increase had to come from our international subsidiaries. The differential in foreign exchange was probably about 15% for the year but their margins were up over 100 basis points. It’s mostly from product in Europe and obviously it’s the shift as well. We came in significantly stronger in our subsidiary business than our distributor business and obviously slightly higher at retail simply because of the new stores and that was both because of those fluctuations brought the whole margin up. We had no deterioration in domestic wholesale nor our international distributors so it’s just a plus from the increased percentage of our subsidiaries. Unidentified Analyst – Susquehanna Financial Group: As you in the past when you guys have looked at your second quarter there’s always been an incremental shift to some degree for back to school between Q2 and Q3, what are retailers telling you right now in terms of how that may or may not unfold given the environment at this point? Have you factored that into your thought process in regard to the guidance?

Well we obviously took it into our thought process. It’s a very difficult conversation to have with retailers because they don’t understand the distinction. It’s to them whether they take it the last week in June or the first week of July is unofficial. It doesn’t change anything, it just changes for us. We have taken into account that most retailers have told us they wanted closer to need, so we’ve shipped it as much as we could from June to July. Basically what you see in these projections is a very solid international performance and a projected decrease in domestic wholesale giving us that net number for the quarter. Unidentified Analyst – Susquehanna Financial Group: And how about company on retail? Is the comp trend more than likely to continue to trend negative at this point?

We’re considering it flat to slightly down although we had significant improvements over the last week to 10 days which could be a positive. Unidentified Analyst – Susquehanna Financial Group: And then just on the selling expense side, obviously did a nice job dollar wise year-over-year with it being down, just give us your thoughts in terms of how you’re projecting that line for this year and if Robert decided to increase spending going to back to school what’s your thoughts about that due to the fact that in the past it seems like retail customers indicated that that drives Skechers business. Any thoughts to that?

I don’t anybody would say we’re backing away from media spending. Even in Q1 where the expenses were controlled and were slightly down our media expense was up. We plan on continuing to advertise and looking for more efficiencies in our other marketing venues. In the first quarter we actually cut some of our show expenses becoming more efficient in the show and cut some of our PLP expenses. To that extent I would think that holds consistently for the year. We’ll probably be up in media expense driving the sales but relatively flat or slightly up due to the control of the other expenses in the marketing line. Unidentified Analyst – Susquehanna Financial Group: So the selling expense line, does that – so for Q2 how are you looking at your selling expenses?

Like we said before we’ll be within 10% of last year when everything is said and done.

Our next question comes from Scott Krasik with C.L. King & Associates. Please go ahead. Scott Krasik – C.L. King & Associates: Can you say generally, David, how much or what percent of your sales are now in the fashion athletic category and how you’re envisioning those sales? It seems like a pretty mature category at this point.

Categories are always changing and they have very broad definitions and we tend to see them switch from one to the other. We talk about low profile athletic and then jogging, we’re within that entire mix. It makes up a significant percentage but certainly not all of it. We have a very large kids business. We have a very big fashion business that has some of those characteristics and some that do not. We have a work business that’s growing and it’s growing around the world. And our men’s business which is only partially in that world growing so I would venture to guess if you don’t consider kids part of that realm, that it’s certainly significantly less than 40 or 50% of the whole and we keep reminding everybody we’re a very flexible group. As things change in the marketplace or as merchandising requirements change we’re very flexible and can change very quickly and we think our name carries this. Scott Krasik – C.L. King & Associates: Is your belief though that that category, the low profile category, the growth will start to subside and that’s built into your certain internal numbers?

We have new styles that are selling and some of them cross over, so it’s very difficult to put it into place but sooner or later you come into the rules of large numbers and that category and people’s tastes tend to change. So we haven’t seen anything that would have a serious negative impact on any of our divisions that are in that and some of them have switched to more athletic looking and some of them are cut differently and some of them are different uppers. But we haven’t really seen any slowdown in our men’s and women’s categories as yet. Scott Krasik – C.L. King & Associates: And then, Fred, do you know what the total sales of the brands that you discontinued in the fourth quarter, the [Abracks] and the 310? How much you had in sales in the first quarter and also the second quarter in 2007? Frederick H. Schneider: Of the discontinued brands? Scott Krasik – C.L. King & Associates: Right, what are we Xing out here? Frederick H. Schneider: I don’t know that we’ve given that kind of level of detail in the past. Scott Krasik – C.L. King & Associates: I guess you said in the third quarter of 07 it was about $8 million you were beginning to phase it out so I assume it was something higher than that. I’m just trying to figure out what the apples to apples comparison is.

Just off the top of my head I would think it’s about $3 or $4 million in the first quarter for the actual clothes, the kids in the [Abracks] and the in the Michelle K. 310 is still with us obviously on a smaller scale and the kids businesses are still with us. I would guess it’s in the $3 or $4 million category for Q1 last year. Scott Krasik – C.L. King & Associates: And then this 33.8% tax rate is based on the higher international sales level, is that what we should use for the year? Frederick H. Schneider: Yes, that’s correct.

Our next question comes from the Sam Poser of Sterne, Agee. Please go ahead. Sam Poser – Sterne, Agee & Leach: I just want to understand here that on the domestic – can you break down more specifically how you’re seeing the domestic wholesale business? Looking ahead is Q2 really because of the shifts where you’re going to see softness? And, do you expect to get that back later in the year? Frederick H. Schneider: So far as we know right now that’s what it certainly looks like given our ordering patterns and our backlog. We seemed booked heavier ahead in Q3 and relatively even to slightly down for Q2 so we take in to account for in our assumptions for our guidance that we’ll have a stronger Q3 than Q2 but of course, that can change as retail changes and products get hotter. But, right now our guidance would be along the line of increases at our own retail stores simply because of the new stores and a relatively flat comp and significant increase in international which has significant increased backlogs and a big growth in our distributor based sales and a decrease in wholesale that we think is going to be made up in the third quarter. Sam Poser – Sterne, Agee & Leach: Do you see gross margins staying at that 44, that high level it did in Q1? Or, are you positioning at a slightly lower gross margin than that? Frederick H. Schneider: Well, we’ve planned a slightly lower gross margin across the year, this is just when we seem to have maximized our international subsidiaries and that mix is at a maximum for gross margin purposes. We’ll have a bigger domestic wholesale component for Q3 which will slightly moderate that piece and certainly a growing domestic distributor business that will also moderate some of that piece although at a higher sales number. So, I think this is about the peak and we planned it down somewhat.

In other words it’s more of a mix change if we look forward changing the margin than it is essentially by division. Sam Poser – Sterne, Agee & Leach: Then, to follow up on Scott’s question, on the low profile, the biker product in general, I heard quite a bit that it had slowed down and then I was hearing a lot of very positive things about the new energy shoe, the Delights and product of that nature. Is this a situation where one might have slowed down a little faster than you expected and you weren’t ready for the acceleration of the other and part of the Q2 and Q3 movement is getting in to stock in the Delight or like styles there with the slowdown of lower profile products? Frederick H. Schneider: I don’t think so. We don’t have any delivery issues and it’s not like we can’t deliver it in June if they want them, or in July too if we need. Nor, do we have excess inventory do we feel in any of those categories so we think we’re playing it just the way it belongs. Some things tend to seem slower or faster and it’s a very difficult retail environment but we think we have our hands around it and we haven’t seen any significant increases in inventory nor any significant shortage that would delay deliveries. It’s not us that’s making any of this shift. Sam Poser – Sterne, Agee & Leach: Are you finding that product like some of the low profile product is selling internationally well may have slowed down a little bit in the US? Frederick H. Schneider: Well, there’s always changes internationally. Some of that is always true in different areas. The question is what order and what size. It’s slightly different every place but our basic styles sell everywhere. People have a very common fashion look so the big styles sell pretty much everywhere. There are nuances obviously within each country where we move some of our inventory around. Sam Poser – Sterne, Agee & Leach: One of the retailers I spoke with mentioned – I asked if he was cancelling orders from you because of the slowing down and she said, “No.” She said you had actually cancelled some orders for her. I assumed moved it somewhere else that could sell it which I thought was great that you were taking such a proactive stance on making sure things work. That sounded like you really took a lot of control off your business, maybe more than you have in the past. Am I looking at that correctly? Frederick H. Schneider: Well, we think we always are in control of our business. I think what you’re looking at is we’re always looking to match inventories and to push sell throughs and if we do see – we are very close to our customers both domestically and internationally. If we see a slowing down in one place and increasing sales in another we will make the necessary changes without being asked by managing our business. I think that’s always been true of us. We’re in a situation now where I think we’re hot, our inventories are in line so it’s easier for us to have the flexibility of doing all the right things that we need to. Sam Poser – Sterne, Agee & Leach: This is as good of a job as you’ve done in a while with your having your inventories in line and I assume that you expect to keep it in that realm? But, I expect we also might see a little bit higher at the end of Q2 just because of the amount of goods you’re about to ship for Q3. Frederick H. Schneider: Well, that’s always true. We count everything and everything in transit so if we have a big backlog going in to July it would certainly show up in inventory in June but that’s a very big positive for us. We like to be ready early just in case. Like we said, we manage our business and it’s necessary to have a couple of weeks early.

Our next question comes from Jeff Mintz with Wedbush. Please go ahead. Jeff Mintz – Wedbush Morgan Securities, Inc.: Can I go back for a second? On the Q4 call you had given guidance and said that your domestic business was down significantly in the fourth quarter because things had shifted to the first quarter and the first quarter obviously didn’t come in that strong and I’m wondering did you see a further deterioration in the US domestic business just in general? Frederick H. Schneider: Yeah. I think it’s fair to say that we came out of Q4 and in to a very strong January which we announced on our Q4 conference call but I don’t think it’s any secret that the last two or three weeks in March were pretty devastating at retail and a lot of shifts were made back in March. I think it’s fair to say the end of January going in to February we were looking very good and if March had held up we would have been significantly at the top end of our range. Jeff Mintz – Wedbush Morgan Securities, Inc.: Okay. Then back to the gross margin question, are you still in terms of the shifts you’ve seen so far and how fast your international business is growing, are you still expecting gross margins kind of longer term to be in the 42 to 43 range? Or, do you think they could end up above that based on the new mix? Frederick H. Schneider: We plan on 42 to 43 but obviously international, our subsidiaries especially, if there’s no significant deterioration in the dollar and significant growth it could go up from there by 50 to 100 basis points on modeling for a considerable period of time.

There is a benefit in the international margins from the exchange from the low dollar here. So, some of that will depend upon how the dollar goes. Jeff Mintz – Wedbush Morgan Securities, Inc.: Okay. But, in terms of your business you’re still modeling the 42 to 43 range? Frederick H. Schneider: Yeah. Jeff Mintz – Wedbush Morgan Securities, Inc.: Okay. Then, on the new distribution center which I guess is being pushed out about six months or so, can you talk about just what the potential impact is on your business in terms of how your current distribution center is running? And, also what the cap ex impact is? In other words, will there be any cap ex for that DC this year? Or, is it all shifting to 09? Frederick H. Schneider: Not sure yet. Chances are there will be some cap ex towards the end of this year just to accumulate the equipment. The equipment starts going in before the building is even 100% complete. And, it has moved out some more for entitlements than anything else. The one here and the one in Europe is pretty much on schedule so there might be some cap ex this year but it’s not defined yet. We still have to get online to see what the production requirements at the suppliers of these things to get the actual dates we have to be online to meet the commitment dates we have for the distribution center. So, we should have more clarity on that when we give the second quarter conference call. We’ll be able to give you significant more detail. Jeff Mintz – Wedbush Morgan Securities, Inc.: Any concerns with your business is still ramping nicely, any concerns about the operations at your current DC as you increase the level of business? Frederick H. Schneider: Not right now. Part of the efficiencies we in the G&A is efficiencies in our warehouse, all those problems we had last year are stimulating the extra building here domestically and the extra labor seems to have taken account and we’ve actually had some efficiencies and some gain to the G&A line from running the warehouses so we’re fine domestically. We probably will have to give some extra capacity in some off premises help to our distribution center in Belgium for the first quarter of next year which is our biggest quarter out of Belgium and I think that shouldn’t be a problem. We have about six to nine months to ramp up for that and it shouldn’t be that expensive. Jeff Mintz – Wedbush Morgan Securities, Inc.: Okay, great. Then finally, on the cap ex number you just gave which was about $51 million obviously up from the number on the Q4 call, is that based on the real estate that you’re planning on purchasing or were there other incremental cap ex costs this year? Frederick H. Schneider: No, it’s primarily the building itself. It’s about a $14 to $15 million piece of property that would add to our complex here in Manhattan Beach that we ultimately would build on down the road to give us some more office space as we continue to grow.

Next question comes from Sasha Kostadinov with Shaker Investments. Please go ahead. Sasha Kostadinov – Shaker Investments: On the marketing side I’ve been noticing more advertising. Can you quantify the delta year-over-year in your advertising spending? Frederick H. Schneider: It’s up slightly, I think it’s up about 10%. Sasha Kostadinov – Shaker Investments: About 10%? And, can you quantify for – I know you mentioned in the press release that comps were negative in the US, can you quantify how negative they were? Frederick H. Schneider: I think we said low to mid single digits. Sasha Kostadinov – Shaker Investments: Low to mid single digits? Frederick H. Schneider: Yeah. Sasha Kostadinov – Shaker Investments: Can you talk about if there’s been any change in that trend? Frederick H. Schneider: Yeah. Like I said in answer to somebody’s question, the last couple of weeks seem to have picked up significantly once the Easter shift and everything was done and we started to comp against the end of last March. So, the last week or 10 days has seen some pickup but obviously the question is how long will it last and is this the beginning of a trend. It certainly feels like it is but it’s kind of early to tell. Sasha Kostadinov – Shaker Investments: Have your compares eased or no? Frederick H. Schneider: Sorry? Sasha Kostadinov – Shaker Investments: Have your comparisons eased? Was your early April easier last year than March was? Frederick H. Schneider: I don’t think so, I just think early April last year was Easter, it was actually a bigger month. [Inaudible] was difficult to comp against but moving away from that first week or 10 days that included Easter subsequent to that when there was no Easter, after it was just April seems to be doing significantly better. Sasha Kostadinov – Shaker Investments: Okay. And your China joint venture, can you talk about how that’s going to be accounted for? Frederick H. Schneider: Well, it will be counted as a joint venture with a minority interest.

We’re consolidating the joint venture but I don’t know if it will be that significant in total this year. It’s hard to say, it’s pretty new in to the year. But [inaudible]. Sasha Kostadinov – Shaker Investments: How many stores do you plan on having in the joint venture this year? Frederick H. Schneider: Well, in China we’ve talked more in terms of points of sale both store, shops and franchises. We would anticipate on a number starting to approach 100 by the end of the year. Sasha Kostadinov – Shaker Investments: Oh, really?

Those aren’t all stores, those are locations. Sasha Kostadinov – Shaker Investments: Okay. Locations. Your position in auction rate securities, other than putting them on your balance sheet as a long term asset, what else have you explored? Does the broker who sold you these have any liability in your mind? Or, are you just waiting for the credit markets to turn? Frederick H. Schneider: That’s a very long term situation. Right now we think the secured part as far as collateral is concerned, they’re all municipal bank we don’t have any of the questionable ones and our biggest supplier of them, not necessarily the broker has already announced a refinancing of part of them so we’re still of the opinion that somewhere down the road that it’s a liquidity issue and not a credit issue and we keep getting good interest on them so right now we’ve taken the course like everyone else or the SEC lead moving it to a long term and accumulating interest. But, we do anticipate that it’s a liquidity issue and that they will be redeemed at par somewhere down the road.

Our next question comes from Adam Comora with EnTrust Capital. Please go ahead. Adam J. Comora – EnTrust Capital: Just a couple of quick ones. First, congratulations on the expense management, it’s very encouraging to see you guys drive the bottom line. My first question is on the international, what are you guys sort of anticipating in the second quarter international doing in your guidance? Frederick H. Schneider: It’s growing very nicely. Adam J. Comora – EnTrust Capital: But, it sounds like you’re anticipating that it’s growing double digits or slower than what it had been historically? Frederick H. Schneider: No, I think it’s growing what it has been historically. We said that number we felt would hold through the year and I don’t think anybody’s changing that yet. Adam J. Comora – EnTrust Capital: Okay. Then just to flush out a little bit more what’s happening out there in April, you think all of retail in general is getting a bounce? What are your customers telling you? And, can you give a little more color about how your April comps are running so far? Is it sort of up mid singles or even better than that? Frederick H. Schneider: We don’t really quote comps that diligently. They were down in the first part of the month, they’re up in the second part of the month. We hear the same from a lot of our retail customers although it’s a mixed bag out there so I don’t know if it’s a barometer. But, it does seem from what we hear anecdotally and what we’ve seen in our stores to be turning and becoming positive to some degree. But, it’s way too early, it’s only the 23rd of April to put a long term prognosis on it yet.

(Operator Instructions) Our next question comes from Scott Krasik with C. L. King & Associates. Please go ahead. Scott Krasik – C. L. King & Associates: Just a few follow ups, David have your thoughts on cost increases come out of Asia changed at all? I think you had said about 10%?

No, I think we’re still online to what we had said in the past and I think it shows in the margins we’ve had we’re reporting. We feel very comfortable, we think whatever we’re getting we’re sort of sharing with some of our suppliers. There will be some increases, we think we have some pricing power in the states and certainly internationally so we’re still comfortable with maintaining margins even with what we see coming out of the orient. Scott Krasik – C. L. King & Associates: I assume the price increases are being passed through for third quarter, are they being accepted by the retailer?

Yeah, that shows in our backlog. Our backlogs are continuing and our order rates are coming in and we certainly are anticipating a strong year. So, we wouldn’t do that unless it was being accepted and the orders were being booked. Scott Krasik – C. L. King & Associates: Okay. Do you want to give us numbers on domestic and international backlog?

Not particularly but they’re obviously stronger internationally than they are domestically. Frederick H. Schneider: We historically don’t publish backlog but once a year when we’re required to. Scott Krasik – C. L. King & Associates: Okay. Is it up double digits for the next six months in the US or no?

It wouldn’t be yet anyway, it’s too early we’re still booking for season so I doubt it especially buying closer to the vest, the fact that it’s up at all is a positive. Scott Krasik – C. L. King & Associates: Right. Then, just what are you finding in international in some of your more mature subs, whether it’s France, or Germany, or England, are you still getting meaningful additional door expansion? Or, is it comp growth with just taking share from some athletic retailers? Where is that growth coming from in you more mature?

I think it’s a little bit of both. We are getting door expansion and pulled some new accounts. Our subsidiary business especially in Europe, while we’ve been there a year has taken us a while to get started and now that it’s unfolding we’re getting door expansion, some within existing accounts, just moving out the door counts. Some new doors that we haven’t been in for quite some time and certainly shelf expansion because this kind of growth requires all three of those I think. Scott Krasik – C. L. King & Associates: So you wouldn’t really consider yourself mature in any sub you’re in at this point?

Not even close. Scott Krasik – C. L. King & Associates: Right. Good. Great. Then, just lastly maybe talk about Cali Gear obviously the category seems to have peaked a little bit. What’s your outlook now for the year and internationally and domestically?

Well, it’s different. It’s obviously selling better in some places than other, it’s just one piece of our category and while it may be the same size, slightly smaller or slightly larger in some places than we had anticipated there’s nothing outrageous about it nor do we think it impacts our overall business. In some places it will pick up some and we’ll move inventory there and some places it will slow down. Some, I think the kid’s business certainly overseas has held up and we plan on having it as a piece of our kid’s business as we go forward. So, it may not have the acceleration we once saw but we’re certainly replacing it with other things and it hasn’t impacted our growth either domestically or overseas. Scott Krasik – C. L. King & Associates: Just as an absolute number, do you want to give a target for 2008?

No, I think it’s too early. We’ve got to wait for some more warm weather around the world to find out exactly what’s what in each region.

The next question is a follow up from Sasha Kostadinov. Please go ahead. Sasha Kostadinov – Shaker Investments: Did you guys disclose what your cash flow was during the quarter? Frederick H. Schneider: What element of cash flow? Operating cash flow? Sasha Kostadinov – Shaker Investments: Yeah, operating cash flow. Frederick H. Schneider: Cash flow from operations when we filed our Q was about – actually during the quarter it was a use of cash from operating activities of about -$29 million. Sasha Kostadinov – Shaker Investments: $29? Frederick H. Schneider: Yeah.

Mr. Greenebaum there are no further question. Please continue.

Thank you for joining us on today’s call. Again, I’d like to note that today’s call may have contained forward-looking statements. As result of various factors actual results may vary from those projected in such statements. These risks factors are detailed in Skechers’ filings with the SEC. Again, thank you and have a good day. We’ll speak to you next quarter.

Ladies and gentlemen this does conclude the Skechers U.S.A. first quarter 2008 earnings conference call. Thank you for your participation and you may now disconnect.