Attached files
file | filename |
---|---|
8-K - FORM 8-K - WEYCO GROUP INC | v238831_8k.htm |
Weyco Reports Third Quarter Sales and Earnings
MILWAUKEE, Nov. 1, 2011 /PRNewswire/ -- Weyco Group, Inc. (NASDAQ:WEYS) (the "Company") today announced financial results for the quarter ended September 30, 2011.
Net sales for the third quarter were $74.6 million, an increase of 31% from 2010 sales of $57.1 million. Operating earnings for the third quarter of 2011 were $6.7 million, compared to $4.5 million in 2010. Net earnings attributable to the Company were $4.4 million, compared to $3.4 million in 2010. Diluted earnings per share increased to $.40 per share in 2011 from $.30 per share in the third quarter of 2010. The improvement in 2011 sales and earnings was due to sales volumes increases across our North American wholesale and retail businesses, and as a result of the Company's March 2, 2011 acquisition of the Combs Company ("Bogs"), the owner of the BOGS and Rafters footwear brands. The financial results of Bogs are included in the Company's consolidated financial statements from the date of acquisition.
Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $56.6 million for the third quarter of 2011, compared with $41.4 million in 2010. Wholesale sales were $55.5 million in the third quarter of 2011, up from $41.1 million in 2010. Wholesale net sales for the third quarter of 2011 included Bogs' sales of $10.7 million. Wholesale net sales of Stacy Adams, Nunn Bush and Florsheim footwear were up 6%, 5% and 10% this quarter, respectively. Licensing revenues were $1.1 million in 2011 and $362,000 in 2010. Bogs' licensing revenues were $583,000 for the third quarter of 2011. Operating earnings for the segment increased approximately $1.7 million for the third quarter.
Net sales in the North American retail segment, which include sales from the Company's 30 Florsheim retail stores in the United States and its Internet business, were $5.8 million in the third quarter of 2011, compared with $5.2 million in 2010, an increase of 13%. Same store sales were up 22% for the quarter. There were six fewer domestic retail stores during the third quarter of 2011 compared to 2010. Operating earnings for the segment improved by approximately $622,000 for the quarter. This was the result of a higher sales volume and slightly lower selling and administrative expenses.
Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $12.2 million in the third quarter of 2011, compared to $10.6 million in 2010. The majority of other net sales are generated by Florsheim Australia. Florsheim Australia's net sales were up 18%. In local currency, net sales were flat. The increase in U.S. dollars was caused by the weaker U.S. dollar relative to the Australian dollar this year. Collectively, the operating earnings of the Company's other businesses in the third quarter of 2011 were relatively flat with last year.
"The third quarter marked the beginning of the main selling season for the Bogs brand, and consequently, as we expected, we are now experiencing accretion from our March acquisition," stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group, Inc. "In addition, our other wholesale brands and our U.S. retail business posted sales gains for the quarter, and our overseas sales remained level with last year."
On October 31, 2011, the Company's Board of Directors declared a quarterly cash dividend of $.16 per share to all shareholders of record December 5, 2011, payable January 2, 2012.
Weyco Group will host a conference call on November 2, 2011 at 11:00 a.m. Eastern Time to discuss the third quarter financial results in more detail. To participate in the call please dial 888-679-8040 or 617-213-4851, referencing passcode 60291889#, five minutes before the start of the call. A replay will be available for one week beginning about one hour after the completion of the call by dialing 888-286-8010 or 617-801-6888, referencing passcode 80158083. Alternatively, the conference call and replay will be available by visiting the investor relations section of Weyco Group's website at www.weycogroup.com.
About Weyco Group:
Weyco Group, Inc., designs and markets quality and innovative footwear for men, women and children under a portfolio of well-recognized brand names including: Florsheim, Nunn Bush, Stacy Adams, BOGS, Rafters and Umi. The Company's products can be found in leading footwear, department, and specialty stores worldwide. Weyco Group also operates Florsheim concept stores in the United States and Australia, as well as in a variety of international markets.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Various factors could cause the results of Weyco Group to be materially different from any future results expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the Company's ability to: (i) successfully market and sell its products in a highly competitive industry and in view of changing consumer trends, consumer acceptance of products and other factors affecting retail market conditions; (ii) procure its products from independent manufacturers; and (iii) other factors, including those detailed from time to time in Weyco Group's filings made with the SEC. Weyco Group undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
WEYCO GROUP, INC. AND SUBSIDIARIES | |||||||||
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS | |||||||||
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010 (UNAUDITED) | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
(In thousands, except per share amounts) | |||||||||
Net sales | $ 74,601 | $ 57,136 | $ 196,297 | $ 166,898 | |||||
Cost of sales | 46,061 | 34,985 | 120,269 | 102,681 | |||||
Gross earnings | 28,540 | 22,151 | 76,028 | 64,217 | |||||
Selling and administrative expenses | 21,823 | 17,660 | 61,769 | 52,599 | |||||
Earnings from operations | 6,717 | 4,491 | 14,259 | 11,618 | |||||
Interest income | 543 | 597 | 1,719 | 1,703 | |||||
Interest expense | (124) | (7) | (351) | (95) | |||||
Other income and expense, net | (62) | 539 | 46 | 321 | |||||
Earnings before provision for income taxes | 7,074 | 5,620 | 15,673 | 13,547 | |||||
Provision for income taxes | 2,525 | 1,831 | 5,334 | 4,695 | |||||
Net earnings | 4,549 | 3,789 | 10,339 | 8,852 | |||||
Net earnings attributable to noncontrolling interest | 140 | 396 | 621 | 320 | |||||
Net earnings attributable to Weyco Group, Inc. | $ 4,409 | $ 3,393 | $ 9,718 | $ 8,532 | |||||
Weighted average shares outstanding | |||||||||
Basic | 10,946 | 11,252 | 11,128 | 11,293 | |||||
Diluted | 11,037 | 11,458 | 11,251 | 11,495 | |||||
Earnings per share | |||||||||
Basic | $ 0.40 | $ 0.30 | $ 0.87 | $ 0.76 | |||||
Diluted | $ 0.40 | $ 0.30 | $ 0.86 | $ 0.74 | |||||
Cash dividends per share | $ 0.16 | $ 0.16 | $ 0.48 | $ 0.47 | |||||
WEYCO GROUP, INC. AND SUBSIDIARIES | ||||
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) | ||||
September 30, | December 31, | |||
2011 | 2010 | |||
(Dollars in thousands) | ||||
ASSETS: | ||||
Cash and cash equivalents | $ 10,619 | $ 7,150 | ||
Marketable securities, at amortized cost | 4,754 | 4,989 | ||
Accounts receivable, net | 50,693 | 38,840 | ||
Accrued income tax receivable | 249 | - | ||
Inventories | 56,287 | 56,111 | ||
Prepaid expenses and other current assets | 4,120 | 4,398 | ||
Total current assets | 126,722 | 111,488 | ||
Marketable securities, at amortized cost | 48,426 | 58,059 | ||
Deferred income tax benefits | 3,026 | 1,090 | ||
Other assets | 17,778 | 14,375 | ||
Property, plant and equipment, net | 27,416 | 25,675 | ||
Goodwill | 11,027 | - | ||
Trademarks | 34,748 | 12,748 | ||
Total assets | $ 269,143 | $ 223,435 | ||
LIABILITIES AND EQUITY: | ||||
Short-term borrowings | $ 44,000 | $ 5,000 | ||
Accounts payable | 8,988 | 10,360 | ||
Dividend payable | 1,753 | 1,811 | ||
Accrued liabilities | 13,415 | 10,204 | ||
Accrued income taxes | - | 116 | ||
Deferred income tax liabilities | 1,016 | 228 | ||
Total current liabilities | 69,172 | 27,719 | ||
Long-term pension liability | 18,072 | 18,572 | ||
Other long-term liabilities | 9,753 | - | ||
Common stock | 10,941 | 11,356 | ||
Capital in excess of par value | 21,839 | 19,548 | ||
Reinvested earnings | 143,330 | 150,546 | ||
Accumulated other comprehensive loss | (9,003) | (9,004) | ||
Total Weyco Group, Inc. equity | 167,107 | 172,446 | ||
Noncontrolling interest | 5,039 | 4,698 | ||
Total equity | 172,146 | 177,144 | ||
Total liabilities and equity | $ 269,143 | $ 223,435 | ||
WEYCO GROUP, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||
Nine Months Ended September 30, | ||||||
2011 | 2010 | |||||
(Dollars in thousands) | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net earnings | $ 10,339 | $ 8,852 | ||||
Adjustments to reconcile net earnings to net cash | ||||||
provided by (used for) operating activities - | ||||||
Depreciation | 2,085 | 2,066 | ||||
Amortization | 178 | 101 | ||||
Bad debt expense | 133 | 37 | ||||
Deferred income taxes | (1,420) | (67) | ||||
Net foreign currency transaction losses (gains) | 303 | (334) | ||||
Stock-based compensation | 896 | 852 | ||||
Pension contribution | (1,600) | (1,500) | ||||
Pension expense | 2,212 | 2,436 | ||||
Net gains on sale of marketable securities | (346) | - | ||||
Net (gains) losses on disposal of assets | (13) | 16 | ||||
Increase in cash surrender value of life insurance | (268) | (258) | ||||
Changes in operating assets and liabilities, net of effects from acquisitions - | ||||||
Accounts receivable | (8,328) | (5,776) | ||||
Inventories | 2,483 | (6,940) | ||||
Prepaids and other current assets | 736 | 797 | ||||
Accounts payable | (1,785) | (1,768) | ||||
Accrued liabilities and other | 111 | 278 | ||||
Accrued income taxes | (351) | (651) | ||||
Net cash provided by (used for) operating activities | 5,365 | (1,859) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Acquisition of business, net of cash acquired | (27,023) | (2,558) | ||||
Purchase of marketable securities | (1,154) | (22,094) | ||||
Proceeds from maturities and sales of marketable securities | 11,349 | 4,641 | ||||
Proceeds from the sale of assets | 14 | - | ||||
Life insurance premiums paid | (155) | (155) | ||||
Purchase of property, plant and equipment | (4,013) | (1,054) | ||||
Net cash used for investing activities | (20,982) | (21,220) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Cash dividends paid | (5,396) | (5,221) | ||||
Shares purchased and retired | (12,132) | (2,240) | ||||
Proceeds from stock options exercised | 1,059 | 723 | ||||
Repayment of debt assumed in acquisition | (3,814) | - | ||||
Net (repayments) borrowings of commercial paper | (5,000) | 6,000 | ||||
Proceeds from bank borrowings | 68,000 | - | ||||
Repayments of bank borrowings | (24,000) | - | ||||
Income tax benefits from stock-based compensation | 457 | 381 | ||||
Net cash provided by (used for) financing activities | 19,174 | (357) | ||||
Effect of exchange rate changes on cash and cash equivalents | (88) | 207 | ||||
Net increase (decrease) in cash and cash equivalents | 3,469 | (23,229) | ||||
CASH AND CASH EQUIVALENTS at beginning of period | $ 7,150 | $ 30,000 | ||||
CASH AND CASH EQUIVALENTS at end of period | $ 10,619 | $ 6,771 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||
Income taxes paid, net of refunds | $ 5,304 | $ 5,788 | ||||
Interest paid | $ 354 | $ 95 | ||||
CONTACT: John Wittkowske, Senior Vice President and Chief Financial Officer of Weyco Group, Inc., +1-414-908-1880