MILWAUKEE, April 29, 2011 /PRNewswire/ -- Weyco Group, Inc. (Nasdaq: WEYS) today announced financial results for the quarter ended March 31, 2011.
Net sales for the first quarter were $65.1 million, an increase of 7% from 2010 sales of $61.0 million. Operating earnings for the first quarter of 2011 were $4.8 million, compared to $5.4 million in 2010. Net earnings attributable to Weyco Group, Inc. were $3.4 million, compared to $3.9 million in 2010. Diluted earnings per share were $.30 per share in 2011 as compared with $.34 per share in the first quarter of 2010.
As previously announced, on March 2, 2011, the Company acquired 100% of the outstanding shares of The Combs Company ("Bogs"), the owner of the BOGS and Rafters footwear brands. The purchase price was $29.3 million in cash plus debt assumed of $3.8 million and contingent payments estimated to be $9.8 million, which are dependent on Bogs achieving certain performance measures. Bogs had approximately $27 million of sales during 2010. The Company believes that the acquisition will be accretive to its earnings in 2011, excluding the impact of certain purchase accounting adjustments as well as transaction and integration costs. Most of that accretion is expected in the second half of the year, as the majority of Bogs' business occurs in the third and fourth quarters.
Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $48.1 million for the first quarter of 2011, compared with $44.7 million in 2010. Wholesale sales were $47.6 million in the first quarter of 2011, up from $44.1 million in 2010. Wholesale net sales for 2011 included Bogs' sales since the date of acquisition of $2.3 million. The first quarter of 2011 included Umi shoe sales of approximately $1.1 million. There were no Umi sales in the first quarter of 2010, as Umi was acquired on April 28, 2010. Wholesale net sales of the Nunn Bush and Florsheim brands were up 1% and 5%, respectively, while Stacy Adams footwear sales were down 4%. Licensing revenues were $504,000 in 2011 and $580,000 in 2010. Operating earnings for the segment decreased approximately $755,000 for the first quarter. This was a result of slightly lower margins as well as increased selling and administrative expenses, which included Bogs acquisition costs.
Net sales in the North American retail segment, which include sales from the Company's 33 Florsheim retail stores in the United States and its Internet business, were $5.6 million in the first quarter of 2011, compared with $5.3 million in 2010, an increase of 6%. Same store sales were up 8% for the quarter. There were two fewer domestic retail stores during the first quarter of 2011 compared to 2010, and the Company closed an additional retail store at the end of the first quarter 2011. Operating earnings for the segment improved by $125,000 for the quarter, primarily due to higher operating earnings from the Internet business.
Other net sales, which include the wholesale and retail sales of Florsheim Europe and Florsheim Australia, were $11.4 million in the first quarter of 2011, compared to $11.1 million in 2010. The majority of other net sales are generated by Florsheim Australia. Florsheim Australia's net sales were up 7%. However, in local currency, net sales were down 3%. The increase was caused by the weaker U.S. dollar relative to the Australian dollar. Florsheim Europe's sales were down 7% due to the closing of its retail store in Dusseldorf, Germany at the end of 2010, as well as decreased wholesale shipments. Collectively, the operating earnings of the Company's other businesses were flat.
"We are excited about the addition of more casual brands to our portfolio at Weyco," stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group. "Our earnings have decreased during this transitional period, but we believe that as we continue through 2011, we will start to leverage our operational efficiencies and see the positive impact of our new businesses."
On April 27, 2011, the Company's Board of Directors declared a quarterly cash dividend of $.16 per share to all shareholders of record on June 1, 2011, payable July 1, 2011.
Weyco Group will host a conference call on May 2, 2011 at 11:00 a.m. Eastern Time to discuss the first quarter financial results in more detail. To participate in the call please dial 888-680-0860 or 617-213-4852, referencing passcode #72664089, 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 #70252518. 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 (UNAUDITED) | |
|
|
|
|
| |
| Three Months Ended March 31, |
| |
| 2011 |
| 2010 |
| |
| (In thousands, except per share amounts) |
| |
|
|
|
|
| |
Net sales | $ 65,146 |
| $ 61,039 |
| |
Cost of sales | 40,321 |
| 37,630 |
| |
Gross earnings | 24,825 |
| 23,409 |
| |
|
|
|
|
| |
Selling and administrative expenses | 20,016 |
| 17,968 |
| |
Earnings from operations | 4,809 |
| 5,441 |
| |
|
|
|
|
| |
Interest income | 590 |
| 498 |
| |
Interest expense | (90) |
| (1) |
| |
Other income and expense, net | 56 |
| 133 |
| |
|
|
|
|
| |
Earnings before provision for income taxes | 5,365 |
| 6,071 |
| |
|
|
|
|
| |
Provision for income taxes | 1,863 |
| 2,090 |
| |
|
|
|
|
| |
Net earnings | 3,502 |
| 3,981 |
| |
|
|
|
|
| |
Net earnings attributable to noncontrolling interest | 130 |
| 124 |
| |
|
|
|
|
| |
Net earnings attributable to Weyco Group, Inc. | $ 3,372 |
| $ 3,857 |
| |
|
|
|
|
| |
Weighted average shares outstanding |
|
|
|
| |
Basic | 11,322 |
| 11,291 |
| |
Diluted | 11,366 |
| 11,494 |
| |
|
|
|
|
| |
Earnings per share |
|
|
|
| |
Basic | $ 0.30 |
| $ 0.34 |
| |
Diluted | $ 0.30 |
| $ 0.34 |
| |
|
|
|
|
| |
Cash dividends per share | $ 0.16 |
| $ 0.15 |
| |
|
|
|
|
| |
| | | | |
| |
WEYCO GROUP, INC. AND SUBSIDIARIES | |
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) | |
|
|
|
|
| |
|
| March 31, |
| December 31, | |
|
| 2011 |
| 2010 | |
|
| (Dollars in thousands) | |
ASSETS: | |
Cash and cash equivalents |
| $ 7,194 |
| $ 7,150 | |
Marketable securities, at amortized cost |
| 3,691 |
| 4,989 | |
Accounts receivable, net |
| 48,742 |
| 38,840 | |
Inventories |
| 51,143 |
| 56,111 | |
Prepaid expenses and other current assets |
| 3,888 |
| 4,398 | |
Total current assets |
| 114,658 |
| 111,488 | |
|
|
|
|
| |
Marketable securities, at amortized cost |
| 57,691 |
| 58,059 | |
Deferred income tax benefits |
| 1,266 |
| 1,090 | |
Other assets |
| 18,259 |
| 14,375 | |
Property, plant and equipment, net |
| 25,738 |
| 25,675 | |
Goodwill |
| 10,791 |
| - | |
Trademarks |
| 34,748 |
| 12,748 | |
Total assets |
| $ 263,151 |
| $ 223,435 | |
|
|
|
|
| |
LIABILITIES AND EQUITY: | |
Short-term borrowings |
| $ 34,045 |
| $ 5,000 | |
Accounts payable |
| 6,890 |
| 10,360 | |
Dividend payable |
| 1,812 |
| 1,811 | |
Accrued liabilities |
| 8,770 |
| 10,204 | |
Accrued income taxes |
| 1,082 |
| 116 | |
Deferred income tax liabilities |
| 392 |
| 228 | |
Total current liabilities |
| 52,991 |
| 27,719 | |
|
|
|
|
| |
Long-term pension liability |
| 18,938 |
| 18,572 | |
Other long-term liabilities |
| 11,753 |
| - | |
|
|
|
|
| |
Common stock |
| 11,353 |
| 11,356 | |
Capital in excess of par value |
| 19,983 |
| 19,548 | |
Reinvested earnings |
| 151,809 |
| 150,546 | |
Accumulated other comprehensive loss |
| (8,564) |
| (9,004) | |
Total Weyco Group, Inc. equity |
| 174,581 |
| 172,446 | |
Noncontrolling interest |
| 4,888 |
| 4,698 | |
Total equity |
| 179,469 |
| 177,144 | |
Total liabilities and equity |
| $ 263,151 |
| $ 223,435 | |
|
|
|
|
| |
| | | | |
| |
WEYCO GROUP, INC. AND SUBSIDIARIES | |
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) | |
|
|
|
| |
|
|
| Three Months Ended March 31, | |
|
|
| 2011 |
| 2010 | |
|
|
| (Dollars in thousands) | |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
| |
| Net earnings | $ 3,502 |
| $ 3,981 | |
| Adjustments to reconcile net earnings to net cash provided by operating activities - |
|
|
| |
|
| Depreciation | 657 |
| 704 | |
|
| Amortization | 46 |
| 22 | |
|
| Bad debt expense | 26 |
| 24 | |
|
| Deferred income taxes | (61) |
| 66 | |
|
| Net foreign currency transaction gains | (47) |
| (135) | |
|
| Stock-based compensation | 268 |
| 285 | |
|
| Pension expense | 737 |
| 813 | |
|
| Net gains on the sale of assets | (13) |
| - | |
|
| Increase in cash surrender value of life insurance | (141) |
| (138) | |
| Changes in operating assets and liabilities, net of effects from acquisition - |
|
|
| |
|
| Accounts receivable | (5,895) |
| (9,013) | |
|
| Inventories | 7,884 |
| 8,578 | |
|
| Prepaids and other current assets | 405 |
| 206 | |
|
| Accounts payable | (3,938) |
| (3,290) | |
|
| Accrued liabilities and other | (1,629) |
| (732) | |
|
| Accrued income taxes | 957 |
| 632 | |
|
| Net cash provided by operating activities | 2,758 |
| 2,003 | |
|
|
|
|
|
| |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
| |
| Acquisition of business, net of cash acquired | (27,023) |
| - | |
| Purchases of marketable securities | (16) |
| (6,448) | |
| Proceeds from maturities of marketable securities | 1,658 |
| 1,380 | |
| Proceeds from the sale of assets | 13 |
| - | |
| Purchases of property, plant and equipment | (654) |
| (385) | |
|
| Net cash used for investing activities | (26,022) |
| (5,453) | |
|
|
|
|
|
| |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
| |
| Cash dividends paid | (1,817) |
| (1,700) | |
| Shares purchased and retired | (305) |
| (90) | |
| Proceeds from stock options exercised | 172 |
| 152 | |
| Repayment of debt assumed in acquisition | (3,814) |
| - | |
| Net borrowings of commercial paper | 17,045 |
| - | |
| Proceeds from bank borrowings | 15,000 |
| - | |
| Repayments of bank borrowings | (3,000) |
| - | |
| Income tax benefits from stock-based compensation | 5 |
| 154 | |
|
| Net cash provided by (used for) financing activities | 23,286 |
| (1,484) | |
|
|
|
|
|
| |
| Effect of exchange rate changes on cash | 22 |
| 88 | |
|
|
|
|
|
| |
| Net increase (decrease) in cash and cash equivalents | 44 |
| (4,846) | |
|
|
|
|
|
| |
CASH AND CASH EQUIVALENTS at beginning of period | $ 7,150 |
| $ 30,000 | |
|
|
|
|
|
| |
CASH AND CASH EQUIVALENTS at end of period | $ 7,194 |
| $ 25,154 | |
|
|
|
|
|
| |
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
| |
| Income taxes paid, net of refunds | $ 1,073 |
| $ 1,903 | |
| Interest paid | $ 74 |
| $ - | |
|
|
|
|
|
| |
| | | | | |
CONTACT: John Wittkowske, Senior Vice President and Chief Financial Officer of Weyco Group, Inc., +1-414-908-1880
