Exhibit 99.1
Weyco Reports Record Fourth Quarter And Full Year Sales And Earnings
MILWAUKEE, Feb. 23 /PRNewswire-FirstCall/ -- Weyco Group, Inc.
(Nasdaq: WEYS), today announced record financial results for the fourth
quarter and full year 2003.
For the fourth quarter:
-- Diluted earnings per share increased 11.0% to a record $.91 compared
with $.82 in 2002.
-- Net sales totaled $54.6 million compared with $54.2 in 2002.
Wholesale sales were $46.1 in 2003, versus $46.7 in 2002, a decrease
of 1.3%. The Company's Stacy Adams brand was up 1% with the
Company's Florsheim and Nunn Bush brands each down 2%. Retail sales
increased 8.5% to $7.2 million up from $6.6 million in 2002. Same
store sales were up 2%, with the rest of the increase due to one
additional store in 2003. Licensing revenue, which is included in net
sales, was $1.3 million in 2003 as compared with $.9 million in 2002.
-- Operating earnings increased 6.8% to $8.5 million or 15.7% of net
sales, compared with $8.0 million or 14.8% of net sales in 2002. The
increase in operating earnings results from an increase in overall
gross margins of approximately 1.2%. The increased margins were
primarily in the Company's Florsheim division and are the result of
product mix, as less excess and obsolete merchandise was sold in
2003. Inventories of the Florsheim products are now at normal
operating levels.
-- Net earnings grew by 13.3% to $5.4 million or 9.8% of sales, versus
$4.7 million or 8.7% of net sales in 2002. The 13.3% increase in net
earnings was greater than the 6.8% increase in operating earnings
because of lower interest expense, as both interest rates and debt
levels are down from 2002, and a lower effective tax rate.
For the year:
-- Diluted earnings per share increased by 27% to a record $2.91 as
compared with $2.29 in 2002.
-- Net sales were $215.8 million up 19.1% from 2002 net sales of
$181.2 million. Wholesale sales rose 14.5% to $187.3 million as
compared with $163.6 million in 2002. The increase in sales was due
to the Florsheim acquisition in May 2002, as 2003 now included a full
year of sales for the Florsheim brand. The Company's Nunn Bush brand
was up 1% while the Stacy Adams brand was down 2%. Retail sales
increased 56% to $24.9 million as compared with $15.9 million in
2002. The increase was primarily due to having a full year of retail
sales from the 23 stores acquired as part of the Florsheim
acquisition in May 2002 and the opening of one new store in March
2003. Same store retail sales were up 1.4% in 2003. Licensing
revenue, which is included in net sales, was $3.6 million in 2003 as
compared with $1.7 million in 2002.
-- Operating earnings increased 27.4% to $27.3 million or 12.6% of net
sales compared with $21.4 million or 11.8% of net sales.
-- Net earnings grew by 30% to $17.1 million or 7.9% of net sales, as
compared with $13.2 million or 7.3% of net sales.
Operating earnings and net earnings both increased primarily as a
result of the acquisition of Florsheim in May 2002. Also contributing to the
increase in earnings was an increase in overall gross margins of 2.8%, of
which 1% was the result of having a larger percentage of retail sales to total
sales in 2003. The remaining increase was principally in the Company's
Florsheim division, resulting from the change in product mix.
The Company's balance sheet continued to strengthen. During 2003 the
Company's cash and marketable securities increased $2.1 million, while at the
same time the Company completed an $8.5 million expansion of its distribution
center, repurchased $3.4 million of its common stock and paid down
$9.9 million on its outstanding debt. At December 31, 2003, the Company had
cash and marketable securities of $19.6 million and outstanding debt under its
revolving credit agreement of $27.9 million.
"2003 marked the best year in the Company's history," stated Tom
Florsheim, Jr., Chairman and Chief Executive Officer, Weyco Group, Inc. "We
are very pleased with the progress we have made in the first full year of
having Florsheim within the Weyco fold. We have worked through obsolete
inventory acquired in the acquisition, pruned back the distribution that did
not fit Florsheim's position in the market, and have retooled the product line
to broaden Florsheim's appeal to a more modern consumer. Our focus for 2004
is on continuing to build the Florsheim brand for the long term with the right
retail partners, emphasizing department stores and better specialty stores."
"Our Nunn Bush business continues to be strong, as indicated by the second
straight year of wholesale sales increases. Nunn Bush growth continues to be
driven by strong consumer and retail acceptance of our Comfort-Gel
construction, which offers an unparalleled value in today's marketplace."
"Our Stacy Adams dress shoe business continued to be robust, with a high
single-digit increase for the second straight year. Overall, sales for the
Stacy Adams division were down slightly based upon decline in our SAO casuals.
The casual streetwear market in which SAO competes remains challenging, as the
15 to 25-year old consumer has shifted more towards athletic shoes. However,
we believe that the SAO business is stabilizing. Our new designs for Fall
2004 have been well received and we are committed to maintaining SAO as an
important part of the Stacy Adams division. Overall we feel all of our brands
are well positioned as we head into 2004."
"Our licensing revenue more than doubled in 2003. This is due both to
having a full year of Florsheim licensing business, as well as strong growth
in our Stacy Adams licensing business. Florsheim licenses its brand in a
number of markets overseas and also has certain accessory licenses in the
United States. Stacy Adams licenses its brand name across eight different
product categories, with significant growth achieved every year since the
brand entered the licensing business in 1998."
On January 2, 2004, the Company paid a regular quarterly dividend of $.10
per share to shareholders of record December 1, 2003.
Weyco Group, Inc., headquartered in Milwaukee, WI, is engaged in the
distribution of men's footwear. The principal brands of shoes sold are
Florsheim, Nunn Bush, Nunn Bush NXXT, Brass Boot, Stacy Adams, and SAO by
Stacy Adams. The company's products consist of quality leather dress and
casual shoes.
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 a majority of 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.
CONSOLIDATED STATEMENTS OF EARNINGS
Unaudited
For the Quarter Ended For the Year Ended
December 31, December 31,
2003 2002 2003 2002
NET SALES 54,563,067 54,182,766 $215,760,531 $181,200,118
COST OF SALES 32,959,701 33,374,153 139,315,498 122,062,238
Gross earnings 21,603,366 20,808,613 76,445,033 59,137,880
SELLING AND
ADMINISTRATIVE
EXPENSES 13,055,488 12,805,113 49,184,303 37,731,912
Earnings from
operations 8,547,878 8,003,500 27,260,730 21,405,968
INTEREST INCOME 126,035 169,963 528,531 853,032
INTEREST EXPENSE (290,332) (477,773) (1,374,682) (1,289,159)
OTHER INCOME AND
EXPENSE, net 32,608 37,765 275,222 18,077
Earnings before
provision for
income taxes 8,416,189 7,733,455 26,689,801 20,987,918
PROVISION FOR
INCOME TAXES 3,055,000 3,000,000 9,555,000 7,800,000
Net earnings $ 5,361,189 $ 4,733,455 $ 17,134,801 $ 13,187,918
BASIC EARNINGS
PER SHARE* $.94 $.84 $3.01 $2.34
DILUTED EARNINGS
PER SHARE* $.91 $.82 $2.91 $2.29
*Earnings per share figures have been adjusted to reflect the October 1,
2003 150% stock dividend.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
December 31, 2003 and 2002
2003 2002
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $9,091,567 $7,301,104
Marketable securities, at amortized cost 4,206,100 2,099,140
Accounts receivable, net 29,900,197 32,170,795
Accrued income tax receivable 228,074 1,008,079
Inventories 43,727,578 49,740,933
Deferred income tax benefits 2,483,037 2,421,000
Prepaid expenses and other current assets 968,264 803,108
Total current assets 90,604,817 95,544,159
MARKETABLE SECURITIES, at amortized cost 6,273,638 8,026,127
OTHER ASSETS 13,750,574 12,687,075
PLANT AND EQUIPMENT, net 29,689,257 22,159,983
TRADEMARK 10,867,969 10,821,681
$151,186,255 $149,239,025
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings $27,944,830 $ --
Accounts payable 7,465,606 11,268,713
Dividend payable 563,642 490,810
Accrued liabilities 8,279,846 8,473,373
Total current liabilities 44,253,924 20,232,896
LONG-TERM PENSION LIABILITY 3,077,285 3,003,823
DEFERRED INCOME TAX LIABILITIES 5,009,158 3,416,000
LONG TERM DEBT -- 37,801,992
SHAREHOLDERS' INVESTMENT:
Common Stock 4,324,983 2,886,456
Class B Common Stock 1,305,435 902,608
Capital in excess of par value 4,189,138 4,999,047
Reinvested earnings 88,917,253 77,092,150
Accumulated other comprehensive income
(loss) 109,079 (1,095,947)
Total shareholders' investment 98,845,888 84,784,314
$151,186,255 $149,239,025
CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited)
For the years ended December 31, 2003 and 2002
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $17,134,801 $13,187,918
Adjustments to reconcile net earnings to
net cash provided by operating activities -
Depreciation 2,322,794 2,104,960
Amortization of debt issuance costs 187,020 126,159
Deferred income taxes 978,527 1,164,000
Deferred compensation 197,292 184,380
Pension expense (income) 992,050 13,971
(Gain) loss on sale of assets (25,819) 5,694
Increase in cash surrender value of
life insurance (574,371) (551,394)
Changes in operating assets and liabilities
(net of acquired business) -
Accounts receivable 2,270,598 852,193
Inventories 6,013,355 (7,374,620)
Prepaids and other current assets (165,156) (39,647)
Accounts payable (3,803,107) 5,672,219
Accrued liabilities and other (258,149) 1,439,578
Accrued income taxes 1,009,700 (2,468,382)
Net cash provided by operating
activities 26,279,535 14,317,029
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Florsheim assets (46,288) (48,477,847)
Purchase of marketable securities (5,163,270) (6,004,234)
Proceeds from maturities of marketable
securities 4,808,799 9,899,355
Purchase of plant and equipment (9,833,660) (8,194,532)
Proceeds from sales of plant and equipment 37,623 2,200
Net cash used for investing activities (10,196,796) (52,775,058)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs -- (374,057)
Cash dividends paid (2,086,763) (1,878,604)
Shares purchased and retired (3,361,294) (195,447)
Proceeds from stock options exercised 1,012,943 1,064,155
Net (repayments) borrowings under
revolving credit facilities (9,857,162) 30,292,088
Net cash (used for) provided by
financing activities (14,292,276) 28,908,135
Net increase (decrease) in cash and
cash equivalents 1,790,463 (9,549,894)
CASH AND CASH EQUIVALENTS, at beginning
of year $7,301,104 $16,850,998
CASH AND CASH EQUIVALENTS, at end of year $9,091,567 $7,301,104
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $7,543,171 $9,069,613
Interest paid $1,383,664 $893,957
SOURCE Weyco Group, Inc.
-0- 02/23/2004
/CONTACT: John Wittkowske of Weyco Group, Inc., +1-414-908-1880/
/Web site: http://www.weycogroup.com /
(WEYS)
CO: Weyco Group, Inc.
ST: Wisconsin
IN: REA
SU: ERN