Exhibit 99.1
Weyco Reports Record First Quarter Sales and Earnings
MILWAUKEE, April 26 /PRNewswire-FirstCall/ -- Weyco Group, Inc.
(Nasdaq: WEYS), today announced record financial results for the quarter ended
March 31, 2004.
First Quarter Highlights:
-- Diluted earnings per share increased 10% to a record $.88 compared
with $.80 in 2003.
-- Net sales totaled $61.7 million compared with $60.4 in 2003. Sales in
both the Company's wholesale and retail divisions showed increases.
The Company's Stacy Adams and Nunn Bush brands were up 9% and 1%,
respectively, with the Company's Florsheim brand down 11%. Retail
sales increased 14% to $6.5 million, up from $5.7 million in 2003.
Same store sales were up 13%. Licensing revenue was flat with
$750,000 included in net sales in each year.
-- Operating earnings increased 9.6% to $8.5 million or 13.7% of net
sales, compared with $7.7 million or 12.8% of net sales in 2003. The
increase in operating earnings results from an increase in overall
gross margins of approximately .7%. The increased margins were
primarily in the Company's Florsheim division and resulted from a
reduction of closeout sales. The increase in gross margins as a
percent of net sales in the Florsheim division offsets the loss of
gross margin dollars due to the decrease in net sales for the quarter.
-- Net earnings grew by 10.3% to $5.2 million or 8.3% of net sales,
versus $4.7 million or 7.7% of net sales in 2003. The 10.3% increase
in net earnings was greater than the 9.6% increase in operating
earnings because of lower interest expense, which was partially offset
by a slightly higher effective tax rate.
"We are very pleased with the results of the first quarter," stated Tom
Florsheim, Jr., Chairman and Chief Executive Officer, Weyco Group, Inc.
"While sales of Florsheim product were down for the quarter, the outlook for
the brand is strong. Our bookings for the fall season are up and we expect to
show an increase in sales in the Florsheim division in 2004. Since the
Florsheim acquisition in May 2002, we have updated the product to appeal to a
consumer that is in his 30's and 40's. This younger consumer is reacting
positively to our footwear, which we are seeing in our sell-through
performance, both in accounts that we are selling to on a wholesale basis, and
in our own stores as well."
"Our key strategy with Florsheim is to align ourselves with department
stores and 'better' shoe and clothing stores that provide an environment and
image that properly represent the brand. We have discontinued distribution
with several retailers where we feel that the environment is not appropriate
to selling Florsheim product, and we are making good strides in opening new
distribution that fits with Florsheim's quality and heritage. We are
supporting our product initiative by investing heavily in both print and
outdoor media with a creative execution that reflects an updated image for the
Florsheim brand."
"Our Stacy Adams division had an excellent quarter, up over 9%. This was
fueled by the continued strong performance of the Stacy Adams dress shoe
business. The Stacy Adams licensed products and the related licensing revenue
also had a strong quarter as the brand continues to benefit from the overall
market trend towards dressing up."
"Our Nunn Bush division sales were solid as the brand continues to deliver
a strong performance at retail. Over the past few years we believe that Nunn
Bush has strengthened its position as a dominant player in men's moderate
branded footwear and that potential remains for continued growth."
On April 1, 2004, the Company paid a regular quarterly dividend of $.10
per share to shareholders of record on March 8, 2004.
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)
March 31 March 31
2004 2003
NET SALES $61,743,369 $60,379,924
COST OF SALES 40,484,710 40,195,100
Gross earnings 21,258,659 20,184,824
SELLING AND ADMINISTRATIVE EXPENSES 12,776,351 12,447,444
Earnings from operations 8,482,308 7,737,380
INTEREST INCOME 120,863 149,826
INTEREST EXPENSE (167,485) (351,962)
OTHER INCOME AND EXPENSE, net (32,990) 20,950
Earnings before provision for income taxes 8,402,696 7,556,194
PROVISION FOR INCOME TAXES 3,250,000 2,885,000
Net earnings $5,152,696 $4,671,194
WEIGHTED AVERAGE SHARES
Basic 5,637,793 5,685,509
Diluted 5,837,573 5,843,840
EARNINGS PER SHARE
Basic $.91 $.82
Diluted $.88 $.80
CASH DIVIDENDS PER SHARE $.10 $.09
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31 December 31
2004 2003
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $7,911,001 $9,091,567
Marketable securities, at
amortized cost 3,729,197 4,206,100
Accounts receivable, net 38,835,619 29,900,197
Accrued income tax receivable -- 228,074
Inventories 36,736,510 43,727,578
Deferred income tax benefits 1,985,878 2,483,037
Prepaid expenses and other
current assets 949,681 968,264
Total current assets 90,147,886 90,604,817
MARKETABLE SECURITIES, at amortized cost 7,535,243 6,273,638
OTHER ASSETS 13,730,819 13,750,574
PLANT AND EQUIPMENT, net 29,341,365 29,689,257
TRADEMARK 10,867,969 10,867,969
$151,623,282 $151,186,255
LIABILITIES & SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings $24,969,660 $27,944,830
Accounts payable 5,813,425 7,465,606
Dividend payable 555,462 563,642
Accrued liabilities 6,310,449 8,279,846
Accrued income taxes 2,263,958 --
Total current liabilities 39,912,954 44,253,924
LONG-TERM PENSION LIABILITY 3,109,154 3,077,285
DEFERRED INCOME TAX LIABILITIES 5,006,478 5,009,158
SHAREHOLDERS' INVESTMENT:
Common stock 4,338,875 4,324,983
Class B common stock 1,306,043 1,305,435
Capital in excess of par value 4,416,651 4,189,138
Reinvested earnings 93,505,857 88,917,253
Accumulated other comprehensive income
(loss) 27,270 109,079
Total shareholders investment 103,594,696 98,845,888
$151,623,282 $151,186,255
CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited)
For the three months ended March 31, 2004 and 2003
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 5,152,696 $ 4,671,194
Adjustments to reconcile net
earnings to net cash provided
by operating activities -
Depreciation 678,422 667,439
Amortization 48,649 47,295
Deferred income taxes 494,479 111,000
Deferred compensation 17,400 49,323
Pension expense 150,000 150,000
Gain on sale of assets (84,704) --
Increase in cash surrender
value of life insurance (102,000) (93,000)
Changes in operating assets and
liabilities -
Accounts receivable (8,935,422) (9,044,392)
Inventories 6,991,068 (1,457,116)
Prepaids and other current assets 18,584 323,253
Accounts payable (1,652,181) 6,843,872
Accrued liabilities and other (2,103,152) (1,091,131)
Accrued income taxes 2,492,032 3,548,331
Net cash provided by
operating activities 3,165,871 4,726,068
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (1,412,909) (700,000)
Proceeds from maturities of
marketable securities 626,313 1,215,850
Purchase of plant and equipment (345,023) (1,038,628)
Proceeds from sales of plant
and equipment 90,611 --
Net cash used for
investing activities (1,041,008) (522,778)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (572,272) (490,810)
Proceeds from stock options exercised 242,013 64,025
Net (repayments) borrowings under
revolving credit agreement (2,975,170) 3,150,717
Net cash (used for)
provided by financing
activities (3,305,429) 2,723,932
Net (decrease) increase in cash
and cash equivalents (1,180,566) 6,927,222
CASH AND CASH EQUIVALENTS
at beginning of period $9,091,567 $7,301,104
CASH AND CASH EQUIVALENTS
at end of period $7,911,001 $14,228,326
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $129,500 $(937,710)
Interest paid $153,745 $396,679
SOURCE Weyco Group, Inc.
-0- 04/26/2004
/CONTACT: John Wittkowske of Weyco Group, Inc., +1-414-908-1880/
/Web site: www.weycogroup.com /
(WEYS)
CO: Weyco Group, Inc.
ST: Wisconsin
IN: REA FAS
SU: ERN