Exhibit 99.1
Weyco Reports Third Quarter Sales and Earnings
MILWAUKEE, Nov. 1 /PRNewswire-FirstCall/ -- Weyco Group, Inc.
(Nasdaq: WEYS), today announced financial results for the quarter ended
September 30, 2004.
Third Quarter Highlights:
-- Diluted earnings per share increased 25% to $0.74 compared with $0.59
in 2003.
-- Net sales increased 12% to $55.8 million compared with $49.8 million
in 2003.
Sales in the Company's wholesale division increased 14% to
$49.3 million compared with $43.1 million in 2003, with all three of
the company's major brands generating growth in the quarter.
Florsheim, Nunn Bush, and Stacy Adams increased 24%, 5%, and 19%,
respectively.
Licensing revenue increased 11% to $881,000 compared with $796,000
in 2003. The Company also recently signed a licensing agreement
with Aquarius, Ltd. to manufacture and market Florsheim belts and
small leather goods in the U.S.
Retail sales decreased 4% to $5.6 million compared with $5.9 million
in 2003. Same store sales were down 1% primarily as a result of
declines in the Company's seven Florida stores, which were adversely
affected by the hurricanes that hit Florida during the quarter. The
Company's other same store sales were up slightly. The remaining
decline in retail sales were due to the effect of closing three
stores earlier in 2004, which was partially offset by
the opening of one new store on July 31, 2004.
-- Operating earnings increased 37% to $7.1 million or 12.6% of net
sales, compared with $5.2 million or 10.3% of net sales in 2003. The
increase in operating earnings resulted from a 160 basis point
increase in overall gross margins and a decrease in operating expenses
as a percent of sales of 0.7%. The increase in gross margins was
primarily due to changes in product mix.
-- Earnings before income taxes increased 44% to $7.1 million or 12.7% of
net sales, compared to $4.9 million or 9.9% of net sales in 2003. The
increase in earnings before income taxes was greater than the increase
in operating earnings because of lower interest expense.
-- Net earnings increased 25% to $4.4 million or 7.8% of net sales,
compared to $3.5 million or 7.0% of net sales in 2003. Net earnings
growth was lower than the increase in earnings before taxes because
the tax rate was 38.2% this year versus 28.5% in 2003, as a result of
a favorable tax settlement in 2003.
"We are extremely pleased with our results for the third quarter in which
all of our major brands experienced solid increases," stated Tom Florsheim,
Jr., Chief Executive Officer, Weyco Group, Inc. "Our performance reflects the
Company's ability to target different segments of the men's footwear market
and achieve meaningful growth in each segment.
"In the third quarter, our Florsheim brand growth was driven by a strong
reception to new product, as well as the addition of a major new department
store group. While a portion of these sales are 'pipeline fill' to new
customers, we are generally encouraged by the level of sell through received
so far. Our focus with Florsheim has been to update the product mix and open
new distribution that fits with Florsheim's quality and heritage, and we are
making good progress toward both ends.
"Stacy Adams continues to benefit from the overall trend towards dressing
up, as well as the brand's continued momentum in its licensed products which
also had double digit growth. The success that Stacy Adams has experienced in
apparel and accessories has enabled the brand to position itself as a leader
in its lifestyle segment, and has helped spur additional footwear sales.
"Nunn Bush continues to strengthen its position as a major player in men's
moderately priced branded footwear. Nunn Bush sales increases were primarily
driven by demand for our Comfort Gel product, as well as our traditional dress
shoe business."
Weyco Group will host a conference call on Tuesday, November 2, at 11:00
a.m. Eastern Time to discuss the third quarter 2004 financial results in more
detail. To participate in the call please dial (800) 299-0433, referencing
passcode #35598062, 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, referencing passcode #96322569.
Alternatively, the conference call and replay will be available by visiting
the investor relations section of WEYCO Group's website at
http://www.weycogroup.com .
On October 1, 2004, the Company paid a regular quarterly dividend of $0.11
per share to shareholders of record September 1, 2004.
Weyco Group, Inc., designs and markets moderately priced and better-grade
men's branded footwear for casual, fashion, and dress lifestyles. The
principal brands of shoes sold by the Company are Florsheim, Nunn Bush, Nunn
Bush NXXT, Brass Boot, Stacy Adams and SAO by Stacy Adams. The Company also
operates a small number of retail stores in the U.S. and Europe.
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 September 30 Nine Months ended September 30
2004 2003 2004 2003
NET SALES $55,841,100 $49,817,256 $167,370,829 $161,197,464
COST OF SALES 35,866,719 32,774,309 107,967,795 106,355,797
Gross earnings 19,974,381 17,042,947 59,403,034 54,841,667
SELLING AND
ADMINISTRATIVE
EXPENSES 12,919,417 11,887,045 37,502,695 36,128,815
Earnings from
operations 7,054,964 5,155,902 21,900,339 18,712,852
INTEREST INCOME 119,460 131,378 360,466 403,346
INTEREST EXPENSE (101,923) (421,998) (368,261) (1,084,350)
OTHER INCOME
AND EXPENSE, net (2,268) 43,692 (45,401) 241,764
Earnings before
provision for
income taxes 7,070,233 4,908,974 21,847,143 18,273,612
PROVISION FOR
INCOME TAXES 2,700,000 1,400,000 8,350,000 6,500,000
Net earnings $4,370,233 $3,508,974 $13,497,143 $11,773,612
WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic 5,725,533 5,700,959 5,675,568 5,693,346
Diluted 5,903,247 5,903,141 5,856,138 5,881,725
EARNINGS PER SHARE
Basic $.76 $.62 $2.38 $2.07
Diluted $.74 $.59 $2.30 $2.00
CASH DIVIDENDS
PER SHARE $.11 $.10 $.32 $.28
WEYCO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
ASSETS
September 30 December 31
2004 2003
CURRENT ASSETS:
Cash and cash equivalents $5,865,563 $9,091,567
Marketable securities 940,560 4,206,100
Accounts receivable, net 38,145,332 29,900,197
Accrued income tax receivable -- 228,074
Inventories - finished shoes 52,234,327 43,727,578
Deferred income tax benefits 2,162,417 2,483,037
Prepaid expenses and other current assets 1,109,380 968,264
Total current assets 100,457,579 90,604,817
MARKETABLE SECURITIES 9,835,260 6,273,638
OTHER ASSETS 13,728,082 13,750,574
PLANT AND EQUIPMENT 40,177,966 40,914,250
Less - Accumulated depreciation 11,840,007 11,224,993
28,337,959 29,689,257
TRADEMARK 10,867,969 10,867,969
$163,226,849 $151,186,255
LIABILITIES & SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings $26,956,972 $27,944,830
Accounts payable 6,449,669 7,465,606
Dividend payable 630,022 563,642
Accrued liabilities 7,289,485 8,279,846
Accrued income taxes 1,480,526 --
Total current liabilities 42,806,674 44,253,924
LONG-TERM PENSION LIABILITY 3,242,128 3,077,285
DEFERRED INCOME TAX LIABILITIES 4,904,789 5,009,158
SHAREHOLDERS' INVESTMENT:
Common stock 5,728,225 5,630,418
Other shareholders' investment 106,545,033 93,215,470
$163,226,849 $151,186,255
WEYCO GROUP, INC AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (Unaudited)
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $13,497,143 $11,773,612
Adjustments to reconcile net
earnings to net cash
provided by operating activities -
Depreciation 2,003,050 1,643,335
Amortization 66,962 140,265
Deferred income taxes 216,251 (443,000)
Deferred compensation expense 37,800 147,969
Pension expense 534,720 610,000
Loss (Gain) on sale of assets 116,174 (25,819)
Increase in cash surrender vale of
life insurance (306,000) (279,000)
Changes in operating assets and liabilities -
Accounts receivable (8,245,135) (2,196,389)
Inventories (8,506,749) 6,424,915
Prepaids and other current assets (141,116) 244,696
Accounts payable (1,015,937) (5,515,193)
Accrued liabilities and other (1,287,958) 634,247
Accrued income taxes 1,708,600 770,838
Net cash (used for) provided by operating
activities (1,322,195) 13,930,476
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (4,260,081) (3,400,000)
Proceeds from maturities of marketable
securities 3,957,915 4,499,248
Purchase of plant and equipment (928,955) (8,379,073)
Proceeds from sales of plant and equipment 230,706 37,623
Net cash used for investing activities (1,000,415) (7,242,202)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (1,750,137) (1,594,878)
Shares purchased and retired -- (212,102)
Proceeds from stock options exercised 1,834,601 449,363
Net (repayments) borrowings under
revolving credit agreement (987,858) (2,839,719)
Net cash used for financing activities (903,394) (4,197,336)
Net (decrease) increase in cash and cash
equivalents (3,226,004) 2,490,938
CASH AND CASH EQUIVALENTS at
beginning of period $9,091,567 $7,301,104
CASH AND CASH EQUIVALENTS at end of period $5,865,563 $9,792,042
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $6,413,534 $5,694,925
Interest paid $335,763 $916,603
SOURCE Weyco Group, Inc.
-0- 11/01/2004
/CONTACT: John Wittkowske, Senior VP and CFO of WEYCO Group, Inc.,
+1-414-908-1880; or Rob Damron, Managing Director of 21st Century Equity
Advisors, +1-414-224-1668/
/Web site: http://www.weycogroup.com /
(WEYS)
CO: Weyco Group, Inc.
ST: Wisconsin
IN: REA HOU
SU: ERN SLS CCA