Published:
Weyco Reports Third Quarter Sales and Earnings
MILWAUKEE, Nov. 3 /PRNewswire-FirstCall/ -- Weyco Group, Inc. (Nasdaq: WEYS) today announced financial results for the quarter ended September 30, 2009.
Net sales for the third quarter were $57.9 million, an increase of 1% from 2008 sales of $57.2 million. Net earnings for the quarter were $3.4 million, down from $4.3 million in 2008. Diluted earnings per share were $.29 per share in 2009 as compared with $.37 per share in the third quarter of 2008.
On January 23, 2009, the Company acquired a majority interest in a new subsidiary that subsequently purchased the Florsheim wholesale and retail businesses in Australia, Asia Pacific and South Africa (collectively "Florsheim Australia"). The financial results of Florsheim Australia are included in the Company's consolidated financial statements from the date of acquisition. The Company previously had license agreements with these entities; consequently, no licensing revenues were recorded for these entities after January 23, 2009.
Net sales in the wholesale division, which includes North American wholesale sales and licensing revenues, were $42.4 million for the third quarter of 2009, compared with $48.8 million in 2008. Wholesale product sales were $41.8 million in the third quarter of 2009, down from $47.8 million in 2008. In the wholesale division, sales of the Company's Stacy Adams, Nunn Bush and Florsheim brands were down 10%, 7% and 21%, respectively. Licensing revenues were $616,000 in 2009 and $991,000 in 2008. The decrease in licensing revenues resulted from the Company's acquisition of its licensees in Australia, Asia Pacific, and South Africa, described above, and also was due to a general trend of lower sales of the Company's licensed products in the current challenging retail environment.
Net sales in the retail division, which includes sales from the Company's North American retail stores and domestic Internet business, were $5.1 million in the third quarter of 2009, compared with $6.2 million in 2008. The Company has two fewer stores this year compared with 2008. Same store sales were down 9.5%.
Foreign sales, which include the wholesale and retail sales of Florsheim Europe and Florsheim Australia, were $10.5 million in the third quarter of 2009, compared to $2.2 million in 2008. In 2009, Florsheim Europe's net sales were $2.3 million, with the remaining $8.2 million representing sales of Florsheim Australia.
Operating earnings for the third quarter were $4.6 million, down from $6.3 million in 2008. As a percent of sales, operating earnings fell from 11.1% in 2008 to 7.9% in 2009, due primarily to lower sales volumes in 2009.
"Our results continue to be impacted by the generally weak retail economy," stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group. "Our Company has strong brands and a lean cost structure and we believe that we will be well-positioned for success when the overall economy improves."
Weyco Group will host a conference call on November 4, 2009, at 11:00 a.m. Eastern Time to discuss the third quarter financial results in more detail. To participate in the call please dial 888-713-4215 or 617-213-4867, referencing passcode #41299823, 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 #84847251. 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 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, and Stacy Adams. The Company's products are sold to shoe specialty stores, department stores and clothing retailers. Weyco Group, Inc. operates wholesale and retail businesses in the United States, Canada, Europe, Australia, South Africa and the Far East.
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, 2009 AND 2008
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
------- ------- ------- -------
(In thousands, except per share amounts)
Net sales $57,943 $57,170 $166,904 $171,465
Cost of sales 36,272 36,265 106,631 108,561
------- ------- ------- -------
Gross earnings 21,671 20,905 60,273 62,904
Selling and administrative expenses 17,089 14,578 50,156 43,097
------- ------- ------- -------
Earnings from operations 4,582 6,327 10,117 19,807
Interest income 523 496 1,542 1,496
Interest expense (1) (15) (26) (45)
Other income and expense, net 373 3 1,172 11
------- ------- ------- -------
Earnings before provision for
income taxes 5,477 6,811 12,805 21,269
Provision for income taxes 1,877 2,470 4,352 7,745
------- ------- ------- -------
Net earnings 3,600 4,341 8,453 13,524
Net earnings attributable to
noncontrolling interest 240 - 404 -
------- ------- ------- -------
Net earnings attributable to
Weyco Group, Inc. $3,360 $4,341 $8,049 $13,524
======= ======= ======= =======
Weighted average shares outstanding
Basic 11,256 11,352 11,259 11,418
Diluted 11,453 11,726 11,493 11,791
Earnings per share
Basic $0.30 $0.38 $0.71 $1.18
======= ======= ======= =======
Diluted $0.29 $0.37 $0.70 $1.15
======= ======= ======= =======
Cash dividends per share $0.15 $0.14 $0.44 $0.39
======= ======= ======= =======
WEYCO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
2009 2008
-------- --------
(Dollars in thousands)
ASSETS:
Cash and cash equivalents $10,709 $11,486
Marketable securities, at amortized cost 1,326 6,623
Accounts receivable, net 42,612 29,873
Accrued income tax receivable - 2,226
Inventories 44,452 47,012
Deferred income tax benefits 371 579
Prepaid expenses and other current assets 3,245 3,678
-------- --------
Total current assets 102,715 101,477
Marketable securities, at amortized cost 46,319 39,447
Deferred income tax benefits 629 736
Other assets 11,058 10,069
Property, plant and equipment, net 28,351 28,043
Trademark 10,868 10,868
-------- --------
Total assets $199,940 $190,640
======== ========
LIABILITIES & SHAREHOLDERS' INVESTMENT:
Short-term borrowings $- $1,250
Accounts payable 7,043 7,494
Dividend payable 1,690 1,589
Accrued liabilities 8,491 6,490
Accrued income taxes 801 -
-------- --------
Total current liabilities 18,025 16,823
Long-term pension liability 15,255 15,160
Common stock 11,322 11,353
Capital in excess of par value 16,578 15,203
Reinvested earnings 143,204 142,617
Accumulated other comprehensive loss (8,384) (10,516)
-------- --------
Total Weyco Group Inc. shareholders'
investment 162,720 158,657
Noncontrolling interest 3,940 -
-------- --------
Total shareholders' investment 166,660 158,657
-------- --------
Total liabilities and shareholders'
investment $199,940 $190,640
======== ========
WEYCO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (UNAUDITED)
2009 2008
------- -------
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $8,453 $13,524
Adjustments to reconcile net earnings to net cash
provided by operating activities -
Depreciation 2,163 1,962
Amortization 70 85
Deferred income taxes 315 (598)
Stock-based compensation 645 437
Pension contribution (1,000) -
Pension expense 2,240 1,014
Loss on disposal of fixed assets 14 141
Increase in cash surrender value of life insurance (249) (247)
Change in operating assets and liabilities -
Accounts receivable (8,042) (2,297)
Inventories 9,614 (1,179)
Prepaids and other current assets 956 453
Accounts payable (1,953) (2,568)
Accrued liabilities and other 1,623 (1,673)
Accrued income taxes 3,027 184
------- -------
Net cash provided by operating activities 17,876 9,238
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of businesses (9,320) -
Purchase of marketable securities (8,065) (2,841)
Proceeds from maturities of marketable securities 6,420 4,078
Life insurance premiums paid (155) (155)
Purchase of property, plant and equipment (935) (2,048)
Proceeds from the sale of property, plant and
equipment - 2
------- -------
Net cash used for investing activities (12,055) (964)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash received from noncontrolling interest 1,314 -
Cash dividends paid (4,881) (4,144)
Shares purchased and retired (2,596) (8,418)
Proceeds from stock options exercised 677 2,058
Net (repayments) borrowings under revolving
credit agreement (1,250) 1,450
Income tax benefits from share-based compensation 138 1,635
------- -------
Net cash used for financing activities (6,598) (7,419)
------- -------
Net (decrease) increase in cash and cash
equivalents (777) 855
CASH AND CASH EQUIVALENTS at beginning of period $11,486 $7,859
------- -------
CASH AND CASH EQUIVALENTS at end of period $10,709 $8,714
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $1,304 $6,470
======= =======
Interest paid $28 $45
======= =======
SOURCE Weyco Group, Inc.
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