Weyco Reports First Quarter Sales And Earnings

MILWAUKEE, May 2, 2013 /PRNewswire/ -- Weyco Group, Inc. (NASDAQ: WEYS) (the "Company") today announced financial results for the quarter ended March 31, 2013.

Net sales for the first quarter of 2013 were $73.6 million, compared to 2012 net sales of $75.3 million. Operating earnings for the first quarter were $4.7 million in 2013 and $5.8 million in 2012.  Net earnings attributable to the Company were $3.2 million in 2013, compared to $3.9 million in 2012.  Diluted earnings per share were $0.30 per share in 2013, compared with $0.35 per share in the first quarter of 2012. Net earnings for last year's first quarter included approximately $301,000, or $0.03 per diluted share of income resulting from a reduction in the estimated liability for future payments to be made as a result of the 2011 acquisition of The Combs Company ("Bogs"). No significant adjustment was made to the estimated liability in the first quarter 2013.

Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $55.2 million for the first quarter of 2013, compared to $56.6 million in 2012.  Wholesale product sales were $54.6 million in the first quarter of 2013, compared to $55.9 million in 2012. Wholesale net sales of the Stacy Adams, Florsheim and Bogs brands were up 2%, 3%, and 8% respectively, while net sales of Nunn Bush were down 11% for the quarter.  The increase in Bogs net sales was due to sales this year in Canada, as  the Company took over the distribution of Bogs in Canada from a third party licensee on June 1, 2012.  This was partially offset by a 9% decrease in Bogs net sales in the United States.  Management believes that Bogs net sales in the United States decreased because retailers continued to sell winter products carried over from the prior mild winter rather than buying new stock.  Nunn Bush net sales were down due to soft sales to department stores in the first quarter this year.  Licensing revenues were $594,000 in the first quarter of 2013 and $725,000 in 2012.  Operating earnings for the North American wholesale segment were $3.7 million in the first quarter of 2013, compared to $4.5 million in 2012.

Net sales in the North American retail segment, which include sales from the Company's Florsheim retail stores in the United States and its Internet business, were $5.7 million in the first quarter of 2013 and 2012.  Same store sales were up 10% for the quarter. There were six fewer domestic retail stores at the end of the first quarter of 2013, compared to 2012.  Operating earnings for the segment improved for the quarter due to higher same store sales and the closure of underperforming stores since last year.

Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $12.6 million in the first quarter of 2013, compared to $13.0 million in 2012.  The majority of other net sales were generated by Florsheim Australia. Florsheim Australia's net sales decreased 2%.  Collectively, the operating earnings of the Company's other businesses in the first quarter of 2013 decreased $854,000 as compared to 2012.  

"Overall, we believe our first quarter performance reflected the soft retail environment," stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group, Inc.  "We remain confident that as retail growth picks up, we should see a corresponding increase in our business."

No dividends were paid in the first quarter of 2013, as the Company accelerated its first and second quarter 2013 dividend payments into 2012.  On April 30, 2013, the Company's Board of Directors declared a cash dividend of $0.18 per share to all shareholders of record on May 31, 2013, payable July 1, 2013.  This represents an increase of 6% above the previous quarterly dividend rate of $0.17.

Weyco Group will host a conference call on May 3, 2013 at 11:00 a.m. Eastern Time to discuss the first quarter financial results in more detail.  To participate in the call please dial 888-680-0869 or 617-213-4854, referencing passcode 94909589, 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 41998456.  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 AND COMPREHENSIVE INCOME (UNAUDITED)











Three Months Ended March 31, 




2013


2012




(In thousands, except per share amounts)







Net sales


$ 73,590


$ 75,314

Cost of sales


45,891


47,283

Gross earnings


27,699


28,031







Selling and administrative expenses


23,011


22,198

Earnings from operations


4,688


5,833







Interest income 


412


483

Interest expense


(127)


(129)

Other income and expense, net


(89)


58







Earnings before provision for income taxes


4,884


6,245







Provision for income taxes


1,759


2,190







Net earnings


3,125


4,055







Net (loss) earnings attributable to noncontrolling interest


(75)


186







Net earnings attributable to Weyco Group, Inc.


$   3,200


$   3,869







Weighted average shares outstanding






Basic


10,760


10,888


Diluted


10,835


11,028







Earnings per share






Basic


$     0.30


$     0.36


Diluted


$     0.30


$     0.35







Cash dividends declared (per share)


$         -


$     0.16













Comprehensive income


$   2,882


$   4,890







Comprehensive (loss) income attributable to noncontrolling interest


(147)


645







Comprehensive income attributable to Weyco Group, Inc.


$   3,029


$   4,245

 

WEYCO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)






March 31, 


December 31, 


2013


2012


(Dollars in thousands)

ASSETS:

Cash and cash equivalents

$     13,782


$             17,288

Marketable securities, at amortized cost

7,017


8,004

Accounts receivable, net

56,282


49,048

Accrued income tax receivable

-


1,136

Inventories

53,619


65,366

Deferred income tax benefits

351


649

Prepaid expenses and other current assets

3,318


4,953

     Total current assets

134,369


146,444





Marketable securities, at amortized cost

34,369


36,216

Deferred income tax benefits

1,369


792

Property, plant and equipment, net

36,827


37,218

Goodwill

11,112


11,112

Trademarks

34,748


34,748

Other assets

18,776


18,791

     Total assets

$   271,570


$           285,321









LIABILITIES AND EQUITY:

Short-term borrowings

$     38,000


$             45,000

Accounts payable

6,393


11,133

Accrued liabilities

8,900


13,888

Accrued income taxes

532


-

     Total current liabilities

53,825


70,021





Long-term pension liability

27,885


27,530

Other long-term liabilities

6,462


6,381





Common stock

10,807


10,831

Capital in excess of par value

29,261


26,184

Reinvested earnings

148,938


149,664

Accumulated other comprehensive loss

(12,685)


(12,514)

     Total Weyco Group, Inc. equity

176,321


174,165

Noncontrolling interest

7,077


7,224

     Total equity

183,398


181,389

     Total liabilities and equity

$   271,570


$           285,321

 

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)











Three Months Ended March 31,




2013


2012




(Dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:





Net earnings

$  3,125


$  4,055


Adjustments to reconcile net earnings to net cash





 provided by operating activities - 






Depreciation

953


800



Amortization

85


94



Bad debt expense

36


78



Deferred income taxes

(428)


(442)



Net gains on remeasurement of contingent consideration

-


(518)



Net foreign currency transaction losses (gains)

124


(51)



Stock-based compensation

316


299



Pension expense

825


989



Net losses (gains) on disposal of property, plant and equipment

3


(3)



Increase in cash surrender value of life insurance

(135)


(135)


Changes in operating assets and liabilities - 






Accounts receivable

(7,272)


(10,554)



Inventories

11,750


11,351



Prepaids and other assets

1,716


315



Accounts payable

(4,742)


(7,021)



Accrued liabilities and other

(4,341)


(1,155)



Accrued income taxes

1,669


2,233



    Net cash provided by operating activities

3,684


335







CASH FLOWS FROM INVESTING ACTIVITIES:





Proceeds from maturities of marketable securities

2,819


431


Proceeds from the sale of property, plant and equipment

3


-


Purchase of property, plant and equipment

(564)


(891)



     Net cash provided by (used for) investing activities

2,258


(460)







CASH FLOWS FROM FINANCING ACTIVITIES:





Cash dividends paid

-


(1,748)


Shares purchased and retired

(4,099)


(133)


Proceeds from stock options exercised

2,499


136


Payment of contingent consideration

(1,270)


-


Proceeds from bank borrowings

2,000


2,000


Repayments of bank borrowings

(9,000)


-


Income tax benefits from stock-based compensation

411


22



     Net cash (used for) provided by financing activities

(9,459)


277








Effect of exchange rate changes on cash and cash equivalents

11


62








Net (decrease) increase in cash and cash equivalents

$ (3,506)


$     214







CASH AND CASH EQUIVALENTS at beginning of period

17,288


10,329







CASH AND CASH EQUIVALENTS at end of period

$ 13,782


$ 10,543







SUPPLEMENTAL CASH FLOW INFORMATION:





Income taxes paid, net of refunds

$     560


$     419


Interest paid

$     123


$     103

SOURCE Weyco Group, Inc.



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