Weyco Reports Fourth Quarter And Full Year 2012 Results

Feb 28, 2013, 16:05 ET from Weyco Group, Inc.

MILWAUKEE, Feb. 28, 2013 /PRNewswire/ -- Weyco Group, Inc. (NASDAQ: WEYS) (the "Company") today announced financial results for the quarter and year ended December 31, 2012.

FOURTH QUARTER

Net sales for the fourth quarter were $78.4 million, an increase of 5% from 2011 sales of $74.8 million.  Operating earnings for the fourth quarter of 2012 increased 39% to $12.5 million, from $8.9 million in 2011. Net earnings attributable to the Company were $7.7 million, compared to $5.5 million in 2011. Diluted earnings per share increased to $0.71 per share in 2012, from $0.50 per share in the fourth quarter of 2011. Earnings for the quarter included $1.8 million ($1.1 million after tax, or $0.10 per diluted share) of income resulting from a reduction in the liability for  future payments to be made as a result of the 2011 acquisition of The Combs Company ("Bogs").

Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $56.6 million for the fourth quarter of 2012, compared with $55.0 million in 2011.  Wholesale product sales were $55.4 million in the fourth quarter of 2012, up from $53.8 million in 2011. Wholesale net sales of the Company's Stacy Adams and Florsheim brands were each up 9% for the quarter, while Nunn Bush sales remained flat.  Wholesale net sales of the Company's BOGS and Rafters brands collectively decreased 7% for the quarter.  The decrease in the BOGS and Rafters business was primarily due to lower fourth quarter 2012 sales of the BOGS brand in the U.S. due to the mild winter.  The decrease in BOGS U.S. business was partially offset by $2.5 million of BOGS net sales in Canada in the fourth quarter 2012, following the Company's June 1, 2012 takeover of the Canadian distribution of the BOGS and Rafters brands from a third party licensee.  Licensing revenues were $1.2 million in the fourth quarter of 2012 and 2011. Operating earnings for the wholesale segment were $9.1 million in the fourth quarter of 2012 compared to $6.0 million in 2011.

Net sales in the North American retail segment, which include sales from the Company's Florsheim retail stores in the U.S. and its Internet business, were $7.6 million in the fourth quarter of 2012, compared with $7.5 million in 2011, an increase of 1%.  Same store sales were up 8% for the quarter. There were seven fewer domestic retail stores as of December 31, 2012 compared to 2011.  Operating earnings for the segment were $1.3 million in the fourth quarter of 2012 compared to $1.2 million in 2011.

Other net sales, which include the wholesale and retail net sales of Florsheim Australia and Florsheim Europe, were $14.1 million in the fourth quarter of 2012, compared to $12.3 million in 2011.  The majority of other net sales were generated by Florsheim Australia.  Florsheim Australia's net sales were up 15% or $1.7 million.  Collectively, the operating earnings of the Company's other businesses were $2.1 million in the fourth quarter of 2012 compared to $1.7 million in the same period last year.  

FULL YEAR 2012

Overall net sales in 2012 were $293.5 million, an increase of 8% from 2011 sales of $271.1 million. Operating earnings increased 28% to $29.8 million in 2012, from $23.2 million in 2011.  Net earnings attributable to the Company were $19.0 million in 2012, compared to $15.3 million in 2011.  Diluted earnings per share increased to $1.73 per share in 2012, from $1.37 per share in the prior year.  Earnings for the year included $3.4 million ($2.1 million after tax, or $0.19 per share) of income resulting from a reduction in the liability for future payments to be made as a result of the 2011 acquisition of Bogs.

In the North American wholesale segment, net sales were $217.9 million in 2012 compared with $199.1 million in 2011. Wholesale product sales were $214.6 million in 2011, up 10% from $195.7 million in 2011. Net sales of the BOGS and Rafters brands were $36 million in 2012 compared to $28 million in 2011.  The Company's 2012 results included Bogs operations for the full year, while 2011 only included Bogs operations from the March 2, 2011 acquisition date through December 31, 2011.  In addition, Bogs had $6.9 million of sales in Canada in 2012, following the Company's June 1, 2012 takeover of the distribution of the BOGS and Rafters brands in Canada. Wholesale net sales of Stacy Adams, Nunn Bush and Florsheim were up 10%, 1%, and 8%, respectively, for the year.  Licensing revenues were $3.3 million in 2012 compared to $3.4 million in 2011. The operating earnings of the wholesale segment were up $6.6 million, or 42%, for the year.

In the retail segment, net sales were $24.3 million, down 2% from $24.7 million in 2011.  There were seven fewer stores at the end of 2012 compared to 2011.  Same store sales were up 8%.  The retail division's operating earnings were $1.7 million in 2012 compared to $1.6 million in 2011 due to an improvement in same store performance as well as the closing of underperforming stores during the year.

The Company's other businesses had net sales of $51.2 million in 2012 compared to $47.3 million in 2011.  The majority of the increase was at Florsheim Australia, whose net sales increased $4.7 million, or 12%.  Collectively, the operating earnings of the Company's other businesses were $5.9 million in 2012 compared to $6.0 million in 2011.

"We are pleased to announce that we had sales growth across all of our wholesale brands in North America and internationally during 2012," stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group, Inc. "We feel that our brands are well-positioned in their respective markets for future growth."

Weyco Group will host a conference call on March 1, 2013 at 11:00 a.m. Eastern Time to discuss the fourth quarter and full year 2012 financial results in more detail.  To participate in the call please dial 888-713-4211 or 617-213-4864, referencing passcode 33795724, 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 71041856.  Alternatively, the conference call and replay will be available by visiting the investor relations section of Weyco Group's website at www.weycogroup.com.

On December 31, 2012, the Company paid two quarterly cash dividends.  The Company accelerated the timing of its first quarter 2013 dividend of $0.17 per share which was payable to all shareholders of record on December 3, 2012.  The Company also accelerated the timing of its second quarter 2013 dividend of $0.17 per share which was payable to all shareholders of record on December 21, 2012. Both dividends were accelerated into the fourth quarter in anticipation of potential tax law changes effective January 1, 2013.  The Company plans to resume its regular quarterly dividend payment schedule in July 2013.

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

FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011 (UNAUDITED)

Three Months Ended December 31, 

Twelve Months Ended December 31,

2012

2011

2012

2011

(In thousands, except per share amounts)

Net sales

$  78,351

$   74,803

$   293,471

$  271,100

Cost of sales

44,819

44,109

178,584

164,378

Gross earnings

33,532

30,694

114,887

106,722

Selling and administrative expenses

21,078

21,756

85,090

83,525

Earnings from operations

12,454

8,938

29,797

23,197

Interest income 

436

501

1,840

2,220

Interest expense

(173)

(260)

(561)

(611)

Other income and (expense), net

(89)

170

(144)

216

Earnings before provision for income taxes

12,628

9,349

30,932

25,022

Provision for income taxes

4,288

3,247

10,533

8,581

Net earnings

8,340

6,102

20,399

16,441

Net earnings attributable to noncontrolling interest

663

569

1,442

1,190

Net earnings attributable to Weyco Group, Inc.

$    7,677

$     5,533

$     18,957

$    15,251

Weighted average shares outstanding

Basic

10,797

10,881

10,844

11,066

Diluted

10,878

11,016

10,950

11,159

Earnings per share

Basic

$      0.71

$       0.51

$         1.75

$        1.38

Diluted

$      0.71

$       0.50

$         1.73

$        1.37

Cash dividends declared (per share)

$      0.34

$       0.16

$         0.84

$        0.64

 

 

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

December 31,

December 31, 

2012

2011

(Dollars in thousands)

ASSETS:

Cash and cash equivalents

$             17,288

$             10,329

Marketable securities, at amortized cost

8,004

4,745

Accounts receivable, net

49,048

43,636

Accrued income tax receivable

1,136

816

Inventories

65,366

62,689

Deferred income tax benefits

649

395

Prepaid expenses and other current assets

4,953

5,613

     Total current assets

146,444

128,223

Marketable securities, at amortized cost

36,216

46,839

Deferred income tax benefits

792

3,428

Property, plant and equipment, net

37,218

31,077

Goodwill

11,112

11,112

Trademarks

34,748

34,748

Other assets

18,791

18,081

     Total assets

$           285,321

$           273,508

LIABILITIES AND EQUITY:

Short-term borrowings

$             45,000

$             37,000

Accounts payable

11,133

12,936

Dividend payable

-

1,742

Accrued liabilities

13,888

13,217

     Total current liabilities

70,021

64,895

Long-term pension liability

27,530

26,344

Other long-term liabilities

6,381

10,879

Common stock

10,831

10,922

Capital in excess of par value

26,184

22,222

Reinvested earnings

149,664

146,266

Accumulated other comprehensive loss

(12,514)

(13,419)

     Total Weyco Group, Inc. equity

174,165

165,991

Noncontrolling interest

7,224

5,399

     Total equity

181,389

171,390

     Total liabilities and equity

$           285,321

$           273,508

 

 

 

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Twelve Months Ended December 31,

2012

2011

(Dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$  20,399

$ 16,441

Adjustments to reconcile net earnings to net cash

 provided by operating activities - 

Depreciation

3,338

2,591

Amortization

305

253

Bad debt expense

175

316

Deferred income taxes

1,648

(343)

Net gains on remeasurement of contingent consideration

(3,522)

(206)

Net foreign currency transaction losses

138

197

Stock-based compensation

1,201

1,224

Pension contribution

-

(1,600)

Pension expense

3,407

2,836

Net gains on sale of marketable securities

-

(346)

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

63

(14)

Impairment of property, plant and equipment

93

165

Increase in cash surrender value of life insurance

(535)

(527)

Changes in operating assets and liabilities, net of effects from acquisitions - 

Accounts receivable

(5,586)

(1,267)

Inventories

(2,676)

(3,667)

Prepaids and other assets

368

(752)

Accounts payable

(1,802)

2,141

Accrued liabilities and other

1,293

633

Accrued income taxes

(320)

(932)

    Net cash provided by operating activities

17,987

17,143

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of businesses, net of cash acquired

-

(27,023)

Purchase of marketable securities

(10)

(1,179)

Proceeds from maturities and sales of marketable securities

7,342

12,963

Proceeds from the sale of property, plant and equipment

-

14

Life insurance premiums paid

(155)

(155)

Purchase of property, plant and equipment

(9,540)

(8,189)

     Net cash used for investing activities

(2,363)

(23,569)

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash dividends paid

(10,875)

(7,155)

Cash dividends paid to noncontrolling interest of subsidiary

(233)

-

Shares purchased and retired

(6,558)

(13,021)

Proceeds from stock options exercised

2,300

1,096

Payment of indemnification holdback

(2,000)

-

Repayment of debt assumed in acquisition

-

(3,814)

Net repayments of commercial paper

-

(5,000)

Proceeds from bank borrowings

33,000

73,000

Repayments of bank borrowings

(25,000)

(36,000)

Income tax benefits from stock-based compensation

655

496

     Net cash (used for) provided by financing activities

(8,711)

9,602

Effect of exchange rate changes on cash and cash equivalents

46

3

Net increase in cash and cash equivalents

$    6,959

$   3,179

CASH AND CASH EQUIVALENTS at beginning of year

10,329

7,150

CASH AND CASH EQUIVALENTS at end of year

$  17,288

$ 10,329

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid, net of refunds

$    8,946

$   7,989

Interest paid

$       442

$      457

 

SOURCE Weyco Group, Inc.



RELATED LINKS

http://www.weycogroup.com