Weyco Reports Third Quarter Sales And Earnings

MILWAUKEE, Oct. 29, 2012 /PRNewswire/ -- Weyco Group, Inc. (NASDAQ: WEYS) (the "Company") today announced financial results for the quarter ended September 30, 2012.

Net sales for the third quarter were $79.5 million, an increase of 7% from 2011 sales of $74.6 million. Operating earnings for the third quarter of 2012 increased 21% to $8.1 million, from $6.7 million in 2011. Net earnings attributable to the Company were $5.2 million, compared to $4.4 million in 2011.  Diluted earnings per share increased to $0.48 per share in 2012 from $0.40 per share in the third quarter of 2011.

Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $61.0 million for the third quarter of 2012, compared with $56.6 million in 2011.  Wholesale product sales were $60.2 million in the third quarter of 2012, up from $55.5 million in 2011. Wholesale sales of Florsheim, Bogs and Umi were up 20%, 46% and 9% respectively, for the quarter. Stacy Adams sales remained flat while Nunn Bush sales were down 16% for the quarter. Licensing revenues were $800,000 in the third quarter of 2012 and $1.1 million in 2011. The Company took over the distribution of Bogs in Canada on June 1, 2012. Consequently, Bogs wholesale sales increased and its licensing revenues decreased. Bogs net sales in Canada were $4.1 million in the third quarter of 2012. Operating earnings for the wholesale segment were $6.6 million in the third quarter of 2012, compared to $5.0 million in 2011. The takeover of the Canadian distribution of Bogs contributed to the increase in operating earnings for the quarter.

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 $5.5 million in the third quarter of 2012, compared with $5.8 million in 2011.  Same store sales increased 2% for the quarter. There were four fewer domestic retail stores as of September 30, 2012 compared to 2011.  Operating earnings for the segment were $322,000 in the third quarter of 2012 compared to $245,000 in 2011.

Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $12.9 million in the third quarter of 2012, compared to $12.2 million in 2011.  The majority of these net sales are generated by Florsheim Australia.  Florsheim Australia's net sales increased 14%, or $1.4 million, but that gain was offset by a sales decrease of $700,000 at Florsheim Europe.  Collectively, the operating earnings of the Company's other businesses were $1.2 million in the third quarter of 2012 compared with $1.5 million in the same period last year.

"Overall, we feel we had very solid results this quarter," stated Thomas W. Florsheim, Jr. Chairman and CEO. "In particular, we are pleased with the performance of Bogs in Canada. We recently took over the distribution of Bogs in that market and believe we are well-positioned for long-term growth in Canada." 

On October 29, 2012, the Company's Board of Directors declared a quarterly cash dividend of $0.17 per share to all shareholders of record December 3, 2012, payable January 2, 2013.

Weyco Group will host a conference call on Tuesday, October 30, 2012 at 11:00 a.m. Eastern Time to discuss the third quarter financial results in more detail.  To participate in the call please dial 888-679-8035 or 617-213-4848, referencing passcode 15022148, 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 59235367.  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 September 30, 


Nine Months Ended September 30, 



2012


2011


2012


2011



(In thousands, except per share amounts)










Net sales

$ 79,473


$ 74,601


$ 215,120


$ 196,297

Cost of sales

49,027


46,061


133,765


120,269

Gross earnings

30,446


28,540


81,355


76,028










Selling and administrative expenses

22,338


21,823


64,012


61,769

Earnings from operations

8,108


6,717


17,343


14,259










Interest income 

438


543


1,404


1,719

Interest expense

(143)


(124)


(388)


(351)

Other income and expense, net

10


(62)


(55)


46










Earnings before provision for income taxes

8,413


7,074


18,304


15,673










Provision for income taxes

2,961


2,525


6,245


5,334










Net earnings

5,452


4,549


12,059


10,339










Net earnings attributable to noncontrolling interest

260


140


779


621










Net earnings attributable to Weyco Group, Inc.

$   5,192


$   4,409


$   11,280


$     9,718










Weighted average shares outstanding









Basic

10,827


10,946


10,860


11,128


Diluted

10,911


11,037


10,974


11,251










Earnings per share









Basic

$     0.48


$     0.40


$       1.04


$       0.87


Diluted

$     0.48


$     0.40


$       1.03


$       0.86










Cash dividends per share

$     0.17


$     0.16


$       0.50


$       0.48



















Comprehensive income

$   6,058


$   3,369


$   13,036


$   10,060










Comprehensive income attributable to noncontrolling interest

323


(269)


1,119


341










Comprehensive income attributable to Weyco Group, Inc.

$   5,735


$   3,638


$   11,917


$     9,719










    

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)














September 30,


December 31, 


2012


2011


(Dollars in thousands)

ASSETS:

Cash and cash equivalents

$              7,529


$           10,329

Marketable securities, at amortized cost

6,873


4,745

Accounts receivable, net

58,627


43,636

Accrued income tax receivable

-


816

Inventories

62,839


62,689

Deferred income tax benefits

286


395

Prepaid expenses and other current assets

4,449


5,613

     Total current assets

140,603


128,223





Marketable securities, at amortized cost

38,720


46,839

Deferred income tax benefits

4,429


3,428

Property, plant and equipment, net

34,137


31,077

Goodwill

11,112


11,112

Trademarks

34,748


34,748

Other assets

18,596


18,081

     Total assets

$          282,345


$         273,508





LIABILITIES AND EQUITY:




Short-term borrowings

$            44,000


$           37,000

Accounts payable

9,536


12,936

Dividend payable

1,841


1,742

Accrued liabilities

13,277


13,217

Accrued income tax payable

1,401


-

     Total current liabilities

70,055


64,895





Long-term pension liability

27,455


26,344

Other long-term liabilities

7,786


10,879





Equity:




Common stock

10,845


10,922

Capital in excess of par value

25,808


22,222

Reinvested earnings

146,660


146,266

Accumulated other comprehensive loss

(12,782)


(13,419)

     Total Weyco Group, Inc. equity

170,531


165,991

Noncontrolling interest

6,518


5,399

     Total equity

177,049


171,390

     Total liabilities and equity

$          282,345


$         273,508

    

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
















Nine Months Ended September 30,




2012


2011




(Dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:





Net earnings

$ 12,059


$ 10,339


Adjustments to reconcile net earnings to net cash (used for)





 provided by operating activities - 






Depreciation

2,442


2,085



Amortization

249


178



Bad debt expense

173


133



Deferred income taxes

(1,381)


(1,420)



Net gain on remeasurement of contingent consideration

(1,681)


-



Net foreign currency transaction losses (gains) 

83


303



Stock-based compensation

896


896



Pension contribution

-


(1,600)



Pension expense

2,638


2,212



Net gain on sale of marketable securities

-


(346)



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

3


(13)



Increase in cash surrender value of life insurance

(250)


(268)


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






Accounts receivable

(15,163)


(8,328)



Inventories

(145)


2,483



Prepaids and other assets

848


736



Accounts payable

(3,401)


(1,785)



Accrued liabilities and other

362


111



Accrued income taxes

2,217


(351)



    Net cash (used for) provided by operating activities

(51)


5,365







CASH FLOWS FROM INVESTING ACTIVITIES:





Acquisition of businesses, net of cash acquired

-


(27,023)


Purchase of marketable securities

-


(1,154)


Proceeds from maturities and sales of marketable securities

5,947


11,349


Proceeds from the sale of property, plant and equipment

-


14


Life insurance premiums paid

(155)


(155)


Purchase of property, plant and equipment

(5,411)


(4,013)



     Net cash provided by (used for) investing activities

381


(20,982)







CASH FLOWS FROM FINANCING ACTIVITIES:





Cash dividends paid

(5,351)


(5,396)


Shares purchased and retired

(5,684)


(12,132)


Proceeds from stock options exercised

2,216


1,059


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

22,000


68,000


Repayments of bank borrowings

(15,000)


(24,000)


Income tax benefits from stock-based compensation

643


457



     Net cash (used for) provided by financing activities

(3,176)


19,174








Effect of exchange rate changes on cash and cash equivalents

46


(88)








Net (decrease) increase in cash and cash equivalents

$  (2,800)


$   3,469







CASH AND CASH EQUIVALENTS at beginning of period

10,329


7,150







CASH AND CASH EQUIVALENTS at end of period

$   7,529


$ 10,619







SUPPLEMENTAL CASH FLOW INFORMATION:





Income taxes paid, net of refunds

$   4,665


$   5,304


Interest paid

$      309


$      354







 

 

SOURCE Weyco Group, Inc.



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