Weyco Reports Third Quarter Sales And Earnings

Nov 02, 2015, 16:05 ET from Weyco Group, Inc.

MILWAUKEE, Nov. 2, 2015 /PRNewswire/ -- Weyco Group, Inc. (NASDAQ: WEYS) (the "Company") today announced financial results for the quarter ended September 30, 2015.

The Company achieved record third quarter net sales of $91.2 million in 2015. This represents a 4% increase over third quarter 2014 net sales of $87.4 million. Earnings from operations were $9.1 million in the third quarter of 2015, up 1% as compared to $9.0 million in the third quarter of 2014. Net earnings attributable to the Company and diluted earnings per share were flat at $5.5 million and $0.51 per share, respectively, in the third quarters of 2015 and 2014.  

Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $74.6 million for the third quarter of 2015, up 10% as compared to $68.0 million in the third quarter of 2014.  Within the wholesale segment, net sales of our BOGS brand were up 20% for the quarter, due to strong sales of its core products as well as positive acceptance of its new leather footwear. Net sales of our Stacy Adams brand were up 10% for the quarter, driven by strong new product sales. Florsheim and Nunn Bush net sales were up 4% and 1%, respectively, for the quarter. Wholesale gross earnings were 31.4% of net sales in the third quarter of 2015, as compared to 31.7% in last year's third quarter. Gross margins in the U.S. increased from 30.7% last year to 31.6% this year, however, this increase was offset by lower gross margins in Canada. Gross margins in Canada continue to be affected by the weaker Canadian dollar, however, gains recorded on foreign exchange contracts partially offset the impact of the weaker Canadian dollar this year.  Driven by higher sales volumes, wholesale earnings from operations rose 10% to $8.2 million in the third quarter of 2015, from $7.4 million in the same period last year.

The North American retail segment represents a small portion of the Company's overall business, with retail segment net sales comprising only 5% of total net sales. Net sales of this segment, which include sales from the Company's Florsheim retail stores and its internet business in the U.S., were $4.8 million in the third quarter of 2015, down 11% as compared to $5.4 million in 2014. The decrease was due to three fewer domestic retail stores operating this quarter compared to last year's third quarter, as well as a 5% decrease in same store sales. Retail earnings from operations were $402,000 this quarter, down from $638,000 in last year's third quarter, due to lower net sales at the Company's brick and mortar stores.

Other net sales, which include the wholesale and retail net sales of Florsheim Australia and Florsheim Europe, were $11.9 million in the third quarter of 2015, down 15% as compared to $14.0 million in 2014.  This decrease was primarily due to lower net sales at Florsheim Australia, caused mainly by the translation of the weaker Australian currency into U.S. dollars. In local currency, Florsheim Australia's net sales were up 10% for the quarter. Earnings from operations at Florsheim Australia and Florsheim Europe were $578,000 in the third quarter of 2015 compared to $936,000 in the same period last year. This decrease was primarily due to lower gross margins at Florsheim Australia. Gross margins in Australia were negatively impacted by the weaker Australian dollar this quarter, as Australia purchases its inventory in U.S. dollars.

"We are excited to have achieved record third quarter sales," stated Thomas W. Florsheim, Jr., the Company's Chairman and CEO. "Our sales increase was driven by our eighth consecutive quarter of double-digit sales growth for our BOGS brand, as well as our fifth consecutive quarter of double-digit sales growth for our Stacy Adams brand. We feel fortunate that the strength of our U.S. businesses offset the significant headwinds caused by the appreciation of the U.S. dollar against the Canadian and Australian currencies."

On November 2, 2015, the Company's Board of Directors declared a cash dividend of $0.20 per share to all shareholders of record on December 9, 2015, payable January 4, 2016. 

Conference Call Details:

Weyco Group will host a conference call on November 3, 2015, at 11:00 a.m. Eastern Time to discuss the third quarter financial results in more detail.  To participate in the call, please dial 888-713-4205 or 617-213-4862, referencing passcode 22724374, five minutes before the start of the call. A replay will be available for one year beginning about two hours after the completion of the call at the following webcast link: http://edge.media-server.com/m/p/pzaxkas2. Alternatively, the conference call 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, 

2015

2014

2015

2014

(In thousands, except per share amounts)

Net sales

$       91,227

$         87,425

$    233,213

$       225,217

Cost of sales

58,617

55,004

147,443

141,215

Gross earnings

32,610

32,421

85,770

84,002

Selling and administrative expenses

23,474

23,402

67,516

66,726

Earnings from operations

9,136

9,019

18,254

17,276

Interest income 

221

297

717

892

Interest expense

(67)

(52)

(97)

(123)

Other expense, net

(524)

(221)

(1,150)

(261)

Earnings before provision for income taxes

8,766

9,043

17,724

17,784

Provision for income taxes

3,389

3,498

6,670

6,488

Net earnings

5,377

5,545

11,054

11,296

Net (losses) earnings attributable to noncontrolling interest

(149)

27

(145)

366

Net earnings attributable to Weyco Group, Inc.

$         5,526

$           5,518

$       11,199

$         10,930

Weighted average shares outstanding

     Basic

10,793

10,775

10,788

10,810

     Diluted

10,884

10,870

10,881

10,902

Earnings per share

     Basic

$           0.51

$             0.51

$           1.04

$             1.01

     Diluted

$           0.51

$             0.51

$           1.03

$             1.00

Cash dividends declared (per share)

$           0.20

$             0.19

$           0.59

$             0.56

Comprehensive income

$         4,040

$           4,226

$         8,760

$         10,823

Comprehensive (loss) income attributable to noncontrolling interest

(562)

(342)

(846)

235

Comprehensive income attributable to Weyco Group, Inc.

$         4,602

$           4,568

$         9,606

$         10,588

 

 

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

September 30,

December 31, 

2015

2014

(Dollars in thousands)

ASSETS:

Cash and cash equivalents

$                    13,900

$                    12,499

Marketable securities, at amortized cost

5,739

5,914

Accounts receivable, net

67,098

55,100

Inventories

92,566

69,015

Prepaid expenses and other current assets

4,151

7,521

     Total current assets

183,454

150,049

Marketable securities, at amortized cost

20,630

24,540

Deferred income tax benefits

1,116

1,999

Property, plant and equipment, net

31,661

33,694

Goodwill

11,112

11,112

Trademarks

34,748

34,748

Other assets

20,726

21,304

     Total assets

$                  303,447

$                  277,446

LIABILITIES AND EQUITY:

Short-term borrowings

$                    41,974

$                      5,405

Accounts payable

8,030

15,657

Dividend payable

-

2,045

Accrued liabilities

16,417

12,752

Accrued income tax payable

729

151

Deferred income tax liabilities

1,864

1,747

     Total current liabilities

69,014

37,757

Long-term pension liability

31,959

33,379

Other long-term liabilities

2,656

8,356

Equity:

Common stock

10,809

10,821

Capital in excess of par value

42,075

37,966

Reinvested earnings

160,385

160,179

Accumulated other comprehensive loss

(19,623)

(18,030)

     Total Weyco Group, Inc. equity

193,646

190,936

Noncontrolling interest

6,172

7,018

     Total equity

199,818

197,954

     Total liabilities and equity

$                  303,447

$                  277,446

 

 

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30,

2015

2014

(Dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$            11,054

$             11,296

Adjustments to reconcile net earnings to net cash

 used for operating activities - 

Depreciation

2,700

2,775

Amortization

334

263

Bad debt expense

190

195

Deferred income taxes

456

(47)

Net foreign currency transaction losses

783

174

Stock-based compensation

1,112

1,046

Pension contributions

(2,633)

(1,300)

Pension expense

2,811

1,659

Increase in cash surrender value of life insurance

(250)

(250)

Changes in operating assets and liabilities - 

Accounts receivable

(12,223)

(14,702)

Inventories

(23,844)

(1,039)

Prepaid expenses and other assets

4,122

1,556

Accounts payable

(7,584)

(5,594)

Accrued liabilities and other

(4,807)

(418)

Accrued income taxes

553

1,010

    Net cash used for operating activities

(27,226)

(3,376)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of marketable securities

(2,300)

(7,427)

Proceeds from maturities of marketable securities

6,305

7,001

Life insurance premiums paid

(155)

(155)

Purchases of property, plant and equipment

(1,457)

(1,908)

     Net cash provided by (used for) investing activities

2,393

(2,489)

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash dividends paid

(8,414)

(7,999)

Shares purchased and retired

(4,760)

(3,996)

Proceeds from stock options exercised

2,696

1,226

Proceeds from bank borrowings

127,253

70,757

Repayments of bank borrowings

(90,684)

(58,470)

Income tax benefits from stock-based compensation

463

85

     Net cash provided by financing activities

26,554

1,603

Effect of exchange rate changes on cash and cash equivalents

(320)

21

Net increase (decrease) in cash and cash equivalents

$             1,401

$              (4,241)

CASH AND CASH EQUIVALENTS at beginning of period

12,499

15,969

CASH AND CASH EQUIVALENTS at end of period

$            13,900

$             11,728

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid, net of refunds

$             5,155

$               5,501

Interest paid

$                  97

$                    84

 

 

SOURCE Weyco Group, Inc.



RELATED LINKS

http://www.weycogroup.com