Weyco Reports Fourth Quarter and Full Year 2009 Results
MILWAUKEE, Feb. 23 /PRNewswire-FirstCall/ -- Weyco Group, Inc. (Nasdaq: WEYS) today announced financial results for the fourth quarter and full year 2009.
FOURTH QUARTER
Net sales for the fourth quarter were $58.4 million, up from $50.0 million in 2008. Net earnings attributable to Weyco Group, Inc. for the quarter were $4.8 million, up from $3.5 million in 2008. Diluted earnings per share were $.41 in 2009, as compared with $.30 for the fourth 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 net sales and licensing revenues, were $44.0 million in the fourth quarter of 2009, compared with $41.9 million in 2008. Wholesale product sales were $43.2 million in 2009, up from $40.6 million in 2008. In the wholesale division, sales of the Company's Stacy Adams, Nunn Bush and Florsheim brands were up 7%, 6% and 7%, respectively, compared to 2008. Licensing revenues were $766,000 in 2009, compared with $1.3 million in 2008. The decrease in licensing revenues resulted from the Company's acquisition of its licensees in Australia, Asia Pacific and South Africa, and was also 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 its domestic Internet business, were $6.3 million, down from $7.1 million in 2008. The Company had two fewer stores in 2009 than 2008. Same store sales were down 3%.
The Company's other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $8.1 million for the fourth quarter of 2009, compared to $974,000 in 2008. In 2009, Florsheim Australia's net sales were $7.0 million, and Florsheim Europe's sales were $1.1 million.
Earnings from operations for the fourth quarter of 2009 were $6.7 million, up from $4.7 million in 2008. This resulted primarily from sales volume increases and higher gross margins in the North American wholesale division this quarter. The higher margins this year resulted from increased pricing on selected products and also cost reductions achieved as a result of expense control measures. During the fourth quarter of 2009, earnings from operations were impacted by a $1.1 million charge to recognize the impairment of certain retail division fixed assets.
FULL YEAR 2009
Overall net sales in 2009 of $225.3 million were up 2% compared with $221.4 million in the prior year. Net earnings attributable to Weyco Group, Inc. were $12.8 million, down from $17.0 million in 2008. Diluted earnings per share were $1.11 in 2009 and $1.45 last year.
Net sales in the wholesale division, which includes North American wholesale net sales and licensing revenues, were $168.7 million compared with $187.2 million in 2008. Wholesale product sales were $166.0 million, down 9% from $182.9 million in 2008. Sales of the Company's Stacy Adams, Nunn Bush and Florsheim brands were down 12%, 2% and 15%, respectively, compared to 2008. Licensing revenues were $2.7 million in 2009 and $4.3 million in 2008. For the year, the decrease in licensing revenues resulted from the Company's acquisition of its licensees in Australia, Asia Pacific and South Africa, described above, and was also 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 its domestic Internet business were $22.0 million, down 17% from $26.5 million in 2008. The Company had two fewer stores in 2009 than 2008. Same store sales were down 8%.
The Company's other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $34.6 million in 2009, compared to $7.7 million in 2008. In 2009, Florsheim Australia's net sales were $27.3 million and Florsheim Europe's net sales were $7.3 million.
Earnings from operations were $16.8 million in 2009, down from $24.5 million in the prior year. Operating earnings as a percent of net sales were 7.4% in 2009 and 11.1% in 2008. The decrease is primarily the result of lower sales volumes and lower gross margins throughout the first three quarters of 2009.
The Company's balance sheet remained strong at December 31, 2009. The Company's cash and marketable securities totaled $76.8 million at the end of 2009 and there was no debt outstanding. At December 31, 2008, the Company's cash and marketable securities totaled $57.6 million and there was $1.25 million of borrowings under its revolving line of credit.
"As a result of the recession, we experienced lower sales volumes and margin pressure throughout most of 2009," stated Tom Florsheim Jr., Chairman and CEO of Weyco Group. "In the fourth quarter, there were some signs of stabilization in the economy, some of our cost control measures were realized, and our results improved. Throughout 2009, we continued to invest in our brands and we believe that we are well-positioned for success as the economy improves."
The Company's Board of Directors declared a cash dividend on February 22, 2010 of $.15 per share to all shareholders of record on March 1, 2010, payable April 1, 2010.
Weyco Group will host a conference call on Wednesday, February 24, 2010, at 11:00 a.m. Eastern Time to discuss the fourth quarter and full year 2009 financial results in more detail. To participate in the call, please dial 888-680-0893 or 617-213-4859, referencing passcode #88590903, 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 #32102938. 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 TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008
(UNAUDITED)
Three Months Ended For the year ended
December 31, December 31,
2009 2008 2009 2008
---- ---- ---- ----
(In thousands, except per share amounts)
Net sales $58,401 $49,965 $225,305 $221,432
Cost of sales 34,197 31,732 140,829 140,294
------ ------ ------- -------
Gross earnings 24,204 18,233 84,476 81,138
Selling and
administrative expenses 17,541 13,541 67,696 56,639
------ ------ ------ ------
Earnings from operations 6,663 4,692 16,780 24,499
Interest income 500 520 1,850 2,016
Interest expense - (17) (26) (62)
Other income and expense, net 42 (32) 1,406 (21)
-- -- ----- --
Earnings before provision for
income taxes 7,205 5,163 20,010 26,432
Provision for income taxes 2,589 1,662 6,940 9,407
----- ----- ----- -----
Net earnings 4,616 3,501 13,070 17,025
Net (loss) earnings attributable
to noncontrolling interest (155) - 249 -
--- --- --- ---
Net earnings attributable to
Weyco Group, Inc. $4,771 $3,501 $12,821 $17,025
====== ====== ======= =======
Weighted average shares
outstanding
Basic 11,274 11,335 11,266 11,397
Diluted 11,563 11,654 11,510 11,757
Earnings per share
Basic $0.42 $0.31 $1.14 $1.49
===== ===== ===== =====
Diluted $0.41 $0.30 $1.11 $1.45
===== ===== ===== =====
Cash dividends per share $0.15 $0.14 $0.59 $0.53
===== ===== ===== =====
WEYCO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
December 31, December 31,
2009 2008
---- ----
(Dollars in thousands)
ASSETS:
Cash and cash equivalents $30,000 $11,486
Marketable securities, at amortized cost 3,954 6,623
Accounts receivable, net 33,020 29,873
Accrued income tax receivable - 2,226
Inventories 40,363 47,012
Deferred income tax benefits - 579
Prepaid expenses and other current assets 3,922 3,678
----- -----
Total current assets 111,259 101,477
Marketable securities, at amortized cost 42,823 39,447
Deferred income tax benefits 2,261 736
Other assets 13,070 10,069
Property, plant and equipment, net 26,872 28,043
Trademark 10,868 10,868
------ ------
Total assets $207,153 $190,640
======== ========
LIABILITIES & SHAREHOLDERS' INVESTMENT:
Short-term borrowings $- $1,250
Accounts payable 9,202 7,494
Dividend payable 1,693 1,589
Accrued liabilities 7,846 6,490
Accrued income taxes 1,241 -
Deferred income tax liabilities 295 -
--- ---
Total current liabilities 20,277 16,823
Long-term pension liability 18,533 15,160
Common stock 11,333 11,353
Capital in excess of par value 16,788 15,203
Reinvested earnings 146,241 142,617
Accumulated other comprehensive loss (10,066) (10,516)
------ ------
Total Weyco Group Inc. shareholders'
investment 164,296 158,657
Noncontrolling interest 4,047 -
Total shareholders' investment 168,343 158,657
------- -------
Total liabilities and shareholders'
investment $207,153 $190,640
======== ========
WEYCO GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 (UNAUDITED)
2009 2008
---- ----
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $13,070 $17,025
Adjustments to reconcile net
earnings to net cash provided by
operating activities -
Depreciation 2,948 2,631
Amortization 93 114
Deferred income taxes (18) 436
Stock-based compensation 877 609
Foreign exchange (gain) loss (1,339) -
Impairment of property, plant and
equipment 1,110 -
Pension contribution (1,000) (1,000)
Pension expense 2,986 1,378
Loss on disposal of fixed assets 13 141
Increase in cash surrender value of
life insurance (507) (566)
Change in operating assets and
liabilities -
Accounts receivable 2,917 6,092
Inventories 15,758 (2,380)
Prepaids and other current assets (1,153) (348)
Accounts payable (231) (3,047)
Accrued liabilities and other (1,089) (2,400)
Accrued income taxes 3,467 (2,941)
----- -----
Net cash provided by
operating activities 37,902 15,744
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of businesses (9,320) -
Life insurance premiums paid (155) (155)
Purchase of marketable securities (8,073) (3,069)
Proceeds from maturities of
marketable securities 7,273 5,820
Purchase of property, plant and
equipment (1,318) (2,178)
Proceeds from sales of property, plant,
and equipment 2 4
-- --
Net cash (used for) provided by
investing activities (11,591) 422
------ ---
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash received from noncontrolling
interest 1,314 -
Cash dividends paid (6,578) (5,738)
Shares purchased and retired (2,633) (11,539)
Proceeds from stock options exercised 683 2,191
Net (repayments) borrowings under
revolving credit agreement (1,250) 700
Income tax benefits from share-based
compensation 124 1,847
--- -----
Net cash used for financing
activities (8,340) (12,539)
----- ------
Effect of exchange rate changes
on cash 543 -
Net increase in cash and cash
equivalents 18,514 3,627
CASH AND CASH EQUIVALENTS at beginning
of period $11,486 $7,859
======= ======
CASH AND CASH EQUIVALENTS at end
of period $30,000 $11,486
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $3,055 $9,996
====== ======
Interest paid $28 $62
=== ===
SOURCE Weyco Group, Inc.
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