Weyco Reports Second Quarter Sales And Earnings

Jul 31, 2012, 16:41 ET from Weyco Group, Inc.

MILWAUKEE, July 31, 2012 /PRNewswire/ -- Weyco Group, Inc. (NASDAQ: WEYS) (the "Company") today announced financial results for the quarter ended June 30, 2012.

Net sales for the second quarter were $60.3 million, an increase of 7% from 2011 sales of $56.6 million.  Operating earnings for the second quarter of 2012 were $3.4 million, compared to $2.7 million in 2011. Net earnings attributable to the Company were $2.2 million, compared to $1.9 million in 2011.  Diluted earnings per share increased to $0.20 per share in 2012 from $0.17 per share in the second quarter of 2011.

Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $43.6 million for the second quarter of 2012, compared with $39.4 million in 2011.  Wholesale product sales were $43.1 million in the second quarter of 2012, up from $38.8 million in 2011. Wholesale sales of Stacy Adams, Nunn Bush, Florsheim and Bogs were up 13%, 9%, 5% and 34%, respectively, for the quarter.  Umi sales were down 4%. Licensing revenues were $539,000 in the second quarter of 2012 and $557,000 in 2011. Operating earnings for the segment were $2.1 million in the second quarter of 2012, compared to $1.0 million in 2011.

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 $5.6 million in the second quarter of 2012, compared with $5.9 million in 2011.  Same store sales increased 5% for the quarter. There were five fewer domestic retail stores as of June 30, 2012 compared to 2011.  Operating earnings for the segment decreased approximately $165,000 for the quarter.

Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $11.1 million in the second quarter of 2012, compared to $11.3 million in 2011.  The majority of other net sales are generated by Florsheim Australia.  Florsheim Australia's net sales increased 3%, or $285,000, but that gain was offset by a sales decrease of $445,000 at Florsheim Europe.  Collectively, the operating earnings of the Company's other businesses were $1.3 million in the second quarter of 2012 compared with $1.5 million in the same period last year.

"We are pleased with the sales volume increases that our major brands attained this quarter," stated Thomas W. Florsheim, Jr., Chairman and CEO.  "While the current retail market remains unpredictable, we feel our overall business is well positioned going into the second half of the year."

On July 30, 2012, the Company's Board of Directors declared a quarterly cash dividend of $0.17 per share to all shareholders of record September 3, 2012, payable October 1, 2012.

Weyco Group will host a conference call on August 1, 2012 at 11:00 a.m. Eastern Time to discuss the second quarter financial results in more detail.  To participate in the call please dial 888-713-4205 or 617-213-4862, referencing passcode 71259426, 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 39639443.  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 June 30, 

Six Months Ended June 30, 

2012

2011

2012

2011

(In thousands, except per share amounts)

Net sales

$  60,333

$  56,550

$  135,647

$  121,696

Cost of sales

37,455

33,887

84,738

74,208

Gross earnings

22,878

22,663

50,909

47,488

Selling and administrative expenses

19,476

19,930

41,674

39,946

Earnings from operations

3,402

2,733

9,235

7,542

Interest income 

483

586

966

1,176

Interest expense

(116)

(137)

(245)

(227)

Other income and expense, net

(123)

52

(65)

108

Earnings before provision for income taxes

3,646

3,234

9,891

8,599

Provision for income taxes

1,094

946

3,284

2,809

Net earnings

2,552

2,288

6,607

5,790

Net earnings attributable to noncontrolling interest

333

351

519

481

Net earnings attributable to Weyco Group, Inc.

$    2,219

$    1,937

$      6,088

$      5,309

Weighted average shares outstanding

Basic

10,865

11,120

10,877

11,221

Diluted

10,982

11,239

11,005

11,358

Earnings per share

Basic

$      0.20

$      0.17

$        0.56

$        0.47

Diluted

$      0.20

$      0.17

$        0.55

$        0.47

Cash dividends per share

$      0.17

$      0.16

$        0.33

$        0.32

Comprehensive income

$    2,088

$    2,689

$      6,978

$      6,691

Comprehensive income attributable to noncontrolling interest

151

420

796

610

Comprehensive income attributable to Weyco Group, Inc.

$    1,937

$    2,269

$      6,182

$      6,081

 

 

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

June 30,

December 31, 

2012

2011

(Dollars in thousands)

ASSETS:

Cash and cash equivalents

$                   9,266

$                 10,329

Marketable securities, at amortized cost

5,513

4,745

Accounts receivable, net

38,246

43,636

Accrued income tax receivable

1,211

816

Inventories

60,615

62,689

Deferred income tax benefits

100

395

Prepaid expenses and other current assets

5,178

5,613

     Total current assets

120,129

128,223

Marketable securities, at amortized cost

43,118

46,839

Deferred income tax benefits

4,205

3,428

Property, plant and equipment, net

31,583

31,077

Goodwill

11,112

11,112

Trademarks

34,748

34,748

Other assets

18,270

18,081

     Total assets

$               263,165

$               273,508

LIABILITIES AND EQUITY:

Short-term borrowings

$                 34,000

$                 37,000

Accounts payable

4,405

12,936

Dividend payable

1,848

1,742

Accrued liabilities

14,387

13,217

     Total current liabilities

54,640

64,895

Long-term pension liability

27,107

26,344

Other long-term liabilities

7,832

10,879

Equity:

Common stock

10,882

10,922

Capital in excess of par value

24,730

22,222

Reinvested earnings

145,104

146,266

Accumulated other comprehensive loss

(13,325)

(13,419)

     Total Weyco Group, Inc. equity

167,391

165,991

Noncontrolling interest

6,195

5,399

     Total equity

173,586

171,390

     Total liabilities and equity

$               263,165

$               273,508

 

 

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended June 30,

2012

2011

(Dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$  6,607

$  5,790

Adjustments to reconcile net earnings to net cash

 provided by operating activities - 

Depreciation

1,603

1,342

Amortization

184

83

Bad debt expense

152

99

Deferred income taxes

(841)

(957)

Net gain on remeasurement of contingent consideration

(1,219)

-

Net foreign currency transaction losses (gains) 

90

(121)

Stock-based compensation

598

597

Pension expense

1,869

1,474

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

3

(13)

Increase in cash surrender value of life insurance

(115)

(127)

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

Accounts receivable

5,244

8,083

Inventories

2,082

4,662

Prepaids and other assets

376

1,060

Accounts payable

(8,547)

(3,484)

Accrued liabilities and other

(1,099)

(1,320)

Accrued income taxes

(392)

(2,281)

    Net cash provided by operating activities

6,595

14,887

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of businesses, net of cash acquired

-

(27,023)

Purchase of marketable securities

-

(80)

Proceeds from maturities of marketable securities

2,905

4,035

Proceeds from the sale of property, plant and equipment

-

13

Life insurance premiums paid

(155)

(155)

Purchase of property, plant and equipment

(2,128)

(3,117)

     Net cash provided by (used for) investing activities

622

(26,327)

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash dividends paid

(3,496)

(3,634)

Shares purchased and retired

(3,812)

(10,205)

Proceeds from stock options exercised

1,566

725

Repayment of debt assumed in acquisition

-

(3,814)

Net borrowings of commercial paper

-

19,950

Proceeds from bank borrowings

9,000

31,000

Repayments of bank borrowings

(12,000)

(20,000)

Income tax benefits from stock-based compensation

469

341

     Net cash (used for) provided by financing activities

(8,273)

14,363

Effect of exchange rate changes on cash and cash equivalents

(7)

102

Net (decrease) increase in cash and cash equivalents

$ (1,063)

$  3,025

CASH AND CASH EQUIVALENTS at beginning of period

10,329

7,150

CASH AND CASH EQUIVALENTS at end of period

$  9,266

$ 10,175

SUPPLEMENTAL CASH FLOW INFORMATION:

Income taxes paid, net of refunds

$  4,010

$  4,751

Interest paid

$     191

$     221

SOURCE Weyco Group, Inc.



RELATED LINKS

http://www.weycogroup.com