Wolverine World Wide, Inc. Announces Record Performance for Fourth Quarter and Full Year; Guides to Record Revenue and Earnings in Fiscal 2011

ROCKFORD, Mich., Feb. 1, 2011 /PRNewswire/ -- Wolverine World Wide, Inc. (NYSE: WWW) today reported record revenue and earnings per share for both the fourth quarter and full fiscal year ended January 1, 2011.  This excellent financial performance underscores the broad strength and consumer appeal of the Company's portfolio of lifestyle brands.

Reported revenue for the full year was a record $1.249 billion, an increase of 13.4% versus prior year revenue of $1.101 billion.  Adjusted earnings per fully diluted share were $2.17, a 22.6% increase compared to 2009 adjusted earnings of $1.77 per share.  Both years' adjusted earnings exclude the impact of restructuring charges and other expenses related to the Company's strategic restructuring plan that was completed in the second quarter of 2010.  Reported fully diluted earnings for the year were $2.11 per share compared to $1.24 per share in 2009.

Reported revenue for the fourth quarter was a record $385.0 million, a 23.2% increase versus the prior year.  Fully diluted earnings in the quarter were a record $0.52 per share, an increase of 15.6% compared to fourth quarter 2009 adjusted diluted earnings of $0.45.  The prior year's adjusted earnings exclude the impact of restructuring charges and other expenses related to the Company's strategic restructuring plan.  Reported earnings for the fourth quarter of 2009 were $0.33 per share.

"We are extremely pleased with the Company's exceptional financial performance in 2010, highlighted by record revenue and record earnings per share," said Blake W. Krueger, the Company's Chairman and Chief Executive Officer.  "All four branded operating groups contributed to the year's record results, and all geographic regions delivered double-digit revenue growth.  The Company's fourth quarter performance was also exceptional, and this momentum, coupled with a strong double-digit order backlog and enthusiastic responses to our 2011 product offerings, positions the Company for an excellent 2011."

Don Grimes, the Company's Senior Vice President and Chief Financial Officer, commented, "The Company's record financial performance in 2010 is a clear indication of the strength of our portfolio and the discipline with which we manage the business.  We remain mindful of the need to deliver superior financial results while still making appropriate investments for the future."

Highlights for the year:

• Gross margin for the full year was 39.6%, after adjusting for non-recurring restructuring and related charges included in cost of sales, compared to prior-year adjusted gross margin of 39.7%.  Reported gross margin for the full year was 39.5% compared to 2009 reported gross margin of 39.2%.  

• As a percentage of revenue, adjusted operating expenses were 27.8% of revenue, a decrease of 90 basis points compared to the prior year.  Full-year operating expenses increased 9.8%, to $347.5 million, after adjusting for non-recurring restructuring and related charges in both years.  Reported operating expenses for the full year were $350.3 million compared to 2009 reported operating expenses of $346.1 million.

• Consolidated inventory at the end of the year was $208.7 million, an increase of 32.0% compared to the prior year.  The Company's inventory level reflects both the excellent outlook for the first half of 2011 and strategic purchases ahead of announced price increases from third-party suppliers.

• The full-year effective tax rate was 27.1%, reflecting the net benefit from non-recurring adjustments, the settlement of a foreign tax audit and the reinstatement of the research and development tax credit.

• The Company repurchased 1,795,147 shares during 2010 for an aggregate cost of $51.2 million, or $28.52 per share.  The Company continues to maintain a strong balance sheet, with no significant debt and $150.4 million of cash and cash equivalents at the end of the year.

The Company anticipates continued excellent growth across its portfolio of brands. Based on the very positive momentum in the business, the Company currently anticipates:

• Fiscal 2011 revenue in the range of $1.350 billion to $1.390 billion, representing growth of 8.1% to 11.3% versus the prior year;

• Full-year gross margin in line with the prior-year's adjusted gross margin, as higher product costs are expected to be offset by strategic price increases and anticipated favorable mix;

• Modest operating expense leverage;

• A full-year effective tax rate of 29.0%;

• Fully diluted weighted average shares outstanding of 49.0 million; and

• Fully diluted earnings per share in the range of $2.35 to $2.45, representing growth of approximately 8% to 13% versus prior-year adjusted diluted earnings per share (growth of approximately 11% to 16% versus reported earnings per share).

Krueger concluded, "The state of the business has never been better.  We have momentum, and opportunities exist for accelerated growth across our entire brand portfolio and all geographic regions.  Our Company is known for its fanatical focus on product, and we are very excited about the upcoming launch of the Merrell Barefoot Collection and our brands' ability to continue capitalizing on the Boot and Vintage Americana trends that are currently dominating footwear.  All of these things, and more, put the Company in an enviable position as we look forward to another strong year in 2011."  

The Company will host a conference call at 8:30 a.m. ET today to discuss these results and current business trends.  To listen to the call at the Company's website, go to www.wolverineworldwide.com, click on "Investors" in the navigation bar, and then click on "Webcast" from the top navigation bar of the "Investors" page. To listen to the webcast, your computer must have Windows Media Player, which can be downloaded for free at www.wolverineworldwide.com.  In addition, the conference call can be heard at www.streetevents.com. A replay of the call will be available at the Company's website through February 15, 2011.

With a commitment to service and product excellence, Wolverine World Wide, Inc. is one of the world's leading marketers of branded casual, active lifestyle, work, outdoor sport and uniform footwear and apparel.  The Company's portfolio of highly recognized brands includes: Bates®, Chaco®, Cushe™, Hush Puppies®, HYTEST®, Merrell®, Sebago® Soft Style® and Wolverine®.  The Company also is the exclusive footwear licensee of popular brands including CAT®, Harley-Davidson® and Patagonia®. The Company's products are carried by leading retailers in the U.S. and globally in more than 190 countries and territories. For additional information, please visit our website, www.wolverineworldwide.com.

This press release contains forward-looking statements. In addition, words such as "estimates," "anticipates", "expects," "intends," "should," "will," variations of such words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Risk Factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements.  Uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters and makes it more likely that the Company's actual results could differ materially from expectations.  Risk Factors include, among others:  the Company's ability to successfully develop brands and businesses; changes in duty structures in countries of import and export; trade defense actions by countries; changes in consumer preferences or spending patterns; cancellation of orders for future delivery; changes in planned customer demand, re-orders or at-once orders; the availability and pricing of foreign footwear factory capacity; reliance on foreign sourcing; regulatory or other changes affecting the supply of materials used in manufacturing; the availability of power, labor and resources in key foreign sourcing countries, including China; the impact of competition and pricing; the impact of changes in the value of foreign currencies and the relative value to the U.S. Dollar; the development of new initiatives; the development of apparel; retail buying patterns; consolidation in the retail sector; changes in economic and market conditions; acts and effects of international conflict and terrorism; weather; and additional factors discussed in the Company's reports filed with the Securities and Exchange Commission and exhibits thereto. Other Risk Factors exist, and new Risk Factors emerge from time to time that may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.  Furthermore, the Company undertakes no obligation to update, amend or clarify forward-looking statements.

SOURCE Wolverine World Wide, Inc.