MILWAUKEE, Oct. 31 /PRNewswire-FirstCall/ — Weyco Group, Inc. (NASDAQ:WEYS) today announced financial results for the quarter ended September 30, 2006.
Net earnings increased 7% to $5,168,000, up from $4,822,000 during the same quarter in 2005. Net sales for the quarter were $56,085,000 compared with $55,219,000 in 2005, an increase of 2%. Diluted earnings per share increased to $.43 per diluted share in 2006 from $.40 per diluted share in 2005, an increase of 7.5%.
Net sales in the wholesale division, which include wholesale sales and licensing revenues, were $49,388,000 for the third quarter of 2006 compared with $49,183,000 in 2005. Wholesale sales were $48,472,000 in 2006, up from $48,264,000 in 2005. Licensing revenues in 2006 were $916,000 compared with $919,000 in 2005. Sales of the Company’s Stacy Adams and Florsheim brands were up 4% and 7%, respectively, for the quarter, while sales of the Company’s Nunn Bush brand were down 8%.
Retail sales were up 11% for the quarter to $6,697,000, from $6,036,000 in 2005, with same store sales up 6%. The Company now operates 34 retails stores in the United States as compared with 30 in 2005.
Operating earnings were $7,855,000, up 3% from $7,652,000 in 2005. Operating earnings as a percent of net sales approximated the prior year level at 14%.
“We are pleased that we have been able to grow our sales and increase our earnings, despite the loss of business resulting from some consolidations in the retail industry,” stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group. “This speaks to the strength of our brands and our ability to control costs.”
Weyco Group will host a conference call on Wednesday, November 1, 2006, at 11:00 a.m. Eastern Time to discuss the third quarter financial results in more detail. To participate in the call please dial 866-314-5050, referencing passcode #91858814, 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 #39305292. Alternatively, the conference call and replay will be available by visiting the investor relations section of Weyco Group’s website at http://www.weycogroup.com/ .
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 also operates a small number of retail stores in the United States and Europe.
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 (Unaudited)Three Months ended Nine Months ended
September 30, September 30,
2006 2005 2006 2005NET SALES $56,084,718 $55,218,588 $160,484,367 $157,795,446
COST OF SALES 35,484,325 35,607,712 101,391,210 101,607,480
Gross earnings 20,600,393 19,610,876 59,093,157 56,187,966SELLING AND
ADMINISTRATIVE
EXPENSES 12,744,934 11,959,191 37,547,263 35,524,839
Earnings from
operations 7,855,459 7,651,685 21,545,894 20,663,127INTEREST INCOME 488,670 298,428 1,468,378 710,964
INTEREST EXPENSE (145,271) (87,051) (442,565) (237,018)
OTHER INCOME
(EXPENSE), net (5,720) 4,260 (2,248) (25,788)
Earnings before
provision for
income taxes 8,193,138 7,867,322 22,569,459 21,111,285PROVISION FOR
INCOME TAXES 3,025,000 3,045,000 8,450,000 8,060,000Net earnings $5,168,138 $4,822,322 $14,119,459 $13,051,285
WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic 11,675,238 11,575,788 11,621,084 11,555,307
Diluted 12,098,045 11,992,330 12,031,126 11,973,913EARNINGS PER SHARE
Basic $.44 $.42 $1.21 $1.13
Diluted $.43 $.40 $1.17 $1.09CASH DIVIDENDS
PER SHARE $.09 $.07 $.25 $.195CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
September 30, December 31,
2006 2005
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $5,299,953 $22,780,913
Marketable securities, at amortized cost 815,030 875,317
Accounts receivable, net. 34,985,077 27,843,048
Inventories 47,039,922 38,548,602
Deferred income tax benefits 1,661,788 1,174,235
Prepaid expenses and other current assets 819,341 1,424,858
Total current assets 90,621,111 92,646,973
MARKETABLE SECURITIES, at amortized cost 41,996,669 30,290,089
OTHER ASSETS 15,062,053 14,252,604
PLANT AND EQUIPMENT, net 28,097,396 27,440,762
TRADEMARK 10,867,969 10,867,969
$186,645,198 $175,498,397LIABILITIES & SHAREHOLDERS’ INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings $11,602,566 $9,552,504
Accounts payable 8,288,311 12,222,907
Dividend payable 1,052,693 810,241
Accrued liabilities 7,482,685 6,106,107
Accrued income taxes 570,445 1,221,423
Total current liabilities 28,996,700 29,913,182
LONG-TERM PENSION LIABILITY 3,850,063 3,672,312
DEFERRED INCOME TAX LIABILITIES 5,980,146 5,344,702
SHAREHOLDERS’ INVESTMENT:
Common stock 9,088,312 8,979,243
Class B common stock 2,588,281 2,595,031
Capital in excess of par value 6,213,679 3,437,697
Reinvested earnings 129,570,619 121,334,722
Accumulated other comprehensive income 357,398 221,508
Total shareholders’ investment 147,818,289 136,568,201
$186,645,198 $175,498,397CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
For the nine months ended September 30, 2006 and 20052006 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $14,119,459 $13,051,285
Adjustments to reconcile net earnings
to net cash provided by operating
activities –
Depreciation 1,604,725 1,693,347
Amortization 54,613 35,566
Deferred income taxes 147,891 507,444
Pension contribution (1,000,000) —
Pension expense 894,753 663,453
Gain (loss) on sale of assets 13 (1,642)
Increase in cash surrender value of
life insurance (376,605) (333,000)
Changes in operating assets and
liabilities –
Accounts receivable (7,142,029) (6,416,573)
Inventories (8,491,320) 11,021,966
Prepaids and other current assets 617,670 807,958
Accounts payable (3,934,596) 2,315,548
Accrued liabilities and other 1,333,778 (2,406,293)
Accrued income taxes (650,978) 753,994
Net cash (used for) provided by
operating activities (2,822,626) 21,693,053CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (17,813,020) (17,615,427)
Proceeds from maturities of
marketable securities 6,112,114 3,029,703
Purchase of plant and equipment (2,245,677) (1,086,860)
Proceeds from sales of plant and
equipment 996 4,587
Net cash used for investing
activities (13,945,587) (15,667,997)CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (2,665,206) (2,074,017)
Shares purchased and retired (3,124,644) (1,423,656)
Proceeds from stock options exercised 1,828,579 1,722,494
Net draws (repayments) under revolving
credit agreement 2,050,062 (1,875,404)
Income tax benefit from the exercise
of stock options 1,198,462 —
Net cash used for financing activities (712,747) (3,650,583)Net (decrease) increase in cash and
cash equivalents (17,480,960) 2,374,473CASH AND CASH EQUIVALENTS at beginning
of period $22,780,913 $10,514,707CASH AND CASH EQUIVALENTS at end of
period $5,299,953 $12,889,180SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $7,638,064 $6,848,616
Interest paid $443,781 $232,071
