MILWAUKEE, Feb. 25, 2008 (PRIME NEWSWIRE) -- Weyco Group, Inc. (Nasdaq:WEYS) today announced financial results for the quarter and full year 2007.
FOURTH QUARTER
Net sales were $62.2 million compared with $60.6 million in 2006, an increase of 3%. Net earnings were $7.8 million, up from $7.7 million during the same period in 2006. Diluted earnings per share were up 3% to $.66 in 2007 from $.64 in 2006.
Net sales in the wholesale division, which include wholesale sales and licensing revenues, were $52.8 million compared with $51.2 million in 2006. Wholesale sales were $51.5 million in 2007, up 3% from $50.0 million in 2006. Licensing revenues were $1.3 million in 2007 and $1.2 million in 2006. Sales of the Company's Florsheim and Stacy Adams brands grew 5% and 11%, respectively. Sales of the Company's Nunn Bush brand were down 3%. The increase in Florsheim sales was due entirely to sales in Canada, resulting from the transition in Canada from a licensing business to a wholesale business on January 1, 2007. Florsheim U.S. sales were down 3% for the quarter.
Retail sales were flat in the fourth quarter of 2007, as compared with 2006. Same store sales were down 2%.
Operating earnings were $11.6 million, down 2% from $11.9 million in the prior year. Operating earnings as a percent of net sales were 18.7% in 2007 compared with 19.6% in 2006.
FULL YEAR 2007
Net sales of $232.6 million were up 5% compared with $221.0 million in the prior year. Net earnings were a record $22.9 million, up 5% from $21.9 million in 2006. Diluted earnings per share were $1.91 in 2007 and $1.81 last year.
Net sales in the wholesale division, which include wholesale sales and licensing revenues, were $201.5 million compared with $191.3 million in 2006. Wholesale sales were $197.4 million in 2007, up 5% from $187.2 million in 2006. Licensing revenues were $4.1 million in 2007 and 2006. Sales of the Company's Florsheim brand increased 14%, and sales of the Stacy Adams brand increased 5%. Sales of the Company's Nunn Bush brand were down 2% in 2007. The increase in Florsheim sales was due principally to the previously discussed change in Canadian distribution. Florsheim U.S. sales were up 4% for the year.
Retail sales increased 5% in 2007 to $31.1 million, up from $29.8 million in 2006. Same store sales were up 2%.
Operating earnings of $34.1 million increased 2% from $33.4 million in the prior year. Operating earnings as a percent of net sales were 14.7% in 2007 and 15.1% in 2006.
The Company's balance sheet remains strong at December 31, 2007. The Company's cash and marketable securities totaled $56.8 million at the end of 2007, as compared to $57.3 million in 2006. The Company's borrowings under its revolving credit agreement were $550,000 compared with $11.0 million in 2006. The Company's excess of cash and marketable securities over borrowings was $56.2 million at December 31, 2007, compared with $46.3 million at December 31, 2006.
"We are very pleased that 2007 was a record year for Weyco Group in terms of both sales and profits," stated Tom Florsheim, Jr. Chairman and CEO of Weyco Group. "With that said, we started to see a slow down of retail footwear sales at our customers and in our own stores during the second half of the year, particularly in the fourth quarter. We feel that the slow down that we are seeing is caused by general economic factors, and that our brands are well positioned to grow over the long term."
The Company's Board of Directors declared a cash dividend on February 4, 2008 of $.11 per share to all shareholders of record on February 19, 2008, payable April 1, 2008.
Weyco Group will host a conference call on Tuesday, February 26, 2008 at 11:00 a.m. Eastern Time to discuss the fourth quarter and year end 2007 financial results in more detail. To participate in the call please dial (888) 680-0892 or (617) 213-4858, referencing passcode #47712490, ten 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 #23397788. Alternatively, the conference call and replay will be available by visiting the investor relations section of Weyco Group's website at 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 number of retail stores in the U.S. 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. Except as required by law, 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 STATEMENTS OF EARNINGS (Unaudited)
For the Quarter Ended For the Year Ended
December 31, December 31,
------------------------ --------------------------
2007 2006 2007 2006
----------- ----------- ------------ ------------
NET SALES $62,225,011 $60,563,120 $232,616,656 $221,047,487
COST OF SALES 36,369,218 34,343,337 143,199,303 135,734,547
----------- ----------- ------------ ------------
Gross
earnings 25,855,793 26,219,783 89,417,353 85,312,940
SELLING AND
ADMINISTRATIVE
EXPENSES 14,228,019 14,321,282 55,285,340 51,868,545
----------- ----------- ------------ ------------
Earnings from
operations 11,627,774 11,898,501 34,132,013 33,444,395
INTEREST INCOME 530,068 472,598 2,158,983 1,940,976
INTEREST EXPENSE (65,215) (165,882) (352,905) (608,447)
OTHER INCOME AND
EXPENSE, net 17,527 15,875 24,891 13,627
----------- ----------- ------------ ------------
Earnings
before
provision
for income
taxes 12,110,154 12,221,092 35,962,982 34,790,551
PROVISION FOR
INCOME TAXES 4,287,000 4,485,000 13,062,000 12,935,000
----------- ----------- ------------ ------------
Net earnings $ 7,823,154 $ 7,736,092 $ 22,900,982 $ 21,855,551
=========== =========== ============ ============
BASIC EARNINGS
PER SHARE $.68 $.66 $1.98 $1.88
=========== =========== ============ ============
DILUTED EARNINGS
PER SHARE $.66 $.64 $1.91 $1.81
=========== =========== ============ ============
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
December 31, 2007 and 2006
2007 2006
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 7,858,677 $ 15,314,140
Marketable securities, at
amortized cost 5,603,858 1,600,871
Accounts receivable, net 35,964,696 30,641,632
Inventories 44,632,321 51,000,849
Deferred income tax benefits 475,162 949,109
Prepaid expenses and other
current assets 3,301,054 1,715,859
------------ ------------
Total current assets 97,835,768 101,222,460
MARKETABLE SECURITIES, at amortized cost 43,330,715 40,361,296
OTHER ASSETS 9,440,367 8,725,346
PLANT AND EQUIPMENT, net 28,676,728 28,445,900
TRADEMARK 10,867,969 10,867,969
------------ ------------
$190,151,547 $189,622,971
============ ============
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings $ 550,000 $ 10,957,518
Accounts payable 10,541,233 12,398,740
Dividend payable 1,270,207 1,054,354
Accrued liabilities -
Wages, salaries and commissions 2,254,045 1,852,305
Taxes, other than income taxes 724,993 858,294
Other 5,047,335 5,719,668
Accrued income taxes 715,484 72,907
------------ ------------
Total current liabilities 21,103,297 32,913,786
------------ ------------
LONG-TERM PENSION LIABILITY 6,042,961 6,620,842
DEFERRED INCOME TAX LIABILITIES 2,247,701 1,915,869
SHAREHOLDERS' INVESTMENT:
Common Stock 11,534,059 9,129,256
Class B Common Stock -- 2,585,087
Capital in excess of par 10,787,927 7,576,096
Reinvested earnings 142,774,698 134,264,076
Accumulated other comprehensive income (4,339,096) (5,382,041)
------------ ------------
Total shareholders' investment 160,757,588 148,172,474
------------ ------------
$190,151,547 $189,622,971
============ ============
CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited)
For the years ended December 31, 2007 and 2006
2007 2006
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 22,900,982 $ 21,855,551
Adjustments to reconcile net earnings
to net cash provided by operating
activities -
Depreciation 2,484,414 2,205,979
Amortization 90,010 75,065
Deferred income taxes 79,734 517,973
Long-term incentive compensation 316,511 25,213
Pension contribution -- (1,000,000)
Pension expense 1,359,123 1,185,822
Gain on sale of assets (14,632) (728)
Increase in cash surrender value of
life insurance (681,356) (643,291)
Changes in operating assets
and liabilities -
Accounts receivable (5,323,064) (2,798,584)
Inventories 6,368,528 (12,452,247)
Prepaids and other assets (1,555,538) (293,982)
Accounts payable (1,857,507) 175,833
Accrued liabilities and other (685,110) 1,908,906
Accrued income taxes 669,577 (1,148,516)
------------ ------------
Net cash provided by operating
activities 24,151,672 9,612,994
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (8,405,737) (17,813,940)
Proceeds from maturities of
marketable securities 1,343,321 6,942,114
Purchase of plant and equipment (2,727,362) (3,185,862)
Proceeds from sales of plant
and equipment 76,632 1,737
------------ ------------
Net cash used for
investing activities (9,713,146) (14,055,951)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (4,655,745) (3,717,899)
Shares purchased and retired (9,924,502) (5,197,875)
Proceeds from stock options exercised 1,853,250 2,937,888
Net (repayments) borrowings under
revolving credit facilities (10,407,518) 1,405,014
Income tax benefits from share-based
compensation 1,240,526 1,549,056
------------ ------------
Net cash used for
financing activities (21,893,989) (3,023,816)
------------ ------------
Net decrease in cash and
cash equivalents (7,455,463) (7,466,773)
------------ ------------
CASH AND CASH EQUIVALENTS, at
beginning of year $ 15,314,140 $ 22,780,913
------------ ------------
CASH AND CASH EQUIVALENTS,
at end of year $ 7,858,677 $ 15,314,140
============ ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $ 10,901,122 $ 11,796,993
Interest paid $ 399,770 $ 576,004