MILWAUKEE , Oct. 31 /PRNewswire-FirstCall/ -- Weyco Group, Inc. (Nasdaq: WEYS) today announced financial results for the quarter ended September 30, 2005 .
Net earnings increased 10.3% to $4.82 million , up from $4.37 million during the same quarter in 2004. Net sales for the quarter were $55.2 million compared with $55.8 million in 2004, a decrease of 1%. Diluted earnings per share increased to $.40 per diluted share in 2005 from $.37 per diluted share in 2004, an increase of 8%.
Net sales in the wholesale division, which include wholesale sales and
licensing revenues, were $49.2 million compared with $50.2 million in 2004.
Wholesale sales were down 2% from $49.3 million in 2004 to $48.3 million in
2005. Licensing revenues were approximately $900,000 in both 2005 and 2004.
Sales of the Company's Nunn Bush brand were up 2% and sales of
Retail sales were up 7% in the quarter to $6.0 million , up from $5.6 million in 2004. Same store sales were up 5.5%.
Operating earnings were $7.7 million , up 8.5% from $7.1 million in 2004. Operating earnings as a percent of net sales increased 130 basis points to 13.9% up from 12.6% in 2004. The increase in operating earnings can be attributed primarily to a decrease in selling and administrative expenses as gross earnings remained relatively flat as a percent of net sales.
'While we are pleased with our earnings increase, the overall wholesale environment is challenging and will remain so in the near term,' stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group. 'Our success this quarter reflected our efforts to control costs, as well as the solid performance of our Florsheim retail division.'
The Company's Board of Directors today declared a cash dividend of $.07 per share to all shareholders of record December 1, 2005 , payable January 2, 2006 .
All share and per share amounts in this release have been adjusted to reflect the two-for-one stock split distributed to shareholders on April 1, 2005 .
Weyco Group will host a conference call on Tuesday, November 1, 2005 , at 11:00 a.m. Eastern Time to discuss the third quarter financial results in more detail. To participate in the call please dial (800) 901-5231, referencing passcode #27051516, 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, referencing passcode #87562695. 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, Nunn
Bush NXXT, Brass Boot,
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
2005 2004 2005 2004
NET SALES $55,218,588 $55,841,100 $157,795,446 $167,370,829
COST OF SALES 35,607,712 35,866,719 101,607,480 107,967,795
Gross earnings 19,610,876 19,974,381 56,187,966 59,403,034
SELLING AND
ADMINISTRATIVE
EXPENSES 11,959,191 12,919,417 35,524,839 37,502,695
Earnings from
operations 7,651,685 7,054,964 20,663,127 21,900,339
INTEREST INCOME 298,428 119,460 710,964 360,466
INTEREST EXPENSE (87,051) (101,923) (237,018) (368,261)
OTHER INCOME
(EXPENSE), net 4,260 (2,268) (25,788) (45,401)
Earnings before
provision for
income taxes 7,867,322 7,070,233 21,111,285 21,847,143
PROVISION FOR
INCOME TAXES 3,045,000 2,700,000 8,060,000 8,350,000
Net earnings $4,822,322 $4,370,233 $13,051,285 $13,497,143
WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic 11,575,788 11,451,066 11,555,307 11,351,136
Diluted 11,992,330 11,806,494 11,973,913 11,712,276
EARNINGS PER SHARE
Basic $.42 $.38 $1.13 $1.19
Diluted $.40 $.37 $1.09 $1.15
CASH DIVIDENDS
PER SHARE $.07 $.055 $.195 $.16
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
September 30 December 31
2005 2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $12,889,180 $10,514,707
Marketable securities, at amortized cost 595,000 180,000
Accounts receivable, net 37,190,910 30,774,337
Inventories 36,598,254 47,620,220
Deferred income tax benefits 976,724 1,681,135
Prepaid expenses and other current assets 971,231 1,779,189
Total current assets 89,221,299 92,549,588
MARKETABLE SECURITIES, at amortized cost 25,258,953 11,123,795
OTHER ASSETS 13,871,307 13,904,006
PLANT AND EQUIPMENT, net 27,265,807 27,910,304
TRADEMARK 10,867,969 10,867,969
$166,485,335 $156,355,662
LIABILITIES & SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings $9,484,132 $11,359,536
Accounts payable 8,976,789 6,661,241
Dividend payable 810,912 631,351
Accrued liabilities 6,376,047 8,496,615
Accrued income taxes 1,505,616 751,622
Total current liabilities 27,153,496 27,900,365
LONG-TERM PENSION LIABILITY 3,452,208 3,312,860
DEFERRED INCOME TAX LIABILITIES 5,197,549 5,394,516
SHAREHOLDERS' INVESTMENT:
Common stock 8,988,324 4,440,565
Class B common stock 2,595,682 1,302,110
Capital in excess of par value 2,633,712 6,820,136
Reinvested earnings 116,188,698 106,747,060
Accumulated other comprehensive income 275,666 438,050
Total shareholders' investment 130,682,082 119,747,921
$166,485,335 $156,355,662
CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited)
For the nine months ended September 30, 2005 and 2004
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $13,051,285 $13,497,143
Adjustments to reconcile net earnings to
net cash provided by operating
activities -
Depreciation 1,693,347 2,003,050
Amortization 35,566 66,962
Deferred income taxes 507,444 216,251
Deferred compensation -- 37,800
Pension expense 663,453 534,720
Gain (loss) on sale of assets (1,642) 116,174
Increase in cash surrender value of
life insurance (333,000) (306,000)
Changes in operating assets and
liabilities -
Accounts receivable (6,416,573) (8,245,135)
Inventories 11,021,966 (8,506,749)
Prepaids and other current assets 807,958 (141,116)
Accounts payable 2,315,548 (1,015,937)
Accrued liabilities and other (2,406,293) (1,287,958)
Accrued income taxes 753,994 1,708,600
Net cash provided by (used for)
operating activities 21,693,053 (1,322,195)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (17,615,427) (4,260,081)
Proceeds from maturities of marketable
securities 3,029,703 3,957,915
Purchase of plant and equipment (1,086,860) (928,955)
Proceeds from sales of plant and
equipment 4,587 230,706
Net cash used for investing
activities (15,667,997) (1,000,415)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (2,074,017) (1,750,137)
Shares purchased and retired (1,423,656) --
Proceeds from stock options exercised 1,722,494 1,834,601
Repayments under revolving credit
agreement (1,875,404) (987,858)
Net cash used for financing
activities (3,650,583) (903,394)
Net increase (decrease) in cash and
cash equivalents 2,374,473 (3,226,004)
CASH AND CASH EQUIVALENTS at beginning
of period $10,514,707 $9,091,567
CASH AND CASH EQUIVALENTS at end
of period $12,889,180 $5,865,563
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $6,848,616 $6,413,534
Interest paid $273,507 $335,763
SOURCE Weyco Group, Inc.
