MILWAUKEE , Feb. 23 /PRNewswire-FirstCall/ -- Weyco Group, Inc. (Nasdaq: WEYS) today announced financial results for the quarter and full year 2005.
FOURTH QUARTER
Net sales were $51.7 million compared with $55.6 million in 2004, a decrease of 7%. Net earnings were $6.35 million , down 6% from $6.78 million during the same period in 2004. Diluted earnings per share were $.53 in 2005 and $.57 in 2004.
Net sales in the wholesale division, which include wholesale sales and
licensing revenues, were $43.5 million compared with $47.8 million in 2004.
Wholesale sales were $42.2 million in 2005, down 9% from $46.4 million in
2004. Licensing revenues were $1.26 million in 2005 and $1.35 million in
2004. Sales of the Company's Nunn Bush and
Retail sales climbed 5% in the fourth quarter reaching $8.2 million , up from $7.8 million in 2004. Same store sales were up 2%.
Operating earnings were $10.02 million , down 9% from $11.05 million in the prior year. Operating earnings as a percent of net sales were 19.4% in 2005 compared with 19.9% in 2004.
FULL YEAR 2005
Net sales of $209.5 million were down 6% compared with $223.0 million in the prior year. Net earnings were $19.4 million , down 4% from $20.3 million in 2004. Diluted earnings per share were $1.62 in 2005 and $1.72 last year.
Net sales in the wholesale division, which include wholesale sales and
licensing revenues, were $181.9 million compared with $196.6 million in 2004.
Wholesale sales were $177.6 million in 2005, down 8% from $192.6 million in
2004. Licensing revenues were $4.4 million in 2005, up approximately 11% from
$3.9 million in 2004. Sales of the Company's Nunn Bush and
Retail sales increased 4% in 2005 to $27.5 million , up from $26.4 million in 2004. Same store sales were up 4.7%.
Although operating earnings of $30.68 million were down 6.9% from $32.95 million in the prior year, operating earnings as a percent of net sales remained approximately level with 2004, due to a reduction in selling and administrative costs of 8% or $4.0 million .
The Company's balance sheet remains strong at December 31, 2005 . The Company's cash and marketable securities totaled $53.9 million at the end of 2005, up from $21.8 million in 2004, an increase of $32.1 million . The Company's borrowings under its revolving credit agreement declined $1.8 million to $9.6 million in 2005. The Company's excess of cash and marketable securities over borrowings was $44.3 million at December 31, 2005 , compared with $10.4 million at December 31, 2004 . This increase was generated primarily by net earnings and reductions in inventory. Inventories were down $9.1 million at the end of 2005 compared with 2004, reflecting the Company's increased emphasis on improving its overall buying process.
'2005 was a challenging year for our Company,' stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group. 'Changes in the retail environment and higher gasoline and energy costs which most affect the moderate consumer negatively affected our business in 2005. Our retail division was a bright spot for us, and we feel it represents a good growth opportunity. As we look to 2006, we plan to grow our retail division and remain focused on building our brands for the long term and keeping them relevant to today's ever changing retail environment.'
The Company's Board of Directors declared a cash dividend on February 6, 2006 of $.07 per share to all shareholders of record on February 15, 2006 , payable April 1, 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 Friday, February 24, 2006 at 11:00 a.m. Eastern Time to discuss the fourth quarter and year end 2005 financial results in more detail. To participate in the call please dial (866) 356-3093, referencing passcode #18097635, 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 #10827003 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. 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,
2005 2004 2005 2004
NET SALES $51,673,857 $55,642,505 $209,469,303 $223,013,334
COST OF SALES 31,119,459 32,049,988 132,726,939 140,017,783
Gross earnings 20,554,398 23,592,517 76,742,364 82,995,551
SELLING AND
ADMINISTRATIVE
EXPENSES 10,538,550 12,541,286 46,063,389 50,043,981
Earnings from
operations 10,015,848 11,051,231 30,678,975 32,951,570
INTEREST INCOME 326,566 140,139 1,037,530 500,605
INTEREST EXPENSE (102,652) (109,546) (339,670) (477,807)
OTHER INCOME AND
EXPENSE, net (281) (26,293) (26,070) (71,694)
Earnings before
provision for
income taxes 10,239,481 11,055,531 31,350,765 32,902,674
PROVISION FOR
INCOME TAXES 3,890,000 4,275,000 11,950,000 12,625,000
Net earnings $6,349,481 $6,780,531 $19,400,765 $20,277,674
BASIC EARNINGS
PER SHARE $.55 $.59 $1.68 $1.78
DILUTED EARNINGS
PER SHARE $.53 $.57 $1.62 $1.72
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
December 31, 2005 and 2004
2005 2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $22,780,913 $10,514,707
Marketable securities, at amortized cost 875,317 180,000
Accounts receivable, net 27,843,048 30,774,337
Inventories 38,548,602 47,620,220
Deferred income tax benefits 1,174,235 1,681,135
Prepaid expenses and other current assets 1,424,858 1,779,189
Total current assets 92,646,973 92,549,588
MARKETABLE SECURITIES, at amortized cost 30,290,089 11,123,795
OTHER ASSETS 14,252,604 13,904,006
PLANT AND EQUIPMENT, net 27,440,762 27,910,304
TRADEMARK 10,867,969 10,867,969
$175,498,397 $156,355,662
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings $9,552,504 $11,359,536
Accounts payable 12,222,907 6,661,241
Dividend payable 810,241 631,351
Accrued liabilities --
Wages, salaries and commissions 1,598,492 3,566,277
Taxes, other than income taxes 851,646 979,853
Other 3,655,969 3,950,485
Accrued income taxes 1,221,423 751,622
Total current liabilities 29,913,182 27,900,365
LONG-TERM PENSION LIABILITY 3,672,312 3,312,860
DEFERRED INCOME TAX LIABILITIES 5,344,702 5,394,516
SHAREHOLDERS' INVESTMENT:
Common Stock 8,979,243 4,440,565
Class B Common Stock 2,595,031 1,302,110
Capital in excess of par value 3,437,697 6,820,136
Reinvested earnings 121,334,722 106,747,060
Accumulated other comprehensive income 221,508 438,050
Total shareholders' investment 136,568,201 119,747,921
$175,498,397 $156,355,662
CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited)
For the years ended December 31, 2005 and 2004
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $19,400,765 $20,277,674
Adjustments to reconcile net earnings to
net cash provided by operating
activities --
Depreciation 2,263,187 2,517,417
Amortization 48,537 80,389
Deferred income taxes 457,086 1,187,260
Deferred compensation -- 48,000
Pension expense 884,010 712,959
(Gain) loss on sale of assets (1,642) 116,174
Increase in cash surrender value of
life insurance (599,699) (579,168)
Changes in operating assets and
liabilities --
Accounts receivable 2,931,289 (874,140)
Inventories 9,071,618 (3,892,642)
Prepaids and other assets 298,279 (736,693)
Accounts payable 5,561,666 (804,365)
Accrued liabilities and other (2,785,877) 352,726
Accrued income taxes 1,155,015 1,519,328
Net cash provided by operating
activities 38,684,234 19,924,919
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (25,188,918) (6,106,521)
Proceeds from maturities of marketable
securities 5,278,770 5,262,953
Purchase of plant and equipment (1,835,167) (1,127,088)
Proceeds from sales of plant and equipment 4,587 230,706
Net cash used for investing activities (21,740,728) (1,739,950)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (2,884,927) (2,380,158)
Shares purchased and retired (1,846,150) --
Proceeds from stock options exercised 1,860,809 2,203,623
Net repayments under revolving credit
facilities (1,807,032) (16,585,294)
Net cash used for financing activities (4,677,300) (16,761,829)
Net increase in cash and cash equivalents 12,266,206 1,423,140
CASH AND CASH EQUIVALENTS, at beginning
of year $10,514,707 $9,091,567
CASH AND CASH EQUIVALENTS, at end of year $22,780,913 $10,514,707
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $10,150,856 $10,037,356
Interest paid $332,955 $509,125
SOURCE Weyco Group, Inc.
