MILWAUKEE , May 1 /PRNewswire-FirstCall/ -- Weyco Group, Inc. (Nasdaq: WEYS), today announced financial results for the quarter ended March 31, 2006 .
Net earnings grew approximately 2% to $5.3 million , up from $5.2 million in 2005. Diluted earnings per share increased to $.44 per diluted share in 2006 from $.43 per diluted share in 2005.
Net sales were $59.3 million , up 3%, compared with $57.8 million in 2005. Sales in the wholesale division, which include wholesale sales and licensing revenues, were $52.3 million compared with $51.1 million in 2005. Wholesale sales were $51.2 million in 2006, up 3% from $49.9 million in 2005 . Licensing revenues were $1.1 million compared with $1.2 million in 2005.
In the wholesale division, net sales of the Company's Florsheim and Nunn
Bush brands were up 7% and 3%, respectively, and
Retail sales were $7.0 million for the first quarter of 2006, up 4% from $6.7 million in 2005. This was primarily due to the addition of four new stores since last year. Same store sales were flat for the quarter.
Operating earnings were $8.2 million , down 2% from $8.4 million in 2005. Operating earnings as a percent of net sales were 13.8% in 2006 and 14.5% in 2005. Higher interest income and a lower effective tax rate offset the decrease in operating earnings, resulting in the 2% increase in net earnings.
'Overall, we are encouraged by our solid performance on the wholesale side of the business,' stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group. 'We are especially pleased with the growth in our Florsheim brand as our increase was driven by strong acceptance of our new product initiatives.'
Weyco Group will host a conference call on Tuesday, May 2, 2006 , at 11:00 a.m. Eastern Time to discuss the first quarter financial results in more detail. To participate in the call please dial (866) 578-5788 or (617) 213- 8057, referencing passcode #19462382, 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 #82988819. 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
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.
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
For the three months ended March 31, 2006 and 2005
2006 2005
NET SALES $59,288,211 $57,830,807
COST OF SALES 38,255,321 37,209,141
Gross earnings 21,032,890 20,621,666
SELLING AND ADMINISTRATIVE EXPENSES 12,826,628 12,212,283
Earnings from operations 8,206,262 8,409,383
INTEREST INCOME 461,859 145,306
INTEREST EXPENSE (178,822) (73,268)
OTHER INCOME AND EXPENSE, net (5,270) (21,859)
Earnings before provision for income taxes 8,484,029 8,459,562
PROVISION FOR INCOME TAXES 3,175,000 3,260,000
Net earnings $5,309,029 $5,199,562
WEIGHTED AVERAGE SHARES*
Basic 11,577,837 11,526,611
Diluted 12,081,328 11,978,328
EARNINGS PER SHARE*
Basic $.46 $.45
Diluted $.44 $.43
CASH DIVIDENDS PER SHARE* $.07 $.055
*All share and per share amounts have been adjusted to reflect the two-
for-one stock split distributed to shareholders on April 1, 2005.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31 December 31
2006 2005
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $13,208,872 $22,780,913
Marketable securities, at amortized cost 875,221 875,317
Accounts receivable, net 36,930,184 27,843,048
Inventories 31,381,958 38,548,602
Deferred income tax benefits 1,310,877 1,174,235
Prepaid expenses and other current assets 1,074,607 1,424,858
Total current assets 84,781,719 92,646,973
MARKETABLE SECURITIES, at amortized cost 38,778,497 30,290,089
OTHER ASSETS 14,190,162 14,252,604
PLANT AND EQUIPMENT, net 27,182,939 27,440,762
TRADEMARK 10,867,969 10,867,969
$175,801,286 $175,498,397
LIABILITIES & SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings $9,492,934 $9,552,504
Accounts payable 7,120,728 12,222,907
Dividend payable 810,252 810,241
Accrued liabilities 5,271,531 6,106,107
Accrued income taxes 3,025,103 1,221,423
Total current liabilities 25,720,548 29,913,182
LONG-TERM PENSION LIABILITY 3,731,562 3,672,312
DEFERRED INCOME TAX LIABILITIES 5,247,031 5,344,702
SHAREHOLDERS' INVESTMENT:
Common stock 8,991,283 8,979,243
Class B common stock 2,594,491 2,595,031
Capital in excess of par value 3,848,595 3,437,697
Reinvested earnings 125,385,643 121,334,722
Accumulated other comprehensive income 282,133 221,508
Total shareholders investment 141,102,145 136,568,201
$175,801,286 $175,498,397
CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited)
For the three months ended March 31, 2006 and 2005
2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 5,309,029 $ 5,199,562
Adjustments to reconcile net earnings
to net cash provided by operating
activities -
Depreciation 543,631 572,384
Amortization 15,576 13,481
Deferred income taxes (234,313) 832,810
Pension expense 298,251 221,151
Loss on sale of assets 13 1,017
Increase in cash surrender value of
life insurance (125,535) (111,000)
Changes in operating assets and
liabilities -
Accounts receivable (9,087,136) (6,693,305)
Inventories 7,166,644 12,495,982
Prepaids and other current assets 353,227 447,716
Accounts payable (5,102,179) 266,174
Accrued liabilities and other (832,671) (3,500,302)
Accrued income taxes 1,803,680 1,495,668
Net cash provided by operating
activities 108,217 11,241,338
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (9,084,960) (2,905,250)
Proceeds from maturities of marketable
securities 581,072 1,686,388
Purchase of plant and equipment (282,097) (239,799)
Proceeds from sales of plant and equipment 996 510
Net cash used for investing activities (8,784,989) (1,458,151)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (810,241) (631,351)
Shares purchased and retired (471,606) (285,025)
Proceeds from stock options exercised 289,467 963,429
Repayments under revolving credit agreement (59,570) (1,347,581)
Income tax benefit from the exercise
of stock options 156,681 --
Net cash used for financing activities (895,269) (1,300,528)
Net (decrease) increase in cash and cash
equivalents (9,572,041) 8,482,659
CASH AND CASH EQUIVALENTS at beginning
of period $22,780,913 $10,514,707
CASH AND CASH EQUIVALENTS at end of period $13,208,872 $18,997,366
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $1,201,281 $938,949
Interest paid $182,770 $109,254
SOURCE Weyco Group, Inc.
