MILWAUKEE , July 27 /PRNewswire-FirstCall/ -- Weyco Group, Inc. (Nasdaq: WEYS), today announced financial results for the quarter ended June 30, 2006 .
Net earnings in the quarter grew 20% to $3.6 million , up from $3.0 million in 2005. Diluted earnings per share increased 20% to $.30 per diluted share in 2006 from $.25 per diluted share in 2005.
Second quarter net sales were $45.1 million , up from $44.7 million in
2005. Sales in the wholesale division, which include wholesale sales and
licensing revenues, were $38.4 million compared with $38.2 million in 2005.
Wholesale sales were $37.5 million in 2006, up from $37.2 million in 2005.
Licensing revenues in 2006 were $930,000 compared with $975,000 in 2005.
Sales of the Company's Florsheim and
Retail sales were $6.7 million for the second quarter of 2006, an increase of 3% from $6.5 million in 2005. This increase was primarily due to three additional stores this quarter compared with the second quarter of last year. Same store sales were flat for the quarter.
Operating earnings were $5.5 million , up 19% from $4.6 million in 2005. Operating earnings as a percent of net sales increased to 12% in 2006 from 10% in 2005. This was primarily the result of higher gross margins across all brands this quarter, resulting from increased margins on new footwear, as well as the impact of fewer closeout sales this season. Net interest income for the quarter was up $209,000 over the same period last year due to higher investments in marketable securities.
'While top line growth remains a challenge due to the impact of retail consolidation, our overall business remains solid and we are pleased with our net earnings performance,' stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group.
Weyco Group will host a conference call on Friday, July 28, 2006 , at 10:00 a.m. Eastern Time to discuss the second quarter financial results in more detail. To participate in the call please dial 800-510-0219 or 617-614-3451, referencing passcode #62991970, 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 #31064259. 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. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
For the three and six months ended June 30, 2006 and 2005
Three Months ended June 30 Six Months ended June 30
2006 2005 2006 2005
NET SALES $45,111,438 $44,746,051 $104,399,649 $102,576,858
COST OF SALES 27,651,564 28,790,627 65,906,885 65,999,768
Gross earnings 17,459,874 15,955,424 38,492,764 36,577,090
SELLING AND
ADMINISTRATIVE
EXPENSES 11,975,701 11,353,366 24,802,329 23,565,649
Earnings from
operations 5,484,173 4,602,058 13,690,435 13,011,441
INTEREST INCOME 517,849 267,231 979,708 412,536
INTEREST EXPENSE (118,472) (76,700) (297,294) (149,967)
OTHER INCOME (EXPENSE),
net 8,742 (8,189) 3,472 (30,048)
Earnings before
provision for
income taxes 5,892,292 4,784,400 14,376,321 13,243,962
PROVISION FOR INCOME
TAXES 2,250,000 1,755,000 5,425,000 5,015,000
Net earnings $ 3,642,292 $ 3,029,400 $8,951,321 $8,228,962
WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic 11,612,051 11,569,353 11,596,254 11,543,730
Diluted 12,054,041 11,958,369 12,032,359 11,969,210
EARNINGS PER SHARE
Basic $.31 $.26 $.77 $.71
Diluted $.30 $.25 $.74 $.69
CASH DIVIDENDS PER SHARE $.09 $.07 $.16 $.125
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
June 30 December 31
2006 2005
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $12,389,778 $22,780,913
Marketable securities, at amortized cost 815,126 875,317
Accounts receivable, net 26,082,913 27,843,048
Accrued income tax receivable 1,011,655 --
Inventories 37,624,461 38,548,602
Deferred income tax benefits 1,121,792 1,174,235
Prepaid expenses and other current assets 925,844 1,424,858
Total current assets 79,971,569 92,646,973
MARKETABLE SECURITIES, at amortized cost 44,005,940 30,290,089
OTHER ASSETS 14,124,845 14,252,604
PLANT AND EQUIPMENT, net 27,595,882 27,440,762
TRADEMARK 10,867,969 10,867,969
$176,566,205 $175,498,397
LIABILITIES & SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Short-term borrowings $9,518,076 $9,552,504
Accounts payable 6,597,607 12,222,907
Dividend payable 1,044,713 810,241
Accrued liabilities 6,508,263 6,106,107
Accrued income taxes -- 1,221,423
Total current liabilities 23,668,659 29,913,182
LONG-TERM PENSION LIABILITY 3,790,813 3,672,312
DEFERRED INCOME TAX LIABILITIES 5,161,206 5,344,702
SHAREHOLDERS' INVESTMENT:
Common stock 9,075,601 8,979,243
Class B common stock 2,588,281 2,595,031
Capital in excess of par value 5,310,176 3,437,697
Reinvested earnings 126,645,735 121,334,722
Accumulated other comprehensive income 325,734 221,508
Total shareholders investment 143,945,527 136,568,201
$176,566,205 $175,498,397
CONSOLIDATED STATEMENTS
OF CASH FLOWS (Unaudited)
For the six months ended June 30, 2006 and 2005
2006 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $8,951,321 $8,228,962
Adjustments to reconcile net earnings
to net cash provided by operating
activities --
Depreciation 1,077,279 1,129,259
Amortization 34,164 22,918
Deferred income taxes (131,053) 787,899
Pension expense 596,502 442,302
Loss (Gain) on sale of assets 13 (1,642)
Increase in cash surrender value of
life insurance (251,070) (222,000)
Changes in operating assets and
liabilities --
Accounts receivable 1,760,135 4,492,871
Inventories 924,141 12,769,092
Prepaids and other current assets 507,841 627,632
Accounts payable (5,625,300) 1,637,395
Accrued liabilities and other 384,361 (3,413,868)
Accrued income taxes (2,233,078) (292,711)
Net cash provided by operating
activities 5,995,256 26,208,109
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (14,795,896) (13,614,582)
Proceeds from maturities of marketable
securities 1,106,072 2,071,654
Purchase of plant and equipment (1,219,386) (778,408)
Proceeds from sales of plant and equipment 996 4,587
Net cash used for investing activities (14,908,214) (12,316,749)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (1,620,493) (1,264,542)
Shares purchased and retired (1,875,593) (1,288,822)
Proceeds from stock options exercised 1,195,489 1,303,249
Repayments under revolving credit agreement (34,428) (1,709,878)
Income tax benefit from the exercise
of stock options 856,848 --
Net cash used for financing activities (1,478,177) (2,959,993)
Net (decrease) increase in cash and cash
equivalents (10,391,135) 10,931,367
CASH AND CASH EQUIVALENTS at beginning
of period $22,780,913 $10,514,707
CASH AND CASH EQUIVALENTS at end of period $12,389,778 $21,446,074
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $6,265,637 $4,543,368
Interest paid $289,612 $118,441
SOURCE Weyco Group, Inc.
