Weyco Reports Third Quarter Sales And Earnings

MILWAUKEE, Nov. 6, 2018 /PRNewswire/ -- Weyco Group, Inc. WEYS (the "Company") today announced financial results for the quarter ended September 30, 2018.

Net sales for the third quarter of 2018 were $78.4 million, an increase of 2% compared to third quarter 2017 net sales of $76.9 million. Earnings from operations increased 3% to $8.0 million in the third quarter of 2018, from $7.8 million in the third quarter of 2017. Net earnings attributable to the Company rose 27% to $6.3 million in the third quarter of 2018, up from $4.9 million in last year's third quarter. Net earnings were positively impacted by the lower U.S. federal tax rate this year. Diluted earnings per share were $0.60 per share in the third quarter of 2018 and $0.48 per share in the third quarter of 2017.

Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $63.2 million in the third quarter of 2018, up 4% compared to $60.7 million in the third quarter of 2017. Within the wholesale segment, net sales of the Stacy Adams brand were up 17% for the quarter, primarily due to higher sales to department stores and national shoe chains.  Florsheim net sales were up 8%, due to sales volume increases across the majority of distribution channels.  BOGS third quarter net sales were down 5% for the quarter, mainly with outdoor and online retailers. Net sales of the Nunn Bush brand were flat for the quarter. Licensing revenues were approximately $530,000 in both the third quarters of 2018 and 2017.

Gross earnings for the North American wholesale segment increased to 34.4% of net sales in the third quarter of 2018, from 33.9% of net sales in last year's third quarter. Earnings from operations for the wholesale segment were $7.6 million in the third quarter of 2018, up 3% compared to $7.4 million in the same period last year. The increase was primarily due to higher sales and gross margins. 

Net sales in the North American retail segment, which includes sales from the Company's Florsheim retail stores and its internet businesses in the United States, were $4.9 million in the third quarter of 2018, up 15% compared to $4.3 million in the third quarter of 2017.  Same store sales (which includes U.S. internet sales) were up 20% for the quarter, due mainly to increased sales on the Company's websites. Driven by higher online sales, retail earnings from operations rose to $428,000 in the third quarter of 2018, from $17,000 in the third quarter of 2017.

Other net sales, which include the wholesale and retail net sales of Florsheim Australia and Florsheim Europe, were $10.3 million in the third quarter of 2018, down 14% compared to $11.9 million in the third quarter of 2017. The decrease was primarily due to a 16% reduction in net sales at Florsheim Australia. In local currency, Florsheim Australia's net sales were down 9% for the quarter, with sales down in both its wholesale and retail businesses. The weaker Australian dollar relative to the U.S. dollar also contributed to the decrease in Florsheim Australia's net sales this year. Earnings from operations of Florsheim Australia and Florsheim Europe were $8,000 in the third quarter of 2018, compared to $369,000 in the same period last year. The decline between years was primarily due to lower sales at Florsheim Australia.  

During the third quarter, David Venner, Director of Seraneuse Pty Ltd, the minority interest shareholder of Florsheim Australia Pty Ltd ("Florsheim Australia"), provided notice and tendered to the Company his shares, which represented a 45% equity interest in Florsheim Australia, in accordance with the Shareholders Agreement dated January 23, 2009. The Shareholders Agreement allowed him to tender the shares, at his discretion, anytime on or after January 23, 2014.  Accordingly, the Company purchased the minority interest in Florsheim Australia for $3.7 million on August 30, 2018, and the Company now owns 100% of Florsheim Australia.

"We are pleased with the results of our North American businesses this quarter," stated Thomas W. Florsheim, Jr., the Company's Chairman and CEO. "Not only did our wholesale segment post gains in both sales and operating earnings, but our websites had a particularly strong quarter, boosting our overall operating results for the period.  Overseas our businesses continue to struggle in a tepid retail environment.  As we look ahead to the fourth quarter, our focus continues to be on growing our core brands, as well as improving the profitability of our international businesses."   

On November 6, 2018 the Company's Board of Directors declared a cash dividend of $0.23 per share to all shareholders of record on December 3, 2018, payable on January 2, 2019. 

Conference Call Details:

Weyco Group will host a conference call on November 7, 2018 at 11:00 a.m. Eastern Time to discuss the third quarter financial results in more detail.  To participate in the call, you will first need to pre-register online. Pre-registration takes only a few minutes and you may pre-register at any time, including up to and after the call start time. To pre-register, please go to: https://www.yourconferencecenter.com/confcenter/PinCode/Pin_Code.aspx?100374&o=USQKcavifznPuQ. The pre-registration process will provide the conference call phone number and a passcode required to enter the call. A replay will be available for one year beginning about two hours after the completion of the call at the following webcast link:  https://edge.media-server.com/m6/p/a2ejvfue. The conference call will also be available in the investor relations section of Weyco Group's website at www.weycogroup.com

About Weyco Group:

Weyco Group, Inc. designs and markets quality and innovative footwear for men, women and children under a portfolio of well-recognized brand names including: Florsheim, Nunn Bush, Stacy Adams, BOGS, and Rafters. The Company's products can be found in leading footwear, department, and specialty stores worldwide.  Weyco Group also operates Florsheim concept stores in the United States and Australia, as well as in a variety of international markets.

Forward-Looking Statements:

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 AND COMPREHENSIVE INCOME (UNAUDITED)

























Three Months Ended September 30, 



Nine Months Ended September 30, 





2018



2017



2018



2017





(In thousands, except per share amounts)



















Net sales

$ 78,375



$ 76,906



$ 208,789



$ 203,479

Cost of sales

47,984



47,438



128,067



126,693

Gross earnings

30,391



29,468



80,722



76,786



















Selling and administrative expenses

22,344



21,666



67,161



63,635

Earnings from operations

8,047



7,802



13,561



13,151



















Interest income 

252



193



739



572

Interest expense

(10)



-



(10)



(7)

Other expense, net

(195)



(53)



(414)



(243)



















Earnings before provision for income taxes

8,094



7,942



13,876



13,473



















Provision for income taxes

1,942



3,022



3,385



5,135



















Net earnings

6,152



4,920



10,491



8,338



















Net loss attributable to noncontrolling interest

(124)



(14)



(398)



(70)



















Net earnings attributable to Weyco Group, Inc.

$   6,276



$   4,934



$   10,889



$      8,408



















Weighted average shares outstanding

















Basic

10,114



10,160



10,167



10,299



Diluted

10,391



10,218



10,419



10,360



















Earnings per share

















Basic

$      0.62



$      0.49



$        1.07



$        0.82



Diluted

$      0.60



$      0.48



$        1.05



$        0.81



















Cash dividends declared (per share)

$      0.23



$      0.22



$        0.68



$        0.65





































Comprehensive income

$   6,086



$   5,452



$      9,551



$   10,251

Comprehensive (loss) income attributable to noncontrolling interest

(282)



25



(870)



271

Comprehensive income attributable to Weyco Group, Inc.

$   6,368



$   5,427



$   10,421



$      9,980

 

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)



















September 30,



December 31,



2018



2017



(Dollars in thousands)

ASSETS:

Cash and cash equivalents

$            15,750



$          23,453

Marketable securities, at amortized cost

5,098



5,970

Accounts receivable, net

56,797



49,451

Income tax receivable

533



669

Inventories

60,069



60,270

Prepaid expenses and other current assets

3,085



5,770

     Total current assets

141,332



145,583









Marketable securities, at amortized cost

18,895



17,669

Deferred income tax benefits

786



750

Property, plant and equipment, net

29,393



31,643

Goodwill

11,112



11,112

Trademarks

32,978



32,978

Other assets

23,192



23,097

     Total assets

$          257,688



$        262,832









LIABILITIES AND EQUITY:







Short-term borrowings

$              8,048



$                  -

Accounts payable

5,956



8,905

Dividend payable

-



2,228

Accrued liabilities

11,465



14,031

     Total current liabilities

25,469



25,164









Deferred income tax liabilities 

3,587



2,069

Long-term pension liability

24,422



27,766

Other long-term liabilities

1,634



2,174

     Total liabilities

55,112



57,173









Common stock

10,202



10,162

Capital in excess of par value

63,938



55,884

Reinvested earnings

147,874



150,350

Accumulated other comprehensive loss

(19,438)



(17,859)

     Total Weyco Group, Inc. equity

202,576



198,537

Noncontrolling interest

-



7,122

     Total equity

202,576



205,659

     Total liabilities and equity

$          257,688



$        262,832

 

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)





















Nine Months Ended September 30,







2018



2017







(Dollars in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:









Net earnings

$ 10,491



$  8,338



Adjustments to reconcile net earnings to net cash provided by operating activities - 











Depreciation

2,842



2,971





Amortization

238



265





Bad debt expense

190



350





Deferred income taxes

1,353



2,192





Net foreign currency transaction losses (gains)

332



(61)





Stock-based compensation

1,149



1,174





Pension contribution

(3,000)



(4,000)





Pension expense

522



746





Increase in cash surrender value of life insurance

(250)



(250)



Changes in operating assets and liabilities - 











Accounts receivable

(7,557)



(5,703)





Inventories

180



12,195





Prepaid expenses and other assets

2,756



3,167





Accounts payable

(2,928)



(6,838)





Accrued liabilities and other

(4,749)



1,849





Accrued income taxes

278



22





    Net cash provided by operating activities

1,847



16,417













CASH FLOWS FROM INVESTING ACTIVITIES:









Purchases of marketable securities

(7,819)



(14,719)



Proceeds from maturities of marketable securities

7,450



10,710



Life insurance premiums paid

(155)



(155)



Purchases of property, plant and equipment

(876)



(1,406)





     Net cash used for investing activities

(1,400)



(5,570)













CASH FLOWS FROM FINANCING ACTIVITIES:









Cash dividends paid

(9,213)



(8,877)



Cash dividends paid to noncontrolling interest of subsidiary

(88)



(204)



Payment to acquire noncontrolling interest of subsidiary

(3,740)



-



Shares purchased and retired

(6,589)



(11,621)



Proceeds from stock options exercised

4,308



2,013



Taxes paid related to the net share settlement of equity awards

(699)



(51)



Proceeds from bank borrowings

20,309



20,651



Repayments of bank borrowings

(12,261)



(20,147)





     Net cash used for financing activities

(7,973)



(18,236)















Effect of exchange rate changes on cash and cash equivalents

(177)



383















Net decrease in cash and cash equivalents

$  (7,703)



$ (7,006)













CASH AND CASH EQUIVALENTS at beginning of period

23,453



13,710













CASH AND CASH EQUIVALENTS at end of period

$ 15,750



$  6,704













SUPPLEMENTAL CASH FLOW INFORMATION:









Income taxes paid, net of refunds

$   1,915



$  2,829



Interest paid

$       10



$        7

 

Cision View original content:http://www.prnewswire.com/news-releases/weyco-reports-third-quarter-sales-and-earnings-300745079.html

SOURCE Weyco Group, Inc.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsPress ReleasesConference Call Announcements
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!