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Weyco Reports Fourth Quarter And Full Year 2009 Results

MILWAUKEE, Feb. 23 /PRNewswire-FirstCall/ -- Weyco Group, Inc. (Nasdaq: WEYS) today announced financial results for the fourth quarter and full year 2009.

FOURTH QUARTER

Net sales for the fourth quarter were $58.4 million, up from $50.0 million in 2008.  Net earnings attributable to Weyco Group, Inc. for the quarter were $4.8 million, up from $3.5 million in 2008.  Diluted earnings per share were $.41 in 2009, as compared with $.30 for the fourth quarter of 2008.

On January 23, 2009, the Company acquired a majority interest in a new subsidiary that subsequently purchased the Florsheim wholesale and retail businesses in Australia, Asia Pacific and South Africa (collectively "Florsheim Australia").  The financial results of Florsheim Australia are included in the Company's consolidated financial statements from the date of acquisition.  The Company previously had license agreements with these entities; consequently, no licensing revenues were recorded for these entities after January 23, 2009.

Net sales in the wholesale division, which includes North American wholesale net sales and licensing revenues, were $44.0 million in the fourth quarter of 2009, compared with $41.9 million in 2008.  Wholesale product sales were $43.2 million in 2009, up from $40.6 million in 2008.  In the wholesale division, sales of the Company's Stacy Adams, Nunn Bush and Florsheim brands were up 7%, 6% and 7%, respectively, compared to 2008.  Licensing revenues were $766,000 in 2009, compared with $1.3 million in 2008.  The decrease in licensing revenues resulted from the Company's acquisition of its licensees in Australia, Asia Pacific and South Africa, and was also due to a general trend of lower sales of the Company's licensed products in the current challenging retail environment.

Net sales in the retail division, which includes sales from the Company's North American retail stores and its domestic Internet business, were $6.3 million, down from $7.1 million in 2008. The Company had two fewer stores in 2009 than 2008.  Same store sales were down 3%.

The Company's other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $8.1 million for the fourth quarter of 2009, compared to $974,000 in 2008.  In 2009, Florsheim Australia's net sales were $7.0 million, and Florsheim Europe's sales were $1.1 million.

Earnings from operations for the fourth quarter of 2009 were $6.7 million, up from $4.7 million in 2008.  This resulted primarily from sales volume increases and higher gross margins in the North American wholesale division this quarter.  The higher margins this year resulted from increased pricing on selected products and also cost reductions achieved as a result of expense control measures.  During the fourth quarter of 2009, earnings from operations were impacted by a $1.1 million charge to recognize the impairment of certain retail division fixed assets.

FULL YEAR 2009

Overall net sales in 2009 of $225.3 million were up 2% compared with $221.4 million in the prior year. Net earnings attributable to Weyco Group, Inc. were $12.8 million, down from $17.0 million in 2008.  Diluted earnings per share were $1.11 in 2009 and $1.45 last year.

Net sales in the wholesale division, which includes North American wholesale net sales and licensing revenues, were $168.7 million compared with $187.2 million in 2008. Wholesale product sales were $166.0 million, down 9% from $182.9 million in 2008.  Sales of the Company's Stacy Adams, Nunn Bush and Florsheim brands were down 12%, 2% and 15%, respectively, compared to 2008.  Licensing revenues were $2.7 million in 2009 and $4.3 million in 2008.  For the year, the decrease in licensing revenues resulted from the Company's acquisition of its licensees in Australia, Asia Pacific and South Africa, described above, and was also due to a general trend of lower sales of the Company's licensed products in the current challenging retail environment.

Net sales in the retail division, which includes sales from the Company's North American retail stores and its domestic Internet business were $22.0 million, down 17% from $26.5 million in 2008.  The Company had two fewer stores in 2009 than 2008.  Same store sales were down 8%.

The Company's other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $34.6 million in 2009, compared to $7.7 million in 2008.  In 2009, Florsheim Australia's net sales were $27.3 million and Florsheim Europe's net sales were $7.3 million.

Earnings from operations were $16.8 million in 2009, down from $24.5 million in the prior year.  Operating earnings as a percent of net sales were 7.4% in 2009 and 11.1% in 2008.  The decrease is primarily the result of lower sales volumes and lower gross margins throughout the first three quarters of 2009.

The Company's balance sheet remained strong at December 31, 2009.  The Company's cash and marketable securities totaled $76.8 million at the end of 2009 and there was no debt outstanding.  At December 31, 2008, the Company's cash and marketable securities totaled $57.6 million and there was $1.25 million of borrowings under its revolving line of credit.

"As a result of the recession, we experienced lower sales volumes and margin pressure throughout most of 2009," stated Tom Florsheim Jr., Chairman and CEO of Weyco Group.  "In the fourth quarter, there were some signs of stabilization in the economy, some of our cost control measures were realized, and our results improved.  Throughout 2009, we continued to invest in our brands and we believe that we are well-positioned for success as the economy improves."                      

The Company's Board of Directors declared a cash dividend on February 22, 2010 of $.15 per share to all shareholders of record on March 1, 2010, payable April 1, 2010.  

Weyco Group will host a conference call on Wednesday, February 24, 2010, at 11:00 a.m. Eastern Time to discuss the fourth quarter and full year 2009 financial results in more detail.  To participate in the call, please dial 888-680-0893 or 617-213-4859, referencing passcode #88590903, 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 #32102938.  Alternatively, the conference call and replay will be available by visiting the investor relations section of Weyco Group's website at www.weycogroup.com .

About Weyco Group:

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 Stacy Adams. The Company's products are sold to shoe specialty stores, department stores and clothing retailers.  Weyco Group, Inc. operates wholesale and retail businesses in the United States, Canada, Europe, Australia, South Africa and the Far East.

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
         FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008
                                    (UNAUDITED)
    
                                    Three Months Ended    For the year ended 
                                         December 31,        December 31,
                                       2009      2008       2009     2008
                                       ----      ----       ----     ----
                                    (In thousands, except per share amounts)
    
    Net sales                         $58,401  $49,965  $225,305  $221,432
    Cost of sales                      34,197   31,732   140,829   140,294
                                       ------   ------   -------   -------
    Gross earnings                     24,204   18,233    84,476    81,138
    Selling and
     administrative expenses           17,541   13,541    67,696    56,639
                                       ------   ------    ------    ------
    Earnings from operations            6,663    4,692    16,780    24,499
    Interest income                       500      520     1,850     2,016
    Interest expense                        -      (17)      (26)      (62)
    Other income and expense, net          42      (32)    1,406       (21)
                                           --       --     -----        --
    Earnings before provision for
     income taxes                       7,205    5,163    20,010    26,432
    Provision for income taxes          2,589    1,662     6,940     9,407
                                        -----    -----     -----     -----
    Net earnings                        4,616    3,501    13,070    17,025
    Net (loss) earnings attributable 
     to noncontrolling interest          (155)       -       249         -
                                          ---      ---       ---       ---
    Net earnings attributable to
     Weyco Group, Inc.                 $4,771   $3,501   $12,821   $17,025
                                       ======   ======   =======   =======
    Weighted average shares
     outstanding
      Basic                            11,274   11,335    11,266    11,397
      Diluted                          11,563   11,654    11,510    11,757
    Earnings per share
      Basic                             $0.42    $0.31     $1.14     $1.49
                                        =====    =====     =====     =====
      Diluted                           $0.41    $0.30     $1.11     $1.45
                                        =====    =====     =====     =====
    Cash dividends per share            $0.15    $0.14     $0.59     $0.53
                                        =====    =====     =====     =====
    
    
    
                            WEYCO GROUP, INC. AND SUBSIDIARIES
                       CONSOLIDATED CONDENSED BALANCE SHEETS
                                    (UNAUDITED)
    
                                                  December 31, December 31,
                                                         2009         2008
                                                         ----         ----
                                                     (Dollars in thousands)
    
    ASSETS:
    Cash and cash equivalents                         $30,000      $11,486
    Marketable securities, at amortized cost            3,954        6,623
    Accounts receivable, net                           33,020       29,873
    Accrued income tax receivable                           -        2,226
    Inventories                                        40,363       47,012
    Deferred income tax benefits                            -          579
    Prepaid expenses and other current assets           3,922        3,678
                                                        -----        -----
        Total current assets                          111,259      101,477
    Marketable securities, at amortized cost           42,823       39,447
    Deferred income tax benefits                        2,261          736
    Other assets                                       13,070       10,069
    Property, plant and equipment, net                 26,872       28,043
    Trademark                                          10,868       10,868
                                                       ------       ------
        Total assets                                 $207,153     $190,640
                                                     ========     ========
    
    
    LIABILITIES & SHAREHOLDERS'  INVESTMENT:
    Short-term borrowings                                  $-       $1,250
    Accounts payable                                    9,202        7,494
    Dividend payable                                    1,693        1,589
    Accrued liabilities                                 7,846        6,490
    Accrued income taxes                                1,241            -
    Deferred income tax liabilities                       295            -
                                                          ---          ---
        Total current liabilities                      20,277       16,823
    Long-term pension liability                        18,533       15,160
    Common stock                                       11,333       11,353
    Capital in excess of par value                     16,788       15,203
    Reinvested earnings                               146,241      142,617
    Accumulated other comprehensive loss              (10,066)     (10,516)
                                                       ------       ------
        Total Weyco Group Inc. shareholders' 
         investment                                   164,296      158,657
    Noncontrolling interest                             4,047            -
        Total shareholders' investment                168,343      158,657
                                                      -------      -------
        Total liabilities and shareholders'
         investment                                  $207,153     $190,640
                                                     ========     ========
    
    
    
    
    
    
                        WEYCO GROUP, INC. AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
           FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 (UNAUDITED)
    
                                                 2009                 2008
                                                 ----                 ----
                                                 (Dollars in thousands)
    CASH FLOWS FROM OPERATING ACTIVITIES:
    
      Net earnings                            $13,070              $17,025
      Adjustments to reconcile net
       earnings to net cash provided by 
       operating activities -
        Depreciation                            2,948                2,631
        Amortization                               93                  114
        Deferred income taxes                     (18)                 436
        Stock-based compensation                  877                  609
        Foreign exchange (gain) loss           (1,339)                   -
        Impairment of property, plant and
         equipment                              1,110                    -
        Pension contribution                   (1,000)              (1,000)
        Pension expense                         2,986                1,378
        Loss on disposal of fixed assets           13                  141
        Increase in cash surrender value of
         life insurance                          (507)                (566)
      Change in operating assets and
       liabilities -
        Accounts receivable                     2,917                6,092
        Inventories                            15,758               (2,380)
        Prepaids and other current assets      (1,153)                (348)
        Accounts payable                         (231)              (3,047)
        Accrued liabilities and other          (1,089)              (2,400)
        Accrued income taxes                    3,467               (2,941)
                                                -----                ----- 
          Net cash provided by
           operating activities                37,902               15,744
                                               ------               ------
    
    CASH FLOWS FROM INVESTING ACTIVITIES:
      Acquisition of businesses                (9,320)                   -
      Life insurance premiums paid               (155)                (155)
      Purchase of marketable securities        (8,073)              (3,069)
      Proceeds from maturities of
       marketable securities                    7,273                5,820
      Purchase of property, plant and 
       equipment                               (1,318)              (2,178)
      Proceeds from sales of property, plant,
       and equipment                                2                    4
                                                   --                   --
          Net cash (used for) provided by
           investing activities               (11,591)                 422
                                               ------                  ---
    
    CASH FLOWS FROM FINANCING ACTIVITIES:
      Cash received from noncontrolling
       interest                                 1,314                    -
      Cash dividends paid                      (6,578)              (5,738)
      Shares purchased and retired             (2,633)             (11,539)
      Proceeds from stock options exercised       683                2,191
      Net (repayments) borrowings under
       revolving credit agreement              (1,250)                 700
      Income tax benefits from share-based
       compensation                               124                1,847
                                                  ---                -----
          Net cash used for financing 
           activities                          (8,340)             (12,539)
                                                -----               ------
      Effect of exchange rate changes 
       on cash                                    543                    -
      Net increase in cash and cash 
       equivalents                             18,514                3,627
    
    CASH AND CASH EQUIVALENTS at beginning
     of period                                $11,486               $7,859
                                              =======               ======
    
    CASH AND CASH EQUIVALENTS at end 
     of period                                $30,000              $11,486
                                              =======              =======
    
    SUPPLEMENTAL CASH FLOW INFORMATION:
      Income taxes paid, net of refunds        $3,055               $9,996
                                               ======               ======
      Interest paid                               $28                  $62
                                                  ===                  ===
    

SOURCE Weyco Group, Inc.

Copyright 2009 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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