Wolverine Fourth Quarter Sales Climb 4.4%; Fiscal 2005 Exceeds $1 Billion

Wolverine World Wide, Inc. reported record revenue and earnings per share for its fourth quarter and 2005 fiscal year, marking its fifth consecutive year of record results.
The Company's revenue totaled $1.06 billion for its 2005 fiscal year ended on December 31, 2005, a 7.0% increase over 2004 revenue of $991.9 million. For the fourth quarter of 2005, the Company reported revenue of $321.0 million, a 4.4% increase over fourth quarter 2004 revenue of $307.4 million.

Fiscal 2005 earnings per share grew to a record $1.27, which reflected a 16.5 percent increase over the $1.09 reported in 2004 and exceeded the Company's earnings per share estimate previously announced in December. Included in the reported $1.27 earnings per share is a one-time tax expense of $0.02 per share from the repatriation of $41.5 million of foreign earnings which occurred in the fourth quarter of 2005 and allowed the Company to take advantage of tax relief under the American Jobs Creation Act of 2004. Fourth quarter 2005 earnings per share increased to 36 cents, a 5.9% increase over fourth quarter 2004 earnings per share of 34 cents. Excluding the impact of foreign earnings repatriation, earnings per share growth for the fourth quarter of 2005 would have been 11.8 percent.

“We are very pleased to report the Company's strong financial performance in 2005, highlighted by Wolverine World Wide crossing the $1.0 billion mark in revenue for the first time in the Company's 123-year history,” stated Timothy J. O'Donovan, the Company's Chairman and CEO. “Our business model, which leverages our strong portfolio of global brands, continues to drive consistent growth and exceptional earnings performance.”

“For fiscal 2005, operating margin expanded to 10.7 percent, a 60 basis point improvement over 2004,” reported the Company's CFO, Stephen L. Gulis Jr. “Gross margin expanded 50 basis points for the year. Strong expense controls produced 10 basis points of annualized expense leverage while the Company invested in new initiatives including Merrell Apparel and Patagonia Footwear.

“The financial strength of the business has never been better, as we generated a record $119 million in cash from operating activities, achieved an 11.8 percent inventory reduction and improved our cash collections. These results have allowed us to reduce debt by $11.5 million, repurchase Company shares totaling $63.7 million, invest in new growth initiatives and end the year with a cash balance of $85.3 million.”

Mr. O'Donovan concluded, “Our 2005 year-end backlog is up more than 11 percent over the prior year-end level reflecting the strength of our global brand portfolio. To drive the Company's future growth, we have announced a new vision, which is 'To Excite Consumers Around The World With Innovative Footwear And Apparel That Bring Style To Purpose.' Our objectives are clear: to advance the brands in our portfolio to worldwide leadership positions and invest in initiatives that will extend our brands into categories beyond footwear.

“During 2006, the Company will be making significant investments in new growth initiatives including Merrell Apparel and Patagonia Footwear. Including these investments, we are confirming our 2006 estimates with a revenue range of $1.110 to $1.130 billion and an earnings per share range of $1.34 to $1.40. The earnings per share estimate includes the estimated expense of FAS123® stock incentive expense totaling approximately $.04 per share.”

                          WOLVERINE WORLD WIDE, INC.

                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)
                  ($000's, except share and per share data)

                           16 Weeks Ended               52 Weeks Ended
                     December 31,    January 1,    December 31,    January 1,
                        2005           2005           2005           2005

    Revenue           $321,002       $307,368     $1,060,999      $991,909
    Cost of products
     sold              205,324        192,364        655,800       617,774
        Gross profit   115,678        115,004        405,199       374,135

    Selling and
     administrative
      expenses          83,404         84,284        291,891       274,125
        Operating
         profit         32,274         30,720        113,308       100,010

    Interest expense       619            749          1,911         3,245
    Other expense (income) 322           (462)           150          (305)
                           941            287          2,061         2,940
        Earnings before
         income taxes and
          minority
           interest     31,333         30,433        111,247        97,070
    Income taxes        10,889          9,590         36,780        30,879

        Earnings before
         minority
          interest      20,444         20,843         74,467        66,191
    Minority interest        -            134              -           253

        Net earnings   $20,444        $20,709        $74,467       $65,938

    Diluted earnings
     per share            $.36           $.34          $1.27         $1.09