Weyco Group, Inc. reported that its purchase of the Combs Company boosted its net sales to $75 million in the fourth quarter ended Dec. 31, up 20 percent compared to fourth quarter 2010 sales of $62 million.
Operating earnings for the fourth quarter of 2011 were $8.9 million, compared to $7.2 million in 2010. Net earnings attributable to the company were $5.5 million, compared to $5.1 million in 2010. Diluted earnings per share increased to 50 cents per share in 2011 from 45 cents per share in the fourth quarter of 2010.
The increase in 2011 sales was primarily due to the company's March 2, 2011 acquisition of the Combs Company (“Bogs”), the owner of the Bogs (rubber and other outdoor boots) and Rafters (sandals) footwear brands. The financial results of Bogs are included in the company's consolidated financial statements from the date of acquisition.
Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $55.0 million for the fourth quarter of 2011, compared with $44.7 million in 2010. Wholesale product sales were $53.8 million in the fourth quarter of 2011, up from $43.9 million in 2010. Wholesale net sales for the fourth quarter of 2011 included Bogs' sales of $12.4 million. Wholesale net sales of Stacy Adams, Nunn Bush and Florsheim footwear were down 9%, 2% and 8% this quarter, respectively.
Licensing revenues were $1.2 million in 2011 and $766,000 in 2010. Bogs' licensing revenues were $440,000 for the fourth quarter of 2011. Operating earnings for the segment decreased approximately $254,000 for the fourth quarter.
Net sales in the North American retail segment, which include sales from the company's Florsheim retail stores in the United States and its Internet business, were $7.5 million in the fourth quarter of 2011, compared with $6.8 million in 2010, an increase of 11 percent. Same store sales were up 21% for the quarter. There were five fewer domestic retail stores during the fourth quarter of 2011 compared to 2010. Operating earnings for the segment improved by approximately $830,000 for the quarter, due to improvement in same store performance as well as the closing of underperforming stores earlier in 2011.
Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $12.3 million in the fourth quarter of 2011, compared to $10.9 million in 2010. The majority of other net sales were generated by Florsheim Australia. Florsheim Australia's net sales were up 18 percent. In local currency, net sales were up 15 percent. Collectively, the operating earnings of the company's other businesses in the fourth quarter of 2011 were up $1.2 million as compared to 2010.
Full year 2011
Overall net sales in 2011 of $271 million were up 18 percent compared with $229 million in the prior year. Earnings from operations were $23.2 million in 2011, up from $18.8 million in the prior year. Net earnings attributable to Weyco Group, Inc. were $15.3 million in 2011, up from $13.7 million in 2010. Diluted earnings per share were $1.37 in 2011 and $1.19 in the prior year.
In the North American wholesale segment, net sales were $199 million in 2011 compared with $166 million in 2010. Wholesale product sales were $196 million in 2011, up 19 percent from $164 million in 2010. Wholesale net sales for the year included Bogs' sales of $28 million. Sales of the company's Stacy Adams and Florsheim brands were each up 1 percent for the year, while the Nunn Bush brand was flat. The Umi brand, which was acquired in April 2010, had $3.8 million of net sales in 2011 as compared to $1.2 million of net sales in 2010. Licensing revenues were $3.4 million in 2011 compared to $2.2 million in 2010. The operating earnings of the wholesale segment were flat for the year.
In the retail segment, net sales were $24.7 million, up 10 percent from $22.5 million in 2010. There were five fewer stores in 2011 than 2010. Same store sales were up 18 percent. The retail division's operating earnings increased $1.9 million in 2011 due to improvement in same store performance as well as the closing of underperforming stores during the year.
The company's other businesses had net sales of $47.3 million in 2011 compared to $40.7 million in 2010. The majority of the increase was at Florsheim Australia, whose net sales increased $6.5 million, or 20 percent. In local currency, Florsheim Australia's net sales increased 7 percent, and the rest of the increase was due to the strengthening of the Australian dollar relative to the US dollar during 2011 as compared to 2010. There was a $2.5 million increase in earnings from operations in the company's other businesses in 2011 due mainly to Florsheim Australia's increased sales and gross margins.
Interest expense for the year increased primarily due to additional debt outstanding during 2011 following the Bogs acquisition.
Cash and marketable securities totaled $62 million at Dec. 31, 2011 compared to $70 million at Dec. 31, 2010. There were additional bank borrowings of $32 million under our revolving line of credit this year, mainly to fund the Bogs acquisition along with increased inventory and capital expenditure needs as a result of the acquisition.
“The Bogs acquisition has gone well and the brand is now fully integrated into our company,” stated Tom Florsheim, Jr.,chairman and CEO of Weyco Group, Inc. “We are also very pleased with the improvement of our retail division as well as the strength of our international businesses.”
The company's board of directors declared a cash dividend on Feb. 27, of 16 cents per share to all shareholders of record on March 19, 2012, payable April 2, 2012.
Weyco Group, Inc., designs and markets quality and innovative footwear under the Florsheim, Nunn Bush, Stacy Adams, BOGS, Rafters and Umi brand names. 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.
WEYCO GROUP, INC. AND SUBSIDIARIES |
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CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS |
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FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010 (UNAUDITED) | |||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
(In thousands, except per share amounts) | |||||||||
Net sales | $ 74,803 | $ 62,333 | $ 271,100 | $ 229,231 | |||||
Cost of sales | 44,110 | 36,253 | 164,378 | 138,934 | |||||
Gross earnings | 30,693 | 26,080 | 106,722 | 90,297 | |||||
Selling and administrative expenses | 21,756 | 18,917 | 83,525 | 71,516 | |||||
Earnings from operations | 8,937 | 7,163 | 23,197 | 18,781 | |||||
Interest income | 503 | 589 | 2,220 | 2,291 | |||||
Interest expense | (259) | (25) | (611) | (120) | |||||
Other income and expense, net | 168 | 23 | 216 | 345 | |||||
Earnings before provision for income taxes | 9,349 | 7,750 | 25,022 | 21,297 | |||||
Provision for income taxes | 3,247 | 2,476 | 8,581 | 7,171 | |||||
Net earnings | 6,102 | 5,274 | 16,441 | 14,126 | |||||
Net earnings attributable to noncontrolling interest | 570 | 138 | 1,190 | 458 | |||||
Net earnings attributable to Weyco Group, Inc. | $ 5,532 | $ 5,136 | $ 15,251 | $ 13,668 | |||||
Weighted average shares outstanding | |||||||||
Basic | 10,881 | 11,282 | 11,066 | 11,293 | |||||
Diluted | 11,016 | 11,488 | 11,159 | 11,493 | |||||
Earnings per share | |||||||||
Basic | $ 0.51 | $ 0.46 | $ 1.38 | $ 1.21 | |||||
Diluted | $ 0.50 | $ 0.45 | $ 1.37 | $ 1.19 | |||||
Cash dividends per share | $ 0.16 | $ 0.16 | $ 0.64 | $ 0.63 | |||||
