Weyco Group, Inc. reported net sales for the second quarter ended June 30 were $56.6 million, an increase of 16% from 2010 sales of $48.7 million.  Operating earnings for the second quarter of 2011 were $2.7 million, compared to $1.7 million in 2010.


Net earnings attributable to the company were $1.9 million, compared to $1.3 million in 2010.  Diluted earnings per share increased to 17 cents per share in 2011 from 11 cents per share in the second quarter of 2010.


On March 2, 2011, the company acquired 100% of the outstanding shares of The Combs Company (“Bogs”), the owner of the Bogs and Rafters footwear brands.  The financial results of Bogs are included in the company’s consolidated financial statements from the date of acquisition.  Bogs had approximately $27 million of sales during 2010.  The company believes that the acquisition will be accretive to its earnings in 2011, excluding the impact of certain purchase accounting adjustments as well as transaction and integration costs.  Most of that accretion is expected in the second half of the year, as the majority of Bogs business occurs in the third and fourth quarters.


Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $39.4 million for the second quarter of 2011, compared with $35.3 million in 2010.  Wholesale sales were $38.7 million in the second quarter of 2011, up from $34.8 million in 2010.  Wholesale net sales for the second quarter of 2011 included Bogs sales of $2.6 million. 


Wholesale net sales of Stacy Adams footwear were up 14% this year, while Nunn Bush and Florsheim sales were down 2% and 1%, respectively.  Licensing revenues were $650,000 in 2011 and $470,000 in 2010.  Bogs licensing revenues were $143,000 for the second quarter of 2011. 

 

Operating earnings for the segment decreased approximately $725,000 for the second quarter.  This was the result of slightly lower margins and higher selling and administrative expenses, which was primarily due to the inclusion of Bogs second quarter operations.  Bogs had an operating loss this quarter, as sales in the second quarter are typically low during this period due to seasonality, and most operating costs are fixed in nature.  In addition, there were transition costs this year associated with moving Bogs operations from Eugene, OR to the company’s Glendale, WI facility.  This transition was completed by June 30, 2011.


Net sales in the North American retail segment, which include sales from the company’s 31 Florsheim retail stores in the United States and its Internet business, were $5.9 million in the second quarter of 2011, compared with $5.3 million in 2010, an increase of 11%.  Same store sales were up 19% for the quarter. There were four fewer domestic retail stores during the second quarter of 2011 compared to 2010.  Operating earnings for the segment improved by approximately $360,000 for the quarter.  This was the result of higher sales volumes and flat selling and administrative expenses.


Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $11.3 million in the second quarter of 2011, compared to $8.1 million in 2010.  The majority of other net sales are generated by Florsheim Australia.  Florsheim Australia’s net sales were up 39%.  In local currency, net sales were up 16%, reflecting higher sales in both its wholesale and retail businesses.  The additional increase in U.S. dollars was caused by the weaker U.S. dollar relative to the Australian dollar this year.  Florsheim Europe’s sales increased due to higher wholesale shipments.  Collectively, the operating earnings of the company’s other businesses were $1.5 million in the second quarter of 2011 compared with $96,000 in the same period last year, primarily due to higher sales and gross margins achieved at Florsheim Australia.  

“Our new BOGS and Rafters brands are starting to provide some top-line growth to our overall business,” stated Tom Florsheim, Jr., Chairman and CEO of Weyco Group, Inc.  “However, this quarter is still off-season for the majority of their products, so we have yet to see bottom line growth.  We have completed the integration of Bogs into our operations, and we look forward to the second half of the year, which is the main selling season for the BOGS brand.”



















































































































































































































































































WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010 (UNAUDITED)













Three Months Ended June 30,



Six Months Ended June 30,



2011

2010

2011

2010



(In thousands, except per share amounts)











Net sales

$ 56,550

$ 48,724

$ 121,696

$ 109,762

Cost of sales

33,887

30,066

74,208

67,696

Gross earnings

22,663

18,658

47,488

42,066











Selling and administrative expenses

19,930

16,972

39,946

34,939

Earnings from operations

2,733

1,686

7,542

7,127











Interest income


586

607

1,176

1,105

Interest expense

(137)

(87)

(227)

(87)

Other income and expense, net

52

(351)

108

(218)











Earnings before provision for income taxes

3,234

1,855

8,599

7,927











Provision for income taxes

946

774

2,809

2,864











Net earnings

2,288

1,081

5,790

5,063











Net earnings (loss) attributable to noncontrolling interest

351

(201)

481

(76)











Net earnings attributable to Weyco Group, Inc.

$   1,937

$   1,282

$     5,309

$     5,139