Weyco Group, Inc., owner of the Bogs brand of outdoor footwear, reported net sales for the third quarter were $79.5 million, an increase of 7 percent from 2011 sales of $74.6 million. Operating earnings for the third quarter of 2012 increased 21 percent to $8.1 million, from $6.7 million in 2011.
Net earnings attributable to the company were $5.2 million, compared to $4.4 million in 2011. Diluted earnings per share increased to $0.48 per share in 2012 from $0.40 per share in the third quarter of 2011.
Net sales in the North American wholesale segment, which include North American wholesale sales and licensing revenues, were $61.0 million for the third quarter of 2012, compared with $56.6 million in 2011. Wholesale product sales were $60.2 million in the third quarter of 2012, up from $55.5 million in 2011. Wholesale sales of Florsheim, Bogs and Umi were up 20 percent, 46 percent and 9 percent respectively, for the quarter. Stacy Adams sales remained flat while Nunn Bush sales were down 16 percent for the quarter.
Licensing revenues were $800,000 in the third quarter of 2012 and $1.1 million in 2011. The company took over the distribution of Bogs in Canada on June 1, 2012. Consequently, Bogs wholesale sales increased and its licensing revenues decreased. Bogs net sales in Canada were $4.1 million in the third quarter of 2012. Operating earnings for the wholesale segment were $6.6 million in the third quarter of 2012, compared to $5.0 million in 2011. The takeover of the Canadian distribution of Bogs contributed to the increase in operating earnings for the 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 $5.5 million in the third quarter of 2012, compared with $5.8 million in 2011. Same store sales increased 2 percent for the quarter. There were four fewer domestic retail stores as of September 30, 2012 compared to 2011. Operating earnings for the segment were $322,000 in the third quarter of 2012 compared to $245,000 in 2011.
Other net sales, which include the wholesale and retail sales of Florsheim Australia and Florsheim Europe, were $12.9 million in the third quarter of 2012, compared to $12.2 million in 2011. The majority of these net sales are generated by Florsheim Australia. Florsheim Australia's net sales increased 14 percent, or $1.4 million, but that gain was offset by a sales decrease of $700,000 at Florsheim Europe. Collectively, the operating earnings of the company's other businesses were $1.2 million in the third quarter of 2012 compared with $1.5 million in the same period last year.
“Overall, we feel we had very solid results this quarter,” stated Thomas W. Florsheim, Jr. Chairman and CEO. “In particular, we are pleased with the performance of Bogs in Canada. We recently took over the distribution of Bogs in that market and believe we are well-positioned for long-term growth in Canada.”
On Oct. 29, 2012, the company's Board of Directors declared a quarterly cash dividend of $0.17 per share to all shareholders of record December 3, 2012, payable January 2, 2013.
WEYCO GROUP, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED) | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2012 | 2011 | 2012 | 2011 | |||||
(In thousands, except per share amounts) | ||||||||
Net sales | $ 79,473 | $ 74,601 | $ 215,120 | $ 196,297 | ||||
Cost of sales | 49,027 | 46,061 | 133,765 | 120,269 | ||||
Gross earnings | 30,446 | 28,540 | 81,355 | 76,028 | ||||
Selling and administrative expenses | 22,338 | 21,823 | 64,012 | 61,769 | ||||
Earnings from operations | 8,108 | 6,717 | 17,343 | 14,259 | ||||
Interest income | 438 | 543 | 1,404 | 1,719 | ||||
Interest expense | (143) | (124) | (388) | (351) | ||||
Other income and expense, net | 10 | (62) | (55) | 46 | ||||
Earnings before provision for income taxes | 8,413 | 7,074 | 18,304 | 15,673 | ||||
Provision for income taxes | 2,961 | 2,525 | 6,245 | 5,334 | ||||
Net earnings | 5,452 | 4,549 | 12,059 | 10,339 | ||||
Net earnings attributable to noncontrolling interest | 260 | 140 | 779 | 621 | ||||
Net earnings attributable to Weyco Group, Inc. | $ 5,192 | $ 4,409 | $ 11,280 | $ 9,718 | ||||
Weighted average shares outstanding | ||||||||
Basic | 10,827 | 10,946 | 10,860 | 11,128 | ||||
Diluted | 10,911 | 11,037 | 10,974 | 11,251 | ||||
Earnings per share | ||||||||
Basic | $ 0.48 | $ 0.40 | $ 1.04 | $ 0.87 | ||||
Diluted | $ 0.48 | $ 0.40 | $ 1.03 | $ 0.86 | ||||
Cash dividends per share | $ 0.17 | $ 0.16 | $ 0.50 | $ 0.48 | ||||
Comprehensive income | $ 6,058 | $ 3,369 | $ 13,036 | $ 10,060 | ||||
