Weyco Group, Inc. said net sales for the fourth quarter were $62.3 million, up 7% compared to fourth quarter 2009 sales of $58.4 million. Net earnings rose 6.3% to $5.1 million, or 45 cents a share, from $4.8 million, or 41 cents, a share.
In the company's wholesale segment, which includes North American wholesale operations and licensing revenues, net sales were $44.7 million in 2010 compared with $44.0 million in the same period in 2009. Wholesale sales were $43.9 million in 2010, compared to $43.2 million in 2009. Licensing revenues were $766,000 in both 2010 and 2009. Wholesale net sales of Stacy Adams footwear were up 12%, while Nunn Bush and Florsheim were down 4%, and 2%, respectively.
In the company's retail segment, which includes sales from the company's 35 Florsheim retail stores in the U.S. and its Internet business, net sales were $6.8 million in 2010, compared with $6.3 million in 2009. Same store sales were up 9%.
The company's other businesses, which include wholesale and retail operations in Australia, Asia Pacific, South Africa (collectively, “Florsheim Australia”), and Europe, had net sales of $10.9 million in 2010, compared to $8.1 million in 2009.
Operating earnings were $7.2 million in 2010 compared with $6.7 million in 2009. During the fourth quarters of 2010 and 2009, earnings from operations were reduced by charges of $310,000 and $1.1 million, respectively, to recognize the impairment of certain North American retail segment fixed assets.
FULL YEAR 2010
Overall net sales in 2010 of $229.2 million were up 2% compared with $225.3 million in the prior year. Earnings from operations were $18.8 million in 2010, up from $16.8 million in the prior year. Net earnings attributable to Weyco Group, Inc. were $13.7 million, up from $12.8 million in 2009. Diluted earnings per share were $1.19 in 2010 and $1.11 in the prior year.
In the wholesale segment, net sales were $166.0 million in 2010 compared with $168.7 million in 2009. Wholesale product sales were $163.8 million, down 1% from $166.0 million in 2009. Sales of the Company's Stacy Adams brand were up 9%, and the Nunn Bush and Florsheim brands were down 6% and 7%, respectively, compared to 2009. The Umi brand, which was acquired in April 2010, had $1.2 million of net sales in 2010. Sales of the Stacy Adams brand increased this year mainly in department stores and at off-price retailers. Nunn Bush and Florsheim sales each decreased moderately across several trade channels. Licensing revenues were $2.2 million in 2010 and $2.7 million in 2009. The decrease in licensing revenues between years was primarily due to the continued struggles of independent retailers who sell the majority of the company's licensed products. The operating earnings of the wholesale segment were down approximately $800,000 for the year, mainly due to the reduced licensing revenues in 2010.
In the retail segment, net sales were $22.5 million, up 2% from $22.0 million in 2009. There was one fewer store in 2010 than 2009. Same store sales were up 3.5%. The retail division's operating earnings increased $1.1 million in 2010, primarily due to the lower fourth quarter impairment charge in 2010 compared to 2009, as discussed above, and also due to lower depreciation expense in 2010.
The company's other businesses had net sales of $40.7 million in 2010, compared to $34.6 million in 2009. The majority of the increase was at Florsheim Australia, whose net sales increased $5.5 million, or 20%. In local currency, Florsheim Australia's sales increased 4%, and the weaker U.S. dollar in 2010 relative to the Australian dollar caused the rest of the sales increase. There was a $1.7 million increase in earnings from operations in the Company's other businesses in 2010 due mainly to Florsheim Australia's increased sales and gross margins.
The company's other income and expense was $345,000 of income in 2010 compared with $1.4 million of income in 2009. The decrease was due to lower foreign currency exchange gains on intercompany loans in the current year as compared to 2009.
At December 31, 2010, the company's cash and marketable securities totaled $70.2 million and there were $5.0 million of borrowings under its revolving line of credit. At December 31, 2009, the company's cash and marketable securities totaled $76.8 million and there was no debt outstanding. During 2010, cash was used to build inventories from the historically low levels at the end of 2009, and also to increase the Company's stock of core styles in anticipation of possible price increases from overseas manufacturers.
The company's Board of Directors declared a cash dividend on February 21, 2011 of $.16 per share to all shareholders of record on March 14, 2011, payable April 1, 2011.
As previously announced, 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 purchase price was $29.4 million in cash, plus assumed debt of approximately $3.5 million and contingent payments after two and five years, which are dependent on Bogs achieving certain performance measures.
