Wolverine World Wide, Inc. reported that second quarter revenue rose 8.7% to $184.0 million compared to $169.3 million reported for the second quarter of 2002. Earnings per share improved to $0.23 per share compared to $0.21 per share reported for the same quarter last year.
For the first half of 2003, revenue and earnings per share reached record levels of $375.5 million and $0.41 per share respectively. These results represent an 8.4 percent and 13.9 percent improvement from the $346.6 million in revenue and $0.36 earnings per share reported for the first half of 2002.
“All of our major branded groups generated profit improvements,” stated Timothy J. ODonovan, Wolverine’s President and CEO, “with our international businesses producing solid double-digit revenue gains in the quarter. Merrell remains the top performing brand in our portfolio, experiencing its 22nd consecutive quarter of growth.
“Our marketing investments are paying off. Merrell’s expanding shop-in- shop program with key retailers is producing strong sell-through. CAT Footwear’s lifestyle marketing initiative is driving business through youth- oriented retailers around the world. The Hush Puppies repositioning plan is successfully opening new doors with better-grade retailers and Wolverine’s increased focus on accelerating growth in the outdoor sport boot category is working.”
“We were pleased with our 9.5 percent gain in earnings per share,” stated Stephen L. Gulis Jr., the Company’s CFO. “Higher divisional operating earnings coupled with our debt reductions and share repurchase programs more than offset the $0.03 per share increase in pension expense recorded in the second quarter. Gross margins declined 70 basis points for the quarter to 35.7 percent due to a higher percentage of military and slipper shipments, which are lower margin businesses. Adding to the margin decline were costs incurred to consolidate our Mexican manufacturing operation into our Dominican Republic facilities. Year to date, margins are up 20 basis points and are on plan to achieve our projected annualized increase.
“We continue to reap the benefits of our asset management programs, which resulted in minimal revolving debt and over $40.0 million in cash as we exited the second quarter. This performance was driven in part by a 5.3 percent year-over-year reduction in inventories and improved cash collections. Accounts receivable balances at the end of the second quarter increased 3.8 percent, significantly less than our revenue improvement.”
ODonovan concluded, “Looking ahead, we are entering the second half of 2003 with a 5.4 percent increase in order backlog. We believe many retailers have yet to complete their order bookings for third and fourth quarter delivery. Additionally, we experienced an increase in at-once business late in the second quarter, and anticipate this trend to continue. For fiscal 2003, we continue to anticipate revenue and earnings reaching $875 to $885 million and $1.21 to $1.24 per share respectively.”
WOLVERINE WORLD WIDE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION
(Unaudited)
($000's, except share and per share data)
12 Weeks Ended 24 Weeks Ended
June 14, June 15, June 14, June 15,
2003 2002 2003 2002
Revenue $184,040 $169,276 $375,525 $346,553
Cost of products sold 118,316 107,655 240,605 222,830
Gross profit 65,724 61,621 134,920 123,723
Selling and administrative
expenses 50,822 46,524 107,705 97,388
Operating profit 14,902 15,097 27,215 26,335
Other expense 1,152 1,549 2,444 3,202
Earnings before income taxes
and minority interest 13,750 13,548 24,771 23,133
Income taxes 4,458 4,468 8,039 7,631
Earnings before minority
interest 9,292 9,080 16,732 15,502
Minority interest 11 (19) 37 ?
Net earnings $9,281 $9,099 $16,695 $15,502
