Wolverine World Wide, Inc. reported record earnings for its fourth quarter and 2003 fiscal year, marking its third consecutive year of record results. The Company achieved record revenue totaling $888.9 million for its 2003
fiscal year ended on January 3, 2004, a 7.5% increase over 2002 revenue of $827.1 million. Earnings per share for fiscal 2003 grew to $1.27, a 10.4% increase over the $1.15 per share reported in 2002.
For the fourth quarter of 2003, the Company reported
revenue of $282.8 million, an 8.2% increase over fourth quarter 2002 revenue of $261.4 million. Fourth quarter 2003 earnings per share increased to 46 cents, a 9.5% increase over fourth quarter 2002 earnings per share of 42 cents.
“Wolverine World Wide had a very strong 2003 as reflected by our record results and continued consumer enthusiasm for our global brands,” stated Timothy J. O'Donovan, the Company's President and CEO. “We continue to progress in our mission to become the world's premier non-athletic footwear company as evidenced by our fourth consecutive year of sales growth, the generation of record profits and the acceleration of our global brand building initiatives.
“We are pleased to report that all four of our major branded footwear operations contributed to our increased profits in 2003 with Merrell leading the way. Our Merrell and CAT European operations reported solid profits, the
Wolverine Footwear Group delivered strong results and the Hush Puppies U.S. business made key strides in its repositioning plan. Combined, these achievements offer a strong platform to carry momentum into 2004.”
“Our fourth quarter showed significant sales growth, improved gross margin
and record cash generation,” reported the Company's CFO, Stephen L. Gulis Jr.
“Fourth quarter 2003 gross margin of 37.1 percent improved 170 basis points
over fourth quarter 2002. This improvement resulted from continued growth in
our lifestyle businesses, a higher mix of full-margin shipments and reduced
inventory markdowns. For the full year 2003, gross margin improved 110 basis
points.
“Year end 2003 accounts receivable and inventory levels were down 6.0% and 2.4% respectively on 2003 revenue growth of 7.5%. Our asset management programs continue to yield positive results and, excluding the Sebago business acquired in November 2003, inventory and
accounts receivable were reduced by $25 million. These initiatives assisted us in generating $100 million of cash from operating activities in the year.”
O'Donovan concluded, “Our 2003 year-end order backlog is up 20% over prior year-end levels. This increase in order backlog is driven by our growing lifestyle and sandal businesses, solid work boot and military contract
demand as well as the addition of the Sebago business. The positioning of our brands is market-right and, combined with our strong order backlog, has led us
to revise our 2004 earnings estimates. We continue to expect revenue to range between $945 and $965 million and have increased our earnings per share estimates by $.03 per share to a range of $1.37 to $1.43.”
WOLVERINE WORLD WIDE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
($000's, except share and per share data)
4th Quarter Ended Fiscal Year Ended
January 3, December 28, January 3, December 28,
2004 2002 2004 2002
(17 weeks) (16 weeks) (53 weeks) (52 weeks)
Revenue $282,830 $261,356 $888,926 $827,106
Cost of products sold 177,876 168,869 562,338 532,878
Gross profit 104,954 92,487 326,588 294,228
Selling and
administrative
expenses 78,523 66,338 246,652 217,154
Operating profit 26,431 26,149 79,936 77,074
Other expense 482 591 4,788 5,420
Earnings before
income taxes and
minority interest 25,949 25,558 75,148 71,654
Income taxes 7,318 8,407 23,262 23,599
Earnings before
minority interest 18,631 17,151 51,886 48,055
Minority interest 23 83 170 143
Net earnings $18,608 $17,068 $51,716 $47,912
Diluted earnings
per share $ .46 $ .42 $1.27 $1.15
