Wolverine World Wide, Inc. saw first quarter 2003 revenue grow 8.0 percent to a record $191.5 million compared to the $177.3 million reported for the first quarter of 2002. Earnings per share during the first quarter of 2003 increased 20.0 percent, reaching a record $0.18 per share compared to the $0.15 per share reported for the same quarter last year.
“The execution of our strategic plan, which is centered on driving growth through product excellence and highly focused marketing programs, continues to yield positive results,” stated Timothy J. ODonovan, Wolverine’s President and CEO. “Our record first quarter revenue resulted from strong retailer response to our Spring 03 product offerings. In addition, we continued our more aggressive approach to marketing, stepping up our investment to promote sell-through while strengthening our connection with consumers worldwide.
“Our record first quarter revenue was driven by strong performances from several of our major branded operations. Merrell(R) continued to generate solid growth, with global revenue gains exceeding our plan during the quarter. Since becoming a member of the Wolverine World Wide family, Merrell(R) has achieved year-over-year revenue increases for 21 consecutive quarters.
“The global Hush Puppies(R) business posted a double digit revenue gain for the quarter, reflecting sales gains by all operating units and strong increases in the Hush Puppies(R) international wholesale and licensing operations. Sales were up modestly in the Wolverine Footwear Group, with strong results from Bates(R) and Harley-Davidson(R) offsetting weaker sales of Wolverine(R) boots. The global CAT(R) business was flat, with stronger sales of our new younger lifestyle footwear offsetting lower sales of traditional work boots.
“Operationally, we are generating leverage, as evidenced by our earnings growth rate, which was more than twice the rate of our revenue increase during the quarter. As a result, all of our branded footwear groups showed positive earnings gains in the quarter and contributed to our record earnings performance.”
Stephen L. Gulis Jr., the Company’s CFO, reported, “Gross margins during the first quarter grew 110 basis points to 36.1 percent compared to the 35.0 percent reported for the first quarter of 2002. This expansion reflects reduced inventory markdowns and an improved business mix.
“Selling and administrative expenses increased 100 basis points to 29.7 percent of revenue. This increase results primarily from the planned increase in pension expense and higher marketing expenses to support the growth of our brands. Excluding these increases, core selling and administrative expenses were reduced by 20 basis points as a percent of revenue.
“Our working capital management program produced solid results. Inventories declined 3.1 percent from levels a year ago. Accounts receivable increased only 1.9 percent on an 8.0 percent increase in revenue, resulting in further improvements in days sales outstanding. Additionally, interest expense was lower reflecting reduced debt levels.”
ODonovan concluded, “Turning to the future, order backlog at the end of the first quarter was up 14.7 percent from the same quarter last year. As a result, we continue to anticipate fiscal 2003 revenue and earnings reaching $875 to $885 million and $1.21 to $1.24 per share respectively. We remain committed to making Wolverine the premier company in the non-athletic segment of the footwear market.”
WOLVERINE WORLD WIDE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
($000's, except share and per share data)
12 Weeks Ended
March 22, March 23,
2003 2002
Revenue $191,485 $177,277
Cost of products sold 122,289 115,175
Gross profit 69,196 62,102
Selling and administrative expenses 56,883 50,864
Operating profit 12,313 11,238
Other expense 1,292 1,653
Earnings before income taxes and minority interest 11,021 9,585
Income taxes 3,581 3,163
Earnings before minority interest 7,440 6,422
Minority interest (26) (19)
Net earnings $7,414 $6,403
