Wolverine
World Wide, Inc. reported revenue for the fourth quarter grew 23.2% to $385.0
million. Earnings climbed 53.2% to $25.6 million, or 52 cents a share, from $16.7 million, or 33 cents, a year ago. Adjusted for restructuring charges and other non-recurring expenses in the 2009 period, earnings in the latest period were up 15.6%.
Reported revenue for the full year was a record $1.249
billion, an increase of 13.4% versus prior year revenue of $1.101 billion. Adjusted earnings per fully diluted share
were $2.17, a 22.6% increase compared to 2009 adjusted earnings of $1.77 per
share. Both years' adjusted earnings
exclude the impact of restructuring charges and other expenses related to the company's
strategic restructuring plan that was completed in the second quarter of 2010. Reported fully diluted earnings for the year
were $2.11 per share compared to $1.24 per share in 2009.
“We are extremely pleased with the company's
exceptional financial performance in 2010, highlighted by record revenue and
record earnings per share,” said Blake W. Krueger, the company's chairman
and chief executive officer. “All
four branded operating groups contributed to the year's record results, and all
geographic regions delivered double-digit revenue growth. The company's fourth quarter performance was
also exceptional, and this momentum, coupled with a strong double-digit order
backlog and enthusiastic responses to our 2011 product offerings, positions the
company for an excellent 2011.”
Don Grimes, the company's senior vice president and chief financial officer, commented, “The company's record financial performance
in 2010 is a clear indication of the strength of our portfolio and the
discipline with which we manage the business.
We remain mindful of the need to deliver superior financial results
while still making appropriate investments for the future.”
Highlights for the year:
* Gross margin for
the full year was 39.6%, after adjusting for non-recurring restructuring and
related charges included in cost of sales, compared to prior-year adjusted gross
margin of 39.7%. Reported gross margin
for the full year was 39.5% compared to 2009 reported gross margin of
39.2%.
* As a percentage
of revenue, adjusted operating expenses were 27.8% of revenue, a decrease of 90
basis points compared to the prior year.
Full-year operating expenses increased 9.8%, to $347.5 million, after
adjusting for non-recurring restructuring and related charges in both
years. Reported operating expenses for
the full year were $350.3 million compared to 2009 reported operating expenses
of $346.1 million.
* Consolidated
inventory at the end of the year was $208.7 million, an increase of 32.0%
compared to the prior year. The company's
inventory level reflects both the excellent outlook for the first half of 2011
and strategic purchases ahead of announced price increases from third-party
suppliers.
* The full-year
effective tax rate was 27.1%, reflecting the net benefit from non-recurring
adjustments, the settlement of a foreign tax audit and the reinstatement of the
research and development tax credit.
* The company
repurchased 1,795,147 shares during 2010 for an aggregate cost of $51.2
million, or $28.52 per share. The company
continues to maintain a strong balance sheet, with no significant debt and
$150.4 million of cash and cash equivalents at the end of the year.
The company anticipates continued excellent growth across its
portfolio of brands. Based on the very positive momentum in the business, the company
currently anticipates:
* Fiscal 2011
revenue in the range of $1.350 billion to $1.390 billion, representing growth
of 8.1% to 11.3% versus the prior year;
* Full-year gross
margin in line with the prior-year's adjusted gross margin, as higher product
costs are expected to be offset by strategic price increases and anticipated
favorable mix;
* Modest operating
expense leverage;
* A full-year
effective tax rate of 29.0%;
* Fully diluted
weighted average shares outstanding of 49.0 million; and
* Fully diluted
earnings per share in the range of $2.35 to $2.45, representing growth of
approximately 8% to 13% versus prior-year adjusted diluted earnings per share
(growth of approximately 11% to 16% versus reported earnings per share).
Krueger concluded, “The state of the business has never
been better. We have momentum, and
opportunities exist for accelerated growth across our entire brand portfolio
and all geographic regions. Our company
is known for its fanatical focus on product, and we are very excited about the
upcoming launch of the Merrell Barefoot Collection and our brands' ability to
continue capitalizing on the Boot and Vintage Americana trends that are
currently dominating footwear. All of
these things, and more, put the company in an enviable position as we look
forward to another strong year in 2011.”
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WOLVERINE WORLD WIDE, INC. |
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS |
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(Unaudited) |
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($000s, except per share data) |
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4th Quarter Ended |
Fiscal Year Ended |
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January 1, |
January 2, |
January 1, |
January 2, |
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|
2011 |
2010 |
2011 |
2010 |
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Revenue |
$ 385,025 |
$ 312,530 |
$ 1,248,517 |
$ 1,101,056 |
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Cost of products sold |
242,291 |
188,523 |
754,537 |
663,461 |
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