• Weyco Reports Second Quarter Sales and Earnings

    ソース: Nasdaq GlobeNewswire / 01 8 2023 15:05:28   America/Chicago

    MILWAUKEE, Aug. 01, 2023 (GLOBE NEWSWIRE) -- Weyco Group, Inc. (NASDAQ: WEYS) (“we,” “our,” “us” and the “Company”) today announced financial results for the quarter ended June 30, 2023.

    Second Quarter 2023
    Consolidated net sales were $67.0 million, down 10% compared to record second-quarter sales of $74.4 million in 2022. Consolidated gross earnings increased to 43.3% of net sales compared to 40.0% of net sales in last year’s second quarter, due mainly to higher gross margins in our North American wholesale segment. Earnings from operations rose 18% to $6.7 million, from $5.7 million in the second quarter of 2022. Net earnings were a second-quarter record of $4.9 million, or $0.50 per diluted share, up 8% over our previous record of $4.5 million, or $0.47 per diluted share, last year.

    North American Wholesale Segment

    Net sales in our wholesale segment were $51.5 million, down 13% compared to record sales of $59.0 million in the second quarter of 2022. Sales were lower across all our major brands due to reduced demand in 2023 following record growth in 2022. Net sales of the Stacy Adams, Florsheim, BOGS and Nunn Bush brands declined 17%, 11%, 35%, and 1%, respectively, for the quarter.

    Wholesale gross earnings were 37.0% of net sales in the second quarter of 2023 compared to 33.7% of net sales last year. Gross margins improved as a result of selling price increases implemented in 2022 to address higher costs. Wholesale selling and administrative expenses totaled $13.7 million for the quarter, compared to $15.7 million last year, which constituted 27% of net sales in both periods. Wholesale operating earnings rose to $5.4 million for the quarter, up 28% compared to $4.2 million last year.

    North American Retail Segment

    Net sales in our retail segment were a second-quarter record of $7.6 million, up 3% compared to our previous record of $7.4 million in 2022. The increase was primarily due to higher sales volumes across all our e-commerce websites.

    Retail gross earnings as a percent of net sales were 66.2% and 67.4% in the second quarters of 2023 and 2022, respectively. Selling and administrative expenses for the retail segment totaled $4.0 million for the quarter compared to $3.9 million last year. As a percent of net sales, retail selling and administrative expenses were 52% in both 2023 and 2022. Retail operating earnings were $1.1 million in both the second quarters of 2023 and 2022.

    Other

    Our other operations consist of our retail and wholesale businesses in Australia, South Africa, and Asia Pacific (collectively, “Florsheim Australia”). Net sales of Florsheim Australia totaled $7.9 million, down slightly compared to $8.0 million in the second quarter of 2022. In local currency, Florsheim Australia’s net sales were up 7% for the quarter, with sales up in both its retail and wholesale businesses. The decrease in sales in U.S. dollars was due to the weakening of the Australian dollar relative to the U.S. dollar compared to last year.

    Florsheim Australia’s gross earnings were 62.4% of net sales compared to 61.3% of net sales in last year’s second quarter. Its operating earnings were $276,000 for the quarter versus $365,000 last year. This decrease was primarily due to lower operating earnings in Asia.

    “Sales eased during the second quarter, after 2022 and the first quarter of 2023 exhibited record-breaking growth,” stated Thomas W. Florsheim, Jr., Chairman and CEO. “Our results reflect what is happening in the larger retail environment, as retailers are well-stocked with inventory. Despite the reduction in sales, we achieved record bottom-line earnings for the quarter, as efforts to improve gross margins and contain selling and administrative expenses continued to pay off. As we move into the second half of the year, we face headwinds going up against last year’s record third and fourth quarter results, which were lifted by pipeline fill and strong consumer demand. We remain focused on investing in and developing our core brands for success over the long-run.”

    On August 1, 2023, our Board of Directors declared a cash dividend of $0.25 per share to all shareholders of record on August 25, 2023, payable September 29, 2023.  

    Conference Call Details:
    Weyco Group will host a conference call on August 2, 2023, at 11:00 a.m. Eastern Time to discuss the second quarter financial results in more detail. To participate in the call, you will first need to pre-register online. Pre-registration takes only a few minutes and you may pre-register at any time, including up to and after the call start time. To pre-register, please go to: https://register.vevent.com/register/BI726a74a9d3c34a38be79e77125b402ff. The pre-registration process will provide the conference call phone number and a passcode required to enter the call. A replay will be available for one year beginning about two hours after the completion of the call at the following webcast link: https://edge.media-server.com/mmc/p/4mykyd7u. The conference call will also be available in the investor relations section of Weyco Group’s website at www.weycogroup.com.

    About Weyco Group:
    Weyco Group, Inc., designs and markets quality and innovative footwear principally for men, but also for women and children, under a portfolio of well-recognized brand names including: Florsheim, Nunn Bush, Stacy Adams, BOGS, Rafters, and Forsake. The Company’s products can be found in leading footwear, department, and specialty stores, as well as on e-commerce websites worldwide. Weyco Group also operates Florsheim stores in the United States and Australia, as well as in certain other international markets.

    Forward-Looking Statements
    This press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  Various factors could cause our results to be materially different from the results expressed or implied by such forward-looking statements.  Such factors include, but are not limited to, the impact of inflation generally and, specifically, increases in our costs for materials, labor and other manufacturing inputs, a slow down or contraction in the overall U.S. or Australian economies, our ability to successfully market and sell our products in a highly competitive industry and in view of changing and unpredictable consumer trends, our ability to successfully procure our products from independent manufacturers on a timely basis, consumer acceptance of products and other factors affecting retail market conditions, increased interest rates, the uncertain impact of the war in Ukraine and the related economic and other sanctions imposed by the U.S. and European Union, and other factors detailed from time to time in our filings made with the Securities and Exchange Commission, including our annual report on Form 10-K filed on March 13, 2023, which are incorporated herein by reference.  We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

    For more information, contact:

    Judy Anderson
    Vice President, Chief Financial Officer and Secretary
    414-908-1833

    WEYCO GROUP, INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)
     
             
      Three Months Ended June 30,  Six Months Ended June 30,
       2023   2022   2023   2022 
      (In thousands, except per share amounts)
             
    Net sales$67,014  $74,359  $153,308  $155,719 
    Cost of sales 38,007   44,589   87,139   96,821 
    Gross earnings 29,007   29,770   66,169   58,898 
             
    Selling and administrative expenses 22,307   24,105   49,083   47,802 
    Earnings from operations 6,700   5,665   17,086   11,096 
             
    Interest income 190   89   329   180 
    Interest expense (132)   (11)   (517)   (12) 
    Other (expense) income, net (168)   181   (298)   175 
             
    Earnings before provision for income taxes 6,590   5,924   16,600   11,439 
             
    Provision for income taxes 1,726   1,429   4,291   2,891 
             
    Net earnings$4,864  $4,495  $12,309  $8,548 
             
             
    Weighted average shares outstanding       
     Basic 9,440   9,549   9,461   9,572 
     Diluted 9,542   9,664   9,625   9,655 
             
    Earnings per share       
     Basic$0.51  $0.47  $1.30  $0.89 
     Diluted$0.50  $0.47  $1.28  $0.89 
             
    Cash dividends declared (per share)$0.25  $0.24  $0.49  $0.48 
             
             
    Comprehensive income$5,210  $3,430  $12,448  $8,158 
             


    WEYCO GROUP, INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
         
         
      June 30, December 31,
       2023  2022
      (Dollars in thousands)
    ASSETS:
    Cash and cash equivalents $21,962  $16,876 
    Investments, at fair value  109   107 
    Marketable securities, at amortized cost  1,097   1,385 
    Accounts receivable, net  34,176   53,298 
    Income tax receivable  3,019   945 
    Inventories  103,857   127,976 
    Prepaid expenses and other current assets  3,496   5,870 
    Total current assets  167,716   206,457 
         
    Marketable securities, at amortized cost  6,410   7,123 
    Deferred income tax benefits  1,012   1,038 
    Property, plant and equipment, net  28,874   28,812 
    Operating lease right-of-use assets  12,976   13,428 
    Goodwill  12,317   12,317 
    Trademarks  33,618   33,618 
    Other assets  24,105   23,827 
    Total assets $287,028  $326,620 
         
    LIABILITIES AND EQUITY:    
    Short-term borrowings $2,570  $31,136 
    Accounts payable  5,659   14,946 
    Dividend payable  -   2,290 
    Operating lease liabilities  4,148   4,026 
    Accrued liabilities  9,866   15,137 
    Total current liabilities  22,243   67,535 
         
    Deferred income tax liabilities  8,622   8,530 
    Long-term pension liability  15,751   15,523 
    Operating lease liabilities  9,855   10,661 
    Other long-term liabilities  478   466 
    Total liabilities  56,949   102,715 
         
    Common stock  9,529   9,584 
    Capital in excess of par value  70,971   70,475 
    Reinvested earnings  169,633   164,039 
    Accumulated other comprehensive loss  (20,054)   (20,193) 
    Total equity  230,079   223,905 
    Total liabilities and equity $287,028  $326,620 
         
     
     
         


    WEYCO GROUP, INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
          
       Six Months Ended June 30,
        2023   2022 
       (Dollars in thousands)
    CASH FLOWS FROM OPERATING ACTIVITIES:   
     Net earnings$12,309  $8,548 
     Adjustments to reconcile net earnings to net cash provided by   
     (used for) operating activities -   
      Depreciation 1,279   1,215 
      Amortization 137   142 
      Bad debt expense 88   34 
      Deferred income taxes 55   (140) 
      Net foreign currency transaction (gains) losses (9)   118 
      Share-based compensation expense 675   818 
      Pension expense 647   36 
      Increase in cash surrender value of life insurance (210)   (300) 
     Changes in operating assets and liabilities -   
      Accounts receivable 18,982   13,237 
      Inventories 24,115   (24,448) 
      Prepaid expenses and other assets 2,167   311 
      Accounts payable (9,305)   (12,310) 
      Accrued liabilities and other (5,273)   (4,252) 
      Accrued income taxes (2,003)   (1,725) 
      Excess tax benefits from share-based compensation (73)   - 
      Net cash provided by (used for) operating activities 43,581   (18,716) 
          
    CASH FLOWS FROM INVESTING ACTIVITIES:   
     Proceeds from maturities of marketable securities 1,010   990 
     Proceeds from sale of investment securities -   8,050 
     Purchases of property, plant and equipment (1,381)   (722) 
      Net cash (used for) provided by investing activities (371)   8,318 
          
    CASH FLOWS FROM FINANCING ACTIVITIES:   
     Cash dividends paid (6,920)   (4,587) 
     Shares purchased and retired (2,134)   (2,527) 
     Net proceeds from stock options exercised 24   228 
     Payment of contingent consideration (500)   - 
     Taxes paid related to the net share settlement of equity awards (173)   (12) 
     Proceeds from bank borrowings 63,047   5,437 
     Repayments of bank borrowings (91,613)   - 
      Net cash used for financing activities (38,269)   (1,461) 
          
     Effect of exchange rate changes on cash and cash equivalents 145   (228) 
          
     Net increase (decrease) in cash and cash equivalents$5,086  $(12,087) 
          
    CASH AND CASH EQUIVALENTS at beginning of period 16,876   19,711 
          
    CASH AND CASH EQUIVALENTS at end of period$21,962  $7,624 
          
    SUPPLEMENTAL CASH FLOW INFORMATION:   
     Income taxes paid, net of refunds$6,273  $4,774 
     Interest paid$808  $12 
          
          
     

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