Expected fiscal 2022 revenue growth of 15%
to 18% and adjusted EPS growth of 19% to 27%
Wolverine World Wide, Inc. (NYSE: WWW) today reported financial
results for the fourth quarter and full-year ended January 1, 2022.
The Company also provided its initial fiscal 2022 outlook.
“We are pleased that the Company managed through a challenging
supply chain to deliver nearly 25% revenue growth in the fourth
quarter,” said Brendan Hoffman, Wolverine Worldwide’s President and
Chief Executive Officer. “I am thrilled to be leading the
organization at such a pivotal time. Our strong portfolio of iconic
brands combined with the operational foundation built over the last
decade positions us to capitalize on very favorable consumer and
category trends. Excluding Sweaty Betty, fiscal 2021 revenue
exceeded 2019 which speaks to our team’s resolve and tenacity in
overcoming the impact of COVID-19. We expect to further unlock the
growth potential of our brands as we deliver on our fiscal 2022
outlook of mid to high-teens revenue growth.”
FOURTH-QUARTER 2021 PERFORMANCE
On August 2, 2021, Wolverine Worldwide acquired women’s
activewear brand Sweaty Betty, a digitally-native, premium global
apparel brand, which will continue to fuel growth and enhance the
Company’s fast-growing eCommerce business. Unless otherwise stated,
the following 2021 fourth-quarter and full-year results include
Sweaty Betty; the prior year 2020 quarter and full-year periods do
not.
- Revenue was $635.6 million, up 24.7% versus the prior year. On
a constant currency basis, revenue was up 24.6% versus the prior
year.
- Excluding Sweaty Betty, revenue increased 9.4% versus the prior
year and decreased 8.2% versus 2019.
- eCommerce revenue was up 58.3% versus the prior year and up
108.5% versus 2019.
- Excluding Sweaty Betty, eCommerce revenue was up 12.7% versus
the prior year and up 48.5% versus 2019.
- Gross margin was 41.3%, compared to 40.1% in the prior year.
Adjusted gross margin was 43.0%, compared to 41.4% in the prior
year.
- Excluding Sweaty Betty, adjusted gross margin was 41.5%
compared to 41.4% in the prior year.
- Operating margin improved to (1.4)%, compared to (40.1)% in the
prior year. Adjusted operating margin was 7.7%, compared to 6.6% in
the prior year.
- Excluding Sweaty Betty, adjusted operating margin was 7.1%
compared to 6.6% in the prior year.
- Diluted earnings per share were ($0.18), compared to diluted
earnings per share of ($2.10) in the prior year. This includes $44
million related to a legacy environmental matter and recent
progress on settlements of certain litigation. Adjusted diluted
earnings per share were $0.41, and on a constant currency basis,
were $0.39 compared to $0.21 in the prior year.
- Excluding Sweaty Betty, adjusted diluted earnings per share
were $0.31 compared to $0.21 in the prior year.
- Inventory at the end of the quarter was $365.5 million, up
50.3% versus the prior year. Sweaty Betty contributed 19.4% to the
increase versus the prior year.
- Total debt at the end of the quarter was $966.8 million, or
$244.3 million more than in the prior year reflecting the impact of
the Sweaty Betty acquisition. Total liquidity including cash and
available borrowings under the Company's revolving line of credit
was approximately $900 million.
- At the end of the quarter, the company has nearly $450 million
available under its board-approved share repurchase plan.
FULL-YEAR 2021 PERFORMANCE
- Revenue was $2,414.9 million, up 34.8% versus the prior year.
On a constant currency basis, revenue was up 33.4% versus the prior
year.
- Excluding Sweaty Betty, revenue increased 28.3% versus the
prior year and 1.0% versus 2019.
- eCommerce reported revenue was up 39.7% versus the prior year
and up 109.4% versus 2019.
- Excluding Sweaty Betty, eCommerce revenue was up 18.3% versus
the prior year and up 77.3% versus 2019.
- Gross margin was 42.6%, compared to 41.1% in the prior year.
Adjusted gross margin was 44.1%, compared to 41.5% in the prior
year.
- Excluding Sweaty Betty, adjusted gross margin was 43.4%
compared to 41.5% in the prior year.
- Operating margin was 6.4%, compared to (7.7)% in the prior
year. Adjusted operating margin was 10.6%, compared to 7.5% in the
prior year.
- Excluding Sweaty Betty, adjusted operating margin was 10.7%
compared to 7.5% in the prior year.
- Diluted earnings per share were $0.81, compared to diluted
earnings per share of ($1.70) in the prior year. Adjusted diluted
earnings per share were $2.09, and on a constant currency basis,
were $2.05, compared to $0.93 in the prior year.
- Excluding Sweaty Betty, adjusted diluted earnings per share
were $1.98 compared to $0.93 in the prior year.
“We are very encouraged by our fourth quarter and full-year
performance and momentum, despite the ongoing impact of the
pandemic on our business. Revenue and earnings exceeded
expectations entering the year," said Mike Stornant, Senior Vice
President and Chief Financial Officer. "As we transition to 2022,
demand remains at historic levels and the progress made in 2021 to
improve flow of goods and our inventory position gives us
confidence in our outlook for high-teens revenue growth in
2022.”
FULL-YEAR 2022 OUTLOOK
The Company is providing its initial revenue and earnings
outlook for the full year, which is summarized below.
- Revenue is expected to be in the range of $2.775 billion to
$2.850 billion, representing growth of approximately 15.0% to
18.0%.
- Diluted earnings per share are expected to be between $2.30 to
$2.45 and adjusted diluted earnings per share are expected to be
between $2.50 to $2.65, representing growth of 19.4% to 26.5%.
- Gross margin is expected to be in the range of 43.5% to
44.0%.
- Operating margin is expected to be approximately 10.2% and
adjusted operating margin is expected to be approximately 11.0%, up
approximately 35 bps versus 2021.
- The effective tax rate is expected to be approximately
20.0%.
- Diluted weighted average shares are expected to be
approximately 82.6 million.
This outlook assumes no meaningful deterioration of current
market conditions related to the COVID-19 pandemic during the
remainder of 2022.
NON-GAAP FINANCIAL MEASURES
Measures referred to in this release as “adjusted” financial
results are non-GAAP measures that exclude environmental and other
related costs net of recoveries, costs related to the COVID-19
pandemic including air freight costs, credit loss expenses,
severance expenses and other related costs, reorganization expenses
and debt extinguishment costs. Measures referred to in this release
as “organic” financial results are non-GAAP measures that exclude
the results of Sweaty Betty. The Company also presents constant
currency information, which is a non-GAAP measure that excludes the
impact of fluctuations in foreign currency exchange rates. The
Company calculates constant currency basis by converting the
current-period local currency financial results using the prior
period exchange rates and comparing these adjusted amounts to the
Company's current period reported results. The Company believes
providing each of these non-GAAP measures provides valuable
supplemental information regarding its results of operations,
consistent with how the Company evaluates performance.
The Company has provided a reconciliation of each of the above
non-GAAP financial measures to the most directly comparable GAAP
financial measure. The Company believes these non-GAAP measures
provide useful information to both management and investors because
they increase the comparability of current period results to prior
period results by adjusting for certain items that may not be
indicative of core operating results and enable better
identification of trends in our business. The adjusted financial
results are used by management to, and allow investors to, evaluate
the operating performance of the Company on a comparable basis. The
organic financial results are used by management to, and allow
investors to, evaluate the aggregate operating performance of the
Company’s brands other than Sweaty Betty. Management does not, nor
should investors, consider such non-GAAP financial measures in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP.
EARNINGS CALL INFORMATION
The Company will host a conference call today at 8:30 a.m. EST
to discuss these results and current business trends. The
conference call will be broadcast live and accessible under the
“Investor Relations” tab at www.wolverineworldwide.com. A replay of
the conference call will be available on the Company’s website for
a period of approximately 30 days.
ABOUT WOLVERINE WORLDWIDE
Founded in 1883 on the belief in the possibility of opportunity,
Wolverine World Wide, Inc. (NYSE:WWW) is one of the world’s leading
marketers and licensors of branded casual, active lifestyle, work,
outdoor sport, athletic, children's and uniform footwear and
apparel. Through a diverse portfolio of highly recognized brands,
our products are designed to empower, engage and inspire our
consumers every step of the way. The company’s portfolio includes
Merrell®, Saucony®, Sweaty Betty®, Sperry®, Hush Puppies®,
Wolverine®, Keds®, Chaco®, Bates®, HYTEST®, and Stride Rite®.
Wolverine Worldwide is also the global footwear licensee of the
popular brands Cat® and Harley-Davidson®. Based in Rockford,
Michigan, for more than 130 years, the company's products are
carried by leading retailers in the U.S. and globally in
approximately 170 countries and territories. For additional
information, please visit our website, www.wolverineworldwide.com
or visit us on Facebook, LinkedIn, and Instagram.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements,
including statements regarding the Company’s expectations
regarding: its outlook for fiscal year 2022 results including
revenue, reported gross margin, reported and adjusted operating
margin, effective tax rate and reported and adjusted earnings per
share as well as the Company's expectations regarding the
continuing effect of the COVID-19 pandemic in 2022 and that Sweaty
Betty will fuel growth and enhance the Company's eCommerce
business. In addition, words such as “estimates,” “anticipates,”
“believes,” “forecasts,” “step,” “plans,” “predicts,” “focused,”
“projects,” “outlook,” “is likely,” “expects,” “intends,” “should,”
“will,” “confident,” variations of such words, and similar
expressions are intended to identify forward-looking statements.
These statements are not guarantees of future performance and
involve certain risks, uncertainties, and assumptions (“Risk
Factors”) that are difficult to predict with regard to timing,
extent, likelihood, and degree of occurrence. Risk Factors include,
among others: the effects of the COVID-19 pandemic on the Company’s
business, operations, financial results and liquidity, including
the duration and magnitude of such effects, which will depend on
numerous evolving factors that the Company cannot currently
accurately predict or assess, including: the duration and scope of
the pandemic; the negative impact on global and regional markets,
economies and economic activity, including the duration and
magnitude of its impact on unemployment rates, consumer
discretionary spending and levels of consumer confidence; actions
governments, businesses and individuals take in response to the
pandemic; the effects of the pandemic, including all of the
foregoing, on the Company’s distributors, manufacturers, suppliers,
joint venture partners, wholesale customers and other
counterparties, and how quickly economies and demand for the
Company’s products recover after the pandemic subsides; changes in
general economic conditions, employment rates, business conditions,
interest rates, tax policies and other factors affecting consumer
spending in the markets and regions in which the Company’s products
are sold; the inability for any reason to effectively compete in
global footwear, apparel and consumer-direct markets; the inability
to maintain positive brand images and anticipate, understand and
respond to changing footwear and apparel trends and consumer
preferences; the inability to effectively manage inventory levels;
increases or changes in duties, tariffs, quotas or applicable
assessments in countries of import and export; foreign currency
exchange rate fluctuations; currency restrictions; supply chain or
other capacity constraints, production disruptions, quality issues,
price increases or other risks associated with foreign sourcing;
the cost and availability of raw materials, inventories, services
and labor for contract manufacturers; labor disruptions; changes in
relationships with, including the loss of, significant wholesale
customers; risks related to the significant investment in, and
performance of, the Company’s consumer-direct operations; risks
related to expansion into new markets and complementary product
categories; the impact of seasonality and unpredictable weather
conditions; changes in general economic conditions and/or the
credit markets on the Company’s distributors, suppliers and
retailers; increases in the Company’s effective tax rates; failure
of licensees or distributors to meet planned annual sales goals or
to make timely payments to the Company; the risks of doing business
in developing countries, and politically or economically volatile
areas; the ability to secure and protect owned intellectual
property or use licensed intellectual property; the impact of
regulation, regulatory and legal proceedings and legal compliance
risks, including compliance with federal, state and local laws and
regulations relating to the protection of the environment,
environmental remediation and other related costs, and litigation
or other legal proceedings relating to the protection of the
environment or environmental effects on human health; the potential
breach of the Company’s databases or other systems, or those of its
vendors, which contain certain personal information, payment card
data or proprietary information, due to cyberattack or other
similar events; problems affecting the Company’s supply chain or
distribution system, including service interruptions at shipping
and receiving ports; strategic actions, including new initiatives
and ventures, acquisitions and dispositions, and the Company’s
success in integrating acquired businesses, and implementing new
initiatives and ventures; the risk of impairment to goodwill and
other intangibles; changes in future pension funding requirements
and pension expenses; and additional factors discussed in the
Company’s reports filed with the Securities and Exchange Commission
and exhibits thereto. The foregoing Risk Factors, as well as other
existing Risk Factors and new Risk Factors that emerge from time to
time, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these or other
risks and uncertainties, investors should not place undue reliance
on forward-looking statements as a prediction of actual results.
Furthermore, the Company undertakes no obligation to update, amend,
or clarify forward-looking statements.
WOLVERINE WORLD WIDE,
INC.
CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except earnings
per share)
Quarter Ended
Fiscal Year Ended
January 1, 2022
January 2, 2021
January 1, 2022
January 2, 2021
Revenue
$
635.6
$
509.6
$
2,414.9
$
1,791.1
Cost of goods sold
373.2
305.0
1,385.0
1,055.5
Gross profit
262.4
204.6
1,029.9
735.6
Gross margin
41.3
%
40.1
%
42.6
%
41.1
%
Selling, general and administrative
expenses
226.6
182.2
817.8
639.4
Impairment of intangible assets
—
222.2
—
222.2
Environmental and other related costs, net
of recoveries
44.5
4.3
56.4
11.1
Operating expenses
271.1
408.7
874.2
872.7
Operating expenses as a % of revenue
42.7
%
80.2
%
36.2
%
48.7
%
Operating profit (loss), net
(8.7
)
(204.1
)
155.7
(137.1
)
Operating margin
(1.4
) %
(40.1
) %
6.4
%
(7.7
) %
Interest expense, net
8.5
12.5
37.4
43.6
Debt extinguishment and other costs
0.3
5.3
34.3
5.5
Other expense (income), net
1.2
0.8
3.7
(2.1
)
Total other expenses
10.0
18.6
75.4
47.0
Earnings (loss) before income taxes
(18.7
)
(222.7
)
80.3
(184.1
)
Income tax expense (benefit)
(3.7
)
(51.5
)
13.3
(45.5
)
Effective tax rate
19.5
%
23.1
%
16.6
%
24.7
%
Net earnings (loss)
(15.0
)
(171.2
)
67.0
(138.6
)
Less: net loss attributable to
noncontrolling interests
(0.4
)
(0.5
)
(1.6
)
(1.7
)
Net earnings (loss) attributable to
Wolverine World Wide, Inc.
$
(14.6
)
$
(170.7
)
$
68.6
$
(136.9
)
Diluted earnings (loss) per share
$
(0.18
)
$
(2.10
)
$
0.81
$
(1.70
)
Supplemental information:
Net earnings (loss) used to calculate
diluted earnings (loss) per share
$
(14.7
)
$
(170.9
)
$
67.5
$
(137.7
)
Shares used to calculate diluted earnings
(loss) per share
82.3
81.2
83.3
81.0
WOLVERINE WORLD WIDE,
INC.
CONSOLIDATED CONDENSED BALANCE
SHEETS
(Unaudited)
(In millions)
January 1, 2022
January 2, 2021
ASSETS
Cash and cash equivalents
$
161.7
$
347.4
Accounts receivables, net
319.6
268.3
Inventories, net
365.5
243.1
Other current assets
56.9
45.4
Total current assets
903.7
904.2
Property, plant and equipment, net
129.0
124.6
Lease right-of-use assets
138.2
142.5
Goodwill and other indefinite-lived
intangibles
1,274.7
824.7
Other noncurrent assets
140.8
141.4
Total assets
$
2,586.4
$
2,137.4
LIABILITIES AND STOCKHOLDERS'
EQUITY
Accounts payable and other accrued
liabilities
$
486.3
$
362.0
Lease liabilities
38.3
34.0
Current maturities of long-term debt
10.0
10.0
Borrowings under revolving credit
agreements
225.0
—
Total current liabilities
759.6
406.0
Long-term debt
731.8
712.5
Lease liabilities, noncurrent
118.2
130.3
Other noncurrent liabilities
332.4
315.6
Stockholders' equity
644.4
573.0
Total liabilities and stockholders'
equity
$
2,586.4
$
2,137.4
WOLVERINE WORLD WIDE,
INC.
CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Fiscal Year Ended
January 1, 2022
January 2, 2021
OPERATING ACTIVITIES:
Net earnings (loss)
$
67.0
$
(138.6
)
Adjustments to reconcile net earnings
(loss) to net cash provided by operating activities:
Depreciation and amortization
33.2
32.8
Deferred income taxes
(14.7
)
(56.9
)
Stock-based compensation expense
38.1
28.9
Pension and SERP expense
14.0
8.5
Debt extinguishment and other costs
5.8
5.5
Impairment of intangible assets
—
222.2
Environmental and other related costs, net
of cash payments and recoveries received
33.7
31.5
Other
(1.9
)
(12.7
)
Changes in operating assets and
liabilities
(88.4
)
187.9
Net cash provided by operating
activities
86.8
309.1
INVESTING ACTIVITIES:
Business acquisition, net of cash
acquired
(417.4
)
(5.5
)
Additions to property, plant and
equipment
(17.6
)
(10.3
)
Investment in joint ventures
—
(3.5
)
Proceeds from company-owned insurance
policy liquidations
—
26.8
Other
(2.3
)
(1.4
)
Net cash provided by (used in) investing
activities
(437.3
)
6.1
FINANCING ACTIVITIES:
Payments under revolving credit
agreements
(435.0
)
(898.0
)
Borrowings under revolving credit
agreements
660.0
538.0
Borrowings of long-term debt
750.0
471.0
Payments on long-term debt
(730.0
)
(183.5
)
Payments of debt issuance and debt
extinguishment costs
(10.4
)
(6.4
)
Termination of interest rate swap
—
(7.3
)
Cash dividends paid
(33.5
)
(33.6
)
Purchase of common stock for treasury
(39.6
)
(21.0
)
Employee taxes paid under stock-based
compensation plans
(14.1
)
(24.8
)
Proceeds from the exercise of stock
options
17.1
9.8
Contributions from noncontrolling
interests
4.8
1.8
Net cash provided by (used in) financing
activities
169.3
(154.0
)
Effect of foreign exchange rate
changes
(4.5
)
5.6
Increase (decrease) in cash and cash
equivalents
(185.7
)
166.8
Cash and cash equivalents at beginning of
the year
347.4
180.6
Cash and cash equivalents at end of the
year
$
161.7
$
347.4
The following tables contain information regarding the non-GAAP
financial measures used by the Company in the presentation of its
financial results:
WOLVERINE WORLD WIDE,
INC.
Q4 2021 RECONCILIATION
TABLES
RECONCILIATION OF REPORTED
REVENUE TO ADJUSTED
REVENUE ON A CONSTANT CURRENCY
BASIS*
(Unaudited)
(In millions)
GAAP Basis 2021-Q4
Foreign Exchange
Impact
Constant Currency Basis
2021-Q4
GAAP Basis 2020-Q4
Constant Currency
Growth
Reported Growth
REVENUE
Wolverine Michigan Group
$
322.0
$
(0.1
)
$
321.9
$
298.5
7.8
%
7.9
%
Wolverine Boston Group
218.1
(0.4
)
217.7
197.6
10.2
%
10.4
%
Other
95.5
—
95.5
13.5
607.4
%
607.4
%
Total
$
635.6
$
(0.5
)
$
635.1
$
509.6
24.6
%
24.7
%
RECONCILIATION OF REPORTED
REVENUE
TO ADJUSTED ORGANIC
REVENUE*
(Unaudited)
(In millions)
GAAP Basis
Sweaty Betty (1)
Organic Basis
Revenue - Fiscal 2021 Q4
$
635.6
$
(78.3
)
$
557.3
(1)
Q4 2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
RECONCILIATION OF REPORTED
eCOMMERCE REVENUE GROWTH
TO ADJUSTED ORGANIC eCOMMERCE
REVENUE GROWTH*
(Unaudited)
GAAP Basis
Sweaty Betty (1)
Organic Basis
eCommerce Revenue Growth - Fiscal 2021
Q4
58.3
%
45.6
%
12.7
%
(1)
Q4 2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
RECONCILIATION OF REPORTED
GROSS MARGIN TO ADJUSTED GROSS
MARGIN* AND ADJUSTED ORGANIC
GROSS MARGIN*
(Unaudited)
(In millions)
GAAP Basis
Adjustments (1)
As Adjusted
Sweaty Betty (2)
Organic Basis
Gross Profit - Fiscal 2021 Q4
$
262.4
$
11.0
$
273.4
$
(42.0
)
$
231.4
Gross margin
41.3
%
43.0
%
41.5
%
Gross Profit - Fiscal 2020 Q4
$
204.6
$
6.3
$
210.9
$
—
$
210.9
Gross margin
40.1
%
41.4
%
41.4
%
(1)
Q4 2021 adjustments reflect $4.1
million of air freight and other charges related to production and
shipping delays caused by the COVID-19 pandemic and $6.9 million of
costs associated with the acquisition of Sweaty Betty®. Q4 2020
adjustments reflect expenses related to the COVID-19 pandemic
including $3.2 million of inventory charges and $3.1 million of air
freight charges related to production delays.
(2)
Q4 2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
RECONCILIATION OF REPORTED
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
TO ADJUSTED SELLING, GENERAL
AND ADMINISTRATIVE EXPENSES*
(Unaudited)
(In millions)
GAAP Basis
Adjustment (1)
As Adjusted
Selling, general and administrative
expenses - Fiscal 2021 Q4
$
271.1
$
(46.8
)
$
224.3
Selling, general and administrative
expenses - Fiscal 2020 Q4
$
408.7
$
(231.3
)
$
177.4
Selling, general and administrative
expenses - Fiscal 2019 Q4
$
235.1
$
(66.5
)
$
168.6
(1)
Q4 2021 adjustments reflect $44.4
million of environmental and other related costs net of recoveries
and $2.4 million of costs associated with the acquisition of Sweaty
Betty®. Q4 2020 adjustments reflect $222.2 million for a non-cash
impairment of the Sperry® trade name, $4.8 million of expenses
related to the COVID-19 pandemic including $0.7 million of
severance expenses, $3.6 million of facility exit costs and $0.5
million of other related costs, and $4.3 million of environmental
and other related costs net of recoveries. Q4 2019 adjustments
reflect $64.4 million of environmental and related costs net of a
settlement and $2.1 million of costs related to business
development and reorganization costs.
RECONCILIATION OF REPORTED
OPERATING MARGIN TO ADJUSTED OPERATING
MARGIN* AND ADJUSTED ORGANIC
OPERATING MARGIN*
(Unaudited)
(In millions)
GAAP Basis
Adjustments (1)
As Adjusted
Sweaty Betty (2)
Organic Basis
Operating Profit - Fiscal 2021 Q4
$
(8.7
)
$
57.8
$
49.1
$
(9.3
)
$
39.8
Operating margin
(1.4
) %
7.7
%
7.1
%
Operating Profit - Fiscal 2020 Q4
$
(204.1
)
$
237.6
$
33.5
$
—
$
33.5
Operating margin
(40.1
) %
6.6
%
6.6
%
Operating Profit - Fiscal 2019 Q4
$
(5.2
)
$
66.5
$
61.3
$
—
$
61.3
Operating margin
(0.9
) %
10.1
%
10.1
%
(1)
Q4 2021 adjustments reflect $44.4
million of environmental and other related costs net of recoveries,
$9.3 million of costs associated with the acquisition of Sweaty
Betty® and $4.1 million of air freight charges and other costs
related to production and shipping delays caused by the COVID-19
pandemic. Q4 2020 adjustments reflect $222.2 million for a non-cash
impairment of the Sperry® trade name, $11.1 million of expenses
related to the COVID-19 pandemic including $0.7 million of
severance expenses, $3.6 million of facility exit costs, $3.2
million of inventory charges, $3.1 million of air freight charges
related to production delays and $0.5 million of other related
costs and $4.3 million of environmental and other related costs net
of recoveries, Q4 2019 adjustments reflect $64.4 million of
environmental and related costs net of a settlement and $2.1
million of costs related to business development costs and
reorganization costs.
(2)
Q4 2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
RECONCILIATION OF REPORTED
INVENTORY
TO ADJUSTED ORGANIC
INVENTORY*
(Unaudited)
(In millions)
GAAP Basis
Sweaty Betty (1)
Organic Basis
Inventories, net - Fiscal 2021 Q4
$
365.5
$
(47.1
)
$
318.4
Inventories, net - Fiscal 2020 Q4
$
243.1
$
—
$
243.1
Inventories, net - Fiscal 2019 Q4
$
348.2
$
—
$
348.2
(1)
Q4 2021 adjustment reflects the Sweaty Betty® inventories
included in the consolidated condensed balance sheet.
RECONCILIATION OF REPORTED
DILUTED EPS TO ADJUSTED
DILUTED EPS ON A CONSTANT
CURRENCY BASIS*
(Unaudited)
GAAP Basis
Adjustments (1)
As Adjusted
Foreign Exchange
Impact
As Adjusted EPS On a Constant
Currency Basis
EPS - Fiscal 2021 Q4
$
(0.18
)
$
0.59
$
0.41
$
(0.02
)
$
0.39
EPS - Fiscal 2020 Q4
$
(2.10
)
$
2.31
$
0.21
(1)
Q4 2021 adjustments reflect costs
associated with the acquisition of Sweaty Betty®, air freight
charges and other costs related to production and shipping delays
caused by the COVID-19 pandemic, non-cash impairment related to one
of the Company's joint ventures and environmental and other related
costs net of recoveries. Q4 2020 adjustments reflect a non-cash
impairment of the Sperry® trade name, expenses related to the
COVID-19 pandemic, and environmental and other related costs net of
recoveries
RECONCILIATION OF REPORTED
DILUTED EPS TO ADJUSTED
DILUTED EPS AND ADJUSTED
ORGANIC DILUTED EPS*
(Unaudited)
GAAP Basis
Adjustments (1)
As Adjusted
Sweaty Betty (2)
Organic Basis
EPS - Fiscal 2021 Q4
$
(0.18
)
$
0.59
$
0.41
$
(0.10
)
$
0.31
EPS - Fiscal 2020 Q4
$
(2.10
)
$
2.31
$
0.21
$
—
$
0.21
(1)
Q4 2021 adjustments reflect costs
associated with the acquisition of Sweaty Betty®, air freight
charges and other costs related to production and shipping delays
caused by the COVID-19 pandemic, non-cash impairment related to one
of the Company's joint ventures and environmental and other related
costs net of recoveries. Q4 2020 adjustments reflect a non-cash
impairment of the Sperry® trade name, expenses related to the
COVID-19 pandemic, and environmental and other related costs net of
recoveries
(2)
Q4 2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
2021 FULL-YEAR RECONCILIATION
TABLES
RECONCILIATION OF REPORTED
REVENUE TO ADJUSTED
REVENUE ON A CONSTANT CURRENCY
BASIS*
(Unaudited)
(In millions)
GAAP Basis 2021
Foreign Exchange
Impact
Constant Currency Basis
2021
GAAP Basis 2020
Constant Currency
Growth
Reported Growth
REVENUE
Wolverine Michigan Group
$
1,298.9
(14.4
)
$
1,284.5
$
1,051.0
22.2
%
23.6
%
Wolverine Boston Group
935.8
(10.9
)
924.9
696.0
32.9
34.5
Other
180.2
—
180.2
44.1
308.6
308.6
Total
$
2,414.9
$
(25.3
)
$
2,389.6
$
1,791.1
33.4
%
34.8
%
RECONCILIATION OF REPORTED
REVENUE
TO ADJUSTED ORGANIC
REVENUE*
(Unaudited)
(In millions)
GAAP Basis
Sweaty Betty (1)
Organic Basis
Revenue - Fiscal 2021
$
2,414.9
$
(117.4
)
$
2,297.5
(1)
2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
RECONCILIATION OF REPORTED
eCOMMERCE REVENUE GROWTH
TO ADJUSTED ORGANIC eCOMMERCE
REVENUE GROWTH*
(Unaudited)
GAAP Basis
Sweaty Betty (1)
Organic Basis
eCommerce Revenue Growth - Fiscal 2021
39.7
%
21.4
%
18.3
%
(1)
2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
RECONCILIATION OF REPORTED
GROSS MARGIN
TO ADJUSTED GROSS
MARGIN*
(Unaudited)
(In millions)
GAAP Basis
Adjustments (1)
As Adjusted
Sweaty Betty (2)
Organic Basis
Gross Profit - Fiscal 2021
$
1,029.9
$
35.2
$
1,065.1
$
(67.8
)
$
997.3
Gross margin
42.6
%
44.1
%
43.4
%
Gross Profit - Fiscal 2020
$
735.6
$
8.3
$
743.9
$
—
$
743.9
Gross margin
41.1
%
41.5
%
41.5
%
Gross Profit - Fiscal 2019
$
923.8
$
0.5
$
924.3
$
—
$
924.3
Gross margin
40.6
%
40.6
%
40.6
%
(1)
2021 adjustments reflect $26.1
million of air freight and other charges related to production and
shipping delays caused by the COVID-19 pandemic and $9.1 million of
costs associated with the acquisition of Sweaty Betty®. 2020
adjustments reflect expenses related to the COVID-19 pandemic
including $4.4 million of inventory charges and $3.9 million of air
freight charges related to production delays.
(2)
2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
RECONCILIATION OF REPORTED
OPERATING MARGIN
TO ADJUSTED OPERATING
MARGIN*
(Unaudited)
(In millions)
GAAP Basis
Adjustments (1)
As Adjusted
Sweaty Betty (2)
Organic Basis
Operating Profit (Loss) - Fiscal 2021
$
155.7
$
101.2
$
256.9
$
(11.2
)
$
245.7
Operating margin
6.4
%
10.6
%
10.7
%
Operating Profit (Loss) - Fiscal 2020
$
(137.1
)
$
271.0
$
133.9
$
—
$
133.9
Operating margin
(7.7
) %
7.5
%
7.5
%
Operating Profit - Fiscal 2019
$
171.0
$
91.6
$
262.6
$
—
$
262.6
Operating margin
7.5
%
11.5
%
11.5
%
(1)
2021 adjustments reflect $56.4
million of environmental and other related costs net of recoveries,
$26.1 million of air freight charges and other costs related to
production and shipping delays caused by the COVID-19 pandemic and
$18.7 million of costs associated with the acquisition of Sweaty
Betty®. 2020 adjustments reflect $222.2 million for a non-cash
impairment of the Sperry® trade name, $37.7 million of expenses
related to the COVID-19 pandemic including $10.9 million of
severance expenses, $8.5 million of credit loss expenses, $4.9
million of inventory charges, $3.9 million of air freight charges
related to production delays, $3.6 million of facility exit costs
and $5.9 million of other costs, and $11.1 million of environmental
and other related costs net of recoveries. 2019 adjustments reflect
$83.5 million of environmental and other related costs net of a
settlement and $8.1 million of other costs including business
development costs and reorganization costs.
(2)
2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
RECONCILIATION OF REPORTED
DILUTED EPS TO ADJUSTED
DILUTED EPS ON A CONSTANT
CURRENCY BASIS*
(Unaudited)
GAAP Basis
Adjustments (1)
As Adjusted
Foreign Exchange
Impact
As Adjusted EPS On a Constant
Currency Basis
EPS - Fiscal 2021
$
0.81
$
1.28
$
2.09
$
(0.04
)
$
2.05
EPS - Fiscal 2020
$
(1.70
)
$
2.63
$
0.93
(1)
2021 adjustments reflect debt
extinguishment costs, costs associated with the acquisition of
Sweaty Betty®, air freight and other costs related to production
and shipping delays caused by the COVID-19 pandemic, environmental
and other related costs net of recoveries and non-cash impairment
related to one of the Company's joint ventures. 2020 adjustments
reflect a non-cash impairment of the Sperry® trade name, expenses
related to the COVID-19 pandemic, and environmental and other
related costs net of recoveries.
RECONCILIATION OF REPORTED
DILUTED EPS TO ADJUSTED
DILUTED EPS AND ADJUSTED
ORGANIC DILUTED EPS*
(Unaudited)
GAAP Basis
Adjustments (1)
As Adjusted
Sweaty Betty (2)
Organic Basis
EPS - Fiscal 2021
$
0.81
$
1.28
$
2.09
$
(0.11
)
$
1.98
EPS - Fiscal 2020
$
(1.70
)
$
2.63
$
0.93
$
—
$
0.93
(1)
2021 adjustments reflect debt
extinguishment costs, costs associated with the acquisition of
Sweaty Betty®, air freight and other costs related to production
and shipping delays caused by the COVID-19 pandemic, environmental
and other related costs net of recoveries and non-cash impairment
related to one of the Company's joint ventures. 2020 adjustments
reflect a non-cash impairment of the Sperry® trade name, expenses
related to the COVID-19 pandemic, and environmental and other
related costs net of recoveries.
(2)
2021 adjustment reflects the
Sweaty Betty® results included in the consolidated condensed
statement of operations.
2022 GUIDANCE RECONCILIATION
TABLES
RECONCILIATION OF REPORTED
OPERATING MARGIN GUIDANCE TO ADJUSTED OPERATING MARGIN GUIDANCE,
REPORTED DILUTED EPS GUIDANCE TO ADJUSTED DILUTED EPS
GUIDANCE AND SUPPLEMENTAL
INFORMATION*
(Unaudited)
(In millions, except earnings
per share)
GAAP Basis
Adjustments (1)
As Adjusted
Operating Margin - Fiscal 2022 Full
Year
10.2 %
0.8 %
11.0 %
Dilutive EPS - Fiscal 2022 Full Year
$ 2.30 - $2.45
$ 0.20
$ 2.50 - $2.65
Fiscal 2022 Full Year Supplemental
information:
Net Earnings
$193 - $206
$ 16.0
$209 - $222
Net Earnings used to calculate diluted
earnings per share
$190 - $203
$ 16.0
$206 - $219
Shares used to calculate diluted earnings
per share
82.6
82.6
(1)
2022 adjustments reflect
estimated environmental and other related costs net of recoveries
and estimated Sweaty Betty® integration costs.
* To supplement the consolidated condensed financial statements
presented in accordance with Generally Accepted Accounting
Principles ("GAAP"), the Company describes what certain financial
measures would have been if, costs associated with the acquisition
of the Sweaty Betty® brand, environmental and other related costs
net of recoveries, costs related to the COVID-19 pandemic including
air freight costs, credit loss expenses, severance expenses and
other related costs, reorganization expenses and debt
extinguishment costs were excluded. The Company also describes what
certain financial measures would have been if the previously
described financial measures also excluded the results of Sweaty
Betty®. The Company believes these non-GAAP measures provide useful
information to both management and investors by increasing
comparability to the prior period by adjusting for certain items
that may not be indicative of core operating measures and to better
identify trends in the Company's business. The adjusted financial
results are used by management to, and allow investors to, evaluate
the operating performance of the Company on a comparable basis.
The constant currency presentation, which is a non-GAAP measure,
excludes the impact of fluctuations in foreign currency exchange
rates. The Company believes providing constant currency information
provides valuable supplemental information regarding results of
operations, consistent with how the Company evaluates performance.
The Company calculates constant currency by converting the
current-period local currency financial results using the prior
period exchange rates and comparing these adjusted amounts to the
Company's current period reported results.
Management does not, nor should investors, consider such
non-GAAP financial measures in isolation from, or as a substitution
for, financial information prepared in accordance with GAAP. A
reconciliation of all non-GAAP measures included in this press
release, to the most directly comparable GAAP measures are found in
the financial tables above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220223005397/en/
Michael D. Stornant (616) 866-5728
Wolverine World Wide (NYSE:WWW)
Historical Stock Chart
From Mar 2024 to Apr 2024
Wolverine World Wide (NYSE:WWW)
Historical Stock Chart
From Apr 2023 to Apr 2024