Weyco Group, Inc. (NASDAQ: WEYS) (“we,” “our,” “us” and the
“Company”) today announced financial results for the quarter and
year ended December 31, 2023.
Fourth Quarter 2023
Consolidated net sales were $80.6 million, down
19% from $99.0 million in the fourth quarter of 2022. Consolidated
gross earnings increased to 50.3% of net sales compared to 46.6% of
net sales in last year’s fourth quarter, due mainly to higher gross
margins in our North American wholesale segment. Quarterly earnings
from operations were $11.5 million, down 24% compared to record
operating earnings of $15.1 million in 2022. Fourth-quarter 2023
net earnings were $8.5 million, or $0.90 per diluted share,
compared to $10.2 million, or $1.06 per diluted share, last
year.
North American Wholesale Segment
Net sales in our wholesale segment were $59.6
million, down 21% compared to $75.5 million in
2022. Our BOGS brand experienced the largest
decrease, with sales down 32% for the quarter, as retailers reduced
orders amid the current saturation of product in the outdoor
footwear market, and due to the mild Fall and Winter weather. Sales
of the Stacy Adams, Nunn Bush, and Florsheim brands were down 19%,
18%, and 13%, respectively, for the quarter. Sales volumes were
down across our legacy brands as a result of weaker demand
following a period of strong growth in 2022.
Wholesale gross earnings were 44.9% of net sales
for the quarter compared to 41.3% of net sales in last year’s
fourth quarter. Gross margins improved as a result of lower
inventory costs, primarily inbound freight. Wholesale selling and
administrative expenses totaled $18.9 million for the quarter
compared to $20.5 million last year. The decrease was largely due
to lower employee costs, mainly commission-based compensation. As a
percent of net sales, wholesale selling and administrative expenses
totaled 32% for the quarter versus 27% last year. Wholesale
operating earnings totaled $7.9 million for the quarter, down 27%
from $10.7 million in 2022, primarily due to lower sales.
North American Retail Segment
Retail net sales were $13.9 million, down 3%
compared to record sales of $14.3 million in the fourth quarter of
2022. The decrease was primarily on the BOGS website, as a result
of lower demand.
Retail gross earnings as a percent of net sales
were 65.8% and 64.5% in the fourth quarters of 2023 and 2022,
respectively. Selling and administrative expenses for the retail
segment totaled $5.6 million for the quarter compared to $5.9
million last year, down as a result of lower web advertising costs.
As a percent of net sales, retail selling and administrative
expenses were flat at 41% in both 2023 and 2022. Retail operating
earnings reached a record $3.5 million in the fourth quarter of
2023, up 6% over $3.3 million in 2022. The earnings improvement
resulted from lower costs in the fourth quarter of 2023.
Other
Our other operations consist of our retail and
wholesale businesses in Australia, South Africa, and Asia Pacific
(collectively, “Florsheim Australia”). However, as previously
disclosed, we ceased operations in the Asia Pacific region in 2023,
and are in the final stages of winding down this business. Net
sales of Florsheim Australia were $7.2 million, down 23% from $9.2
million in the fourth quarter of 2022. In local currency, Florsheim
Australia’s net sales were down 22%, due mainly to the loss of a
sizeable wholesale customer in Australia earlier in 2023, but also
due to lower retail sales in the Asia Pacific region as a result of
its wind-down.
Florsheim Australia’s gross earnings were 65.4%
of net sales for the quarter compared to 61.8% of net sales in the
fourth quarter of 2022. Its operating earnings were $0.2 million
for the quarter compared to $1.1 million last year, down due to
lower sales volumes this year.
Full Year 2023
Consolidated net sales for the full year were
$318.0 million, down 10% compared to record sales of $351.7 million
in 2022. Consolidated gross earnings increased to 44.9% of net
sales in 2023 from 41.1% last year, due mainly to higher gross
margins in our North American wholesale segment. Full year 2023
operating earnings were a record $41.0 million, up 2% over our
previous record of $40.4 million in 2022, despite lower sales. Net
earnings were a record $30.2 million, or $3.17 per diluted share,
in 2023, up 2% compared to $29.5 million, or $3.07 per diluted
share, in 2022.
North American Wholesale Segment
Wholesale net sales were $250.4 million in 2023,
down 12% compared to record sales of $283.2 million in 2022. The
decrease was primarily due to a 31% decline in BOGS sales, compared
to record sales for the brand last year, as orders were down amid
the current saturation of product in the outdoor footwear market.
Sales of the Stacy Adams, Florsheim, and Nunn bush brands were down
10%, 4% and 2%, respectively, for the year, resulting from lower
demand following strong growth last year.
Wholesale gross earnings as a percent of net
sales were 39.7% in 2023 and 35.6% in 2022. Gross margins improved
as a result of increased selling prices and lower inventory costs,
primarily inbound freight. Selling and administrative expenses
totaled $66.0 million in 2023 compared to $68.2 million in 2022.
The decrease in 2023 was primarily due to lower employee costs,
mainly commission-based compensation. As a percent of net sales,
wholesale selling and administrative expenses were 26% in 2023 and
24% in 2022. Wholesale operating earnings reached a record $33.3
million in 2023, up 2% over our previous record of $32.6 million in
2022, due to higher gross margins and lower selling and
administrative expenses.
North American Retail Segment
Retail net sales were a record $38.0 million in
2023, up 4% over our previous record of $36.7 million in 2022. The
increase was primarily due to higher sales on our legacy brands’
websites, partially offset by lower sales on the BOGS website.
Sales at our four domestic brick and mortar stores were down 4% for
the year.
Retail gross earnings were 65.9% of net sales in
2023 and 65.7% of net sales in 2022. Selling and administrative
expenses totaled $18.3 million, or 48% of net sales, for the year
compared to $18.1 million, or 49% of net sales, last year. The
retail segment achieved record operating earnings of $6.8 million
in 2023, up 11% over $6.1 million in 2022, due mainly to the
increase in web sales.
Other
Net sales at Florsheim Australia totaled $29.6
million in 2023, down 7% from $31.8 million in 2022. In local
currency, Florsheim Australia’s net sales were down 3% for the
year, with sales down in its wholesale businesses due to the
previously mentioned mid-year loss of a wholesale customer in
Australia, partially offset by higher sales in its retail
businesses.
Florsheim Australia’s gross earnings were 62.5%
of net sales in 2023 versus 61.1% of net sales in 2022. Its
operating earnings totaled $1.0 million in 2023 and $1.7 million in
2022, down as a result of lower sales.
“We generated record annual earnings in 2023 as
a result of stronger gross margins and efforts to contain costs,”
stated Thomas W. Florsheim, Jr., Chairman and CEO. “We are
particularly pleased with these results despite the lower sales
volumes. The last couple of years have had distortions in revenues
such as unusually robust fourth quarter sales in Fall of 2022,
resulting from timing shifts due to supply chain
issues. Looking ahead, we expect to face headwinds in the
first half of 2024, but continue to focus on building our backlogs
and are optimistic that demand will improve in the back half of the
year.”
On March 5, 2024, our Board of Directors
declared a cash dividend of $0.25 per share to all shareholders of
record on March 15, 2024, payable March 29, 2024.
Conference Call Details: Weyco Group will host a
conference call on March 6, 2024, at 11:00 a.m. Eastern Time to
discuss the fourth quarter and full year 2023 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/BI03d3ec598dac468082a42ffaf8a159e8.
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/4yvkihqo. 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 wars in Ukraine and Israel 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 December 31, |
|
Year Ended
December 31, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(In thousands,
except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
80,590 |
|
|
$ |
99,047 |
|
|
$ |
318,048 |
|
|
$ |
351,737 |
|
Cost of
sales |
|
40,029 |
|
|
|
52,940 |
|
|
|
175,165 |
|
|
|
207,344 |
|
Gross earnings |
|
40,561 |
|
|
|
46,107 |
|
|
|
142,883 |
|
|
|
144,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses |
|
29,056 |
|
|
|
31,045 |
|
|
|
101,859 |
|
|
|
104,028 |
|
Earnings from operations |
|
11,505 |
|
|
|
15,062 |
|
|
|
41,024 |
|
|
|
40,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and
dividend income |
|
509 |
|
|
|
95 |
|
|
|
1,107 |
|
|
|
361 |
|
Interest
expense |
|
(7 |
) |
|
|
(501 |
) |
|
|
(529 |
) |
|
|
(710 |
) |
Other
expense, net |
|
(307 |
) |
|
|
(593 |
) |
|
|
(738 |
) |
|
|
(277 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before provision for income taxes |
|
11,700 |
|
|
|
14,063 |
|
|
|
40,864 |
|
|
|
39,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes |
|
3,158 |
|
|
|
3,841 |
|
|
|
10,676 |
|
|
|
10,199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings |
$ |
8,542 |
|
|
$ |
10,222 |
|
|
$ |
30,188 |
|
|
$ |
29,540 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
9,422 |
|
|
|
9,540 |
|
|
|
9,449 |
|
|
|
9,555 |
|
Diluted |
|
9,523 |
|
|
|
9,582 |
|
|
|
9,535 |
|
|
|
9,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.90 |
|
|
$ |
1.07 |
|
|
$ |
3.19 |
|
|
$ |
3.09 |
|
Diluted |
$ |
0.90 |
|
|
$ |
1.06 |
|
|
$ |
3.17 |
|
|
$ |
3.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends declared (per share) |
$ |
0.25 |
|
|
$ |
0.24 |
|
|
$ |
0.99 |
|
|
$ |
0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
$ |
11,966 |
|
|
$ |
16,735 |
|
|
$ |
33,070 |
|
|
$ |
34,141 |
|
|
|
|
|
|
|
|
|
|
|
|
|
WEYCO GROUP, INC. AND
SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
|
(Dollars in
thousands) |
ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
69,312 |
|
|
$ |
16,876 |
|
Investments,
at fair value |
|
|
— |
|
|
|
107 |
|
Marketable
securities, at amortized cost |
|
|
215 |
|
|
|
1,385 |
|
Accounts
receivable, net |
|
|
39,275 |
|
|
|
53,298 |
|
Income tax
receivable |
|
|
245 |
|
|
|
945 |
|
Inventories |
|
|
74,890 |
|
|
|
127,976 |
|
Prepaid
expenses and other current assets |
|
|
6,172 |
|
|
|
5,870 |
|
Total current assets |
|
|
190,109 |
|
|
|
206,457 |
|
|
|
|
|
|
|
|
Marketable
securities, at amortized cost |
|
|
6,354 |
|
|
|
7,123 |
|
Deferred
income tax benefits |
|
|
1,096 |
|
|
|
1,038 |
|
Property,
plant and equipment, net |
|
|
29,504 |
|
|
|
28,812 |
|
Operating
lease right-of-use assets |
|
|
12,520 |
|
|
|
13,428 |
|
Goodwill |
|
|
12,317 |
|
|
|
12,317 |
|
Trademarks |
|
|
33,168 |
|
|
|
33,618 |
|
Other
assets |
|
|
24,274 |
|
|
|
23,827 |
|
Total assets |
|
$ |
309,342 |
|
|
$ |
326,620 |
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY: |
|
|
|
|
|
|
Short-term
borrowings |
|
$ |
— |
|
|
$ |
31,136 |
|
Accounts
payable |
|
|
8,845 |
|
|
|
14,946 |
|
Dividend
payable |
|
|
2,352 |
|
|
|
2,290 |
|
Operating
lease liabilities |
|
|
3,979 |
|
|
|
4,026 |
|
Accrued
liabilities |
|
|
14,446 |
|
|
|
15,137 |
|
Total current liabilities |
|
|
29,622 |
|
|
|
67,535 |
|
|
|
|
|
|
|
|
Deferred
income tax liabilities |
|
|
11,819 |
|
|
|
8,530 |
|
Long-term
pension liability |
|
|
13,412 |
|
|
|
15,523 |
|
Operating
lease liabilities |
|
|
9,531 |
|
|
|
10,661 |
|
Other
long-term liabilities |
|
|
465 |
|
|
|
466 |
|
Total liabilities |
|
|
64,849 |
|
|
|
102,715 |
|
|
|
|
|
|
|
|
Common
stock |
|
|
9,497 |
|
|
|
9,584 |
|
Capital in
excess of par value |
|
|
71,661 |
|
|
|
70,475 |
|
Reinvested
earnings |
|
|
180,646 |
|
|
|
164,039 |
|
Accumulated
other comprehensive loss |
|
|
(17,311 |
) |
|
|
(20,193 |
) |
Total equity |
|
|
244,493 |
|
|
|
223,905 |
|
Total liabilities and equity |
|
$ |
309,342 |
|
|
$ |
326,620 |
|
|
|
|
|
|
|
|
|
|
WEYCO GROUP, INC. AND
SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS (UNAUDITED)
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
|
|
(Dollars in thousands) |
CASH FLOWS
FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net earnings |
|
$ |
30,188 |
|
|
$ |
29,540 |
|
Adjustments to reconcile net earnings to net cash provided by (used
for) operating activities - |
|
|
|
|
|
|
Depreciation |
|
|
2,579 |
|
|
|
2,485 |
|
Amortization |
|
|
271 |
|
|
|
282 |
|
Bad debt expense |
|
|
519 |
|
|
|
151 |
|
Deferred income taxes |
|
|
2,462 |
|
|
|
1,297 |
|
Net foreign currency transaction losses |
|
|
99 |
|
|
|
43 |
|
Share-based compensation expense |
|
|
1,352 |
|
|
|
1,523 |
|
Pension settlement charge |
|
|
— |
|
|
|
894 |
|
Pension expense |
|
|
1,293 |
|
|
|
178 |
|
Impairment of trademark |
|
|
450 |
|
|
|
1,150 |
|
Loss on disposal of fixed assets |
|
|
59 |
|
|
|
117 |
|
Gain from fair value remeasurement of contingent consideration |
|
|
— |
|
|
|
(857 |
) |
Increase in cash surrender value of life insurance |
|
|
(684 |
) |
|
|
(690 |
) |
Changes in operating assets and liabilities - |
|
|
|
|
|
|
Accounts receivable |
|
|
13,531 |
|
|
|
(282 |
) |
Inventories |
|
|
53,047 |
|
|
|
(56,963 |
) |
Prepaid expenses and other assets |
|
|
(358 |
) |
|
|
(1,429 |
) |
Accounts payable |
|
|
(6,074 |
) |
|
|
(4,293 |
) |
Accrued liabilities and other |
|
|
(982 |
) |
|
|
(2,553 |
) |
Accrued income taxes |
|
|
879 |
|
|
|
(497 |
) |
Net cash provided by (used for) operating activities |
|
|
98,631 |
|
|
|
(29,904 |
) |
|
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
Proceeds from maturities of marketable securities |
|
|
1,960 |
|
|
|
1,719 |
|
Proceeds from sale of investment securities |
|
|
107 |
|
|
|
8,049 |
|
Purchases of property, plant and equipment |
|
|
(3,309 |
) |
|
|
(2,342 |
) |
Net cash (used for) provided by investing activities |
|
|
(1,242 |
) |
|
|
7,426 |
|
|
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
Cash dividends paid |
|
|
(9,286 |
) |
|
|
(6,951 |
) |
Shares purchased and retired |
|
|
(4,338 |
) |
|
|
(4,195 |
) |
Net proceeds from stock options exercised |
|
|
103 |
|
|
|
293 |
|
Payment of contingent consideration |
|
|
(500 |
) |
|
|
— |
|
Taxes paid related to the net share settlement of equity
awards |
|
|
(186 |
) |
|
|
(12 |
) |
Proceeds from bank borrowings |
|
|
70,060 |
|
|
|
120,608 |
|
Repayments of bank borrowings |
|
|
(101,196 |
) |
|
|
(89,472 |
) |
Net cash (used for) provided by financing activities |
|
|
(45,343 |
) |
|
|
20,271 |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
390 |
|
|
|
(628 |
) |
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
$ |
52,436 |
|
|
$ |
(2,835 |
) |
|
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS at beginning of year |
|
|
16,876 |
|
|
|
19,711 |
|
|
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS at end of year |
|
$ |
69,312 |
|
|
$ |
16,876 |
|
|
|
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION: |
|
|
|
|
|
|
Income taxes paid, net of refunds |
|
$ |
7,115 |
|
|
$ |
9,441 |
|
Interest paid |
|
$ |
977 |
|
|
$ |
710 |
|
Weyco (NASDAQ:WEYS)
Historical Stock Chart
From Apr 2024 to May 2024
Weyco (NASDAQ:WEYS)
Historical Stock Chart
From May 2023 to May 2024