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Wolverine delivers excellent earnings performance in Q3
08 Oct '09
5 min read
• Operating expenses decreased 11.1% from the prior year after adjusting for non-recurring restructuring and related charges, the benefit of a stronger U.S. dollar, expenses directly related to newly-acquired brands, and increased pension expense. Reported operating expenses in the quarter were $77.8 million, a 5.6% decrease from the prior year.
• The effective tax rate in the third quarter dropped to 26.6%, reflecting the cumulative year-to-date benefits from the implementation of tax planning strategies related primarily to the Company's international operations.
• Accounts receivable at quarter end were 7.1% lower than the prior year's third quarter, as the Company continues to closely monitor customers' credit standing and remains diligent regarding timely collections.
• Third quarter inventory was down 5.2% compared to the prior year. As planned, the Company made a meaningful reduction in inventory in the quarter and anticipates continued inventory reduction by year-end 2009.
• The Company has generated $71.1 million of cash from operations year to date, helping reduce its revolver balance to $9.9 million at the end of the third quarter, down from $34.8 million at the end of the second quarter. The Company maintains a strong balance sheet with total interest-bearing debt of $11.6 million offset by $78.5 million of cash and cash equivalents.
The Company is pleased to announce that it is raising its full-year 2009 earnings guidance. Excluding full-year restructuring and related charges, the Company now expects fully diluted earnings per share in the range of $1.65 to $1.75 per share, up from its previous range of $1.55 to $1.73 per fully diluted share. This earnings guidance continues to reflect an expected full-year negative foreign exchange impact of $0.14 per fully diluted share and $0.12 per fully diluted share of increased pension expense.
The Company is also narrowing its expectation for full-year revenue to a range of $1.080 billion to $1.110 billion. The midpoint of the revenue range remains unchanged at $1.095 billion. Foreign exchange has negatively impacted year-to-date reported revenue by approximately $41 million, and the Company expects minimal foreign exchange impact on fourth quarter reported revenue. Reported fully diluted earnings per share for the year are now expected to be in the range of $1.15 to $1.25, including the $0.50 per share midpoint of the estimated range of restructuring and related charges.
Krueger concluded, "Our year-to-date performance and our outlook for the fourth quarter give us the confidence to raise our annual earnings guidance. We have an outstanding portfolio of lifestyle brands that translates across geographies and appeals to a wide range of consumers. The dedication of our team and our ongoing ability to deliver compelling style, innovation and technical performance features in our branded products are enabling the Company to successfully navigate the current environment and positioning us to continue delivering superior returns to our shareholders."
• The effective tax rate in the third quarter dropped to 26.6%, reflecting the cumulative year-to-date benefits from the implementation of tax planning strategies related primarily to the Company's international operations.
• Accounts receivable at quarter end were 7.1% lower than the prior year's third quarter, as the Company continues to closely monitor customers' credit standing and remains diligent regarding timely collections.
• Third quarter inventory was down 5.2% compared to the prior year. As planned, the Company made a meaningful reduction in inventory in the quarter and anticipates continued inventory reduction by year-end 2009.
• The Company has generated $71.1 million of cash from operations year to date, helping reduce its revolver balance to $9.9 million at the end of the third quarter, down from $34.8 million at the end of the second quarter. The Company maintains a strong balance sheet with total interest-bearing debt of $11.6 million offset by $78.5 million of cash and cash equivalents.
The Company is pleased to announce that it is raising its full-year 2009 earnings guidance. Excluding full-year restructuring and related charges, the Company now expects fully diluted earnings per share in the range of $1.65 to $1.75 per share, up from its previous range of $1.55 to $1.73 per fully diluted share. This earnings guidance continues to reflect an expected full-year negative foreign exchange impact of $0.14 per fully diluted share and $0.12 per fully diluted share of increased pension expense.
The Company is also narrowing its expectation for full-year revenue to a range of $1.080 billion to $1.110 billion. The midpoint of the revenue range remains unchanged at $1.095 billion. Foreign exchange has negatively impacted year-to-date reported revenue by approximately $41 million, and the Company expects minimal foreign exchange impact on fourth quarter reported revenue. Reported fully diluted earnings per share for the year are now expected to be in the range of $1.15 to $1.25, including the $0.50 per share midpoint of the estimated range of restructuring and related charges.
Krueger concluded, "Our year-to-date performance and our outlook for the fourth quarter give us the confidence to raise our annual earnings guidance. We have an outstanding portfolio of lifestyle brands that translates across geographies and appeals to a wide range of consumers. The dedication of our team and our ongoing ability to deliver compelling style, innovation and technical performance features in our branded products are enabling the Company to successfully navigate the current environment and positioning us to continue delivering superior returns to our shareholders."
Wolverine World Wide, Inc
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