Wolverine posts record performance for Q4 2010

02 Feb '11

5 min read

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.

With a commitment to service and product excellence, Wolverine World Wide, Inc. is one of the world's leading marketers of branded casual, active lifestyle, work, outdoor sport and uniform footwear and apparel. The Company's portfolio of highly recognized brands includes: Bates, Chaco, Cushe, Hush Puppies, HYTEST, Merrell, Sebago Soft Style and Wolverine.

Wolverine World Wide Inc

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