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Weyco reports 5% dip in net sales in 2008

24
Feb '09
Weyco Group Inc announced financial results for the fourth quarter and full year 2008.

Fourth Quarter:
Net sales for the fourth quarter were $50.0 million, down from $62.2 million in 2007. Net earnings for the quarter were $3.5 million, down from $7.8 million in 2007. Diluted earnings per share were $.30 in 2008, as compared with $.66 for the fourth quarter of 2007.

Net sales in the wholesale division, which include wholesale net sales and licensing revenues, were $42.4 million in the fourth quarter of 2008, compared with $52.9 million in 2007. Wholesale net sales were $41.1 million in 2008, down from $51.5 million in 2007. Licensing revenues in 2008 were $1.3 million, compared with $1.4 million in 2007. Fourth quarter wholesale net sales of the Company's Stacy Adams, Nunn Bush and Florsheim brands were down 17%, 11% and 31%, respectively.

Retail net sales for the fourth quarter were $7.6 million, down from $9.4 million in 2007. Same store sales were down 19%.

Earnings from operations for the fourth quarter of 2008 were $4.7 million, down from $11.6 million in 2007. This resulted from sales volume decreases in both the wholesale and retail divisions. In the wholesale division, in addition to decreases in sales volume, the Company experienced lower gross margins. The lower gross margins resulted from cost increases from its foreign suppliers and refinements to management's estimates in response to current economic conditions related to sales returns and allowances and coop advertising accruals, which resulted in more expense in the fourth quarter of 2008 than 2007.

Full Year 2008:
Overall net sales in 2008 of $221.4 million were down 5% compared with $232.6 million in the prior year. Net earnings were $17.0 million, down from $22.9 million in 2007. Diluted earnings per share were $1.45 in 2008 and $1.91 last year.

Net sales in the wholesale division, which include wholesale net sales and licensing revenues, were $192.5 million compared with $201.5 million in 2007. Wholesale net sales were $188.2 million, down 5% from $197.4 million in 2007. Licensing revenues were $4.3 million in 2008 and $4.1 million in 2007. Sales of the Company's Stacy Adams and Florsheim brands were down 3% and 12% respectively, while Nunn Bush sales were up 1% for the year.

Retail net sales for 2008 were $28.9 million, down 7% from $31.1 million in 2007. Same store sales were down 8%.

Earnings from operations were $24.5 million in 2008, down from $34.1 million in the prior year. Operating earnings as a percent of net sales were 11.1% in 2008 and 14.7% in 2007. The decrease was caused principally by lower sales and lower gross margins.

The Company's balance sheet remains strong at December 31, 2008. The Company's cash and marketable securities totaled $57.6 million at the end of 2008, as compared to $56.8 million in 2007. The Company's borrowings under its revolving line of credit were $1.3 million compared with $550,000 last year. The Company's excess cash and marketable securities over borrowings was $56.3 million in 2008, compared to $56.2 million in 2007.


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