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Wolverine delivers another solid financial performance in Q2
16 Jul '09
5 min read
• Operating expenses decreased 6.0% from the prior year after adjusting for non-recurring restructuring and related charges, the benefit from a stronger U.S. dollar, expenses directly related to the newly acquired Chaco and Cushe brands, and increased pension expense. Reported operating expenses in the quarter were $79.7 million.
• Accounts receivable at quarter end were down 6.5% compared to the prior year's second quarter. The Company continues to closely monitor customers' credit standing and improved its days sales outstanding with increased efforts towards timely collections.
• Inventory at the end of the second quarter was up 6.9% compared to the prior year, a substantial improvement versus the two most recent fiscal quarters. Of the $11.9 million inventory increase, approximately half related to newly acquired brands, the strategic pre-buy of inventory referenced last quarter, and a planned increase in the Wolverine Leathers business inventory as it transitioned to an outsource model. The Company remains comfortable with its inventory position and is on track to end the year with inventory meaningfully lower than year end 2008.
• As planned, the Company significantly reduced its revolver balance, from $93.0 million at the end of the first quarter to $34.8 million at the end of the second quarter. The Company ended the quarter with $79.2 million in cash and substantial overall liquidity.
Today, the Company is raising its 2009 earnings guidance. Excluding full-year restructuring and related costs in the range of $33 million to $36 million, the Company now expects earnings in the range of $1.55 to $1.73 per share, up from previous guidance of $1.50 to $1.70 per share, on reported revenue in the range of $1.070 billion to $1.120 billion.
Foreign exchange is expected to negatively impact full-year reported revenue by $40 million to $60 million, resulting in projected constant currency revenue of $1.120 billion to $1.170 billion. Included in this earnings guidance is an estimated full-year negative foreign exchange impact of $0.11 to $0.14 per share and $0.12 per share of increased pension expense. Reported fully diluted earnings per share for the year are now expected to be in the range of $1.07 to $1.25.
Krueger concluded, "We are very pleased that our strong year-to-date performance provides us with the confidence to raise earnings guidance in this challenging environment. We remain encouraged by consumer demand for our lifestyle brands and are pleased with the retail and consumer response to our newest brands, Cushe and Chaco. Our continuing focus on product innovation is helping us outperform in these difficult global economic conditions."
• Accounts receivable at quarter end were down 6.5% compared to the prior year's second quarter. The Company continues to closely monitor customers' credit standing and improved its days sales outstanding with increased efforts towards timely collections.
• Inventory at the end of the second quarter was up 6.9% compared to the prior year, a substantial improvement versus the two most recent fiscal quarters. Of the $11.9 million inventory increase, approximately half related to newly acquired brands, the strategic pre-buy of inventory referenced last quarter, and a planned increase in the Wolverine Leathers business inventory as it transitioned to an outsource model. The Company remains comfortable with its inventory position and is on track to end the year with inventory meaningfully lower than year end 2008.
• As planned, the Company significantly reduced its revolver balance, from $93.0 million at the end of the first quarter to $34.8 million at the end of the second quarter. The Company ended the quarter with $79.2 million in cash and substantial overall liquidity.
Today, the Company is raising its 2009 earnings guidance. Excluding full-year restructuring and related costs in the range of $33 million to $36 million, the Company now expects earnings in the range of $1.55 to $1.73 per share, up from previous guidance of $1.50 to $1.70 per share, on reported revenue in the range of $1.070 billion to $1.120 billion.
Foreign exchange is expected to negatively impact full-year reported revenue by $40 million to $60 million, resulting in projected constant currency revenue of $1.120 billion to $1.170 billion. Included in this earnings guidance is an estimated full-year negative foreign exchange impact of $0.11 to $0.14 per share and $0.12 per share of increased pension expense. Reported fully diluted earnings per share for the year are now expected to be in the range of $1.07 to $1.25.
Krueger concluded, "We are very pleased that our strong year-to-date performance provides us with the confidence to raise earnings guidance in this challenging environment. We remain encouraged by consumer demand for our lifestyle brands and are pleased with the retail and consumer response to our newest brands, Cushe and Chaco. Our continuing focus on product innovation is helping us outperform in these difficult global economic conditions."
Wolverine World Wide Inc
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