Delaware | 001-06024 | 38-1185150 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
9341 Courtland Drive Rockford, Michigan |
49351 |
|
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press Release dated July 12,
2011. This Exhibit shall
not be deemed filed for
purposes of Section 18 of
the Exchange Act, or
incorporated by reference in
any filing under the
Securities Act or the
Exchange Act, except as
shall be expressly set forth
by specific reference in
such a filing. |
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Dated: July 12, 2011 | WOLVERINE WORLD WIDE, INC. (Registrant) |
|||
/s/ Donald T. Grimes | ||||
Donald T. Grimes | ||||
Senior Vice President, Chief Financial Officer and Treasurer |
-3-
Exhibit Number | Document | |||
99.1 | Wolverine World Wide, Inc. Press Release dated July 12, 2011. |
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9341 Courtland Drive, Rockford, MI 49351 Phone (616) 866-5500; Fax (616) 866-0257 FOR IMMEDIATE RELEASE CONTACT: Don Grimes (616) 863-4404 |
| Revenue of $310.1 million, growth of 20.1% vs. the prior year, representing the
fourth consecutive quarter of record revenue |
| Diluted earnings per share of $0.48, growth of 23.1% vs. adjusted fully diluted
earnings per share for the prior year and representing the sixth consecutive
quarter of record earnings |
| Double-digit revenue growth for all brand groups and the consumer direct
business |
| Double-digit revenue growth for all major geographic regions |
| Operating expenses of 28.6% as a percentage of revenue versus an adjusted 29.7%
in the prior year |
| Record operating margin of 10.8% |
| The Company reaffirms full year revenue and earnings guidance |
Q2 2011 | page 2 |
| A modestly weaker U.S. dollar contributed $6.3 million to reported revenue in
the quarter. |
| The Outdoor Group (consisting of Merrell Footwear and Apparel, Chaco and
Patagonia Footwear) led the way in the quarter, with revenue of $127.3 million,
growth of 30.0% vs. the prior year, followed by 17.5% revenue growth from the
Lifestyle Group (Hush Puppies, Sebago, Cushe and SoftStyle) and 15.0% revenue
growth from the Heritage Group (Wolverine, Caterpillar Footwear, Bates, HyTest and
Harley Davidson Footwear). Strong double-digit growth from the consumer direct
business was partially offset by softness in the Companys leather business. |
| Gross margin in the quarter was 39.4% compared to prior-year adjusted gross
margin of 40.3%. The decline in gross margin versus the prior year was primarily
attributable to negative results from the Companys owned manufacturing
operations. Reported gross margin for the second quarter 2010 was 40.2%. |
| Operating expenses as a percentage of revenue were 28.6% in the quarter, strong
leverage of 110 basis points when compared to an adjusted 29.7% in 2010. Reported
operating expenses grew to $88.8 million in the quarter, driven by higher variable
costs associated with the quarters revenue growth and continued brand-building
investments in advertising and marketing initiatives, including the support of the
Merrell Barefoot Collection. Reported operating expenses as a percentage of
revenue for the second quarter of 2010 were 30.6%. |
| The effective tax rate in the quarter was 25.7% and includes the favorable
settlement of a state tax audit and a more favorable dispersion of taxable income
to lower-tax jurisdictions. |
Q2 2011 | page 3 |
| Fully diluted earnings were a record $0.48 per share compared to adjusted fully
diluted earnings of $0.39 per share in the prior year, an increase of 23.1%. The
prior years adjusted earnings exclude the impact of restructuring charges and
other expenses related to a strategic restructuring plan that was completed in the
second quarter of 2010. Reported fully diluted earnings for the second quarter of
2010 were $0.35 per share. |
| The Company repurchased approximately 479,000 of its own shares in the quarter
for an aggregate cost of $18.1 million. Through the end of the second quarter,
the Company has repurchased approximately 621,000 shares for a total cost of $23.1
million. The Company has a solid balance sheet, with little debt and $118.5
million of cash and cash equivalents at the end of the second quarter. |
Q2 2011 | page 4 |
12 Weeks Ended | 24 Weeks Ended | |||||||||||||||
June 18, | June 19, | June 18, | June 19, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue |
$ | 310,139 | $ | 258,199 | $ | 641,012 | $ | 543,096 | ||||||||
Cost of products sold |
188,022 | 154,093 | 381,096 | 320,420 | ||||||||||||
Restructuring and related costs |
| 425 | | 1,406 | ||||||||||||
Gross profit |
122,117 | 103,681 | 259,916 | 221,270 | ||||||||||||
Gross margin |
39.4 | % | 40.2 | % | 40.5 | % | 40.7 | % | ||||||||
Selling, general and administrative expenses |
88,751 | 76,720 | 177,080 | 155,260 | ||||||||||||
Restructuring and related costs |
| 2,311 | | 2,828 | ||||||||||||
Operating expenses |
88,751 | 79,031 | 177,080 | 158,088 | ||||||||||||
Operating expenses as a % of revenue |
28.6 | % | 30.6 | % | 27.6 | % | 29.1 | % | ||||||||
Operating profit |
33,366 | 24,650 | 82,836 | 63,182 | ||||||||||||
Operating margin |
10.8 | % | 9.5 | % | 12.9 | % | 11.6 | % | ||||||||
Interest expense (income), net |
129 | (4 | ) | 354 | 85 | |||||||||||
Other expense, net |
973 | 395 | 393 | 165 | ||||||||||||
1,102 | 391 | 747 | 250 | |||||||||||||
Earnings before income taxes |
32,264 | 24,259 | 82,089 | 62,932 | ||||||||||||
Income taxes |
8,301 | 7,037 | 22,246 | 18,251 | ||||||||||||
Effective tax rate |
25.7 | % | 29.0 | % | 27.1 | % | 29.0 | % | ||||||||
Net earnings |
$ | 23,963 | $ | 17,222 | $ | 59,843 | $ | 44,681 | ||||||||
Diluted earnings per share |
$ | 0.48 | $ | 0.35 | $ | 1.20 | $ | 0.89 | ||||||||
June 18, | June 19, | |||||||
2011 | 2010 | |||||||
ASSETS: |
||||||||
Cash & cash equivalents |
$ | 118,478 | $ | 110,120 | ||||
Receivables |
226,739 | 183,221 | ||||||
Inventories |
249,871 | 170,773 | ||||||
Other current assets |
25,983 | 20,628 | ||||||
Total current assets |
621,071 | 484,742 | ||||||
Property, plant & equipment, net |
76,739 | 70,555 | ||||||
Other assets |
135,687 | 130,043 | ||||||
Total Assets |
$ | 833,497 | $ | 685,340 | ||||
LIABILITIES & EQUITY: |
||||||||
Current maturities on long-term debt |
$ | 539 | $ | 492 | ||||
Revolving credit agreement |
20,000 | | ||||||
Accounts payable and other accrued liabilities |
141,930 | 109,613 | ||||||
Total current liabilities |
162,469 | 110,105 | ||||||
Long-term debt |
| 492 | ||||||
Other non-current liabilities |
76,765 | 96,632 | ||||||
Stockholders equity |
594,263 | 478,111 | ||||||
Total Liabilities & Equity |
$ | 833,497 | $ | 685,340 | ||||
2nd Quarter Ended | ||||||||||||||||||||||||
June 18, 2011 | June 19, 2010 | Change | ||||||||||||||||||||||
Revenue | % of Total | Revenue | % of Total | $ | % | |||||||||||||||||||
Outdoor Group |
$ | 127,258 | 41.0 | % | $ | 97,857 | 37.9 | % | $ | 29,401 | 30.0 | % | ||||||||||||
Heritage Group |
102,859 | 33.2 | % | 89,443 | 34.6 | % | 13,416 | 15.0 | % | |||||||||||||||
Lifestyle Group |
41,506 | 13.4 | % | 35,327 | 13.7 | % | 6,179 | 17.5 | % | |||||||||||||||
Other |
3,655 | 1.2 | % | 2,520 | 1.0 | % | 1,135 | 45.0 | % | |||||||||||||||
Total branded footwear, apparel
and licensing revenue |
275,278 | 88.8 | % | 225,147 | 87.2 | % | 50,131 | 22.3 | % | |||||||||||||||
Other business units |
34,861 | 11.2 | % | 33,052 | 12.8 | % | 1,809 | 5.5 | % | |||||||||||||||
Total Revenue |
$ | 310,139 | 100.0 | % | $ | 258,199 | 100.0 | % | $ | 51,940 | 20.1 | % | ||||||||||||
24 Weeks Ended | ||||||||
June 18, | June 19, | |||||||
2011 | 2010 | |||||||
OPERATING ACTIVITIES: |
||||||||
Net earnings |
$ | 59,843 | $ | 44,681 | ||||
Adjustments necessary to reconcile net cash
(used in) provided by operating activities: |
||||||||
Depreciation and amortization |
7,555 | 7,854 | ||||||
Deferred income taxes |
(1,093 | ) | (649 | ) | ||||
Stock-based compensation expense |
7,377 | 5,110 | ||||||
Excess tax benefits from stock-based compensation expense |
(1,770 | ) | (873 | ) | ||||
Pension expense |
8,078 | 7,517 | ||||||
Pension contribution |
(31,800 | ) | (10,400 | ) | ||||
Restructuring and other transition costs |
| 4,234 | ||||||
Cash payments related to restructuring |
(680 | ) | (6,912 | ) | ||||
Other |
(224 | ) | 8,510 | |||||
Changes in operating assets and liabilities |
(67,005 | ) | (48,739 | ) | ||||
Net cash (used in) provided by operating activities |
(19,719 | ) | 10,333 | |||||
INVESTING ACTIVITIES: |
||||||||
Additions to property, plant and equipment |
(9,182 | ) | (5,102 | ) | ||||
Other |
(1,410 | ) | (890 | ) | ||||
Net cash used in investing activities |
(10,592 | ) | (5,992 | ) | ||||
FINANCING ACTIVITIES: |
||||||||
Net borrowings under revolver |
20,000 | | ||||||
Cash dividends paid |
(11,194 | ) | (10,799 | ) | ||||
Purchase of common stock for treasury |
(23,146 | ) | (47,193 | ) | ||||
Other |
9,336 | 7,529 | ||||||
Net cash used in financing activities |
(5,004 | ) | (50,463 | ) | ||||
Effect of foreign exchange rate changes |
3,393 | (4,197 | ) | |||||
Decrease in cash and cash equivalents |
(31,922 | ) | (50,319 | ) | ||||
Cash and cash equivalents at beginning of year |
150,400 | 160,439 | ||||||
Cash and cash equivalents at end of year |
$ | 118,478 | $ | 110,120 | ||||
As Reported | As Adjusted | |||||||||||
2nd Quarter Ended | Restructuring and | 2nd Quarter Ended | ||||||||||
June 19, 2010 | Related Costs(a) | June 19, 2010 | ||||||||||
Gross profit |
$ | 103,681 | $ | 425 | $ | 104,106 | ||||||
Gross margin |
40.2 | % | 40.3 | % | ||||||||
Operating expenses |
$ | 79,031 | $ | (2,311 | ) | $ | 76,720 | |||||
% of revenue |
30.6 | % | 29.7 | % | ||||||||
Diluted earnings per share |
$ | 0.35 | $ | 0.04 | $ | 0.39 | ||||||
As Reported | As Adjusted | |||||||||||
Fiscal Year Ended | Restructuring and | Fiscal Year Ended | ||||||||||
January 1, 2011 | Related Costs(a) | January 1, 2011 | ||||||||||
Diluted earnings per share |
$ | 2.11 | $ | 0.06 | $ | 2.17 |
(a) | These adjustments present the Companys results of operations on a
continuing basis without the effects of fluctuations in restructuring
and related costs. The adjusted financial results are used by
management to, and allow investors to, evaluate the operating
performance of the Company on a comparable basis. |
|
* | To supplement the consolidated financial statements presented in
accordance with Generally Accepted Accounting Principles (GAAP), the
Company describes what certain financial measures would have been in
the absence of restructuring and related costs. The Company believes
these non-GAAP measures provide useful information to both management
and investors to increase comparability to the prior period by
adjusting for certain items that may not be indicative of core
operating measures. Management does not, nor should investors,
consider such non-GAAP financial measures in isolation from, or as a
substitution for, financial information prepared in accordance with
GAAP. A reconciliation of all non-GAAP measures included in this
press release, to the most directly comparable GAAP measures, are
found in the financial tables above. |