WOLVERINE WORLD WIDE, INC. 
By ROCKFORD, Mich., Jan. 30, 2012 /PRNewswire/ -- Wolverine Worldwide (NYSE: WWW) today reported record revenue for both the fourth quarter and fiscal year ended December 31, 2011, as well as record earnings per share for the full year.
Highlights for the year:
-- Revenue rose 12.9% to a record $1,409.1 million, driven by double-digit
growth from each of the Company's branded operating groups: the Outdoor
Group, Lifestyle Group and Heritage Group. Foreign exchange contributed
$17.3 million, or 1.4%, to reported revenue growth. This year's revenue
represents the second consecutive year of double-digit growth,
reflecting strong momentum for the Company's brand portfolio in almost
all major geographies.
-- Gross margin of 39.5% was equal to the prior year's reported gross
margin, representing outstanding performance in a challenging sourcing
and product cost environment.
-- Operating margin expanded to a record 12.1%, compared to prior year
reported operating margin of 11.4%.
-- Diluted earnings per share increased 14.3%, to $2.48, compared to prior
year adjusted earnings per share of $2.17. Reported full-year earnings
per share in 2010 were $2.11.
-- The excellent free cash flow generated in 2011 was used to invest for
future growth, fund benefit plans for employees and return value to
shareholders through the payout of $22.7 million in dividends and the
repurchase of 1.8 million shares for $65.3 million.
"Our portfolio of strong, global lifestyle brands combined to deliver another year of record performance," said Blake W. Krueger, the Company's Chairman and Chief Executive Officer. "Each of our three branded operating groups and our direct-to-consumer business contributed to the year's outstanding results. Additionally, all major international regions reported double-digit revenue growth, as our newly created International Group focused on the significant opportunities outside of North America. Our distributor and licensee business, which markets our brands in nearly 190 countries, also had an exceptional year, with revenue up nearly 40%. We are very proud of the record performance in 2011 and are excited about the global momentum of our brands, our continued geographic expansion and the impressive product innovations we have planned for 2012."
Highlights for the fourth quarter 2011:
-- On top of the prior year's 23.2% fourth quarter revenue growth, revenue
in this year's fourth quarter rose 5.6% to $406.5 million, representing
the sixth consecutive quarter of record revenue, driven by growth from
all branded operating groups.
-- Gross margin in the quarter decreased 20 basis points to 36.9%, with
incremental non-cash LIFO expense lowering gross margin by 80 basis
points.
-- The Company continued to invest behind its most important growth
initiatives, with a double-digit increase in marketing investments in
the quarter.
-- Diluted earnings per share during the quarter of $0.47 compares to $0.52
in the prior year, a decrease of 9.6%. Organic growth across the
portfolio of brands was offset by i) $0.06 per diluted share in
incremental investments to drive accelerated growth; ii) $0.04 per
diluted share in incremental non-cash LIFO expense; iii) $0.02 per
diluted share in higher tax expense as a result of a lower effective tax
rate in the prior year; and iv) a one-time gain on the sale of a
non-core business that added $0.02 per diluted share to fourth quarter
fiscal 2010 results.
Don Grimes, the Company's Senior Vice President and Chief Financial Officer, commented, "We are extremely pleased with the Company's double-digit increases in both revenue and earnings per share, another record year by both measurements. This exceptional financial performance in 2011 is indicative of the strength of our business model, the drive and focus of our seasoned management team and the discipline with which we manage the business. We remain focused on our goal of delivering superior financial results while increasing brand investments to drive future growth."
The Company's outlook for 2012 reflects the following:
-- The recent strengthening of the U.S. dollar vs. the British pound, the
Canadian dollar and the Euro;
-- Revenue in the range of $1.485 billion to $1.525 billion, representing
growth of 5.4% to 8.2% versus the prior year;
-- Moderate gross margin expansion;
-- Modest SG&A deleverage reflecting i) approximately $11.1 million, or
$0.15 per diluted share, of incremental non-cash pension expense; ii) an
estimated $2.5 million, or $0.03 per diluted share, of incremental
expenses associated with a significant expansion of the Company's
distribution infrastructure in support of future growth; and iii)
incremental investments associated with retail store openings;
-- A full-year effective tax rate of approximately 28%;
-- Fully diluted weighted average shares outstanding of approximately 49
million; and
-- Fully diluted earnings per share in the range of $2.60 to $2.70,
representing growth of approximately 4.8% to 8.9% versus the prior year.
Adjusted for the estimated incremental non-cash pension expense,
earnings per share are expected to grow in the range of 10.9% to 14.9%.
Krueger concluded, "We are in a strong position heading into the new year, with several global consumer trends and macro lifestyle trends working in our favor. The expanding footprint of our lifestyle brands and our ability to target many different consumer groups through a variety of distribution channels enables us to outperform in many different economic environments. We are certainly excited about the Company's prospects for 2012."
The Company will host a conference call at 8:30 a.m. EST today to discuss these results and current business trends. To listen to the call at the Company's website, go to www.wolverineworldwide.com, click on "Investor Relations" in the navigation bar, and then click on "Webcasts & Presentations" from the side navigation bar of the "Investor Relations" page. To listen to the webcast, your computer must have a streaming media player, which can be downloaded for free at www.wolverineworldwide.com. In addition, the conference call can be heard at www.streetevents.com. A replay of the call will be available at the Company's website through April 16, 2012.
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®. The Company also is the footwear licensee of popular brands including CAT®, Harley-Davidson® and Patagonia®. The Company's products are carried by leading retailers in the U.S. and globally in more than 190 countries and territories. For additional information, please visit our website, www.wolverineworldwide.com.
This press release contains forward-looking statements. In addition, words such as "estimates," "anticipates," "believes," "forecasts," "plans," "predicts," "projects," "is likely," "expects," "intends," "should," "will," variations of such words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Risk Factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. Risk Factors include, among others: the Company's ability to successfully develop its brands and businesses; changes in duty structures in countries of import and export including anti-dumping measures and trade defense actions; changes in consumer preferences or spending patterns; cancellation of orders for future delivery, or the failure of the Department of Defense to exercise future purchase options, award new contracts or the cancellation of existing contracts by the Department of Defense or other military purchasers; changes in planned customer demand, re-orders or at-once orders; the availability and pricing of footwear manufacturing capacity; reliance on foreign sourcing; failure of international licensees and distributors to meet sales goals or to make timely payments on amounts owed; disruption of technology systems; regulatory or other changes affecting the supply or price of materials used in manufacturing; the availability of power, labor and resources in key foreign sourcing countries, including China; the impact of competition and pricing; the impact of changes in the value of foreign currencies; the development of new initiatives; the risks of doing business in developing countries, and politically or economically volatile areas; retail buying patterns; consolidation in the retail sector; changes in economic and market conditions; acts and effects of war and terrorism; weather; and additional factors discussed in the Company's reports filed with the Securities and Exchange Commission and exhibits thereto. Other Risk Factors exist, and new Risk Factors emerge from time to time that may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Furthermore, the Company undertakes no obligation to update, amend or clarify forward-looking statements.
WOLVERINE WORLD WIDE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
($000s, except per share data)
4th Quarter Ended Fiscal Year Ended
----------------- -----------------
December January December January
31, 1, 31, 1,
2011 2011 2011 2011
---- ---- ---- ----
Revenue $406,466 $385,025 $1,409,068 $1,248,517
Cost of
products sold 256,313 242,291 852,316 754,537
Restructuring
and related
costs - - - 1,406
--- --- --- -----
Gross Profit 150,153 142,734 556,752 492,574
Gross margin 36.9% 37.1% 39.5% 39.5%
Selling,
general and
administrative
expenses 119,210 111,568 386,534 347,499
Restructuring
and related
costs - - - 2,828
--- --- --- -----
Operating
Expenses 119,210 111,568 386,534 350,327
Operating
expenses as a
% of revenue 29.3% 29.0% 27.4% 28.1%
---- ---- ---- ----
Operating
Profit 30,943 31,166 170,218 142,247
Operating
margin 7.6% 8.1% 12.1% 11.4%
Interest
expense, net 378 247 1,025 387
Other (income)
expense, net 147 (1,288) 283 (1,366)
--- ------ --- ------
525 (1,041) 1,308 (979)
--- ------ ----- ----
Earnings
before income
taxes 30,418 32,207 168,910 143,226
Income taxes 7,407 6,560 45,623 38,756
Effective tax
rate 24.4% 20.4% 27.0% 27.1%
Net earnings $23,011 $25,647 $123,287 $104,470
======= ======= ======== ========
Diluted
earnings per
share $0.47 $0.52 $2.48 $2.11
===== ===== ===== =====
Supplemental
information:
Net earnings
used to
calculate
diluted
earnings per
share $22,314 $25,253 $120,990 $102,900
Shares used to
calculate
diluted
earnings per
share 47,957 48,634 48,728 48,857
Weighted
average
shares
outstanding 48,209 48,805 48,911 49,052
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
($000s)
December 31, January 1,
2011 2011
---- ----
ASSETS:
Cash & cash equivalents $140,012 $150,400
Receivables 219,963 196,457
Inventories 234,757 208,655
Other current assets 37,314 24,622
------ ------
Total current assets 632,046 580,134
Property, plant & equipment,
net 78,489 74,397
Other assets 138,667 132,044
Total Assets $849,202 $786,575
======== ========
LIABILITIES & EQUITY:
Current maturities on long-
term debt $515 $517
Accounts payable and other
accrued liabilities 149,146 140,638
------- -------
Total current liabilities 149,661 141,155
Long-term debt - 517
Other non-current
liabilities 124,324 101,006
Stockholders' equity 575,217 543,897
Total Liabilities & Equity $849,202 $786,575
======== ========
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
($000s)
Fiscal Year Ended
-----------------
January
December 31, 1,
2011 2011
---- ----
OPERATING ACTIVITIES:
Net earnings $123,287 $104,470
Adjustments necessary to reconcile
net earnings to net cash provided by
operating activities:
Depreciation and amortization 15,907 16,201
Deferred income taxes 7,676 (2,747)
Stock-based compensation expense 10,819 10,181
Pension Expense 17,502 16,286
Pension Contribution (31,800) (10,400)
Restructuring and other transition costs - 4,234
Cash payments related to restructuring (984) (7,516)
Other 6,271 6,405
Changes in operating assets and
liabilities (69,864) (69,248)
------- -------
Net cash provided by operating activities 78,814 67,866
INVESTING ACTIVITIES:
Additions to property, plant and
equipment (19,397) (16,370)
Other (3,186) (668)
------ ----
Net cash used in investing activities (22,583) (17,038)
FINANCING ACTIVITIES:
Net borrowings under revolver 11,000 -
Cash dividends paid (22,737) (21,414)
Purchase of common stock for treasury (67,388) (52,190)
Other 16,808 14,455
------ ------
Net cash used in financing activities (62,317) (59,149)
Effect of foreign exchange rate changes (4,302) (1,718)
------ ------
Decrease in cash and cash equivalents (10,388) (10,039)
Cash and cash equivalents at beginning of
year 150,400 160,439
Cash and cash equivalents at end of year $140,012 $150,400
======== ========
WOLVERINE WORLD WIDE, INC.
REVENUE BY OPERATING GROUP
(Unaudited)
($000s)
4th Quarter Ended
-----------------
December 31, 2011 January 1, 2011 Change
----------------- --------------- ------
% of % of
Revenue Total Revenue Total $ %
------- ----- ------- ----- --- ---
Outdoor
Group $141,084 34.7% $134,947 35.1% $6,137 4.5%
Heritage
Group 158,365 39.0% 151,399 39.3% 6,966 4.6%
Lifestyle
Group 57,286 14.1% 50,531 13.1% 6,755 13.4%
Other 5,043 1.2% 4,079 1.1% 964 23.6%
----- --- ----- --- --- ----
Total
branded
footwear,
apparel
and
licensing
revenue 361,778 89.0% 340,956 88.6% 20,822 6.1%
Other
business
units 44,688 11.0% 44,069 11.4% 619 1.4%
------ ---- ------ ---- --- ---
Total
Revenue $406,466 100.0% $385,025 100.0% $21,441 5.6%
======== ===== ======== ===== ======= ===
Fiscal Year Ended
-----------------
December 31, 2011 January 1, 2011 Change
----------------- --------------- ------
% of % of
Revenue Total Revenue Total $ %
------- ----- ------- ----- --- ---
Outdoor
Group $551,789 39.2% $467,612 37.5% $84,177 18.0%
Heritage
Group 500,283 35.5% 454,563 36.4% 45,720 10.1%
Lifestyle
Group 206,276 14.6% 182,892 14.6% 23,384 12.8%
Other 15,719 1.1% 12,577 1.0% 3,142 25.0%
------ --- ------ --- ----- ----
Total
branded
footwear,
apparel
and
licensing
revenue 1,274,067 90.4% 1,117,644 89.5% 156,423 14.0%
Other
business
units 135,001 9.6% 130,873 10.5% 4,128 3.2%
------- --- ------- ---- ----- ---
Total
Revenue $1,409,068 100.0% $1,248,517 100.0% $160,551 12.9%
========== ===== ========== ===== ======== ====
As required by the Securities and Exchange Commission Regulation G,
the following tables contain information regarding the non-GAAP
adjustments used by the Company in the presentation of its financial
results:
WOLVERINE WORLD WIDE, INC.
RECONCILIATION OF REPORTED FINANCIAL RESULTS TO ADJUSTED FINANCIAL
RESULTS, EXCLUDING RESTRUCTURING AND RELATED COSTS*
(Unaudited)
($000s, except per share data)
As Reported As Adjusted
Fiscal Year Restructuring Fiscal Year
Ended and Ended
January 1, Related Costs January 1,
2011 (a) 2011
----------- ---------------- -----------
Diluted
earnings
per share $2.11 $0.06 $2.17
RECONCILIATION OF EPS GUIDANCE TO ADJUSTED EPS GUIDANCE,
EXCLUDING INCREMENTAL PENSION EXPENSE*
(Unaudited)
Full-Year Full-Year
2012 2012
Incremental
Guidance Pension Guidance
(GAAP Basis) Expense (b) As Adjusted
------------ ---------- -----------
Diluted
earnings
per share $2.60 - 2.70 $0.15 $2.75 - 2.85
Percentage
change from
prior year 4.8% - 8.9% 10.9% - 4.9%
(a) This adjustment presents the Company's 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 allows investors to, evaluate the
operating performance of the Company on a comparable basis.
(b) This adjustment presents the Company's 2012 outlook of
operations on a continuing basis without the effects of fluctuations
in non-cash pension expense. The adjusted financial outlook is
used by management to, and allows investors to, evaluate the future
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 discloses certain non-GAAP financial 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.
SOURCE Wolverine Worldwide
