ROCKFORD, Mich., April 28, 2015 /PRNewswire/ -- Wolverine
Worldwide (NYSE: WWW) today reported financial results for its
first quarter ended March 28,
2015. Adjusted financial results exclude restructuring and
acquisition-related integration costs.
"Our first-quarter results reflect the continued strength of our
brand portfolio and a global business model that is built on 15
brands, targeting multiple consumer groups, distribution channels
and geographies," commented Blake W.
Krueger, Wolverine Worldwide's Chairman, Chief Executive
Officer and President. "We believe the strategic investments
we are making in our brands - including investments in
consumer-demand creation and omnichannel initiatives - position us
to capitalize on the many opportunities we have identified to
accelerate our growth around the world in 2016 and beyond."
FIRST-QUARTER 2015 REVIEW
- Consolidated revenue increased to $631.4
million, representing growth of 0.6% versus prior year
revenue of $627.6 million. Mid
single-digit growth from the Heritage Group and low single-digit
growth from the Lifestyle Group were partially offset by a low
single-digit revenue decline from the Performance Group. On a
constant currency basis, revenue grew 3.4%. Retail store
closures associated with the Company's realignment plan and the
exit of the Patagonia Footwear license had a negative 170 basis
point impact on reported revenue growth.
- Gross margin was 41.4%, a solid increase of 60 basis points
versus the prior year's reported and adjusted gross margin.
The gross margin expansion was driven primarily by price increases
and lower close out sales, partially offset by product cost
increases.
- As expected, adjusted operating margin decreased 60 basis
points to 9.9% due to increased brand investment and higher pension
expense. Reported operating margin was flat compared to the
prior year at 10.1%.
- Adjusted diluted earnings per share decreased 2.6% to
$0.37, compared to an adjusted
$0.38 per share in the prior
year. On a constant currency basis, adjusted diluted earnings
per share increased 2.6% to $0.39. Reported diluted earnings per share
were $0.39, compared to $0.36 per share in the prior year.
- The Company ended the quarter with cash and cash equivalents of
$121.3 million and net debt of
$736.0 million, a reduction of
$271.5 million from the same period
last year.
"The Company delivered earnings in the first quarter that
exceeded our expectations," commented Don
Grimes, Senior Vice President and Chief Financial
Officer. "Reported financial results were excellent given the
negative impact of foreign exchange, incremental pension expense,
and accelerated investments in demand creation and omnichannel
initiatives. On a reported basis, low single-digit growth in
the U.S. and Latin America, and
very strong double-digit growth in Asia
Pacific contributed to the revenue gain in the
quarter. On a constant currency basis, we were pleased to
deliver revenue growth in almost all of our major geographic
regions."
FISCAL 2015 GUIDANCE
Based on first-quarter results
and expectations for the balance of the year - including continued
headwinds from the significantly stronger U.S. dollar and the
previously announced increase in brand-building investments - the
Company is reaffirming its full-year revenue and adjusted earnings
per share guidance, as follows:
- Consolidated reported revenue in the range of $2.82 billion to $2.87 billion, representing
growth in the range of approximately 2% to 4% versus the prior
year. Constant currency revenue growth is expected in the
range of approximately 5% to 7%.
- Adjusted diluted earnings per share in the range of
$1.53 to $1.60. Constant
currency adjusted diluted earnings per share is expected in the
range of $1.71 to $1.78.
The Company now expects to incur total pretax charges of
approximately $44 million to $48
million related to the previously announced Strategic
Realignment Plan. Of this amount, $26
million was recorded in fiscal 2014, and we expect to incur
$18 million of charges in fiscal 2015
with the balance recorded in fiscal 2016. As a result,
reported diluted earnings per share in fiscal 2015 is expected in
the range of $1.42 to $1.49.
EARNINGS CALL INFORMATION
The Company will host a
conference call today at 8:30 a.m. Eastern
Time to discuss these results and current business
trends. The conference call will be broadcast live and
accessible under the "Investor Relations" tab at
wolverineworldwide.com. A replay of the conference call will
be available at the Company's website for a period of approximately
30 days.
ABOUT WOLVERINE WORLDWIDE
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, athletic, children's and uniform footwear and
apparel. The Company's portfolio of highly recognized brands
includes: Merrell®, Sperry®, Hush
Puppies®, Saucony®, Wolverine®,
Keds®, Stride Rite®, Sebago®,
Cushe®, Chaco®, Bates®, and
HYTEST®. The Company also is the global footwear
licensee of the popular brands Cat® and
Harley-Davidson®. The Company's products are
carried by leading retailers in the U.S. and globally in
approximately 200 countries and territories. For additional
information, please visit our website, wolverineworldwide.com.
FORWARD-LOOKING STATEMENTS
This press release contains
forward-looking statements, including statements regarding expected
2015 financial performance, 2015 investment plans and benefits,
future growth plans, future growth in shareholder value, and
effectiveness of the Company's business model. In addition,
words such as "guidance," "estimates," "anticipates," "believes,"
"forecasts," "step," "plans," "predicts," "projects," "is likely,"
"expects," "intends," "should," "will," "confident," 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. Risk Factors include, among others: the
Company's ability to successfully develop its brands and
businesses; the impact of financial and credit markets on the
Company, its suppliers and customers; changes in interest rates,
tax laws, duties, tariffs, quotas, or applicable assessments in
countries of import and export including anti-dumping measures and
trade defense actions; changes in consumer preferences, spending
patterns, buying patterns, price sensitivity or the demand for the
Company's products; changes in future pension funding requirements
and pension expenses; the ability to secure and protect owned
intellectual property or use licensed intellectual property; the
risk of impairment to goodwill and other intangibles; cancellation
of orders for future delivery; the failure of the U.S. Department
of Defense to exercise future purchase options or award new
contracts, or the cancellation or modification of existing
contracts by the Department of Defense or other military
purchasers; changes in relationships with, including the loss of,
significant customers; 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; risks related to the
significant investment in, and performance of, the Company's
consumer-direct business; disruption of technology systems; the
impact of regulation, regulatory or legal proceedings and legal
compliance risks; the cost, availability, and management of raw
materials, inventories, services, and labor for owned and contract
manufacturers; the impact of competition and pricing; currency
fluctuations and restrictions; the risks of doing business in
developing countries and politically or economically volatile
areas; retail buying patterns; consolidation in the retail sector;
the shift in consumer shopping and buying patterns including the
increased shift to e-commerce and mobile platforms; changes in
national, regional or global economic and market conditions; acts
and effects of war and terrorism; the impact of seasonality and
unpredictable weather conditions; problems affecting the Company's
distribution system, including service interruptions at shipping
and receiving ports; the potential breach of the Company's
databases, or those of its vendors, which contain certain personal
information or payment card data; the inability for any reason to
effectively compete in global footwear, apparel and consumer-direct
markets; strategic actions, including new initiatives and ventures,
acquisitions and dispositions, and the Company's success in
integrating acquired businesses; the success of the Company's
consumer-direct realignment initiatives; and additional factors
discussed in the Company's reports filed with the Securities and
Exchange Commission and exhibits thereto. The foregoing Risk
Factors, as well as other existing Risk Factors and new Risk
Factors that emerge from time to time, 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)
(in millions, except per
share data)
|
|
|
12 Weeks
Ended
|
|
March 28,
2015
|
|
March 22,
2014
|
|
Revenue
|
$
|
631.4
|
|
|
$
|
627.6
|
|
|
Cost of goods
sold
|
370.0
|
|
|
371.4
|
|
|
Restructuring
costs
|
—
|
|
|
0.4
|
|
|
Gross
profit
|
261.4
|
|
|
255.8
|
|
|
Gross
margin
|
41.4
|
%
|
|
40.8
|
%
|
|
|
|
|
|
Selling, general and
administrative expenses
|
198.8
|
|
|
190.5
|
|
|
Acquisition-related
integration costs
|
—
|
|
|
1.6
|
|
|
Net gain on
restructuring
|
(1.0)
|
|
|
—
|
|
|
Operating
expenses
|
197.8
|
|
|
192.1
|
|
|
Operating expenses
as a % of revenue
|
31.3
|
%
|
|
30.6
|
%
|
|
|
|
|
|
Operating
profit
|
63.6
|
|
|
63.7
|
|
|
Operating
margin
|
10.1
|
%
|
|
10.1
|
%
|
|
|
|
|
|
Interest expense,
net
|
9.5
|
|
|
10.9
|
|
|
Other expense
(income), net
|
(1.0)
|
|
|
0.8
|
|
|
8.5
|
|
|
11.7
|
|
|
Earnings before
income taxes
|
55.1
|
|
|
52.0
|
|
|
|
|
|
|
Income tax
expense
|
15.0
|
|
|
14.8
|
|
|
Effective tax
rate
|
27.3
|
%
|
|
28.5
|
%
|
|
|
|
|
|
Net
earnings
|
40.1
|
|
|
37.2
|
|
|
|
|
|
|
Less: net earnings
attributable to noncontrolling interest
|
—
|
|
|
0.1
|
|
|
Net earnings
attributable to Wolverine World Wide, Inc.
|
$
|
40.1
|
|
|
$
|
37.1
|
|
|
Diluted earnings per
share
|
$
|
0.39
|
|
|
$
|
0.36
|
|
|
|
|
|
|
Supplemental
information:
|
|
|
|
|
Net earnings used to
calculate diluted earnings per share
|
$
|
39.4
|
|
|
$
|
36.4
|
|
|
Shares used to
calculate earnings per share
|
100.8
|
|
|
99.9
|
|
|
Weighted average
shares outstanding
|
102.5
|
|
|
101.0
|
|
|
WOLVERINE WORLD
WIDE, INC.
CONSOLIDATED
CONDENSED BALANCE SHEETS
(Unaudited)
(in
millions)
|
|
|
March 28,
2015
|
|
March 22,
2014
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
|
121.3
|
|
$
|
166.8
|
|
Accounts receivables,
net
|
357.2
|
|
484.1
|
|
Inventories,
net
|
419.8
|
|
465.6
|
|
Other current
assets
|
89.8
|
|
68.6
|
|
Total current
assets
|
988.1
|
|
1,185.1
|
|
Property, plant and
equipment, net
|
135.3
|
|
147.6
|
|
Goodwill and other
indefinite-lived intangibles
|
1,124.6
|
|
1,132.5
|
|
Other non-current
assets
|
192.5
|
|
214.2
|
|
Total
assets
|
$
|
2,440.5
|
|
$
|
2,679.4
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Accounts payable and
other accrued liabilities
|
$
|
235.8
|
|
$
|
274.9
|
|
Current maturities of
long-term debt
|
42.0
|
|
43.6
|
|
Borrowings under
revolving credit agreement
|
14.5
|
|
34.0
|
|
Total current
liabilities
|
292.3
|
|
352.5
|
|
Long-term
debt
|
800.8
|
|
1,096.7
|
|
Other non-current
liabilities
|
376.0
|
|
358.6
|
|
Stockholders'
equity
|
971.4
|
|
871.6
|
|
Total liabilities and
stockholders' equity
|
$
|
2,440.5
|
|
$
|
2,679.4
|
|
WOLVERINE WORLD
WIDE, INC.
CONSOLIDATED
CONDENSED STATEMENTS OF CASH
FLOWS
(Unaudited)
(in millions)
|
|
|
12 Weeks
Ended
|
|
March 28,
2015
|
|
March 22,
2014
|
|
OPERATING
ACTIVITIES:
|
|
|
|
|
Net
earnings
|
$
|
40.1
|
|
$
|
37.2
|
|
Adjustments to
reconcile net earnings to net cash used in operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
10.9
|
|
12.6
|
|
Deferred income
taxes
|
2.3
|
|
2.2
|
|
Stock-based
compensation expense
|
6.7
|
|
4.6
|
|
Excess tax benefits
from stock-based compensation
|
(3.4)
|
|
(3.5)
|
|
Pension
expense
|
6.4
|
|
3.0
|
|
Restructuring costs
(gain)
|
(1.0)
|
|
0.4
|
|
Other
|
1.8
|
|
1.6
|
|
Changes in operating
assets and liabilities
|
(106.8)
|
|
(114.2)
|
|
Net cash used in
operating activities
|
(43.0)
|
|
(56.1)
|
|
|
|
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
Additions to
property, plant and equipment
|
(6.4)
|
|
(5.6)
|
|
Investment in joint
ventures
|
—
|
|
(0.7)
|
|
Other
|
(0.7)
|
|
(0.4)
|
|
Net cash used in
investing activities
|
(7.1)
|
|
(6.7)
|
|
|
|
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
Net borrowings under
revolving credit agreement
|
14.5
|
|
34.0
|
|
Payments of long-term
debt
|
(58.0)
|
|
(9.7)
|
|
Cash dividends
paid
|
(6.1)
|
|
(6.3)
|
|
Purchases of shares
under employee stock plans
|
(7.4)
|
|
(9.3)
|
|
Proceeds from the
exercise of stock options
|
5.8
|
|
2.8
|
|
Excess tax benefits
from stock-based compensation
|
3.4
|
|
3.5
|
|
Net cash provided by
(used in) financing activities
|
(47.8)
|
|
15.0
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
(4.6)
|
|
0.4
|
|
Decrease in cash and
cash equivalents
|
(102.5)
|
|
(47.4)
|
|
|
|
|
|
Cash and cash
equivalents at beginning of the year
|
223.8
|
|
214.2
|
|
Cash and cash
equivalents at end of the period
|
$
|
121.3
|
|
$
|
166.8
|
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
FISCAL 2015 Q1 REPORTED REVENUE TO
ADJUSTED REVENUE ON A
CONSTANT CURRENCY BASIS*
(Unaudited)
(in
millions)
|
|
|
GAAP Basis
Fiscal 2015 Q1
|
|
Foreign
Exchange
Impact
|
|
Fiscal 2015
Q1 Constant
Currency
Basis
|
|
GAAP Basis
Fiscal 2014 Q1
|
|
Constant
Currency
Growth
|
|
Reported
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Group
|
$
|
243.4
|
|
$
|
10.6
|
|
$
|
254.0
|
|
$
|
248.8
|
|
2.1
|
%
|
|
(2.2)
|
%
|
|
Lifestyle
Group
|
243.0
|
|
3.6
|
|
246.6
|
|
238.0
|
|
3.6
|
%
|
|
2.1
|
%
|
|
Heritage
Group
|
126.1
|
|
3.1
|
|
129.2
|
|
120.7
|
|
7.0
|
%
|
|
4.5
|
%
|
|
Other
|
18.9
|
|
—
|
|
18.9
|
|
20.1
|
|
(6.0)
|
%
|
|
(6.0)
|
%
|
|
Total
|
$
|
631.4
|
|
$
|
17.3
|
|
$
|
648.7
|
|
$
|
627.6
|
|
3.4
|
%
|
|
0.6
|
%
|
|
RECONCILIATION OF
REPORTED OPERATING
PROFIT TO ADJUSTED OPERATING PROFIT*
(Unaudited)
(in millions)
|
|
|
GAAP Basis
Operating Profit
|
|
Adjustments
(1)
|
|
As Adjusted
Operating Profit
|
|
|
|
|
|
|
|
Fiscal 2015
Q1
|
$
|
63.6
|
|
|
$
|
(1.0)
|
|
$
|
62.6
|
|
|
|
|
|
|
|
|
Operating
margin
|
10.1
|
%
|
|
|
|
9.9
|
%
|
|
|
|
|
|
|
|
Fiscal 2014
Q1
|
$
|
63.7
|
|
|
$
|
2.0
|
|
$
|
65.7
|
|
|
|
|
|
|
|
|
Operating
margin
|
10.1
|
%
|
|
|
|
10.5
|
%
|
|
|
|
(1)
|
Fiscal 2015 Q1
Adjustments include a Net Restructuring Gain. Fiscal 2014 Q1
Adjustments include Acquisition-Related Integration and
Restructuring Costs.
|
|
RECONCILIATION OF
REPORTED DILUTED EPS TO ADJUSTED DILUTED EPS*
(Unaudited)
|
|
|
GAAP Basis
EPS
|
|
Adjustments
(1)
|
|
As Adjusted
EPS
|
|
|
|
|
|
|
|
Fiscal 2015
Q1
|
$
|
0.39
|
|
$
|
(0.02)
|
|
$
|
0.37
|
|
|
|
|
|
|
|
Fiscal 2014
Q1
|
$
|
0.36
|
|
$
|
0.02
|
|
$
|
0.38
|
|
|
|
(1)
|
Fiscal 2015 Q1
Adjustments include a Net Restructuring Gain. Fiscal 2014 Q1
Adjustments include Acquisition-Related Integration and
Restructuring Costs.
|
|
RECONCILIATION OF
ADJUSTED DILUTED EPS TO ADJUSTED DILUTED EPS
ON A CONSTANT CURRENCY BASIS*
(Unaudited)
|
|
|
As Adjusted
EPS
|
|
Foreign
Exchange
Impact
|
|
As Adjusted
EPS Constant
Currency Basis
|
|
|
|
|
|
|
|
Fiscal 2015
Q1
|
$
|
0.37
|
|
$
|
0.02
|
|
$
|
0.39
|
|
|
|
|
|
|
|
RECONCILIATION OF
REPORTED DEBT TO NET DEBT*
(Unaudited)
(in millions)
|
|
|
Fiscal 2015
Q1
|
|
Fiscal 2014
Q1
|
|
|
|
|
|
GAAP reported
debt
|
$
|
857.3
|
|
$
|
1,174.3
|
|
Cash and cash
equivalents
|
(121.3)
|
|
(166.8)
|
|
Net debt
|
$
|
736.0
|
|
$
|
1,007.5
|
|
RECONCILIATION OF
FISCAL 2015 Q1 REPORTED REVENUE GROWTH BY GEOGRAPHY TO
ADJUSTED REVENUE GROWTH BY GEOGRAPHY ON A CONSTANT CURRENCY
BASIS*
(Unaudited)
|
|
|
Constant
Currency
Growth
|
|
Foreign
Exchange
Impact
|
|
GAAP Basis
Reported
Growth
|
|
|
|
|
|
|
|
Revenue
growth:
|
|
|
|
|
|
|
U.S.
|
1.2
|
%
|
|
—
|
%
|
|
1.2
|
%
|
|
EMEA
|
(2.1)
|
|
|
(11.6)
|
|
|
(13.7)
|
|
|
Canada
|
4.8
|
|
|
(12.1)
|
|
|
(7.3)
|
|
|
Asia
Pacific
|
51.7
|
|
|
(1.1)
|
|
|
50.6
|
|
|
Latin
America
|
7.2
|
|
|
(5.1)
|
|
|
2.1
|
|
|
RECONCILIATION OF
FISCAL 2015 FULL-YEAR REPORTED REVENUE GUIDANCE
TO ADJUSTED REVENUE ON A CONSTANT CURRENCY BASIS*
(Unaudited)
(in millions)
|
|
|
GAAP
Basis
Full-Year 2015
Guidance
|
|
Foreign
Exchange
Impact
|
|
Full-Year 2015
Guidance
Constant
Currency Basis
|
|
|
|
|
|
|
|
Revenue
|
$
2,820 - 2,870
|
|
$
|
70.0
|
|
$
2,890 - 2,940
|
|
Percentage
growth
|
2.1 -
3.9%
|
|
|
|
4.7 -
6.5%
|
|
RECONCILIATION OF
FISCAL 2015 FULL-YEAR REPORTED DILUTED EPS GUIDANCE
TO DILUTED EPS ADJUSTED TO EXCLUDE RESTRUCTURING COSTS*
(Unaudited)
|
|
|
GAAP
Basis
Full-Year 2015
Guidance
|
|
Restructuring
Costs
|
|
As
Adjusted
Full-Year 2015
Guidance
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$ 1.42
- 1.49
|
|
$
|
0.11
|
|
$ 1.53
- 1.60
|
|
RECONCILIATION OF
FISCAL 2015 FULL-YEAR ADJUSTED DILUTED EPS GUIDANCE
TO ADJUSTED DILUTED EPS ON A CONSTANT CURRENCY BASIS*
(Unaudited)
|
|
|
As
Adjusted
Full-Year 2015
Guidance
|
|
Foreign
Exchange
Impact
|
|
As
Adjusted
Full-Year 2015
Guidance
Constant
Currency Basis
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$ 1.53
- 1.60
|
|
$
|
0.18
|
|
$ 1.71
- 1.78
|
|
|
|
*
|
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 if
acquisition-related integration costs and restructuring costs were
excluded. 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 and to
better identify trends in our business. The adjusted
financial results are used by management to, and allow investors
to, evaluate the operating performance of the Company on a
comparable basis. The Company has defined net debt as debt
less cash and cash equivalents. The Company believes that
netting these sources of cash against debt provides a clearer
picture of the future demands on cash to repay debt. The
Company evaluates results of operations on both a reported and a
constant currency basis. The constant currency presentation, which
is a non-GAAP measure, excludes the impact of fluctuations in
foreign currency exchange rates. The Company believes providing
constant currency information provides valuable supplemental
information regarding results of operations, consistent with how
the Company evaluates performance. The Company calculates constant
currency by converting the current-period local currency financial
results using the prior period exchange rates and comparing these
adjusted amounts to our current period reported results. 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.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/wolverine-worldwide-reports-first-quarter-2015-results-reaffirms-full-year-revenue-and-adjusted-earnings-per-share-guidance-300072996.html
SOURCE Wolverine Worldwide