Weyco Group, Inc. (WEYS) has reported a 16.76 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $4.60 million, or $0.44 a share in the quarter, compared with $5.53 million, or $0.51 a share for the same period last year. Revenue during the quarter dropped 13.33 percent to $79.07 million from $91.23 million in the previous year period. Gross margin for the quarter expanded 134 basis points over the previous year period to 37.08 percent. Total expenses were 90.73 percent of quarterly revenues, up from 89.99 percent for the same period last year. That has resulted in a contraction of 74 basis points in operating margin to 9.27 percent.
Operating income for the quarter was $7.33 million, compared with $9.14 million in the previous year period.
"This was a difficult quarter for our North American wholesale segment," stated Thomas W. Florsheim, Jr., the Company's chairman and chief executive officer. "Not only did we see a large reduction in BOGS orders following last year's mild winter, we were also affected by a soft retail environment and changes in consumer buying patterns which contributed to the loss of sales for two of our other major wholesale brands this quarter. While the retail landscape remains uncertain, we remain confident in the strength of our brands, and believe that each is well positioned in its respective market for growth when conditions improve."
Operating cash flow turns positive
Weyco Group, Inc. has generated cash of $27.79 million from operating activities during the nine month period as against cash outgo of $27.23 million in the last year period. The company has spent $4.44 million cash to meet investing activities during the nine month period as against cash inflow of $2.39 million in the last year period
The company has spent $26.68 million cash to carry out financing activities during the nine month period as against cash inflow of $26.55 million in the last year period.
Cash and cash equivalents stood at $14.84 million as on Sep. 30, 2016, up 6.76 percent or $0.94 million from $13.90 million on Sep. 30, 2015.
Working capital decreases marginally
Weyco Group, Inc. has witnessed a decline in the working capital over the last year. It stood at $109.20 million as at Sep. 30, 2016, down 4.58 percent or $5.24 million from $114.44 million on Sep. 30, 2015. Current ratio was at 3.66 as on Sep. 30, 2016, up from 2.66 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 113 days for the quarter from 185 days for the last year period. Days sales outstanding went up to 60 days for the quarter compared with 56 days for the same period last year.
Days inventory outstanding has decreased to 65 days for the quarter compared with 140 days for the previous year period. At the same time, days payable outstanding was almost stable at 12 days for the quarter, when compared with the previous year period.
Debt comes down significantly
Weyco Group, Inc. has recorded a decline in total debt over the last one year. It stood at $22.81 million as on Sep. 30, 2016, down 45.66 percent or $19.16 million from $41.97 million on Sep. 30, 2015. Weyco Group has recorded a decline in short-term debt over the last one year. It stood at $22.81 million as on Sep. 30, 2016, down 45.66 percent or $19.16 million from $41.97 million on Sep. 30, 2015. Total debt was 8.31 percent of total assets as on Sep. 30, 2016, compared with 13.83 percent on Sep. 30, 2015. Debt to equity ratio was at 0.11 as on Sep. 30, 2016, down from 0.21 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 120.16 for the quarter from 136.36 for the same period last year.
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