Wolverine Worldwide Announces Record First Quarter Results

          Wolverine Worldwide Announces Record First Quarter Results

PR Newswire

ROCKFORD, Mich., April 16, 2013

ROCKFORD, Mich., April 16, 2013 /PRNewswire/ -- Wolverine Worldwide (NYSE:
WWW) today reported record financial results for the first quarter ended March
23, 2013. This marks the first reporting period for the Company that includes
a full quarter of results from the Sperry Top-Sider, Saucony, Stride Rite, and
Keds brands that the Company acquired in October 2012 (the "PLG acquisition").

First quarter highlights:

  oRevenue for the quarter was a record $645.9 million, growth of 100.1%
    versus prior year's reported revenue and growth of 8.2% versus prior
    year's pro forma revenue. Key contributors to the excellent revenue
    performance in the quarter were Sperry Top-Sider, Merrell, and Saucony.
    Foreign exchange fluctuations had minimal impact on reported revenue
    growth during the quarter.
  oExcluding non-recurring transaction and integration expenses, fully
    diluted earnings per share in the quarter were $0.81, a 26.6% increase
    compared to $0.64 per share in the prior year's first quarter that
    included a $0.12 per share non-recurring tax benefit. Reported earnings
    per share were $0.60 in the first fiscal quarter.
  oExcluding non-recurring transaction and integration expenses, the PLG
    acquisition delivered a stronger-than-anticipated $0.34 per share of
    earnings accretion in the first quarter. The Company defines "earnings
    accretion" as operating income of the acquired business reduced by
    incremental interest expense, certain non-cash amortization expense
    related to purchase price accounting, and net synergies, all on an
    after-tax basis. 
  oThe Company reduced its long-term interest-bearing debt by approximately
    $33 million in the quarter, including a $25 million voluntary principal
    reduction made in late January, underscoring its intent to aggressively
    reduce its leverage.

"We are exceptionally pleased to be off to such a strong start in 2013,
particularly as this represents the first full fiscal quarter that includes
our four new lifestyle brands," said Blake W. Krueger, Chairman and Chief
Executive Officer. "As we anticipated, the addition of Sperry Top-Sider,
Saucony, Stride Rite, and Keds has made our brand offerings even stronger, and
we are already seeing very positive reactions to the broader portfolio from
key retail and global distributor partners.

"The U.S. market was a key component of the Company's overperformance in the
quarter. As expected, challenging conditions in Europe continue, but the
resiliency of the global consumer, the strength of our international business,
and standout performances from brands like Sperry Top-Sider and Merrell
combined to more than offset these challenges."

Additional details for the quarter:

  oReported gross margin in the quarter was 40.6%, down approximately 40
    basis points from the prior year, as negative foreign exchange, lower
    relative contributions from high-margin third-party distributor and
    licensee business, and higher LIFO expense more than offset a greater
    relative contribution from high-margin consumer-direct business.
  oExcluding non-recurring transaction and integration expenses of $15.2
    million in the quarter, operating expenses were $196.0 million, or 30.3%
    of revenue, compared to 29.5% of revenue in the prior year's first
    quarter. Year-over-year SG&A comparisons were impacted by important
    long-term brand building investments, such as the multi-year Taylor Swift
    partnership with the Keds brand; non-cash amortization expense related to
    purchase price accounting of $4.6 million; incremental non-cash pension
    expense of $2.1 million; and incremental consumer-direct business in the
    quarter, which carries higher operating expenses as a percentage of sales.
    Reported operating expenses were $211.2 million in the first quarter. 
  oExcluding non-recurring transaction and integration expenses, the
    effective tax rate in the quarter was 23.3%. The reported tax rate, which
    benefits from the deductibility of the non-recurring charges primarily in
    high statutory tax rate jurisdictions, was 20.9%.
  oThe Company ended the quarter with $82.0 million of cash and cash
    equivalents and net debt of $1.176 billion.

Don Grimes, Senior Vice President and Chief Financial Officer, commented, "Our
financial performance in the first quarter is indicative of Wolverine's goal
of being the best operator in our competitive space. We intend to
appropriately invest in key growth initiatives while maintaining financial
discipline in backroom and support functions. We also intend to continue our
efforts to aggressively pay down debt and maximize returns to our
shareholders."

Today the Company is updating its full-year guidance, with revenue expected in
the range of $2.7 to $2.775 billion – growth in the range of 6.0% to 9.0%
compared to prior year pro forma revenue of $2.547 billion – and adjusted
earnings per share expected in the range of $2.50 to $2.65 per share – growth
in the range of 9.2% to 15.7% compared to prior year adjusted earnings per
share of $2.29. The prior year's earnings included $0.19 per share of
non-recurring tax benefits. On a reported basis, earnings per share are
expected in the range of $2.05 to $2.20 per share.

The Company will host a conference call at 8:30 a.m. EDT 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 July 5, 2013.

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 Top-Sider^®, Hush Puppies^®, Saucony^®, Wolverine^®, Keds^®,
Stride Rite^®, Sebago^®, Cushe^®, Chaco^®, Bates^®, HYTEST^®, and Soft
Style^®. The Company also is the global 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 approximately 200
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 realize the benefits of the PLG acquisition on a timely
basis or at all; the Company's ability to combine its legacy businesses and
PLG successfully or in a timely and cost-efficient manner; the degree of
business disruption relating to the PLG acquisition; the Company's ability to
successfully develop its brands and businesses; changes in interest rates, tax
laws, duty structures, 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
or price sensitivity; changes in future pension funding requirements and
pension expenses; the ability to secure and protect owned intellectual
property or use licensed intellectual property; 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; 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; disruption of
technology systems; regulatory or other changes affecting the supply or price
of materials used in manufacturing; the impact of regulatory or legal
proceedings and legal compliance risks; the availability of power, labor and
resources in key foreign sourcing countries, including China; the cost,
availability and management of raw materials, inventories, services and labor
for owned and contract manufacturers; 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; seasonality and weather; problems
affecting the Company's distribution system, including service interruptions
at shipping and receiving ports; the failure to maintain the security of
personally identifiable and other information of customers, stockholders and
employees; 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)
(in millions, except per share data)
                                              1st Quarter Ended
                                              March 23,        March 24,
                                              2013             2012
Revenue                                       $          $      
                                              645.9            322.8
Cost of products sold                         383.8            190.6
Gross Profit                                  262.1            132.2
Gross margin                                  40.6%            41.0%
Selling, general and administrative expenses  196.0            95.2
Non-recurring transaction and integration     15.2             -
costs
Operating Expenses                            211.2            95.2
Operating expenses as a % of revenue          32.7%            29.5%
Operating Profit                              50.9             37.0
Operating margin                              7.9%             11.4%
Interest expense, net                         12.9             0.4
Other expense, net                            0.3              1.0
                                              13.2             1.4
Earnings before income taxes                  37.7             35.6
Income taxes                                  7.9              4.4
Effective tax rate                            21.0%            12.4%
Net earnings                                  29.8             31.2
Net earnings attributable to noncontrolling   -                -
interests
Net earnings attributable to Wolverine        $         $       
Worldwide                                     29.8             31.2
Diluted earnings per share                    $         $       
                                              0.60             0.64
Supplemental information:
Net earnings used to calculate diluted        $         $       
earnings per share                            29.3             30.6
Shares used to calculate diluted earnings     49.1             48.2
per share
Weighted average shares outstanding           49.7             48.4



CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(in millions)
                                           March 23,             March 24,
                                           2013                  2012
ASSETS:
Cash & cash equivalents                    $        82.0  $      
                                                                 123.3
Receivables                                470.7                 261.0
Inventories                                487.3                 262.1
Other current assets                       73.9                  44.1
Total current assets                       1,113.9               690.5
Property, plant & equipment, net           146.8                 77.8
Goodwill and other non-amortizable         1,135.9               56.8
intangibles
Other assets                               240.5                 81.5
Total Assets                               $     2,637.1    $      
                                                                 906.6
LIABILITIES & EQUITY:
Accounts payable and other accrued         $       276.3   $      
liabilities                                                      129.1
Current maturities on long-term debt       33.9                  -
Revolving credit agreement                 41.0                  70.0
Total current liabilities                  351.2                 199.1
Long-term debt                             1,183.4               -
Other non-current liabilities              429.0                 100.4
Stockholders' equity                       673.5                 607.1
Total Liabilities & Equity                 $     2,637.1    $      
                                                                 906.6



WOLVERINE WORLD WIDE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
                                            1st Quarter Ended
                                            March 23,          March 24,
                                            2013               2012
OPERATING ACTIVITIES:
Net earnings                                $           $     
                                            29.8               31.2
Adjustments necessary to reconcile
net earnings to net cash used in
operating activities:
Depreciation and amortization               14.2               3.8
Deferred income taxes                       (2.4)              1.7
Stock-based compensation expense, net of    6.8                0.5
tax benefits
Pension expense                             8.6                6.5
Pension contribution                        -                  (26.7)
Other                                       1.2                (3.5)
Changes in operating assets and liabilities (147.5)            (77.9)
Net cash used in operating activities       (89.3)             (64.4)
INVESTING ACTIVITIES:
Investment in joint ventures                (0.6)              -
Additions to property, plant and equipment  (5.3)              (2.7)
Other                                       2.8                (0.6)
Net cash used in investing activities       (3.1)              (3.3)
FINANCING ACTIVITIES:
Net borrowings under revolver               41.0               59.0
Payments of long term debt                  (32.7)             (0.5)
Cash dividends paid                         (5.9)              (6.0)
Purchase of common stock for treasury       -                  (7.8)
Other                                       2.0                7.0
Net cash provided by financing activities   4.4                51.7
Effect of foreign exchange rate changes     (1.4)              (0.7)
Decrease in cash and cash equivalents       (89.4)             (16.7)
Cash and cash equivalents at beginning of   171.4              140.0
year
Cash and cash equivalents at end of         $           $     123.3
quarter                                     82.0



WOLVERINE WORLD WIDE, INC.
REPORTED REVENUE BY OPERATING GROUP
(Unaudited)
(in millions)
                  1st Quarter Ended
                  March 23, 2013     March 24, 2012            Change
                  Revenue    % of    Revenue           % of    $        %
                             Total                     Total
Lifestyle Group   $      41.8%   $      32.4  10.0%   $     734.0%
                  270.2                                        237.8
Performance Group 240.5      37.2%   152.5             47.2%   88.0     57.7%
Heritage Group    118.6      18.4%   119.2             36.9%   (0.6)    -0.5%
Other             16.6       2.6%    18.7              5.9%    (2.1)    -11.2%
Total Revenue     $      100.0%  $     322.8   100.0%  $     100.1%
                  645.9                                        323.1



REPORTED FISCAL Q1 2013 REVENUE BY OPERATING GROUP COMPARED TO
FISCAL Q1 2012 PRO FORMA REVENUE BY OPERATING GROUP*
(Unaudited)
(in millions)
                  1st Quarter Ended
                  March 23, 2013       March 24, 2012            Change
                  Revenue    % of      Pro Forma        % of     $       %
                             Total     Revenue*         Total
Lifestyle Group   $        41.8%     $   237.5      39.8%    $     13.8%
                  270.2                                           32.7
Performance Group 240.5      37.2%     222.7            37.3%    17.8    8.0%
Heritage Group    118.6      18.4%     119.2            20.0%    (0.6)   -0.5%
Other             16.6       2.6%      17.3             2.9%     (0.7)   -4.1%
Total Revenue     $        100.0%    $   596.7      100.0%   $     8.2%
                  645.9                                           49.2
*2012 revenues are presented as if the Company acquired PLG on January 1,
2012. The adjusted financial results are used by management to, and allow
investors to, evaluate the operating performance of the Company on a
comparable basis.



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 FISCAL Q1 2012 REPORTED REVENUE TO FISCAL Q1 2012 PRO FORMA
REVENUE*
(Unaudited)
(in millions)
                         GAAP Basis                           Pro Forma
                         Revenue                              Revenue
                         Fiscal Q1 2012      PLG Revenue      Fiscal Q1 2012
                                             ^(a)
                         $            $          $       
Lifestyle Group               32.4                     
                                             205.1            237.5
Performance Group        152.5               70.2             222.7
Heritage Group           119.2               -                119.2
Other                    18.7                (1.4)            17.3
                         $            $          $       
Total Revenue                322.8                      
                                             273.9            596.7



RECONCILIATION OF FISCAL Q1 2013 EPS AS REPORTED TO EPS ADJUSTED
TO EXCLUDE NON-RECURRING TRANSACTION AND INTEGRATION COSTS*
(Unaudited)
                                    Non-recurring
                     GAAP Basis     Transaction and        As Adjusted
                     Fiscal Q1      Integration Costs      Fiscal Q1 2013
                     2013
Diluted earnings per $        $            $         
share                            0.21                 0.81
                     0.60



RECONCILIATION OF FISCAL Q1 2013 OPERATING EXPENSES AS REPORTED TO OPERATING
EXPENSES
ADJUSTED TO EXCLUDE NON-RECURRING TRANSACTION AND INTEGRATION COSTS*
(Unaudited)
(in millions)
                                      Non-recurring
                      GAAP Basis      Transaction and        As Adjusted
                      Fiscal Q1 2013  Integration Costs      Fiscal Q1 2013
                      $         $            $        
Operating expenses                 (15.2)                 196.0
                      211.2
Percentage of revenue 32.7%                                  30.3%



RECONCILIATION OF FISCAL Q1 2013 EFFECTIVE TAX RATE ADJUSTED TO EXCLUDE
NON-RECURRING
TRANSACTION AND INTEGRATION COSTS*
(Unaudited)
                                        Non-recurring
                       GAAP Basis       Transaction and        As Adjusted
                       Fiscal Q1        Integration Costs      Fiscal Q1 2013
                       2013
Effective tax rate     20.9%            32.2% ^(b)             23.3%



RECONCILIATION OF FISCAL 2012 FULL-YEAR REVENUE AS REPORTED TO REVENUE
ADJUSTED TO INCLUDE PLG FULL-YEAR 2012 REVENUE*
(Unaudited)
(in millions)
        GAAP Basis             PLG Pre "Stub Period"  As Adjusted
        Full-Year 2012         Revenue ^(a)           Full-Year 2012
Revenue $            $            $           
         1,640.8                  906.5            2,547.3



RECONCILIATION OF FISCAL 2013 FULL-YEAR EPS GUIDANCE ADJUSTED TO
EXCLUDE NON-RECURRING TRANSACTION AND INTEGRATION COSTS*
(Unaudited)
                       GAAP Basis      Non-recurring            As Adjusted
                       Full-Year 2013  Transaction and          Full-Year 2013
                       Guidance        Integration Costs        Guidance
Diluted earnings per   $ 2.05   $             $ 2.50
share                  - 2.20            0.45           - 2.65
Percentage change from
 prior year          25.8%                             9.2%
                       - 35.0%                                - 15.7%

RECONCILIATION OF FISCAL 2012 FULL-YEAR EPS AS REPORTED TO EPS ADJUSTED
TO EXCLUDE NON-RECURRING TRANSACTION AND INTEGRATION COSTS*
(Unaudited)
                                      Non-recurring
                     GAAP Basis       Transaction and      As Adjusted
                     Full-Year 2012   Integration Costs    Full-Year 2012
Diluted earnings per $         $           $         
share                                 0.66          
                     1.63                                  2.29

    This adjustment presents the Company's revenue as if PLG was acquired on
(a) January 1, 2012. The adjusted financial results are used by management
    to, and allow investors to, evaluate the operating performance of the
    Company on a comparable basis.
(b) Represents the effective tax rate for non-recurring acquisition related
    costs incurred in the U.S. and foreign operations.
    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 acquisition related revenues, costs and earnings. 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.
    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

Website: http://www.wolverineworldwide.com
Contact: Don Grimes, (616) 863-4404