Wellco Enterprises, Inc. Announces Operating Results for the Quarter Ended September 30, 2006, Cash Dividend and Action Taken at

  
    
  
  
    
      Wellco Enterprises, Inc. (AMEX:WLC) today reported a net loss for the 
      first quarter of fiscal year 2007 (current quarter), which ended 
      September 30, 2006 of $371,000 equivalent to basic and diluted loss per 
      share of $0.29 from revenues of $5,329,000. This compares to net loss of 
      $646,000 equivalent to basic and diluted loss per share of $0.51, from 
      revenues of $8,318,000 in the prior year three-month period ended 
      October 1, 2005 (prior quarter).
    
    
      The Company’s primary customer is the Defense 
      Supply Center Philadelphia (DSCP), the DOD agency with which the Company 
      contracts for the manufacture of boots used by U. S. Armed Forces 
      personnel. Revenues decreased by $2,989,000. The primary reason for the 
      decrease was a 40% reduction of total pairs of boots shipped to the U.S. 
      government due to DSCP reducing inventories of certain boots. However, 
      late in the current period, DSCP started to increase their orders and 
      issued several delivery orders that will be shipped during the second 
      and third fiscal quarters of 2007.
    
    
      Revenues from technical assistance fees and equipment rentals from 
      licensees, which vary with their shipments, decreased $116,000 because 
      the Company’s boot manufacturing licensees 
      were also affected by the DOD’s reduction in 
      inventories of certain boots.
    
    
      The majority of the Company’s boot 
      manufacturing operations occur at the factory of a wholly-owned 
      subsidiary located in Puerto Rico. The Company is participating in a 
      Puerto Rican government program to assist manufacturers in the training 
      of new and expanded work force under which the Company is reimbursed for 
      part of the compensation paid to certain employees. During the current 
      period, the Company received $159,000 of reimbursement under this 
      program, which is included in revenues. In the prior period, the Company 
      did not receive any reimbursement. The Company’s 
      policy is to recognize the reimbursements as revenue in the period in 
      which it is received, and not when the related compensation is paid.
    
    
      Gross profit for the three months ended September 30, 2006 was $182,000 
      as compared to negative gross profit of $84,000 for the prior period. 
      During the current period, the gross profit margin was only 3.4% of 
      revenues due to an extremely low level of production and sales volume. 
      The Company sold approximately 55,000 pairs of boots to DOD during the 
      current period compared to the prior period of 92,000 pairs of boots. 
      Fixed costs (such as depreciation, insurance and rent) and semi-variable 
      costs did not decrease proportionately to the decrease in the production 
      and sales volume. In addition, the Company retained critical operating 
      personnel assuming the low level of production would be temporary.
    
    
      During the prior period, the gross profit was negative. In early August 
      2005, the only U.S. supplier of a DOD required component had a 
      significant quality problem. Fortunately, the Company’s 
      quality system found this problem when it first occurred. In order to 
      assure that defective product did not get into boots, the Company had to 
      perform additional quality checks and time consuming repairs. The rate 
      of boot production was reduced due to the limited supply of this 
      component. After this supplier solved its quality problem, the rate of 
      production continued to be impaired, as it took that supplier several 
      weeks to reestablish full production. The supplier agreed to reimburse 
      certain excess manufacturing costs and this reimbursement has been 
      reflected in the Cost of Sales and Services for the quarter ending 
      October 1, 2005. However, some of the excess costs could not be recouped 
      from the supplier.
    
    
      The Company announced the following, related to its November 14, 2006 
      Annual Stockholders meeting:
    
    
      Incumbent directors Claude S. Abernathy, Jr., Katherine J. Emerson, Lee 
      Ferguson, George Henson, Rolf Kaufman, David Kemper, John D. Lovelace, 
      Sara E. Lovelace, and Fred K. Webb, Jr. were elected for a one-year term 
      expiring in 2007.
    
    
      At the subsequent 2006 Annual Meeting of the Board of Directors, the 
      following action was taken:
    
    
      1. All present officers of the Company were reelected. In addition, 
      Tammy Francis was elected to the office of Vice President of Finance. 
      Ms. Francis’s previous position was Controller.
    
    
      2. The Board declared a quarterly cash dividend of $.10 (ten cents) per 
      share to all shareholders of record on December 8, 2006, payable on 
      January 5, 2007.
    
    
      CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
    
    
      Statements throughout this report that are not historical facts are 
      forward-looking statements.
    
    
      These statements are based on current expectations and beliefs, and 
      involve numerous risks and uncertainties. Many factors could affect the 
      Company’s actual results, causing results to 
      differ materially from those expressed in any such forward-looking 
      information.
    
    
      These factors include, but are not limited to, the receipt of contracts 
      from the U. S. government and the performance thereunder; the ability to 
      control costs under fixed price contracts; the cancellation of 
      contracts; and other risks detailed from time to time in the Company’s 
      Securities and Exchange Commission filings, including Form 10-K for the 
      year ended July 1, 2006. Those statements include, but may not be 
      limited to, all statements regarding intent, beliefs, expectations, 
      projections, forecasts, and plans of the Company and its management. 
      Actual results may differ materially from management expectations. The 
      Company assumes no obligation to update any forward-looking statements.
    
    
      
        
          WELLCO ENTERPRISES, INC.

          
            CONSOLIDATED OPERATING RESULTS
          
          
            (UNAUDITED)
          
          
            (000's omitted except for per share amounts and number of 
            shares)
          
        
        
        
      
      
        
        
        
           
        
      
      
        
           
        
        
          Fiscal Three Months Ended
        
        
        
      
      
        
           
        
        
          
            September 30, 2006
          
        
        
        
        
        
        
          October 1, 2005
        
        
        
      
      
        
          Revenues
        
        
          $
        
        
          5,329 
        
        
        
        
        
        
          $
        
        
          8,318 
        
        
        
      
      
        
          Operating Loss
        
        
           
        
        
          (455)
        
        
        
        
        
        
           
        
        
          (631)
        
        
        
      
      
        
          Loss Before Income Taxes
        
        
           
        
        
          (469)
        
        
        
        
        
        
           
        
        
          (674)
        
        
        
      
      
        
          Benefit for Income Taxes
        
        
           
        
        
          (98)
        
        
        
        
        
        
           
        
        
          (28)
        
        
        
      
      
        
          Net Loss
        
        
          $
        
        
          (371)
        
        
        
        
        
        
          $
        
        
          (646)
        
        
        
      
      
        
          Loss Per Share:
        
        
           
        
        
        
        
        
        
           
        
        
        
      
      
        
          Basic
        
        
          $
        
        
          (0.29)
        
        
        
        
        
        
          $
        
        
          (0.51)
        
        
        
      
      
        
          Diluted
        
        
          $
        
        
          (0.29)
        
        
        
        
        
        
          $
        
        
          (0.51)
        
        
        
      
      
        
          Weighted Average Number of Common Shares Outstanding:
        
        
           
        
        
        
        
        
        
           
        
        
        
      
      
        
          For Basic Loss Per Share
        
        
           
        
        
          1,270,746 
        
        
        
        
        
        
           
        
        
          1,270,746 
        
        
        
      
      
        
          For Diluted Loss Per Share
        
        
           
        
        
          1,270,746 
        
        
        
        
        
        
           
        
        
          1,270,746 
        
      
    
  
Wellco Enterprises, Inc. (AMEX:WLC) today reported a net loss for
the first quarter of fiscal year 2007 (current quarter), which ended
September 30, 2006 of $371,000 equivalent to basic and diluted loss
per share of $0.29 from revenues of $5,329,000. This compares to net
loss of $646,000 equivalent to basic and diluted loss per share of
$0.51, from revenues of $8,318,000 in the prior year three-month
period ended October 1, 2005 (prior quarter).

   The Company's primary customer is the Defense Supply Center
Philadelphia (DSCP), the DOD agency with which the Company contracts
for the manufacture of boots used by U. S. Armed Forces personnel.
Revenues decreased by $2,989,000. The primary reason for the decrease
was a 40% reduction of total pairs of boots shipped to the U.S.
government due to DSCP reducing inventories of certain boots. However,
late in the current period, DSCP started to increase their orders and
issued several delivery orders that will be shipped during the second
and third fiscal quarters of 2007.

   Revenues from technical assistance fees and equipment rentals from
licensees, which vary with their shipments, decreased $116,000 because
the Company's boot manufacturing licensees were also affected by the
DOD's reduction in inventories of certain boots.

   The majority of the Company's boot manufacturing operations occur
at the factory of a wholly-owned subsidiary located in Puerto Rico.
The Company is participating in a Puerto Rican government program to
assist manufacturers in the training of new and expanded work force
under which the Company is reimbursed for part of the compensation
paid to certain employees. During the current period, the Company
received $159,000 of reimbursement under this program, which is
included in revenues. In the prior period, the Company did not receive
any reimbursement. The Company's policy is to recognize the
reimbursements as revenue in the period in which it is received, and
not when the related compensation is paid.

   Gross profit for the three months ended September 30, 2006 was
$182,000 as compared to negative gross profit of $84,000 for the prior
period. During the current period, the gross profit margin was only
3.4% of revenues due to an extremely low level of production and sales
volume. The Company sold approximately 55,000 pairs of boots to DOD
during the current period compared to the prior period of 92,000 pairs
of boots. Fixed costs (such as depreciation, insurance and rent) and
semi-variable costs did not decrease proportionately to the decrease
in the production and sales volume. In addition, the Company retained
critical operating personnel assuming the low level of production
would be temporary.

   During the prior period, the gross profit was negative. In early
August 2005, the only U.S. supplier of a DOD required component had a
significant quality problem. Fortunately, the Company's quality system
found this problem when it first occurred. In order to assure that
defective product did not get into boots, the Company had to perform
additional quality checks and time consuming repairs. The rate of boot
production was reduced due to the limited supply of this component.
After this supplier solved its quality problem, the rate of production
continued to be impaired, as it took that supplier several weeks to
reestablish full production. The supplier agreed to reimburse certain
excess manufacturing costs and this reimbursement has been reflected
in the Cost of Sales and Services for the quarter ending October 1,
2005. However, some of the excess costs could not be recouped from the
supplier.

   The Company announced the following, related to its November 14,
2006 Annual Stockholders meeting:

   Incumbent directors Claude S. Abernathy, Jr., Katherine J.
Emerson, Lee Ferguson, George Henson, Rolf Kaufman, David Kemper, John
D. Lovelace, Sara E. Lovelace, and Fred K. Webb, Jr. were elected for
a one-year term expiring in 2007.

   At the subsequent 2006 Annual Meeting of the Board of Directors,
the following action was taken:

   1. All present officers of the Company were reelected. In
addition, Tammy Francis was elected to the office of Vice President of
Finance. Ms. Francis's previous position was Controller.

   2. The Board declared a quarterly cash dividend of $.10 (ten
cents) per share to all shareholders of record on December 8, 2006,
payable on January 5, 2007.

      CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

   Statements throughout this report that are not historical facts
are forward-looking statements.

   These statements are based on current expectations and beliefs,
and involve numerous risks and uncertainties. Many factors could
affect the Company's actual results, causing results to differ
materially from those expressed in any such forward-looking
information.

   These factors include, but are not limited to, the receipt of
contracts from the U. S. government and the performance thereunder;
the ability to control costs under fixed price contracts; the
cancellation of contracts; and other risks detailed from time to time
in the Company's Securities and Exchange Commission filings, including
Form 10-K for the year ended July 1, 2006. Those statements include,
but may not be limited to, all statements regarding intent, beliefs,
expectations, projections, forecasts, and plans of the Company and its
management. Actual results may differ materially from management
expectations. The Company assumes no obligation to update any
forward-looking statements.

-0-
*T
                      WELLCO ENTERPRISES, INC.
                   CONSOLIDATED OPERATING RESULTS
                             (UNAUDITED)
  (000's omitted except for per share amounts and number of shares)
---------------------------------------------------------------------

                                       Fiscal Three Months Ended
---------------------------------------------------------------------
                                  September 30, 2006  October 1, 2005
----------------------------------------------------  ---------------
Revenues                                 $    5,329       $    8,318
----------------------------------------------------  ---------------
Operating Loss                                 (455)            (631)
----------------------------------------------------  ---------------
Loss Before Income Taxes                       (469)            (674)
----------------------------------------------------  ---------------
Benefit for Income Taxes                        (98)             (28)
----------------------------------------------------  ---------------
Net Loss                                 $     (371)      $     (646)
----------------------------------------------------  ---------------
Loss Per Share:
----------------------------------------------------  ---------------
   Basic                                 $    (0.29)      $    (0.51)
----------------------------------------------------  ---------------
   Diluted                               $    (0.29)      $    (0.51)
----------------------------------------------------  ---------------
Weighted Average Number of Common
 Shares Outstanding:
----------------------------------------------------  ---------------
For Basic Loss Per Share                  1,270,746        1,270,746
----------------------------------------------------  ---------------
For Diluted Loss Per Share                1,270,746        1,270,746
----------------------------------------------------  ---------------
*T