Wellco (AMEX:WLC)
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Wellco Enterprises, Inc. (AMEX:WLC) today reported net
income for the second fiscal quarter ended December 31, 2005 of its
2006 fiscal year (current three month period) of $225,000, equivalent
to basic earnings per share of $.18 ($.17 diluted), from revenues of
$11,041,000. This compares to net income of $521,000, equivalent to
basic earnings per share of $.41 ($.40 diluted), from revenues of
$14,358,000 in the prior year three month period ended January 1, 2005
(prior three month period).
Compared to the prior three month period, total revenues in the
current three month period decreased by $3,317,000. In the current
three month period, pairs of boots shipped under U. S. Department of
Defense (DOD) contracts decreased by 23%. In early August 2005, the
only U.S. supplier of a DOD required component had a quality problem
that significantly impaired production volume. Although this problem
was substantially resolved in late September 2005, production and
shipments in the early part of the current three month period were
also impaired by the time required to reestablish an adequate supply
of this component.
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 or expanded work force
under which the Company is reimbursed for part of the compensation
paid to certain employees. Under this program, the Company received
and recognized as revenues in the current three month period $381,000,
compared to $384,000 in the prior three month period. The Company's
policy is to record these reimbursements in the fiscal period in which
they are received. The Company has filed reimbursement claims totaling
$840,000 at December 31, 2005, that have not been received or recorded
as revenues.
For the six month period ended December 31, 2005 (current six
month period) the Company had a net loss of ($421,000), equivalent to
basic and diluted loss per share of ($.33), from revenues of
$19,359,000. This compares with net income of $918,000, equivalent to
basic earnings per share of $.73 ($.70 diluted), from revenues of
$25,760,000 in the prior year six months ended January 1, 2005 (prior
six month period).
Compared to the prior six month period, total revenues in the
current six month period decreased by $6,401,000. In the current
six-month period, pairs of boots shipped under U. S. Department of
Defense (DOD) contracts decreased by 33%. This decrease was caused by
the supplier component problem mentioned above and to the Iraq surge
being substantially completed in the prior period. Reimbursement of
compensation cost under the Puerto Rican government program was
$381,000, $784,000 less than the $1,165,000 received and recognized in
the prior year six month period.
At a February 14, 2006 meeting, the Wellco Board of Directors
declared a cash dividend of $.15 per share payable on March 31, 2006
to shareholders of record on March 3, 2006.
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 2, 2005. 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.
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CONSOLIDATED OPERATING RESULTS
(000'S OMITTED EXCEPT FOR PER SHARE AMOUNTS AND NUMBER OF SHARES)
----------------------------------------------------------------------
(unaudited) (unaudited)
Fiscal Three Months Fiscal Six Months
Ended Ended
----------------------------------------------------------------------
December 31, January 1, December 31, January 1,
2005 2005 2005 2005
----------------------------------------------------------------------
Revenues $ 11,041 $ 14,358 $ 19,359 $ 25,760
----------------------- ----------- ---------- ----------- ----------
Operating Income (Loss) 301 764 (330) 1,310
----------------------- ----------- ---------- ----------- ----------
Interest Expense (66) (89) (109) (137)
----------------------- ----------- ---------- ----------- ----------
Income (Loss) Before
Income Taxes 235 675 (439) 1,173
----------------------- ----------- ---------- ----------- ----------
Income Tax Provision
(Benefit) 10 154 (18) 255
----------------------- ----------- ---------- ----------- ----------
Net Income (Loss) 225 521 (421) 918
----------------------- ----------- ---------- ----------- ----------
Basic Earnings (Loss)
Per Share $ .18 $ .41 ($.33) $ .73
----------------------- ----------- ---------- ----------- ----------
Diluted Earnings (Loss)
Per Share $ .17 $ .40 ($.33) $ .70
----------------------- ----------- ---------- ----------- ----------
Weighted Average Number
of Common Shares
Outstanding:
----------------------------------------------------------------------
For Basic Earnings
(Loss) Per Share 1,270,746 1,266,402 1,270,746 1,257,092
----------------------- ----------- ---------- ----------- ----------
For Diluted Earnings
(Loss) Per
Share 1,292,157 1,303,970 1,270,746 1,312,888
----------------------- ----------- ---------- ----------- ----------
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