Wellco (AMEX:WLC)
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Wellco Enterprises, Inc. (AMEX:WLC) today reported a net
loss for the first quarter of fiscal year 2006 (current quarter),
which ended October 1, 2005 of $646,000 equivalent to basic and
diluted loss per share of $0.51 from revenues of $8,318,000. This
compares to net income of $397,000 equivalent to basic earnings per
share of $0.32 ($0.31 diluted), from revenues of $11,401,000 in the
prior year three-month period ended October 2, 2004 (prior quarter).
Compared to the prior quarter, total revenues in the current
quarter decreased by $3,083,000. In the current quarter, pairs of
boots shipped under U. S. Department of Defense (DOD) contracts
decreased by 38% and production of boots decreased by 63%. In early
August 2005, the only U.S. supplier of a DOD required component had a
quality problem that impaired our production volume. Although this
problem has been substantially resolved, the Company is continuing to
perform additional, time consuming, quality procedures. While the rate
of production in the second quarter is improving, the necessary
additional quality procedures, and repairs resulting from those
procedures, continue to restrict production.
The prior quarter included in revenues $780,000 of reimbursement
for certain labor costs from the government of Puerto Rico. The
current quarter does not include any reimbursement. The majority of
the Company's boot manufacturing operations occurs 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. The Company's policy is to recognize the
reimbursement in the period that it is received. Subsequent to October
1, 2005, the company received $234,000 from this program. Excluding
this payment, the total reimbursement filed for but not received is
$762,000.
The Company announced the following, related to its November 15,
2005 Annual Stockholders meeting:
Incumbent directors Claude S. Abernathy, Jr., William M. Cousins,
Jr., Katherine J. Emerson, Rolf Kaufman, John D. Lovelace, Sara E.
Lovelace, David Lutz and Fred K. Webb, Jr. were elected for a one-year
term expiring in 2006. Director Nominee George Henson was also elected
for a one-year term expiring in 2006.
At the subsequent 2005 Annual Meeting of the Board of Directors,
the following action was taken:
1. All present officers of the Company were reelected.
2. The Board declared a quarterly cash dividend of $.15 (fifteen
cents) per share to all shareholders of record on December 9, 2005,
payable on January 6, 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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WELLCO ENTERPRISES, INC.
CONSOLIDATED OPERATING RESULTS
(UNAUDITED)
(000's omitted except for per share amounts and number of shares)
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Fiscal Three Months Ended
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October 1, 2005 October 2, 2004
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Revenues $ 8,318 $ 11,401
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Operating Income (Loss) (631) 546
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Income (Loss) Before Income Taxes (674) 498
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Provision (Benefit) for Income Taxes (28) 101
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Net Income (Loss) $ (646) $ 397
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Earnings (Loss) Per Share:
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Basic $ (0.51) $ 0.32
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Diluted $ (0.51) $ 0.31
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Weighted Average Number of Common
Shares Outstanding:
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For Basic Earnings (Loss) Per Share 1,270,746 1,247,650
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For Diluted Earnings (Loss) Per Share 1,270,746 1,299,415
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