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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Wolverine World Wide Inc | NYSE:WWW | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.14 | -1.29% | 10.75 | 11.15 | 10.63 | 11.12 | 1,180,902 | 01:00:00 |
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
38-1185150
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
|
|
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9341 Courtland Drive N.E., Rockford, Michigan
|
|
49351
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
¨
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Non-accelerated filer
|
¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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PART I
|
||
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
PART II
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
•
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changes in general economic conditions, employment rates, business conditions, interest rates, tax policies and other factors affecting consumer spending in the markets and regions in which the Company’s products are sold;
|
•
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the inability for any reason to effectively compete in global footwear, apparel and consumer-direct markets;
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•
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the inability to maintain positive brand images and anticipate, understand and respond to changing footwear and apparel trends and consumer preferences;
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•
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the inability to effectively manage inventory levels;
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•
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increases or changes in duties, tariffs, quotas or applicable assessments in countries of import and export;
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•
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foreign currency exchange rate fluctuations;
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•
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currency restrictions;
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•
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capacity constraints, production disruptions, quality issues, price increases or other risks associated with foreign sourcing;
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•
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the cost and availability of raw materials, inventories, services and labor for owned and contract manufacturers;
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•
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labor disruptions;
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•
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changes in relationships with, including the loss of, significant wholesale customers;
|
•
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the failure of the U.S. Department of Defense to exercise future purchase options or award new contracts, or the cancellation or modification of existing contracts by the U.S. Department of Defense or other military purchasers;
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•
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risks related to the significant investment in, and performance of, the Company’s consumer-direct operations;
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•
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risks related to expansion into new markets and complementary product categories as well as consumer-direct operations;
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•
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the impact of seasonality and unpredictable weather conditions;
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•
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changes in general economic conditions and/or the credit markets on the Company’s distributors, suppliers and retailers;
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•
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increase in the Company’s effective tax rates;
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•
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failure of licensees or distributors to meet planned annual sales goals or to make timely payments to the Company;
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•
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the risks of doing business in developing countries and politically or economically volatile areas;
|
•
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the ability to secure and protect owned intellectual property or use licensed intellectual property;
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•
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the impact of regulation, regulatory and legal proceedings and legal compliance risks, including compliance with federal, state and local laws and regulations relating to the protection of the environment, environmental remediation and other related costs, and litigation or other legal proceedings relating to the protection of the environment or environmental effects on human health;
|
•
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the potential breach of the Company’s databases, or those of its vendors, which contain certain personal information or payment card data;
|
•
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problems affecting the Company’s distribution system, including service interruptions at shipping and receiving ports;
|
•
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strategic actions, including new initiatives and ventures, acquisitions and dispositions, and the Company’s success in integrating acquired businesses, and implementing new initiatives and ventures;
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•
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the risk of impairment to goodwill and other acquired intangibles;
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•
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the success of the Company’s consumer-direct realignment initiatives; and
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•
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changes in future pension funding requirements and pension expenses.
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PART I.
|
FINANCIAL INFORMATION
|
ITEM 1.
|
Financial Statements
|
(In millions, except per share data)
|
13 Weeks Ended
September 30, 2017 |
|
12 Weeks Ended
September 10, 2016 |
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
||||||||
Revenue
|
$
|
581.3
|
|
|
$
|
603.7
|
|
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$
|
1,771.4
|
|
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$
|
1,765.0
|
|
Cost of goods sold
|
349.4
|
|
|
366.1
|
|
|
1,070.8
|
|
|
1,068.1
|
|
||||
Restructuring costs
|
1.2
|
|
|
0.3
|
|
|
8.3
|
|
|
4.2
|
|
||||
Gross profit
|
230.7
|
|
|
237.3
|
|
|
692.3
|
|
|
692.7
|
|
||||
Selling, general and administrative expenses
|
172.4
|
|
|
167.4
|
|
|
529.6
|
|
|
534.5
|
|
||||
Restructuring and impairment costs
|
23.0
|
|
|
0.9
|
|
|
65.6
|
|
|
13.4
|
|
||||
Operating profit
|
35.3
|
|
|
69.0
|
|
|
97.1
|
|
|
144.8
|
|
||||
Other expenses:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
8.6
|
|
|
8.6
|
|
|
23.4
|
|
|
24.9
|
|
||||
Debt extinguishment and other costs
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
||||
Other expense (income), net
|
(0.4
|
)
|
|
—
|
|
|
3.4
|
|
|
1.0
|
|
||||
Total other expenses
|
8.2
|
|
|
9.1
|
|
|
26.8
|
|
|
26.4
|
|
||||
Earnings before income taxes
|
27.1
|
|
|
59.9
|
|
|
70.3
|
|
|
118.4
|
|
||||
Income tax expense
|
4.3
|
|
|
11.7
|
|
|
10.2
|
|
|
28.5
|
|
||||
Net earnings
|
22.8
|
|
|
48.2
|
|
|
60.1
|
|
|
89.9
|
|
||||
Less: net earnings (loss) attributable to noncontrolling interests
|
(0.4
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
0.3
|
|
||||
Net earnings attributable to Wolverine World Wide, Inc.
|
$
|
23.2
|
|
|
$
|
48.2
|
|
|
$
|
60.6
|
|
|
$
|
89.6
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings per share (see Note 3):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.24
|
|
|
$
|
0.49
|
|
|
$
|
0.63
|
|
|
$
|
0.92
|
|
Diluted
|
$
|
0.24
|
|
|
$
|
0.49
|
|
|
$
|
0.62
|
|
|
$
|
0.91
|
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
27.6
|
|
|
$
|
46.5
|
|
|
$
|
68.0
|
|
|
$
|
86.6
|
|
Less: comprehensive income (loss) attributable to noncontrolling interests
|
(0.4
|
)
|
|
0.4
|
|
|
—
|
|
|
0.3
|
|
||||
Comprehensive income attributable to Wolverine World Wide, Inc.
|
$
|
28.0
|
|
|
$
|
46.1
|
|
|
$
|
68.0
|
|
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$
|
86.3
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share
|
$
|
0.06
|
|
|
$
|
0.06
|
|
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$
|
0.18
|
|
|
$
|
0.18
|
|
(In millions, except share data)
|
September 30,
2017 |
|
December 31,
2016 |
|
September 10,
2016 |
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
342.7
|
|
|
$
|
369.8
|
|
|
$
|
530.9
|
|
Accounts receivable, less allowances:
|
|
|
|
|
|
||||||
September 30, 2017 – $37.0
|
|
|
|
|
|
||||||
December 31, 2016 – $39.4
|
|
|
|
|
|
||||||
September 10, 2016 – $42.6
|
294.5
|
|
|
263.3
|
|
|
309.5
|
|
|||
Inventories:
|
|
|
|
|
|
||||||
Finished products, net
|
331.5
|
|
|
333.7
|
|
|
445.6
|
|
|||
Raw materials and work-in-process, net
|
7.3
|
|
|
15.0
|
|
|
12.0
|
|
|||
Total inventories
|
338.8
|
|
|
348.7
|
|
|
457.6
|
|
|||
Prepaid expenses and other current assets
|
44.0
|
|
|
49.6
|
|
|
42.6
|
|
|||
Total current assets
|
1,020.0
|
|
|
1,031.4
|
|
|
1,340.6
|
|
|||
Property, plant and equipment:
|
|
|
|
|
|
||||||
Gross cost
|
410.0
|
|
|
434.0
|
|
|
454.3
|
|
|||
Accumulated depreciation
|
(267.8
|
)
|
|
(287.9
|
)
|
|
(305.5
|
)
|
|||
Property, plant and equipment, net
|
142.2
|
|
|
146.1
|
|
|
148.8
|
|
|||
Other assets:
|
|
|
|
|
|
||||||
Goodwill
|
429.9
|
|
|
424.3
|
|
|
429.6
|
|
|||
Indefinite-lived intangibles
|
673.1
|
|
|
678.5
|
|
|
685.6
|
|
|||
Amortizable intangibles, net
|
78.5
|
|
|
83.8
|
|
|
87.1
|
|
|||
Deferred income taxes
|
4.4
|
|
|
2.3
|
|
|
3.3
|
|
|||
Other
|
70.6
|
|
|
65.3
|
|
|
64.0
|
|
|||
Total other assets
|
1,256.5
|
|
|
1,254.2
|
|
|
1,269.6
|
|
|||
Total assets
|
$
|
2,418.7
|
|
|
$
|
2,431.7
|
|
|
$
|
2,759.0
|
|
(In millions, except share data)
|
September 30,
2017 |
|
December 31,
2016 |
|
September 10,
2016 |
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
141.7
|
|
|
$
|
150.8
|
|
|
$
|
168.0
|
|
Accrued salaries and wages
|
36.2
|
|
|
30.8
|
|
|
26.6
|
|
|||
Other accrued liabilities
|
100.1
|
|
|
111.7
|
|
|
135.5
|
|
|||
Current maturities of long-term debt
|
48.8
|
|
|
37.5
|
|
|
393.5
|
|
|||
Borrowings under revolving credit agreements and other short-term notes
|
3.7
|
|
|
2.9
|
|
|
1.2
|
|
|||
Total current liabilities
|
330.5
|
|
|
333.7
|
|
|
724.8
|
|
|||
Long-term debt, less current maturities
|
744.2
|
|
|
780.3
|
|
|
657.7
|
|
|||
Accrued pension liabilities
|
133.8
|
|
|
143.1
|
|
|
111.4
|
|
|||
Deferred income taxes
|
150.5
|
|
|
161.0
|
|
|
176.1
|
|
|||
Other liabilities
|
49.6
|
|
|
39.5
|
|
|
48.3
|
|
|||
Stockholders’ equity:
|
|
|
|
|
|
||||||
Wolverine World Wide, Inc. stockholders’ equity:
|
|
|
|
|
|
||||||
Common stock – par value $1, authorized 320,000,000 shares; shares issued (including shares in treasury):
|
|
|
|
|
|
||||||
September 30, 2017 – 105,956,497 shares
|
|
|
|
|
|
||||||
December 31, 2016 – 105,647,040 shares
|
|
|
|
|
|
||||||
September 10, 2016 – 105,599,231 shares
|
105.9
|
|
|
105.6
|
|
|
105.6
|
|
|||
Additional paid-in capital
|
134.1
|
|
|
103.2
|
|
|
93.6
|
|
|||
Retained earnings
|
1,058.4
|
|
|
1,015.1
|
|
|
1,022.8
|
|
|||
Accumulated other comprehensive loss
|
(73.7
|
)
|
|
(81.1
|
)
|
|
(59.4
|
)
|
|||
Cost of shares in treasury:
|
|
|
|
|
|
||||||
September 30, 2017 – 10,347,476 shares
|
|
|
|
|
|
||||||
December 31, 2016 – 8,522,425 shares
|
|
|
|
|
|
||||||
September 10, 2016 – 6,441,591 shares
|
(223.0
|
)
|
|
(176.3
|
)
|
|
(130.4
|
)
|
|||
Total Wolverine World Wide, Inc. stockholders’ equity
|
1,001.7
|
|
|
966.5
|
|
|
1,032.2
|
|
|||
Noncontrolling interest
|
8.4
|
|
|
7.6
|
|
|
8.5
|
|
|||
Total stockholders’ equity
|
1,010.1
|
|
|
974.1
|
|
|
1,040.7
|
|
|||
Total liabilities and stockholders’ equity
|
$
|
2,418.7
|
|
|
$
|
2,431.7
|
|
|
$
|
2,759.0
|
|
(In millions)
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net earnings
|
$
|
60.1
|
|
|
$
|
89.9
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
28.0
|
|
|
30.0
|
|
||
Deferred income taxes
|
(13.2
|
)
|
|
(0.6
|
)
|
||
Stock-based compensation expense
|
19.1
|
|
|
15.3
|
|
||
Excess tax benefits from stock-based compensation
|
—
|
|
|
(0.4
|
)
|
||
Pension contribution
|
(11.1
|
)
|
|
(0.4
|
)
|
||
Pension and SERP expense
|
11.2
|
|
|
7.3
|
|
||
Restructuring and impairment costs
|
73.9
|
|
|
17.6
|
|
||
Cash payments related to restructuring costs
|
(58.9
|
)
|
|
(11.2
|
)
|
||
(Gain)/loss on sale of a business and other assets
|
(7.0
|
)
|
|
—
|
|
||
Other
|
(12.1
|
)
|
|
(4.8
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(24.3
|
)
|
|
(12.7
|
)
|
||
Inventories
|
(15.1
|
)
|
|
8.3
|
|
||
Other operating assets
|
1.9
|
|
|
10.1
|
|
||
Accounts payable
|
(10.0
|
)
|
|
(34.7
|
)
|
||
Other operating liabilities
|
7.0
|
|
|
29.5
|
|
||
Net cash provided by operating activities
|
49.5
|
|
|
143.2
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Additions to property, plant and equipment
|
(28.7
|
)
|
|
(34.4
|
)
|
||
Proceeds from sale of a business and other assets
|
38.0
|
|
|
—
|
|
||
Investment in joint venture
|
—
|
|
|
(0.5
|
)
|
||
Other
|
(4.1
|
)
|
|
10.4
|
|
||
Net cash provided by (used in) investing activities
|
5.2
|
|
|
(24.5
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Net borrowings under revolving credit agreements and other short-term notes
|
0.3
|
|
|
1.2
|
|
||
Borrowings of long-term debt
|
—
|
|
|
250.0
|
|
||
Payments on long-term debt
|
(26.2
|
)
|
|
(5.7
|
)
|
||
Payments of debt issuance costs
|
(0.1
|
)
|
|
(3.4
|
)
|
||
Cash dividends paid
|
(17.4
|
)
|
|
(17.7
|
)
|
||
Purchases of common stock for treasury
|
(51.5
|
)
|
|
(11.4
|
)
|
||
Purchases of shares under employee stock plans
|
(5.2
|
)
|
|
(4.7
|
)
|
||
Proceeds from the exercise of stock options
|
11.9
|
|
|
5.6
|
|
||
Excess tax benefits from stock-based compensation
|
—
|
|
|
0.4
|
|
||
Contributions from noncontrolling interests
|
0.8
|
|
|
2.2
|
|
||
Net cash provided by (used in) financing activities
|
(87.4
|
)
|
|
216.5
|
|
||
Effect of foreign exchange rate changes
|
5.6
|
|
|
1.6
|
|
||
Increase (decrease) in cash and cash equivalents
|
(27.1
|
)
|
|
336.8
|
|
||
Cash and cash equivalents at beginning of the year
|
369.8
|
|
|
194.1
|
|
||
Cash and cash equivalents at end of the period
|
$
|
342.7
|
|
|
$
|
530.9
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
NEW ACCOUNTING STANDARDS
|
Standard
|
|
Description
|
|
Effect on the Financial Statements or Other Significant Matters
|
ASU 2015-11,
Simplifying the Measurement of Inventory
|
|
Requires that an entity measure inventory at the lower of cost and net realizable value. This ASU does not apply to inventory measured using last-in, first-out.
|
|
The adoption of the new standard in fiscal 2017 did not have, nor does the Company believe it will have, a material impact on the accounting for its inventory.
|
ASU 2016-05,
Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships
|
|
Clarifies that the novation of a derivative contract (i.e., a change in the counterparty) in a hedge accounting relationship does not, in and of itself, require dedesignation of that hedge accounting relationship, provided that all other hedge accounting criteria continue to be met.
|
|
The adoption of the new standard in fiscal 2017 did not have, nor does the Company believe it will have, a material impact on the accounting for its derivatives.
|
ASU 2016-09,
Improvements to Employee Share-Based Payment Accounting
|
|
Seeks to provide simplification to issues of share-based payment awards in relation to income tax consequences, forfeitures, classification of awards as either equity or liabilities and classification on the statement of cash flows.
|
|
The adoption of the new standard in fiscal 2017 did not have a significant impact on the Company’s results of operations and cash flows.
|
ASU 2017-01,
Clarifying the Definition of a Business
|
|
Clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.
|
|
The adoption of the new standard in fiscal 2017 did not have a significant impact on the Company’s results of operations and cash flows.
|
Standard
|
|
Description
|
|
Planned Period of Adoption
|
|
Effect on the Financial Statements or Other Significant Matters
|
ASU 2014-09,
Revenue from Contracts with Customers
(as amended by ASUs 2015-04, 2016-08, 2016-10, 2016-12 and 2017-10)
|
|
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also amends the required disclosures of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.
|
|
Q1 2018
|
|
The Company does not expect the adoption of the new standard to have a significant impact on its consolidated financial position, results of operations or cash flows. The effect on results is not expected to be material because the Company’s analysis of contracts under the new revenue recognition standard supports the recognition of revenue at a point in time for the majority of contracts, which is consistent with the current revenue recognition model. Revenue on the majority of contracts will continue to be recognized at a point in time because of the distinct transfer of control to the customer. The Company will adopt the standard using the modified retrospective method.
|
Standard
|
|
Description
|
|
Planned Period of Adoption
|
|
Effect on the Financial Statements or Other Significant Matters
|
ASU 2016-01,
Recognition and Measurement of Financial Assets and Financial Liabilities
|
|
Enhances the reporting model for financial instruments to provide users of financial statements with more decision-useful information. This ASU addresses certain aspects of recognition, measurement, presentation and disclosure of financial statements.
|
|
Q1 2018
|
|
The Company is evaluating the impacts of the new standard on its consolidated financial statements.
|
ASU 2017-07,
Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
|
Sponsors of benefit plans would be required to present service cost in the same line item or items as other current employee compensation costs, and present the remaining components of net benefit cost in one or more separate line items outside of income from operations, while also limiting the components of net benefit cost eligible to be capitalized to service cost.
|
|
Q1 2018
|
|
The Company does not expect the adoption of the new standard to have a significant impact on its consolidated financial position, results of operations or cash flows. The new standard will require the Company to present the non-service pension costs as a component of expense below operating profit.
|
ASU 2016-02,
Leases
|
|
The core principle is that a lessee shall recognize a lease asset and lease liability in its statement of financial position. A lessee should recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term.
|
|
Q1 2019
|
|
The Company is evaluating the impacts of the new standard on its existing leases.
|
ASU 2017-12,
Targeted Improvements to Accounting for Hedging Activities
|
|
Seeks to improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities and to reduce the complexity of and simplify the application of hedge accounting. This ASU eliminates the requirement to separately measure and report hedge ineffectiveness.
|
|
Q1 2019
|
|
The Company is evaluating the impacts of the new standard on its existing derivative contracts.
|
ASU 2016-13,
Measurement of Credit Losses on Financial Instruments
|
|
Seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates.
|
|
Q1 2020
|
|
The Company is evaluating the impacts of the new standard on its existing financial instruments, including trade receivables.
|
3.
|
EARNINGS PER SHARE
|
(In millions, except per share data)
|
13 Weeks Ended
September 30, 2017 |
|
12 Weeks Ended
September 10, 2016 |
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net earnings attributable to Wolverine World Wide, Inc.
|
$
|
23.2
|
|
|
$
|
48.2
|
|
|
$
|
60.6
|
|
|
$
|
89.6
|
|
Adjustment for earnings allocated to non-vested restricted common stock
|
(0.5
|
)
|
|
(1.0
|
)
|
|
(1.3
|
)
|
|
(1.9
|
)
|
||||
Net earnings used in calculating basic and diluted earnings per share
|
$
|
22.7
|
|
|
$
|
47.2
|
|
|
$
|
59.3
|
|
|
$
|
87.7
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding
|
96.1
|
|
|
99.4
|
|
|
96.6
|
|
|
99.4
|
|
||||
Adjustment for non-vested restricted common stock
|
(2.1
|
)
|
|
(3.8
|
)
|
|
(2.2)
|
|
|
(3.8)
|
|
||||
Shares used in calculating basic earnings per share
|
94.0
|
|
|
95.6
|
|
|
94.4
|
|
|
95.6
|
|
||||
Effect of dilutive stock options
|
1.8
|
|
|
1.3
|
|
|
1.6
|
|
|
0.7
|
|
||||
Shares used in calculating diluted earnings per share
|
95.8
|
|
|
96.9
|
|
|
96.0
|
|
|
96.3
|
|
||||
Net earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.24
|
|
|
$
|
0.49
|
|
|
$
|
0.63
|
|
|
$
|
0.92
|
|
Diluted
|
$
|
0.24
|
|
|
$
|
0.49
|
|
|
$
|
0.62
|
|
|
$
|
0.91
|
|
4.
|
GOODWILL AND INDEFINITE-LIVED INTANGIBLES
|
(In millions)
|
Goodwill
|
|
Indefinite-lived
intangibles
|
|
Total
|
||||||
Balance at January 2, 2016
|
$
|
429.1
|
|
|
$
|
685.4
|
|
|
$
|
1,114.5
|
|
Purchase of intangibles
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|||
Foreign currency translation effects
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|||
Balance at September 10, 2016
|
$
|
429.6
|
|
|
$
|
685.6
|
|
|
$
|
1,115.2
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2016
|
$
|
424.3
|
|
|
$
|
678.5
|
|
|
$
|
1,102.8
|
|
Sale of intangibles
|
—
|
|
|
(5.4
|
)
|
|
(5.4
|
)
|
|||
Foreign currency translation effects
|
5.6
|
|
|
—
|
|
|
5.6
|
|
|||
Balance at September 30, 2017
|
$
|
429.9
|
|
|
$
|
673.1
|
|
|
$
|
1,103.0
|
|
5.
|
ACCOUNTS RECEIVABLE
|
(In millions)
|
13 Weeks Ended
September 30, 2017 |
|
12 Weeks Ended
September 10, 2016 |
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
||||||||
Accounts receivable sold
|
$
|
134.5
|
|
|
$
|
138.2
|
|
|
$
|
432.5
|
|
|
$
|
437.1
|
|
Fees charged
|
0.5
|
|
|
0.3
|
|
|
1.5
|
|
|
1.1
|
|
6.
|
DEBT
|
(In millions)
|
September 30,
2017 |
|
December 31,
2016 |
|
September 10,
2016 |
||||||
Term Loan A, due July 13, 2020
|
$
|
549.4
|
|
|
$
|
575.6
|
|
|
$
|
438.7
|
|
Senior Notes, 5.000% interest, due September 1, 2026
|
250.0
|
|
|
250.0
|
|
|
250.0
|
|
|||
Public Bonds, 6.125% interest
|
—
|
|
|
—
|
|
|
375.0
|
|
|||
Borrowings under revolving credit agreements and other short-term notes
|
3.7
|
|
|
2.9
|
|
|
1.2
|
|
|||
Capital lease obligation
|
0.5
|
|
|
0.5
|
|
|
0.6
|
|
|||
Unamortized debt issuance costs
|
(6.9
|
)
|
|
(8.3
|
)
|
|
(13.1
|
)
|
|||
Total debt
|
$
|
796.7
|
|
|
$
|
820.7
|
|
|
$
|
1,052.4
|
|
7.
|
DERIVATIVE FINANCIAL INSTRUMENTS
|
(Dollars in millions)
|
September 30, 2017
|
|
December 31, 2016
|
|
September 10, 2016
|
||||||
Foreign exchange contracts:
|
|
|
|
|
|
||||||
Hedge contracts
|
$
|
159.8
|
|
|
$
|
169.2
|
|
|
$
|
161.4
|
|
Non-hedge contracts
|
—
|
|
|
2.1
|
|
|
10.8
|
|
|||
Interest rate swaps
|
464.0
|
|
|
496.0
|
|
|
537.9
|
|
|||
Cross currency swap
|
106.4
|
|
|
—
|
|
|
—
|
|
(In millions)
|
September 30, 2017
|
|
December 31, 2016
|
|
September 10, 2016
|
||||||
Financial assets:
|
|
|
|
|
|
||||||
Foreign exchange contracts - hedge
|
$
|
0.2
|
|
|
$
|
6.6
|
|
|
$
|
2.5
|
|
Interest rate swaps
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Financial liabilities:
|
|
|
|
|
|
||||||
Foreign exchange contracts - hedge
|
$
|
(5.6
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
(1.6
|
)
|
Foreign exchange contracts - non-hedge
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|||
Interest rate swaps
|
(3.0
|
)
|
|
(5.3
|
)
|
|
(12.1
|
)
|
|||
Cross currency swap
|
(11.8
|
)
|
|
—
|
|
|
—
|
|
8.
|
STOCK-BASED COMPENSATION
|
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
||
Expected market price volatility
(1)
|
29.3
|
%
|
|
27.2
|
%
|
Risk-free interest rate
(2)
|
1.7
|
%
|
|
1.0
|
%
|
Dividend yield
(3)
|
1.0
|
%
|
|
1.4
|
%
|
Expected term
(4)
|
4 years
|
|
|
4 years
|
|
(1)
|
Based on historical volatility of the Company’s common stock. The expected volatility is based on the daily percentage change in the price of the stock over the
four years
prior to the grant.
|
(2)
|
Represents the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant.
|
(3)
|
Represents the Company’s estimated cash dividend yield for the expected term.
|
(4)
|
Represents the period of time that options granted are expected to be outstanding. As part of the determination of the expected term, the Company concluded that all employee groups exhibit similar exercise and post-vesting termination behavior.
|
9.
|
RETIREMENT PLANS
|
(In millions)
|
13 Weeks Ended
September 30, 2017 |
|
12 Weeks Ended
September 10, 2016 |
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
||||||||
Service cost pertaining to benefits earned during the period
|
$
|
1.8
|
|
|
$
|
1.5
|
|
|
$
|
5.4
|
|
|
$
|
4.5
|
|
Interest cost on projected benefit obligations
|
4.5
|
|
|
4.5
|
|
|
13.3
|
|
|
13.3
|
|
||||
Expected return on pension assets
|
(5.0
|
)
|
|
(4.6
|
)
|
|
(14.8
|
)
|
|
(13.9
|
)
|
||||
Net amortization loss
|
2.4
|
|
|
1.1
|
|
|
7.3
|
|
|
3.4
|
|
||||
Net pension expense
|
$
|
3.7
|
|
|
$
|
2.5
|
|
|
$
|
11.2
|
|
|
$
|
7.3
|
|
10.
|
INCOME TAXES
|
11.
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
(In millions)
|
Foreign
currency
translation
adjustments
|
|
Derivatives
|
|
Pension
adjustments
|
|
Total
|
||||||||
Balance of AOCI as of June 18, 2016
|
$
|
(37.0
|
)
|
|
$
|
(9.0
|
)
|
|
$
|
(11.3
|
)
|
|
$
|
(57.3
|
)
|
Other comprehensive income (loss) before reclassifications
(1)
|
(5.9
|
)
|
|
3.9
|
|
|
—
|
|
|
(2.0
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
(1.3
|
)
|
(2)
|
1.1
|
|
(3)
|
(0.2
|
)
|
||||
Income tax expense (benefit)
|
—
|
|
|
0.4
|
|
|
(0.3
|
)
|
|
0.1
|
|
||||
Net reclassifications
|
—
|
|
|
(0.9
|
)
|
|
0.8
|
|
|
(0.1
|
)
|
||||
Net current-period other comprehensive income (loss)
(1)
|
(5.9
|
)
|
|
3.0
|
|
|
0.8
|
|
|
(2.1
|
)
|
||||
Balance of AOCI as of September 10, 2016
|
$
|
(42.9
|
)
|
|
$
|
(6.0
|
)
|
|
$
|
(10.5
|
)
|
|
$
|
(59.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance of AOCI as of July 1, 2017
|
$
|
(41.6
|
)
|
|
$
|
(9.7
|
)
|
|
$
|
(27.2
|
)
|
|
$
|
(78.5
|
)
|
Other comprehensive income (loss) before reclassifications
(1)
|
8.8
|
|
|
(5.4
|
)
|
|
—
|
|
|
3.4
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
(0.1
|
)
|
(2)
|
2.4
|
|
(3)
|
2.3
|
|
||||
Income tax expense (benefit)
|
—
|
|
|
(0.1
|
)
|
|
(0.8
|
)
|
|
(0.9
|
)
|
||||
Net reclassifications
|
—
|
|
|
(0.2
|
)
|
|
1.6
|
|
|
1.4
|
|
||||
Net current-period other comprehensive income (loss)
(1)
|
8.8
|
|
|
(5.6
|
)
|
|
1.6
|
|
|
4.8
|
|
||||
Balance of AOCI as of September 30, 2017
|
$
|
(32.8
|
)
|
|
$
|
(15.3
|
)
|
|
$
|
(25.6
|
)
|
|
$
|
(73.7
|
)
|
(1)
|
Other comprehensive income (loss) is reported net of taxes and noncontrolling interest.
|
(2)
|
Amounts related to foreign currency derivatives are included in cost of goods sold. Amounts related to interest rate swaps and the cross currency swap are included in interest expense.
|
(3)
|
Amounts reclassified are included in the computation of net pension expense.
|
(In millions)
|
Foreign
currency
translation
adjustments
|
|
Derivatives
|
|
Pension
adjustments
|
|
Total
|
||||||||
Balance of AOCI as of January 2, 2016
|
$
|
(47.3
|
)
|
|
$
|
4.0
|
|
|
$
|
(12.8
|
)
|
|
$
|
(56.1
|
)
|
Other comprehensive income (loss) before reclassifications
(1)
|
4.4
|
|
|
(6.1
|
)
|
|
—
|
|
|
(1.7
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
(5.5
|
)
|
(2)
|
3.4
|
|
(3)
|
(2.1
|
)
|
||||
Income tax expense (benefit)
|
—
|
|
|
1.6
|
|
|
(1.1
|
)
|
|
0.5
|
|
||||
Net reclassifications
|
—
|
|
|
(3.9
|
)
|
|
2.3
|
|
|
(1.6
|
)
|
||||
Net current-period other comprehensive income (loss)
(1)
|
4.4
|
|
|
(10.0
|
)
|
|
2.3
|
|
|
(3.3
|
)
|
||||
Balance of AOCI as of September 10, 2016
|
$
|
(42.9
|
)
|
|
$
|
(6.0
|
)
|
|
$
|
(10.5
|
)
|
|
$
|
(59.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance of AOCI as of December 31, 2016
|
$
|
(53.5
|
)
|
|
$
|
2.8
|
|
|
$
|
(30.4
|
)
|
|
$
|
(81.1
|
)
|
Other comprehensive income (loss) before reclassifications
(1)
|
20.7
|
|
|
(15.6
|
)
|
|
—
|
|
|
5.1
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
(2.7
|
)
|
(2)
|
7.3
|
|
(3)
|
4.6
|
|
||||
Income tax expense (benefit)
|
—
|
|
|
0.2
|
|
|
(2.5
|
)
|
|
(2.3
|
)
|
||||
Net reclassifications
|
—
|
|
|
(2.5
|
)
|
|
4.8
|
|
|
2.3
|
|
||||
Net current-period other comprehensive income (loss)
(1)
|
20.7
|
|
|
(18.1
|
)
|
|
4.8
|
|
|
7.4
|
|
||||
Balance of AOCI as of September 30, 2017
|
$
|
(32.8
|
)
|
|
$
|
(15.3
|
)
|
|
$
|
(25.6
|
)
|
|
$
|
(73.7
|
)
|
(1)
|
Other comprehensive income (loss) is reported net of taxes and noncontrolling interest.
|
(2)
|
Amounts related to foreign currency derivatives are included in cost of goods sold. Amounts related to interest rate swaps and the cross currency swap are included in interest expense.
|
(3)
|
Amounts reclassified are included in the computation of net pension expense.
|
12.
|
FAIR VALUE MEASUREMENTS
|
Level 1:
|
|
Fair value is measured using quoted prices (unadjusted) in active markets for identical assets and liabilities.
|
|
|
|
Level 2:
|
|
Fair value is measured using either direct or indirect inputs, other than quoted prices included within Level 1, which are observable for similar assets or liabilities.
|
|
|
|
Level 3:
|
|
Fair value is measured using valuation techniques in which one or more significant inputs are unobservable.
|
|
Fair Value Measurements
|
||||||||||
|
Quoted Prices With Other Observable Inputs (Level 2)
|
||||||||||
(In millions)
|
September 30, 2017
|
|
December 31, 2016
|
|
September 10, 2016
|
||||||
Financial assets:
|
|
|
|
|
|
||||||
Derivatives
|
$
|
0.2
|
|
|
$
|
6.7
|
|
|
$
|
2.5
|
|
Financial liabilities:
|
|
|
|
|
|
||||||
Derivatives
|
$
|
(20.4
|
)
|
|
$
|
(5.6
|
)
|
|
$
|
(14.2
|
)
|
|
39 Weeks Ended September 30, 2017
|
||||||
(In millions)
|
Fair Value
|
|
Impairment
|
||||
Property and equipment
|
$
|
—
|
|
|
$
|
9.6
|
|
(In millions)
|
September 30, 2017
|
|
December 31, 2016
|
|
September 10, 2016
|
||||||
Carrying value
|
$
|
796.2
|
|
|
$
|
820.2
|
|
|
$
|
1,051.8
|
|
Fair value
|
815.2
|
|
|
827.6
|
|
|
1,092.1
|
|
13.
|
LITIGATION AND CONTINGENCIES
|
(In millions)
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||
Minimum royalties
|
$
|
0.5
|
|
|
$
|
1.4
|
|
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Minimum advertising
|
0.7
|
|
|
2.9
|
|
|
3.0
|
|
|
3.1
|
|
|
3.2
|
|
|
10.2
|
|
14.
|
BUSINESS SEGMENTS
|
•
|
Wolverine Outdoor & Lifestyle Group
, consisting of
Merrell
®
footwear and apparel,
Cat
®
footwear,
Hush Puppies
®
footwear
and apparel,
Chaco
®
footwear,
Sebago
®
footwear and apparel and
Cushe
®
footwear;
|
•
|
Wolverine Boston Group
, consisting of
Sperry
®
footwear and apparel,
Saucony
®
footwear and apparel and
Keds
®
footwear and apparel;
|
•
|
Wolverine Heritage Group
, consisting of
Wolverine
®
footwear and apparel,
Bates
®
uniform footwear,
Harley-Davidson
®
footwear and
HyTest
®
safety footwear; and
|
•
|
Wolverine Multi-Brand Group
, consisting of the Company’s Children’s footwear business and the Company's multi-brand consumer-direct businesses. The Children’s footwear business includes
Stride Rite
®
, as well as children’s footwear offerings from
Saucony
®
,
Sperry
®
,
Keds
®
and
Merrell
®
.
|
(In millions)
|
13 Weeks Ended
September 30, 2017 |
|
12 Weeks Ended
September 10, 2016 |
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Wolverine Outdoor & Lifestyle Group
|
$
|
247.7
|
|
|
$
|
219.1
|
|
|
$
|
712.2
|
|
|
$
|
639.8
|
|
Wolverine Boston Group
|
196.6
|
|
|
202.4
|
|
|
622.2
|
|
|
629.7
|
|
||||
Wolverine Heritage Group
|
89.2
|
|
|
86.0
|
|
|
239.0
|
|
|
232.0
|
|
||||
Wolverine Multi-Brand Group
|
28.8
|
|
|
80.5
|
|
|
144.9
|
|
|
218.6
|
|
||||
Other
|
19.0
|
|
|
15.7
|
|
|
53.1
|
|
|
44.9
|
|
||||
Total
|
$
|
581.3
|
|
|
$
|
603.7
|
|
|
$
|
1,771.4
|
|
|
$
|
1,765.0
|
|
Operating profit (loss):
|
|
|
|
|
|
|
|
||||||||
Wolverine Outdoor & Lifestyle Group
|
$
|
54.1
|
|
|
$
|
43.2
|
|
|
$
|
150.4
|
|
|
$
|
126.7
|
|
Wolverine Boston Group
|
33.5
|
|
|
30.7
|
|
|
104.3
|
|
|
89.3
|
|
||||
Wolverine Heritage Group
|
16.4
|
|
|
13.3
|
|
|
37.2
|
|
|
30.1
|
|
||||
Wolverine Multi-Brand Group
|
4.3
|
|
|
5.9
|
|
|
8.6
|
|
|
7.1
|
|
||||
Other
|
1.6
|
|
|
1.4
|
|
|
4.8
|
|
|
3.5
|
|
||||
Corporate
|
(74.6
|
)
|
|
(25.5
|
)
|
|
(208.2
|
)
|
|
(111.9
|
)
|
||||
Total
|
$
|
35.3
|
|
|
$
|
69.0
|
|
|
$
|
97.1
|
|
|
$
|
144.8
|
|
(In millions)
|
September 30,
2017 |
|
December 31,
2016 |
|
September 10,
2016 |
||||||
Total assets:
|
|
|
|
|
|
||||||
Wolverine Outdoor & Lifestyle Group
|
$
|
472.0
|
|
|
$
|
391.8
|
|
|
$
|
481.4
|
|
Wolverine Boston Group
|
1,264.4
|
|
|
1,273.5
|
|
|
1,309.6
|
|
|||
Wolverine Heritage Group
|
148.1
|
|
|
157.8
|
|
|
162.0
|
|
|||
Wolverine Multi-Brand Group
|
92.5
|
|
|
140.8
|
|
|
179.9
|
|
|||
Other
|
26.9
|
|
|
33.7
|
|
|
31.4
|
|
|||
Corporate
|
414.8
|
|
|
434.1
|
|
|
594.7
|
|
|||
Total
|
$
|
2,418.7
|
|
|
$
|
2,431.7
|
|
|
$
|
2,759.0
|
|
Goodwill:
|
|
|
|
|
|
||||||
Wolverine Outdoor & Lifestyle Group
|
$
|
128.6
|
|
|
$
|
126.6
|
|
|
$
|
128.2
|
|
Wolverine Boston Group
|
261.1
|
|
|
257.5
|
|
|
258.9
|
|
|||
Wolverine Heritage Group
|
16.5
|
|
|
16.5
|
|
|
16.5
|
|
|||
Wolverine Multi-Brand Group
|
23.7
|
|
|
23.7
|
|
|
26.0
|
|
|||
Total
|
$
|
429.9
|
|
|
$
|
424.3
|
|
|
$
|
429.6
|
|
15.
|
RESTRUCTURING ACTIVITIES
|
(In millions)
|
Severance and employee related
|
|
Impairment of property and equipment
|
|
Costs associated with exit or disposal activities
|
|
Total
|
||||||||
Balance at December 31, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring costs
|
3.8
|
|
|
1.6
|
|
|
1.1
|
|
|
6.5
|
|
||||
Amounts paid
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
||||
Charges against assets
|
—
|
|
|
(1.6
|
)
|
|
(1.0
|
)
|
|
(2.6
|
)
|
||||
Balance at September 30, 2017
|
$
|
2.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
2.2
|
|
(In millions)
|
Severance and employee related
|
|
Impairment of property and equipment
|
|
Costs associated with exit or disposal activities
|
|
Total
|
||||||||
Balance at December 31, 2016
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
2.0
|
|
Restructuring costs
|
3.2
|
|
|
8.0
|
|
|
55.6
|
|
|
66.8
|
|
||||
Amounts paid
|
(3.8
|
)
|
|
—
|
|
|
(50.7
|
)
|
|
(54.5
|
)
|
||||
Charges against assets
|
—
|
|
|
(8.0
|
)
|
|
(3.8
|
)
|
|
(11.8
|
)
|
||||
Balance at September 30, 2017
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
|
$
|
2.5
|
|
(In millions)
|
Severance and employee related
|
|
Impairment of property and equipment
|
|
Costs associated with exit or disposal activities
|
|
Total
|
||||||||
Balance at January 2, 2016
|
$
|
2.1
|
|
|
$
|
—
|
|
|
$
|
6.5
|
|
|
$
|
8.6
|
|
Restructuring and impairment costs
|
1.2
|
|
|
0.2
|
|
|
9.6
|
|
|
11.0
|
|
||||
Amounts paid
|
(3.3
|
)
|
|
—
|
|
|
(5.7
|
)
|
|
(9.0
|
)
|
||||
Charges against assets
|
—
|
|
|
(0.2
|
)
|
|
(6.9
|
)
|
|
(7.1
|
)
|
||||
Balance at September 10, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.5
|
|
|
$
|
3.5
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
Restructuring and impairment costs (gain)
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
||||
Amounts paid
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
||||
Balance at September 30, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
16.
|
DIVESTITURES
|
(In millions)
|
Book Value
|
||
Inventory
|
$
|
17.1
|
|
Prepaid expenses and other current assets
|
1.4
|
|
|
Other accrued liabilities
|
(1.8
|
)
|
|
Total assets and liabilities sold
|
$
|
16.7
|
|
(In millions)
|
Book Value
|
||
Indefinite-lived intangibles
|
5.4
|
|
|
Amortizable intangibles
|
0.2
|
|
|
Total assets sold
|
$
|
5.6
|
|
(In millions)
|
Book Value
|
||
Inventory
|
$
|
5.6
|
|
Prepaid expenses and other current assets
|
0.5
|
|
|
Property, plant and equipment
|
3.0
|
|
|
Total assets sold
|
$
|
9.1
|
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Revenue was $
581.3 million
for the
third
quarter of fiscal 2017, representing a decline of 3.7% versus the
third
quarter of fiscal 2016. The change in revenue reflected a
13.1%
increase from the Outdoor & Lifestyle Group, a
2.9%
decrease from the Boston Group, a
3.7%
increase from the Heritage Group and a
64.2%
decline from the Multi-Brand Group. The change in revenue includes $28.2 million of additional revenues due to the additional week of operations and $41.6 million of lower revenue due to the closure of Company retail stores. Changes in foreign exchange rates increased revenues by approximately $3.2 million for the
third
quarter of fiscal 2017.
|
•
|
Gross margin increased 40 basis points to 39.7% in the
third
quarter of fiscal 2017 versus the
third
quarter of fiscal 2016 driven by positive product mix and product cost improvements.
|
•
|
The effective tax rate in the
third
quarter of fiscal 2017 was 15.9% compared to 19.5% in the
third
quarter of fiscal 2016. The lower effective tax rate in the current year periods reflects a reduction in U.S. income due to higher restructuring and impairment costs and organizational transformation costs.
|
•
|
Diluted earnings per share for the
third
quarter of fiscal 2017 and the
third
quarter of fiscal 2016 was $0.24 per share and $0.49 per share, respectively.
|
•
|
Inventory at September 30, 2017 declined 26.0% versus the third quarter of fiscal 2016.
|
•
|
The Company repurchased
1,139,256
shares during the quarter at an average price of $
26.33
per share.
|
•
|
The Company declared cash dividends of $0.06 per share in both the
third
quarter of fiscal 2017 and fiscal 2016.
|
(In millions, except per share data)
|
13 Weeks Ended
September 30, 2017 |
|
12 Weeks Ended
September 10, 2016 |
|
Percent
Change
|
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
|
Percent
Change
|
||||||||||
Revenue
|
$
|
581.3
|
|
|
$
|
603.7
|
|
|
(3.7
|
)%
|
|
$
|
1,771.4
|
|
|
$
|
1,765.0
|
|
|
0.4
|
%
|
Cost of goods sold
|
349.4
|
|
|
366.1
|
|
|
(4.6
|
)
|
|
1,070.8
|
|
|
1,068.1
|
|
|
0.3
|
|
||||
Restructuring costs
|
1.2
|
|
|
0.3
|
|
|
300.0
|
|
|
8.3
|
|
|
4.2
|
|
|
97.6
|
|
||||
Gross profit
|
230.7
|
|
|
237.3
|
|
|
(2.8
|
)
|
|
692.3
|
|
|
692.7
|
|
|
(0.1
|
)
|
||||
Selling, general and administrative expenses
|
172.4
|
|
|
167.4
|
|
|
3.0
|
|
|
529.6
|
|
|
534.5
|
|
|
(0.9
|
)
|
||||
Restructuring and impairment costs
|
23.0
|
|
|
0.9
|
|
|
2,455.6
|
|
|
65.6
|
|
|
13.4
|
|
|
389.6
|
|
||||
Operating profit
|
35.3
|
|
|
69.0
|
|
|
(48.8
|
)
|
|
97.1
|
|
|
144.8
|
|
|
(32.9
|
)
|
||||
Interest expense, net
|
8.6
|
|
|
8.6
|
|
|
—
|
|
|
23.4
|
|
|
24.9
|
|
|
(6.0
|
)
|
||||
Debt extinguishment and other costs
|
—
|
|
|
0.5
|
|
|
(100.0
|
)
|
|
—
|
|
|
0.5
|
|
|
(100.0
|
)
|
||||
Other expense (income), net
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
3.4
|
|
|
1.0
|
|
|
240.0
|
|
||||
Earnings before income taxes
|
27.1
|
|
|
59.9
|
|
|
(54.8
|
)
|
|
70.3
|
|
|
118.4
|
|
|
(40.6
|
)
|
||||
Income tax expense
|
4.3
|
|
|
11.7
|
|
|
(63.2
|
)
|
|
10.2
|
|
|
28.5
|
|
|
(64.2
|
)
|
||||
Net earnings
|
22.8
|
|
|
48.2
|
|
|
(52.7
|
)
|
|
60.1
|
|
|
89.9
|
|
|
(33.1
|
)
|
||||
Less: net earnings (loss) attributable to noncontrolling interests
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
0.3
|
|
|
(266.7
|
)
|
||||
Net earnings attributable to Wolverine World Wide, Inc.
|
$
|
23.2
|
|
|
$
|
48.2
|
|
|
(51.9
|
)%
|
|
$
|
60.6
|
|
|
$
|
89.6
|
|
|
(32.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share
|
$
|
0.24
|
|
|
$
|
0.49
|
|
|
(51.0
|
)%
|
|
$
|
0.62
|
|
|
$
|
0.91
|
|
|
(31.9
|
)%
|
•
|
Wolverine Outdoor & Lifestyle Group
, consisting of
Merrell
®
footwear and apparel,
Cat
®
footwear,
Hush Puppies
®
footwear
and apparel,
Chaco
®
footwear,
Sebago
®
footwear and apparel and
Cushe
®
footwear;
|
•
|
Wolverine Boston Group
, consisting of
Sperry
®
footwear and apparel,
Saucony
®
footwear and apparel and
Keds
®
footwear and apparel;
|
•
|
Wolverine Heritage Group
, consisting of
Wolverine
®
footwear and apparel,
Bates
®
uniform footwear,
Harley-Davidson
®
footwear and
HyTest
®
safety footwear; and
|
•
|
Wolverine Multi-Brand Group
, consisting of the Company’s Children’s footwear business and the Company's multi-brand consumer-direct businesses. The Children’s footwear business includes
Stride Rite
®
, as well as children’s footwear offerings from
Saucony
®
,
Sperry
®
,
Keds
®
and
Merrell
®
.
|
(In millions)
|
13 Weeks Ended
September 30, 2017 |
|
12 Weeks Ended
September 10, 2016 |
|
Change
|
|
Percent
Change
|
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
|
Change
|
|
Percent
Change
|
||||||||||||||
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Wolverine Outdoor & Lifestyle Group
|
$
|
247.7
|
|
|
$
|
219.1
|
|
|
$
|
28.6
|
|
|
13.1
|
%
|
|
$
|
712.2
|
|
|
$
|
639.8
|
|
|
$
|
72.4
|
|
|
11.3
|
%
|
Wolverine Boston Group
|
196.6
|
|
|
202.4
|
|
|
(5.8
|
)
|
|
(2.9
|
)
|
|
622.2
|
|
|
629.7
|
|
|
(7.5
|
)
|
|
(1.2
|
)
|
||||||
Wolverine Heritage Group
|
89.2
|
|
|
86.0
|
|
|
3.2
|
|
|
3.7
|
|
|
239.0
|
|
|
232.0
|
|
|
7.0
|
|
|
3.0
|
|
||||||
Wolverine Multi-Brand Group
|
28.8
|
|
|
80.5
|
|
|
(51.7
|
)
|
|
(64.2
|
)
|
|
144.9
|
|
|
218.6
|
|
|
(73.7
|
)
|
|
(33.7
|
)
|
||||||
Other
|
19.0
|
|
|
15.7
|
|
|
3.3
|
|
|
21.0
|
|
|
53.1
|
|
|
44.9
|
|
|
8.2
|
|
|
18.3
|
|
||||||
Total
|
$
|
581.3
|
|
|
$
|
603.7
|
|
|
$
|
(22.4
|
)
|
|
(3.7
|
)%
|
|
$
|
1,771.4
|
|
|
$
|
1,765.0
|
|
|
$
|
6.4
|
|
|
0.4
|
%
|
(In millions)
|
13 Weeks Ended
September 30, 2017 |
|
12 Weeks Ended
September 10, 2016 |
|
Change
|
|
Percent
Change |
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
|
Change
|
|
Percent
Change
|
||||||||||||||
OPERATING PROFIT (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Wolverine Outdoor & Lifestyle Group
|
$
|
54.1
|
|
|
$
|
43.2
|
|
|
$
|
10.9
|
|
|
25.2
|
%
|
|
$
|
150.4
|
|
|
$
|
126.7
|
|
|
$
|
23.7
|
|
|
18.7
|
%
|
Wolverine Boston Group
|
33.5
|
|
|
30.7
|
|
|
2.8
|
|
|
9.1
|
|
|
104.3
|
|
|
89.3
|
|
|
15.0
|
|
|
16.8
|
|
||||||
Wolverine Heritage Group
|
16.4
|
|
|
13.3
|
|
|
3.1
|
|
|
23.3
|
|
|
37.2
|
|
|
30.1
|
|
|
7.1
|
|
|
23.6
|
|
||||||
Wolverine Multi-Brand Group
|
4.3
|
|
|
5.9
|
|
|
(1.6
|
)
|
|
(27.1
|
)
|
|
8.6
|
|
|
7.1
|
|
|
1.5
|
|
|
21.1
|
|
||||||
Other
|
1.6
|
|
|
1.4
|
|
|
0.2
|
|
|
14.3
|
|
|
4.8
|
|
|
3.5
|
|
|
1.3
|
|
|
37.1
|
|
||||||
Corporate
|
(74.6
|
)
|
|
(25.5
|
)
|
|
(49.1
|
)
|
|
(192.5
|
)
|
|
(208.2
|
)
|
|
(111.9
|
)
|
|
(96.3
|
)
|
|
(86.1
|
)
|
||||||
Total
|
$
|
35.3
|
|
|
$
|
69.0
|
|
|
$
|
(33.7
|
)
|
|
(48.8
|
)%
|
|
$
|
97.1
|
|
|
$
|
144.8
|
|
|
$
|
(47.7
|
)
|
|
(32.9
|
)%
|
(In millions)
|
September 30, 2017
|
|
December 31, 2016
|
|
September 10, 2016
|
||||||
Cash and cash equivalents
|
$
|
342.7
|
|
|
$
|
369.8
|
|
|
$
|
530.9
|
|
Debt
|
796.7
|
|
|
820.7
|
|
|
1,052.4
|
|
|||
Available revolving credit facility
(1)
|
597.5
|
|
|
597.4
|
|
|
497.4
|
|
(1)
|
Amounts are net of both borrowings and outstanding standby letters of credit in accordance with the terms of the revolving credit facility.
|
(In millions)
|
39 Weeks Ended
September 30, 2017 |
|
36 Weeks Ended
September 10, 2016 |
||||
Net cash provided by operating activities
|
$
|
49.5
|
|
|
$
|
143.2
|
|
Net cash provided by (used in) investing activities
|
5.2
|
|
|
(24.5
|
)
|
||
Net cash provided by (used in) financing activities
|
(87.4
|
)
|
|
216.5
|
|
||
Additions to property, plant and equipment
|
28.7
|
|
|
34.4
|
|
||
Depreciation and amortization
|
28.0
|
|
|
30.0
|
|
(In millions)
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||
Minimum rental payments
|
$
|
8.5
|
|
|
$
|
31.4
|
|
|
$
|
30.4
|
|
|
$
|
27.0
|
|
|
$
|
25.4
|
|
|
$
|
112.0
|
|
ITEM 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
ITEM 4.
|
Controls and Procedures
|
PART II.
|
OTHER INFORMATION
|
ITEM 1A.
|
Risk Factors
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Dollar Amount that May Yet Be Purchased Under the Plans or Programs
|
||||||
Period 7 (July 2, 2017 to August 5, 2017)
|
|
|
|
|
|
|
|
||||||
Common Stock Repurchase Program
(1)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
232,267,206
|
|
Employee Transactions
(2)
|
8,415
|
|
|
$
|
27.44
|
|
|
—
|
|
|
|
||
Period 8 (August 6, 2017 to September 2, 2017)
|
|
|
|
|
|
|
|
||||||
Common Stock Repurchase Program
(1)
|
1,139,256
|
|
|
$
|
26.33
|
|
|
1,139,256
|
|
|
$
|
202,267,225
|
|
Employee Transactions
(2)
|
5,862
|
|
|
$
|
26.35
|
|
|
—
|
|
|
|
||
Period 9 (September 3, 2017 to September 30, 2017)
|
|
|
|
|
|
|
|
||||||
Common Stock Repurchase Program
(1)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
202,267,225
|
|
Employee Transactions
(2)
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
||
Total for Quarter Ended September 30, 2017
|
|
|
|
|
|
|
|
||||||
Common Stock Repurchase Program
(1)
|
1,139,256
|
|
|
$
|
26.33
|
|
|
1,139,256
|
|
|
$
|
202,267,225
|
|
Employee Transactions
(2)
|
14,277
|
|
|
$
|
26.99
|
|
|
—
|
|
|
|
(1)
|
The Company’s Board of Directors approved a common stock repurchase program on August 8, 2016 that authorizes the repurchase of up to $
300.0 million
in common stock over a four-year period, although the annual amount of any stock repurchases are restricted under the terms of the Company's Credit Agreement and senior notes indenture.
|
(2)
|
Employee transactions include: (1) shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by holders of employee stock options who exercised options, and (2) restricted shares and units withheld to offset statutory minimum tax withholding that occurs upon vesting of restricted shares and units. The Company’s employee stock compensation plans provide that the shares delivered or attested to, or withheld, shall be valued at the closing price of the Company’s common stock on the date the relevant transaction occurs.
|
ITEM 6.
|
Exhibits
|
Exhibit Number
|
|
Document
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
WOLVERINE WORLD WIDE, INC.
|
|
|
|
|
|
|
November 9, 2017
|
|
/s/ Blake W. Krueger
|
Date
|
|
Blake W. Krueger
Chairman, Chief Executive Officer and President
(Principal Executive Officer and Duly Authorized Signatory for Registrant)
|
|
|
|
|
|
|
November 9, 2017
|
|
/s/ Michael D. Stornant
|
Date
|
|
Michael D. Stornant
Senior Vice President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer and Duly Authorized Signatory for Registrant)
|
1 Year Wolverine World Wide Chart |
1 Month Wolverine World Wide Chart |
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