WOLVERINE WORLD WIDE INC. Wolverine World Wide Inc. designs manufactures distributes and markets various brands and styles of footwear. The wide variety of footwear sold by the Company includes casual shoes slippers moccasins dress shoes boots uniform shoes and work boots and shoes. The Company is also a domestic tanner of pigskin. Wolverine World Wide Inc. has a market cap of $985.3 million; its shares were traded at around $19.89 with a P/E ratio of 10.7 and P/S ratio of 0.8. The dividend yield of Wolverine World Wide Inc. stocks is 2.2%. Wolverine World Wide Inc. had an annual average earning growth of 12.1% over the past 10 years.
Highlight of Business Operations:The Company declared dividends of $5.3 million in the first quarter of 2009, or $0.11 per share. This is comparable to the $0.11 per share declared in the first quarter of 2008. The quarterly dividend is payable on May 1, 2009 to stockholders of record on April 1, 2009.
The Company conducts wholesale operations outside of the United States in the United Kingdom, continental Europe and Canada, where the functional currencies are primarily the British pound, euro and Canadian dollar, respectively. The Company utilizes foreign currency forward exchange contracts to manage the volatility associated with inventory purchases made by non-U.S. wholesale operations in U.S. dollars in the normal course of business. At March 28, 2009 and March 22, 2008, the Company had outstanding forward currency exchange contracts to purchase $50.8 million and $51.7 million, respectively, of U.S. dollars with maturities ranging up to 280 days.
Assets and liabilities outside the United States are primarily located in the United Kingdom, Canada and the Netherlands. The Companys investments in foreign subsidiaries with a functional currency other than the U.S. dollar are generally considered long-term. Accordingly, the Company does not hedge these net investments. For the quarter ended March 28, 2009, the strengthening of the U.S. dollar compared to foreign currencies decreased the value of these investments in net assets by $3.3 million. For the quarter ended March 22, 2008, the weakening of the U.S. dollar compared to foreign currencies increased the value of these investments in net assets by $0.6 million. These changes resulted in cumulative foreign currency translation adjustments at March 28, 2009 and March 22, 2008 of $4.2 million and $36.0 million, respectively, that are deferred and recorded as a component of accumulated other comprehensive income in stockholders equity.
The Company is exposed to changes in interest rates primarily as a result of its revolving credit agreement. The Company has not historically utilized interest rate swaps or similar hedging arrangements to fix interest rates; however, in 1998 the Company entered into an interest rate lock agreement to fix the interest rate prior to the issuance of 6.5% senior notes in the amount of $75 million. The contract was settled in 1998 and resulted in a prepayment of interest of $2.2 million that was amortized over the term of the senior notes. These notes were fully repaid during 2008 and, as such, there was no remaining unamortized balance at March 28, 2009. The amortization of the prepayment created an effective interest rate of 6.78% on the senior notes.
Read the The complete ReportWWW is in the portfolios of David Swensen of Yale University, David Dreman of Dreman Value Management, David Dreman of Dreman Value Management.