Good day, thank you for standing by. Welcome to the Weyco Group fourth quarter 2022 earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Judy Anderson, Chief Financial Officer. Thank you. Good morning, everyone, and welcome to Weyco Group's conference call to discuss fourth quarter and full year 2022 results. On this call with me today are Tom Florsheim, Jr., Chairman and CEO, and John Florsheim, President and COO. Before we begin to discuss the results for the quarter and year, I will read a brief cautionary statement. During this call, we may make projections or other forward-looking statements regarding our current expectations concerning future events and the future financial performance of the company. We wish to caution you that these statements are just predictions, and that actual events or results may differ materially. We refer you to the section entitled Risk Factors in our most recent annual report on Form 10-K and to our other filings with the Securities and Exchange Commission for a discussion of important factors and risks that could cause our actual results to differ materially from our projections, including the uncertain impact of inflation on our costs and consumer demand for our products, increased interest rates, and other macroeconomic factors that may cause a slowdown or contraction in the U.S. or Australian economy. Net sales for the fourth quarter of 2022 were $99 million, down 2% compared to last year's fourth quarter net sales of $101.4 million. Consolidated gross earnings increased to 46.6% of net sales for the quarter compared to 40.2% of net sales in last year's fourth quarter due to higher gross margins in our North American wholesale segment. Quarterly operating earnings rose to a record $15.1 million, up 18% compared to $12.8 million in the fourth quarter of 2021. Fourth quarter 2022 net earnings were $10.2 million or $1.06 per diluted share, compared to $10.3 million or $1.07 per diluted share last year. In the North American wholesale segment, net sales for the quarter were $75.5 million, down 6% from $79.9 million last year. Last year's fourth quarter sales were abnormally high due to supply chain delays, which caused some third quarter orders to ship in the fourth quarter. Wholesale gross earnings were 41.3% of net sales for the quarter, compared to 33.7% of net sales in last year's fourth quarter. Gross margins returned to pre-pandemic levels as a result of selling price increases implemented to address higher costs. Selling and administrative expenses were $20.5 million, or 27% of net sales for the quarter, compared to $17.5 million or 22% of net sales last year. The increase in 2022 was primarily due to higher advertising and pension expenses. Operating earnings rose to $10.7 million for the quarter, up 14% over $9.4 million in last year's fourth quarter, due mainly to higher gross margins. Net sales in our North American retail segment were a record $14.2 million for the quarter, up 6% compared to $13.5 million last year. The increase was primarily due to higher sales on the Florsheim website. Sales at our four domestic stores were also up collectively for the quarter. Retail gross earnings as a percent of net sales were 64.5% and 66.2% in the fourth quarters of 2022 and 2021, respectively. Selling and administrative expenses totaled $5.9 million, or 41% of net sales for the quarter, compared to $5.6 million, or 42% of net sales last year. Retail operating earnings were $3.3 million in the fourth quarters of both 2022 and 2021, as higher sales were offset by lower gross margins and higher expenses this year. Our other operations have historically included the wholesale and retail businesses of Florsheim Australia and Florsheim Europe. As previously disclosed, the company closed Florsheim Europe. The 2022 operating results of the other category reflect only that of Florsheim Australia. Other net sales were $9.2 million, up 16% compared to $8 million in the fourth quarter of 2021. In local currency, Florsheim Australia's net sales were up 29% for the quarter, with sales up in both its wholesale and retail businesses. Other gross earnings were 61.8% net sales for the quarter compared to 61.1% of net sales in the fourth quarter of 2021. Other operating earnings reached $1.1 million for the quarter, compared to $41,000 last year. The increase was driven by improved performance of our retail business in Australia. We will now discuss our full year 2022 results. Consolidated net sales for the full year were a record $351.7 million, up 31% compared to $267.6 million in 2021. Consolidated gross earnings as a percent of net sales were 41.1% and 40.1% in 2022 and 2021 respectively. Operating earnings were a record $40.4 million, up 57% over 2021 operating earnings of $25.7 million. 2022 net earnings were a record $29.5 million or $3.07 per diluted share, up 44% compared to $20.6 million or $2.12 per diluted share in 2021. North American wholesale net sales were a record $283 million in 2022, up 38% compared to $205 million in 2021. While part of the overall increase was due to pipeline fills, sales were also up due to robust consumer demand and higher selling prices this year. Wholesale gross earnings as a percent of net sales for the year were 35.6% in 2022 and 33.8% in 2021. Gross margins returned to pre-pandemic levels as a result of selling price increases implemented to address higher costs. Selling and administrative expenses were $68.2 million and $49.9 million in 2022 and 2021 respectively. 2021 expenses were reduced by $5.5 million in wage subsidies received from the U.S. and Canadian governments. As a percent of net sales, wholesale selling and administrative expenses remained flat at 24% of net sales in both 2022 and 2021. Wholesale operating earnings reached a record $32.6 million in 2022, up 68% over $19.5 million in 2021, due mainly to higher sales and gross margins this year. In the North American retail segment, net sales were a record $36.7 million in 2022, up 16% compared to $31.6 million in 2021. The increase was primarily due to higher sales across all our brands' websites, fueled by strong consumer demand. Sales were also up for the year at our four domestic brick-and-mortar stores. For the year, retail gross earnings were $65.7 million of net sales in. 7%. I'm sorry. For the year, retail gross earnings were 65.7% of net sales in 2022 and 66.4% of net sales in 2021. Retail selling and administrative expenses were $18.1 million or 49% of net sales a year, compared to $14.3 million or 45% of net sales last year. The increase in 2022 was mainly due to higher e-commerce expenses, primarily outbound freight and advertising. The retail segment had operating earnings of $6.1 million in 2022 and $6.7 million in 2021. The decrease was primarily due to lower earnings from our e-commerce business as higher sales were offset by higher selling administrative expenses. Our other operations had net sales of $31.8 million in 2022, up 4% from $30.7 million in 2021. Sales in US dollars were up $3.5 million or 12% at Florsheim Australia. In local currency, Florsheim Australia's net sales were up 22% for the year, with sales up in both its retail and wholesale businesses. Last year's sales at Florsheim Australia were negatively impacted by COVID-related lockdowns that existed throughout much of 2021. Florsheim Europe was closed and had no sales in 2022 versus $2.3 million of sales in 2021. Other gross earnings were 61.1% of net sales in 2022 versus 55.8% of net sales in 2021. Other operating earnings recovered to $1.7 million in 2022, up from operating losses of $404,000 in 2021. The improvement in 2022 was due to stronger performance at Florsheim Australia and the shedding of losses at Florsheim Europe. At December 31st, 2022, our cash short-term investments and marketable securities totaled $25.5 million, and we had $31.1 million outstanding on our $50 million revolving line of credit. During 2022, we had net borrowings of $31.1 million on our line of credit and liquidated $8 million of investment securities. We used funds to pay $7 million in dividends and to repurchase $4.2 million of our company's stock. In addition, our operations resulted in a net $29.9 million use of cash, mainly to fund inventory purchases. We also had $2.3 million of capital expenditures. We estimate that our 2023 annual capital expenditures will be between $2 million and $4 million. On March 7th, 2023, our board of directors declared a quarterly cash dividend of $0.24 per share to all shareholders of record on March 17th, 2023, payable March 31st, 2023. I would now like to turn the call over to Tom Florsheim, Jr., Chairman and CEO. Thanks, Judy, and good morning, everyone. We are very pleased with our fourth quarter results, which capped off a record year in both sales and earnings. Our entire Weyco team worked extremely hard throughout 2022 to navigate supply chain issues and challenging market conditions, and we are proud of this accomplishment. As mentioned, part of our strong volume this year had to do with pipeline fill, as many retailers needed to get shoes back on their shelves in the first half of the year. However, we also enjoyed strong consumer demand for our brands, especially in our more traditional business, which experienced a resurgence in 2022. In our legacy business comprised of Florsheim, Stacy Adams, and Nunn Bush, all three brands had comeback years. Florsheim was going against a record fourth quarter last year driven by timing of shipments and was down 14% for the fourth quarter. The brand was up 43% for the year, and 2022 was a record year for Florsheim. Stacy Adams sales were up 5% for the quarter and 49% for the year. The Nunn Bush brand was up 18% for the quarter and 40% for the year. Our legacy brands benefited from the strength of the men's dress and refined casual business as consumers were once again updating their wardrobes for social occasions as well as the return to the office work environment. While the refined footwear market reverted to more normalized sell-throughs during the fourth quarter, the category is healthy, and we expect to see a steady performance throughout 2023. As discussed in past conference calls, Florsheim, Nunn Bush, and Stacy Adams are focused on diversifying their product mix, with Nunn Bush having the most success at retail with its value-oriented comfort casual footwear. Florsheim also continued to make progress with a strong casual boot performance in the fourth quarter. While BOGS was down 14% for the quarter, they were up 23% for the year, leading the brand to a record year of sales. In 2022, we delivered on a strong backlog of orders as BOGS continues to broaden its mix of footwear into less seasonal lifestyle product. In the fourth quarter, the outdoor category was oversaturated with product due to the unwinding of supply chain issues. We saw a more promotional environment along with a softness in consumer demand, reflecting mild winter weather in certain parts of the U.S. and Canada. Despite the changes in the market, we remain enthused about the overall performance of the BOGS brand. As we progress through 2023, we are mindful of the more challenging environment in the outdoor category, We are optimistic that we can navigate these changes and continue to move the brand forward and evolve the product offering. In our retail segment, sales were up 6% for the quarter and 16% for the year. Given the promotional environment and some of the weather challenges impacting BOGS, we are pleased with the increase for the fourth quarter and double-digit growth for the year. We believe this reflects the strength of our e-commerce platform and the appeal of our brands. From a bottom-line perspective, the promotional environment affected our gross margins, and we had higher expenses leading to a flat profit for the fourth quarter. However, during the quarter, we did make progress on controlling our spending in a more competitive, less efficient advertising space, and we also found creative ways to slightly reduce our freight costs. As always, we are cognizant of striking the right balance between growth in our direct-to-consumer business and maintaining profitability. Florsheim Australia's net sales and local currency were up 29% in the fourth quarter and 22% for the year. Australia was the bright spot for our business this year as we saw growth across retail, e-commerce, and wholesale for Florsheim, as well as increases for BOGS via wholesale and e-commerce. This resulted in greater profitability for the division. A portion of the increase was related to comparisons with pandemic-related shutdowns in 2021, but a good part of our success had to do with our management team's strong execution in 2022, including a warehouse move and the opening of several new stores. Our overall inventory was $128 million as of December 31st, 2022, up from $112 million at the end of September 2022. We have been building our inventories, and due to supply chain issues, we brought in much of our inventory for spring 2023 early. We are at peak inventory right now and expect to see our levels come down as we move through the first half of the year. The supply chain at this point is largely back to normal. That will make it easier for us to plan our inventory levels and bring product in closer to the season that is being targeted. That concludes our formal remarks. Thank you for your interest in Weyco Group. I would now like to open the call to your questions. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Again, that is star one one to ask a question. Our first question comes from the line of John Deysher with Pinnacle. Your line is now open. Good morning. Thanks for taking my call. Hi, John. Good morning. Good morning. Just two quick questions. One, where are we with the Forsake brand at this point? I know you're monitoring that pretty closely. We're coming up on the two-year anniversary of the purchase. I just wanna make sure we're on target for launching that. I think the last update was for fall of 2023. Is that still realistic? John, go ahead. Yeah, yeah. This is John. Hi. Hi, John. You know, a couple things on Forsake. You know, we're just really starting to get new product out there. I think we completed the purchase in June 2021, you know, so it's been a year and a half, but the supply chain issues slowed us down a bit. We're looking at more of a Weyco overhaul set for the fall of 2023. It's too early to tell, really, from a new product standpoint. That being said, you know, the outdoor market has gotten more difficult, you know, which we referenced in the call. The direct-to-consumer market has become less efficient, you know, especially for brands with lower consumer recognition. You know, we're, you know, we're moving forward. We're looking forward to getting the new product out in market, the back half of the year, but the jury is still very much out. Okay. Okay, good. That's helpful. Thank you. Just a couple questions on the cash flow statement. There's some looks like non-recurring items there, and I'm just wondering where they appear on the income statement. You've got a pension settlement charge of $900,000 and an impairment of trademark for $1.2 million for the year. Where do those appear on the income statement? Do those go through SG&A or how do they flow through the income statement since it's not broken out? Both of those go through SG&A. The settlement loss is part of pension expense. Actually, let me change that a little bit. That pension loss, $600,000 of it goes through other income. You know, it's just because of the accounting rules make us split it, and the other $300,000 is in SG&A. That's the settlement loss. The impairment charge is in SG&A. $1.2 million. Yes. Okay, good. The gains, from fair value measurement of contingent consideration, I guess that's for Forsake. Where does that flow through? That's also in SG&A. That's also embedded in SG&A. Okay, great. Correct. All right. Terrific. Thanks for the update, and good luck going forward. Thanks, John. Thank you. Our next question comes from the line of David Wright with Henry Investment Trust. Hey, good morning, everyone. Good morning. Good morning. Morning. I have a question. You highlighted the high level of inventory. I go back five, six years when you might have ended a year with $60 million of inventory. Kind of, any nervousness about the absolute level of inventory? We overall feel like it's very manageable. We. You know, the situation over the last two years really has been one in which if you're going to deliver shoes on time for the season, you have to bring in everything early. You know, the transit time, and I'm going back, you know, six months or more, always historically from China was about 30 days. During the supply chain issues, that went up to three months, and at times, you know, it was longer than that. We basically were forced to bring in seasonal goods early and bring in everything early, so we were confident that we'd have the inventory. I think that part of the reason we've been able to show such big revenue growth is that we've had the inventory, and some of our competitors have not. You know, we've discussed in past calls that when we are forced essentially to buy earlier and to buy larger quantities and bring them in earlier, we focus on core merchandise. Where the majority of that inventory is, it's on our best sellers. That inventory is not perishable. You know, it's good for several seasons. As the supply chain unfroze, you know, we saw what was happening, we cut back our buying nine months ago. We feel very confident that over the first half of this year, our inventories are gonna be back in line. They're not gonna be down to the $60 million because our business is bigger now. They're gonna be, you know, substantially lower than the $128 million. Well, great. Thanks for that answer. Non-financial question, if you don't mind. I'm curious, just more as a consumer. In your e-commerce segment, and let's just stick with Florsheim, what's the incidence of returns? You know, a pair of shoes, you go to the store, you try on four or five different ones, and this one feels best and looks okay, so fine. Can't really do that so well with e-commerce. Curious about the return rates? Hi, this is John. It's about 12%-13%, for instance, on the Florsheim brand. Yeah. That's all. That's relatively low when you look at it within the context of the industry. I think we benefit from, you know, a lot of our consumers, you know, it's repeat purchases. They know, you know, what shoe they want, they know their size, how they fit our brands. We tend to have lower return rates than the industry, especially, you know, the multi-brand sites. Okay. Well, thanks for giving me some insight there. Congratulations on the record results, and thanks for taking my questions. Thank you. Thank you. I'm showing no further questions in queue at this time. I'd like to turn the call back to Judy Anderson for closing remarks. I just wanna say thank you, everyone, for joining our call today. Have a great day. This concludes today's conference call. Thank you for participating. You may now disconnect.