Good day, and thank you for standing by. Welcome to the Weyco Group, Inc. Fourth Quarter and Full Year 2023 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 this session, you'll need to press star one one on your telephone. You will then hear an automated message advising you 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. Please go ahead. Good morning, and welcome, everyone, to Weyco Group's Conference Call to Discuss Fourth Quarter and Full Year 2023 Results. On this call with me today are Tom Florsheim, Jr., Chairman and Chief Executive Officer, and John Florsheim, President and Chief Operating Officer. 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, which provides a discussion of important factors and risks that could cause our actual results to differ materially from our projections. These risk factors are incorporated herein by reference. They include, in part, 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 economies. Net sales for the fourth quarter of 2023 were $80.6 million, down 19% compared to last year's fourth quarter net sales of $99 million. Consolidated gross earnings increased to 50.3% of net sales for the quarter compared to 46.6% of net sales in last year's fourth quarter, due mainly to higher gross margins in our North American Wholesale segment. Quarterly operating earnings were $11.5 million, down 24% compared to record operating earnings of $15.1 million in the fourth quarter of 2022. Net earnings were $8.5 million or $0.90 per diluted share for the quarter compared to $10.2 million or $1.06 per diluted share for the fourth quarter of 2022. In the North American Wholesale segment, net sales for the quarter were $59.6 million, down 21% from $75.5 million last year. The decrease was primarily due to a 32% decline in Bogs sales, but also due to decreased sales across our legacy brands as a result of weaker demand. Wholesale gross earnings were 44.9% of net sales for the quarter compared to 41.3% of net sales in last year's fourth quarter. Gross margins improved as a result of lower inventory costs, primarily inbound freight. Wholesale selling and administrative expenses totaled $18.9 million for the quarter compared to $20.5 million last year. The decrease was largely due to lower employee costs, mainly commission-based compensation. As a% of net sales, wholesale selling and administrative expenses totaled 32% for the quarter vs 27% last year. Wholesale operating earnings totaled $7.9 million for the quarter, or down 27% compared to $10.7 million in 2022, primarily due to lower sales. Net sales in our North American Retail segment were $13.9 million for the quarter, down 3% compared to record sales of $14.3 million last year. The decrease was primarily on the BOGS e-commerce website as a result of lower demand. Retail gross earnings as a% of net sales were 65.8% and 64.5% in the fourth quarters of 2023 and 2022, respectively. Retail selling and administrative expenses totaled $5.6 million for the quarter compared to $5.9 million last year, down as a result of lower web advertising costs. As a% of net sales, retail selling and administrative expenses were flat at 41% in both this year and last year. Retail operating earnings reached a record $3.5 million in the fourth quarter of 2023, up 6% over $3.3 million in 2022. The earnings improvement resulted from lower costs in the fourth quarter of 2023. Our other operations consist of our retail and wholesale businesses in Australia, South Africa, and Asia-Pacific, collectively referred to as Florsheim Australia. However, as previously disclosed, we ceased operations in the Asia-Pacific region in 2023 and are in the final stages of winding down this business. Net sales of Florsheim Australia were $7.2 million, down 23% from $9.2 million in the fourth quarter of 2022. In local currency, Florsheim Australia's net sales were down 22%, due mainly to the loss of a sizable wholesale customer in Australia earlier this year, but also due to lower retail sales in the Asia-Pacific region as a result of its winddown. Florsheim Australia's gross earnings were 65.4% of net sales for the quarter compared to 61.8% in the fourth quarter of 2022. Its operating earnings were $200,000 for the quarter compared to $1.1 million last year, down due to lower sales volumes this year. We will now discuss our full year 2023 results. Consolidated net sales for the full year were $318 million, down 10% compared to record sales of $351.7 million in 2022. Consolidated gross earnings increased to 44.9% of net sales in 2023 from 41.1% last year, due mainly to higher gross margins in our North American Wholesale segment. Full year 2023 operating earnings were a record $41 million, up 2% over our previous record of $40.4 million in 2022, despite lower sales. Net earnings were a record $30.2 million, or $3.17 per diluted share in 2023, up 2% compared to $29.5 million, or $3.07 per diluted share in 2022. North American wholesale net sales were $250.4 million in 2023, down 12% compared to record sales of $283.2 million in 2022. The decrease was primarily due to a 31% decline in Bogs sales compared to record sales for the brand last year. Sales of the Stacy Adams, Florsheim, and Nunn Bush brands were also down for the year due to lower demand following strong growth last year. Wholesale gross earnings as a% of net sales were 39.7% in 2023 and 35.6% in 2022. Gross margins improved as a result of increased selling prices and lower inventory costs, primarily inbound freight. Wholesale selling and administrative expenses totaled $66 million in 2023 compared to $68.2 million in 2022. The decrease in 2023 was primarily due to lower employee costs, mainly commission-based compensation. As a% of net sales, wholesale selling and administrative expenses were 26% in 2023 and 24% in 2022. Wholesale operating earnings reached a record $33.3 million in 2023, up 2% over our previous record of $32.6 million in 2022, due to higher gross margins and lower selling and administrative expenses. In our North American Retail segment, net sales were a record $38 million in 2023, up 4% over our previous record of $36.7 million in 2022. The increase was primarily due to higher sales across our legacy brands' websites, partially offset by lower sales on the BOGS website. Sales at our four domestic brick-and-mortar stores were down 4% for the year. Retail gross earnings were 65.9% of net sales in 2023 and 65.7% of net sales in 2022. Retail selling and administrative expenses totaled $18.3 million, or 48% of net sales for the year compared to $18.1 million, or 49% of net sales last year. The retail segment achieved record operating earnings of $6.8 million in 2023, up 11% over $6.1 million in 2022, due mainly to the increase in web sales. Net sales at Florsheim Australia totaled $29.6 million in 2023, down 7% from $31.8 million in 2022. In local currency, Florsheim Australia's net sales were down 3% for the year, with sales down in its wholesale businesses due to the previously mentioned midyear loss of a wholesale customer in Australia, partially offset by higher sales across its retail businesses. Florsheim Australia's gross earnings were 62.5% of net sales in 2023 vs 61.1% of net sales in 2022. Its operating earnings totaled $1 million in 2023 and $1.7 million in 2022, down as a result of lower net sales. At December 31st, 2023, our cash and marketable securities totaled $75.9 million, and we had no debt outstanding on our $40 million revolving line of credit. During 2023, we generated $98.6 million of cash from operations, due mainly to net earnings and reductions in inventory levels. We used funds to pay off $31.1 million on our line of credit to pay $9.3 million in dividends and to repurchase $4.3 million of our common stock. We also had $3.3 million of capital expenditures. We estimate that our 2024 annual capital expenditures will be between $2 and $4 million. On March 5th, 2024, our board of directors declared a cash dividend of $0.25 per share to all shareholders of record on March 15th, 2024, payable March 29th, 2024. I would now like to turn the call over to Tom Florsheim, Jr., Chairman and CEO. Good morning, everyone. As Judy mentioned, we experienced a slowdown in sales as our overall wholesale shipments were down 21% vs a strong fourth quarter last year. The retail environment remains difficult for footwear and apparel as consumers are spending more of their discretionary income on experiences and services. Retailers, in turn, are being cautious in regards to their inventory levels. Excuse me. While we recognize we are in a challenging period for our industry, we are pleased with our overall financial performance in 2023. We achieved record wholesale operating earnings by maintaining our price integrity while taking a disciplined approach to our expenses. BOGS sales were down 32% in the fourth quarter and 31% for the year. Mild weather throughout the fall and early winter, in combination with an inventory glut in the outdoor market, made for a tough 2023. We believe the outdoor boot market will remain challenging throughout 2024 as retailers right-size their inventories. With BOGS, we are focused on moving the business forward through product innovation with an emphasis on BOGS seamless rubber boot construction. BOGS seamless construction is 30% lighter than comparable vulcanized rubber boots and over twice as durable as measured by the number of flexes our seamless boots can withstand without any sign of cracking. This year, we are expanding the number of seamless boots in our line across numerous price points. Consumers and retailers are excited about this technology, which positions us well for future sales growth. In addition to the expansion of our seamless collection, we are also introducing new non-insulated and lightly insulated footwear so the BOGS brand is less dependent on inclement weather. Our overall legacy business declined 16% for the quarter and 5% for the year. At the brand level, Florsheim, Nunn Bush, and Stacy Adams were down 13%, 18%, and 19%, respectively, for the latest quarter and 4%, 2%, and 10%, respectively, for the year. The decline in sales of all three brands reflects a general slowdown in the market for dress and dress-casual footwear. In addition, many of our retail partners have shifted to more of a chase strategy in order to maintain greater inventory flexibility. We see the decrease in our legacy shipments as part of a return to a normal business cycle after a period of heightened demand and supply chain delays. We anticipate this trend will continue through the first half of 2024. Our sell-throughs at retail remain solid, and we continue to diversify our product mix across all three brands to expand our casual and hybrid offerings. In our retail segment, sales were down 3% for the quarter but up 4% for the year. The fourth quarter decrease was driven primarily by a decline in BOGS online sales due to unseasonably warm and dry weather. Overall, we believe the company had a strong direct-to-consumer performance with a solid increase for 2023 as well as record retail operating earnings. We view our direct-to-consumer business as a growth opportunity and continue to invest in our online platform. Florsheim Australia's net sales in local currency were down 22% in the fourth quarter and 3% for the year. The loss of a major wholesale account as well as soft consumer demand presented challenges in the Australian market. We anticipate headwinds through the first half of 2024 and are focused on reducing expenses while we assess opportunities to rekindle our growth. As previously discussed, we closed our Hong Kong office in December and are in the process of transitioning the Asia-Pacific wholesale business to Australian division. Our inventory level was $74.9 million at December 31st, 2023, down from $128 million at December 31st, 2022. As discussed in the third quarter call, we have brought our inventories down to a level that balances availability for in-season orders with better inventory turn. For the year, overall gross margins were 44.9% in 2023 and 41.1% in 2022. Going forward, we expect our margins to remain at a healthy level. As Judy discussed, our cash flow in 2023 was strong, resulting in a balance of $75.9 million in cash and marketable securities. We continue to look at potential acquisitions and other options to put our cash to use. We also continue to invest in the distribution platform we have built in Milwaukee. In the fourth quarter of 2023, we installed equipment that automates the packing and labeling process of single pairs. With the growth of our e-commerce and dropship business, gaining efficiency in this area allows us to give faster service with significant labor savings. This new equipment allows us to process singles at a rate of 38-40 pairs per minute, which is a processing speed approximately four times faster than previously. This concludes our formal remarks. Thank you for your interest in Weyco Group, and I would now like to open the call to your questions. Thank you. As a reminder, to ask a question at this time, 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. It looks like our first question is going to come from the line of David Wright with Henry Investment Trust. Your line is open. Please go ahead. Hi. Good morning, everyone. Good morning. Good morning. I wanted to compliment and congratulate you, first off, to make $30 million after tax. I mean, that's got to be a pretty good feeling. So if you look back 10 years ago, on kind of the same revenues, you were making net sort of high 10s millions. But the last couple of years, you've really elevated the results. So as a stockholder, I say thank you. Well, thanks for acknowledging that. We appreciate it. Okay. On the cash, Judy, can you break down where that's held geographically? The majority of it is in the U.S., and we have invested it in a money market account. So we're earning between 5% and 5.5% on that. We also do have some cash in Canada, earning about the same rate. Okay. Well, thanks. Those are a couple of very good places to have your money. You can get to it, and your interest earnings were double your interest expense. So that's a good result too. Further on the cash, Tom, when you mentioned the board considering acquisitions and other options, do the other options include sort of shareholder capital return? We are looking at all the different options right now because we recognize that our cash has piled up, which is a good problem. And we've had a couple of investors actually ask us about a special dividend, so we're considering that. We're considering additional stock buybacks. We still want to have the flexibility for M&A, and we feel like with our balance sheet, we're in a good place for that, even if we reduce our cash slightly. So I'll just say at this point, we really recognize that we have more cash than we need on our balance sheet right now, and we're figuring out the best ways to use it. And we're trying to do that in a shareholder-friendly way. Okay. That's great. Thanks for the elaboration. If you'd indulge me, I just have kind of a demographic question. If you look back 25 years ago, say, when a white-collar job meant you wore a suit and tie and dress shoes, yeah, and over the decades that preceded that, you probably had pretty stable - I'm going to call it dress shoe sales - growing a little with the economy and with the fact that there's more people. And office dress, professional dress has changed so dramatically. Sorry to be sentimental, but I'm curious if there's any way you can quantify if traditional lace-up leather dress shoes were X 25 years ago, your sales in those products today are 10% of that or any way to quantify the decline in that particular style? Yeah. I mean, we don't have the exact numbers with us right now, but what you're saying is 100% correct. When we look at our traditional classic dress business, that has shrunken drastically over the last 10 years. What people are wearing as dress shoes today are really completely different. In the script, we talked about hybrid. Hybrid, what that means is a dressy kind of upper with a nice kind of dressy finish but with a more casual or sporty bottom. I mean, I'm sure you've seen a lot of men wearing dressy shoes with the white bottoms, with the white soles. That's what we're referring to when we talk about hybrid. That's a huge growth category because people still they want to look nice at the office, but you're 100% correct. They're not wearing suits and ties, and so they need something that goes with that clothing. We look at shoes as an accessory to clothing, and so we pay a lot of attention to what people are wearing. Over the years, really going back probably more than a decade, we've been trying to evolve our brand so they go with the clothing. We recognize that in order to keep growing and be successful, we have to continue to adjust our product. So when you look at a brand like Nunn Bush, for example, 75% of what we sell in Nunn Bush is casual, totally casual, casual, not even hybrid. We have hybrid, and we have some traditional dress, but 75% casual. In Florsheim, we've made good inroads into more casual offerings with true casuals. We have kind of a boat-type shoe called the Lakeside. We have active casuals. We have a new one that's on our website that you could check out called Satellite. And then we have a lot of hybrid shoes like the Dash. And so we are continuing to evolve. And with Stacy Adams, Stacy Adams still skews more dressy, but we're working to develop more hybrids. We have a successful hybrid in Stacy called the Synchro right now. And so you are 100% right with your original statement, and we're very aware of it. And we continue to look at this every time we put together a new line and continue to evolve to become more and more lifestyle-oriented, more casual-oriented because that's the way people are addressing it, and it's not going to change. We are convinced it's going to continue to go down that path. Well, you've done a great job of moving the product line with the market, and the results show that. So thanks for the elaboration there. Okay. Well, listen, I really appreciate the conference calls. I'm sorry I missed the last one. I know a lot of people maybe don't show up for them, but I really appreciate you having them, and so I thank you for that. And thanks for taking my questions. Thank you. Thank you. Thank you. And again, ladies and gentlemen, if you wish to ask a question at this time, please press star one one on your telephone. I'm showing no further questions at this time, and I would like to turn the conference back over to Judy Anderson for any further remarks. Thank you. Thank you, everyone, for joining us today and for your support of our company. Have a great day. This concludes today's conference call. Thank you for participating, and you may now disconnect.