Q4 2023 Weyco Group Inc Earnings Call
Operator: Okay. 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 11 on your telephone. You will then hear an automated message advising you that your hand is raised.
Okay.
Good day and thank you for standing by welcome to the Waco 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 the session you'll need to press star 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 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.
Operator: To withdraw your question, please press star 11 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.
Judy Anderson: 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.
Good morning, and welcome everyone to Waco group's conference call to discuss fourth quarter and full year 2023 result.
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 here 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.
Judy Anderson: These 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 sector. 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 90 cents per diluted share, for the quarter compared to $10.2 million, or $1.6 per diluted share, for the fourth quarter of 2022.
They include in part the uncertain impact of inflation on our cost and consumer demand for our products increased interest rates and other macroeconomic factors that may cause a slowdown or contraction in the U S. Our Australian economy.
Yeah.
Net sales for the fourth quarter of 2023 $86 million down 19% compared to last year's fourth quarter net sales of $99 million.
Consolidated gross earnings increased to 53% of net sales for the quarter compared to 46 for <unk>.
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 a record operating earnings of $15 $1 million in the fourth quarter of 2022.
Net earnings were $8 $5 million or 90 cents per diluted share for the quarter compared to $10 $2 million or $1 60 per diluted share for the fourth quarter of 2022.
Judy Anderson: 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 box sales, but also due to decreased sales across our legacy brands as a result of weaker demand. Wholesale growth 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.
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 box sales, but also due to decreased sales across our legacy brands as a result of weaker demand.
Sales 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 $25 million last year. The decrease was largely due to lower employee costs, mainly commission based compensation.
Judy Anderson: As a percent of net sales, wholesale selling and administrative expenses totaled 32 percent for the quarter versus 27 percent 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 growth earnings as a percent of that 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. As a percent of net sales, retail selling and administrative expenses were flat at 41% both this year and last.
As a percent of net sales wholesale selling and administrative expenses totaled 32% for the quarter versus 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 due was primarily on the bogs E Commerce website as a result of lower demand.
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Retail gross earnings as a percent of that 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 for the quarter compared to $5 $9 million last year down as a result of lower web advertising costs.
As a percent of net sales retail selling and administrative expenses were flat at 41% in both this year and last year.
Judy Anderson: 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 result consists 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.
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 result 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 see we ceased operations in the Asia Pacific region in two.
And in 'twenty, three and are in the final stages of winding down this business.
Judy Anderson: 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 Asia in the Asia Pacific region as a result of its winding down. 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.
That sales at 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 Asia, and the Asia Pacific region as a result of its wind down.
Florsheim, Australia 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 $200000 for the quarter compared to $1 $1 million last year.
Due to lower sales volume this year.
Judy Anderson: We will now discuss our full year 2023 results. Consolidated net sales for the full year, or $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 sector. 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 bog sales compared to record sales for the brand last year. Sales of the Stacey Adams, Florsheim, and Nunn-Busch brands were also down for the year due to lower demand following strong growth last year.
We will now discuss our full year 2023 results.
So all the data that sales for the full year or $318 million down 10% compared to record sales of $351 $7 million in 2022.
Consolidated gross earnings increased to 44, 9% of that sales in 2023 from 41, 1% last year due mainly to higher gross margins in our North American wholesale segment.
All year 2023 operating earnings were a record $41 million up 2% over our previous record of $444 million in 2022, despite lower sales.
Net earnings were a record $32 million or.
$3 17.
<unk> 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 <unk>.
$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 Stacy Adams Florsheim, our Nunn Bush brands were also down for the year due to lower demand following strong growth last year.
Judy Anderson: Wholesale growth earnings as a percent of net sales were 39.7% in 2023 and 35.6% in 2022. Growth 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.
Wholesale gross earnings as a percent of that sales were 39, 7% in 'twenty three in 2023 and 35, 6% in two one in 2022 gross margins improved as a result of increased selling prices and lower inventory cost 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.
Judy Anderson: As a percent 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 growth margins and lower selling and administrative expenses. For more information, visit www.weyco.com. 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 www.weyco.com. The increase was primarily due to higher sales across our legacy brand's websites, partially offset by lower sales on the BOGS website; sales that are for domestic brick and mortar stores were down 4% for the year. Retail growth 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.
As a percent 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 expense.
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.
The.
Greece was primarily due to higher sales across our legacy brands websites, partially offset.
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 that 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.
Judy Anderson: The retail segment achieved record rated earnings of $6.8 million in 2023, up 11% over $6.1 million in 2022, due mainly to increased 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 mid-year loss of a wholesale customer in Australia, partially offset by higher sales across its retail business.
The retail segment achieved record operating earnings of $6 8 million in 2023 up 11% over $6 $1 million in 2022, due mainly to increased.
Two 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 mid year loss of our wholesale customer in Australia, partially offset by higher sales across its retail businesses.
Judy Anderson: Florsheim Australia's gross earnings were 62.5% of net sales in 2023, versus 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 31, 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 5, 2024, our Board of Directors declared a cash dividend of 25 cents per share to all shareholders of record on March 15, 2024, payable on March 29, 2024. I would now like to turn the call over to Tom Florsheim, Jr., Chairman and CEO. Good morning, everyone.
Florsheim Australia's gross earnings were 62, 5% of net sales in 2023.
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 31, 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 two and $4 million.
On March 5th 2024, our board of directors declared a cash dividend of 25 cents per share to all shareholders of record on March 15th 2024 payable March 29 2024.
I would now like to turn the call over to Tom Florsheim, Jr. Chairman.
Oh.
Thomas W. Florsheim: As Judy mentioned, we experienced a slowdown in sales as our overall wholesale shipments were down 21% versus 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, but while we recognize we are in a challenging period for our industry, we are pleased with our overall financial performance in 2020. We achieved record wholesale operating earnings by maintaining our price integrity while taking a disciplined approach to our expenses. Fog sales were down 32% in the fourth quarter and 31% for the year.
Good morning, everyone as Judy mentioned, we experienced a slowdown in sales as our overall wholesale shipments were down 21%.
Versus a strong fourth quarter last year.
The retail environment remains difficult for footwear and apparel.
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 operating ultra performance in 2023.
We achieved record wholesale operating earnings by maintaining our price integrity, while taking a disciplined approach to our expenses.
<unk> sales were down 32% in the fourth quarter at 31% for the year.
Thomas W. Florsheim: Mild weather throughout the fall and early winter in combination with an inventory clump 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 wear without any sign of cracking.
Mild weather throughout the fall and early winter a 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 box seamless rubber boot construction bogs seamless construction is 30% lighter than comparable volcanize, Robert roots and over twice as durable as measured by the number of <unk> or.
Our Cmos fruits can withstand without any side of cracking. This year, we're expanding the number of seamless groups and our wide 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 were offshore.
Thomas W. Florsheim: 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. 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, Dunbush, 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.
Introducing new non insulated and lightly insulated footwear.
So the bogs brand is less dependent on any quarter with weather.
Our overall legacy business declined 16% for the quarter and 5% for the year.
At the brand level for sharp <unk> were down 13%.
18% and 19%, respectively for the latest quarter, and 4%, 2% and 10% respectively for the year that.
The decline in sales of our 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.
Thomas W. Florsheim: 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 normal 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 offer. 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.
We see the decrease in our legacy shipments as part of a return to normal 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 remains 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 box online sales due to unseasonably warm and dry weather overall.
Thomas W. Florsheim: 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 and local currency were down 22% in the fourth quarter, 3% for the year.
Overall, we believe the company had a strong <unk>.
Direct to consumer performance with a solid increase for 2023.
Well as record retail operating earnings.
We view, our direct to consumer because 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 of 3% for the year for.
Thomas W. Florsheim: The loss of a major wholesale account as well as soft 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 the Australia division. Our inventory level was $74.9 million at December 31, 2023, down from $128 million at December 31, 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 terms. For the year, overall gross margins were 44.9% in 2023 and 41.1% in 2022.
One of our major wholesale account as well as a shock 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, where we assess opportunities to rekindle our growth as previously discussed.
Closure of our cargo office in December and are in the process of transitioning that Asia Pacific wholesale business to Australia.
Our inventory level was $74 9 million at December 31, 2023 down from $128 million at December 31, 2022.
As discussed in the third quarter call, we have broader inventories down to a level that balances availability for <unk> orders with better inventory turn.
For the year overall gross margins were 44, 9% in 2023 and 41, 1% in 2022.
Thomas W. Florsheim: 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 drop ship 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 to 40 pairs per minute, which is a processing speed approximately four times faster than before.
Going forward, we expect our margins to remain at a healthy level.
As Judy discussed 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 continued to invest in the distribution platform, we have built and walk in Milwaukee.
In the fourth quarter of 2023, we installed equipment that automates, the packing and weibo process of single peers.
With the growth of our ecommerce and drop ship business gaining efficiency in this area allows us to give faster service with significant labor savings. This new equipment allows us to process singles or at a rate of 38 to 40 <unk> per minute.
Which is a processing speed approximately four times faster than previously.
Operator: 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 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.
This concludes our formal remarks thank.
Thank you for your interest in Waco 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 on your telephone and wait for your name to be announced still withdraw. Your question. Please press star one again.
Okay.
David W. Wright: And it looks like our first question is going to come from David Wright of Henry Investment Trust. Your line is open. Please go ahead.
And 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.
David W. Wright: Hi, good morning, everyone. Good morning. First off, I wanted to compliment and congratulate you on making $30 million after tax. I mean, that's got to be a pretty good feeling.
Hi, good morning, everyone.
Good morning, good morning.
Hum.
Wanted to complemented congratulate you first off Bob.
To make $30 million after tax I mean, that's got to be a pretty good feeling.
Judy Anderson: So, you know, I, the If you look back 10 years ago on kind of the same revenues, you were making net profits in the high teens, 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. I'm on the cache, 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.
No.
Yes.
If you look back 10 years ago on kind of the same revenues you were making that sort of high teens millions.
But the last couple of years, you've really elevated the results so as a stockholder or I'll say thank you.
Well, thanks for acknowledging that we appreciate it.
Okay.
Sure.
On the cash Judy can you can you breakdown, where thats held geographically.
The majority of it is in the U S and we have we have invested in.
The money market account.
So we're earning.
Between five and five 5% on that.
David W. Wright: 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 are double your interest expense.
Also we do have some cash in Canada.
Earning about the same rate.
Okay well. Thanks, there was a couple of very good places to have your money you can get to it in.
Your interest earnings were double your interest expense so.
Thomas W. Florsheim: 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..., you know, shareholders? 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 investors actually ask us about a special dividend. So we're considering that we're considering, we're considering, additional stock buybacks. We still want to have the flexibility for M&A, and we feel like with our balance sheet, you know, we're in a good place for that, even if we reduce our cash slightly. So I'll just say at this point that 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, you know, and we're trying to do that in a shareholder-friendly way. Okay, that's, that's great. Thanks for the elaboration. If you'd indulge me, I just have kind of a demographic question.
That's it.
A good result, too.
Further on the cash Tom when you mentioned the board considering acquisitions and other options.
The other options include sort of.
Shareholder.
Capital return.
We are working at.
All the different options right now because we recognize that our Kashi has piled up which is a good problem.
And we've had a couple of dressers actually asked us about a special dividend. So we're considering that we're considering.
We're considering.
Additional stock buybacks.
We're still we still want to have the flexibility for M&A and we feel like with our balance sheet.
We are in a good place for that EBIT, if we reduce our cash slightly so we 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.
We're trying to do that at a shareholder friendly way.
Okay.
Great. Thanks for the <unk>.
Elaboration.
If you would indulge me I just have kind of a.
A demographic question.
David W. Wright: You look back 25 years ago, say, when a white-collar job meant you wore a suit and tie and dress shoes. Yeah, and, you know, 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 were more people, and, you know, office dress, professional dress has changed so dramatically. Sorry to be sentimental, but I'm curious if there's any way you can quantify what, You know, 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.
You look back 25 years ago say.
When.
A white collar job, maybe were a suit and tie dress shoes.
And.
Over the decades that preceded that you've probably had pretty stable NIM guide.
Call it dress shoe sales.
Growing a little with the economy and with the fact that Theres more people.
And dress office dress professional dress has changed so dramatically.
Sorry to be sentimental, but.
I'm curious if there's any way you can quantify what.
Yeah.
If traditional lace up leather dress shoes were X 25 years ago your sales in those.
Products today are 10.
10% of that or any way to quantify the leader.
The decline in that particular style.
Yes, I mean, we don't have the exact numbers with us right now, but what youre, saying is 100% correct. When we look at our traditional classic dress business that has shrunk and drastically over the last 10 years and what people are wearing as dress shoes today.
Thomas W. Florsheim: When we look at our traditional classic dress business, which has shrunken drastically over the last 10 years, and what people are wearing as dress shoes today, you know, is really completely different. And you know, in the script, we talked about hybrid and hybrid. What that means is a dressy kind of upper with a nice fit 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 white bottoms and white soles.
Our really completely different and you know in the in the script, we talked about hybrid and hybrid what that means is dressy kind of upper.
A nice fit with a nice kind of dressy finish but with.
Our more casual or sporty bottom I mean, I'm sure you've seen a lot of men wearing.
Thomas W. Florsheim: And that's what we're referring to when we talk about hybrid. That's a huge growth category because people still want to look nice at the office, but you're 100% correct. They're not wearing suits and ties.
Dressy shoes with the white bottoms with white solves. So that's that's what we're referring to when we talk about hybrid.
That's a huge growth category because people still.
I 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 their clothing and we.
Thomas W. Florsheim: And you know, so they need something that goes with that clothing. And we look at shoes as an accessory to clothing. And so we pay a lot of attention to what people are wearing. And over the years, really going back probably more than a decade,
We look at shoes as an accessory to call data. So we pay a lot of attention to what people are worried.
And over the years.
Really going back probably more than a decade, we've been trying to evolve our brands. So they go with the call did add.
Thomas W. Florsheim: You know, we've been trying to evolve our brand so that it goes with the clothing, and we recognize that in order to keep growing and be successful, we have to continue to adjust our product. And so when you look at a brand like Nunn-Busch, for example, 75% of what we sell at Nunn-Busch is casual, like totally casual, not even hybrid. You know, we have hybrids, and we have some traditional dress, but 75% casual. With Florsheim, we've made good head roads into more casual offerings with, with, um, True Casuals, like we have a 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.
We.
Recognize that in order to keep growing and be successful we.
To continue to adjust our pricing and so when you want the brand like Nunn Bush for example, 75% of what we sell in the Bush as casual like totally casual casual not EBIT hi, Brian we have high bright and we have some traditional dress, but 75% casual and florsheim we've made good <unk>.
Roads.
Into more casual offerings with with.
True casuals like we have a we have a kind of a bold type Chicago wake side, we have active casuals, we have a new one that's on our website that you could checkout card satellite.
And then we have a lot of hybrid shoes like the dash and so we are continuing to evolve and with Stacy Adams CCF still skews more dressy, but we're working to develop more hybrids. We have a successful hybrid and Stacy called the synchro right now and so you are 100% rate with.
Thomas W. Florsheim: And so we are continuing to evolve. And with Stacey Adams, she still skews more dressy, but we're working to develop more hybrids. We have a successful hybrid in Stacey called the Synchro right now.
Thomas W. Florsheim: And so you are 100% right with your original statement, and we're very aware of it. We continue to look at this every time we put together a new line and continue to evolve to become more, more and more lifestyle oriented, more casual oriented, because that's the way people are addressing it. It's not going to change. We are convinced it will continue to go down that path.
Your original statement and we're very aware of it Ed.
We continue to look at this every time, we put together a new wide are continue to evolve to become more more and more.
Lifestyle oriented more casual oriented because that's the way that's the way people are addressing it is that.
Going to change we are convinced is going to continue to go down that path.
David W. Wright: Well, you've done a great job of moving the product line with the market, and the results show that, you know. So, thanks for the explanation 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.
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.
Sorry, I missed the last one I know a lot of people, maybe don't show up for them, but I really appreciate you haven't done that yet so I. Thank you for that and thanks for taking my questions.
David W. Wright: And so I thank you for that. And thanks for taking my question. 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 answering 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. Thomas Florsheim, John Deysher, David Wright, Unknown Executive, WEYCO Group Inc. www.weyco.com
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 on your telephone.
I am showing no further questions at this time 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.
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