Good day ladies and gentlemen and welcome to the Q4 2007 Weyco Group earnings conference call. My name is Antwon and I’ll be your coordinator today. At this time all participants are on listen only mode. We will conduct a question and answer session towards the end of this conference. (Operator Instructions) I would now like to turn the call over Mr. Rob Damron, Investor Relations Representative. Please proceed sir.

Good morning and welcome to Weyco Group’s conference call to discuss fourth quarter 2007 and full year earnings. I’m Rob Damron Weyco Group’s Investor Relations Representative. On this call today are Tom Florsheim, Chairman & CEO, John Florsheim, President & COO and John Wittkowske, Senior Vice President & CFO. Before I turn the call over to management to discuss the results for the quarter I will read a brief disclaimer. During the course of 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 such statements are just predictions and that actual events or results may differ materially. We refer you to Weyco Group’s most recent Form 10K and Forms 10Q as filed with the Securities & Exchange Commission. These documents identify important factors that may cause the company’s actual results to differ materially from our projections. Additionally, some comparisons may refer to non-GAAP measures. Our SEC filings may contain additional information about these non-GAAP measures and why we use them. I will now turn the conference call over to John Wittkowske, Weyco Group’s Senior Vice President & CFO to discuss some of the financial highlights of the quarter and the year.

Good morning everyone. On behalf of John and Tom Florsheim I would like to thank all of you for joining us today on our fourth quarter and year end conference call. Net sales for the fourth quarter of 2007 were $62.2 million up 3% from $60.6 million in 2006. Net earnings were a record $7.8 million compared with $7.7 million last year. Fourth quarter diluted earnings per share were $0.66 compared with $0.64 per share in 2006. For the year net sales were a record $232.6 million up 5% from $221 million in 2006. Net earnings were a record $22.9 million up 5% from $21.9 million last year. Diluted earnings per share were $1.91 per share up from $1.81 in 2006. Wholesale sales for the quarter were $51.5 million up 3% from $50 million in 2006. For the year wholesale sales were $197.4 million up 5% from $187.1 million. Looking at each brand in our wholesale division Stacy Adams’ sales increased 11% in the fourth quarter and 5% for the year. The increases are attributable to good performance in the national shoe chain and department store sectors. Nunn Bush’s sales were down 3% for the quarter and 2% for the year. The decrease in Nunn Bush sales was caused by soft sales in Canada. US sales were flat in 2007 despite the residual impact of the loss of business with May Company following its acquisition by Federated. We were able to replace this business through increased sales to other department stores. Florsheim net sales increased 5% for the quarter and 14% for the year. Florsheim net sales for the quarter and year included $1.4 million and $5.7 million respectively of Florsheim sales in Canada. Prior to 2007 Florsheim footwear was distributed in Canada by a third party licensee. That license…

Good morning. Overall, we believe our brands fared well this year relative to the industry. While we definitely felt a squeeze on discretionary spending in some sectors we experienced gains in others. Within our brands we have a large range of styles and price points and while some consumers may have curtailed their spending on footwear this year others were drawn to our quality and value. As John noted earlier sales of the Florsheim brand in the quarter and the year both increased due to the additional distribution in Canada. In the US sales were up for the year but down for the fourth quarter. The decrease in the fourth quarter was reflective of the overall slowdown at retail during the period. While the US economic environment at the moment is challenging we believe that over the long term we continue to have good potential for growth with the Florsheim brand. Over the past two years we have increased our penetration in the casual, dress casual and contemporary segments and we believe there remains significant opportunity to gain shelf space in these product areas going forward. With the Florsheim brand our focus is to leverage Florsheim’s heritage of craftsmanship with the latest in comfort and technology and relevant styling. As a part of that effort we recently announced a collaboration with Men’s wear design firm Duckie Brown to introduce a collection of high end men’s shoes targeting a more fashion forward consumer. Duckie Brown, a finalist for the CFDA Men’s Wear and Designer of the Year Award will enable the brand to reach select specialty and department stores that did not currently carry Florsheim. The Florsheim by Duckie Brown line will be introduced to retailers in fall 2008 and will appear in stores in fall 2009. Our intention here is…

(Operator Instructions) Please hold briefly for your first question. Your first question comes Haruki Toyama with Toyama Capital. Please proceed with your question. Haruki Toyama – Toyama Capital: First, your tax rate continues to come down John, is that you’re buying more muni bonds? Or, what is that from?

Actually, it’s really a combination of a little more muni income and also lower state taxes. We do plan and we’ve been able to reduce our state tax provision over the last couple of years. So, those are the two main reasons and you’ll see that in the annual report in the effective rate reconciliation. Haruki Toyama – Toyama Capital: Okay. Then, capital expenditures I think you had been forecasting $3 to $4 million as late as October, what happen there?

I think a little of that comes in to timing of when these bills get paid with some of the store remodeling and I think that is a little bit to do with it. I think we ended up around $2.7 and next year I’m anticipating I’d drill out for around $2 to $2.5 would be my guess next year. I think we still have some store remodeling that we’re doing. We don’t have any new store openings planned this year right now but those could come up so that’s a possibility. [Inaudible] that number stays around $2 million next year. Haruki Toyama – Toyama Capital: Okay. You had hoped that you might be able to open two, three or four stores this year, did you cut back because of the environment or just because you couldn’t find the right locations?

Well, I’m not sure we ever had [inaudible] how many stores we were going to open each year. We certainly right now are taking a little bit harder look at retail locations in general and retail of course, even the big retailers are having a little bit harder time now and it’s even harder for the smaller retailers so we’re being very cautious. We want to make sure if we’re going to open a store that we have a very high degree of confidence that it’s going to change the brand and profitability. So, we’re not cutting off the spigot if you will but we’re going to make sure that we’re not going to stick to some predetermined number that we’re going to open X number of stores per year. Haruki Toyama – Toyama Capital: Finally, on the retail margins up until recently you were doing 16, 17% plus operating margins and I think a lot of the reductions came in the form of rents and new openings, I don’t know if that’s true or not but can you comment on that and talk about whether you can get back those levels?

I would say that I don’t believe that we can get back to that level of profitability in retail. I think that rents and operating costs at these malls and other centers are increasing and when we renew leases that’s what we really take a look at is to make sure we can maintain or at least maintain what we would consider an adequate level of profitability. I don’t believe that it can be as high as 16.7, the number you threw out there in retail, I think it will be a little bit lower than that. Haruki Toyama – Toyama Capital: When you say operating costs are we talking about labor? Or, are we talking about mostly the rent you’re paying?

It’s more rent costs, it’s not really labor costs. A lot of the people in retail are paid on a base plus commission basis so that costs really is not that – it’s not that variable or it’s variable but it doesn’t change that much. It’s really the fixed costs that are the issue. Haruki Toyama – Toyama Capital: Because you’re still seeing – you know the sales are okay but you’re still seeing flat to positive same store sales so does that mean the rents are going up as they renew or?

Yes. Haruki Toyama – Toyama Capital: How many years do you typically sign on when you open a stores?

Typically it’s about eight. Eight to 10, it varies on the leases. Haruki Toyama – Toyama Capital: Okay. So you’re seeing a lot of leases renewing right now?

That’s exactly right. Again, when we acquired Florsheim they had a lot of older leases that had very favorable terms. Some were very long term leases and over the time things renew and we’ve closed some, we’ve opened some, we’ve gotten better deals on others but in general that’s exactly what’s occurring.

(Operator Instructions) Please hold briefly for your next question. There are no further questions at this time.

Okay. Well, thank you very much and we’ll talk to you after our first quarter conference call. Thank you.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect.