Welcome to the First Quarter 2018 Earnings Release Conference Call. My name is Christine, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to John Wittkowske, CFO; you may begin.

Thank you. Good morning, everyone. Welcome to Weyco Group's first quarter 2018 conference call. On this call with me today is Tom Florsheim Jr., our Chairman and CEO; and John Florsheim, our President & COO. Before we begin 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 results or events may differ materially. We refer you to Weyco Group's most recent Form 10-K as filed with the Securities and Exchange Commission. The 10-K identifies important factors and risks that could 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 decided to use them. Net sales for the first quarter of 2018 were $69.5 million, up 1% compared with 2017 net sales of $69.1 million. Operating earnings were $3.6 million, an increase of 3% over the $3.5 million in 2017. Net earnings attributable to Weyco Group were $3 million this quarter, a 35% increase as compared with $2.2 million last year. Diluted earnings per share were $0.29 in the first quarter versus $0.21 per share in 2017. In the North American wholesale segment, net sales for the first quarter were $53.8 million compared with $52.9 million last year. Licensing revenue were $793,000, up from $701,000 last year. Wholesale gross earnings were 33.1% of net sales compared with 30.8% of net sales in 2017. Wholesale operating earnings increased 7% to $3.4 million in the first quarter of 2018, up from $3.2…

Thanks, John, and good morning, everyone. Our North American wholesale revenues for the quarter were up 2%. Given the tough retail environment, we feel good about our performance. Within our principal categories, men's dress and dress casual, footwear; we're picking up market share while at the same time increasing our gross margins by managing our inventories well. While sales performance of our individual brands varied significantly, our North American wholesale business is off to a solid start in 2018. Our Florsheim business was up 21% for the quarter. We continue to experience exceptional sales at retail for the Florsheim brand and we're picking up shelf space even in challenging retail channel such as department stores. Sales are being driven by updated sales vets [ph] that reflect modern, salient and comfort features but also are very much connected to the classic care to Florsheim. Anecdotally, we're getting a lot of feedback that Florsheim is increasingly being purchased by younger audience that connects with the authenticity of the brands history. We believe our current sales momentum and receptivity among retailers and consumers will help us move Florsheim towards our long-term goal of increasing our casual penetration. Stacy Adams sales were up 1% for the quarter as the brand continues to be a consistent performer at retail in the dress shoe category. Stacy Adams is experiencing strong momentum in e-commerce trade channel which is helping offset the volatility in brick-and-mortar retail. Sales were down 10% this quarter with Nunn Bush sales and national shoe chains off significantly. As discussed in previous conference calls, the Nunn Bush brand is impacted disproportionately by the challenges of mid-tier department stores. We do believe that this situation is beginning to stabilize and we should start to see Nunn Bush get back on a growth track beginning in…

Thank you. [Operator Instructions] We do have a question from Paul Carter of Adaptable Capital. Go ahead.

Thank you. First, regarding [indiscernible].

Did you say the Australian customer? We missed the part of...

I'm sorry. The bond...

Did you ask us what the volume was of Nunn Bush [ph]?

Yes. Just how big of a customer, how they've been and what sort of impact this year do you expect your liquidation to have?

Yes, [indiscernible] between $2 million and $3 million. And in terms of the impact or liquidation, on general market, I think it's going to be impacts of scores of Midwest, but I don't think it's going to have a large impact. I think they're volumes. They were a good account for us. We're disappointed to bonds going to Chapter 11 [ph] and eventually liquidate. It wasn't entirely unexpected, I think -- you will see that both, the volume you pick up in other accounts that are [indiscernible].

And just a couple of questions on the lifestyle relationship in India. Will Weyco Group's revenue be in the form of royalties or will you be receiving wholesale revenues for the product that's distributed across the 100 points of sale later this year?

It will be a licensing revenue.

And the relationship of yours or is it sort of through the Australian sub or do you have a non-controlling interest?

No, it's directly from the U.S. to India.

And are you able to say what your expectations for incremental revenue from that relationship is?

It's in the early stages, it's one of those things where we don't expect that it's going to really have a big impact in first couple of years. Hopefully it will over the longer term but it's something that we're working closely with Samara [ph] Lifestyle, and -- but they are going to start opening stores as you're pricing. But it's going to take -- it's going to be a slow build, we're going to do it with them slowly and kind of methodically which we found from past experiences that's what works best.

[Operator Instructions] I'm showing no further questions at this time.

Okay, we'd like to thank everybody for your participation. And look forward to talking with you next quarter. Have a great day.