WEYCO GROUP INC
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
WEYS$60.69-3.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001558370-24-011519
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001558370-24-015014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 54 previous paragraphs and 58 current paragraphs.
19 unchanged; 27 reworded; 12 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Third quarter 2024 net sales in our Wholesale segment were down 12% compared to last year’s third quarter. The decrease was a result of the challenging economic environment, in which consumers have limited discretionary funds, and footwear market sales are being impacted accordingly.
Current report
BOGS net sales were down 18% for the quarter. The outdoor category, particularly the weather boot market, has been under pressure for the better part of two years. During the pandemic, retailers and consumers alike loaded up on outdoor gear, resulting in record sales for many brands, including BOGS. Since then, the industry has been working through excess inventory, and we believe we have finally reached an equilibrium for the remainder of 2024. However, many retailers are taking a wait-and-see approach regarding orders, operating under the premise that if they need inventory, it will be available in the market. The result is that we have seen demand impacted by the mild and dry weather throughout the country, which has negatively affected our wholesale sales. The adverse effects of the weather extended to our BOGS e-commerce business, which was down 31% for the quarter.
Current report
While our success for the remainder of 2024 depends on Fall and Winter weather returning to normal, for the long-term, we are focused on reducing the weather sensitivity of the BOGS business. Towards that goal, we have increased our sales efforts in the Farm & Agriculture trade channel with the introduction of our Seamless Construction collection, which is 30% lighter and twice as durable as the vulcanized construction more commonly used in our category. The Farm & Agriculture trade channel is less weather-dependent and utilizes BOGS products year-round. We are making progress in this category, but it will take time to expand our penetration in retailers that cater to this market. We are also introducing Seamless Construction and lighter, less-insulated products to our Kids and Women’s lifestyle collections, which will help us make BOGS more of a three-season brand for this customer base. It has been a challenging stretch for the BOGS brand. We expect that having our retail partners with right-sized inventory will help move BOGS forward.
Current report
Our combined legacy business was down 10% for the quarter, with Florsheim up 1%, Stacy Adams down 17%, and Nunn Bush down 20%. As a category, dress footwear has been trending down for some time, except for a brief period emerging from the pandemic when
Current report
there was a burst of weddings and more dressy occasions. This downtrend resulted in retailers shifting funding away from dress footwear and toward other categories. Given this context, Florsheim’s performance over the last few years, including this quarter, is very solid. Florsheim continues to pick up market share in the refined footwear category and has made good progress in the hybrid and true casual segments of the market.
Current report
Our Stacy Adams brand had a difficult quarter. The brand remains the market leader in accessible fashion in the contemporary dress footwear segment and is performing well, especially with accounts that maintain dress-oriented footwear as an important part of their retail assortment. The challenge is evolving the product lineup so that Stacy Adams is in consideration for hybrid and more refined casual footwear. While it will take time, we are getting traction at retail with casual lifestyle product, particularly in the hybrid category.
Current report
Our Nunn Bush brand caters to a more value-oriented, price-sensitive consumer. We saw reduced demand in the third quarter, as these consumers cut back on discretionary purchases. In addition, a significant portion of Nunn Bush’s sales decrease in the third quarter was due a shift in timing of shipments to a large retailer from third to second quarter. Despite the volume drop, we feel good about the future trajectory of the Nunn Bush business. We have reinvented Nunn Bush as the most casual brand within our legacy portfolio. Nunn Bush is also well-positioned in the market with its strong value proposition and innovative comfort technology.
Current report
Retail sales were down 5% for the quarter. The decline in retail sales was driven primarily by the decrease in BOGS e-commerce sales. Overall, our direct-to-consumer business has been more price-sensitive and promotionally oriented.
Current report
Sales at Florsheim Australia were down 15%. The decrease in sales at Florsheim Australia was mainly the result of our closing operations in the Asia-Pacific region. Sales in Australia were down 1%, with same-store sales up 1%. We are finding the economic environment in Australia to be very similar to that of North America, with consumers under pressure and very conservative in their approach to discretionary purchases.
Current report
Third Quarter Highlights
Current report
Wholesale net sales for the three and nine months ended September 30, 2024, were down 12% in both periods, compared to the same periods one year ago. This year, all our wholesale brands have been impacted by soft consumer demand resulting from reductions in discretionary spending. Our BOGS brand was down 18% for the quarter and 31% for the year-to-date period, compared to the same periods of 2023. While outdoor retailer inventory levels have normalized which positively impacted BOGS third-quarter performance relative to the first half of 2024, BOGS at-once orders did not reach their expected potential during the third quarter due to unseasonably warm and dry weather throughout the country. BOGS fourth-quarter 2024 sales will largely depend on colder weather to bolster its growth.
Current report
costs, including commission-based compensation. As a percent of net sales, wholesale selling and administrative expenses were 25% and 22% in the third quarters of 2024 and 2023, respectively, and 26% and 25% in the first nine months of 2024 and 2023, respectively. The increases as a percent of net sales were because many of our costs are fixed in nature and do not vary with sales.
Removed paragraphs (8)
Previous report
Wholesale segment net sales were down 2% for the quarter. Despite the decrease, wholesale operating earnings improved because of higher gross margins. As we enter the second half of the year, many retailers remain conservative in their approach to future order bookings. However, we are encouraged by the strength of our at-once business, and believe we are well-positioned with the right inventory to leverage an uptick in consumer demand.
Previous report
Net sales attributable to our legacy businesses (comprised of our Stacy Adams, Nunn Bush, and Florsheim brands) increased slightly in the second quarter, with Florsheim and Nunn Bush up 3% and 8%, respectively, and Stacy Adams down 10%. The increase for Nunn Bush was partly due to a timing shift of shipments to a large retailer from third to second quarter. Our legacy brands face the challenge of maintaining a strong position in refined footwear while expanding their presence in the casual segment. The traditional dress and dress-casual footwear categories comprise a meaningful but shrinking market. While we remain committed to maximizing our leadership position in refined footwear, growth over the medium to long term is dependent on each brand’s ability to navigate the casual lifestyle aesthetic that accelerated during the pandemic. From a product perspective, we are focused on introducing more hybrid and athleisure styles that appeal to today’s consumer who places a premium on versatility and comfort. Our success in these categories is most evident on our websites: Nunn Bush and Florsheim now derive more than half of their direct-to-consumer sales volume from true casual and hybrid footwear. Stacy Adams, our most dress-oriented brand, has also started to make inroads selling hybrid footwear. As we move forward, we expect all three brands to benefit from a more balanced product offering.
Previous report
Our BOGS business experienced a 33% decline in net sales for the quarter. As noted in previous quarters, the outdoor weather boot market has been affected by an oversaturation of inventory and two relatively mild winters. Retailers have spent the last eighteen months working to normalize their inventory levels. We are now seeing early signs of renewed wholesale demand in the U.S., as retailers evaluate their upcoming inventory needs. We remain cautiously optimistic as we approach the key Fall selling season.
Previous report
A current focus for BOGS is to enhance the brand's presence in the work-footwear category which is more of a year-round business. We are introducing lighter insulated boots with seamless construction suitable for use from September through May. These seamless construction boots offer more than twice the durability of traditional vulcanized boots and should serve as a significant differentiator as we expand our footprint in the Farm and Agriculture channel.
Previous report
Retail sales, which are mainly generated by our websites, were flat for the quarter. We are encountering a more price-sensitive, competitive environment. Nunn Bush and Stacy Adams experienced slight declines for the quarter that offset low, single-digit increases in BOGS and Florsheim. We continue to invest in our online platform as we believe this is an area of future growth.
Previous report
Sales at Florsheim Australia were down 23% for the quarter. Approximately half of the decrease was attributable to the closing of our Asia Pacific business in late 2023. Australia’s results were also impacted by the loss of a sizeable wholesale customer, three fewer stores operating in the quarter compared to the same period last year, and a challenging environment at retail. Like their counterparts in the U.S., Australian consumers are facing inflationary pressures for basic everyday necessities and housing, leading to reduced spending on discretionary items, such as footwear and apparel. Additionally, we had three fewer stores in Australia in the second quarter of 2024 compared to the same period last year. We are focused on controlling our costs while working to turn around both our Australian retail and wholesale businesses.
Previous report
Second Quarter Highlights
Previous report
Wholesale net sales for the second quarter of 2024 were down 2% compared to last year’s second quarter, due to lower sales of the BOGS and Stacy Adams brands partially offset by higher sales of the Nunn Bush and Florsheim brands. For the six months ended June 30, 2024, wholesale net sales were down 12% compared to the first six months of 2023, with sales down across all our brands due to reduced consumer demand. Our BOGS brand experienced the largest decreases for the three and six-month periods, as outdoor retailers continue to be cautious with orders after a recent period of oversaturation of inventories in the outdoor boot market. We believe retailer inventory levels are starting to normalize and BOGS demand will improve as we enter the prime selling season for the brand in the second half of the year.
Reworded paragraphs (27)
Previous wording
We have two reportable segments, North American wholesale operations (“Wholesale”) and North American retail operations (“Retail”). In the Wholesale segment, our products are sold to leading footwear, department, and specialty stores, as well as e-commerce retailers, primarily in the United States and Canada. We also have licensing agreements with third parties who sell our branded apparel, accessories, and specialty footwear in the United States, as well as our footwear in Mexico and certain markets overseas. Licensing revenues are included in our Wholesale segment. Our Retail segment consists of e-commerce businesses and four brick-and-mortar retail stores in the United States. Retail sales are made directly to consumers on our websites, or by our employees in our stores. Our “other” operations include our wholesale and retail businesses in Australia, South Africa, and Asia Pacific (collectively, “Florsheim Australia”). We ceased operations in the Asia Pacific region in 2023, and are in the final stages of winding down that business. The majority of our operations are in the United States and our results are primarily affected by the economic conditions and the retail environment in the United States.
Current wording
We have two reportable segments, North American wholesale operations (“Wholesale”) and North American retail operations (“Retail”). In the Wholesale segment, our products are sold to leading footwear, department, and specialty stores, as well as e-commerce retailers, primarily in the United States and Canada. We also have licensing agreements with third parties who sell our branded apparel, accessories, and specialty footwear in the United States, as well as our footwear in Mexico and certain markets overseas. Licensing revenues are included in our Wholesale segment. Our Retail segment consists of e-commerce businesses and four brick-and-mortar retail stores in the United States. Retail sales are made directly to consumers on our websites, or by our employees in our stores. Our “other” operations include our wholesale and retail businesses in Australia, South Africa, and Asia Pacific (collectively, “Florsheim Australia”). We ceased operations in the Asia Pacific region in 2023 and have substantially completed the wind down of that business. The majority of our operations are in the United States and our results are primarily affected by the economic conditions and the retail environment in the United States.
Previous wording
Consolidated net sales were $63.9 million, down 5% compared to net sales of $67.0 million in the second quarter of 2023. Consolidated gross earnings increased to 43.9% of net sales compared to 43.3% of net sales in last year’s second quarter, due mainly to higher gross margins in our Wholesale segment. Earnings from operations totaled approximately $6.7 million in both the second quarters of 2024 and 2023. Second-quarter 2024 net earnings were a record $5.6 million, or $0.59 per diluted share, up 15% over our previous record of $4.9 million or $0.50 per diluted share, last year.
Current wording
Consolidated net sales were $74.3 million, down 12% compared to net sales of $84.2 million in the third quarter of 2023. Consolidated gross earnings increased to 44.3% of net sales compared to 43.0% of net sales in last year’s third quarter, due mainly to higher gross margins in our Wholesale segment. Earnings from operations totaled $10.2 million for the quarter, down 18% from $12.4 million last year. Third quarter net earnings were $8.1 million, or $0.84 per diluted share, in 2024, versus $9.3 million, or $0.98 per diluted share, in 2023.
Previous wording
Consolidated net sales for the first half of 2024 were $135.5 million, down 12% from $153.3 million in 2023. Consolidated gross earnings increased to 44.4% of net sales in the first six months of 2024 versus 43.2% of net sales in the same period one year ago. The increase was due to higher gross margins in our Wholesale segment. Year-to-date earnings from operations totaled $14.9 million, down 13% from record operating earnings of $17.1 million in 2023. Our net earnings were $12.3 million, or $1.28 per diluted share, in the first six months of 2024, level with last year’s net earnings in the same period.
Current wording
Consolidated net sales for the first nine months of 2024 were $209.8 million, down 12% from $237.5 million in 2023. Consolidated gross earnings increased to 44.3% of net sales in the first nine months of 2024 compared to 43.1% of net sales in the same period one year ago. The increase was primarily due to higher gross margins in our Wholesale segment. Year-to-date 2024 earnings from operations totaled $25.1 million, down 15% from record operating earnings of $29.5 million in 2023. To date in 2024, our net earnings totaled $20.3 million, or $2.12 per diluted share, down from record net earnings of $21.6 million, or $2.27 per diluted share, in the first nine months of 2023.
Previous wording
At June 30, 2024, our cash and marketable securities totaled $84.8 million and we had no debt outstanding on our $40.0 million revolving line of credit. During the first six months of 2024, we generated $17.7 million of cash from operations and used funds to pay $7.2 million in dividends. We also repurchased $0.5 million of our common stock and had $0.3 million of capital expenditures during the period.
Current wording
At September 30, 2024, our cash and marketable securities totaled $81.8 million and we had no debt outstanding on our $40.0 million revolving line of credit. During the first nine months of 2024, we generated $17.3 million of cash from operations and used funds to pay $9.6 million in dividends. We also repurchased $0.6 million of our common stock and had $0.9 million of capital expenditures during the period.
Previous wording
Net sales and earnings from operations for our segments for the three and six months ended June 30, 2024 and 2023, were as follows:
Current wording
Net sales and earnings from operations for our segments for the three and nine months ended September 30, 2024 and 2023, were as follows:
Previous wording
Net sales in our Wholesale segment for the three and six months ended June 30, 2024 and 2023, were as follows:
Current wording
Net sales in our Wholesale segment for the three and nine months ended September 30, 2024 and 2023, were as follows:
Previous wording
Wholesale gross earnings were 38.2% of net sales in the second quarter of 2024 compared to 37.0% of net sales in last year’s second quarter. For the six months ended June 30, wholesale gross earnings as a percent of net sales were 39.0% in 2024 and 37.7% in 2023. Gross margins improved for both the quarter and year-to-date periods as a result of lower inventory costs, primarily inbound freight. Freight costs stabilized beginning in the first half of 2022, but because of the large buildup of inventories in 2022, it was not until late 2023 that we sold through inventory with higher freight costs and were able to begin realizing the full benefit of the lower freight costs.
Current wording
Wholesale gross earnings were 40.1% of net sales in the third quarter of 2024 compared to 38.6% of net sales in last year’s third quarter. For the nine months ended September 30, wholesale gross earnings as a percent of net sales were 39.4% in 2024 and 38.0% in 2023. Gross margins improved for both the quarter and year-to-date periods as a result of lower inventory costs, primarily inbound freight. Freight costs stabilized beginning in the first half of 2022, but because of the large buildup of inventories in 2022, it was not until late 2023 that we sold through inventory with higher freight costs and were able to begin realizing the full benefit of the lower freight costs.
Previous wording
Wholesale selling and administrative expenses consist primarily of distribution costs, salaries and commissions, advertising costs, employee benefit costs, and depreciation. Wholesale selling and administrative expenses totaled $13.4 million for the quarter compared to $13.7 million in last year’s second quarter, which constituted 27% of net sales in both periods. For the six months ended June 30, wholesale selling and administrative expenses were $28.3 million, or 27% of net sales, in 2024, versus $31.6 million, or 26% of net sales, in 2023.
Current wording
Wholesale selling and administrative expenses consist primarily of distribution costs, salaries and commissions, advertising costs, employee benefit costs, and depreciation. Wholesale selling and administrative expenses totaled $15.1 million for the quarter compared to $15.6 million in last year’s third quarter. For the nine months ended September 30, wholesale selling and administrative expenses were $43.4 million in 2024 versus $47.1 million in 2023. The quarter and year-to-date decreases were largely due to lower employee
Previous wording
Wholesale operating earnings rose 8% to $5.8 million for the quarter, from $5.4 million in last year’s second quarter, primarily due to the impact of higher gross margins. For the six months ended June 30, 2024, wholesale operating earnings were $13.2 million, down 7% compared to $14.2 million in the same period of 2023. The year-to-date decrease was due to lower sales partially offset by the higher gross margins this year.
Current wording
Wholesale operating earnings totaled $9.4 million for the quarter, down 16% from $11.3 million in last year’s third quarter. For the nine months ended September 30, 2024, wholesale operating earnings were $22.6 million, down 11% from $25.4 million in the same period of 2023. The quarter and year-to-date decreases were a result of lower sales.
Previous wording
Our cost of sales does not include distribution costs (e.g., receiving, inspection, warehousing, shipping, and handling costs) which are included in selling and administrative expenses. Wholesale distribution costs were $3.3 million and $3.5 million in the second quarters of 2024 and 2023, respectively. For the six-month periods ended June 30, wholesale distribution costs were $6.9 million in 2024 and $7.7 million in 2023.
Current wording
Our cost of sales does not include distribution costs (e.g., receiving, inspection, warehousing, shipping, and handling costs) which are included in selling and administrative expenses. Wholesale distribution costs totaled $3.8 million in both the third quarters of 2024 and 2023. For the nine-month periods ended September 30, wholesale distribution costs were $10.8 million in 2024 and $11.5 million in 2023, down in line with lower distribution activities this year.
Previous wording
Net sales in our Retail segment, which were mainly generated by our e-commerce websites, were flat at $7.6 million in both the second quarters of 2024 and 2023. For the six months ended June 30, retail net sales were a record $17.4 million in 2024, up 5% over our previous record of $16.6 million in 2023. The year-to-date increase was driven mainly by higher sales on the BOGS and Florsheim websites. Brick-and-mortar sales were down slightly for the three and six-month periods.
Current wording
Net sales in our Retail segment, which were generated mainly by our e-commerce websites, were $7.2 million for the quarter, down 5% from $7.6 million in the third quarter of 2023. Lower sales on our BOGS website, a result of the mild Fall, were partially offset by higher sales on our Florsheim and Stacy Adams websites this quarter. For the nine months ended September 30, retail net sales were a record $24.6 million in 2024, up 2% over our previous record of $24.1 million in 2023. The year-to-date increase was driven by higher sales on the Florsheim website. Brick-and-mortar sales were down slightly for both the three and nine-month periods.
Previous wording
Retail gross earnings as a percent of net sales were 67.5% and 66.2% in the second quarters of 2024 and 2023, respectively. For the six months ended June 30, retail gross earnings were 66.2% of net sales in both 2024 and 2023.
Current wording
Retail gross earnings as a percent of net sales were 66.9% and 65.4% in the third quarters of 2024 and 2023, respectively. For the nine months ended September 30, retail gross earnings were 66.4% and 66.0% of net sales in 2024 and 2023, respectively.
Previous wording
Selling and administrative expenses for the Retail segment consist primarily of freight, advertising expense, employee costs, rent and occupancy costs. Retail selling and administrative expenses were $4.4 million, or 58% of net sales, for the quarter compared to $4.0 million, or 52% of net sales, in last year’s second quarter. For the six months ended June 30, Retail selling and administrative expenses totaled $9.5 million, or 55% of net sales, in 2024 versus $8.6 million, or 52% of net sales, in 2023. The quarter and year-to-date increases were primarily due to higher web advertising and freight costs. This year’s web advertising expenses increased largely due to the reallocation of certain expenditures historically charged to our Wholesale segment that primarily benefit our websites.
Current wording
Selling and administrative expenses for the Retail segment consist primarily of freight, advertising expense, employee costs, rent and occupancy costs. Retail selling and administrative expenses totaled $4.0 million in both the third quarters of 2024 and 2023. As a percent of net sales, retail selling and administrative expenses were 56% and 53% in the third quarters of 2024 and 2023, respectively. For the nine months ended September 30, Retail selling and administrative expenses totaled $13.6 million, or 55% of net sales, in 2024 versus $12.6 million, or 52% of net sales, in 2023. The year-to-date increase was primarily due to higher web freight and advertising costs in the first half of the year. This year’s web advertising expenses increased largely due to the reallocation of certain expenditures historically charged to our Wholesale segment that primarily benefit our websites.
Previous wording
Retail operating earnings were $0.7 million for the quarter, down 35% from $1.1 million in last year’s second quarter. For the six months ended June 30, 2024, Retail operating earnings totaled $2.0 million, down 15% compared to record operating earnings of $2.4 million last year. The three and six-month earnings decreases were due to the higher web expenses this year.
Current wording
Retail operating earnings were $0.8 million for the quarter and $0.9 million in last year’s third quarter. For the nine months ended September 30, 2024, Retail operating earnings totaled $2.8 million, down 15% from $3.3 million last year. The nine-month earnings decrease was due to the higher web expenses this year.
Previous wording
Operating results reported in the“other” category historically included our retail and wholesale businesses in Australia, South Africa, and Asia Pacific (collectively,“Florsheim Australia”). We ceased operations in the Asia Pacific region in 2023 and are in the final stages of winding down that business. As a result, the 2024 operating results of the“other” category primarily reflect that of Australia and South Africa.
Current wording
Operating results reported in the“other” category historically included our retail and wholesale businesses in Australia, South Africa, and Asia Pacific (collectively,“Florsheim Australia”). We ceased operations in the Asia Pacific region in 2023 and have substantially completed the wind down of that business. As a result, the year-to-date 2024 operating results of the“other” category primarily reflect that of Australia and South Africa.
Previous wording
Net sales of Florsheim Australia were $6.1 million in the second quarter of 2024, down 23% from $7.9 million in the second quarter of 2023. For the year-to-date period, Florsheim Australia’s net sales declined $3.8 million, or 25%, from the same period one year ago. The quarter and year-to-date decreases were largely due to the closing of our Asia Pacific operations. Sales in Australia were also down due to three fewer retail stores operating during the quarter and year-to-date periods, compared to the same periods of 2023, the mid-year 2023 loss of a sizeable wholesale customer, and a challenging environment at retail.
Current wording
Net sales of Florsheim Australia were $6.0 million in the third quarter of 2024, down 15% from $7.1 million in the third quarter of 2023. The quarterly decrease was almost entirely due to the closing of our Asia Pacific operations. Sales in Australia were down 1% for the quarter, due to the impact of four fewer retail stores operating compared to the same period last year. Australia’s same store sales were up 1% for the quarter. For the year-to-date period, Florsheim Australia’s net sales declined $4.9 million, or 22%, compared to the same period one year ago. The year-to-date decrease was largely due to the closing of our Asia Pacific operations. Sales in Australia were also down due to fewer retail stores operating, the mid-year 2023 loss of a sizeable wholesale customer, and a challenging environment at retail.
Previous wording
Florsheim Australia’s gross earnings were 62.0% of net sales for the quarter and 62.4% of net sales in last year’s second quarter. For the six months ended June 30, Florsheim Australia’s gross earnings as a percent of net sales were 61.2% and 61.5% in 2024 and 2023, respectively.
Current wording
Florsheim Australia’s gross earnings were 59.2% of net sales for the quarter and 61.6% of net sales in last year’s third quarter. For the nine months ended September 30, Florsheim Australia’s gross earnings as a percent of net sales were 60.5% and 61.5% in 2024 and 2023, respectively.
Previous wording
Florsheim Australia’s operating earnings for the three-month period were $0.2 million in 2024 and $0.3 million in 2023. For the six months ended June 30, 2024, its operating losses totaled $0.3 million, down from operating earnings of $0.6 million in the same period one year ago. The three and six-month decreases were mainly due to lower sales this year.
Current wording
Florsheim Australia’s operating earnings for the three-months ended September 30, were zero in 2024 and $0.3 million in 2023. For the nine months ended September 30, 2024, its operating losses totaled $0.3 million, down from operating earnings of $0.8 million in the same period one year ago. The nine-month earnings decrease was primarily due to lower sales this year.
Previous wording
Interest income totaled $1.0 million in the second quarter of 2024 compared to $0.2 million in last year’s second quarter. For the six months ended June 30, interest income was $1.9 million in 2024 and $0.3 million in 2023. The increases in 2024 were due to interest earned on higher cash balances in the U.S. and Canada this year. Interest expense decreased $0.1 million and $0.5 million during the three and six months ended June 30, 2024, compared to the same periods of 2023. Last year’s quarter and year-to-date interest expense was incurred on outstanding debt balances during those periods, which have since been paid off.
Current wording
Interest income totaled $0.9 million in the third quarter of 2024 compared to $0.3 million in last year’s third quarter. For the nine months ended September 30, interest income was $2.8 million in 2024 and $0.6 million in 2023. The increases in 2024 were due to interest earned on higher cash balances in the U.S. and Canada. Interest expense was zero for both the third quarters of 2024 and 2023. For the nine-months ended September 30, 2024, interest expense decreased $0.5 million from the same period in 2023. Last year’s interest expense was incurred on outstanding debt balances during the first half of 2023, which has since been paid off.
Previous wording
Other expense, net, totaled $0.1 million and $0.2 million in the second quarters of 2024 and 2023, respectively. For the six months ended June 30, other expense, net, totaled $0.2 million in 2024 and $0.3 million in 2023.
Current wording
Other expense, net, totaled $0.2 million and $0.1 million in the third quarters of 2024 and 2023, respectively. For the nine months ended September 30, other expense, net, totaled $0.4 million in both 2024 and 2023.
Previous wording
The effective income tax rates for the three months ended June 30, 2024 and 2023 were 25.1% and 26.2%, respectively. For the six months ended June 30, 2024 and 2023, the effective tax rate was 25.9% in both periods. The 2024 and 2023 effective tax rates differed from the federal rate of 21% primarily because of state taxes.
Current wording
The effective income tax rate for the three months ended September 30, 2024 and 2023 was 25.7% in both periods. For the nine months ended September 30, 2024 and 2023, the effective tax rate was 25.8% in both periods. The 2024 and 2023 effective tax rates differed from the federal rate of 21% primarily because of state taxes.
Previous wording
Our primary sources of liquidity are cash and our revolving line of credit. During the first six months of 2024, we generated $17.7 million of cash from operations compared $43.6 million in the same period one year ago. The decrease in 2024 was primarily due to changes in operating assets and liabilities, principally accounts receivable and inventory.
Current wording
Our primary sources of liquidity are cash and our revolving line of credit. During the first nine months of 2024, we generated $17.3 million of cash from operations compared $62.9 million in the same period one year ago. The decrease in 2024 was primarily due to changes in operating assets and liabilities, principally inventory.
Previous wording
We paid dividends totaling $7.2 million and $6.9 million in the first six months of 2024 and 2023, respectively. On August 6, 2024, our Board of Directors declared a cash dividend of $0.26 per share to all shareholders of record on August 19, 2024, payable September 30, 2024.
Current wording
We paid dividends totaling $9.6 million and $9.3 million in the first nine months of 2024 and 2023, respectively. On November 5, 2024, our Board of Directors declared a regular quarterly cash dividend of $0.26 per share to all shareholders of record on November 18, 2024, payable January 2, 2025. Additionally, on November 5, 2024, our Board of Directors also declared a special one-time cash dividend of $2.00 per share to all shareholders of record on November 18, 2024, payable January 2, 2025.
Previous wording
We repurchase our common stock under our share repurchase program when we believe market conditions are favorable. During the first six months of 2024, we repurchased 18,013 shares for a total cost of approximately $0.5 million. As of June 30, 2024, there were 850,744 authorized shares available for repurchase under the program. See Part II, Item 2,“Unregistered Sales of Equity Securities and Use of Proceeds” below for more information.
Current wording
We repurchase our common stock under our share repurchase program when we believe market conditions are favorable. During the first nine months of 2024, we repurchased 19,841 shares for a total cost of approximately $0.6 million. As of September 30, 2024, there were 848,916 authorized shares available for repurchase under the program. See Part II, Item 2,“Unregistered Sales of Equity Securities and Use of Proceeds” below for more information.
Previous wording
Capital expenditures totaled $0.3 million in the first six months of 2024. Management estimates that total capital expenditures for 2024 will be between $1.0 million and $3.0 million.
Current wording
Capital expenditures totaled $0.9 million in the first nine months of 2024. Management estimates that total capital expenditures for 2024 will be between $1.0 million and $2.0 million.
Previous wording
At June 30, 2024, we had a $40.0 million revolving line of credit with a bank that is secured by a lien against our general business assets, and expires on September 28, 2024. Outstanding advances on the line of credit bear interest at SOFR plus 125 basis points. Our line of credit agreement contains representations, warranties and covenants (including a minimum tangible net worth financial covenant) that are customary for a facility of this type. At June 30, 2024, there were no outstanding borrowings on the line of credit, and we were in compliance with all financial covenants.
Current wording
On September 27, 2024, we amended our line of credit agreement. The Amended Credit Agreement extends the maturity of our credit facility to September 26, 2025. Under the terms of the Amended Credit Agreement, there is a maximum available borrowing limit of $40.0 million, and amounts outstanding bear interest at the one-month term SOFR plus 125 basis points. The Amended Credit Agreement is secured by a lien against our general business assets, and contains representations, warranties and covenants (including a minimum tangible net worth financial covenant) that are customary for a facility of this type. At September 30, 2024, there were no outstanding borrowings on the line of credit, and we were in compliance with all financial covenants.
Previous wording
As of June 30, 2024, approximately $5.4 million of cash and cash equivalents was held by our foreign subsidiaries.
Current wording
As of September 30, 2024, approximately $4.6 million of cash and cash equivalents was held by our foreign subsidiaries.