UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

x~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the quarterly period ended September 30, ~~2017~~2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the transition period from ________________________ to _____________________________

Commission File Number:~~0-9068~~000-09068

WEYCO GROUP, INC.

(Exact name of registrant as specified in its charter)

WISCONSIN

~~WEYCO GROUP, INC.~~

39-0702200

~~(Exact name of registrant as specified in its charter)~~

~~WISCONSIN~~	~~39-0702200~~
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

333 W. Estabrook Boulevard

P. O. Box 1188

Milwaukee, Wisconsin 53201

(Address of principal executive offices)

(Zip Code)

(414) 908-1600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock - $1.00 par value per share		WEYS		The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yesx☒ No¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

~~Yes~~x No¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐

Accelerated Filer ☒

Non-Accelerated Filer ☐

Smaller Reporting Company ☒

Emerging Growth Company ☐

~~Large Accelerated Filer~~¨ ~~Accelerated Filer~~x ~~Non-Accelerated Filer~~¨ ~~Smaller Reporting Company~~¨ ~~Emerging Growth Company~~¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes¨☐ Nox☒

As of October ~~31, 2017,~~27, 2023, there were ~~10,192,905~~9,497,622 shares of common stock outstanding.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

The following consolidated condensed balance sheet as of December 31, 2022, which has been derived from audited financial statements, and the unaudited interim consolidated condensed financial statements have been prepared by Weyco Group, Inc. ~~(the~~(“we,” “our,” “us,” and the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although ~~the Company believes~~we believe that the disclosures made are adequate to make the information not misleading. ~~It is suggested that~~Please read these consolidated condensed financial statements ~~be read~~ in conjunction with the financial statements and notes thereto included in ~~the Company’s~~our latest ~~annual report~~Annual Report on Form 10-K.

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

September 30, December 31,
2017 2016
(Dollars in thousands)
ASSETS:
Cash and cash equivalents $ 6,704 $ 13,710
Marketable securities, at amortized cost 11,354 4,601
Accounts receivable, net 56,271 50,726
Income tax receivable 781 789
Inventories 57,692 69,898
Prepaid expenses and other current assets 3,010 6,203
Total current assets 135,812 145,927

Marketable securities, at amortized cost 18,273 21,061
Deferred income tax benefits 707 660
Property, plant and equipment, net 32,371 33,717
Goodwill 11,112 11,112
Trademarks 32,978 32,978
Other assets 22,984 22,785
Total assets $ 254,237 $ 268,240

LIABILITIES AND EQUITY:
Short-term borrowings $ 4,772 $ 4,268
Accounts payable 5,001 11,942
Dividend payable - 2,192
Accrued liabilities 12,207 10,572
Total current liabilities 21,980 28,974

Deferred income tax liabilities 3,096 703
Long-term pension liability 23,724 27,801
Other long-term liabilities 2,269 2,482

Common stock 10,197 10,505
Capital in excess of par value 53,258 50,184
Reinvested earnings 147,951 157,468
Accumulated other comprehensive loss (14,997 ) (16,569 )
Total Weyco Group, Inc. equity 196,409 201,588
Noncontrolling interest 6,759 6,692
Total equity 203,168 208,280
Total liabilities and equity $ 254,237 $ 268,240


	September 30,		December 31,
	2023		2022

	(Dollars in thousands)
ASSETS:
Cash and cash equivalents	$	33,397	$	16,876
Investments, at fair value		110		107
Marketable securities, at amortized cost		1,096		1,385
Accounts receivable, net		53,209		53,298
Income tax receivable		250		945
Inventories		79,567		127,976
Prepaid expenses and other current assets		3,060		5,870
Total current assets		170,689		206,457

Marketable securities, at amortized cost		6,412		7,123
Deferred income tax benefits		979		1,038
Property, plant and equipment, net		29,337		28,812
Operating lease right-of-use assets		11,546		13,428
Goodwill		12,317		12,317
Trademarks		33,618		33,618
Other assets		23,962		23,827
Total assets	$	288,860	$	326,620

LIABILITIES AND EQUITY:
Short-term borrowings	$	—	$	31,136
Accounts payable		4,831		14,946
Dividend payable		—		2,290
Operating lease liabilities		3,840		4,026
Accrued liabilities		11,389		15,137
Total current liabilities		20,060		67,535

Deferred income tax liabilities		8,485		8,530
Long-term pension liability		15,866		15,523
Operating lease liabilities		8,640		10,661
Other long-term liabilities		426		466
Total liabilities		53,477		102,715

Common stock		9,511		9,584
Capital in excess of par value		71,269		70,475
Reinvested earnings		175,338		164,039
Accumulated other comprehensive loss		(20,735)		(20,193)
Total equity		235,383		223,905
Total liabilities and equity	$	288,860	$	326,620

The accompanying notes to consolidated condensed financial statements (unaudited) are an integral part of these financial statements.

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(In thousands, except per share amounts)

Net sales $ 76,906 $ 79,069 $ 203,479 $ 214,836
Cost of sales 47,438 49,747 126,693 136,096
Gross earnings 29,468 29,322 76,786 78,740

Selling and administrative expenses 21,666 21,568 63,635 64,751
Earnings from operations 7,802 7,754 13,151 13,989

Interest income 193 190 572 584
Interest expense - (61 ) (7 ) (228 )
Other expense, net (53 ) (311 ) (243 ) (850 )

Earnings before provision for income taxes 7,942 7,572 13,473 13,495

Provision for income taxes 3,022 2,871 5,135 5,084

Net earnings 4,920 4,701 8,338 8,411

Net (losses) earnings attributable to noncontrolling interest (14 ) 101 (70 ) 124

Net earnings attributable to Weyco Group, Inc. $ 4,934 $ 4,600 $ 8,408 $ 8,287

Weighted average shares outstanding
Basic 10,160 10,461 10,299 10,556
Diluted 10,218 10,516 10,360 10,605

Earnings per share
Basic $ 0.49 $ 0.44 $ 0.82 $ 0.79
Diluted $ 0.48 $ 0.44 $ 0.81 $ 0.78

Cash dividends declared (per share) $ 0.22 $ 0.21 $ 0.65 $ 0.62

Comprehensive income $ 5,452 $ 5,218 $ 10,251 $ 10,400

Comprehensive income attributable to noncontrolling interest 25 235 271 376

Comprehensive income attributable to Weyco Group, Inc. $ 5,427 $ 4,983 $ 9,980 $ 10,024


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

	(In thousands, except per share amounts)

Net sales	$	84,150	$	96,971	$	237,458	$	252,690
Cost of sales		47,997		57,583		135,136		154,404
Gross earnings		36,153		39,388		102,322		98,286

Selling and administrative expenses		23,720		25,181		72,803		72,983
Earnings from operations		12,433		14,207		29,519		25,303

Interest income		269		86		598		266
Interest expense		(5)		(197)		(522)		(209)
Other (expense) income, net		(133)		141		(431)		316

Earnings before provision for income taxes		12,564		14,237		29,164		25,676

Provision for income taxes		3,227		3,467		7,518		6,358

Net earnings	$	9,337	$	10,770	$	21,646	$	19,318

Weighted average shares outstanding
Basic		9,451		9,535		9,458		9,560
Diluted		9,530		9,605		9,539		9,638

Earnings per share
Basic	$	0.99	$	1.13	$	2.29	$	2.02
Diluted	$	0.98	$	1.12	$	2.27	$	2.01

Cash dividends declared (per share)	$	0.25	$	0.24	$	0.74	$	0.72

Comprehensive income	$	8,656	$	9,248	$	21,104	$	17,406

The accompanying notes to consolidated condensed financial statements (unaudited) are an integral part of these financial statements.

WEYCO GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Nine Months Ended September 30,
2017 2016
(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 8,338 $ 8,411
Adjustments to reconcile net earnings to net cash provided by operating activities -
Depreciation 2,971 2,708
Amortization 265 288
Bad debt expense 350 96
Deferred income taxes 2,192 1,537
Net foreign currency transaction gains (61 ) (389 )
Stock-based compensation 1,174 1,121
Pension contributions (4,000 ) (2,400 )
Pension expense 746 2,500
Increase in cash surrender value of life insurance (250 ) (250 )
Changes in operating assets and liabilities -
Accounts receivable (5,703 ) (3,714 )
Inventories 12,195 26,641
Prepaid expenses and other assets 3,167 800
Accounts payable (6,838 ) (7,699 )
Accrued liabilities and other 1,879 (1,023 )
Accrued income taxes 22 (839 )
Excess tax benefits from stock-based compensation (30 ) -
Net cash provided by operating activities 16,417 27,788

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities (14,719 ) (3,605 )
Proceeds from maturities of marketable securities 10,710 4,190
Life insurance premiums paid (155 ) (155 )
Purchases of property, plant and equipment (1,406 ) (4,872 )
Net cash used for investing activities (5,570 ) (4,442 )

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (8,877 ) (8,678 )
Cash dividends paid to noncontrolling interest of subsidiary (204 ) (170 )
Shares purchased and retired (11,621 ) (9,368 )
Proceeds from stock options exercised 2,013 585
Taxes paid related to the net share settlement of equity awards (51 ) -
Payment of contingent consideration - (5,217 )
Proceeds from bank borrowings 20,651 91,729
Repayments of bank borrowings (20,147 ) (95,568 )
Excess tax benefits from stock-based compensation - 3
Net cash used for financing activities (18,236 ) (26,684 )

Effect of exchange rate changes on cash and cash equivalents 383 252

Net decrease in cash and cash equivalents $ (7,006 ) $ (3,086 )

CASH AND CASH EQUIVALENTS at beginning of period 13,710 17,926

CASH AND CASH EQUIVALENTS at end of period $ 6,704 $ 14,840

SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds $ 2,829 $ 4,083
Interest paid $ 7 $ 228


	Nine Months Ended September 30,
	2023		2022

	(Dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	21,646	$	19,318
Adjustments to reconcile net earnings to net cash provided by (used for) operating activities -
Depreciation		1,930		1,840
Amortization		204		213
Bad debt expense		107		135
Deferred income taxes		(82)		(215)
Net foreign currency transaction gains		(9)		(233)
Share-based compensation expense		996		1,157
Pension expense		970		53
Impairment of trademark		—		350
Net gain on remeasurement of contingent consideration		—		(407)
Increase in cash surrender value of life insurance		(315)		(450)
Changes in operating assets and liabilities -
Accounts receivable		(6)		(11,188)
Inventories		48,442		(41,134)
Prepaid expenses and other assets		2,775		1,319
Accounts payable		(10,164)		(10,116)
Accrued liabilities and other		(4,331)		(2,571)
Accrued income taxes		775		(139)
Net cash provided by (used for) operating activities		62,938		(42,068)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of marketable securities		1,015		1,495
Proceeds from sale of investment securities		—		8,050
Purchases of property, plant and equipment		(2,565)		(1,515)
Net cash (used for) provided by investing activities		(1,550)		8,030

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid		(9,285)		(6,878)
Shares purchased and retired		(3,439)		(3,264)
Net proceeds from stock options exercised		33		276
Payment of contingent consideration		(500)		—
Taxes paid related to the net share settlement of equity awards		(173)		(12)
Proceeds from bank borrowings		70,060		71,833
Repayments of bank borrowings		(101,196)		(37,168)
Net cash (used for) provided by financing activities		(44,500)		24,787

Effect of exchange rate changes on cash and cash equivalents		(367)		(612)

Net increase (decrease) in cash and cash equivalents	$	16,521	$	(9,863)

CASH AND CASH EQUIVALENTS at beginning of period		16,876		19,711

CASH AND CASH EQUIVALENTS at end of period	$	33,397	$	9,848

SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid, net of refunds	$	6,462	$	6,729
Interest paid	$	971	$	209

The accompanying notes to consolidated condensed financial statements (unaudited) are an integral part of these financial statements.

NOTES:

~~Financial Statements~~

1.Financial Statements

In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments necessary to present fairly ~~the Company’s~~our financial position, results of operations and cash flows for the periods presented. All such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended September 30, ~~2017,~~2023, may not necessarily be indicative of the results for the full year.

Use of Estimates

~~New Accounting Pronouncements~~

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and during the reporting period. Actual results specifically related to inventory reserves, realizability of deferred tax assets, goodwill, trademarks, and sales allowances could materially differ from those estimates, which would impact the reported amounts and disclosures in the consolidated financial statements and accompanying notes.

2.New Accounting Pronouncement

Recently Adopted

In ~~March 2017,~~June 2016, the ~~Financial Accounting Standards Board (“FASB”)~~FASB issued Accounting Standards Update (“ASU”) ~~No. 2017-07~~2016-13, ~~“Improving~~Financial Instruments – Credit Losses: Measurements of Credit Losses on Financial Instruments. This ASU modifies the ~~Presentation~~measurement of ~~Net Periodic Pension Cost~~expected credit losses of certain financial instruments, based on historical experience, current conditions, and ~~Net Periodic Post Retirement Benefit Cost”(“ASU 2017-07”). This new standard requires that employers disaggregate the service~~reasonable forecasts, and applies to financial assets measured at amortized cost, ~~component from the other components of~~including loans, held-to-maturity debt securities, net ~~periodic pension cost~~investments in the income statement. The service cost component should be included in the same line item as other compensation costs rendered by employees, while the other cost components should be presented outside of earnings from operations. The Company adopted ASU 2017-07 effective January 1, 2017leases, and retrospectively applied it to all periods presented. Accordingly, the service cost component of net periodic pension cost was included within selling and administrative expenses while the other cost components were classified in other expense, net, in the Consolidated Condensed Statements of Earnings and Comprehensive Income (Unaudited). See Note 8.

~~In March 2016, the FASB issued ASU No. 2016-09, "~~~~Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting”~~ (“ASU 2016-09”). This new standard simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements,trade accounts receivable as well as ~~specifies~~certain off-balance sheet credit exposures, such as loan commitments. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to reinvested earnings in the ~~classification~~period of ~~certain cash flows associated with share-based payment transactions within the statements~~adoption. We adopted this standard in first quarter of ~~cash flows. The Company adopted ASU 2016-09 effective January 1, 2017.~~2023. The adoption of this standard ~~resulted in the following:~~

The prospective recognition of excess tax benefits or deficiencies within the provision for income taxes in the income statement. Prior to the adoption of the new standard, these amounts would have been recorded within capital in excess of par value on the balance sheet. This change may create volatility in the Company’s future effective tax rate.

Accounting rules require the use of the treasury stock method when calculating potential common shares used to determine diluted earnings per share. The new standard requires that the calculation of diluted earnings per share under the treasury stock method exclude the amount of excess tax benefits that would have been recognized within capital in excess of par value on the balance sheet. This change was adopted prospectively and had an immaterial impact on the Company’s weighted average diluted shares outstanding for the quarter and year-to-date periods.

The new standard requires that excess tax benefits from share-based payment awards be reported as operating activities in the cash flow statement. Previously, these cash flows were included in financing activities. This change was adopted prospectively, and had an immaterial impact on the Consolidated Condensed Statements of Cash Flows (Unaudited) for the year-to-date period.

~~The new standard requires that cash flows related to employee taxes paid for withheld shares be presented as a financing activity in the cash flow statement. Previously, accounting rules~~ did not specify where such cash flows should be reported. This change was retrospectively applied to all periods presented, and had an immaterial impact on the Consolidated Condensed Statements of Cash Flows (Unaudited) for the year-to-date period.

The Company elected not to change its policy on accounting for forfeitures, and will continue to estimate forfeitures expected to occur to determine the amount of stock-based compensation expense recognized in each period. Finally, the Company will continue to allow its employees to withhold up to the minimum statutory withholding requirements, as allowed under the new standard.

~~ASU No. 2014-09, "~~~~Revenue from Contracts with Customers~~," outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry specific guidance. Additional ASUs have also been issued as part of the overall new revenue guidance. The new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The standard allows the Company to transition to the new model using either a full or modified retrospective approach. This guidance will be effective for the Company’s interim and annual periods beginning January 1, 2018.

The Company plans to complete an assessment of its revenue streams during the fourth quarter of 2017. Based on its assessment to date, the Company does not expect that the adoption of this new standard will have a material impact on ~~its~~our consolidated financial statements. The Company is continuing its assessment, which may identify other impacts. The Company currently plans to adopt the new standard in the first quarter of 2018. The Company is currently planning to adopt this standard using the modified retrospective approach.statements or related disclosures.

~~In February 2016, the FASB issued ASU No. 2016-02 “~~~~Leases.~~” This new standard requires lessees to recognize the rights and obligations created by finance and operating leases with terms exceeding 12 months as assets and liabilities on their balance sheets. The amendments in this update are effective for fiscal years beginning after December 15, 2018 and interim periods therein. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.

~~Reclassifications~~

~~Certain prior year amounts in the Consolidated Condensed Statements of~~ 3.Earnings and Comprehensive Income (Unaudited) were reclassified to conform to current year presentation. For the three and nine months ended September 30, 2016, the Company reclassified $424,000 and $1,272,000, respectively, of expense from selling and administrative expenses to other expense, net. These amounts represent the non-service cost components of net periodic pension cost for the periods then ended, and were reclassified in connection with the adoption of ASU 2017-07. These reclassifications had no effect on previously reported net earnings or equity.

~~Earnings Per Share~~

Per Share

The following table sets forth the computation of basic and diluted earnings per share:


									Three Months Ended September 30,				Nine Months Ended September 30,
									2023		2022		2023		2022
	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(In thousands, except per share amounts)
									(In thousands, except per share amounts)
Numerator:
Net earnings attributable to Weyco Group, Inc.	$	4,934	$	4,600	$	8,408	$	8,287

Net earnings									$	9,337	$	10,770	$	21,646	$	19,318

Denominator:
Basic weighted average shares outstanding		10,160		10,461		10,299		10,556		9,451		9,535		9,458		9,560
Effect of dilutive securities:
Employee stock-based awards		58		55		61		49
Employee share-based awards										79		70		81		78
Diluted weighted average shares outstanding		10,218		10,516		10,360		10,605		9,530		9,605		9,539		9,638


Basic earnings per share	$	0.49	$	0.44	$	0.82	$	0.79	$	0.99	$	1.13	$	2.29	$	2.02


Diluted earnings per share	$	0.48	$	0.44	$	0.81	$	0.78	$	0.98	$	1.12	$	2.27	$	2.01

Diluted weighted average shares outstanding for the three months ended September 30, ~~2017, exclude~~2023, excluded anti-dilutive ~~stock-based awards~~stock options totaling ~~1,116,325~~606,000 shares of common stock at a weighted average exercise price of ~~$26.49.~~$28.13. Diluted weighted average shares outstanding for the nine months ended September 30, ~~2017, exclude~~2023, excluded anti-dilutive ~~stock-based awards~~stock options totaling ~~844,036~~692,000 shares of common stock at a weighted average exercise price of ~~$26.93.~~$28.56. Diluted weighted average shares outstanding for the three months ended September 30, ~~2016, exclude~~2022, excluded anti-dilutive ~~stock-based awards~~stock options totaling ~~1,232,000~~1,046,000 shares of common stock at a weighted average exercise price of ~~$26.14.~~$26.80. Diluted weighted average shares outstanding for the nine months ended September 30, ~~2016, exclude~~2022, excluded anti-dilutive ~~stock-based awards~~stock options totaling ~~924,161~~819,000 shares of common stock at a weighted average exercise price of ~~$26.78.~~$27.59.

~~Investments~~

4.Investments

Investments, at fair value

At both September 30, 2023 and December 31, 2022, we had $0.1 million of cash invested in highly liquid taxable bond funds. We classify these investments as trading securities and report them at fair value. There were no significant unrealized gains or losses on these investments in the three or nine months ended September 30, 2023 and 2022. The fair value measurements of these investments are based on quoted market prices in active markets, and thus represent a Level 1 valuation as defined by Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures.

Marketable securities, at amortized cost

We also invest in marketable securities. As noted in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022, all ~~of the Company’s~~our marketable securities are classified as held-to-maturity securities and reported at amortized cost pursuant to ~~Accounting Standards Codification (“ASC”)~~ASC 320,Investments – Debt and Equity Securities, as ~~the Company has~~we have the intent and ability to hold all investments to maturity.

Below is a summary of the amortized cost and estimated market values of ~~the Company’s~~our marketable securities as of September 30, ~~2017,~~2023, and December 31, ~~2016.~~2022.


									September 30, 2023				December 31, 2022
									Amortized		Market		Amortized		Market
									Cost		Value		Cost		Value
	September 30, 2017				December 31, 2016
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
	(Dollars in thousands)
Municipal bonds:
									(Dollars in thousands)
Marketable Securities:
Current	$	11,354	$	11,380	$	4,601	$	4,610	$	1,096	$	1,093	$	1,385	$	1,381
Due from one through five years		9,819		10,157		12,133		12,486		3,264		3,127		3,977		3,950
Due from six through ten years		5,789		6,050		7,705		7,804		3,148		3,069		2,347		2,455
Due from eleven through twenty years		2,665		2,763		1,223		1,222		—		—		799		773
Total	$	29,627	$	30,350	$	25,662	$	26,122	$	7,508	$	7,289	$	8,508	$	8,559

The unrealized gains and losses on marketable securities at September 30, ~~2017,~~2023, and at December 31, ~~2016,~~2022, were as follows:

September 30, 2017 December 31, 2016
Unrealized Unrealized Unrealized Unrealized
Gains Losses Gains Losses
(Dollars in thousands)
Municipal bonds $ 759 $ (36 ) $ 546 $ (86 )


	September 30, 2023				December 31, 2022
	Unrealized		Unrealized		Unrealized		Unrealized
	Gains		Losses		Gains		Losses

	(Dollars in thousands)
Marketable Securities	$	160	$	(379)	$	145	$	(94)

The estimated market values provided are ~~level~~Level 2 valuations as defined by ASC ~~820,~~~~Fair Value Measurements and Disclosures~~ ~~(“ASC 820”). The Company~~820. We reviewed ~~its~~our portfolio of investments as of September 30, ~~2017~~2023, and determined that no other-than-temporary market value impairment exists.

~~Intangible Assets~~

5.Intangible Assets

~~The Company’s~~

During the nine months ended September 30, 2023, there were no changes in the carrying value of our indefinite-lived intangible assets (goodwill and trademarks). Our amortizable intangible assets, ~~as recorded in the Consolidated Condensed Balance Sheets (Unaudited) consisted of the following:~~

September 30, 2017 December 31, 2016
Gross Gross
Carrying Accumulated Carrying Accumulated
Amount Impairment Net Amount Impairment Net
(Dollars in thousands) (Dollars in thousands)
Indefinite-lived intangible assets
Goodwill $ 11,112 $ - $ 11,112 $ 11,112 $ - $ 11,112
Trademarks 34,748 (1,770 ) 32,978 34,748 (1,770 ) 32,978
Total indefinite-lived intangible assets $ 45,860 $ (1,770 ) $ 44,090 $ 45,860 $ (1,770 ) $ 44,090

~~The Company’s amortizable intangible assets as recorded in the Consolidated Condensed Balance Sheets (Unaudited) consisted of the following:~~

September 30, 2017 December 31, 2016
Weighted Gross Gross
Average Carrying Accumulated Carrying Accumulated
Life (Years) Amount Amortization Net Amount Amortization Net
(Dollars in thousands) (Dollars in thousands)

Amortizable intangible assets
Customer relationships 15 $ 3,500 $ (1,536 ) $ 1,964 $ 3,500 $ (1,361 ) $ 2,139
Total amortizable intangible assets $ 3,500 $ (1,536 ) $ 1,964 $ 3,500 $ (1,361 ) $ 2,139

~~The amortizable intangible assets are~~which were included within other assets in the Consolidated Condensed Balance ~~Sheets. (Unaudited).~~Sheets (unaudited), consisted of the following:


			September 30, 2023						December 31, 2022
	Weighted		Gross						Gross
	Average		Carrying		Accumulated				Carrying		Accumulated
	Life (Years)		Amount		Amortization		Net		Amount		Amortization		Net

			(Dollars in thousands)						(Dollars in thousands)
Amortizable intangible assets
Customer relationships		15	$	3,500	$	(2,936)	$	564	$	3,500	$	(2,761)	$	739
Total amortizable intangible assets			$	3,500	$	(2,936)	$	564	$	3,500	$	(2,761)	$	739

Amortization expense related to the intangible assets was approximately $58,000 ~~for~~in both the third quarters of ~~2017~~2023 and ~~2016.~~2022. For both the ~~nine months~~nine-month periods ended September 30, 2023 and September 30, 2022, amortization expense related to the intangible assets was approximately ~~$175,000 and $182,000 in 2017 and 2016, respectively.~~$175,000.

6.Segment Information

~~Segment Information~~

~~The Company has~~We have two reportable segments: North American wholesale operations (“~~wholesale”~~Wholesale”) and North American retail operations (“~~retail”~~Retail”). ~~The chief operating decision maker, the Company’s~~Our Chief Executive Officer evaluates the performance of ~~the Company’s~~our segments based on earnings from operations. Therefore, interest income or expense, other income or expense, and income taxes are not allocated to the segments. The “other” category in the ~~tables~~table below includes ~~the Company’s~~our wholesale and retail operations in Australia, South Africa, and Asia Pacific, ~~and Europe,~~ which do not meet the criteria for separate reportable segment classification. Summarized segment data for the three and ~~nine months~~nine-month periods ended September 30, ~~2017~~2023 and ~~2016, was~~2022, were as follows:


Three Months Ended
September 30,	Wholesale		Retail		Other		Total		Wholesale		Retail		Other		Total
	(Dollars in thousands)
2017
									(Dollars in thousands)
2023
Product sales	$	60,200	$	4,291	$	11,887	$	76,378	$	68,927	$	7,584	$	7,094	$	83,605
Licensing revenues		528		-		-		528		545		—		—		545
Net sales	$	60,728	$	4,291	$	11,887	$	76,906	$	69,472	$	7,584	$	7,094	$	84,150
Earnings from operations	$	7,416	$	17	$	369	$	7,802	$	11,251	$	926	$	256	$	12,433

2016

2022
Product sales	$	61,645	$	4,702	$	12,197	$	78,544	$	81,183	$	7,129	$	8,205	$	96,517
Licensing revenues		525		-		-		525		454		—		—		454
Net sales	$	62,170	$	4,702	$	12,197	$	79,069	$	81,637	$	7,129	$	8,205	$	96,971
Earnings from operations	$	6,710	$	313	$	731	$	7,754	$	12,906	$	825	$	476	$	14,207


Nine Months Ended
September 30,	Wholesale		Retail		Other		Total		Wholesale		Retail		Other		Total
	(Dollars in thousands)
2017
									(Dollars in thousands)
2023
Product sales	$	154,049	$	13,979	$	33,631	$	201,659	$	189,118	$	24,141	$	22,484	$	235,743
Licensing revenues		1,820		-		-		1,820		1,715		—		—		1,715
Net sales	$	155,869	$	13,979	$	33,631	$	203,479	$	190,833	$	24,141	$	22,484	$	237,458
Earnings from operations	$	11,880	$	244	$	1,027	$	13,151	$	25,435	$	3,277	$	807	$	29,519

2016

2022
Product sales	$	164,145	$	14,508	$	34,452	$	213,105	$	206,435	$	22,409	$	22,562	$	251,406
Licensing revenues		1,731		-		-		1,731		1,284		—		—		1,284
Net sales	$	165,876	$	14,508	$	34,452	$	214,836	$	207,719	$	22,409	$	22,562	$	252,690
Earnings from operations	$	11,910	$	787	$	1,292	$	13,989	$	21,939	$	2,766	$	598	$	25,303

~~Employee Retirement Plans~~

7.Employee Retirement Plans

The components of ~~the Company’s net periodic~~our pension ~~cost~~expense were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Dollars in thousands)
Service cost $ 141 $ 409 $ 423 $ 1,228
Interest cost 552 612 1,655 1,837
Expected return on plan assets (576 ) (607 ) (1,727 ) (1,822 )
Net amortization and deferral 132 419 395 1,257
Net periodic pension cost $ 249 $ 833 $ 746 $ 2,500


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

	(Dollars in thousands)
Service cost	$	116	$	111	$	350	$	334
Interest cost		658		438		1,974		1,315
Expected return on plan assets		(575)		(751)		(1,726)		(2,253)
Net amortization and deferral		124		219		372		657
Pension expense	$	323	$	17	$	970	$	53

The components of ~~net periodic~~ pension ~~cost~~expense other than the service cost component ~~are~~were included in ~~"other expense, net"~~“other (expense) income, net” in the Consolidated Condensed Statements of Earnings and Comprehensive Income (Unaudited).

8.Leases

We lease retail shoe stores, as well as several office and distribution facilities worldwide. These leases have original lease periods expiring between 2023 and 2029. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The ~~Company made~~components of our operating lease costs were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

	(Dollars in thousands)
Operating lease costs	$	1,119	$	1,283	$	3,744	$	3,855
Variable lease costs ⁽¹⁾		40		—		91		10
Total lease costs	$	1,159	$	1,283	$	3,835	$	3,865

⁽¹⁾Variable lease costs primarily include percentage rentals based upon sales in excess of specified amounts.

Short-term lease costs, which were excluded from the above table, are not material to our financial statements.

The following is a ~~$4.0 million pension contribution~~schedule of maturities of operating lease liabilities as of September 30, 2023:


	Operating Leases
	(Dollars in thousands)
2023, excluding the nine months ended September 30, 2023	$	1,129
2024		4,054
2025		3,169
2026		2,736
2027		1,599
Thereafter		1,061
Total lease payments		13,748
Less imputed interest		(1,268)
Present value of lease liabilities	$	12,480

The operating lease liabilities are classified in the ~~second quarter~~consolidated condensed balance sheets (unaudited) as follows:


	September 30, 2023		December 31, 2022

	(Dollars in thousands)
Operating lease liabilities - current	$	3,840	$	4,026
Operating lease liabilities - non-current		8,640		10,661
Total	$	12,480	$	14,687

We determined the present value of ~~2017. No additional~~our lease liabilities using a weighted-average discount rate of 4.25%. As of September 30, 2023, our leases had a weighted-average remaining lease term of 3.8 years.

Supplemental cash ~~contributions are expected~~flow information related to our operating leases is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

	(Dollars in thousands)
Cash paid for amounts included in the measurement of lease liabilities	$	1,204	$	1,160	$	3,728	$	3,444
Right-of-use assets obtained in exchange for new lease liabilities (noncash)	$	99	$	3,710	$	1,571	$	5,870

9. Income Taxes

The effective income tax rates for the ~~remainder~~three months ended September 30, 2023 and 2022 were 25.7% and 24.4%, respectively. The effective income tax rates for the nine months ended September 30, 2023 and 2022 were 25.8% and 24.8%, respectively. The 2023 and 2022 effective tax rates differed from the federal rate of ~~2017.~~21% primarily because of state and foreign taxes.

~~Stock-Based Compensation Plans~~

10.Share-Based Compensation Plans

During the three and nine months ended September 30, ~~2017, the Company~~2023, we recognized ~~approximately $395,000~~$321,000 and ~~$1,174,000~~$996,000, respectively, of compensation expense associated with stock option and restricted stock awards granted in years ~~2013~~2018 through ~~2017.~~2023. During the three and nine months ended September 30, ~~2016, the Company~~2022, we recognized ~~approximately $393,000~~$339,000 and ~~$1,121,000,~~$1,157,000, respectively, of compensation expense associated with stock option and restricted stock awards granted in years ~~2012~~2017 through ~~2016.~~

2022.

The following table summarizes ~~the Company’s~~our stock option activity for the nine-month period ended September 30, ~~2017:~~2023:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Shares			Price		Term (Years)		Value*
Outstanding at December 31, 2016		1,486,257		$	26.13

													Weighted
											Weighted		Average
											Average		Remaining	Aggregate
											Exercise		Contractual	Intrinsic
										Shares	Price		Term (Years)	Value*
Outstanding at December 31, 2022										1,345,369	$	25.83
Granted		211,200		$	27.94					149,200	$	25.79
Exercised		(81,464	)	$	24.71					(404,564)	$	25.36
Forfeited or expired		(14,175	)	$	26.46					(31,890)	$	25.59
Outstanding at September 30, 2017		1,601,818		$	26.44		3.9	$	3,149,000
Exercisable at September 30, 2017		898,106		$	26.19		2.4	$	1,992,000
Outstanding at September 30, 2023										1,058,115	$	26.02	6.9	$	1,682,000
Exercisable at September 30, 2023										609,387	$	26.82	5.7	$	1,041,000

*The aggregate intrinsic value of outstanding and exercisable stock options is defined as the difference between the market value of ~~the Company's~~our common stock on September 29, ~~2017, the last trading day~~2023 of ~~the quarter, of $28.38~~$25.35 and the exercise price multiplied by the number of in-the-money outstanding and exercisable stock options.

The following table summarizes ~~the Company’s stock option exercise activity for the three and nine months ended September 30, 2017 and 2016:~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Dollars in thousands)
Total intrinsic value of stock options exercised $ 208 $ 14 $ 272 $ 87
Cash received from stock option exercises $ 1,575 $ 132 $ 2,013 $ 585
Income tax benefit from the exercise of stock options $ 81 $ 5 $ 106 $ 34

~~The following table summarizes the Company’s~~our restricted stock award activity for the nine-month period ended September 30, ~~2017:~~2023:

						Weighted
				Weighted		Average
	Shares of			Average		Remaining		Aggregate
	Restricted			Grant Date		Contractual		Intrinsic
	Stock			Fair Value		Term (Years)		Value*
Non-vested at December 31, 2016		58,500		$	26.09

													Weighted
											Weighted		Average
										Shares of	Average		Remaining	Aggregate
										Restricted	Grant Date		Contractual	Intrinsic
										Stock	Fair Value		Term (Years)	Value*
Non-vested at December 31, 2022										71,808	$	24.67
Issued		30,800			27.94					27,700		25.79
Vested		(18,600	)		26.05					(28,243)		25.65
Forfeited		-			-					(2,175)		25.13
Non-vested at September 30, 2017		70,700		$	26.90		2.9	$	2,006,000
Non-vested at September 30, 2023										69,090	$	25.54	2.9	$	1,751,000

*The aggregate intrinsic value of non-vested restricted stock was calculated using the market value of ~~the Company's~~our common stock on September 29, ~~2017, the last trading day~~2023 of ~~the quarter, of $28.38~~$25.35 multiplied by the number of non-vested restricted shares outstanding.

~~10.~~

~~Short-Term Borrowings~~

11.Short-Term Borrowings

On September 28, 2023, we amended our line of credit agreement. The amendment (“Amended Credit Agreement”) extended the maturity of our credit facility to September 28, 2024 and has a maximum available borrowing limit of $40.0 million. Under the terms of the Amended Credit Agreement, amounts outstanding bear interest at the one-month term secured overnight financing rate (“SOFR”) plus 125 basis points. The Amended Credit Agreement is secured by a security interest in our general business assets, and contains customary representations, warranties, and covenants (including a minimum tangible net worth financial covenant) for a facility of this type. At September 30, 2017, the Company had a $60 million unsecured revolving line of credit with a bank expiring November 3, 2017. The line of credit bears interest at the daily London Interbank Offered Rate (“LIBOR”) plus 0.75%. At September 30, 2017,2023, there were no outstanding borrowings ~~were approximately $4.8 million at an interest rate of 2.0%. The highest balance~~ on the line of credit, ~~during the quarter was approximately $4.8 million. Subsequent to September 30, 2017, the line of credit agreement was renewed on the same terms for another one-year period, expiring November 4, 2018.~~and we were in compliance with all financial covenants.

~~11.~~

~~Financial Instruments~~

12.Financial Instruments

At September 30, ~~2017, the Company had foreign exchange contracts outstanding to sell $8.0 million Canadian dollars at a price of approximately $6.0 million U.S. dollars. The Company’s majority-owned~~2023, our wholly-owned subsidiary, Florsheim Australia, had foreign exchange contracts outstanding to buy ~~$3.7~~$1.2 million U.S. dollars at a price of approximately ~~$4.7~~$1.7 million Australian dollars. ~~Florsheim Australia also had foreign exchange~~These contracts ~~outstanding to buy 200,000 Euros at a price of approximately $299,000 Australian dollars.~~all expire in 2023. Based on quarter-end exchange rates, there were no significant unrealized gains or losses on the outstanding contracts.

~~The Company determines~~We determine the fair value of foreign exchange contracts based on the difference between the foreign currency contract rates and the widely available foreign currency rates as of the measurement date. The fair value measurements are based on observable market transactions, and thus represent a ~~level~~Level 2 valuation as defined by ASC 820.

~~12.~~

~~Comprehensive Income~~

13.Comprehensive Income

Comprehensive income for the three and nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, was as follows:


									Three Months Ended September 30,				Nine Months Ended September 30,
									2023		2022		2023		2022
	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(Dollars in thousands)
									(Dollars in thousands)
Net earnings	$	4,920	$	4,701	$	8,338	$	8,411	$	9,337	$	10,770	$	21,646	$	19,318
Foreign currency translation adjustments		452		261		1,672		1,222		(773)		(1,684)		(817)		(2,398)
Pension liability, net of tax of $52, $163, $154 and $490, respectively		80		256		241		767
Pension liability adjustment, net of tax of $32, $57, $97, and $171, respectively										92		162		275		486
Total comprehensive income	$	5,452	$	5,218	$	10,251	$	10,400	$	8,656	$	9,248	$	21,104	$	17,406

The components of accumulated other comprehensive loss as recorded in the Consolidated Condensed Balance Sheets (Unaudited) were as follows:


							September 30,		December 31,
							2023		2022
	September 30,			December 31,
	2017			2016
	(Dollars in thousands)
							(Dollars in thousands)
Foreign currency translation adjustments	$	(4,158	)	$	(5,489	)	$	(9,413)	$	(8,596)
Pension liability, net of tax		(10,839	)		(11,080	)		(11,322)		(11,597)
Total accumulated other comprehensive loss	$	(14,997	)	$	(16,569	)	$	(20,735)	$	(20,193)

The following ~~presents a tabular disclosure about~~tables show changes in accumulated other comprehensive loss during the nine months ended September 30, ~~2017:~~2023 and 2022:

Foreign
Currency
Translation
Adjustments Defined
Benefit
Pension
Items Total
Beginning balance, December 31, 2016 $ (5,489 ) $ (11,080 ) $ (16,569 )
Other comprehensive income before reclassifications 1,331 - 1,331
Amounts reclassified from accumulated other comprehensive loss - 241 241
Net current period other comprehensive income 1,331 241 1,572
Ending balance, September 30, 2017 $ (4,158 ) $ (10,839 ) $ (14,997 )


	Foreign		Defined
	Currency		Benefit
	Translation		Pension
	Adjustments		Items		Total
Beginning balance, December 31, 2022	$	(8,596)	$	(11,597)	$	(20,193)
Other comprehensive loss before reclassifications		(817)		—		(817)
Amounts reclassified from accumulated other comprehensive loss		—		275		275
Net current period other comprehensive (loss) income		(817)		275		(542)
Ending balance, September 30, 2023	$	(9,413)	$	(11,322)	$	(20,735)


	Foreign		Defined
	Currency		Benefit
	Translation		Pension
	Adjustments		Items		Total
Beginning balance, December 31, 2021	$	(6,783)	$	(18,011)	$	(24,794)
Other comprehensive loss before reclassifications		(2,398)		—		(2,398)
Amounts reclassified from accumulated other comprehensive loss		—		486		486
Net current period other comprehensive (loss) income		(2,398)		486		(1,912)
Ending balance, September 30, 2022	$	(9,181)	$	(17,525)	$	(26,706)

The following ~~presents a tabular disclosure about~~table shows reclassification adjustments out of accumulated other comprehensive loss during the three and nine ~~months~~month periods ended September 30, ~~2017:~~2023 and 2022:

	Amounts reclassified from accumulated other comprehensive loss for the nine months ended September 30, 2017			Affected line item in the statement where net income is presented

					Amounts Reclassified from Accumulated Other Comprehensive Loss									Affected line item in the
					Three Months Ended September 30,				Nine Months Ended September 30,					statement where net income is
					2023		2022		2023		2022			presented
Amortization of defined benefit pension items
Prior service cost	$	(47)	⁽¹⁾	Other expense, net	$	5	$	2	$	15	$	5	⁽¹⁾	Other (expense) income, net
Actuarial losses		442	⁽¹⁾	Other expense, net		119		217		357		652	⁽¹⁾	Other (expense) income, net
Total before tax		395				124		219		372		657
Tax benefit		(154)				(32)		(57)		(97)		(171)
Net of tax	$	241			$	92	$	162	$	275	$	486

⁽¹⁾

These amounts were included in ~~the net periodic~~ pension ~~cost.~~expense. See Note 87 for additional details.

~~13.~~

~~Equity~~

14.Equity

~~A reconciliation of the Company’s~~The following table reconciles our equity for the nine months ended September 30, ~~2017, is as follows:~~2023:

Accumulated
Capital in Other
Common Excess of Reinvested Comprehensive Noncontrolling
Stock Par Value Earnings Loss Interest
(Dollars in thousands)

Balance, December 31, 2016 $ 10,505 $ 50,184 $ 157,468 $ (16,569 ) $ 6,692

Net earnings - - 8,408 - (70 )
Foreign currency translation adjustments - - - 1,331 341
Pension liability adjustment, net of tax - - - 241 -
Cash dividends declared - - (6,725 ) - -
Cash dividends paid to noncontrolling interest - - - - (204 )
Stock options exercised 82 1,931 - - -
Issuance of restricted stock 31 (31 ) - - -
Stock-based compensation expense - 1,174 - - -
Shares purchased and retired (421 ) - (11,200 ) - -

Balance, September 30, 2017 $ 10,197 $ 53,258 $ 147,951 $ (14,997 ) $ 6,759

~~14.~~

~~Subsequent Events~~

On October 31, 2017, the Company’s Board of Directors authorized the repurchase of an additional 1.0 million shares of common stock under its repurchase program, bringing the total available to purchase to approximately 1.1 million shares.


							Accumulated
			Capital in				Other
	Common		Excess of		Reinvested		Comprehensive
	Stock		Par Value		Earnings		Loss

	(Dollars in thousands)
Balance, December 31, 2022	$	9,584	$	70,475	$	164,039	$	(20,193)
Net earnings		—		—		7,445		—
Foreign currency translation adjustments		—		—		—		(306)
Pension liability adjustment, net of tax		—		—		—		99
Cash dividends declared		—		—		(2,289)		—
Stock options exercised, net of shares withheld for employee taxes and strike price		1		15		—		—
Share-based compensation expense		—		338		—		—
Shares purchased and retired		(62)		—		(1,478)		—
Balance, March 31, 2023	$	9,523	$	70,828	$	167,717	$	(20,400)
Net earnings		—		—		4,864		—
Foreign currency translation adjustments		—		—		—		262
Pension liability adjustment, net of tax		—		—		—		84
Cash dividends declared		—		—		(2,377)		—
Stock options exercised, net of shares withheld for employee taxes and strike price		29		(194)		—		—
Share-based compensation expense		—		337		—		—
Shares purchased and retired		(23)		—		(571)		—
Balance, June 30, 2023	$	9,529	$	70,971	$	169,633	$	(20,054)
Net earnings		—		—		9,337		—
Foreign currency translation adjustments		—		—		—		(773)
Pension liability adjustment, net of tax		—		—		—		92
Cash dividends declared		—		—		(2,377)		—
Stock options exercised, net of shares withheld for employee taxes and strike price		6		3		—		—
Issuance of restricted stock		28		(28)		—		—
Restricted stock forfeited		(2)		2		—		—
Share-based compensation expense		—		321		—		—
Shares purchased and retired		(50)		—		(1,255)		—
Balance, September 30, 2023	$	9,511	$	71,269	$	175,338	$	(20,735)

The following table reconciles our equity for the nine months ended September 30, 2022:


							Accumulated
			Capital in				Other
	Common		Excess of		Reinvested		Comprehensive
	Stock		Par Value		Earnings		Loss

	(Dollars in thousands)
Balance, December 31, 2021	$	9,709	$	68,718	$	147,762	$	(24,794)
Net earnings		—		—		4,053		—
Foreign currency translation adjustments		—		—		—		521
Pension liability adjustment, net of tax		—		—		—		154
Cash dividends declared		—		—		(2,316)		—
Stock options exercised, net of shares withheld for emloyee taxes and strike price		—		8		—		—
Share-based compensation expense		—		350		—		—
Shares purchased and retired		(75)		—		(1,722)		—
Balance, March 31, 2022	$	9,634	$	69,076	$	147,777	$	(24,119)
Net earnings		—		—		4,495		—
Foreign currency translation adjustments		—		—		—		(1,235)
Pension liability adjustment, net of tax		—		—		—		170
Cash dividends declared		—		—		(2,307)		—
Stock options exercised, net of shares withheld for emloyee taxes and strike price		15		193		—		—
Share-based compensation expense		—		468		—		—
Shares purchased and retired		(29)		—		(701)		—
Balance, June 30, 2022	$	9,620	$	69,737	$	149,264	$	(25,184)
Net earnings		—		—		10,770		—
Foreign currency translation adjustments		—		—		—		(1,684)
Pension liability adjustment, net of tax		—		—		—		162
Cash dividends declared		—		—		(2,310)		—
Stock options exercised, net of shares withheld for emloyee taxes and strike price		3		45		—		—
Issuance of restricted stock		28		(28)		—		—
Share-based compensation expense		—		339		—		—
Shares purchased and retired		(30)		—		(707)		—
Balance, September 30, 2022	$	9,621	$	70,093	$	157,017	$	(26,706)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements ~~with respect to~~within the ~~Company’s outlook for~~meaning of the ~~future.~~“safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements represent ~~the Company's reasonable~~our good faith judgment with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially. Such statements can be identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” ~~“is likely,~~“likely,” “plans,” “predicts,” “projects,” “should,” “will,” or variations of such words, and similar expressions. Forward-looking statements, by their nature, address matters that are, to varying degrees, uncertain. Therefore, the reader is cautioned that these forward-looking statements are subject to a number of risks, uncertainties or other factors that may cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, the risk factors described under Item 1A, “Risk Factors,” of ~~the Company’s~~ our Annual Report on Form 10-K for the year-ended December 31, ~~2016.~~2022, filed on March 13, 2023, which information is incorporated herein by reference. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

GENERAL

The Company designs and markets quality and innovative footwear principally for men, but also for women and children, under a portfolio of well-recognized brand names including: ~~“Florsheim,” “Nunn~~Florsheim, Nunn Bush,~~” “Stacy~~ Stacy Adams,~~” “BOGS,” “Rafters,”~~ BOGS, Rafters, and ~~“Umi.”~~Forsake. Inventory is purchased from third-party overseas manufacturers. ~~The majority~~Almost all of these foreign-sourced purchases are denominated in U.S. dollars.

~~The Company has~~We have two reportable segments, North American wholesale operations (“~~wholesale”~~Wholesale”) and North American retail operations (“~~retail”~~Retail”). In the ~~wholesale~~Wholesale segment, ~~the Company’s~~our products are sold to leading footwear, department, and specialty stores, as well as e-commerce retailers, primarily in the United States and Canada. ~~The Company~~We also ~~has~~have licensing agreements with third parties who sell ~~its~~our branded apparel, accessories, and specialty footwear in the United States, as well as ~~its~~our footwear in Mexico and certain markets overseas. Licensing revenues are included in ~~the Company’s wholesale~~our Wholesale segment. ~~The Company’s retail~~Our Retail segment ~~consisted~~consists of 10e-commerce businesses and four brick and mortar retail stores ~~and internet businesses~~ in the United ~~States as of September 30, 2017. Sales in retail outlets~~States. Retail sales are made directly to consumers on our websites, or by ~~Company employees.~~

~~The Company’s~~our employees in our stores. Our “other” operations include ~~the Company’s~~our wholesale and retail businesses in Australia, South Africa, and Asia Pacific (collectively, “Florsheim Australia”) ~~and Europe (“Florsheim Europe”)~~. The majority of ~~the Company’s~~our operations are in the United States and ~~its~~our results are primarily affected by the economic conditions and ~~the~~ retail environment in the United States.

EXECUTIVE OVERVIEW

Sales in our North American wholesale segment were down 15% for the quarter, compared to a record third quarter last year. Wholesale sales in 2022 reflected strong consumer demand, but also significant pipeline fill as many accounts were replenishing stock depleted due to pandemic-related supply chain delays. This quarter was our second most profitable third quarter in terms of wholesale operating earnings, second only to last year. This year, the retail environment is more challenging due to macro-economic pressures, and consumers are being cautious in terms of expenditures on footwear and apparel. With demand softening, retailers are being conservative with at-once and future orders at the wholesale level.

The change in retail dynamics is most apparent in the outdoor market. Given the spike in demand in 2021 and the first half of last year, retailers placed heavy orders with the expectation of strong consumer sell-throughs. Sales did not keep pace in the back half of last year, and the outdoor trade channel entered 2023 with an inventory glut. The situation has been exacerbated by unseasonably warm weather in early Fall. As a result, sales of the BOGS brand declined 42%, compared to record sales last year, with retailers placing fewer orders due to the current saturation of product in the market. While the majority of our BOGS’ inventory is in core product that remains valid from year to year, we are also taking steps to reduce inventory of slower moving styles. We anticipate that the inventory backlog in the outdoor footwear category will not normalize until the second half of 2024. While the market is challenging, we are optimistic about the brand’s long-term growth prospects given BOGS’ strong consumer loyalty. We continue to develop new BOGS product with a special focus on less insulated footwear with a longer selling season.

In our legacy business, Florsheim net sales were down 7%, compared to record sales for the brand in last year’s third quarter. Sales of Stacy Adams were down 1%, and sales of the Nunn Bush brand were up 11%, with the increase driven in part by incremental sales in the casual and hybrid categories, and sales of new programs to a few large retailers. All three brands maintained solid retail sell-throughs during the quarter despite a general slowdown in the more refined footwear category. We are encouraged by our progress in selling

hybrid footwear that is more casual in nature but can be worn across a variety of settings from office to social occasions. Consumers are gravitating towards this category of footwear, and we see this as an important growth area for our Legacy business. From a product development perspective, we are expanding our range of hybrid footwear while selectively adding to our true casual and refined footwear assortment.

Retail sales were up 6% for the quarter with the increase driven primarily by our e-commerce business. Footwear industry statistics indicate the e-commerce sales channel is down year-to-date, so it is encouraging that we continue to grow our e-commerce platform in a very competitive environment.

Sales at Florsheim Australia were down 14%, and in local currency, were down 10%. The Australian market is facing some of the same challenges as in the U.S. regarding softness in the footwear and apparel category. We also lost a sizeable wholesale account that impacted our wholesale shipments for the quarter. Going forward, we believe that we will make up some of this deficit in the Australian market through other accounts as well as the transfer of the Asia-Pacific wholesale business to the Florsheim Australia office.

Third Quarter Highlights

Consolidated net sales ~~for the~~were $84.2 million, down 13% compared to record third-quarter sales of $97.0 million in 2022. Consolidated gross earnings increased to 43.0% of net sales compared to 40.6% of net sales in last year’s third quarter, ~~of 2017 were $76.9 million, down 3% as compared~~due mainly to ~~last year’s third quarter net sales of $79.1 million.~~higher gross margins in our Wholesale segment. Earnings from operations were ~~$7.8~~$12.4 million, down 12% compared to record operating earnings of $14.2 million in ~~both 2017 and 2016. Consolidated~~2022. Quarterly net earnings ~~attributable~~totaled $9.3 million, or $0.98 per diluted share, compared to ~~Weyco Group, Inc. increased 7% to $4.9~~record net earnings of $10.8 million, ~~in 2017, up from $4.6 million~~or $1.12 per diluted share, last year. ~~Diluted earnings per share were $0.48 this quarter and $0.44 per share in the third quarter of 2016.~~

The majority of the decrease in consolidated net sales came from the Company’s wholesale segment. Wholesale net sales declined $1.4 million, due mainly to lower sales of the Stacy Adams, Nunn Bush, and BOGS brands, partially offset by higher sales of the Florsheim brand. Net sales of the Company’s retail segment and its other operations were also down.

Consolidated earnings from operations were relatively flat for the quarter. Earnings from operations in the Company’s wholesale segment were up, due to higher gross margins and lower wholesale selling and administrative expenses, but this increase was offset by lower earnings from operations in the Company’s retail segment and its other operations.

~~Other expense was down due to lower pension expense in 2017.~~

Year-to-Date Highlights

Consolidated net sales for the first nine months of ~~2017~~2023 were ~~$203.5~~$237.5 million, down ~~5% from last year’s year-to-date net~~6% compared to record sales of ~~$214.8 million. Earnings from operations were $13.2~~$252.7 million in ~~2017, a decrease~~the first nine months of ~~6% as compared to $14.0 million in 2016.~~2022. Consolidated ~~net~~gross earnings ~~attributable to Weyco Group, Inc.~~ were ~~$8.4 million this year, up 1% as compared to $8.3 million last year. Diluted earnings per share to date in 2017 were $0.81, versus $0.78 per share in the same period~~43.1% of ~~2016.~~

~~The majority of the decrease in consolidated~~ net sales came from the Company’s wholesale segment. Wholesale net sales were down $10.0 million, due primarily to lower sales of the Stacy Adams, Nunn Bush, and BOGS brands, partially offset by higher sales of the Florsheim brand. Net sales in the ~~Company’s retail segment and its other operations were also down.~~

~~Consolidated earnings from operations decreased $838,000 for the~~first nine months ~~ended September 30, 2017, compared to~~of 2023 versus 38.9% of net sales in the same period one year ago. The ~~decrease occurred mainly in the Company’s retail segment,~~increase was primarily due to ~~lower sales and higher retail selling and administrative expenses. Earnings from operations in the Company’s wholesale segment were flat, as lower sales were offset by~~ higher gross margins ~~and lower wholesale selling and administrative expenses this year. Earnings from operations~~in our Wholesale segment. Year-to-date consolidated operating earnings were a record $29.5 million in 2023, up 17% over our previous record of $25.3 million in 2022. Our net earnings reached a record $21.6 million, or $2.27 per diluted share, in the ~~Company’s other businesses were also down.~~first nine months of 2023, up 12% over our previous record of $19.3 million, or $2.01 per diluted share, in 2022.

~~Other expense was down due to lower pension expense in 2017.~~

Financial Position Highlights

At September 30, ~~2017,~~2023, our cash, short-term investments, and marketable securities totaled ~~$36.3~~$41.0 million and we had no debt outstanding ~~debt totaled $4.8 million. At December 31, 2016, cash and marketable securities totaled $39.4~~on our $40.0 million ~~and outstanding debt totaled $4.3 million.~~revolving line of credit. During the first nine months of ~~2017, the Company~~2023, we generated ~~$16.4~~$62.9 million of cash from ~~operations. The Company~~operations, due mainly to reductions in inventory levels. We paid ~~dividends of $9.1 million, spent $11.6~~off $31.1 million on ~~purchases~~our line of ~~Company~~credit, paid $9.3 million in dividends, repurchased $3.4 million of our common stock, and ~~purchased a net of $4.0 million in marketable securities. The Company also~~we had ~~$1.4~~$2.6 million of capital ~~expenditures.~~expenditures during the period.

SEGMENT ANALYSIS

Net sales and earnings from operations for ~~the Company’s~~our segments infor the three and nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, were as follows:


													Three Months Ended September 30,				%		Nine Months Ended September 30,				%
													2023		2022		Change		2023		2022		Change
	Three Months Ended September 30,				%		Nine Months Ended September 30,				%
	2017		2016		Change		2017		2016		Change
	(Dollars in thousands)
													(Dollars in thousands)
Net Sales
North American Wholesale	$	60,728	$	62,170		-2%	$	155,869	$	165,876		-6%	$	69,472	$	81,637	-15	%	$	190,833	$	207,719	-8	%
North American Retail		4,291		4,702		-9%		13,979		14,508		-4%		7,584		7,129	6	%		24,141		22,409	8	%
Other		11,887		12,197		-3%		33,631		34,452		-2%		7,094		8,205	-14	%		22,484		22,562	0	%
Total	$	76,906	$	79,069		-3%	$	203,479	$	214,836		-5%	$	84,150	$	96,971	-13	%	$	237,458	$	252,690	-6	%


Earnings from Operations
North American Wholesale	$	7,416	$	6,710		11%	$	11,880	$	11,910		0%	$	11,251	$	12,906	-13	%	$	25,435	$	21,939	16	%
North American Retail		17		313		-95%		244		787		-69%		926		825	12	%		3,277		2,766	18	%
Other		369		731		-50%		1,027		1,292		-21%		256		476	-46	%		807		598	35	%
Total	$	7,802	$	7,754		1%	$	13,151	$	13,989		-6%	$	12,433	$	14,207	-12	%	$	29,519	$	25,303	17	%

North American Wholesale Segment

Net Sales

Net sales in ~~the Company’s North American wholesale~~our Wholesale segment for the three and nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, were as follows:


	Three Months Ended September 30,				%		Nine Months Ended September 30,				%
	2023		2022		Change		2023		2022		Change

	(Dollars in thousands)
North American Wholesale Segment Net Sales
Stacy Adams	$	14,348	$	14,544	-1	%	$	43,750	$	47,131	-7	%
Nunn Bush		15,401		13,824	11	%		41,681		40,001	4	%
Florsheim		22,638		24,463	-7	%		69,303		70,505	-2	%
BOGS/Rafters		16,057		27,735	-42	%		33,298		47,607	-30	%
Forsake		483		617	-22	%		1,086		1,191	-9	%
Total North American Wholesale	$	68,927	$	81,183	-15	%	$	189,118	$	206,435	-8	%
Licensing		545		454	20	%		1,715		1,284	34	%
Total North American Wholesale Segment	$	69,472	$	81,637	-15	%	$	190,833	$	207,719	-8	%

~~North American~~ Wholesale ~~Segment Net Sales~~

Three Months Ended September 30, % Nine Months Ended September 30, %
2017 2016 Change 2017 2016 Change
(Dollars in thousands)
North American Net Sales
Stacy Adams $ 14,486 $ 14,861 -3% $ 49,632 $ 52,092 -5%
Nunn Bush 12,200 13,362 -9% 37,027 42,909 -14%
Florsheim 15,518 14,262 9% 39,611 38,513 3%
BOGS/Rafters 17,644 18,462 -4% 26,527 28,950 -8%
Umi 352 698 -50% 1,252 1,681 -26%
Total North American Wholesale $ 60,200 $ 61,645 -2% $ 154,049 $ 164,145 -6%
Licensing 528 525 1% 1,820 1,731 5%
Total North American Wholesale Segment $ 60,728 $ 62,170 -2% $ 155,869 $ 165,876 -6%

~~Stacy Adams and Nunn Bush~~ sales for the quarter and year-to-date periods were down ~~mainly with department stores. The increases~~across most of our major brands (Stacy Adams, Florsheim, and BOGS/Rafters) due to reduced demand in ~~Florsheim~~2023 following record growth in 2022. Last year’s sales were ~~primarily~~up significantly due to post-pandemic retailer pipeline fill and strong consumer demand. So far in 2023, most of our brands experienced decreases in pairs sold, as the footwear industry returned to its normal cycle, and as many retailers in the U.S. and Canada continue to pare back higher levels of inventory. BOGS has been particularly impacted by this slowdown due to the current saturation of product in the outdoor footwear market, and due to the mild start to Fall. Nunn Bush sales rose 11% and 4% for the quarter and year-to-date periods, respectively, due mainly to ~~department stores and national shoe chains. BOGS sales were down as~~new programs with a ~~result of lower sales with outdoor retailers.~~

few large retailers that performed well in the third quarter.

Licensing revenues consist of royalties earned on the sales of branded apparel, accessories, and specialty footwear in the United States and on branded footwear in Mexico and certain overseas markets.

Earnings from Operations

Wholesale gross earnings were ~~33.9%~~38.6% of net sales in the third quarter of ~~2017,~~2023 compared to ~~32.2%~~36.3% of net sales in last ~~year’s third quarter. For the first nine months of the year, wholesale~~year. Quarterly gross ~~earnings rose to 32.1% of net sales in 2017, from 31.2% of net sales in 2016. Gross~~ margins improved as a result of lower inventory costs compared to last year, primarily related to inbound freight costs. For the nine months ended September 30, wholesale gross earnings were 38.0% of net sales in 2023 and 33.5% of net sales in 2022. The increase in gross margins for the year-to-date period was due to higher selling prices and lower inbound freight costs. In the first half of last year, gross margins were negatively impacted by inflated inbound freight costs as a ~~reduction in sales~~result of ~~closeout inventory,~~the global supply chain issues at that time, which ~~is sold at lower margins.~~have since eased.

~~North American wholesale segment~~Wholesale selling and administrative expenses include, and are primarily related to, distribution costs, salaries and commissions, advertising costs, employee benefit costs and depreciation. Wholesale selling and administrative expenses were ~~$13.2~~$15.6 million ~~or 22%~~for the quarter compared to $16.7 million last year. The decrease was primarily due to lower employee costs, mainly commission-based compensation. As a percent of net sales, ~~in the third quarter of 2017,~~wholesale selling and ~~$13.3 million, or~~administrative expenses were 22% and 21% of net sales in the third ~~quarter~~quarters of ~~2016.~~2023 and 2022, respectively. For the nine months ended September 30, wholesale selling and administrative expenses were ~~$38.2~~$47.1 million, or 25% of net sales, in ~~2017, as compared to $39.8~~2023 versus $47.7 million, or ~~24%~~23% of net sales, in ~~2016.~~2022.

~~Earnings~~Wholesale operating earnings totaled $11.3 million for the quarter, down 13% from ~~operations in the North American wholesale segment were $7.4~~$12.9 million in ~~the~~last year’s third quarter, ~~of 2017, up 11% as compared~~due primarily to ~~$6.7 million in the third quarter of 2016.~~lower sales. For the nine months ended September 30, ~~2017 and 2016,~~ wholesale operating earnings ~~from operations remained flat at $11.9~~reached a record $25.4 million in ~~both periods. Despite the decrease~~2023, up 16% over our previous record of $21.9 million in ~~sales, wholesale~~2022. The year-to-date earnings ~~from operations were up for the quarter, and flat for the first nine months of the year,~~increase was primarily due to higher gross ~~margins and lower wholesale selling and administrative expenses.~~margins.

~~The Company’s~~Our cost of sales does not include distribution costs (e.g., receiving, inspection, or warehousing, shipping, and handling costs)~~. Distribution~~ which are included in selling and administrative expenses. Wholesale distribution costs were ~~$2.6~~$3.8 million ~~for~~in the third quarter of ~~2017 versus $2.8~~2023 and $4.1 million ~~for~~in the same period of ~~2016.~~2022. For the nine-month periods ended September 30, ~~2017 and 2016,~~wholesale distribution costs were ~~$7.9~~$11.5 million in 2023 and ~~$8.8~~$11.3 million ~~respectively. This year, distribution costs~~in 2022.

North American Retail Segment

Net Sales

Net sales in our retail segment were ~~down~~a third-quarter record of $7.6 million in 2023, up 6% compared to our previous record of $7.1 million last year. The quarterly increase was due to ~~lower employee~~higher sales across all our domestic e-commerce websites, with the largest increases at BOGS and ~~warehousing costs. The Company’s consolidated wholesale shipping and handling expenses were $353,000 and $408,000 for the three months ended September 30, 2017 and 2016, respectively.~~Florsheim. For the nine months ended September 30, ~~2017, consolidated wholesale shipping and handling expenses were $959,000 and $1.1~~retail net sales reached a record $24.1 million in ~~2016. These costs were included~~2023, up 8% over our previous record of $22.4 million in ~~selling and administrative expenses.~~2022. The ~~Company’s gross earnings may not be comparable to other companies, as some companies may include distribution costs and shipping and handling expenses in cost of sales.~~

~~North American Retail Segment~~

~~Net Sales~~

Net sales in the Company’s North American retail segment declined $411,000 and $529,000, for the three and nine months ended September 30, 2017, respectively, compared to the same periods last year. Same store sales, which include sales of both the U.S. internet business and brick and mortar same stores, were down 10% and 6% for the quarter and year-to-date ~~periods, respectively. Same store sales were down~~increase was due to ~~decreased~~higher sales volumes across all our e-commerce websites, with the largest increase at ~~both brick and mortar locations and on the Company’s websites. The majority of the Company’s brick and mortar locations are in Florida and Texas, and~~Florsheim. Brick-and-mortar sales for the ~~quarter and year~~first nine months of 2023 were ~~impacted by the recent hurricanes.~~relatively flat compared to last year.

Earnings from Operations

~~Gross earnings as a percent of net sales were 63.6% in the third quarter of 2017, compared to 65.5% in the third quarter of 2016. For the nine months ended September 30, retail~~Retail gross earnings as a percent of net sales were ~~64.4%~~65.4% and 66.3% in ~~2017~~the third quarters of 2023 and ~~65.1% in 2016.~~

~~Retail~~2022, respectively. For the nine months ended September 30, 2023, retail gross earnings ~~from operations declined $296,000 for the quarter,~~were 66.0% of net sales, compared to 66.5% of net sales in the ~~third quarter~~same period of 2016, due mainly to lower sales. For the year-to-date period, retail earnings from operations were down $543,000 in 2017, compared to the first nine months of 2016, due to lower sales and higher retail selling and administrative expenses. 2022.

Selling and administrative expenses for the retail segment ~~include,~~consist primarily of freight, advertising expense, employee costs, and ~~are primarily related to,~~ rent and occupancy ~~costs, employee costs, advertising expense and freight.~~costs. Retail selling and administrative expenses ~~as a percent~~were $4.0 million, or 53% of net sales, ~~were 63% and 59% for~~in the ~~three-month periods ended September 30, 2017 and 2016, respectively.~~third quarter of 2023 versus $3.9 million, or 55% of net sales, in the third quarter of 2022. For the nine months ended September 30, retail selling and administrative expenses ~~as a percent~~were $12.6 million, or 52% of net sales, ~~were 63%~~ in ~~2017~~2023 and ~~60% in 2016.~~

~~Other~~

~~The Company’s other~~$12.1 million, or 54% of net sales, ~~were $11.9 million~~ in 2022.

Retail operating earnings rose to $926,000 for the ~~third~~ quarter, ~~of 2017, down 3% as~~up 12% compared to ~~$12.2 million~~$825,000 in ~~2016.~~last year’s third quarter. For the nine months ended September 30, ~~2017, other net sales~~retail operating earnings were ~~$33.6 million, down 2% from $34.5~~$3.3 million in the same period last year. The decreases in both periods were due to lower sales at both Florsheim Australia and Florsheim Europe. Florsheim Australia’s net sales, which accounts for the majority of other net sales, were down 2% for both the quarter and first nine months of 2017, as compared to the same periods of 2016. In local currency, Florsheim Australia’s net sales were down 6% for the quarter and 5% for the year-to-date period, compared to the same periods last year, with sales down in both its retail and wholesale businesses.

Collectively, the earnings from operations of the Company’s other businesses were $369,000 in the third quarter of 2017 and $731,000 in the same period last year. For the nine months ended September 30, earnings from operations of the Company’s other businesses were $1.02023, up 18% over $2.8 million in ~~2017 and $1.3 million in 2016.~~2022. The ~~decreases~~increases for the quarter and year-to-date periods were primarily due to higher earnings from our e-commerce businesses, driven by higher web sales.

Other

Operating results reported in the “other” category consist entirely of the operating results at Florsheim Australia. Third quarter 2023 net sales of Florsheim Australia totaled $7.1 million, down 14% compared to $8.2 million in the third quarter of 2022. In local currency, its net sales were down 10%, primarily in its wholesale businesses. For the nine months ended September 30, 2023, other net sales were $22.5 million, down slightly compared to $22.6 million in the same period one year ago. In local currency, Florsheim Australia’s net sales were up 5% for the year-to-date period, due to higher sales in its retail businesses partially offset by lower sales in its wholesale businesses. The weakening of the Australian dollar relative to the U.S. dollar led to the lower sales growth in U.S. dollars this year.

Florsheim Australia’s gross earnings were 61.6% of net sales for the quarter compared to 61.4% of net sales in last year’s third quarter. For the nine months ended September 30, its gross earnings as a percent of net sales were 61.5% and 60.9% in 2023 and 2022, respectively.

Other operating earnings totaled $256,000 for the quarter versus $476,000 last year. The decrease was primarily due to lower earnings in ~~Florsheim Australia’s~~Australia’s wholesale businesses, as a result of lower sales. For the nine-months ended September 30, 2023, other operating earnings totaled $807,000, compared to $598,000 in the same period last year. The year-to-date earnings increase was largely due to improved results of the retail businesses ~~mainly due to the decrease~~ in ~~retail sales.~~Australia.

Other income and expense

Interest income was ~~$193,000~~$269,000 and ~~$190,000 in~~$86,000 for the ~~third quarters of 2017~~three months ended September 30, 2023 and ~~2016,~~2022, respectively. For the nine months ended September 30, interest income was ~~$572,000~~$598,000 in ~~2017~~2023 and ~~$584,000~~$266,000 in ~~2016.~~2022. The increases in 2023 were due to more interest earned on the higher cash balances this year. Interest expense decreased $192,000 in the three months ended September 30, 2023, compared to the same period of 2022, due to less interest incurred as we paid off our debt in the 2023 quarter. Interest expense for the ~~three and~~ nine months ended September 30, ~~2017, decreased $61,000 and $221,000, respectively, compared to~~2023 was up $313,000 over the same ~~periods in 2016,~~period of 2022, due to ~~lower~~interest incurred on the higher average debt balances earlier this ~~year~~year.

Other (expense) income, net, totaled ($133,000) for the quarter compared to $141,000 in last ~~year.~~

year’s third quarter. For the year-to-date period, other (expense) income, net, totaled ($431,000) in 2023 and $316,000 in 2022. The ~~Company adopted ASU 2017-07~~increases in expense for both the quarter and year-to-date periods was primarily due to an increase in the ~~first quarter of 2017 and retrospectively applied it to all periods presented. This required the Company to reclassify the~~ non-service ~~cost~~costs components of pension expense ~~from selling and administrative expenses to other expense, net,~~this year. See Note 7 in the Notes to Consolidated Condensed Financial Statements ~~of Earnings and Comprehensive Income~~ (Unaudited). for additional details.

The ~~decrease in other expense~~effective income tax rates for the ~~quarter~~three months ended September 30, 2023 and ~~first~~2022 were 25.7% and 24.4%, respectively. The effective income tax rates for the nine months ended September 30, 2023 and 2022 were 25.8% and 24.8%, respectively. The 2023 and 2022 effective tax rates differed from the federal rate of ~~2017 was mainly due to decreases~~21% primarily because of ~~$316,000~~state and ~~$949,000, respectively, in the non-service cost components of pension expense. Pension expense decreased in 2017 as a result of freezing benefits under the pension plan, effective December 31, 2016.~~foreign taxes.

LIQUIDITY AND CAPITAL RESOURCES

~~The Company’s~~Our primary sources of liquidity are ~~its~~ cash, short-term investments, short-term marketable securities, and ~~its~~our revolving line of credit. During the first nine months of ~~2017, the Company~~2023, we generated ~~$16.4~~$62.9 million of cash from ~~operating activities,~~operations compared to ~~$27.8~~a use of cash totaling $42.1 million in the same period ~~of 2016.~~one year ago. The ~~decrease between years~~increase in 2023 was primarily due to changes in operating assets and liabilities, principally inventory. Our inventory level was $79.6 million as of September 30, 2023 compared to $128.0 million at December 31, 2022. We believe our inventory is now at a normalized level, and we continue to review areas of slow-moving product.

~~The Company~~We paid ~~cash~~ dividends ~~of $9.1~~totaling $9.3 million and ~~$8.8~~$6.9 million ~~during~~in the first nine months ~~ended September 30, 2017~~of 2023 and ~~2016,~~2022, respectively. The increase in 2023 was due to a shift in timing of our quarterly dividend payment schedule; the first nine months of 2023 included four quarterly dividend payments, as our fourth quarter 2022 dividend was paid in early January 2023. Conversely, the first nine months of 2022 only included three dividend payments, as our fourth quarter 2021 dividend was paid in December 2021. On November 7, 2023, our Board of Directors declared a cash dividend of $0.25 per share to all shareholders of record on November 27, 2023, payable on January 2, 2024.

~~The Company continues to~~We repurchase ~~its~~our common stock under ~~its~~our share repurchase program when ~~the Company believes~~we believe market conditions are favorable. During the first nine ~~months~~ of ~~2017, the Company~~2023, we repurchased ~~420,711~~135,513 shares atfor a total cost of ~~$11.6~~$3.4 million. As of September 30, ~~2017,~~2023, we had the ~~Company had~~authority to repurchase approximately ~~144,000~~904,000 shares ~~available~~ under ~~its~~our previously announced stock repurchase program. On October 31, 2017, the Company’s Board of Directors authorized the repurchase of an additional 1.0 million shares of its common stock under its repurchase program, bringing the total available to purchase to approximately 1.1 million shares. See Part II, Item 2, ~~“Unregistered~~“Unregistered Sales of Equity Securities and Use of ~~Proceeds”~~Proceeds” below for more information.

Capital expenditures totaled ~~$1.4~~$2.6 million in the first nine months of ~~2017.~~2023. Management estimates that ~~annual~~total capital expenditures for ~~2016~~2023 will be between ~~$1.5~~$3.0 million and ~~$2.0~~$4.0 million.

On September 28, 2023, we amended our line of credit agreement. The amendment (“Amended Credit Agreement”) extended the maturity of our credit facility to September 28, 2024 and has a maximum available borrowing limit of $40.0 million. Under the terms of the Amended Credit Agreement, amounts outstanding bear interest at the one-month term secured overnight financing rate (“SOFR”) plus 125 basis points. The Amended Credit Agreement is secured by a security interest in our general business assets, and contains customary representations, warranties, and covenants (including a minimum tangible net worth financial covenant) for a facility of this type. At September 30, 2017, the Company had a $60 million unsecured revolving line of credit with a bank expiring November 3, 2017. The line of credit bears interest at LIBOR plus 0.75%. The Company borrowed a net of $0.5 million2023, there were no outstanding borrowings on the line of credit, ~~during the first nine months of 2017.~~and we were in compliance with all financial covenants. At ~~September 30, 2017,~~December 31, 2022, outstanding borrowings ~~were $4.8~~on the line of credit totaled $31.1 million at an interest rate of ~~2.0%~~5.77%. ~~The highest balance on the~~So far in 2023, our cash provided by operations exceeded cash outlays, which allowed us to repay outstanding borrowings under our line of ~~credit during the quarter was $4.8 million. Subsequent to~~credit.

As of September 30, ~~2017, the line of credit agreement was renewed on the same terms for another one-year period, expiring November 4, 2018.~~

~~At September 30, 2017,~~2023, approximately ~~$1.6~~$4.5 million of cash and cash equivalents was held by ~~the Company’s~~our foreign subsidiaries.

~~The Company~~We will continue to evaluate the best uses for ~~its~~our available liquidity, including, among other uses, capital expenditures, continued stock repurchases and ~~additional~~ acquisitions.

The Company believes that available cash, ~~and~~short-term investments, marketable securities, cash provided by operations, and available borrowing facilities will provide adequate support for the cash needs of the business for at least one year, although there can be no assurances.

~~COMMITMENTS~~

There were no material changes to the Company’s contractual obligations during the nine months ended September 30, 2017, from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

~~There have been no material changes from those reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.~~

Item 4. Controls and Procedures.

~~The Company maintains~~We maintain disclosure controls and procedures designed to ensure that the information ~~the Company~~we must disclose in ~~its~~our filings with the Securities and Exchange Commission is recorded, processed, summarized and reported on a timely basis. ~~The Company’s~~Our Chief Executive Officer and Chief Financial Officer have reviewed and evaluated ~~the Company’s~~our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ~~“Exchange Act”~~“Exchange Act”), as of the end of the period covered by this report (the ~~“Evaluation Date”~~“Evaluation Date”). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, ~~the Company’s~~our disclosure controls and procedures are effective in bringing to their attention on a timely basis material information relating to the Company required to be included in ~~the Company’s~~our periodic filings under the Exchange Act. Such officers have also concluded that, as of the Evaluation Date, ~~the Company’s~~our disclosure controls and procedures are effective in accumulating and communicating information in a timely manner, allowing timely decisions regarding required disclosures.

There have been no significant changes in the ~~Company’s~~Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during ~~the Company’s~~our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the ~~Company’s~~Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

~~None~~

~~Item 1A. Risk Factors.~~

~~There have been no material changes~~From time to ~~the risk factors affecting the Company from those disclosed~~time, we are engaged in legal proceedings in the ~~Company’s Annual Report~~ordinary course of business. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on ~~Form 10-K for the year ended December 31, 2016.~~our business, financial condition, operating results or cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

In 1998, our stock repurchase program was established. On several occasions since the program’s inception, our Board of Directors has increased the number of shares authorized for repurchase under the program. In total, 8.5 million shares have been authorized for repurchase. The table below presents information ~~pursuant to Item 703(a)~~regarding our repurchases of ~~Regulation S-K regarding the purchase of the Company’s~~our common stock ~~by the Company~~ in the three-month period ended September 30, ~~2017.~~2023.

Total Number of Maximum Number
Total Average Shares Purchased as of Shares
Number Price Part of the Publicly that May Yet Be
of Shares Paid Announced Purchased Under
Period Purchased Per Share Program the Program⁽¹⁾

7/1/2017 - 7/31/2017 45,937 $ 27.89 45,937 270,823

8/1/2017 - 8/31/2017 89,816 $ 27.57 89,816 181,007

9/1/2017 - 9/30/2017 36,543 $ 27.94 36,543 144,464

Total 172,296 $ 27.73 172,296


					Maximum Number
	Total	Average		Total Number of	of Shares
	Number	Price		Shares Purchased as	that May Yet Be
	of Shares	Paid		Part of the Publicly	Purchased Under
Period	Purchased	Per Share		Announced Program	the Program
07/01/2023 - 07/31/2023	7,931	$	26.29	7,931	946,091
08/01/2023 - 08/31/2023	30,144		25.75	30,144	915,947
09/01/2023 - 09/30/2023	12,281		26.08	12,281	903,666
Total	50,356	$	25.92	50,356

⁽¹⁾

In 1998 the Company's stock repurchase program was established. On several occasions since the program's inception, the Company's Board of Directors has extended the number of shares authorized for repurchase under the program. In total, 7.5 million shares have been authorized for repurchase to date. This includes the additional 1.0 million shares that were authorized for repurchase on October 31, 2017.

~~Item 5. Other Information~~

On November 2, 2017, the Company renewed its line of credit agreement with PNC Bank, N.A. for another term that expires on November 4, 2018, on the same terms as the prior agreement. The forgoing description does not purport to be complete and is qualified in its entirety by reference to the Line of Credit Renewal Letter with PNC Bank, N.A., a copy of which is filed as Exhibit 10.1 to this Form 10-Q.

Item 6. Exhibits.

~~See the Exhibit Index included herewith for a listing of exhibits.~~

~~SIGNATURES~~

~~Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~

Exhibit	~~WEYCO GROUP, INC.~~

~~Dated: November 6, 2017~~	~~/s/ John F. Wittkowske~~
	~~John F. Wittkowske~~
	~~Senior Vice President and Chief Financial Officer~~

~~WEYCO GROUP, INC.~~

~~(THE “REGISTRANT”)~~

~~(COMMISSION FILE NO. 0-9068)~~

~~EXHIBIT INDEX~~

~~CURRENT REPORT ON FORM 10-Q~~

~~FOR THE QUARTERLY PERIOD ENDEDSeptember 30, 2017~~

~~Exhibit~~	Description	~~Description~~	Incorporation Herein By Reference To	Filed Herewith

10.1		~~Line~~Third Amendment to Credit Agreement, dated as of ~~Credit Renewal Letter with PNC Bank, N.A., dated November 2, 2017~~September 28, 2023	Exhibit 10.9 to Form 8-K filed September 29, 2023	X

~~10.21a~~ 10.2		Third Amended and Restated Revolving Loan Note, dated September 28, 2023	Exhibit 10.10 to Form ~~of incentive stock option agreement for the Weyco Group, Inc. 2017 Incentive Plan~~8-K filed September 29, 2023		X

~~10.21b~~ 31.1		~~Form of non-qualified stock option agreement for the Weyco Group, Inc. 2017 Incentive Plan~~		X

~~10.21c~~		~~Form of restricted stock agreement for the Weyco Group, Inc. 2017 Incentive Plan~~		X

~~31.1~~		Certification of Chief Executive Officer		X

31.2		Certification of Chief Financial Officer		X

32		Section 906 Certification of Chief Executive Officer and Chief Financial Officer		X

101		The following financial information from Weyco Group, Inc.'s’s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2017~~2023 formatted in ~~XBRL (eXtensible~~iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets (Unaudited); (ii) Consolidated Condensed Statements of Earnings and Comprehensive Income (Unaudited); (iii) Consolidated Condensed Statements of Cash Flows (Unaudited); and (iv) Notes to Consolidated Condensed Financial Statements ~~furnished herewith~~		X

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in iXBRL (included in Exhibit 101).		X

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	19	WEYCO GROUP, INC.

Dated: November 9, 2023		/s/ Judy Anderson
		Judy Anderson
		Vice President, Chief Financial Officer and Secretary