Good afternoon ladies and gentlemen and thank you for standing by. Welcome to the Rocky Brands Fourth Quarter and Fiscal 2013 Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and answer session. Instructions will be given at that time for you to queue up for questions. [Operator Instructions]. I would like to remind everyone that this conference is being recorded. And we'll now turn the conference over to Jim McDonald, Chief Financial Officer of Rocky Brands.

Thanks everyone for joining us. Before we begin, please note that today's discussion, including the Q&A period may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such statements are based on information and assumptions available at this time and are subject to change, risks, and uncertainties, which may cause actual results to differ materially. We assume no obligation to update such statements. For a complete discussion of the risks and uncertainties, please refer to today's Press Release, and reports filed with the Securities and Exchange Commission, including our 10-K for the year ended December 31, 2012. I'll now turn the conference over to Mr. David Sharp, President and Chief Executive Officer of Rocky Brands.

Thanks, Jim. And welcome everyone to this afternoon’s call. We finished 2013 on a solid note, highlighted by a 9% increase in wholesale footwear during the fourth quarter. In addition our Retail and Military segment sales were also up over the last year. Work footwear a largest category, had one of its best quarters in sometime, increasing 20% driven by strong sell through of our Georgia and Rocky brands, combined with the contribution from our private-label business that launched with TFC in early 2013. We definitely benefited from favorable weather as it was cold or wet in many areas of the country throughout the fourth quarter. At the same time we were in a much stronger inventory position versus a year ago, which allowed us to capitalize on pent-up demand for work boots following back-to-back mild winters. We put a great deal of effort into improving our product lines to feature even more comfortable and durable styles with great value propositions. Consumers have responded very positively to our efforts, which have helped strengthen our retail relationships and leadership position in the work category. For the Rocky brand, this includes the IronClad collection, which sold through very well in Q4 and that momentum has carried over into the first quarter. Meanwhile the early response for the Georgia brand's new Homeland collection of waterproof boots has been very positive. There has long been a need in the workspace for quality products that can retail under $100 to $120 range, while still providing strong margins for our wholesale accounts. Excitement for the collection let us to pull forward some initial deliveries from Q1 into Q4 and consumer demand has been strong since its debut. Finally on work, we completed the first year of our private-label program with attractive supply, with a solid fourth-quarter.…

Thanks, David. Net sales for the fourth quarter were $61.6 million, compared to $58.3 million for the corresponding period a year ago. Wholesale sales for the fourth quarter were $47.7 million, compared to $46.2 million last year. The $1.5 million increase was driven by a $3.8 million or 9% in footwear sales, partially offset by a $2.3 million decrease in apparel sales. As David referenced earlier, the decrease in apparel sales was a result of our decision to transition some apparel to a licensing model in early 2013. Retail sales for the fourth quarter increased to $12.9 million, compared to $12 million a year ago. Military segment sales increased to $1 million, versus non-military sales for the same period in 2012. Gross profit in the fourth quarter was $21.8 million or 35.4% of sales, compared to $20.9 million or 36% of sales for the same period last year. The 60 basis point decrease was driven by increased military sales versus a year ago period, which carry a lower gross margin. Before I discuss expenses in the bottom line, I’d like to mention that the fourth quarter 2013 included a onetime expense of $1 million and a one-time income gain of $600,000 related to the acquisition of Creative Recreation which closed on December 13, 2013. Also included in the fourth quarter of 2013 were expenses of a $172,000 associated with the ongoing operations with Creative Recreation. Selling, General and & Administrative expenses, excluding Creative Recreation were $18.4 million or 29.9% of net sales for the fourth quarter of 2013, compared to $16.8 million or 28.8% of net sales a year ago. The 110 basis point increase in SG&A was driven primarily by the reversal of incentive competition accruals in the fourth quarter of 2012. Income from operations, also excluding the expenses…

Thanks, Jim. 2014 has gotten off to a good start. The prolonged cold and wet weather has helped drive sell through in our work and outdoor retailers during the first quarter, reducing their on hand inventory and freeing up more open to buy dollars that will now be dedicated to new product introductions. The strength of our evolved product lines in work, western and outdoor has fueled our best pre book period in some years. Our excitement is being a bit tempered by the uncertain retail environment. However we feel confident that the momentum in our core businesses, combined with the addition of Creative Recreation has us well positioned to improve our top and bottom line performance for the year. As we've previously discussed, we expect Creative Recreation sales to be approximately $20 million this year and to be modestly accretive to earnings, and as previously mentioned we are currently focused on strengthening Creative Recreation’s operating platform, particularly with respect to supplier chain issues and therefore we expect any accretion to be primarily in the back half of the year. In our core business we’re planning our top line to increase in the mid to high single digits throughout the year. Operator, we are now ready to take questions.

Thank you. [Operator Instructions]. Our first question comes from the line of Mitch Kummetz with Robert Baird. Please proceed with your question.

Yes, I've got a handful of questions. Let me start David, you made the comment kind of in your closing remarks that this is your best pre-book period in years. Could you just elaborate on that? How far into your fall orders are you and can you give us a sense as to how much those orders are up year-on-year?

We’re seeing in the range of 8% to 10% of those customers where we know there isn’t a difference in timing. We are seeing about 8% to 10%. I am talking fall, winter.

Great, okay. And is that concentrated in any particular part of the business, I mean in hunting and work or also in western?

Hunting and work and heavily [ph] insulated product. Our retailers obviously have, as we mentioned experienced great sell through and that’s where we are seeing a lot of upside right now in the order book.

Okay. And then I think you said that you would expect the core business to be up mid-to-high single digits for the year. First of all was that, did I hear that correctly and how does that kind of break out by wholesale versus retail versus military in terms of how you are planning the business?

Yes, and work where -- any of this weather related business, there is a pretty large appetite. So we've planned that up closer to the 10%, 11%, 12% range. Where we see, and obviously our western business, the trend there has been good year-on-year for three years. Where we are concerned that we don’t have the visibility is in our commercial military business because of sequestration and government shenanigans in our duty business because of what’s going on with the postal service. And that pretty much speaks to the, to our wholesale business. The retail business, we have -- planning around 5% right now with the visibility that we have. And our military business, we have planned flat to maybe down a little bit but we don’t know what the orders are going to be on the second year of the contract we have right now. So, the best we have right now will be flat or possibly down slightly.

Got it. And Jim, how should we be thinking about margins for the year and then I don’t know how much that changes with Creative Rec coming into the fold?

I think margins will be, wholesale margins probably with Creative Rec might be down slightly because of, I think on our ongoing Rocky business will be pretty flat with [indiscernible] in the '13 [ph] plus Creative Rec might be down a little bit because of doing so much business distributors, internationally would have lower margins than again have lower SG&A associated with that.

And then how about retail margins pretty consistent or do you think that you see much change in that?

I think it will be pretty flat there. We now got this transition from the truck to the web model and so this will be the last year where hopefully after this we will start seeing margins go up as we go to more through e-commerce business where we've got a significantly higher margins than our Lehigh business.

Got it. And do you happen to have what the gross margins were for those three businesses in the fourth quarter, wholesale, retail and military?

I do, 32.8 for wholesale, 45.8 for retail and 16.3 for military.

Got it. And then lastly, you talked about $20 million of benefit from Creative Rec in 2014. Just to give that some context, could you tell just on a pro-forma basis where that business came in for 2013?

About the same, a little less.

[Operator Instructions] Our next question comes from the line of John Sullivan with Olstein Capital. Please proceed with your question.

In your prepared remarks, you guys called out pulling forward of some inventory into fourth quarter on one of your hotter new products. Did you guys quantify that at all for us?

That made up about, I think it was about $800,000 of Georgia product.

[Operator Instructions] Gentlemen, there appear to be no further questions at this time. I would like to turn the floor back over to management for closing comments.

Thank you and thank you for joining us on the call today. We will be here in Nelsonville, Ohio working hard for the next quarter. Thank you.

This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.