Good day, ladies and gentlemen, and welcome to the Tandy Leather Factory First Quarter 2014 Earnings Conference Call. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the conference over to Shannon Greene. Ma'am, you may begin.

Thank you. Good afternoon, everyone, and thank you for joining us for our first quarter 2014 earnings conference call. I am Shannon Greene, Chief Financial Officer of Tandy Leather Factory. Joining me on today's call is Jon Thompson, our Chief Executive Officer; and Mark Angus, our Senior Vice President. Before we begin, I call your attention to the fact that these conversations will contain forward-looking statements to the extent we speak today of any future event or make other forward-looking statements. You are reminded that the inherent uncertainties of looking into the future that there are risks to Tandy Leather Factory that could prevent these events from occurring in a manner foreseen. Please see our Form 10-K for 2013 and subsequent forms 10-Q for a discussion of some of these risks. Copies of these documents are available to the SEC's EDGAR system and from our Investor Relations office. Also, statements made today by us as management of Tandy Leather Factory are made as of this moment, and we disclaim any duty to the update of those statements. We are pleased with our first quarter results, having achieved a solid sales gain and an even better earnings increase. Gross margin improved nicely, up 200 basis points this quarter compared to last year's first quarter. Operating expenses increased $439,000, slightly ahead of sales growth. We ended the quarter with almost $9 million in cash, after paying $2 million in store manager bonuses during the first quarter and increasing inventory by $4 million. Now for the numbers from today's press release. Our first quarter consolidated sales increased 3% over 2013's first quarter sales. The current quarter sales totaled $19.8 million compared to last year's first quarter sales of $19.2 million. Wholesale Leathercraft posted a 1% sales increase, reporting sales of $6.8 million this…

[Operator Instructions] Our first question is from Allen Kaplan [ph], a private investor.

I noticed that the operating profit quarter-over-quarter for your retail stores went down. Am I reading that correctly? And if so, what is the explanation?

Yes, it is attributable to the new stores that exist now, but it didn't exist a year ago. Their sales, while looking pretty good, are not ramped up to match their expenses yet, so that's -- we have 4 stores that exist now that didn't exist a year ago, and that's primarily it; some increase in advertising expenses; and overall, in all the stores, all the managers got raises in 2014 of their base salaries, which is part of the explanation on the increase on a -- increase in employee comp.

Our next question is from Xavier Renauer, a private investor.

So my first question is just about the comp of the international store managers. So could you just give me some color on that about the flick?

They are slightly higher than the U.S. equivalent simply because of the market, but not substantially, though.

But is the structure the same, kind of the same 25% of store operating profit and the base salary?

No, the -- it's not 25%. It is 5% to 10%.

5% to 10%, okay. And in terms of the U.S. wholesale stores, I was actually just curious if that's the same as the U.S. retail stores. Is that also 25%?

Yes.

Or is it -- yes, yes, okay.

Our Canada stores are at base salary plus 25% of the operating profit of their store.

Right, okay. And then my second question is just, well, I've read in some leathercrafting forums that a number of your senior store managers were let go in recent past. So I was just wondering if you could, one, confirm that; and two is what the rationale behind that move is, considering that you always say that the knowledge of the store managers, they're kind of your most important assets. So just some more color on that would be appreciated.

Say the beginning part again. You read something about what?

Well, I've said in some leathercrafting forums that a number of your senior store managers were let go in the recent past, so just some more color on that, if possible, would be good.

I don't know that that's necessarily true, but I can't really comment on that. We don't get into internal personnel issue publicly.

Can you still hear me?

I'm sorry?

[Operator Instructions] Our next question comes from Ram Vendra [ph], a private investor.

I was just looking for an update on the U.K. store. Are there any plans to open any satellite stores there soon? Is the main obstacle still the fact that you can't find anything attractive rent-wise or -- just an update on that?

I said that we're still interested in, obviously, opening overseas. We just don't have anything on the time table for it. We've put in a regional manager for overseas, and we've been trying to focus, really, on doing a lot more shows. We recently bought a vehicle, where we could transport merchandise, different shows in Europe. So we're just really trying to look at that for now. But no, there's not really anything holding us back. But eventually, we'll try and get something opened, but we just don't have a time table on it.

Okay. And then one other question. So what exactly do you think is the problem with the same store? I know it's -- the comps are a bit better, but why is it struggling as much as it is, considering it's your only store in the country?

Yes. Like I said, again, having a store that has to start from scratch like it did, I don't think it's really any different than a lot of our stores here. They -- that store did not get a lot of the dealership business that we gave to the U.K. when the U.K. opened. The same stores had to create all of its business from scratch, whereas they got all of our existing customers that we had, that we used to sell from the United States, so they kind of got an unfair advantage. And we did not switch any of that business to Spain when they opened. [indiscernible] a bit about that because they really created all of their own business and pretty much all of it is in Spain.

Right. And so that would've been the same for Australia also? They would've got that dealer business initially to kind of...

Yes, they took over all of our existing dealers that we used to sell from the United States.

I'm showing no further questions at this time. I would like to turn the conference back over to Shannon Greene for closing remarks.

Thank you. I appreciate your time today. I would also like to remind everyone that our 2014 Annual Meeting of Stockholders is to be held on June 9 at our offices here in Fort Worth. Please consider yourselves personally invited. On behalf of Jon Thompson, Mark Angus and the entire company, thank you for your participation in today's call, and have a good afternoon.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a nice day.