Good day, ladies and gentlemen, and welcome to the Tandy Leather Fourth Quarter 2014 Earnings Call. [Operator Instructions] As a reminder, today's call will be recorded. I would now like to introduce your host for today's conference, Ms. Shannon Greene, Chief Financial Officer. Ma'am, you may begin.

Thank you. Thank you, everyone, for joining us for our 2014 earnings conference call. We will be discussing our fourth quarter and year-end 2014 results, as well as some plans for 2015. I'm Shannon Greene, Chief Financial Officer, and I'm joined today by Jon Thompson, our CEO; and Mark Angus, our Senior Vice President. Before we get started, 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 statement. You are reminded of the inherent uncertainties of looking into the future that there are risks to Tandy Leather Factory that could prevent these events from occurring in the 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 through 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 of this moment and we disclaim any duty to update those statements. Our goal is always that sales and earnings increase compared to the prior year, and we were able to meet that goal again in 2014. We opened 3 new stores and closed 1. 2014 added another year to our consecutive year-over-year sales gain and with our 18th consultative year of operating profits, increasing 6% to 2013. In this morning's earnings release, we provided our 2015 revenue and earnings guidance, and we'll be discussing that in further detail a little later in the call. Here's a quick run-through of the numbers for the fourth quarter and the year. Quarterly results were as follows: consolidated sales increased 13%, sales were $24.5 million this year compared to $21.5 million in the fourth quarter…

[Operator Instructions] Our first question comes from Mike Neary [ph] With Neary Asset Management. [ph]

I just had a couple of quick questions. So CapEx for the year, $1.2 million to $1.5 million. Depreciation should be about $1.5 million, is that right?

Yes.

Okay. And you mentioned that you're going to analyze your inventory investment. What do you mean by that?

You're talking about the total dollar amount, Mike?

Yes, it just -- it says looking forward, we to expect open 2 to 3 new stores and are analyzing our inventory investment and expense control. So do you anticipate doing anything significantly differently with inventory? Or do you think we'll end next year somewhere around where we are now?

No, like I said, we're trying to trim it back. We ended up, of course, very heavy at year end. On the upside, with the strike on the West Coast it ended up working out very good for us. We ended up having plenty of inventory and had a nice gain. But we'd like to keep it down a little lower than that. I think we were estimating around -- trying to keep it around $32 million or a little less. And we certainly trimmed back our purchases going into this year. But our store levels will probably remain the same. Well, our idea is still the same, to keep them heavy. We don't sell anything in the warehouse, so...

So you think inventory should be roughly flat next year versus where it is now? Or you think you'll trim it back from where it is now?

We'll continue to trim some items. We go into the summer, that's when we start looking at items that are slow movers, things that we need to change. And so that time is almost upon us, and that's what we're looking at.

Okay. So when I look at it, let's say you do your $0.79, $0.80 in estimated earnings, that's $8 million in net income. Depreciation is pretty much equal to CapEx, a little bit higher, actually. It sounds like working capital should be flat to maybe even a little down. So over the next 12 months, if you hit your targets, we'll generate another roughly $8 million of free cash flow. We have $5 million of net cash right now. What do you anticipate doing with it?

I don't think that we have any plans at this time. I think that our -- the amount of inventory and the opportunities that come to us like last year, we had some buying opportunities, and that's where some of our inventory came from in leather. We had a large purchase that we made overseas in odd lots. And we'd like to keep that money available for those opportunities where we can make a good purchase or a good buy.

Okay. And do you have any thoughts in terms of dividends versus share purchases or things like that?

It's always discussed at each meeting, but there's nothing on the books right now.

Our next question comes from Fabian Renauer [ph]. He's a private investor.

Just a few questions about international. The first one is, if you have any time plan regarding the opening of satellites in [ph] the U.K.? And if rent is still sort of a main prohibitive factor there?

Well, we do anticipate trying to get stores open in the U.K. and Europe. And rent, I mean, yes, it's always high. But we're a our destination location, and it depends where you look. If you look down around London, the prices get pretty high. But out in the other areas, Manchester, Birmingham, they're not as prohibitive. So we'll probably tend to stay out in those kind of cities for now, unless something -- we just happen to find a...

So do you have any time frame sort of for that? Or is that still not decided?

Yes. Well, we are still looking. And we anticipate trying to get another location open over there. But we don't have a time frame. We're actively looking for leases, yes.

Yes, but you don't have any properties, for example, that you are interested in yet. Like there's nothing that concrete yet, other than you have the desire to do it.

No. No.

Okay. And then in terms of opening stores in any other countries, do you have any plan for that? Or again, it's just sort of a desire, but nothing concrete yet?

No. Nothing concrete yet.

Okay. And lastly, for Spain. So what exactly are your plans to improve the unprofitability? What are sort of the initiatives that you're implementing there?

Well, that story originally didn't have our dealers as customers. And we've switched some of that over to that store. The store in the U.K. got all of the U.S. distributers that we used to have here. Spain had to start out from scratch. And it's not really unusual for a store to start out like it's done. They've done a lot of shows in Europe, and they'll continue to do a lot of trade shows and keep going out and beating the bushes to try and improve sales.

So do you have any sense when do you think that might be profitable? Like are we getting close? Are we still sort of far-off? Like, what's the improvement been over the last couple of years there?

Well, it's steadily grown. And I think with our people that we have in place there, then the shows that we have on the books to do, hopefully it'll, like I said, come around, like I said, very soon.

Great. And then just a last question about Japan. Do you have any specific plans there? Because there's been some rumors just through the grapevine about Japan. Any plans you would like to disclose there?

Not at this time.

[Operator Instructions] Our next question comes from Alan Kaplan [ph], who is a Private Investor.

I'm interested in possible competition from online-only retailers. Has that been a factor? Or is it a concern for the future?

Well, no, not really. I mean, we stay on top of that and kind of monitor everything all the time. We have quite a bit of our customers that operate their own online stores and always have. But in our business, traditionally, people like to touch and feel leather and that pour [ph] -- that key brick-and-mortar approach has always been good for us, and that continues to be that way. People just want to come in and shop for the goods like that. They just don't feel comfortable buying it over the Internet.

I'm showing no further questions. I would now like to hand the call back to Shannon Greene for closing remarks.

Thank you. On behalf of the entire management team, I would like to thank you for participating in our 2014 earnings conference call today. We look forward to speaking with you again next quarter. Have a good afternoon.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a great day.