Game-changing super shoe features a new next-level foam designed to unlock performance potential ROCKFORD, Mich., July 1, 2024 /PRNewswire/ -- Saucony, a leading global performance running lifestyle brand, has announced that three-time Canadian Olympic marathoner and Saucony athlete Malindi Elmore will be wearing the game-changing Endorphin Elite 2 during the upcoming marathon in Paris. The Elite 2 is the brand's race-ready super shoe featuring a new groundbreaking foam designed to unlock every runner's per ...

Financial Data and Key Metrics Changes - First quarter revenue for the ongoing business was $390.8 million, exceeding the outlook of $360 million, with a significant improvement in demand trends and selling execution [43][44] - Adjusted gross margin reached 46.5%, better than the expected 46% and improved by 540 basis points year-over-year, attributed to a healthier sales mix and lower e-commerce promotions [45] - Adjusted operating margin was 5%, exceeding expectations, while adjusted diluted earnings per share were $0.05, also better than anticipated [47] Business Line Data and Key Metrics Changes - Merrell and Saucony led the balanced performance across the portfolio, with Merrell's Moab Speed 2 recognized as a top new product in the hiking category, driving strong sell-through [8][22] - Saucony's new product launches, including the Ride and Guide 17 and Triumph 22, have shown significant retail performance, with the Triumph 22 driving over 80% growth in its first week [19][20] - Wolverine brand's Trade Wedge and Rancher franchises are performing well, consistently beating sell-through forecasts [25] Market Data and Key Metrics Changes - Average weekly replenishment orders from wholesale partners accelerated from Q4 2023 to Q1 2024, indicating improved market conditions [12] - E-commerce demand has improved each month, with growth inflecting in March and accelerating further in April [12] - Saucony's global search interest increased by over 20% year-to-date compared to 2023, indicating growing consumer interest [32] Company Strategy and Development Direction - The company aims to stabilize and transform its operations, focusing on building strong global brands through innovative products and effective storytelling [8][15] - Continued investment in brand marketing is prioritized to capitalize on current momentum and build brand equity for the future [9] - The transition to a licensing model for Merrell and Saucony Kids is expected to simplify operations and leverage the global licensing team [48] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that while progress has been made, challenges remain in the marketplace, and the company is focused on optimizing operations and driving growth [14][80] - The outlook for fiscal 2024 revenue is projected to be between $1.68 billion and $1.73 billion, reflecting a decline from 2023 due to non-recurring revenue items [49] - The company expects significant gross margin expansion to precede an inflection to growth in the latter half of the year, with a focus on improving inventory management and cash flow [61][62] Other Important Information - Taryn Miller has been appointed as the new Chief Financial Officer, succeeding Mike Stornant, who is retiring after nearly three decades with the company [40][41] - The company is proactively addressing new product regulations related to PFAS, ensuring compliance in the future [56] Q&A Session Summary Question: Was there any revenue pull-forward outside of Europe? - Management indicated that there may have been an additional $2 million to $3 million in pull-forward across the business, but nothing significant outside of Europe [70][71] Question: Why was the sales guide unchanged despite the Q1 beat? - Management explained that while there were encouraging trends, a conservative approach was taken due to the need for sequential improvement and inventory management [73][75] Question: What is the outlook for Saucony? - Management expressed optimism about Saucony's prospects, highlighting strong product momentum and a focus on cleaning up the business while rationalizing the product line [84][86] Question: What are the drivers for gross margin expansion? - Management attributed gross margin expansion to improved supply chain performance, cost structure, and a healthier inventory mix, expecting these trends to continue [100][102] Question: What is the expected interest expense for the year? - The expected interest expense is projected to be about $40 million, down from $63 million in the previous year due to debt reduction efforts [97]

Wolverine Worldwide Investor Presentation | First Quarter 2024 Ending March 30th, 2024 + Investor Presentation | 1Q24 Forward-Looking Statements This presentation contains forward-looking statements, including statements regarding: the commercial drivers, competitive advantages and efficiencies of the Company's global platforms; the pace and urgency of the Company's strategic turnaround; the opportunity for inventory improvement; the Company's transformation and inflection to growth; future profitability; e ...

Exhibit 99.1 9341 Courtland Drive NE, Rockford, MI 49351 Phone (616) 866-5500 FOR IMMEDIATE RELEASE CONTACT: Alex Wiseman (616) 863-3974 WOLVERINE WORLDWIDE EXCEEDS FIRST QUARTER REVENUE AND EARNINGS EXPECTATIONS AND POSTS RECORD GROSS MARGIN Company reaf irms earnings guidance and updates revenue outlook for full year to reflect recent business model changes ROCKFORD, Mich., May 8, 2024 – Wolverine World Wide, Inc. (NYSE: WWW) today reported financial results for the first quarter ended March 30, 2024. "We ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 30, 2023 or ☐ 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 001-06024 WOLVERINE WORLD WIDE, INC. (Exact name of registrant as specified in its charter) | Delaware | | 38-1185150 | | --- | --- | --- | | State ...

Wolverine World Wide, Inc. (NYSE:WWW) Q4 2023 Earnings Conference Call February 21, 2024 8:30 AM ET Company Participants Alex Wiseman – Vice President-Finance, FP&A Chris Hufnagel – President and Chief Executive Officer Mike Stornant – Executive Vice President and Chief Financial Officer Conference Call Participants Jonathan Komp – Baird Jim Duffy – Stifel Abbie Zvejnieks – Piper Sandler Ashley Owens – KeyBanc Capital Markets Sam Poser – Williams Trading Mitch Kummetz – Seaport Global Securities Mauricio ...

Financial Performance & Strategic Turnaround - Wolverine Worldwide generated approximately $380 million in proceeds from portfolio rationalization between 1Q23 and 1Q24, including the divestiture of Sperry and Keds brands[8] - The company reduced net debt by $280 million year-over-year, resulting in a bank-defined debt leverage of 29x at year-end[8, 12] - The company anticipates approximately $215 million of annual run rate savings and a 70% operating margin in FY24, a 310 basis points increase compared to FY23[9] - Inventory was reduced by nearly 40% year-over-year, adjusted to reflect the exclusion of Sperry, consolidated China joint ventures, Keds, and Wolverine Leathers businesses[11] Q4 2023 & FY2023 Results (Ongoing Business) - Q4 2023 adjusted revenue was $521 million, a 179% year-over-year decrease[20, 21] - Full year 2023 adjusted revenue was $220 billion, a 131% year-over-year decrease[21] - Q4 2023 adjusted operating margin was -35%, a 170 basis points year-over-year decrease[20, 28] - Full year 2023 adjusted operating margin was 31%, a 370 basis points year-over-year decrease[21, 29] FY24 Outlook (Ongoing Business) - The company projects revenue between $170 billion and $175 billion, representing a 134% decrease versus FY23 at the midpoint of guidance[30] - The company anticipates an adjusted gross margin of approximately 445%[32] - The company expects an adjusted operating margin of approximately 70%[9, 34]

PART I. FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) The unaudited consolidated condensed financial statements detail the company's financial position, operational results, cash flows, and changes in equity [Consolidated Condensed Statements of Operations and Comprehensive Income](index=4&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Income) The statements of operations show a significant decline in revenue and net earnings for the quarter and year-to-date periods ended September 30, 2023 **Operations and Comprehensive Income Summary** | Metric (in millions) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :------------------- | :------ | :------ | :------- | :------- | | Revenue | $527.7 | $691.4 | $1,716.2 | $2,019.8 | | Gross profit | $215.4 | $277.8 | $679.5 | $846.2 | | Operating profit | $27.3 | $58.8 | $118.7 | $246.3 | | Net earnings | $9.0 | $38.8 | $51.4 | $171.7 | | Diluted EPS | $0.11 | $0.48 | $0.64 | $2.12 | - Revenue decreased by **23.7%** for Q3 2023 and **15.0%** for YTD 2023 compared to the prior year[11](index=11&type=chunk) - Net earnings attributable to Wolverine World Wide, Inc decreased by **77.9%** for Q3 2023 and **70.2%** for YTD 2023[11](index=11&type=chunk) [Consolidated Condensed Balance Sheets](index=5&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) The balance sheets show a decrease in total assets and liabilities as of September 30, 2023, driven by reductions in inventories and debt **Balance Sheet Summary** | Metric (in millions) | Sep 30, 2023 | Dec 31, 2022 | Oct 1, 2022 | | :------------------- | :----------- | :----------- | :---------- | | Total current assets | $1,097.2 | $1,265.3 | $1,551.8 | | Total assets | $2,231.3 | $2,492.7 | $3,170.6 | | Total current liabilities | $851.7 | $1,110.3 | $1,331.3 | | Total liabilities and stockholders' equity | $2,231.3 | $2,492.7 | $3,170.6 | - Total inventories decreased from **$745.2 million** at December 31, 2022, to **$563.8 million** at September 30, 2023[14](index=14&type=chunk) - Borrowings under revolving credit agreements decreased from **$425.0 million** at December 31, 2022, to **$370.0 million** at September 30, 2023[14](index=14&type=chunk) [Consolidated Condensed Statements of Cash Flows](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) The statements of cash flows show a significant improvement in cash from operating activities for the year-to-date period due to working capital changes **Cash Flow Summary** | Metric (in millions) | YTD Sep 30, 2023 | YTD Oct 1, 2022 | | :------------------- | :--------------- | :-------------- | | Net cash provided by (used in) operating activities | $7.0 | $(490.2) | | Net cash provided by investing activities | $116.2 | $68.2 | | Net cash provided by (used in) financing activities | $(91.5) | $402.5 | | Cash and cash equivalents at end of the quarter | $164.7 | $136.4 | - Net cash provided by operating activities improved from a use of **$490.2 million** in YTD 2022 to a provision of **$7.0 million** in YTD 2023[16](index=16&type=chunk) - Investing activities provided **$116.2 million** in YTD 2023, up from $68.2 million in YTD 2022, largely due to proceeds from divestitures[16](index=16&type=chunk) [Consolidated Condensed Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Stockholders'%20Equity) The statements of stockholders' equity reflect a decrease in total equity due to net earnings being offset by comprehensive loss and dividends **Stockholders' Equity Summary** | Metric (in millions) | Sep 30, 2023 | Oct 1, 2022 | | :------------------- | :----------- | :---------- | | Total Wolverine World Wide, Inc. stockholders' equity | $342.4 | $656.9 | | Total stockholders' equity | $362.7 | $674.2 | | Retained earnings | $934.5 | $1,277.1 | | Accumulated other comprehensive loss | $(144.5) | $(159.7) | - Total stockholders' equity decreased from **$674.2 million** at October 1, 2022, to **$362.7 million** at September 30, 2023[19](index=19&type=chunk)[22](index=22&type=chunk) [Notes to Consolidated Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) These notes provide detailed explanations for the financial statements, covering accounting policies, standards, and specific financial line items [1. BASIS OF PRESENTATION](index=9&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This note outlines the Company's operations, basis for financial preparation, fiscal year, seasonality, and impairment of long-lived assets - The Company is a leading designer, marketer, and licensor of a broad range of footwear and apparel, with brands including **Merrell, Saucony, Sweaty Betty, Wolverine, Cat, Sperry, and Hush Puppies**[25](index=25&type=chunk) - The Company completed the sale of the **Keds business** effective February 4, 2023, and entered into a multi-year licensing agreement for the **Hush Puppies** brand in the U.S. and Canada, also selling Hush Puppies trademarks in China, Hong Kong, and Macau[25](index=25&type=chunk) **Impairment Charges** | Impairment Type (in millions) | Q3 2023 | YTD 2023 | | :---------------------------- | :------ | :------- | | Lease right-of-use assets | $— | $12.1 | | Property, plant and equipment | $1.9 | $5.4 | | Indefinite-lived trade name | $38.3 | $38.3 | | Total impairment | $40.2 | $55.8 | [2. NEW ACCOUNTING STANDARDS](index=10&type=section&id=2.%20NEW%20ACCOUNTING%20STANDARDS) The Company adopted ASU 2020-04 for reference rate reform, which did not materially affect the consolidated financial statements - The Company adopted **ASU 2020-04, Reference Rate Reform**, in Q2 2023, amending its senior credit facility to use SOFR[33](index=33&type=chunk) - The adoption of ASU 2020-04 did not have a material effect on the consolidated financial statements[33](index=33&type=chunk) [3. EARNINGS PER SHARE](index=10&type=section&id=3.%20EARNINGS%20PER%20SHARE) This note details the computation of basic and diluted earnings per share, showing a significant decrease compared to the prior year **Earnings Per Share Calculation** | Metric (in millions, except per share data) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :---------------------------------------- | :------ | :------ | :------- | :------- | | Net earnings attributable to Wolverine World Wide, Inc. | $8.6 | $39.0 | $51.6 | $173.3 | | Basic EPS | $0.11 | $0.49 | $0.64 | $2.12 | | Diluted EPS | $0.11 | $0.48 | $0.64 | $2.12 | | Weighted average shares outstanding | 79.5 | 78.7 | 79.4 | 80.0 | - Diluted EPS decreased by **77.1%** for Q3 2023 and **69.8%** for YTD 2023[35](index=35&type=chunk) - **1.96 million** and **2.04 million** outstanding stock options were anti-dilutive for the quarter and year-to-date ended September 30, 2023, respectively[35](index=35&type=chunk) [4. GOODWILL AND INDEFINITE-LIVED INTANGIBLES](index=11&type=section&id=4.%20GOODWILL%20AND%20INDEFINITE-LIVED%20INTANGIBLES) This note details changes in goodwill and intangibles, highlighting a $38.3 million impairment charge to the Sperry trade name in Q3 2023 **Goodwill and Intangibles Summary** | Metric (in millions) | Sep 30, 2023 | Oct 1, 2022 | | :------------------- | :----------- | :---------- | | Goodwill balance at end of the quarter | $465.4 | $526.5 | | Indefinite-lived intangibles | $237.0 | $658.6 | - A **$38.3 million** impairment charge was recognized for the **Sperry trade name** in Q3 2023[37](index=37&type=chunk) - In Q4 2022, the Company recognized **$191.0 million** and **$189.3 million** impairment charges for Sperry and Sweaty Betty trade names, respectively, and a **$48.4 million** goodwill impairment for the Sweaty Betty reporting unit[37](index=37&type=chunk) [5. ACCOUNTS RECEIVABLE](index=11&type=section&id=5.%20ACCOUNTS%20RECEIVABLE) The Company utilizes a receivables purchase agreement to sell trade receivables without recourse, with $510.3 million sold year-to-date - Total receivables sold under the RPA were **$144.7 million** for Q3 2023 and **$510.3 million** for YTD 2023[39](index=39&type=chunk) - As of September 30, 2023, **$131.5 million** in receivables were sold and derecognized, with **$61.5 million** in unsold receivables held as collateral[40](index=40&type=chunk) [6. REVENUE FROM CONTRACTS WITH CUSTOMERS](index=12&type=section&id=6.%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) This note disaggregates revenue by channel and segment, showing overall declines for the quarter and year-to-date periods **Revenue by Segment and Channel** | Revenue (in millions) | Q3 2023 Wholesale | Q3 2023 Direct-to-Consumer | Q3 2023 Total | YTD 2023 Wholesale | YTD 2023 Direct-to-Consumer | YTD 2023 Total | | :-------------------- | :---------------- | :------------------------- | :------------ | :----------------- | :-------------------------- | :------------- | | Active Group | $225.2 | $103.4 | $328.6 | $800.4 | $297.4 | $1,097.8 | | Work Group | $111.4 | $11.6 | $123.0 | $322.4 | $32.9 | $355.3 | | Lifestyle Group | $42.8 | $20.0 | $62.8 | $162.0 | $61.0 | $223.0 | | Other | $11.7 | $1.6 | $13.3 | $35.9 | $4.2 | $40.1 | | Total Revenue | $391.1 | $136.6 | $527.7 | $1,320.7 | $395.5 | $1,716.2 | - Total revenue decreased by **23.7%** in Q3 2023 and **15.0%** in YTD 2023 compared to the prior year[42](index=42&type=chunk) **Contract Balances** | Contract Balance (in millions) | Sep 30, 2023 | Dec 31, 2022 | Oct 1, 2022 | | :----------------------------- | :----------- | :----------- | :---------- | | Product returns reserve | $10.8 | $15.3 | $11.6 | | Customer markdowns reserve | $4.6 | $2.6 | $2.2 | | Other sales incentives reserve | $3.4 | $3.3 | $3.7 | | Customer rebates liability | $14.0 | $19.8 | $18.2 | | Customer advances liability | $4.9 | $9.1 | $5.3 | [7. DEBT](index=13&type=section&id=7.%20DEBT) The Company's total debt decreased to $1,096.3 million, and it remained in compliance with all financial covenants as of September 30, 2023 **Debt Summary** | Debt (in millions) | Sep 30, 2023 | Dec 31, 2022 | Oct 1, 2022 | | :----------------- | :----------- | :----------- | :---------- | | Term Facility | $182.5 | $190.0 | $192.5 | | Senior Notes | $550.0 | $550.0 | $550.0 | | Borrowings under revolving credit agreements | $370.0 | $425.0 | $740.0 | | Total debt | $1,096.3 | $1,158.0 | $1,475.2 | - The weighted-average interest rate for the Term Facility and Revolving Facility was **6.38%** at September 30, 2023[49](index=49&type=chunk) - The Company entered into an amendment on June 30, 2023, to adjust the maximum Consolidated Leverage Ratio, providing near-term financial flexibility[52](index=52&type=chunk) [8. LEASES](index=14&type=section&id=8.%20LEASES) Total lease cost increased for the quarter and year-to-date periods ended September 30, 2023, compared to the prior year **Lease Cost Summary** | Lease Cost (in millions) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :----------------------- | :------ | :------ | :------- | :------- | | Operating lease cost | $10.0 | $8.6 | $30.5 | $26.4 | | Total lease cost | $13.3 | $11.0 | $39.5 | $33.8 | **Lease-Related Cash Flow** | Cash Flow (in millions) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :---------------------- | :------ | :------ | :------- | :------- | | Cash paid for operating lease liabilities | $10.0 | $11.1 | $32.6 | $30.3 | | Operating lease assets obtained | $4.2 | $9.7 | $9.6 | $59.0 | [9. DERIVATIVE FINANCIAL INSTRUMENTS](index=14&type=section&id=9.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS) The Company uses foreign currency forward contracts and an interest rate swap to hedge cash flow and transaction exposures **Notional Amounts of Derivatives** | Notional Amounts (in millions) | Sep 30, 2023 | Dec 31, 2022 | Oct 1, 2022 | | :----------------------------- | :----------- | :----------- | :---------- | | Foreign exchange hedge contracts | $267.8 | $334.2 | $376.3 | | Interest rate swap | $109.6 | $176.2 | $240.6 | **Fair Values of Derivatives** | Fair Values (in millions) | Sep 30, 2023 | Dec 31, 2022 | Oct 1, 2022 | | :------------------------ | :----------- | :----------- | :---------- | | Foreign exchange hedge contracts (assets) | $4.3 | $7.5 | $32.3 | | Interest rate swap (assets) | $3.0 | $6.1 | $7.2 | | Foreign exchange hedge contracts (liabilities) | $(0.3) | $(1.3) | $— | [10. STOCK-BASED COMPENSATION](index=15&type=section&id=10.%20STOCK-BASED%20COMPENSATION) Stock-based compensation expense and related income tax benefits decreased for both the quarter and year-to-date periods **Compensation Expense Summary** | Metric (in millions) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :------------------- | :------ | :------ | :------- | :------- | | Compensation expense | $4.0 | $7.1 | $11.8 | $26.4 | | Income tax benefits | $0.8 | $1.4 | $2.3 | $5.1 | **Stock Award Activity** | Award Type (shares in millions) | YTD Sep 30, 2023 Issued | YTD Sep 30, 2023 Avg Fair Value | YTD Oct 1, 2022 Issued | YTD Oct 1, 2022 Avg Fair Value | | :------------------------------ | :---------------------- | :------------------------------ | :--------------------- | :----------------------------- | | Restricted Awards | 1.41 | $14.90 | 0.97 | $26.06 | | Performance Awards | 0.68 | $15.16 | 0.39 | $29.90 | [11. RETIREMENT PLANS](index=15&type=section&id=11.%20RETIREMENT%20PLANS) Net pension expense significantly decreased for both the quarter and year-to-date periods compared to the prior year **Net Pension Expense Components** | Metric (in millions) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :------------------- | :------ | :------ | :------- | :------- | | Service cost | $0.7 | $1.3 | $2.3 | $4.0 | | Interest cost | $4.4 | $3.3 | $13.3 | $9.9 | | Expected return on pension assets | $(4.6) | $(5.1) | $(13.9) | $(15.4) | | Net amortization loss | $(0.1) | $2.9 | $(0.5) | $8.5 | | Net pension expense | $0.4 | $2.4 | $1.2 | $7.0 | [12. INCOME TAXES](index=16&type=section&id=12.%20INCOME%20TAXES) The Company's effective tax rate fluctuated due to income mix changes between jurisdictions and discrete tax items **Effective Tax Rate** | Metric | Q3 2023 Effective Tax Rate | Q3 2022 Effective Tax Rate | YTD 2023 Effective Tax Rate | YTD 2022 Effective Tax Rate | | :----- | :------------------------- | :------------------------- | :-------------------------- | :-------------------------- | | Rate | 4.6% | 10.9% | 24.5% | 19.3% | - The decrease in Q3 effective tax rate is due to **income mix changes**, partially offset by discrete tax expenses[69](index=69&type=chunk) - The increase in YTD effective tax rate is due to **discrete tax expenses**, partially offset by income mix changes[69](index=69&type=chunk) [13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)](index=16&type=section&id=13.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20(LOSS)) Accumulated other comprehensive loss increased during the quarter and year-to-date, primarily due to foreign currency translation losses **AOCI Components** | Metric (in millions) | Sep 30, 2023 | Oct 1, 2022 | | :------------------- | :----------- | :---------- | | Balance at end of quarter | $(144.5) | $(159.7) | | Foreign currency translation | $(138.1) | $(156.8) | | Derivatives | $(4.3) | $23.6 | | Pension | $(2.1) | $(26.5) | - Net current-period other comprehensive loss was **$(9.0) million** for Q3 2023 and **$(11.6) million** for YTD 2023[71](index=71&type=chunk)[72](index=72&type=chunk) [14. FAIR VALUE MEASUREMENTS](index=17&type=section&id=14.%20FAIR%20VALUE%20MEASUREMENTS) The Company measures certain financial instruments at fair value and applied nonrecurring measurements to intangible assets, resulting in an impairment **Recurring Fair Value Measurements** | Financial Instruments (in millions) | Sep 30, 2023 | Dec 31, 2022 | Oct 1, 2022 | | :-------------------------------- | :----------- | :----------- | :---------- | | Derivatives (assets) | $7.3 | $13.6 | $39.5 | | Derivatives (liabilities) | $(0.3) | $(1.3) | $— | - A **$38.3 million** impairment charge was recognized for the Sperry trade name in Q3 2023[77](index=77&type=chunk) **Fair Value of Debt** | Debt (in millions) | Sep 30, 2023 Carrying Value | Sep 30, 2023 Fair Value | | :----------------- | :-------------------------- | :---------------------- | | Total debt | $1,096.3 | $971.9 | [15. LITIGATION AND CONTINGENCIES](index=18&type=section&id=15.%20LITIGATION%20AND%20CONTINGENCIES) This note details ongoing environmental litigation related to PFAS contamination, for which the Company maintains a remediation reserve - The Company settled the EGLE Action in February 2020, agreeing to pay up to **$69.5 million** for municipal water system extensions[82](index=82&type=chunk) - A settlement with 3M Company in February 2020 resulted in a **$55.0 million** payment to the Company for remediation costs[83](index=83&type=chunk) **Environmental Remediation Reserve Activity** | Environmental Remediation Reserve (in millions) | YTD Sep 30, 2023 | YTD Oct 1, 2022 | | :---------------------------------------------- | :--------------- | :-------------- | | Remediation liability at beginning of the year | $74.1 | $85.7 | | Changes in estimate | $(21.0) | $— | | Amounts paid | $(9.5) | $(21.3) | | Remediation liability at the end of the quarter | $43.6 | $64.4 | [16. BUSINESS SEGMENTS](index=20&type=section&id=16.%20BUSINESS%20SEGMENTS) All reportable segments experienced revenue and operating profit declines for the quarter and year-to-date periods **Segment Revenue** | Segment Revenue (in millions) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :---------------------------- | :------ | :------ | :------- | :------- | | Active Group | $328.6 | $398.2 | $1,097.8 | $1,172.6 | | Work Group | $123.0 | $157.8 | $355.3 | $435.8 | | Lifestyle Group | $62.8 | $117.7 | $223.0 | $346.9 | | Other | $13.3 | $17.7 | $40.1 | $64.5 | | Total | $527.7 | $691.4 | $1,716.2 | $2,019.8 | **Segment Operating Profit** | Segment Operating Profit (in millions) | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :------------------------------------- | :------ | :------ | :------- | :------- | | Active Group | $32.7 | $54.9 | $124.6 | $180.8 | | Work Group | $15.4 | $28.2 | $45.7 | $81.7 | | Lifestyle Group | $5.4 | $13.4 | $18.6 | $43.2 | | Other | $2.8 | $2.8 | $9.3 | $9.7 | | Corporate | $(29.0) | $(40.5) | $(79.5) | $(69.1) | | Operating profit | $27.3 | $58.8 | $118.7 | $246.3 | - Total assets decreased across all segments from October 1, 2022, to September 30, 2023[104](index=104&type=chunk) [17. VARIABLE INTEREST ENTITIES AND RELATED PARTY TRANSACTIONS](index=22&type=section&id=17.%20VARIABLE%20INTEREST%20ENTITIES%20AND%20RELATED%20PARTY%20TRANSACTIONS) The Company consolidates two joint ventures in China as Variable Interest Entities and engages in arm's-length related party transactions **Consolidated VIEs Summary** | Consolidated VIEs (in millions) | Sep 30, 2023 | Dec 31, 2022 | Oct 1, 2022 | | :------------------------------ | :----------- | :----------- | :---------- | | Total assets | $53.5 | $44.7 | $41.1 | | Total liabilities | $11.9 | $11.2 | $5.8 | - Net sales to equity affiliates totaled **$16.8 million** for Q3 2023 and **$41.1 million** for YTD 2023, up from $9.5 million and $20.5 million respectively in the prior year[111](index=111&type=chunk) **Related Party Balances** | Related Party Balances (in millions) | Sep 30, 2023 | Dec 31, 2022 | Oct 1, 2022 | | :----------------------------------- | :----------- | :----------- | :---------- | | Accounts receivable due from related parties | $8.4 | $18.1 | $11.3 | [18. DIVESTITURES AND ASSETS AND LIABILITIES HELD FOR SALE](index=23&type=section&id=18.%20DIVESTITURES%20AND%20ASSETS%20AND%20LIABILITIES%20HELD%20FOR%20SALE) The Company completed several divestitures in 2023, generating significant gains, and has classified one business as held for sale - Sale of **Keds business** effective February 4, 2023, generated net proceeds of **$83.4 million** and a gain of **$20.1 million**[114](index=114&type=chunk) - Sale of **U.S. Wolverine Leathers business** completed August 23, 2023, for **$4.0 million** cash, recognizing a **$1.9 million** gain[115](index=115&type=chunk) - Sale of **Hush Puppies intellectual property** in China, Hong Kong, and Macau completed September 14, 2023, for **$58.8 million** cash, recognizing a **$55.8 million** gain[116](index=116&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Company's financial performance, liquidity, and capital resources, highlighting revenue declines and inventory management efforts [BUSINESS OVERVIEW](index=25&type=section&id=BUSINESS%20OVERVIEW) Wolverine World Wide, Inc is a global designer, marketer, and licensor of branded footwear, apparel, and accessories - The Company markets brands in approximately **170 countries and territories**, operating 165 retail stores and 56 direct-to-consumer eCommerce sites[122](index=122&type=chunk) - The **Keds business was sold** effective February 4, 2023, and strategic alternatives for the **Sperry business** are being explored[123](index=123&type=chunk) - A multi-year licensing agreement for the **Hush Puppies brand** in the U.S. and Canada was entered, and Hush Puppies trademarks in China, Hong Kong, and Macau were sold[123](index=123&type=chunk) [Known Trends Impacting Our Business](index=25&type=section&id=Known%20Trends%20Impacting%20Our%20Business) Macroeconomic conditions, excess inventory, and inflationary pressures continue to adversely affect the Company's business and gross margin - Excess inventory from improved transit times led to storage and capacity pressures, resulting in **additional carrying costs**[124](index=124&type=chunk) - Inventory declined by **$181.4 million** in the first three quarters of 2023 due to decreased purchases and increased promotional activity[124](index=124&type=chunk) - Inflationary pressures and higher promotional activity caused a **230 basis point gross margin contraction** for the first three quarters of 2023 compared to 2022[125](index=125&type=chunk) [2023 FINANCIAL OVERVIEW](index=25&type=section&id=2023%20FINANCIAL%20OVERVIEW) For the third quarter of 2023, revenue decreased significantly, while gross margin slightly increased and operating cash flow improved year-to-date - Revenue for Q3 2023 was **$527.7 million**, a **23.7% decrease** from Q3 2022[127](index=127&type=chunk) - Gross margin was **40.8%** in Q3 2023, up from 40.2% in Q3 2022[127](index=127&type=chunk) - Diluted EPS for Q3 2023 was **$0.11**, compared to $0.48 for Q3 2022[130](index=130&type=chunk) - Cash flow provided by operating activities was **$7.0 million** for YTD 2023, a significant improvement from a **$490.2 million** use in YTD 2022[130](index=130&type=chunk) [RESULTS OF OPERATIONS](index=26&type=section&id=RESULTS%20OF%20OPERATIONS) The Company experienced substantial declines in revenue and operating profit due to decreased sales, increased interest, and impairment charges **Financial Performance Summary** | Metric (in millions) | Q3 2023 | Q3 2022 | % Change Q3 | YTD 2023 | YTD 2022 | % Change YTD | | :------------------- | :------ | :------ | :---------- | :------- | :------- | :----------- | | Revenue | $527.7 | $691.4 | (23.7)% | $1,716.2 | $2,019.8 | (15.0)% | | Gross profit | $215.4 | $277.8 | (22.5)% | $679.5 | $846.2 | (19.7)% | | Operating profit | $27.3 | $58.8 | (53.6)% | $118.7 | $246.3 | (51.8)% | | Net earnings | $9.0 | $38.8 | (76.8)% | $51.4 | $171.7 | (70.1)% | | Diluted EPS | $0.11 | $0.48 | (77.1)% | $0.64 | $2.12 | (69.8)% | [REVENUE](index=26&type=section&id=REVENUE) Revenue declined by 23.7% in Q3 2023 and 15.0% year-to-date, driven by decreases across all reportable segments and key brands - **Active Group** revenue decreased by **$69.6 million (17.5%)** in Q3 2023, driven by Merrell ($50.4M), Saucony ($18.9M), and Chaco ($7.5M), partially offset by Sweaty Betty ($7.2M)[130](index=130&type=chunk) - **Work Group** revenue decreased by **$34.8 million (22.1%)** in Q3 2023, primarily from Cat ($28.1M), Harley-Davidson ($4.0M), and Wolverine ($2.8M)[130](index=130&type=chunk) - **Lifestyle Group** revenue declined by **$54.9 million (46.6%)** in Q3 2023, mainly due to Sperry ($32.7M) and the Keds divestiture ($21.3M)[130](index=130&type=chunk) [GROSS MARGIN](index=27&type=section&id=GROSS%20MARGIN) Gross margin slightly increased in Q3 2023 due to favorable product mix but decreased year-to-date from unfavorable product costs and pricing - Q3 2023 gross margin increased by **60 basis points to 40.8%**, driven by favorable product mix (100 bps) partially offset by increased closeout sales (40 bps)[132](index=132&type=chunk) - YTD 2023 gross margin decreased by **230 basis points to 39.6%**, due to unfavorable product cost changes (100 bps), direct-to-consumer pricing/costs (60 bps), and increased closeout sales (50 bps)[133](index=133&type=chunk) [OPERATING EXPENSES](index=27&type=section&id=OPERATING%20EXPENSES) Operating expenses decreased in Q3 2023 due to gains on divestitures, partially offset by impairment and reorganization costs - Q3 2023 operating expenses decreased by **$30.9 million**, driven by a **$57.7 million** gain on sale of businesses and lower advertising costs ($14.0M), offset by impairment of intangible assets ($38.3M) and reorganization costs ($8.5M)[134](index=134&type=chunk) - YTD 2023 operating expenses decreased by **$39.1 million**, driven by a **$77.8 million** gain on sale of businesses and lower environmental costs ($60.6M), offset by prior year Champion trademark sale gain ($90.0M), impairment of intangible assets ($38.3M), and long-lived assets ($17.5M)[135](index=135&type=chunk) [INTEREST, OTHER AND INCOME TAXES](index=27&type=section&id=INTEREST%2C%20OTHER%20AND%20INCOME%20TAXES) Net interest expense increased significantly due to higher borrowings and interest rates, while the effective tax rate fluctuated - Net interest expense increased to **$15.5 million** in Q3 2023 (from $12.5M in Q3 2022) and **$47.4 million** in YTD 2023 (from $31.3M in YTD 2022) due to higher borrowings and interest rates[136](index=136&type=chunk) - Effective tax rates were **4.6%** for Q3 2023 (down from 10.9% in Q3 2022) and **24.5%** for YTD 2023 (up from 19.3% in YTD 2022)[138](index=138&type=chunk) [REPORTABLE SEGMENTS](index=27&type=section&id=REPORTABLE%20SEGMENTS) All reportable segments experienced revenue and operating profit declines due to softer consumer demand and the impact of divestitures **Segment Revenue Performance** | Segment (in millions) | Q3 2023 Revenue | Q3 2022 Revenue | Q3 % Change | YTD 2023 Revenue | YTD 2022 Revenue | YTD % Change | | :-------------------- | :-------------- | :-------------- | :---------- | :--------------- | :--------------- | :----------- | | Active Group | $328.6 | $398.2 | (17.5)% | $1,097.8 | $1,172.6 | (6.4)% | | Work Group | $123.0 | $157.8 | (22.1)% | $355.3 | $435.8 | (18.5)% | | Lifestyle Group | $62.8 | $117.7 | (46.6)% | $223.0 | $346.9 | (35.7)% | **Segment Operating Profit Performance** | Segment (in millions) | Q3 2023 Operating Profit | Q3 2022 Operating Profit | Q3 % Change | YTD 2023 Operating Profit | YTD 2022 Operating Profit | YTD % Change | | :-------------------- | :----------------------- | :----------------------- | :---------- | :------------------------ | :------------------------ | :----------- | | Active Group | $32.7 | $54.9 | (40.4)% | $124.6 | $180.8 | (31.1)% | | Work Group | $15.4 | $28.2 | (45.4)% | $45.7 | $81.7 | (44.1)% | | Lifestyle Group | $5.4 | $13.4 | (59.7)% | $18.6 | $43.2 | (56.9)% | [Active Group](index=28&type=section&id=Active%20Group) The Active Group's revenue decreased due to declines in Merrell, Saucony, and Chaco, driven by softening demand and high retail inventory - Q3 2023 revenue decline was driven by **Merrell ($50.4M)**, **Saucony ($18.9M)**, and **Chaco ($7.5M)**, partially offset by **Sweaty Betty ($7.2M)**[142](index=142&type=chunk) - YTD 2023 revenue decline was driven by **Merrell ($56.4M)** and **Chaco ($22.7M)**, partially offset by **Saucony ($6.6M)**[142](index=142&type=chunk) - Operating profit decreased by **40.4%** in Q3 2023 and **31.1%** YTD, due to revenue declines and a **350 basis point** decrease in YTD gross margin[143](index=143&type=chunk)[144](index=144&type=chunk) [Work Group](index=29&type=section&id=Work%20Group) The Work Group's revenue decreased due to declines across its brands, reflecting softer consumer demand and high retail inventory levels - Q3 2023 revenue decline was driven by **Cat ($28.1M)**, **Harley-Davidson ($4.0M)**, and **Wolverine ($2.8M)**[145](index=145&type=chunk) - YTD 2023 revenue decline was driven by **Cat ($40.1M)**, **Wolverine ($26.3M)**, **Harley-Davidson ($12.5M)**, and **Bates ($5.1M)**[145](index=145&type=chunk) - Operating profit decreased by **45.4%** in Q3 2023 and **44.1%** YTD, due to revenue declines and a **230 basis point** decrease in YTD gross margin[145](index=145&type=chunk) [Lifestyle Group](index=29&type=section&id=Lifestyle%20Group) The Lifestyle Group's revenue decreased primarily due to the divestiture of Keds and declines in Sperry from softer consumer demand - Q3 2023 revenue decline was driven by **Sperry ($32.7M)** and **Keds ($21.3M)** divestiture[146](index=146&type=chunk) - YTD 2023 revenue decline was driven by **Keds ($67.5M)** divestiture and **Sperry ($59.7M)**, partially offset by **Hush Puppies ($3.3M)**[146](index=146&type=chunk) - Operating profit decreased by **59.7%** in Q3 2023 and **56.9%** YTD, with Q3 gross margin increasing by **240 basis points** due to the Keds divestiture[146](index=146&type=chunk) [Other](index=30&type=section&id=Other) The 'Other' category revenue declined, primarily driven by a decrease from the performance leathers business - Q3 2023 revenue decreased by **$4.4 million (24.9%)**, primarily from the performance leathers business ($5.8M)[147](index=147&type=chunk) - YTD 2023 revenue decreased by **$24.4 million (37.8%)**, primarily from the performance leathers business ($18.7M)[147](index=147&type=chunk) [Corporate](index=30&type=section&id=Corporate) Corporate expenses decreased in Q3 2023 due to divestiture gains but increased year-to-date as prior year gains did not recur - Q3 2023 Corporate expenses decreased by **$11.5 million**, driven by a **$57.7 million** gain on sale of businesses, offset by **$40.2 million** impairment of long-lived assets and **$8.5 million** reorganization costs[148](index=148&type=chunk) - YTD 2023 Corporate expenses increased by **$10.4 million**, due to the prior year's **$90.0 million** gain on Champion trademarks not recurring, and **$55.8 million** impairment of long-lived assets, partially offset by a **$77.8 million** gain on sale of businesses and **$60.6 million** lower environmental costs[149](index=149&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=30&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The Company's liquidity improved with increased cash and available credit, driven by positive operating cash flows and divestiture proceeds **Liquidity Summary** | Metric (in millions) | Sep 30, 2023 | Dec 31, 2022 | Oct 1, 2022 | | :------------------- | :----------- | :----------- | :---------- | | Cash and cash equivalents | $164.7 | $135.5 | $136.4 | | Debt | $1,096.3 | $1,158.0 | $1,475.2 | | Available revolving credit facility | $623.4 | $569.3 | $254.4 | [Liquidity](index=30&type=section&id=Liquidity) Cash and cash equivalents increased, supported by operating activities and divestitures, with sufficient borrowing capacity available - Cash and cash equivalents increased by **$28.3 million** to **$164.7 million** as of September 30, 2023[151](index=151&type=chunk) - Cash provided by operating activities was **$318.3 million**, and proceeds from divestitures were **$136.0 million**[151](index=151&type=chunk) - The Company had **$623.4 million** of borrowing capacity available under its revolving facility[151](index=151&type=chunk) [Financing Arrangements](index=31&type=section&id=Financing%20Arrangements) Total debt decreased due to divestiture proceeds, and the Company remains in compliance with all covenants under its Senior Credit Facilities - Total debt decreased to **$1,096.3 million** as of September 30, 2023, from $1,158.0 million at December 31, 2022[161](index=161&type=chunk) - The Company was in compliance with all covenants and performance ratios under the Senior Credit Facilities as of September 30, 2023[159](index=159&type=chunk) - An amendment on June 30, 2023, adjusted the maximum Consolidated Leverage Ratio, providing near-term financial flexibility[160](index=160&type=chunk) [Cash Flows](index=31&type=section&id=Cash%20Flows) Net cash from operating activities improved significantly, investing activities were driven by divestitures, and financing activities reflected debt payments **Cash Flow Summary** | Cash Flow (in millions) | YTD Sep 30, 2023 | YTD Oct 1, 2022 | | :---------------------- | :--------------- | :-------------- | | Net cash provided by (used in) operating activities | $7.0 | $(490.2) | | Net cash provided by investing activities | $116.2 | $68.2 | | Net cash provided by (used in) financing activities | $(91.5) | $402.5 | [Operating Activities](index=31&type=section&id=Operating%20Activities) Operating activities generated cash, a significant improvement from the prior year, primarily driven by a decrease in inventories - A decrease in net working capital provided **$9.8 million** in cash for YTD 2023[164](index=164&type=chunk) - Inventories decreased by **$178.5 million**, favorably impacting working capital[164](index=164&type=chunk) - Operating cash flows included a **$77.8 million** gain on sale of divestitures and a **$68.8 million** cash outflow for environmental and other related costs[164](index=164&type=chunk) [Investing Activities](index=32&type=section&id=Investing%20Activities) Investing activities provided cash, primarily driven by proceeds from divestitures, partially offset by capital expenditures - Capital expenditures were **$18.5 million** in YTD 2023, down from $23.5 million in YTD 2022[165](index=165&type=chunk) - Proceeds from divestitures contributed **$136.0 million** to investing activities in YTD 2023[165](index=165&type=chunk) [Financing Activities](index=32&type=section&id=Financing%20Activities) Financing activities used cash, mainly due to net payments under the Revolving Facility and cash dividends paid - Net payments under the Revolving Facility amounted to **$55.0 million** in YTD 2023[166](index=166&type=chunk) - Cash dividends paid totaled **$24.5 million** in YTD 2023, consistent with $0.30 per share declared[167](index=167&type=chunk) - **No shares were repurchased** in YTD 2023, compared to $81.3 million in YTD 2022[166](index=166&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=32&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) The Company's financial statements rely on management's estimates and assumptions, with no material changes to critical policies since year-end - The preparation of financial statements requires management to make estimates and assumptions[168](index=168&type=chunk) - Management believes there have been no material changes in critical accounting policies since the 2022 Form 10-K[169](index=169&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company is exposed to market risks from foreign currency exchange rates and interest rate changes, which it manages with derivatives - The Company faces market risk from **foreign currency exchange rates** and **interest rate changes**[171](index=171&type=chunk) - Outstanding forward currency exchange contracts totaled **$267.8 million** as of September 30, 2023, to manage foreign currency exposure[173](index=173&type=chunk) - Total variable-rate debt was **$552.5 million** at September 30, 2023, with an interest rate swap converting **$109.6 million** to fixed-rate[176](index=176&type=chunk) [ITEM 4. Controls and Procedures](index=33&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and procedures were effective, with no material changes to internal controls - Disclosure controls and procedures were **effective** as of September 30, 2023[178](index=178&type=chunk) - **No material changes** to internal control over financial reporting occurred during Q3 2023[178](index=178&type=chunk) PART II. OTHER INFORMATION [ITEM 1. Legal Proceedings](index=34&type=section&id=ITEM%201.%20Legal%20Proceedings) The Company is involved in various legal matters incidental to its business, including environmental compliance activities detailed in Note 15 - The Company is involved in litigation and legal matters, including **environmental compliance activities**[180](index=180&type=chunk) - Further details on legal matters are provided in **Note 15** of the financial statements[180](index=180&type=chunk) [ITEM 1A. Risk Factors](index=34&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the Company's risk factors from those disclosed in its 2022 Annual Report on Form 10-K - **No material changes** in risk factors from the 2022 Form 10-K were identified[181](index=181&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company did not repurchase any common stock under its public program, which expired, though some shares were acquired via employee transactions - **No shares were purchased** under the common stock repurchase program during Q3 2023, and the program expired on September 11, 2023[184](index=184&type=chunk)[185](index=185&type=chunk) - **9,149 shares** were purchased through employee transactions at an average price of **$12.60 per share** in Q3 2023[184](index=184&type=chunk) [ITEM 5. Other Information](index=34&type=section&id=ITEM%205.%20Other%20Information) No director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement during the third quarter - No director or Section 16 officer adopted or terminated a **Rule 10b5-1** or non-Rule 10b5-1 trading arrangement during Q3 2023[185](index=185&type=chunk) [ITEM 6. Exhibits](index=35&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including corporate governance documents and required certifications - Exhibits include corporate governance documents, an employment agreement, and certifications under the **Sarbanes-Oxley Act**[187](index=187&type=chunk) - Financial information for the quarter ended September 30, 2023, is provided in **Inline XBRL format**[187](index=187&type=chunk) [SIGNATURES](index=36&type=section&id=SIGNATURES) The report is duly signed on behalf of the Company by its Chief Executive Officer and Chief Financial Officer on November 9, 2023 - The report was signed by **Christopher E. Hufnagel, President and CEO**, and **Michael D. Stornant, EVP, CFO and Treasurer**, on November 9, 2023[190](index=190&type=chunk)

Wolverine World Wide Inc. (NYSE:WWW) Q3 2023 Results Conference Call November 9, 2023 8:30 AM ET Company Participants Alex Wiseman - Vice President of Finance eCommerce Chris Hufnagel - CEO, President and Director Michael Stornant - Executive VP, CFO, Chief Accounting Officer & Treasurer Conference Call Participants Jim Duffy - Stifel Laurent Vasilescu - BNP Paribas Mitch Kummetz - Seaport Global Securities Abbie Zvejnieks - Piper Sandler Sam Poser - William Trading Mauricio Serna - UBS Operator Greetings, ...

Wolverine World Wide, Inc. (NYSE:WWW) Q2 2023 Earnings Conference Call August 10, 2023 8:30 AM ET Company Participants Alex Wiseman - Vice President of Finance Tom Long - Chairman of the Board Chris Hufnagel - President and Chief Executive Officer Mike Stornant - Executive Vice President and Chief Financial Officer Conference Call Participants Jonathan Komp - Robert W. Baird Jim Duffy - Stifel Nicolaus Sam Poser - Williams Trading Mauricio Serna - UBS Mitch Kummetz - Seaport Global Securities Abbie Zvejniek ...