frye annual report
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ÂTRANSCRIPT
Sustainingthe traditionof benchcrafting
LEATHER COMPANY
Sustainingof benchcrafting
SINCE 1863
quality boot manufacturers
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Table of ContentsLetter from CEO.....................................3Benchcrafting..........................................7History of Frye........................................9Financial Highlights..............................13Investor Information.............................15Board of Directors.................................19Sustainability.........................................21
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the ceos
Jim & LarryTarica
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Dear Shareholders,
At The Frye Company, 2012 was the start of a new era of growth, marked by a series of remarkable transitions and efforts designed to ensure the future leadership. Our corporation, Jimlar, is now partnered with the Li & Fung Limited corporation to insure the continuation of a classic American brand.
The establishment of three business Networks – Trading, Logistics and Distribution – opens the door to significant growth opportunities. It enables us to sell across these distinct yet interconnected areas. It also provides us with yet another way to serve our customers through expanded scope and capabilities. In these times of global economic uncertainty, this proposition will be especially important as we work toward a new era of growth.
Undoubtedly, the market environment will remain challenging. While the US is expected to grow modestly, the Eurozone’s GDP may contract as the debt crisis continues to create
drag on its economic recovery. Our growth in the immediate future will focus on cross-selling and increasing our market share, which will enable us to grow faster than the overall growth in our markets.
The year 2012 was one of transition and investment, and we believe we have set in motion a business plan that will be borne out by the future success of our Group and our customers. The road ahead will not be entirely smooth. The state of the global economy remains uncertain, and the weakness of the US dollar continues to hamper trade. We are also seeing a proliferation of bilateral agreements in response to the global economic downturn and political uncertainty around the world. This will only serve to undermine the power of the global supply chain while also affecting the ability of SMEs to compete in an increasingly complicated environment. We remain firm in our belief that a multilateral trading system is the best way to achieve economic recovery and growth, and we will continue to strongly encourage the world’s leaders to negotiate sustainable agreements that can help achieve these goals, for developed and developing nations alike.
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first you buy them,
then you earn them.
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it takes 190 steps to make a pairof Frye Boots
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Frye was founded in 1863 and is the oldest continuously operating footwear brand in America. We are one of only a very few shoe companies who still continue to make products here in America. Frye is rooted in American history, having been worn by pioneers and cowboys in the late 1800s, American soldiers at war, and as part of the celebration of life and music in recent times.
Founded in 1863 by John A. Frye, a prominent American shoemaker in Marlborough, Massachusetts, The Frye Company is the oldest continuously operated shoe company in the United States. Frye footwear has a long illustrious history, placing boots on the feet of Confederate soldiers, soldiers in the Spanish-American war, and even Teddy Roosevelt. The very first pair of Frye Boots were benchcrafted in 1863 and they are still crafted in the same way today.
We use the highest quality leathers, all tanned with natural oils, which distinguish our products. We have developed demanding standards for our materials and craftsmanship, and our experienced team of shoemakers and designers work diligently to ensure these standards are met in all the places we make our products.
handcrafting each pair of boots is what makes fryethe best
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the original Wearers oF Frye Boots
soldiers,cowboys,pioneers.
since 1863
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the START OF AN AMERICAN TRADITION
This is our history and our heritage, told in every stitch of every shoe we’ve made for nearly 150 years: across cultural shifts and changes in fashion, for generation upon generation. Now, Frye boots are accessorized and envied on city.
On March 10th, 1863, John A. Frye opened the doors of a small shop on Elm Street in Marlboro, Massachu-setts. The shoes he made weren’t icons of fashion or fanciful in style. They served a simple purpose: to ease the daily working lives of the hundreds of factory work-ers in that small New England town.
The individuals who wore the first Frye shoes were just like us: people who valiantly labored, honing skill and craft, supporting their families and community. When homesteading sparked adventurous New England fami-lies to head west in the mid and late 1800s, many of those pioneers wore Frye boots along the journey.
Frye’s Harness boot is rooted in this tradition and continues to draw inspiration from the American Cavalry. During a 1938 trip to Washington, D.C., John A. Frye’s grandson and namesake met a U.S. Navy Admiral who noted his difficulty in finding the Wellington styles he liked so much. As a favor, John agreed to make him a pair. Frye continued to fill these requests for boots through World War II.
By mail order, the company supplied thousands of brave soldiers and pilots with Frye Wellingtons, known as Jet boots. Our boots traveled the world on the feet of American servicemen, from Normandy to Okinawa – even General Patton wore a pair.
The CAMPUS™ boot featured a bulky toe and chunky heel that came to epitomize the attitude and styles of the 1960s and 1970s. The Smithsonian Institute, in its search for items to best represent America during the Sixties, chose a pair of CAMPUS™ boots that proudly remain on display today in our nation’s capital.
everlasting in
style,quality,
and comfort.
Oh... and the instant rockstar feeling.
Financial patterns
the 2012 report
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Financial patterns
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Turnover
US $ Million
200820072006 2009 2010 2011
700
311300
250
432
548
600
681
500
400
300
200
100
0
profit attributable to shareholders
2011 2010 Change
Total Margin
shareholdersprofit
as percentage of Turnover
as percentage of Turnover
Earning per share
dividend per share
Shareholders’ Funds
New Assets per Share
Cash Earnings
Core operating Profit
20,030,271 15,912,201
3,074,204 2,238,289
882,056 725,138
849,585 679,631
681,229
8.43 US cents 7.17 US cents
548,491
53 HK cents 45 HK cents
3,933,793 3,626,029
US $0.49 US $0.45
+26%
+37%
+22%
+22%
+25%
+24%
+18%
+18%
+31%
Listing Information
Share Information
Index Constituent
Listing: US Stock ExchangeStock Code: 494Ticker Symbol Reuters: 0494.US Bloomberg: 494 US Equity
Board lot size: 2,000 sharesShares outstanding: 8,104,154Market Capitalization: $116KEarning per share for 2012 Interim: 19 cents Final: 32 cents
Jimlar Corp IndexMSCI Index SeriesFTSE4Good index SeriesDow Jones Sustainability IndexHang Send Corporate Sustainability Index
Key Dates
11 August 2012Annuncement of 2012 Interim Results
22 March 2013Announcement of 2012 Final Results
14 May 2013Annual General Meeting
18 May 2013Proposed payment of 2012 Final Dividend
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Investor Information
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be careful...
be careful...
they are addictive.
The role of the Group Chairman is separate from that of the Group Managing Director who was designated as Executive Deputy Chairman on 18 May 2011. This is to enhance their respective independence, accountability and responsibility. Their respective responsibilities are clearly established and defined in writing by the Board.
The Board is responsible for setting up the overall strategy as well as reviewing the operation and financial performance of the Group. The Board reserved for its decision or consideration matters covering overall Group strategy, major acquisitions and disposals, annual budgets, annual and interim results, recommendations on Directors’ appointment or reappointment, approval of major capital transactions and other significant operational and financial matters.
GROUP CHAIRMAN AND EXECUTIVE
ROLES AND RESPONSIBILITIES OF THE BOARD
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“We are invested in more then just leather”
-Paul Broc
GROUP CHAIRMAN AND EXECUTIVE
Supply Chain Collaboration
board and committee meetings
Board meetings are scheduled one year in advance to facilitate maximum attendance by Directors. The meeting agenda is set by the Group Non-executive Chairman in consultation with members of the Board. Senior Management is usually invited to join Board meetings to enhance the Board and management communication. External auditor attended the Company’s 2011 Annual General Meeting to answer any questions from the shareholders on the audit of the Company.
The Vendor Portal remains a key strategic platform and during 2011 was extended to carriers, freight and banking processes, as well as integrating the current quality control and compliance platforms. Leveraging the transactional data from the Vendor Portal, Vendor Search was rolled out to provide a comprehensive search tool to assist in the identification and leverage of the vendor network.
“The board at Frye has the perfect mix of executives and cowboys”
-Bob Corbo
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impact &sustainability
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impact &sustainability
Our global offices reduced our carbon footprint by 18% per m2 and electricity consumption by 13% per m2, compared with 2011. In addition to the environmental benefits of reduced energy consumption, these measures enabled us to save approximately US$490,000 per year in energy costs.
Our efficiency and conservation efforts resulted in our water consumption per head count reducing by 2.8% in the same year. We also reduced paper consumption by 10%.
–2.84%
our impact
how we save the earth
Carbon
2012 Change Reduction
32,120 tons CO2 –3,510 –18.16%
Electricity
Water
Paper
45,405,947 kWh
124,064 m3
149,072 reams
–2,098,542
+18,754
+12,394
–13.23%
–13.23%
–10.05%
To support our people, we have policies, programs and partnerships, as well as a system to track and deliver results that are meaningful to our business. As we reported in 2010, our strategy integrates actions that aim to improve the sustainability of our own operations and facilities and of our global supply chain.
We aim to provide a safe, healthy and respectful workplace by adhering to our policies and codes, raising awareness, sharing tips and experiences, and providing training for our employees. To support the ongoing promotion of health and safety in our workplaces, we launched a series of Environmental, Health and Safety (EHS) initiatives in our distribution centers worldwide.We also provide training to our employees globally and regularly conduct internal EHS audits to ensure compliance in our operations and to strive for continual improvement.
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in frye we trust