First Quarter 2017 Sales Increased
9.6%
First Quarter Diluted EPS Improved to
$0.20
Funded Debt Decreased 75.8% Year-over-Year
to $5.2 Million
Rocky Brands, Inc. (NASDAQ:RCKY) today announced financial
results for its first quarter ended March 31, 2017.
First Quarter 2017 Sales and
Income
First quarter net sales increased 9.6% to $63.1 million compared
to $57.5 million in the first quarter of 2016. The Company reported
first quarter net income of $1.5 million, or $0.20 per diluted
share compared to a net loss of $0.2 million, or ($0.03) per
diluted share in the first quarter of 2016.
Mike Brooks, Chairman and Chief Executive Officer, commented,
“Our first quarter results represent a solid start to 2017. We
achieved approximately 10% top-line growth by more than doubling
our military segment sales to a quarterly record $12 million.
Importantly, we were able to fulfill this significant increase in
military footwear demand at margins well above the last half of
2016 due to improved efficiencies at our company-operated
production facility in Puerto Rico. At the same time, sales trends
in our wholesale segment have stabilized, particularly in Work and
Western, our two largest categories. On top of this, wholesale
gross margins improved meaningfully year-over-year driven by a
higher mix of full priced selling. The actions we have taken over
the past six months to better position the company for profitable
growth are clearly gaining traction. While there is still work
ahead of us in order to maximize shareholder value over the
long-term, we are confident we are heading in the right
direction.”
First Quarter Review
Net sales for the first quarter increased 9.6% to $63.1 million
compared to $57.5 million a year ago. Wholesale sales for the first
quarter were $39.2 million compared to $40.2 million for the same
period in 2016. Retail sales for the first quarter were $11.9
million compared to $11.5 million for the same period last year.
Military segment sales for the first quarter increased 107% to
$12.0 million compared to $5.8 million in the first quarter of
2016.
Gross margin in the first quarter of 2017 increased to $19.7
million, or 31.3% of sales, compared to $18.9 million, or 32.9% of
sales, for the same period last year. The 160 basis point decrease
was driven by the increase in military segment sales which carry
lower gross margins than our wholesale and retail segments.
Selling, general and administrative (SG&A) expenses
decreased to $17.4 million, or 27.6% of net sales, for the first
quarter of 2017 compared to $19.1 million, or 33.3% of net sales, a
year ago. The $1.7 million decrease in SG&A expenses was
primarily related to lower compensation expense following the
workforce reductions in the second half of 2016.
Income from operations was $2.4 million, or 3.8% of net sales
compared to a loss from operations of $0.2 million a year ago.
Interest expense was $90,000 for the first quarter of 2017,
versus $136,000 for the same period last year.
The Company’s funded debt decreased $16.4 million, or 75.8% to
$5.2 million at March 31, 2017 versus $21.6 million at March 31,
2016.
Inventory at March 31, 2017 decreased 18.6% to $68.8 million
compared to $84.5 million on the same date a year ago.
Conference Call
Information
The Company’s conference call to review first quarter 2017
results will be broadcast live over the internet today, Thursday,
April 20, 2017 at 4:30 pm Eastern Time. The broadcast will be
hosted at http://www.rockybrands.com.
About Rocky Brands, Inc.
Rocky Brands, Inc. is a leading designer, manufacturer and
marketer of premium quality footwear and apparel marketed under a
portfolio of well recognized brand names including Rocky®, Georgia
Boot®, Durango®, Lehigh®, Creative Recreation®, and the licensed
brand Michelin®.
Safe Harbor Language
This press release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities and Exchange Act of
1934, as amended, which are intended to be covered by the safe
harbors created thereby. Those statements include, but may not be
limited to, all statements regarding intent, beliefs, expectations,
projections, forecasts, and plans of the Company and its
management. These forward-looking statements involve numerous risks
and uncertainties, including, without limitation, the various risks
inherent in the Company’s business as set forth in periodic reports
filed with the Securities and Exchange Commission, including the
Company’s annual report on Form 10-K for the year ended December
31, 2016 (filed March 9, 2017). One or more of these factors have
affected historical results, and could in the future affect the
Company’s businesses and financial results in future periods and
could cause actual results to differ materially from plans and
projections. Therefore there can be no assurance that the
forward-looking statements included in this press release will
prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the
Company, or any other person should not regard the inclusion of
such information as a representation that the objectives and plans
of the Company will be achieved. All forward-looking statements
made in this press release are based on information presently
available to the management of the Company. The Company assumes no
obligation to update any forward-looking statements.
Rocky Brands, Inc. and
SubsidiariesCondensed Consolidated Balance Sheets
March 31, 2017
December 31, 2016 March 31, 2016 Unaudited Audited Unaudited
ASSETS: CURRENT ASSETS: Cash and cash equivalents $
2,693,078 $ 4,480,505 $ 3,716,716 Trade receivables – net
39,131,277 40,844,583 38,253,999 Other receivables 768,729 688,251
597,343 Inventories 68,819,390 69,168,442 84,502,529 Income tax
receivable - 1,243,678 1,214,755 Prepaid expenses 2,619,898
2,354,107 3,073,814 Total current assets 114,032,372
118,779,566 131,359,156 FIXED ASSETS – net 25,633,199 26,511,493
28,103,995 IDENTIFIED INTANGIBLES 33,383,261 33,415,694 36,514,458
OTHER ASSETS 225,670 232,509 253,621 TOTAL
ASSETS $ 173,274,502 $ 178,939,262 $ 196,231,230
LIABILITIES AND SHAREHOLDERS' EQUITY: CURRENT LIABILITIES:
Accounts payable $ 14,620,330 $ 11,589,040 $ 15,044,942 Accrued
other expenses: 6,931,149 6,130,871 6,085,947
Total current liabilities 21,551,479 17,719,911 21,130,889
LONG TERM DEBT 5,240,000 14,584,008 21,649,319 DEFERRED INCOME
TAXES 10,464,436 11,365,800 11,968,791 DEFERRED LIABILITIES
176,219 176,219 265,262 TOTAL LIABILITIES
37,432,134 43,845,938 55,014,261 SHAREHOLDERS' EQUITY:
Common stock, no par value;
25,000,000 shares authorized; issued and
outstandingMarch 31, 2017 - 7,435,467; December 31, 2016
-7,421,455; March 31, 2016 - 7,583,901
69,362,641
69,291,637
71,004,499
Retained earnings 66,479,727 65,801,687
70,212,470 Total shareholders' equity 135,842,368
135,093,324 141,216,969 TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 173,274,502 $ 178,939,262 $ 196,231,230
Rocky Brands, Inc. and
SubsidiariesCondensed Consolidated Statements of
Operations
Three Months Ended March 31, 2017
2016 Unaudited Unaudited NET SALES $
63,072,954 $ 57,529,945 COST OF GOODS SOLD 43,324,874
38,619,053 GROSS MARGIN 19,748,080
18,910,892 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
17,381,909 19,131,894 INCOME
(LOSS) FROM OPERATIONS 2,366,171 (221,002 ) OTHER INCOME AND
(EXPENSES): Interest expense (90,466 ) (135,976 ) Other – net
(9,764 ) 67,528 Total other - net (100,230 )
(68,448 ) INCOME (LOSS) BEFORE INCOME TAXES 2,265,941
(289,450 ) INCOME TAX EXPENSE (BENEFIT) 770,000
(98,000 ) NET INCOME (LOSS) $ 1,495,941
$ (191,450 ) INCOME (LOSS) PER SHARE Basic $ 0.20 $ (0.03 )
Diluted $ 0.20 $ (0.03 ) WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING Basic 7,435,000 7,583,170
Diluted 7,436,788 7,583,170
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170420006243/en/
Rocky Brands, Inc.Tom Robertson, 740-753-1951Chief
Financial OfficerorInvestor Relations:ICR, Inc.Brendon Frey,
203-682-8200
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