Second Quarter Diluted EPS Improved to
$0.20
Funded Debt Decreased 63.3% Year-over-Year
to $8.6 Million
Rocky Brands, Inc. (NASDAQ:RCKY) today announced financial
results for its second quarter ended June 30, 2017.
Second Quarter 2017 Sales and
Income
Second quarter net sales were $58.5 million compared to $62.6
million in the second quarter of 2016. The Company reported second
quarter net income of $1.5 million, or $0.20 per diluted share
compared to a net loss of $1.8 million, or ($0.23) per diluted
share in the second quarter of 2016.
Net sales were $121.5 million compared to $120.1 million for the
six months ended June 30, 2017 and 2016, respectively. The Company
reported net income of $3.0 million, or $0.40 per diluted share
compared to a net loss of $2.0 million, or ($0.26) per diluted
share for the six months ended June 30, 2017 and 2016,
respectively.
Jason Brooks, President and Chief Executive Officer, commented,
“The significant increase in second quarter profitability
year-over-year reflects the work we have done to create a more
efficient company. Through enhancements to our production facility
in Puerto Rico along with a number of organizational changes aimed
at reducing our expense structure we were able to improve operating
profit by nearly $4.8 million. Equally important, we continued to
see signs of stabilization in our branded wholesale business.
Although wholesale sales decreased in the quarter, in part due to
the discontinuation of a low margin private label program, we
achieved higher gross margins due to less promotional sales as well
as the discontinuation of the private label program. We are
continuing to focus on designing and delivering high quality
branded products which support higher gross margins.”
“Looking ahead, I am encouraged by the outlook for Rocky
Brands,” continued Brooks. “With Rocky, Georgia Boot and Durango,
we have a great portfolio of brands that hold leadership positions
in their respective categories and provide compelling growth
opportunities for our wholesale segment. At the same time, our
retail model is uniquely situated to directly and efficiently serve
the footwear needs of America’s manufacturing and labor based
businesses. Finally, the expansion of our domestic manufacturing
capabilities is allowing us to bid on and win an increasing amount
of military contracts and produce footwear at better margins. The
entire organization is committed to executing our growth and profit
improvement strategies and delivering greater value to shareholders
over the long-term.”
Second Quarter Review
Net sales for the second quarter decreased 6.6% to $58.5 million
compared to $62.6 million a year ago. Wholesale sales for the
second quarter decreased 10.5% to $37.1 million compared to $41.5
million for the same period in 2016. Retail sales for the second
quarter increased 5.8% to $11.0 million compared to $10.4 million
for the same period last year. Military segment sales for the
second quarter were $10.3 million compared to $10.7 million in the
second quarter of 2016.
Gross margin in the second quarter of 2017 increased to $18.2
million, or 31.1% of sales, compared to $16.3 million, or 26.0% of
sales, for the same period last year. The 510 basis point increase
was driven by a significant improvement in both wholesale segment
and military segment margins.
Selling, general and administrative (SG&A) expenses
decreased to $15.9 million, or 27.2% of net sales, for the second
quarter of 2017 compared to $18.8 million, or 30.1% of net sales, a
year ago. The $2.9 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 $2.3 million, or 3.9% of net sales
compared to a loss from operations of $2.5 million a year ago.
Interest expense was $80,000 for the second quarter of 2017,
versus $142,000 for the same period last year.
The Company’s funded debt decreased $14.9 million, or 63.3% to
$8.6 million at June 30, 2017 versus $23.5 million at June 30,
2016.
Inventory at June 30, 2017 decreased 12.8% to $76.3 million
compared to $87.6 million on the same date a year ago.
Conference Call
Information
The Company’s conference call to review second quarter 2017
results will be broadcast live over the internet today, Tuesday,
July 25, 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
and include statements in this press release regarding outlook
(paragraph 4). 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) and quarterly report
on Form 10-Q for the quarter ended March 31, 2017 (filed May 5,
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
Subsidiaries
Condensed Consolidated Balance
Sheets
June 30, 2017 December 31, 2016 June 30, 2016 Unaudited
Audited Unaudited ASSETS: CURRENT ASSETS: Cash and cash
equivalents $ 2,665,148 $ 4,480,505 $ 2,470,576 Trade receivables –
net 39,952,038 40,844,583 42,188,601 Other receivables 687,851
688,251 587,779 Inventories 76,314,721 69,168,442 87,555,956 Income
tax receivable - 1,243,678 2,179,525 Prepaid expenses
2,085,839 2,354,107 2,886,973 Total current assets
121,705,597 118,779,566 137,869,410 FIXED ASSETS – net 25,610,927
26,511,493 27,896,273 IDENTIFIED INTANGIBLES 33,351,030 33,415,694
36,481,414 OTHER ASSETS 227,720 232,509
245,934 TOTAL ASSETS $ 180,895,274 $ 178,939,262 $ 202,493,031
LIABILITIES AND SHAREHOLDERS' EQUITY: CURRENT LIABILITIES:
Accounts payable $ 17,475,226 $ 11,589,040 $ 21,892,208 Accrued
other expenses: 7,584,956 6,130,871 7,380,567
Total current liabilities 25,060,182 17,719,911 29,272,775 LONG
TERM DEBT 8,618,697 14,584,008 23,503,226 DEFERRED INCOME TAXES
10,464,435 11,365,800 11,968,791 DEFERRED LIABILITIES
181,737 176,219 227,345 TOTAL LIABILITIES 44,325,051
43,845,938 64,972,137 SHAREHOLDERS' EQUITY: Common stock, no par
value;
25,000,000 shares authorized; issued and
outstanding June 30, 2017 - 7,441,851; December 31, 2016 -
7,421,455; June 30, 2016 - 7,481,022
69,449,917 69,291,637 69,890,665 Retained earnings
67,120,306 65,801,687 67,630,229 Total
shareholders' equity 136,570,223 135,093,324
137,520,894 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $
180,895,274 $ 178,939,262 $ 202,493,031
Rocky Brands, Inc. and
Subsidiaries
Condensed Consolidated Statements of
Operations
Three Months Ended Six Months Ended June 30, June 30, 2017
2016 2017 2016 Unaudited Unaudited Unaudited
Unaudited NET SALES $ 58,454,954 $ 62,560,094 $ 121,527,907
$ 120,090,039 COST OF GOODS SOLD 40,291,433
46,296,834 83,616,306 84,915,887
GROSS MARGIN 18,163,521 16,263,260 37,911,601
35,174,152 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
15,904,935 18,807,595 33,286,844
37,939,489 INCOME (LOSS) FROM
OPERATIONS 2,258,586 (2,544,335 ) 4,624,757 (2,765,337 )
OTHER INCOME AND (EXPENSES): Interest expense, net (80,096 )
(142,215 ) (170,489 ) (278,191 ) Other, net 32,693
19,221 22,856 86,749
Total other income and (expenses), net (47,403 ) (122,994 )
(147,633 ) (191,442 ) INCOME (LOSS) BEFORE INCOME TAXES
2,211,183 (2,667,329 ) 4,477,124 (2,956,779 ) INCOME TAX
EXPENSE (BENEFIT) 752,000 (908,000 )
1,522,000 (1,006,000 ) NET INCOME (LOSS) $
1,459,183 $ (1,759,329 ) $ 2,955,124 $ (1,950,779 )
INCOME (LOSS) PER SHARE Basic $ 0.20 $ (0.23 ) $ 0.40 $
(0.26 ) Diluted $ 0.20 $ (0.23 ) $ 0.40 $ (0.26 ) WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING Basic 7,442,000
7,530,579 7,438,000
7,556,873 Diluted 7,445,268 7,530,579
7,441,514 7,556,873
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170725006267/en/
Rocky Brands, Inc.Tom Robertson, 740-753-1951Chief Financial
OfficerorInvestor Relations:ICR, Inc.Brendon Frey, 203-682-8200
Rocky Brands (NASDAQ:RCKY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Rocky Brands (NASDAQ:RCKY)
Historical Stock Chart
From Apr 2023 to Apr 2024