Rocky Brands, Inc. Announces Second Quarter 2017 Results
•Funded Debt Decreased 63.3% Year-over-Year to $8.6 Million
Rocky Brands, Inc. (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
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 Americas
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
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 Companys 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 Companys 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(R), Georgia Boot(R), Durango(R),
Lehigh(R), Creative Recreation(R), and the licensed brand Michelin(R).
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 Companys business as set
forth in periodic reports filed with the Securities and Exchange
Commission, including the Companys 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 Companys 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
Rocky Brands, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, 2017
December 31, 2016
June 30, 2016
Cash and cash equivalents
Trade receivables - net
Income tax receivable
Total current assets
FIXED ASSETS - net
LIABILITIES AND SHAREHOLDERS EQUITY:
Accrued other expenses:
Total current liabilities
LONG TERM DEBT
DEFERRED INCOME TAXES
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 -
Total shareholders equity
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
Rocky Brands, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Three Months Ended
Six Months Ended
COST OF GOODS SOLD
INCOME (LOSS) FROM OPERATIONS
OTHER INCOME AND (EXPENSES):
Interest expense, net
Total other income and (expenses), net
INCOME (LOSS) BEFORE INCOME TAXES
INCOME TAX EXPENSE (BENEFIT)
NET INCOME (LOSS)
$ (1,759,329 )
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
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SOURCE: Rocky Brands, Inc.
Tom Robertson, 740-753-1951
Brendon Frey, 203-682-8200