Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ROCKY BRANDS, INC. | v422527_8-k.htm |
Exhibit 99
| ROCKY BRANDS, INC. | ||
| Company Contact: | Jim McDonald | |
| Chief Financial Officer | ||
| (740) 753-1951 | ||
| Investor Relations: | ICR, Inc. | |
| Brendon Frey | ||
| (203) 682-8200 |
ROCKY BRANDS, INC. ANNOUNCES THIRD QUARTER 2015 RESULTS
NELSONVILLE, Ohio, October 21, 2015 - Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial results for its third quarter ended September 30, 2015.
Third Quarter 2015 Sales and Income
Third quarter net sales were $70.0 million compared to $72.7 million in the third quarter of 2014. The Company reported third quarter net income of $1.8 million, or $0.24 per diluted share, compared to net income of $3.1 million, or $0.42 per diluted share, in the third quarter of 2014.
David Sharp, President and Chief Executive Officer, commented, “Our third quarter performance reflects softer than expected demand in our Work and Hunting categories. The combination of warm temperatures, challenging retail store traffic and weakening local economies tied to oil & gas production led to lower levels of reorders for many of our waterproof and insulated boot collections. This was partially offset by continued growth of our Durango brand and Commercial Military business combined with a significant sales increase in our lower margin, contract military segment. While we are disappointed in our overall results and are being cautious about the remainder of this year given current trends, we believe our entire brand portfolio remains healthy and that the slowdown in our top-line is temporary. We are confident that our product and distribution strategies will generate earnings growth in excess of sales growth over the long-term as our business model has recently demonstrated.”
Third Quarter Review
Net sales for the third quarter were $70.0 million compared to $72.7 million a year ago. Wholesale sales for the third quarter decreased 12.0% to $54.7 million compared to $62.1 million for the same period in 2014. Retail sales for the third quarter increased 8.4% to $10.3 million compared to $9.5 million for the same period last year. Military segment sales for the third quarter increased to $5.1 million compared to $1.1 million in the third quarter of 2014.
Gross margin in the third quarter of 2015 was $22.1 million, or 31.6% of sales, compared to $24.3 million, or 33.4% of sales, for the same period last year. The 180 basis point decrease was primarily due to the increase in military segment sales as a percentage of overall sales, which carry lower gross margins than wholesale and retail.
Selling, general and administrative (SG&A) expenses were $19.2 million, or 27.5% of net sales, for the third quarter of 2015 compared to $19.4 million, or 26.6% of net sales, a year ago.
Income from operations was $2.9 million, or 4.1% of net sales, compared to $4.9 million, or 6.8% of net sales, a year ago.
Interest expense was $188,000 for the third quarter of 2015, versus $253,000 for the same period last year.
The Company’s funded debt decreased $5.7 million, or 11.2%, to $45.0 million at September 30, 2015 compared to $50.7 million at September 30, 2014.
Inventories decreased $2.1 million, or 2.4%, to $88.0 million at September 30, 2015 compared with $90.1 million on the same date a year ago.
Conference Call Information
The Company’s conference call to review third quarter 2015 results will be broadcast live over the internet today, Wednesday October 21, 2015 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 the health of the brand (paragraph 3). 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, 2014 (filed February 27, 2015) and quarterly reports on Form 10-Q for the quarters
ended March 31, 2015 (filed April 30, 2015) and June 30, 2015 (filed July 29, 2015. 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.
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Rocky Brands, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
| September 30, 2015 | December 31, 2014 | September 30, 2014 | ||||||||||
| Unaudited | Audited | Unaudited | ||||||||||
| ASSETS: | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 3,978,553 | $ | 4,616,694 | $ | 4,327,710 | ||||||
| Trade receivables – net | 62,389,224 | 55,807,103 | 61,650,439 | |||||||||
| Other receivables | 509,026 | 476,480 | 503,371 | |||||||||
| Inventories | 87,996,325 | 85,237,042 | 90,115,460 | |||||||||
| Income tax receivable | 215,736 | - | - | |||||||||
| Deferred income taxes | 1,291,287 | 1,291,907 | 1,137,429 | |||||||||
| Prepaid expenses | 2,969,005 | 2,553,442 | 2,577,125 | |||||||||
| Total current assets | 159,349,156 | 149,982,668 | 160,311,534 | |||||||||
| FIXED ASSETS – net | 26,808,704 | 26,264,641 | 27,266,880 | |||||||||
| IDENTIFIED INTANGIBLES | 36,581,475 | 36,681,644 | 36,707,473 | |||||||||
| OTHER ASSETS | 261,766 | 299,490 | 267,041 | |||||||||
| TOTAL ASSETS | $ | 223,001,101 | $ | 213,228,443 | $ | 224,552,928 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY: | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Accounts payable | $ | 15,623,738 | $ | 15,116,131 | $ | 18,829,425 | ||||||
| Accrued expenses: | ||||||||||||
| Taxes - other | 389,712 | 532,470 | 443,172 | |||||||||
| Other | 7,163,907 | 9,561,139 | 7,336,579 | |||||||||
| Total current liabilities | 23,177,357 | 25,209,740 | 26,609,176 | |||||||||
| LONG TERM DEBT | 45,030,998 | 36,270,373 | 50,687,596 | |||||||||
| DEFERRED INCOME TAXES | 12,998,424 | 12,928,048 | 12,448,842 | |||||||||
| DEFERRED LIABILITIES | 343,791 | 472,364 | 255,906 | |||||||||
| TOTAL LIABILITIES | 81,550,570 | 74,880,525 | 90,001,520 | |||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||
| Common stock, no par value; | ||||||||||||
| 25,000,000 shares authorized; issued and outstanding September 30, 2015 - 7,564,313; December 31, 2014 - 7,550,126; September 30, 2014 - 7,546,654 | 70,762,851 | 70,460,672 | 70,380,692 | |||||||||
| Retained earnings | 70,687,680 | 67,887,246 | 64,170,716 | |||||||||
| Total shareholders' equity | 141,450,531 | 138,347,918 | 134,551,408 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 223,001,101 | $ | 213,228,443 | $ | 224,552,928 | ||||||
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Rocky Brands, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| NET SALES | $ | 70,001,496 | $ | 72,729,678 | $ | 204,035,995 | $ | 207,335,482 | ||||||||
| COST OF GOODS SOLD | 47,884,019 | 48,455,886 | 137,298,575 | 138,622,879 | ||||||||||||
| GROSS MARGIN | 22,117,477 | 24,273,792 | 66,737,420 | 68,712,603 | ||||||||||||
| SELLING, GENERAL AND | ||||||||||||||||
| ADMINISTRATIVE EXPENSES | 19,217,222 | 19,363,984 | 58,180,467 | 59,920,806 | ||||||||||||
| INCOME FROM OPERATIONS | 2,900,255 | 4,909,808 | 8,556,953 | 8,791,797 | ||||||||||||
| OTHER INCOME AND (EXPENSES): | ||||||||||||||||
| Interest expense | (188,413 | ) | (252,972 | ) | (529,675 | ) | (696,944 | ) | ||||||||
| Other – net | (37,885 | ) | (25,855 | ) | (96,701 | ) | (25,623 | ) | ||||||||
| Total other - net | (226,298 | ) | (278,827 | ) | (626,376 | ) | (722,567 | ) | ||||||||
| INCOME BEFORE INCOME TAXES | 2,673,957 | 4,630,981 | 7,930,577 | 8,069,230 | ||||||||||||
| INCOME TAX EXPENSE | 870,290 | 1,492,474 | 2,710,290 | 2,695,474 | ||||||||||||
| NET INCOME | $ | 1,803,667 | $ | 3,138,507 | $ | 5,220,287 | $ | 5,373,756 | ||||||||
| INCOME PER SHARE | ||||||||||||||||
| Basic | $ | 0.24 | $ | 0.42 | $ | 0.69 | $ | 0.71 | ||||||||
| Diluted | $ | 0.24 | $ | 0.42 | $ | 0.69 | $ | 0.71 | ||||||||
| WEIGHTED AVERAGE NUMBER OF | ||||||||||||||||
| COMMON SHARES OUTSTANDING | ||||||||||||||||
| Basic | 7,564,289 | 7,546,617 | 7,561,845 | 7,543,199 | ||||||||||||
| Diluted | 7,578,219 | 7,550,268 | 7,574,239 | 7,545,338 | ||||||||||||
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