EXHIBIT 99
FOR IMMEDIATE RELEASE For Additional Information
Contact: Jim McDonald
Vice President & CFO
(740) 753-1951
ROCKY SHOES & BOOTS, INC. REPORTS FIRST QUARTER RESULTS
Branded Sales Increase 38.5%
NELSONVILLE, Ohio (April 23, 2003) Rocky Shoes & Boots, Inc. (NASDAQ: RCKY)
today reported results for the three months ended March 31, 2003. The net loss
decreased to $622,569, or $0.14 per diluted share, compared with a net loss of
$1,227,188, or $0.27 per diluted share, for the same period last year.
Mike Brooks, Chairman and CEO commented, "Our results for the three months ended
March 31, which is historically our weakest quarter of the year, reflect
improvement over last year. Positive factors include a 38.5% gain in branded
product sales and an increase in gross margin to 25.2%. Orders received during
first quarter 2003 are well ahead of last year. We are pleased with the growing
interest in ROCKY(R) as we continue to extend the brand through our
"head-to-toe" growth strategy, which includes lines of branded clothing and
accessories. Our recent acquisition of GATES(R) underscores our commitment to
this approach. While uncertainties remain concerning the national economy, we
are encouraged regarding improved performance this year."
First Quarter Results
Net sales improved slightly to $13,754,941 for the quarter ended March 31, 2003
versus $13,749,588 a year ago. Branded sales, led by an increase of $2,756,000,
or 47.9% in occupational footwear sales, rose 38.5% to $13,755,000 for first
quarter 2003 from $9,929,000 for the same period last year. Increases were
realized in all branded product categories. There were no sales of footwear to
the U.S. Military in first quarter 2003 versus $3,821,000 for the same period a
year ago.
Gross profit rose to $3,465,528, or 25.2% of net sales, for first quarter 2003
compared with $2,340,653, or 17.0% of net sales, last year. The results
benefited primarily from no sales of military boots during first quarter 2003,
which were produced at significantly lower margins than other products. Gross
profit on branded products improved 160 basis points as a result of increased
higher margin sourced product sales, which rose to 49.1% of net sales for first
quarter 2003 from 30.0% last year. It is anticipated that the quarterly gross
margin will increase this year as sales volumes increase.
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Selling, general and administrative expenses were $4,250,606, or 30.9% of net
sales, for first quarter 2003 versus $3,899,501, or 28.4% of net sales, for the
same period last year. The increase was due to additional commissions for the
higher amount of branded sales and, to a lesser extent, increased fringe
benefits costs.
Funded Debt
Funded debt was $10,828,975 at March 31, 2003 versus $15,893,958 on the same
date a year ago, a decline of 31.9%. Interest expense declined 30.7% for first
quarter 2003 to $196,180 from $283,109 a year ago, primarily as a result of
lower borrowings.
Inventory
Inventory was $28,342,873 at March 31, 2003 compared with $29,713,341 on the
same date last year.
Share Repurchase Program
The Board of Directors authorized a share repurchase program in September 2002
for up to 500,000 shares, representing approximately 11% of the Company's common
shares outstanding at that time. Purchases were authorized through open market
or privately negotiated transactions. The purchases were funded from the
Company's operating cash flow and credit facility. During first quarter 2003 the
Company completed the repurchase program. The average purchase price was $6.38
per share.
Outlook
The Company anticipates that its 2003 net sales, including $8 million from the
recently acquired GATES(R) brand, will be at least $98 million. If the Company
achieves net sales of at least $98 million for the year 2003 net income is
expected to exceed $1.00 per diluted share for the year 2003 compared with $0.62
for 2002. The Company cautions investors, however, that the fiscal 2003 net
sales and earnings outlook is made on the basis of present market conditions and
if sales do not reach $98 million, actual earnings may be less than the current
guidance.
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About Rocky Shoes & Boots, Inc.
Rocky Shoes & Boots, Inc. designs, develops, manufactures and markets premium
quality rugged outdoor, occupational, and casual footwear, as well as branded
clothing and accessories. The Company's footwear, clothing and accessories are
marketed through several distribution channels, primarily under the registered
trademark, ROCKY.
This press release contains certain forward-looking statements with in 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: anticipated 2003 performance in
sales, gross margin, net income and earnings per share (paragraphs 2, 4 and 9).
These forward-looking statements involve numerous risks and uncertainties,
including the risks that sales plans will not be met, that present orders may be
cancelled or delayed, that the general economy or consumer spending habits will
depress the market for the Company's products, that there may be disruption in
the shipment of products from overseas to the Company, that the weather in 2003
is drier and warmer than normal, and all of the other 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, 2002. One or more of these factors
have affected, and could in the future effect, 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 SHOES & BOOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
2003 2002
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NET SALES $ 13,754,941 $ 13,749,588
COST OF GOODS SOLD 10,289,413 11,408,935
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GROSS MARGIN 3,465,528 2,340,653
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,250,606 3,899,501
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LOSS FROM OPERATIONS (785,078) (1,558,848)
OTHER INCOME AND (EXPENSES):
Interest expense (196,180) (283,109)
Other - net 91,873 88,831
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Total other - net (104,307) (194,278)
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LOSS BEFORE INCOME TAX BENEFIT (889,385) (1,753,126)
INCOME TAX BENEFIT (266,816) (525,938)
------------ ------------
NET LOSS $ (622,569) $ (1,227,188)
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NET LOSS PER SHARE
Basic ($0.14) ($0.27)
Diluted ($0.14) ($0.27)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic 4,363,115 4,493,823
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Diluted 4,363,115 4,493,823
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ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2003 DECEMBER 31, 2002 MARCH 31, 2002
-------------- ----------------- ---------------
UNAUDITED UNAUDITED
-------------- ---------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,391,867 $ 4,276,722 $ 1,117,729
Trade receivables - net 10,639,471 15,282,618 11,005,564
Other receivables 1,854,435 1,173,714 2,525,586
Inventories 28,342,873 23,181,989 29,713,341
Deferred income taxes 578,951 584,511 615,609
Prepaid expenses 1,748,220 1,267,097 1,539,910
------------ ------------ ------------
Total current assets $ 45,555,817 $ 45,766,651 $ 46,517,739
FIXED ASSETS - net 18,770,432 19,049,287 20,471,642
DEFERRED PENSION ASSET 1,651,222 1,651,222 2,169,021
DEFERRED INCOME TAXES 153,495 153,495 295,784
OTHER ASSETS 1,842,517 1,796,359 2,537,800
------------ ------------ ------------
TOTAL ASSETS $ 67,973,483 $ 68,417,014 $ 71,991,986
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LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $ 4,881,731 $ 1,642,306 $ 3,629,340
Current maturities - long-term debt 488,169 486,161 474,315
Accrued taxes - other 410,500 346,168 609,655
Accrued salaries and wages 712,192 807,611 704,559
Accrued plant closing costs 210,000 210,000 851,175
Accrued other 393,097 523,118 275,248
------------ ------------ ------------
Total current liabilities 7,095,689 4,015,364 6,544,292
LONG TERM DEBT - less current maturities 10,340,806 10,488,388 15,419,643
DEFERRED LIABILITIES 1,687,053 1,520,338 173,750
------------ ------------ ------------
TOTAL LIABILITIES 19,123,548 16,024,090 22,137,685
SHAREHOLDERS' EQUITY:
Common stock, no par value;
10,000,000 shares authorized; issued and outstanding
March 31, 2003 - 4,051,430; December 31, 2002 - 4,489,065;
March 31, 2002 - 4,498,965 32,368,617 35,289,038 35,340,315
Accumulated other comprehensive loss (2,311,749) (2,311,749) (831,161)
Retained earnings 18,793,067 19,415,635 15,345,147
------------ ------------ ------------
Total shareholders' equity 48,849,935 52,392,924 49,854,301
------------ ------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 67,973,483 $ 68,417,014 $ 71,991,986
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