Exhibit 99
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ROCKY SHOES & BOOTS, INC. |
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Company Contact:
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Jim McDonald |
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Chief Financial Officer |
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(740) 753-1951 |
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Investor Relations:
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Integrated Corporate Relations, Inc. |
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Brendon E. Frey/Chad A. Jacobs |
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(203) 682-8200 |
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Media Relations:
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Integrated Corporate Relations, Inc. |
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Megan McDonnell |
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(203) 682-8200 |
ROCKY SHOES & BOOTS, INC. REPORTS FIRST QUARTER REVENUES AND EARNINGS
NELSONVILLE, Ohio, April 27, 2006 — Rocky Shoes & Boots, Inc. (Nasdaq: RCKY) today announced
financial results for the first quarter ended March 31, 2006.
For the three months ended March 31, 2006, net sales were $57.5 million compared to $61.5 million
for the corresponding period a year ago. Net income was $0.9 million versus net income of $1.1
million and diluted earnings per share was $0.16 versus $0.20 last year. Net income for the first
quarter of fiscal 2006 includes approximately $94,000 in stock compensation expense required by
current accounting standards compared with no stock compensation
expense in the first quarter of fiscal
2005. Excluding the stock compensation expense, diluted earnings per share for the first quarter of
fiscal 2006 would have been $0.18.
Mike Brooks, Chairman and Chief Executive Officer of Rocky Shoes & Boots, stated, “Our first
quarter results were driven by double digit gains in our western footwear category, coupled with
improvements in our work and retail segments. We continue to make meaningful progress leveraging
our sales relationships in order to further penetrate our current account base and gain important
shelf space for our entire portfolio of brands. As we approach the summer and fall selling seasons,
we are focused on executing our business plan and remain optimistic about our prospects for the
remainder of the year.”
First Quarter Results
Net sales for the first quarter decreased to $57.5 million compared to $61.5 million a year ago.
The decrease in sales is primarily attributable to the decline in footwear sales to the military,
which were $0.9 million in the first quarter of 2006 compared to $3.7 million in the first quarter
of 2005. Sales were also impacted by lower than expected results in
our outdoor footwear category during the first quarter of fiscal 2006.
Gross margin in the first quarter of 2006 was $24.9 million, or 43.3% of sales, compared to $24.2
million or 39.4% of sales, for the same period last year. The 390 basis point increase was
primarily due to the decrease in shipments to the U.S. military in the first quarter of fiscal 2006
compared to the first quarter of fiscal 2005. Military boots are sold at lower gross margins than
branded products.
Selling, general and administrative (SG&A) expenses were $21.8 million, or 37.9% of sales for the
first quarter of 2006 compared to $20.7 million, or 33.6% of sales, a year ago. The increase in
SG&A expenses is partially related to a one-time charge of approximately $0.6 million related to
the curtailment of the Company’s defined benefit pension plan which occurred during the first
quarter of fiscal 2006.
Income from operations was $3.1 million or 5.5% of net sales for the period from $3.5 million or
5.8% of net sales in the prior year. Excluding the aforementioned one-time charge of approximately
$0.6 million, income from operations for the first quarter of fiscal 2006 was $3.7 million, or 6.5%
of net sales.
Interest expense increased to $2.4 million for the quarter ended March 31, 2006 versus $1.9 million
for same period last year, primarily due higher interest rates than a year ago.
Other income in the first quarter of 2006 included a one-time gain of approximately $0.7 million
related to the sale of Company owned property.
Inventory
Inventory increased to $83.0 million at March 31, 2006 compared with $69.3 million on the same date
a year ago primarily to support growth in the Company’s western and work footwear segments.
Outlook
The Company stated it remains comfortable with its previously updated guidance for fiscal 2006. The
Company expects revenues to be in the range of $287 million to $292 million, and diluted earnings
per share to be in the range of $2.28 to $2.38, including a non-cash charge of approximately $0.07
per share related to stock option expensing. Excluding stock option expensing, the Company expects
diluted earnings per share to be in the range of $2.35 to $2.45. It is important to note that the
Company’s guidance for fiscal 2006 does not include any footwear sales to the military compared to
approximately $27.7 million in fiscal 2005.
Mr. Brooks concluded, “Our ability to expand distribution and further leverage the strength of our
brands through new product introductions and additional category extensions should set the stage
for future growth. Our strategy is in place and we look forward to capitalizing on the many
opportunities that are still ahead of us.”
About Rocky Shoes & Boots, Inc.
Rocky Shoes & Boots, 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
Outdoor Gear®, Georgia Boot®, Durango®, Lehigh® and Dickies.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
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 guidance for fiscal 2006 (paragraph 10). 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, 2005
(filed March 16, 2006). 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.