Exhibit 99
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ROCKY BRANDS, 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 Frey/Chad Jacobs |
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(203) 682-8200 |
ROCKY BRANDS, INC. ANNOUNCES FIRST QUARTER FISCAL 2007 RESULTS
NELSONVILLE, Ohio, May 7, 2007 — Rocky Brands, Inc. (Nasdaq: RCKY) today announced financial
results for its first quarter ended March 31, 2007.
For the first quarter of 2007, net sales increased 7.2% to $61.7 million versus net sales of $57.5
million in the first quarter of 2006. Net income was $0.8 million versus net income of $0.9 million
and diluted earnings per share were $0.14 compared to diluted earnings per share of $0.16 a year
ago.
Mike Brooks, Chairman and Chief Executive Officer, commented, “We were pleased with our top-line
performance during the first quarter which was driven by gains in our work and outdoor segments,
offset by a decrease in our western business. As we expected, gross margins declined as a result of
a shift in our product mix combined with our strategic decision to reduce a portion of our
inventory at closeout. At the same time, we benefited from a reimbursement of expenses from the
U.S. military. Overall, we are
encouraged by our start to the new year and we remain on track to achieve our near and long-term
objectives.”
First Quarter Results
Net sales for the first quarter increased to $61.7 million compared to $57.5 million a year ago.
The increase in sales is primarily attributable to year-over-year improvements in our work footwear
category, coupled with an increase in our retail operations.
Gross margin in the first quarter of 2007 was $26.1 million, which included $0.7 million of a
reimbursement of expenses from the military, or 42.3% of sales, compared to $24.9 million or 43.3%
of sales, for the same period last year. The decline was primarily due to a decrease in sales of
our western footwear, which carry higher gross margins and an increase in closeout sales versus a
year ago.
Selling, general and administrative (SG&A) expenses were $22.3 million, or 36.2% of sales, for the
first quarter of 2007 compared to $21.1 million, or 36.7% of sales, a year ago. The increase in
SG&A expenses is partially due to additional selling expenses related to increased sales and higher
professional fees.
Income from operations was $3.8 million, or 6.1% of net sales, for the period compared to $3.8
million, or 6.6% of net sales, in the prior year.
Funded Debt and Interest Expense
The Company’s funded debt at March 31, 2007 was $89.9 million versus $94.1 million at March 31,
2006. Interest expense increased to $2.5 million for the first quarter of 2007 versus $2.4 million
for the same period last year. The slight increase in interest expense was due to higher interest
rates versus a year ago.
Inventory
Inventory decreased $11.2 million, or 13.5%, to $71.8 million at March 31, 2007 compared with $83.0
million on the same date a year ago.
Outlook
The Company stated it remains comfortable with its previously issued guidance and continues to
expect fiscal 2007 revenues to increase approximately 5% over 2006 levels, and diluted earnings per
share to increase approximately 35% over 2006 levels.
Mr. Brooks concluded, “We have made important progress over the past several months diversifying
our business, reducing our expenses, and improving our balance sheet. While we still have much work
to do we are excited about several upcoming product introductions and believe recent investments in
research and development will lead to future market share gains in each of our operating segments.
We are committed to capitalizing on all the opportunities we believe exist for our entire portfolio
of brands and move forward more focused than ever on successfully executing our growth strategy.”
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 Outdoor Gear®,
Georgia Boot®, Durango®, Lehigh®, and the licensed brands Dickies®, Zumfoot® and Michelin®.
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 the achievement of near and long-term objectives (paragraph 3), expected
2007 revenues and earnings (paragraph 10) and future market share gains (paragraph 11). 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, 2006 (filed March 15, 2007). 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.