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 THIRD QUARTER FISCAL 2008 RESULTS
Company Reports Third Quarter Diluted Earnings Per Share of $0.43
Wholesale Gross Margin Increased 410 Basis Points
SG&A Expenses Decreased Approximately $3.1 million
Company’s Funded Debt Decreased 12.4% Year-over-Year
NELSONVILLE, Ohio, October 28, 2008 – Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial
results for its third quarter ended September 30, 2008.
For the third quarter of 2008, net sales were $72.5 million versus net sales of $82.3 million in
the third quarter of 2007. The Company reported net income of $2.4 million, or $0.43 per diluted
share versus net income of $1.1 million or $0.21 per diluted share a year ago.
Mike Brooks, Chairman and Chief Executive Officer, commented, “We are pleased with our third
quarter results, particularly the significant increase in our bottom line. While the current
macroeconomic conditions have created a challenging sales environment, we have continued to focus
on areas of our business that we can control such as cost containment and manufacturing
efficiencies. Our ability to successfully execute our strategy is reflected in the 410 basis point
increase in wholesale gross margins and the $3.1 million or 12.5% reduction in our operating
expenses compared with a year ago. We move ahead optimistic about our opportunity to drive improved
profitability on a year-over-year basis during the fourth quarter.”
Third Quarter Results
Net sales for the third quarter were $72.5 million compared to $82.3 million a year ago. Wholesale
sales for the third quarter were $55.6 million compared to $64.1 million for the same period in
2007. The decline in wholesale sales is primarily attributable to supply chain disruptions combined
with the difficult economic conditions. Retail sales for the third quarter were $15.3 million
compared to $18.2 million for the same period in 2007. Retail sales were negatively impacted by
customer decisions to close plants, reduce headcount, and defer safety shoe purchases as the result
of the challenging economy. Military segment sales for the third quarter were $1.6 million, versus
no comparable sales in the same period in 2007.
Gross margin in the third quarter was $27.1 million, or 37.4% of sales, compared to $29.3 million
or 35.6% of sales, for the same period last year. Wholesale gross margin for the third quarter was
$19.7 million, or 35.4% of net sales, compared to $20.0 million, or 31.3% of net sales, in the same
period last year. The 410 basis point increase reflects an increase in sales price per unit, as
well as a decrease in manufacturing costs resulting from increased operating efficiencies. Retail
gross margin for the third quarter was $7.3 million, or 47.5% of net sales, compared to $9.2
million, or 50.8% of net sales, for the same period in 2007. Military gross margin for the third
quarter was $0.1 million, or 8.2% of net sales.
Selling, general and administrative (SG&A) expenses decreased 12.5% or $3.1 million to $22.0
million, or 30.3% of sales, for the third quarter of 2008 compared to $25.1 million, or 30.5% of
sales, a year ago. The decrease in SG&A expenses is primarily the result of reductions in
compensation, distribution and advertising expenses.
Income from operations increased 200 basis points to $5.1 million or 7.1% of net sales compared to
$4.2 million, or 5.1% of net sales, in the prior year.
Income tax expense for the third quarter included a $0.6 million
benefit compared to a $0.3 million benefit in the same period last year.
Funded Debt and Interest Expense
The Company’s funded debt decreased $15.2 million, or 12.4% to $107.6 million at September 30, 2008
versus $122.8 million at September 30, 2007. Interest expense decreased to $2.3 million for the
third quarter of 2008 versus $2.9 million for the same period last year. The decrease in interest
expense was due to reduced borrowings under the Company’s line of credit as well as lower interest
rates compared to the same period last year.
Inventory
Inventory decreased $1.8 million to $83.3 million at September 30, 2008 compared with $85.1 million
on the same date a year ago.
Mr. Brooks concluded, “We have worked extremely hard over the past year to improve the overall
efficiency of our Company and we are pleased with our recent accomplishments. Given the
uncertainty in the marketplace we will continue to operate in a conservative manner and will look
to capitalize on cost containment opportunities until our growth prospects improve. Importantly,
we have reduced our debt levels, which has improved our balance sheet.”
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 improved profitability (paragraph 3) and our continued conservative manner
of operating (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, 2007 (filed March 6, 2008),
the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2008 (filed May 1,
2008), and the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2008 (filed
August 6, 2008). 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.