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 FIRST QUARTER 2012 RESULTS

Diluted Earnings Per Share Increased 42.9% to $0.10

Wholesale Sales Increased 6.5%

Funded Debt Decreased 22.5% or $6.3 Million to $21.5 Million

 

NELSONVILLE, Ohio, April 19, 2012 – Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial results for its first quarter ended March 31, 2012.

 

First quarter 2012 net income increased $0.2 million to $0.7 million compared with $0.5 million in the first quarter of 2011 and diluted earnings per share increased 42.9% to $0.10 from $0.07 during the same period last year. First quarter net sales improved to $53.3 million versus net sales of $52.3 million a year ago.

 

David Sharp, President and Chief Executive Officer, commented, “We are pleased with our first quarter results as we continued to realize solid progress against our strategic initiatives. Our top-line performance was again driven by our wholesale division highlighted by gains in our work and western segments and the expansion of our fast growing commercial military business. New product introductions continue to fuel growth and are leading to additional distribution with both new and existing accounts. Sell-in during the first quarter included a rollout to all locations of one of our largest national accounts that included price concessions which had a temporary impact on gross margins. We were able to fully offset the decline through expense management and deliver a marked improvement in earnings compared to a year ago. This was especially true in our retail division where the profit contribution was up dramatically even on lower sales. We are encouraged by the current pace of our business and based on our fall order book we expect our sales momentum to carry through the remainder of the year.”

 

First Quarter Review

Wholesale sales for the first quarter increased 6.5% to $42.4 million compared to $39.8 million for the same period in 2011. Retail sales for the first quarter were $10.5 million compared to $11.7 million for the same period last year. Military segment sales for the first quarter were $0.4 million compared to $0.8 million in the same period in 2011. As a result, net sales for the first quarter increased 1.9% to $53.3 million compared to $52.3 million a year ago.

 

Gross margin in the first quarter of 2012 was $18.0 million, or 33.8% of sales compared to $19.3 million, or 36.8% for the same period last year. The decrease in gross margin was primarily driven by lower initial mark ups associated with the rollout to all locations of one of our largest national accounts.

 

Selling, general and administrative (SG&A) expenses decreased 8.2% to $16.7 million or 31.4% of net sales, for the first quarter of 2012 compared to $18.2 million, or 34.9% of net sales a year ago. The $1.5 million decrease is primarily due to lower compensation expense and operating costs of our retail business.

 

Income from operations was $1.3 million, or 2.4% of net sales, compared to $1.0 million, or 2.0% of net sales, in the prior year period.

 

Interest expense decreased to $0.1 million for the first quarter of 2012 versus $0.2 million due to lower borrowings versus the same period a year ago.

 

 
 

 

The Company’s funded debt decreased 22.5% or $6.3 million to $21.5 million at March 31, 2012 versus $27.8 million at March 31, 2011.

 

Inventory increased 4.0% to $64.1 million at March 31, 2012 compared with $61.7 million on the same date a year ago. The increase in inventory was the result of an increase in cost per unit partially offset by a decrease in units of footwear.

 

Conference Call Information

The Company’s conference call to review first quarter fiscal 2012 results will be broadcast live over the internet today, Thursday, April 19, 2012 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®, and the licensed brands Michelin® and Mossy Oak®.

 

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 future sales (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, 2011 (filed February 28, 2012). 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.

 

 
 

 

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

  

  December 31, 2011   March 31, 2012   March 31, 2011 
  Unaudited   Audited   Unaudited 
ASSETS:               
CURRENT ASSETS:               
Cash and cash equivalents  $2,424,864   $3,650,291   $2,230,661 
Trade receivables – net   38,587,112    45,008,793    37,459,868 
Other receivables   783,349    946,686    1,010,981 
Inventories   64,113,346    65,019,048    61,654,840 
Income tax receivable   947,575    1,164,664    260,555 
Deferred income taxes   1,154,040    1,154,040    1,218,101 
Prepaid expenses   2,842,105    2,561,941    3,033,002 
Total current assets   110,852,391    119,505,463    106,868,008 
FIXED ASSETS – net   24,572,535    23,557,102    22,631,554 
IDENTIFIED INTANGIBLES   30,498,545    30,493,107    30,512,025 
OTHER ASSETS   468,692    510,293    1,548,308 
TOTAL ASSETS  $166,392,163   $174,065,965   $161,559,895 
LIABILITIES AND SHAREHOLDERS' EQUITY:               
CURRENT LIABILITIES:               
Accounts payable  $12,643,640   $5,696,363   $10,368,817 
Current maturities – long term debt   -    -    463,749 
Accrued expenses:               
Taxes - other   481,847    609,992    554,680 
Other   2,775,396    4,624,167    4,467,278 
Total current liabilities   15,900,883    10,930,522    15,854,524 
LONG TERM DEBT – less current maturities   21,512,650    35,000,000    27,300,087 
DEFERRED INCOME TAXES   10,987,395    10,987,395    9,374,685 
DEFERRED LIABILITIES   488,437    488,437    2,917,934 
TOTAL LIABILITIES   48,889,365    57,406,354    55,447,230 
SHAREHOLDERS' EQUITY:               
Common stock, no par value;               
25,000,000 shares authorized; issued and outstanding  March 31, 2012 - 7,503,568; December 31, 2011 - 7,489,995; March 31, 2011 - 7,489,995   69,694,770    69,572,270    69,546,028 
Accumulated other comprehensive loss   -    -    (2,755,425)
Retained earnings   47,808,028    47,087,341    39,322,062 
Total shareholders' equity   117,502,798    116,659,611    106,112,665 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $166,392,163   $174,065,965   $161,559,895 

 
 

 

 Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

 

 

   Three Months Ended  
   March 31,  
   2012   2011 
   Unaudited   Unaudited 
         
NET SALES  $53,325,918   $52,306,275 
           
COST OF GOODS SOLD   35,303,837    33,040,330 
           
GROSS MARGIN   18,022,081    19,265,945 
           
OPERATING EXPENSES          
           
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   16,742,058    18,229,351 
           
INCOME FROM OPERATIONS   1,280,023    1,036,594 
           
OTHER INCOME AND (EXPENSES):          
Interest expense   (144,347)   (215,532)
Other – net   (8,989)   12,554 
Total other - net   (153,336)   (202,978)
           
INCOME BEFORE INCOME TAXES   1,126,687    833,616 
           
INCOME TAX EXPENSE   406,000    292,000 
           
NET INCOME  $720,687   $541,616 
           
INCOME PER SHARE          
Basic  $0.10   $0.07 
Diluted  $0.10   $0.07 
           
WEIGHTED AVERAGE NUMBER OF          
   COMMON SHARES OUTSTANDING          
Basic   7,503,270    7,476,448 
Diluted   7,503,270    7,478,611