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 2015 RESULTS

First Quarter Net Income Doubles to $1.4 Million; Earnings Per Share Increases to $0.19

 

NELSONVILLE, Ohio, April 21, 2015 – Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial results for its first quarter ended March 31, 2015.

 

First Quarter 2015 Sales and Income

First quarter net sales were $65.5 million compared to $65.8 million in the first quarter of 2014. The Company reported first quarter net income of $1.4 million, or $0.19 per diluted share compared to net income of $0.7 million, or $0.10 per diluted share in the first quarter of 2014.

 

David Sharp, President and Chief Executive Officer, commented, “We are extremely pleased to deliver strong first quarter earnings and start 2015 on a positive note. Our bottom line performance was driven by improved gross margin in our wholesale channel and a reduction in operating expenses. At the same time, demand for our Durango collections continued to gain pace, fueling a 30% increase in Durango brand sales over the year ago period. We did experience some headwinds during the first quarter including delayed deliveries as a result of the West Coast port situation. We believe the current top-line challenges are temporary and based on recent sell-through trends and our fall order book, we are confident that growth will accelerate as the year progresses.”

 

First Quarter Review

Net sales for the first quarter were $65.5 million compared to $65.8 million a year ago. Wholesale sales for the first quarter decreased 4.0% to $51.0 million compared to $53.1 million for the same period in 2014. Retail sales for the first quarter increased 6.8% to $11.9 million compared to $11.1 million for the same period last year. Military segment sales for the first quarter increased to $2.6 million compared to $1.6 million in the first quarter of 2014.

 

Gross margin in the first quarter of 2015 was $22.0 million, or 33.6% of sales, compared to $21.9 million, or 33.2% of sales, for the same period last year. The 40 basis point increase was driven by higher wholesale gross margins, partially offset by an increase in military segment sales which carry lower gross margins than our wholesale and retail segments.

 

Selling, general and administrative (SG&A) expenses were $19.6 million, or 29.9% of net sales, for the first quarter of 2015 compared to $20.5 million, or 31.2% of net sales, a year ago. The $950,000 decrease in SG&A expenses was primarily related to a reduction in freight expenses and lower tradeshow & advertising spends compared with a year ago.

 

Income from operations was $2.4 million, or 3.7% of net sales, compared to $1.3 million, or 2.0% of net sales, a year ago.

 

Interest expense was $165,000 for the first quarter of 2015, versus $219,000 for the same period last year.

 

The Company’s funded debt was $36.7 million at March 31, 2015 versus $36.6 million at March 31, 2014.

 

 
 

 

Inventory increased 6.2%, or $4.8 million, to $83.1 million at March 31, 2015 compared with $78.3 million on the same date a year ago. Based on current sales trends and the fall order book, the Company is comfortable with its current inventory position.

 

Conference Call Information

The Company’s conference call to review first quarter 2015 results will be broadcast live over the internet today, Tuesday April 21, 2015 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®, Creative Recreation®, and the licensed brand Michelin®.

 

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 challenges and growth acceleration (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, 2014 (filed February 27, 2015). 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.

 

 

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Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

 

   March 31, 2015   December 31, 2014   March 31, 2014 
   Unaudited   Audited   Unaudited 
ASSETS:            
             
CURRENT ASSETS:               
Cash and cash equivalents  $4,391,765   $4,616,694   $4,203,846 
Trade receivables – net   54,271,919    55,807,103    52,735,602 
Other receivables   618,179    476,480    357,133 
Inventories   83,125,271    85,237,042    78,308,659 
Income tax receivable   52,961    -    759,938 
Deferred income taxes   1,291,907    1,291,907    1,104,050 
Prepaid expenses   3,078,008    2,553,442    2,708,168 
Total current assets   146,830,010    149,982,668    140,177,396 
FIXED ASSETS – net   25,331,520    26,264,641    27,971,316 
IDENTIFIED INTANGIBLES   36,649,003    36,681,644    36,773,351 
OTHER ASSETS   277,305    299,490    322,863 
TOTAL ASSETS  $209,087,838   $213,228,443   $205,244,926 
                
                
LIABILITIES AND SHAREHOLDERS' EQUITY:               
                
CURRENT LIABILITIES:               
Accounts payable  $13,894,921   $15,116,131   $19,583,618 
Accrued expenses:               
Taxes - other   439,220    532,470    563,816 
Other   5,588,270    9,561,139    5,268,562 
Total current liabilities   19,922,411    25,209,740    25,415,996 
                
LONG TERM DEBT   36,691,449    36,270,373    36,590,000 
DEFERRED INCOME TAXES   12,928,048    12,928,048    11,750,718 
DEFERRED LIABILITIES   434,625    472,364    255,906 
                
TOTAL LIABILITIES   69,976,533    74,880,525    74,012,620 
                
SHAREHOLDERS' EQUITY:               
Common stock, no par value;               
25,000,000 shares authorized; issued and outstanding  March 31, 2015 - 7,559,725; December 31, 2014 - 7,550,126; March 31, 2014 - 7,539,808   70,566,065    70,460,672    70,202,570 
Retained earnings   68,545,240    67,887,246    61,029,736 
                
Total shareholders' equity   139,111,305    138,347,918    131,232,306 
                
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $209,087,838   $213,228,443   $205,244,926 

 

  

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Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations


   Three Months Ended 
   March 31, 
   2015   2014 
   Unaudited   Unaudited 
NET SALES  $65,451,303   $65,783,284 
           
COST OF GOODS SOLD   43,479,993    43,930,135 
           
GROSS MARGIN   21,971,310    21,853,149 
           
OPERATING EXPENSES          
           
SELLING, GENERAL AND          
   ADMINISTRATIVE EXPENSES   19,567,947    20,515,539 
           
INCOME FROM OPERATIONS   2,403,363    1,337,610 
           
OTHER INCOME AND (EXPENSES):          
Interest expense   (165,076)   (218,673)
Other – net   (63,340)   (6,149)
Total other - net   (228,416)   (224,822)
           
INCOME BEFORE INCOME TAXES   2,174,947    1,112,788 
           
INCOME TAX EXPENSE   761,000    389,000 
           
NET INCOME  $1,413,947   $723,788 
           
INCOME PER SHARE          
Basic  $0.19   $0.10 
Diluted  $0.19   $0.10 
           
WEIGHTED AVERAGE NUMBER OF          
    COMMON SHARES OUTSTANDING          
Basic   7,559,343    7,539,733 
Diluted   7,566,698    7,540,406 

 

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