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 THIRD QUARTER 2015 RESULTS

 

NELSONVILLE, Ohio, October 21, 2015 - Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial results for its third quarter ended September 30, 2015.

 

Third Quarter 2015 Sales and Income

Third quarter net sales were $70.0 million compared to $72.7 million in the third quarter of 2014. The Company reported third quarter net income of $1.8 million, or $0.24 per diluted share, compared to net income of $3.1 million, or $0.42 per diluted share, in the third quarter of 2014.

 

David Sharp, President and Chief Executive Officer, commented, “Our third quarter performance reflects softer than expected demand in our Work and Hunting categories. The combination of warm temperatures, challenging retail store traffic and weakening local economies tied to oil & gas production led to lower levels of reorders for many of our waterproof and insulated boot collections. This was partially offset by continued growth of our Durango brand and Commercial Military business combined with a significant sales increase in our lower margin, contract military segment. While we are disappointed in our overall results and are being cautious about the remainder of this year given current trends, we believe our entire brand portfolio remains healthy and that the slowdown in our top-line is temporary. We are confident that our product and distribution strategies will generate earnings growth in excess of sales growth over the long-term as our business model has recently demonstrated.”

 

Third Quarter Review

Net sales for the third quarter were $70.0 million compared to $72.7 million a year ago. Wholesale sales for the third quarter decreased 12.0% to $54.7 million compared to $62.1 million for the same period in 2014. Retail sales for the third quarter increased 8.4% to $10.3 million compared to $9.5 million for the same period last year. Military segment sales for the third quarter increased to $5.1 million compared to $1.1 million in the third quarter of 2014.

 

Gross margin in the third quarter of 2015 was $22.1 million, or 31.6% of sales, compared to $24.3 million, or 33.4% of sales, for the same period last year. The 180 basis point decrease was primarily due to the increase in military segment sales as a percentage of overall sales, which carry lower gross margins than wholesale and retail.

 

Selling, general and administrative (SG&A) expenses were $19.2 million, or 27.5% of net sales, for the third quarter of 2015 compared to $19.4 million, or 26.6% of net sales, a year ago.

 

Income from operations was $2.9 million, or 4.1% of net sales, compared to $4.9 million, or 6.8% of net sales, a year ago.

 

Interest expense was $188,000 for the third quarter of 2015, versus $253,000 for the same period last year.

 

The Company’s funded debt decreased $5.7 million, or 11.2%, to $45.0 million at September 30, 2015 compared to $50.7 million at September 30, 2014.

 

 

 

 

Inventories decreased $2.1 million, or 2.4%, to $88.0 million at September 30, 2015 compared with $90.1 million on the same date a year ago.

 

Conference Call Information

The Company’s conference call to review third quarter 2015 results will be broadcast live over the internet today, Wednesday October 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 the health of the brand (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) and quarterly reports on Form 10-Q for the quarters ended March 31, 2015 (filed April 30, 2015) and June 30, 2015 (filed July 29, 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

 

   September 30, 2015   December 31, 2014   September 30, 2014 
   Unaudited   Audited   Unaudited 
ASSETS:               
                
CURRENT ASSETS:               
Cash and cash equivalents  $3,978,553   $4,616,694   $4,327,710 
Trade receivables – net   62,389,224    55,807,103    61,650,439 
Other receivables   509,026    476,480    503,371 
Inventories   87,996,325    85,237,042    90,115,460 
Income tax receivable   215,736    -    - 
Deferred income taxes   1,291,287    1,291,907    1,137,429 
Prepaid expenses   2,969,005    2,553,442    2,577,125 
Total current assets   159,349,156    149,982,668    160,311,534 
FIXED ASSETS – net   26,808,704    26,264,641    27,266,880 
IDENTIFIED INTANGIBLES   36,581,475    36,681,644    36,707,473 
OTHER ASSETS   261,766    299,490    267,041 
TOTAL ASSETS  $223,001,101   $213,228,443   $224,552,928 
                
                
LIABILITIES AND SHAREHOLDERS' EQUITY:               
                
CURRENT LIABILITIES:               
Accounts payable  $15,623,738   $15,116,131   $18,829,425 
Accrued expenses:               
Taxes - other   389,712    532,470    443,172 
Other   7,163,907    9,561,139    7,336,579 
Total current liabilities   23,177,357    25,209,740    26,609,176 
                
LONG TERM DEBT   45,030,998    36,270,373    50,687,596 
DEFERRED INCOME TAXES   12,998,424    12,928,048    12,448,842 
DEFERRED LIABILITIES   343,791    472,364    255,906 
                
TOTAL LIABILITIES   81,550,570    74,880,525    90,001,520 
                
SHAREHOLDERS' EQUITY:               
Common stock, no par value;               
25,000,000 shares authorized; issued and outstanding  September 30, 2015 - 7,564,313; December 31, 2014 - 7,550,126; September 30, 2014 - 7,546,654   70,762,851    70,460,672    70,380,692 
Retained earnings   70,687,680    67,887,246    64,170,716 
                
Total shareholders' equity   141,450,531    138,347,918    134,551,408 
                
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $223,001,101   $213,228,443   $224,552,928 

  

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Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations


   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2015   2014   2015   2014 
                     
NET SALES  $70,001,496   $72,729,678   $204,035,995   $207,335,482 
                     
COST OF GOODS SOLD   47,884,019    48,455,886    137,298,575    138,622,879 
                     
GROSS MARGIN   22,117,477    24,273,792    66,737,420    68,712,603 
                     
SELLING, GENERAL AND                    
    ADMINISTRATIVE EXPENSES   19,217,222    19,363,984    58,180,467    59,920,806 
                     
INCOME FROM OPERATIONS   2,900,255    4,909,808    8,556,953    8,791,797 
                     
OTHER INCOME AND (EXPENSES):                    
Interest expense   (188,413)   (252,972)   (529,675)   (696,944)
Other – net   (37,885)   (25,855)   (96,701)   (25,623)
Total other - net   (226,298)   (278,827)   (626,376)   (722,567)
                     
INCOME BEFORE INCOME TAXES   2,673,957    4,630,981    7,930,577    8,069,230 
                     
INCOME TAX EXPENSE   870,290    1,492,474    2,710,290    2,695,474 
                     
NET INCOME  $1,803,667   $3,138,507   $5,220,287   $5,373,756 
                     
INCOME PER SHARE                    
Basic  $0.24   $0.42   $0.69   $0.71 
Diluted  $0.24   $0.42   $0.69   $0.71 
                     
WEIGHTED AVERAGE NUMBER OF                    
    COMMON SHARES OUTSTANDING                    
Basic   7,564,289    7,546,617    7,561,845    7,543,199 
Diluted   7,578,219    7,550,268    7,574,239    7,545,338 

 

 

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