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 2016 Results
NELSONVILLE, Ohio, April 21, 2016 – Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial results for its first quarter ended March 31, 2016.
First Quarter 2016 Sales and Income
First quarter net sales were $57.5 million compared to $65.5 million in the first quarter of 2015. The Company reported a first quarter net loss of $0.2 million, or ($0.03) per diluted share compared to net income of $1.4 million, or $0.19 per diluted share in the first quarter of 2015.
David Sharp, President and Chief Executive Officer, commented, “We are making solid progress executing our strategies aimed at further diversifying our business. Earlier this month we announced actor and musician Nick Jonas as brand ambassador of the Creative Recreation brand. We are confident this exciting partnership will advance Creative Recreations’ positon as a leading fashion brand with both consumers and key retailers and positively impact demand for the product line. At the same time, we’ve been successful at expanding distribution for our bourgeoning Euro-Comfort brand Rocky 4Eur Sole. Unfortunately the factors that impacted our core Work, Western and Hunting categories during the second half of last year, namely warm temperatures and the softening of local economies tied to oil & gas production, created an inventory overhang in our channels of distribution that impacted fill-in of our Georgia Boot, Rocky and Durango brands during the first quarter. Therefore, we’ll continue to shift more time and resources to support our opportunities in the casual and fashion segments of the market which we believe will help reduce our dependency on weather and drive long-term growth and increased shareholder value.”
Net sales for the first quarter were $57.5 million compared to $65.5 million a year ago. Wholesale sales for the first quarter decreased to $40.2 million compared to $51.0 million for the same period in 2015. Retail sales for the first quarter were $11.5 million compared to $11.9 million for the same period last year. Military segment sales for the first quarter increased to $5.8 million compared to $2.6 million in the first quarter of 2015.
Gross margin in the first quarter of 2016 was $18.9 million, or 32.9% of sales, compared to $22.0 million, or 33.6% of sales, for the same period last year. The 70 basis point decrease was driven by the increase in military segment sales which carry lower gross margins than our wholesale and retail segments.
Selling, general and administrative (SG&A) expenses were $19.1 million, or 33.3 % of net sales, for the first quarter of 2016 compared to $19.6 million, or 29.9% of net sales, a year ago. The $0.5 million decrease in SG&A expenses was primarily related to lower variable expenses associated with the decrease in wholesale sales.
Loss from operations was $0.2 million compared to income from operations of $2.4 million, or 3.7% of net sales, a year ago.
Interest expense was $136,000 for the first quarter of 2016, versus $165,000 for the same period last year.
The Company’s funded debt decreased $15.0 million, or 41.0% to $21.6 million at March 31, 2016 versus $36.7 million at March 31, 2015.
Inventory at March 31, 2016 was $84.5 million compared with $83.1 million on the same date a year ago. The slight increase in inventories year-over-year was driven by the buildup of raw materials ahead of the ramp up in military footwear production.
Conference Call Information
The Company’s conference call to review first quarter 2016 results will be broadcast live over the internet today, Thursday, April 21, 2016 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 shifting of time and resources (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, 2015 (filed March 3, 2016). 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
| March 31, 2016 | December 31, 2015 | March 31, 2015 | ||||||||||
| Unaudited | Audited | Unaudited | ||||||||||
| ASSETS: | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 3,716,716 | $ | 3,407,140 | $ | 4,391,765 | ||||||
| Trade receivables – net | 38,253,999 | 44,549,207 | 54,271,919 | |||||||||
| Other receivables | 597,343 | 583,479 | 618,179 | |||||||||
| Inventories | 84,502,529 | 76,991,059 | 83,125,271 | |||||||||
| Income tax receivable | 1,214,755 | 128,699 | 52,961 | |||||||||
| Deferred income taxes | 1,031,818 | 1,031,818 | 1,291,907 | |||||||||
| Prepaid expenses | 3,073,814 | 2,530,517 | 3,078,008 | |||||||||
| Total current assets | 132,390,974 | 129,221,919 | 146,830,010 | |||||||||
| FIXED ASSETS – net | 28,103,995 | 27,836,527 | 25,331,520 | |||||||||
| IDENTIFIED INTANGIBLES | 36,514,458 | 36,547,873 | 36,649,003 | |||||||||
| OTHER ASSETS | 253,621 | 258,812 | 277,305 | |||||||||
| TOTAL ASSETS | $ | 197,263,048 | $ | 193,865,131 | $ | 209,087,838 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY: | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Accounts payable | $ | 15,044,942 | $ | 9,118,555 | $ | 13,894,921 | ||||||
| Accrued other expenses: | 6,085,947 | 5,629,661 | 6,027,490 | |||||||||
| Total current liabilities | 21,130,889 | 14,748,216 | 19,922,411 | |||||||||
| LONG TERM DEBT | 21,649,319 | 23,700,089 | 36,691,449 | |||||||||
| DEFERRED INCOME TAXES | 13,000,609 | 13,000,609 | 12,928,048 | |||||||||
| DEFERRED LIABILITIES | 265,262 | 295,676 | 434,625 | |||||||||
| TOTAL LIABILITIES | 56,046,079 | 51,744,590 | 69,976,533 | |||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||||
| Common stock, no par value; | ||||||||||||
25,000,000 shares authorized; issued and outstanding March 31, 2016 - 7,583,901; December 31, 2015 - 7,567,271; March 31, 2015 - 7,559,725 | ||||||||||||
| 71,004,499 | 70,882,392 | 70,566,065 | ||||||||||
| Retained earnings | 70,212,470 | 71,238,149 | 68,545,240 | |||||||||
| Total shareholders' equity | 141,216,969 | 142,120,541 | 139,111,305 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 197,263,048 | $ | 193,865,131 | $ | 209,087,838 | ||||||
Rocky Brands, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2016 | 2015 | |||||||
| Unaudited | Unaudited | |||||||
| NET SALES | $ | 57,529,945 | $ | 65,451,303 | ||||
| COST OF GOODS SOLD | 38,619,053 | 43,479,993 | ||||||
| GROSS MARGIN | 18,910,892 | 21,971,310 | ||||||
| SELLING, GENERAL AND | ||||||||
| ADMINISTRATIVE EXPENSES | 19,131,894 | 19,567,947 | ||||||
| INCOME (LOSS) FROM OPERATIONS | (221,002 | ) | 2,403,363 | |||||
| OTHER INCOME AND (EXPENSES): | ||||||||
| Interest expense | (135,976 | ) | (165,076 | ) | ||||
| Other – net | 67,528 | (63,340 | ) | |||||
| Total other - net | (68,448 | ) | (228,416 | ) | ||||
| INCOME (LOSS) BEFORE INCOME TAXES | (289,450 | ) | 2,174,947 | |||||
| INCOME TAX EXPENSE (BENEFIT) | (98,000 | ) | 761,000 | |||||
| NET INCOME (LOSS) | $ | (191,450 | ) | $ | 1,413,947 | |||
| INCOME (LOSS) PER SHARE | ||||||||
| Basic | $ | (0.03 | ) | $ | 0.19 | |||
| Diluted | $ | (0.03 | ) | $ | 0.19 | |||
| WEIGHTED AVERAGE NUMBER OF | ||||||||
| COMMON SHARES OUTSTANDING | ||||||||
| Basic | 7,583,170 | 7,559,343 | ||||||
| Diluted | 7,583,170 | 7,566,698 | ||||||