First Quarter Revenue Increased 7.4% to
$65.9 Million
First Quarter Retail Sales Increased
18.2%
First Quarter Wholesale Sales Increased
4.8%
First Quarter Diluted EPS Increased 9.1% to
$0.48
Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial
results for its first quarter ended March 31, 2019.
First Quarter 2019 Sales and
Income
First quarter net sales increased 7.4% to $65.9 million compared
to $61.4 million in the first quarter of 2018. The Company reported
first quarter net income of $3.6 million, or $0.48 per diluted
share compared to net income of $3.3 million, or $0.44 per diluted
share in the first quarter of 2018.
Jason Brooks, President and Chief Executive Officer, commented,
“We are pleased to be off to a good start in 2019 with solid first
quarter results that included an 18% increase in retail sales. Our
overall performance continues to be driven by our commitment to
execute the game plan we’ve outlined for the Company, namely,
introducing compelling products, expanding awareness and demand for
our brands and direct channels, providing enhanced retailer
support, and capitalizing on our production capabilities to
increase sales and manufacturing efficiencies. These initiatives
are fueling consistent gains in revenue, gross margins and
profitability, which is allowing us to reinvest in our business and
return capital to shareholders through our quarterly dividend and
share repurchase plan. Looking ahead, we are cautiously optimistic
about our prospects for growth over the remainder of the year and
believe we are well positioned for sustained success over the
long-term.”
First Quarter Review
Net sales for the first quarter increased 7.4% to $65.9 million
compared to $61.4 million a year ago. Wholesale sales for the first
quarter increased 4.8% to $42.4 million compared to $40.4 million
for the same period in 2018. Retail sales for the first quarter
increased 18.2% to $15.4 million compared to $13.1 million for the
same period last year. Military segment sales for the first quarter
were $8.1 million compared to $7.9 million in the first quarter of
2018.
Gross margin in the first quarter of 2019 increased to $23.0
million, or 34.9% of sales, compared to $21.0 million, or 34.2% of
sales, for the same period last year. The 70 basis point increase
was driven by higher retail and military margins combined with a
lower percentage of military sales, which carry lower gross margins
than wholesale and retail sales.
Operating expenses increased to $18.5 million, or 28.0% of net
sales, for the first quarter of 2019 compared to $16.7 million, or
27.3% of net sales, a year ago. The increase in operating expenses
was driven primarily by increased investments in marketing and
personnel to support future growth as well as higher variable
expenses associated with the increase in sales.
Income from operations increased to $4.5 million, or 6.8% of net
sales compared to income from operations of $4.2 million, or 6.9%
of net sales a year ago.
Balance Sheet Review
Cash and cash equivalents increased $7.5 million or 74.3% to
$17.6 million at March 31, 2019 compared to $10.1 million on the
same date a year ago.
Inventory at March 31, 2019 increased 7.3% to $69.9 million
compared to $65.2 million on the same date a year ago.
Conference Call
Information
The Company’s conference call to review first quarter 2019
results will be broadcast live over the internet today, Tuesday,
April 23, 2019 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 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 our future
prospects for growth over the remainder of the year and position
for sustained success over the long-term (paragraph 2). 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, 2018 (filed March 13, 2019). 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
inclusion of such information should not be regarded as a
representation by the Company or any other person 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
(In thousands, except share
amounts)
March
31,
December 31,
March
31,
2019 2018 2018 ASSETS: CURRENT ASSETS: Cash and cash equivalents $
17,630 $ 10,173 $ 10,116 Trade receivables, net 41,161 43,337
41,231 Contract receivables 817 2,602 13,518 Other receivables 161
331 411 Inventories – net 69,905 72,822 65,151 Income tax
receivable 348 30 997 Prepaid expenses 3,383 1,890 2,442 Total
current assets 133,405 131,185 133,866 LEASED ASSETS 1,037 - -
PROPERTY, PLANT & EQUIPMENT – net 23,438 23,057 23,738
IDENTIFIED INTANGIBLES – net 30,264 30,273 30,304 OTHER ASSETS 262
148 190 TOTAL ASSETS $ 188,406 $ 184,663 $ 188,098
LIABILITIES AND SHAREHOLDERS' EQUITY: CURRENT LIABILITIES: Accounts
payable $ 17,271 $ 13,543 $ 14,130 Contract liabilities 817 2,602
13,518 Accrued expenses: Salaries and wages 1,518 3,339 1,789 Taxes
- other 638 556 94 Accrued freight 455 668 712 Commissions 494 560
415 Accrued duty 2,124 2,334 2,261 Other 1,746 1,416 1,183 Total
current liabilities 25,063 25,018 34,102 LONG TERM TAXES PAYABLE
169 169 2,287 LONG TERM LEASE 517 - - DEFERRED INCOME TAXES 7,780
7,780 7,726 DEFERRED LIABILITIES 121 121 155 TOTAL LIABILITIES
33,650 33,088 44,270 SHAREHOLDERS' EQUITY: Common stock, no par
value; 25,000,000 shares authorized; issued and outstanding March
31, 2019 - 7,391,660; December 31, 2018 - 7,368,494 and March 31,
2018 - 7,406,801 68,849 68,387 69,273 Retained earnings 85,907
83,188 74,555 Total shareholders' equity 154,756 151,575 143,828
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 188,406 $ 184,663 $
188,098
Rocky Brands, Inc. and
Subsidiaries
Condensed Consolidated Statements of
Operations
(In thousands, except per share
amounts)
Three Months Ended March 31, 2019 2018 NET
SALES $ 65,929 $ 61,387 COST OF GOODS SOLD 42,951 40,421 GROSS
MARGIN 22,978 20,966 OPERATING EXPENSES 18,479 16,738
INCOME FROM OPERATIONS 4,499 4,228 OTHER INCOME (EXPENSES)
65 (139) INCOME BEFORE INCOME TAXES 4,564 4,089
INCOME TAX EXPENSE (BENEFIT) 959 838 NET INCOME $ 3,605 $
3,251 INCOME PER SHARE Basic $ 0.49 $ 0.44
Diluted
$ 0.48 $ 0.44
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING
Basic 7,382 7,407 Diluted 7,434 7,431
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190423005894/en/
Company Contact:Tom RobertsonChief Financial Officer(740)
753-9100Investor Relations:Brendon FreyICR, Inc.(203) 682-8200
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