Net Sales Increased 6.4% to $62.0
Million
Retail Sales Increased 20.2% to $14.1
Million
Diluted EPS Increased 20.0% to $0.42
Rocky Brands, Inc. (NASDAQ:RCKY) today announced financial
results for its second quarter ended June 30, 2019.
Second Quarter 2019 and Year-to-Date
Sales and Income
Second quarter net sales increased 6.4% to $62.0 million
compared to $58.2 million in the second quarter of 2018. The
Company reported second quarter net income of $3.2 million, or
$0.42 per diluted share compared to net income of $2.6 million, or
$0.35 per diluted share in the second quarter of 2018.
Net sales for the first six months of 2019 increased 6.9% to
$127.9 million compared with $119.6 million for the first six
months of 2018. The Company reported net income of $6.8 million, or
$0.91 per diluted share and net income of $5.9 million, or $0.79
per diluted share for the six months ended June 30, 2019 and 2018,
respectively.
Jason Brooks, President and Chief Executive Officer, commented,
“We delivered another quarter of very solid results highlighted by
year-over-year sales increases in all three of our segments and a
nice improvement in overall profitability. Our top-line performance
was driven by twenty-plus percent growth in our retail division as
our Lehigh CustomFit model gained further traction with existing
and new accounts. At the same time, the combination of compelling
products, impactful marketing programs and enhanced retailer
support fueled gains in our wholesale business including our work,
western, outdoor and domestic commercial military categories.
Equally important, we’ve bolstered our internal manufacturing
capabilities which is driving improved efficiencies and increased
margins while also providing the Company with alternative sourcing
options in the event of a tariff increase on footwear imports from
China. I am confident that we are well positioned to capitalize on
the growth prospects we believe exist across our business and
continue generating increased value for our shareholders in the
near and long-term.”
Second Quarter Review
Net sales for the second quarter increased 6.4% to $62.0 million
compared to $58.2 million a year ago. Wholesale sales for the
second quarter increased 2.1% to $40.6 million compared to $39.8
million for the same period in 2018. Retail sales for the second
quarter increased 20.2% to $14.1 million compared to $11.7 million
for the same period last year. Military segment sales for the
second quarter increased 8.4% to $7.2 million compared to $6.7
million in the second quarter of 2018.
Gross margin in the second quarter of 2019 increased to $21.4
million, or 34.6% of sales, compared to $19.5 million, or 33.6% of
sales, for the same period last year. The 100 basis point increase
was driven by a higher percentage of retail sales, which carry
higher gross margins than wholesale and military sales combined
with higher wholesale and military margins.
Operating expenses were $17.5 million, or 28.2% of net sales,
for the second quarter of 2019 compared to $16.2 million, or 27.8%
of net sales, a year ago. The increase in operating expenses was
attributable to higher variable expenses associated with the growth
in retail sales.
Income from operations for the second quarter of 2019 was $3.9
million, or 6.4% of net sales compared to $3.4 million for the same
period a year ago, or 5.8% of net sales.
Balance Sheet Review
Cash and cash equivalents increased $7.4 million or 88.7% to
$15.7 million at June 30, 2019 compared to $8.3 million on the same
date a year ago.
Inventory at June 30, 2019 increased 6.6% to $77.5 million
compared to $72.6 million on the same date a year ago.
Conference Call
Information
The Company’s conference call to review second quarter 2019
results will be broadcast live over the internet today, Wednesday,
July 24, 2019 at 4:30 pm Eastern Time. Investors and analysts
interested in participating in the call are invited to dial (800)
263-0877 (domestic) or (646) 828-8143 (international). The
conference call will also be available to interested parties
through a live webcast at www.rockybrands.com. Please visit the
website and select the “Investors” link at least 15 minutes prior
to the start of the call to register and download any necessary
software.
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 ability
to capitalize on growth prospects (paragraph 3) and our ability to
generate near-term and long-term shareholder value (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, 2018 (filed March 13, 2019) and quarterly report on Form 10-Q
for the quarter ended March 31, 2019 (filed May 9, 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 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
(In thousands, except share
amounts)
June 30,
December 31,
June 30,
2019
2018
2018
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents
$
15,715
$
10,173
$
8,328
Trade receivables, net
40,910
43,337
42,616
Contract receivables
1,959
2,602
8,634
Other receivables
152
331
214
Inventories – net
77,458
72,822
72,644
Income tax receivable
1,361
30
222
Prepaid expenses
2,819
1,890
2,185
Total current assets
140,374
131,185
134,843
LEASED ASSETS
1,282
-
-
PROPERTY, PLANT & EQUIPMENT – net
24,041
23,057
23,655
IDENTIFIED INTANGIBLES – net
30,256
30,273
30,293
OTHER ASSETS
279
148
173
TOTAL ASSETS
$
196,232
$
184,663
$
188,964
LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable
$
20,182
$
13,543
$
17,642
Contract liabilities
1,959
2,602
8,634
Accrued expenses:
Salaries and wages
2,100
3,339
2,516
Taxes - other
667
556
349
Accrued freight
476
668
531
Commissions
491
560
420
Accrued duty
2,603
2,334
2,338
Other
1,767
1,416
1,125
Total current liabilities
30,245
25,018
33,555
LONG TERM TAXES PAYABLE
169
169
1,777
LONG TERM LEASE
776
-
-
DEFERRED INCOME TAXES
7,780
7,780
7,726
DEFERRED LIABILITIES
221
121
153
TOTAL LIABILITIES
39,191
33,088
43,211
SHAREHOLDERS' EQUITY:
Common stock, no par value;
25,000,000 shares authorized; issued and
outstanding June 30, 2019 - 7,393,851; December 31, 2018 -
7,368,494 and June 30, 2018 - 7,414,509
69,013
68,387
69,437
Retained earnings
88,028
83,188
76,316
Total shareholders' equity
157,041
151,575
145,753
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
196,232
$
184,663
$
188,964
Rocky Brands, Inc. and
Subsidiaries
Condensed Consolidated
Statements of Operations
(In thousands, except per
share amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
NET SALES
$
61,959
$
58,206
$
127,888
$
119,593
COST OF GOODS SOLD
40,518
38,674
83,469
79,095
GROSS MARGIN
21,441
19,532
44,419
40,498
OPERATING EXPENSES
17,498
16,159
35,976
32,897
INCOME FROM OPERATIONS
3,943
3,373
8,443
7,601
OTHER INCOME (EXPENSES)
52
(40
)
117
(179
)
INCOME BEFORE INCOME TAXES
3,995
3,333
8,560
7,422
INCOME TAX EXPENSE (BENEFIT)
839
684
1,798
1,522
NET INCOME
$
3,156
$
2,649
$
6,762
$
5,900
INCOME PER SHARE
Basic
$
0.43
$
0.36
$
0.92
$
0.80
Diluted
$
0.42
$
0.35
$
0.91
$
0.79
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING
Basic
7,388
7,410
7,388
7,408
Diluted
7,431
7,464
7,436
7,445
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190724005715/en/
Company: Tom Robertson Chief Financial Officer (740)
753-9100
Investor Relations: Brendon Frey ICR, Inc. (203) 682-8200
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