NELSONVILLE, Ohio--(BUSINESS WIRE)-- Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial results for its third quarter ended September 30, 2012.
Third quarter 2012 net income was $5.4 million compared with $5.2 million in the third quarter of 2011, and diluted earnings per share were $0.72 compared to $0.70 during the same period last year. Third quarter net sales were $72.5 million versus net sales of $71.0 million a year ago.
David Sharp, President and Chief Executive Officer, commented, “We are pleased that several of our more recently launched footwear initiatives once again delivered strong results. Double digit percentage gains in our western, commercial military and lifestyle categories, which include our new Durango City line of more fashion forward boots, fueled a 9% increase in footwear sales for the third quarter. As apparel sales to one of our customers continue to decline and growth projections for the overall work and hunting footwear markets remain modest, we are encouraged by our ability to successfully develop new growth vehicles for the future. We are also pleased with our continued progress towards improving our balance sheet. With funded debt down 30% from a year ago, the Company is now better positioned to capitalize on the long-term growth opportunities that lie ahead.”
Third Quarter Review
Wholesale sales for the third quarter increased 4.5% to $62.9 million compared to $60.2 million for the same period in 2011. The increase in wholesale sales was driven by a 9% increase in footwear sales, which was offset by a decline in apparel sales. Retail sales for the third quarter were $9.6 million compared to $10.3 million last year. There were no military segment sales for the third quarter compared to $0.4 million in the third quarter of 2011.
Gross margin in the third quarter of 2012 was $26.2 million, or 36.1% of sales compared to $25.6 million, or 36.0% for the same period last year.
Selling, general and administrative (SG&A) expenses increased 1.2% to $18.2 million or 25.2% of net sales, for the third quarter of 2012 compared to $18.0 million, or 25.4% of net sales a year ago. The $0.2 million increase is primarily due to higher advertising expenses partially offset by a decrease in compensation expense.
Income from operations was $7.9 million, or 10.9% of net sales, compared to $7.6 million, or 10.7% of net sales, in the prior year period.
Interest expense decreased to $0.2 million for the third quarter of 2012 versus $0.3 million due to lower borrowings versus the same period a year ago.
The Company’s funded debt decreased 30.3% or $18.2 million to $41.9 million at September 30, 2012 versus $60.1 million at September 30, 2011.
Inventory at September 30, 2012 decreased 7.4% or $5.9 million to $73.0 million compared with $78.9 million on the September 30, 2011.
Conference Call Information
The Company’s conference call to review third quarter fiscal 2012 results will be broadcast live over the internet today, Wednesday, October 24, 2012 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® and Lehigh® and the licensed brands Michelin® and Mossy Oak®. Rocky Brands is proud to supply footwear to the United States military. For more information, visit www.RockyBrands.com.
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 long-term growth opportunities (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, 2011 (filed February 28, 2012) and the Company’s quarterly reports on Form 10-Q for the quarters ended March 31, 2012 (filed April 25, 2012) and June 30, 2012 (filed July 27, 2012 and amended August 6, 2012). 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
September 30, 2011
25,000,000 shares authorized; issued and outstanding
September 30, 2012 - 7,503,568; December 31, 2011 -
7,489,995; September 30, 2011 - 7,489,995
Rocky Brands, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Rocky Brands, Inc.
Jim McDonald, 740-753-1951
Chief Financial Officer
Brendon Frey, 203-682-8200
Source: Rocky Brands, Inc.