UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported)
April 22,
2010
ROCKY BRANDS,
INC.
(Exact name
of
registrant as specifıed in its charter)
|
Ohio
|
0-21026
|
31-1364046
|
|
(State or other
jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of incorporation)
|
File Number)
|
Identifıcation
No.)
|
|
39 East Canal Street, Nelsonville,
Ohio
|
45764
|
|
(Address of principal executive
offıces)
|
(Zip
Code)
|
Registrant's
telephone number, including area code
(740)
753-1951
Not
Applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K fıling is intended to simultaneously
satisfy the fıling obligation of the registrant
under any of the following
provisions (see General Instruction A.2. below):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02.
Results of Operations
and Financial Condition.
On April 22, 2010, Rocky Brands, Inc.
(the “Company”) issued a press release entitled “Rocky Brands, Inc. Announces
First Quarter Fiscal 2010 Results” regarding its consolidated financial results
for the quarter ended March 31, 2010. A copy of the Company’s press
release is furnished as Exhibit 99 to this Form 8-K and is incorporated herein
by reference.
The information in this Form 8-K and
accompanying press release is being furnished under Item 2.02 and shall not be
deemed to be “filed” for the purposes of Section 18 of the Securities Exchange
Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of
such section, nor shall such information be deemed incorporated by reference in
any filing under the Securities Act of 1933 or the Exchange Act, except as shall
be expressly set forth by specific reference in such a filing.
The information contained or
incorporated by reference in this Form 8-K contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act, 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 the accompanying press release regarding expanding revenues and
improved profitability (paragraph 3) and increasing gross margins, decreasing
costs, and increased production schedules (paragraph 5). 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, 2009 (filed March 2, 2010). 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 contained or incorporated by
reference in this Form 8-K will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included or
incorporated by reference 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
contained or incorporated by reference in this Form 8-K are based on information
presently available to the management of the Company. The Company
assumes no obligation to update any forward-looking statements.
Item
9.01.
Financial Statements
and Exhibits.
(d) Exhibits.
|
Exhibit
No.
|
Description
|
|
|
|
|
99*
|
Press
Release, dated April 22, 2010, entitled “Rocky Brands, Inc. Announces
First Quarter Fiscal 2010 Results.”
|
|
*
|
Such
press release is being “furnished” (not filed) under Item 2.02 of this
Current Report on
Form
8-K.
|
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
|
|
Rocky
Brands, Inc.
|
|
|
|
|
|
|
|
Date: April
22, 2010
|
By:
|
/s/
James E. McDonald
|
|
|
|
|
James
E. McDonald, Executive Vice
President
and Chief Financial Officer
|
|
EXHIBIT
INDEX
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
99*
|
|
Press Release, dated April
22, 2010, entitled “Rocky Brands, Inc. Announces First Quarter Fiscal 2010
Results.”
|
|
*
|
Such
press release is being “furnished” (not filed) under Item 2.02 of this
Current Report on
Form
8-K.
|
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 FISCAL 2010 RESULTS
First
Quarter Sales Increased 12% to $56.1 Million
Funded
Debt Decreased $39.5 Million, or 46% to $46.7 Million
Company
Improves First Quarter Diluted Loss Per Share by 50% to ($0.10)
NELSONVILLE,
Ohio, April 22, 2010 – Rocky Brands, Inc. (Nasdaq: RCKY) today announced
financial results for its first quarter ended March 31, 2010.
For the
first quarter of 2010, net sales increased 12.0% to $56.1 million versus net
sales of $50.1 million in the first quarter of 2009. The Company reported a net
loss of $0.6 million, or ($0.10) per diluted share versus a net loss of $1.1
million, or ($0.20) per diluted share a year ago.
Mike
Brooks, Chairman and Chief Executive Officer, commented, “Our first quarter
results were above internal and external projections driven by higher sales in
our wholesale and military segments combined with improved operating expense
leverage. Our performance was also highlighted by a significant reduction in our
debt levels, which, at the end of the first quarter, were down 46%, or $39.5
million versus the same date a year ago. With regard to our bottom line, the
seasonality of our business makes it difficult to realize positive earnings
during the first quarter which is typically our lowest volume sales quarter.
However, we are confident that the steps we have taken to right size both our
wholesale and retail platforms, combined with our initiatives aimed at expanding
revenues will result in improved profitability year-over-year during the
remainder of this year.”
First Quarter
Review
Net sales
for the first quarter increased 12.0% to $56.1 million compared to $50.1 million
a year ago. Wholesale sales for the first quarter increased 5.2% to $37.9
million compared to $36.0 million for the same period in 2009. The increase in
wholesale sales was primarily driven by increases in our work and categories.
Retail sales for the first quarter were $12.9 million compared to $13.7 million
for the same period last year. The modest decline in retail sales was the result
of the ongoing transition to more Internet driven transactions and the decision
to remove a portion of our Lehigh mobile stores from operations to help lower
costs as discussed below. Military segment sales for the first quarter increased
to $5.2 million versus $0.3 million for the same period in 2009.
Gross
margin in the first quarter of 2010 was $18.8 million, or 33.4% of sales
compared to $20.1 million, or 40.1% for the same period last
year. The decrease in gross margin as a percentage of sales was
primarily attributable to lower wholesale gross margins due to increased
manufacturing costs versus a year ago, and an increase in sales in our military
segment which carry lower gross margins than our retail and wholesale segments.
We currently project gross margins to increase sequentially over the next three
quarters as costs per pair in our factories decrease as a result of increased
production schedules.
Selling,
general and administrative (SG&A) expenses decreased $1.9 million or 9.6% to
$18.0 million, or 32.1% of sales for the first quarter of 2010 compared to $19.9
million, or 39.8% of sales a year ago. The decrease in SG&A expenses was
primarily the result of a reduction in salaries & benefits, bad debt expense
and Lehigh store expenses.
Income
from operations was $0.7 million, or 1.3% of net sales for the period compared
to $0.1 million, or 0.3% of net sales, in the prior year.
Interest
expense decreased 7.3% to $1.6 million for the first quarter of 2010 versus $1.8
million for the same period last year. The decrease is primarily the result of a
reduction in average borrowings.
The
Company’s funded debt decreased $39.5 million, or 45.8% to $46.7 million at
March 31, 2010 versus $86.2 million at March 31, 2009.
Inventory
decreased $25.3 million, or 32.3%, to $53.1 million at March 31, 2010 compared
with $78.4 million on the same date a year ago.
The
Company’s accounts receivable decreased $7.5 million, or 15.8% to $40.0 million
at March 31, 2010 versus $47.5 million at March 31, 2009.
Conference Call
Information
The
Company’s conference call to review first quarter fiscal 2010 results will be
broadcast live over the internet today, Thursday, April 22, 2010 at 4:30 pm
Eastern Time. The broadcast will be hosted at
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 brands
Dickies®, Michelin® and Mossy Oak®.
Safe Harbor
Statement under the Private Securities Litigation Reform Act of
1995
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 expanding revenues and improved
profitability (paragraph 3) and increasing gross margins, decreasing costs, and
increased production schedules (paragraph 5). 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, 2009 (filed March 2, 2010). 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, 2010
|
|
|
December
31, 2009
|
|
|
March
31, 2009
|
|
|
|
|
Unaudited
|
|
|
|
|
|
Unaudited
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
3,517,629
|
|
|
$
|
1,797,093
|
|
|
$
|
3,321,903
|
|
|
Trade
receivables – net
|
|
|
39,994,342
|
|
|
|
45,831,558
|
|
|
|
47,488,146
|
|
|
Other
receivables
|
|
|
1,216,568
|
|
|
|
1,476,643
|
|
|
|
1,806,231
|
|
|
Inventories
|
|
|
53,123,111
|
|
|
|
55,420,467
|
|
|
|
78,432,082
|
|
|
Deferred
income taxes
|
|
|
1,475,694
|
|
|
|
1,475,695
|
|
|
|
2,167,966
|
|
|
Income
tax receivable
|
|
|
420,150
|
|
|
|
-
|
|
|
|
1,440,697
|
|
|
Prepaid
expenses
|
|
|
2,036,965
|
|
|
|
1,309,138
|
|
|
|
2,137,625
|
|
|
Total
current assets
|
|
|
101,784,459
|
|
|
|
107,310,594
|
|
|
|
136,794,650
|
|
|
FIXED
ASSETS – net
|
|
|
22,540,705
|
|
|
|
22,669,876
|
|
|
|
24,316,954
|
|
|
IDENTIFIED
INTANGIBLES
|
|
|
30,519,994
|
|
|
|
30,516,910
|
|
|
|
30,883,011
|
|
|
OTHER
ASSETS
|
|
|
2,817,110
|
|
|
|
2,892,683
|
|
|
|
4,005,577
|
|
|
TOTAL
ASSETS
|
|
$
|
157,662,268
|
|
|
$
|
163,390,063
|
|
|
$
|
196,000,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
8,916,985
|
|
|
$
|
6,781,534
|
|
|
$
|
10,443,348
|
|
|
Current
maturities – long term debt
|
|
|
520,067
|
|
|
|
511,870
|
|
|
|
488,271
|
|
|
Accrued
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes
- other
|
|
|
468,119
|
|
|
|
440,223
|
|
|
|
508,430
|
|
|
Income
Tax Payable
|
|
|
-
|
|
|
|
26,242
|
|
|
|
-
|
|
|
Other
|
|
|
6,425,516
|
|
|
|
5,226,749
|
|
|
|
5,376,723
|
|
|
Total
current liabilities
|
|
|
16,330,687
|
|
|
|
12,986,618
|
|
|
|
16,816,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG
TERM DEBT – less current maturities
|
|
|
46,225,039
|
|
|
|
55,079,776
|
|
|
|
85,710,049
|
|
|
DEFERRED
INCOME TAXES
|
|
|
9,071,639
|
|
|
|
9,071,639
|
|
|
|
9,438,921
|
|
|
DEFERRED
LIABILITIES
|
|
|
3,824,702
|
|
|
|
3,774,356
|
|
|
|
3,995,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
75,452,067
|
|
|
|
80,912,389
|
|
|
|
115,961,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, no par value;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000,000
shares authorized; issued and outstanding March
|
|
|
31,
2010 - 5,605,537; December 31, 2009 - 5,576,465;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31, 2009 - 5,547,215
|
|
|
54,801,424
|
|
|
|
54,598,104
|
|
|
|
54,380,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
other comprehensive loss
|
|
|
(3,127,193
|
)
|
|
|
(3,217,144
|
)
|
|
|
(3,142,331
|
)
|
|
Retained
earnings
|
|
|
30,535,970
|
|
|
|
31,096,714
|
|
|
|
28,800,771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
shareholders' equity
|
|
|
82,210,201
|
|
|
|
82,477,674
|
|
|
|
80,038,696
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
$
|
157,662,268
|
|
|
$
|
163,390,063
|
|
|
$
|
196,000,192
|
|
Rocky Brands, Inc. and
Subsidiaries
Condensed
Consolidated Statements of Operations
(Unaudited)
|
|
|
Three
Months Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
NET
SALES
|
|
$
|
56,078,986
|
|
|
$
|
50,064,561
|
|
|
|
|
|
|
|
|
|
|
|
|
COST
OF GOODS SOLD
|
|
|
37,322,137
|
|
|
|
29,972,073
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
MARGIN
|
|
|
18,756,849
|
|
|
|
20,092,488
|
|
|
|
|
|
|
|
|
|
|
|
|
SELLING,
GENERAL AND
|
|
|
|
|
|
|
|
|
|
ADMINISTRATIVE
EXPENSES
|
|
|
18,024,687
|
|
|
|
19,946,128
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
FROM OPERATIONS
|
|
|
732,162
|
|
|
|
146,360
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME AND (EXPENSES):
|
|
|
|
|
|
|
Interest
expense
|
|
|
(1,644,591
|
)
|
|
|
(1,773,930
|
)
|
|
Other
– net
|
|
|
36,685
|
|
|
|
(124,566
|
)
|
|
Total
other - net
|
|
|
(1,607,906
|
)
|
|
|
(1,898,496
|
)
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
BEFORE INCOME TAXES
|
|
|
(875,744
|
)
|
|
|
(1,752,136
|
)
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
TAX BENEFIT
|
|
|
(315,000
|
)
|
|
|
(631,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$
|
(560,744
|
)
|
|
$
|
(1,121,136
|
)
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
PER SHARE
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.10
|
)
|
|
$
|
(0.20
|
)
|
|
Diluted
|
|
$
|
(0.10
|
)
|
|
$
|
(0.20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF
|
|
|
|
|
|
|
COMMON
SHARES OUTSTANDING
|
|
|
|
|
|
|
Basic
|
|
|
5,603,125
|
|
|
|
5,546,541
|
|
|
Diluted
|
|
|
5,603,125
|
|
|
|
5,546,541
|
|