Exhibit
99
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ROCKY BRANDS, INC.
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Company
Contact:
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Jim
McDonald
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Chief
Financial Officer
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(740)
753-1951
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Investor
Relations:
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ICR,
Inc.
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Brendon
Frey/Chad Jacobs
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(203)
682-8200
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ROCKY
BRANDS, INC. ANNOUNCES SECOND QUARTER FISCAL 2009 RESULTS
NELSONVILLE,
Ohio, July 27, 2009 – Rocky Brands, Inc. (Nasdaq: RCKY) today announced
financial results for its second quarter ended June 30, 2009.
For the
second quarter of 2009, net sales decreased to $51.2 million versus net sales of
$60.5 million in the second quarter of 2008. The Company reported a net loss of
$1.4 million, or ($0.25) per diluted share versus net income of $0.7 million, or
$0.13 per diluted share a year ago.
Mike
Brooks, Chairman and Chief Executive Officer, commented, “Our operating
performance continued to be affected by the difficult retail environment during
the second quarter. Sales were down as retailers remained cautious with
inventory commitments as the result of decreases in consumer spending and store
traffic. Our gross margin was also negatively impacted due to higher closeout
sales versus a year ago combined with the deleveraging of our manufacturing
costs from lower sales volumes. Importantly, our operating expenses are down
over 13%, or nearly $6 million year-to-date and we move forward a much leaner,
more efficient organization. Looking ahead, the combination of lower
SG&A levels, our current order book, and easier comparisons, has us
optimistic that we can deliver improved profitability year-over-year during the
second half of 2009.”
Second Quarter
Review
Net sales
for the second quarter decreased to $51.2 million compared to $60.5 million a
year ago. Wholesale sales for the second quarter were $37.9 million compared to
$42.5 million for the same period in 2008. The decline in wholesale sales was
primarily attributable to lower than expected orders as many accounts are
choosing to operate with leaner inventory levels during this challenging
economy. Retail sales for the second quarter were $12.3 million compared to
$16.2 million for the same period last year. Retail sales were down
year-over-year as a result of the ongoing transition to more internet driven
transactions and the decision to remove a portion of our Lehigh mobile stores
from operation to help lower costs as discussed below. Military segment sales
for the second quarter were $0.9 million versus $1.8 million for the same period
in 2008.
Gross
margin in the second quarter of 2009 was $17.7 million, or 34.6% of sales
compared to $24.4 million, or 40.3% for the same period last
year. The decrease in gross margin as a percentage of sales was
primarily attributable to higher closeout sales, lower retail sales, which carry
a higher gross margin, and increased manufacturing costs versus a year
ago.
Selling,
general and administrative (SG&A) expenses decreased $2.8 million or 13.4%
to $18.1 million, or 35.4% of sales for the second quarter of 2009 compared to
$20.9 million, or 34.5% of sales, a year ago. The decrease in SG&A expenses
was primarily the result of a reduction in salaries & benefits, freight,
sales commissions and Lehigh mobile store expenses.
Loss from
operations was $0.4 million for the period compared to income from operations of
$3.5 million in the prior year.
Interest
expense decreased $0.5 million or 20.8% to $1.9 million for the second quarter
of 2009 versus $2.4 million for the same period last year. The decrease is the
result of a reduction in average borrowings combined with lower interest rates
compared to the same period last year.
The
Company’s funded debt decreased $13.9 million, or 13.7% to $87.5 million at June
30, 2009 versus $101.4 million at June 30, 2008.
Inventory
decreased $6.2 million, or 7.3%, to $79.3 million at June 30, 2009 compared with
$85.5 million on the same date a year ago.
Conference Call
Information
The
Company’s conference call to review second quarter fiscal 2009 results will be
broadcast live over the internet today, Monday, July 27, 2009 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 Outdoor Gear®, 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 improved profitability (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, 2008 (filed March 3, 2009) and the Company’s
quarterly report on Form 10-Q for the quarter ended March 31, 2009 (filed May 4,
2009). 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
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June
30, 2009
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December
31, 2008
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June
30, 2008
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Unaudited
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Unaudited
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ASSETS:
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CURRENT
ASSETS:
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Cash
and cash equivalents
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$
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2,865,461
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$
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4,311,313
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$
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3,025,144
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Trade
receivables – net
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44,454,476
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60,133,493
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59,245,156
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Other
receivables
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1,924,195
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1,394,235
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1,010,254
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Inventories
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79,286,477
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70,302,174
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85,542,820
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Deferred
income taxes
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2,167,966
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2,167,966
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1,952,536
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Prepaid
& refundable income taxes
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2,413,523
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75,481
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729,024
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Prepaid
expenses
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1,396,308
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1,455,158
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2,703,446
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Total
current assets
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134,508,406
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139,839,820
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154,208,380
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FIXED
ASSETS – net
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23,777,945
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23,549,319
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24,090,519
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IDENTIFIED
INTANGIBLES
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30,769,248
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31,020,478
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36,207,210
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OTHER
ASSETS
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4,236,066
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2,452,501
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2,323,778
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TOTAL
ASSETS
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$
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193,291,665
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$
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196,862,118
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$
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216,829,887
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LIABILITIES
AND SHAREHOLDERS' EQUITY:
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CURRENT
LIABILITIES:
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Accounts
payable
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$
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8,504,099
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$
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9,869,948
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$
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13,238,830
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Current
maturities – long term debt
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495,976
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480,723
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338,314
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Accrued
expenses:
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Taxes
- other
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502,032
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641,670
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840,751
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Other
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4,504,202
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4,261,689
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4,703,591
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Total
current liabilities
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14,006,309
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15,254,030
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19,121,486
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LONG
TERM DEBT – less current maturities
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87,023,125
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87,258,939
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101,042,347
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DEFERRED
INCOME TAXES
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9,438,921
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9,438,921
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12,951,828
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DEFERRED
LIABILITIES
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4,095,782
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3,960,472
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1,257,606
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TOTAL
LIABILITIES
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114,564,137
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115,912,362
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134,373,267
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SHAREHOLDERS'
EQUITY:
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Common
stock, no par value;
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25,000,000
shares authorized; issued and outstanding June
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30,
2009 - 5,547,215; December 31, 2008 - 5,516,898;
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June
30, 2008 - 5,508,278
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54,384,172
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54,250,064
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54,168,292
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Accumulated
other comprehensive loss
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(3,062,448
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(3,222,215
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(1,500,197
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Retained
earnings
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27,405,804
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29,921,907
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29,788,525
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Total
shareholders' equity
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78,727,528
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80,949,756
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82,456,620
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TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
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$
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193,291,665
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$
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196,862,118
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$
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216,829,887
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Rocky Brands, Inc. and
Subsidiaries
Condensed
Consolidated Statements of Operations
(Unaudited)
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Three
Months Ended
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Six
Months Ended
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June 30,
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June 30,
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2009
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2008
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2009
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2008
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NET
SALES
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$
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51,188,615
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$
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60,507,421
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$
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101,253,176
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$
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120,992,137
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COST
OF GOODS SOLD
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33,470,943
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36,111,328
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63,443,016
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70,646,379
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GROSS
MARGIN
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17,717,672
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24,396,093
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37,810,160
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50,345,758
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SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES
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18,119,173
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20,875,459
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38,065,301
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43,936,946
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(LOSS)/INCOME
FROM OPERATIONS
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(401,501
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3,520,634
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(255,141
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6,408,812
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OTHER
INCOME AND (EXPENSES):
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Interest
expense
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(1,936,490
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(2,409,515
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(3,710,420
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(4,816,186
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Other
– net
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158,023
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15,723
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33,457
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(2,869
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Total
other - net
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(1,778,467
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(2,393,792
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(3,676,963
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)
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(4,819,055
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(LOSS)/INCOME
BEFORE INCOME TAXES
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(2,179,968
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1,126,842
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(3,932,104
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)
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1,589,757
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INCOME
TAX (BENEFIT)/EXPENSE
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(785,000
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)
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394,000
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(1,416,000
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)
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556,000
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NET
(LOSS)/INCOME
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$
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(1,394,968
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)
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$
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732,842
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$
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(2,516,104
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)
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$
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1,033,757
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NET
(LOSS)/INCOME PER SHARE
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Basic
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$
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(0.25
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)
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$
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0.13
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$
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(0.45
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)
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$
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0.19
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Diluted
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$
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(0.25
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)
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$
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0.13
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$
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(0.45
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)
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$
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0.19
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WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
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Basic
|
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|
5,547,215
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|
|
|
5,508,278
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|
|
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5,546,880 |
|
|
|
5,508,058
|
|
|
Diluted
|
|
|
5,547,215
|
|
|
|
5,520,625
|
|
|
|
5,546,880
|
|
|
|
5,523,265
|
|