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)
October 21,
2010
ROCKY
BRANDS, INC.
(Exact name
of
registrant as specifıed in its charter)
|
Ohio
|
001-34382
|
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 October 21, 2010, Rocky Brands, Inc.
(the “Company”) issued a press release entitled “Rocky Brands, Inc. Announces
Third Quarter Fiscal 2010 Results” regarding its consolidated financial results
for the quarter ended September 30, 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 future growth prospects
(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, 2009 (filed March 2, 2010) and the
Company’s quarterly reports on Form 10-Q for the quarters ended March 31, 2010
(filed May 3, 2010) and June 30, 2010 (filed August 3, 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.
|
Exhibit
No.
Description
|
|
99*
|
Press
Release, dated October 21, 2010, entitled “Rocky Brands, Inc. Announces
Third 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: October
21, 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 October 21, 2010, entitled “Rocky Brands, Inc. Announces
Third Quarter Fiscal 2010
Results.”
|
* Such
press release is being “furnished” (not filed) under Item 2.02 of this Current
Report on
Form
8-K.
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 THIRD QUARTER FISCAL 2010 RESULTS
Third
Quarter Sales Increased 12.3% to $74.8 Million
Third
Quarter Diluted EPS Increased 26.0% to $0.63
Funded
Debt Decreased $30.0 Million, or 36.0% to $53.4 Million
NELSONVILLE,
Ohio, October 21, 2010 – Rocky Brands, Inc. (Nasdaq: RCKY) today announced
financial results for its third quarter ended September 30, 2010.
For the
third quarter of 2010, net sales increased 12.3% to $74.8 million versus net
sales of $66.6 million in the third quarter of 2009. Net income for the third
quarter of 2010 increased $1.9 million to $4.7 million, or $0.63 per diluted
share versus net income of $2.8 million, or $0.50 per diluted share a year
ago.
Mike
Brooks, Chairman and Chief Executive Officer, commented, “During the third
quarter we continued to experience positive business trends similar to the first
six months of 2010 which allowed us once again deliver improved profitability
versus the year ago period. This included higher sales levels in both our
wholesales and military segments, a 40 basis point increase in wholesale gross
margin, and better operating expense leverage. We are particularly pleased with
our wholesale growth which is being driven by demand for our work footwear. We
also recently secured a new credit facility that will further reduce our
interest expense approximately $2 million next year and free up capital to
expand our business. Looking ahead, we are excited about both our near and
long-term growth prospects and we are confident we have the right pieces in
place to capitalize on the many opportunities still in front of
us.”
Third Quarter
Review
Net sales
for the third quarter increased 12.3% to $74.8 million compared to $66.6 million
a year ago. Wholesale sales for the third quarter increased 9.0% to $59.4
million compared to $54.5 million for the same period in 2009. The increase was
driven primarily by growth of our work category. Retail sales for the third
quarter were $11.1 million compared to $11.5 million for the same period last
year. Military segment sales for the third quarter increased to $4.3 million
versus $0.6 million for the same period in 2009.
Gross
margin in the third quarter of 2010 was $27.2 million, or 36.4% of sales
compared to $24.7 million, or 37.1% for the same period last
year. The 70 basis point decline in gross margin was due to an
increase in sales to the Military which carry lower gross margin than the
wholesale and retail businesses.
Selling,
general and administrative (SG&A) expenses were $19.2 million, or 25.6% of
sales for the third quarter of 2010 compared to $18.6 million, or 27.9% of sales
a year ago. The increase in SG&A expenses is primarily due to additional
selling expenses and incentive accruals, which were partially offset by
decreases in other expenses.
Income
from operations increased 31.1% to $8.0 million, or 10.7% of net sales for the
period compared to operating income of $6.1 million, or 9.2% of net sales in the
prior year.
Interest
expense decreased $1.0 million, or 50.0% to $1.0 million for the third quarter
of 2010. The decrease is the result of debt reductions over the past 12 months
combined with lower interest rates compared to the same period last
year.
The
Company’s funded debt decreased $30.0 million, or 36.0% to $53.4 million at
September 30, 2010 versus $83.4 million at September 30, 2009.
Inventory
decreased 7.6% to $62.9 million at September 30, 2010 compared with $68.1
million on the same date a year ago.
Conference Call
Information
The
Company’s conference call to review third quarter fiscal 2010 results will be
broadcast live over the internet today, Thursday, October 21, 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
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 future growth prospects (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, 2009 (filed March 2, 2010) and the
Company’s quarterly reports on Form 10-Q for the quarters ended March 31, 2010
(filed May 3, 2010) and June 30, 2010 (filed August 3, 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
|
|
|
September
30, 2010
|
|
|
December
31, 2009
|
|
|
September
30, 2009
|
|
|
|
|
Unaudited
|
|
|
|
|
|
Unaudited
|
|
|
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
3,965,906
|
|
|
$
|
1,797,093
|
|
|
$
|
4,002,909
|
|
|
Trade
receivables – net
|
|
|
61,261,175
|
|
|
|
45,831,558
|
|
|
|
58,296,661
|
|
|
Other
receivables
|
|
|
1,319,589
|
|
|
|
1,476,643
|
|
|
|
1,598,829
|
|
|
Inventories
|
|
|
62,913,777
|
|
|
|
55,420,467
|
|
|
|
68,065,444
|
|
|
Deferred
income taxes
|
|
|
1,490,601
|
|
|
|
1,475,695
|
|
|
|
2,173,391
|
|
|
Income
tax receivable
|
|
|
-
|
|
|
|
-
|
|
|
|
247,011
|
|
|
Prepaid
expenses
|
|
|
1,494,653
|
|
|
|
1,309,138
|
|
|
|
1,323,115
|
|
|
Total
current assets
|
|
|
132,445,701
|
|
|
|
107,310,594
|
|
|
|
135,707,360
|
|
|
FIXED
ASSETS – net
|
|
|
22,114,258
|
|
|
|
22,669,876
|
|
|
|
23,132,489
|
|
|
IDENTIFIED
INTANGIBLES
|
|
|
30,504,785
|
|
|
|
30,516,910
|
|
|
|
30,627,527
|
|
|
OTHER
ASSETS
|
|
|
1,896,914
|
|
|
|
2,892,683
|
|
|
|
3,304,123
|
|
|
TOTAL
ASSETS
|
|
$
|
186,961,658
|
|
|
$
|
163,390,063
|
|
|
$
|
192,771,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
9,449,927
|
|
|
$
|
6,781,534
|
|
|
$
|
7,683,778
|
|
|
Current
maturities – long term debt
|
|
|
508,376
|
|
|
|
511,870
|
|
|
|
503,841
|
|
|
Accrued
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes
- other
|
|
|
490,978
|
|
|
|
440,223
|
|
|
|
387,817
|
|
|
Income
tax payable
|
|
|
2,280,900
|
|
|
|
26,242
|
|
|
|
-
|
|
|
Other
|
|
|
6,612,636
|
|
|
|
5,226,749
|
|
|
|
5,987,861
|
|
|
Total
current liabilities
|
|
|
19,342,817
|
|
|
|
12,986,618
|
|
|
|
14,563,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG
TERM DEBT – less current maturities
|
|
|
52,910,608
|
|
|
|
55,079,776
|
|
|
|
82,940,392
|
|
|
DEFERRED
INCOME TAXES
|
|
|
9,060,211
|
|
|
|
9,071,639
|
|
|
|
9,558,761
|
|
|
DEFERRED
LIABILITIES
|
|
|
3,925,393
|
|
|
|
3,774,356
|
|
|
|
4,116,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
85,239,029
|
|
|
|
80,912,389
|
|
|
|
111,179,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, no par value;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000,000
shares authorized; issued and outstanding
|
|
|
September 30, 2010 - 7,409,537; December 31, 2009 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,576,465; September 30, 2009 - 5,547,215
|
|
|
68,927,984
|
|
|
|
54,598,104
|
|
|
|
54,387,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
other comprehensive loss
|
|
|
(2,947,290
|
)
|
|
|
(3,217,144
|
)
|
|
|
(2,982,564
|
)
|
|
Retained
earnings
|
|
|
35,741,935
|
|
|
|
31,096,714
|
|
|
|
30,187,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
shareholders' equity
|
|
|
101,722,629
|
|
|
|
82,477,674
|
|
|
|
81,592,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
$
|
186,961,658
|
|
|
$
|
163,390,063
|
|
|
$
|
192,771,499
|
|
Rocky Brands, Inc. and
Subsidiaries
Condensed
Consolidated Statements of Operations
(Unaudited)
|
|
|
Three
Months Ended
|
|
|
Nine
Months Ended
|
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
NET
SALES
|
|
$
|
74,760,244
|
|
|
$
|
66,572,437
|
|
|
$
|
186,062,284
|
|
|
$
|
167,825,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST
OF GOODS SOLD
|
|
|
47,575,649
|
|
|
|
41,856,651
|
|
|
|
121,021,756
|
|
|
|
105,299,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
MARGIN
|
|
|
27,184,595
|
|
|
|
24,715,786
|
|
|
|
65,040,528
|
|
|
|
62,525,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELLING,
GENERAL AND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADMINISTRATIVE
EXPENSES
|
|
|
19,159,541
|
|
|
|
18,576,780
|
|
|
|
53,347,582
|
|
|
|
56,642,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME/(LOSS)
FROM OPERATIONS
|
|
|
8,025,054
|
|
|
|
6,139,006
|
|
|
|
11,692,946
|
|
|
|
5,883,865
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME AND (EXPENSES):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(955,033
|
)
|
|
|
(1,955,485
|
)
|
|
|
(4,721,176
|
)
|
|
|
(5,665,905
|
)
|
|
Other
– net
|
|
|
246,334
|
|
|
|
224,442
|
|
|
|
286,451
|
|
|
|
257,899
|
|
|
Total
other - net
|
|
|
(708,699
|
)
|
|
|
(1,731,043
|
)
|
|
|
(4,434,725
|
)
|
|
|
(5,408,006
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME/(LOSS)
BEFORE INCOME TAXES
|
|
|
7,316,355
|
|
|
|
4,407,963
|
|
|
|
7,258,221
|
|
|
|
475,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
TAX EXPENSE/(BENEFIT)
|
|
|
2,634,000
|
|
|
|
1,626,518
|
|
|
|
2,613,000
|
|
|
|
210,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME/(LOSS)
|
|
$
|
4,682,355
|
|
|
$
|
2,781,445
|
|
|
$
|
4,645,221
|
|
|
$
|
265,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME/(LOSS)
PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.63
|
|
|
$
|
0.50
|
|
|
$
|
0.71
|
|
|
$
|
0.05
|
|
|
Diluted
|
|
$
|
0.63
|
|
|
$
|
0.50
|
|
|
$
|
0.71
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
7,407,409
|
|
|
|
5,547,215
|
|
|
|
6,522,058
|
|
|
|
5,546,993
|
|
|
Diluted
|
|
|
7,422,194
|
|
|
|
5,547,215
|
|
|
|
6,541,192
|
|
|
|
5,546,993
|
|