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Rocky Brands Inc. Reports Operating Results (10-Q)

October 31, 2012 | About:
10qk

10qk

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Rocky Brands Inc. (RCKY) filed Quarterly Report for the period ended 2012-09-30.

Rocky Brands, Inc. has a market cap of $89.3 million; its shares were traded at around $11.9 with a P/E ratio of 8.3 and P/S ratio of 0.4. Rocky Brands, Inc. had an annual average earning growth of 2.8% over the past 10 years.

Highlight of Business Operations:

Net sales. Net sales for the three months ended September 30, 2012 were $72.5 million compared to $71.0 million for the same period in 2011. Wholesale sales for the three months ended September 30, 2012 were $62.9 million compared to $60.2 million for the same period in 2011. The $2.7 million increase in wholesale sales was the result of a $3.8 million or 41.6% increase in our western footwear category and a $1.1 million or 16.9% increase in our commercial military footwear category, which was partially offset by a $2.2 million or 32.7% decrease in our apparel category. Retail sales for the three months ended September 30, 2012 were $9.6 million compared to $10.3 million for the same period in 2011. The $0.7 million decrease in retail sales resulted from our ongoing transition to more internet driven transactions and the decision to remove a portion of our Lehigh mobile stores from operations to help lower operating expenses. There were no military segment sales for the three months ended September 30, 2012, compared to $0.4 million in the same period in 2011. From time to time, we bid on military contracts when they become available. Our sales under such contracts are dependent on us winning the bids for these contracts.

Gross margin. Gross margin for the three months ended September 30, 2012 was $26.2 million, or 36.1% of net sales, compared to $25.6 million, or 36.0% of net sales, in the same period last year. Wholesale gross margin for the three months ended September 30, 2012 was $21.8 million, or 34.6% of net sales, compared to $20.7 million, or 34.3% of net sales, in the same period last year. Retail gross margin for the three months ended September 30, 2012 was $4.4 million, or 46.1% of net sales, compared to $4.9 million, or 47.1% of net sales, for the same period in 2011. The 100 basis point decrease was largely due to lower average selling prices on our internet driven transactions than our mobile store transactions. Military gross margin for the three months ended September 30, 2012 was zero compared to $0.1 million, or 13.3% of net sales, for the same period in 2011.

SG&A expenses. SG&A expenses were $18.2 million, or 25.2% of net sales, for the three months ended September 30, 2012, compared to $18.0 million, or 25.4% of net sales for the same period in 2011. The net change primarily reflected increases in advertising expense of $0.7 million, freight expense of $0.2 million and show expenses of $0.1 million, which were partially offset by decreases in compensation and benefits expense of $0.6 million and decreased operating expenses of $0.3 million for our retail operations due to the continued closing of mobile stores.

Net sales. Net sales for the nine months ended September 30, 2012 were $170.3 million compared to $175.6 million for the same period in 2011. Wholesale sales for the nine months ended September 30, 2012 were $140.0 million compared to $140.8 million for the same period in 2011. The $0.8 million decrease in wholesale sales was the result of a $2.9 million or 32.3% decrease in our apparel category, a $2.8 million or 13.3% decrease in our hunting footwear category, a $0.9 million or 8.7% decrease in our duty footwear category, a $0.9 million or 1.4% decrease in our work footwear category, and a $1.1 million decline in other, which were partially offset by a $5.9 million or 25.7% increase in our western footwear category and a $1.9 million or 11.9% increase in our commercial military footwear category. Retail sales for the nine months ended September 30, 2012 were $29.3 million compared to $33.0 million for the same period in 2011. The $3.7 million decrease in retail sales resulted from our ongoing transition to more internet driven transactions and the decision to remove a portion of our Lehigh mobile stores from operations to help lower operating expenses. Military segment sales for the nine months ended September 30, 2012, were $1.0 million, compared to $1.8 million in the same period in 2011. From time to time, we bid on military contracts when they become available. Our sales under such contracts are dependent on us winning the bids for these contracts.

Gross margin. Gross margin for the nine months ended September 30, 2012 was $59.6 million, or 35.0% of net sales, compared to $65.5 million, or 37.3% of net sales, in the same period last year. Wholesale gross margin for the nine months ended September 30, 2012 was $45.7 million, or 32.7% of net sales, compared to $49.5 million, or 35.1% of net sales, in the same period last year. The 240 basis point decrease was primarily due to an increase in product costs and the result of a rollout to all stores for one of our largest accounts in the first quarter of 2012 that negatively impacted gross margins due to temporary price concessions. Retail gross margin for the nine months ended September 30, 2012 was $13.8 million, or 47.1% of net sales, compared to $15.8 million, or 47.9% of net sales, for the same period in 2011. The 80 basis point decrease was primarily the result of lower average selling prices on our internet driven transactions than our mobile store transactions. Military gross margin for the nine months ended September 30, 2012 was less than $0.1 million, or 4.2% of net sales, compared to $0.2 million, or 13.1% of net sales, for the same period in 2011.

Read the The complete Report

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