Rocky Brands Inc. (RCKY, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 brand Dickies. Rocky Brands Inc. has a market cap of $46.7 million; its shares were traded at around $8.43 with a P/E ratio of 46.8 and P/S ratio of 0.2. Rocky Brands Inc. had an annual average earning growth of 0.8% over the past 5 years.
Gross margin. Gross margin for the three months ended September 30, 2009 was $24.7 million, or 37.1% of net sales, compared to $27.1 million, or 37.4% of net sales, in the same period last year. Wholesale gross margin for the three months ended September 30, 2009 was $19.5 million, or 35.7% of net sales, compared to $19.7 million, or 35.4% of net sales, in the same period last year. Retail gross margin for the three months ended September 30, 2009 was $5.2 million, or 45.6% of net sales, compared to $7.3 million, or 47.5% of net sales, for the same period in 2008. The 190 basis point decrease reflects reduced sales via our mobile stores, which carry the highest gross margin in our retail business. Military gross margin for the three months ended September 30, 2009 was less than $0.1 million, or 4.2% of net sales, compared to $0.1 million, or 8.2% of net sales, for the same period in 2008.
Net sales. Net sales for the nine months ended September 30, 2009 were $167.8 million compared to $193.5 million for the same period in 2008. Wholesale sales for the nine months ended September 30, 2009 were $128.4 million compared to $137.9 million for the same period in 2008. The $9.5 million decrease in wholesale sales is the result of decreased sales in the majority of our footwear categories and apparel. Retail sales for the nine months ended September 30, 2009 were $37.5 million compared to $50.4 million for the same period in 2008. The $12.9 million decrease in retail sales results from plant closings and layoffs in the manufacturing sector as the current economic conditions have impacted a significant portion of our retail customer base. In addition, retail sales were negatively impacted by 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 costs. Military segment sales for the nine months ended September 30, 2009, were $1.9 million, compared to $5.2 million in the same period in 2008. Shipments in 2009 were under the $6.4 million contract issued in July 2007 and the $29.0 million contract, issued in July 2009.
Gross margin. Gross margin for the nine months ended September 30, 2009 was $62.5 million, or 37.3% of net sales, compared to $77.4 million, or 40.0% of net sales, in the same period last year. Wholesale gross margin for the nine months ended September 30, 2009 was $44.6 million, or 34.7% of net sales, compared to $51.6 million, or 37.5% of net sales, in the same period last year. The 280 basis point decrease is the result of additional sales of closeouts at reduced gross margins, an increase in manufacturing costs, and a decrease in sales price per unit for competitive reasons. Retail gross margin for the nine months ended September 30, 2009 was $17.8 million, or 47.5% of net sales, compared to $25.3 million, or 50.2% of net sales, for the same period in 2008. The 270 basis point decrease reflects reduced sales via our mobile stores, which carry the highest gross margin in our retail business. Military gross margin for the nine months ended September 30, 2009 was $0.1 million, or 4.4% of net sales, compared to $0.5 million or 9.0% of net sales for the same period in 2009.
SG&A expenses. SG&A expenses were $56.6 million, or 33.8% of net sales, for the nine months ended September 30, 2009, compared to $65.9 million, or 34.0% of net sales for the same period in 2008. The net change primarily results from decreases in compensation and benefits expenses of $4.3 million, shipping expenses of $1.5 million, Lehigh mobile store expenses of $0.8 million, advertising expenses of $0.8 million, travel expenses of $0.6, professional and consulting fees of $0.5 million, and show expenses of $0.4 million, partially offset by a $0.5 million increase in bad debt expense.
Financing Activities. Cash used in financing activities for the nine months ended September 30, 2009 was $5.8 million and reflects a decrease in net borrowings under the revolving credit facility of $3.9 million, debt financing costs associated with the amendment of our credit facility with GMAC of $1.5 million and repayments on long-term debt of $0.4 million. Cash provided by financing activities for the nine months ended September 30, 2008 was $4.0 million and reflects an increase in net borrowings under the revolving credit facility of $3.9 million and information technology software financing of $0.3 million, offset by repayments on long-term debt of $0.2 million.
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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 brand Dickies. Rocky Brands Inc. has a market cap of $46.7 million; its shares were traded at around $8.43 with a P/E ratio of 46.8 and P/S ratio of 0.2. Rocky Brands Inc. had an annual average earning growth of 0.8% over the past 5 years.
Highlight of Business Operations:
Net sales. Net sales for the three months ended September 30, 2009 were $66.6 million compared to $72.5 million for the same period in 2008. Wholesale sales for the three months ended September 30, 2009 were $54.5 million compared to $55.6 million for the same period in 2008. The $1.2 million decrease in wholesale sales was the result of decreased sales in our work footwear and apparel categories, partially offset by increases in the Hunting, Western and Duty categories. Retail sales for the three months ended September 30, 2009 were $11.5 million compared to $15.3 million for the same period in 2008. The $3.8 million decrease in retail sales resulted from plant closings and layoffs in the manufacturing sector as the current economic conditions have impacted a significant portion of our retail customer base. In addition, retail sales were negatively impacted by our ongoing transition to more internet driven transactions and the decision to remove a portion of our Lehigh mobile stores from operations which resulted in reductions in SG&A expenses. Military segment sales for the three months ended September 30, 2009, were $0.6 million, compared to $1.6 million in the same period in 2008. Shipments in 2009 were under the $6.4 million contract issued in July 2007and the $29.0 million contract, issued in July 2009.Gross margin. Gross margin for the three months ended September 30, 2009 was $24.7 million, or 37.1% of net sales, compared to $27.1 million, or 37.4% of net sales, in the same period last year. Wholesale gross margin for the three months ended September 30, 2009 was $19.5 million, or 35.7% of net sales, compared to $19.7 million, or 35.4% of net sales, in the same period last year. Retail gross margin for the three months ended September 30, 2009 was $5.2 million, or 45.6% of net sales, compared to $7.3 million, or 47.5% of net sales, for the same period in 2008. The 190 basis point decrease reflects reduced sales via our mobile stores, which carry the highest gross margin in our retail business. Military gross margin for the three months ended September 30, 2009 was less than $0.1 million, or 4.2% of net sales, compared to $0.1 million, or 8.2% of net sales, for the same period in 2008.
Net sales. Net sales for the nine months ended September 30, 2009 were $167.8 million compared to $193.5 million for the same period in 2008. Wholesale sales for the nine months ended September 30, 2009 were $128.4 million compared to $137.9 million for the same period in 2008. The $9.5 million decrease in wholesale sales is the result of decreased sales in the majority of our footwear categories and apparel. Retail sales for the nine months ended September 30, 2009 were $37.5 million compared to $50.4 million for the same period in 2008. The $12.9 million decrease in retail sales results from plant closings and layoffs in the manufacturing sector as the current economic conditions have impacted a significant portion of our retail customer base. In addition, retail sales were negatively impacted by 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 costs. Military segment sales for the nine months ended September 30, 2009, were $1.9 million, compared to $5.2 million in the same period in 2008. Shipments in 2009 were under the $6.4 million contract issued in July 2007 and the $29.0 million contract, issued in July 2009.
Gross margin. Gross margin for the nine months ended September 30, 2009 was $62.5 million, or 37.3% of net sales, compared to $77.4 million, or 40.0% of net sales, in the same period last year. Wholesale gross margin for the nine months ended September 30, 2009 was $44.6 million, or 34.7% of net sales, compared to $51.6 million, or 37.5% of net sales, in the same period last year. The 280 basis point decrease is the result of additional sales of closeouts at reduced gross margins, an increase in manufacturing costs, and a decrease in sales price per unit for competitive reasons. Retail gross margin for the nine months ended September 30, 2009 was $17.8 million, or 47.5% of net sales, compared to $25.3 million, or 50.2% of net sales, for the same period in 2008. The 270 basis point decrease reflects reduced sales via our mobile stores, which carry the highest gross margin in our retail business. Military gross margin for the nine months ended September 30, 2009 was $0.1 million, or 4.4% of net sales, compared to $0.5 million or 9.0% of net sales for the same period in 2009.
SG&A expenses. SG&A expenses were $56.6 million, or 33.8% of net sales, for the nine months ended September 30, 2009, compared to $65.9 million, or 34.0% of net sales for the same period in 2008. The net change primarily results from decreases in compensation and benefits expenses of $4.3 million, shipping expenses of $1.5 million, Lehigh mobile store expenses of $0.8 million, advertising expenses of $0.8 million, travel expenses of $0.6, professional and consulting fees of $0.5 million, and show expenses of $0.4 million, partially offset by a $0.5 million increase in bad debt expense.
Financing Activities. Cash used in financing activities for the nine months ended September 30, 2009 was $5.8 million and reflects a decrease in net borrowings under the revolving credit facility of $3.9 million, debt financing costs associated with the amendment of our credit facility with GMAC of $1.5 million and repayments on long-term debt of $0.4 million. Cash provided by financing activities for the nine months ended September 30, 2008 was $4.0 million and reflects an increase in net borrowings under the revolving credit facility of $3.9 million and information technology software financing of $0.3 million, offset by repayments on long-term debt of $0.2 million.
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