EJ Acquisition Helps Double Rocky Q4 Sales…

Rocky Shoes & Boots saw a considerable upside from their acquisition of EJ Footwear, more than doubling Q4 sales and increasing the company’s bottom line to $2.6 million compared to $2.2 million in the year-ago period. Net sales for the fourth quarter increased 128% to $74.9 million compared to $32.9 million a year ago, with EJ Footwear contributing $41.8 million in revenue s for the period. Organic revenue growth was pegged at just 0.6% for Rocky’s core businesses.

Wholesale revenues, which include footwear and apparel sales of the company's owned brands — Rocky, Gates, Georgia Boot, and Durango — and footwear sales of the licensed Dickies brand, increased 104% to $51.9 million compared to $25.4 million a year ago. Retail sales, which consist of the company's Lehigh business and the company-owned store in Nelsonville, Ohio, were $14.3 million compared to $1.7 million a year ago. Sales of footwear to the U.S. military increased 52.6% to $8.7 million compared to $5.7 million in Q4 last year.

Gross margins in the fourth quarter were 38.4% of sales, up 10 full percentage points from 28.1% of sales last year, primarily due to sales of EJ Footwear product. SG&A expenses were 30.3% of sales for the fourth quarter up from 20.0% of sales, a year ago. The increase was primarily a result of higher SG&A costs associated with the EJ Footwear business. Income from operations increased to $6.0 million or 8.0% of net sales from $2.7 million or 8.2% of net sales last year.

Rocky maintained previous guidance of revenues in the range of $287 million to $292 million, and diluted EPS in the range of $2.28 to $2.38, including a non-cash charge of approximately 7 cents per share related to stock option expensing. Excluding stock option expensing, the company expects diluted earnings per share to be in the range of $2.35 to $2.45. The company's guidance for fiscal 2006 does not include any footwear sales to the military compared to approximately $27.7 million in fiscal 2005.