Rocky Shoes & Boots acquisition of EJ Footwear caused the companys sales to nearly triple during the first quarter of 2005 with a 181% increase to $61.5 million compared to $21.9 million last year. EJ Footwear contributed $39.9 million in revenue. Without the acquisition, Rocky actually posted a 1.4% decline in sales due to a decrease in shipments to the U.S. military in the first quarter of 2005 compared to 2004.
Gross margin in the first quarter increased 1370 basis points to 39.4% of sales from 25.7% of sales last year due to sales of EJ Footwear product, which carry a higher gross margin than Rocky products. The decrease in shipments to the U.S. military also boosted margins. EJ Footwear also boosted SG&A expenses by 930 basis points to 33.6% of sales compared to 24.3% last year.
Overall, the company seems to be running much more efficiently with income from operations climbing to $3.5 million or 5.8% of net sales compared to $300,000 or 1.3% of net sales in the prior year.
Inventory nearly doubled to $69.3 million at quarter-end compared with $35.1 million last year, due to the acquisition of EJ Footwear.
Net income rose to a record $1.1 million versus net income of $0.1 million and diluted earnings per share increased to 20 cents per share versus one penny per share last year. This increase brought the companys ROS ratio to 1.8% versus 1.4% without the EJ footwear business last year.
Rocky reiterated its guidance for fiscal 2005 of net sales in the range of $300 million to $305 million and earnings per share in the range of $2.55 to $2.65.
>>> It looks like the military business may be drying up for a number of companies and now all of that capacity needs to be switched to branded consumer products. Luckily, Rocky was able to buy themselves another brand