Rocky Brands Inc. reported second-quarter net sales were $68.6 million, slightly down from $68.8 million in the second quarter of 2014. Net income reached $2.0 million, or 26 cents per share, compared to net income of $1.5 million, or 20 cents, in the second quarter of 2014.
David Sharp, president and chief executive officer, commented, “We continue to deliver exceptionally strong profit gains year-over-year highlighting the power of our business model. The enhancements we’ve made to our operating structure fueled improved gross margins and lower expenses in the second quarter, allowing us to translate a slight decrease in sales into a 30 percent increase in earnings per share. Our top-line comparison reflects certain one-time events such as a seeding program with a major retail partner during the year ago period that we didn’t repeat this year which impacted our wholesale results, offset by a significant increase in our contract military business. Based on current sell-through momentum, our fall order book and easier comparisons, we are confident that we can increase sales mid-single digits during the back half of 2015.”
Second Quarter Review
Net sales for the second quarter were $68.6 million compared to $68.8 million a year ago. Wholesale sales for the second quarter decreased 4.9 percent to $53.9 million compared to $56.7 million for the same period in 2014. Retail sales for the second quarter increased 1.2 percent to $10.2 million compared to $10.1 million for the same period last year. Military segment sales for the second quarter increased to $4.5 million compared to $2.0 million in the second quarter of 2014.
Gross margin in the second quarter of 2015 was $22.6 million, or 33.0 percent of sales, compared to $22.6 million, or 32.8 percent of sales, for the same period last year. The 20 basis point increase was driven by higher wholesale and retail gross margins, partially offset by the increase in military segment sales which carry lower gross margins than wholesale and retail.
Selling, general and administrative (SG&A) expenses were $19.4 million, or 28.3 percent of net sales, for the second quarter of 2015 compared to $20.0 million, or 29.1 percent of net sales, a year ago. The $0.6 million decrease in SG&A expenses was primarily attributable to lower incentive compensation expense.
Income from operations was $3.3 million, or 4.7 percent of net sales, compared to $2.5 million, or 3.7 percent of net sales, a year ago.
Interest expense was $176,000 for the second quarter of 2015, versus $225,000 for the same period last year.
The company’s funded debt decreased $7.8 million or 17.9 percent to $35.6 million at June 30, 2015 compared to $43.4 million at June 30, 2014.
Inventories were $86.5 million at June 30, 2015 compared with $86.4 million on the same date a year ago.
The company's brands include: Rocky, Georgia Boot, Durango, Lehigh, Creative Recreation, and the licensed brand Michelin.
