Rocky Brands swung to a second quarter profit on recovering sales, cost cutting measures and improving margins along with resurgences from the Work, Wholesale and Military segments. Total sales for the company were $55.2 million, up 7.9% from $51.2 million in the year-ago period. Net earnings were $525,610, or 8 cents per diluted share, compared with a net loss of $1.4 million, or 25 cents per diluted share, in the year-ago period. Excluding one-time charges of $600,000, net of tax, associated with the early repayment of a portion of the company’s senior term loan, second quarter 2010 net income improved to $1.1 million, or 17 cents per diluted share. Gross margin was 34.6% of sales, flat to the year-ago period.
By segment, Rocky’s Wholesale business, which makes up about 70% of sales, contributed higher profitability due to lower manufacturing costs on a per-pair basis at Rocky facilities in the Caribbean. Total sales for the Wholesale segment improved 1.6% to $38.5 million from $37.9 million a year ago. Gross margins for the Wholesale segment were up 370 basis points.
For the Work segment, sales were up 10.5% for the quarter on strength from the Georgia Boot and Rocky brands, which were up 13% and 16%, respectively.
Retail sales were $11.0 million for the second quarter, down $1.3 million from sales of $12.3 million a year ago. Management attributed the decline to the continued transition to a more direct order/direct ship program and the decision to remove a portion of the Lehigh mobile stores from operation to help lower costs.
Inventory decreased 22.0% to $61.8 million at quarter-end.
