Rocky Shoes and Boots capitalized on U.S. military sales to post a fourth quarter sales increase of 12.6% to $32.9 million compared to $29.2 million a year ago. Military sales made up 17.3%, or $5.7 million, of Rocky’s business for the quarter, compared to 1.4%, or $400,000, last year. Excluding Military from sales, revenues would have been down 6.8% to $27.2 million.

The increased activity with the military is also affecting margins which dropped 430 basis points to 28.2% of sales, from 32.5% of sales last year. On the positive side, there are also fewer SG&A expenses associated with these large contracts. SG&A expenses dropped to 20.1% of sales compared to 22.1% a year ago.

This dip brought net income up 4.2% for the quarter to $2.2 million, compared to $2.1 million a year ago. Diluted EPS for the quarter dropped one cent to 43 cents.

Even though military sales are masking a decline in sales of branded goods, Rocky seems to have bought some more time with a new government contract to produce Infantry Combat Boots worth $21 million. Shipment of the ICB’s, which will be manufactured in Rocky’s Moca, Puerto Rico factory, is expected to begin in the second quarter of fiscal 2005 with an estimated completion date of December 2005.

Rocky Shoes and Boots capitalized on U.S. military sales to post a fourth quarter sales increase of 12.6% to $32.9 million compared to $29.2 million a year ago. Military sales made up 17.3%, or $5.7 million, of Rocky’s business for the quarter, compared to 1.4%, or $400,000, last year.
Excluding Military revenues from sales, revenues would have been down 6.8% to $27.2 million.

The increased activity with the military is also affecting margins, which dropped 430 basis points to 28.2% of sales, from 32.5% of sales last year. On the positive side, there are also fewer SG&A expenses associated with these large contracts. SG&A expenses dropped to 20.1% of sales compared to 22.1% a year ago.

This brought net income up 4.2% for the quarter to $2.2 million, compared to $2.1 million a year ago. Diluted EPS for the quarter dropped one cent to 43 cents.

Even though military sales are masking a decline in sales of branded goods, Rocky seems to have bought some more time with a new government contract to produce Infantry Combat Boots worth $21 million. Shipment of the ICB’s, which will be manufactured in the Rocky’s Moca, Puerto Rico factory, is expected to begin in the second quarter of fiscal 2005 with an estimated completion date of December 2005.

Mike Brooks, Chairman and Chief Executive Officer of Rocky Shoes & Boots, said, “This order represents a great opportunity for us to utilize our domestic manufacturing facilities in Puerto Rico and reflects our leadership position in the marketplace. We look forward to taking advantage of our operating platform to produce our high quality footwear for the U.S. Military.”