Last week, Rocky Shoes & Boots, Inc. was notified that an order to fulfill a contract for combat boots for the U.S. Military has been terminated by the U.S. government. Shipment of the boots affected by this termination began in the fourth quarter with an estimated completion date of December 2006. The company is currently exploring the exact consequences of the government's termination of the contract.
The company also has withdrawn its registration statement filed with the Securities and Exchange Commission on September 15, 2005, for a follow-on equity offering of 2.6 million shares of common stock consisting of 2 million primary shares to be offered by the company and 600,000 shares to be offered by certain selling stockholders. The company expects to incur a non-operational charge in fiscal 2005 of approximately 4 cents diluted earnings per share for accounting and legal fees associated with the follow-on equity offering.
Rocky management now believes fiscal 2005 diluted EPS will be in the range of $2.21 to $2.25, compared to its previous guidance of $2.25 to $2.29. The company remains comfortable with its revenue forecast of $294 million to $296 million for 2005. For fiscal 2006, the company now expects revenues to be $287 million to $292 million, compared to it previous guidance of $313 million to $318 million, and diluted EPS to be in the range of $2.35 to $2.45, compared to $3.05 to $3.15.
