Rocky Brands Q4 net sales rise 5.7%

26 Feb '14

4 min read

Fourth Quarter Review

Net sales for the fourth quarter increased 5.7% to $61.6 million compared to $58.3 million a year ago. Wholesale sales for the fourth quarter were $47.7 million compared to $46.2 million for the same period in 2012. The $1.5 million increase was driven by a $3.8 million or 9.0% increase in footwear sales partially offset by a $2.3 million decrease in apparel sales. The decrease in apparel sales was the result of the Company’s decision to transition some apparel to a licensing model in early 2013.

Retail sales for the fourth quarter increased to $12.9 million compared to $12.0 million for the same period last year. Military segment sales for the fourth quarter increased to $1.0 million compared to no military sales in the fourth quarter of 2012.

Gross margin in the fourth quarter of 2013 was $21.8 million, or 35.4% of sales, compared to $20.9 million, or 36.0% of sales, for the same period last year. The 60 basis point decrease was driven by increased military sales versus the year ago period, which carry lower gross margins.

Selling, general and administrative (SG&A) expenses, excluding the aforementioned expense associated with the ongoing operations of Creative Recreation, were $18.4 million, or 29.9% of net sales, for the fourth quarter of 2013 compared to $16.8 million, or 28.8% of net sales, a year ago. The 110 basis point increase in SG&A as a percent of net sales was driven primarily by the reversal of incentive compensation accruals in the fourth quarter of 2012.

Income from operations, excluding the aforementioned expenses associated with the acquisition and ongoing operations of Creative Recreation was $3.4 million, or 5.6% of net sales, compared to $4.1 million, or 7.1% of net sales, a year ago.

Interest expense was $0.2 million for the fourth quarter of 2013, versus $0.2 million for the same period last year.

The Company’s funded debt was $38.4 million at December 31, 2013 versus $23.5 million at December 31, 2012, with the majority of the increase related to additional borrowings to fund the acquisition of Creative Recreation.

Inventory increased 16.3% or $11.0 million to $78.2 million at December 31, 2013 compared with $67.2 million on the same date a year ago. Inventory at December 31, 2013 included approximately $1.0 million associated with the acquisition of Creative Recreation.

Rocky Brands

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