The Company reported first quarter net income of $0.9 million, or $0.12 per diluted share compared with net income of $0.7 million, or $0.10 per diluted share in the first quarter of 2012. First quarter 2013 net sales were $53.7 million versus net sales of $53.3 million a year ago.
David Sharp, President and Chief Executive Officer, commented, “The year is off to a solid start highlighted by improvements in gross margin and net income. Sales continue to be driven by Durango as the brand’s western and lifestyle collections collectively were up 40% in the first quarter. In addition, increased Military sales combined with the initial shipments of our new private label program helped to offset softness in our work and commercial military categories. We are cautiously optimistic that we can generate improved top-line performance as the year progresses, which along with enhanced gross margins should result in a meaningful increase in annual profitability.”
First Quarter Review
Net sales for the first quarter were $53.7 million compared to $53.3 million a year ago. Wholesale sales for the first quarter were $42.0 million compared to $42.4 million for the same period in 2012. Retail sales for the first quarter were $10.8 million compared to $10.5 million for the same period last year with the increase driven by a significant gain in our business-to-consumer ecommerce sales. Military sales for the first quarter were $0.9 million compared to $0.4 million in the first quarter of 2012.
Gross margin in the first quarter of 2013 was $18.7 million, or 34.8% of sales, compared to $18.0 million, or 33.8% of sales, for the same period last year. The 100 basis point increase was driven primarily by improved manufacturing efficiencies.
Selling, general and administrative (SG&A) expenses were $17.2 million, or 32.0% of net sales, for the first quarter of 2013 compared to $16.7 million, or 31.4% of net sales, a year ago. The increase in SG&A was due to higher freight expense primarily related to the increase in business-to-consumer ecommerce sales compared with a year ago.
Income from operations was $1.5 million, or 2.8% of net sales, compared to $1.3 million, or 2.4% of net sales.
The Company’s funded debt decreased 5.9% to $20.3 million at March 31, 2013 versus $21.5 million at March 31, 2012.
Inventory increased 6.5% to $68.3 million at March 31, 2013 compared with $64.1 million on the same date a year ago.
Rocky Brands, Inc