Rocky Brands, Inc. Announces Third Quarter 2024 Results
Rocky Brands (NASDAQ: RCKY) reported Q3 2024 financial results with net sales decreasing 8.8% to $114.6 million. Gross margin improved 110 basis points to 38.1%. Net income was $5.3 million, or $0.70 per diluted share, compared to $6.8 million, or $0.93 per diluted share in Q3 2023. Durango brand and Lehigh CustomFit safety footwear showed double-digit growth, partially offsetting wholesale declines. The company reduced inventory by 11.8% and total debt by 29.7% year-over-year. Operating income was $10.1 million compared to $14.3 million in the year-ago quarter.
Rocky Brands (NASDAQ: RCKY) ha riportato i risultati finanziari del terzo trimestre 2024, con un calo delle vendite nette dell'8,8%, scendendo a 114,6 milioni di dollari. Il margine lordo è migliorato di 110 punti base, raggiungendo il 38,1%. L'utile netto è stato di 5,3 milioni di dollari, equivalente a 0,70 dollari per azione diluita, rispetto ai 6,8 milioni di dollari, o 0,93 dollari per azione diluita, nel terzo trimestre 2023. Le calzature di sicurezza del marchio Durango e Lehigh CustomFit hanno mostrato una crescita a doppia cifra, parzialmente compensando i cali delle vendite all'ingrosso. L'azienda ha ridotto l'inventario dell'11,8% e il debito totale del 29,7% rispetto all'anno precedente. L'utile operativo è stato di 10,1 milioni di dollari, rispetto ai 14,3 milioni di dollari dello stesso trimestre dell'anno scorso.
Rocky Brands (NASDAQ: RCKY) informó los resultados financieros del tercer trimestre de 2024, con una disminución en las ventas netas del 8.8%, alcanzando 114.6 millones de dólares. El margen bruto mejoró 110 puntos base, llegando al 38.1%. El ingreso neto fue de 5.3 millones de dólares, o 0.70 dólares por acción diluida, en comparación con 6.8 millones de dólares, o 0.93 dólares por acción diluida en el tercer trimestre de 2023. El calzado de seguridad de la marca Durango y Lehigh CustomFit mostró un crecimiento de dos dígitos, compensando parcialmente las caídas en mayoreo. La compañía redujo su inventario en un 11.8% y su deuda total en un 29.7% interanual. El ingreso operativo fue de 10.1 millones de dólares, en comparación con 14.3 millones de dólares en el mismo trimestre del año anterior.
Rocky Brands (NASDAQ: RCKY)는 2024년 3분기 재무 실적을 발표하였으며, 순 판매액은 8.8% 감소하여 1억 1,460만 달러에 이릅니다. 총 마진은 110 베이시스 포인트 개선되어 38.1%에 도달하였습니다. 순익은 530만 달러이며, 희석 주당 0.70 달러로, 2023년 3분기의 680만 달러, 희석 주당 0.93 달러에 비해 감소하였습니다. Durango 브랜드와 Lehigh CustomFit 안전화는 두 자릿수 성장률을 보이며 도매 판매 감소를 부분적으로 상쇄하였습니다. 회사는 재고를 11.8% 줄였고, 총 부채는 전년 대비 29.7% 감소하였습니다. 운영 수익은 1,010만 달러로, 전년 동기 1,430만 달러에 비해 감소하였습니다.
Rocky Brands (NASDAQ: RCKY) a annoncé ses résultats financiers pour le troisième trimestre 2024, avec une baisse des ventes nettes de 8,8% à 114,6 millions de dollars. La marge brute s'est améliorée de 110 points de base, atteignant 38,1%. Le bénéfice net s'élevait à 5,3 millions de dollars, soit 0,70 $ par action diluée, comparé à 6,8 millions de dollars, soit 0,93 $ par action diluée au troisième trimestre 2023. Les chaussures de sécurité de la marque Durango et Lehigh CustomFit ont affiché une croissance à deux chiffres, compensant en partie les baisses en gros. L'entreprise a réduit son inventaire de 11,8% et sa dette totale de 29,7% d'une année sur l'autre. Le résultat d'exploitation était de 10,1 millions de dollars, contre 14,3 millions de dollars au trimestre de l'année précédente.
Rocky Brands (NASDAQ: RCKY) hat die Finanzzahlen für das dritte Quartal 2024 veröffentlicht, mit einem Rückgang der Nettoumsätze um 8,8% auf 114,6 Millionen US-Dollar. Die Bruttomarge verbesserte sich um 110 Basispunkte auf 38,1%. Der Nettogewinn betrug 5,3 Millionen US-Dollar, oder 0,70 US-Dollar pro verwässerter Aktie, im Vergleich zu 6,8 Millionen US-Dollar, oder 0,93 US-Dollar pro verwässerter Aktie im dritten Quartal 2023. Die Sicherheits- schuhe der Durango-Marke und Lehigh CustomFit zeigten ein zweistelliges Wachstum und haben teilweise die Rückgänge im Großhandel ausgeglichen. Das Unternehmen reduzierte den Lagerbestand um 11,8% und die Gesamtschulden um 29,7% im Jahresvergleich. Das operative Ergebnis betrug 10,1 Millionen US-Dollar, im Vergleich zu 14,3 Millionen US-Dollar im same-quarter des Vorjahres.
- Gross margin increased 110 basis points to 38.1%
- Double-digit sales growth in Durango brand and Lehigh CustomFit
- Inventory reduced by 11.8% year-over-year
- Total debt decreased 29.7% year-over-year
- Interest expense reduced from $5.8M to $3.3M
- Net sales decreased 8.8% to $114.6M
- Operating income declined from $14.3M to $10.1M
- Net income decreased from $6.8M to $5.3M
- Diluted EPS dropped from $0.93 to $0.70
- Wholesale sales declined 15.7%
Insights
The Q3 2024 results reveal mixed performance with some concerning trends. Net sales declined
The company's debt reduction efforts are noteworthy, with total debt down
The results reflect broader retail sector challenges, particularly in discretionary spending. The bright spots include double-digit growth in the Durango brand and Lehigh CustomFit safety footwear platform, showing resilience in specific market segments. The company's multi-brand, multi-channel strategy provides some insulation against market volatility.
The increased operating expenses for brand building (
Third Quarter 2024 Overview
|
|
|
|
|
|
|
"While cautious consumer spending outside of peak shopping periods and warm, dry weather acted as headwinds this quarter, the underlying strength of our business remains intact," said Jason Brooks, Chairman, President and Chief Executive Officer. “The benefits of our multi-brand, multi-channel model were evident in the third quarter as double digit sales growth in both our Durango brand and our Lehigh CustomFit safety footwear platform partially offset Wholesale declines primarily within our work, outdoor and commercial military categories. Based on our current order book for 2025, we believe this softness is transitory and that recent brand and marketing investments, along with our improved capital structure, have the Company well positioned to drive sustainable, profitable growth and long-term shareholder value."
Third Quarter 2024 Review
Third quarter net sales decreased
Gross margin in the third quarter of 2024 was
Operating expenses were
Income from operations for the third quarter of 2024 was
Interest expense for the third quarter of 2024 was
The Company reported third quarter net income of
Balance Sheet Review
Cash and cash equivalents were
Inventories at September 30, 2024 were
Total debt, net of unamortized debt issuance costs of
Conference Call Information
The Company's conference call to review third quarter 2024 results will be broadcast live over the internet today, Wednesday, October 30, 2024 at 4:30 pm Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 704-4453 (domestic) or (201) 389-0920 (international). The conference call will also be available to interested parties through a live webcast at www.rockybrands.com. Please visit the website and select the “Investors” link at least 15 minutes prior to the start of the call to register and download any necessary software.
About Rocky Brands, Inc.
Rocky Brands, Inc. is a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names. Brands in the portfolio include Rocky®, Georgia Boot®, Durango®, Lehigh®, The Original Muck Boot Company®, XTRATUF® and Ranger®. More information can be found at RockyBrands.com.
Safe Harbor Language
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Those statements include, but may not be limited to, all statements regarding intent, beliefs, expectations, projections, forecasts, and plans of the Company and its management and include statements in this press release regarding softness in consumer spending being transitory (Paragraph 2) and that recent brand and marketing investments along with an improved capital structure have the Company well positioned to drive sustainable, profitable growth and long-term shareholder value (Paragraph 2). These forward-looking statements involve numerous risks and uncertainties, including, without limitation, the various risks inherent in the Company’s business as set forth in periodic reports filed with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K for the year ended December 31, 2023 (filed March 15, 2024) and the quarterly reports on Form 10-Q for the quarters ended March 31, 2024 (filed May 9, 2024) and June 30, 2024 (filed August 8, 2024). One or more of these factors have affected historical results, and could in the future affect the Company’s businesses and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation or warranty by the Company or any other person that the objectives and plans of the Company will be achieved. All forward-looking statements made in this press release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.
Rocky Brands, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except share amounts) (Unaudited)
|
||||||||||||
|
|
September 30, |
|
|
December 31, |
|
|
September 30, |
|
|||
|
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,705 |
|
|
$ |
4,470 |
|
|
$ |
4,240 |
|
Trade receivables – net |
|
|
77,130 |
|
|
|
77,028 |
|
|
|
97,844 |
|
Contract receivables |
|
|
- |
|
|
|
927 |
|
|
|
2,990 |
|
Other receivables |
|
|
177 |
|
|
|
1,933 |
|
|
|
2,207 |
|
Inventories – net |
|
|
171,847 |
|
|
|
169,201 |
|
|
|
194,734 |
|
Income tax receivable |
|
|
- |
|
|
|
1,253 |
|
|
|
2,445 |
|
Prepaid expenses |
|
|
5,205 |
|
|
|
3,361 |
|
|
|
4,985 |
|
Total current assets |
|
|
258,064 |
|
|
|
258,173 |
|
|
|
309,445 |
|
LEASED ASSETS |
|
|
6,705 |
|
|
|
7,809 |
|
|
|
7,982 |
|
PROPERTY, PLANT & EQUIPMENT – net |
|
|
50,380 |
|
|
|
51,976 |
|
|
|
53,124 |
|
GOODWILL |
|
|
47,844 |
|
|
|
47,844 |
|
|
|
47,844 |
|
IDENTIFIED INTANGIBLES – net |
|
|
110,521 |
|
|
|
112,618 |
|
|
|
113,321 |
|
OTHER ASSETS |
|
|
1,503 |
|
|
|
965 |
|
|
|
1,015 |
|
TOTAL ASSETS |
|
$ |
475,017 |
|
|
$ |
479,385 |
|
|
$ |
532,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
63,148 |
|
|
$ |
49,840 |
|
|
$ |
62,733 |
|
Contract liabilities |
|
|
- |
|
|
|
927 |
|
|
|
2,990 |
|
Current portion of long-term debt |
|
|
8,361 |
|
|
|
2,650 |
|
|
|
2,704 |
|
Accrued expenses and other liabilities |
|
|
20,845 |
|
|
|
18,112 |
|
|
|
21,275 |
|
Total current liabilities |
|
|
92,354 |
|
|
|
71,529 |
|
|
|
89,702 |
|
LONG-TERM DEBT |
|
|
141,929 |
|
|
|
170,480 |
|
|
|
211,190 |
|
LONG-TERM TAXES PAYABLE |
|
|
- |
|
|
|
169 |
|
|
|
169 |
|
LONG-TERM LEASE |
|
|
4,232 |
|
|
|
5,461 |
|
|
|
5,715 |
|
DEFERRED INCOME TAXES |
|
|
7,475 |
|
|
|
7,475 |
|
|
|
8,006 |
|
DEFERRED LIABILITIES |
|
|
777 |
|
|
|
716 |
|
|
|
1,179 |
|
TOTAL LIABILITIES |
|
|
246,767 |
|
|
|
255,830 |
|
|
|
315,961 |
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, no par value; |
|
|
|
|
|
|
|
|
|
|
|
|
25,000,000 shares authorized; issued and outstanding September 30, 2024 - 7,449,020; December 31, 2023 - 7,412,480; September 30, 2023 - 7,366,201 |
|
|
73,537 |
|
|
|
71,973 |
|
|
|
70,757 |
|
Retained earnings |
|
|
154,713 |
|
|
|
151,582 |
|
|
|
146,013 |
|
Total shareholders' equity |
|
|
228,250 |
|
|
|
223,555 |
|
|
|
216,770 |
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
475,017 |
|
|
$ |
479,385 |
|
|
$ |
532,731 |
|
Rocky Brands, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (In thousands, except share amounts) (Unaudited)
|
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
NET SALES |
|
$ |
114,554 |
|
|
$ |
125,614 |
|
|
$ |
325,718 |
|
|
$ |
335,881 |
|
COST OF GOODS SOLD |
|
|
70,908 |
|
|
|
79,076 |
|
|
|
199,886 |
|
|
|
208,012 |
|
GROSS MARGIN |
|
|
43,646 |
|
|
|
46,538 |
|
|
|
125,832 |
|
|
|
127,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
33,575 |
|
|
|
32,259 |
|
|
|
103,271 |
|
|
|
107,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM OPERATIONS |
|
|
10,071 |
|
|
|
14,279 |
|
|
|
22,561 |
|
|
|
20,636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE AND OTHER – net |
|
|
(3,180 |
) |
|
|
(5,649 |
) |
|
|
(13,964 |
) |
|
|
(15,943 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAX EXPENSE |
|
|
6,891 |
|
|
|
8,630 |
|
|
|
8,597 |
|
|
|
4,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE |
|
|
1,612 |
|
|
|
1,803 |
|
|
|
2,011 |
|
|
|
980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
5,279 |
|
|
$ |
6,827 |
|
|
$ |
6,586 |
|
|
$ |
3,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.71 |
|
|
$ |
0.93 |
|
|
$ |
0.89 |
|
|
$ |
0.50 |
|
Diluted |
|
$ |
0.70 |
|
|
$ |
0.93 |
|
|
$ |
0.88 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
7,449 |
|
|
|
7,366 |
|
|
|
7,432 |
|
|
|
7,355 |
|
Diluted |
|
|
7,503 |
|
|
|
7,375 |
|
|
|
7,479 |
|
|
|
7,374 |
|
Rocky Brands, Inc. and Subsidiaries Reconciliation of GAAP Measures to Non-GAAP Measures (In thousands, except share amounts) (Unaudited)
|
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES, AS REPORTED |
|
$ |
114,554 |
|
|
$ |
125,614 |
|
|
$ |
325,718 |
|
|
$ |
335,881 |
|
ADD: RETURNS RELATING TO SUPPLIER DISPUTE |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,542 |
|
ADJUSTED NET SALES |
|
$ |
114,554 |
|
|
$ |
125,614 |
|
|
$ |
325,718 |
|
|
$ |
337,423 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF GOODS SOLD |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF GOODS SOLD, AS REPORTED |
|
$ |
70,908 |
|
|
$ |
79,076 |
|
|
$ |
199,886 |
|
|
$ |
208,012 |
|
LESS: SUPPLIER DISPUTE INVENTORY ADJUSTMENT |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(181 |
) |
ADJUSTED COST OF GOODS SOLD |
|
$ |
70,908 |
|
|
$ |
79,076 |
|
|
$ |
199,886 |
|
|
$ |
207,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN, AS REPORTED |
|
$ |
43,646 |
|
|
$ |
46,538 |
|
|
$ |
125,832 |
|
|
$ |
127,869 |
|
ADJUSTED GROSS MARGIN |
|
$ |
43,646 |
|
|
$ |
46,538 |
|
|
$ |
125,832 |
|
|
$ |
129,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES, AS REPORTED |
|
$ |
33,575 |
|
|
$ |
32,259 |
|
|
$ |
103,271 |
|
|
$ |
107,233 |
|
LESS: ACQUISITION-RELATED AMORTIZATION |
|
|
(692 |
) |
|
|
(692 |
) |
|
|
(2,076 |
) |
|
|
(2,148 |
) |
LESS: CLOSURE OF MANUFACTURING FACILITY |
|
|
- |
|
|
|
(398 |
) |
|
|
- |
|
|
|
(398 |
) |
LESS: RESTRUCTURING COSTS |
|
|
- |
|
|
|
(453 |
) |
|
|
- |
|
|
|
(1,486 |
) |
ADJUSTED OPERATING EXPENSES |
|
$ |
32,883 |
|
|
$ |
30,716 |
|
|
$ |
101,195 |
|
|
$ |
103,201 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED OPERATING INCOME |
|
$ |
10,763 |
|
|
$ |
15,822 |
|
|
$ |
24,637 |
|
|
$ |
26,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE AND OTHER – net, AS REPORTED |
|
$ |
(3,180 |
) |
|
$ |
(5,649 |
) |
|
$ |
(13,964 |
) |
|
$ |
(15,943 |
) |
ADD: TERM LOAN FACILITY EXTINGUISHMENT COSTS |
|
|
- |
|
|
|
- |
|
|
|
2,597 |
|
|
|
- |
|
LESS: GAIN ON SALE OF BUSINESS |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,341 |
) |
ADJUSTED INTEREST EXPENSE AND OTHER – net |
|
|
(3,180 |
) |
|
|
(5,649 |
) |
|
|
(11,367 |
) |
|
|
(17,284 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME, AS REPORTED |
|
$ |
5,279 |
|
|
$ |
6,827 |
|
|
$ |
6,586 |
|
|
$ |
3,713 |
|
TOTAL NON-GAAP ADJUSTMENTS |
|
|
692 |
|
|
|
1,543 |
|
|
|
4,673 |
|
|
|
4,414 |
|
TAX IMPACT OF ADJUSTMENTS |
|
|
(162 |
) |
|
|
(322 |
) |
|
|
(1,093 |
) |
|
|
(922 |
) |
ADJUSTED NET INCOME |
|
$ |
5,809 |
|
|
$ |
8,048 |
|
|
$ |
10,166 |
|
|
$ |
7,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME PER SHARE, AS REPORTED |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
$ |
0.71 |
|
|
$ |
0.93 |
|
|
$ |
0.89 |
|
|
$ |
0.50 |
|
DILUTED |
|
$ |
0.70 |
|
|
$ |
0.93 |
|
|
$ |
0.88 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET INCOME PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
$ |
0.78 |
|
|
$ |
1.09 |
|
|
$ |
1.37 |
|
|
$ |
0.98 |
|
DILUTED |
|
$ |
0.77 |
|
|
$ |
1.09 |
|
|
$ |
1.36 |
|
|
$ |
0.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
|
7,449 |
|
|
|
7,366 |
|
|
|
7,432 |
|
|
|
7,355 |
|
DILUTED |
|
|
7,503 |
|
|
|
7,375 |
|
|
|
7,479 |
|
|
|
7,374 |
|
Use of Non-GAAP Financial Measures
In addition to GAAP financial measures, we present the following non-GAAP financial measures: "non-GAAP adjusted net sales," "non-GAAP adjusted costs of goods sold," "non-GAAP adjusted gross margin," "non-GAAP adjusted operating expenses," "non-GAAP adjusted operating income," "non-GAAP adjusted interest expense and other - net," "non-GAAP adjusted net income," and "non-GAAP adjusted net income per share." Adjusted results exclude the impact of items that management believes affect the comparability or underlying business trends in our consolidated financial statements in the periods presented. We believe that these non-GAAP measures are useful to management and investors and other users of our consolidated financial statements as an additional tool for evaluating operating performance. We believe they also provide a useful baseline for analyzing trends in our operations.
Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. See "Reconciliation of GAAP Measures to Non-GAAP Measures" accompanying this press release.
Non-GAAP adjustment or measure |
Definition |
Usefulness to management and investors |
Returns relating to supplier dispute |
Returns relating to supplier dispute consist of returns of product produced by a manufacturing supplier. |
We excluded these returns for calculating certain non-GAAP measures because these returns are inconsistent in size with our normal course of business and were unique to a resolved dispute with a manufacturing supplier. These adjustments facilitate a useful evaluation of our current operating performance and comparison to past operating performance and provide investors with additional means to evaluate net sales trends. |
Supplier dispute inventory adjustment |
Supplier dispute inventory adjustment consists of an inventory adjustment to cost of goods sold for product produced by a manufacturing supplier. |
We excluded this inventory adjustment to cost of goods sold for calculating certain non-GAAP measures because this adjustment is noncustomary and was unique to a resolved dispute with a manufacturing supplier. This adjustment facilitates a useful evaluation of our current operating performance and comparison to past operating performance and provides investors with additional means to evaluate net cost of goods sold trends. |
Acquisition-related amortization |
Amortization of acquisition-related intangible assets consists of amortization of intangible assets such as brands and customer relationships acquired in connection with the acquisition of the performance and lifestyle footwear business of Honeywell International Inc. Charges related to the amortization of these intangibles are recorded in operating expenses in our GAAP financial statements. Amortization charges are recorded over the estimated useful life of the related acquired intangible asset, and thus are generally recorded over multiple years. |
We excluded amortization charges for our acquisition-related intangible assets for purposes of calculating certain non-GAAP measures because these charges are inconsistent in size and are significantly impacted by the valuation of our acquisition. These adjustments facilitate a useful evaluation of our current operating performance and comparison to past operating performance and provide investors with additional means to evaluate cost and expense trends. |
Closure of Manufacturing Facility |
Closure of manufacturing facility relates to the expenses and overhead incurred associated with closing our Rock Island manufacturing facility. |
We excluded costs associated with the closure of our manufacturing facility for purposes of calculating non-GAAP measures because these costs did not reflect our current operating performance. These adjustments facilitated a useful evaluation of our current operating performance and comparison to past operating results and provided investors with additional means to evaluate expense trends. |
Restructuring Costs |
Restructuring costs represent severance expenses associated with headcount reductions following the integration of the acquired performance and lifestyle footwear business of Honeywell International Inc. in 2022 and the sale of Servus in 2023. |
We excluded restructuring costs for purposes of calculating non-GAAP measures because these costs do not reflect our current operating performance. These adjustments facilitate a useful evaluation of our current operations performance and comparisons to past operating results and provide investors with additional means to evaluate expense trends. |
Term debt extinguishment costs |
Term debt extinguishment costs relate to the loss incurred on the extinguishment of debt during the second quarter 2024. The prepayment penalty associated with the early termination of the term debt, as well as the accelerated amortization of deferred financing fees of the term debt, was recorded as expense within Interest Expense and Other - net accompanying unaudited condensed consolidated financial statements. |
We excluded these costs for purposes of calculating non-GAAP measures because these costs do not reflect our current operating performance. This adjustment is a one-time cost for refinancing the term debt and is not reoccurring. This adjustment facilitates a useful evaluation of our current operations performance and comparisons to past operating results and provide investors with additional means to evaluate expense trends. |
Gain on sale of business |
Gain on sale of business relates to the sale of the brand Servus. This includes the disposal of non-financial assets and corresponding expenses relating to the sale of the brand along with assets held at our Rock Island manufacturing facility. |
We excluded the disposition of non-financial assets and related expenses for purposes of calculating certain non-GAAP measures because the gain does not accurately reflect our current operating performance and comparisons to past operating results and provide investors with additional means to evaluate cost trends. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241030135433/en/
Company Contact:
Tom Robertson
Chief Operating Officer, Chief Financial Officer and Treasurer
(740) 753-9100
Investor Relations:
Brendon Frey
ICR, Inc.
(203) 682-8200
Source: Rocky Brands, Inc.
FAQ
What was Rocky Brands (RCKY) revenue in Q3 2024?
How much did Rocky Brands (RCKY) earn per share in Q3 2024?
What was Rocky Brands (RCKY) gross margin in Q3 2024?