First Quarter 2024 Performance Report Unveiled by Rocky Brands, Inc

Today, Rocky Brands, Inc. (NASDAQ: RCKY) disclosed its financial performance for the first quarter concluding on March 31, 2024.

First Quarter 2024 Highlights

Rocky Brands, Inc. reports a 2.2% increase in net sales to $112.9 million, with a notable 7.6% increase excluding Servus brand net sales from the previous year. Operating income sees a significant surge of 92.1% to $8.0 million, or 76.4% adjusted to $8.7 million. Net income records $2.6 million, or $0.34 per diluted share, a marked improvement compared to the net loss of $0.4 million or $0.05 per diluted share in the corresponding period last year. Adjusted net income stands at $3.1 million, or $0.41 per diluted share, in contrast to the net loss of $0.8 million or $0.12 per diluted share in the prior year. Inventories witness a substantial decrease of 26.3% year-over-year. Total debt as of March 31, 2024, decreases by 29.0% compared to the same period in 2023. Jason Brooks, Chairman, President, and CEO, expresses satisfaction with the company’s solid start to the year, attributing it to cost-saving measures implemented in 2023. He highlights increased spending on advertising programs, resulting in better-than-expected growth and significant expense leverage. Key Points from First Quarter 2024

Net sales for the first quarter increase to $112.9 million, with a notable growth rate of 7.6% excluding the divested Servus brand. Wholesale sales amount to $79.8 million, showing a slight decrease, while retail sales increase to $30.4 million. Contract manufacturing sales also rise to $2.7 million. Gross margin for the quarter stands at 39.1% of net sales, a slight decrease compared to the previous year, primarily due to the sale of the Servus brand. Operating expenses decrease to $36.2 million, or 32.0% of net sales, mainly attributed to cost-saving initiatives and operational efficiencies. Income from operations increases to $8.0 million, or 7.1% of net sales, showing significant growth compared to the prior year. Interest expense decreases to $4.5 million, reflecting lower debt levels compared to the previous year. Balance Sheet Review

Cash and cash equivalents decrease to $3.1 million at March 31, 2024, compared to $4.9 million in the same period last year. Inventories decrease by 26.3% year-over-year to $165.1 million at March 31, 2024. Total debt decreases by 29.0% compared to March 31, 2023, standing at $156.0 million. Debt Refinancing

On April 29, 2024, Rocky Brands, Inc. announces the signing of a definitive debt refinance agreement with Bank of America, N.A., aimed at retiring the existing senior secured term loan facility agented by TCW Asset Management Company, LLC. The newly upsized, amended, and extended ABL facility includes a $175 million revolving credit facility and a $50 million term facility, expected to generate significant interest savings. The combined transactions are anticipated to yield an interest savings of approximately $2.9 million for the remainder of 2024, with further annualized savings of approximately $4.4 million projected for 2025.

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