Rocky Brands, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Rocky Brands filed its 2023 10-K, reporting $235.4M in net sales and $7.3M in net income, while also noting the divestiture of the Servus brand.</b>

AI Summary

ROCKY BRANDS, INC. (RCKY) filed a Annual Report (10-K) with the SEC on March 15, 2024. Rocky Brands reported net sales of $235.4 million for the fiscal year ended December 31, 2023. The company's net income was $7.339 million, resulting in EPS of $0.59 for FY 2023. Goodwill allocated to Wholesale and Retail segments was $23.0 million and $24.8 million, respectively, as of December 31, 2023. The Servus brand was divested during FY 2023, with related customer relationships and amortization reduced to zero. Rocky Brands increased its quarterly dividend from $0.14 to $0.155 per share in Q3 2021.

Why It Matters

For investors and stakeholders tracking ROCKY BRANDS, INC., this filing contains several important signals. The divestiture of the Servus brand impacts the company's asset base and potentially future revenue streams, requiring a strategic assessment of its portfolio. The filing provides detailed financial performance and segment allocation of goodwill, offering insights into the company's operational structure and asset valuation.

Risk Assessment

Risk Level: medium — ROCKY BRANDS, INC. shows moderate risk based on this filing. The company's financial performance, including net sales and net income, is subject to market demand and operational execution, as evidenced by the reported figures for FY 2023.

Analyst Insight

Investors should monitor the impact of the Servus brand divestiture on future revenue and profitability, and assess the company's strategy for growth in its remaining segments.

Financial Highlights

revenue

235,400,000

net Income

7,339,011

eps

0.59

Revenue Breakdown

Key Numbers

• 235,400,000 — Net Sales (Fiscal Year 2023)
• 7,339,011 — Net Income (Fiscal Year 2023)
• 0.59 — EPS (Fiscal Year 2023)
• 25,000,000 — Goodwill (As of December 31, 2023)
• 4.3 — Customer Relationships (Servus) (Reduced to zero in March 2023)
• 0.9 — Customer Relationships (NEOS) (Reduced to zero in December 2022)

Key Players & Entities

• ROCKY BRANDS, INC. (company) — Filer name
• RCKY (company) — Ticker symbol
• Servus (company) — Divested brand
• NEOS (company) — Brand with reduced intangible assets

FAQ

Risk Factors

• Goodwill Impairment [medium — financial]: Goodwill is subject to impairment testing, and a decline in the fair value of reporting units could result in an impairment charge.
• Consumer Demand [medium — market]: The company's performance is dependent on consumer demand for its footwear products, which can be affected by economic conditions and fashion trends.
• Supply Chain Disruptions [medium — operational]: The company relies on third-party manufacturers and is subject to risks associated with supply chain disruptions, including delays and increased costs.

Key Dates

• 2023-12-31: Fiscal Year End — Reporting period for the 10-K filing.

Key Financial Figures

• $45.00 — e of suggested retail price points from $45.00 for our value priced products to $655.0
• $655.00 — $45.00 for our value priced products to $655.00 for our premium products. In addition,
• $92.00 — of suggested U.S. retail price points: $92.00 to $405.00 for our footwear products;
• $405.00 — d U.S. retail price points: $92.00 to $405.00 for our footwear products; and $18.00
• $18.00 — $405.00 for our footwear products; and $18.00 to $160.00 for our apparel and accesso
• $160.00 — our footwear products; and $18.00 to $160.00 for our apparel and accessory lines.
• $55.00 — U.S. retail price points ranging from $55.00 to $265.00 . Through widespread consum
• $265.00 — l price points ranging from $55.00 to $265.00 . Through widespread consumer validatio
• $76.00 — U.S. retail price points ranging from $76.00 to $292.00 . This line of products pri
• $292.00 — l price points ranging from $76.00 to $292.00 . This line of products primarily targe
• $120.00 — U.S. retail price points ranging from $120.00 to $655.00 . Our brand portfolio categ
• $195.00 — l price points ranging from $45.00 to $195.00 . Lehigh The Lehigh brand was estab
• $91.00 — d U.S. retail price points ranging from $91.00 to $274.00 . Ranger Ranger primar
• $274.00 — il price points ranging from $91.00 to $274.00 . Ranger Ranger primarily serves t
• $74.00 — U.S. retail price points ranging from $74.00 to $100.00 . Michelin Michelin is

Filing Documents

• rcky20231231_10k.htm (10-K) — 1808KB
• ex_638941.htm (EX-10.02) — 4KB
• ex_599168.htm (EX-21) — 6KB
• ex_599169.htm (EX-23) — 3KB
• ex_599170.htm (EX-24) — 18KB
• ex_599171.htm (EX-31.1) — 16KB
• ex_599172.htm (EX-31.2) — 14KB
• ex_599173.htm (EX-32) — 12KB
• ex_638942.htm (EX-97) — 29KB
• pgraph.jpg (GRAPHIC) — 106KB
• 0001437749-24-007987.txt (&nbsp;) — 9985KB
• rcky-20231231.xsd (EX-101.SCH) — 88KB
• rcky-20231231_cal.xml (EX-101.CAL) — 72KB
• rcky-20231231_def.xml (EX-101.DEF) — 600KB
• rcky-20231231_lab.xml (EX-101.LAB) — 500KB
• rcky-20231231_pre.xml (EX-101.PRE) — 649KB
• rcky20231231_10k_htm.xml (XML) — 1658KB

Business

Business 2 Item 1A.

Risk Factors

Risk Factors 9 Item 1B. Unresolved Staff Comments 15 Item 1C. Cybersecurity 15 Item 2.

Properties

Properties 16 Item 3.

Legal Proceedings

Legal Proceedings 16 Item 4. Mine Safety Disclosures 16 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 17 Item 6. Reserved 18 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 18 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 25 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 26 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 52 Item 9A.

Controls and Procedures

Controls and Procedures 52 Item 9B. Other Information 54 Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections 54 PART III Item 10. Directors, Executive Officers and Corporate Governance 54 Item 11.

Executive Compensation

Executive Compensation 54 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 54 Item 13. Certain Relationships and Related Transactions, and Director Independence 54 Item 14. Principal Accounting Fees and Services 54 PART IV Item 15. Exhibits and Financial Statement Schedules 55 Item 16. Form 10-K Summary 57

SIGNATURES

SIGNATURES 58 Appendix A: Financial Statement Schedule 59 1 Table of Contents This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. The words "anticipate," "believe," "expect," "estimate" and "project" and similar words and expressions identify forward-looking statements which speak only as of the date hereof. Investors are cautioned that such statements involve risks and uncertainties that could cause actual results to differ materially from historical or anticipated results due to many factors, including, but not limited to, the factors discussed in "Item 1A, Risk Factors." The Company undertakes no obligation to publicly update or revise any forward-looking statements. PART I

BUSINESS

ITEM 1. BUSINESS. All references to "we," "us," "our," "Rocky Brands," or the "Company" in this Annual Report on Form 10-K mean Rocky Brands, Inc. and our subsidiaries. We are a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names including Rocky, The Original Muck Boot Company ("Muck"), Georgia Boot, Durango, XTRATUF, Lehigh, Ranger and the licensed brand Michelin. Our brands have a long history of representing high quality, comfortable, functional, and durable footwear and our products are organized around six target markets: outdoor, work, duty, commercial military, military and western. Our footwear products incorporate varying features and are positioned across a range of suggested retail price points from $45.00 for our value priced products to $655.00 for our premium products. In addition, as part of our strategy of outfitting consumers from head-to-toe, we market complementary branded apparel and accessories that we believe leverage the strength and positioning of each of our brands. We report our segment information in accordance with provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 280, Segment Reporting and each of our reporting segments continue to employ consistent accounting policies. S ee Note 1 9 of our Consolidated Financial Statements fo r further information. The Company's portfolio of brands is organized into the following reportable segments, in which our products are distributed: Wholesale Retail Contract Manufacturing Wholesale We distribute Rocky, Muck, Georgia Boot, Durango, XTRATUF, Lehigh, Ranger and Michelin products through a wide range of wholesale distribution channels throughout the world. O ur Wholesale channels vary by product line and include sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants, uniform store

View Full Filing

View this 10-K filing on SEC EDGAR