Rocky Brands Q2 2024: Sales Flat, Net Loss Continues

TL;DR

Rocky Brands sales flat YOY, still losing money. Servus brand gone.

AI Summary

Rocky Brands, Inc. reported net sales of $74.4 million for the six months ended June 30, 2024, a decrease from $74.1 million in the same period of 2023. The company experienced a net loss for the three months ended June 30, 2024, resulting in zero dilutive restricted share units and stock options being included due to anti-dilutive effects. The sale of the Servus brand in March 2023 led to a write-down of its trademarks from $2.5 million to zero.

Why It Matters

The company's continued net loss and the impact of divesting brands like Servus indicate potential challenges in profitability and brand portfolio management.

Risk Assessment

Risk Level: medium — The company is reporting net losses and has divested a brand, indicating financial performance concerns.

Key Numbers

• $74.4M — Net Sales (6 months ended 06/30/2024) (Slightly up from $74.1M in the prior year period.)
• $0 — Dilutive EPS (Q2 2024) (Due to net loss, anti-dilutive securities are excluded.)
• $0 — Dilutive EPS (Q2 2023) (Due to net loss, anti-dilutive securities are excluded.)
• $2.5M — Servus Trademarks (Prior to Sale) (Reduced to zero after sale of Servus brand.)

Key Players & Entities

• ROCKY BRANDS, INC. (company) — Filer
• Servus (company) — Divested Brand
• $74.4 million (dollar_amount) — Net Sales for six months ended June 30, 2024
• $74.1 million (dollar_amount) — Net Sales for six months ended June 30, 2023
• $2.5 million (dollar_amount) — Servus trademarks value before write-down
• March 30, 2023 (date) — Date of Servus brand sale
• June 30, 2024 (date) — End of reporting period for Q2 2024

FAQ

Filing Documents

• rcky20240630_10q.htm (10-Q) — 1061KB
• ex_687721.htm (EX-31.1) — 13KB
• ex_687722.htm (EX-31.2) — 13KB
• ex_687723.htm (EX-32) — 6KB
• 0001437749-24-025288.txt ( ) — 5183KB
• rcky-20240630.xsd (EX-101.SCH) — 47KB
• rcky-20240630_cal.xml (EX-101.CAL) — 39KB
• rcky-20240630_def.xml (EX-101.DEF) — 300KB
• rcky-20240630_lab.xml (EX-101.LAB) — 242KB
• rcky-20240630_pre.xml (EX-101.PRE) — 329KB
• rcky20240630_10q_htm.xml (XML) — 844KB

Financial Statements

Financial Statements Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited), December 31, 2023, and June 30, 2023 (Unaudited) 2 Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited) 3 Condensed Consolidated Statements of Shareholders ' Equity for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited) 4 Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited) 5 Notes to Unaudited Condensed Consolidated Financial Statements 6 Item 2. Management ' s Discussion and Analysis of Financial Condition and Results of Operations 14 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 20 Item 4.

Controls and Procedures

Controls and Procedures 20 PART II Other Information Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20 Item 5. Other Information 20 Item 6. Exhibits 21

SIGNATURES

SIGNATURES 22 1 Table of Contents PART 1 – FINANCIAL INFORMATION

– FINANCIAL STATEMENTS

ITEM 1 – FINANCIAL STATEMENTS Rocky Brands, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except share amounts) (Unaudited) June 30, December 31, June 30, 2024 2023 2023 ASSETS: CURRENT ASSETS: Cash and cash equivalents $ 4,107 $ 4,470 $ 3,082 Trade receivables – net 62,968 77,028 72,566 Contract receivables - 927 2,990 Other receivables 427 1,933 2,225 Inventories – net 174,973 169,201 218,327 Income tax receivable 1,025 1,253 3,494 Prepaid expenses 5,659 3,361 5,522 Total current assets 249,159 258,173 308,206 LEASED ASSETS 7,367 7,809 9,362 PROPERTY, PLANT & EQUIPMENT – net 51,296 51,976 54,032 GOODWILL 47,844 47,844 47,844 IDENTIFIED INTANGIBLES – net 111,220 112,618 114,019 OTHER ASSETS 988 965 1,049 TOTAL ASSETS $ 467,874 $ 479,385 $ 534,512 LIABILITIES AND SHAREHOLDERS' EQUITY: CURRENT LIABILITIES: Accounts payable $ 57,824 $ 49,840 $ 61,225 Contract liabilities - 927 2,990 Current portion of long-term debt 8,361 2,650 4,625 Accrued expenses and other liabilities 20,663 18,112 21,526 Total current liabilities 86,848 71,529 90,366 LONG-TERM DEBT 144,073 170,480 217,114 LONG-TERM TAXES PAYABLE - 169 169 LONG-TERM LEASE 4,914 5,461 6,804 DEFERRED INCOME TAXES 7,475 7,475 8,006 DEFERRED LIABILITIES 752 716 1,325 TOTAL LIABILITIES 244,062 255,830 323,784 SHAREHOLDERS' EQUITY: Common stock, no par value; 25,000,000 shares authorized; issued and outstanding June 30, 2024 - 7,444,881 ; December 31, 2023 - 7,412,480 ; June 30, 2023 - 7,354,060 73,223 71,973 70,400 Retained earnings 150,589 151,582 140,328 Total shareholders' equity 223,812 223,555 210,728 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 467,874 $ 479,385 $ 534,512 See Notes to Unaudited Condensed Consolidated Financial Statements 2 Table of Contents Rocky Brands, Inc. and Subsidiaries Condensed Consolidated Statements of O

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