2018 Q1 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 24, 2018

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ROCKY BRANDS, INC.

(Exact name of registrant as specified in its charter)


Ohio	001-34382	31-1364046
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

39 East Canal Street, Nelsonville, Ohio 45764

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (740) 753-1951

Not Applicable

(Former name or former address, if changed since last report.)

________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On April 24, 2018, Rocky Brands, Inc. (the "Company") issued a press release entitled "Rocky Brands, Inc. Announces First Quarter 2018 Results" regarding its consolidated financial results for the three months ended March 31, 2018. A copy of the Company's press release is furnished as Exhibit 99 to this Form 8-K and is incorporated herein by reference.

The information in this Form 8-K and accompanying press release is being furnished under Item 2.02 and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

The information contained or incorporated by reference in this Form 8-K 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. 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, 2017 (filed March 12, 2018). 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 Company, or any other person should not regard the inclusion of such information as a representation 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.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.



Exhibit 99*		Press Release, dated April 24, 2018 entitled "Rocky Brands, Inc. Announces First Quarter 2018 Results”.

* Such press release is being "furnished" (not filed) under Item 2.02 of this Current Report on Form 8-K

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 24, 2018


	Rocky Brands, Inc.

	/s/ Tom Robertson
	Tom Robertson
	Chief Financial Officer

ROCKY BRANDS, INC.

Rocky Brands, Inc. Announces 2018 First Quarter Results

First Quarter Diluted EPS Increased 120% to $0.44

First Quarter Wholesale Sales Increased by 3.2% to $40.4 million

First Quarter Retail Sales Increased by 10.0% to $13.1 million

NELSONVILLE, Ohio, April 24, 2018 – Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial results for its first quarter ended March 31, 2018.

First Quarter 2018 Sales and Income

First quarter net sales were $61.4 million compared to $63.1 million in the first quarter of 2017. The Company reported first quarter net income of $3.3 million, or $0.44 per diluted share compared to a net income of $1.5 million, or $0.20 per diluted share in the first quarter of 2017.

Jason Brooks, President and Chief Executive Officer, commented, “The new year is off to a strong start. Our wholesale and retail divisions continue to benefit from the strategies we’ve implemented to drive improved full price selling across our core work, western and outdoor categories. At the same time, our commercial military business grew double digits over the same period last year as our domestic and international expansion plans gain further traction. The growth in commercial military sales partially offset the expected top-line headwinds from our contract military business while also helping expand gross margins through increased productivity at our company-owned manufacturing facilities. We are very pleased with our recent performance and the Company’s strong financial position. That said, our sights are firmly focused on the future and on continuing to deliver enhanced profitability and greater value for our shareholders.”

First Quarter Review

Net sales for the first quarter were $61.4 million compared to $63.1 million a year ago. Wholesale sales for the first quarter increased 3.2% to $40.4 million compared to $39.2 million for the same period in 2017. Retail sales for the first quarter increased 10.0% to $13.1 million compared to $11.9 million for the same period last year. Military segment sales for the first quarter were $7.9 million compared to $12.0 million in the first quarter of 2017.

Gross margin in the first quarter of 2018 increased to $21.0 million, or 34.2% of sales, compared to $19.7 million, or 31.3% of sales, for the same period last year. The 290 basis point increase was driven by higher wholesale and military margins combined with a lower percentage of military sales, which carry lower gross margins than wholesale and retail sales.

Selling, general and administrative (SG&A) expenses decreased to $16.7 million, or 27.3% of net sales, for the first quarter of 2018 compared to $17.4 million, or 27.6% of net sales, a year ago. The $0.6 million decrease in SG&A expenses was primarily related to the reduction in expenses related to the Creative Recreation brand, which was sold in the fourth quarter of 2017.

Income from operations increased 78.7% to $4.2 million, or 6.9% of net sales compared to income from operations of $2.4 million a year ago.

Interest expense was $47,000 for the first quarter of 2018, versus $90,000 for the same period last year.

Income tax expense was estimated at 20.5% for the first quarter of 2018, compared to 34.0% for the first quarter of 2017 due to the recently enacted Tax Cuts and Jobs Act (TCJA).

The Company had no funded debt at March 31, 2018 versus $5.2 million at March 31, 2017.

Inventory at March 31, 2018 decreased 5.3% to $65.2 million compared to $68.8 million on the same date a year ago.

Conference Call Information

The Company’s conference call to review first quarter 2018 results will be broadcast live over the internet today, Tuesday, April 24, 2018 at 4:30 pm Eastern Time. The broadcast will be hosted at http://www.rockybrands.com.

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 including Rocky®, Georgia Boot®, Durango®, Lehigh®, and the licensed brand Michelin®.

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 our future delivery of enhanced profitability and greater value to our shareholders (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, 2017 (filed March 12, 2018). 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 Company, or any other person should not regard the inclusion of such information as a representation 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.


Company Contact:	Tom Robertson
	Chief Financial Officer
	(740) 753-1951

Investor Relations:	Brendon Frey
	ICR, Inc.
	(203) 682-8200

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets



		March 31,		December 31,		March 31,
		2018		2017		2017
		Unaudited		Audited		Unaudited
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents	$	10,115,863	$	3,680,776	$	2,693,078
Trade receivables, net		41,231,333		45,027,002		39,131,277
Contract receivables		13,518,203		-		-
Other receivables		410,570		806,468		768,729
Inventories		65,151,332		65,622,432		68,819,390
Income tax receivable		996,563		1,849,237		510,223
Prepaid expenses		2,442,001		2,199,648		2,619,898
Total current assets		133,865,865		119,185,563		114,542,595
PROPERTY, PLANT & EQUIPMENT – net		23,737,918		23,781,001		25,633,199
IDENTIFIED INTANGIBLES		30,303,843		30,314,749		33,383,261
OTHER ASSETS		190,292		197,977		225,670
TOTAL ASSETS	$	188,097,918	$	173,479,290	$	173,784,725

LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable	$	14,130,491	$	12,982,535	$	14,620,330
Contract liabilities		13,518,203		-		-
Accrued expenses:
Salaries and wages		1,788,471		1,754,681		1,741,222
Taxes - other		94,338		599,793		692,267
Accrued freight		712,488		770,219		407,428
Commissions		415,464		455,845		401,663
Accrued duty		2,260,540		2,160,847		1,994,870
Other		1,182,746		1,301,931		1,302,558
Total current liabilities		34,102,741		20,025,851		21,160,338
LONG TERM DEBT		-		2,199,423		5,240,000
LONG TERM TAXES PAYABLE		2,286,512		2,286,512		-
DEFERRED INCOME TAXES		7,726,234		7,726,234		11,365,800
DEFERRED LIABILITIES		154,736		148,408		176,219
TOTAL LIABILITIES		44,270,223		32,386,428		37,942,357
SHAREHOLDERS' EQUITY:
Common stock, no par value;
25,000,000 shares authorized; issued and outstanding March 31, 2018 - 7,406,801; December 31, 2017 - 7,398,654 and March 31, 2017 - 7,435,467		69,272,506		68,973,927		69,362,641
Retained earnings		74,555,189		72,118,935		66,479,727
Total shareholders' equity		143,827,695		141,092,862		135,842,368
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	188,097,918	$	173,479,290	$	173,784,725

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations



		Three Months Ended
		March 31,
		2018		2017
		Unaudited		Unaudited
NET SALES	$	61,386,673	$	63,072,954
COST OF GOODS SOLD		40,421,491		43,324,874
GROSS MARGIN		20,965,182		19,748,080

OPERATING EXPENSES		16,737,507		17,381,909

INCOME FROM OPERATIONS		4,227,675		2,366,171

OTHER EXPENSES:
Interest expense		(46,741)		(90,466)
Other – net		(91,823)		(9,764)
Total other - net		(138,564)		(100,230)

INCOME BEFORE INCOME TAXES		4,089,111		2,265,941

INCOME TAX EXPENSE		838,000		770,000

NET INCOME	$	3,251,111	$	1,495,941

INCOME PER SHARE
Basic	$	0.44	$	0.20
Diluted	$	0.44	$	0.20
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Basic		7,406,620		7,435,000
Diluted		7,431,071		7,436,788