10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-34382

ROCKY BRANDS, INC.

(Exact name of Registrant as specified in its charter)

Ohio	No. 31-1364046
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
39 East Canal Street, Nelsonville, Ohio 45764
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (740) 753‑9100

Title of class	Trading symbol	Name of exchange on which registered
Common Stock – No Par Value	RCKY	Nasdaq

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in 12b-2 of the Exchange Act.

☐ Large accelerated filer	☒ Accelerated filer
☐ Non-accelerated filer	☐ Smaller reporting company
	☐ 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.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

There were 7,313,075 shares of the Registrant's Common Stock outstanding on July 31, 2022.

TABLE OF CONTENTS

		Page
PART I	Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2022 (Unaudited), December 31, 2021, and June 30, 2021 (Unaudited)	2
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	3
	Condensed Consolidated Statements of Shareholders’ Equity for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021 (Unaudited)	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II	Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 6.	Exhibits	26
SIGNATURES		27

1

PART 1 – FINANCIAL INFORMATION

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,
	2022		2021		2021
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents	$	5,802	$	5,909	$	8,358
Trade receivables – net		115,794		126,807		79,963
Contract receivables		-		1,062		2,017
Other receivables		224		242		235
Inventories – net		287,817		232,464		143,516
Income tax receivable		6,360		4,294		2,290
Prepaid expenses		5,216		4,507		4,772
Total current assets		421,213		375,285		241,151
LEASED ASSETS		10,376		11,428		2,626
PROPERTY, PLANT & EQUIPMENT – net		61,352		59,989		55,956
GOODWILL		50,246		50,641		48,375
IDENTIFIED INTANGIBLES – net		124,740		126,315		127,904
OTHER ASSETS		911		917		879
TOTAL ASSETS	$	668,838	$	624,575	$	476,891
LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable	$	130,246	$	114,632	$	67,224
Contract liabilities		-		1,062		2,017
Current Portion of Long-Term Debt		3,250		3,250		3,250
Accrued expenses:
Salaries and wages		4,869		3,668		4,363
Taxes - other		1,674		849		536
Accrued freight		2,290		1,798		2,670
Commissions		1,428		2,447		1,068
Accrued duty		12,144		5,469		6,534
Accrued interest		2,705		2,133		2,197
Other		5,693		4,828		5,115
Total current liabilities		164,299		140,136		94,974
LONG-TERM DEBT		281,365		266,794		184,121
LONG-TERM TAXES PAYABLE		169		169		169
LONG-TERM LEASE		7,636		8,809		1,867
DEFERRED INCOME TAXES		10,293		10,293		8,272
DEFERRED LIABILITIES		609		519		392
TOTAL LIABILITIES		464,371		426,720		289,795
SHAREHOLDERS' EQUITY:
Common stock, no par value;
25,000,000 shares authorized; issued and outstanding June 30, 2022 - 7,313,075; December 31, 2021 - 7,302,199; June 30, 2021 - 7,283,434		68,680		68,061		67,210
Retained earnings		135,787		129,794		119,886
Total shareholders' equity		204,467		197,855		187,096
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	668,838	$	624,575	$	476,891

See Notes to Unaudited Condensed Consolidated Financial Statements

2

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
NET SALES	$	162,039		$	131,602		$	329,063		$	219,268
COST OF GOODS SOLD		108,288			82,448			212,486			134,976
GROSS MARGIN		53,751			49,154			116,577			84,292
OPERATING EXPENSES		48,155			40,717			97,785			69,275
INCOME FROM OPERATIONS		5,596			8,437			18,792			15,017
INTEREST EXPENSE AND OTHER EXPENSES		(4,323	)		(3,378	)		(8,230	)		(4,125	)
INCOME BEFORE INCOME TAX EXPENSE		1,273			5,059			10,562			10,892
INCOME TAX EXPENSE		353			1,164			2,304			2,506
NET INCOME	$	920		$	3,895		$	8,258		$	8,386
INCOME PER SHARE
Basic	$	0.13		$	0.53		$	1.13		$	1.15
Diluted	$	0.12		$	0.52		$	1.12		$	1.13
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		7,313			7,283			7,310			7,271
Diluted		7,389			7,439			7,400			7,402

See Notes to Unaudited Condensed Consolidated Financial Statements

3

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity

(In thousands, except per share amounts)

(Unaudited)

	Common Stock and				Accumulated
	Additional Paid-in Capital				Other					Total
	Shares				Comprehensive		Retained			Shareholders'
	Outstanding		Amount		Income		Earnings			Equity
BALANCE - December 31, 2020		7,248	$	65,971		-	$	113,534		$	179,505
SIX MONTHS ENDED JUNE 30, 2021
Net income							$	4,492		$	4,492
Dividends paid on common stock ($0.14 per share)								(1,015	)		(1,015	)
Repurchase of common stock		-		-				-			-
Stock issued for options exercised, including tax benefits		31	$	607				-			607
Stock compensation expense		2		278				-			278
BALANCE - March 31, 2021		7,281	$	66,856	$	-	$	117,011		$	183,867
Net income							$	3,895		$	3,895
Dividends paid on common stock ($0.14 per share)								(1,020	)		(1,020	)
Repurchase of common stock		-		-				-			-
Stock issued for options exercised, including tax benefits		1	$	24				-			24
Stock compensation expense		1		330				-			330
BALANCE - June 30, 2021		7,283	$	67,210	$	-	$	119,886		$	187,096
BALANCE - December 31, 2021		7,302	$	68,061		-	$	129,794		$	197,855
SIX MONTHS ENDED JUNE 30, 2022
Net income							$	7,338		$	7,338
Dividends paid on common stock ($0.155 per share)								(1,133	)		(1,133	)
Repurchase of common stock		-		-				-			-
Stock issued for options exercised, including tax benefits		7	$	145				-			145
Stock compensation expense		2		248				-			248
BALANCE - March 31, 2022	$	7,311	$	68,454	$	-	$	135,999		$	204,453
Net income							$	920		$	920
Dividends paid on common stock ($0.155 per share)								(1,132	)		(1,132	)
Repurchase of common stock		-		-				-			-
Stock issued for options exercised, including tax benefits		-		-				-			-
Stock compensation expense		2	$	226				-			226
BALANCE - June 30, 2022		7,313	$	68,680	$	-	$	135,787		$	204,467

See Notes to Unaudited Condensed Consolidated Financial Statements

4

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended
	June 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	8,258		$	8,386
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		5,847			5,557
Amortization of debt issuance costs		427			249
Deferred income taxes		-			1
Loss on disposal of fixed assets		1			13
Stock compensation expense		474			608
Change in assets and liabilities:
Receivables		11,032			2,620
Contract receivables		1,062			3,153
Inventories		(54,958	)		(23,487	)
Other current assets		343			(1,254	)
Other assets		6			(430	)
Accounts payable		13,541			19,547
Accrued and other liabilities		8,528			(1,019	)
Income taxes		(2,066	)		636
Contract liabilities		(1,062	)		(3,565	)
Net cash (used in) provided by operating activities		(8,567	)		11,015
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(3,565	)		(9,757	)
Acquisition of business, net of cash acquired		-			(206,970	)
Net cash used in investing activities		(3,565	)		(216,727	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility		20,820			92,700
Repayments on revolving credit facility		(5,050	)		(30,500	)
Proceeds from term loan		-			130,000
Repayments on term loan		(1,625	)		(813	)
Debt issuance costs		-			(4,266	)
Proceeds from stock options		145			631
Dividends paid on common stock		(2,265	)		(2,035	)
Net cash provided by financing activities		12,025			185,717
DECREASE IN CASH AND CASH EQUIVALENTS		(107	)		(19,995	)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD		5,909			28,353
END OF PERIOD	$	5,802		$	8,358

See Notes to Unaudited Condensed Consolidated Financial Statements

5

Rocky Brands, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

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, Georgia Boot, Durango, Lehigh, The Original Muck Boot Company ("Muck"), XTRATUF, Servus, NEOS and Ranger. 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. 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.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments that are necessary for a fair presentation of the financial results. All such adjustments reflected in the unaudited condensed consolidated financial statements are considered to be of normal and recurring nature. The results of operations for the three and six months ended June 30, 2022 and 2021 are not necessarily indicative of the results to be expected for the whole year. The  December 31, 2021 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). This Quarterly Report on Form 10-Q should be read in connection with our Annual Report on Form 10-K for the year ended  December 31, 2021, which includes all disclosures required by GAAP.

We report our segment information in accordance with provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 280, Segment Reporting. We evaluate business performance based upon several metrics, using segment profit as the primary financial measure. During the three months ended June 30, 2021, we changed our reporting segments when compared to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, to change our Military reporting segment to "Contract Manufacturing" and to change the composition thereof to continue to include sales to the U.S. Military ("Military Contracts") and to include sales under manufacturing contracts for private label or other specific footwear products sold through our Wholesale and Retail channels ("Private Contracts"). Previously, only Military Contracts were included in this segment. The Private Contract sales have characteristics more like Military Contracts, with similar sales, delivery processes and gross margins. This segment reporting change reflects a corresponding change in how our Chief Executive Officer and our Chief Financial Officer, our chief operating decision makers ("CODMs"), review financial information in order to allocate resources and assess performance. Previously, Private Contracts were included in the Wholesale segment, but with our acquisition of the lifestyle and performance footwear business of Honeywell International Inc., our Wholesale segment has substantially increased in size and our CODMs determined that the change in segment reporting was appropriate at this time to mirror how they evaluate and manage our business.

There has been no change in our total consolidated financial condition, results of operations, or segment information previously reported, as the result of the change in our reportable segments, as we had no Private Contract sales during the fiscal year ended December 31, 2020 or quarterly period ended March 31, 2021. Each of our reporting segments continue to employ consistent accounting policies. As a result of this assessment, we now report our activities in the following three reporting segments: Wholesale, Retail and Contract Manufacturing. Our Wholesale segment includes sales of footwear and accessories to several classifications of retailers, including sporting goods stores, outdoor specialty stores, online retailers, marine stores, independent retailers, mass merchants, retail uniform stores, and specialty safety shoe stores. Our Retail segment includes direct sales of our products to consumers through our e-commerce websites, marketplaces, our Rocky outlet store, and Lehigh businesses. Our Contract Manufacturing segment includes sales to the U.S. Military, private label sales and any sales to customers in which we are contracted to manufacture or source a specific footwear product for a customer. See Note 14 – Segment Information for further information.

2. ACCOUNTING STANDARDS UPDATES

Recently Issued Accounting Pronouncements

We are currently evaluating the impact of the following Accounting Standards Update (“ASU”) on our Unaudited Condensed Consolidated Financial Statements or Notes to the Unaudited Condensed Consolidated Financial Statements:

Standard	Description	Anticipated Adoption Period	Effect on the financial statements or other significant matters
ASU 2016-13, Measurement of Credit Losses on Financial Instruments	The pronouncement seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.	Q1 2023	We are evaluating the impacts of the new standard on our existing financial instruments, including trade receivables.

6

 

Accounting Standards Adopted in the Current Year

Standard	Description	Effect on the financial statements or other significant matters
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes	This pronouncement is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.	We adopted the new standard in Q1 2021 and the standard did not have a significant impact on our Consolidated Financial Statements.

3. FAIR VALUE

Generally accepted accounting standards establish a framework for measuring fair value. The fair value accounting standard defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This standard clarifies how to measure fair value as permitted under other accounting pronouncements.

The fair value accounting standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. This standard also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

● Level 1 – Quoted prices in active markets for identical assets or liabilities.

● Level 2 – Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The fair values of cash and cash equivalents, receivables, and payables approximated their carrying values because of the short-term nature of these instruments. Receivables consist primarily of amounts due from our customers, net of allowances, amounts due from employees (sales persons’ advances in excess of commissions earned and employee travel advances), other customer receivables, net of allowances, and expected insurance recoveries. The carrying amounts of our long-term credit facility and other short-term financing obligations also approximate fair value, as they are comparable to the available financing in the marketplace during the year. The fair value of our credit facilities is categorized as Level 2.

We hold assets and liabilities in a separate trust in connection with deferred compensation plans. The fair value of these assets is based on unadjusted quoted market prices for the funds in active markets with sufficient volume and frequency (Level 1).

7

 

4. ACQUISITION 

The Performance and Lifestyle Footwear Business of Honeywell International Inc.

On January 24, 2021, we entered into a Purchase Agreement (the "Purchase Agreement") with certain subsidiaries of Honeywell International Inc. (collectively, "Honeywell"), to purchase Honeywell's performance and lifestyle footwear business, including brand names, trademarks, assets and liabilities associated with Honeywell's performance and lifestyle footwear business (the "Acquisition") for an aggregate purchase price of $212 million.

On March 15, 2021 (the "Acquisition Date"), pursuant to the terms and conditions set forth in the Purchase Agreement, we completed the Acquisition for an aggregate preliminary closing price of approximately $207 million, net of cash acquired, based on preliminary working capital and other adjustments. Upon a final agreement of net working capital as of the Acquisition Date, we owed Honeywell an additional $5.4 million. The Acquisition was funded through cash on hand and borrowings under two new credit facilities. See Note 10 for information regarding the two new credit facilities.

The Acquisition expanded our brand portfolio to include Muck, XTRATUF, Servus, NEOS and Ranger brands (the "Acquired Brands"). We acquired 100% of the voting interests of certain subsidiaries and additional assets comprising the performance and lifestyle footwear business of Honeywell with the Acquisition.

Through the Acquisition, we have greatly enhanced our portfolio of footwear brands and significantly increased our sales. We acquired a well-run business with a corporate culture and a customer base similar to ours, which provides meaningful growth opportunities within our existing product categories as well as an entry into new market segments. Its innovative and authentic product collections complement our existing offering with minimal overlap, which will allow us to strengthen our wholesale relationships and serve a wider consumer audience. At the same time, we plan to leverage our existing advanced fulfillment capabilities to improve distribution of the Acquired Brands to wholesale customers and accelerate direct-to-consumer penetration.

In connection with the Acquisition, we also entered into employment agreements with seven key employees from the performance and lifestyle footwear business of Honeywell, pursuant to which, among other things, we agreed to grant 25,000 non-qualified stock options in the aggregate to the seven employees as an inducement for continuing their employment with us.

We acquired multiple leases through the Acquisition including the lease of our Rock Island, Illinois and China manufacturing facilities and an office building in Westwood, Massachusetts.

The Acquisition contributed net sales of $66.7 million and $50.7 million, respectively, for the three months ended June 30, 2022 and 2021, and net sales of $131.1 million and $57.2 million, respectively, to the unaudited condensed consolidated operating results for the six months ended June 30, 2022 and 2021. The Acquisition contributed net loss of $0.1 million and net income of $0.1 million, respectively, to the unaudited condensed consolidated operating results for the three months ended June 30, 2022 and 2021, and net income of $1.9 million and $0.7 million, respectively, to the unaudited condensed consolidated operating results for the six months ended June 30, 2022 and 2021.

Acquisition-related costs

Costs incurred to complete and integrate the Acquisition are expensed as incurred and included in "operating expenses" in the accompanying condensed consolidated statements of operations. During the three months ended June 30, 2022 and 2021, there were approximately $2.1 million and $2.3 million, respectively, of acquisition-related costs recognized. During the six months ended June 30, 2022 and 2021, there were approximately $3.2 million and $7.5 million, respectively, of acquisition-related costs recognized. These costs represent investment banking fees, legal and professional fees, transaction fees, integration costs, amortization, consulting fees and restructuring costs associated with the Acquisition.

8

 

Purchase Price Allocation

The Acquisition has been accounted for under the business combinations accounting guidance. As a result, we have applied acquisition accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the Acquisition Date. The aggregate closing price noted above was allocated to the major categories of assets acquired and liabilities assumed based on their fair values at the Acquisition Date using primarily Level 2 and Level 3 inputs. These Level 2 and Level 3 valuation inputs include an estimate of future cash flows and discount rates. Additionally, estimated fair values are based, in part, upon outside valuation for certain assets, including specifically identified intangible assets.

The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill is finalized and is no longer subject to adjustment as the final valuation related to assets acquired and liabilities assumed has been obtained.

The following table summarizes the consideration paid and estimated fair value of the assets acquired and liabilities assumed as of the Acquisition Date.

($ in thousands)	Fair Value
Cash	$	2,655
Accounts receivable (1)		36,734
Inventories (2)		41,057
Property, plant and equipment		16,243
Goodwill (3)		50,246
Intangible assets		98,620
Other assets		1,250
Accounts payable		(18,108	)
Accrued expenses		(13,634	)
Total identifiable net assets		215,063
Cash acquired		(2,655	)
Total cash paid, net of cash acquired	$	212,408

⁽¹⁾ The recorded amount for accounts receivable considers expected uncollectible amounts of approximately $0.6 million in its determination of fair value.

⁽²⁾ Fair value of finished goods inventories included a preliminary step up value of approximately $3.5 million, of which approximately $2.3 million and $2.6 million, respectively, was expensed during the three months and six months ended June 30, 2021, and are included in "Cost of Goods Sold" in the accompanying unaudited condensed consolidated statements of operations. The remaining $0.9 million was expensed during the year ended December 31, 2021 and as such there was no expense for the three or six months ended June 30, 2022.

⁽³⁾ Goodwill consists largely of the acquired workforce, expected cost synergies and economies of scale resulting from the Acquisition.

9

 

Unaudited Pro Forma Financial Information

The following unaudited pro forma results of operations assume that the Acquisition occurred at the beginning of the periods presented. These unaudited pro forma results are presented for information purposes only and are not necessarily indicative of what the results of operations would have been if the Acquisition had occurred at the beginning of the periods presented, nor are they indicative of the future results of operations. The pro forma results presented below are adjusted for the removal of acquisition-related costs of approximately $2.1 million and $2.3 million for the three months ended June 30, 2022 and 2021, respectively, and approximately $3.2 million and $7.5 million, respectively, for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands, except per share amount)	2022		2021		2022		2021
Net sales	$	162,039	$	131,602	$	329,063	$	257,947
Net income	$	2,548	$	7,400	$	10,730	$	16,144
Diluted earnings per share	$	0.34	$	0.99	$	1.45	$	2.18

5. REVENUE

Nature of Performance Obligations

Our products are distributed through three distinct channels, which represent our business segments: Wholesale, Retail, and Contract Manufacturing. In our Wholesale business, we distribute our products through a wide range of distribution channels representing over ten thousand retail store locations in the U.S., Canada, and internationally. Our Wholesale channels vary by product line and include sporting goods stores, outdoor specialty stores, online retailers, marine stores, independent retailers, mass merchants, retail uniform stores, and specialty safety shoe stores. Our Retail business includes direct sales of our products to consumers through our e-commerce websites, marketplaces, our Rocky outlet store, and Lehigh businesses. Under our Contract Manufacturing segment, we sell footwear under the Rocky label to the U.S. Military and manufacture private label footwear and other footwear as contracted by a customer.

Significant Accounting Policies and Judgements

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; this generally occurs upon shipment of our product to our customer, which is when the transfer of control of our products passes to the customer. The duration of our arrangements with our customers are typically one year or less. Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of our products at a point in time and consists of either fixed or variable consideration or a combination of both.

Revenues from sales are recorded at the net sales price, which includes estimates of variable consideration for which reserves are established. Components of variable consideration include prompt payment discounts, volume rebates, and product returns. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales, and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer).

The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Our analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a material reversal of revenue would not occur in a future period for the estimates detailed below as of  June 30, 2022. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net revenue and earnings in the period such variances become known.

When a customer has a right to a prompt payment discount, we estimate the likelihood that the customer will earn the discount using historical data and adjust our estimate when the estimate of the likelihood that a customer will earn the discount changes or the consideration becomes fixed, whichever occurs earlier. The estimated amount of variable consideration is recognized as a credit to trade receivables and a reduction in revenue until the uncertainty of the variable consideration is alleviated. Because most of our customers have payment terms of less than six months, there is not a significant financing component in our contracts with customers.

10

 

When a customer is offered a rebate on purchases retroactively this is accounted for as variable consideration because the consideration for the current and past purchases is not fixed until it is known if the discount is earned. We estimate the expected discount the customer will earn at contract inception using historical data and projections and update our estimates when projections materially change or consideration becomes fixed. The estimated rebate is recognized as a credit to trade receivables and offset against revenue until the rebate is earned or the earning period has lapsed.

When a right of return is part of the arrangement with the customer, we estimate the expected returns based on an analysis using historical data. We adjust our estimate either when the most likely amount of consideration we expect to receive changes or when the consideration becomes fixed, whichever occurs earlier. See Note 6  and Note 7 for additional information.

Trade receivables represent our right to unconditional payment that only relies on the passage of time.

Contract receivables represent contractual minimum payments required under non-cancellable contracts with the U.S. Military and other customers with a duration of one year or less.

Contract liabilities are performance obligations that we expect to satisfy or relieve within the next twelve months, advance consideration obtained prior to satisfying a performance obligation, or unconditional obligations to provide goods or services under non-cancellable contracts before the transfer of goods or services to the customer has occurred. Our contract liability represents unconditional obligations to provide goods under non-cancellable contracts with the U.S. Military and other customers.

Items considered immaterial within the context of the contract are recognized as an expense.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue producing transaction, that are collected from customers, are excluded from revenue.

Costs associated with our manufacturer’s warranty continue to be recognized as expense when the products are sold in accordance with guidance surrounding product warranties.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in operating expenses.

Costs associated with obtaining a contract are expensed as incurred in accordance with the practical expedient in ASC 340-40 in instances where the amortization period is one year or less. We anticipate substantially all of our costs incurred to obtain a contract would be subject to this practical expedient.

Contract Balances

The following table provides information about contract liabilities from contracts with our customers.

	June 30,		December 31,		June 30,
($ in thousands)	2022		2021		2021
Contract liabilities	$	-	$	1,062	$	2,017

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Significant changes in the contract liabilities balance during the period are as follows:

($ in thousands)	Contract liabilities
Balance, December 31, 2021	$	1,062
Non-cancelable contracts with customers entered into during the period		-
Revenue recognized related to non-cancelable contracts with customers during the period		(1,062	)
Balance, June 30, 2022	$	-

Disaggregation of Revenue

All revenues are recognized at a point in time when control of our products pass to the customer at point of shipment. Because all revenues are recognized at a point in time and are disaggregated by channel, our segment disclosures are consistent with ASC 606 disaggregation requirements. See Note 14 for segment disclosures.

6. TRADE RECEIVABLES

Trade receivables are presented net of the related allowance for uncollectible accounts of approximately $2,618,000, $613,000 and $1,062,000 at June 30, 2022,  December 31, 2021 and  June 30, 2021, respectively. We record the allowance based on historical experience, the age of the receivables, and identification of customer accounts that are likely to prove difficult to collect due to various criteria including pending bankruptcy. However, estimates of the allowance in any future period are inherently uncertain and actual allowances may differ from these estimates. If actual or expected future allowances were significantly greater or less than established reserves, a reduction or increase to bad debt expense would be recorded in the period this determination was made. Our credit policy generally provides that trade receivables will be deemed uncollectible and written-off once we have pursued all reasonable efforts to collect on the account.

In accordance with ASC 606, the return reserve liability netted against trade receivables was approximately $1,309,000, $1,670,000 and $2,057,000 at  June 30, 2022,  December 31, 2021 and  June 30, 2021, respectively.

7. INVENTORY

Inventories are comprised of the following:

	June 30,		December 31,		June 30,
($ in thousands)	2022		2021		2021
Raw materials	$	22,214	$	20,933	$	22,105
Work-in-process		1,793		1,316		1,668
Finished goods		263,810		210,215		119,743
Total	$	287,817	$	232,464	$	143,516

In accordance with ASC 606, the return reserve asset included within inventories was approximately $729,000, $902,000 and $955,000 at  June 30, 2022,  December 31, 2021 and  June 30, 2021, respectively.

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8. GOODWILL

Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets of acquired businesses. Goodwill arose from the Acquisition and largely consists of the workforce acquired, expected cost synergies and economies of scale resulting from the business combination. The amount of goodwill that is expected to be deductible for tax purposes is $49.4 million.

GAAP has established guidance for reporting information about a company's operating segments, including disclosures related to a company's products and services, geographic areas and major customers. We monitor and review our segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact our reportable segments, as well as our reporting units. As previously stated, our operations represent three reporting segments: Wholesale, Retail and Contract Manufacturing. Goodwill impairment analysis will be performed for our Wholesale and Retail reporting segments. There is no goodwill allocated to our Contract Manufacturing segment. Of total goodwill, $25.4 million was allocated to our Wholesale segment and $24.8 million was allocated to our Retail segment.

Goodwill is subject to impairment tests at least annually. We review the carrying amounts of goodwill by reporting unit at least annually, or when indicators of impairment are present, to determine if goodwill may be impaired. We include assumptions about the expected future operating performance as part of a discounted cash flow analysis to estimate fair value. If the carrying value of these assets is not recoverable, based on the discounted cash flow analysis, management compares the fair value of the assets to the carrying value. Goodwill is considered impaired if the recorded value exceeds the fair value.

We may first assess qualitative factors to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. We would not be required to quantitatively determine the fair value of goodwill unless we determine, based on the qualitative assessment, that it is more likely than not that its fair value is less than the carrying value. Future cash flows of the individual indefinite-lived intangible assets are used to measure their fair value after consideration of certain assumptions, such as forecasted growth rates and cost of capital, which are derived from internal projection and operating plans. We perform our annual testing for goodwill at the beginning of the fourth quarter of each fiscal year, starting with our fiscal year ended December 31, 2021.

9. IDENTIFIED INTANGIBLE ASSETS

A schedule of identified intangible assets is as follows:

	Gross		Accumulated		Carrying
($ in thousands)	Amount		Amortization		Amount
June 30, 2022
Trademarks
Wholesale (1)	$	72,579		-	$	72,579
Retail (2)		9,220		-		9,220
Patents		895	$	815		80
Customer relationships (3)		46,900		4,039		42,861
Total Intangibles	$	129,594	$	4,854	$	124,740

⁽¹⁾ $45.4 million of the total resulted from our Acquisition that occurred on March 15, 2021.

⁽²⁾ $6.3 million of the total resulted from our Acquisition that occurred on March 15, 2021.

⁽³⁾ Resulted from our Acquisition that occurred on March 15, 2021.

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	Gross		Accumulated		Carrying
($ in thousands)	Amount		Amortization		Amount
December 31, 2021
Trademarks
Wholesale (1)	$	72,579		-	$	72,579
Retail (2)		9,220		-		9,220
Patents		895	$	804		91
Customer relationships (3)		46,900		2,475		44,425
Total Intangibles	$	129,594	$	3,279	$	126,315

	Gross		Accumulated		Carrying
($ in thousands)	Amount		Amortization		Amount
June 30, 2021
Trademarks
Wholesale (1)	$	72,592		-	$	72,592
Retail (2)		9,220		-		9,220
Patents		895	$	791		104
Customer relationships (3)		46,900		912		45,988
Total Intangibles	$	129,607	$	1,703	$	127,904

⁽¹⁾ $45.4 million of the total resulted from our Acquisition that occurred on March 15, 2021.

⁽²⁾ $6.3 million of the total resulted from our Acquisition that occurred on March 15, 2021.

⁽³⁾ Resulted from our Acquisition that occurred on March 15, 2021.

The weighted average life for our patents is 7.3 years.

A schedule of approximate amortization expense related to finite-lived intangible assets for the three and six months ended June 30, 2022 and 2021 is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands)	2022		2021		2022		2021
Amortization expense	$	788	$	918	$	1,575	$	925

A schedule of approximate expected remaining amortization expense related to finite-lived intangible assets for the years ending December 31, is as follows:

	Amortization
($ in thousands)	Expense
2022	$	1,574
2023		3,147
2024		3,143
2025		3,139
2026		3,136
2027		3,134
2028+		25,668

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10.LONG-TERM DEBT

On March 15, 2021, we entered into a senior secured term loan facility ("Term Facility") with TCW Asset Management Company, LLC (TCW), as agent, for the lenders party thereto in the amount of $130 million. The Term Facility provided for quarterly payments of principal and bore interest of LIBOR plus 7.00% through June 30, 2021. After this date, interest will be assessed quarterly based on our total leverage ratio. The total leverage ratio is calculated as (a) Total Debt to (b) EBITDA. If our total leverage ratio is greater than or equal to 3.25, the effective interest rate will be SOFR plus 7.00% (or at our option, Prime Rate plus 6.00%). If our total leverage ratio is less than 3.25, the effective interest rate will be SOFR plus 6.50% (or at our option, Prime Rate plus 5.50%). The Term Facility also has a SOFR floor rate of 1.00%. In December 2021, the Term Facility was amended to increase the effective interest rate to LIBOR plus 7.00% until June 2022. In June 2022, we entered into a second amendment with TCW to further amend our Term Facility to consent to the modifications in our borrowing capacity under the ABL Facility as described below, and to adjust certain pricing and prepayment terms, among other things. The second amendment also modified the interest index whereas SOFR will be used to calculate interest rather than LIBOR. The effective interest rate was increased to SOFR plus 7.5% through November 2022.

Our Term Facility is collateralized by a second-lien on accounts receivable, inventory, cash and related assets and a first-lien on substantially all other assets. The Term Facility matures on March 15, 2026.

On March 15, 2021, we also entered into a senior secured asset-based credit facility ("ABL Facility") with Bank of America, N.A. ("Bank of America") as agent, for the lenders party thereto. The ABL Facility provides a new senior secured asset-based revolving credit facility up to a principal amount of $150 million, which includes a sub-limit for the issuance of letters of credit up to $5 million. The ABL Facility may be increased up to an additional $50 million at the Borrowers’ request and the Lenders’ option, subject to customary conditions. In December 2021, we amended our ABL Facility to temporarily increase our borrowing capacity from $150 million to $175 million through  June 10, 2022. In June 2022, we further amended our ABL Facility to temporarily increase our borrowing capacity by $25 million to $200 million through December 31, 2022, which thereafter will be reduced to $175 million. The ABL Facility includes a separate first in, last out (FILO) tranche, which allows the Company to borrow at higher advance rates on eligible accounts receivables and inventory balances. As of  June 30, 2022, we had borrowing capacity of $38.2 million.

The ABL Facility is collateralized by a first-lien on accounts receivable, inventory, cash and related assets and a second-lien on substantially all other assets. The ABL Facility matures on March 15, 2026. Interest on the ABL Facility is based on the amount available to be borrowed as set forth on the following chart:

	Average Availability as a
Revolver Pricing Level (1)	Percentage of Commitments	Base Rate			Term SOFR Loan			Base Rate for FILO			Term SOFR FILO Loans
I	> 66.7%		0.00	%		1.25	%		0.50	%		1.75	%
II	>33.3% and < or equal to 66.7%		0.00	%		1.50	%		0.50	%		2.00	%
III	< or equal to 33.3%		0.25	%		1.75	%		0.75	%		2.25	%

⁽¹⁾ Until June 30, 2021, Tier II applied.

In connection with the Term Facility and ABL Facility, we had to pay certain fees that were capitalized and will be amortized over the life of each respective loan. In addition, the ABL Facility requires us to pay an annual collateral management fee in the amount of $75,000 due on each anniversary of the ABL Facility issuance date, until it matures.

15

 

Current and long-term debt consisted of the following:

	June 30,			December 31,			June 30,
($ in thousands)	2022			2021			2021
Term Facility that matures in 2026 with an effective interest rate of 9.06%, 8.00% and 8.00% as of June 30, 2022, December 31, 2021 and June 30, 2021, respectively	$	125,938		$	127,563		$	129,188
ABL Facility that matures in 2026:
LIBOR borrowings with an effective interest rate of 3.88%, 1.88% and 1.63% June 30, 2022, December 31, 2021 and June 30, 2021, respectively		155,726			140,000			40,000
Prime borrowings with an effective interest rate of 5.00%, 3.50% and 3.25% as of June 30, 2022, December 31, 2021 and June 30, 2021, respectively		6,115			6,072			22,200
Total debt		287,779			273,635			191,388
Less: Unamortized debt issuance costs		(3,164	)		(3,591	)		(4,017	)
Total debt, net of debt issuance costs		284,615			270,044			187,371
Less: Debt maturing within one year		(3,250	)		(3,250	)		(3,250	)
Long-term debt	$	281,365		$	266,794		$	184,121

Credit Facility Covenants

The Term Facility contains restrictive covenants which requires us to maintain a maximum total leverage ratio and a minimum fixed charge coverage ratio, as defined in the agreement. We are in compliance with all credit facility covenants as of June 30, 2022, December 31, 2021 and  June 30, 2021.

Our ABL Facility contains a restrictive covenant which requires us to maintain a fixed charge coverage ratio upon a triggering event taking place (as defined in the ABL Facility agreement). During the three and six months ended June 30, 2022 and 2021, there were no triggering events and the covenant was not in effect.

Both the Term Facility and the ABL Facility contain restrictions on the amount of dividend payments.

11. TAXES

We are subject to tax examinations in various taxing jurisdictions. The earliest years open for examination are as follows:

	Earliest Exam Year
Taxing Authority Jurisdiction:
U.S. Federal	2018
Various U.S. States	2017
Puerto Rico (U.S. Territory)	2017
Canada	2018
China	2019
Mexico	2021
United Kingdom	2021
Australia	2021

Our policy is to accrue interest and penalties on any uncertain tax position as a component of income tax expense. No such expenses were recognized during the three and six months ended June 30, 2022 and 2021. We do not believe there will be any material changes in our uncertain tax positions over the next 12 months.

Accounting for uncertainty in income taxes requires financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements.  Under this guidance, income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of the standard.  We did not have any unrecognized tax benefits and there was no effect on our financial condition or results of operations.

Our estimated effective tax rates for the three and six months ended June 30, 2022 and 2021 are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Effective Tax Rate		27.7	%		23.0	%		21.8	%		23.0	%

12. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed by dividing net income applicable to common shareholders by the weighted average number of common shares outstanding during each period. The diluted earnings per share computation includes common share equivalents, when dilutive.

A reconciliation of the shares used in the basic and diluted income per common share computation for the three and six months ended June 30, 2022 and 2021 is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(shares in thousands)	2022		2021		2022		2021
Basic - weighted average shares outstanding		7,313		7,283		7,310		7,271
Dilutive stock options		76		156		90		131
Diluted - weighted average shares outstanding		7,389		7,439		7,400		7,402
Anti-dilutive securities		104		25		299		25

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13. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for the six months ended June 30, 2022 and 2021 was as follows:

		Six Months Ended
		June 30,
($ in thousands)	2022			2021
Interest paid	$	4,566		$	1,625
Federal, state, and local income taxes paid, net	$	4,047		$	5,771
Change in contract receivables, net	$	1,062		$	3,153
Change in contract liabilities, net	$	(1,062	)	$	(3,565	)
Property, plant, and equipment purchases in accounts payable	$	(2,073	)	$	855
Working capital true-up related to acquired business	$	-		$	5,835

14. SEGMENT INFORMATION

During the three months ended June 30, 2021, we changed our reporting segments when compared to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, to change our Military reporting segment to "Contract Manufacturing" and to change the composition thereof to continue to include Military Contracts and to include sales under manufacturing contracts for private label or other Private Contracts. Previously, only Military Contracts were included in this segment. The Private Contract sales have characteristics more like Military Contracts, with similar sales, delivery processes and gross margins. This segment reporting change reflects a corresponding change in how our CODMs review financial information in order to allocate resources and assess performance. Previously, Private Contracts were included in the Wholesale segment, but with our Acquisition, our Wholesale segment has substantially increased in size and our CODMs determined that the change in segment reporting was appropriate at this time to mirror how they evaluate and manage our business.

There has been no change in our total consolidated financial condition, results of operations, or segment information previously reported, as the result of the change in our reportable segments, as we had no Private Contract sales during the fiscal year ended December 31, 2020 or quarterly period ended March 31, 2021.

We have identified three reportable segments: Wholesale, Retail and Contract Manufacturing. Our Wholesale segment includes sales of footwear and accessories to several classifications of retailers, including sporting goods stores, outdoor specialty stores, online retailers, marine stores, independent retailers, mass merchants, retail uniform stores, and specialty safety shoe stores. Our Retail segment includes direct sales of our products to consumers through our e-commerce websites, marketplaces, our Rocky outlet store, and Lehigh businesses. Our Contract Manufacturing segment includes sales to the U.S. Military, private label sales and any sales to customers in which we are contracted to manufacture or source a specific footwear product for a customer. The following is a summary of segment results for the Wholesale, Retail, and Contract Manufacturing segments for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands)	2022		2021		2022		2021
NET SALES:
Wholesale	$	131,155	$	101,142	$	265,116	$	160,261
Retail		26,015		22,344		54,641		46,328
Contract Manufacturing		4,869		8,116		9,306		12,679
Total Net Sales	$	162,039	$	131,602	$	329,063	$	219,268
GROSS MARGIN:
Wholesale	$	40,509	$	36,291	$	88,768	$	58,530
Retail		12,730		11,094		26,578		22,643
Contract Manufacturing		512		1,769		1,231		3,119
Total Gross Margin	$	53,751	$	49,154	$	116,577	$	84,292

15. GAIN CONTINGENCY

In June 2022, we became aware of a misclassification of Harmonized Tariff Schedule (HTS) codes filed with the U.S. Customs and Border Protection (U.S. Customs) on certain products imported into the U.S. associated with the Acquired Brands during 2021 and 2022. As a result of the misclassification of HTS codes we have paid duties in excess of the required amount. We are in the process of filing multiple post summary corrections with U.S. Customs to seek refunds of duties paid in excess of the correct HTS codes. As of June 30, 2022, we have the potential to recover the total amount of overpaid duties resulting in a potential refund of approximately $6.8 million. We are accounting for these post summary corrections as a gain contingency, and, as such have not recorded these potential refunds within the accompanying balance sheet due to uncertainty of collection. Any refunds received will be recognized as a reduction to the cost of goods sold when and if the refunds are received.

16. RESTRUCTURING CHARGES

In June 2022, we completed a cost savings review aimed at operating efficiencies to better position us for profitable growth. Following the integration of the Acquired Brands after the Acquisition, we identified a number of operational synergies and cost savings opportunities, including a reduction in workforce. We recorded restructuring costs of approximately $1.2 million included in operating expenses in the accompanying unaudited condensed consolidated operating results for the three months ended June 30, 2022.

During the six months ended June 30, 2022, the following activity was recorded:

	Employee Severance, Benefits and
($ in thousands)		Related Costs
Accrued expenses, March 31, 2022		-
Restructuring charges	$	1,201
Cash payments		(100	)
Accrued expenses, June 30, 2022	$	1,101

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

During the second quarter of 2022, we experienced strong demand for our brands which led to growth across our Wholesale and Retail segments and throughout our diverse mix of distribution channels including western, work, farm and ranch, outdoor, and family retail.  The combination of a healthy inventory position and additional fulfillment capacity allowed us to better capitalize on the market opportunities we are creating through our product and focus on operational excellence.

During the first quarter of 2021, we closed on the acquisition of the performance and lifestyle footwear business of Honeywell International Inc. We have incurred significant expenses associated with the Acquisition.

COVID-19- We are monitoring and responding to the evolving nature of the global novel coronavirus pandemic (“COVID-19” or “pandemic”) and its impact to our global business. The health and safety of our team members is our top priority and to protect our employees, we are implementing all measures recommended by the Centers for Disease Control and Prevention (“CDC”). We will continue to proactively manage the Company and its operations through the pandemic, however we cannot predict the ultimate impact that COVID-19 will have on our short-term and long-term demand at this time, as it will depend on, among other things, the severity and duration of the COVID-19 pandemic. The further spread of COVID-19, and the requirements to take action to help limit the spread of the illness, may impact our ability to carry out our business as usual and may materially adversely impact global economic conditions, our business, results of operations and financial condition.

RESULTS OF OPERATIONS

The following tables set forth, for the periods indicated, information derived from our Unaudited Condensed Consolidated Financial Statements, expressed as a percentage of net sales. The discussion that follows each table should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements as well as our annual report on Form 10-K for the year ended December 31, 2021.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of goods sold		66.8			62.6			64.6			61.6
Gross margin		33.2			37.4			35.4			38.4
Operating expenses		29.7			30.9			29.7			31.6
Income from operations		3.5	%		6.5	%		5.7	%		6.8	%

Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

	Three Months Ended
	June 30,
($ in thousands)	2022		2021		Inc./ (Dec.)			Inc./ (Dec.)
NET SALES:
Wholesale	$	131,155	$	101,142	$	30,013			29.7	%
Retail		26,015		22,344		3,671			16.4
Contract Manufacturing		4,869		8,116		(3,247	)		(40.0	)
Total Net Sales	$	162,039	$	131,602	$	30,437			23.1	%

Included in Wholesale net sales for the three months ended June 30, 2022 and 2021 were approximately $61.9 million and $46.9 million, respectively, of net sales attributed to the Acquired Brands. The increases in both our legacy and Acquired Brands were due to increased demand supported by a healthy inventory position and additional fulfillment capacity which allowed us to better capitalize on the market opportunities we are creating through our product and marketing strategies.

19

Included in Retail net sales for the three months ended June 30, 2022 and 2021 were approximately $4.8 million and $3.8 million, respectively, of net sales attributed to the Acquired Brands. The increases in Retail sales were attributable to a strong growth in our Lehigh business in the second quarter of 2022 as businesses continued to re-open and get back to full capacity in the wake of the COVID-19 pandemic. 

Contract Manufacturing sales decreased in the second quarter of 2022 due to expiring contracts with the U.S. Military. 

	Three Months Ended
	June 30,
($ in thousands)	2022			2021			Inc./ (Dec.)
GROSS MARGIN:
Wholesale Margin $'s	$	40,509		$	36,291		$	4,218
Margin %		30.9	%		35.9	%		-5.0	%
Retail Margin $'s	$	12,730		$	11,094		$	1,636
Margin %		48.9	%		49.7	%		-0.7	%
Contract Manufacturing Margin $'s	$	512		$	1,769		$	(1,257	)
Margin %		10.5	%		21.8	%		-11.3	%
Total Margin $'s	$	53,751		$	49,154		$	4,597
Margin %		33.2	%		37.4	%		-4.2	%

Wholesale gross margin decreased in the second quarter of 2022 compared to the prior year period due to an increase in product costs, inbound freight costs and other shipping and logistics costs. Excluding $1.6 million of duties paid in excess of the correct HTS code for which we are seeking multiple post summary corrections (see Note 15), Wholesale gross margins would have been 32.1% for the three months ended June 30, 2022.

Retail gross margin decreased for the three months ended June 30, 2022 compared to the same period a year ago due to increased product costs and freight costs. 

Contract Manufacturing gross margin decreased in the second quarter of 2022 compared to the prior year period due to increased product costs, as well as increased labor costs at our Puerto Rico manufacturing facility.

	Three Months Ended
	June 30,
($ in thousands)	2022			2021			Inc./ (Dec.)			Inc./ (Dec.)
OPERATING EXPENSES:
Operating Expenses	$	48,155		$	40,717		$	7,438			18.3	%
% of Net Sales		29.7	%		30.9	%		-1.2	%

20

The increase in operating expenses for the second quarter of 2022 compared to the second quarter 2021 was due to an increase in outbound freight and increased variable expenses tied to the sales increase. Excluding Acquisition related costs, including restructuring costs of $2.1 million and Acquisition related costs of $2.3 million, respectively, the adjusted operating expenses for the three months ended June 30, 2022 and 2021, were $46.0 million and $38.5 million. 

	Three Months Ended
	June 30,
($ in thousands)	2022			2021			Inc./ (Dec.)			Inc./ (Dec.)
INCOME TAXES:
Income Tax Expense	$	353		$	1,164		$	(811	)		-69.7	%
Effective Tax Rate	27.7		%		23.0	%	4.7		%

The effective tax rate increased in the second quarter of 2022 compared to the same year ago period due to an increase in our projected tax rate for the year ended December 31, 2022 which is estimated to be 21.8%

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

	Six Months Ended
	June 30,
($ in thousands)	2022		2021		Inc./ (Dec.)			Inc./ (Dec.)
NET SALES:
Wholesale	$	265,116	$	160,261	$	104,855			65.4	%
Retail		54,641		46,328		8,313			17.9
Contract Manufacturing		9,306		12,679		(3,373	)		(26.6	)
Total Net Sales	$	329,063	$	219,268	$	109,795			50.1	%

Included in Wholesale net sales for the six months ended June 30, 2022 and 2021 were approximately $122.0 million and $52.4 million, respectively, of net sales attributed to the Acquired Brands. The increase in both our legacy and Acquired Brands was due to increased demand supported by a healthy inventory position and additional fulfillment capacity which allowed us to better capitalize on the market opportunities we are creating through our product and marketing strategies.

21

Included in Retail net sales for the six months ended June 30, 2022 and 2021 were approximately $9.1 million and $4.8 million, respectively, of net sales attributed to the Acquired Brands. The increase in Retail sales was partially attributable to a strong growth in our Lehigh business in the first half of 2022 as businesses continued to re-open and get back to full capacity in the wake of the COVID-19 pandemic. Our ecommerce business also increased sales in the first half of 2022.

Contract Manufacturing sales decreased in the first half of 2022 as contracts with the U.S. Military expired.

	Six Months Ended
	June 30,
($ in thousands)	2022			2021			Inc./ (Dec.)
GROSS MARGIN:
Wholesale Margin $'s	$	88,768		$	58,530		$	30,238
Margin %		33.5	%		36.5	%		-3.0	%
Retail Margin $'s	$	26,578		$	22,643		$	3,935
Margin %		48.6	%		48.9	%		-0.3	%
Contract Manufacturing Margin $'s	$	1,231		$	3,119		$	(1,888	)
Margin %		13.2	%		24.6	%		-11.4	%
Total Margin $'s	$	116,577		$	84,292		$	32,285
Margin %		35.4	%		38.4	%		-3.0	%

Wholesale gross margin decreased in the first half of 2022 compared to the prior year period due to an increased capitalized manufacturing and sourcing costs including inbound freight costs and other shipping and logistics costs. Excluding $3.2 million of duties paid in excess of the correct HTS code for which we are seeking multiple post summary corrections (see Note 15), wholesale gross margins would have been 34.7% for the six months ended June 30, 2022.

Retail gross margin decreased for the six months ended June 30, 2022 compared to the same period a year ago due to increased product costs and freight costs. 

Contract Manufacturing gross margin decreased in the first half of 2022 compared to the prior year period due to increased product costs as well as increased labor costs in our Puerto Rico manufacturing facility.

	Six Months Ended
	June 30,
($ in thousands)	2022			2021			Inc./ (Dec.)			Inc./ (Dec.)
OPERATING EXPENSES:
Operating Expenses	$	97,785		$	69,275		$	28,510			41.2	%
% of Net Sales		29.7	%		31.6	%		-1.9	%

22

The increase in operating expenses for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was due to an increase in variable expenses tied to the sales increase. We also experienced higher logistics and fulfillment costs including temporary spending associated with the opening of the new distribution center in Reno, Nevada. Excluding Acquisition related costs including restructuring costs of $3.2 million and Acquisition related expenses of $7.5 million, respectively, for the six months ended June 30, 2022 and 2021, on an adjusted basis, operating expenses were $94.6 million and $61.8 million.

	Six Months Ended
	June 30,
($ in thousands)	2022			2021			Inc./ (Dec.)			Inc./ (Dec.)
INCOME TAXES:
Income Tax Expense	$	2,304		$	2,506		$	(202	)		-8.1	%
Effective Tax Rate		21.8	%		23.0	%		-1.2	%

We estimate that our tax rate will decrease to 21.8% for the year ended December 31, 2022 based on our actual results and additional foreign tax credits as a result of the Acquisition.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our principal sources of liquidity have been our income from operations and borrowings under our credit facilities and other indebtedness.

During the six months ended June 30, 2022, our primary source of cash from borrowings under our credit facilities. Our working capital consists primarily of trade receivables and inventory, offset by debt and accounts payable. Our working capital fluctuates throughout the year as a result of our seasonal business cycle and business expansion and is generally lowest in the months of January through March of each year and highest during the months of May through October of each year. We typically utilize our revolving credit facility to fund our seasonal working capital requirements. As a result, balances on our revolving credit facility can fluctuate significantly throughout the year.

Our capital expenditures relate primarily to projects relating to our corporate offices, property, merchandising fixtures, molds and equipment associated with our manufacturing and distribution operations and for information technology. Capital expenditures were $5.5 million and $10.6 million for the six months ended June 30, 2022 and 2021, respectively.

We lease certain machinery, one shoe center, distribution centers in Lancaster, Ohio, Reno, Nevada and manufacturing facilities under operating leases that generally provide for renewal options.

We believe that our ABL Facility, coupled with cash generated from operations will provide sufficient liquidity to fund our operations and debt obligations for at least the next twelve months. Our continued liquidity, however, is contingent upon future operating performance, cash flows and our ability to meet financial covenants under our credit facility. For more information regarding our credit facility see Note 10.

Cash Flows

	Six Months Ended
	June 30,
($ in millions)	2022			2021
Operating activities	$	(8.6	)	$	11.0
Investing activities		(3.5	)		(216.7	)
Financing activities		12.0			185.7
Net change in cash and cash equivalents	$	(0.1	)	$	(20.0	)

Operating Activities. Cash used in operating activities for the six months ended June 30, 2022 was primarily used to purchase inventories. Cash provided by operations for the six months ended June 30, 2021 was primarily impacted by an increase in accounts payable and accrued liabilities, offset by an increase in inventory.

Investing Activities. Cash used in investing activities for the six months ended June 30, 2022 was primarily related the purchase of investments in molds and equipment associated with our manufacturing operations, for information technology and for improvements to our distribution facility. Cash used in investing activities for the six months ended June 30, 2021 was primarily to fund our Acquisition. See Note 4 for additional information regarding the Acquisition. 

Financing Activities. Cash provided by financing activities for the six months ended June 30, 2022 was primarily related to proceeds on our revolving credit facility. Cash provided by financing activities for the six months ended June 30, 2021 was primarily related to proceeds from our revolving credit facility and term credit facility.

23

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the Company’s Unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates. Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Historically, actual results have not been materially different from the Company’s estimates. However, actual results may differ materially from these estimates under different assumptions or conditions.

We have identified the critical accounting policies used in determining estimates and assumptions in the amounts reported in our Management Discussion and Analysis of Financial Conditions and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2021.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES REFORM ACT OF 1995

This report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, 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, which are intended to be covered by the safe harbors created thereby. Those statements include, but may not be limited to, all statements regarding our and management’s intent, belief, and expectations, such as statements concerning our future profitability and our operating and growth strategy. Words such as “believe,” “anticipate,” “expect,” “will,” “may,” “should,” “intend,” “plan,” “estimate,” “predict,” “potential,” “continue,” “likely,” “would,” “could” and similar expressions are intended to identify forward-looking statements. Investors are cautioned that forward-looking statements involve risk and uncertainties including, without limitations, dependence on sales forecasts, changes in consumer demand, seasonality, impact of weather, competition, reliance on suppliers, risks inherent to international trade, changing retail trends, the loss or disruption of our manufacturing and distribution operations, cybersecurity breaches or disruption of our digital systems, fluctuations in foreign currency exchange rates, economic changes, as well as other factors set forth under the caption “Item 1A, Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 (filed March 15, 2022) and Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (filed May 9, 2022), and other factors detailed from time to time in our filings with the Securities and Exchange Commission. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate. Therefore, there can be no assurance that the forward-looking statements included herein 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 by us or any other person that our objectives and plans will be achieved. We assume no obligation to update any forward-looking statements.

24

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

There have been no material changes to our market risk as disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2021.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, our management, with the participation of our chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 and 15d-15 promulgated under the Exchange Act. Based upon this evaluation, our chief executive officer and our chief financial officer concluded that, as of June 30, 2022, our disclosure controls and procedures were (1) designed to ensure that material information relating to our Company is accumulated and made known to our management, including our chief executive officer and chief financial officer, in a timely manner, particularly during the period in which this report was being prepared, and (2) effective, in that they provide reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Management believes, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Controls There have been no material changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) during our fiscal quarter ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have made the necessary and appropriate updates to our internal controls as it relates to financial reporting over our Acquired Brands, none of which were material. 

PART II -- OTHER INFORMATION

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Use of Proceeds

Not applicable.

Our shareholder repurchase program expired on March 4, 2022.

25

ITEM 6. EXHIBITS

Exhibit Number	Description
10.1***	Second Amendment to ABL Loan and Security Agreement, dated June 8, 2022, between the Company, Bank of America, N.A. and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated June 6, 2022 and filed on June 10, 2022).
10.2***	Second Amendment to Term Loan and Security Agreement, dated June 8, 2022, between the Company, TCW Asset Management Company, LLC and the other lenders party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated June 6, 2022 and filed on June 10, 2022).
31.1*	Certification Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) of the Principal Executive Officer.
31.2*	Certification Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) of the Principal Financial Officer.
32**	Section 1350 Certification of Principal Executive Officer/Principal Financial Officer.
101*	Attached as Exhibits 101 to this report are the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 formatted in Inline XBRL (“eXtensible Business Reporting Language”): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Shareholders' Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) related notes to these financial statements.
104*	Cover Page Interactive Data File, formatted in Inline XBRL and contained in Exhibit 101

* Filed with this Report.

** Furnished with this Report.

*** Exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish copies of any omitted schedules or exhibits upon request of the U.S. Securities and Exchange Commission.

26

SIGNATURE

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 thereunto duly authorized.

	ROCKY BRANDS, INC.
Date: August 9, 2022	By:	/s/THOMAS D. ROBERTSON
		Thomas D. Robertson
		Executive Vice President, Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer and Duly Authorized Officer)

27

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a) OF THE PRINCIPAL EXECUTIVE OFFICER

I, Jason Brooks, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Rocky Brands, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2022

/s/ Jason Brooks

Jason Brooks

Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a) OF THE PRINCIPAL FINANCIAL OFFICER

I, Tom Robertson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Rocky Brands, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2022

/s/ Thomas D. Robertson

Thomas D. Robertson

Executive Vice President, Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO RULE 13a - 14(b) AND

SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE

UNITED STATES CODE AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Rocky Brands, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned hereby certifies, pursuant to Section 1350 of Title 18 of the United States Code as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jason Brooks

Jason Brooks

Chief Executive Officer (Principal Executive Officer)

August 9, 2022

/s/ Thomas D. Robertson

Thomas D. Robertson

Executive Vice President, Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

August 9, 2022

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2022	Jul. 31, 2022
Document Information [Line Items]
Entity Central Index Key	0000895456
Entity Registrant Name	ROCKY BRANDS, INC.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-34382
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	31-1364046
Entity Address, Address Line One	39 East Canal Street
Entity Address, City or Town	Nelsonville
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	45764
City Area Code	740
Local Phone Number	753‑9100
Title of 12(b) Security	Common Stock – No Par Value
Trading Symbol	RCKY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,313,075

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
CURRENT ASSETS:
Cash and cash equivalents	$ 5,802	$ 5,909	$ 8,358
Trade receivables – net	115,794	126,807	79,963
Contract receivables	0	1,062	2,017
Other receivables	224	242	235
Inventories – net	287,817	232,464	143,516
Income tax receivable	6,360	4,294	2,290
Prepaid expenses	5,216	4,507	4,772
Total current assets	421,213	375,285	241,151
LEASED ASSETS	10,376	11,428	2,626
PROPERTY, PLANT & EQUIPMENT – net	61,352	59,989	55,956
GOODWILL	50,246	50,641	48,375
IDENTIFIED INTANGIBLES – net	124,740	126,315	127,904
OTHER ASSETS	911	917	879
TOTAL ASSETS	668,838	624,575	476,891
CURRENT LIABILITIES:
Accounts payable	130,246	114,632	67,224
Contract liabilities	0	1,062	2,017
Current Portion of Long-Term Debt	3,250	3,250	3,250
Accrued expenses:
Salaries and wages	4,869	3,668	4,363
Taxes - other	1,674	849	536
Accrued freight	2,290	1,798	2,670
Commissions	1,428	2,447	1,068
Accrued duty	12,144	5,469	6,534
Accrued interest	2,705	2,133	2,197
Other	5,693	4,828	5,115
Total current liabilities	164,299	140,136	94,974
Long-term debt	281,365	266,794	184,121
LONG-TERM TAXES PAYABLE	169	169	169
LONG-TERM LEASE	7,636	8,809	1,867
DEFERRED INCOME TAXES	10,293	10,293	8,272
DEFERRED LIABILITIES	609	519	392
TOTAL LIABILITIES	464,371	426,720	289,795
SHAREHOLDERS' EQUITY:
Common stock, no par value; 25,000,000 shares authorized; issued and outstanding September 30, 2021 - 7,295,435; December 31, 2020 - 7,247,631; September 30, 2020 - 7,276,379	68,680	68,061	67,210
Retained earnings	135,787	129,794	119,886
Total shareholders' equity	204,467	197,855	187,096
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 668,838	$ 624,575	$ 476,891

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares $ / shares in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Common stock, par value (in dollars per share)	$ 0	$ 0	$ 0
Common stock, shares authorized (in shares)	25,000,000	25,000,000	25,000,000
Common stock, shares issued (in shares)	7,313,075	7,302,199	7,283,434
Common stock, shares outstanding (in shares)	7,313,075	7,302,199	7,283,434

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
NET SALES	$ 162,039	$ 131,602	$ 329,063	$ 219,268
COST OF GOODS SOLD	108,288	82,448	212,486	134,976
GROSS MARGIN	53,751	49,154	116,577	84,292
OPERATING EXPENSES	48,155	40,717	97,785	69,275
INCOME FROM OPERATIONS	5,596	8,437	18,792	15,017
INTEREST EXPENSE AND OTHER EXPENSES	(4,323)	(3,378)	(8,230)	(4,125)
INCOME BEFORE INCOME TAX EXPENSE	1,273	5,059	10,562	10,892
INCOME TAX EXPENSE	353	1,164	2,304	2,506
NET INCOME	$ 920	$ 3,895	$ 8,258	$ 8,386
INCOME PER SHARE
Basic (in dollars per share)	$ 0.13	$ 0.53	$ 1.13	$ 1.15
Diluted (in dollars per share)	$ 0.12	$ 0.52	$ 1.12	$ 1.13
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic (in shares)	7,313	7,283	7,310	7,271
Diluted (in shares)	7,389	7,439	7,400	7,402

XML

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock Including Additional Paid in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
BALANCE (in shares) at Dec. 31, 2020	7,248
BALANCE at Dec. 31, 2020	$ 65,971	$ 0	$ 113,534	$ 179,505
Net income			4,492	4,492
Dividends paid on common stock			(1,015)	(1,015)
Repurchase of common stock				0
Stock issued for options exercised, including tax benefits (in shares)	31
Stock issued for options exercised, including tax benefits	$ 607			607
Stock compensation expense (in shares)	2
Stock compensation expense	$ 278			278
BALANCE (in shares) at Mar. 31, 2021	7,281
BALANCE at Mar. 31, 2021	$ 66,856	0	117,011	183,867
BALANCE (in shares) at Dec. 31, 2020	7,248
BALANCE at Dec. 31, 2020	$ 65,971	0	113,534	179,505
Net income				8,386
BALANCE (in shares) at Jun. 30, 2021	7,283
BALANCE at Jun. 30, 2021	$ 67,210	0	119,886	187,096
BALANCE (in shares) at Mar. 31, 2021	7,281
BALANCE at Mar. 31, 2021	$ 66,856	0	117,011	183,867
Net income			3,895	3,895
Dividends paid on common stock			(1,020)	(1,020)
Repurchase of common stock				0
Stock issued for options exercised, including tax benefits (in shares)	1
Stock issued for options exercised, including tax benefits	$ 24			24
Stock compensation expense (in shares)	1
Stock compensation expense	$ 330			330
BALANCE (in shares) at Jun. 30, 2021	7,283
BALANCE at Jun. 30, 2021	$ 67,210	0	119,886	187,096
BALANCE (in shares) at Dec. 31, 2021	7,302
BALANCE at Dec. 31, 2021	$ 68,061	0	129,794	197,855
Net income			7,338	7,338
Dividends paid on common stock			(1,133)	(1,133)
Repurchase of common stock				0
Stock issued for options exercised, including tax benefits (in shares)	7
Stock issued for options exercised, including tax benefits	$ 145		0	145
Stock compensation expense (in shares)	2
Stock compensation expense	$ 248		0	248
BALANCE (in shares) at Mar. 31, 2022	7,311
BALANCE at Mar. 31, 2022	$ 68,454	0	135,999	204,453
BALANCE (in shares) at Dec. 31, 2021	7,302
BALANCE at Dec. 31, 2021	$ 68,061	0	129,794	197,855
Net income				8,258
BALANCE (in shares) at Jun. 30, 2022	7,313
BALANCE at Jun. 30, 2022	$ 68,680	0	135,787	204,467
BALANCE (in shares) at Mar. 31, 2022	7,311
BALANCE at Mar. 31, 2022	$ 68,454	0	135,999	204,453
Net income			920	920
Dividends paid on common stock			(1,132)	(1,132)
Repurchase of common stock				0
Stock issued for options exercised, including tax benefits	$ 0		0	0
Stock compensation expense (in shares)	2
Stock compensation expense	$ 226		0	226
BALANCE (in shares) at Jun. 30, 2022	7,313
BALANCE at Jun. 30, 2022	$ 68,680	$ 0	$ 135,787	$ 204,467

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Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021
Dividends paid on common stock, per share (in dollars per share)	$ 0.155	$ 0.155	$ 0.14	$ 0.14

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 8,258	$ 8,386
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	5,847	5,557
Amortization of debt issuance costs	427	249
Deferred income taxes	0	1
Loss on disposal of fixed assets	1	13
Stock compensation expense	474	608
Change in assets and liabilities:
Receivables	11,032	2,620
Contract receivables	1,062	3,153
Inventories	(54,958)	(23,487)
Other current assets	343	(1,254)
Other assets	6	(430)
Accounts payable	13,541	19,547
Accrued and other liabilities	8,528	(1,019)
Income taxes	(2,066)	636
Contract liabilities	(1,062)	(3,565)
Net cash (used in) provided by operating activities	(8,567)	11,015
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets	(3,565)	(9,757)
Acquisition of business, net of cash acquired	0	(206,970)
Net cash used in investing activities	(3,565)	(216,727)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility	20,820	92,700
Repayments on revolving credit facility	(5,050)	(30,500)
Proceeds from term loan	0	130,000
Repayments on term loan	(1,625)	(813)
Debt issuance costs	0	(4,266)
Proceeds from stock options	145	631
Dividends paid on common stock	(2,265)	(2,035)
Net cash provided by financing activities	12,025	185,717
DECREASE IN CASH AND CASH EQUIVALENTS	(107)	(19,995)
CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD	5,909	28,353
END OF PERIOD	$ 5,802	$ 8,358

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Note 1 - Nature of Operations and Basis of Presentation

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

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, Georgia Boot, Durango, Lehigh, The Original Muck Boot Company ("Muck"), XTRATUF, Servus, NEOS and Ranger. 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. 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.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments that are necessary for a fair presentation of the financial results. All such adjustments reflected in the unaudited condensed consolidated financial statements are considered to be of normal and recurring nature. The results of operations for the three and six months ended June 30, 2022 and 2021 are not necessarily indicative of the results to be expected for the whole year. The  December 31, 2021 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). This Quarterly Report on Form 10-Q should be read in connection with our Annual Report on Form 10-K for the year ended  December 31, 2021, which includes all disclosures required by GAAP.

We report our segment information in accordance with provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 280, Segment Reporting. We evaluate business performance based upon several metrics, using segment profit as the primary financial measure. During the three months ended June 30, 2021, we changed our reporting segments when compared to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, to change our Military reporting segment to "Contract Manufacturing" and to change the composition thereof to continue to include sales to the U.S. Military ("Military Contracts") and to include sales under manufacturing contracts for private label or other specific footwear products sold through our Wholesale and Retail channels ("Private Contracts"). Previously, only Military Contracts were included in this segment. The Private Contract sales have characteristics more like Military Contracts, with similar sales, delivery processes and gross margins. This segment reporting change reflects a corresponding change in how our Chief Executive Officer and our Chief Financial Officer, our chief operating decision makers ("CODMs"), review financial information in order to allocate resources and assess performance. Previously, Private Contracts were included in the Wholesale segment, but with our acquisition of the lifestyle and performance footwear business of Honeywell International Inc., our Wholesale segment has substantially increased in size and our CODMs determined that the change in segment reporting was appropriate at this time to mirror how they evaluate and manage our business.

There has been no change in our total consolidated financial condition, results of operations, or segment information previously reported, as the result of the change in our reportable segments, as we had no Private Contract sales during the fiscal year ended December 31, 2020 or quarterly period ended March 31, 2021. Each of our reporting segments continue to employ consistent accounting policies. As a result of this assessment, we now report our activities in the following three reporting segments: Wholesale, Retail and Contract Manufacturing. Our Wholesale segment includes sales of footwear and accessories to several classifications of retailers, including sporting goods stores, outdoor specialty stores, online retailers, marine stores, independent retailers, mass merchants, retail uniform stores, and specialty safety shoe stores. Our Retail segment includes direct sales of our products to consumers through our e-commerce websites, marketplaces, our Rocky outlet store, and Lehigh businesses. Our Contract Manufacturing segment includes sales to the U.S. Military, private label sales and any sales to customers in which we are contracted to manufacture or source a specific footwear product for a customer. See Note 14 – Segment Information for further information.

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Note 2 - Accounting Standards Updates

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

2. ACCOUNTING STANDARDS UPDATES

Recently Issued Accounting Pronouncements

We are currently evaluating the impact of the following Accounting Standards Update (“ASU”) on our Unaudited Condensed Consolidated Financial Statements or Notes to the Unaudited Condensed Consolidated Financial Statements:

Standard	Description	Anticipated Adoption Period	Effect on the financial statements or other significant matters
ASU 2016-13, Measurement of Credit Losses on Financial Instruments	The pronouncement seeks to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.	Q1 2023	We are evaluating the impacts of the new standard on our existing financial instruments, including trade receivables.

Accounting Standards Adopted in the Current Year

Standard	Description	Effect on the financial statements or other significant matters
ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes	This pronouncement is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.	We adopted the new standard in Q1 2021 and the standard did not have a significant impact on our Consolidated Financial Statements.

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Note 3 - Fair Value

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Fair Value Disclosures [Text Block]

3. FAIR VALUE

Generally accepted accounting standards establish a framework for measuring fair value. The fair value accounting standard defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This standard clarifies how to measure fair value as permitted under other accounting pronouncements.

The fair value accounting standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. This standard also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

● Level 1 – Quoted prices in active markets for identical assets or liabilities.

● Level 2 – Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The fair values of cash and cash equivalents, receivables, and payables approximated their carrying values because of the short-term nature of these instruments. Receivables consist primarily of amounts due from our customers, net of allowances, amounts due from employees (sales persons’ advances in excess of commissions earned and employee travel advances), other customer receivables, net of allowances, and expected insurance recoveries. The carrying amounts of our long-term credit facility and other short-term financing obligations also approximate fair value, as they are comparable to the available financing in the marketplace during the year. The fair value of our credit facilities is categorized as Level 2.

We hold assets and liabilities in a separate trust in connection with deferred compensation plans. The fair value of these assets is based on unadjusted quoted market prices for the funds in active markets with sufficient volume and frequency (Level 1).

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Note 4 - Acquisition

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Business Combination Disclosure [Text Block]

4. ACQUISITION 

The Performance and Lifestyle Footwear Business of Honeywell International Inc.

On January 24, 2021, we entered into a Purchase Agreement (the "Purchase Agreement") with certain subsidiaries of Honeywell International Inc. (collectively, "Honeywell"), to purchase Honeywell's performance and lifestyle footwear business, including brand names, trademarks, assets and liabilities associated with Honeywell's performance and lifestyle footwear business (the "Acquisition") for an aggregate purchase price of $212 million.

On March 15, 2021 (the "Acquisition Date"), pursuant to the terms and conditions set forth in the Purchase Agreement, we completed the Acquisition for an aggregate preliminary closing price of approximately $207 million, net of cash acquired, based on preliminary working capital and other adjustments. Upon a final agreement of net working capital as of the Acquisition Date, we owed Honeywell an additional $5.4 million. The Acquisition was funded through cash on hand and borrowings under two new credit facilities. See Note 10 for information regarding the two new credit facilities.

The Acquisition expanded our brand portfolio to include Muck, XTRATUF, Servus, NEOS and Ranger brands (the "Acquired Brands"). We acquired 100% of the voting interests of certain subsidiaries and additional assets comprising the performance and lifestyle footwear business of Honeywell with the Acquisition.

Through the Acquisition, we have greatly enhanced our portfolio of footwear brands and significantly increased our sales. We acquired a well-run business with a corporate culture and a customer base similar to ours, which provides meaningful growth opportunities within our existing product categories as well as an entry into new market segments. Its innovative and authentic product collections complement our existing offering with minimal overlap, which will allow us to strengthen our wholesale relationships and serve a wider consumer audience. At the same time, we plan to leverage our existing advanced fulfillment capabilities to improve distribution of the Acquired Brands to wholesale customers and accelerate direct-to-consumer penetration.

In connection with the Acquisition, we also entered into employment agreements with seven key employees from the performance and lifestyle footwear business of Honeywell, pursuant to which, among other things, we agreed to grant 25,000 non-qualified stock options in the aggregate to the seven employees as an inducement for continuing their employment with us.

We acquired multiple leases through the Acquisition including the lease of our Rock Island, Illinois and China manufacturing facilities and an office building in Westwood, Massachusetts.

The Acquisition contributed net sales of $66.7 million and $50.7 million, respectively, for the three months ended June 30, 2022 and 2021, and net sales of $131.1 million and $57.2 million, respectively, to the unaudited condensed consolidated operating results for the six months ended June 30, 2022 and 2021. The Acquisition contributed net loss of $0.1 million and net income of $0.1 million, respectively, to the unaudited condensed consolidated operating results for the three months ended June 30, 2022 and 2021, and net income of $1.9 million and $0.7 million, respectively, to the unaudited condensed consolidated operating results for the six months ended June 30, 2022 and 2021.

Acquisition-related costs

Costs incurred to complete and integrate the Acquisition are expensed as incurred and included in "operating expenses" in the accompanying condensed consolidated statements of operations. During the three months ended June 30, 2022 and 2021, there were approximately $2.1 million and $2.3 million, respectively, of acquisition-related costs recognized. During the six months ended June 30, 2022 and 2021, there were approximately $3.2 million and $7.5 million, respectively, of acquisition-related costs recognized. These costs represent investment banking fees, legal and professional fees, transaction fees, integration costs, amortization, consulting fees and restructuring costs associated with the Acquisition.

Purchase Price Allocation

The Acquisition has been accounted for under the business combinations accounting guidance. As a result, we have applied acquisition accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the Acquisition Date. The aggregate closing price noted above was allocated to the major categories of assets acquired and liabilities assumed based on their fair values at the Acquisition Date using primarily Level 2 and Level 3 inputs. These Level 2 and Level 3 valuation inputs include an estimate of future cash flows and discount rates. Additionally, estimated fair values are based, in part, upon outside valuation for certain assets, including specifically identified intangible assets.

The allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount allocated to goodwill is finalized and is no longer subject to adjustment as the final valuation related to assets acquired and liabilities assumed has been obtained.

The following table summarizes the consideration paid and estimated fair value of the assets acquired and liabilities assumed as of the Acquisition Date.

($ in thousands)	Fair Value
Cash	$	2,655
Accounts receivable (1)		36,734
Inventories (2)		41,057
Property, plant and equipment		16,243
Goodwill (3)		50,246
Intangible assets		98,620
Other assets		1,250
Accounts payable		(18,108	)
Accrued expenses		(13,634	)
Total identifiable net assets		215,063
Cash acquired		(2,655	)
Total cash paid, net of cash acquired	$	212,408

⁽¹⁾ The recorded amount for accounts receivable considers expected uncollectible amounts of approximately $0.6 million in its determination of fair value.

⁽²⁾ Fair value of finished goods inventories included a preliminary step up value of approximately $3.5 million, of which approximately $2.3 million and $2.6 million, respectively, was expensed during the three months and six months ended June 30, 2021, and are included in "Cost of Goods Sold" in the accompanying unaudited condensed consolidated statements of operations. The remaining $0.9 million was expensed during the year ended December 31, 2021 and as such there was no expense for the three or six months ended June 30, 2022.

⁽³⁾ Goodwill consists largely of the acquired workforce, expected cost synergies and economies of scale resulting from the Acquisition.

Unaudited Pro Forma Financial Information

The following unaudited pro forma results of operations assume that the Acquisition occurred at the beginning of the periods presented. These unaudited pro forma results are presented for information purposes only and are not necessarily indicative of what the results of operations would have been if the Acquisition had occurred at the beginning of the periods presented, nor are they indicative of the future results of operations. The pro forma results presented below are adjusted for the removal of acquisition-related costs of approximately $2.1 million and $2.3 million for the three months ended June 30, 2022 and 2021, respectively, and approximately $3.2 million and $7.5 million, respectively, for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands, except per share amount)	2022		2021		2022		2021
Net sales	$	162,039	$	131,602	$	329,063	$	257,947
Net income	$	2,548	$	7,400	$	10,730	$	16,144
Diluted earnings per share	$	0.34	$	0.99	$	1.45	$	2.18

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Note 5 - Revenue

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

5. REVENUE

Nature of Performance Obligations

Our products are distributed through three distinct channels, which represent our business segments: Wholesale, Retail, and Contract Manufacturing. In our Wholesale business, we distribute our products through a wide range of distribution channels representing over ten thousand retail store locations in the U.S., Canada, and internationally. Our Wholesale channels vary by product line and include sporting goods stores, outdoor specialty stores, online retailers, marine stores, independent retailers, mass merchants, retail uniform stores, and specialty safety shoe stores. Our Retail business includes direct sales of our products to consumers through our e-commerce websites, marketplaces, our Rocky outlet store, and Lehigh businesses. Under our Contract Manufacturing segment, we sell footwear under the Rocky label to the U.S. Military and manufacture private label footwear and other footwear as contracted by a customer.

Significant Accounting Policies and Judgements

Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; this generally occurs upon shipment of our product to our customer, which is when the transfer of control of our products passes to the customer. The duration of our arrangements with our customers are typically one year or less. Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of our products at a point in time and consists of either fixed or variable consideration or a combination of both.

Revenues from sales are recorded at the net sales price, which includes estimates of variable consideration for which reserves are established. Components of variable consideration include prompt payment discounts, volume rebates, and product returns. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales, and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer).

The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Our analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a material reversal of revenue would not occur in a future period for the estimates detailed below as of  June 30, 2022. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net revenue and earnings in the period such variances become known.

When a customer has a right to a prompt payment discount, we estimate the likelihood that the customer will earn the discount using historical data and adjust our estimate when the estimate of the likelihood that a customer will earn the discount changes or the consideration becomes fixed, whichever occurs earlier. The estimated amount of variable consideration is recognized as a credit to trade receivables and a reduction in revenue until the uncertainty of the variable consideration is alleviated. Because most of our customers have payment terms of less than six months, there is not a significant financing component in our contracts with customers.

When a customer is offered a rebate on purchases retroactively this is accounted for as variable consideration because the consideration for the current and past purchases is not fixed until it is known if the discount is earned. We estimate the expected discount the customer will earn at contract inception using historical data and projections and update our estimates when projections materially change or consideration becomes fixed. The estimated rebate is recognized as a credit to trade receivables and offset against revenue until the rebate is earned or the earning period has lapsed.

When a right of return is part of the arrangement with the customer, we estimate the expected returns based on an analysis using historical data. We adjust our estimate either when the most likely amount of consideration we expect to receive changes or when the consideration becomes fixed, whichever occurs earlier. See Note 6  and Note 7 for additional information.

Trade receivables represent our right to unconditional payment that only relies on the passage of time.

Contract receivables represent contractual minimum payments required under non-cancellable contracts with the U.S. Military and other customers with a duration of one year or less.

Contract liabilities are performance obligations that we expect to satisfy or relieve within the next twelve months, advance consideration obtained prior to satisfying a performance obligation, or unconditional obligations to provide goods or services under non-cancellable contracts before the transfer of goods or services to the customer has occurred. Our contract liability represents unconditional obligations to provide goods under non-cancellable contracts with the U.S. Military and other customers.

Items considered immaterial within the context of the contract are recognized as an expense.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue producing transaction, that are collected from customers, are excluded from revenue.

Costs associated with our manufacturer’s warranty continue to be recognized as expense when the products are sold in accordance with guidance surrounding product warranties.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in operating expenses.

Costs associated with obtaining a contract are expensed as incurred in accordance with the practical expedient in ASC 340-40 in instances where the amortization period is one year or less. We anticipate substantially all of our costs incurred to obtain a contract would be subject to this practical expedient.

Contract Balances

The following table provides information about contract liabilities from contracts with our customers.

	June 30,		December 31,		June 30,
($ in thousands)	2022		2021		2021
Contract liabilities	$	-	$	1,062	$	2,017

Significant changes in the contract liabilities balance during the period are as follows:

($ in thousands)	Contract liabilities
Balance, December 31, 2021	$	1,062
Non-cancelable contracts with customers entered into during the period		-
Revenue recognized related to non-cancelable contracts with customers during the period		(1,062	)
Balance, June 30, 2022	$	-

Disaggregation of Revenue

All revenues are recognized at a point in time when control of our products pass to the customer at point of shipment. Because all revenues are recognized at a point in time and are disaggregated by channel, our segment disclosures are consistent with ASC 606 disaggregation requirements. See Note 14 for segment disclosures.

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Note 6 - Trade Receivables

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

6. TRADE RECEIVABLES

Trade receivables are presented net of the related allowance for uncollectible accounts of approximately $2,618,000, $613,000 and $1,062,000 at June 30, 2022,  December 31, 2021 and  June 30, 2021, respectively. We record the allowance based on historical experience, the age of the receivables, and identification of customer accounts that are likely to prove difficult to collect due to various criteria including pending bankruptcy. However, estimates of the allowance in any future period are inherently uncertain and actual allowances may differ from these estimates. If actual or expected future allowances were significantly greater or less than established reserves, a reduction or increase to bad debt expense would be recorded in the period this determination was made. Our credit policy generally provides that trade receivables will be deemed uncollectible and written-off once we have pursued all reasonable efforts to collect on the account.

In accordance with ASC 606, the return reserve liability netted against trade receivables was approximately $1,309,000, $1,670,000 and $2,057,000 at  June 30, 2022,  December 31, 2021 and  June 30, 2021, respectively.

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Note 7 - Inventory

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Inventory Disclosure [Text Block]

7. INVENTORY

Inventories are comprised of the following:

	June 30,		December 31,		June 30,
($ in thousands)	2022		2021		2021
Raw materials	$	22,214	$	20,933	$	22,105
Work-in-process		1,793		1,316		1,668
Finished goods		263,810		210,215		119,743
Total	$	287,817	$	232,464	$	143,516

In accordance with ASC 606, the return reserve asset included within inventories was approximately $729,000, $902,000 and $955,000 at  June 30, 2022,  December 31, 2021 and  June 30, 2021, respectively.

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Note 8 - Goodwill

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Goodwill Disclosure [Text Block]

8. GOODWILL

Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets of acquired businesses. Goodwill arose from the Acquisition and largely consists of the workforce acquired, expected cost synergies and economies of scale resulting from the business combination. The amount of goodwill that is expected to be deductible for tax purposes is $49.4 million.

GAAP has established guidance for reporting information about a company's operating segments, including disclosures related to a company's products and services, geographic areas and major customers. We monitor and review our segment reporting structure in accordance with authoritative guidance to determine whether any changes have occurred that would impact our reportable segments, as well as our reporting units. As previously stated, our operations represent three reporting segments: Wholesale, Retail and Contract Manufacturing. Goodwill impairment analysis will be performed for our Wholesale and Retail reporting segments. There is no goodwill allocated to our Contract Manufacturing segment. Of total goodwill, $25.4 million was allocated to our Wholesale segment and $24.8 million was allocated to our Retail segment.

Goodwill is subject to impairment tests at least annually. We review the carrying amounts of goodwill by reporting unit at least annually, or when indicators of impairment are present, to determine if goodwill may be impaired. We include assumptions about the expected future operating performance as part of a discounted cash flow analysis to estimate fair value. If the carrying value of these assets is not recoverable, based on the discounted cash flow analysis, management compares the fair value of the assets to the carrying value. Goodwill is considered impaired if the recorded value exceeds the fair value.

We may first assess qualitative factors to determine whether it is more likely than not that the fair value of goodwill is less than its carrying value. We would not be required to quantitatively determine the fair value of goodwill unless we determine, based on the qualitative assessment, that it is more likely than not that its fair value is less than the carrying value. Future cash flows of the individual indefinite-lived intangible assets are used to measure their fair value after consideration of certain assumptions, such as forecasted growth rates and cost of capital, which are derived from internal projection and operating plans. We perform our annual testing for goodwill at the beginning of the fourth quarter of each fiscal year, starting with our fiscal year ended December 31, 2021.

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Note 9 - Identified Intangible Assets

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

9. IDENTIFIED INTANGIBLE ASSETS

A schedule of identified intangible assets is as follows:

	Gross		Accumulated		Carrying
($ in thousands)	Amount		Amortization		Amount
June 30, 2022
Trademarks
Wholesale (1)	$	72,579		-	$	72,579
Retail (2)		9,220		-		9,220
Patents		895	$	815		80
Customer relationships (3)		46,900		4,039		42,861
Total Intangibles	$	129,594	$	4,854	$	124,740

⁽¹⁾ $45.4 million of the total resulted from our Acquisition that occurred on March 15, 2021.

⁽²⁾ $6.3 million of the total resulted from our Acquisition that occurred on March 15, 2021.

⁽³⁾ Resulted from our Acquisition that occurred on March 15, 2021.

	Gross		Accumulated		Carrying
($ in thousands)	Amount		Amortization		Amount
December 31, 2021
Trademarks
Wholesale (1)	$	72,579		-	$	72,579
Retail (2)		9,220		-		9,220
Patents		895	$	804		91
Customer relationships (3)		46,900		2,475		44,425
Total Intangibles	$	129,594	$	3,279	$	126,315

	Gross		Accumulated		Carrying
($ in thousands)	Amount		Amortization		Amount
June 30, 2021
Trademarks
Wholesale (1)	$	72,592		-	$	72,592
Retail (2)		9,220		-		9,220
Patents		895	$	791		104
Customer relationships (3)		46,900		912		45,988
Total Intangibles	$	129,607	$	1,703	$	127,904

⁽¹⁾ $45.4 million of the total resulted from our Acquisition that occurred on March 15, 2021.

⁽²⁾ $6.3 million of the total resulted from our Acquisition that occurred on March 15, 2021.

⁽³⁾ Resulted from our Acquisition that occurred on March 15, 2021.

The weighted average life for our patents is 7.3 years.

A schedule of approximate amortization expense related to finite-lived intangible assets for the three and six months ended June 30, 2022 and 2021 is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands)	2022		2021		2022		2021
Amortization expense	$	788	$	918	$	1,575	$	925

A schedule of approximate expected remaining amortization expense related to finite-lived intangible assets for the years ending December 31, is as follows:

	Amortization
($ in thousands)	Expense
2022	$	1,574
2023		3,147
2024		3,143
2025		3,139
2026		3,136
2027		3,134
2028+		25,668

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Note 10 - Long-term Debt

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

10.LONG-TERM DEBT

On March 15, 2021, we entered into a senior secured term loan facility ("Term Facility") with TCW Asset Management Company, LLC (TCW), as agent, for the lenders party thereto in the amount of $130 million. The Term Facility provided for quarterly payments of principal and bore interest of LIBOR plus 7.00% through June 30, 2021. After this date, interest will be assessed quarterly based on our total leverage ratio. The total leverage ratio is calculated as (a) Total Debt to (b) EBITDA. If our total leverage ratio is greater than or equal to 3.25, the effective interest rate will be SOFR plus 7.00% (or at our option, Prime Rate plus 6.00%). If our total leverage ratio is less than 3.25, the effective interest rate will be SOFR plus 6.50% (or at our option, Prime Rate plus 5.50%). The Term Facility also has a SOFR floor rate of 1.00%. In December 2021, the Term Facility was amended to increase the effective interest rate to LIBOR plus 7.00% until June 2022. In June 2022, we entered into a second amendment with TCW to further amend our Term Facility to consent to the modifications in our borrowing capacity under the ABL Facility as described below, and to adjust certain pricing and prepayment terms, among other things. The second amendment also modified the interest index whereas SOFR will be used to calculate interest rather than LIBOR. The effective interest rate was increased to SOFR plus 7.5% through November 2022.

Our Term Facility is collateralized by a second-lien on accounts receivable, inventory, cash and related assets and a first-lien on substantially all other assets. The Term Facility matures on March 15, 2026.

On March 15, 2021, we also entered into a senior secured asset-based credit facility ("ABL Facility") with Bank of America, N.A. ("Bank of America") as agent, for the lenders party thereto. The ABL Facility provides a new senior secured asset-based revolving credit facility up to a principal amount of $150 million, which includes a sub-limit for the issuance of letters of credit up to $5 million. The ABL Facility may be increased up to an additional $50 million at the Borrowers’ request and the Lenders’ option, subject to customary conditions. In December 2021, we amended our ABL Facility to temporarily increase our borrowing capacity from $150 million to $175 million through  June 10, 2022. In June 2022, we further amended our ABL Facility to temporarily increase our borrowing capacity by $25 million to $200 million through December 31, 2022, which thereafter will be reduced to $175 million. The ABL Facility includes a separate first in, last out (FILO) tranche, which allows the Company to borrow at higher advance rates on eligible accounts receivables and inventory balances. As of  June 30, 2022, we had borrowing capacity of $38.2 million.

The ABL Facility is collateralized by a first-lien on accounts receivable, inventory, cash and related assets and a second-lien on substantially all other assets. The ABL Facility matures on March 15, 2026. Interest on the ABL Facility is based on the amount available to be borrowed as set forth on the following chart:

	Average Availability as a
Revolver Pricing Level (1)	Percentage of Commitments	Base Rate			Term SOFR Loan			Base Rate for FILO			Term SOFR FILO Loans
I	> 66.7%		0.00	%		1.25	%		0.50	%		1.75	%
II	>33.3% and < or equal to 66.7%		0.00	%		1.50	%		0.50	%		2.00	%
III	< or equal to 33.3%		0.25	%		1.75	%		0.75	%		2.25	%

⁽¹⁾ Until June 30, 2021, Tier II applied.

In connection with the Term Facility and ABL Facility, we had to pay certain fees that were capitalized and will be amortized over the life of each respective loan. In addition, the ABL Facility requires us to pay an annual collateral management fee in the amount of $75,000 due on each anniversary of the ABL Facility issuance date, until it matures.

Current and long-term debt consisted of the following:

	June 30,			December 31,			June 30,
($ in thousands)	2022			2021			2021
Term Facility that matures in 2026 with an effective interest rate of 9.06%, 8.00% and 8.00% as of June 30, 2022, December 31, 2021 and June 30, 2021, respectively	$	125,938		$	127,563		$	129,188
ABL Facility that matures in 2026:
LIBOR borrowings with an effective interest rate of 3.88%, 1.88% and 1.63% June 30, 2022, December 31, 2021 and June 30, 2021, respectively		155,726			140,000			40,000
Prime borrowings with an effective interest rate of 5.00%, 3.50% and 3.25% as of June 30, 2022, December 31, 2021 and June 30, 2021, respectively		6,115			6,072			22,200
Total debt		287,779			273,635			191,388
Less: Unamortized debt issuance costs		(3,164	)		(3,591	)		(4,017	)
Total debt, net of debt issuance costs		284,615			270,044			187,371
Less: Debt maturing within one year		(3,250	)		(3,250	)		(3,250	)
Long-term debt	$	281,365		$	266,794		$	184,121

Credit Facility Covenants

The Term Facility contains restrictive covenants which requires us to maintain a maximum total leverage ratio and a minimum fixed charge coverage ratio, as defined in the agreement. We are in compliance with all credit facility covenants as of June 30, 2022, December 31, 2021 and  June 30, 2021.

Our ABL Facility contains a restrictive covenant which requires us to maintain a fixed charge coverage ratio upon a triggering event taking place (as defined in the ABL Facility agreement). During the three and six months ended June 30, 2022 and 2021, there were no triggering events and the covenant was not in effect.

Both the Term Facility and the ABL Facility contain restrictions on the amount of dividend payments.

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Note 11 - Taxes

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

11. TAXES

We are subject to tax examinations in various taxing jurisdictions. The earliest years open for examination are as follows:

	Earliest Exam Year
Taxing Authority Jurisdiction:
U.S. Federal	2018
Various U.S. States	2017
Puerto Rico (U.S. Territory)	2017
Canada	2018
China	2019
Mexico	2021
United Kingdom	2021
Australia	2021

Our policy is to accrue interest and penalties on any uncertain tax position as a component of income tax expense. No such expenses were recognized during the three and six months ended June 30, 2022 and 2021. We do not believe there will be any material changes in our uncertain tax positions over the next 12 months.

Accounting for uncertainty in income taxes requires financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements.  Under this guidance, income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized upon the adoption of the standard.  We did not have any unrecognized tax benefits and there was no effect on our financial condition or results of operations.

Our estimated effective tax rates for the three and six months ended June 30, 2022 and 2021 are as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Effective Tax Rate		27.7	%		23.0	%		21.8	%		23.0	%

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Note 12 - Earnings Per Share

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

12. EARNINGS PER SHARE

Basic earnings per share (“EPS”) is computed by dividing net income applicable to common shareholders by the weighted average number of common shares outstanding during each period. The diluted earnings per share computation includes common share equivalents, when dilutive.

A reconciliation of the shares used in the basic and diluted income per common share computation for the three and six months ended June 30, 2022 and 2021 is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(shares in thousands)	2022		2021		2022		2021
Basic - weighted average shares outstanding		7,313		7,283		7,310		7,271
Dilutive stock options		76		156		90		131
Diluted - weighted average shares outstanding		7,389		7,439		7,400		7,402
Anti-dilutive securities		104		25		299		25

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Note 13 - Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

13. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for the six months ended June 30, 2022 and 2021 was as follows:

		Six Months Ended
		June 30,
($ in thousands)	2022			2021
Interest paid	$	4,566		$	1,625
Federal, state, and local income taxes paid, net	$	4,047		$	5,771
Change in contract receivables, net	$	1,062		$	3,153
Change in contract liabilities, net	$	(1,062	)	$	(3,565	)
Property, plant, and equipment purchases in accounts payable	$	(2,073	)	$	855
Working capital true-up related to acquired business	$	-		$	5,835

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Note 14 - Segment Information

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

14. SEGMENT INFORMATION

During the three months ended June 30, 2021, we changed our reporting segments when compared to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, to change our Military reporting segment to "Contract Manufacturing" and to change the composition thereof to continue to include Military Contracts and to include sales under manufacturing contracts for private label or other Private Contracts. Previously, only Military Contracts were included in this segment. The Private Contract sales have characteristics more like Military Contracts, with similar sales, delivery processes and gross margins. This segment reporting change reflects a corresponding change in how our CODMs review financial information in order to allocate resources and assess performance. Previously, Private Contracts were included in the Wholesale segment, but with our Acquisition, our Wholesale segment has substantially increased in size and our CODMs determined that the change in segment reporting was appropriate at this time to mirror how they evaluate and manage our business.

There has been no change in our total consolidated financial condition, results of operations, or segment information previously reported, as the result of the change in our reportable segments, as we had no Private Contract sales during the fiscal year ended December 31, 2020 or quarterly period ended March 31, 2021.

We have identified three reportable segments: Wholesale, Retail and Contract Manufacturing. Our Wholesale segment includes sales of footwear and accessories to several classifications of retailers, including sporting goods stores, outdoor specialty stores, online retailers, marine stores, independent retailers, mass merchants, retail uniform stores, and specialty safety shoe stores. Our Retail segment includes direct sales of our products to consumers through our e-commerce websites, marketplaces, our Rocky outlet store, and Lehigh businesses. Our Contract Manufacturing segment includes sales to the U.S. Military, private label sales and any sales to customers in which we are contracted to manufacture or source a specific footwear product for a customer. The following is a summary of segment results for the Wholesale, Retail, and Contract Manufacturing segments for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands)	2022		2021		2022		2021
NET SALES:
Wholesale	$	131,155	$	101,142	$	265,116	$	160,261
Retail		26,015		22,344		54,641		46,328
Contract Manufacturing		4,869		8,116		9,306		12,679
Total Net Sales	$	162,039	$	131,602	$	329,063	$	219,268
GROSS MARGIN:
Wholesale	$	40,509	$	36,291	$	88,768	$	58,530
Retail		12,730		11,094		26,578		22,643
Contract Manufacturing		512		1,769		1,231		3,119
Total Gross Margin	$	53,751	$	49,154	$	116,577	$	84,292

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Note 15 - Gain Contingency

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Contingencies Disclosure [Text Block]

15. GAIN CONTINGENCY

In June 2022, we became aware of a misclassification of Harmonized Tariff Schedule (HTS) codes filed with the U.S. Customs and Border Protection (U.S. Customs) on certain products imported into the U.S. associated with the Acquired Brands during 2021 and 2022. As a result of the misclassification of HTS codes we have paid duties in excess of the required amount. We are in the process of filing multiple post summary corrections with U.S. Customs to seek refunds of duties paid in excess of the correct HTS codes. As of June 30, 2022, we have the potential to recover the total amount of overpaid duties resulting in a potential refund of approximately $6.8 million. We are accounting for these post summary corrections as a gain contingency, and, as such have not recorded these potential refunds within the accompanying balance sheet due to uncertainty of collection. Any refunds received will be recognized as a reduction to the cost of goods sold when and if the refunds are received.

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Note 16 Restructuring Changes

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

16. RESTRUCTURING CHARGES

In June 2022, we completed a cost savings review aimed at operating efficiencies to better position us for profitable growth. Following the integration of the Acquired Brands after the Acquisition, we identified a number of operational synergies and cost savings opportunities, including a reduction in workforce. We recorded restructuring costs of approximately $1.2 million included in operating expenses in the accompanying unaudited condensed consolidated operating results for the three months ended June 30, 2022.

During the six months ended June 30, 2022, the following activity was recorded:

	Employee Severance, Benefits and
($ in thousands)		Related Costs
Accrued expenses, March 31, 2022		-
Restructuring charges	$	1,201
Cash payments		(100	)
Accrued expenses, June 30, 2022	$	1,101

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Note 4 - Acquisition (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

($ in thousands)	Fair Value
Cash	$	2,655
Accounts receivable (1)		36,734
Inventories (2)		41,057
Property, plant and equipment		16,243
Goodwill (3)		50,246
Intangible assets		98,620
Other assets		1,250
Accounts payable		(18,108	)
Accrued expenses		(13,634	)
Total identifiable net assets		215,063
Cash acquired		(2,655	)
Total cash paid, net of cash acquired	$	212,408

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands, except per share amount)	2022		2021		2022		2021
Net sales	$	162,039	$	131,602	$	329,063	$	257,947
Net income	$	2,548	$	7,400	$	10,730	$	16,144
Diluted earnings per share	$	0.34	$	0.99	$	1.45	$	2.18

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Note 5 - Revenue (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]

	June 30,		December 31,		June 30,
($ in thousands)	2022		2021		2021
Contract liabilities	$	-	$	1,062	$	2,017

Revenue, Initial Application Period, Cumulative Effect Transition [Table Text Block]

($ in thousands)	Contract liabilities
Balance, December 31, 2021	$	1,062
Non-cancelable contracts with customers entered into during the period		-
Revenue recognized related to non-cancelable contracts with customers during the period		(1,062	)
Balance, June 30, 2022	$	-

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Note 7 - Inventory (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	June 30,		December 31,		June 30,
($ in thousands)	2022		2021		2021
Raw materials	$	22,214	$	20,933	$	22,105
Work-in-process		1,793		1,316		1,668
Finished goods		263,810		210,215		119,743
Total	$	287,817	$	232,464	$	143,516

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Note 9 - Identified Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	Gross		Accumulated		Carrying
($ in thousands)	Amount		Amortization		Amount
June 30, 2022
Trademarks
Wholesale (1)	$	72,579		-	$	72,579
Retail (2)		9,220		-		9,220
Patents		895	$	815		80
Customer relationships (3)		46,900		4,039		42,861
Total Intangibles	$	129,594	$	4,854	$	124,740

	Gross		Accumulated		Carrying
($ in thousands)	Amount		Amortization		Amount
December 31, 2021
Trademarks
Wholesale (1)	$	72,579		-	$	72,579
Retail (2)		9,220		-		9,220
Patents		895	$	804		91
Customer relationships (3)		46,900		2,475		44,425
Total Intangibles	$	129,594	$	3,279	$	126,315

	Gross		Accumulated		Carrying
($ in thousands)	Amount		Amortization		Amount
June 30, 2021
Trademarks
Wholesale (1)	$	72,592		-	$	72,592
Retail (2)		9,220		-		9,220
Patents		895	$	791		104
Customer relationships (3)		46,900		912		45,988
Total Intangibles	$	129,607	$	1,703	$	127,904

Finite-Lived Intangible Assets Amortization Expense [Table Text Block]

	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands)	2022		2021		2022		2021
Amortization expense	$	788	$	918	$	1,575	$	925

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

	Amortization
($ in thousands)	Expense
2022	$	1,574
2023		3,147
2024		3,143
2025		3,139
2026		3,136
2027		3,134
2028+		25,668

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Note 10 - Long-term Debt (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Qualitative Measure of Debt Facility [Table Text Block]

	Average Availability as a
Revolver Pricing Level (1)	Percentage of Commitments	Base Rate			Term SOFR Loan			Base Rate for FILO			Term SOFR FILO Loans
I	> 66.7%		0.00	%		1.25	%		0.50	%		1.75	%
II	>33.3% and < or equal to 66.7%		0.00	%		1.50	%		0.50	%		2.00	%
III	< or equal to 33.3%		0.25	%		1.75	%		0.75	%		2.25	%

Schedule of Debt [Table Text Block]

	June 30,			December 31,			June 30,
($ in thousands)	2022			2021			2021
Term Facility that matures in 2026 with an effective interest rate of 9.06%, 8.00% and 8.00% as of June 30, 2022, December 31, 2021 and June 30, 2021, respectively	$	125,938		$	127,563		$	129,188
ABL Facility that matures in 2026:
LIBOR borrowings with an effective interest rate of 3.88%, 1.88% and 1.63% June 30, 2022, December 31, 2021 and June 30, 2021, respectively		155,726			140,000			40,000
Prime borrowings with an effective interest rate of 5.00%, 3.50% and 3.25% as of June 30, 2022, December 31, 2021 and June 30, 2021, respectively		6,115			6,072			22,200
Total debt		287,779			273,635			191,388
Less: Unamortized debt issuance costs		(3,164	)		(3,591	)		(4,017	)
Total debt, net of debt issuance costs		284,615			270,044			187,371
Less: Debt maturing within one year		(3,250	)		(3,250	)		(3,250	)
Long-term debt	$	281,365		$	266,794		$	184,121

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Note 11 - Taxes (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Summary of Income Tax Examinations [Table Text Block]

	Earliest Exam Year
Taxing Authority Jurisdiction:
U.S. Federal	2018
Various U.S. States	2017
Puerto Rico (U.S. Territory)	2017
Canada	2018
China	2019
Mexico	2021
United Kingdom	2021
Australia	2021

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Effective Tax Rate		27.7	%		23.0	%		21.8	%		23.0	%

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Note 12 - Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(shares in thousands)	2022		2021		2022		2021
Basic - weighted average shares outstanding		7,313		7,283		7,310		7,271
Dilutive stock options		76		156		90		131
Diluted - weighted average shares outstanding		7,389		7,439		7,400		7,402
Anti-dilutive securities		104		25		299		25

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Note 13 - Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

		Six Months Ended
		June 30,
($ in thousands)	2022			2021
Interest paid	$	4,566		$	1,625
Federal, state, and local income taxes paid, net	$	4,047		$	5,771
Change in contract receivables, net	$	1,062		$	3,153
Change in contract liabilities, net	$	(1,062	)	$	(3,565	)
Property, plant, and equipment purchases in accounts payable	$	(2,073	)	$	855
Working capital true-up related to acquired business	$	-		$	5,835

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Note 14 - Segment Information (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended				Six Months Ended
	June 30,				June 30,
($ in thousands)	2022		2021		2022		2021
NET SALES:
Wholesale	$	131,155	$	101,142	$	265,116	$	160,261
Retail		26,015		22,344		54,641		46,328
Contract Manufacturing		4,869		8,116		9,306		12,679
Total Net Sales	$	162,039	$	131,602	$	329,063	$	219,268
GROSS MARGIN:
Wholesale	$	40,509	$	36,291	$	88,768	$	58,530
Retail		12,730		11,094		26,578		22,643
Contract Manufacturing		512		1,769		1,231		3,119
Total Gross Margin	$	53,751	$	49,154	$	116,577	$	84,292

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Note 16 Restructuring Changes (Tables)

6 Months Ended

Jun. 30, 2022

Notes Tables

Restructuring and Related Costs [Table Text Block]

	Employee Severance, Benefits and
($ in thousands)		Related Costs
Accrued expenses, March 31, 2022		-
Restructuring charges	$	1,201
Cash payments		(100	)
Accrued expenses, June 30, 2022	$	1,101

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Note 1 - Nature of Operations and Basis of Presentation (Details Textual)	6 Months Ended
	Jun. 30, 2022
Number of Reportable Segments	3

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Note 4 - Acquisition (Details Textual) - Honeywell International, Inc. [Member] - USD ($) $ in Millions			3 Months Ended		6 Months Ended		12 Months Ended	13 Months Ended
	Mar. 15, 2021	Jan. 24, 2021	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021	Mar. 31, 2022
Business Combination, Consideration Transferred, Total	$ 207.0	$ 212.0
Business Combination, Consideration Transferred, Liabilities Incurred	$ 5.4
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares)	25,000
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual			$ 66.7	$ 50.7	$ 131.1	$ 57.2
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual			0.1	0.1	1.9	0.7
Business Combination, Acquisition Related Costs			$ 2.1	2.3	$ 3.2	7.5
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables, Allowance for Doubtful Accounts	$ 0.6
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Inventory							$ 0.9	$ 3.5
Expense Related to Step Up Value of Acquired Inventory				$ 2.3		$ 2.6

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Note 4 - Acquisition - Consideration Paid for the Acquisition (Details) - USD ($) $ in Thousands			6 Months Ended
		Mar. 15, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Goodwill (3)			$ 50,246	$ 48,375	$ 50,641
Total cash paid, net of cash acquired			$ (0)	$ 206,970
Honeywell International, Inc. [Member]
Cash		$ 2,655
Accounts receivable (1)	[1]	36,734
Inventories (2)	[2]	41,057
Property, plant and equipment		16,243
Goodwill (3)	[3]	50,246
Intangible assets		98,620
Other assets		1,250
Accounts payable		(18,108)
Accrued expenses		(13,634)
Total identifiable net assets		215,063
Cash acquired		(2,655)
Total cash paid, net of cash acquired		$ 212,408

[1] The recorded amount for accounts receivable considers expected uncollectible amounts of approximately $0.6 million in its determination of fair value.

[2] Fair value of finished goods inventories included a preliminary step up value of approximately $3.5 million, of which approximately $2.3 million and $2.6 million was expensed during the three months and six months ended June 30, 2021, and are included in "Cost of Goods Sold" in the accompanying unaudited condensed consolidated statements of operations. The remaining $0.9 million was expensed during the year ended December 31, 2021 and as such there was no expense for the three or six months ended June 30, 2022.

[3] Goodwill consists largely of the acquired workforce, expected cost synergies and economies of scale resulting from the Acquisition.

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Note 4 - Acquisition - Unaudited Pro Forma Financial Information (Details) - Honeywell International, Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2022		Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Net sales	$ 162,039		$ 131,602	$ 329,063	$ 257,947
Net income	$ 2,548	[1]	$ 7,400	$ 10,730	$ 16,144
Diluted earnings per share (in dollars per share)	$ 0.34		$ 0.99	$ 1.45	$ 2.18

[1] The Acquisition-related costs mentioned above are excluded from the unaudited pro forma net income.

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Note 5 - Revenue (Details Textual)	6 Months Ended
	Jun. 30, 2022
Number of Operating Segments	3
Maximum [Member]
Contract with Customer, Period (Year)	1 year
Capitalized Contract Cost, Amortization Period (Year)	1 year

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Note 5 - Revenue - Contract Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Contract liabilities	$ 0	$ 1,062	$ 2,017

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Note 5 - Revenue - Changes in Contract Liabilities (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Balance	$ 1,062
Non-cancelable contracts with customers entered into during the period	0
Revenue recognized related to non-cancelable contracts with customers during the period	(1,062)
Balance	$ 0

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Note 6 - Trade Receivables (Details Textual) - USD ($)	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Accounts Receivable, Allowance for Credit Loss, Current	$ 2,618,000	$ 613,000	$ 1,062,000
Contract with Customer, Refund Liability, Current	$ 1,309,000	$ 1,670,000	$ 2,057,000

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Note 7 - Inventory (Details Textual) - USD ($)	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Contract with Customer, Returns Reserve Asset	$ 729,000	$ 902,000	$ 955,000

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Note 7 - Inventories - Schedule of Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Raw materials	$ 22,214	$ 20,933	$ 22,105
Work-in-process	1,793	1,316	1,668
Finished goods	263,810	210,215	119,743
Total	$ 287,817	$ 232,464	$ 143,516

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Note 8 - Goodwill (Details Textual) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)
Business Acquisition, Goodwill, Expected Tax Deductible Amount	$ 49,400
Number of Reportable Segments	3
Goodwill, Ending Balance	$ 50,246	$ 50,641	$ 48,375
Contract Manufacturing [Member]
Goodwill, Ending Balance	0
Wholesale [Member]
Goodwill, Ending Balance	25,400
Retail [Member]
Goodwill, Ending Balance	$ 24,800

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Note 9 - Identified Intangible Assets (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022		Jun. 30, 2021		Mar. 15, 2021
Patents [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	7 years 3 months 18 days
Trademarks [Member] | Wholesale [Member]
Indefinite-lived Intangible Assets (Excluding Goodwill), Ending Balance	$ 72,579	[1]	$ 72,592	[1]	$ 45,400
Trademarks [Member] | Retail [Member]
Indefinite-lived Intangible Assets (Excluding Goodwill), Ending Balance	$ 9,220	[2]	$ 9,220	[2]	$ 6,300

[1] $45.4 million of the total resulted from our Acquisition that occurred on March 15, 2021.

[2] $6.3 million of the total resulted from our Acquisition that occurred on March 15, 2021.

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Note 9 - Identified Intangible Assets - Identified Intangible Assets (Details) - USD ($) $ in Thousands		Jun. 30, 2022		Dec. 31, 2021	Jun. 30, 2021		Mar. 15, 2021
Accumulated amortization		$ 4,854		$ 3,279	$ 1,703
Total Intangibles		129,594			129,607
Carrying amount		124,740		126,315	127,904
Wholesale (1)				129,594
Wholesale (1)		124,740		126,315	127,904
Patents [Member]
Gross amount, finite-lived intangible assets		895			895
Accumulated amortization		815		804	791
Carrying amount, finite-lived intangible assets		80			104
Wholesale (1)				895
Wholesale (1)				91
Customer Relationships [Member]
Gross amount, finite-lived intangible assets	[1]	46,900
Accumulated amortization	[1]	4,039		2,475	912
Carrying amount, finite-lived intangible assets	[1]	42,861			45,988
Wholesale (1)	[1]			46,900	46,900
Wholesale (1)	[1]			44,425
Trademarks [Member] | Wholesale [Member]
Indefinite-lived Intangible Assets (Excluding Goodwill), Ending Balance		72,579	[2]		72,592	[2]	$ 45,400
Accumulated amortization	[2]			0
Wholesale (1)	[2]			72,579
Wholesale (1)	[2]			72,579
Trademarks [Member] | Retail [Member]
Indefinite-lived Intangible Assets (Excluding Goodwill), Ending Balance		$ 9,220	[3]		$ 9,220	[3]	$ 6,300
Accumulated amortization	[3]			0
Wholesale (1)	[3]			9,220
Wholesale (1)	[3]			$ 9,220

[1] Resulted from our Acquisition that occurred on March 15, 2021.

[2] $45.4 million of the total resulted from our Acquisition that occurred on March 15, 2021.

[3] $6.3 million of the total resulted from our Acquisition that occurred on March 15, 2021.

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Note 9 - Identified Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Amortization expense	$ 788	$ 918	$ 1,575	$ 925

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Note 9 - Identified Intangible Assets - Expected Amortization Expense (Details) $ in Thousands	Jun. 30, 2022 USD ($)
2022	$ 1,574
2023	3,147
2024	3,143
2025	3,139
2026	3,136
2027	3,134
2028+	$ 25,668

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Note 10 - Long-term Debt (Details Textual) - USD ($)			1 Months Ended		6 Months Ended		12 Months Ended
	Jul. 01, 2021	Mar. 15, 2021	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021	Jan. 01, 2023	Dec. 31, 2022
Term Facility [Member]
Debt Instrument, Face Amount		$ 130,000,000
Debt Instrument, LIBOR Floor		1.00%
Term Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate		7.00%		7.00%
Debt Instrument, Basis Spread on Variable Rate if Total Average Leverage Ratio is Greater or Equal to 3.25	7.00%
Debt Instrument, Basis Spread on Variable Rate if Total Average Leverage Ratio is Less Than 3.25	6.50%
Term Facility [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate if Total Average Leverage Ratio is Greater or Equal to 3.25	6.00%
Debt Instrument, Basis Spread on Variable Rate if Total Average Leverage Ratio is Less Than 3.25	5.50%
Term Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Debt Instrument, Basis Spread on Variable Rate			7.50%
The ABL Facility [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 150,000,000	$ 25,000,000	$ 175,000,000	$ 25,000,000		$ 175,000,000
Line of Credit Facility, Additional Borrowing Capacity upon Request		50,000,000
Line of Credit Facility, Remaining Borrowing Capacity			$ 38,200,000		$ 38,200,000
Debt Instrument, Collateral Fee		75,000
The ABL Facility [Member] | Revolving Credit Facility [Member] | Forecast [Member]
Line of Credit Facility, Maximum Borrowing Capacity								$ 175,000,000	$ 200,000,000
The ABL Facility [Member] | Letter of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 5,000,000
The ABL Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate					3.88%	1.63%	1.88%
The ABL Facility [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate					5.00%	3.25%	3.50%

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Note 10 - Long-term Debt - Debt Facility Information (Details)			6 Months Ended		12 Months Ended
		Mar. 15, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
London Interbank Offered Rate (LIBOR) [Member] | The ABL Facility [Member]
Variable rate			3.88%	1.63%	1.88%
Commitments Above 66.7% [Member] | Base Rate [Member] | The ABL Facility [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	0.00%
Commitments Above 66.7% [Member] | Base Rate [Member] | The ABL Facility FILO Borrowings [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	0.50%
Commitments Above 66.7% [Member] | London Interbank Offered Rate (LIBOR) [Member] | The ABL Facility [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	1.25%
Commitments Above 66.7% [Member] | London Interbank Offered Rate (LIBOR) [Member] | The ABL Facility FILO Borrowings [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	1.75%
Commitmeents Between 33.3% and 66.7% [Member] | Base Rate [Member] | The ABL Facility [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	0.00%
Commitmeents Between 33.3% and 66.7% [Member] | Base Rate [Member] | The ABL Facility FILO Borrowings [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	0.50%
Commitmeents Between 33.3% and 66.7% [Member] | London Interbank Offered Rate (LIBOR) [Member] | The ABL Facility [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	1.50%
Commitmeents Between 33.3% and 66.7% [Member] | London Interbank Offered Rate (LIBOR) [Member] | The ABL Facility FILO Borrowings [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	2.00%
Commitments Below 33.3% [Member] | Base Rate [Member] | The ABL Facility [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	0.25%
Commitments Below 33.3% [Member] | Base Rate [Member] | The ABL Facility FILO Borrowings [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	0.75%
Commitments Below 33.3% [Member] | London Interbank Offered Rate (LIBOR) [Member] | The ABL Facility [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	1.75%
Commitments Below 33.3% [Member] | London Interbank Offered Rate (LIBOR) [Member] | The ABL Facility FILO Borrowings [Member] | Revolving Credit Facility [Member]
Variable rate	[1]	2.25%

[1] Until June 30, 2021, Tier II applied.

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Note 10 - Long-term Debt - Current and Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Jun. 30, 2021
Debt	$ 287,779	$ 273,635	$ 191,388
Less: Unamortized debt issuance costs	(3,164)	(3,591)	(4,017)
Total debt, net of debt issuance costs	284,615	270,044	187,371
Less: Debt maturing within one year	(3,250)	(3,250)	(3,250)
Long-term debt	281,365	266,794	184,121
Term Facility [Member]
Debt	125,938	127,563	129,188
The ABL Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt	155,726	140,000	40,000
The ABL Facility [Member] | Prime Rate [Member]
Debt	$ 6,115	$ 6,072	$ 22,200

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Note 10 - Long-term Debt - Current and Long-term Debt (Details) (Parentheticals)		1 Months Ended	6 Months Ended		12 Months Ended
	Mar. 15, 2021	Dec. 31, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Term Facility [Member]
Interest rate		8.00%	9.06%	8.00%	8.00%
Term Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Variable rate	7.00%	7.00%
The ABL Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Variable rate			3.88%	1.63%	1.88%
The ABL Facility [Member] | Prime Rate [Member]
Variable rate			5.00%	3.25%	3.50%

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Note 11 - Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense, Total	$ 0	$ 0	$ 0	$ 0
Unrecognized Tax Benefits, Ending Balance	$ 0		$ 0

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Note 11 - Taxes - Tax Examinations (Details)	6 Months Ended
	Jun. 30, 2022
Domestic Tax Authority [Member]
Open tax year	2018
State and Local Jurisdiction [Member]
Open tax year	2017
Foreign Tax Authority [Member] | Departamento de Hacienda de Puerto Rico [Member]
Open tax year	2017
Foreign Tax Authority [Member] | Canada Revenue Agency [Member]
Open tax year	2018
Foreign Tax Authority [Member] | State Administration of Taxation, China [Member]
Open tax year	2019
Foreign Tax Authority [Member] | Mexican Tax Authority [Member]
Open tax year	2021
Foreign Tax Authority [Member] | United Kingdom Tax Authority [Member]
Open tax year	2021
Foreign Tax Authority [Member] | Australian Taxation Office [Member]
Open tax year	2021

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Note 11 - Taxes - Effective Tax Rate (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Effective Tax Rate	27.70%	23.00%	21.80%	23.00%

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Note 12 - Earnings Per Share - Basic and Diluted Income Per Common Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Basic (in shares)	7,313	7,283	7,310	7,271
Dilutive stock options (in shares)	76	156	90	131
Diluted - weighted average shares outstanding (in shares)	7,389	7,439	7,400	7,402
Anti-dilutive securities (in shares)	104	25	299	25

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Note 13 - Supplemental Cash Flow Information - Supplemental Cash Flow (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Interest paid	$ 4,566	$ 1,625
Federal, state, and local income taxes paid, net	4,047	5,771
Change in contract receivables, net	1,062	3,153
Change in contract liabilities, net	(1,062)	(3,565)
Property, plant, and equipment purchases in accounts payable	(2,073)	855
Working capital true-up related to acquired business	$ 0	$ 5,835

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Note 14 - Segment Information (Details Textual)	6 Months Ended
	Jun. 30, 2022
Number of Reportable Segments	3

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Note 14 - Segment Information - Summary of Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
NET SALES	$ 162,039	$ 131,602	$ 329,063	$ 219,268
GROSS MARGIN	53,751	49,154	116,577	84,292
Wholesale [Member]
NET SALES	131,155	101,142	265,116	160,261
GROSS MARGIN	40,509	36,291	88,768	58,530
Retail [Member]
NET SALES	26,015	22,344	54,641	46,328
GROSS MARGIN	12,730	11,094	26,578	22,643
Contract Manufacturing [Member]
NET SALES	4,869	8,116	9,306	12,679
GROSS MARGIN	$ 512	$ 1,769	$ 1,231	$ 3,119

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Note 15 - Gain Contingency (Details Textual) $ in Millions	Jun. 30, 2022 USD ($)
Overpaid Duties [Member]
Gain Contingency, Unrecorded Amount	$ 6.8

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Note 16 Restructuring Changes (Details Textual) $ in Millions	1 Months Ended
	Jun. 30, 2022 USD ($)
Restructuring Costs, Total	$ 1.2

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Note 16 - Restructuring Changes - Restructuring Activities (Details) - Employee Severance [Member] $ in Thousands	3 Months Ended
	Jun. 30, 2022 USD ($)
Accrued expenses	$ 0
Restructuring charges	1,201
Cash payments	(100)
Accrued expenses	$ 1,101