Rocky Brands Outlines Shareholder Value Creation Efforts
August 17 2016 - 4:05PM
Business Wire
Rocky Brands, Inc. (NASDAQ:RCKY) today provided an overview of
the steps it is taking, in conjunction with third-party advisors,
to maximize profitability, drive long-term revenue growth and
maximize shareholder value. This range of activities include, among
others, reducing expenses, reorganizing and refocusing its sales
efforts, and increasing operating efficiencies.
Management and the Board of Directors are in agreement to pursue
operational and cost efficiencies. To that end, the Company has
recently reduced its U.S. work force, which is expected to result
in approximately $3.0 million in reduced annualized operating
expenses once the plan is fully implemented.
Similar to many of its direct competitors, including the North
American operations of the Heritage Group of Wolverine Worldwide
and Timberland Pro Group of VF Corporation, the Company’s net sales
in the first half of 2016 were affected by unusually warm weather,
retailer strategies to lower their inventory levels, increased
ecommerce sales, volatility in the oil and gas markets, and lower
consumer spending for soft goods generally, including footwear. To
that end, the Company is shifting more resources to support its
lifestyle segment growth prospects, which it believes will help
reduce its dependence on optimal weather, resulting in improved
profitability and greater shareholder value over the long-term. The
Company’s profitability in the first half of 2016 was also impacted
by additional costs to significantly increase production of
contract military boots at its Puerto Rico factory. Management and
the Board of Directors have determined that making continued
strategic investments in the Company’s internal manufacturing
capabilities positions the Company to capitalize on the current
strong demand for military footwear.
“Our total focus at this time is on maximizing earnings and
laying the groundwork for more consistent profitability in future
years,” said David Sharp, President and Chief Executive Officer.
“While unseasonal weather and a soft retail environment have
created headwinds for our core boot business along with many of our
industry peers, we remain confident that our ongoing efforts to
reduce our dependence on optimal weather and improve operational
efficiencies will help to boost top and bottom line performance.
Following an initial investment in additional labor and training in
our Puerto Rico facility which has temporarily pressured margins,
we are now well positioned to fulfill the triple digit increase in
contracted military orders we have already received for 2016. These
efforts should contribute to more consistent growth and greater
shareholder value in the years ahead.”
Mike Brooks, Chairman of the Board, added, “The Board has
confidence in management’s ability to return the Company to
profitability. The Board is always evaluating the best means by
which to help grow the business and enhance long-term value for our
shareholders. Part of this process will involve a thoughtful search
process to identify potential director candidates who could bring
additional industry expertise and experience to our Board, as well
as focusing our investments on the growth prospects with the
highest possible returns.”
In addition to proactively addressing structural and operational
improvements, the Company plans to continue to return capital to
shareholders through its quarterly dividend of $0.11 per share, or
approximately $3.3 million annually, and its $7.5 million share
buyback program authorized by the Board in March 2016 and in effect
through February 2017. The Board of Directors believes that the
shares are undervalued and that the repurchase of shares at this
time is in the long-term interest of all shareholders. The company
to date has repurchased 106,171 shares for $1,236,000 under the
share repurchase authorization.
About Rocky Brands, Inc.
Rocky Brands, Inc. is a leading designer, manufacturer and
marketer of premium quality footwear and apparel marketed under a
portfolio of well recognized brand names including Rocky®, Georgia
Boot®, Durango®, Lehigh®, Creative Recreation®, and the licensed
brand Michelin®.
Safe Harbor Language
This press release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities and Exchange Act of
1934, as amended, which are intended to be covered by the safe
harbors created thereby. Those statements include, but may not be
limited to, all statements regarding intent, beliefs, expectations,
projections, forecasts, and plans of the Company and its
management. These forward-looking statements involve numerous risks
and uncertainties, including, without limitation, the various risks
inherent in the Company’s business as set forth in periodic reports
filed with the Securities and Exchange Commission, including the
Company’s annual report on Form 10-K for the year ended December
31, 2015 (filed March 3, 2016) and quarterly reports on Form 10-Q
for the periods ended March 31, 2016 (filed April 29, 2016) and
June 30, 2016 (filed July 28, 2016). One or more of these factors
have affected historical results, and could in the future affect
the Company’s businesses and financial results in future periods
and could cause actual results to differ materially from plans and
projections. Therefore there can be no assurance that the
forward-looking statements included in this press release will
prove to be accurate. In light of the significant uncertainties
inherent in the forward-looking statements included herein, the
Company, or any other person should not regard the inclusion of
such information as a representation that the objectives and plans
of the Company will be achieved. All forward-looking statements
made in this press release are based on information presently
available to the management of the Company. The Company assumes no
obligation to update any forward-looking statements.
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version on businesswire.com: http://www.businesswire.com/news/home/20160817006194/en/
Rocky Brands, Inc.Jim McDonald, 740-753-1951Chief
Financial OfficerorInvestor Relations:ICR, Inc.Brendon Frey,
203-682-8200
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