Rocky Brands, Inc. Announces First Quarter 2013 Results

  Rocky Brands, Inc. Announces First Quarter 2013 Results

                  Earnings Per Share Increased 20% to $0.12

                  Funded Debt Decreased 6% to $20.3 Million

Business Wire

NELSONVILLE, Ohio -- April 23, 2013

Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial results for its
first quarter ended March 31, 2013.

The Company reported first quarter net income of $0.9 million, or $0.12 per
diluted share compared with net income of $0.7 million, or $0.10 per diluted
share in the first quarter of 2012. First quarter 2013 net sales were $53.7
million versus net sales of $53.3 million a year ago.

David Sharp, President and Chief Executive Officer, commented, “The year is
off to a solid start highlighted by improvements in gross margin and net
income. Sales continue to be driven by Durango as the brand’s western and
lifestyle collections collectively were up 40% in the first quarter. In
addition, increased Military sales combined with the initial shipments of our
new private label program helped to offset softness in our work and commercial
military categories. We are cautiously optimistic that we can generate
improved top-line performance as the year progresses, which along with
enhanced gross margins should result in a meaningful increase in annual
profitability.”

First Quarter Review

Net sales for the first quarter were $53.7 million compared to $53.3 million a
year ago. Wholesale sales for the first quarter were $42.0 million compared to
$42.4 million for the same period in 2012. Retail sales for the first quarter
were $10.8 million compared to $10.5 million for the same period last year
with the increase driven by a significant gain in our business-to-consumer
ecommerce sales. Military sales for the first quarter were $0.9 million
compared to $0.4 million in the first quarter of 2012.

Gross margin in the first quarter of 2013 was $18.7 million, or 34.8% of
sales, compared to $18.0 million, or 33.8% of sales, for the same period last
year. The 100 basis point increase was driven primarily by improved
manufacturing efficiencies.

Selling, general and administrative (SG&A) expenses were $17.2 million, or
32.0% of net sales, for the first quarter of 2013 compared to $16.7 million,
or 31.4% of net sales, a year ago. The increase in SG&A was due to higher
freight expense primarily related to the increase in business-to-consumer
ecommerce sales compared with a year ago.

Income from operations was $1.5 million, or 2.8% of net sales, compared to
$1.3 million, or 2.4% of net sales.

The Company’s funded debt decreased 5.9% to $20.3 million at March 31, 2013
versus $21.5 million at March 31, 2012.

Inventory increased 6.5% to $68.3 million at March 31, 2013 compared with
$64.1 million on the same date a year ago.

Conference Call Information

The Company’s conference call to review first quarter fiscal 2013 results will
be broadcast live over the internet today, Tuesday, April 23, 2013 at 4:30 pm
Eastern Time. The broadcast will be hosted at http://www.rockybrands.com.

About Rocky Brands, Inc.

Rocky Brands, Inc. is a leading designer, manufacturer and marketer of premium
quality footwear and apparel marketed under a portfolio of well recognized
brand names including Rocky®, Georgia Boot®, Durango® and Lehigh® and the
licensed brands Michelin® and Mossy Oak®. Rocky Brands is proud to supply
footwear to the United States military. For more information, visit
www.RockyBrands.com.

Safe Harbor Language

This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities and Exchange Act of 1934, as amended, which are intended
to be covered by the safe harbors created thereby. Those statements include,
but may not be limited to, all statements regarding intent, beliefs,
expectations, projections, forecasts, and plans of the Company and its
management, and include statements in this press release regarding future
profitability (paragraph 3). 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, 2012 (filed March 4, 2013 and
amended on March 5, 2013). 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.

                                                         
Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets
                                                                
                       March 31, 2013     December 31, 2012     March 31, 2012
                       Unaudited          Audited               Unaudited
ASSETS:
                                                                
CURRENT ASSETS:
Cash and cash          $  1,865,887       $   4,022,579         $  2,424,864
equivalents
Trade receivables         42,329,436          44,555,057           38,587,112
– net
Other receivables         461,297             575,984              783,349
Inventories               68,258,101          67,196,245           64,113,346
Income tax                1,077,092           -                    947,575
receivable
Deferred income           1,252,030           1,252,030            1,154,040
taxes
Prepaid expenses         2,903,410          2,127,726           2,842,105
Total current             118,147,253         119,729,621          110,852,391
assets
FIXED ASSETS – net        24,465,470          24,252,465           24,572,535
IDENTIFIED                30,490,800          30,498,802           30,498,545
INTANGIBLES
OTHER ASSETS             328,242            363,527             468,692
TOTAL ASSETS           $  173,431,765     $   174,844,415       $  166,392,163
                                                                
                                                                
LIABILITIES AND
SHAREHOLDERS'
EQUITY:
                                                                
CURRENT
LIABILITIES:
Accounts payable       $  11,426,322      $   9,930,518         $  12,643,640
Accrued expenses:
Taxes - other             633,200             704,064              481,847
Income tax payable        -                   335,210              -
Other                    3,018,513          3,324,668           2,775,396
Total current             15,078,035          14,294,460           15,900,883
liabilities
LONG TERM DEBT            20,252,298          23,461,340           21,512,650
DEFERRED INCOME           11,148,333          11,148,333           10,987,395
TAXES
DEFERRED                 255,906            303,406             488,437
LIABILITIES
TOTAL LIABILITIES         46,734,572          49,207,539           48,889,365
SHAREHOLDERS'
EQUITY:
Common stock, no
par value;
25,000,000 shares
authorized; issued
and outstanding
March 31, 2013 -
7,516,448;
December 31, 2012
-
7,503,568; March
31, 2012 -             69,862,770         69,694,770            69,694,770
7,503,568
Retained earnings        56,834,423         55,942,106          47,808,028
                                                                
Total
shareholders'            126,697,193        125,636,876         117,502,798
equity
TOTAL LIABILITIES
AND SHAREHOLDERS'      $  173,431,765     $   174,844,415       $  166,392,163
EQUITY
                                                                   

                                               
Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations
                                                    
                                 Three Months Ended
                                 March 31,
                                  2013             2012       
                                 Unaudited          Unaudited
                                                                 
NET SALES                        $ 53,715,476       $ 53,325,918
                                                    
COST OF GOODS SOLD                35,044,706       35,303,837 
                                                    
GROSS MARGIN                       18,670,770         18,022,081
                                                    
OPERATING EXPENSES
                                                    
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES           17,164,182       16,742,058 
                                                    
INCOME FROM OPERATIONS             1,506,588          1,280,023
                                                    
OTHER INCOME AND (EXPENSES):
Interest expense                   (129,557   )       (144,347   )
Other – net                       (4,935     )      (8,989     )
Total other - net                  (134,492   )       (153,336   )
                                                    
INCOME BEFORE INCOME TAXES         1,372,096          1,126,687
                                                    
INCOME TAX EXPENSE                480,000          406,000    
                                                    
NET INCOME                       $ 892,096         $ 720,687    
                                                    
INCOME PER SHARE
Basic                            $ 0.12             $ 0.10
Diluted                          $ 0.12             $ 0.10
                                                    
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
Basic                             7,516,162        7,503,270  
Diluted                           7,516,162        7,503,270  

Contact:

Rocky Brands, Inc.
Jim McDonald, 740-753-1951
Chief Financial Officer
or
Investor Relations:
ICR, Inc.
Brendon Frey, 203-682-8200