Financial Data and Key Metrics Changes - The company reported third-quarter sales of $114.5 million, down 2.4% year-over-year, with wholesale sales down 9.7% to $84 million, retail sales up 11.8% to $26.8 million, and contract manufacturing sales at $3.6 million, up from $0.2 million last year [28] - Gross profit was $43.6 million or 38.1% of sales, compared to $46.5 million or 37% of sales in the same period last year, reflecting a 110 basis point increase in gross margin [29] - Net income for the third quarter was $5.3 million or $0.70 per diluted share, down from $6.8 million or $0.93 per diluted share in the third quarter of 2023 [34] Business Line Data and Key Metrics Changes - Durango saw double-digit growth, with strong bookings across key accounts and farm and ranch partners, setting up for a strong finish to the year [10] - XTRATUF maintained strong momentum, driven by new product introductions and collaborations, with significant sell-through rates for new collections [12][13] - Muck experienced headwinds due to unfavorable weather, but at-once orders trended higher compared to a year ago, indicating brand resilience [15] - Georgia Boots faced challenges from changes in order size and frequency, but recent product adjustments have begun to drive increased retail volumes [17] - Rocky work footwear was flat year-over-year, with improved results from independent retailers and branded websites [19] Market Data and Key Metrics Changes - Retail sales showed notable strength, particularly for XTRATUF and Durango, with double-digit revenue gains [23] - The B2B Lehigh business saw double-digit sales growth, attributed to a realignment of the sales organization and the addition of over 200 new accounts [24] Company Strategy and Development Direction - The company is focused on adding manufacturing and sourcing capacity to meet future demand, with expectations for a strong spring season in 2025 [9] - Strategic investments are being made in Durango and XTRATUF to capitalize on their momentum, while also leaning into value propositions for other brands to drive higher volumes [25] - The company aims to improve overall top-line performance throughout 2025, with a focus on sustainable and profitable growth [37] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the near-term macroeconomic environment but remains optimistic about growth prospects heading into 2025 [8] - The company anticipates full-year sales to be at the low end of the initial range of $450 million to $460 million, with gross margins expected to be similar to 2023 [36][37] Other Important Information - The company reported a decrease in total debt by 13.2% from December 31, and a decrease of 29.7% since September 30 last year [35] - Cash and cash equivalents stood at $3.7 million at the end of the third quarter, down from $4.5 million at the end of 2023 [35] Q&A Session Summary Question: Can you elaborate on the delays and inventory shortages? - Management indicated that demand for XTRATUF outpaced forecasts, leading to inventory shortages, and they are working to increase capacity to meet demand [41][42] Question: How does the company view its promotional strategy in light of cautious consumer spending? - Management noted that they were less promotional this year compared to last year, as inventory levels improved and they did not feel the need to drive promotions [43][44][46] Question: What are the updated thoughts on Wholesale growth for the second half? - Management expects retail sales to grow slightly more than initially anticipated, while wholesale business is targeted to be relatively flat [50][53] Question: What is the current visibility for brands trending well and correcting issues for underperforming brands? - Management expressed good visibility for Q1, particularly for XTRATUF and Durango, and plans to continue investing in underperforming brands [55][56] Question: What are the expectations for inventory and debt levels by year-end? - Management anticipates inventory will be down seven figures but not as much as initially expected due to increased demand, and they expect to pay down an additional $10 million to $12 million in debt [61][62]

Financial Performance - Net sales for Q3 2024 decreased 8.8% to $114.6 million compared to $125.6 million in Q3 2023, or 2.4% excluding non-recurring sales[2] - Operating income was $10.1 million, down from $14.3 million in the same quarter last year[6] - Net income for Q3 2024 was $5.3 million, or $0.70 per diluted share, compared to $6.8 million, or $0.93 per diluted share in Q3 2023[8] - Adjusted net income was $5.8 million, or $0.77 per diluted share, down from $8.0 million, or $1.09 per diluted share in the prior year[8] - Net sales for the three months ended September 30, 2024, were $114,554,000, a decrease of 8.5% compared to $125,614,000 for the same period in 2023[15] - Income from operations for the three months ended September 30, 2024, was $10,071,000, a decline of 29.0% from $14,279,000 in the prior year[15] - Net income for the three months ended September 30, 2024, was $5,279,000, down 22.7% from $6,827,000 in the same period of 2023[15] - Adjusted net income for the three months ended September 30, 2024, was $5,809,000, compared to $8,048,000 in the same period last year, a decrease of 27.5%[16] - Basic earnings per share for the three months ended September 30, 2024, were $0.71, down from $0.93 in the same period of 2023, a decline of 23.7%[15] Margins and Expenses - Gross margin increased by 110 basis points to 38.1% in Q3 2024 from 37.0% in Q3 2023[4] - Operating expenses rose to $33.6 million, or 29.3% of net sales, compared to $32.3 million, or 25.7% of net sales in the prior year[5] - Gross margin for the three months ended September 30, 2024, was $43,646,000, representing a gross margin percentage of 38.1%, down from 37.1% in the prior year[15] - Operating expenses increased to $33,575,000 for the three months ended September 30, 2024, compared to $32,259,000 in the same period last year, reflecting a rise of 4.1%[15] Debt and Inventory - Inventories decreased by 11.8% year-over-year to $171.8 million as of September 30, 2024[9] - Total debt decreased by 29.7% year-over-year to $150.3 million as of September 30, 2024[10] - Interest expense decreased to $3.3 million from $5.8 million a year ago due to lower debt levels and interest rates[7] Adjustments and Non-GAAP Measures - The company highlighted the impact of supplier disputes on net sales, with adjusted net sales reflecting a significant adjustment from reported figures[16] - The company excluded costs related to the closure of the Rock Island manufacturing facility for non-GAAP measures, as these costs did not reflect current operating performance[19] - Supplier dispute inventory adjustments were excluded from non-GAAP measures as they were unique to a resolved dispute with a manufacturing supplier[19] - Returns related to supplier disputes were excluded from certain non-GAAP measures to facilitate a useful evaluation of current operating performance[19] - The company emphasized that adjustments for non-GAAP measures provide investors with additional means to evaluate net sales trends and expense trends[19] - The adjustments made for non-GAAP measures were aimed at facilitating a useful evaluation of current operating performance and comparisons to past results[19] - The company highlighted that the adjustments for amortization charges are significantly impacted by the valuation of acquisitions, thus providing a clearer picture of operating performance[19] Other Notable Events - The company reported a gain on the sale of the Servus brand, which included the disposal of non-financial assets and related expenses[21] - Restructuring costs were incurred due to severance expenses associated with headcount reductions following the integration of the acquired performance and lifestyle footwear business of Honeywell International Inc. in 2022 and the sale of Servus in 2023[19] - Term debt extinguishment costs were recorded during Q2 2024, including prepayment penalties and accelerated amortization of deferred financing fees[20] - The company reported an adjusted operating income of $10,763,000 for the three months ended September 30, 2024, down from $15,822,000 in the same period last year, a decrease of 32.5%[16] - The weighted average number of diluted shares outstanding for the three months ended September 30, 2024, was 7,503,000, compared to 7,375,000 in the prior year[15]

Financial Performance - Net sales for Q2 2024 decreased by 1.6% to $98.3 million compared to $99.8 million in Q2 2023[65] - Operating income for Q2 2024 increased by 104.7% to $4.5 million from $2.2 million in Q2 2023[65] - For the first half of 2024, net sales increased by 0.4% to $211.2 million compared to $210.3 million in the first half of 2023[66] - Income from operations for the first half of 2024 was $12.5 million, or 5.9% of net sales, compared to $6.4 million, or 3.0% of net sales in the same period last year[73] - Total net sales for the six months ended June 30, 2024, were $211.2 million, a slight increase of 0.4% compared to $210.3 million for the same period in 2023[81] Debt and Expenses - Total debt decreased by 31.3% to $152.4 million as of June 30, 2024[65] - Operating expenses for Q2 2024 were $33.5 million, or 34.1% of net sales, down from $35.4 million, or 35.4% of net sales in Q2 2023[71] - Operating expenses decreased by 7.0% to $69.7 million, representing 33.0% of net sales, down from 35.7% in the same period last year[85] - Interest expense increased by 4.8% to $10.8 million, influenced by a term loan extinguishment charge and lower debt levels compared to the previous year[86] Sales Breakdown - Wholesale net sales decreased by 2.3% to $148.1 million for the six months ended June 30, 2024, down from $151.5 million in the prior year, primarily due to the sale of the Servus brand and non-recurring military sales[81][82] - Retail net sales increased by 3.5% to $56.5 million, driven by growth in e-commerce and targeted digital marketing efforts[82] - Contract Manufacturing segment sales increased by 18.7% to $3.9 million in Q2 2024, driven by a new multi-year contract with the U.S. Military[74] - Contract manufacturing net sales surged by 58.5% to $6.6 million, attributed to a multi-year contract with the U.S. Military[82] Margins and Gains - Gross margin for Q2 2024 was $38.0 million, or 38.7% of net sales, compared to $37.6 million, or 37.6% of net sales in Q2 2023[70] - Gross margin for the six months ended June 30, 2024, was $82.2 million, or 38.9% of net sales, compared to $81.3 million, or 38.7% of net sales in the prior year[83] - The company divested the Servus brand in Q1 2023, recording a gain of approximately $1.3 million[63] Cash Flow and Capital Expenditures - Net cash provided by operating activities was $23.9 million for the six months ended June 30, 2024, compared to $19.7 million in the same period of 2023[93] - Capital expenditures for the six months ended June 30, 2024, were $2.4 million, slightly up from $2.3 million in the prior year[89] Tax and Accounting - The effective tax rate for the six months ended June 30, 2024, was 23.4%, up from 20.9% in the prior year, primarily due to a shift in the mix of domestic and foreign earnings[87] - The company has identified critical accounting policies for estimates and assumptions in its Annual Report on Form 10-K for the year ended December 31, 2023[100] - There have been no material changes to the company's market risk as disclosed in Item 7A of the Annual Report on Form 10-K for the year ended December 31, 2023[102] - The company does not assume any obligation to update forward-looking statements, which involve risks and uncertainties[102] Cost-Saving Initiatives - The company implemented cost-saving initiatives in 2023, resulting in reduced operating expenses as a percentage of net sales[71]

Financial Data and Key Metrics Changes - Reported net sales for Q2 2024 were $98.3 million, down 1.6% from $99.8 million in the same period last year [27] - Adjusted net income for Q2 2024 was $1.3 million, or $0.17 per diluted share, compared to breakeven a year ago [21] - Gross profit was $38 million, or 38.7% of net sales, compared to $37.6 million, or 37.6% of sales in the same period last year [48] - Operating expenses were $33.5 million, or 34.1% of net sales, compared to $35.4 million, or 35.4% of net sales last year [28] Business Line Data and Key Metrics Changes - Wholesale sales increased 2.3% to $68.3 million; Retail sales increased 6.1% to $26.1 million; Contract Manufacturing sales were up $3.5 million [19] - Durango and XTRATUF led the way with double-digit year-over-year gains, offsetting softness in other areas [12] - Rocky Outdoor faced challenges due to last year's poor hunting season, but non-hunting footwear showed positive trends [17] Market Data and Key Metrics Changes - The company experienced strong demand across various outdoor verticals, particularly for XTRATUF, which saw a positive reception for new products [14] - The Work category faced pressure primarily from smaller accounts, while key accounts showed better performance [36] Company Strategy and Development Direction - The company is focused on improving its financial profile to reinvest in growth and drive shareholder value, evidenced by higher gross margins and lower operating expenses [6] - A new credit and term facility is projected to generate approximately $4.4 million in annualized interest expense savings starting in 2025 [7] - The company aims to secure new bookings for upcoming product lines while managing inventory effectively [15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half of 2024, highlighting efforts in top-line expansion and expense management [27] - The company anticipates net sales to be toward the high end of the initial range of $450 million to $460 million [30] - Rising ocean freight rates have led to a revision in gross margin expectations for 2024, now expected to be slightly less than last year's adjusted gross margin [30] Other Important Information - The company reported a decrease in total debt by 12% since December 31 and 31.3% since June 30 of last year [50] - Cash and cash equivalents stood at $4.1 million, compared to $4.5 million at the end of 2023 [50] Q&A Session Summary Question: Supply chain status and inventory management - Management noted that sales for Durango and XTRATUF exceeded expectations, but there were challenges with inventory due to supply chain issues [33] - Container prices saw an increase in June but softened in July, prompting cautious margin guidance [34] Question: Pressure on Work brands - The pressure is primarily from smaller accounts, while key accounts are performing better [36] Question: Wholesale growth expectations - Management targets mid-single-digit growth in Wholesale and expects better performance in retail, particularly in e-commerce [57]

Financial Performance - Net sales for the second quarter of 2024 decreased by 1.6% to $98.3 million compared to $99.8 million in the same quarter of 2023, but increased by 6.1% when excluding certain non-recurring sales[2] - Operating income increased by 104.7% to $4.5 million from $2.2 million in the year-ago quarter[5] - The net loss for the second quarter was $1.2 million, or $0.17 per diluted share, compared to a net loss of $2.7 million, or $0.37 per diluted share, in the second quarter of 2023[9] - Adjusted net income for the second quarter of 2024 was $1.3 million, or $0.17 per diluted share, compared to $0.0 million, or $0.00 per diluted share, in the year-ago period[9] - Adjusted operating income for the second quarter was $5.2 million, down from $5.7 million in the same quarter of 2023[29] - The company reported total non-GAAP adjustments of $3.3 million for the quarter[29] Margins and Expenses - Gross margin in the second quarter of 2024 was $38.0 million, or 38.7% of net sales, compared to $37.6 million, or 37.6% of net sales, for the same period last year[7] - Operating expenses were $33.5 million, or 34.1% of net sales, down from $35.4 million, or 35.4% of net sales, in the same period a year ago[3] Assets and Liabilities - Total current assets decreased to $249.2 million as of June 30, 2024, down from $258.2 million at the end of 2023, representing a decline of approximately 3.9%[26] - Total liabilities decreased to $244.1 million as of June 30, 2024, down from $255.8 million at the end of 2023, indicating a reduction of approximately 4.6%[26] - Shareholders' equity increased slightly to $223.8 million as of June 30, 2024, compared to $223.6 million at the end of 2023, showing a marginal growth of about 0.1%[26] - The company reported a decrease in trade receivables to $63.0 million as of June 30, 2024, down from $77.0 million at the end of 2023, a decline of approximately 18.1%[26] Inventory and Debt - Inventories at June 30, 2024, decreased by 20.0% year-over-year[5] - Total debt at June 30, 2024, decreased by 31.3% year-over-year[5] - Total debt decreased by 31.3% year-over-year, amounting to $152.4 million as of June 30, 2024[31] - Inventories increased to $175.0 million as of June 30, 2024, compared to $169.2 million at the end of 2023, reflecting a growth of about 3.4%[26] Strategic Initiatives - The company expects approximately $4.4 million in annualized savings beginning in 2025 due to recent debt refinancing and capital structure simplification[2] - The company is focused on reinvesting in growth and driving increased shareholder value through improved financial profiles[2] - The company completed a debt refinancing in April 2024, resulting in lower debt levels and interest rates[21] - The company incurred restructuring costs related to severance expenses following the integration of the acquired business in 2022[26] Other Financial Metrics - Interest expense for Q2 2024 was $6.1 million, including a $2.6 million one-time term loan extinguishment charge, compared to $5.6 million a year ago[21] - The weighted average shares outstanding for the quarter were 7.429 million, compared to 7.354 million in the same quarter of 2023[29] - The company reported a gain on the sale of the brand Servus, which included the disposal of non-financial assets[18] - The company excluded certain non-GAAP adjustments to facilitate a useful evaluation of current operating performance and comparisons to past results[18]

Despite high interest rates, which hit small-cap stocks harder than their larger brethren, the Russell 2000 index of the market's smallest companies is making its move. Since the end of April, the small-cap benchmark has kept pace with the S&P 500 and has been ahead till last week's dip. Over time, small-cap stocks tend to outperform bigger companies. Including a mix of these upstarts is a good way to juice your portfolio's performance. Because the Russell 2000 has lagged the index of the 500 largest compan ...

Table of Contents 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 March 31, 2024 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) (State or other jurisdiction of incorporation or organization) ...

Rocky Brands, Inc. (NASDAQ:RCKY) Q1 2024 Results Earnings Conference Call April 30, 2023 4:30 PM ET Company Participants Brendon Frey - Investor Relations, ICR, Inc. Jason Brooks - Chairman of the Board and Chief Executive Officer Thomas Robertson - Chief Operating Officer and Chief Financial Officer Conference Call Participants Jonathan Komp - Robert W. Baird Janine Stichter - BTIG Operator Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Rocky Brands First Quarter 2024 E ...

Exhibit 10.1 Execution Version AMENDED AND RESTATED ABL LOAN AND SECURITY AGREEMENT Dated as of April 26, 2024 ROCKY BRANDS, INC., as Parent and as Borrower Agent THE OTHER OBLIGORS PARTY HERETO as Borrowers or Guarantors BANK OF AMERICA, N.A., as Agent BANK OF AMERICA, N.A., as Sole Lead Arranger and Sole Bookrunner TABLE OF CONTENTS | | SECTION 1.DEFINITIONS; RULES OF CONSTRUCTION | 1 | | --- | --- | --- | | 1.1. | Definitions | 1 | | 1.2. | Accounting Terms | 39 | | 1.3. | Uniform Commercial Code | 39 | ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 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 ...