Rocky Brands(RCKY) - 2024 Q2 - Quarterly Results

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]