Rocky Brands(RCKY) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter net sales increased 1.7% to $128.1 million compared to $126.0 million in Q4 2023, or 8.8% after excluding non-recurring sales[5] - Full year 2024 net sales decreased 1.7% to $453.8 million compared to $461.8 million in 2023, but increased 5.3% when excluding non-recurring sales[13] - Net sales for Q4 2024 were $128,054,000, a slight increase of 0.87% compared to $125,952,000 in Q4 2023[31] - Retail segment sales for Q4 increased 15.3% to $43.6 million compared to $37.8 million in Q4 2023[5] - Contract Manufacturing segment sales increased 72.2% to $13.6 million compared to $7.9 million in 2023[13] Profitability - Adjusted net income for Q4 2024 rose 22.7% to $8.9 million, or $1.19 per diluted share, compared to $7.3 million, or $0.98 per diluted share in Q4 2023[12] - Net income for Q4 2024 was $4,801,000, a decrease of 28.4% from $6,712,000 in Q4 2023[31] - The company reported a basic income per share of $0.64 for Q4 2024, down from $0.91 in Q4 2023[31] Expenses and Margins - Fourth quarter gross margin improved by 120 basis points to 41.5% of net sales, up from 40.3% in the same period last year[6] - Operating expenses for Q4 2024 were $44.7 million, or 34.9% of net sales, compared to $36.0 million, or 28.6% of net sales in Q4 2023[8] - Operating expenses increased to $44,674,000 in Q4 2024, up 24.1% from $35,993,000 in Q4 2023[31] Debt and Liabilities - Total debt decreased by $44.4 million or 25.7% year-over-year to $128.7 million as of December 31, 2024[7] - Total current assets decreased to $246,439,000 as of December 31, 2024, down from $258,173,000 in 2023[29] - Total liabilities decreased to $225,076,000 as of December 31, 2024, compared to $255,830,000 in 2023[29] - Interest expense for 2024 decreased to $17.0 million from $21.2 million in 2023, driven by lower interest rates and reduced debt levels[17] Shareholder Actions - The company announced a new share repurchase program of up to $7.5 million of its outstanding common stock[23] Non-GAAP Measures - Excluded returns related to a supplier dispute for calculating non-GAAP measures, as these returns were inconsistent in size with normal business operations[36] - Supplier dispute inventory adjustment excluded from cost of goods sold for non-GAAP measures, facilitating evaluation of current operating performance[36] - Trademark impairment costs excluded from non-GAAP measures, as they do not reflect current operating performance[36] - Amortization of acquisition-related intangible assets excluded for non-GAAP measures, due to inconsistency in size and impact from acquisition valuation[36] - Costs associated with the closure of the Rock Island manufacturing facility excluded from non-GAAP measures, as they do not reflect current operating performance[37] - Restructuring costs related to headcount reductions excluded from non-GAAP measures, facilitating evaluation of current operations[37] - Term debt extinguishment costs excluded from non-GAAP measures, as they are one-time costs not reflecting current operating performance[37] - Gain on the sale of the brand Servus excluded from non-GAAP measures, as it does not accurately reflect current operating performance[37] Future Outlook - The company expressed optimism about carrying fourth quarter momentum into 2025 and investing in growth for enhanced earnings[27]