Rocky Brands Inc. continues to march forward, thanks to more business with the military.
Net income at the Nelsonville, Ohio-based firm for the period ended Sept. 30 was $4.7 million, up 68 percent from $2.8 million. Earnings per share increased 26 percent to 63 cents.
Net revenue for the third quarter increased 12 percent to $74.8 million, compared with $66.6 million a year ago. Analysts were looking for 46 cents on revenue of $71.7 million as polled by Yahoo Finance.
“Rocky reported better-than-expected third-quarter results, [so] we are encouraged by [its] performance and believe that the company is poised to report solid fourth-quarter operating results as well,” said Mitch Kummetz, analyst at Robert W. Baird and Co., in a research report.
Military segment sales increased to $4.3 million, from $600,000 in the same period in 2009.
Wholesale revenue also experienced growth, growing 9 percent to $59.4 million, from $54.5 million in the year-ago period. The increase was driven primarily by the work category, said a statement from the firm.
Retail sales, on the other hand, dipped slightly to $11.1 million, from $11.5 million.
“During the third quarter, we continued to experience positive business trends similar to the first six months of 2010 … [including] higher sales levels in both our wholesale and military segments, a 40-basis-point increase in wholesale gross margin and better operating expense leverage,” said Mike Brooks, Rocky’s chairman and CEO.
Rocky recently secured a new credit facility that will reduce its interest expense by about $2 million next year and free up capital to expand its business, Brooks added without providing specifics.
The firm’s cash balance remained unchanged at $4 million. Rocky also reduced its long-term debt to $52.9 million from $82.9 million, as of Sept. 30, 2009.
“The company is now in a stronger financial position, which should lead to significantly lower interest payments next year,” said Kummetz.