rcky20250930

rcky20250930_10q.htm

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 September 30, 2025

☐ 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 organization)		(I.R.S. Employer Identification No.)

39 East Canal Street, Nelsonville, Ohio 45764
(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (740) 753‑9100

Title of class		Trading symbol		Name of exchange on which registered
Common Stock – No Par Value		RCKY		Nasdaq

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in 12b-2 of the Exchange Act.

	☐ Large accelerated filer	☒ Accelerated filer

	☐ Non-accelerated filer	☐ Smaller reporting company

		☐ Emerging growth company

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 7,493,687 shares of the Registrant's Common Stock outstanding on October 31, 2025.

Table of Contents

TABLE OF CONTENTS



		Page
PART I	Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited), December 31, 2024, and September 30, 2024 (Unaudited)	2
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)	3
	Condensed Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited)	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21

PART II	Other Information
Item 1A.	Risk Factors	21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 5.	Other Information	21
Item 6.	Exhibits	22
SIGNATURES		23

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)

(Unaudited)

	September 30,		December 31,		September 30,
	2025		2024		2024
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents	$	3,319	$	3,719	$	3,705
Trade receivables – net		82,564		71,983		77,130
Other receivables		96		1,028		177
Inventories – net		193,613		166,701		171,847
Prepaid expenses		5,658		3,008		5,205
Total current assets		285,250		246,439		258,064
LEASED ASSETS		4,890		6,030		6,705
PROPERTY, PLANT & EQUIPMENT – net		50,533		49,666		50,380
GOODWILL		47,844		47,844		47,844
IDENTIFIED INTANGIBLES – net		103,730		105,823		110,521
OTHER ASSETS		1,767		1,498		1,503
TOTAL ASSETS	$	494,014	$	457,300	$	475,017

LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable	$	63,323	$	58,069	$	63,148
Current portion of long-term debt		8,361		8,361		8,361
Accrued expenses and other liabilities		32,471		23,977		20,845
Total current liabilities		104,155		90,407		92,354
LONG-TERM DEBT		130,684		120,376		141,929
LONG-TERM LEASE		2,183		3,537		4,232
DEFERRED INCOME TAXES		10,044		10,044		7,475
DEFERRED LIABILITIES		851		712		777
TOTAL LIABILITIES		247,917		225,076		246,767
SHAREHOLDERS' EQUITY:
Common stock, no par value;		-		-		-
25,000,000 shares authorized; issued and outstanding September 30, 2025 - 7,488,341; December 31, 2024 - 7,454,465; September 30, 2024 - 7,449,020
Additional paid-in-capital		75,449		73,866		73,537
Retained earnings		170,648		158,358		154,713
Total shareholders' equity		246,097		232,224		228,250
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	494,014	$	457,300	$	475,017

See Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
NET SALES	$	122,540		$	114,554		$	342,260		$	325,718
COST OF GOODS SOLD		73,264			70,908			202,695			199,886
GROSS MARGIN		49,276			43,646			139,565			125,832

OPERATING EXPENSES		37,541			33,575			111,968			103,271

INCOME FROM OPERATIONS		11,735			10,071			27,597			22,561

INTEREST EXPENSE AND OTHER – net		(2,493	)		(3,180	)		(7,367	)		(13,964	)

INCOME BEFORE INCOME TAX EXPENSE		9,242			6,891			20,230			8,597

INCOME TAX EXPENSE		2,030			1,612			4,468			2,011

NET INCOME	$	7,212		$	5,279		$	15,762		$	6,586

INCOME PER SHARE
Basic	$	0.96		$	0.71		$	2.11		$	0.89
Diluted	$	0.96		$	0.70		$	2.10		$	0.88

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

Basic		7,475			7,449			7,465			7,432
Diluted		7,543			7,503			7,511			7,479

See Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity

(In thousands, except per share amounts)

(Unaudited)

	Common Stock and
	Additional Paid-in Capital									Total
	Shares						Retained			Shareholders'
	Outstanding			Amount			Earnings			Equity

BALANCE - December 31, 2023		7,412		$	71,973		$	151,582		$	223,555

NINE MONTHS ENDED SEPTEMBER 30, 2024
Net income							$	2,550		$	2,550
Dividends paid on common stock ($0.155 per share)								(1,149	)		(1,149	)
Stock compensation expense		5		$	339			-			339
BALANCE - March 31, 2024		7,417		$	72,312		$	152,983		$	225,295

Net loss							$	(1,243	)	$	(1,243	)
Dividends paid on common stock ($0.155 per share)								(1,151	)		(1,151	)
Stock issued for options exercised, including tax benefits				$	599			-			599
Stock compensation expense		6			312			-			312
BALANCE - June 30, 2024		7,423		$	73,223		$	150,589		$	223,812

Net income							$	5,279		$	5,279
Dividends paid on common stock ($0.155 per share)								(1,155	)		(1,155	)
Stock compensation expense		26		$	314			-			314
BALANCE - September 30, 2024		7,449		$	73,537		$	154,713		$	228,250

BALANCE - December 31, 2024		7,454		$	73,866		$	158,358		$	232,224

NINE MONTHS ENDED SEPTEMBER 30, 2025
Net income							$	4,941		$	4,941
Dividends paid on common stock ($0.155 per share)								(1,156	)		(1,156	)
Repurchase of common stock		(10	)	$	(201	)		-			(201	)
Stock issued for options exercised, including tax benefits		1			19			-			19
Stock compensation expense		7			386			-			386
BALANCE - March 31, 2025		7,452		$	74,070		$	162,143		$	236,213

Net income							$	3,608		$	3,608
Dividends paid on common stock ($0.155 per share)								(1,156	)		(1,156	)
Stock compensation expense		9		$	400			-			400
BALANCE - June 30, 2025		7,461		$	74,470		$	164,595		$	239,065

Net income							$	7,212		$	7,212
Dividends paid on common stock ($0.155 per share)								(1,159	)		(1,159	)
Stock issued for options exercised, including tax benefits		20		$	561			-			561
Stock compensation expense		7			418			-			418
BALANCE - September 30, 2025		7,488		$	75,449		$	170,648		$	246,097

See Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Rocky Brands, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended
	September 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	15,762		$	6,586
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization		7,329			7,805
Noncash lease expense		2,084			1,943
Stock compensation expense		1,204			965
Provision for bad debts		538			1,172
Amortization of debt issuance costs and loan fees		496			454
Loss on term loan extinguishment		-			1,111
Change in assets and liabilities:
Receivables		(10,186	)		(1,217	)
Contract receivables		-			927
Inventories		(26,912	)		(2,646	)
Other current assets		(2,651	)		(1,843	)
Other assets		(145	)		(131	)
Accounts payable		4,860			12,363
Operating lease liability		(2,139	)		(1,931	)
Accrued and other liabilities		6,175			2,150
Income taxes		2,299			1,591
Contract liabilities		-			(927	)
Net cash (used in) provided by operating activities		(1,286	)		28,372

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(5,709	)		(3,170	)
Proceeds from sale of business		-			1,700
Net cash used in investing activities		(5,709	)		(1,470	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facility		39,187			128,394
Repayments on revolving credit facility		(23,000	)		(118,713	)
Proceeds on term loan		-			50,000
Repayments on term loan		(6,271	)		(82,205	)
Payments of debt issuance costs and loan fees		(229	)		(2,287	)
Proceeds from stock options		580			599
Repurchase of common stock		(201	)		-
Dividends paid on common stock		(3,471	)		(3,455	)
Net cash provided by (used in) financing activities		6,595			(27,667	)

DECREASE IN CASH AND CASH EQUIVALENTS		(400	)		(765	)

CASH AND CASH EQUIVALENTS:
BEGINNING OF PERIOD		3,719			4,470
END OF PERIOD	$	3,319		$	3,705

See Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Rocky Brands, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(in thousands, except per share amounts)

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

We are a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names including The Original Muck Boot Company ("Muck"), Rocky, Georgia Boot, Durango, Lehigh, XTRATUF, Ranger and the licensed brand Michelin. Our brands have a long history of representing high quality, comfortable, functional and durable footwear and our products are organized around six target markets: work, outdoor, western, commercial military, duty and military. In addition, as part of our strategy of outfitting consumers from head-to-toe, we market complementary branded apparel and accessories that we believe leverage the strength and positioning of each of our brands.

The accompanying Unaudited Condensed Consolidated Financial Statements reflect all adjustments that are necessary for a fair presentation of the financial results. All such adjustments reflected in the Unaudited Condensed Consolidated Financial Statements are considered to be of normal and recurring nature. The results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results to be expected for the whole year. The December 31, 2024 Unaudited Condensed Consolidated Balance Sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). This Quarterly Report on Form 10-Q should be read in connection with our Annual Report on Form 10-K for the year ended December 31, 2024, which includes all disclosures required by GAAP.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

2. ACCOUNTING STANDARDS UPDATES

Recently Issued Accounting Pronouncements

Rocky Brands, Inc. is currently evaluating the impact of certain ASUs on its Unaudited Condensed Consolidated Financial Statements:

Standard	Description	Anticipated Adoption Periods	Effect on Consolidated Financial Statements
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures	This pronouncement requires expanded income tax disclosures primarily related to an entity's effective tax rate reconciliation and income taxes paid.	Q4 2025	The Company is still assessing the impact of the new accounting standard but does not expect the adoption of this standard to have a material impact on its consolidated financial statements.
ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses	This pronouncement requires expanded disclosures on comprehensive income to improve expenses and address requests from investors for more detailed information about the types of expenses.	Q4 2027 (fiscal year) Q1 2028 (interim period)	The Company is still assessing the impact of the new accounting standard on its consolidated financial statements.
ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software	This pronouncement modernizes the accounting for internal-use software costs by removing all references to prescriptive and sequential software development stages. The new standard requires entities to consider whether significant development uncertainty has been resolved before starting to capitalize software costs and enhances disclosure requirements.	Q4 2028 (fiscal year) Q1 2029 (interim period)	The Company is still assessing the impact of the new accounting standard on its consolidated financial statements.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act ("OBBBA"). The OBBBA includes modifications to the international tax framework and amends and extends several provisions of the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation, the deductibility of domestic research and development expenses, and the business interest expense limitation. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company has evaluated the impact of the OBBBA and does not believe it will have a material impact on the Company's consolidated financial statements and related disclosures.

Table of Contents

3. FAIR VALUE

The fair value accounting standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. This standard also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

●

Level 1 – Quoted prices in active markets for identical assets or liabilities.

●

Level 2 – Observable inputs other than quoted market prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

●

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The fair values of cash and cash equivalents, receivables, and payables approximate their carrying values because of the short-term nature of these instruments. Receivables consist primarily of amounts due from our customers, net of allowances, and expected insurance recoveries. The carrying amounts of our long-term credit facility and other short-term financing obligations also approximate fair value, as they are comparable to the available financing in the marketplace during the year. The fair value of our credit facilities is categorized as Level 2.

We hold assets and liabilities in a separate trust in connection with deferred compensation plans. The deferred compensation assets are classified as trading securities within other assets and the deferred compensation liabilities are classified within deferred liabilities in the accompanying Unaudited Condensed Consolidated Balance Sheet. The fair value of these assets is based on unadjusted quoted market prices for the funds in active markets with sufficient volume and frequency (Level 1).

Some assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. These assets primarily include goodwill and other indefinite lived intangible assets that are reduced to fair value when impaired. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

4. REVENUE

Nature of Performance Obligations

Our products are distributed through three distinct channels, which represent our business segments: Wholesale, Retail, and Contract Manufacturing. In our Wholesale business, we distribute our products through a wide range of distribution channels representing over 10,000 retail store locations in the U.S., the U.K., and other international markets such as Europe. Our Wholesale channels vary by product line and include sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants, uniform stores, farm store chains, specialty safety stores, specialty retailers, and online retailers. Our Retail business includes direct sales of our products to consumers through our business-to-business web platform, e-commerce websites, third-party marketplaces, and our Rocky Outdoor Gear Store. Our Contract Manufacturing segment includes sales to the U.S. Military, private label sales, and any sales to customers in which we are contracted to manufacture or source a specific footwear product for a customer.

Significant Accounting Policies and Judgments

Revenue is recognized when the performance obligations under the terms of a contract with our customer are satisfied. The performance obligation is satisfied, and revenue is recorded when control passes to the customer, which is generally upon shipment to the customer or at the time of sale for our retail store customers. Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of our products, which is the net sales price.

The net sales price includes estimates of variable consideration for which reserves may be established. Components of variable consideration include discounts and allowances, customer rebates, markdowns and product returns. These reserves are based on the amounts earned, or to be claimed, on the related sales of our products.

Elements of variable consideration including discounts and allowances and rebates are determined at contract inception and are reassessed at each reporting date, at a minimum, to reflect any change in the types of variable consideration offered to the customer. We determine estimates of variable consideration based on evaluations of each type of variable consideration and customer contract, historical and anticipated trends, and current economic conditions. Overall, these reserves reflect our best estimates of the amount of consideration to be earned on the related sales. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net revenue and earnings in the period such variances become known.

Our estimated sales returns are based on historical customer return data and known or anticipated returns not yet received from customers. Actual returns in any future period are inherently uncertain and thus may differ from estimates recorded. If actual or expected future returns are significantly higher or lower than the established reserves, a reduction or increase to net revenues is recorded in the period in which the determination is made.

Table of Contents

From time to time, we enter into non-cancellable contracts with the U.S. Military and other customers with a duration of one year or less. The contractual minimum payments under such contracts may result in current contract receivable balances.

Current contract liabilities are performance obligations that we expect to satisfy or relieve within the next twelve months, advance consideration obtained prior to satisfying a performance obligation, or unconditional obligations to provide goods or services under non-cancellable contracts before the transfer of goods or services to the customer has occurred.

As of September 30, 2025, December 31, 2024, and September 30, 2024, there were no contract receivable or contract liability balances outstanding.

Taxes assessed by a governmental authority that are both imposed on, and concurrent with, a specific revenue producing transaction that are collected from customers are excluded from revenue.

Costs associated with our manufacturer’s warranty are recognized as expense when the products are sold.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in operating expenses.

Disaggregation of Revenue

All revenues are recognized at a point in time when control of our products pass to the customer at point of shipment or point of sale for retail store customers. Because all revenues are recognized at a point in time and are disaggregated by channel, our segment disclosures are consistent with disaggregation requirements. See Note 12 - Segment Information for segment disclosures.

5. TRADE RECEIVABLES

We maintain an allowance for credit losses resulting from the inability of our customers to make required payments. We calculate the allowance based on historical experience, the age of the receivables, receivable insurance status, and identification of customer accounts that are likely to prove difficult to collect due to various criteria including pending bankruptcy. Estimates of the allowance in any future period are inherently uncertain and actual allowances may differ from these estimates. If actual or expected future allowances were significantly greater or less than established reserves, a reduction or increase to bad debt expense would be recorded in the period this determination was made. Our credit policy generally provides that trade receivables will be deemed uncollectible and written-off once we have pursued all reasonable efforts to collect on the account. Trade receivables are presented net of the related allowance for credit losses of approximately $0.8 million, $1.0 million and $1.1 million at September 30, 2025, December 31, 2024 and September 30, 2024, respectively.

Table of Contents

6. INVENTORY

Inventories are comprised of the following:

	September 30,		December 31,		September 30,
($ in thousands)	2025		2024		2024
Finished goods	$	174,955	$	149,328	$	153,722
Raw materials		17,920		16,671		17,196
Work-in-process		738		702		929
Total	$	193,613	$	166,701	$	171,847

The asset associated with our returns reserve included within inventories was approximately $0.9 million, as of September 30, 2025, December 31, 2024 and September 30, 2024.

7. GOODWILL & IDENTIFIED INTANGIBLE ASSETS

There was no change in goodwill during the nine months ended September 30, 2025.

Intangible assets other than goodwill at the respective balance sheet dates consisted of the following:

	September 30, 2025
	Gross		Accumulated		Accumulated			Carrying
($ in thousands)	Amount		Amortization		Impairment⁽¹⁾			Amount
Indefinite-lived intangible assets
Trademarks	$	78,654		-	$	(4,000	)	$	74,654

SEC Form 10-Q filed by Rocky Brands Inc.