US: Rocky order cancelled, lowers FY profit forecast
Outdoor footwear company Rocky Shoes & Boots has had a US$30.0m order from the US Military terminated, and has also lowered earnings guidance for 2005.
The US government said it had terminated the order for convenience.
The contract had been for about $30,0m worth of Hot Weather boots for the military. Shipment of the boots began in the fourth quarter of financial 2005 with an estimated completion date of December 2006.
Rocky is currently exploring the exact financial consequences of the government's termination of the contract.
Rocky chairman and chief executive Mike Brooks said: "While we are clearly disappointed with the government's termination of this order, we know this decision was not based on Rocky's ability to produce high quality boots and successfully fulfill this contract."
Brooks added: "…Rocky remains well positioned to source additional footwear orders for the U.S. Military going forward".
Rocky has revised outlook for financial 2005 and 2006, now expecting 2005 earnings per share to be in the range of $2.21 to $2.25 compared to previous guidance of $2.25 to $2.29. However, it is sticking to its revenue forecast of $294m to $296m for financial 2005.
For financial 2006, the company now expects revenues to be in the range of $287m to $292m, compared to it previous guidance of $313m to $318m, and diluted earnings per share to be in the range of $2.35 to $2.45, compared to its previous expectation of $3.05 to $3.15.
Brooks concluded "During the past 12 months we have worked extremely hard to integrate the EJ Footwear acquisition and to build a stronger organisation for the future, and we are very pleased with our progress to date."
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