• Net sales for the quarter fall to $66.6m
  • Earnings before income taxes increased 53.4%
  • CEO says results reflect moves to reduce expenses and improve efficiency

Falling costs have seen Rocky Brands report a third quarter increase in profits, despite a fall in net sales.

The company said that net sales for the quarter reached $66.6 million versus net sales of $72.5m in the third quarter of 2008.

However, the company's earnings before income taxes increased 53.4% to $4.4m in the period. Net earnings increased 17.2% to $2.8m.

Mike Brooks, chairman and CEO said: "We are very pleased with our third quarter performance. Our recent results reflect the steps we have taken over the last 18 months to reduce expenses and improve efficiency in order to enhance our profitability and strengthen our balance sheet. For the fifth consecutive quarter we lowered our operating expenses double digits on a percentage basis as we continue to remove costs from our retail division by transitioning more customer transactions to the internet. At the same time, our ability to more effectively manage our inventory levels and receivables decreased borrowings under our credit facility and lowered our interest expense by 14%. Equally important, we began to see some stabilisation of our sales base with several of our wholesale categories - Hunting, Western, and Duty - reporting positive gains.

"With inventories at retailers relatively clean, we are optimistic we will continue to benefit from a higher frequency of reorders and we are confident that we can deliver improved profitability year-over-year during the fourth quarter."

Wholesale sales for the third quarter decreased 2.1% to $54.5m. Retail sales for the period were $11.5m compared to $15.3m for the same period last year.

The company said that retail sales were down year-over-year as a result of the ongoing transition to more internet driven transactions, and the decision to remove a portion of its Lehigh mobile stores from operation to help lower costs.

Military segment sales for the third quarter were $0.6 million versus $1.6 million for the same period in 2008.

Selling, general and administrative (SG&A) expenses decreased $3.4m or 15.4% to $18.6m, or 27.9% of sales for the third quarter of 2009. The decrease in SG&A expenses was primarily the result of a reduction in salaries and benefits, freight, Lehigh mobile store expenses and tradeshow expenses.