RCKY - Earnings call 4 2021 | Rocky Brands, Inc.

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Rocky Brands Fourth Quarter Fiscal 2021 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference call is being recorded.

And I will now turn the conference over to Brendon Frey of ICR.

Brendon Frey

to us thanks and you, everyone today. joining Thank

of to that including statements may assume to on obligation the we Reform defined begin, and period, information which session, subject note please Act Litigation at statements. Securities materially. forward-looking differ such no Before and Q&A assumptions are this uncertainties, today's may results to the We changes, Private cause Such update and available actual XXXX. statements by time based as are contain risks

For to discussion XX, and December for of with our please a XX-K the complete ended Securities risks today's reports XXXX. uncertainties, and Exchange the and our year refer Commission, including press release the filed

Executive Rocky And Officer I'll turn Brooks, of conference now Brands. the over to Chief Jason

Jason Brooks

call Robertson, on Brendon. Chief our you, Officer. me With Thank is Tom today's Financial

moving fourth performance in we sales we've enhanced and lifestyle significantly portfolio of business quarter, critical inventory onto nearly in good very our our on demand the and their of Coupled and saw was expand we inventory was you March. onto by year meaningfully and wholesale mitigated business Honeywell's the our level, for doubled our accomplished also the with brands XXXX earnings retail platform, XXXX sustained we footwear Since during to Brands, our brand in closing strengthen and market acquisition products. which ERP opportunities year driven healthy for transition, release, our another system. a our through the presence. distribution step relationships As a numerous our Rocky the capitalized

vertically year. distribution half to said, experienced temporary acquired we month, adjusted the issues reflecting year limited business of and profitability positive impact hampered challenges achieved revenue for on and this integration the in that internal That have our record ability go and of didn't the strength Admittedly, as We our the manufacturing. second underlying each we as of net year, of some capitalize for our had the the that demand recent brands performance integrated our and the fully hoped. improved the the seamlessly inventory and record benefits

Today, our continues before Ohio ever gain shipments and to more is than efficiencies. center distribution processing

center in of Nevada, be which has And XXX,XXX the While feet, quarter. distribution footage sourcing our on functional to our a to in inventory first strong square new by challenges, doubled very position. Reno, is end the nearly despite finished track fully XXXX we industry-wide over

manufacturing we capitalize to of struggling XX% And American on to With our competitors our have that carried products. has procure facilities, coming many the our from strong especially still ample supply momentum are XXXX. operated North of as into

we with where expectations. our during QX range with line were million guidance the XXXX fulfill to strong completely again, brands like review we, of X for quarter's months Shifting last in call. our last our while $XXX.X a revised first demand over remain established able increased year, unlike demand our sales quarter, Fourth to the to results XX% to unable were quarter of drive fourth quarter

potential begin pleased and results, we our Overall, our us. to I am excited with fully about challenges our I'm distribution put behind as

going at Let's call, our separately. our recent last performance. look Group of to of Boston to now drivers the and our some take a Ohio I'm Similar discuss

the in delayed year impact reflecting Group, Ohio full fulfillment. our sales XX%, the fourth X%, quarter with from increased increased Starting while sales

high. the Overall, country the the at been an nice digits with up Wholesale Durango year, up all-time for driven double of rodeos tailwinds. particularly resumption by the provided contributed quarter. the has Several and brand for low demand remains Demand and across strong digits holiday Beginning strong in as Wholesale. finished ranch performance traditional performance brand Western Durango's throughout Our double retail customers farm key for demand, and the our and strong segment. to fourth

to allowed historical of and up top The many picked our of fulfill as able quarter dynamic did were helped sellers While brand acceleration our a second western in year, shelf demand new the fuel in orders added an gain shipments the near-record with the than of December. market over slow for progressed of we half the shipments better at industry This majority rate the products business Durango's space. pace for to competition. the

fall to Georgia this million Turning brand added for quarter of dollars new several booking season, Fourth in record-breaking were by resulting the year. Boot. sales a business

experience suppliers the Republic While and of results production on allowing to us competition Asian to expand dependency were reduce western third-party to constrained as demand continued center take help space. like shelf capabilities output, woes, category, much advantage Dominican delivery exceeded distribution our our

shifted The this which sellers disruption military spans business, western brick-and-mortar. and was best space outdoor Starting able generate a in despite solid work, of challenges the Availability to with shelf over season. retailers Rocky brand, commercial a injection gains holiday e-commerce increased and traditional of headwinds. with our in nice traditionally products what some of has resulted supply largest new outdoor, been focus strong distribution chain to XXXX for that at quarter segment

You'll remember way and began outdoor. prioritizing that product last that big off seasonal for paid in we quarter, distribution, a

supply keep helped trends, struggling business due to several wholesale take Our mid-teen coupled key of the strong demand quarter. increases its challenges. availability Western Rocky market advantage with on with trend up inventory to this continued chain many with in upward Rocky U.S. positions vendors strong styles

and retailers drove box key distribution the stores large with increased with sell-through sales. Solid new

was and well-positioned As quarter, capitalize. has struggles this Rocky created theme been the to opportunities competitor Western sourcing

in for Being Work. key Rocky was stock also

were low comparison in is fill business strong outpacing shortage boots unveiled result manufacturing continued a for still Puerto we with on consumer the still to we And while the early, Rocky's Zappos that some in fourth this, look it a exclusive quarter. product commercial inventory as compliant On a product third some of facility. partnership the against a demand fourth of top start contract quarter Rico sales quarter very military supply. up was tough during in staffing the of strong retailers laps ago. As year as its large

Despite the optimistic loyal rebound. should being the the And market has developed very are tough poised Rocky both collection diminished avid Rocky business the participated a demand newly new the mission for drive and hired share and ever-popular commercial before. the areas SXV produced addition XXXX talent to wins. marketing will and following. requirements is for meet in not of future in year, and for has in military The we has product not teams help sales the finish

Turning to our segment. retail

total of down was time. QX the XX%, comparison in XXXX, this a in and online tough portion increase on delay combination XX% a sales of in a orders channel the processing reflecting Following of e-commerce our

further our enhancing we've and the expanding to direct-to-consumer the ease As to of done a we our shipping resume we normalized functionality on expect work state, see e-commerce to comparisons sites return fueled by growth efforts sales and marketplace.

from to and new late slowed led display the business distribution third-party including temporary pressured James pandemic, QX. delays Meanwhile, by in Republic these recent in of Hardy in the Services recovery growth, year account positive the height the signs, the while the acquisition challenges spike cases many account all internal Lehigh's to related that headwinds, Absent higher retention, ADM, also launched continues sales. COVID product and

years new time, At cruise steadily, dormant for line account account our improve and drive to while now, helping and SMS X business, nearly e-mail strategy participation revenue continues our the rates per same is higher.

and Shifting to is Group. XTRATUF Demand our high now to grow. continues Boston for and Muck

closely challenges shipping with and operations continued of logistics While the productivity packs. a such leverage fourth distribution to alternative DC improved, containers, the shipping opportunities, situation case and increase sales resulting team in full full The team selling worked maximize quarter, as and X%.

the stronger good accounts QX, product retail, the key their The to in and at popularity our good portion season. growing Both Although stores fourth in digital news after and underscoring quarter. were a the is performing communities extremely shipments arriving traffic website deliveries selling arrived once well to the of across record of brands further experienced our strategic organic engagement Muck XTRATUF. is

remain Muck, extremely even this core demand mild in selling high to are areas in and climate styles was season. Specific where the well, through

working and to are sales normal The of and plan see our large but positions demand, first to the quarter retail retail backlog most inventory started with off year. we with increase pent-up return to new partners a the in

momentum with and brand a to brand gain proof upcoming. demand continues a is robust for become product strong launches spring tremendous brand and fourth further a business. that The a versus backlog year-round XTRATUF XX is positioned record quarter XTRATUF has new one-season The

ongoing in early are call to our delays, increased we half XTRATUF sourcing and in with enviable new Rocky, for fulfillment of turn to lost the to like we at momentum regain product some inventory some industry-wide brands our struggled thoughts over I'd when retail leave with Georgia Before financials, the of and combined to to review second and shipping the during a the enough get With year. Muck XXXX Tom been to position position market. on have capacity XXXX. solid Demand you good Durango, our I the we

timely good XXXX. The our fulfill in and e-commerce and about Lehigh are growth to are rhythm, especially manner. we of off prospects branded own websites, in able to good for now a feel demand same our true terms a in the is start, retail DCs business In division, consumer for our is back we

in the shipping manufacturing year expect increase first we inventory we Republic supply While have issues, of price experienced our more throughout and announced effect round Dominican from on and Therefore, Puerto our we container the pressure chain facilities in persist most not in what offset immune half the sharp helped of are still we source the help insulate XXXX. to own increases the the recent half margins than rates take Rico Asia. industry global from us of as until

year, the programs the the the of distribution by allowed opportunities with the combined terms new driving excellence were now to our new heavy ERP Rocky of and in company. Though coming new we combined us transformational reach lifting identifying synergies expansion savings tested system issues current In cost fourth behind successful in our chain is is market In migration operational acquisition our following throughout 'XX. and supply and the and heights this quarter. focus integration, year, all

and importantly, further demand what forward to we entire share well-positioned work throughout incredibly market accomplish more are I'm market great and the the incredibly strong but the of limited resiliency manufacturing across grateful of strengths year. to take I results, proud really look and with a our look supply to answers to XXXX. team, for of challenging the dedication the to channels. we Rocky XXXX, and our in a I'm brands full As in grow advantage continues such to team

to Tom Tom? over call the to cover turn the now I'll financials.

Thomas Robertson

Jason. Thanks,

sales Net was in from XXXX for to the fourth XXXX's fourth $XX.X Boston Group, sales to which quarter the ago period. acquired or $XX.X million increased XX.X% million year of $XXX.X million compared quarter XXXX. of the March in includes net

XX.X% inbound due sales segment $X.X million or to $XX.X increased in lower lower sales By military ago and year. attributable to million gross wholesale in Wholesale last sales margins sales in costs was Boston point retail XX.X% segment, retail. year in to higher-margin increased Gross as in a XX.X% to profit in period fourth period. XX.X% segment gross XXX compared $XX.X The sales, or primarily to Of Retail increased of of was same basis $XXX.X mix increases to million the our sales and in to the to was a XX.X% reported. Wholesale of approximately compared million $XX.X margin decrease million, container million. $XX.X Group million. $XX.X the million and sales XXX.X% quarter increased $X.X segment

XX.X% our prior of for higher and XX.X%, XXXX. margins the gross Wholesale third-party owned gross by to gross compared were in margins up XX.X% XX% XX.X%, XX.X% brands from versus versus the fourth Retail contract year. manufacturing driven quarter were in the were margins of sales quarter

last sales the $XX.X to XX.X% in fourth or of net of million million general or of administrative Selling, XXXX sales expenses and compared year. XX.X% quarter $XX.X net were

amortization XXXX, integration the the brands. operating or increase were expenses and in $X.X the $XX.X primarily net with expenses of by in million expenses associated operating The expenses Excluding acquired of was XX.X% sales. fourth million quarter acquisition-related driven for

were in Income $XX.X XX.X% sales ago compared or adjusted basis, operations million or margins net of XX.X% an million to sales net of period. from $XX.X XX.X% XX.X% year On XX.X%. to the increased versus operating

footwear the credit Honeywell was the fourth facility of The used year fund we quarter expense interest diluted a the For income increase basis, interest period. per $X.XX the the compared senior term to with the to to On or per of $X.X million payments compared share $X.X $XX,XXX diluted acquisition. this ago. in and $XX.X GAAP reflects just on year, loan or a share net increased quarter million net XX.X% million ago for income year $X.XX

of Adjusted expenses, fourth the for diluted per the $X.XX acquisition-related this net income year, excludes or share. quarter was million which $XX.X

Rocky we adeptly. XXXX demand was challenges Despite navigated for the short-term and Brands. acquisition a stemming transformational issues fulfillment year integration, strong, was very inventory from industry-wide the

line year, For sales XX.X% million, a growth contribution Ohio the increased Group. net acquired to the $XXX.X strong Group $XXX from Boston to record sales the double-digit the full in our top and reflecting million

increased and sales up By were XXX.X%, wholesale segment, contract manufacturing XX.X% increased retail sales XX%.

EPS improved $XX income million. of to Adjusted XX.X% In $XX.X net adjusted million $X.XX. to terms profitability, XX.X% and XX.X% income increased increased operating to

the at totaled cash and compared end our and very And good -- debt we of our secured credit of markdowns. a approximately includes consisting and our year-end increase $XXX.X million million, the borrowings $XXX product, facility. brands. XXXX, the quality sheet. functional million, under senior inventory. total million The facility feel little $XXX.X Turning secured million $XXX term of to million equivalents to nature At Inventory the $X.X risk with about $XX.X year cash balance senior our acquired $XXX.X of above-average We our for low at debt stood loan was see and ago. -- our associated our given the asset-backed million

moderate increase With and of to XX% be decrease quarter the cash of our planning XXXX first businesses. be first brands a will are year. to days the quarter XX the the third inventory another growth solid inventory projected as by levels. with growth we over With normalizes of are first the as the source and to owning this then of levels full combined XXXX, second between for in quarter end this quarter acquired against quarter of respect in expect year year, in we of an strongest XX% additional We and up sales the

the XXXX. reaccelerate in As should lost the we from of XXXX, sales into fulfillment from levels we delayed move half as growth recapture back QX year-over-year

the first increases flowing of quarter and and half terms similar of In by margins, wholesale this into gross Based quarter improve XX% the of effect that segment, third statement. income the as the through be for by the margins our XXXX we'll move and expect margins our on in will fourth towards mix of the quarter projected then the gross sales in price go we outlook wholesale of to start starting overall margins year. to approximately fourth XX%

to our we adjusted the As basis synergies identify is the the expense over XX earlier, over drive are said Jason shifting XXXX opportunities. year, course average the that integration organizations to of points is This levels. of attention to two complete, cost-saving work place and now of will and take our goal

the year for projected XX%. tax is approximately Finally, rate our to be

for concludes that, we remarks. prepared ready With are Operator, now questions. our it

Operator

question Our Jonathan Komp of from comes Baird. first Instructions] [Operator

Jonathan Komp

just that demand ask seeing the consumer, health environment. trends inflationary first your read volatile question thoughts various service especially broader macro and an and across you're the you to of in a the just want on on I industries the broader of

Jason Brooks

really and our great any in. not thing Jon, consumer still looking yet, we retail going is we customer The the At watching on. are inflation either right? seen are full at going really time, slowdown, I shopping, have question. not the this think completely they're level. particular in yes, base shelves this point still But about base,

around that think some things I so happening that. there's And

as we're will be XXXX we we pretty into that and go that probably good I cautious XXXX. for more think

Jonathan Komp

the you last help Okay. assuming? Boston up you if how you I then, quarter the you're own the on you could much outlook brands detail in the follow a more could And Tom, Great. provided, bit revenue I not just on the since quarter benefit get little know first did growth year. whole underlying

just other it. it give for Boston So however make the both business assuming might for to brands? the maybe underlying what the you are Or sense growth versus --

Thomas Robertson

Yes.

XXXX, we and as one think a look out Rocky hearing then we'll be bit, change I think you'll little the messaging start So into I Brands.

quarter. time we a big at spent we is lot stray is because And obviously, the Group guidance. I category, wholesale in there biggest out, mean so third XX% away about quarters, that be of the to giving Boston particularly be miss to or as XX%, tried that of the to the last the talking the also first probably Ohio from going earnings we're had from fulfillment in call we the issues. But then driver Group-specific And call to the other quarter. going

And those lot of in hope $XX of in sales, which million $XX somewhere so year. of illustrated QX last to we recover was range to kind a million we that

we benefit as it's websites. getting up the retail also the will and So our operated be sales are distribution as should stood owned on as in well shipping it way back focusing our

there'll to And XXXX, inventory be Boston getting in a fashion. be we available in particularly door to think we'll on Group a lot timely and we'll able the focus more that that out the product be so that for ship,

the the it higher we that bid production contract margin are a retail some Jason product, to drive manufacturing has will and have of success, we opportunities the are are I wholesale produce marketed carried some the focused our in noted to on expire. From than on our And business. on going USA some with think businesses. to military Made we're contract our which product, anticipating potentially There is, But of those. contracts growing is that reality a of we standpoint, --

don't half, anticipate in So maybe I cut XXXX. to, in the segment would contract I know, manufacturing

Jonathan Komp

the I be revenue just should understanding make sure fourth then we I'm your quarter? in commentary. want just QX in thinking growth clarify, to And and total to

Thomas Robertson

Yes.

So the product right? the as was did years and our look third right in we if Honeywell distribution hiccups quarter, own growth the second after modest, in center closed the in going the as We that we have quarter past. this to that had year, be was because the If second more you we still is it not efficiently quarter, shipping operating distribution had was at acquisition. still back think the to on

don't Some growth. as fourth we the modest QX anticipate over then carry the the to the bit QX the third more we'll XXXX growth in probably second in in did quarter. of even XXXX door all And the I that a we in this of little year. the quarter, nearly backorders get hope modest product of out quarter given

Jonathan Komp

Great. last And one for Yes. me.

but you Sorry, expense this, overall on then. talking me were margin was SG&A that's the operating it And you're I for talking about, ratio part of leverage? a or leverage comment missed that the about

Thomas Robertson

Yes, expenses so on that's on our adjusted an basis. operating

very be go year, So we approach took and doing things the boots on to in we're as we can, where the any to organization defend into able on really efficiently focused get efficiently. all we the the some this which leaning find shelf we'll going we -- fill up to be shelves think that the XXXX to more that orders and our and able as we're space, costs leverage in to XXXX,

Jonathan Komp

for all Thanks the Understood. Okay. again detail.

Operator

Anderson comes question of next Susan B. from Riley. Our

Susan Anderson

with then -- margin. the and just also the issues also I impact the guess I the gross remind XXXX puts you versus distribution guess really last freight Honeywell Can is once Just on and little on like XXXX. you And the takes a freight in margin. us above from like perspective expecting cycling what it the sounds place, year. there you're distribution guiding brands, had gross extra a you're bit quick will have

Thomas Robertson

one. this take I'll yes, Susan,

So just bit. unpack little that to a

our margins. the brand, Boston the for is particularly historically, case. Group than stronger Group Muck has has So That historical been that still the -- Ohio margin,

out the the However, by inbound comes our cost than they've been of for more container more as greatly impacted freight Ohio their of average Asia Group. product

for Group. increases the the Ohio both price and Boston done we've Group so And

fourth effect. were increases our we of margins the really, relation so And the quarter. into And of a slightly more going by guiding price end that's up of

the beginning some started we the we shipping of the So items QX, price new increase at which announced a in but we if price of of recall, kind the in fourth another the of effect of XXXX order still were a of this price then back went shipping quarter into lot January in year and announced we've product fourth -- increase X. of we that quarter,

or are that increases for or out that so price gross realized pressure in be we will lag as timing on called margins -- first the the those when some And first those the they apologize. actually I and the slowly quarter think we of get kind margins the will should combined year, where be fourth back basis. improve a to into historically on half of And quarter

Susan Anderson

Got it.

the DC. Okay. And then new just on

-- we up still we the and ramping go is I is that or throughout still now? running fully to expect So Or that, guess, should year? as that be

Jason Brooks

Yes.

one, So The and I'll up has Reno take and running. been this Susan. DC

some racking We have -- getting to had had equipment. and delays in getting we've equipment and

And more that the the But for shipping case. out It's pretty it been it case be be going that in by is year. we'll benefits we that to believe we packs so see shoes will of to -- from and to up end it more been than March, be there. and of and the QX of here the sporadic of sort just able fully ramping have month rest functional from

Susan Anderson

it. Got

That's Okay. helpful.

that also, kind I as increased efficiencies we go positive margin you impacts So and would of as expect the guess throughout year, ramps?

Jason Brooks

can. evaluate find think the here I operations cost throughout excellence really mean, from up fine-tune of really year savings where to goal the once and and fine-tune I both that into is standpoint, the really an in make Reno, running those XXXX and operational to this it we is and Logan rest to Yes. efficiencies in get and more to, we that

Susan Anderson

Group maybe hindered and year, distribution pretty between had all on and just sharing and I from and bad how terms capturing I Honeywell, and not of obviously so I Muck XTRATUF, mainly And was of kind is if I when you you're there? it remember also now the But guess back. guess, some possible. wholesale some and inefficiencies too, e-com by Muck of really Great. bought opportunity getting issues Last sales inventory about that the brands, then they Boston it much the right, forth, of in think talking

So as grow to forward, much you look I there how that is brand? do more think guess we opportunity

Jason Brooks

Yes.

question. thought be because struggling with, were chuckled able great would we resolve we Another little area we we to of quickly the that I they one kind stumbled knew bit. a and

we there's there. opportunity a still So think good

I think what between X DCs to the there. see and we able able should were to upside we some be do,

As that used particularly upside I the both those where now, we think we we communication refine in back used have. and to indicated, traction good that and the get I continue on be our brands, is we and brand to get websites pretty XTRATUF as to there right some for the capabilities this to

Thomas Robertson

Yes.

add to on there, Just Susan.

on and automated as away Jason drop websites, for the available any but able in make also not days to retail it's from I flip and available up partners. shipment Reno we'll weeks, all our very Reno of think a happening, that's our of is switch with fully once be inventory key and said, if importantly, a essentially lot

been last our And over little of so a And to very months, because pairs inability part out a Reno, really, there. meaningful ship our of that's the handcuffed single business. of few we've

but very weeks our our not capabilities of fulfill, come. see to Reno shipments ability e-commerce in we're as own well So the to drop only excited to our and

Operator

Our of Camilo next question comes from Lyon BTIG.

Camilo Lyon

you're with and gains. conversations more that. talk your some first space of know with about space those could your you the great It's the guess, I you those are shelf durability the if gained? now presence on Maybe permanent that taking gain advantage to that the couple locations curious shelf of a gains. be see manufacturing got that -- and into shelf have unfolding a of I'm shelf visibility taking partners, how retail leveraging I to you've space those that having questions.

Jason Brooks

a day that's we And into you miss. here, hit Camilo, that as I tell question into or it is that are really really Yes. January. every great we would started digging

space able are retail very shelf sophisticated to are we to of in partners a us our seeing us give what So and clearly lot there. have they're to show about more And reduction talk space future. us today willing shelf and the we what not

So you hunting categories continue in, we if space. staying strong. feel good marketplaces to pretty for strong. the get that our boots, but at bookings we feel are that mom-and-pops, boots, it, harder to it's were are look those The a that shelf Particularly, western work smaller we see independent will really boots,

So we space. Where think on our seen about that space shelf we believe slip you And are we not areas holding to shelf to expertise, some so if start is some in right? that is that have a do the our we business and at boot, Merrells hiking good the the outdoor when Rocky not and a lower But like much there. brand the marketplaces as of brands recognized. you in look the is Keens world,

in of year. seeing reduction my like, you give I'll little of retailer brands, back a reduction. is bought much whatever business So a So our brand, that that last you I've seeing to into pair." to the "Look, bit pair from area I that are these we're we big starting see X,XXX But core we are XXX not be got there.

Thomas Robertson

to just quick, add Real there. Yes. on

Jason a bit. it on little touched Sorry.

strong we're So for seeing bookings XXXX.

I have right? this of we behavior, fourth mind, little if the a they were boots are quarter think signals early think year. next my to in going do shelf so seeing the not And also I bookings and be bit space maybe it be we'd QX then come losing But QX retailers' inventory. approach of to They taking orders and the make third the to more sure for in And aggressive they get want year. in to their shift of a

bookings. feel about good So we our

of, the is had prove partners, particularly that retail need to on this we've out, call lot to of with thing a other our look, The Group year. "Hey, too, you conversations it Boston side

You inventory prove the the time need fulfill those after Reno get running capacity us and the and to up boots then to have you was we'll inventory." ability can have do at here We on And orders. clearly the that. March, to full have in

or good into feeling pretty QX, XXXX. we of roll as QX we're QX So

Camilo Lyon

the an on that on opportunity about either love topic That's from I'm Asia you're sure of thinking great. but potential guess I to Puerto shift would That's discussions, great get to to the production had how to hear. you've these or the update sticking Republic. Dominican Group, or Boston I Rico the

Jason Brooks

our great for it but X you is the is going tell definitely would in to really question. priorities be not XXXX. on top it Man, I radar, probably that

stress it fastest doesn't is and cannot you We will performs it, you a if to slow product. doesn't that. the fits lose and play that way in and the and it fit anybody and I way, the marketplace, to boot enough same move perform

will we very careful and do and Muck the do be the Servus Dominican. opportunity so but both the that and in know maybe about this, and for there's And feel do XTRATUF product see we

but is our take it happen. we on time make that will our So to radar,

Thomas Robertson

in think on need the and can change little bit I out. a to else America But don't somewhere in methodical, duties Central Yes, it's the Jason rubber slow industry pointed overnight. the North significant -- mean I reduction everybody there, in or as in Those happen whether or changes those be to America too. to add boots South see America. by moving duty

Central presence, the work partners America, it whether will with really. in be we Dominican so their expand And or to our

standpoint, is that from we've color Group here The other Ohio or the product leather this. standpoint really our out recognized important

or the with so cost container the inbound these the a -- on changed And leather prices. math boot from a Dominican Rico boot new getting Asia Puerto has versus of

strongly we've Rico Dominican be production pretty and both that will up anticipate XXXX. XXXX production the we so from forecasted Puerto in our and in And

the or we what and but So we it with fit product. to do can, were we are not any methodically jeopardize quality trying shifting issues

Camilo Lyon

it leverage the Last of comments And or anticipate if -- that of greater recognition? synergy this the you on color. consider them? further identify thereafter points Is for you recognize for basis of points synergies and Great anticipated year. more is, first SG&A basis is XX step to that do of as would me you XX than the be one that less the

Thomas Robertson

Yes.

in things Ohio our or there's the doing basis is about think whether efficiently that. XX particularly Logan. be, be a things couple it should we as So not driving still we're One in distribution, in of as as we XXXX, points

make Reno, for we're you're temp like having but efficient distribution more our improvements first staff do But not employees anything going else also there's a labor. They center Ohio, as in and just as supplement be expensive So the not to in are naturally. to to you time, brand-new with efficient. with

Reno, capability And before, I didn't to our -- we one, our of, our have continue so mean, in do find for also ability direct operating internally kind will efficiencies our out as Group, had looking hire associates continue to too, we new a shipments which folks, we before benefit factory from then that that. But will acquisition. talked we the but Boston and the is they about to will leverage,

that accounts so lead for their factory Boston their times shorter think better key direct matter, -- they smaller the and their that shipments. Group, business with And and factory again, SKU given we that add are lower will counts suited times, for

product that don't Rocky centers And will that, focus distribution have which to to run Because win straight big for so can the on it a of we we goes our through retail and partner. either Brands. be operating

be So XXXX. rest we XXXX start. a started thing of off on with that We've of great throughout that factory directs, will the already work but another

So look to the see years growth. go X history XXXX, think ability we're into optimistic we that guidance, over last standpoint. But leverage in our give further as I and to any point, I but line you think can and sales your back from top won't we that Rocky's probably

core our is X brands we're and And to leaner so really structure. the be Lehigh experiencing growth that leverage will our on our that goal with operating

first going it's some to to half time particularly take XXXX. the of in so, So do

Operator

comes Singular Research. next [Operator Our Rob from of Shapiro Instructions] question

Robert Shapiro;Singular Research;Analyst

related quarter? impacting -- I still debt that additional some -- Is the quarter. did did so you this the debt to need issues went actually this fulfillment long-term see up

Thomas Robertson

Yes, yes, Rob. absolutely,

So yes, coming in to our that fulfillment ability we saw. out center issues to the slowed the meet down our door, demand inventory had and we boots get

in the inventory really quarters. the And or up plan call to out next that remarks so the that sorry, drove increase leverage cost we our -- And the the is business. prepared rightsize few over the tried in inventory total I'm to of

-- source to the in down that leverage. debt us business will to free so help flows cash And XXXX results as pay the we'll as of use of down EBITDA But cash will a the give well. pay also

Robert Shapiro;Singular Research;Analyst

but modest did you Great. And quarter. what And what mentioned fourth you missed reiterate mention I it, about I expect missed did to I quarter? talk I -- hear see did this, the might you talk quarter, on second first growth. have first the wanted -- you Did mention that and hear -- just you you about could the I happened, if

Thomas Robertson

Yes.

owned think first XX Group quarter, XXXX, the for Boston the you only about if days. we on So

last the And certainly our standpoint. a the Group the issues. a of So Boston will of from days having you increase significant kind our issues about third distribution we fulfillment the of peak on of results That additional in year. talked then XX the quarter, center was give

And sales the the lot left on quarter. of we fourth table going so into a

of recoup sales And hope those quarter third so XXXX. we to the in

Operator

conference would Jason back closing concludes I to over the This turn to any for session. question-and-answer Brooks remarks. like the

Jason Brooks

will that's 'XX company. employees with exceptional where like Great. an get and more really boys we did Brands' forward And us where employees. time all of a where the And happening the during things with Thank you. job a the 'XX. and year, have that's XXXX really from, The feel just to are. stepped one integration real to I worked reiterate to and in we would my crazy like appreciation the Tom's up hard and we continue I of move Rocky in XXXX came and and

the time thank And so for just more XXXX. you a employees all the great forward world, to to to your want and say efforts one I look over

Operator

conference today's call. concludes This

Thank a day. lines. participating, You disconnect pleasant and you your for have may

Rocky Brands (RCKY) 1 Mar 222021 Q4 Earnings call transcript