Shares of fast-rising footwear company Rocky Shoes & Boots (NASDAQ:RCKY) jumped more than 11% yesterday on news of fourth-quarter and full-year financial results that put the finishing touches on a remarkable year for the company and the stock alike.
Management said yesterday that 2003 revenues rose more than 19% to $106.2 million. This is despite a drop in boot sales to the U.S. military, demand for which changes according to the Defense Department's needs. (In late September, the company announced a $6.1 million military deal scheduled to run between December and April, most of which will turn up as Q1 revenue.)
Gross margins expanded as the company lowered production expense by moving more production to the Far East. That powered improved operating margins, even as SG&A expense as a percentage of revenue rose because of increased commissions and distribution costs. As a result, net income more than doubled to $6 million. Earnings per share grew more quickly on a slightly lower share count.
No shortage of investor attention has been paid to footwear companies in recent quarters, as the run-ups in shares of firms like Deckers Outdoor (NASDAQ:DECK), LaCrosse Footwear (NASDAQ:BOOT), and Vans (NASDAQ:VANS) illustrate. (Salim Haji took a look at Deckers in an article yesterday.) Rocky and these four companies have easily outpaced the S&P 500 over the last 12 months, with Ugg-powered Deckers the leader by a lambskin-comfortable margin.
But Rocky has been no slouch. Yesterday's numbers -- impressive for a small company that's both profitable and growing -- illustrate why.
Is Rocky on a roll? Talk about it on our Rocky Shoes & Boots discussion board.
Fool contributor Dave Marino-Nachison doesn't own any companies in this story. He can be reached via email.
