About Rocky Brands

Rocky Brands, Inc. operates as a designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names, including Rocky, Georgia Boot, Durango, Lehigh, The Original Muck Boot Company (Muck), XTRATUF, Servus, Ranger and the licensed brand Michelin. The company’s brands have a long history of representing high quality, comfortable, functional, and durable footwear and its products are organized around six target markets: outdoor, work, duty, commercial military, military, and western. As part of its strategy of outfitting consumers from head-to-toe, the company markets complementary branded apparel and accessories that leverage the strength and positioning of each of its brands. Each of the company’s reporting segments continue to employ consistent accounting policies. In its Wholesale business, the company distributes its products through a wide range of distribution channels representing over 10,000 retail store locations in the U.S. and Canada, as well as in several international markets. The company’s 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. The company’s Retail business includes direct sales of its products to consumers through its business-to-business web platform, e-commerce websites, third party marketplaces and its Outdoor Gear Store. Contract Manufacturing includes sales to the U.S. military, private label sales and any sales to customers in which is contracted to manufacture or source a specific footwear product for a customer. Growth Strategy The key elements of the company’s strategy are to expand into new target markets under existing brands; cross-sell its brands to its retailers; expand business internationally; grow its e-commerce business; increases in its Lehigh business; and acquire or develop new brands. Product Lines The company’s product lines consist of high-quality products that target the following markets: Work: The company’s work product lines consist of footwear and apparel marketed to industrial and construction workers, as well as workers in the hospitality industry, such as restaurants or hotels and those who partake in farm and ranch work. All of its work products are specially designed to be comfortable, incorporate safety features for specific work environments or tasks and meet applicable federal and other standards for safety. This category includes products, such as safety toe footwear for industrial and construction workers and non-slip footwear for hospitality workers. Western: The company’s western product line currently consists of authentic footwear products marketed to farmers and ranchers who generally live in rural communities in North America. Commercial Military: The company’s commercial military product line consists of footwear products marketed to military personnel as a substitute for the government issued military boots. The company’s commercial military boots are designed to be comfortable, lightweight, and durable and are marketed under the Rocky brand name. Outdoor: The company’s outdoor product lines consist of footwear, apparel and accessory items marketed to outdoor enthusiasts who spend time actively engaged in activities, such as hunting, fishing, camping and hiking. The company’s consumers demand high quality, durable products that incorporate the highest level of comfort and the most advanced technical features, and it is committed to ensuring its products reflect the most advanced designs, features and materials available in the marketplace. The company’s outdoor product lines consist of all-season sport/hunting and fishing footwear, apparel and accessories that are typically waterproof and insulated and are designed to keep outdoor enthusiasts comfortable on rugged terrain or in extreme weather conditions. Duty: The company’s duty product line consists of footwear products marketed to law enforcement, security personnel and postal employees who are required to spend a majority of their time at work on their feet. All of its duty footwear styles are designed to be comfortable, flexible, lightweight, slip resistant and durable. Duty footwear is generally designed to fit as part of a uniform and typically incorporates stylistic features, such as black leather uppers in addition to the comfort features that are incorporated in all of its footwear products. U.S. Military: The company’s U.S. military product line consists of footwear products designed specifically for U.S. military personnel. These footwear products are designed and manufactured to meet rigorous specification requirements, which include lightweight, durable, waterproof footwear products manufactured in the U.S.A. The U.S. military products are marketed under the Rocky brand name. The company’s products are marketed under nine well-recognized, proprietary brands, Rocky, Georgia Boot, Durango, Lehigh, Muck, XTRATUF, Ranger and Servus, in addition to the licensed brand Michelin. Rocky Rocky is the company’s premium priced line of branded footwear, apparel and accessories. The company designs Rocky products for each of its six target markets and offers its products at a range of suggested U.S. retail price points: $38.00 to $405.00 for its footwear products; and $17.00 to $160.00 for its apparel and accessory lines. The Rocky brand originally targeted outdoor enthusiasts, particularly hunters, and has since become a market leader in the hunting boot category. In 2002, the company also extended into hunting apparel, including jackets, pants, gloves and caps. The company’s Rocky products for hunters and other outdoor enthusiasts are designed for specific weather conditions and the diverse terrains of North America. These products incorporate a range of technical features and designs, such as Gore-Tex waterproof breathable fabric, 3M Thinsulate insulation, nylon Cordura fabric and camouflaged uppers featuring either Venator, Mossy Oak or Realtree patterns. The company uses rugged outsoles made by industry leaders like Vibram, as well as its own proprietary design features to make the products durable and easy to wear. The company also produces Rocky duty and commercial military footwear targeting law enforcement professionals, military, security workers, fire industry professionals and postal service employees, and it has established leading market share positions in these categories. In 2002, the company introduced Rocky work footwear designed for varying weather conditions or difficult terrain, particularly for people who make their living outdoors, such as those in lumber, forestry, and oil and gas occupations. These products typically include many of the proprietary features and technologies that the company incorporates in its hunting and outdoor products. The company has also introduced western influenced work boots for farmers and ranchers. Most of these products are waterproof, insulated and utilize its proprietary comfort systems. In addition, the company has introduced men’s and women’s casual western footwear for consumers enamored with western influenced fashion. Georgia Boot Georgia Boot is the company’s moderately priced, high quality line of work footwear. Georgia Boot footwear is sold at suggested U.S. retail price points ranging from $76.00 to $292.00. This line of products primarily targets construction workers and those who work in industrial plants where special safety features are required for hazardous work environments. Many of the company’s boots incorporate safety toes or metatarsal guards to protect wearers’ feet from heavy objects and non-slip outsoles to prevent slip related injuries in the workplace. All of the company’s boots are designed to help prevent injury and subsequent work loss and is designed according to standards determined by the Occupational Safety & Health Administration or other standards required by employers. In addition, the company markets a line of Georgia Boot footwear to brand loyal consumers for farming, ranch work and other outdoor activities. These products are primarily all leather boots distributed through rural areas that allow the company to incorporate other technical features to provide all day comfort for long days outside. Durango Durango Boots manufactures premium western footwear for men, women and kids. Over the last 50 years, Durango has earned a reputation for building authentic western boots using exceptional materials and innovative constructions. The company’s line of Durango products is offered at suggested the U.S. retail price points ranging from $79.00 to $480.00. The company’s brand portfolio categories include work-western, farm and ranch, western-performance, premium exotics, fashion-forward and casual wear. Many of the company’s western products are marketed to core western and aspirational western consumers who have an affinity and loyalty to the western lifestyle. Such products include high-performance technologies that include the company’s patented Dually Shank System, which provides twice the torsion stability and midfoot support and various footbeds that offer flexibility, comfort and support for immediate gratification. Lehigh The Lehigh brand was established as a high quality line of occupational safety footwear that later expanded into a full service program offering. While still manufacturing and selling branded core product, the brand primarily focuses on providing managed programs to corporations that require and provide a subsidy to their employees to wear safety footwear. Most of the footwear incorporates a protective toe and can include a metatarsal guard, puncture-resistant plate, slip-resistant outsole and special materials to combat caustic substances. Lehigh offers an extensive selection of styles to fit any work environment and has a wide range of customer accounts in the industrial, hospitality and healthcare industries. The Lehigh brand line of safety shoes has suggested U.S. retail price points ranging from $29.00 to $520.00. Michelin Michelin is a premier price point line of work footwear targeting specific industrial professions, primarily indoor professions. The license to design, develop and manufacture footwear under the Michelin name was secured in 2006. Suggested U.S. retail prices for the Michelin brand are from $157.00 to $192.00. The license agreement for the Michelin brand expires on December 31, 2025, with the option to renew. The Original Muck Boot Company The Original Muck Boot Company (Muck) has pioneered the premium rubber and neoprene boot category by delivering high quality, innovative, weatherproof and comfortable products. The company’s line of Muck footwear products is offered at suggested U.S. retail price points ranging from $55.00 to $270.00. Through widespread consumer validation in the farm, agriculture, hunt and equestrian segments, Muck has been able to expand to new segments, such as outdoor, gardening, industrial and general work, as well as to new regions, such as the U.K., Norway and Germany to reach new consumers who have adopted the brand and its offerings. Both new and existing consumer groups have welcomed line extensions from the brand as the total catalog expands beyond its core offering into premium leather and other new footwear categories. XTRATUF XTRATUF is a leading outfitter in the commercial, sport and recreational fishing segment, having provided fishermen with capable, comfortable and reliable footwear for use in the harshest conditions. With roots in Alaska and continued widespread use by those who live there, the XTRATUF brand has been able to expand to other regions throughout North America and most in the U.K. and Japan. Fueled by the strong growth in the outdoor segment, the brand has been adopted by non-fishermen seeking quality, functional footwear. The company’s line of XTRATUF footwear products is offered at suggested U.S. retail price points ranging from $45.00 to $245.00. Servus Servus boots is known for its reliable PVC footwear made for wet and hazardous working conditions. Primarily sold to industrial and work users throughout North America, the Servus brand is a staple in the company’s portfolio of brands. With a substantial percentage of the line manufactured in the company’s own facility in Rock Island, Illinois and other North American locations, the brand is positioned to offer great value to end consumers. The company’s line of Servus footwear products is offered at suggested U.S. retail price points ranging from $26.00 to $145.00. Ranger Ranger serves two primary user segments: outdoor recreation and industrial/work. Ranger products consist of a focused range of pac-boots, rubber boots, waders, hip-boots and over-boots that are built for wet and cold weather and provide exceptional comfort and function at a value price. The company’s line of Ranger footwear products is offered at suggested U.S. retail price points ranging from $66.00 to $100.00. Sales and Distribution The company’s products are distributed through three distinct business segments: Wholesale, Retail and Contract Manufacturing. Wholesale In the U.S., the company distributes Rocky, Georgia Boot, Durango, Muck, XTRATUF, Servus, Ranger and Michelin products through a wide range of wholesale distribution channels. As of December 31, 2022, the company’s products were offered for sale at over 10,000 retail locations in the U.S. and Canada. Through its dedicated in-house sales team the company sells to wholesale accounts in the U.S. through the use of a dedicated in-house sales team, exclusive, as well as independent sales representatives who carry its branded products and other non-competing products. The company’s sales force is organized around major accounts, including Boot Barn, Tractor Supply Company and Dick’s Sporting Goods, and around its target markets: outdoor, work, duty, commercial military, and western. The company’s sales force is organized around brands, regions and customers in order to target a broad range of distribution channels. All of the company’s sales people actively call on their retail customer base to educate them on the quality, comfort, technical features and breadth of its product lines and to ensure that its products are displayed effectively at retail locations. The company’s Wholesale distribution channels vary by market: The company’s outdoor products are sold primarily through sporting goods stores, outdoor specialty stores, online retailers, catalogs and mass merchants. The company’s work-related products are sold primarily through work related retailers, farm and ranch stores, specialty safety stores, independent shoe stores, hardware stores and online retailers. The company’s duty products are sold primarily through uniform stores, catalog specialists and online retailers. The company’s commercial military products are sold primarily through base exchanges such as AAFES and consumer e-commerce websites. The company’s western products are sold through western stores, work stores, specialty farm and ranch stores, online retailers and more recently, fashion-oriented footwear retailers. Retail The company markets products directly to consumers through three retail strategies: Lehigh business-to-business including direct sales and through its Custom Fit websites; Consumer e-commerce websites and third-party marketplaces; and The company’s stores, which include its outdoor gear store and its retail store. Websites The company sells its product lines on its websites at rockyboots.com, georgiaboot.com, durangoboot.com, muckbootcompany.com, xtratuf.com, lehighoutfitters.com, lehighsafetyshoes.com, and slipgrips.com, as well as through online marketplaces. The company’s internet presence allows it to showcase the breadth and depth of its product lines in each of its target markets and enables it to educate its consumers about the unique technical features of its products. The company also sells to its business customers directly through its Custom Fit websites that are tailored to the specific needs of its customers. The company’s customers’ employees order directly through their employers’ established Custom Fit website, and the footwear is delivered directly to the consumer via a common freight carrier. The company’s customers include large, national companies, such as Carnival Cruise Lines, Pepsi, Schneider, Whirlpool, Holland America Cruise Lines, and Republic Services. Outdoor Gear and Retail Stores The company operates the Outdoor Gear Store in Nelsonville, Ohio. The company’s outdoor gear store primarily sells first quality or discontinued products in addition to a limited amount of factory damaged goods. Related products from other manufacturers are also sold in the store. The company’s outdoor gear store allows it to showcase the breadth of its product lines as well as to cost-effectively sell slow-moving inventory. The company’s outdoor gear store also provides an opportunity to interact with consumers to better understand their needs. Lehigh’s successful continued focus on converting its customers from delivery via its mobile and retail stores to purchasing via its Custom Fit sites and delivery direct has led to the continued reduction of the mobile and retail stores in the past several years. As of December 31, 2022, the company’s only remaining retail store is located at The Puget Sound Naval Base. Contract Manufacturing While the company focuses on continuing to build its Wholesale and Retail business, it also actively bids, from time to time, on eligible footwear contracts with the U.S. military. In addition to contracts with the U.S. military, the company bids on private label contracts. The company’s sales under such contracts are dependent on it winning the bids for these contracts. In 2022, the company fulfilled several multiyear contracts for the U.S. military. The company will continue to actively bid on U.S. military contracts. Marketing and Advertising The company has developed comprehensive marketing and advertising programs to gain national exposure and expand brand awareness for each of its brands in their target markets. The company has focused the majority of its advertising efforts on both digital advertising and consumer advertising in support of its retail partners. Digital advertising includes online brand level marketing, search engine pay-per-click, retargeting and social media targeting. A key component to supporting the company’s retail partners includes in-store point of purchase materials that add a dramatic focus to its brands and the products its retail partners carry. The company also advertises through targeted national and local cable programs, radio advertisements and print publications aimed at audiences that share the demographic profile of its typical customers. In addition, the company promotes through event sponsorships, which provide significant national exposure for all of its brands, as well as a direct connection to its target consumer. The company’s print advertisements and television commercials emphasize the technical features of its products as well as their high quality, comfort, functionality and durability. The company also supports independent dealers by listing their locations in its national print advertisements. In addition to the company’s national advertising campaigns, it has developed attractive merchandising displays and store-in-store concept fixturing that are available to its retailers who purchase the breadth of its product lines. The company also attends numerous tradeshows, which allow it to showcase its entire product line to retail buyers and has historically been an important source of new accounts. Foreign Operations and Sales Outside of the U.S. The company’s products are primarily distributed in the U.S., Canada, the U.K. and other international markets, mainly in Europe. The company ships its products from its finished goods distribution facilities located in Ohio and Nevada. Seasonality Historically, the company has experienced significant seasonal fluctuations in its business as many of its footwear products are used by consumers in adverse weather conditions. In order to meet these demands, the company must manufacture and source footwear year-round to be in a position to ship advance and at once orders for these products during the last two quarters of each year. Accordingly, average inventory levels have been highest during the second and third quarters of each year (year ended December 31, 2022) and sales have been highest in the last two quarters of the year. In addition, mild or dry weather conditions historically have had a material adverse effect on sales of the company’s outdoor products, particularly if they occurred in broad geographical areas during late fall or early winter. Intellectual Property The company owns numerous design and utility patents for footwear and footwear components (such as insoles and outsoles) in the U.S. and in several countries where its products are sold or manufactured, including China. The company owns numerous U.S. and foreign registrations for the trademarks used in its business, including its major brands Rocky, Georgia Boot, Durango, and Lehigh. The company also acquired various patents and trademark registrations through the Acquisition, including the brands Muck, XTRATUF, Servus and Ranger. In addition, the company licenses the use of third party trademarks, including Gore-Tex and Michelin, in order to market its products. The company’s license with W. L. Gore & Associates, Inc. (Gore) permits it to use the Gore-Tex and related marks on products and styles that have been approved in advance by Gore. Similarly, the company licenses with Michelin Lifestyle Limited permits it to use the Michelin brand and related marks on its products. The company’s license agreement with Michelin Lifestyle Limited to use the Michelin name expires on December 31, 2025, with the option to renew. History Rocky Brands, Inc. was founded in 1932. The company was incorporated in 2000.