What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-12 · 120 added, 157 removed, 374 unchanged (43% of the section changed)

4 unchanged sentences

(In thousands, except share amounts)

September 30,

CURRENT ASSETS:

3 unchanged sentences

74,453 71,983 70,662

Contract receivables

Other receivables

3 unchanged sentences

Income tax receivable

- 1,253 2,445

Prepaid expenses

15 unchanged sentences

$ 64,560 $ 58,069 $ 53,479

Contract liabilities

Current portion of long-term debt

12 unchanged sentences

DEFERRED LIABILITIES

777 716 1,179

TOTAL LIABILITIES

3 unchanged sentences

25,000,000 shares authorized;

issued and outstanding September 30, 2024 - 7,449,020 ;

issued and outstanding March 31, 2025 - 7,451,996 ;

December 31, 2024 - 7,454,465 ;

September 30, 2023 - 7,366,201

March 31, 2024 - 7,417,546

Additional paid-in-capital

74,070 73,866 72,312

11 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

COST OF GOODS SOLD

16 unchanged sentences

7,412 $ 71,973 $ 151,582 $ 223,555

NINE MONTHS ENDED SEPTEMBER 30, 2023

$ 2,550 $ 2,550

1 unchanged sentence

( 1,149 ) ( 1,149 )

Stock issued for options exercised, including tax benefits

Stock compensation expense

BALANCE - March 31, 2023

5 $ 339 - 339

$ ( 2,715 ) $ ( 2,715 )

Dividends paid on common stock ($ 0.155 per share)

( 1,139 ) ( 1,139 )

Stock compensation expense

7 $ 293 - 293

BALANCE - June 30, 2023

7,354 $ 70,400 $ 140,328 $ 210,728

$ 6,827 $ 6,827

Dividends paid on common stock ($ 0.155 per share)

( 1,142 ) ( 1,142 )

Stock issued for options exercised, including tax benefits

Stock compensation expense

BALANCE - September 30, 2023

BALANCE - March 31, 2024

7,417 $ 72,312 $ 152,983 $ 225,295

1 unchanged sentence

7,454 $ 73,866 $ 158,358 $ 232,224

NINE MONTHS ENDED SEPTEMBER 30, 2024

$ 4,941 $ 4,941

1 unchanged sentence

( 1,156 ) ( 1,156 )

Stock compensation expense

5 $ 339 - 339

BALANCE - March 31, 2024

7,417 $ 72,312 $ 152,983 $ 225,295

$ ( 1,243 ) $ ( 1,243 )

Dividends paid on common stock ($ 0.155 per share)

Repurchase of common stock

( 10 ) $ ( 201 ) - ( 201 )

Stock issued for options exercised, including tax benefits

- $ 599 - 599

Stock compensation expense

BALANCE - June 30, 2024

7,423 $ 73,223 $ 150,589 $ 223,812

$ 5,279 $ 5,279

Dividends paid on common stock ($ 0.155 per share)

( 1,155 ) ( 1,155 )

Stock compensation expense

26 $ 314 - 314

BALANCE - September 30, 2024

BALANCE - March 31, 2025

7,452 $ 74,070 $ 162,143 $ 236,213

4 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

2 unchanged sentences

Noncash lease expense

Loss on term loan extinguishment

Provision for bad debts

2 unchanged sentences

Loss on disposal of assets

Gain on sale of business

Change in assets and liabilities:

8 unchanged sentences

Purchase of fixed assets

Proceeds from sale of business

Net cash (used in) provided by investing activities

Proceeds from the sale of fixed assets

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from revolving credit facility

Repayments of revolving credit facility

Proceeds from long-term debt

Repayments of long-term debt

Payment of debt issuance costs and loan fees

Repayments on revolving credit facility

Repayments on term loan

Payments of loan fees

Proceeds from stock options

Repurchase of common stock

Dividends paid on common stock

10 unchanged sentences

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

We are a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names including Rocky, The Original Muck Boot Company ("Muck"), Georgia Boot, Durango, XTRATUF, Lehigh, Ranger and the licensed brand Michelin.

We are a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names including The Original Muck Boot Company ("Muck"), Rocky, Georgia Boot, Durango, Lehigh, XTRATUF, Ranger and the licensed brand Michelin.

Our brands have a long history of representing high quality, comfortable, functional and durable footwear and our products are organized around six target markets:

outdoor, work, duty, commercial military, military and western.

work, outdoor, western, commercial military, duty and military.

In addition, as part of our strategy of outfitting consumers from head-to-toe, we market complementary branded apparel and accessories that we believe leverage the strength and positioning of each of our brands.

1 unchanged sentence

All such adjustments reflected in the Unaudited Condensed Consolidated Financial Statements are considered to be of normal and recurring nature.

The results of operations for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results to be expected for the whole year.

The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results to be expected for the whole year.

The December 31, 2024 Unaudited Condensed Consolidated Balance Sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP").

3 unchanged sentences

Reclassifications

We have reclassified certain amounts in Note 9 - Accrued Expenses and Other Liabilities to conform to current period presentation.

We have reclassified certain amounts in prior periods in Note 8 - Accrued Expenses and Other Liabilities to conform to current period presentation.

ACCOUNTING STANDARDS UPDATES

4 unchanged sentences

Effect on Consolidated Financial Statements

ASU 2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures

This pronouncement requires expanded disclosures about an entity’s reportable segments, including more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how an entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources.

Fiscal year ending December 31, 2024

The Company is still assessing the impact of the new accounting standard but does not expect the adoption of this standard to have a material impact on its financial statements.

ASU 2023 - 09, Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures

This pronouncement requires expanded income tax disclosures primarily related to an entity's effective tax rate reconciliation and income taxes paid.

The Company is still assessing the impact of the new accounting standard but does not expect the adoption of this standard to have a material impact on its financial statements.

In addition to the recently issued accounting pronouncements, the SEC recently issued its final rule regarding climate change disclosures.

We are evaluating the impact this final rule will have on our Unaudited Condensed Consolidated Financial Statements.

No other new accounting pronouncement issued or effective during the period had, or is expected to have, a material impact on our Unaudited Condensed Consolidated Financial Statements.

Improvements to Income Tax Disclosures This pronouncement requires expanded income tax disclosures primarily related to an entity's effective tax rate reconciliation and income taxes paid.

Q4 2025 The Company is still assessing the impact of the new accounting standard but does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses

This pronouncement requires expanded disclosures on comprehensive income to improve expenses and address requests from investors for more detailed information about the types of expenses.

Q4 2027 (fiscal year) Q1 2028 (interim period)

The Company is still assessing the impact of the new accounting standard on its consolidated financial statements.

The fair value accounting standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

12 unchanged sentences

The fair value of our credit facilities is categorized as Level 2.

The Company does not currently have any Level 3 assets or liabilities.

We hold assets and liabilities in a separate trust in connection with deferred compensation plans.

1 unchanged sentence

The fair value of these assets is based on unadjusted quoted market prices for the funds in active markets with sufficient volume and frequency (Level 1 ).

SALE OF SERVUS BRAND AND RELATED ASSETS

On March 30, 2023, we completed the sale of the Servus brand and related assets to PQ Footwear, LLC and Petroquim S.R.L.

(collectively, the "Buyer").

Total consideration for this transaction was approximately $ 19.0 million, of which $ 17.3 million was received at closin g.

The remaining $ 1.7 million was received during the nine months ended September 30, 2024 .

The s ale of the Servus brand included the sale of inventory, fixed assets, customer relationships and tradenames, all of which related to our Wholesale segment.

We recorded a gain on the sale of Servus of approximately $ 1.3 million which is recorded within Interest Expense and Other - net on the accompanying Unaudited Condensed Consolidated Statement of Operations for the nine months ended September 30, 2023 .

Some assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances.

These assets primarily include goodwill and other indefinite lived intangible assets that are reduced to fair value when impaired.

Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

Nature of Performance Obligations

1 unchanged sentence

Wholesale, Retail and Contract Manufacturing.

In our Wholesale business, we distribute our products through a wide range of distribution channels representing over 10,000 retail store locations in the U.S., Canada, U.K.

and other international markets such as Europe.

In our Wholesale business, we distribute our products through a wide range of distribution channels representing over 10,000 retail store locations in the U.S., the U.K., and other international markets such as Europe.

Our 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.

3 unchanged sentences

Significant Accounting Policies and Judgments

Revenue is recognized when performance obligations under the terms of a contract with our customer are satisfied;

this generally occurs at a point in time when our product ships to the customer, which is when the transfer of control passes to the customer.

Revenue is recognized when the performance obligations under the terms of a contract with our customer are satisfied.

The performance obligation is satisfied, and revenue is recorded when control passes to the customer, which is generally upon shipment to the customer or at the time of sale for our retail store customers.

Revenue is measured as the amount of consideration we expect to receive in exchange for the transfer of our products, which is the net sales price.

The net sales price includes estimates of variable consideration for which reserves are established.

Components of variable consideration include discounts and allowances, customer rebates, markdowns, chargebacks, and product returns.

The net sales price includes estimates of variable consideration for which reserves may be established.

Components of variable consideration include discounts and allowances, customer rebates, markdowns and product returns.

These reserves are based on the amounts earned, or to be claimed, on the related sales of our products.

4 unchanged sentences

If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net revenue and earnings in the period such variances become known.

Trade receivables represent our right to unconditional payment.

Current contract receivables represent contractual minimum payments required under non-cancellable contracts with the U.S.

Our estimated sales returns are based on historical customer return data and known or anticipated returns not yet received from customers.

Actual returns in any future period are inherently uncertain and thus may differ from estimates recorded.

If actual or expected future returns are significantly higher or lower than the established reserves, a reduction or increase to net revenues is recorded in the period in which the determination is made.

From time to time, we enter into non-cancellable contracts with the U.S.

Military and other customers with a duration of one year or less.

The contractual minimum payments under such contracts may result in current contract receivable balances.

Current contract liabilities are performance obligations that we expect to satisfy or relieve within the next twelve months, advance consideration obtained prior to satisfying a performance obligation, or unconditional obligations to provide goods or services under non-cancellable contracts before the transfer of goods or services to the customer has occurred.

Our contract liability represents unconditional obligations to provide goods under non-cancellable contracts with the U.S.

Military and other customers.

As of September 30, 2024 , there are no contract receivable or contract liability balances outstanding.

Items considered immaterial within the context of the contract are recognized as an expense.

As of March 31, 2025 , December 31, 2024, and March 31, 2024, there are no contract receivable or contract liability balances outstanding.

Taxes assessed by a governmental authority that are both imposed on, and concurrent with, a specific revenue producing transaction that are collected from customers are excluded from revenue.

1 unchanged sentence

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in operating expenses.

Contract Balances

The following table provides information about contract liabilities from contracts with our customers:

September 30,

($ in thousands)

Contract liabilities

Significant changes in the contract liabilities balance during the period are as follows:

($ in thousands)

Contract liabilities

Balance, December 31, 2023

Non-cancelable contracts with customers entered into during the period

Revenue recognized related to non-cancelable contracts with customers during the period

Balance, September 30, 2024

Disaggregation of Revenue

3 unchanged sentences

TRADE RECEIVABLES

Trade receivables are presented net of the related allowance for credit losses of approximately $ 1.1 million, $ 1.8 million and $ 2.1 million at September 30, 2024 , December 31, 2023 and September 30, 2023 , respectively.

We maintain an allowance for credit losses resulting from the inability of our customers to make required payments.

We calculate the allowance based on historical experience, the age of the receivables, receivable insurance status, and identification of customer accounts that are likely to prove difficult to collect due to various criteria including pending bankruptcy.

However, estimates of the allowance in any future period are inherently uncertain and actual allowances may differ from these estimates.

Estimates of the allowance in any future period are inherently uncertain and actual allowances may differ from these estimates.

If actual or expected future allowances were significantly greater or less than established reserves, a reduction or increase to bad debt expense would be recorded in the period this determination was made.

Our credit policy generally provides that trade receivables will be deemed uncollectible and written-off once we have pursued all reasonable efforts to collect on the account.

Trade receivables are presented net of the related allowance for credit losses of approximately $ 0.9 million, $ 1.0 million and $ 1.3 million at March 31, 2025 , December 31, 2024 and March 31, 2024 , respectively.

Inventories are comprised of the following:

September 30,

($ in thousands)

Finished goods

$ 156,939 $ 149,328 $ 146,784

Raw materials

17,629 16,671 17,479

Work-in-process

Finished goods

The asset associated with our returns reserve included within inventories was approximately $ 0.9 million, $ 0.8 million and $ 1.0 million at September 30, 2024 , December 31, 2023 and September 30, 2023 , respectively.

$ 175,508 $ 166,701 $ 165,129

The asset associated with our returns reserve included within inventories wa s approximately $ 0.9 million, $ 0.9 million and $ 0.8 millio n at March 31, 2025 , December 31, 2024 and March 31, 2024 , respectively.

GOODWILL & IDENTIFIED INTANGIBLE ASSETS

There was no change in goodwill during the nine months ended September 30, 2024 .

There was no change in goodwill during the three months ended March 31, 2025 .

Intangible assets other than goodwill at the respective balance sheet dates consisted of the following:

September 30, 2024

March 31, 2025

($ in thousands)

Impairment (1)

Indefinite-lived intangible assets

6 unchanged sentences

$ 121,208 $ ( 12,082 ) $ ( 4,000 ) $ 105,126

( 1 ) Relates to the impairment of the Muck brand for the year ended December 31, 2024.

December 31, 2024

($ in thousands)

Amount Amortization Amount

Impairment (1)

Indefinite-lived intangible assets

6 unchanged sentences

$ 121,208 $ ( 11,385 ) $ ( 4,000 ) $ 105,823

September 30, 2023

( 1 ) Relates to the impairment of the Muck brand for the year ended December 31, 2024.

March 31, 2024

($ in thousands)

Amount Amortization Amount

Indefinite-lived intangible assets

6 unchanged sentences

$ 121,208 $ ( 9,289 ) - $ 111,919

The weighted average life of patents and customer relationships is 2.7 years and 11.5 years, respectively.

Amortization expense for intangible assets subject to amortization for each of the three months ended September 30, 2024 and 2023 was $ 0.7 million.

Amortization expense for intangible assets subject to amortization for the nine months ended September 30, 2024 and 2023 was $ 2.1 million and $ 2.2 million, respectively.

As of September 30, 2024 , a schedule of approximate expected remaining amortization expense related to intangible assets for the years ending December 31 is as follows:

The weighted average life of patents and customer relation ships is 2.9 years and 11.0 years, res pectively.

Amortization expense for intangible assets subject to amortization for each of the three months ended March 31, 2025 and 2024 was $0.7 million.

As of March 31, 2025 , a schedule of approximate expected remaining amortization expense related to intangible assets for the years ending December 31 is as follows:

($ in thousands)

1 unchanged sentence

Amounts reported in "Accrued expenses and other liabilities" within the accompanying Unaudited Condensed Consolidated Balance Sheets were:

September 30,

($ in thousands)

1 unchanged sentence

Accrued duties

Salaries and wages

$ 9,889 $ 6,807 $ 5,867

Operating lease liability

Returns liability

2,808 2,772 2,612

Salaries and wages

2,198 3,220 1,774

Accrued freight

1,807 3,244 2,193

Returns liability

1,716 1,754 -

Accrued advertising

1,338 1,406 1,357

Income taxes payable

1 unchanged sentence

Accrued interest

2,688 2,419 1,657

Total accrued expenses and other liabilities

$ 25,164 $ 23,977 $ 18,619

LONG-TERM DEBT

3 unchanged sentences

The ABL Facility includes a separate first in, last out (FILO) tranche, which allows the Company to borrow at higher advance rates on eligible accounts receivables and inventory balances.

As of September 30, 2024 , we had borrowing capacity of $ 50.1 million under the ABL Facility.

As of March 31, 2025 , we had borrowing capacity of $ 53.0 million under the ABL Facility.

The Term Facility provides for monthly principal payments until the date of maturity, at which date the remaining principal balance is due.

This transaction resulted in a $ 2.6 million expense within Interest Expense and Other - net in the accompanying Unaudited Combined Condensed Statements of Operations, consisting of a $ 1.1 million loss on term loan extinguishment and a $ 1.5 million term loan prepayment penalty for the nine months ended September 30, 2024 .

The $ 1.1 million loss on term loan extinguishment is included as a noncash adjustment to net income and the $ 1.5 million prepayment penalty is included within Repayments of long-term debt in the accompanying Unaudited Combined Condensed Statements of Cash Flows for the nine months ended September 30, 2024 .

Loans under the ABL Agreement bear interest at a variable rate equal to either (i) the Base Rate (as calculated in the ABL Agreement) or (ii) Term SOFR (as calculated in the ABL Agreement), plus in each case an interest margin determined by the Company's average daily availability as a percentage of the aggregate amount of revolving commitments for revolving loans and term loans, with a range of Base Rate margins and term SOFR margins, as set forth of the following chart:

7 unchanged sentences

Base Rate FILO Loan

2.75 % 1.50 % 1.25 % 0.00 % 1.75 % 0.50 %

>33.3% and < or equal to 66.7%

3.00 % 1.50 % 1.50 % 0.00 % 2.00 % 0.50 %

< or equal to 33.3%

( 1 ) Until September 30, 2024 , Level III applied.

3.25 % 1.75 % 1.75 % 0.25 % 2.25 % 0.75 %

In connection with the ABL Agreement, we paid certain fees that were capitalized and will be amortized over the life of such agreement.

Current and long-term debt under the ABL Agreement consisted of the following:

September 30,

($ in thousands)

Term Facility that matures in 2029 with an effective interest rate of 8.82 %

Term Facility that matures in 2029 with an effective interest rate of 7.97 % as of March 31, 2025 and 10.47 % as of December 31, 2024, respectively

$ 33,032 $ 35,123

ABL Facility that matures in 2029:

SOFR borrowings with an effective interest rate of 6.76 %

Prime borrowings with an effective interest rate of 8.47 %

SOFR borrowings with an effective interest rate of 6.23 % as of March 31, 2025 and 6.24 % as of December 31, 2024, respectively

96,300 91,300

Prime borrowings with an effective interest rate of 7.80 % as of March 31, 2025 and 7.77 % as of December 31, 2024, respectively

130,748 131,000

Unamortized debt issuance costs

( 2,132 ) ( 2,263 )

Total debt, net of debt issuance costs

128,616 128,737

Debt maturing within one year

( 8,361 ) ( 8,361 )

Long-term debt

$ 120,255 $ 120,376

A schedule of debt payments for the next five years is as follows:

2 unchanged sentences

Our ABL Facility and Term Facility require us to maintain a minimum fixed charge coverage ratio, as defined in the agreement.

As of September 30, 2024 , we were in compliance with all credit facility covenants.

The ABL Facility and Term Facility also contain restrictions on the amount of dividend payments.

As of September 30, 2024 , the Company was in compliance with the amounts paid on dividends in accordance with our debt facilities.

As of March 31, 2025 , we were in compliance with all credit facility covenants.

The ABL Facility and Term Facility also contain restrictions on the amount of dividend payments and share repurchases.

As of March 31, 2025 , the Company was in compliance with the amounts paid on dividends and share repurchases in accordance with our debt facilities.

Retired Term Debt

13 unchanged sentences

In May 2023, we entered into a fourth amendment to the TCW Term Facility to provide certain EBITDA adjustments in respect of the financial covenants, adjust the method to calculate total debt, continue certain pricing terms, extend certain prepayment terms, and pay such lenders certain amendment fees, among other things.

In October 2023, we entered into a sixth amendment to the TCW Term Facility to provide certain EBITDA adjustments in respect of the financial covenants, adjust the performance pricing grid, adjust the total leverage ratio periodically through June 30, 2025, among other things.

In October 2023, we entered into a sixth amendment to the TCW Term Facility to provide certain EBITDA adjustments in respect of the financial covenants, adjust the performance pricing grid and adjust the total leverage ratio periodically through June 30, 2025, among other things.

The TCW Term Facility was collateralized by a second -lien on accounts receivable, inventory, cash and related assets, and a first -lien on substantially all other assets.

16 unchanged sentences

Term SOFR FILO Loans

0.00 % 1.25 % 0.50 % 1.75 %

>33.3% and < or equal to 66.7%

0.00 % 1.50 % 0.50 % 2.00 %

< or equal to 33.3%

0.25 % 1.75 % 0.75 % 2.25 %

In connection with the TCW Term Facility and the Original ABL Facility, we had to pay certain fees that were capitalized and amortized over the life of each respective loan.

1 unchanged sentence

Current and long-term debt under the Original ABL Facility and TCW Term Facility consisted of the following:

September 30,

($ in thousands)

TCW Term Facility refinanced in April 2024 with an effective interest rate of 13.20% as of December 31, 2023 and 12.77% as of September 30, 2023

TCW Term Facility refinanced in April 2024 with an effective interest rate of 13.20 %

Original ABL Facility amended and restated in April 2024:

SOFR borrowings with an effective interest rate of 7.31% and 7.25% as of December 31, 2023 and September 30, 2023, respectively

Prime borrowings with an effective interest rate of 8.75% as of and December 31, 2023 and September 30, 2023

SOFR borrowings with an effective interest rate of 7.18 %

Prime borrowings with an effective interest rate of 8.75 %

Unamortized debt issuance costs

5 unchanged sentences

The Original ABL Facility contained a restrictive covenant which required us to maintain a fixed charge coverage ratio upon a triggering event taking place (as defined in the Original ABL Facility).

During the three months ended September 30, 2023, we were in compliance with all credit facility covenants.

During the three months ended March 30, 2024, we were in compliance with all credit facility covenants.

The TCW Term Facility and the Original ABL Facility also contained restrictions on the amount of dividend payments.

We were in compliance with all TCW Term Facility and Original ABL Facility Agreement covenants through April 26, 2024, the date on which we refinanced such debt.

The effective tax rate for the three and nine months ended September 30, 2024 and 2023 wa s 23.4 % and 20.9 %, r espectively.

The effective tax rate used for interim reporting purposes is based on management’s best estimate of factors impacting the effective tax rate for the full fiscal year and includes the impact of discrete items recognized in the quarter.

The effective tax rate for the three and three months ended March 31, 2025 and 2024 was 22.2 % and 23.4 %, r espectively.

The effective tax rate used for interim reporting purposes is based on management’s best estimate of factors impacting the effective tax rate, including projected income from our domestic and international businesses, for the full fiscal year and includes the impact of discrete items recognized in the quarter.

There can be no assurance that the effective tax rate estimated for interim financial reporting purposes will approximate the effective tax rate determined at fiscal year-end.

3 unchanged sentences

Our policy is to accrue interest and penalties on any uncertain tax position as a component of income tax expense.

No such expenses were recognized during the three and nine months ended September 30, 2024 and 2023 .

No such expenses were recognized during the three months ended March 31, 2025 and 2024 .

We do not believe there will be any material changes in our uncertain tax positions over the next 12 months.

2 unchanged sentences

The diluted EPS computation includes common share equivalents, when dilutive.

A reconciliation of the shares used in the basic and diluted income per common share computation for the three and nine months ended September 30, 2024 and 2023 is as follows:

A reconciliation of the shares used in the basic and diluted income per common share computation for the three months ended March 31, 2025 and 2024 is as follows:

Three Months Ended

Nine Months Ended

September 30,

(shares in thousands)

5 unchanged sentences

SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for the nine months ended September 30, 2024 and 2023 is as follows:

Nine Months Ended

September 30,

Supplemental cash flow information for the three months ended March 31, 2025 and 2024 is as follows:

Three Months Ended

($ in thousands)

Interest paid

$ 2,276 $ 2,724

Federal, state, and local income taxes paid, net

Property, plant, and equipment noncash purchases in accounts payable

Property, plant, and equipment purchases in accounts payable

Right-of-use assets obtained in exchange for operating lease liabilities, net of terminations

2 unchanged sentences

Wholesale, Retail and Contract Manufacturing.

In our Wholesale segment, our products are offered in over 10,000 retail locations representing a wide range of distribution channels in the U.S., Canada, U.K.

In our Wholesale segment, our products are offered in over 10,000 retail locations representing a wide range of distribution channels in the U.S., the U.K.

and other international markets, mainly in Europe.

5 unchanged sentences

Military, private label sales and any sales to customers in which we are contracted to manufacture or source a specific footwear product for a customer.

Net sales to foreign countries represented approxima tely 4.8 % and 7.5 % of net sa les for the three months ended September 30, 2024 and 2023 , respectively.

Net sales to foreign countries represented approxim ately 3.2 % and 5.5 % of net sales for the nine months ended September 30, 2024 and 2023 , respectively.

For segment reporting purposes, management uses gross margin to evaluate segment performance and allocate resources.

Net sales to foreign countries represented approximately 2.0 % and 2.1 % of net sales for the three months ended March 31, 2025 and 2024 , respectively.

Our Chief Operating Decision Maker ("CODM") is our Chief Executive Officer (CEO), who evaluates operating results and performance based on net sales and gross margin.

Our CODM also uses results of net sales and gross margin to evaluate segment performance and allocate resources as the primary metrics for overall segment evaluation.

Operating expenses such as warehousing, distribution, marketing and other key activities supporting our operations are integrated to maximize efficiency and productivity;

1 unchanged sentence

The following is a summary of segment results for the Wholesale, Retail and Contract Manufacturing segments for the

three and nine months ended September 30, 2024 and 2023

three months ended March 31, 2025 and 2024 .

Three Months Ended

Nine Months Ended

September 30,

($ in thousands)

$ 74,784 $ 79,791

36,641 30,408

Contract Manufacturing

Total Net Sales

$ 114,073 $ 112,906

COST OF GOODS SOLD:

$ 44,674 $ 50,760

19,896 15,606

Contract Manufacturing

Total Cost of Goods Sold

$ 67,065 $ 68,757

GROSS MARGIN:

$ 30,110 $ 29,031

16,745 14,802

Contract Manufacturing

Total Gross Margin

$ 47,008 $ 44,149

Segment asset information is not prepared or used to assess segment performance.

COMMITMENTS AND CONTINGENCIES

The Company is involved in legal proceedings in the ordinary course of business.

Unless otherwise stated, we believe that the likelihood of the resolution being materially adverse to our financial statements is remote and as such have

not recorded any contingent liabilities within the accompanying Unaudited Condensed Consolidated Financial Statement.

Gain Contingency

5 unchanged sentences

We have the potential to recover the total amount of overpaid duties resulting in an estimated potential refund of approximately $ 7.7 million, of which we have received $ 5.1 million to date.

No refunds were received for the nine months ended September 30, 2024 and $ 1.9 million in refunds were received during the nine months ended September 30, 2023 .

No refunds were received for the three months ended March 31, 2025 and March 31, 2024.

We are accounting for these post summary corrections as a gain contingency, and as such have not recorded these potential refunds within the accompanying Unaudited Condensed Consolidated Balance Sheet due to uncertainty of collection.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements