What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 102 added, 119 removed, 375 unchanged (37% of the section changed)

39 unchanged sentences

124,167 120,376 144,073

LONG-TERM TAXES PAYABLE

LONG-TERM LEASE

8 unchanged sentences

25,000,000 shares authorized;

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

issued and outstanding June 30, 2025 - 7,461,167 ;

December 31, 2024 - 7,454,465 ;

March 31, 2024 - 7,417,546

June 30, 2024 - 7,444,881

Additional paid-in-capital

12 unchanged sentences

Three Months Ended

Six Months Ended

$ 105,647 $ 98,258 $ 219,720 $ 211,164

COST OF GOODS SOLD

62,366 60,220 129,431 128,977

43,281 38,038 90,289 82,187

OPERATING EXPENSES

36,125 33,530 74,427 69,695

INCOME FROM OPERATIONS

7,156 4,508 15,862 12,492

INTEREST EXPENSE AND OTHER – net

INCOME BEFORE INCOME TAX EXPENSE

INCOME TAX EXPENSE

INCOME PER SHARE

( 2,519 ) ( 6,131 ) ( 4,874 ) ( 10,785 )

INCOME (LOSS) BEFORE INCOME TAX EXPENSE

4,637 ( 1,623 ) 10,988 1,707

INCOME TAX EXPENSE (BENEFIT)

1,029 ( 380 ) 2,438 399

NET INCOME (LOSS)

$ 3,608 $ ( 1,243 ) $ 8,550 $ 1,308

INCOME (LOSS) PER SHARE

$ 0.48 $ ( 0.17 ) $ 1.15 $ 0.18

$ 0.48 $ ( 0.17 ) $ 1.14 $ 0.18

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

7,461 7,429 7,460 7,423

7,493 7,429 7,493 7,466

See Notes to Unaudited Condensed Consolidated Financial Statements

8 unchanged sentences

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

SIX MONTHS ENDED JUNE 30, 2024

$ 2,550 $ 2,550

5 unchanged sentences

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

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

Dividends paid on common stock ($ 0.155 per share)

( 1,151 ) ( 1,151 )

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

BALANCE - December 31, 2024

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

SIX MONTHS ENDED JUNE 30, 2025

$ 4,941 $ 4,941

7 unchanged sentences

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

$ 3,608 $ 3,608

Dividends paid on common stock ($ 0.155 per share)

( 1,156 ) ( 1,156 )

Repurchase of common stock

Stock issued for options exercised, including tax benefits

Stock compensation expense

BALANCE - June 30, 2025

7,461 74,470 $ 164,595 239,065

See Notes to Unaudited Condensed Consolidated Financial Statements

3 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

$ 8,550 $ 1,308

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

3 unchanged sentences

Stock compensation expense

Loss on term loan extinguishment

Amortization of debt issuance costs and loan fees

Loss on disposal of assets

Change in assets and liabilities:

Contract receivables

( 20,134 ) ( 5,772 )

Other current assets

( 2,338 ) ( 2,298 )

( 70 ) ( 23 )

Accounts payable

Operating lease liability

( 1,402 ) ( 1,270 )

Accrued and other liabilities

3 unchanged sentences

Purchase of fixed assets

Proceeds from the sale of fixed assets

( 3,872 ) ( 2,130 )

Proceeds from sale of business

Net cash used in investing activities

( 3,872 ) ( 430 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from revolving credit facility

23,710 120,892

Repayments on revolving credit facility

( 16,000 ) ( 110,833 )

Proceeds on term loan

Repayments on term loan

Payments of loan fees

( 4,181 ) ( 80,115 )

Payments of debt issuance costs and loan fees

( 145 ) ( 2,051 )

Proceeds from stock options

1 unchanged sentence

Dividends paid on common stock

Net cash used in financing activities

( 2,312 ) ( 2,300 )

Net cash provided by (used in) financing activities

890 ( 23,808 )

DECREASE IN CASH AND CASH EQUIVALENTS

( 940 ) ( 363 )

CASH AND CASH EQUIVALENTS:

1 unchanged sentence

END OF PERIOD

$ 2,779 $ 4,107

See Notes to Unaudited Condensed Consolidated Financial Statements

10 unchanged sentences

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

The results of operations for the three and six months ended June 30, 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").

2 unchanged sentences

Actual results could differ from those estimates.

Reclassifications

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

59 unchanged sentences

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.

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

As of June 30, 2025 , December 31, 2024, and June 30, 2024, there were 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.

2 unchanged sentences

Disaggregation of Revenue

All revenues are recognized at a point in time when control of our products pass to the customer at point of shipment or point of sale for retail customers.

All revenues are recognized at a point in time when control of our products pass to the customer at point of shipment or point of sale for retail store customers.

Because all revenues are recognized at a point in time and are disaggregated by channel, our segment disclosures are consistent with disaggregation requirements.

6 unchanged sentences

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.

Trade receivables are presented net of the related allowance for credit losses of approximately $ 0.8 million, $ 1.0 million and $ 0.9 million at June 30, 2025 , December 31, 2024 and June 30, 2024 , respectively.

Inventories are comprised of the following:

6 unchanged sentences

$ 186,836 $ 166,701 $ 174,973

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.

The asset associated with our returns reserve included within inventories wa s approximately $ 0.9 million, $ 0.9 million and $ 0.7 million at June 30, 2025 , December 31, 2024 and June 30, 2024 , respectively.

GOODWILL & IDENTIFIED INTANGIBLE ASSETS

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

There was no change in goodwill during the six months ended June 30, 2025 .

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

March 31, 2025

June 30, 2025

($ in thousands)

21 unchanged sentences

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

March 31, 2024

June 30, 2024

($ in thousands)

8 unchanged sentences

The weighted average life of patents and customer relation ships is 2.7 years and 10.8 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)

ACCRUED EXPENSES AND OTHER LIABILTIES

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

Amortization expense for intangible assets subject to amortization for each of the three months ended June 30, 2025 and 2024 was $ 0.7 million.

Amortization expense for intangible assets subject to amortization for the six months ended June 30, 2025 and 2024 was $ 1.4 million.

As of June 30, 2025 , a schedule of approximate expected remaining amortization expense related to intangible assets for the years ending December 31 is as follows:

($ in thousands)

Accrued expenses and other liabilities:

Accrued duties

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

Operating lease 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

Taxes - other

Accrued interest

2,688 2,419 1,657

Total accrued expenses and other liabilities

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

LONG-TERM DEBT

On April 26, 2024, we refinanced our existing debt by amending and restating our credit agreement with Bank of America, N.A., as agent, sole lead arranger and sole bookrunner and other lenders party thereto (the "ABL Agreement").

On April 26, 2024, we refinanced our previous term debt and asset-based lending credit facilities by amending and restating our credit agreement with Bank of America, N.A., as agent, sole lead arranger and sole bookrunner and other lenders party thereto (the "ABL Agreement").

The ABL Agreement consists of a $ 175.0 million asset-based lending credit facility (the "ABL Facility") and a $ 50.0 million term loan facility (the "Term Facility").

1 unchanged sentence

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

As of June 30, 2025 , we had borrowing capacity of $ 45.7 mi llion 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.

The April 26, 2024 refinance of debt 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 six months ended June 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 six months ending June 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:

15 unchanged sentences

($ in thousands)

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

Term Facility that matures in 2029 with an effective interest rate of 7.69 % as of June 30, 2025, 10.47 % as of December 31, 2024 and 8.93 % as of June 30, 2024, respectively

$ 30,942 $ 35,123 $ 49,303

ABL Facility that matures in 2029:

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

SOFR borrowings with an effective interest rate of 6.22 % as of June 30, 2025, 6.24 % as of December 31, 2024 and 7.18 % as of June 30, 2024, respectively

103,300 91,300 100,278

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

Prime borrowings with an effective interest rate of 7.94 % as of June 30, 2025, 7.77 % as of December 31, 2024 and 8.75 % as of June 30, 2024, respectively

288 4,577 5,377

134,530 131,000 154,958

Unamortized debt issuance costs

9 unchanged sentences

Credit Facility Covenants

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

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

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

As of June 30, 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

On March 15, 2021, we entered into a senior secured term loan facility with TCW Asset Management Company, LLC ("TCW"), as agent, for the lenders party thereto in the amount of $ 130.0 million (the "TCW Term Facility").

The TCW Term Facility provided for quarterly payments of principal and bore interest of LIBOR plus 7.00 % through June 30, 2021.

After that date, interest was assessed quarterly based on our total leverage ratio.

The total leverage ratio was calculated as (a) Total Debt to (b) EBITDA.

If our total leverage ratio was greater than or equal to 4.00, the effective interest rate would have been SOFR plus 7.75 % (or at our option, Prime Rate plus 6.75 %).

If our total leverage ratio was less than 4.00 but greater than or equal to 3.50, the effective interest rate would have been SOFR plus 7.50 % (or at our option, Prime Rate plus 6.50 %).

If our total leverage ratio was less than 3.50 but greater than 3.00, the effective interest rate would have been SOFR plus 7.00 % (or at our option, Prime Rate plus 6.00 %).

If our total leverage ratio was less than 3.00, the effective interest rate would have been SOFR plus 6.50 % (or at our option, Prime Rate plus 5.50 %).

The TCW Term Facility also had a SOFR floor rate of 1.00 %.

In June 2022, we entered into a second amendment with TCW to further amend the TCW Term Facility to consent to the modifications in our borrowing capacity under the Original ABL Facility as described below, and to adjust certain pricing and prepayment terms, among other things.

The second amendment also modified the interest index to provide the use of SOFR to calculate interest rather than LIBOR.

The effective interest rate was increased to SOFR plus 7.50 % through November 2022.

In November 2022, the TCW Term Facility was amended to increase the effective interest rate to SOFR plus 7.00 % until June 2023 and to provide certain EBITDA adjustments with respect to financial covenants, among other things.

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 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.

The TCW Term Facility was replaced by the Term Facility that was part of the ABL Agreement in April 2024.

On March 15, 2021, we also entered into a senior secured asset-based credit facility (the "Original ABL Facility") with Bank of America, N.A.

as agent, for the lenders party thereto.

The Original ABL Facility provided a senior secured asset-based revolving credit facility up to a principal amount of $ 150.0 million, which included a sub-limit for the issuance of letters of credit up to $ 5.0 million.

The Original ABL Facility would be increased up to an additional $ 50.0 million at the borrowers’ request and the lenders’ option, subject to customary conditions.

In June 2022, we further amended the Original ABL Facility to temporarily increase our borrowing capacity to $ 200.0 million through December 31, 2022, which thereafter was reduced to $ 175.0 million.

In November 2022, we entered into a third amendment to the Original ABL Facility to provide certain EBITDA adjustments with respect to our financial covenant.

The Original ABL Facility included a separate first in, last out (FILO) tranche, which allowed us to borrow at higher advance rates on eligible accounts receivables and inventory balances.

In October 2023, we entered into a fifth amendment to the Original ABL Facility to provide certain EBITDA adjustments with respect to our financial covenant.

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

The Original ABL Facility was replaced with the ABL Facility that was part of the ABL Agreement in April 2024.

Interest on the Original ABL Facility was based on the amount available to be borrowed as set forth on the following chart:

Revolver Pricing Level

Average Availability as a Percentage of Commitments

Term SOFR Loan

Base Rate for FILO

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.

In addition, the Original ABL Facility required us to pay an annual collateral management fee in the amount of $ 75,000 due on each anniversary of the issuance date, until it matured.

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

($ in thousands)

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 7.18 %

Prime borrowings with an effective interest rate of 8.75 %

Unamortized debt issuance costs

Total debt, net of debt issuance costs

Debt maturing within one year

Long-term debt

Retired Credit Facility Covenants

The TCW Term Facility contained restrictive covenants which required us to maintain a maximum total leverage ratio and a minimum fixed charge coverage ratio, as defined in the TCW Term Facility agreement.

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 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 three months ended March 31, 2025 and 2024 was 22.2 % and 23.4 %, r espectively.

As of June 30, 2025 , the Company was in compliance with the amounts paid on dividends and share repurchases in accordance with our credit facilities.

We were in compliance with all applicable credit facility covenants under our previous term debt and asset-based lending credit facility through April 26, 2024, the date on which we refinanced such debt.

The effective tax rate for the six months ended June 30, 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.

4 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 months ended March 31, 2025 and 2024 .

No such expenses were recognized during the three and six months ended June 30, 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 months ended March 31, 2025 and 2024 is as follows:

A reconciliation of the shares used in the basic and diluted income per common share computation for the three and six months ended June 30, 2025 and 2024 is as follows:

Three Months Ended

Six Months Ended

(shares in thousands)

Basic - weighted average shares outstanding

7,461 7,429 7,460 7,423

Dilutive restricted share units (1)

1 unchanged sentence

Diluted - weighted average shares outstanding

7,493 7,429 7,493 7,466

Anti-dilutive securities

179 54 179 103

( 1 ) Due to a net loss for the three months ended June 30, 2024, zero dilutive restricted share units and stock options are included for the period because the effect would be anti-dilutive.

SUPPLEMENTAL CASH FLOW INFORMATION

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

Three Months Ended

Supplemental cash flow information for the six months ended June 30, 2025 and 2024 is as follows:

Six Months Ended

($ in thousands)

2 unchanged sentences

Federal, state, and local income taxes paid, net

$ 1,639 $ 219

Property, plant, and equipment purchases in accounts payable

11 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 approximately 2.0 % and 2.1 % of net sales for the three months ended March 31, 2025 and 2024 , respectively.

Net sales to foreign countries represented approximately 3.6 % and 2.7 % of net sales for the three months ended June 30, 2025 and 2024, respectively.

Net sales to foreign countries represented approximately 2.8 % and 2.4 % of net sales for the six months ended June 30, 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.

3 unchanged sentences

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

three months ended March 31, 2025 and 2024 .

three and six months ended June 30, 2025 and 2024 .

Three Months Ended

Six Months Ended

($ in thousands)

2 unchanged sentences

Contract Manufacturing

2,809 3,890 5,457 6,597

Total Net Sales

4 unchanged sentences

Contract Manufacturing

2,461 3,518 4,956 5,909

Total Cost of Goods Sold

4 unchanged sentences

Contract Manufacturing

348 372 501 688

Total Gross Margin

4 unchanged sentences

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.

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

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 $ 7.9 million, of which we have received $ 5.1 million to date.

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

No refunds were received for the six months ended June 30, 2025 and June 30, 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