Okay, we're going to get started now. Good afternoon. I'm John McNamara with Three Part Advisors. Our next presentation is Rocky Brands. Rocky Brands designs, manufactures, and markets premium work, outdoor, and Western footwear and apparel through a portfolio of heritage brands. The stock trades on the Nasdaq under the symbol RCKY. With us from management are Jason Brooks, President and Chief Executive Officer, and Tom Robertson, Chief Operating and Chief Financial Officer. Who's going to take over? Tom? I'm going to take over, yeah. It's all yours. Thank you, John. Appreciate it. Thank you all for being here. Appreciate that. Speak to the- You want me up there? the internet audience. I got to go up here. Wow. Not used to having a mic in front of me. Again, thank you for being here. We'll go over some slides and then, I guess, John, if it's okay, do questions at the end? Awesome. Thank you very much. I've done. Get out. Safe harbor statement, I'm sure everybody here knows what this is. We'll jump in, talk a little bit about the history of the company, the portfolio brands, 25 sales mix, brand overviews, distribution, and manufacturing, a little bit on the financial highlights, investment, and contact information as well. Rocky Brands started back in 1932. I promise I won't go through every year, but 1932 is when the company started in Nelsonville, Ohio. In the 1980s, we built our own factories in the Dominican Republic and also in Puerto Rico. We still have those factories today, and they still produce product for us. We did go public in 1993, and in 2005, we did an acquisition of EJ Footwear or Endicott Johnson Footwear, which was the Durango, the Georgia Boot brand, and the Lehigh business, which we'll talk a little bit about later. In 2017, we had a leadership change, and that was when I was fortunate enough to move into the CEO role, this is going on my 10th year, which is kind of crazy to think about. In 2021, we did another acquisition of the Muck brand, XTRATUF, NEOS, Servus, and Ranger. We have since sold off the NEOS and the Servus brand in 2023. We break out the segments in wholesale, retail, and contract manufacturing, and as I mentioned, we own manufacturing in the U.S., we have the Dominican, and with the acquisition in 2021 came a factory in mainland China as well. Again, these are the strong brands that we have. We've talked a little bit about them already. This slide gives you a little bit of information about the company. Wholesale is 66%. Retail, that would include our DTC business, our own websites, but the retail also would encompass our Lehigh business, which we'll talk a little more about why we call that retail. The contract manufacturing today is 2% of the business, and that fluctuates with the U.S. government, needing military boots or not needing. This will give you a little breakdown on the brands. Work is our biggest category, and pretty much every brand falls in the work category. Outdoor, I want to clarify for us, outdoor is more the fishing, hunting outdoor segment, not as much around the hiking section. We specify that very differently. Western boots, Durango's the largest Western category that we have, and Rocky also makes up a little bit of that. Service is going to be your police, fire departments. We do footwear for all those areas. Apparel, we have a little bit of apparel, like I said, it's 2% of the business. Definitely somewhere we could focus on and grow on, and we'll continue to do that. A little bit about Muck. The imagery will just give you a little bit about the target audience that we're going after here, and think about farm and ranch, think about people who have big farms but have their own backyard farm. These boots will really accommodate in all those sections. These are just some of the three examples of our top sellers, and there to the right, you'll see some of the key customers like Tractor Supply, Bass Pro, depending on if it's more of the work category or if it's more of that hunting category. Muck sales from a wholesale standpoint is about 75% of our business. Again, back to those customers, the Tractors of the world, the Bass Pros of the world, but we do do about 25% of our business DTC there on our own website, muckboots.com. Jumping into Rocky, as I mentioned, we do kind of all categories here. The upper left-hand corner is going to be what we call is commercial military. I talked a little bit about our U.S. government contracts. This is going to fall under just wholesale. What we do here is design, develop better boots than what the government is giving to our military, and we sell these in retail stores like AAFES is one of the largest retailers around the world there on U.S. bases, right? They sell everything to the people that are on the bases. They would go in there and purchase those boots directly for themselves. The police boots, you can see there, the black, a little hunting boot, just a brown Gore-Tex casual kind of work shoe. About 80% of our business is done through wholesale on Rocky and about 20% direct on the rockyboots.com website. Georgia, I like to talk about, this is our blue-collar working guy, around more rural than in the cities. Kind of an opportunity for us if we can get a little more penetration in places like New York City. This is the top three kind of styles that we have here. Our wedges are a really popular product line for us. The shoe all the way to the right is called the Romeo, and that is very big out in the Northwest. That shoe's been in the line about 25 years, hasn't changed a bit. Same leather, same outsole, everything, which I personally really like, just that kind of everyday thing. Boot Barn's a big customer. Tractor Supply as well is a big customer. Out in the West Coast, Coastal is a big farm and ranch retailer out there. Georgia Boot is about 86% wholesale, 14% online. One of the things that we think here is if you think about that customer base I just talked about, like that blue-collar guy, he's definitely coming and doing more shopping online, he's the kind of guy, he got done working that day, his boot's leaking, he needs to go to the store and get a new pair of boots for work tomorrow. A little bit less there, but we are target marketing them and trying to increase our DTC business. Durango is our Western-influenced product. The flag boot there in the middle has been one of our best-selling boots for probably 15 years. Yeah, close. Yeah. Cavender's, a big Western retailer down in Texas. Boot Barn does really well with the Durango brand also. Durango, again, about 89% wholesale, 11% DTC. Again, if you think about the guy wearing that, they're probably going to be needing those boots a little bit quicker than waiting two days to get them delivered. Trying to push more business to our own websites, and we'll continue to do that. XTRATUF is our Alaska-built fishing boot, and this is actually our fastest-growing brand right now and has been for probably the last four or five years. The boot all the way to the left is the Legacy boot. That's where the brand really started in Alaska. If you've ever seen the TV show "Deadliest Catch," all of the fishermen are wearing that boot on that show. They just buy it. We don't sponsor it. We don't do anything to get it. What they would do normally after the fishing season in Alaska, they would come maybe to Florida, and they would bring this boot, but they would cut it down. Just to the right of it, the brown one, that's where the ADV kind of came from. Very functional, good use for boating and fishing, but now we're seeing it expand into different areas. Moms and kids are buying into it. College students are buying into it. The great thing about XTRATUF is it's really a coastal brand right now, but we're starting to see it come inwards quite a bit. One of the areas we saw last year was in the ski areas, fleece-lined ADVs have become very popular. You take your ski boots off, you slip your ADVs on, you're in a good place. 73% wholesale, about 27% DTC. Again, if you think about the brand and what it offers, there's more women buying this brand as well. Online is working better in that area. The need's not quite as urgent to have that boot today. I'm going to have Tom come up and do this. He loves Lehigh. Yeah. Lehigh CustomFit, for those of you who don't know, it's a really unique business. What we do is we enter into relationships with employers that have some type of safety footwear requirement. In those situations, a lot of times, those employers are actually providing a subsidy or voucher for the footwear for their employees. The thing I love most about this business is that it's like an annuity in footwear, every year, we have these employers, they give the subsidy, and the employees almost always spend their subsidy. The unique thing about us, this business has evolved over the years. It started selling trucks, pulling up to manufacturing facilities, selling the inventory to the employees. We used to have 120 trucks on the road 15 years ago. The evolution is we took it all digitally, right? Selling product through trucks is a really bad way of selling boots, right? The inventory is limited to what's on the truck. Having the trucks just drive around, the cost associated with that, the collection of cash, returns were a nightmare. This industry is built for selling shoes or selling online, the beauty of it is we sell our brands, but we also sell third-party brands. We sell Timberland, Ariat, Justin, over 65 different brands. One of the great things about this business is it's very capital light, right? About 50% of this product that we sell, we never actually physically touch. We just act as the conduit or the marketplace for those employees to buy the product. One of the things we've been experimenting with, last year, we introduced prescription eyeglasses to the program. It bolts right onto the proprietary platform that we built for this. Again, that's a contactless sale for us, right? They upload their prescriptions, the eyeglass manufacturer, Bollé, sends the prescription directly to the customer, we make a good margin on it. The exciting part about this is that we're going to be moving into apparel here in the fall. The idea around that, we have customers already asking for it, right? The apparel subsidy program is much larger than the footwear. It's somewhere between eight and 10 times the footwear voucher, we think this could be a good growth area for us. A lot of our customers already for Lehigh, the employees are already wearing a shirt with the company logo on it, fire-resistant clothing, things such as that. We think this will be an easy bolt-on. We've done the work on the technology side to get this in place. Now we're going to be implementing getting the equipment to do the customization of the apparel over the summer. Here's just a list of some of the bigger customers that we have for Lehigh. What we find is, we do very well when a larger employer with multiple locations who need that data provided to them to say, "Hey, is our facility in Columbus, Ohio, have they hit their quota for boots for the year?" It also actually enables the safety manager almost to become a little bit of a boot sales rep going around, making sure everybody has the right footwear. The customers really value all the data we can have. We can do billing by cost center. It's just a better way for the safety managers to manage the program. Touching on our distribution and manufacturing, Jason already called out the three manufacturing facilities that we have. This has been critically key and a big competitive advantage for us in the new tariff landscape, right? We have the ability to start production in one facility in Asia, finish that product in the Dominican Republic. We can kind of tariff engineer our production process to really be at a competitive advantage. A perfect example is the XTRATUF boot, the rubber boots out of China, even before any of the reciprocal tariffs, had a 45% duty on them. Rubber boots out of the Dominican, prior to all these reciprocal tariffs and 301 investigations and all that, had a 0% duty on them, right? Today, we're able to make part of that boot in our factory in China, ship that boot, or the material to Dominican Republic. Then we're able to finish that product in the Dominican Republic, and it only has a 10% duty. We effectively have boots today that cost less than they used to cost a couple of years ago. As much as this tariff has been a massive pain and challenge for us, it's kind of taught us new tricks. We distribute all of our product in the U.S. from two distribution centers. We do about 80% of the shipments in our facility in Logan, Ohio. Then 20% of our shipments out of Nevada. As we keep expanding our DTC business, as Jason was touching on earlier, it's becoming a competitive advantage to have inventory in both distribution centers because we can pick and choose where we're putting product and where we're shipping product from. As you're trying to ship more e-commerce, freight is obviously a big expense of that. We can be smarter about where we're shipping it from in the future. These are just some financial highlights. I'm not going to read the slide to you. You can see 2022, just to put things in perspective, right, was a massive banner year. We were coming out of the pandemic. We also had a couple of brands in the portfolio that we don't have today. You saw the big decline into 2023. Over the last couple of years, we've been able to grow sales. A lot of that's been driven by XTRATUF, Lehigh, and our DTC business. You can see the margin. We've been able to work margins up really consistently up until this year. We have the tariff hang-up that we're working through. We had about $7 million in Q1 and about $3 million here in Q2 that we've guided to of kind of incremental tariffs above and beyond the go-forward rate. We've been hyper-focused on getting inventory down. We were doing a spectacular job of that until the tariffs came along, that increased our cost. Pairs were actually flat from 2024- 2025. With the incremental tariffs in there, the face of the balance sheet had higher inventory. We've also been meaningfully paying down debt over the last five years as well. Here's this in a bar chart form. You can see the sales going in the right direction. EPS is guided up, or has been going up, but guided down slightly because of tariffs for the rest of the year. You can see income from operations kind of steadily ticking up from 2023, or after 2023. For 2026, we've given an outlook to The Street. We've said net sales are going to increase 6%. This is a higher growth year for us. Part of that is being assisted the first half of the year by pricing that we took last year after the tariffs were announced. We took pricing in July of last year, we're going to anniversary that price increase at the beginning of Q3. We're continuing to see growth, particularly in XTRATUF, Lehigh, and online, as I noted earlier. Gross margin declined modestly. We will see how this plays out. If e-commerce, if the DTC business continues to be as strong, we'll probably see margin improvements later this year. We also have to work through all of the tariffs in the first half. We're anticipating leveraging operating expenses by about 80 basis points. This is being driven really by the sales increase, but also we are making incremental investments. We're investing a lot more digitally online to push our brands online. When we're selling online, we're seeing higher costs associated with fulfilling those orders, fuel surcharges given what's happened with the price of oil. Interest expense down year-over-year because of the decrease in debt, growing EPS in the mid-teen range. Just from an investment highlights perspective, we have a diversified brand. It insulates us if Western's in or out, we're diversified. We're also diversified in our distribution channel as well, having redundant distribution centers. We do use distributors for all of our international sales. We have distributors in Canada, U.K., Europe, Germany, we also have our own manufacturing facilities, which we've already touched on. Quarterly dividend increase announced last month, by the way, we're at 1.8% future dividend yield. We have a share repurchase program in place, we started in the 10-Q. If you read the 10-Q, we started actively participating in that. We bought about $800,000 or $900,000 worth of stock back in the first quarter. That's it. Any questions? You're unusual in that you own your own manufacturing. Dare I say you're unique in that. Just talk about that strategically going forward. Yeah. Jason, you can fill in since I'm on the mic. It is a big competitive advantage to have your own manufacturing. It does create a lot of headaches. Our ability to react to things is much quicker than a lot of our peers have when they rely on partners to source all their product. A couple examples of this. We've seen this with the pandemic when everybody got stimulus money, everybody was chasing inventory. We got inventory to customers faster because of that. It's also allowed us to play this tariff game significantly differently. We've been doing that, we've been in, well, 40 years down in Puerto Rico and Dominican Republic, and it's a great advantage to have. Partially the military business, we have to make those in Puerto Rico as well. We make those in Puerto Rico made in the USA for all the requirements for the U.S. government. I think we've always been in manufacturing. Since the company started, it was a manufacturing company, and having those facilities in the Dominican and Puerto Rico really produced, only produced leather goods. In the acquisition in 2021, the factory in China, that's mainly, it's really all rubber product. The education we're learning on that manufacturing to help us now, we are actually moving some of that production to the Dominican. We'll see what happens with China. That factory's amazing. They do such a great job. I think just to reiterate what Tom said, too, having the control, because if we need something tomorrow, our other sourcing partners aren't going to stop what they're doing to help us. I can stop that factory and say, "No, make this." It really is beneficial, especially when Tractor Supply calls and says, "I need an extra 50,000 pair." I'm like, "Okay, we'll get on it. The capital commitment, employee commitment, and all that excuse me, justifies your owning it yourself? Yes. Yeah, no. I'm sure- That's a loaded question. Right. It's a lot. 1,000 employees. 1,000 employees. I mean, our employees, but 1,000 employees there. Puerto Rico's probably got 400. 400. China's probably got 400. 400 or 500. You're right, it is significant. We're able to build those products there and get those at a cheaper price than when we source it from someone else. It also allows us to source product better. Yeah. We know what to look for. We know when we get a bill of materials, or we go to another factory to source a product, we know what the labor cost is in Asia to make that product. We know exactly what the raw materials cost. I think it gives us a better education as well. The capital expense, in footwear, there are certainly capital expenses with it, but it's not as meaningful as you think because the equipment lasts so long. We've got DESMAs. There's a DESMA in the Dominican Republic that was moved from Ohio over 30 years ago. It's not as capital intensive. If you look back at our CapEx, we're running less than 2% of sales for CapEx. If you wanted to open a factory, you had. Yeah. To buy all that equipment, yes, it's very capital. Every year we add new machines, we add new sewing machines, we add new whatever. Yeah. It's a great question. Yeah. It's real, for sure. Any other questions? Bill. The XTRATUF direct to consumer. Yep. What's that rate of growth relative to the rate of growth of wholesale at XTRATUF? XTRATUF in the fourth quarter of last year grew online 100%. It's growing faster than- First quarter was in the 70%, 60, 70%. The wholesale? Wholesale around high teens. Both periods? Yeah. Great, thanks. We've applied for our refund, we didn't talk about that, for the tariff refund. That's about $20.5 million we're working to get back. We're starting to get a couple pieces and bits of it, but they're making it very difficult. The system works really well. Anything else? Awesome. All right, well, thanks, everybody. Thank you, guys so much.