Good afternoon ladies and gentlemen and thank you for standing by. Welcome to the Rocky Brands Second Quarter Fiscal 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and answer session. Instructions will be provided at that time for you to queue up for questions. (Operator Instructions) I would like to remind everyone that this conference call is being recorded. And I'll now turn the conference over to Mr. David Sharp, President and Chief Executive Officer. Thank you Mr. Sharp. You may begin.

Thanks Manny and welcome everyone. On the call with me this afternoon is Jim McDonald, our Chief Financial Officer who will read our Safe Harbor Statement.

Please note that today's discussion, including the Q&A period, may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such statements are based on information and assumptions available at this time and are subject to change, risks, and uncertainties, which may cause actual results to differ materially. We assume no obligation to update any such statements. For a complete discussion of the risks and uncertainties, please refer to today's press release and reports filed with the Securities and Exchange Commission including our 10-K for the year ended December 31st, 2013. I'll now turn the call over to David.

Thanks Jim. We are delighted to deliver second consecutive quarter of strong double-digit growth. Revenue increased 16% to a record $68 million. Our wholesale business grew 24%. This is the second consecutive quarter above 20% and the growth included 17% gain for our legacy brands. We believe our momentum is being fueled by positive internal response to our broader, more compelling, more innovative footwear that we’ve introduced over the past several seasons, expanding our sharp space with existing accounts and opening up new distribution. This is evident in our three major categories, work, western and hunting, each of which increased double digits over a year ago. At the same time, sales trends in our commercial military and duty businesses accelerated over the fourth quarter. There is pent-up demand in channels following the government headwinds in 2013, which is driving strong replenishment order and expanded distribution for our products. Many of our major retail partner entered the second quarter with much clean inventory level compared with year ago (indiscernible) that fuels strong sales of the boots in late 2013 and early 2014. This was especially true in our largest category, work, which posted sales being 20% and 18% in the last quarter of 2013 and the first quarter of this year respectively. Well, temperatures were warmer and dry in the second quarter, we continue to experience positive response with several of our new work (indiscernible) Georgia and Rocky Brands, helping drive 6% gain for the category over last year. Georgia’s performance was highlighted by our new Homeland series that we introduced late last year ahead of schedule based on retail requests. Selling and sell-through of this product line features an extremely flexible but normal (indiscernible) that exceeded projections. And with a solid inventory position heading into the back half of the…

Thanks, David. Net sales for the second quarter increased 15.8% to $68.8 million, compared to $59.4 million for the corresponding period a year ago. Wholesale sales for the second quarter increased 23.7% to $56.7 million, compared to $45.8 million last year. The $10.9 million increase was driven by a 16.8% increase in our legacy brands and the contribution from Creative Recreation, which we acquired in December 2013. Retail sales for the second quarter increased to $10.1 million, compared to $9.8 million a year ago while military segment sales decreased to $2 million versus $3.8 million for the same period in 2013. Gross profit in the second quarter was $22.6 million or 32.8% of sales compared to $20.3 million or 34.2% of sales for the same period last year. The 140 basis points decrease was driven by a combination of factors. They included lower wholesale margins due primarily to the seeding program attractive (indiscernible) in the first quarter. As a reminder, we expect this tailwind to ease as we get into the back half of the year. Second quarter gross margin were also down due to our shift to the web-based retail platform, which carries lower gross margins than our previous mobile store structure and lower operating expenses as well. Selling, general and administrative expenses were $20 million for the second quarter of 2014, compared to $17.4 million a year ago. The $2.6 million increase in SG&A was driven primarily by additional expenses associated with the Creative Recreation brand which we acquired in December 2013 and higher compensation expenses related to a midyear -- a new midyear bonus program that we implemented this year for the first time. Potential annual bonuses under this new management incentive program as similar to the potential payment under the previous annual program. As a percentage…

Thanks, Jim. It’s been an encouraging start to 2014. For several years we struggled to growth, but we’re able to improve profitability with cost cutting measures and debt reduction actions. The several trends now head in the right direction. We need to find the balance between driving the sustainable top and bottom line growth simultaneously. As we told you on our last conference call, we are convinced we have the right strategy in place to better leverage the investments we’ve made in the business to achieve this objective starting in the second half of the year and beyond. Now, with another quarter under our belt, we reiterate that we will improve earnings year-on-year in the second half. Operator, we’re now ready to take questions.

(Operator Instructions) Our first question is from Mitch Kummetz of Robert W. Baird. Please go ahead.

Yeah. Thanks and good quarter. I've got handful of questions guys. Now I want to start with speak about the year. I think coming after last earnings call, you’re talking sales guidance sort of in the 10% to 12% organic growth range and also like you're ahead of that pace to the first half. I’m just kind of wondering if there is any updates on that.

I think at this point Mitch, we want to -- we’ll stay in the 10% to 12%.

Okay. And then how about the seeding program? Again, I think you’ve said that that should be incremental to revenues by about $5 million for the year, is that still kind of what you’re for out of that?

Yes, it is.

And are there any other -- I mean, that’s probably the biggest piece in terms of incremental revenues hitting the P&L this year. Is there other staff as well in addition to that seeding program that we should be thinking about?

There are the key accounts, Mitch, that we’re experiencing pretty dramatic growth with, amongst those are Amazon and Groupon and Sporting Goods.

Okay. And then on Creative Rec, again I think coming after last call, you’re talking about $18 million to $20 million in revenues from that business this year. Is that still kind of the plan or is that changed at all?

Yeah. I think based on our experience in the first half, what’s going on there is we’ve been very offended by late deliveries from our vendors. So in order to hold on for the sales, we had to in place of customers, we’ve really had to make concessions, fly a lot of product, decent pricing. So, based on all of this and based on what we know about delivering the (indiscernible) I think we’re looking more like 17 to 18.

Okay. When should that improve? You talked about concessions and all that based on late deliveries from I guess, the manufacturers. When would you guys be able to kind of change that trend and really improve upon that?

Well, we’re out there right now selling (indiscernible) which we can deliver as early as September of this year.

Okay.

And we’re getting very favorably (indiscernible) on that. But I don’t think we’re far enough into the season to move off this $17 million to $18 million.

Okay.

(Indiscernible) 40 units a year. So we can turn to site quickly, once we have the right kind of structure.

Okay. And then just a couple last questions. Jim, maybe on the gross margin size, could you just give us segment gross margins on the quarter?

Sure. Wholesale was 32%, retail was 41.3% and military is 15.3%.

Okay. If I recall correctly, you were looking for or expecting some gross margin improvement in the back half and for gross margins to meet -- to maybe to be up modestly for the year, is that still kind of the plan at this point?

Yes. I think gross margin back half of the year will be up year-over-year particularly in wholesale. In detail, I won’t think they will be because we’re still anniversaring those mobile sale, mobile storage that had higher gross margin that (indiscernible). But I think that’s all we planned in the back half of the year (indiscernible) and military continue to be with military …

All right. That’s all I have. Thanks guys. Good luck.

Thanks.

(Operator Instructions) We have no further questions in queue at this time. I’d like to turn the floor back over to management for any closing remarks.

Okay. Thanks Manny. We thank you for listening in this afternoon and your interest in Rocky Brands. Everyone here is focused on enhancing shareholder value and we look forward to reporting the improved results in 90 days from now. Thank you.

Thank you. This does conclude today’s teleconference. You may disconnect your lines at this time. And thank you for your participation.