Q4 2023 Rocky Brands Inc Earnings Call
Participants
Brendon Frey; IR; ICR, Inc.
Jason Brooks; Chairman of the Board and CEO; Rocky Brands Inc
Tom Robertson; COO & CFO; Rocky Brands Inc
Janine Stichter; Analyst; BTIG LLC
Jeff Lick; Analyst; B. Riley Securities, Inc.
Jonathan Komp; Analyst; Robert W. Baird & Co.
Bruce Geller
Presentation
Operator
Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Rocky Brands fourth quarter 2023 earnings conference call. (Operator Instructions) I would like to remind everyone that this conference call is being recorded.
I will now turn the conference over to Brendon Frey of ICR.
Brendon Frey
Thank you, and thanks to everyone joining us today. Before we begin, please note that today's session, 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 changes, risks, and uncertainties, which may cause actual results to differ materially. We assume no obligation to update such statements.
For a complete discussion of the risks and uncertainties, please refer to today's press release and our reports filed with the Securities and Exchange Commission, including our 10-K for the year ended December 31, 2022.
I will now turn the conference over to Jason Brooks, Chief Executive Officer of Rocky Brands. Jason?
Jason Brooks
Thank you, Brendon. With me on today's call is Tom Robertson. After Tom's and my prepared remarks, we will be happy to take questions.
Our company has transformed significantly over the past few years following the impact from COVID, the organization did a very good job navigating the early days of the pandemic, integrating a large acquisition, bringing on a new distribution center and servicing our customers and consumers during this volatile market conditions.
While 2023 had its share of challenges, the fundamentals of our business are solid and we are in a great position operationally and financially to invest in our growth encouragingly, our reported results improved throughout the year as solid sell through of our products, coupled with over inventory levels continuing to improve at the majority of our wholesale accounts positively impacted our sell in despite some unexpected headwinds in the fourth quarter, net sales improved sequentially from the third quarter and year-over-year declines moderated to their lowest levels in 2023 due in part to high single digit growth in our direct e-commerce channel.
Equally important, we made great progress strengthening our balance sheet throughout 2023, highlighted by a $66 million or 28% reduction in our inventories and an $84 million or 33% decline in our debt levels compared with the end of 2022. Tom will cover the numbers in more detail shortly. But first, I want to spend a few minutes reviewing our fourth quarter sales performance by category and brands.
Starting with work four brands that make up this category. Georgia, Rocky and select styles under the muck and extra top brands continued to improve this quarter with several areas to highlight. The Georgia brand continued to build momentum from the third quarter as partner inventory constraints that stall reorders throughout 2023 began to moderate driving wholesale demand to the strongest level of the year.
The brand saw strong sell-in with several of our largest accounts in the farm and ranch segment this quarter, increasing sales with these customers on both a sequential basis and compared to a year ago period. Additionally, this year's cost savings and subsequent selective price decreases on certain Georgia styles helped spur a notable pickup in demand for the brand.
While the recent inventory backlogs caused many accounts to be more conservative and there are new orders to best-selling SKUs. Two new product introductions in 2023 that have been well received drove outsized demand this quarter contributing significantly to George's recent progress.
Operator
Ladies and gentlemen, we seem to be experiencing some technical difficulties. Please remain on the line while we get the difficulties.
Jason Brooks
Yes, hello. This is Jason Brooks, we got cut off there for a minute, so I will start with the Georgia brand. The Georgia brand continued to build momentum from the third quarter as a partner inventory constraints that stalled reorders throughout 2023 began to moderate driving wholesale demand to the strongest levels of the year.
Brands saw strong sell in with several of our largest accounts in the farm and ranch segment this quarter, increasing sales with these customers on both a sequential basis and compared to a year ago period. Additionally, this year's cost savings and subsequent selective price decreases on certain Georgia styles helped spur a notable pickup in demand for the brand.
While the recent inventory backlogs cause many accounts to be more conservative and narrow new orders to best-selling SKUs to new product introductions in 2023 that have been well received, drove outsized demand this quarter contributing significantly to George's recent progress.
Strong sell through for these new styles demonstrates that the Georgia brand remains relevant and in-demand with consumers even in the current environment. Our Rocky Work brand remained challenged this quarter with excess inventory levels continuing to impact replenishment orders.
However, there was some positive momentum, particularly with new higher-priced products. We've seen strong sell through with the top tier work boots, and we introduced a new line of similar product that retailers for more moderate prices in the fourth quarter. This new product line made in our own Dominican facility should provide solid top line and margin contributions for the Rocky Work in the years ahead.
Shifting to our rubber boot based work product, both the muck and extra truck brands on there on their positive 2023 momentum in the fourth quarter. The muck brand delivered a positive year-over-year comparison, underscoring the work we've done in recent quarters to reinvigorate the brand as we continue to adjust much brand message to communicate more directly with our targeted audience.
We've seen the brand's marketing metric significantly outperform industry benchmarks and consumers. Demand has resonated in time. For the first time this year, we saw year-over-year growth in the U.S. wholesale market for the Mac work also helping fuel this demand must decrease prices on several legacy products in November and also introduced 12 new styles for the fall winter season, while above average temperatures to start to fall 23 season posted a slight headwind.
We are confident that MACH is well positioned coming into 2024 Xtra tuff carried its positive momentum from Q3 into Q4, outpacing expectations driven by significant year-over-year growth in both the U.S. wholesale market and the e-commerce channel. We saw our partner inventory positions improve as the quarter progressed, driving stronger bookings for 2024 in the period.
At the same time, we persistently added at-once business for in-demand styles that resulted in very strong sell through and left us chasing inventory in key sizes. With awareness of extra tests surging, we will look to capitalize on the growing relevance of the brand and ensuring product availability for our growing extra tough consumer base in 2024.
Turning now to our Western business. While many top accounts are currently operating on replenishment only ordering, Durango was able to secure several nice bookings in the period that accelerated fourth quarter results, well ahead of the trend earlier in the year, we saw strong orders from key accounts in both replenishment inventories due to the strong shelf through end of the stock for holiday '23 and early '24.
We also saw the best quarter of the year from our field accounts with new distribution channels and an improving retail climate acting as a positive positive catalyst for the brand. Most importantly, customers are reporting that they are now and significantly improved inventory positions which allow with with our focus on modernizing our inventory to eliminate slow-moving styles and better stock are best sellers to take advantage of growing demand positions. The brand for higher turns and more favorable results going forward.
Our Rocky Western business continues to stabilize and we saw several bright bright spots this quarter's across the channel. This included strong growth with our own e-commerce channel, along with solid results from our dot-com partners and within key western boot retailers who saw better sell through in the quarter.
Looking ahead, we are optimistic that the improving retail trends we've seen this quarter will allow our overall western business to return to its historical growth trajectory. Doors, which include styles under our Rocky Mountain and extra top brands began to stabilize in the fourth quarter after a very difficult first nine months of the year, particularly for our Rocky Outdoor boots and apparel lines.
Though the quarter was still challenged by unfavorable weather conditions, e-commerce gains, improving wholesale trends and partner inventory improvements helped the category reposition to take advantage of improving trends going forward.
Also, as I mentioned, when we discussed our work product. Both extra tough and muck brands delivered a notable improvement in this quarter, driven in part by new penetration of the outdoor products in more outdoor focused market.
And last but not least within our wholesale segment. Commercial military was a bright spot in the fourth quarter as it has been all year orders from suppliers and the U.S. Army. And for the division's code. Red fire collection drove a great fourth quarter to cap off the strongest year in recent memory for this business.
Shifting to our retail segment, sales increased low single digits compared to a year ago period. Thanks to a very solid quarter for our direct e-commerce channel. Each of our branded sites, Rocky, Georgia, Durango, muck and extra Tuff, solid double digit traffic and sales increases in the quarter. We continue to enhance our digital marketing efforts, allowing us to engage with consumers more directly, and we expect this trend to continue going forward, which should positively impact the segment's growth and margin profile.
Lastly, our B to B VI. business was down year over year in line with expectations as we lapped a very strong quarter of growth in 2022. We expect that sales to rebound in 2024 as comparisons ease and events bookings continue to increase, along with the introduction of several new key accounts slated for this year as ready as I am to put 2023 behind us.
I am pleased that the work we did strengthening our product innovation, brand building, consumer connections and fulfillment capabilities started to translate into improved results towards the end of the year by focusing on controlling what we can control. We exited 2023 with good momentum and was well situated to deliver growth enhanced earnings in 2024.
Before I turn the call over to Tom, I want to thank the entire Rocky team for their efforts and their commitment to excellence. We have weathered the ups and downs over the past four years and have emerged a stronger organization that I am confident will benefit the business, our shareholders over the next year and long term. Thank you, Tom.
Tom Robertson
Thanks, Jason. As Jason shared, we are pleased to see recent top-line pressures to our wholesale business begin to moderate this quarter, resulting in sequential quarter over quarter growth in sales and the lowest lowest level of year-over-year declines we've seen all year for the fourth quarter, sales decreased 9.3% year over year to $126 million or 6% when you exclude service brand sales of $4.9 million from the year-ago period by segment. On a reported basis, wholesale sales decreased 13.3% or 8.8%, excluding excluding service, to $85.8 million. Retail sales increased 1.5% to $37.8 million and contract manufacturing sales were $2.3 million.
Turning to gross profit for the fourth quarter, gross profit was $50.7 million or 40.3% of sales compared to $56.7 million or 40.8% of sales in the same period last year. The 50 basis point decrease in gross margin as a percentage of net sales was mainly attributable to a tough year-over-year comparison related to a tariff recovery within an approximate impact of $2.4 million in the prior year period.
This was partially offset by a higher mix of retail segment sales, which carry higher gross margins than the wholesale and contract manufacturing segments. Gross margins by segment were as follows wholesale down 120 basis points to 35.4%. However, excluding the tariff recovery benefit a year ago, wholesale gross margins were up 120 basis points.
Meanwhile, retail gross margins were down 30 basis points to 52.9% and contract manufacturing was down to 13.7%. Operating expenses were $36.0 million or 28.6% of net sales in the fourth quarter of 2023 compared to $43.1 million or 31% of net sales last year. On an adjusted basis, operating expenses were $35.2 million in the current year period and $41.4 million in a year ago.
The decrease is largely attributable to cost savings reviews and operational efficiencies that we achieved through strategic restructuring initiatives implemented over the past year as a percentage of sales, adjusted operating expenses were 27.9% in the fourth quarter of 2023 compared to 29.8% in a year ago, income from operations was $14.7 million or 11.7% of net sales compared to $13.6 million or 9.8% of net sales in the year ago period, adjusted operating income was $15.5 million or 12.3% of net sales compared to adjusted operating income of $15.3 million or 11% of net sales a year ago.
For the fourth quarter of 2023, interest expense was $5.3 million compared with $5.9 million in the year ago period. The decrease reflects lower debt levels in the quarter compared to the fourth quarter of 2022. On a GAAP basis, we reported net income of $6.7 million or $0.91 per diluted share, compared to net income of $6.5 million or $0.89 per diluted share in the fourth quarter of 2022.
Adjusted net income for the fourth quarter of 2023 was $7.3 million or $0.98 per diluted share compared to adjusted net income of $7.9 million or $1.8 per diluted share a year ago. The effective tax rate for the fourth quarter of 2023 increased to 29% compared to 16.1% a year ago year over year increase, which was higher than our initial projections, was driven primarily by a return to provision adjustment resulting from foreign tax credits recognized in the fourth quarter of 2023.
Turning to our full year results for the year was challenged by our wholesale partners working through excess inventories. We were encouraged by solid retail sell-through and a growing performance of our e-commerce sites.
2023 was also a year in which we made great progress, strengthening our balance sheet and positioning the Company for future growth. For the full year, net sales were down 25% or 24.3% on an adjusted basis to $463.4 million, excluding the US and service brand sales, which were divested in September of '22 and market 23, respectively. Adjusted net sales decreased approximately 20.9% by segment. Wholesale decreased 30.5% or 27.2%. Excluding the Neose and service brands, retail was up 1.4% and contract manufacturing decreased 48.4%.
In terms of profitability, adjusted operating income decreased 13.7% to $41.9 million, while adjusted operating margins increased 110 basis points to 9% of net sales. Adjusted net income was $14.3 million and adjusted EPS was $1.93. For the full year, interest expense was $22.7 million, an increase of 24% compared with $18.3 million in 2022.
And our effective tax rate for 2023 was 26.3% compared to 20.6% in the prior year, which was above our projected tax rate for 2023 of 20.8% due to the foreign tax credit adjustments in the fourth quarter. I mentioned a moment ago Turning to our balance sheet. At the end of the fourth quarter, cash and cash equivalents stood at $4.5 million and our debt totaled $173.1 million.
We've made excellent progress paying down our debt over the last 12 months with total indebtedness, 32.6% lower compared to the end of last year. The big part of the debt paydown has been driven by our ability to treat strategically reduce our inventory levels. At the end of the fourth quarter, inventories were $169.2 million, down $66.2 million or 28.1% compared to $235.4 million a year ago.
Now to our outlook, before I get into how we are thinking about 2024 I want to highlight a couple of business changes that impact year-over-year comparisons. First, as you recall, we sold the service brand at the end of the first quarter of last year.
Following the sale, we continued to manufacture and supply product to the new owners of the brand for several months as part of the transition process. Second change has to do with their distribution in Canada. In November, we switched from direct operations to a distributor model for our Rocky Georgia Boot, Durango, Mark and extra top brands.
While this decision negatively impacts our top line in the near term, it contributes positively to profitability as there is little to no SG&A associated with the new agreements. In addition to these two changes, we also fulfilled an elevated amount of orders to a customer that supplies the U.S. Army with footwear.
This temporary spike in demand was driven by escalation in global geopolitical events and given their current inventory position. We do not expect this level of sell-in to repeat itself. In total, we anticipate approximately $26 million in revenue from 2023 will not reoccur in 2024.
Looking at this year, we expect revenue to be in the range of $450 million to $460 million. This represents approximately 3% to 4% growth over 2020 three's adjusted base of $438 million, which excludes the app aforementioned nonrecurring revenue.
In terms of cadence of revenue, we expect to see slight growth in the first half of the year before accelerating in the second half, we expect margin gross margin to remain consistent with consistent or to see slight improvement from the adjusted gross margins we delivered in 2023.
This will be partially offset by SG&A deleverage as 2024 includes investments in marketing for our brands as well as performance-based compensation as we did not pay any bonuses in 2023. The biggest change year over year will be in our interest expense as a result of the progress we've made paying down our debt. Based on the year-end debt levels and current interest rates, we expect interest expense to be down approximately $5 million.
That concludes our prepared remarks. Operator, we are now ready for questions.
Question and Answer Session
Operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. (Operator Instructions)
Janine Stichter, DTIG.
Janine Stichter
Thanks for taking my questions. And first, on the Rocky brand, I think you mentioned some excess inventory in the channel there. Hoping you could elaborate a bit on that? And then more broadly on channel inventories, if there's any other pockets of excess, it sounds like in general, it's pretty clean and then also wanted to ask one extra tough on you some really nice momentum there.
Would just love to hear more about how you're thinking about potential for that to become more of a year-round business and just to round out the the selling period, making it more or less of a seasonal phenomenon? Thank you.
Jason Brooks
Yes. Thank you, Janine. There's a lot of questions in there. So I think the first one was about Rocky and some inventory. I think in that breadth, all the brands, we are in a pretty good inventory position on from our own inventory. And I feel like most of the retailers have gotten themselves into a pretty good place from an inventory position, although I do believe they're still being very cautious about how they are booking orders and filling in there is this conversation going around?
Obviously, we're in an election year. So I think that makes everybody a little bit nervous but I believe that we are in a pretty good position and our retailers are in a pretty good position, but that's still some cautions cautiousness around that. From the other one I remember was extra tough and I think the first one was Rocky and the last one was actually up.
Tom Robertson
I think the Xtra top brand is unique. In that sense, it's more of a summer brand, everything from about inefficient perspective. So we've seen we've seen success or the seasonality of that business, maybe going a little more Q2 as people load in for most of the East Coast fishing, which happens in the summer months.
However, we have introduced new products like the Quebec Glacier track food, which is a fleece lined version. And we also have the trolling pack collection, which is also fleece line. And so we're seeing people embrace that product for their fall and winter boot as well as well as we've also launched some new standards slides and flip-flops that we anticipate selling strong in the spring as well.
Jason Brooks
Yes, I would just add that in general, if you think of all of our brands, I talk about us not being very sexy in in Rocky, Georgia, Durango and Mark extra tough is probably the sexiest brand we have and we see a big opportunity for expansion there. We want to be really careful about how we do it and trying to control that and make sure we don't go too fast and too broad too quick.
So we're really excited about that brand. And I think there's a big opportunity and upside.
Janine Stichter
I think that's helpful. And then maybe one last one, if you could just elaborate on the DTC trends you're seeing with e-commerce. And maybe just a little bit more about what you've been doing there to drive additional growth in that business?
Jason Brooks
Yes, I think you know, I think, Tom, the same thing everybody else is all right. We are doing more advertising on social media we are appealing to the younger crowd. We are getting in front of them via Instagram, the all the platforms out there and introducing them to our brands. And we are seeing a lot more traffic to our websites. We are seeing a lot more transition transactions through our own website. And so I think the brands are resonating and even back to the extra stuff. I would tell you that that is one brand that even more resonates from an Internet e-commerce kind of standpoint. So I don't know if you had anything to add Tom?
Tom Robertson
Yes, I think as we look into 2024, I thought out in the guidance, the investment and marketing and a lot of those investments, investments in marketing and R&D happening digitally, whether it's social media or pay-per-click search. So so we're going to continue to drive consumers to our websites. And it's really the extra tough, Brian, to Jason's point, it's written compared that consumer is much quicker to buy online and then some of our other brands with almost a third of the sales in the fourth quarter, fresh cup happening on to our own e-commerce channel. So we're excited about the trajectory of our e-commerce business and continue to invest in it in 2024.
Jason Brooks
But I do want to add, though, it's a it's a balancing act in our wholesale partners are very important to us, and we have to navigate that as well as we as we go through this.
Janine Stichter
Great. Thanks so much.
Operator
Jeff Glick, B. Riley Financial.
Jeff Lick
Good afternoon, Jason and Tom. I was wondering again, if you could talk a little bit tight. Thanks for taking the question. I was wondering if you could draw some hit on Lee Lee.
And just as we look at last year as the baseline and as we filter through into 2024, you'd mentioned compares get a little easier as the year wears on. Maybe just talk about where that business is. Any key account wins and also some of the stuff that you had going with the technology. Just kind of curious how that business is holding up and what we should think about for 2024?
Tom Robertson
Yes, I'll take this one off. Joe. Yes, the LEO business for us has grown over the last several years. I think this year was a little challenging for 2022. I think that the PPE. world and the safety management HR managers of the world had more dollars in their budgets in 2022. And we saw that particularly at the end of 2022, when we saw some people get incremental vouchers or subsidies to buy additional products, whether it be footwear or flatbeds are orthotics.
And so we knew we had a very tough comparison going into into 2023. We guided the business. We expect the business to be down in 2020 in the fourth quarter of 2023 and it it actually it met our expectations. And so I think we saw a little bit earlier in the year to where we saw us at least start to see some businesses pulling back a little bit on their spend as they are doing their own SG&A savings or budget cuts.
And so and so we feel that we've opened up some new new key accounts at the end of this year that kicked off in January. So we feel good about the business in 2024 and presumably would get back to growth for the HI business and 2024 upgrades.
Jeff Lick
And just wanted to kind of follow up, you kind of build on what Jim was talking about. I'm just curious in terms of the national accounts, the bigger needle movers. I'm just curious, I'm not asking you to name names where things stand in terms of their willingness to pay Yes, maybe be a little more aggressive on call it less than buying to need and actually prebooking and ordering a little more aggressively?
Jason Brooks
Yes, good question, Jeff. I think we have seen this, they loosen up a little bit and they are definitely being more active and not only in regards to at-once business, but some some booking businesses well or at least forecasting and giving us that information. So we've definitely seen that open up in the outdoor category, the farm and ranch category, the Western category. And so that's been that's been a good sign. I will say it is still everybody still seems to be pretty cautious and what they're doing it and how they're doing it. But it's definitely changed a little bit for us.
Tom Robertson
Yes, I think, Jeff, just to add on, as we look at as we look at our bookings for the rest of the year, bookings are up but what the calculus we're trying to do is does that mean though they're going to their behavior will shift back a little bit more normalized, where they're booking a 40% of the product and ordering at one 60% because we saw that kind of we saw the at-once increase over the last couple of years as as to Jason's point, the buyers remain more cautious and conservative. So we're trying to figure out what the new normal is, but we'll wait and see.
Jeff Lick
Great. I appreciate it. I'll let someone else have a chance to ask a question. Best of luck.
Jason Brooks
Thanks, Jeff.
Tom Robertson
Thanks, Jeff
Operator
Jonathan Komp, Baird.
Jonathan Komp
Hi. Good afternoon. Thank you, Hans. Just two questions for me. I think first, looking at the the underlying revenue growth you're expecting for the year. Can you just give any more color and by segment or category, how you're thinking about about the growth on a relative basis based on what you see. And then separately, just on the operating margin commentary, Tom, can you maybe just be specific So are using the right numbers, what margin you see for 2024 and any ability to and drive drive your less deleverage even on lower sales? Or maybe you could quantify that incentive compensation headwind for this year that you outlined? Thank you.
Jason Brooks
Thanks John. So I'll kick off with a little bit of growth. I think as we look at all the brands, we would we would look at them all about equal, except for the extra tuff brand, we think there's probably a little bit more upside there.
But the Rocky, Georgia, Durango, muck brands, probably all pretty similar kind of growth rates. And then our Lee High division, I would say we're anticipating or expecting a little bit higher some growth rate there for 2024 as well.
Tom Robertson
Yes. I think to add on to the just for modeling purposes to help out with the $26 million because of nonrecurring revenue in $23 million, that would about -- $20 million of that would show up I'm sorry, in the wholesale segment. And so and so that's where you'll see that, that that comparison with the other six being split between retail and contract manufacturing, just also to give a little color from a from a quarterly perspective. Of that $26 million, I would say about $7 million to $8 million comes out of Q1 and Q2, $8 million in Q3 and about $3 million in Q4.
Just so you add up all the analysts and get their kind of their quarters lined up a little bit. And then, John, the last question you had was around margin operating expenses. Is that correct?
Jonathan Komp
Just operating margin for the year? Tom, could you just clarify on what operating margin roughly you're expecting and any ability to drive that de-leverage on the post floor sales growth? Or if you could give any more color on the G&A expenses, including incentive compensation reset?
Tom Robertson
Yes, I would say from a dollar standpoint, you were looking at a few million dollar increase from an operating expense standpoint because of perspective, our goal is going to be that tried to keep that operating margin flat with LY. However, as we sit today, we've got to just slightly under 2023 numbers.
Jonathan Komp
Okay. Thanks again.
Jason Brooks
Thanks John.
Operator
Bruce Geller, private investor.
Bruce Geller
Please go ahead say good afternoon, gentlemen. You may agree to hey, you made some really impressive progress this year on the balance sheet and I'm curious where you think this can continue to go in 2024 on can you generate some incremental cash from inventory? If so, can you give some guidance around that and in terms of debt paydown, similarly, I would imagine a lot of those proceeds would be channeled into debt paydown. And it seems to me based on some prelim preliminary numbers you should be able to get your debt to EBITDA ratio down below three in the current year? And if that's the case, what are also the prospects for are refinancing your debt with? And would I think, further enhance the earnings growth, considering you've still got about $2 a share in interest expense locked up in the P&L?
Tom Robertson
Yes, hey, Bruce. I'll take this one, To. Yes. So from an inventory perspective, we've been targeting that 30% of sales as a long-term number from an inventory perspective. So that would suggest that there's there's another $25 million to $30 million of inventory to come off. We will see how this Canadian distribution distribution change. That should have also helped that number going forward. And you're exactly right.
The working capital improvements there will go to paying down debt. And in your math on the leverage ratio, it is correct to we've got ourselves in kind of the mid to two range from a total leverage ratio standpoint. And so we'll continue to work with our lenders to trying to find the right solution from from a credit facility standpoint, but I would anticipate that given where this leverage ratio is, we'll be able to unlock some savings here in 2024 from an interest expense standpoint and from where we sit today.
Bruce Geller
Okay, thanks. I also had a question on the revenue guide. I think you mentioned for 50 to 40 60, which would be, you know about flattish versus why. But you also noted that you expected modest growth in the first half with accelerating growth in the second half. So there is a bit of a disconnect there because you imply that there's going to be growth throughout the year, but the aggregate number does not imply any growth. So maybe I I misheard that, but if you could provide some clarification that would be great.
Jason Brooks
Yes, absolutely. So the comment of the 3% to 4% growth is driving back to what we're considering kind of the new base, which was like $438 million, which was essentially this year's results minus that non-reoccurring revenue of $26 million. And we talked about. And so if you were to look at that and I tried to give a little color on each quarter on what that new base would be. But I would say you would see kind of lower lower growth that 2% to 3% range in the first half of the year and then maybe the 4% to 5% in the second half of the year to get to that blended of three to four and that we guided to.
Bruce Geller
Okay, thank you.
Operator
There are no further questions at this time. I will now turn the call and call back over to you, Jason Brooks for closing, please go ahead here.
Jason Brooks
I just want to thank the Rocky team one more time on 2023 was a incredibly complicated challenging year and our company and the people in the Company really stepped up and did an amazing job navigating it. I know we are all excited about 2024 in the future Rocky Brands, and I look forward to working with you all to make that happen. And I also just want to say thanks to our investors and their support in 2023 and look forward to proving to you guys that we have a great 24 in the future ahead of us. So thank you all.
Operator
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating in that you please disconnect.
