î/2ÿñH-  d 1$&%*ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ñ'ROCKY SHOES & BOOTS, INC.ñ'AND SUBSIDIARIES"ñ'CONSOLIDATED BALANCE SHEETSñ^DECEMBER 31,ñ^DECEMBER 31, ñ^2000 ñ^1999ñ'CURRENT ASSETS: ñ'Cash and cash equivalentsñ"$ 2,117,994ñ"$ 2,330,324'ñ 'Accounts receivable - trade, netñ "18,055,881ñ "18,712,588ñ 'Refundable income taxesñ "3,850,000ñ 'Other receivablesñ "2,956,900ñ "1,377,394ñ 'Inventoriesñ "32,035,237ñ "32,573,067ñ 'Deferred income taxesñ "536,012ñ "1,017,331ñ'Other current assetsñ"1,295,287ñ"1,222,914ñ'Total current assetsñ"56,997,311ñ"61,083,618ñ'FIXED ASSETS, AT COST:$ñ'Property, plant and equipmentñ"47,401,015ñ"45,012,101&ñ'Less - accumulated depreciationñ"(23,070,696)ñ"(18,879,879)ñ'Total fixed assets - netñ"24,330,319ñ"26,132,222ñ'DEFERRED PENSION ASSETñ"2,526,603ñ"357,520ñ'OTHER ASSETSñ"2,196,939ñ"1,759,994ñ'TOTAL ASSETSñ"$ 86,051,172ñ"$ 89,333,3546ñ"'See notes to consolidated financial statements. ñ$'ROCKY SHOES & BOOTS, INC.ñ%'AND SUBSIDIARIES"ñ&'CONSOLIDATED BALANCE SHEETSñ(^DECEMBER 31,ñ(^DECEMBER 31, ñ)^2000 ñ)^1999ñ+'CURRENT LIABILITIES:ñ,'Accounts payableñ,"$ 3,502,296ñ,"$ 2,128,112*ñ-'Current maturities - long-term debtñ-"1,070,374ñ-"8,599,897ñ.'Accrued expenses:ñ/'Taxes - otherñ/"560,537ñ/"412,721ñ0'Salaries and wagesñ0"369,925ñ0"569,203ñ1'Co-op advertisingñ1"520,019ñ1"128,644ñ2'Interestñ2"272,882ñ2"198,399 ñ3'Otherñ3"500,313ñ3"578,740 ñ6'Total current liabilitiesñ6"6,796,346ñ6"12,615,716/ñ8'LONG-TERM DEBT - Less current maturitiesñ8"26,445,276ñ8"25,176,918ñ:'DEFERRED LIABILITIES:ñ;'Compensationñ;"187,959ñ;"170,294ñ<'Income taxesñ<"528,273ñ='Pensionñ="2,295,919ñ="613,023!ñ@'Total deferred liabilitiesñ@"2,483,878ñ@"1,311,590ñC'Total liabilitiesñC"35,725,500ñC"39,104,224$ñE'COMMITMENTS AND CONTINGENCIESñG'SHAREHOLDERS' EQUITY:BñH'Preferred stock, Series A, no par value, $.06 stated value;%ñI'none outstanding 2000 and 1999@ñJ'Common stock, no par value; 10,000,000 shares authorized;3ñK'outstanding 2000 and 1999 - 4,489,215 sharesñK"35,284,159ñK"35,284,159ñL'Retained earningsñL"15,041,513ñL"14,944,971!ñO'Total shareholders' equityñO"50,325,672ñO"50,229,1301ñS'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITYñS"$86,051,172ñS"$89,333,3546ñV'See notes to consolidated financial statements. ñX'ROCKY SHOES & BOOTS, INC.ñY'AND SUBSIDIARIES,ñZ'CONSOLIDATED STATEMENTS OF OPERATIONSñ\^YEAR ENDED ñ\^YEAR ENDED ñ\^YEAR ENDED ñ]^DECEMBER 31,ñ]^DECEMBER 31,ñ]^DECEMBER 31, ñ^^2000 ñ^^1999 ñ^^1998ñ`'NET SALESñ`"$ 102,451,376ñ`"$ 98,099,184ñ`"$ 88,699,413ñb'COST OF GOODS SOLDñb"78,617,092ñb"83,256,768ñb"68,185,041ñe'GROSS MARGINñe"23,834,284ñe"14,842,416ñe"20,514,372ñg'SELLING, GENERAL ANDñh'ADMINISTRATIVE EXPENSESñh"20,649,147ñh"20,020,357ñh"17,208,211$ñk'INCOME (LOSS) FROM OPERATIONSñk"3,185,137ñk"(5,177,941)ñk"3,306,161#ñn'OTHER INCOME AND (EXPENSES):ño'Interest expenseño"(3,354,388)ño"(2,415,682)ño"(1,734,611)ñp'Other - netñp"449,257ñp"236,287ñp"691,073ñs'Total other - netñs"(2,905,131)ñs"(2,179,395)ñs"(1,043,538)(ñv'INCOME (LOSS) BEFORE INCOME TAXESñv"280,006ñv"(7,357,336)ñv"2,262,623#ñx'INCOME TAX EXPENSE (BENEFIT)ñx"183,464ñx"(2,227,579) ñx"426ñ|'NET INCOME (LOSS)ñ|"$ 96,542ñ|"$ (5,129,757)ñ|"$ 2,262,197*ñ€'NET INCOME (LOSS) PER COMMON SHARE: ñ'Basicñ"$ 0.02ñ"$ (1.09)ñ"$ 0.42ñƒ'Dilutedñƒ"$ 0.02ñƒ"$ (1.09)ñƒ"$ 0.41ñ†'WEIGHTED AVERAGE COMMONñ‡'SHARES OUTSTANDING: ñˆ'Basicñˆ"4,489,215ñˆ"4,710,039ñˆ"5,425,026ñŠ'DilutedñŠ"4,493,304ñŠ"4,710,039ñŠ"5,526,8636ñ'See notes to consolidated financial statements. ñ'ROCKY SHOES & BOOTS, INC.ñ'AND SUBSIDIARIES6ñ‘'CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY ñ“^TOTALñ”^PREFERRED ñ”^COMMONñ”^TREASURYñ”^RETAINEDñ”^SHAREHOLDERS' ñ•^STOCK ñ•^STOCK ñ•^STOCKñ•^EARNINGS ñ•^EQUITY!ñ˜'BALANCE, DECEMBER 31, 1997ñ˜"$ 5,400ñ˜"$ 42,604,658ñ˜"$ (1,226,059)ñ˜"$ 17,812,531ñ˜"$ 59,196,530$ñš'YEAR ENDED DECEMBER 31, 1998:ñ›'Net incomeñ›"2,262,197ñ›"2,262,197.ñœ'Treasury stock retired (124,095 shares)ñœ"(1,226,059)ñœ"1,226,059<ñ'Treasury stock purchased and retired (292,600 shares)ñ"(2,038,118)ñ"(2,038,118)ñž'Stock options exercisedñž"214,462ñž"214,4620ñŸ'Preferred stock converted to common stockñŸ"(5,400) ñŸ"5,400!ñ¢'BALANCE, DECEMBER 31, 1998ñ¢"39,560,343ñ¢"20,074,728ñ¢"59,635,071$ñ¤'YEAR ENDED DECEMBER 31, 1999:ñ¥'Net lossñ¥"(5,129,757)ñ¥"(5,129,757)<ñ¦'Treasury stock purchased and retired (685,100 shares)ñ¦"(4,285,184)ñ¦"(4,285,184)ñ§'Stock options exercised ñ§"9,000 ñ§"9,000!ñª'BALANCE, DECEMBER 31, 1999ñª"35,284,159ñª"14,944,971ñª"50,229,130$ñ¬'YEAR ENDED DECEMBER 31, 2000:ñ­'Net income ñ­"96,542 ñ­"96,542!ñ±'BALANCE, DECEMBER 31, 2000ñ±"$ñ±"$ 35,284,159ñ±"$ñ±"$ 15,041,513ñ±"$ 50,325,6726ñ´'See notes to consolidated financial statements. ñ¶'ROCKY SHOES & BOOTS, INC.ñ·'AND SUBSIDIARIES,ñ¸'CONSOLIDATED STATEMENTS OF CASH FLOWS ñº^YEAR ñº^YEAR ñº^YEARñ»^ENDED DECEMBER 31,ñ»^ENDED DECEMBER 31,ñ»^ENDED DECEMBER 31, ñ¼^2000 ñ¼^1999 ñ¼^1998,ñ¾'CASH FLOWS FROM OPERATING ACTIVITIES:ñ¿'Net income (loss)ñ¿"$ 96,542ñ¿"$ (5,129,757)ñ¿"$ 2,262,1978ñÀ'Adjustments to reconcile net income (loss) to net7ñÁ'cash provided by (used in) operating activities:$ñÂ'Depreciation and amortizationñÂ"4,698,554ñÂ"3,836,586ñÂ"4,226,313ñÃ'Deferred income taxesñÃ"(46,954)ñÃ"(1,052,222)ñÃ"(11,293).ñÄ'Deferred compensation and pension - netñÄ"(468,522)ñÄ"254,769ñÄ"138,485#ñÅ'Loss on sale of fixed assets ñÅ"32,116 ñÅ"9,048 ñÅ"837(ñÆ'Change in assets and liabilities:ñÇ'ReceivablesñÇ"2,927,201ñÇ"(6,690,028)ñÇ"1,014,968ñÈ'InventoriesñÈ"537,830ñÈ"14,536,944ñÈ"(14,215,775)ñÉ'Other current assetsñÉ"(72,373)ñÉ"(378,992)ñÉ"(21,515)ñÊ'Other assetsñÊ"(469,514)ñÊ"(749,720) ñÊ"58,811ñË'Accounts payableñË"1,551,745ñË"162,705ñË"(506,171)ñÌ'Accrued expensesñÌ"335,969ñÌ"277,628ñÌ"(854,432):ñÏ'Net cash provided by (used in) operating activitiesñÏ"9,122,594ñÏ"5,076,961ñÏ"(7,907,575),ñÒ'CASH FLOWS FROM INVESTING ACTIVITIES:ñÓ'Purchase of fixed assetsñÓ"(3,113,529)ñÓ"(9,675,010)ñÓ"(6,817,108))ñÔ'Proceeds from sale of fixed assets ñÔ"39,770,ñ×'Net cash used in investing activitiesñ×"(3,073,759)ñ×"(9,675,010)ñ×"(6,817,108),ñÚ'CASH FLOWS FROM FINANCING ACTIVITIES:#ñÛ'Proceeds from long-term debtñÛ"106,607,246ñÛ"57,527,000ñÛ"79,835,000!ñÜ'Payments on long-term debtñÜ"(112,868,411)ñÜ"(53,555,319)ñÜ"(64,610,668)!ñÝ'Purchase of treasury stockñÝ"(4,285,184)ñÝ"(2,038,118).ñÞ'Proceeds from exercise of stock options ñÞ"9,000ñÞ"214,462:ñá'Net cash provided by (used in) financing activitiesñá"(6,261,165)ñá"(304,503)ñá"13,400,676,ñä'DECREASE IN CASH AND CASH EQUIVALENTSñä"(212,330)ñä"(4,902,552)ñä"(1,324,007)!ñæ'CASH AND CASH EQUIVALENTS,ñç'BEGINNING OF YEARñç"2,330,324ñç"7,232,876ñç"8,556,883-ñë'CASH AND CASH EQUIVALENTS, END OF YEARñë"$ 2,117,994ñë"$ 2,330,324ñë"$ 7,232,8766ñî'See notes to consolidated financial statements.