/2 H@d 1$&%*%'PART 1 - FINANCIAL INFORMATION$'ITEM 1 - FINANCIAL STATEMENTS1'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES,'CONDENSED CONSOLIDATED BALANCE SHEETS^March 31, 2000^Dec. 31, 1999^Unaudited'ASSETS: 'CURRENT ASSETS: 'Cash and cash equivalents "$ 3,859,881 "$ 2,330,324 'Trade receivables - net "12,989,762 "18,712,588 'Other receivables "4,193,023 "5,227,394'Inventories"39,715,162"32,573,067'Deferred income taxes"1,017,331"1,017,331'Prepaid expenses"2,216,028"1,222,914"----------"----------'Total current assets"63,991,187"61,083,618'FIXED ASSETS - net"26,109,375"26,132,222'OTHER ASSETS"2,117,053"2,117,514"----------"----------'TOTAL ASSETS"$92,217,615"$89,333,354"----------"----------'LIABILITIES AND'SHAREHOLDERS' EQUITY:'CURRENT LIABILITIES:'Accounts Payable"$ 5,465,413"$ 2,128,112*'Current Maturities - Long Term Debt"3,276,351"8,599,897 'Accrued Taxes - Other "632,910 "412,721!!'Accrued Salaries and Wages!"707,884!"569,203"'Accrued Other""534,709""905,783#"----------#"---------- $'Total Current Liabilities$"10,617,267$"12,615,716/&'LONG TERM DEBT - Less current maturities&"31,841,303&"25,176,918('DEFERRED LIABILITIES("1,145,483("1,311,590)"----------)"----------+'Total liabilities+"43,604,053+"39,104,224-'SHAREHOLDERS' EQUITY:"/'Common Stock, no par value;$0'10,000,000 shares authorized;61'issued and outstanding 2000 - 4,489,215 shares;2'1999 - 4,489,215 shares2"35,284,1592"35,284,1593'Retained Earnings3"13,329,4033"14,944,9714"----------4"----------!6'Total Shareholders' Equity6"48,613,5626"50,229,1307"----------7"----------18'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY8"$92,217,6158"$89,333,3549"===========9"===========V;'See notes to the interim unaudited condensed consolidated financial statements.1='ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6>'CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS?'(UNAUDITED)A^Three Months EndedA^Three Months EndedB^March 31,B^March 31, C^2000 C^1999D" D" E'NET SALESE"$ 14,842,111E"$ 13,622,730G'COST OF GOODS SOLDG"11,598,351G"10,444,060H"------------H"------------J'GROSS MARGINJ"3,243,760J"3,178,6703L'SELLING, GENERAL AND ADMINISTRATIVE EXPENSESL"4,986,910L"3,344,511M"------------M"------------O'LOSS FROM OPERATIONSO"(1,743,150)O"(165,841)#Q'OTHER INCOME AND (EXPENSES):R'Interest expenseR"(658,060)R"(506,805)T'Other - netT"108,503T"132,933U"------------U"------------V'Total other - netV"(549,557)V"(373,872)W"------------W"------------Y'LOSS BEFORE INCOME TAXESY"(2,292,707)Y"(539,713)['INCOME TAX BENEFIT["(677,139)["(217,740)\"------------\"------------^'NET LOSS^"$ (1,615,568)^"$ (321,973)_"=============_"============a'NET LOSS PER SHARE b'Basicb"($0.36)b"($0.06)c"-------c"-------d'Dilutedd"($0.36)d"($0.06)e"-------e"-------(g'WEIGHTED AVERAGE NUMBER OF SHARESh'OUTSTANDING: i'Basici"4,489,215i"4,999,544j"==========j"=========k'Dilutedk"4,489,215k"4,999,544l"==========l"=========Vn'See notes to the interim unaudited condensed consolidated financial statements.1p'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6q'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSr'(UNAUDITED)t^Three Months Endedt^Three Months Endedu^March 31,u^March 31, v^2000 v^1999w" w" ,x'CASH FLOWS FROM OPERATING ACTIVITIES:y'Net lossy"$ (1,615,568)y"$ (321,973)4z'Adjustments to reconcile net loss to net cash3{'provided by (used in) operating activities:$|'Depreciation and amortization|"1,122,019|"858,342.}'Deferred compensation and pension - net}"(166,108) }"18,297#~'Gain on sale of fixed assets~"(9,468)('Change in assets and liabilities:'Receivables"6,757,197"1,947,714'Inventories"(7,142,095)"(4,122,309)'Other current assets"(993,114)"(555,908)'Prepaid expenses"(7,288) "1,588'Accounts payable"3,433,758"3,883,660$'Accrued and other liabilities"(12,204)"(42,515)"------------"------------1'Net cash provided by operating activities"1,367,129"1,666,896"------------"------------,'CASH FLOWS FROM INVESTING ACTIVITIES:'Purchase of fixed assets"(1,344,343)"(3,341,935))'Proceeds from sale of fixed assets"165,932"------------"------------,'Net cash used in investing activities"(1,178,411)"(3,341,935)"------------"------------,'CASH FLOWS FROM FINANCING ACTIVITIES:#'Proceeds from Long Term Debt"19,675,000!'Payments on Long Term Debt"(18,334,161)"(2,253,918)'Purchase Treasury Stock"(1,724,481)"------------"------------/'Net cash provided by (used in) financing"1,340,839"(3,978,399)"------------"------------'activities+'INCREASE (DECREASE) IN CASH AND CASH'EQUIVALENTS"1,529,557"(5,653,438)!'CASH AND CASH EQUIVALENTS,'BEGINNING OF PERIOD"2,330,324"7,232,876"------------"------------!'CASH AND CASH EQUIVALENTS,'END OF PERIOD"$ 3,859,881"$ 1,579,438"============"============V'See notes to the interim unaudited condensed consolidated financial statements.