/2H9d 1$&%*%'PART 1 - FINANCIAL INFORMATION$'ITEM 1 - FINANCIAL STATEMENTS1'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES,'CONDENSED CONSOLIDATED BALANCE SHEETS^March 31, 2001^December 31, 2000^Unaudited'ASSETS: 'CURRENT ASSETS: 'Cash and cash equivalents "$ 1,116,851 "$ 2,117,994 'Trade receivables - net "11,372,760 "18,055,881 'Other receivables "3,411,050 "2,956,900 'Inventories "38,422,375 "32,035,237'Deferred income taxes"502,722"536,012'Prepaid expenses"4,084,974"1,295,287'Total current assets"58,910,732"56,997,311'FIXED ASSETS - net"23,440,166"24,330,319'OTHER ASSETS"4,743,990"4,723,542'TOTAL ASSETS"$87,094,888"$86,051,172'LIABILITIES AND'SHAREHOLDERS' EQUITY:'CURRENT LIABILITIES:'Accounts payable"$ 6,262,617"$ 3,502,296*'Current maturities - long term debt"553,081"1,070,374'Accrued taxes - other"841,070"560,537! 'Accrued salaries and wages "657,481 "369,925!'Accrued other!"596,986!"1,293,214 #'Total current liabilities#"8,911,235#"6,796,346-%'LONG TERM DEBT-less current maturities%"26,335,962%"26,445,276''DEFERRED LIABILITIES'"2,428,113'"2,483,878)'TOTAL LIABILITIES)"37,675,310)"35,725,500+'SHAREHOLDERS' EQUITY:"-'Common stock, no par value;$.'10,000,000 shares authorized;@/'issued and outstanding March 31, 2001 - 4,489,215 shares;+0'December 31, 2000 - 4,489,215 shares0"35,284,1590"35,284,1592'Retained earnings2"14,135,4192"15,041,513!4'Total shareholders' equity4"49,419,5784"50,325,67216'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY6"$87,094,8886"$86,051,172V8'See notes to the interim unaudited condensed consolidated financial statements.1:'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6;'CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS<'(UNAUDITED) =' >^Three Months Ended>^Three Months Ended?^March 31,?^March 31, @^2001 @^2000B'NET SALESB"$ 15,675,240B"$ 15,131,032D'COST OF GOODS SOLDD"12,508,166D"11,598,351G'GROSS MARGING"3,167,074G"3,532,681*I'SELLING, GENERAL AND ADMINISTRATIVEJ'EXPENSESJ"4,008,499J"5,275,831L'LOSS FROM OPERATIONSL"(841,425)L"(1,743,150)#N'OTHER INCOME AND (EXPENSES):O'Interest expenseO"(579,097)O"(658,060)P'Other - netP"132,986P"108,503R'Total other - netR"(446,111)R"(549,557)%T'LOSS BEFORE INCOME TAX BENEFITT"(1,287,536)T"(2,292,707)V'INCOME TAX BENEFITV"(381,442)V"(677,139)Y'NET LOSSY"$ (906,094)Y"$ (1,615,568)['NET LOSS PER SHARE \'Basic\"($0.20)\"($0.36)^'Diluted^"($0.20)^"($0.36)(`'WEIGHTED AVERAGE NUMBER OF SHARESa'OUTSTANDING b'Basicb"4,489,215b"4,489,215d'Dilutedd"4,489,215d"4,489,215Vf'See notes to the interim unaudited condensed consolidated financial statements.1h'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6i'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSj'(UNAUDITED) k' l^Three Months Endedl^Three Months Endedm^March 31,m^March 31, n^2001 n^2000,p'CASH FLOWS FROM OPERATING ACTIVITIES:q'Net lossq"$ (906,094)q"$ (1,615,568)=r'Adjustments to reconcile net loss to net cash provided*s'by (used in) operating activities:$t'Depreciation and amortizationt"1,164,455t"1,122,019+u'Deferred taxes and liabilities - netu"(22,475)u"(166,108)#v'Gain on sale of fixed assetsv"(9,468)(x'Change in assets and liabilities:y'Receivablesy"6,228,971y"6,757,197z'Inventoriesz"(6,387,138)z"(7,142,095){'Prepaid expenses{"(2,789,687){"(993,114)|'Other assets|"(29,492)|"(7,288)}'Accounts payable}"2,753,104}"3,433,758$~'Accrued and other liabilities~"(128,139)~"(12,204);'Net cash provided by (used in) operating activities"(116,495)"1,367,129,'CASH FLOWS FROM INVESTING ACTIVITIES:'Purchase of fixed assets"(258,041)"(1,344,343))'Proceeds from sale of fixed assets"165,932,'Net cash used in investing activities"(258,041)"(1,178,411),'CASH FLOWS FROM FINANCING ACTIVITIES:#'Proceeds from Long Term Debt"21,980,847"19,675,000!'Payments on Long Term Debt"(22,607,454)"(18,334,161):'Net cash provided by (used in) financing activities"(626,607)"1,340,8397'INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS"(1,001,143)"1,529,557!'CASH AND CASH EQUIVALENTS,'BEGINNING OF PERIOD"2,117,994"2,330,324!'CASH AND CASH EQUIVALENTS,'END OF PERIOD"$ 1,116,851"$ 3,859,881V'See notes to the interim unaudited condensed consolidated financial statements.