/2H9 d 1$&%*1'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES,'CONDENSED CONSOLIDATED BALANCE SHEETS^March 31, 2002^December 31, 2001^March 31, 2001^Unaudited^Unaudited'ASSETS:'CURRENT ASSETS:A'Cash and cash equivalents ................................"$ 1,117,729"$ 2,954,935"$ 1,116,851A 'Trade receivables - net .................................. "11,005,564 "15,091,100 "11,372,760A 'Other receivables ........................................ "2,525,586 "2,225,498 "3,411,050A 'Inventories .............................................. "29,713,341 "27,713,664 "38,422,375A 'Deferred income taxes .................................... "615,609 "615,609 "502,722A 'Prepaid expenses ......................................... "1,539,910 "1,053,192 "4,084,974<'Total current assets ................................"46,517,739"49,653,998"58,910,732G'FIXED ASSETS - net ............................................."20,471,642"20,766,094"23,440,166G'DEFERRED PENSION ASSET ........................................."2,169,021"1,802,922"2,526,603G'DEFERRED INCOME TAXES .........................................."295,784"295,784G'OTHER ASSETS ..................................................."2,537,800"2,141,016"2,217,387G'TOTAL ASSETS ..................................................."$ 71,991,986"$ 74,659,814"$ 87,094,888'LIABILITIES AND'SHAREHOLDERS' EQUITY:'CURRENT LIABILITIES:A 'Accounts payable ......................................... "$ 3,629,340 "$ 1,559,444 "$ 6,262,617A!'Current maturities - long term debt ......................!"474,315!"469,143!"553,081A"'Accrued taxes - other ....................................""609,655""991,295""841,070A#'Accrued salaries and wages ...............................#"704,559#"985,992#"657,481A$'Accrued plant closing costs ..............................$"851,175$"903,291A%'Accrued other ............................................%"275,248%"477,938%"596,986<''Total current liabilities ...........................'"6,544,292'"5,387,103'"8,911,235G)'LONG TERM DEBT-less current maturities .........................)"15,419,643)"16,976,023)"26,335,962G+'DEFERRED LIABILITIES ...........................................+"173,750+"1,253,355+"2,428,113G-'TOTAL LIABILITIES ..............................................-"22,137,685-"23,616,481-"37,675,310/'SHAREHOLDERS' EQUITY:"1'Common stock, no par value;A2'10,000,000 shares authorized; issued and outstanding March<3'31, 2002 - 4,498,965; December 31, 2001 - 4,492,215 -!4'March 31, 2001 - 4,489,2156"35,340,3156"35,302,1596"35,284,159A7'Accumulated other comprehensive loss .....................7"(831,161)7"(831,161)A8'Retained earnings ........................................8"15,345,1478"16,572,3358"14,135,419<:'Total shareholders' equity ..........................:"49,854,301:"51,043,333:"49,419,578G<'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .....................<"$ 71,991,986<"$ 74,659,814<"$ 87,094,888V?'See notes to the interim unaudited condensed consolidated financial statements.1A'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6B'CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSC'(UNAUDITED)E^Three Months EndedE^Three Months EndedF^March 31,F^March 31, G^2002 G^20011I'NET SALES ................................I"$ 13,749,588I"$ 16,063,8951K'COST OF GOODS SOLD .......................K"11,408,935K"12,896,8211N'GROSS MARGIN .............................N"2,340,653N"3,167,074*P'SELLING, GENERAL AND ADMINISTRATIVE+Q'EXPENSES ...........................Q"3,899,501Q"4,008,4991T'LOSS FROM OPERATIONS .....................T"(1,558,848)T"(841,425)#V'OTHER INCOME AND (EXPENSES):+W'Interest expense ...................W"(283,109)W"(579,097)+X'Other - net ........................ X"88,831X"132,986&Z'Total other - net .............Z"(194,278)Z"(446,111)1\'LOSS BEFORE INCOME TAX BENEFIT ...........\"(1,753,126)\"(1,287,536)1^'INCOME TAX BENEFIT .......................^"(525,938)^"(381,442)1a'NET LOSS .................................a"$ (1,227,188)a"$ (906,094)d'NET LOSS PER SHARE+e'Basic ..............................e"($ 0.27)e"($ 0.20)+g'Diluted ............................g"($ 0.27)g"($ 0.20)(j'WEIGHTED AVERAGE NUMBER OF SHARESk'OUTSTANDING+l'Basic ..............................l"4,493,823l"4,489,215+n'Diluted ............................n"4,493,823n"4,489,215Vq'See notes to the interim unaudited condensed consolidated financial statements.1s'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6t'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSu'(UNAUDITED)w^Three Months Endedw^Three Months Endedx^March 31,x^March 31, y^2002 y^2001,{'CASH FLOWS FROM OPERATING ACTIVITIES:C|'Net loss ...................................................|"$ (1,227,188)|"$ (906,094)=}'Adjustments to reconcile net loss to net cash provided*~'by (used in) operating activities:>'Depreciation and amortization ........................."1,033,333"1,164,455>'Deferred liabilities - net ............................"(1,445,704)"(22,475)>'Gain on sale of fixed assets .........................."(7,802)('Change in assets and liabilities:>'Receivables ..........................................."3,785,448"6,228,971>'Inventories ..........................................."(1,999,677)"(6,387,138)>'Prepaid expenses ......................................"(486,718)"(2,789,687)>'Other assets .........................................."(408,363)"(29,492)>'Accounts payable ......................................"2,041,008"2,753,104>'Accrued and other liabilities ........................."(917,879)"(128,139);'Net cash provided by (used in) operating activities"366,458"(116,495),'CASH FLOWS FROM INVESTING ACTIVITIES:C'Purchase of fixed assets ..................................."(699,572)"(258,041)C'Proceeds from sale of fixed assets ......................... "8,960>'Net cash used in investing activities ................."(690,612)"(258,041),'CASH FLOWS FROM FINANCING ACTIVITIES:C'Proceeds from long term debt ..............................."19,887,761"21,980,847C'Payments on long term debt ................................."(21,438,969)"(22,607,454)C'Proceeds from exercise of stock options .................... "38,156>'Net cash used in financing activities ................."(1,513,052)"(626,607)C'DECREASE IN CASH AND CASH EQUIVALENTS ......................"(1,837,206)"(1,001,143)!'CASH AND CASH EQUIVALENTS,C'BEGINNING OF PERIOD ........................................"2,954,935"2,117,994!'CASH AND CASH EQUIVALENTS,C'END OF PERIOD .............................................."$ 1,117,729"$ 1,116,851V'See notes to the interim unaudited condensed consolidated financial statements.