/23H8d 1$&%*1'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES,'CONDENSED CONSOLIDATED BALANCE SHEETS"March 31, 1999"Dec. 31, 1998"(unaudited)"(unaudited)'ASSETS:'CURRENT ASSETS: 'Cash and Cash Equivalents"$ 1,579,438"$ 7,232,876 'Trade Receivables - net "12,836,183 "15,595,483 'Other Receivables "2,466,057 "1,654,471 'Inventories "51,232,320 "47,110,011 'Deferred Income Taxes "1,735,699 "1,735,699 'Prepaid Expenses "1,427,441 "871,533"-----------"-----------'Total Current Assets"71,277,138"74,200,073'Fixed Assets - Net"22,623,367"20,503,854'Other Assets"1,892,954"1,894,542"-----------"-----------'Total Assets"$95,793,459"$96,598,469"==========="==========='LIABILITIES AND'SHAREHOLDERS' EQUITY:'Current Liabilities:'Accounts Payable"$ 5,713,606"$ 2,194,026*'Current Maturities - Long Term Debt"885,877"2,927,625'Accrued Taxes - Other"699,266"479,211!'Accrued Salaries and Wages"715,608"511,916 'Accrued Other "152,690 "618,952!"-----------!"----------- "'Total Current Liabilities""8,167,047""6,731,730-$'Long Term Debt-less current maturities$"26,665,339$"26,877,509&'Deferred Liabilities&"3,372,456&"3,354,159'"-----------'"-----------)'Total Liabilities)"38,204,842)"36,963,398+'Shareholders' Equity:"-'Common Stock, no par value;$.'10,000,000 shares authorized;./'issued and outstanding 1999 - 4,865,415%0'shares; 1998 -5,172,815 shares0"37,835,8620"39,560,3431'Retained Earnings1"19,752,7551"20,074,7282"-----------2"-----------!4'Total Shareholders' Equity4"57,588,6174"59,635,0715"-----------5"-----------17'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY7"$95,793,4597"$96,598,4698"===========8"===========D:'See notes to the condensed consolidated financial statements.1<'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6='CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS>'(UNAUDITED)@"Three Months Ended@"Three Months EndedA"March 31,A"March 31, B"1999 B"1998 C"---- C"----D'Net SalesD"$13,622,730D"$12,956,930F'Cost of Goods SoldF"10,444,060F"9,375,903G"-----------G"-----------H'Gross MarginH"3,178,670H"3,581,027*I'Selling, General and AdministrativeJ'ExpensesJ"3,344,511J"3,071,607K"-----------K"-----------$L'(Loss) Income from OperationsL"(165,841)L"509,420#N'Other Income and (Expenses):O'Interest ExpenseO"(506,805)O"(192,492)P'Other netP"132,933 P"78,679Q"-----------Q"-----------S'Total Other - netS"(373,872)S"(113,813)T"-----------T"-----------(V'(Loss) Income Before Income TaxesV"(539,713)V"395,607#X'Income Tax (Benefit) ExpenseX"(217,740)X"103,920Y"-----------Y"-----------Z'Net (Loss) IncomeZ"$ (321,973)Z"$ 291,687["===========["==========="\'Net (Loss) Income Per Share ]'Basic]"$ (0.06)]"$ 0.05^"-----------^"-----------_'Diluted_"$ (0.06)_"$ 0.05`"-----------`"-----------(a'Weighted Average Number of Sharesb'Outstanding: c'Basicc"4,999,544c"5,413,809d"===========d"===========e'Dilutede"5,002,585e"5,611,078f"===========f"===========Dh'See notes to the condensed consolidated financial statements.1j'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6k'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSl'(UNAUDITED)n"Three Months Endedn"Three Months Endedo"March 31,o"March 31, p"1999 p"1998 q"---- q"----r'CASH FLOWS FROMs'OPERATING ACTIVITIES:t"$ (321,973)t"$ 291,687u'Net (Loss) Income1v'Adjustments to Reconcile Net (Loss) Income(w'to Net Cash Provided By (Used In)x'Operating Activities:$y'Depreciation and Amortizationy"858,342y"994,475z'Deferred Taxes and Other z"77,896 {'Deferred Compensation and|'Pension - net |"18,297('Change in Assets and Liabilities:'Receivables"1,947,714"5,418,372'Inventories"(4,122,309)"(8,707,321)'Prepaid Expenses"(555,908)"(697,737)'Other Assets "1,588 "6,640'Accounts Payable"3,883,660"2,570,228$'Accrued and Other Liabilities"(42,515)"(616,149)"-----------"-----------/'Net Cash Provided By (Used In) Operating'Activities"1,666,896"(661,909)"-----------"-----------'CASH FLOWS FROM'INVESTING ACTIVITIES:'Purchase of Fixed Assets"(3,341,935)"(1,145,510)"-----------"----------- 'CASH FLOWS FROM FINANCING'ACTIVITIES:#'Proceeds from Long Term Debt"7,200,000!'Payments on Long Term Debt"(2,253,918)"(12,760,665)'Purchase Treasury Stock"(1,724,481).'Proceeds from Exercise of Stock Options$'Including Related Tax Benefit "14,406"-----------"-----------,'Net Cash Used In Financing Activities"(3,978,399)"(5,546,259)"-----------"----------- 'DECREASE IN CASH AND CASH"(5,653,438)"(7,353,678)'EQUIVALENTS!'CASH AND CASH EQUIVALENTS,'BEGINNING OF PERIOD"7,232,876"8,556,883"-----------"-----------!'CASH AND CASH EQUIVALENTS,'END OF PERIOD"$ 1,579,438"$ 1,203,205"==========="===========D'See notes to the condensed consolidated financial statements.