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AND SUBSIDIARIES+'CONDENSED CONSOLIDATED BALANCE SHEETS^June 30, 2002^December 31, 2001^June 30, 2001^Unaudited^Unaudited 'ASSETS:'CURRENT ASSETS: 'Cash and cash equivalents "$ 1,514,834 "$ 2,954,935 "$ 1,453,055 'Trade receivables - net "15,072,183 "15,091,100 "20,197,326 'Other receivables "2,345,324 "2,225,498 "4,973,000 'Inventories "31,319,150 "27,713,664 "41,384,116 'Deferred income taxes "615,609 "615,609 "502,722'Prepaid expenses"1,491,523"1,053,192"1,454,132'Total current assets"52,358,623"49,653,998"69,964,351'FIXED ASSETS - net"19,965,259"20,766,094"22,473,023'DEFERRED PENSION ASSET"2,311,806"1,802,922"2,526,603'DEFERRED INCOME TAXES "295,784 "295,784'OTHER ASSETS"2,469,050"2,141,016"2,157,433'TOTAL ASSETS"$ 77,400,522"$ 74,659,814"$ 97,121,410'LIABILITIES AND'SHAREHOLDERS' EQUITY:!'CURRENT LIABILITIES:"'Accounts payable""$ 4,207,401""$ 1,559,444""$ 6,091,027)#'Current maturities - long term debt #"480,751 #"469,143#"9,516,681$'Accrued taxes - other $"606,690 $"991,295 $"910,612 %'Accrued salaries and wages %"852,859 %"985,992%"1,063,461!&'Accrued plant closing costs &"780,499 &"903,291''Accrued other '"282,721 '"477,938 '"558,948)'Total current liabilities)"7,210,921)"5,387,103)"18,140,729,+'LONG TERM DEBT-less current maturities+"20,004,450+"16,976,023+"26,212,433-'DEFERRED LIABILITIES -"180,500-"1,253,355-"2,646,3310'TOTAL LIABILITIES0"27,395,8710"23,616,4810"46,999,4932'SHAREHOLDERS' EQUITY:!4'Common stock, no par value;:5'10,000,000 shares authorized; issued and outstanding?6'June 30, 2002 - 4,505,465; December 31, 2001 - 4,492,215;7'June 30, 2001 - 4,489,2157"35,373,5787"35,302,1597"35,284,159*8'Accumulated other comprehensive loss8"(831,161)8"(831,161)9'Retained earnings9"15,462,2349"16,572,3359"14,837,758 <'Total shareholders' equity<"50,004,651<"51,043,333<"50,121,9170?'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY?"$ 77,400,522?"$ 74,659,814?"$ 97,121,410UB'See notes to the interim unaudited condensed consolidated financial statements.0D'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES5E'CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSF'(UNAUDITED)H^Three Months EndedH^Three Months EndedH^Six Months EndedH^Six Months EndedI^June 30,I^June 30,I^June 30,I^June 30, J^2002 J^2001 J^2002 J^2001L'NET SALESL"$ 19,194,071L"$ 22,006,132L"$ 32,943,659L"$ 38,070,027N'COST OF GOODS SOLDN"14,256,438N"15,854,003N"25,665,373N"28,750,824Q'GROSS MARGINQ"4,937,633Q"6,152,129Q"7,278,286Q"9,319,203S'SELLING, GENERAL ANDT'ADMINISTRATIVE EXPENSEST"4,517,033T"4,691,982T"8,416,534T"8,700,481#W'INCOME (LOSS) FROM OPERATIONS W"420,600W"1,460,147W"(1,138,248) W"618,722"Y'OTHER INCOME AND (EXPENSES):Z'Interest expenseZ"(332,959)Z"(632,685)Z"(616,068)Z"(1,211,782)['Other - net ["78,198 ["147,041 ["167,029 ["280,027]'Total other - net]"(254,761)]"(485,644)]"(449,039)]"(931,755)!_'INCOME (LOSS) BEFORE INCOME `'TAXES `"165,839 `"974,503`"(1,587,287)`"(313,033)"b'INCOME TAX (BENEFIT) EXPENSE b"48,752 b"272,164b"(477,186)b"(109,278)e'NET INCOME (LOSS)e"$ 117,087e"$ 702,339e"$ (1,110,101)e"$ (203,755)!h'NET INCOME (LOSS) PER SHARE i'Basici"$ 0.03i"$ 0.16i"$ (0.25)i"$ (0.05) k'Dilutedk"$ 0.03k"$ 0.16k"$ (0.25)k"$ (0.05) n'WEIGHTED AVERAGE NUMBER OFo'SHARES OUTSTANDING p'Basicp"4,502,608p"4,489,215p"4,498,240p"4,489,215 r'Dilutedr"4,680,002r"4,522,039r"4,489,240r"4,489,215Uu'See notes to the interim unaudited condensed consolidated financial statements.0w'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES5x'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSy'(UNAUDITED){^Six Months Ended{^Six Months Ended|^June 30,|^June 30, }^2002 }^2001+'CASH FLOWS FROM OPERATING ACTIVITIES:€'Net loss€"$ (1,110,101)€"$ (203,755)<'Adjustments to reconcile net loss to net cash provided)‚'by (used in) operating activities:#ƒ'Depreciation and amortizationƒ"2,069,977ƒ"2,304,910*„'Deferred taxes and liabilities - net„"(1,581,738) „"195,743"…'Loss on sale of fixed assets …"9,508 …"7,434'‡'Change in assets and liabilities:ˆ'Receivablesˆ"(100,909)ˆ"(4,157,545)‰'Inventories‰"(3,605,486)‰"(9,348,879)Š'Prepaid expensesŠ"(438,331)Š"(158,845)‹'Other assets‹"(347,810) ‹"20,602Œ'Accounts payableŒ"2,643,981Œ"2,598,861#'Accrued and other liabilities"(835,747) "309,344,'Net cash used in operating activities"(3,296,656)"(8,432,130)+“'CASH FLOWS FROM INVESTING ACTIVITIES:”'Purchase of fixed assets”"(1,267,649)”"(452,772)(•'Proceeds from sale of fixed assets •"12,750 •"6,498+˜'Net cash used in investing activities˜"(1,254,899)˜"(446,274)+›'CASH FLOWS FROM FINANCING ACTIVITIES:"œ'Proceeds from Long Term Debtœ"40,122,478œ"45,171,590 'Payments on Long Term Debt"(37,082,443)"(36,958,125)-ž'Proceeds from exercise of stock options ž"71,419/¡'Net cash provided by financing activities¡"3,111,454¡"8,213,465+¥'DECREASE IN CASH AND CASH EQUIVALENTS¥"(1,440,101)¥"(664,939) §'CASH AND CASH EQUIVALENTS,¨'BEGINNING OF PERIOD¨"2,954,935¨"2,117,994 «'CASH AND CASH EQUIVALENTS,¬'END OF PERIOD¬"$ 1,514,834¬"$ 1,453,055U°'See notes to the interim unaudited condensed consolidated financial statements. °6Sheet1 °6Sheet2 °6Sheet3€ÿÿŽd“–ÿ—_˜™ÿš ›Ðœ£ÿ®Arial®Arial¯  °ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ±  ¸¹Oÿÿÿÿÿÿÿÿÿÿ4!ø*îîèèdº»Ã"Ã"Ã"ÉÉÉÍdÎÏÐFM3FM3 PropertyWK3WK3 Propertyÿÿ  3ð N13 3N1¢ô2 ð2¤CM¥Hdr×3ð