/2H4d 1$&%*1'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES,'CONDENSED CONSOLIDATED BALANCE SHEETS^September 30, 2000^December 31, 1999^(unaudited)'ASSETS:'CURRENT ASSETS: 'Cash and cash equivalents"$ 1,925,013"$ 2,330,324 'Trade receivables - net "39,366,729 "18,712,588 'Other receivables "3,852,011 "5,227,394 'Inventories "42,162,237 "32,573,067 'Deferred income taxes "1,017,331 "1,017,331 'Prepaid expenses "1,816,021 "1,222,914"------------"-----------'Total current assets"90,139,342"61,083,618'FIXED ASSETS - net"25,379,126"26,132,222'OTHER ASSETS"2,512,903"2,117,514"------------"-----------'TOTAL ASSETS"$118,031,371"$89,333,354"============"==========='LIABILITIES AND'SHAREHOLDERS' EQUITY:'CURRENT LIABILITIES:'Accounts payable"$ 13,062,373"$ 2,128,112*'Current maturities - long term debt"12,595,188"8,599,897'Accrued taxes - other"609,112"412,721!'Accrued salaries and wages"968,209"569,203 'Accrued other "955,871 "905,783!"------------!"----------- "'Total current liabilities""28,190,753""12,615,716-$'LONG TERM DEBT-less current maturities$"38,146,201$"25,176,918&'DEFERRED LIABILITIES&"1,474,595&"1,311,590'"------------'"-----------)'TOTAL LIABILITIES)"67,811,549)"39,104,224+'SHAREHOLDERS' EQUITY:"-'Common stock, no par value;$.'10,000,000 shares authorized;</'issued and outstanding September 30, 2000 - 4,489,21530'shares; December 31, 1999 - 4,489,215 shares0"35,284,1590"35,284,1591'Retained earnings1"14,935,6631"14,944,9712"------------2"-----------!4'Total shareholders' equity4"50,219,8224"50,229,1305"------------5"-----------17'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY7"$118,031,3717"$89,333,3548"============8"===========N:'See notes to the unaudited condensed consolidated financial statements.1<'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6='CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS>'(UNAUDITED)@^Three Months Ended@^Three Months Ended@^Nine Months Ended@^Nine Months EndedA^September 30,A^September 30,A^September 30,A^September 30, B^2000 B^1999 B^2000 B^1999D'NET SALESD"$36,994,402D"$34,458,907D"$74,754,970D"$71,282,065E'COST OF GOODS SOLDE"28,485,904E"25,674,704E"57,726,628E"53,355,770F"-----------F"-----------F"-----------F"-----------G'GROSS MARGING"8,508,498G"8,784,203G"17,028,342G"17,926,2953I'SELLING, GENERAL AND ADMINISTRATIVE EXPENSESI"5,658,184I"5,394,236I"15,037,646I"13,344,182J"-----------J"-----------J"-----------J"-----------K'INCOME FROM OPERATIONSK"2,850,314K"3,389,967K"1,990,696K"4,582,113#L'OTHER INCOME AND (EXPENSES):M'Interest expenseM"(1,197,902)M"(800,611)M"(2,329,623)M"(1,851,291)N'Other - netN"146,060 N"4,731N"326,119N"246,090O"-----------O"-----------O"-----------O"-----------P'Total other - netP"(1,051,842)P"(795,880)P"2,003,504P"1,605,201Q"-----------Q"-----------Q"-----------Q"-----------(R'INCOME (LOSS) BEFORE INCOME TAXESR"1,798,472R"2,594,087R"(12,808)R"2,976,912#S'INCOME TAX (BENEFIT) EXPENSES"535,500S"775,866S"(3,500)S"893,015T"-----------T"-----------T"-----------T"-----------U'NET INCOME (LOSS)U"$ 1,262,972U"$ 1,818,221U"$ (9,308)U"$ 2,083,897V"===========V"===========V"===========V"==========="W'NET INCOME (LOSS) PER SHARE X'BasicX"$ 0.28X"$ 0.40X"$ (0.00)X"$ 0.44Y"===========Y"===========Y"===========Y"===========Z'DilutedZ"$ 0.28Z"$ 0.40Z"$ (0.00)Z"$ 0.44["===========["===========["===========["===========5]'WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: ^'Basic^"4,489,215^"4,554,317^"4,489,215^"4,765,509_"===========_"===========_"===========_"===========`'Diluted`"4,489,921`"4,593,675`"4,489,215`"4,786,436a"===========a"===========a"===========a"===========Nc'See notes to the unaudited condensed consolidated financial statements.1e'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6f'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSg'(UNAUDITED)i^Nine Months Endedi^Nine Months Endedj^September 30,j^September 30, k^2000 k^1999,m'CASH FLOWS FROM OPERATING ACTIVITIES:n'Net income (loss)n"$ (9,308)n"$ 2,083,897=o'Adjustments to reconcile net income (loss) to net cash2p'provided by (used in) operating activities:$q'Depreciation and amortizationq"3,492,468q"3,044,014r'Deferred taxes and otherr"(50,000).s'Deferred compensation and pension - nets"163,005s"(99,727)#t'Loss on sale of fixed assets t"667(v'Change in assets and liabilities:w'Receivablesw"(19,278,758)w"(22,536,835)x'Inventoriesx"(9,589,170)x"(1,046,627)y'Other current assetsy"(593,107)y"(779,876)z'Other assetsz"(419,282) z"4,997{'Accounts payable{"10,870,452{"4,491,057$|'Accrued and other liabilities|"645,485|"1,014,469}"------------}"------------,'Net cash used in operating activities"(14,717,548)"(13,874,631),'CASH FLOWS FROM INVESTING ACTIVITIES:'Purchase of fixed assets"(2,692,107)"(7,786,725))'Proceeds from sale of fixed assets "39,770"------------"------------,'Net cash used in investing activities"(2,652,337)"(7,786,725),'CASH FLOWS FROM FINANCING ACTIVITIES:'Proceeds from debt"81,725,969"40,102,000'Payments on debt"(64,761,395)"(19,819,509)'Purchase treasury stock"(3,807,300)8'Proceeds from exercise of stock options including 'related income tax effect "9,000"------------"------------0'Net cash provided by financing activities"16,964,574"16,484,191"------------"------------,'DECREASE IN CASH AND CASH EQUIVALENTS"(405,311)"(5,177,165)!'CASH AND CASH EQUIVALENTS,'BEGINNING OF PERIOD"2,330,324"7,232,876"------------"------------!'CASH AND CASH EQUIVALENTS,'END OF PERIOD"1,925,013"$ 2,055,711"============"============N'See notes to the unaudited condensed consolidated financial statements.