/2H0  d 1$&%*%'PART I - FINANCIAL INFORMATION$'ITEM 1 - FINANCIAL STATEMENTS1'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES,'CONDENSED CONSOLIDATED BALANCE SHEETS^September 30,^December 31,^September 30, ^2001 ^2000 ^2000 ^Unaudited ^Unaudited 'ASSETS: 'CURRENT ASSETS: 'Cash and cash equivalents"$2,553,804"$2,117,994"$1,925,013'Trade receivables - net"34,716,895"18,055,881"39,366,729'Other receivables"2,351,058"2,956,900"3,852,011'Inventories"37,899,594"32,035,237"42,162,237'Deferred income taxes"502,722"536,012"1,017,331'Prepaid expenses"1,498,935"1,295,287"1,816,021'Total current assets"79,523,008"56,997,311"90,139,342'FIXED ASSETS - net"21,541,734"24,330,319"25,379,126'OTHER ASSETS"4,602,196"4,723,542"2,512,903'TOTAL ASSETS"$105,666,938"$86,051,172"$118,031,371'LIABILITIES AND'SHAREHOLDERS' EQUITY:!'CURRENT LIABILITIES:"'Accounts payable""$3,538,230""$3,502,296""$13,062,373*#'Current maturities - long term debt#"17,845,423#"1,070,374#"12,595,188$'Accrued taxes - other$"683,637$"560,537$"609,112!%'Accrued salaries and wages%"1,360,540%"369,925%"968,209#&'Accrued restructuring charge&"1,300,000''Accrued other'"1,481,547'"1,293,214'"955,871 )'Total current liabilities)"26,209,377)"6,796,346)"28,190,753/+'LONG TERM DEBT - less current maturities+"26,095,736+"26,445,276+"38,146,201-'DEFERRED LIABILITIES-"1,760,214-"2,483,878-"1,474,5950'TOTAL LIABILITIES0"54,065,3270"35,725,5000"67,811,5492'SHAREHOLDERS' EQUITY:"4'Common stock, no par value;/5'10,000,000 shares authorized; issued and&6'outstanding September 30, 2001,7'December 31, 2000,)8'and September 30, 2000 - 4,489,2158"35,284,1598"35,284,1598"35,284,1599'Retained earnings9"16,317,4529"15,041,5139"14,935,663!='Total shareholders' equity="51,601,611="50,325,672="50,219,8221@'TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY@"$105,666,938@"$86,051,172@"$118,031,371VC'See notes to the interim unaudited condensed consolidated financial statements.1F'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6G'CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSH'(UNAUDITED)J^Three Months EndedJ^Nine Months EndedK^September 30,K^September 30, L^2001 L^2000 L^2001 L^2000N'NET SALESN"$38,490,267N"$37,230,069N"$76,560,294N"$75,475,202P'COST OF GOODS SOLDP"28,685,843P"28,485,904P"57,436,667P"57,726,628S'GROSS MARGINS"9,804,424S"8,744,165S"19,123,627S"17,748,574U'SELLING, GENERAL ANDV'ADMINISTRATIVE EXPENSESV"5,723,654V"5,893,851V"14,424,135V"15,757,878W'RESTRUCTURING CHARGEW"1,300,000 W"--W"1,300,000 W"--Z'INCOME FROM OPERATIONSZ"2,780,770Z"2,850,314Z"3,399,492Z"1,990,696#\'OTHER INCOME AND (EXPENSES):]'Interest expense]"(764,539)]"(1,197,902)]"(1,976,321)]"(2,329,623)^'Other - net ^"50,097^"146,060^"330,124^"326,119`'Total other - net`"(714,442)`"(1,051,842)`"(1,646,197)`"(2,003,504)"b'INCOME (LOSS) BEFORE INCOME c'TAXESc"2,066,328c"1,798,472c"1,753,295c"(12,808)#e'INCOME TAX (BENEFIT) EXPENSEe"586,634e"535,500e"477,356e"(3,500)h'NET INCOME (LOSS)h"$1,479,694h"$1,262,972h"$1,275,939h"$(9,308)"k'NET INCOME (LOSS) PER SHARE l'Basic l"$0.33 l"$0.28 l"$0.28l"$(0.00)n'Diluted n"$0.32 n"$0.28 n"$0.28n"$(0.00)!q'WEIGHTED AVERAGE NUMBER OFr'SHARES OUTSTANDING s'Basics"4,489,215s"4,489,215s"4,489,215s"4,489,215u'Dilutedu"4,564,929u"4,489,921u"4,540,675u"4,489,215Vy'See notes to the interim unaudited condensed consolidated financial statements.1|'ROCKY SHOES & BOOTS, INC. AND SUBSIDIARIES6}'CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~'(UNAUDITED)^Nine Months Ended^September 30, ^2001 ^2000,'CASH FLOWS FROM OPERATING ACTIVITIES:'Net income (loss)"$1,275,939"$(9,308)8'Adjustments to reconcile net income (loss) to net*'cash used in operating activities:$'Depreciation and amortization"3,381,738"3,492,468,'Deferred income taxes and liabilities"(690,374)"163,005#'Loss on sale of fixed assets"123,040 "667('Change in assets and liabilities:'Receivables"(16,055,172)"(19,278,758)'Inventories"(5,864,357)"(9,589,170)'Prepaid expenses"(203,648)"(593,107)'Other assets "90,972"(419,282)'Accounts payable "45,275"10,870,452$'Accrued and other liabilities"2,602,048"645,485-'Net cash used in operating activities"(15,294,539)"(14,717,548),'CASH FLOWS FROM INVESTING ACTIVITIES:'Purchase of fixed assets"(701,658)"(2,692,107))'Proceeds from sale of fixed assets "6,498 "39,770,'Net cash used in investing activities"(695,160)"(2,652,337),'CASH FLOWS FROM FINANCING ACTIVITIES:#'Proceeds from long term debt"76,046,760"81,725,969!'Payments on long term debt"(59,621,251)"(64,761,395)0'Net cash provided by financing activities"16,425,509"16,964,574+'INCREASE (DECREASE) IN CASH AND CASH'EQUIVALENTS"435,810"(405,311)!'CASH AND CASH EQUIVALENTS,'BEGINNING OF PERIOD"2,117,994"2,330,324!'CASH AND CASH EQUIVALENTS,'END OF PERIOD"$2,553,804"$1,925,013V'See notes to the interim unaudited condensed consolidated financial statements.