Rocky Shoes & Boots, Inc. reported the net loss for the three months ended March 31, 2003 decreased to $622,569, or $0.14 per diluted share, compared with a net loss of $1,227,188, or $0.27 per diluted share, for the same period last year.

Mike Brooks, Chairman and CEO commented, “Our results for the three months ended March 31, which is historically our weakest quarter of the year, reflect improvement over last year. Positive factors include a 38.5% gain in branded product sales and an increase in gross margin to 25.2%. Orders received during first quarter 2003 are well ahead of last year. We are pleased with the growing interest in ROCKY(R) as we continue to extend the brand through our head-to-toe growth strategy, which includes lines of branded clothing and accessories. Our recent acquisition of GATES(R) underscores our commitment to this approach. While uncertainties remain concerning the national economy, we are encouraged regarding improved performance this year.”

Net sales improved slightly to $13,754,941 for the quarter ended March 31, 2003 versus $13,749,588 a year ago. Branded sales, led by an increase of $2,756,000, or 47.9% in occupational footwear sales, rose 38.5% to $13,755,000 for first quarter 2003 from $9,929,000 for the same period last year. Increases were realized in all branded product categories. There were no sales of footwear to the U.S. Military in first quarter 2003 versus $3,821,000 for the same period a year ago.

Gross profit rose to $3,465,528, or 25.2% of net sales, for first quarter 2003 compared with $2,340,653, or 17.0% of net sales, last year. The results benefited primarily from no sales of military boots during first quarter 2003, which were produced at significantly lower margins than other products. Gross profit on branded products improved 160 basis points as a result of increased higher margin sourced product sales, which rose to 49.1% of net sales for first quarter 2003 from 30.0% last year. It is anticipated that the quarterly gross margin will increase this year as sales volumes increase.

Selling, general and administrative expenses were $4,250,606, or 30.9% of net sales, for first quarter 2003 versus $3,899,501, or 28.4% of net sales, for the same period last year. The increase was due to additional commissions for the higher amount of branded sales and, to a lesser extent, increased fringe benefits costs.

Funded debt was $10,828,975 at March 31, 2003 versus $15,893,958 on the same date a year ago, a decline of 31.9%. Interest expense declined 30.7% for first quarter 2003 to $196,180 from $283,109 a year ago, primarily as a result of lower borrowings.

Inventory was $28,342,873 at March 31, 2003 compared with $29,713,341 on the same date last year.

The Board of Directors authorized a share repurchase program in September 2002 for up to 500,000 shares, representing approximately 11% of the Company’s common shares outstanding at that time. Purchases were authorized through open market or privately negotiated transactions. The purchases were funded from the Company’s operating cash flow and credit facility. During first quarter 2003 the Company completed the repurchase program. The average purchase price was $6.38 per share.

The Company anticipates that its 2003 net sales, including $8 million from the recently acquired GATES(R) brand, will be at least $98 million. If the Company achieves net sales of at least $98 million for the year 2003 net income is expected to exceed $1.00 per diluted share for the year 2003 compared with $0.62 for 2002. The Company cautions investors, however, that the fiscal 2003 net sales and earnings outlook is made on the basis of present market conditions and if sales do not reach $98 million, actual earnings may be less than the current guidance.

                  Rocky Shoes & Boots, Inc. and Subsidiaries
               Condensed Consolidated Statements of Operations

                                                      Three Months Ended
                                                            March 31,
                                                       2003           2002

    NET SALES                                      $13,754,941    $13,749,588

    COST OF GOODS SOLD                              10,289,413     11,408,935

    GROSS MARGIN                                     3,465,528      2,340,653


    LOSS FROM OPERATIONS                              (785,078)    (1,558,848)

      Interest expense                                (196,180)      (283,109)
      Other - net                                       91,873         88,831
        Total other - net                             (104,307)      (194,278)

    LOSS BEFORE INCOME TAX BENEFIT                    (889,385)    (1,753,126)

    INCOME TAX BENEFIT                                (266,816)      (525,938)

    NET LOSS                                         $(622,569)   $(1,227,188)