Rocky Shoes & Boots, Inc. has signed a definitive agreement whereby Rocky Shoes & Boots will acquire privately-held EJ Footwear Group, a leading designer, developer, marketer, and licensee of branded footwear products.

The total purchase price for 100% of the equity interests of EJ Footwear will be $87.7 million in cash plus 484,261 shares of Rocky common stock, which were valued at $10 million at the date of the definitive agreement. EJ Footwear will have no debt and working capital of at least $53.1 million at the closing. In connection with the transaction, Rocky has negotiated a term sheet for credit facilities totaling $148 million with GMAC Commercial Finance LLC and American Capital, to fund the acquisition and replace its existing revolving credit facility.

The transaction has been approved by the board of directors of Rocky Shoes & Boots. The closing is expected in early January 2005 and is subject to Rocky’s receipt of firm financing commitments from GMAC Commercial Finance and American Capital by mid-December 2004, audited financial statements of EJ Footwear for the prior three years, the funding of the credit facilities at the time of closing of the acquisition, and other customary conditions including Hart-Scott-Rodino Act regulatory approval.

Based on a successful and timely completion of the transaction, the Company expects fiscal 2005 combined revenues to range from $280 million to $285 million and combined earnings per share to range from $2.35 to $2.45.

Mike Brooks, Chairman and Chief Executive Officer of Rocky Shoes and Boots, stated, “We are extremely excited about joining forces with the EJ Footwear Group. With this acquisition, we will more than double the size of our business, further diversify our operating platform, reduce seasonality, and significantly enhance our prospects for growth. This deal represents a landmark event in the history of our company and we are fully committed to capitalizing on the many opportunities we have now created in the marketplace.”

Headquartered in Franklin, Tennessee, EJ Footwear Group consists of three subsidiaries, EJ Footwear LLC, Georgia Boot LLC, and HM Lehigh Safety Shoe Co. LLC, all of which are owned by Strategic Industries LLC. The Company’s products are sold under owned brands, including Georgia Boot, Durango, and Lehigh, and licensed brands, including Dickies and John Deere.

Mr. Brooks continued, “EJ Footwear fits all the criteria we identify as key for an acquisition. The company operates a portfolio of strong niche brands that ideally complement our existing businesses, and from a financial perspective, the deal is expected to be highly accretive right out of the gate. In addition, we have aligned ourselves with a strong management team at EJ Footwear that shares a similar merchandise philosophy and corporate culture with Rocky. Most importantly, we have the ability to leverage our platform across all of their businesses to drive synergies, realize operating efficiencies and accelerate growth into the future.”

Mr. Brooks concluded, “Over the past several years, we have worked hard to develop our infrastructure, build our brand equity and create one of the leading outdoor footwear brands in the industry. At the same time, we have expanded revenues and profits and increased shareholder value. While we are confident that we still have significant growth potential in our core Rocky business, we believe that the addition of EJ Footwear will enhance the strategic development of our company, further strengthen our position in the market and provide meaningful, long-term growth opportunities.”

Rocky Shoes & Boots was advised on the transaction by Robert W. Baird & Co. EJ Footwear Group was advised on the transaction by Harris Williams Advisors, Inc.