Rocky Shoes & Boots, Inc. reported net income was $1.1 million for the second quarter 2003 compared with $0.1 million for the same period last year. Net income per diluted share rose to $0.25 for the quarter versus $0.03 for the second quarter 2002.

Mike Brooks, Chairman and CEO, stated, “We are pleased with the Company's second quarter results, which benefited from double-digit growth in net sales, including a solid increase in branded sales, and further improvement in gross margin. The ROCKY(R) brand, consistent with our head-to-toe strategy, is being leveraged particularly in the occupational category through the introduction of important line extensions. As a result, our sales are expected to become less sensitive to seasonal factors over time.”

Net sales rose 13.9% to $21.9 million for the quarter ended June 30, 2003 from $19.2 million for the second quarter 2002. The solid improvement was led by an increase of approximately 22% in ROCKY(R) branded sales, representing the third consecutive quarter-over-quarter increase. Double-digit sales increases were realized in the Company's occupational and rugged outdoor categories. The Company recorded $2.1 million of Gates(R) branded sales in the second quarter 2003. There were approximately $2.6 million of net sales to the U.S. military in the second quarter 2002 and none this year.

Gross profit improved $1.8 million to $6.7 million, or 30.8% of net sales, for the second quarter 2003 from $4.9 million, or 25.7% of net sales, the prior year. This 510 basis point improvement particularly benefited from increased sales of sourced footwear, which rose to 62% of net sales from 42% a year ago, and no sales of military footwear in 2003.

Selling, general and administrative expenses were $4.9 million, or 22.6% of net sales, for the second quarter 2003 compared with $4.5 million, or 23.5% of net sales, for the same period last year. The increase in SG&A expenses was primarily due to sales commissions for the increase in branded product sales.

Income from operations improved to $1.8 million, or 8.2% of net sales, for the second quarter 2003 from $0.4 million, or 2.2% of net sales, a year ago.

Funded debt rose to $25.7 million at June 30, 2003 from $20.5 million on the same date last year. This was principally due to funding the acquisition of Gates, approximately $3.5 million, earlier this year and the recently completed stock repurchase program, approximately $3.0 million, through the Company's line of credit.

Inventory rose to $38.3 million at June 30, 2003 versus $31.3 million the prior year. The $7.0 million increase in inventory is to specifically support anticipated sales of branded products during the second half of 2003. Shipments for the rugged outdoor category are highest during the months of June through September annually. The inventory at June 30, 2003 also includes additional products in the occupational category and the inventory purchased from Gates in the second quarter 2003.

The Company's results for the first half of 2003 improved versus the same period last year. Net sales rose to $35.6 million for the first half of 2003 from $32.9 million a year ago due to solid growth in branded product sales in 2003. Increased Rocky branded sales and $2.1 million of Gates branded sales in 2003 more than offset the $6.4 million in sales to the U.S. military in 2002. There were no sales to the U.S. military in 2003. Gross margin improved 650 basis points to 28.6% for the first six months of 2003 as a result of additional sourced product sales, improved manufacturing efficiencies, and no sales to the U.S. military. Net income rose to $0.5 million, or $0.11 per diluted share, for the first half of 2003, from a net loss of $1.1 million, or $0.25 per diluted share, the prior year.

The Company's outlook for 2003 remains positive based on the results for the first half, the April 2003 acquisition of Gates(R), and current orders for shipment in the second half of this year. As a result, net sales are expected to be at least $100 million, or $2 million above previous guidance. If the Company achieves net sales of at least $100 million for the year 2003 net income is expected to exceed $1.05 per diluted share for the year 2003 compared with prior guidance of at least $1.00 per diluted share, and $0.62 per diluted share for the year 2002. The Company cautions investors that the fiscal 2003 net sales and earnings outlook is based on present market conditions. If net sales do not reach $100 million, actual earnings may be less than the current guidance.

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

                          Three Months Ended          Six Months Ended
                                June 30,                   June 30,
                          2003            2002        2003         2002

    NET SALES          $21,863,148   $19,194,071  $35,618,089   $32,943,659

    COST OF GOODS SOLD  15,128,164    14,256,438   25,417,577    25,665,373

    GROSS MARGIN         6,734,984     4,937,633   10,200,512     7,278,286

    SELLING, GENERAL AND
     ADMINISTRATIVE
     EXPENSES            4,944,319     4,517,033    9,194,925     8,416,534

    INCOME /(LOSS) FROM
     OPERATIONS          1,790,665       420,600    1,005,587    (1,138,248)

    OTHER INCOME AND
     (EXPENSES):
      Interest expense    (313,438)     (332,959)    (509,618)     (616,068)
      Other - net           88,230        78,198      180,103       167,029
        Total other - net (225,208)     (254,761)    (329,515)     (449,039)

    INCOME /(LOSS) BEFORE
     INCOME TAX BENEFIT  1,565,457       165,839      676,072    (1,587,287)

    INCOME TAX/(BENEFIT)   469,638        48,752      202,822      (477,186)

    NET INCOME/(LOSS)   $1,095,819      $117,087     $473,250   ($1,110,101)

    NET INCOME/(LOSS)
     PER SHARE
      Basic                  $0.27         $0.03        $0.11       ($0.25)
      Diluted                $0.25         $0.03        $0.11       ($0.25)