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Rocky Shoes & Boots Inc · 424B4 · On 10/7/97

Filed On 10/7/97 · SEC File 333-35391 · Accession Number 950152-97-7052

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

10/07/97  Rocky Shoes & Boots Inc           424B4                  1:58                                     950152

Prospectus · Rule 424(b)(4)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B4       Rocky Shoes & Boots, Inc. Form 424(B)(4)              58    393K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Available Information Business Capitalization Competition Description of Capital Stock Experts Gross margin Incorporation of Certain Documents by Reference Independent Auditors' Report Index to Consolidated Financial Statements Legal Matters Liquidity and Capital Resources Management Management's Discussion and Analysis of Financial Condition and Results of Operations Net income (loss) Net sales Notes to Consolidated Financial Statements Offering, The Overview Patents, Trademarks and Trade Names Preferred Stock Price Range of Common Stock and Dividend Policy Principal and Selling Shareholders Prospectus Summary Risk Factors Risks Associated with Forward Looking Statements Rocky Inc Sales, Marketing and Advertising Seasonality and Unaudited Quarterly Financial Information Seasonality and Weather Selected Consolidated Financial Data Suppliers The offering Underwriting Use of proceeds
1	1st Page
5	Prospectus Summary
6	The offering
"	Risk Factors
8	Competition
11	Risks Associated with Forward Looking Statements
12	Price Range of Common Stock and Dividend Policy
"	Use of proceeds
13	Capitalization
14	Selected Consolidated Financial Data
15	Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Overview
16	Net sales
"	Gross margin
19	Seasonality and Unaudited Quarterly Financial Information
20	Liquidity and Capital Resources
21	Business
24	Sales, Marketing and Advertising
25	Suppliers
26	Seasonality and Weather
27	Patents, Trademarks and Trade Names
29	Management
31	Principal and Selling Shareholders
32	Description of Capital Stock
"	Preferred Stock
36	Underwriting
37	Legal Matters
"	Experts
38	Available Information
"	Incorporation of Certain Documents by Reference
39	Index to Consolidated Financial Statements
40	Independent Auditors' Report
45	Notes to Consolidated Financial Statements
50	Rocky Inc
55	Net income (loss)

424B4 1st Page of 58 TOC Top Previous Next Bottom Just 1st

PROSPECTUS                                                                      

1,700,000 SHARES

[ROCKY SHOES & BOOTS, INC. LOGO]

COMMON STOCK

  Of the 1,700,000 shares of Common Stock offered hereby, 1,370,000 shares
are being sold by Rocky Shoes & Boots, Inc. ("Rocky" or the "Company"), and     
330,000 shares are being sold by certain shareholders of the Company (the       
"Selling Shareholders"). The Company will not receive any of the proceeds from  
the sale of the shares of Common Stock by the Selling Shareholders. See         
"Principal and Selling Shareholders."                                           

 The Common Stock is traded on The Nasdaq Stock Market's National Market
(the "Nasdaq National Market") under the symbol "RCKY." On October 6, 1997, the 
last reported sales price for the Common Stock on the Nasdaq National Market was
$19.38 per share. See "Price Range of Common Stock and Dividend Policy."        

    SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE   
COMMON STOCK OFFERED HEREBY.                                                    
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES 
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. 
================================================================================

                                                        · Enlarge/Download Table

                                                                                   PROCEEDS TO    
                                    PRICE TO      UNDERWRITING    PROCEEDS TO        SELLING      
                                     PUBLIC       DISCOUNT(1)      COMPANY(2)      SHAREHOLDERS   
--------------------------------------------------------------------------------------------------
                                                                                                  
Per Share.......................      $18.50         $1.08           $17.42           $17.42      
--------------------------------------------------------------------------------------------------
Total(3)........................   $31,450,000     $1,836,000     $23,865,400       $5,748,600    

================================================================================

(1) The Company and the Selling Shareholders have agreed to indemnify the       
   Underwriters against certain civil liabilities, including liabilities under
the Securities Act of 1933, as amended. See "Underwriting."             
(2) Before deducting estimated expenses of $400,000 payable by the Company.     

(3) The Company has granted the Underwriters a 30-day over-allotment option to  
  purchase up to 255,000 additional shares of Common Stock on the same terms
  and conditions as set forth above. If all such shares are purchased by the
Underwriters, the total Price to Public will be $36,167,500, the total  
  Underwriting Discount will be $2,111,400 and the total Proceeds to Company
will be $28,307,500. See "Underwriting" and "Principal and Selling      
Shareholders."                                                          

------------------------

   The shares of Common Stock are offered, subject to receipt and acceptance
by the several Underwriters, to prior sale and to the Underwriters' right to    
reject orders in whole or in part and to withdraw, cancel or modify the offer   
without notice. It is expected that certificates for the shares of Common Stock 
will be available for delivery on or about October 10, 1997.                    

------------------------

J.C.Bradford &Co.                                                               

Robert W. Baird & Co. 
Incorporated

                                                                The Ohio Company

October 6, 1997 

424B4 2nd Page of 58 TOC 1st Previous Next Bottom Just 2nd

[ADVERTISEMENT FOR ROCKY SHOES & BOOTS, INC.]   

[PHOTO OF A HUNTER WITH COMPOUND BOW] 

[GORE-TEX LOGO] 

[CORDURA LOGO]

[THINSULATE LOGO] 

[ROCKY SHOES & BOOTS, INC. LOGO]

OUR 
TARGET IS 
IN SIGHT! 

       ROCKY(R) Shoes & Boots seeks opportunity with a vengeance. What started
as a family-owned shoe factory in 1932 has now grown to become the market       
leader that it is today with discipline, constant innovation, and a sharp eye   
for consumer's needs.                                                           

      We go after business in more than 2,600 stores every day with the most
targeted sales and marketing program in the industry. Our quest for market      
dominance continues with the introduction of the warmest boots for the toughest 
outdoor conditions. All across North American and Europe ROCKY(R) is the "brand 
of choice" for trudging through rain and snow searching for that perfect        
ten-point buck. We know others are gunning for our business. That's okay. We    
woke up early this morning to be first into the field. We have our target in    
sight.                                                                          

                                   ROCKY Shoes & Boots
                                  THE REAL DEAL SINCE 1932

[PHOTO OF BOOTS]
 SAMPLE ADVERTISEMENTS

                                                     39 East Canal Street,
Made in the U.S.A.                                      Nelsonville, Ohio 45764 

Cordura is a registered trademark of the Du Pont Company. Thinsulate is a       
registered trademark of 3M. Gore-Tex is a registered trademark of W.L. Gore and 
Associates, Inc. (C)1997 Rocky Shoes & Boots Inc.                               

   CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK. SUCH
TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK TO COVER     
SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION 
OF THESE ACTIVITIES, SEE "UNDERWRITING."                                        

  IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON 
STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M 
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SEE "UNDERWRITING."      

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[ADVERTISEMENT FOR ROCKY SHOES & BOOTS, INC.]   

FIELD TESTED... 

       SPORTSMEN HAVE DEPENDED ON THE WATERPROOF COMFORT OF ROCKY(R) SHOES AND
BOOTS FOR OVER HALF A CENTURY. IT'S A NAME THEY TRUST BECAUSE ROCKY(R) IS THE   
WORLD'S LEADER IN GUARANTEED WATERPROOF FOOTWEAR. USING GORE-TEX(R) FABRIC AND  
HARDWORKING, WATERPROOF AND BREATHABLE LEATHERS MAKES ROCKY(R) THE BEST BOOTS   
FOR THE OUTDOORS.                                                               

    ROCKY(R) WATERPROOF WORK, RUGGED CASUAL AND LIFESTYLE FOOTWEAR MEETS
THE DEMANDS OF DAILY USE WHILE SACRIFICING NOTHING TO THE LOOKS THAT STAND UP   
ON THE STREET. THAT'S BECAUSE ROCKY(R) SHOES AND BOOTS ARE DESIGNED TO PERFORM  
IN THE WOODS, ON THE CONSTRUCTION SITE, OR DURING THAT MAD DASH FOR THE LAST    
TRAIN HOME. SURE, ROCKY(R) STILL MEANS WATERPROOF BOOTS FOR THE OUTDOORS, BUT   
PEOPLE HAVE TO COME OUT OF THE FIELD TO GO TO WORK SOMETIME... DON'T THEY?      

   FOR A CLOSER LOOK AT THE COMPLETE LINE OF ROCKY(R) FOOTWEAR VISIT A
ROCKY(R) SHOES AND BOOTS DEALER NEAR YOU OR CALL 1-800-421-5151 AND ASK ABOUT   
FIELD TESTING A PAIR FOR YOURSELF!                                              

STREET                                                                          
APPROVED.                                                                       

[PHOTO OF BOOTS]

                                              [ROCKY SHOES & BOOTS, INC. LOGO]

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[ADVERTISEMENT FOR ROCKY SHOES & BOOTS, INC.]   

[PHOTO OF SHERIFF AND PARAMEDIC ADMINISTERING FIRST AID]

                            [GORE-TEX LOGO]    [CROSSTECH LOGO]   [CORDURA LOGO]

[ROCKY SHOES & BOOTS, INC. LOGO]

WE'VE 
GOT YOU COVERED.

    You depend on instinct, your partner, and your equipment. That's why
ROCKY(R) Shoes & Boots introduces the Eliminator(R) and EMS boots with          
CROSSTECH(R) Footwear Fabric. Only CROSSTECH(R) Footwear Fabric provides        
resistance to penetration by blood-born pathogens and common chemicals.         
CROSSTECH(R) Footwear Fabric delivers the durable waterproofness and            
breathability of GORE-TEX(R) Fabric with improved liquid resistance for         
increased safety. Formed into a bootie that completely surrounds the foot,      
CROSSTECH(R) Footwear Fabric can help protect you against more than just the    
elements. For a dealer near you, CALL 1-800-421-5151.                           

No Fabric offers complete protection. No fabric, including CROSSTECH(R)         
Footwear Fabric is a totally impenetrable barrier, even when new. And its       
barrier will decline with wear, tear, abrasion and other damage associated with 
use. Conditions of use are outside of our control. Rocky(R) Shoes & Boots and   
W. L. Gore & Associates, Inc. make no guarantee of how product will perform in  
actual use. CROSSTECH(R) and GORE-TEX(R) are trademarks of W. L. Gore &         
Associates, Inc.                                                                

Rocky Shoes & Boots, Inc.                                       EMS BOOT        
THE REAL DEAL                                                   Model 911-139   
SINCE 1932.                                                                     

ELIMINATOR(R)                                                                   
Model 8032                      [PHOTO OF BOOTS]                                

                                                     39 East Canal Street,
Made in the U.S.A.                                      Nelsonville, Ohio 45764 

Cordura is a registered trademark of the Du Pont Company.                       
Gore-Tex is a registered trademark of W. L. Gore and Associates, Inc.(C) 1997   
Rocky Shoes & Boots Inc.                                                        

424B4 5th Page of 58 TOC 1st Previous Next Bottom Just 5th

PROSPECTUS SUMMARY

 The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.    
Unless otherwise indicated in this Prospectus, all information assumes no       
exercise of the Underwriters' over-allotment option. The Company has two        
subsidiaries: Five Star Enterprises Ltd. ("Five Star"), a Cayman Islands        
corporation, which operates a manufacturing facility in La Vega, Dominican      
Republic, and Lifestyle Footwear, Inc. ("Lifestyle"), a Delaware corporation,   
which operates a manufacturing facility in Aquadilla, Puerto Rico. Unless the   
context otherwise requires, all references to "Rocky" or the "Company" include  
Rocky Shoes & Boots, Inc. and its subsidiaries.                                 

THE COMPANY 

Rocky Shoes & Boots, Inc. designs, develops, manufactures and markets 
premium quality rugged outdoor, occupational, and handsewn casual footwear under
the ROCKY brand. The Company's products are designed to appeal to consumers     
seeking high performance, durable, quality footwear manufactured with premium   
materials such as GORE-TEX. The Company's footwear is sold by more than 2,600   
retailers in the United States and Canada. For the six months ended June 30,    
1997, the Company's net sales and net income increased approximately 35% and    
83%, respectively, over the corresponding prior year period.                    

Rugged outdoor footwear, which includes hunting and hiking boots,     
represented approximately 58% of the Company's fiscal 1996 net sales. The       
Company's rugged outdoor footwear is sold through sporting goods stores, outdoor
specialty stores and mail order catalogs. The suggested retail prices of the    
Company's rugged outdoor footwear range from $89 to $239 per pair. The Company's
occupational footwear, which represented approximately 23% of the Company's     
fiscal 1996 net sales, is sold through retail uniform stores, mail order        
catalogs, specialty safety stores and independent retail stores. The suggested  
retail prices of the Company's occupational footwear range from $69 to $179 per 
pair. The Company has recently placed increased emphasis on its line of ROCKY   
brand handsewn casual footwear. This line of products, which represented        
approximately 6% of the Company's fiscal 1996 net sales, is sold through        
independent retail stores, department store chains, mail order catalogs and     
sporting goods stores at suggested retail prices ranging from $89 to $149 per   
pair. See "Business -- Overview."                                               

The Company's objective is to increase sales within its core product  
categories and markets and to leverage the ROCKY brand into new market segments 
with products that emphasize the reputation of the Company's footwear for       
quality, comfort and durability. The Company has recently focused its           
advertising and marketing efforts in order to increase consumer awareness of the
ROCKY brand. By shifting its advertising efforts directly to the consumer, the  
Company seeks to strengthen the quality image of the ROCKY brand and gain       
national exposure in its targeted markets. The Company intends to continue to   
leverage the ROCKY brand into new product categories, as it has recently done   
with handsewn casual footwear.                                                  

   The Company maintains a network of 55 exclusive sales representatives and
manufacturers' representatives, operating in 14 geographic territories, who sell
the Company's products throughout the United States and in Canada. Historically,
the Company has sold its products through manufacturers' representatives who    
carried ROCKY brand products as well as other non-competing products. The       
Company is currently developing an exclusive Rocky-focused sales force in an    
effort to ensure representation of its entire product line and consistent       
support of its customer accounts. Currently, 60% of the Company's sales force is
comprised of exclusive sales representatives. The Company's objective is for at 
least 90% of its sales force to be exclusive sales representatives.             

The Company manufactures its products under a twin-plant concept by   
producing the labor intensive "upper portions" in its lower wage rate plants in 
the Dominican Republic and Puerto Rico and completing its footwear in Puerto    
Rico and Nelsonville, Ohio where it uses state-of-the-art bottoming techniques. 
The Company utilizes a modular "Team Pass-Through" manufacturing system in each 
of its manufacturing facilities. The Company believes that this system, which   
allows each person to perform a number of different tasks, is superior to a     
traditional assembly line approach, which requires each person to perform a     
single repetitive task. This system increases the number of pairs of footwear   
produced per square foot of manufacturing space, reduces the                    

 3

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Company's work-in-process inventory and direct labor costs and improves the     
Company's production yields. In addition, the Company believes that its         
manufacturing process allows it to respond quickly to changes in product demand 
and consumer preferences.                                                       

   The Company currently sources approximately 5% of its products in the Far
East in order to reach price points that it cannot obtain with products         
manufactured in its own facilities. A greater portion of the Company's products 
may be sourced in the future if the Company expands and reaches capacity in its 
manufacturing facilities.                                                       

The Company's principal executive offices are located at 39 East Canal
Street, Nelsonville, Ohio 45764, and its telephone number is (614) 753-1951.    

THE OFFERING

                                                        · Enlarge/Download Table
                                                                                           
Common Stock offered by the Company................ 1,370,000 shares                       
Common Stock offered by the Selling Shareholders... 330,000 shares                         
Common Stock to be outstanding after the            5,124,278 shares(1)                    
  offering.........................................                                        
Use of proceeds.................................... To repay certain indebtedness. See "Use
                                                    of Proceeds."                          
Nasdaq National Market symbol...................... RCKY                                   

---------------                                                                 

(1) Excludes 82,857 shares of Common Stock reserved for issuance upon conversion
of the Company's Series A Non-Voting Convertible Preferred Stock, no par
 value per share, $0.06 stated value (the "Series A Preferred Stock"), and
 excludes 686,270 shares of Common Stock reserved for issuance pursuant to
 the Company's stock option plans, of which 430,850 shares were subject to
options at an average exercise price equal to $8.87 per share as of     
September 15, 1997.                                                     

RISK FACTORS

    Prospective purchasers of the Common Stock offered hereby should carefully
consider the various risk factors that could materially and adversely affect the
operating and financial performance of the Company. These factors include, in   
part, changes in consumer demand, seasonality, impact of weather, competition,  
reliance on suppliers, changing retailing trends, reliance on key personnel,    
reliance on foreign manufacturing, changes in tax rates, concentration of stock 
ownership, certain corporate governance measures, volatility of market price,   
limited protection of intellectual property, reliance on United Parcel Service  
and risks associated with forward-looking statements. See "Risk Factors."       

------------------------

The Company owns United States federal registrations for its marks    
ROCKY(R), ROCKY BOOTS(R) (which claims a ram's head Design as part of the mark),
CORNSTALKERS(R), COME WALK WITH U.S.(R) and Design, ROCKY 911 SERIES(R) and     
Design, SNOW STALKER(R), 4 WAY STOP(R) and Design, BEAR CLAW(R) and STALKERS(R).
Additional mark variations for ROCKY BOOTS(R) and Design (which claims a ram's  
head Design as part of the mark), ROCKY(R) and Design(TM) for cigars, and SINCE 
1932 ROCKY - ROCKY SHOES & BOOTS INC.(TM) plus a detailed full ram Design are   
the subject of pending United States federal applications for registration. In  
addition, the Company uses and has common law rights in the marks ROCKY(R)      
MOUNTAIN STALKERS(TM), ROCKY(R) BEAR CLAW(TM) SERIES and other ROCKY(R) marks.  
The Company has applied for trademark registration of its ROCKY(R) mark in a    
number of foreign countries.                                                    

     The artwork included in this Prospectus represents actual advertisements of
Rocky Shoes & Boots, Inc. which have appeared in the following publications:    
Sports Afield, Field & Stream, North American Hunter, Outdoor Life, North       
American Fisherman, Police and Security News, Rescue and Law and Order.         
Statements made in these advertisements are qualified in their entirety by the  
information set forth elsewhere in this Prospectus.                             

    The Company also uses in its advertising and in other documents trademarks
owned by corporations other than the Company. GORE-TEX(R) and CROSSTECH(R) are  
registered trademarks of W.L. Gore & Associates, Inc.; CORDURA(R) is a          
registered trademark of E.I. DuPont de Nemours and Company; THINSULATE(R) is a  
registered trademark of Minnesota Mining and Manufacturing Company; and         
CAMBRELLE(R) is a trademark of Koppers Industries, Inc.                         

 4

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SUMMARY CONSOLIDATED FINANCIAL DATA 
(IN THOUSANDS, EXCEPT PER SHARE DATA) 

                                                        · Enlarge/Download Table

                                                                 TWELVE     FISCAL YEAR    SIX MONTHS ENDED 
                               FISCAL YEAR ENDED JUNE 30,     MONTHS ENDED     ENDED           JUNE 30,     
                              -----------------------------   DECEMBER 31,  DECEMBER 31,  ------------------
                               1993       1994       1995         1995          1996       1996       1997  
                              -------    -------    -------   ------------  ------------  -------    -------
                                                                                                            
STATEMENT OF OPERATIONS                                                                                     
  DATA(1):                                                                                                  
Net sales...................  $41,205    $52,895    $60,227     $ 60,384      $ 73,148    $25,450    $34,268
Gross margin................    8,215      9,624     11,860       11,049        18,044      7,190      9,558
Income from operations......    2,631      2,810      3,231          479         5,712      1,641      2,840
Income (loss) before income                                                                                 
  taxes.....................    1,972      2,123      1,236       (1,525)        3,724        856      1,725
Income tax expense                                                                                          
  (benefit).................      205        303       (197)        (988)          918        197        519
Income (loss) before                                                                                        
  extraordinary loss and                                                                                    
  cumulative effect of                                                                                      
  change in accounting                                                                                      
  principle.................    1,767      1,820      1,433         (537)        2,806        659      1,206
Extraordinary loss, net of                                                                                  
  income taxes(2)...........     (148)        --         --           --            --         --         --
Cumulative effect of change                                                                                 
  in accounting                                                                                             
  principle(3)..............      134         --         --           --            --         --         --
Net income (loss)...........    1,753      1,820      1,433         (537)        2,806        659      1,206
Net income (loss) per                                                                                       
  share.....................  $  0.60    $  0.47    $  0.38     $  (0.15)     $   0.74    $  0.17    $  0.31
Weighted average number of                                                                                  
  common shares and                                                                                         
  equivalents outstanding...    2,900      3,842      3,741        3,666         3,777      3,765      3,940
Supplemental net income per                                                                                 
  share(4)..................                                                  $   0.74    $  0.21    $  0.33
Weighted average number of                                                                                  
  common shares and                                                                                         
  equivalents used in                                                                                       
  computing supplemental net                                                                                
  income per share(4).......                                                     5,147      5,135      5,310

                                                        · Enlarge/Download Table

                                                                                      JUNE 30, 1997      
                                                                                 ------------------------
                                                                                 ACTUAL    AS ADJUSTED(5)
                                                                                 -------   --------------
                                                                                                         
BALANCE SHEET DATA:                                                                                      
Working capital................................................................. $35,906      $ 47,669   
Total assets....................................................................  83,152        83,152   
Total long-term debt (including current maturities).............................  36,432        12,967   
Total shareholders' equity......................................................  28,305        51,770   

---------------                                                                 
(1) Effective December 31, 1995, the Company changed its fiscal year end from   
   June 30 to December 31. References to "Fiscal 1992," "Fiscal 1993," "Fiscal
 1994" and "Fiscal 1995" refer to the Company's fiscal years ended June 30
    for each respective year. References to "Transition Period" refer to the six
months ended December 31, 1995. References to "Fiscal 1996" refer to the
Company's fiscal year ended December 31, 1996.                          
(2) During Fiscal 1993, the Company retired all outstanding 13.25% subordinated 
debentures originally due 2005 resulting in an extraordinary loss of    
$148,400, or $0.05 per share, net of related income taxes of $76,448.   
(3) Effective July 1, 1992, the Company changed its method of accounting for    
    income taxes to conform with Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("FAS 109"). The cumulative effect of
   this change in accounting principle was to increase net income by $134,000,
or $0.04 per share.                                                     

(4) Assumes that on January 1, 1996, the Company issued 1,370,000 shares of     
    Common Stock at offering price of $18.50 per share and used the net proceeds
  to retire the Mortgage and the Shareholder Note and to paydown the Line of
Credit (each as defined herein). See note 4 of notes to consolidated    
   financial statements. Supplemental net income per share for Fiscal 1996 and
    the six-month periods ended June 30, 1996 and 1997, is calculated based upon
net income adjusted for a reduction in after-tax interest expense of    
$998,000, $414,000 and $548,000, respectively, relating to repayment and
paydown of such debt. See "Use of Proceeds."                            

(5) Adjusted to reflect the sale of 1,370,000 shares offered hereby at an       
    offering price of $18.50 per share, and the application of the estimated net
proceeds therefrom. See "Use of Proceeds."                              

 5

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RISK FACTORS

In addition to the other information contained in this Prospectus,    
prospective investors should consider the following factors carefully in        
evaluating an investment in the Common Stock offered hereby.                    

CHANGES IN CONSUMER DEMAND                                                      

    The footwear industry is subject to rapid changes in consumer preferences.
Demand for the Company's products, particularly the Company's handsewn casual   
product line and certain styles within its rugged outdoor and occupational      
product lines, may be adversely affected by changing fashion trends. The future 
success of the Company will depend upon the Company's ability to anticipate and 
respond to changing consumer preferences and fashion trends in a timely manner. 
The Company's failure to adequately anticipate or respond to such changes could 
have a material adverse effect on the Company's business, financial condition   
and results of operations. In addition, sales of the Company's products may be  
negatively affected by weak consumer spending as a result of adverse economic   
trends or uncertainties regarding the economy. See "Business -- Competition."   

SEASONALITY                                                                     

The Company has historically experienced, and expects to continue to  
experience, significant seasonal fluctuations in the sale of its products. The  
Company's operating results have varied significantly in the past, and may vary 
significantly in the future, partly due to such seasonal fluctuations. A        
majority of the orders for the Company's rugged outdoor footwear are placed in  
January through April for delivery in July through October. To meet demand, the 
Company must manufacture its products year-round. Accordingly, average inventory
levels have been highest during the second and third quarters of each calendar  
year, and sales have been highest in the last two quarters of each calendar     
year. The Company believes that sales of its products will continue to follow   
this seasonal cycle. Additionally, the Company does not have long-term contracts
with its customers. Accordingly, there is no assurance that the results for any 
particular quarter will be indicative of results for the full year or for the   
future. The Company believes that comparisons of its interim results of         
operations are not necessarily meaningful and should not be relied upon as      
indications of future performance. Due to the factors mentioned above as well as
factors discussed elsewhere in this Prospectus, it is likely that in some future
quarter the Company's operating results will be below the expectations of public
market analysts and investors. In such event, the price of the Common Stock will
likely be adversely affected. See "Management's Discussion and Analysis of      
Financial Condition and Results of Operations -- Seasonality and Unaudited      
Quarterly Financial Information" and "Business -- Seasonality and Weather."     

IMPACT OF WEATHER                                                               

  Many of the Company's products, particularly its rugged outdoor footwear
line, are used primarily in cold or wet weather. Mild or dry weather may have a 
material adverse effect on sales of the Company's products, particularly if mild
or dry weather conditions occur in broad geographical areas during late fall or 
early winter. Also, due to variations in weather conditions from year to year,  
results for any single quarter or year may not be indicative of results for any 
future period. See "Business -- Seasonality and Weather."                       

COMPETITION                                                                     

 The footwear industry is intensely competitive, and the Company expects
competition to increase in the future. Many of the Company's competitors have   
greater financial, distribution and marketing resources than the Company. The   
Company's ability to succeed depends on its ability to remain competitive with  
respect to the quality, design, price and timely delivery of its products.      
Competition could materially adversely affect the Company's business, financial 
condition and results of operations. See "Business -- Competition."             

RELIANCE ON SUPPLIERS                                                           

   The Company purchases raw materials from a number of domestic and foreign
sources. The Company does not have any long-term supply contracts for the       
purchase of its raw materials, except for limited blanket orders on leather. The
principal raw materials used in the production of the Company's footwear, in    
terms of dollar value,                                                          

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are leather, GORE-TEX waterproof fabric, CORDURA nylon fabric and soling        
materials. The Company believes that currently there are acceptable alternatives
to these suppliers and materials, with the exception of the GORE-TEX waterproof 
fabric.                                                                         

The Company is currently one of the largest customers of GORE-TEX     
waterproof fabric for use in footwear. The Company's licensing agreement with   
W.L. Gore & Associates, Inc. ("Gore") may be terminated by either party upon 90 
days written notice. Although other waterproofing techniques and materials are  
available, the Company places a high value on its GORE-TEX license because      
GORE-TEX has high brand name recognition and the GORE-TEX waterproof fabric used
in the manufacture of ROCKY footwear has a reputation for quality and proven    
performance. Even though the Company does not believe that its supply of        
GORE-TEX waterproof fabric will be interrupted in the future, no assurance can  
be given in this regard. The Company's loss of its license to use GORE-TEX could
materially adversely affect the Company's competitive position, which could have
a material adverse effect on the Company's business, financial condition and    
results of operations. See "Business -- Suppliers."                             

CHANGING RETAILING TRENDS                                                       

    Historically, the Company has chosen not to sell products to discount mass
merchandisers. A continued shift in the marketplace from traditional independent
retailers to large discount mass merchandisers has increased the pressure on    
many footwear manufacturers to sell products to large discount mass             
merchandisers at less favorable margins. Because of competition from large      
discount mass merchandisers, a number of small retailing customers of the       
Company have gone out of business, and in the future more of such customers may 
go out of business, which could have a material adverse effect on the Company's 
business, financial condition and results of operations. Although progressive   
independent retailers have attempted to improve their competitive position by   
joining buying groups, stressing personal service and stocking more products    
that address specific local needs, a continued shift to discount mass           
merchandisers could have a material adverse effect on the Company's business,   
financial condition and results of operations and could cause the Company to    
reevaluate its strategy. See "Business -- Sales, Marketing and Advertising."    

RELIANCE ON KEY PERSONNEL                                                       

  The development of the Company's business has been, and will continue to
be, highly dependent upon Mike Brooks, Chairman, President and Chief Executive  
Officer, David Fraedrich, Executive Vice President and Chief Financial Officer  
and William S. Moore, Senior Vice President -- Sales and Marketing. Each of     
these executive officers has an at-will employment agreement with the Company.  
Messrs. Brooks' and Fraedrich's employment agreements provide that in the event 
of termination of employment with the Company, they may not compete with the    
Company for a period of one year. Mr. Moore's employment agreement provides that
in the event of termination of employment with the Company, he may not compete  
with the Company for a period of three months. The Company does not maintain a  
significant amount of key-man life insurance on any of its executive officers.  
The loss of the services of any of these officers could have a material adverse 
effect upon the Company's business, financial condition and results of          
operations. See "Management."                                                   

RELIANCE ON FOREIGN MANUFACTURING                                               

  Most of the Company's rugged outdoor and handsewn casual footwear uppers
are produced in the Dominican Republic. Therefore, the Company's business is    
subject to the risks of doing business offshore, such as: the imposition of     
additional United States legislation and regulations relating to imports,       
including quotas, duties, taxes or other charges or restrictions; weather       
conditions in the Dominican Republic; foreign governmental regulation and       
taxation; fluctuations in foreign exchange rates; changes in economic           
conditions; changes in the political stability of the Dominican Republic; and   
changes in relationships between the United States and the Dominican Republic.  
If any such factors were to render the conduct of business in the Dominican     
Republic undesirable or impracticable, the Company would have to locate new     
facilities for its manufacturing operations. There can be no assurance that     
additional facilities would be available to the Company or, if available, that  
such facilities could be obtained on terms favorable to the Company. Such a     
development would have a material                                               

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adverse effect on the Company's business, financial condition and results of    
operations. See "Business -- Manufacturing."                                    

CHANGES IN TAX RATES                                                            

In past years, the Company's effective tax rate typically has been    
substantially below the United States federal statutory rates. The Company has  
paid minimal income taxes on income earned by its subsidiary in Puerto Rico due 
to tax credits afforded the Company under Section 936 of the Internal Revenue   
Code and local tax abatements. However, Section 936 of the Internal Revenue Code
has been repealed such that future tax credits available to the Company will be 
capped beginning in 2002 and terminate in 2006. In addition, the Company's local
tax abatements in Puerto Rico are due to expire in 2004. Prior to Fiscal 1996,  
the Company paid no foreign income tax on the income generated by its subsidiary
in the Dominican Republic. During the fourth quarter of Fiscal 1996, the Company
elected to repatriate future earnings of its subsidiary in the Dominican        
Republic. The Company's future tax rate will vary depending on many factors,    
including the level of relative earnings and tax rates in each jurisdiction in  
which it operates and the repatriation of any foreign income to the United      
States. Accordingly, since October 1, 1996, the Company has accrued taxes on all
amounts repatriated and will accrue taxes on future earnings as they are no     
longer deemed permanently invested. The Company cannot anticipate future changes
in such laws. Increases in effective tax rates or changes in tax laws may have a
material adverse effect on the Company's business, financial condition and      
results of operations. See "Management's Discussion and Analysis of Financial   
Condition and Results of Operations."                                           

CONCENTRATION OF STOCK OWNERSHIP; CERTAIN CORPORATE GOVERNANCE MEASURES         

 Upon completion of this offering, the directors, executive officers and
principal shareholders of the Company will beneficially own approximately 25.5% 
of the outstanding Common Stock, assuming the conversion of such individuals'   
Series A Preferred Stock into an aggregate of 77,743 shares of Common Stock. As 
a result, these shareholders are able to exert significant influence over all   
matters requiring shareholder approval, including the election of directors and 
approval of significant corporate transactions. Such concentration of ownership 
may also have the effect of delaying or preventing a change in control of the   
Company. The Company has also adopted certain corporate governance measures     
which, individually or collectively, could delay or frustrate the removal of    
incumbent directors and could make more difficult a merger, tender offer or     
proxy contest involving the Company even if such events might be deemed by      
certain shareholders to be beneficial to the interest of the shareholders. See  
"Principal and Selling Shareholders" and "Description of Capital Stock."        

VOLATILITY OF MARKET PRICE                                                      

    From time to time after this offering, there may be significant volatility
in the market price of the Common Stock. The Company believes that the current  
market price of its Common Stock reflects expectations that the Company will be 
able to continue to market its products profitably and develop new products with
market appeal. If the Company is unable to market its products profitably and   
develop new products at a pace that reflects the expectations of the market,    
investors could sell shares of the Common Stock at or after the time that it    
becomes apparent that such expectations may not be realized, resulting in a     
decrease in the market price of the Common Stock.                               

  In addition to the operating results of the Company, changes in earnings
estimates by analysts, changes in general conditions in the economy or the      
financial markets or other developments affecting the Company or its industry   
could cause the market price of the Common Stock to fluctuate substantially. In 
recent years, the stock market has experienced extreme price and volume         
fluctuations. This volatility has had a significant effect on the market prices 
of securities issued by many companies, including the Company, for reasons      
unrelated to their operating performance. See "Price Range of Common Stock and  
Dividend Policy."                                                               

LIMITED PROTECTION OF INTELLECTUAL PROPERTY                                     

The Company regards certain of its footwear designs as proprietary and
relies on patents to protect those designs. The Company believes that the       
ownership of the patents is a significant factor in its business. Existing      

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intellectual property laws afford only limited protection of the Company's      
proprietary rights, and it may be possible for unauthorized third parties to    
copy certain of the Company's footwear designs or to reverse engineer or        
otherwise obtain and use information that the Company regards as proprietary.   
The Company believes its patents provide a measure of security against          
competition, and the Company intends to enforce its patents against infringement
by third parties. However, if the Company's patents are found to be invalid, to 
the extent they have served, or would in the future serve, as a barrier to entry
to the Company's competitors, such invalidity could have a material adverse     
effect on the Company's business, financial condition and results of operations.

  The Company owns United States federal registrations for a number of its
trademarks, trade names and designs. Additional trademarks, trade names and     
designs are the subject of pending federal applications for registration. The   
Company also uses and has common law rights in certain trademarks. During 1994, 
the Company began to increase distribution of its goods in several foreign      
countries. Accordingly, the Company has applied for trademark registrations in a
number of these countries. The Company intends to enforce its trademarks and    
trade names against unauthorized use by third parties. However, existing        
trademark and trade name laws afford only limited protection, and the laws of   
countries other than the United States may not protect the Company's proprietary
rights to as great an extent as do the laws of the United States. Accordingly,  
regardless of the legal rights of the Company, it may be possible for           
unauthorized third parties to use the Company's trademarks, trade names or      
designs and realize monetary gain at the Company's expense. Although such       
unauthorized use may be illegal, the Company may be forced to expend substantial
resources to enforce its rights and nonetheless be divested of a portion of its 
goodwill as a result of such unauthorized use. See "Business -- Patents,        
Trademarks and Trade Names."                                                    

RELIANCE ON UNITED PARCEL SERVICE                                               

Historically, the Company has delivered a majority of shipments to its
customers via United Parcel Service ("UPS"). From August 4, 1997 to August 21,  
1997, UPS was not able to deliver some of the Company's products because of a   
union labor strike. Although during the UPS labor strike the Company sought     
alternative carriers for distribution of its products, it could not locate      
another carrier with the same capacity as UPS. The Company's inability to       
deliver its products during the UPS labor strike, and possible interruptions of 
UPS's service in the future, could have a material adverse effect on the        
Company's business, financial condition and results of operations.              

RISKS ASSOCIATED WITH FORWARD LOOKING STATEMENTS                                

This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the           
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as   
amended (the "Exchange Act"), which are intended to be covered by the safe      
harbors created thereby. Those statements include, but may not be limited to,   
all statements regarding the intent, belief and expectations of the Company and 
its management, such as statements concerning the Company's future profitability
and its operating and growth strategy. Investors are cautioned that all         
forward-looking statements involve risks and uncertainties including, without   
limitation, the factors set forth under the caption "Risk Factors" in this      
Prospectus and other factors detailed from time to time in the Company's filings
with the Securities and Exchange Commission (the "Commission"). Although the    
Company believes that the assumptions underlying the forward-looking statements 
contained herein are reasonable, any of the assumptions could be inaccurate.    
Therefore, there can be no assurance that the forward-looking statements        
included in this Prospectus will prove to be accurate. In light of the          
significant uncertainties inherent in the forward-looking statements included   
herein, the inclusion of such information should not be regarded as a           
representation by the Company or any other person that the objectives and plans 
of the Company will be achieved. See "Incorporation of Certain Documents by     
Reference."                                                                     

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PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY 

   The Company's Common Stock trades on the Nasdaq National Market under the
symbol "RCKY." The following table sets forth the range of high and low sales   
prices for the Common Stock for the periods indicated, as reported by the Nasdaq
National Market:                                                                

                                                                · Download Table

                       QUARTER ENDED                          HIGH       LOW  
-----------------------------------------------------------  ------     ------
                                                                              
September 30, 1994.........................................  $11.50     $ 9.25
December 31, 1994..........................................   10.50       8.50
March 31, 1995.............................................   10.50       8.25
June 30, 1995..............................................   10.00       8.00
September 30, 1995.........................................    8.50       5.25
December 31, 1995..........................................    7.13       5.63
March 31, 1996.............................................    6.75       5.00
June 30, 1996..............................................    8.50       5.50
September 30, 1996.........................................    8.25       6.75
December 31, 1996..........................................   10.00       6.75
March 31, 1997.............................................   16.25       8.25
June 30, 1997..............................................   17.38      12.63
September 30, 1997.........................................   19.38      15.88
December 31, 1997 (through October 6, 1997)................   19.50      18.00

  On October 6, 1997, the last reported sales price of the Common Stock on
the Nasdaq National Market was $19.38 per share. As of October 6, 1997, there   
were approximately 185 shareholders of record of the Common Stock.              

    The Company presently intends to retain its earnings to finance the growth
and development of its business and does not anticipate paying any cash         
dividends in the foreseeable future. Future dividend policy will depend upon the
earnings and financial condition of the Company, the Company's need for funds   
and other factors. Presently, the Line of Credit (as defined below) restricts   
the payment of dividends on the Common Stock. At December 31, 1996,             
approximately $668,000 of retained earnings was available for distribution.     

USE OF PROCEEDS 

   The net proceeds to the Company from the sale of the Common Stock offered
hereby are estimated to be approximately $23,465,400 ($27,907,500 if the        
Underwriters' over-allotment option is exercised in full), after deduction of   
the underwriting discount and estimated offering expenses payable by the Company
based upon an offering price of $18.50 per share. The Company will not receive  
any proceeds from the sale of the shares of Common Stock by the Selling         
Shareholders. See "Principal and Selling Shareholders."                         

  The Company intends to use the estimated net proceeds of the offering as
follows: (i) approximately $1,411,000 to pay off the mortgage including accrued 
interest on its office-warehouse facility in Nelsonville, Ohio (the "Mortgage");
(ii) approximately $370,000 to repay a note to a former shareholder of the      
Company (the "Shareholder Note"); and (iii) approximately $21,684,400 to repay a
portion of its outstanding indebtedness under its asset-based line of credit    
(the "Line of Credit") incurred primarily for working capital purposes. The     
Mortgage currently bears interest at 8.75% and is due January 2010. The         
Shareholder Note bears interest at prime plus 2% per year (10.50% on June 30,   
1997) and matures December 20, 1998. At October 6, 1997, approximately $41.6    
million of indebtedness was outstanding under the Line of Credit and bore       
interest at a rate of 8.50%. The Line of Credit terminates on April 30, 1999.   
Until utilized for the above purposes, the Company will invest the net proceeds 
of the offering in short-term, interest-bearing, investment grade securities.   
See "Management's Discussion and Analysis of Financial Condition and Results of 
Operations -- Liquidity and Capital Resources."                                 

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CAPITALIZATION

  The following table sets forth the short-term debt and capitalization of
the Company as of June 30, 1997, and as adjusted to give effect to the sale of  
1,370,000 shares of Common Stock offered hereby by the Company at an offering   
price of $18.50 per share, and the application of the estimated net proceeds    
therefrom as described in "Use of Proceeds."                                    

                                                        · Enlarge/Download Table

                                                                      JUNE 30, 1997     
                                                                 -----------------------
                                                                 ACTUAL      AS ADJUSTED
                                                                 -------     -----------
                                                                     (IN THOUSANDS)     
                                                                                        
Current maturities -- long-term debt............................ $12,770       $ 1,007  
                                                                 =======       =======  
Long-term debt, less current maturities......................... $23,662       $11,960  
Shareholders' equity:                                                                   
  Preferred Stock, Series A, no par value; $0.06 stated value;                          
     125,000 shares authorized; 90,000 shares issued; 82,857                            
     shares outstanding(1)......................................       5             5  
  Common Stock, no par value, 10,000,000 shares authorized;                             
     3,856,480 shares issued and 3,749,528 shares outstanding;                          
     5,226,480 shares issued and 5,119,528 shares outstanding,                          
     as adjusted(2).............................................  15,269        38,734  
  Stock held in treasury, at cost; 116,952 common shares and                            
     7,143 preferred shares.....................................  (1,226)       (1,226) 
  Retained earnings.............................................  14,257        14,257  
                                                                 -------       -------  
     Total shareholders' equity.................................  28,305        51,770  
                                                                 -------       -------  
          Total capitalization.................................. $51,967       $63,730  
                                                                 =======       =======  

---------------                                                                 
(1) See note 8 of notes to consolidated financial statements.                   

(2) Excludes 435,600 shares of Common Stock issuable upon the exercise of stock 
options granted under the Company's stock option plans.                 

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SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA) 

  The following table sets forth the selected consolidated financial data of
the Company as of and for each of the fiscal years in the four year period ended
June 30, 1995, the six month period ended December 31, 1995 and the fiscal year 
ended December 31, 1996 which are derived from the audited consolidated         
financial statements of the Company, certain of which statements appear         
elsewhere in this Prospectus. The following table also sets forth the selected  
consolidated financial data presented below for the six month period ended      
December 31, 1994 and the twelve month period ended December 31, 1995 and the   
six month periods ended June 30, 1996 and 1997 which are derived from the       
unaudited consolidated financial statements of the Company, certain of which    
statements appear elsewhere in this Prospectus. In the opinion of management,   
the unaudited financial data include only normal recurring adjustments necessary
for a fair presentation of such financial data in accordance with generally     
accepted accounting principles. The results of operations for the six month     
period ended June 30, 1997 are not necessarily indicative of the results of     
operations for the full year. The following selected consolidated financial data
should be read in conjunction with the Company's consolidated financial         
statements and related notes thereto and with "Management's Discussion and      
Analysis of Financial Condition and Results of Operations" included elsewhere   
herein.                                                                         

                                                        · Enlarge/Download Table

                                                                                                               SIX MONTHS     
                                                     SIX MONTHS    SIX MONTHS      TWELVE     FISCAL YEAR         ENDED       
                 FISCAL YEAR ENDED JUNE 30,            ENDED         ENDED      MONTHS ENDED     ENDED          JUNE 30,      
            -------------------------------------   DECEMBER 31,  DECEMBER 31,  DECEMBER 31,  DECEMBER 31,  ----------------- 
             1992      1993      1994      1995         1994          1995          1995          1996       1996      1997   
            -------   -------   -------   -------   ------------  ------------  ------------  ------------  -------   ------- 
                                                                                                                              
STATEMENT                                                                                                                     
  OF                                                                                                                          
 OPERATIONS                                                                                                                   
  DATA(1):                                                                                                                    
Net                                                                                                                           
  sales.... $32,504   $41,205   $52,895   $60,227     $ 35,967      $ 36,124      $ 60,384      $ 73,148    $25,450   $34,268 
Cost of                                                                                                                       
  goods                                                                                                                       
  sold.....  25,923    32,990    43,271    48,367       28,134        28,887        49,335        55,104     18,260    24,710 
            -------   -------   -------   -------      -------       -------       -------       -------    -------   ------- 
Gross                                                                                                                         
  margin...   6,581     8,215     9,624    11,860        7,833         7,237        11,049        18,044      7,190     9,558 
Selling,                                                                                                                      
  general                                                                                                                     
  and                                                                                                                         
  administrative                                                                                                              
  expenses...   3,882   5,584     6,814     8,629        4,756         6,863        10,570        12,332      5,549     6,718 
            -------   -------   -------   -------      -------       -------       -------       -------    -------   ------- 
Income from                                                                                                                   
operations...   2,699   2,631     2,810     3,231        3,077           374           479         5,712      1,641     2,840 
Interest                                                                                                                      
  expense                                                                                                                     
  and                                                                                                                         
  other --                                                                                                                    
  net......    (906)     (659)     (687)   (1,995)      (1,139)       (1,197)       (2,004)       (1,988)      (785)   (1,115)
            -------   -------   -------   -------      -------       -------       -------       -------    -------   ------- 
Income                                                                                                                        
  (loss)                                                                                                                      
  before                                                                                                                      
  income                                                                                                                      
  taxes....   1,793     1,972     2,123     1,236        1,938          (823)       (1,525)        3,724        856     1,725 
Income tax                                                                                                                    
  expense                                                                                                                     
  (benefit)...     170     205      303      (197)         459          (333)         (988)          918        197       519 
            -------   -------   -------   -------      -------       -------       -------       -------    -------   ------- 
Income                                                                                                                        
  (loss)                                                                                                                      
  before                                                                                                                      
  extraordinary                                                                                                               
  loss and                                                                                                                    
 cumulative                                                                                                                   
  effect of                                                                                                                   
  change in                                                                                                                   
 accounting                                                                                                                   
 principle...   1,623   1,767     1,820     1,433        1,479          (490)         (537)        2,806        659     1,206 
Extraordinary                                                                                                                 
  loss, net                                                                                                                   
  of income                                                                                                                   
  taxes....      --      (148)       --        --           --            --            --            --         --        -- 
Cumulative                                                                                                                    
  effect of                                                                                                                   
  change in                                                                                                                   
 accounting                                                                                                                   
 principle...      --     134        --        --           --            --            --            --         --        -- 
            -------   -------   -------   -------      -------       -------       -------       -------    -------   ------- 
Net income                                                                                                                    
  (loss)... $ 1,623   $ 1,753   $ 1,820   $ 1,433     $  1,479      $   (490)     $   (537)     $  2,806    $   659   $ 1,206 
            =======   =======   =======   =======      =======       =======       =======       =======    =======   ======= 
Income                                                                                                                        
  (loss)                                                                                                                      
  before                                                                                                                      
  extraordinary                                                                                                               
  loss and                                                                                                                    
 cumulative                                                                                                                   
  effect of                                                                                                                   
  change in                                                                                                                   
 accounting                                                                                                                   
 principle... $  0.72 $  0.61   $  0.47   $  0.38     $   0.39      $  (0.13)     $  (0.15)     $   0.74    $  0.17   $  0.31 
Extraordinary                                                                                                                 
  loss, net                                                                                                                   
  of income                                                                                                                   
taxes(2)...      --     (0.05)       --        --           --            --            --            --         --        -- 
Cumulative                                                                                                                    
  effect of                                                                                                                   
  change in                                                                                                                   
 accounting                                                                                                                   
 principle(3)...      --    0.04      --       --           --            --            --            --         --        -- 
            -------   -------   -------   -------      -------       -------       -------       -------    -------   ------- 
Net income                                                                                                                    
  (loss)                                                                                                                      
  per                                                                                                                         
  share.... $  0.72   $  0.60   $  0.47   $  0.38     $   0.39      $  (0.13)     $  (0.15)     $   0.74    $  0.17   $  0.31 
            =======   =======   =======   =======      =======       =======       =======       =======    =======   ======= 
Weighted                                                                                                                      
  average                                                                                                                     
  number of                                                                                                                   
  common                                                                                                                      
  shares                                                                                                                      
  and                                                                                                                         
equivalents                                                                                                                   
outstanding...   2,250   2,900    3,842     3,741        3,771         3,666         3,666         3,777      3,765     3,940 
BALANCE                                                                                                                       
  SHEET                                                                                                                       
  DATA(4):                                                                                                                    
Working                                                                                                                       
 capital... $ 5,714   $21,146   $30,307   $25,719     $ 29,496      $ 25,454      $ 25,454      $ 30,609    $23,561   $35,906 
Total                                                                                                                         
  assets...  25,559    38,528    51,943    59,458       50,214        49,081        49,081        58,090     63,976    83,152 
Total                                                                                                                         
  long-term                                                                                                                   
  debt                                                                                                                        
 (including                                                                                                                   
  current                                                                                                                     
  maturities)...  12,211   9,548  21,717   25,123       19,794        20,946        20,946        23,130     24,547    36,432 
Total                                                                                                                         
shareholders'                                                                                                                 
  equity...   6,047    21,594    22,627    24,059       24,106        23,569        23,569        26,375     24,228    28,305 

---------------                                                                 
(1) Effective December 31, 1995, the Company changed its fiscal year end from   
June 30 to December 31.                                                 

(2) During Fiscal 1993, the Company retired all outstanding 13.25% subordinated 
debentures originally due 2005 resulting in an extraordinary loss of    
$148,400, or $0.05 per share, net of related income taxes of $76,448.   

(3) Effective July 1, 1992, the Company changed its method of accounting for    
  income taxes to conform with FAS 109. The cumulative effect of this change
    in accounting principle was to increase net income by $134,000, or $0.04 per
share.                                                                  

(4) As of June 30, 1997, as adjusted to reflect the sale of 1,370,000 shares    
   offered hereby at an offering price of $18.50 per share and the application
of the estimated net proceeds therefrom, working capital would have been
$47,669,000, total assets would have been $83,152,000, long-term debt   
(including current maturities) would have been $12,967,000 and total    
shareholders' equity would have been $51,770,000.                       

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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW                                                                        

The Company is the successor to the business of The Wm. Brooks Shoe   
Company, a company established in 1932 by William Brooks, who was later joined  
by F. M. Brooks, the grandfather of the Company's current Chairman, President   
and Chief Executive Officer, Mike Brooks. The business was sold in 1959 to a    
company headquartered in Lancaster, Ohio. John W. Brooks, the father of Mike    
Brooks, remained as an employee of the business when it was sold. In 1975, John 
W. Brooks formed John W. Brooks, Inc. (later known as Rocky Shoes & Boots Co.   
("Rocky Co.")) as an Ohio corporation, reacquired the Nelsonville, Ohio         
operating assets of the original company and moved the business' principal      
executive offices back to Nelsonville, Ohio. In 1993, the Company, Rocky Co.,   
Lifestyle and Five Star were parties to a reorganization, and in 1996, Rocky Co.
was merged with and into the Company, resulting in the Company's present        
corporate structure.                                                            

    Following completion of the Company's initial public offering in 1993, the
Company began to convert all of its factories to a modular "Team Pass-Through"  
manufacturing system. This system substantially increased total manufacturing   
capacity and operating efficiencies. The Company's gross margin, as a percentage
of net sales, was 18.2%, 19.7%, 18.3% and 24.7% for Fiscal 1994, Fiscal 1995,   
the twelve months ended December 31, 1995 and Fiscal 1996, respectively.        
Additional facility expansion and higher utilization of the factories during    
1997 contributed to a gross margin of 27.9% for the six months ended June 30,   
1997.                                                                           

    Most of the Company's footwear is manufactured in the Company's facilities
located in Nelsonville, Ohio, the Dominican Republic and Puerto Rico. The       
Company purchases raw materials from a number of domestic and foreign sources.  
The principal raw materials used in the production of the Company's footwear, in
terms of dollar value, are leather, GORE-TEX waterproof fabric, CORDURA nylon   
fabric and soling materials. The Company's footwear is distributed nationwide   
and in Canada from the Company's warehouse located in Nelsonville, Ohio. The    
Company stores finished goods in the warehouse until they are used to fill an   
order. If the product ordered is in inventory, it can be shipped to customers   
within one week of the order; however, a majority of the Company's orders for   
rugged outdoor footwear are placed in January through April for delivery in July
through October.                                                                

    In the past, the Company has benefited from a relatively low effective tax
rate. The Company receives favorable tax treatment on income earned by its      
subsidiary in Puerto Rico and benefits from local tax abatements available to   
such subsidiary. During the fourth quarter of Fiscal 1996, the Company elected  
to repatriate future earnings of its subsidiary in the Dominican Republic. The  
repatriation of earnings from its subsidiary in the Dominican Republic is       
subject to federal income tax, but is exempt from state and local taxation.     
Accordingly, the Company will have a higher effective tax rate in the future.   

RESULTS OF OPERATIONS                                                           

    The following table sets forth the percentage relationship to net sales of
certain statement of operations data for the periods indicated.                 

                                                        · Enlarge/Download Table

                              FISCAL YEARS       SIX MONTHS                                                    
                                  ENDED             ENDED        TWELVE MONTHS   FISCAL YEAR     SIX MONTHS    
                                JUNE 30,        DECEMBER 31,         ENDED          ENDED      ENDED JUNE 30,  
                             ---------------   ---------------    DECEMBER 31,   DECEMBER 31,  --------------- 
                             1994      1995    1994      1995         1995           1996      1996      1997  
                             -----     -----   -----     -----   --------------  ------------  -----     ----- 
                                                                                                               
Net sales................... 100.0%    100.0%  100.0%    100.0%       100.0%         100.0%    100.0%    100.0%
Cost of goods sold..........  81.8      80.3    78.2      80.0         81.7           75.3      71.7      72.1 
                             -----     -----   -----     -----        -----          -----     -----     ----- 
Gross margin................  18.2      19.7    21.8      20.0         18.3           24.7      28.3      27.9 
Selling, general and                                                                                           
  administrative expenses...  12.9      14.3    13.2      19.0         17.5           16.9      21.8      19.6 
                             -----     -----   -----     -----        -----          -----     -----     ----- 
Income from operations......   5.3%      5.4%    8.6%      1.0%         0.8%           7.8%      6.5%      8.3%
                             =====     =====   =====     =====        =====          =====     =====     ===== 

13

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 Six Months Ended June 30, 1997 Compared to the Six Months Ended June 30, 1996

  Net Sales.  Net sales increased $8,818,048, or 34.6%, to $34,268,258 for
the six months ended June 30, 1997, from $25,450,210 for the same period in     
1996. The increase in net sales was primarily attributable to increased sales of
rugged outdoor and handsewn casual footwear to the Company's expanding customer 
base. During the six months ended June 30, 1997, the Company added 278 new      
accounts, which represents a 20% annualized increase. The Company continues to  
benefit from diversification of its customer base with sales to additional new  
accounts. Average selling prices were approximately 3.0% higher for the six     
months ended June 30, 1997, compared to the same period in 1996 across the      
Company's product categories.                                                   

   Gross Margin.  Gross margin increased $2,368,254, or 32.9%, to $9,558,148
for the six months ended June 30, 1997, from $7,189,894 for the same period in  
1996. As a percentage of net sales, gross margin was 27.9% for the six months   
ended June 30, 1997, versus 28.3% for the same period in 1996. The Company      
benefited from increased selling prices and leveraging of manufacturing overhead
from increased production in all three of the Company's manufacturing facilities
partially offset by increased sales to customers who received volume discounts  
during the first half of 1997.                                                  

Selling, General and Administrative Expenses.  Selling, general and   
administrative ("SG&A") expenses increased $1,169,174, or 21.1%, to $6,718,144  
for the six months ended June 30, 1997, from $5,548,970 for the same period in  
1996. The increase in SG&A expenses was primarily due to increased sales        
commissions and selling and administrative salaries. As a percentage of net     
sales, SG&A expenses were 19.6% for the six months ended June 30, 1997, versus  
21.9% for the same period in 1996. This decrease was due to increased sales     
volume with no increase in the fixed cost component of SG&A expenses.           

     The Company plans to increase its advertising expenses during the remainder
of 1997 to support new product introductions and increased market penetration of
its ROCKY brand products. In July 1997, the Company began advertising on        
selected cable television shows aimed at audiences that share the demographic   
profile of

Rocky Shoes & Boots Inc · 424B4 · On 10/7/97

Filed On 10/7/97 · SEC File 333-35391 · Accession Number 950152-97-7052

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