##### Table of Contents



UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from&n
bsp; to
 Commission file number: 0-21026
 ROCKY BRANDS, INC.
  Ohio
    
    31-1364046(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)
 39 E. Canal Street, Nelsonville, Ohio 45764
 (740) 753-1951
 Not Applicable
 þ o
  o þ o
 o þ




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##### 



FORM 10-Q
 ROCKY BRANDS, INC.
 TABLE OF CONTENTS
 PAGENUMBERPART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets
June 30, 2007 and 2006 (Unaudited), and
December 31, 2006
    
    3Condensed Consolidated Statements of Operations
for the Three and Six Months Ended June 30,
2007 and 2006 (Unaudited)
    
    4Condensed Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 2007 and
2006 (Unaudited)
    
    5Notes to Interim Unaudited Condensed
Consolidated Financial Statements
    
    6 15Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    16  22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    23Item 4. Controls and Procedures
    
    23PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    24Item 1A. Risk Factors
    
    24Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    24Item 3. Defaults Upon Senior Securities
    
    24Item 4. Submission of Matters to a Vote of Security Holders
    
    24Item 5. Other Information
    
    24Item 6. Exhibits
    
    25SIGNATURE
    
    26EX-31(A)EX-31(B)EX-32(A)EX-32(B)
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PART 1  FINANCIAL INFORMATION
 
 ITEM 1  FINANCIAL STATEMENTS
 ROCKY BRANDS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30, 2007
    
    
    December 31, 2006
    
    
    June 30, 2006(Unaudited)
    
    
    
    
    
    (Unaudited)ASSETS:CURRENT ASSETS:Cash and cash equivalents
    
    $
    1,446,022
    
    
    $
    3,731,253
    
    
    $
    474,910Trade receivables  net
    
    
    60,117,677
    
    
    
    65,259,580
    
    
    
    55,905,546Other receivables
    
    
    1,368,863
    
    
    
    1,159,444
    
    
    
    1,659,889Inventories
    
    
    83,973,162
    
    
    
    77,948,976
    
    
    
    94,337,405Deferred income taxes
    
    
    3,902,775
    
    
    
    3,902,775
    
    
    
    133,783Income tax receivable
    
    
    2,561,538
    
    
    
    3,632,808
    
    
    
    1,766,376Prepaid expenses
    
    
    2,118,034
    
    
    
    1,581,303
    
    
    
    2,585,430Total current assets
    
    
    155,488,071
    
    
    
    157,216,139
    
    
    
    156,863,339FIXED ASSETS  net
    
    
    24,443,562
    
    
    
    24,349,674
    
    
    
    23,730,670DEFERRED PENSION ASSET
    
    
    40,432
    
    
    
    13,564
    
    
    
    1,550,639IDENTIFIED INTANGIBLES
    
    
    36,823,525
    
    
    
    37,105,291
    
    
    
    38,093,117GOODWILL
    
    
    24,874,368
    
    
    
    24,874,368
    
    
    
    24,874,368OTHER ASSETS
    
    
    2,758,801
    
    
    
    2,796,776
    
    
    
    3,030,314TOTAL ASSETS
    
    $
    244,428,759
    
    
    $
    246,355,812
    
    
    $
    248,142,447LIABILITIES AND SHAREHOLDERS EQUITY:CURRENT LIABILITIES:Accounts payable
    
    $
    15,471,858
    
    
    $
    10,162,291
    
    
    $
    20,205,334Current maturities  long term debt
    
    
    311,534
    
    
    
    7,288,474
    
    
    
    7,276,398Accrued expenses:Salaries and wages
    
    
    502,334
    
    
    
    178,235
    
    
    
    592,869Co-op advertising
    
    
    
    
    
    
    452,272
    
    
    
    25,258Interest
    
    
    580,665
    
    
    
    338,281
    
    
    
    933,027Taxes  other
    
    
    673,098
    
    
    
    552,782
    
    
    
    378,713Commissions
    
    
    697,628
    
    
    
    649,636
    
    
    
    541,378Other
    
    
    2,310,034
    
    
    
    2,025,079
    
    
    
    1,506,607Total current liabilities
    
    
    20,547,151
    
    
    
    21,647,050
    
    
    
    31,459,584LONG TERM DEBT  less current maturities
    
    
    102,427,204
    
    
    
    103,203,107
    
    
    
    102,417,683DEFERRED INCOME TAXES
    
    
    17,009,025
    
    
    
    17,009,025
    
    
    
    13,477,939DEFERRED LIABILITIES
    
    
    324,038
    
    
    
    368,580
    
    
    
    442,067TOTAL LIABILITIES
    
    
    140,307,418
    
    
    
    142,227,762
    
    
    
    147,797,273COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS EQUITY:Common stock, no par value;25,000,000 shares authorized; issued and outstanding June
30, 2007 - 5,482,293; December 31, 2006 - 5,417,198; June
30, 2006 - 5,400,598
    
    
    53,802,287
    
    
    
    53,238,841
    
    
    
    52,604,460Accumulated other comprehensive loss
    
    
    (942,036
    )
    
    
    (993,182
    )
    
    
    Retained earnings
    
    
    51,261,090
    
    
    
    51,882,391
    
    
    
    47,740,714Total shareholders equity
    
    
    104,121,341
    
    
    
    104,128,050
    
    
    
    100,345,174TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    244,428,759
    
    
    $
    246,355,812
    
    
    $
    248,142,447
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ROCKY BRANDS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006NET SALES
    
    $
    58,797,664
    
    
    $
    57,297,505
    
    
    $
    120,454,688
    
    
    $
    114,822,669COST OF GOODS SOLD
    
    
    34,871,210
    
    
    
    33,224,213
    
    
    
    70,447,548
    
    
    
    65,833,420GROSS MARGIN
    
    
    23,926,454
    
    
    
    24,073,292
    
    
    
    50,007,140
    
    
    
    48,989,249SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
    
    
    22,790,579
    
    
    
    21,451,080
    
    
    
    45,113,520
    
    
    
    42,560,477INCOME FROM OPERATIONS
    
    
    1,135,875
    
    
    
    2,622,212
    
    
    
    4,893,620
    
    
    
    6,428,772OTHER INCOME AND (EXPENSES):Interest expense, net
    
    
    (3,344,076
    )
    
    
    (3,042,596
    )
    
    
    (5,842,921
    )
    
    
    (5,411,629
    )Other  net
    
    
    6,994
    
    
    
    76,759
    
    
    
    (36,001
    )
    
    
    58,462Total other
 net
    
    
    (3,337,082
    )
    
    
    (2,965,837
    )
    
    
    (5,878,922
    )
    
    
    (5,353,167
    )(LOSS) INCOME BEFORE INCOME TAXES
    
    
    (2,201,207
    )
    
    
    (343,625
    )
    
    
    (985,302
    )
    
    
    1,075,605INCOME TAX (BENEFIT) EXPENSE
    
    
    (814,000
    )
    
    
    (128,000
    )
    
    
    (364,000
    )
    
    
    398,000NET (LOSS) INCOME
    
    $
    (1,387,207
    )
    
    $
    (215,625
    )
    
    $
    (621,302
    )
    
    $
    677,605NET (LOSS) INCOME PER SHAREBasic
    
    $
    (0.25
    )
    
    $
    (0.04
    )
    
    $
    (0.11
    )
    
    $
    0.13Diluted
    
    $
    (0.25
    )
    
    $
    (0.04
    )
    
    $
    (0.11
    )
    
    $
    0.12WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDINGBasic
    
    
    5,473,919
    
    
    
    5,394,749
    
    
    
    5,465,783
    
    
    
    5,378,939Diluted
    
    
    5,473,919
    
    
    
    5,394,749
    
    
    
    5,465,783
    
    
    
    5,607,902
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ROCKY BRANDS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 Six Months EndedJune 30,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) income
    
    $
    (621,302
    )
    
    $
    677,605Adjustments to reconcile net (loss) income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    2,753,424
    
    
    
    2,589,785Deferred compensation and other
    
    
    (20,264
    )
    
    
    405,433Deferred debt financing costs
    
    
    811,582
    
    
    
    382,144Gain on disposal of fixed assets
    
    
    (4,543
    )
    
    
    (591,690
    )Stock compensation expense
    
    
    234,191
    
    
    
    258,040Change in assets and liabilitiesReceivables
    
    
    4,932,484
    
    
    
    6,637,315Inventories
    
    
    (6,024,186
    )
    
    
    (18,950,673
    )Other current assets
    
    
    534,540
    
    
    
    (1,507,575
    )Other assets
    
    
    606,832
    
    
    
    411,673Accounts payable
    
    
    5,477,302
    
    
    
    7,484,120Accrued and other liabilities
    
    
    567,474
    
    
    
    (1,799,025
    )Net cash provided by (used in) operating activities
    
    
    9,247,534
    
    
    
    (4,002,848
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of fixed assets
    
    
    (2,687,705
    )
    
    
    (2,953,314
    )Investment in trademarks and patents
    
    
    (49,951
    )
    
    
    (59,074
    )Proceeds from sale of fixed assets
    
    
    8,918
    
    
    
    1,853,584Net cash used in investing activities
    
    
    (2,728,738
    )
    
    
    (1,158,804
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from revolving credit facility
    
    
    125,665,531
    
    
    
    133,942,094Repayment of revolving credit facility
    
    
    (140,774,353
    )
    
    
    (123,222,789
    )Proceeds from long-term debt
    
    
    40,000,000
    
    
    
    15,000,000Repayments of long-term debt
    
    
    (32,644,021
    )
    
    
    (21,397,830
    )Debt financing costs
    
    
    (1,380,439
    )
    
    
    (610,000
    )Proceeds from exercise of stock options
    
    
    329,255
    
    
    
    316,407Net cash (used in) provided by financing activities
    
    
    (8,804,027
    )
    
    
    4,027,882DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (2,285,231
    )
    
    
    (1,133,770
    )CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD
    
    
    3,731,253
    
    
    
    1,608,680CASH AND CASH EQUIVALENTS,
END OF PERIOD
    
    $
    1,446,022
    
    
    $
    474,910
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ROCKY BRANDS, INC.
AND SUBSIDIARIES
 
  1.
    
    INTERIM FINANCIAL REPORTING
   (Unaudited)
    
    
    (Unaudited)Three-Months Ended
    
    
    Six-Months EndedJune 30, 2007
    
    
    June 30, 2007Net loss
    
    $
    (1,387,207
    )
    
    $
    (621,302
    )Other comprehensive income:Amortization of unrecognized
transition
obligation and service cost
    
    
    25,573
    
    
    
    51,146Total comprehensive loss
    
    $
    (1,361,634
    )
    
    $
    (570,156
    )
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2.
    
    INVENTORIES
  June 30, 2007
    
    
    December 31, 2006
    
    
    June 30, 2006(Unaudited)
    
    
    
    
    
    (Unaudited)Raw materials
    
    $
    8,434,319
    
    
    $
    6,564,731
    
    
    $
    10,178,194Work-in-process
    
    
    475,332
    
    
    
    249,644
    
    
    
    610,248Finished goods
    
    
    75,454,060
    
    
    
    71,518,898
    
    
    
    84,110,597Reserve for obsolescence or
lower of cost or market
    
    
    (390,549
    )
    
    
    (384,297
    )
    
    
    (561,634
    )Total
    
    $
    83,973,162
    
    
    $
    77,948,976
    
    
    $
    94,337,405
  3.
    
    SUPPLEMENTAL CASH FLOW INFORMATION
  Six Months EndedJune 30,2007
    
    
    2006Interest
    
    $
    4,422,762
    
    
    $
    4,570,000Federal, state and local income taxes
    
    $
    (1,490,000
    )
    
    $
    996,000Fixed asset purchases in accounts payable
    
    $
    204,448
    
    
    $
    
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4.
    
    PER SHARE INFORMATION
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Weighted average
shares outstanding
    
    
    5,473,919
    
    
    
    5,394,749
    
    
    
    5,465,783
    
    
    
    5,378,939Diluted stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    228,963Diluted weighted average
shares outstanding
    
    
    5,473,919
    
    
    
    5,394,749
    
    
    
    5,465,783
    
    
    
    5,607,902Anti-diluted weighted average
shares outstanding
    
    
    236,721
    
    
    
    576,475
    
    
    
    236,721
    
    
    
    136,736
  5.
    
    RECENT FINANCIAL ACCOUNTING STANDARDS
 How Taxes Collected from Customers and Remitted to Governmental Authorities Should be
Presented in the Income Statement (that is Gross versus Net Presentation
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9




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6.
    
    INCOME TAXES
 Accounting for Uncertainty in
Income Taxes  an Interpretation of FASB Statement No. 109
   10




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7.
    
    INTANGIBLE ASSETS
  Gross
    
    
    Accumulated
    
    
    CarryingJune 30, 2007 (unaudited)
    
    Amount
    
    
    Amortization
    
    
    AmountTrademarks:Wholesale
    
    $
    28,260,640
    
    
    $
    43,126
    
    
    $
    28,217,514Retail
    
    
    6,900,000
    
    
    
    
    
    
    
    6,900,000Patents
    
    
    2,269,662
    
    
    
    1,063,651
    
    
    
    1,206,011Customer relationships
    
    
    1,000,000
    
    
    
    500,000
    
    
    
    500,000Total Identified Intangibles
    
    $
    38,430,302
    
    
    $
    1,606,777
    
    
    $
    36,823,525
 Gross
    
    
    Accumulated
    
    
    CarryingDecember 31, 2006
    
    Amount
    
    
    Amortization
    
    
    AmountTrademarks:Wholesale
    
    $
    28,241,370
    
    
    
    
    
    
    $
    28,241,370Retail
    
    
    6,900,000
    
    
    
    
    
    
    
    6,900,000Patents
    
    
    2,238,981
    
    
    $
    875,060
    
    
    
    1,363,921Customer relationships
    
    
    1,000,000
    
    
    
    400,000
    
    
    
    600,000Total Identified Intangibles
    
    $
    38,380,351
    
    
    $
    1,275,060
    
    
    $
    37,105,291
 Gross
    
    
    Accumulated
    
    
    CarryingJune 30, 2006 (unaudited)
    
    Amount
    
    
    Amortization
    
    
    AmountTrademarks:Wholesale
    
    $
    28,933,009
    
    
    
    
    
    
    $
    28,933,009Retail
    
    
    6,900,000
    
    
    
    
    
    
    
    6,900,000Patents
    
    
    2,247,810
    
    
    $
    687,702
    
    
    
    1,560,108Customer relationships
    
    
    1,000,000
    
    
    
    300,000
    
    
    
    700,000Total Identified Intangibles
    
    $
    39,080,819
    
    
    $
    987,702
    
    
    $
    38,093,117
  Estimate of Aggregate Amortization Expense for the years ended December 31,:
 2008
    
    $
    664,2292009
    
    
    664,2242010
    
    
    124,1412011
    
    
    122,7612012
    
    
    122,761
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8. CAPITAL STOCK
   WeightedAverageExerciseShares
    
    
    PriceOptions outstanding at January 1, 2007
    
    
    536,176
    
    
    $
    14.33Issued
    
    
    15,000
    
    
    
    14.40Exercised
    
    
    (57,500
    )
    
    
    5.73Forfeited
    
    
    (9,125
    )
    
    
    17.23Options outstanding at June 30, 2007
    
    
    484,551
    
    
    $
    15.25Options exercisable at:January 1, 2007
    
    
    443,426
    
    
    $
    13.39June 30, 2007
    
    
    433,832
    
    
    $
    14.86Unvested options at January 1, 2007
    
    
    92,750
    
    
    $
    18.81Granted
    
    
    15,000
    
    
    
    14.40Vested
    
    
    (47,906
    )
    
    
    18.01Forfeited
    
    
    (9,125
    )
    
    
    17.23Unvested options at June 30, 2007
    
    
    50,719
    
    
    $
    18.55
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9.
    
    RETIREMENT PLANS
  (Unaudited)
    
    
    (Unaudited)Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Service cost
    
    $
    26,298
    
    
    $
    18,925
    
    
    $
    52,597
    
    
    $
    235,320Interest
    
    
    139,507
    
    
    
    97,768
    
    
    
    279,013
    
    
    
    226,700Expected return on assets
    
    
    (179,239
    )
    
    
    (148,558
    )
    
    
    (358,478
    )
    
    
    (345,884
    )Amortization of unrecognized
transition obligation
    
    
    2,691
    
    
    
    2,018
    
    
    
    5,382
    
    
    
    6,095Amortization of unrecognized
prior service cost
    
    
    22,882
    
    
    
    16,755
    
    
    
    45,764
    
    
    
    50,603Curtailment charge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393,787Net pension cost
    
    $
    12,139
    
    
    $
    (13,092
    )
    
    $
    24,278
    
    
    $
    566,621
  2007
    
    2006Discount rate
    
    
    6.00
    %
    
    
    5.75
    %Average rate of increase in compensation levels
    
    
    3.0
    %
    
    
    3.0
    %Expected long-term rate of return on plan assets
    
    
    8.0
    %
    
    
    8.0
    %
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10.
    
    SEGMENT INFORMATION
  (Unaudited)
    
    
    (Unaudited)Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006NET SALES:Wholesale
    
    $
    41,902,607
    
    
    $
    43,071,751
    
    
    $
    86,467,639
    
    
    $
    83,700,530Retail
    
    
    16,582,155
    
    
    
    14,225,754
    
    
    
    33,550,119
    
    
    
    30,221,174Military
    
    
    312,902
    
    
    
    
    
    
    
    436,930
    
    
    
    900,965Total Net Sales
    
    $
    58,797,664
    
    
    $
    57,297,505
    
    
    $
    120,454,688
    
    
    $
    114,822,669GROSS MARGIN:Wholesale
    
    $
    14,407,268
    
    
    $
    16,522,940
    
    
    $
    31,280,786
    
    
    $
    32,621,242Retail
    
    
    8,890,604
    
    
    
    7,550,352
    
    
    
    17,420,961
    
    
    
    16,236,018Military
    
    
    628,582
    *
    
    
    
    
    
    
    1,305,393
    *
    
    
    131,989Total Gross Margin
    
    $
    23,926,454
    
    
    $
    24,073,292
    
    
    $
    50,007,140
    
    
    $
    48,989,249
 
 *
    
    The gross margin for the three month and six month periods ended June 30, 2007
included reductions of cost of goods sold from the reimbursement of contract related
expenses incurred in prior periods of $0.5 million and $1.2, respectively.  11.
    
    LONG-TERM DEBT
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 RESULTS OF OPERATIONS
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Net Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost Of Goods Sold
    
    
    59.3
    %
    
    
    58.0
    %
    
    
    58.5
    %
    
    
    57.3
    %Gross Margin
    
    
    40.7
    %
    
    
    42.0
    %
    
    
    41.5
    %
    
    
    42.7
    %Selling, General and
Administrative Expenses
    
    
    38.8
    %
    
    
    37.4
    %
    
    
    37.5
    %
    
    
    37.1
    %Income From Operations
    
    
    1.9
    %
    
    
    4.6
    %
    
    
    4.0
    %
    
    
    5.6
    %
 Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006
 Net sales.
 Gross margin.
 SG&A expenses.
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Interest expense.
 Income taxes.
 Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006
 Net sales.
 Gross margin.
 SG&A expenses.
 Interest expense.
 Income taxes.
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Liquidity and Capital Resources
      Operating Activities.
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Investing Activities.
 Financing Activities.
 Inflation
  Critical Accounting Policies and Estimates
   19




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Revenue recognition
  Accounts receivable allowances
  Sales returns and allowances
  Inventories
  Intangible assets
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Pension benefits
   Income taxes
  SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
  21




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ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4  CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
   Internal Controls
  23




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PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  
 ITEM 1A. RISK FACTORS.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  The election of Class I Directors of the Company, to serve until the 2009 Annual Meeting of
Shareholders or until their successors are elected and qualified.
 Number of Shares VotedWITHHOLDFOR
    
    AUTHORITY
    
    TOTALMike Brooks
    
    
    4,578,969
    
    
    
    485,253
    
    
    
    5,064,222Glenn E. Corlett
    
    
    4,502,802
    
    
    
    561,420
    
    
    
    5,064,222Harley E. Rouda, Jr.
    
    
    4,716,561
    
    
    
    347,661
    
    
    
    5,064,222James L. Stewart
    
    
    4,576,029
    
    
    
    488,193
    
    
    
    5,064,222
  
 ITEM 5. OTHER INFORMATION.
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ITEM 6. EXHIBITS.
 EXHIBIT
    
    EXHIBITNUMBER
    
    DESCRIPTION31(a)*
    
    Certification pursuant to Exchange Act Rules 13a-14(a) and
15d-14(a) of the Chief Executive Officer.31(b)*
    
    Certification pursuant to Exchange Act Rules 13a-14(a) and
15d-14(a) of the Chief Financial Officer.32(a)+
    
    Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief
Executive Officer.32(b)+
    
    Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief
Financial Officer.
 
 *
    
    Filed with this report.+
    
    Furnished with this report. 25




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SIGNATURE
  Rocky Brands, Inc.Date: July 31, 2007
    /s/ James E. McDonaldJames E. McDonald, Executive Vice President andChief Financial Officer* 
 *
    
    In his capacity as Executive Vice President and Chief Financial Officer, Mr. McDonald is duly
authorized to sign this report on behalf of the Registrant. 26