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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 0-238001
 LaCrosse Footwear, Inc.
 (Exact name of registrant as specified in its charter)
 Wisconsin
 39-1446816
 18550 NE Riverside Parkway  Portland, Oregon
 97230
    
 o þ
 o þ
 þ o
 o
  o o þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS
 PagePART IITEM 1. BUSINESS
    
    
    1ITEM 1A. RISK FACTORS
    
    
    8ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    14ITEM 2. PROPERTIES
    
    
    15ITEM 3. LEGAL PROCEEDINGS
    
    
    16ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    16PART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
    
    
    16ITEM 6. SELECTED FINANCIAL DATA
    
    
    17ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    18ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
    
    
    26ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    26ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    26ITEM 9A. CONTROLS AND PROCEDURES
    
    
    27ITEM 9B. OTHER INFORMATION
    
    
    27PART IIIITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
    
    
    27ITEM 11. EXECUTIVE COMPENSATION
    
    
    28ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    
    28ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    
    
    29ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    29PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    29SIGNATURES
    
    
    33




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PageEXHIBITS FILED AS PART OF FORM 10-K
    
    Exhibit IndexFINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    F-1 to F-21EXHIBIT 10.6EXHIBIT 10.18EXHIBIT 21EXHIBIT 23EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2




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PART I
 
 Item 1. Business
  General
 ® ®
 ®
   Strategy
  
    
    build, position and capitalize on the strength of established brands;
    
    develop innovative products and relevant technologies that will differentiate its
products, footwear and apparel;
    
    offer superior customer service; and
    
    expand and enhance its strong distribution network of sales representatives and retail
and industrial customers.
 -1-




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Brand Positioning
 ® ® ® ® ®
 Products
  Rubber Footwear
 ®
  Leather Footwear
 ® ® ® ® ®
 Rainwear and Protective Clothing
   -2-




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Product Design and Development
  Customers, Sales and Distribution
  ® ®
   ® ® ®
  -3-




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Advertising and Promotion
   Manufacturing and Sourcing
     ® ® ®
 -4-




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Competition
   ® ® ® ® ®
 ®
 Employees
  -5-




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Trademarks and Trade Names; Patents
 ® ® ® ® ® ® ® ® ® TM ® TM ® ® ® ® ®
  ® TM ® TM
 Seasonality
  Foreign Operations and Export Sales
  Environmental Matters
  -6-




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Executive Officers of the Registrant
  Name
    
    Age
    
    PositionJoseph P. Schneider
    
    
    46
    
    
    President, Chief Executive Officer and DirectorDavid P. Carlson
    
    
    50
    
    
    Executive Vice President and Chief Financial OfficerDavid M. Strouse
    
    
    46
    
    
    Vice President of Product DevelopmentDarrin S. McClintock
    
    
    40
    
    
    Vice President of Sales, Safety and Industrial DivisionAaron G. Atkinson
    
    
    37
    
    
    Corporate Controller and Assistant Secretary
 Where You Can Find More Information
  Forward Looking Statements
  -7-




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Item 1A. Risk Factors
  If we do not accurately forecast consumer demand, we may have excess inventory to liquidate or have
greater difficulty filling our customers orders, either of which could adversely affect our
business.
   Our business is substantially affected by the weather, and sustained periods of warm and/or dry
weather can negatively impact our sales.
  -8-




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A decline in consumer spending due to unfavorable economic conditions could hinder our product
revenues and earnings.
  We conduct a significant portion of our manufacturing activities outside the U.S., and therefore we
are subject to the risks of international commerce.
  
    
    tariffs, import and export controls and other non-tariff barriers such as quotas and
local content rules;
    
    increased transportation costs due to distance, energy prices or other factors;
    
    delays in the transportation and delivery of goods due to increased security concerns;
    
    foreign currency fluctuations (particularly with respect to the euro and Chinese
renminbi), for which we do not currently engage in any material hedging transactions;
    
    restrictions on the transfer of funds;
    
    changing economic conditions;
    
    restrictions, due to privacy laws, on the handling and transfer of consumer and
other personal information;
    
    changes in governmental policies and regulations;
    
    political unrest, terrorism or war, any of which can interrupt commerce;
    
    expropriation and nationalization;
    
    difficulties in managing foreign operations effectively and efficiently from the U.S.;
    
    difficulties in understanding and complying with local laws, regulations and customs
in foreign jurisdictions; and
    
    Limited capital of foreign distributors
  -9-




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Because we depend on third party manufacturers, we face challenges in maintaining a timely supply
of goods to meet sales demand, and we may experience delay or interruptions in our supply chain.
Any shortfall or delay in the supply of our products may decrease our sales and have an adverse
impact on our customer relationships.
    Failure to efficiently import foreign sourced products could result in decreased margins, cancelled
orders and unanticipated inventory accumulation.
   Any major disruption at one of our two distribution facilities or our domestic manufacturing
facility could prevent the timely delivery of our product.
 -10-




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The continued consolidation of retailers, and the leveraged growth in the overall number of stores,
increases and concentrates the Companys credit risk.
  Our financial success may be limited by the strength of our relationships with our retail customers
and to the success of such retail customers.
    We face significant competition
and if we are unable to compete effectively, sales of our products may decline and our business could be harmed.
  -11-




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
    
    have significantly greater financial resources than we have;
    
    have more comprehensive product lines than ours;
    
    have broader market presence than we have in retail outlets, or have their own retail outlets;
    
    have longer-standing relationships with retailers than we have;
    
    have a longer operating history than ours;
    
    have greater distribution capabilities than we have;
    
    have stronger brand recognition than we have; and
    
    spend substantially more on product advertising and sales than we do.
   We may be unable to meet changing consumer preferences and demands.
  -12-




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Changes in the price or availability of raw materials could disrupt our operations and adversely
affect our financial results .
  Our failure or inability to protect our intellectual property could significantly harm our
competitive position and reduce future revenues.
  We depend on a limited number of suppliers for key production materials, and any disruption in the
supply of such materials could interrupt product manufacturing and increase product costs.
 ® ®
  In order to be successful, we must retain and motivate key employees, and the failure to do so
could have an adverse impact on our business.
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If we fail to comply with the covenants contained in our revolving credit facility we may be unable
to secure additional financing and repayment obligations on our outstanding indebtedness may be
accelerated.
  Our articles of incorporation, bylaws and Wisconsin corporate law each contain provisions that
could delay, defer or prevent a change in control of our company or changes in our management.
  
    
    classify our board of directors so that only some of our directors are elected each
year;
    
    do not permit cumulative voting in the election of directors, which would otherwise
allow less than a majority of stockholders to elect director candidates; and
    
    establish advance notice and other procedural requirements for submitting
nominations for election to the board of directors and for proposing matters that can
be acted upon by stockholders at a meeting.
  
 Item 1B. Unresolved Staff Comments
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Item 2. Properties
  PropertiesOwned or
    Approximate FloorLocation
    
    Leased
    Area in Square Feet
    Principal UsesPortland, OR
    
    Leased(1)
    
    
    55,000
    
    
    Former principal sales,
marketing and executive
offices and warehouse
spacePortland, OR
    
    Leased(2)
    
    
    145,000
    
    
    New principal sales,
marketing and executive
offices and warehouse
spacePortland, OR
    
    Leased(3)
    
    
    36,000
    
    
    Manufacturing operations
and retail outlet storeLa Crosse, WI
    
    Leased(4)
    
    
    212,000
    
    
    Warehouse spaceLa Crosse, WI
    
    Leased(5)
    
    
    230,000
    
    
    Warehouse and distribution
facilityLa Crosse, WI
    
    Leased
    
    
    11,000
    
    
    Retail outlet storeRacine, WI
    
    Leased(6)
    
    
    104,700
    
    
    Sublet through end of leaseZhongshan, China
    
    Leased
    
    
    1,400
    
    
    Office space
 
 (1)
    
    Former sales, marketing and executive offices and warehouse space. On October
17, 2005, the Company entered into a Lease Termination Agreement. The Lease Termination
Agreement terminates the current Multi-Tenant Industrial Triple Net Lease, originally
dated August 2000, which was to expire in 2007. The Company expects to vacate this
building in June 2006 or when the new Portland facility is ready for occupancy, see (2)
below.(2)
    
    On October 17, 2005, the Company announced that it had signed a Single-Tenant
Industrial Triple Net Lease for the occupancy of a newly constructed 145,000 square foot
building in Portland, Oregon. The building is expected to house the Companys corporate
headquarters and distribution center for its Danner line of footwear products. The term
of the Lease and occupancy is expected to commence on or about June 1, 2006. The monthly
base rent is scheduled for 120 months from the commencement of the Lease.(3)
    
    The lease for this facility expires in March 2009, however the Company has the option
to extend the term for an additional five years.(4)
    
    The lease for this building expires in 2007. Approximately 11% of this building is
currently sublet to a third party through April 2007. The balance of the facility is used
by the Company for warehouse space. Under the sublease agreement, the Company received
$0.1 million in 2004 and $0.1 million in 2005, and is scheduled to receive $0.1 million in
2006, and $0.1 million in 2007. -15-




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(5)
    
    The lease for space in this facility expires in December 2006. The Company may
terminate this lease at any time upon 120 days written notice to the lessor but in no
event shall such notice be given prior to January 2005.(6)
    
    The lease for this facility was entered into in May 1996 and expires in May 2006.
Effective July 1, 2004, the Company entered into an agreement to sublease this facility.
Under the sublease agreement, the Company received $0.1 million in 2004 and $0.2 million
in 2005 and is scheduled to receive $0.1 million in 2006.  
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
 Price Range of Common Stock
  2005
    
    2004High
    
    Low
    
    High
    
    LowFirst Quarter
    
    $
    13.67
    
    
    $
    10.06
    
    
    $
    8.99
    
    
    $
    7.03Second Quarter
    
    
    13.19
    
    
    
    8.00
    
    
    
    11.00
    
    
    
    7.10Third Quarter
    
    
    12.80
    
    
    
    9.58
    
    
    
    8.85
    
    
    
    6.03Fourth Quarter
    
    
    12.78
    
    
    
    9.51
    
    
    
    12.39
    
    
    
    6.76
  -16-




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Dividends
  Sales of Unregistered Securities
  Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  Equity Compensation Plan Information
  
 Item 6. Selected Financial Data
 Selected Income Statement Data
 Year Ended December 31
    
    2005
    
    2004
    
    2003
    
    2002
    
    2001($ in thousands, except per share data)Net sales
    
    $
    99,378
    
    
    $
    105,470
    
    
    $
    95,687
    
    
    $
    97,785
    
    
    $
    125,301Operating income (loss)
    
    
    8,609
    
    
    
    7,640
    
    
    
    3,666
    
    
    
    (3,999
    )
    
    
    (5,308
    )Net income (loss)
    
    
    5,234
    
    
    
    6,973
    
    
    
    2,630
    
    
    
    (5,086
    )
    
    
    (7,949
    )Earnings (loss) per common shareBasic
    
    $
    0.88
    
    
    $
    1.18
    
    
    $
    0.45
    
    
    ($
    0.87
    )
    
    ($
    1.35
    )Diluted
    
    $
    0.85
    
    
    $
    1.15
    
    
    $
    0.44
    
    
    ($
    0.87
    )
    
    ($
    1.35
    )Weighted average shares outstandingBasic
    
    
    5,954
    
    
    
    5,891
    
    
    
    5,874
    
    
    
    5,874
    
    
    
    5,874Diluted
    
    
    6,166
    
    
    
    6,070
    
    
    
    5,939
    
    
    
    5,874
    
    
    
    5,874
 Selected Balance Sheet Data
 Year Ended December 31
    
    2005
    
    2004
    
    2003
    
    2002
    
    2001($ in thousands)Inventory
    
    
    24,865
    
    
    
    16,962
    
    
    
    24,042
    
    
    
    23,460
    
    
    
    34,371Total assets
    
    
    64,583
    
    
    
    57,788
    
    
    
    55,241
    
    
    
    60,845
    
    
    
    79,925Notes payable, bank
    
    
    
    
    
    
    
    
    
    
    5,319
    
    
    
    8,378
    
    
    
    17,645Long-term obligations, including
current maturities
    
    
    
    
    
    
    
    
    
    
    2,219
    
    
    
    4,432
    
    
    
    6,031Shareholders equity
    
    
    50,477
    
    
    
    45,151
    
    
    
    37,876
    
    
    
    35,089
    
    
    
    41,545
 -17-




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Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Overview
       -18-




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RESULTS OF OPERATIONS  FISCAL 2005 COMPARED TO FISCAL 2004
 Financial Summary  2005 versus 2004
  ($ in millions)
    
    2005
    
    2004
    
    $ Change
    
    % ChangeNet Sales
    
    $
    99.4
    
    
    $
    105.5
    
    
    $
    (6.1
    )
    
    
    (5.8
    %)Gross Profit
    
    
    36.3
    
    
    
    35.6
    
    
    
    0.7
    
    
    
    2.0
    %Gross Margin %
    
    
    36.6
    %
    
    
    33.8
    %SG&A
    
    
    27.7
    
    
    
    28.0
    
    
    
    (0.3
    )
    
    
    (1.1
    %)% of Net Sales
    
    
    27.9
    %
    
    
    26.5
    %Non-Operating Expenses
    
    
    (0.3
    )
    
    
    (0.4
    )
    
    
    0.1
    
    
    
    (25.0
    %)Income Before Income Taxes
    
    
    8.3
    
    
    
    7.2
    
    
    
    1.1
    
    
    
    15.3
    %Income Tax Expense
    
    
    3.1
    
    
    
    0.3
    
    
    
    2.8
    
    
    
    1,052.4
    %Net Income
    
    $
    5.2
    
    
    $
    7.0
    
    
    $
    (1.8
    )
    
    
    (25.7
    %)
 Consolidated Net Sales:
   Gross Profit:
  -19-




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Sales, General and Administrative Expenses (SG&A):
 Non-operating Expenses:
 Net Income Before Taxes:
 Income Taxes:
 Direct Charge To Equity:
 Net Income:
 -20-




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RESULTS OF OPERATIONS  FISCAL 2004 COMPARED TO FISCAL 2003
 Financial Summary  2004 versus 2003
  2004
    
    2003
    
    $ Change
    
    % Change($ in millions)Net Sales
    
    $
    105.5
    
    
    $
    95.7
    
    
    $
    9.8
    
    
    
    10.2
    %Gross Profit
    
    
    35.6
    
    
    
    29.5
    
    
    
    6.1
    
    
    
    20.7
    %Gross Margin %
    
    
    33.8
    %
    
    
    30.8
    %SG&A
    
    
    28.0
    
    
    
    25.8
    
    
    
    2.2
    
    
    
    8.5
    %% of Net Sales
    
    
    26.5
    %
    
    
    27.0
    %Non-Operating Expenses
    
    
    (0.4
    )
    
    
    (1.0
    )
    
    
    0.6
    
    
    
    n/aIncome Before Income Taxes
    
    
    7.2
    
    
    
    2.6
    
    
    
    4.6
    
    
    
    n/aIncome Tax Expense
    
    
    0.3
    
    
    
    
    
    
    
    0.3
    
    
    
    n/aNet Income (Loss)
    
    $
    7.0
    
    
    $
    (2.6
    )
    
    $
    9.6
    
    
    
    n/a
 Consolidated Net Sales:
 Gross Profit:
 SG&A:
 Non-operating Expenses:
 -21-




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Income Taxes:
 Direct Charge To Equity
 Net Income:
 LIQUIDITY AND CAPITAL RESOURCES
   -22-




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Contractual Obligations
    
    Total
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    ThereafterOperating Leases (1) (2)
    
    $
    11,800
    
    
    $
    1,500
    
    
    $
    1,300
    
    
    $
    1,200
    
    
    $
    1,000
    
    
    $
    1,000
    
    
    $
    5,800
  
 (1)
    
    Effective July 1, 2004, the Company entered into an agreement to sublease the
leased facility in Racine, WI. Under the sublease agreement, the Company received
$0.2 million in 2005 and is scheduled to receive $0.1 million in 2006.(2)
    
    Approximately 11% of one of the Companys leased warehouses in La Crosse, WI
is currently sublet to a third party through April 2007. The balance of the facility
is used by the Company for warehouse space. Under the sublease agreement, the Company
received $0.1 million in 2005 and is scheduled to receive $0.1 million in 2006 and
$0.1 million in 2007.  -23-




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(In Thousands)Other Commercial
    
    Maximum AmountCommitment
    
    Committed
    
    Outstanding at 12/31/05
    
    Date of ExpirationLine of credit (1)
    
    $30,000
    
    $
    
    June 2007
 
 (1)
    
    On October 1, 2005, we announced an amendment to our existing credit agreement
with Wells Fargo Bank, National Association. Under the amendment, the maximum
aggregate principal amount of borrowings allowed from January 1 to May 31 was
decreased from $30 million to $17.5 million. The maximum aggregate principal amount
of borrowings allowed from June 1 to December 31 remained $30 million. With the
amendment, this became a straight line of credit and borrowing base limitations were
removed. CRITICAL ACCOUNTING POLICIES AND ESTIMATES
  Revenue Recognition:
 Allowances for Doubtful Accounts, Discounts and Non-Defective Returns:
 Allowance for Slow-Moving Inventory:
 -24-




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Product Warranty:
 Valuation of Long-Lived and Intangible Assets:
 Pension and Other Postretirement Benefit Plans:
 Recently Issued Accounting Pronouncements
 Share-Based Payment: an amendment of FASB Statements
No. 123,
 -25-




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Accounting for Asset Retirement Obligations
 
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
   
 Item 8. Financial Statements and Supplementary Data
  
 Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
  -26-




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Item 9A. Controls and Procedures
 Evaluation of disclosure controls and procedures
 Changes in internal control
 
 Item 9B. Other Information
  
 PART III
 
 Item 10. Directors and Executive Officers of the Registrant
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Item 11. Executive Compensation
  
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
   Number of securitiesremaining available forNumber of securities to
    
    
    
    
    
    future issuance underbe issued upon
    
    Weighted-average
    
    equity compensationexercise of outstanding
    
    exercise price of
    
    plans (excludingoptions, warrants and
    
    outstanding options,
    
    securities reflected inPlan Category
    
    rights(1)
    
    warrants and rights
    
    the first column) (2)Equity compensation
plans approved by
security holders
    
    
    650,798
    
    
    $
    7.01
    
    
    
    423,625Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    650,798
    
    
    $
    7.01
    
    
    
    423,625
 
 (1)
    
    Represents options to purchase the Companys Common Stock granted under
the Companys 1993 Employee Stock Incentive Plan, 1997 Employee Stock Incentive Plan
(the 1997 Plan), 2001 Stock Incentive Plan (the 2001 Plan) and 2001 Non-Employee
Director Stock Option Plan (the Director Plan).(2)
    
    Includes 390 shares of the Companys Common Stock available for issuance under
the 1997 Plan; 352,235 shares of the Companys Common Stock available for issuance
under the 2001 Plan; and 71,000 shares of the Companys Common Stock available for
issuance under the Director Plan. -28-




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Item 13. Certain Relationships and Related Transactions
  
 Item 14. Principal Accountant Fees and Services
  
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 Financial Statements
 1.
    
    The following financial statements are included in this Annual Report on Form 10-K beginning
on the pages indicated below:
 Report of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets as of December 31, 2005 and 2004
    
    
    F-2Consolidated Statements of Operations for the Years ended December 31,
2005, 2004 and 2003
    
    
    F-4Consolidated Statements of Shareholders Equity for the Years ended
December 31, 2005, 2004 and 2003
    
    
    F-5Consolidated Statements of Cash Flows for the Years ended December 31,
2005, 2004 and 2003
    
    
    F-6Notes to Consolidated Financial Statements for the Years ended
December 31, 2005, 2004 and 2003
    
    
    F-7
 2.
    
    Financial Statement ScheduleThe financial statement schedule for the years ended December 31, 2005, 2004 and 2003
is included in this Annual Report on Form 10-K and should be read in conjunction with
the Consolidated Financial Statements.
 Report of
Independent Registered Public Accounting Firm on Financial Statement Schedule
    
    
    34Schedule II Valuation and Qualifying Accounts
    
    
    35
 All other financial statement schedules are omitted since the required information is
not present or is not present in amounts sufficient to require submission of the
schedules, or because the information required is included in the consolidated
financial statements and notes thereto.
 -29-




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Exhibits3.
    
    The following exhibits are filed herewith:
 ExhibitNumber
    
   Exhibit Description(3.1
    )
    
    Restated Articles of
Incorporation of LaCrosse
Footwear, Inc. [Incorporated
by reference to Exhibit (3.0)
to LaCrosse Footwear, Inc.s
Form S-1 Registration
Statement (Registration No.
33-75534)](3.2
    )
    
    Amended and Restated By-Laws
of LaCrosse Footwear, Inc.
[Incorporated by reference to
Exhibit (3.1) to LaCrosse
Footwear, Inc.s Current
Report on Form 8-K filed with
the Commission on November 3,
2005](3.3
    )
    
    Amendment to Amended and
Restated By-Laws of LaCrosse
Footwear, Inc. [Incorporated
by reference to Exhibit (3.1)
to LaCrosse Footwear, Inc.s
Current Report on Form 8-K
filed with the Commission on
February 6, 2006](10.1)*
    
    
    LaCrosse Footwear, Inc. Retirement Plan [Incorporated by
reference to Exhibit (10.18) to LaCrosse Footwear, Inc.s Form
S-1 Registration Statement (Registration No. 33-75534)](10.2)*
    
    
    LaCrosse Footwear, Inc. Employees Retirement Savings Plan
[Incorporated by reference to Exhibit (10.19) to LaCrosse
Footwear, Inc.s Form S-1 Registration Statement (Registration
No. 33-75534)](10.3)*
    
    
    LaCrosse Footwear, Inc. 1993 Employee Stock Incentive Plan
[Incorporated by reference to Exhibit (10.20) to LaCrosse
Footwear, Inc.s Form S-1 Registration Statement (Registration
No. 33-75534)](10.4)*
    
    
    LaCrosse Footwear, Inc. 1997 Employee Stock Incentive Plan
[Incorporated by reference to Exhibit (10.17) to LaCrosse
Footwear, Inc.s Annual Report on Form 10-K for the year ended
December 31, 1996](10.5)*
    
    
    LaCrosse Footwear, Inc. 2001 Stock Incentive Plan, as amended
[Incorporated by reference to Exhibit (10.1) of LaCrosse
Footwear, Inc.s Current Report on Form 8-K as filed with the
Commission on May 9, 2005](10.6)*
    
    
    LaCrosse Footwear, Inc. 2001 Non-Employee Director Stock Option
Plan, as amended and restated(10.7)*
    
    
    Summary of 2006 Incentive Compensation Program [Incorporated by
reference to LaCrosse Footwear, Inc.s Current Report on Form 8-K
as filed with the Commission on December 13, 2005](10.8)*
    
    
    Summary of 2006 Compensation of Executive Officers [Incorporated
by reference to LaCrosse Footwear, Inc.s Current Report on Form
8-K as filed with the Commission on December 13, 2005](10.9)*
    
    
    Schedule of Fees for Non-Employee Directors [Incorporated by
Reference to
 
 *
    
    A management contract or
compensatory plan or arrangement. -30-




---



##### Table of Contents



ExhibitNumber
    
   Exhibit DescriptionLaCrosse Footwear, Inc.s Current Report on Form 8-K
as filed with the Commission on January 6, 2005](10.10
    )
    
    Lease, dated as of March 14, 1994, between JEPCO Development Co.
and LaCrosse Footwear, Inc. [Incorporated by reference to
Exhibit (10.22) to LaCrosse Footwear, Inc.s Form S-1
Registration Statement (Registration No. 33-75534)](10.12
    )
    
    Amendment, dated as of March 17, 1998, to Lease between JEPCO
Development Co., LLC and LaCrosse Footwear, Inc. [Incorporated
by reference to Exhibit (10.17) to LaCrosse Footwear, Inc.s
Annual Report on Form 10-K for the year ended December 31, 1998](10.13
    )
    
    Lease Termination Agreement, by and among LaCrosse Footwear,
Inc., Danner, Inc., and ProLogis, dated October 17, 2005
[Incorporated by reference to Exhibit (10.1) to LaCrosse
Footwear, Inc.s Current Report on Form 8-K as filed with the
Commission on October 20, 2005](10.14
    )
    
    Single-Tenant Industrial Triple Net Lease, by and between
LaCrosse Footwear, Inc. and ProLogis, dated October 14, 2005
[Incorporated by reference to Exhibit (10.2) to LaCrosse
Footwear, Inc.s Current Report on Form 8-K as filed with the
Commission on October 20, 2005](10.15
    )
    
    Manufacturing Certification Agreement, dated as of October 19,
1993, between W.L. Gore & Associates, Inc. and Danner Shoe
Manufacturing Co. [Incorporated by reference to Exhibit (10.23)
to LaCrosse Footwear, Inc.s Form S-1 Registration Statement
(Registration No. 33-75534)](10.16
    )
    
    Trademark License, dated as of October 19, 1993, between W.L.
Gore & Associates, Inc. and Danner Shoe Manufacturing Co.
[Incorporated by reference to Exhibit (10.24) to LaCrosse
Footwear, Inc.s Form S-1 Registration Statement (Registration
No. 33-75534)](10.17
    )
    
    Credit Agreement, dated as of April 15, 2004, by and among
LaCrosse Footwear, Inc. as borrowers, and Wells Fargo Bank,
National Association, as lenders. [Incorporated by reference to
Exhibit (4.1) to LaCrosse Footwear, Inc.s Quarterly Report on
Form 10-Q for the quarter ended March 27, 2004](10.18
    )
    
    First Amendment, dated as of October 1, 2005, to Credit Agreement
dated April 15, 2004 by and among LaCrosse Footwear, Inc. as
borrowers, and Wells Fargo Bank, National Association, as
lenders.(21
    )
    
    List of subsidiaries of LaCrosse Footwear, Inc.(23
    )
    
    Consent of McGladrey & Pullen, LLP(31.1
    )
    
    Certification of the President & Chief Executive Officer pursuant
to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act
of 1934(31.2
    )
    
    Certification of the Executive Vice President & Chief Financial
Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the
Securities Exchange Act of 1934(32.1
    )
    
    Certification of the President & Chief Executive Officer pursuant
to 18 U.S.C. § 1350
 -31-




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##### Table of Contents



ExhibitNumber
    
   Exhibit Description(32.2
    )
    
    Certification of the Executive Vice President & Chief Financial
Officer pursuant to 18 U.S.C. § 1350(99
    )
    
    Proxy Statement for the 2006 Annual Meeting of Shareholders[The Proxy Statement for the 2006 Annual Meeting of Shareholders
will be filed with the Securities and Exchange Commission under
Regulation 14A within 120 days after the end of the Companys
fiscal year. Except to the extent specifically incorporated by
reference, the Proxy Statement for the 2006 Annual Meeting of
Shareholders shall not be deemed to be filed with the Securities
and Exchange Commission as part of this Annual Report on Form 10-K.]
 -32-




---



##### Table of Contents



SIGNATURES
  LACROSSE FOOTWEAR, INC.By
    
    /s/ Joseph P. SchneiderJoseph P. SchneiderPresident and Chief Executive Officer
  Signature
    
    Title
    
    Date/s/ Joseph P. Schneider

Joseph P. Schneider
    
    President, Chief Executive
Officer and Director (Principal
Executive Officer)
    
    March 9, 2006/s/ David P. Carlson

David P. Carlson
    
    Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
    
    March 9, 2006/s/ Richard A. Rosenthal

Richard A. Rosenthal
    
    Chairman of the Board and Director
    
    March 9, 2006/s/Stephen F. Loughlin

Stephen F. Loughlin
    
    Director
    
    March 9, 2006/s/ Luke E. Sims

Luke E. Sims
    
    Director
    
    March 9, 2006/s/ Charles W. Smith

Charles W. Smith
    
    Director
    
    March 9, 2006/s/ John D. Whitcombe

John D. Whitcombe
    
    Director
    
    March 9, 2006/s/ William H. Williams

William H. Williams
    
    Director
    
    March 9, 2006
 -33-




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON
FINANCIAL STATEMENT SCHEDULE
 
  McGLADREY & PULLEN, LLP 
 -34-




---



##### Table of Contents



AdditionsBalance at
    
    
    
    
    
    
    
    
    
    
    
    
    
    BalanceBeginning
    
    
    Charged to Costs
    
    
    Charged To
    
    
    
    
    
    
    at Endof Period
    
    
    and Expenses
    
    
    Other Accounts
    
    
    Deductions
    
    
    of PeriodYear ended December 31, 2003Accounts receivable allowances:Allowance for discounts
    
    $
    
    
    
    $
    297
    
    
    $
    
    
    
    $
    250
    
    
    $
    47Allowance for doubtful accounts
    
    
    415
    
    
    
    412
    
    
    
    
    
    
    
    476
    
    
    
    351Total
    
    $
    415
    
    
    $
    709
    
    
    $
    
    
    
    $
    726
    
    
    $
    398Inventory allowance:Allowance for slow-moving inventory
    
    $
    1,545
    
    
    $
    1,151
    
    
    $
    
    
    
    $
    1,022
    
    
    $
    1,674Deferred income taxes:Deferred tax asset valuation allowance
    
    $
    4,230
    
    
    $
    
    
    
    $
    
    
    
    $
    670
    
    
    $
    3,560Allowance for warranties
    
    $
    999
    
    
    $
    1,835
    
    
    $
    
    
    
    $
    1,982
    
    
    $
    852Year ended December 31, 2004Accounts receivable allowances:Allowance for discounts
    
    $
    47
    
    
    $
    1,344
    
    
    $
    
    
    
    $
    1,204
    
    
    $
    187Allowance for doubtful accounts
    
    
    351
    
    
    
    108
    
    
    
    
    
    
    
    126
    
    
    
    333Total
    
    $
    398
    
    
    $
    1,452
    
    
    $
    
    
    
    $
    1,330
    
    
    $
    520Inventory allowance:Allowance for slow-moving inventory
    
    $
    1,674
    
    
    $
    1,068
    
    
    $
    
    
    
    $
    1,044
    
    
    $
    1,698Deferred income taxes:Deferred tax asset valuation allowance
    
    $
    3,560
    
    
    $
    
    
    
    $
    
    
    
    $
    2,472
    
    
    $
    1,088Allowance for warranties
    
    $
    852
    
    
    $
    1,840
    
    
    $
    
    
    
    $
    1,846
    
    
    $
    846
 -35-




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##### Table of Contents



AdditionsBalance at
    
    
    
    
    
    
    
    
    
    
    
    
    
    BalanceBeginning
    
    
    Charged to Costs
    
    
    Charged To
    
    
    
    
    
    
    at Endof Period
    
    
    and Expenses
    
    
    Other Accounts
    
    
    Deductions
    
    
    of PeriodYear ended December 31, 2005Accounts receivable allowances:Allowance for discounts
    
    $
    187
    
    
    $
    1,403
    
    
    $
    
    
    
    $
    1,246
    
    
    $
    344Allowance for nondefective product
    
    
    
    
    
    
    78
    
    
    $
    
    
    
    
    
    
    
    
    78Allowance for doubtful accounts
    
    
    333
    
    
    
    129
    
    
    
    
    
    
    
    109
    
    
    
    353Total
    
    $
    520
    
    
    $
    1,610
    
    
    $
    
    
    
    $
    1,355
    
    
    $
    775Inventory allowance:Allowance for slow-moving inventory
    
    $
    1,698
    
    
    $
    302
    
    
    $
    
    
    
    $
    1,282
    
    
    $
    718Deferred income taxes:Deferred tax asset valuation allowance
    
    $
    1,088
    
    
    $
    3
    
    
    $
    
    
    
    $
    
    
    
    $
    1,091Allowance for warranties
    
    $
    846
    
    
    $
    1,494
    
    
    $
    
    
    
    $
    1,578
    
    
    $
    762
  -36-




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Exhibit Description(3.1)
    
    Restated Articles of Incorporation of LaCrosse Footwear,
Inc. [Incorporated by reference to Exhibit (3.0) to
LaCrosse Footwear, Inc.s Form S-1 Registration Statement
(Registration No. 33-75534)](3.2)
    
    Amended and Restated By-Laws of LaCrosse Footwear, Inc.
[Incorporated by reference to Exhibit (3.1) to LaCrosse
Footwear, Inc.s Current Report on Form 8-K filed with the
Commission on November 3, 2005](3.3)
    
    Amendment to Amended and Restated By-Laws of LaCrosse
Footwear, Inc. [Incorporated by reference to Exhibit (3.1) to LaCrosse
Footwear, Inc.s Current Report on Form 8-K filed with the Commission
on February 6, 2006](10.1)*
    
    LaCrosse Footwear, Inc. Retirement Plan [Incorporated by
reference to Exhibit (10.18) to LaCrosse Footwear, Inc.s
Form S-1 Registration Statement (Registration No. 33-75534)](10.2)*
    
    LaCrosse Footwear, Inc. Employees Retirement Savings Plan
[Incorporated by reference to Exhibit (10.19) to LaCrosse
Footwear, Inc.s Form S-1 Registration Statement
(Registration No. 33-75534)](10.3)*
    
    LaCrosse Footwear, Inc. 1993 Employee Stock Incentive Plan
[Incorporated by reference to Exhibit (10.20) to LaCrosse
Footwear, Inc.s Form S-1 Registration Statement
(Registration No. 33-75534)](10.4)*
    
    LaCrosse Footwear, Inc. 1997 Employee Stock Incentive Plan
[Incorporated by reference to Exhibit (10.17) to LaCrosse
Footwear, Inc.s Annual Report on Form 10-K for the year
ended December 31, 1996](10.5)*
    
    LaCrosse Footwear, Inc. 2001 Stock Incentive Plan, as
amended [Incorporated by reference to Exhibit (10.1) of
LaCrosse Footwear, Inc.s Current Report on Form 8-K as
filed with the Commission on May 9, 2005](10.6)*
    
    LaCrosse Footwear, Inc. 2001 Non-Employee Director Stock
Option Plan, as amended and restated(10.7)*
    
    Summary of 2006 Incentive Compensation Program
[Incorporated by reference to LaCrosse Footwear, Inc.s
Current Report on Form 8-K as filed with the Commission on
December 13, 2005](10.8)*
    
    Summary of 2006 Compensation of Executive Officers
[Incorporated by reference to LaCrosse Footwear, Inc.s
Current Report on Form 8-K as filed with the Commission on
December 13, 2005](10.9)*
    
    Schedule of Fees for Non-Employee Directors [Incorporated
by Reference to LaCrosse Footwear, Inc.s Current Report
on Form 8-K as filed with the Commission on January 6,
2005](10.10)
    
    Lease, dated as of March 14, 1994, between JEPCO
Development Co. and LaCrosse Footwear, Inc. [Incorporated
by reference to Exhibit (10.22) to
 
 *
    
    A management contract or
compensatory plan or arrangement.




---



##### Table of Contents



ExhibitNumber
    
    Exhibit DescriptionLaCrosse Footwear,
Inc.s Form S-1 Registration Statement (Registration
No. 33-75534)](10.12)
    
    Amendment, dated as of March 17, 1998, to Lease between
JEPCO Development Co., LLC and LaCrosse Footwear, Inc.
[Incorporated by reference to Exhibit (10.17) to LaCrosse
Footwear, Inc.s Annual Report on Form 10-K for the year
ended December 31, 1998](10.13)
    
    Lease Termination Agreement, by and among LaCrosse
Footwear, Inc., Danner, Inc., and ProLogis, dated October 17, 2005 [Incorporated
by reference to Exhibit (10.1) to
LaCrosse Footwear, Inc.s Current Report on Form 8-K as
filed with the Commission on October 20, 2005](10.14)
    
    Single-Tenant Industrial Triple Net Lease, by and between
LaCrosse Footwear, Inc. and ProLogis, dated October 14,
2005 [Incorporated by reference to Exhibit (10.2) to
LaCrosse Footwear, Inc.s Current Report on Form 8-K as
filed with the Commission on October 20, 2005](10.15)
    
    Manufacturing Certification
Agreement, dated as of October 19, 1993, between W.L. Gore & Associates, Inc. and Danner
Shoe Manufacturing Co. [Incorporated by reference to
Exhibit (10.23) to LaCrosse Footwear, Inc.s Form S-1
Registration Statement (Registration No. 33-75534)](10.16)
    
    Trademark License, dated as of October 19, 1993, between
W.L. Gore & Associates, Inc. and Danner Shoe Manufacturing
Co. [Incorporated by reference to Exhibit (10.24) to
LaCrosse Footwear, Inc.s Form S-1 Registration Statement
(Registration No. 33-75534)](10.17)
    
    Credit Agreement, dated as of April 15, 2004, by and among
LaCrosse Footwear, Inc. as borrowers, and Wells Fargo
Bank, National Association, as lenders. [Incorporated by
reference to Exhibit (4.1) to LaCrosse Footwear, Inc.s
Quarterly Report on Form 10-Q for the quarter ended March 27, 2004](10.18)
    
    First Amendment, dated as of October 1, 2005, to Credit
Agreement dated April 15, 2004 by and among LaCrosse
Footwear, Inc. as borrowers, and Wells Fargo Bank,
National Association, as lenders.(21)
    
    List of subsidiaries of LaCrosse Footwear, Inc.(23)
    
    Consent of McGladrey & Pullen, LLP(31.1)
    
    Certification of the President & Chief Executive Officer
pursuant to Rule 13a-14(a) or 15d-14(a) under the
Securities Exchange Act of 1934(31.2)
    
    Certification of the Executive Vice President & Chief
Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a)
under the Securities Exchange Act of 1934(32.1)
    
    Certification of the President & Chief Executive Officer
pursuant to 18 U.S.C. § 1350(32.2)
    
    Certification of the Executive Vice President & Chief
Financial Officer pursuant to 18 U.S.C. § 1350(99)
    
    Proxy Statement for the 2006 Annual Meeting of Shareholders
[The Proxy Statement for the 2006 Annual Meeting of
Shareholders will be




---



##### Table of Contents



ExhibitNumber
    
    Exhibit Descriptionfiled with the Securities and
Exchange Commission under Regulation 14A within 120 days
after the end of the Companys fiscal year. Except to the
extent specifically incorporated by reference, the Proxy
Statement for the 2006 Annual Meeting of Shareholders
shall not be deemed to be filed with the Securities and
Exchange Commission as part of this Annual Report on Form 10-K.]




---



##### Table of Contents



INDEX
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    F-1CONSOLIDATED FINANCIAL STATEMENTSConsolidated balance sheets
    
    F-2 and
F-3Consolidated statements of operations
    
    
    F-4Consolidated statements of shareholders equity
    
    
    F-5Consolidated statements of cash flows
    
    
    F-6Notes to consolidated financial statements
    
    
    F-7  F-21




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 F - 1




---



##### Table of Contents



LACROSSE
FOOTWEAR, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 December 31, 2005 and 2004
(In Thousands, except share and per share data)
 ASSETS (Note 4)
    
    2005
    
    
    2004CURRENT ASSETSCash and cash equivalents
    
    $
    6,113
    
    
    $
    7,149Trade accounts receivable, less allowances of
$0.8 million in 2005 and $0.5 million in 2004
    
    
    16,684
    
    
    
    15,613Inventories (Note 2)
    
    
    24,865
    
    
    
    16,962Prepaid expenses and other
    
    
    955
    
    
    
    622Deferred tax assets (Note 3)
    
    
    1,351
    
    
    
    2,170Total current assets
    
    
    49,968
    
    
    
    42,516PROPERTY AND EQUIPMENTLand, land improvements and building
    
    
    1,713
    
    
    
    2,439Machinery and equipment
    
    
    12,762
    
    
    
    12,35214,475
    
    
    
    14,791Less accumulated depreciation
    
    
    11,428
    
    
    
    11,234Net property and equipment
    
    
    3,047
    
    
    
    3,557OTHER ASSETSGoodwill
    
    
    10,753
    
    
    
    10,753Other assets (Note 7)
    
    
    815
    
    
    
    962Total other assets
    
    
    11,568
    
    
    
    11,715TOTAL ASSETS
    
    $
    64,583
    
    
    $
    57,788
 See Notes to Consolidated Financial Statements.
 F - 2




---



##### Table of Contents



LIABILITIES AND SHAREHOLDERS EQUITY
    
    2005
    
    
    2004CURRENT LIABILITIESAccounts payable
    
    $
    5,402
    
    
    $
    3,348Accrued compensation
    
    
    1,507
    
    
    
    2,360Other accruals
    
    
    2,014
    
    
    
    1,819Total current liabilities
    
    
    8,923
    
    
    
    7,527COMPENSATION AND BENEFITS (Note 7)
    
    
    4,015
    
    
    
    3,708DEFERRED TAX LIABILITIES (Note 3)
    
    
    1,168
    
    
    
    1,402Total liabilities
    
    
    14,106
    
    
    
    12,637COMMITMENTS AND CONTINGENCIES
(Notes 5 and 7)SHAREHOLDERS EQUITY (Note 6)Common stock, par value $.01 per share; authorized
50,000,000 shares; issued 6,717,627 shares
    
    
    67
    
    
    
    67Additional paid-in capital
    
    
    25,987
    
    
    
    26,255Accumulated other comprehensive loss (Notes 7 and 9)
    
    
    (1,306
    )
    
    
    (1,015
    )Retained earnings
    
    
    29,608
    
    
    
    24,374Less cost of 728,370 and 811,251 shares of treasury stock
    
    
    (3,879
    )
    
    
    (4,530
    )Total shareholders equity
    
    
    50,477
    
    
    
    45,151TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    64,583
    
    
    $
    57,788
 F - 3




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Years Ended December 31, 2005, 2004 and 2003
(In Thousands, except share and per share data)
 2005
    
    
    2004
    
    
    2003Net sales (Notes 10 and 11)
    
    $
    99,378
    
    
    $
    105,470
    
    
    $
    95,687Cost of goods sold
    
    
    63,032
    
    
    
    69,822
    
    
    
    66,201Gross profit
    
    
    36,346
    
    
    
    35,648
    
    
    
    29,486Selling and administrative expenses (Note 8)
    
    
    27,737
    
    
    
    28,008
    
    
    
    25,820Operating income
    
    
    8,609
    
    
    
    7,640
    
    
    
    3,666Non-operating income (expense):Interest expense
    
    
    (317
    )
    
    
    (543
    )
    
    
    (1,136
    )Other income
    
    
    6
    
    
    
    145
    
    
    
    100Total non-operating expense
    
    
    (311
    )
    
    
    (398
    )
    
    
    (1,036
    )Income before income tax expense
    
    
    8,298
    
    
    
    7,242
    
    
    
    2,630Income tax expense (Note 3)
    
    
    3,064
    
    
    
    269
    
    
    
    Net income
    
    $
    5,234
    
    
    $
    6,973
    
    
    $
    2,630Net income per common share:Basic
    
    $
    0.88
    
    
    $
    1.18
    
    
    $
    0.45Diluted
    
    $
    0.85
    
    
    $
    1.15
    
    
    $
    0.44Weighted average number of common shares outstanding :Basic
    
    
    5,954,119
    
    
    
    5,890,721
    
    
    
    5,874,477Diluted
    
    
    6,165,547
    
    
    
    6,070,167
    
    
    
    5,939,175
 See Notes to Consolidated Financial Statements.
 F - 4




---



##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 
 CONSOLIDATED
STATEMENTS OF SHAREHOLDERS EQUITY
 Years Ended December 31, 2005, 2004 and 2003 
(In Thousands)
 AccumulatedOtherAdditional
    
    
    Comprehensive
    
    
    
    
    
    
    
    
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Income (Loss)
    
    
    Retained
    
    
    Treasury
    
    
    ShareholdersStock
    
    
    Capital
    
    
    (Note 9)
    
    
    Earnings
    
    
    Stock
    
    
    EquityBalance, December 31, 2002
    
    $
    67
    
    
    $
    26,434
    
    
    $
    (1,370
    )
    
    $
    14,771
    
    
    $
    (4,813
    )
    
    $
    35,089Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,630
    
    
    
    
    
    
    
    2,630Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    155
    
    
    
    
    
    
    
    
    
    
    
    155Exercise of stock options
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    2Balance, December 31, 2003
    
    
    67
    
    
    
    26,430
    
    
    
    (1,215
    )
    
    
    17,401
    
    
    
    (4,807
    )
    
    
    37,876Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,973
    
    
    
    
    
    
    
    6,973Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    (250
    )
    
    
    
    
    
    
    
    
    
    
    (250
    )Income tax benefit on
minimum pension liability
(Note 3)
    
    
    
    
    
    
    
    
    
    
    450
    
    
    
    
    
    
    
    
    
    
    
    450Exercise of stock options
    
    
    
    
    
    
    (175
    )
    
    
    
    
    
    
    
    
    
    
    277
    
    
    
    102Balance, December 31, 2004
    
    
    67
    
    
    
    26,255
    
    
    
    (1,015
    )
    
    
    24,374
    
    
    
    (4,530
    )
    
    
    45,151Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,234
    
    
    
    
    
    
    
    5,234Minimum pension liability
    
    
    
    
    
    
    
    
    
    
    (601
    )
    
    
    
    
    
    
    
    
    
    
    (601
    )Income tax benefit on
minimum pension liability
(Note 3)
    
    
    
    
    
    
    
    
    
    
    310
    
    
    
    
    
    
    
    
    
    
    
    310Exercise of stock options
    
    
    
    
    
    
    (268
    )
    
    
    
    
    
    
    
    
    
    
    651
    
    
    
    383Balance, December 31, 2005
    
    $
    67
    
    
    $
    25,987
    
    
    $
    (1,306
    )
    
    $
    29,608
    
    
    $
    (3,879
    )
    
    $
    50,477
 See Notes to Consolidated Financial Statements.
 F - 5




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 31, 2005, 2004 and 2003
(In Thousands)
 2005
    
    
    2004
    
    
    2003Cash Flows from Operating ActivitiesNet income
    
    $
    5,234
    
    
    $
    6,973
    
    
    $
    2,630Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Depreciation
    
    
    1,353
    
    
    
    1,255
    
    
    
    1,417Amortization
    
    
    147
    
    
    
    216
    
    
    
    304(Gain) loss on disposal / impairment of property and equipment
    
    
    (30
    )
    
    
    540
    
    
    
    55Deferred income taxes
    
    
    895
    
    
    
    (318
    )
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    95Changes in current assets and liabilities:Trade accounts receivable
    
    
    (1,071
    )
    
    
    (2,201
    )
    
    
    1,890Inventories
    
    
    (7,903
    )
    
    
    7,080
    
    
    
    (582
    )Refundable income taxes
    
    
    
    
    
    
    
    
    
    
    2,888Accounts payable
    
    
    2,054
    
    
    
    621
    
    
    
    (1,940
    )Accrued expenses and other
    
    
    (1,285
    )
    
    
    1,344
    
    
    
    (348
    )Net cash provided by (used in) operating activities
    
    
    (606
    )
    
    
    15,510
    
    
    
    6,409Cash Flows from Investing ActivitiesPurchases of property and equipment
    
    
    (1,423
    )
    
    
    (934
    )
    
    
    (1,165
    )Proceeds from sales of property and equipment
    
    
    610
    
    
    
    226
    
    
    
    28Net cash used in investing activities
    
    
    (813
    )
    
    
    (708
    )
    
    
    (1,137
    )Cash Flows from Financing ActivitiesPrincipal payments on long-term obligations
    
    
    
    
    
    
    (2,219
    )
    
    
    (2,213
    )Net payments on short-term borrowings
    
    
    
    
    
    
    (5,319
    )
    
    
    (3,059
    )Payment of deferred financing costs
    
    
    
    
    
    
    (217
    )
    
    
    Proceeds from exercise of stock options
    
    
    383
    
    
    
    102
    
    
    
    Net cash provided by (used in) financing activities
    
    
    383
    
    
    
    (7,653
    )
    
    
    (5,272
    )Increase (decrease) in cash and cash equivalents
    
    
    (1,036
    )
    
    
    7,149
    
    
    
    Cash and cash equivalents:Beginning
    
    
    7,149
    
    
    
    
    
    
    
    Ending
    
    $
    6,113
    
    
    $
    7,149
    
    
    $
    SUPPLEMENTAL INFORMATIONCash payments (refunds) of:Interest
    
    $
    323
    
    
    $
    602
    
    
    $
    1,402Income taxes
    
    $
    1,984
    
    
    $
    318
    
    
    $
    (2,888
    )Non-cash deferred income tax benefit from minimum
pension liability (Notes 3 and 9)
    
    $
    (310
    )
    
    $
    (450
    )
    
    $
    
 See Notes to Consolidated Financial Statements.
 F - 6




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (In Thousands, except share and per share data)
 Note 1. Nature of Business and Significant Accounting Policies
 Nature of business:
  Summary of significant accounting policies:
 Principles of consolidation 
 Use of estimates in the preparation of financial statements 
 Cash and cash equivalents 
 Revenue recognition
 Fair value of financial instruments Disclosures About Fair Value of Financial Instruments
 Trade accounts receivable and allowance for doubtful accounts
 F - 7




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 1. Nature of Business and Significant Accounting Policies, Continued
   Inventories 
 Property and equipment
 Goodwill and other intangible assets
 Recoverability and impairment of intangible assets and other long-lived assets
 Product warranties
 F - 8




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 1. Nature of Business and Significant Accounting Policies, Continued
  December 31,2005
    
    
    2004Balance, beginning
    
    $
    846
    
    
    $
    852Accruals for products sold
    
    
    1,494
    
    
    
    1,840Costs incurred
    
    
    (1,578
    )
    
    
    (1,846
    )Balance, ending
    
    $
    762
    
    
    $
    846
 Employee stock-based compensation
 Share-Based
Payment
 December 31,2005
    
    
    2004
    
    
    2003Net income, as reported
    
    $
    5,234
    
    
    $
    6,973
    
    
    $
    2,630Deduct: Total stock-based employee compensation
expense determined under the fair value based
method for all awards, net of the related tax effects
    
    
    (310
    )
    
    
    (386
    )
    
    
    (152
    )Pro forma net income
    
    $
    4,924
    
    
    $
    6,587
    
    
    $
    2,478Net income per common share:Basic  as reported
    
    $
    0.88
    
    
    $
    1.18
    
    
    $
    0.45Diluted  as reported
    
    $
    0.85
    
    
    $
    1.15
    
    
    $
    0.44Basic  pro forma
    
    $
    0.83
    
    
    $
    1.12
    
    
    $
    0.42Diluted  pro forma
    
    $
    0.80
    
    
    $
    1.09
    
    
    $
    0.42
 F - 9




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 1. Nature of Business and Significant Accounting Policies, Continued
  December 31,2005
    
    2004
    
    2003Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected stock price volatility
    
    
    40
    %
    
    
    55
    %
    
    
    25
    %Risk-free interest rate
    
    
    4.1
    %
    
    
    3.6
    %
    
    
    6.5
    %Expected life of options
    
    4 years
    
    4 years
    
    6 years
   Income taxes
 Research and development costs 
 Advertising and promotion
 Net income per common share
 F - 10




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 1. Nature of Business and Significant Accounting Policies, Continued
   December 31,2005
    
    
    2004
    
    
    2003Basic weighted average shares outstanding
    
    
    5,954,119
    
    
    
    5,890,721
    
    
    
    5,874,477Dilutive securities:Stock options
    
    
    211,428
    
    
    
    179,446
    
    
    
    64,698Diluted weighted average shares outstanding
    
    
    6,165,547
    
    
    
    6,070,167
    
    
    
    5,939,175
 Note 2. Inventories
  December 31,2005
    
    
    2004Raw materials
    
    $
    1,218
    
    
    $
    1,426Work in process
    
    
    145
    
    
    
    188Finished goods
    
    
    24,220
    
    
    
    17,046Subtotal
    
    
    25,583
    
    
    
    18,660Less: provision for obsolete and slow-moving inventory
    
    
    (718
    )
    
    
    (1,698
    )Total
    
    $
    24,865
    
    
    $
    16,962
 Note 3. Income Tax Matters
   F - 11




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 3. Income Tax Matters, Continued
  2005
    
    
    2004Deferred tax assets:Receivable allowances
    
    $
    301
    
    
    $
    202Inventory differences
    
    
    669
    
    
    
    942Compensation and benefits
    
    
    1,605
    
    
    
    1,500Warranty reserves and other
    
    
    597
    
    
    
    648Net operating loss carryforwards
    
    
    1,253
    
    
    
    1,309Valuation allowance
    
    
    (1,091
    )
    
    
    (1,088
    )Total deferred tax assets
    
    
    3,334
    
    
    
    3,513Deferred tax liabilitiesIntangibles
    
    
    3,000
    
    
    
    2,623Property & equipment
    
    
    23
    
    
    
    118Other
    
    
    128
    
    
    
    4Total deferred tax liabilities
    
    
    3,151
    
    
    
    2,745Net deferred tax assets
    
    $
    183
    
    
    $
    768
  December 31,2005
    
    
    2004Current assets
    
    $
    1,351
    
    
    $
    2,170Noncurrent liabilities
    
    
    (1,168
    )
    
    
    (1,402
    )Net deferred tax assets
    
    $
    183
    
    
    $
    768
  December 31,2005
    
    
    2004
    
    
    2003CurrentFederal
    
    $
    2,141
    
    
    $
    587
    
    
    $
    State
    
    
    28
    
    
    
    
    
    
    
    Deferred
    
    
    895
    
    
    
    (318
    )
    
    
    Provision for income taxes
    
    $
    3,064
    
    
    $
    269
    
    
    $
    
 F-12




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 3. Income Tax Matters, Continued
  December 31,2005
    
    2004
    
    2003Statutory federal tax rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State rate, net of federal tax effect
    
    
    2.3
    %
    
    
    4.2
    %
    
    
    4.2
    %Benefit of net operating loss carryforwards
    
    
    0.0
    %
    
    
    (18.0
    %)
    
    
    (5.5
    %)Valuation allowance
    
    
    0.0
    %
    
    
    (15.9
    %)
    
    
    (33.7
    %)Other, net
    
    
    (0.4
    %)
    
    
    (1.6
    %)
    
    
    0.0
    %Effective tax rate
    
    
    36.9
    %
    
    
    3.7
    %
    
    
    0.0
    %
  Note 4. Line of Credit Agreement
   Note 5. Lease Commitments and Contingencies
 Lease Commitments 
 F-13




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 5. Lease Commitments and Contingencies, Continued
 Contingencies 
 Note 6. Stock Options
   Common Shares
    
    
    Weighted AverageUnder Options
    
    
    Exercise PriceDecember 31, 2002
    
    
    348,129
    
    
    $
    5.69Granted
    
    
    194,350
    
    
    
    2.63Canceled
    
    
    (84,661
    )
    
    
    7.09Exercised
    
    
    (724
    )
    
    
    3.13December 31, 2003
    
    
    457,094
    
    
    
    4.14Granted
    
    
    249,350
    
    
    
    7.78Canceled
    
    
    (84,050
    )
    
    
    7.61Exercised
    
    
    (31,203
    )
    
    
    3.29December 31, 2004
    
    
    591,191
    
    
    
    5.23Granted
    
    
    207,050
    
    
    
    11.03Canceled
    
    
    (64,562
    )
    
    
    6.87Exercised
    
    
    (82,881
    )
    
    
    4.48December 31, 2005
    
    
    650,798
    
    
    $
    7.01
  F-14




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 6. Stock Options, Continued
  Outstanding Options
    
    Exercisable OptionsNumber of
    
    Weighted
    
    Weighted
    
    Number of
    
    Weighted
    
    WeightedRange of
    
    Outstanding
    
    Average
    
    Average
    
    Outstanding
    
    Average
    
    AverageExercise Price
    
    Options
    
    Exercise Price
    
    Remaining Life
    
    Options
    
    Exercise Price
    
    Remaining Life< $5.00
    
    
    247,988
    
    
    $
    3.04
    
    
    
    6.1
    
    
    
    133,955
    
    
    $
    3.20
    
    
    
    6.1$5.00  $10.00
    
    
    205,160
    
    
    $
    7.86
    
    
    
    7.6
    
    
    
    50,700
    
    
    $
    8.07
    
    
    
    7.6> $10.00
    
    
    197,650
    
    
    $
    11.10
    
    
    
    8.9
    
    
    
    10,500
    
    
    $
    11.82
    
    
    
    8.9650,798
    
    
    $
    7.01
    
    
    
    7.4
    
    
    
    195,155
    
    
    $
    4.93
    
    
    
    6.6
 Note 7. Compensation and Benefit Agreements
    F - 15




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 7. Compensation and Benefit Agreements, Continued
 Pension Benefits
    
    
    Other BenefitsDecember 31,
    
    
    December 31,2005
    
    
    2004
    
    
    2005
    
    
    2004Changes in benefit obligations:Obligations at beginning of year
    
    $
    15,889
    
    
    $
    15,936
    
    
    $
    281
    
    
    $
    278Interest cost
    
    
    972
    
    
    
    999
    
    
    
    16
    
    
    
    18Benefits paid
    
    
    (1,039
    )
    
    
    (1,478
    )
    
    
    (15
    )
    
    
    (15
    )Actuarial losses
    
    
    180
    
    
    
    432
    
    
    
    
    
    
    
    Obligations at end of year
    
    $
    16,002
    
    
    $
    15,889
    
    
    $
    282
    
    
    $
    281Changes in plan assets:Fair value of assets at beginning of year
    
    $
    12,575
    
    
    $
    12,883
    
    
    $
    
    
    
    $
    Actual return on assets
    
    
    552
    
    
    
    1,170
    
    
    
    
    
    
    
    Company contributions
    
    
    182
    
    
    
    
    
    
    
    15
    
    
    
    15Benefits paid
    
    
    (1,039
    )
    
    
    (1,478
    )
    
    
    (15
    )
    
    
    (15
    )Fair value of assets at end of year
    
    $
    12,270
    
    
    $
    12,575
    
    
    $
    
    
    
    $
    Funded status at end of year:Plan assets less than obligations, included
in accrued liabilities
    
    $
    (3,732
    )
    
    $
    (3,314
    )
    
    $
    (268
    )
    
    $
    (267
    )Unrecognized (gain) loss
    
    
    2,066
    
    
    
    1,465
    
    
    
    (14
    )
    
    
    (14
    )Unrecognized prior service cost
    
    
    138
    
    
    
    153
    
    
    
    
    
    
    
    Accrued benefit cost
    
    $
    (1,528
    )
    
    $
    (1,696
    )
    
    $
    (282
    )
    
    $
    (281
    )
  2005
    
    
    2004Accumulated benefit obligations
    
    $
    16,002
    
    
    $
    15,889Plan assets
    
    
    (12,270
    )
    
    
    (12,575
    )Accrued benefit cost
    
    
    (1,528
    )
    
    
    (1,696
    )Additional minimum liability
    
    
    2,204
    
    
    
    1,618Amount recorded as intangible asset
    
    
    (138
    )
    
    
    (153
    )Amount recorded as a deferred tax asset (Note 3)
    
    
    (760
    )
    
    
    (450
    )Cumulative equity reduction component
    
    $
    1,306
    
    
    $
    1,015
 F - 16




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 7. Compensation and Benefit Agreements, Continued
 Pension Benefits
    
    Other BenefitsDecember 31,
    
    December 31,2005
    
    2004
    
    2003
    
    2005
    
    2004
    
    2003Cost recognized during the year:Service cost
    
    $
    
    
    
    $
    
    
    
    $
    28
    
    
    $
    
    
    
    $
    
    
    
    $
    2Interest cost
    
    
    972
    
    
    
    999
    
    
    
    1,029
    
    
    
    16
    
    
    
    18
    
    
    
    25Expected return on plan assets
    
    
    (976
    )
    
    
    (989
    )
    
    
    (936
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of prior gains
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101Amortization of prior service cost
    
    
    15
    
    
    
    15
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    (352
    )Curtailment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (349
    )Net period cost (benefit)
    
    $
    14
    
    
    $
    25
    
    
    $
    137
    
    
    $
    16
    
    
    $
    18
    
    
    $
    (573
    )
 Pension Benefits
    
    
    Other BenefitsDecember 31,
    
    
    December 31,2005
    
    
    2004
    
    
    2003
    
    
    2005
    
    
    2004
    
    
    2003Assumptions used in computations:Discount rate
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    6.5
    %
    
    
    6.25
    %
    
    
    6.25
    %
    
    
    6.5
    %Expected return on plan assets
    
    
    8.0
    %
    
    
    8.0
    %
    
    
    8.0
    %
    
    
    *
    
    
    
    *
    
    
    
    *
 
 *
    
    This plan does not have separate assets, as a result there is no actual or expected return on
plan assets.   Target
    
    
    Percentage of Plan AssetsAllocation
    
    
    December 31,Asset Category
    
    2006
    
    
    2005
    
    
    2004Equity securities
    
    
    50%  60
    %
    
    
    58
    %
    
    
    55
    %Debt securities
    
    
    40%  50
    %
    
    
    42
    %
    
    
    45
    %Total
    
    
    
    
    
    
    100
    %
    
    
    100
    %
 F - 17




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 7. Compensation and Benefit Agreements, Continued
   Year(s)
    
    Pension Benefits
    
    Other Benefits2006
    
    $
    1,030
    
    
    $
    162007
    
    
    1,015
    
    
    
    172008
    
    
    1,010
    
    
    
    182009
    
    
    1,005
    
    
    
    182010
    
    
    990
    
    
    
    192011-2015
    
    
    5,070
    
    
    
    106
 Note 8. Facility Shutdown Charges
    December 31,
    
    New
    
    Payments or
    
    December 31,2004
    
    Charges
    
    Reserves Used
    
    2005Racine facility shutdown
    
    $
    268
    
    
    $
    
    
    
    $
    (183
    )
    
    $
    85Claremont facility shutdown
    
    
    386
    
    
    
    
    
    
    
    (386
    )
    
    
    Total
    
    $
    654
    
    
    $
    
    
    
    $
    (569
    )
    
    $
    85
 Note 9. Comprehensive Income
 Reporting Comprehensive Income,
 Note 9. Comprehensive Income
  December 31,2005
    
    
    2004
    
    
    2003Net income, as reported
    
    $
    5,234
    
    
    $
    6,973
    
    
    $
    2,630Minimum pension liability, net of tax effect
    
    
    (291
    )
    
    
    200
    
    
    
    155Comprehensive income
    
    $
    4,943
    
    
    $
    7,173
    
    
    $
    2,785
 F - 18




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 10. Significant Risks and Uncertainties
 Concentrations
of Credit Risk  Cash 
 Concentration
of Credit Risk  Accounts Receivable 
 Major
Customer
 Note 11. Enterprise-wide Disclosures
  Years Ended December 31,2005
    
    2004
    
    2003Footwear
    
    $
    95,054
    
    
    $
    100,969
    
    
    $
    88,137Protective Clothing
    
    
    4,324
    
    
    
    4,501
    
    
    
    7,550$
    99,378
    
    
    $
    105,470
    
    
    $
    95,687
  Note 11. Enterprise-wide Disclosures, Continued
 Years Ended December 31,2005
    
    2004
    
    2003United States
    
    $
    94,310
    
    
    $
    101,644
    
    
    $
    92,639Foreign Countries
    
    
    5,068
    
    
    
    3,826
    
    
    
    3,048$
    99,378
    
    
    $
    105,470
    
    
    $
    95,687
 F - 19




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 Note 12. Recent Accounting Pronouncements
 Share-Based Payment: an
amendment of FASB Statements No. 123,
  Accounting for Asset Retirement Obligations
 Note 13. Quarterly Selected Financial Data (Unaudited)
  F - 20




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, except share and per share data)
 2005Q1
    
    Q2
    
    Q3
    
    Q4Net sales
    
    $
    18,866
    
    
    $
    19,752
    
    
    $
    31,021
    
    
    $
    29,739Gross profit
    
    
    7,004
    
    
    
    7,066
    
    
    
    11,381
    
    
    
    10,895Operating income
    
    
    551
    
    
    
    690
    
    
    
    4,016
    
    
    
    3,352Income tax expense
    
    
    186
    
    
    
    222
    
    
    
    1,416
    
    
    
    1,239Net income
    
    
    318
    
    
    
    408
    
    
    
    2,463
    
    
    
    2,045Basic income per common share
    
    
    0.05
    
    
    
    0.07
    
    
    
    0.41
    
    
    
    0.34Diluted income per common share
    
    
    0.05
    
    
    
    0.07
    
    
    
    0.40
    
    
    
    0.33
 2004Q1
    
    Q2
    
    Q3
    
    Q4Net sales
    
    $
    23,726
    
    
    $
    18,600
    
    
    $
    34,484
    
    
    $
    28,660Gross profit
    
    
    7,233
    
    
    
    5,970
    
    
    
    12,109
    
    
    
    10,336Operating income (loss)
    
    
    1,236
    
    
    
    (87
    )
    
    
    3,890
    
    
    
    2,601Income tax expense (benefit)
    
    
    
    
    
    
    
    
    
    
    (60
    )
    
    
    331Net income (loss)
    
    
    1,095
    
    
    
    (237
    )
    
    
    3,892
    
    
    
    2,223Basic income (loss) per common share
    
    
    0.19
    
    
    
    (0.04
    )
    
    
    0.66
    
    
    
    0.38Diluted income (loss) per common share
    
    
    0.18
    
    
    
    (0.04
    )
    
    
    0.64
    
    
    
    0.37
 F - 21