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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, 2010
 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: 000-23800
 LaCrosse Footwear, Inc.
 (Exact name of registrant as specified in its charter)
 Wisconsin     39-1446816  (I.R.S. Employer Identification No.)
  17634 NE Airport Way  Portland, Oregon
 97230  (Zip code)
   Title of Each Class:
    
    Name of each exchange on which registered :Common Stock, $.01 par value per share
    
    NASDAQ Global Market
  o þ
 o þ
 þ o
 o o
 þ
   Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller Reporting Company þ(Do not check if a smaller reporting company)
 o þ




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DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 PART I
    
    PageITEM 1. BUSINESS
    
    1ITEM 1A. RISK FACTORS
    
    7ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    14ITEM 2. PROPERTIES
    
    15ITEM 3. LEGAL PROCEEDINGS
    
    15PART IIITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
    
    16ITEM 6. SELECTED FINANCIAL DATA
    
    18ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    19ITEM 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 (Including
Managements Annual Report on Internal Control
Over Financial Reporting)
    
    26ITEM 9B. OTHER INFORMATION
    
    29PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF THE
REGISTRANT, AND CORPORATE GOVERNANCE
    
    29ITEM 11. EXECUTIVE COMPENSATION
    
    29ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
    
    30ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    30ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    30PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    31SIGNATURES
    
    32EXHIBIT INDEX
    
    35CONSOLIDATED FINANCIAL STATEMENTS
    
    F-1 to F-24EX-10.27EX-10.28EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




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Forward Looking Statements
    
 PART I
 
 Item 1. Business
  General
 ® ®
 Company History
  -1-




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® ®
 Corporate Strategy
  
    
    Build identity, expand awareness and create demand for the DANNER® and
LACROSSE® brands.
    
    Identify and develop new products and technologies that can be leveraged across multiple
market segments.
    
    Increase demand through our four distribution channels and work and outdoor market
categories.
    
    Improve operational efficiency.
    
    Maximize return on capital.
 Product Positioning and Branding
  Danner
 ® ®
 LaCrosse
 ® ®
 -2-




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Work and Outdoor Markets
  Product Design and Development
   Customers, Sales, and Distribution Channels
 ® ®
 ® ®
  ®
  ® ®
 -3-




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Advertising and Promotion
   
    
    Marketing development funds provided by the Company to help our retail customers market
and sell Danner and LaCrosse products through advertising, local retail partner events and
similar activities;
    
    Marketing material updates, website upgrades, campaign development and related
advertising; and
    
    Visual merchandising, which focuses on all branded point-of-sale development and
production.
  Manufacturing and Sourcing
 Manufacturing Overview
 ®
 -4-




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Sourcing Overview
  
    
    Work with suppliers to maintain our standards for high quality products;
    
    Locate and develop relationships with complementary sourcing alternatives; and
    
    Increase speed to market for new products.
   ® ® ®
 Competition
  ® ® ® ®
 ®
 -5-




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Employees
  Trademarks and Trade Names; Patents
 ® ® ® ® ® ® ® ® TM ® ® ® TM ®
 ® ®
   Seasonality
     Foreign Operations and Sales Outside of the United States
  -6-




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Environmental Matters
   Executive Officers of the Registrant
  Name
    
    Age
    
    PositionJoseph P. Schneider
    
    
    51
    
    
    President, Chief Executive Officer and DirectorDavid P. Carlson
    
    
    55
    
    
    Executive Vice President, Chief Financial Officer, and SecretaryRoss M. Vonhoff
    
    
    45
    
    
    Senior Vice President of Operations and MarketingC. Kirk Layton
    
    
    55
    
    
    Vice President of Finance and Assistant Secretary
 Where You Can Find More Information
 www.sec.gov www.lacrossefootwearinc.com
 
 Item 1A. Risk Factors
  -7-




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Sales to the U.S. Government, which are becoming an increasingly significant portion of our net
sales, may not continue at current levels, or we may not be able to fill these orders due to
facility constraints. Additionally, we may continue to experience significant fluctuations in our
quarterly revenue performance due to the timing of orders and requested shipment dates for U.S.
government contract orders.
  For all of our distribution channels, including domestic retailers, a deterioration in the general
business environment and lack of growth in consumer spending due to unfavorable economic and
consumer credit conditions could create an environment of increasing price discounts which would
negatively impact our revenues, gross margins and earnings.
  Reduced levels of consumer spending may negatively impact our domestic wholesale partners, which
would impact their financial operations and their access to capital to fund growth, which increases
and concentrates our credit risk.
  Changes in the price or availability of raw materials and labor in the global market, as well as
currency fluctuation and other risks associated with international operations could disrupt our
operations and adversely affect our financial results, particularly our gross margins.
  -8-




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We may experience consolidation in our raw materials supply base for outsoles and leather, which
presents overall risks in our supply base.
  Our European subsidiary, LaCrosse Europe ApS, increases our exposure to risks associated with
foreign operations and the outsourcing of our European distribution center.
  Our profitability is significantly dependent upon future effective tax rates for federal, state and
international taxing jurisdictions.
  -9-




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We conduct a significant portion of our manufacturing activities and a certain portion of our net
sales occurs outside the U.S.; therefore we are subject to the risks of international commerce.
Also, any adverse political conditions or governmental actions, including the imposition of duties
and quotas, internally within China (where the majority of our third-party manufacturers are
concentrated) or externally with NAFTA countries and the European Union could disrupt our supply of
product to customers.
 ®
 
    
    delays associated with the manufacture, transportation and delivery of
foreign-sourced products;
    
    tariffs, import and export controls and other non-tariff barriers such as quotas and
local content rules;
    
    delays in the transportation and delivery of goods due to increased security
concerns, labor disputes at various ports or other events;
    
    foreign currency fluctuations (particularly with respect to the Chinese Renminbi),
a risk which we do not currently seek to mitigate through 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;
    
    Work slowdowns, stoppages, strikes, expropriation or nationalization affecting our
manufacturing partners;
    
    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;
    
    limited capital of foreign distributors and the possibility that such distributors
may terminate their operations or their relationships with us; and
    
    concentration of credit risk, currency, and political risks associated with
international distributors.
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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.
    Our business is substantially affected by weather conditions, and sustained periods of warm and/or
dry weather can negatively impact our sales. Additionally, such weather conditions may negatively
impact our inventory levels and subsequent period sales.
  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.
   -11-




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Labor disruptions or disruptions due to natural disasters or casualty losses at one of our
distribution facilities or our domestic manufacturing facility could have a material adverse effect
on our operations.
   Our financial success may be limited by the strength of our relationships with our wholesale
customers and by the success of such wholesale 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.
   -12-




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We may be unable to meet changing consumer preferences and demands.
  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.
  -13-




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If we fail to comply with the covenants contained in our revolving credit facility, we may be
unable to maintain existing, or secure additional financing, and repayment obligations on any
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
  -14-




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Item 2. Properties
  PROPERTIESApproximate FloorLocation
    
    Owned or Leased
    
    Area in Square Feet
    
    Principal UsesPortland, OR
    
    Leased (1)
    
    
    145,000
    
    
    Principal sales,
marketing and executive
offices and
distribution facilityIndianapolis, IN
    
    Leased (2)
    
    
    380,000
    
    
    Distribution facilityZhongshan, China
    
    Leased (3)
    
    
    1,400
    
    
    Office spaceCopenhagen, Denmark
    
    Leased (4)
    
    
    2,300
    
    
    Office spacePortland, OR
    
    Leased (5)
    
    
    59,000
    
    
    Manufacturing operationsPortland, OR
    
    Leased (6)
    
    
    12,600
    
    
    Factory store
 
 (1)
    
    The lease term on the Single Tenant Industrial Lease is 120 months from August 1,
2006 and the Lease provides for potential term extensions of up to 60 months after the
original term.(2)
    
    In June 2008, we signed a Single Tenant Industrial Lease for 124 months beginning March
1, 2009.(3)
    
    The lease for this facility expires November, 2012.(4)
    
    The lease for this facility expires June, 2012.(5)
    
    In February 2010, we signed a multi-tenant lease to relocate our Danner factory.
The lease has an initial term of 64 months, and includes provision for three
successive extension terms of five years each. The initial term of the lease
commenced on May 1, 2010.(6)
    
    In January 2010, we signed a lease to move our Danner Factory Store to a new
facility in Portland. The lease has an initial term of 64 months and includes
provision for three successive extension terms of five years each. The initial term
of the lease commenced on March 1, 2010. 
 Item 3. Legal Proceedings
  -15-




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PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
 Price Range of Common Stock
  2010
    
    
    2009High
    
    
    Low
    
    
    High
    
    
    LowFirst Quarter
    
    $
    17.42
    
    
    $
    12.38
    
    
    $
    13.40
    
    
    $
    7.00Second Quarter
    
    $
    21.00
    
    
    $
    14.95
    
    
    $
    10.84
    
    
    $
    7.10Third Quarter
    
    $
    19.32
    
    
    $
    11.50
    
    
    $
    12.25
    
    
    $
    9.22Fourth Quarter
    
    $
    17.25
    
    
    $
    13.52
    
    
    $
    15.09
    
    
    $
    11.34
  Dividends
      Sales of Unregistered Securities
  -16-




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Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  Equity Compensation Plan Information
  Market Price of the Registrants Common Equity
  COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG LACROSSE FOOTWEAR, INC.,
NASDAQ MARKET INDEX AND MORNINGSTAR GROUP INDEX
 
 12/31/2005
    
    
    12/31/2006
    
    
    12/31/2007
    
    
    12/31/2008
    
    
    12/31/2009
    
    
    12/31/2010LaCrosse Footwear
    
    $
    100
    
    
    $
    123
    
    
    $
    163
    
    
    $
    127
    
    
    $
    133
    
    
    $
    192NASDAQ Market Index
    
    $
    100
    
    
    $
    110
    
    
    $
    122
    
    
    $
    73
    
    
    $
    106
    
    
    $
    125Morningstar Group Index
    
    $
    100
    
    
    $
    123
    
    
    $
    122
    
    
    $
    86
    
    
    $
    129
    
    
    $
    173
 -17-




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Item 6. Selected Financial Data
 Selected Income Statement DataYear Ended December 31(in thousands, except per share data)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Net sales
    
    $
    150,542
    
    
    $
    139,152
    
    
    $
    127,956
    
    
    $
    118,179
    
    
    $
    107,798Operating income
    
    $
    11,430
    
    
    $
    8,585
    
    
    $

    10,120
    
    
    $
    10,983
    
    
    $
    8,834Net income
    
    $
    6,881
    
    
    $
    5,510
    
    
    $
    6,167
    
    
    $
    7,300
    
    
    $
    6,344Net income per common shareBasic
    
    $
    1.07
    
    
    $
    0.87
    
    
    $
    0.99
    
    
    $
    1.20
    
    
    $
    1.05Diluted
    
    $
    1.04
    
    
    $
    0.86
    
    
    $
    0.96
    
    
    $
    1.15
    
    
    $
    1.02Weighted average common shares outstandingBasic
    
    
    6,429
    
    
    
    6,303
    
    
    
    6,215
    
    
    
    6,087
    
    
    
    6,022Diluted
    
    
    6,590
    
    
    
    6,375
    
    
    
    6,417
    
    
    
    6,357
    
    
    
    6,213
 Selected Balance Sheet DataYear Ended December 31(in thousands)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Cash and cash equivalents
    
    $
    4,274
    
    
    $
    17,739
    
    
    $
    13,683
    
    
    $
    15,385
    
    
    $
    12,702Inventories
    
    $
    40,071
    
    
    $
    27,031
    
    
    $
    28,618
    
    
    $
    27,131
    
    
    $
    22,038Total assets
    
    $
    97,270
    
    
    $
    88,585
    
    
    $
    84,565
    
    
    $
    83,547
    
    
    $
    73,533Long-term debt, including current maturities
    
    
    263
    
    
    
    
    
    
    
    
    
    
    $
    394
    
    
    $
    506Shareholders equity
    
    $
    64,448
    
    
    $
    65,595
    
    
    $
    61,412
    
    
    $
    65,985
    
    
    $
    57,344Dividends paid
    
    $
    9,621
    
    
    $
    3,154
    
    
    $
    9,322
    
    
    $
    914
    
    
    $
    0Dividends paid per common share
    
    $
    1.50
    
    
    $
    0.50
    
    
    $
    1.50
    
    
    $
    0.15
    
    
    $
    0.00Inventory turns
    
    
    2.7
    
    
    
    3.1
    
    
    
    2.8
    
    
    
    2.9
    
    
    
    2.8Fourth quarter days sales outstanding
    
    
    39
    
    
    
    46
    
    
    
    57
    
    
    
    62
    
    
    
    56
 -18-




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Overview
 ® ®
     -19-




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RESULTS OF OPERATIONS
 Financial Summary  2010 versus 2009
  ($ in millions)
    
    2010
    
    
    2009
    
    
    $ Change
    
    
    % ChangeNet Sales
    
    $
    150.5
    
    
    $
    139.2
    
    
    $
    11.3
    
    
    
    8
    %Gross Profit
    
    $
    59.1
    
    
    $
    54.1
    
    
    $
    5.0
    
    
    
    9
    %Gross Margin %
    
    
    39.3
    %
    
    
    38.9
    %
    
    
    
    
    
    40 bpsSelling and Administrative Expenses
    
    $
    47.7
    
    
    $
    45.5
    
    
    $
    2.2
    
    
    
    5
    %% of Net Sales
    
    
    31.7
    %
    
    
    32.7
    %
    
    
    
    
    
    (100 bps)Non-Operating Expense, Net
    
    $
    (0.2
    )
    
    $
    (0.4
    )
    
    $
    0.2
    
    
    
    (50
    %)Income Before Income Taxes
    
    $
    11.2
    
    
    $
    8.2
    
    
    $
    3.0
    
    
    
    37
    %Income Tax Provision
    
    $
    4.3
    
    
    $
    2.7
    
    
    $
    1.6
    
    
    
    59
    %Net Income
    
    $
    6.9
    
    
    $
    5.5
    
    
    $
    1.4
    
    
    
    25
    %
 Consolidated Net Sales:
 Gross Margin:
 Selling and Administrative Expenses:
 Non-operating Expense, Net:
 Income Taxes:
 Net Income:
 -20-




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Financial Summary  2009 versus 2008
  ($ in millions)
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeNet Sales
    
    $
    139.2
    
    
    $
    128.0
    
    
    $
    11.2
    
    
    
    9
    %Gross Profit
    
    $
    54.1
    
    
    $
    50.7
    
    
    $
    3.4
    
    
    
    7
    %Gross Margin %
    
    
    38.9
    %
    
    
    39.6
    %
    
    
    
    
    
    (70 bps)Selling and Administrative Expenses
    
    $
    45.5
    
    
    $
    40.5
    
    
    $
    5.0
    
    
    
    12
    %% of Net Sales
    
    
    32.7
    %
    
    
    31.7
    %
    
    
    
    
    
    100 bpsNon-Operating Expense, net
    
    $
    (0.4
    )
    
    $
    (0.0
    )
    
    $
    (0.4
    )
    
    
    Income Before Income Taxes
    
    $
    8.2
    
    
    $
    10.1
    
    
    $
    (1.9
    )
    
    
    (19
    %)Income Tax Provision
    
    $
    2.7
    
    
    $
    3.9
    
    
    $
    (1.2
    )
    
    
    (31
    %)Net Income
    
    $
    5.5
    
    
    $
    6.2
    
    
    $
    (0.7
    )
    
    
    (11
    %)
 Consolidated Net Sales:
 Gross Margin:
 Selling and Administrative Expenses:
 Non-operating Expense, Net:
 Income Taxes:
 Net Income:
 -21-




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LIQUIDITY AND CAPITAL RESOURCES
          -22-




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OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS
   (In Thousands)
    
    Payments due by periodContractual Obligations
    
    Total
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    ThereafterOperating leases
    
    $
    18,348
    
    
    $
    2,589
    
    
    $
    2,600
    
    
    $
    2,596
    
    
    $
    2,686
    
    
    $
    2,615
    
    
    $
    5,262Product purchase
obligations (1)
    
    
    16,551
    
    
    
    16,551
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  
 (1)
    
    From time to time, we enter into purchase commitments with our suppliers and
third-party manufacturers under customary purchase order terms. Any significant losses
implicit in these contracts would be recognized in accordance with generally accepted
accounting principles. At December 31, 2010, no such losses existed. -23-




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Other Commercial
    
    Maximum AmountCommitment
    
    Committed
    
    
    Outstanding at 12/31/10
    
    
    Date of ExpirationLine of credit
    
    $
    30,000,000
    
    
    $
    
    
    
    June 30, 2012
  CRITICAL ACCOUNTING ESTIMATES
  Revenue Recognition, Allowances for Doubtful Accounts, Cash Discounts and Non-Defective Returns:
  Allowance for Slow-Moving Inventory:
 Product Warranty:
 Valuation of Long-Lived and Intangible Assets:
 -24-




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Pension and Other Postretirement Benefit Plans:
 Deferred Tax Asset Valuation Allowance:
 Stock-Based Compensation:
  Recently Issued Accounting Pronouncements
  -25-




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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
  
 Item 9A.
    
    Controls and Procedures
 Evaluation of disclosure controls and procedures
 -26-




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Changes in internal control
 Managements Annual Report on Internal Control over Financial Reporting
   Internal Control  Integrated
Framework
  -27-




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Report of Independent Registered Public Accounting Firm
 
 Internal ControlIntegrated Framework
    Internal ControlIntegrated Framework
   
 -28-




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Item 9B.
    
    Other Information
  
 PART III
 
 Item 10.
    
    Directors, Executive Officers of the Registrant, and Corporate Governance
  www.lacrossefootwearinc.com
 
 Item 11.
    
    Executive Compensation
  -29-




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Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
   Approximate number ofsecurities remainingavailable for futureNumber of securities
    
    
    
    
    
    
    issuance under equityto be issued upon
    
    
    Weighted-average
    
    
    compensation plansexercise of outstanding
    
    
    exercise price of
    
    
    (excluding securitiesoptions, warrants and
    
    
    outstanding options,
    
    
    reflected in the firstPlan Category
    
    rights (1)
    
    
    warrants and rights
    
    
    column) (2)Equity compensation
plans approved by
security holders
    
    
    799,237
    
    
    $
    11.99
    
    
    
    589,000Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    799,237
    
    
    $
    11.99
    
    
    
    589,000
 
 (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), 2007 Long Term Incentive
Plan and 2001 Non-Employee Director Stock Option Plan, As Amended and Restated (the
Director Plan).(2)
    
    Includes 463,000 shares of the Companys Common Stock available for issuance under
the 2007 Long Term Incentive Plan and 126,000 shares of the Companys Common Stock
available for issuance under the Director Plan. 
 Item 13.
    
    Certain Relationships, Related Transactions, and Director Independence
  
 Item 14.
    
    Principal Accountant Fees and Services
  -30-




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##### Table of Contents



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, 2010 and 2009
    
    
    F-2Consolidated Statements of Income for the Years ended December 31, 2010, 2009, and 2008
    
    
    F-4Consolidated Statements of Shareholders Equity and Comprehensive
Income for the Years ended December 31, 2010, 2009, and 2008
    
    
    F-5Consolidated Statements of Cash Flows for the Years ended December 31,
2010, 2009, and 2008
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7
 2.
    
    Financial Statement ScheduleThe financial statement schedule for the years ended December 31, 2010 and 2009 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
    
    
    33Schedule II Valuation and Qualifying Accounts
    
    
    34
 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.
 3.
    
    See the Exhibit Index for a description of exhibits filed with or incorporated by reference
in this report.
 -31-




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##### 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 4, 2011/s/ David P. Carlson

David P. Carlson
    
    Executive Vice President and Chief
Financial Officer (Principal Financial
and Accounting Officer)
    
    March 4, 2011/s/ Richard A. Rosenthal

Richard A. Rosenthal
    
    Chairman of the Board and Director
    
    March 4, 2011/s/ Stephen F. Loughlin

Stephen F. Loughlin
    
    Director
    
    March 4, 2011/s/ Charles W. Smith

Charles W. Smith
    
    Director
    
    March 4, 2011/s/ John D. Whitcombe

John D. Whitcombe
    
    Director
    
    March 4, 2011/s/ William H. Williams

William H. Williams
    
    Director
    
    March 4, 2011
 -32-




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    
 -33-




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##### Table of Contents



AdditionsBalance at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    BalanceBeginning
    
    
    Charged to Costs
    
    
    Charged To
    
    
    
    
    
    
    at Endof Year
    
    
    and Expenses
    
    
    Other Accounts
    
    
    Deductions
    
    
    of YearYear ended December 31, 2010Accounts receivable allowances:Allowance for discounts
    
    $
    198
    
    
    $
    829
    
    
    $
    
    
    
    $
    862
    
    
    $
    165Allowance for nondefective product
    
    
    171
    
    
    
    1,701
    
    
    
    
    
    
    
    1,653
    
    
    
    219Allowance for doubtful accounts
    
    
    294
    
    
    
    51
    
    
    
    
    
    
    
    212
    
    
    
    133Total
    
    $
    663
    
    
    $
    2,581
    
    
    $
    
    
    
    $
    2,727
    
    
    $
    517Allowance for slow-moving inventory
    
    $
    797
    
    
    $
    520
    
    
    $
    
    
    
    $
    919
    
    
    $
    398Deferred tax asset valuation allowance
    
    $
    1,017
    
    
    $
    5
    
    
    $
    
    
    
    $
    
    
    
    $
    1,022Year ended December 31, 2009Accounts receivable allowances:Allowance for discounts
    
    $
    225
    
    
    $
    953
    
    
    $
    
    
    
    $
    980
    
    
    $
    198Allowance for nondefective product
    
    
    135
    
    
    
    1,623
    
    
    
    
    
    
    
    1,587
    
    
    
    171Allowance for doubtful accounts
    
    
    449
    
    
    
    306
    
    
    
    
    
    
    
    461
    
    
    
    294Total
    
    $
    809
    
    
    $
    2,882
    
    
    $
    
    
    
    $
    3,028
    
    
    $
    663Allowance for slow-moving inventory
    
    $
    449
    
    
    $
    1,167
    
    
    $
    
    
    
    $
    819
    
    
    $
    797Deferred tax asset valuation allowance
    
    $
    1,070
    
    
    $
    
    
    
    $
    
    
    
    $
    53
    
    
    $
    1,017
 
 The accounts receivable, inventory, and deferred tax asset allowances above are deducted from the applicable asset accounts

in the accompanying consolidated balance sheets. -34-




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##### Table of Contents



EXHIBIT INDEX
 Exhibit Number
    
    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)*
    
    Amended and Restated LaCrosse Footwear, Inc. 2001 Non-Employee Director Stock Option
Plan, as amended (Incorporated by reference to Exhibit (4.1) of LaCrosse Footwear,
Inc.s Registration Statement on Form S-8 as filed with the Commission on May 3,
2007 (Registration No. 333-142598))(10.7)*
    
    LaCrosse Footwear, Inc. 2007 Long Term Incentive Plan (Incorporated by reference to
Exhibit (4.1) of LaCrosse Footwear, Inc.s Registration Statement on Form S-8 as filed
with the Commission on May 3, 2007 (Registration No. 333-142597))(10.8)*
    
    LaCrosse Footwear, Inc. 2010 Annual Incentive Compensation Plan Document
(Incorporated by reference to Exhibit (10.1) of LaCrosse Footwear, Inc.s Current
Report on Form 8-K as filed with the Commission on December 11, 2009)(10.9)*
    
    LaCrosse Footwear, Inc. 2011 Annual Incentive Compensation Plan Document
(Incorporated by reference to Exhibit (10.1) of LaCrosse Footwear, Inc.s Current
Report on Form 8-K as filed with the Commission on December 21, 2010)
 
 *
    
    A management contract or
compensatory plan or arrangement. -35-




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##### Table of Contents



Exhibit Number
    
    Exhibit Description(10.10)
    
    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)(10.11)
    
    Single Tenant Industrial Triple Net Lease, dated June 11, 2008, by and between
LaCrosse Footwear, Inc. and 267 Associates, L.L.C. (Incorporated by reference to
Exhibit (10.1) to LaCrosse Footwear, Inc.s Current Report on Form 8-K as filed with
the Commission on June 13, 2008)(10.12)
    
    Multi-Tenant Industrial Triple Net Lease, dated February 9, 2010, by and among
LaCrosse Footwear, Inc., Danner, Inc., and DP Partners Portland I, LLC (Incorporated
by reference to Exhibit (10.1) to LaCrosse Footwear, Inc.s Current Report on Form
8-K as filed with the Commission on February 10, 2010)(10.13)
    
    Parking Lot Lease, dated February 9, 2010, by and among LaCrosse Footwear, Inc.,
Danner, Inc., and DP Partners Portland I, LLC (Incorporated by reference to Exhibit
(10.2) to LaCrosse Footwear, Inc.s Current Report on Form 8-K as filed with the
Commission on February 10, 2010)(10.14)
    
    Certified Manufacturer Agreement, dated as of March 5, 2003, by and between W.L.
Gore & Associates, Inc. and LaCrosse Footwear, Inc. (Incorporated by reference to
Exhibit (10.14) to LaCrosse Footwear, Inc.s Annual Report on Form 10-K filed with
the Commission on March 7, 2008) [Confidential treatment has been granted with
respect to a portion of this Agreement](10.15)
    
    Trademark License, dated as of February 25, 2003, by and between W.L. Gore &
Associates, Inc. and LaCrosse Footwear, Inc. (Incorporated by reference to Exhibit
(10.15) to LaCrosse Footwear, Inc.s Annual Report on Form 10-K filed with the
Commission on March 7, 2008) [Confidential treatment has been granted with respect
to a portion of this Agreement](10.16)
    
    Amendment to Contractual Agreements, dated as of November 17, 2008, by and between
W.L. Gore & Associates, Inc. and LaCrosse Footwear, Inc. (Incorporated by reference
to Exhibit (10.18) to LaCrosse Footwear, Inc.s Annual Report on Form 10-K filed
with the Commission on March 7, 2008) [Confidential treatment has been granted with
respect to a portion of this Agreement](10.17)
    
    Amended and Restated Credit Agreement, dated September 8, 2006, by and between
LaCrosse Footwear, Inc. as borrower, and Wells Fargo Bank, National Association, as
lender. (Incorporated by reference to Exhibit (10.1) to LaCrosse Footwear, Inc.s
Quarterly Report on Form 10-Q as filed with the Commission on July 22, 2010)(10.18)
    
    Revolving Credit Note, dated as of September 8, 2006, issued by LaCrosse Footwear,
Inc. in favor of Wells Fargo Bank, National Association (Incorporated by reference
to Exhibit 10.2 to LaCrosse Footwear, Inc.s Current Report on Form 8-K as filed
with the Commission on September 12, 2006)(10.19)
    
    First Amendment To Credit Agreement and Waiver, dated February 25, 2008, by and
between LaCrosse Footwear, Inc. as borrower, and Wells Fargo Bank, National
Association, as lender. (Incorporated by reference to Exhibit (10.1) to LaCrosse
Footwear Inc.s Form 8-K as filed with the Commission on February 27, 2008)
 -36-




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##### Table of Contents



Exhibit Number
    
    Exhibit Description(10.20)
    
    Second Amendment to Credit Agreement and Waiver, dated October 3, 2008, by and
between LaCrosse Footwear, Inc. as borrower, and Wells Fargo Bank, National
Association, as lender (Incorporated by reference to exhibit (10.1) to LaCrosse
Footwear, Inc.s Quarterly Report on Form 10-Q as filed with the Commission on
October 28, 2008)(10.21)
    
    Second Amended and Restated Credit Agreement, dated March 1, 2009, by and between
LaCrosse Footwear, Inc. as borrower, and Wells Fargo Bank, National Association, as
lender (Incorporated by reference to exhibit (10.2) to LaCrosse Footwear, Inc.s
Quarterly Report on Form 10-Q as filed with the Commission on July 22, 2010)(10.22)
    
    Revolving Line of Credit Note, dated as of March 9, 2009, issued by LaCrosse
Footwear, Inc. in favor of Wells Fargo Bank, National Association (Incorporated by
reference to exhibit (10.2) to LaCrosse Footwear, Inc.s Quarterly Report on Form
10-Q as filed with the Commission on April 24, 2009)(10.23)
    
    Letter Amendment to Second Amended and Restated Credit Agreement, dated November 30,
2009, by and between LaCrosse Footwear, Inc. as borrower, and Wells Fargo Bank,
National Association, as lender (Incorporated by reference to exhibit (10.28) to
LaCrosse Footwear, Inc.s Annual Report on Form 10-K as filed with the Commission on
March 5, 2010)(10.24)
    
    Letter Amendment to Second Amended and Restated Credit Agreement, dated January 26,
2010, by and between LaCrosse Footwear, Inc. as borrower, and Wells Fargo Bank,
National Association, as lender (Incorporated by reference to exhibit (10.29) to
LaCrosse Footwear, Inc.s Annual Report on Form 10-K as filed with the Commission on
March 5, 2010)(10.25)
    
    Second Amendment to Third Party Security Agreement, dated January 26, 2010, by and
between LaCrosse Footwear, Inc. and Wells Fargo Bank, National Association
(Incorporated by reference to exhibit (10.30) to LaCrosse Footwear, Inc.s Annual
Report on Form 10-K as filed with the Commission on March 5, 2010)(10.26)
    
    Second Amendment to Third Party Security Agreement, dated January 26, 2010, by and
between Danner, Inc. and Wells Fargo Bank, National Association (Incorporated by
reference to exhibit (10.31) to LaCrosse Footwear, Inc.s Annual Report on Form 10-K
as filed with the Commission on March 5, 2010)(10.27)
    
    Letter Amendment to Second Amended and Restated Credit Agreement, dated September
30, 2010, by and between LaCrosse Footwear, Inc. as borrower, and Wells Fargo Bank,
National Association, as lender(10.28)
    
    Letter Amendment to Second Amended and Restated Credit Agreement, dated January 31,
2011, by and between LaCrosse Footwear, Inc. as borrower, and Wells Fargo Bank,
National Association, as lender(21.1)
    
    List of subsidiaries of LaCrosse Footwear, Inc.(23.1)
    
    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
 -37-




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##### 



INDEX
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    
    
    F-1
 
  Consolidated balance sheets
    
    F-2 and F-3Consolidated statements of income
    
    
    F-4Consolidated statements of shareholders equity and comprehensive income
    
    
    F-5Consolidated statements of cash flows
    
    
    F-6Notes to consolidated financial statements
    
    
    F-7  F-24
  F - INDEX




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Internal Control 
Integrated Framework
  
 F - 1




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS  December 31, 2010 and 2009  (In thousands, except share and per share data)
 ASSETS
    
    2010
    
    
    2009CURRENT ASSETSCash and cash equivalents (Notes 2 and 9)
    
    $
    4,274
    
    
    $
    17,739Trade
accounts and other receivables, less allowances of $517 in 2010 and $663 in 2009 (Note 9)
    
    
    22,834
    
    
    
    21,635Inventories (Note 3)
    
    
    40,071
    
    
    
    27,031Prepaid expenses and other
    
    
    1,321
    
    
    
    1,129Deferred tax assets (Note 4)
    
    
    1,614
    
    
    
    1,503Total current assets
    
    
    70,114
    
    
    
    69,037PROPERTY AND EQUIPMENTLeasehold improvements
    
    
    7,173
    
    
    
    1,772Machinery and equipment
    
    
    21,569
    
    
    
    18,584Gross property and equipment
    
    
    28,742
    
    
    
    20,356Less accumulated depreciation
    
    
    12,588
    
    
    
    11,874Property and equipment, net
    
    
    16,154
    
    
    
    8,482OTHER ASSETSGoodwill
    
    
    10,753
    
    
    
    10,753Other assets
    
    
    249
    
    
    
    313Total other assets
    
    
    11,002
    
    
    
    11,066TOTAL ASSETS
    
    $
    97,270
    
    
    $
    88,585
 See accompanying notes to consolidated financial statements.
 F - 2




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##### Table of Contents



LIABILITIES AND SHAREHOLDERS EQUITY
    
    2010
    
    
    2009CURRENT LIABILITIESAccounts payable
    
    $
    16,477
    
    
    $
    8,036Accrued compensation
    
    
    4,261
    
    
    
    3,343Other accruals
    
    
    3,356
    
    
    
    3,755Total current liabilities
    
    
    24,094
    
    
    
    15,134LONG-TERM DEBT (Note 5)
    
    
    263
    
    
    
    DEFERRED REVENUE (Note 5)
    
    
    566
    
    
    
    225DEFERRED LEASE OBLIGATIONS
    
    
    782
    
    
    
    614COMPENSATION AND BENEFITS (Note 8)
    
    
    4,385
    
    
    
    4,680DEFERRED TAX LIABILITIES (Note 4)
    
    
    2,732
    
    
    
    2,337Total liabilities
    
    
    32,822
    
    
    
    22,990COMMITMENTS AND CONTINGENCIES (Notes 6, 8, 9 and 15)SHAREHOLDERS EQUITY (Notes 7, 8, 13 and 15)Common
stock, par value $.01 per share; authorized 50,000,000 shares; issued 6,717,627 shares
    
    
    67
    
    
    
    67Additional paid-in capital
    
    
    30,536
    
    
    
    29,041Accumulated other comprehensive loss
    
    
    (3,731
    )
    
    
    (3,348
    )Retained earnings
    
    
    38,789
    
    
    
    41,529Less cost of 258,775 and 381,829 shares of treasury stock
    
    
    (1,213
    )
    
    
    (1,694
    )Total shareholders equity
    
    
    64,448
    
    
    
    65,595TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    97,270
    
    
    $
    88,585
 See accompanying notes to consolidated financial statements.
 F - 3




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME  Years Ended December 31, 2010, 2009, and 2008  (In thousands, except share and per share data)
 2010
    
    
    
    2009
    
    
    
    2008Net sales (Note 10)
    
    $
    150,542
    
    
    $
    139,152
    
    
    $
    127,956Cost of goods sold
    
    
    91,413
    
    
    
    85,062
    
    
    
    77,295Gross profit
    
    
    59,129
    
    
    
    54,090
    
    
    
    50,661Selling and administrative expenses
    
    
    47,699
    
    
    
    45,505
    
    
    
    40,541Operating income
    
    
    11,430
    
    
    
    8,585
    
    
    
    10,120Non-operating expense
    
    
    (239
    )
    
    
    (375
    )
    
    
    (24
    )Income before income taxes
    
    
    11,191
    
    
    
    8,210
    
    
    
    10,096Income tax provision (Note 4)
    
    
    4,310
    
    
    
    2,700
    
    
    
    3,929Net income
    
    $
    6,881
    
    
    $
    5,510
    
    
    $
    6,167Net income per common share:Basic
    
    $
    1.07
    
    
    $
    0.87
    
    
    $
    0.99Diluted
    
    $
    1.04
    
    
    $
    0.86
    
    
    $
    0.96Weighted average number of common shares outstanding:Basic
    
    
    6,428,625
    
    
    
    6,303,473
    
    
    
    6,215,049Diluted
    
    
    6,590,009
    
    
    
    6,374,936
    
    
    
    6,416,731
 See accompanying notes to consolidated financial statements.
 F - 4




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
AND COMPREHENSIVE INCOME
Years Ended December 31, 2010, 2009, and 2008
(In thousands)
 AccumulatedCommon
    
    
    Additional Paid-In
    
    
    Other Comprehensive
    
    
    Retained
    
    
    Treasury
    
    
    Total Shareholders
    
    
    ComprehensiveStock
    
    
    Capital
    
    
    Loss
    
    
    Earnings
    
    
    Stock
    
    
    Equity
    
    
    IncomeBalance, December 31, 2007
    
    $
    67
    
    
    $
    27,473
    
    
    
    ($1,011
    )
    
    $
    42,328
    
    
    
    ($2,872
    )
    
    $
    65,985Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,167
    
    
    
    
    
    
    
    6,167
    
    
    $
    6,167Employee benefit plan actuarial loss
net of deferred tax of $1,731
    
    
    
    
    
    
    
    
    
    
    (2,709
    )
    
    
    
    
    
    
    
    
    
    
    (2,709
    )
    
    
    (2,709
    )Stock based compensation expense
    
    
    
    
    
    
    577
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    577Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,322
    )
    
    
    
    
    
    
    (9,322
    )Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (95
    )
    
    
    (95
    )Exercise of stock options
    
    
    
    
    
    
    197
    
    
    
    
    
    
    
    
    
    
    
    921
    
    
    
    1,118Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    (309
    )
    
    
    
    
    
    
    
    
    
    
    (309
    )
    
    
    (309
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,149Balance, December 31, 2008
    
    
    67
    
    
    
    28,247
    
    
    
    (4,029
    )
    
    
    39,173
    
    
    
    (2,046
    )
    
    
    61,412Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,510
    
    
    
    
    
    
    
    5,510
    
    
    
    5,510Employee benefit plan actuarial gain
net of deferred tax of $411
    
    
    
    
    
    
    
    
    
    
    641
    
    
    
    
    
    
    
    
    
    
    
    641
    
    
    
    641Stock based compensation expense
    
    
    
    
    
    
    581
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    581Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,154
    )
    
    
    
    
    
    
    (3,154
    )Exercise of stock options
    
    
    
    
    
    
    213
    
    
    
    
    
    
    
    
    
    
    
    352
    
    
    
    565Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    40Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,191Balance, December 31, 2009
    
    
    67
    
    
    
    29,041
    
    
    
    (3,348
    )
    
    
    41,529
    
    
    
    (1,694
    )
    
    
    65,595Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,881
    
    
    
    
    
    
    
    6,881
    
    
    
    6,881Employee benefit plan actuarial loss
net of deferred tax of $146
    
    
    
    
    
    
    
    
    
    
    (229
    )
    
    
    
    
    
    
    
    
    
    
    (229
    )
    
    
    (229
    )Stock based compensation expense
    
    
    
    
    
    
    560
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    560Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,621
    )
    
    
    
    
    
    
    (9,621
    )Exercise of stock options
    
    
    
    
    
    
    935
    
    
    
    
    
    
    
    
    
    
    
    540
    
    
    
    1,475Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59
    )
    
    
    (59
    )Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    (154
    )
    
    
    
    
    
    
    
    
    
    
    (154
    )
    
    
    (154
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    6,498Balance, December 31, 2010
    
    $
    67
    
    
    $
    30,536
    
    
    
    ($3,731
    )
    
    $
    38,789
    
    
    
    ($1,213
    )
    
    $
    64,448
 See accompanying 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, 2010, 2009, and 2008
(In thousands)
 2010
    
    
    2009
    
    
    2008Cash Flows from Operating ActivitiesNet income
    
    $
    6,881
    
    
    $
    5,510
    
    
    $
    6,167Adjustments to reconcile net income to net cash
provided by operating activities, net of effects of
acquisitions:Depreciation and amortization
    
    
    3,016
    
    
    
    2,705
    
    
    
    1,891Loss on disposal of property and equipment
    
    
    64
    
    
    
    225
    
    
    
    5Stock-based compensation expense
    
    
    560
    
    
    
    581
    
    
    
    577Deferred income taxes
    
    
    433
    
    
    
    1,011
    
    
    
    64Changes in current assets and liabilities, net of effects
of acquisitions in 2009 and 2008:Trade accounts and other receivables
    
    
    (1,241
    )
    
    
    814
    
    
    
    144Inventories
    
    
    (13,150
    )
    
    
    1,740
    
    
    
    1,682Accounts payable
    
    
    8,120
    
    
    
    (2,252
    )
    
    
    3,022Accrued expenses and other
    
    
    381
    
    
    
    1,872
    
    
    
    (301
    )Net cash provided by operating activities
    
    
    5,064
    
    
    
    12,206
    
    
    
    13,251Cash Flows from Investing ActivitiesPurchases of property and equipment
    
    
    (10,604
    )
    
    
    (5,254
    )
    
    
    (3,176
    )Proceeds from sales of property and equipment
    
    
    1
    
    
    
    41
    
    
    
    Acquisition payment (Note 11)
    
    
    
    
    
    
    (388
    )
    
    
    (3,169
    )Net cash used in investing activities
    
    
    (10,603
    )
    
    
    (5,601
    )
    
    
    (6,345
    )Cash Flows from Financing ActivitiesProceeds from long-term debt
    
    
    300
    
    
    
    
    
    
    
    Cash dividends paid
    
    
    (9,621
    )
    
    
    (3,154
    )
    
    
    (9,322
    )Purchase of treasury stock
    
    
    (59
    )
    
    
    
    
    
    
    (95
    )Proceeds from exercise of stock options
    
    
    1,475
    
    
    
    565
    
    
    
    1,118Net cash used in financing activities
    
    
    (7,905
    )
    
    
    (2,589
    )
    
    
    (8,299
    )Effect of foreign currency exchange rate changes on cash
and
cash equivalents
    
    
    (21
    )
    
    
    40
    
    
    
    (309
    )Increase (decrease) in cash and cash equivalents
    
    
    (13,465
    )
    
    
    4,056
    
    
    
    (1,702
    )Cash and cash equivalents:Beginning
    
    
    17,739
    
    
    
    13,683
    
    
    
    15,385Ending
    
    $
    4,274
    
    
    $
    17,739
    
    
    $
    13,683SUPPLEMENTAL INFORMATIONCash payments for income taxes
    
    $
    4,451
    
    
    $
    438
    
    
    $
    3,692Non-cash actuarial pension liability adjustment
net of tax (Note 8)
    
    $
    (229
    )
    
    $
    641
    
    
    $
    (2,709
    )Non-cash deferred income tax expense (benefit) from
actuarial change to pension liability (Note 8)
    
    $
    (146
    )
    
    $
    411
    
    
    $
    (1,731
    )
 See accompanying notes to consolidated financial statements.
 F - 6




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Nature of Business and Significant Accounting Policies
 Nature of business:
 ® ®
  
    
    Within the wholesale channel, the LACROSSE® and DANNER® brands
are marketed through its employee field sales staff directly to sporting goods and
outdoor retailers, general merchandisers, industrial distributors, and independent shoe
stores.
    
    The government channel provides performance footwear built to meet the demands and
specific requirements for multiple branches of the U.S. military, retail outlets on
military bases, as well as federal, state and other governmental agencies.
    
    Through the direct channels of distribution, the Company operates four Internet
websites for use by consumers and its wholesale partners. The Company also has a factory
store in Portland, Oregon.
    
    International sales are derived through the Companys European subsidiary sales staff,
its Japanese distributor and through various independent distributor and dealer networks
in other countries outside the United States.
 Summary of significant accounting policies:
 Principles of consolidation 
 Use of estimates in the preparation of financial statements 
 Cash and cash equivalents 
 F - 7




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Nature of Business and Significant Accounting Policies, Continued
 Revenue recognition
 Foreign currency translation and foreign currency transactions -
  Fair value of financial instruments
 Trade accounts receivable and allowance for doubtful accounts
 Inventories 
 Property and equipment
 Goodwill
 F - 8




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Nature of Business and Significant Accounting Policies, Continued
  Recoverability and impairment of intangible assets and other long-lived assets
 Product warranties
  December 31,2010
    
    
    2009Accrued product warranties, beginning
    
    $
    1,409
    
    
    $
    1,266Accruals for products sold
    
    
    3,181
    
    
    
    2,890Warranty claims
    
    
    (3,002
    )
    
    
    (2,747
    )Accrued product warranties, ending
    
    $
    1,588
    
    
    $
    1,409
 Stock-based compensation
 Income taxes
 F - 9




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Nature of Business and Significant Accounting Policies, Continued
 Research and development costs 
 Advertising and promotion
 Net income per common share
  December 31,2010
    
    
    2009
    
    
    2008Basic weighted average common shares outstanding
    
    
    6,428,625
    
    
    
    6,303,473
    
    
    
    6,215,049Dilutive stock options
    
    
    161,384
    
    
    
    71,463
    
    
    
    201,682Diluted weighted average common shares
outstanding
    
    
    6,590,009
    
    
    
    6,374,936
    
    
    
    6,416,731
 Segment reporting
 Note 2. Fair Value of Financial Instruments
  F - 10




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 3. Inventories
  December 31,2010
    
    
    2009Raw materials
    
    $
    8,186
    
    
    $
    4,094Work in process
    
    
    637
    
    
    
    388Finished goods
    
    
    31,646
    
    
    
    23,346Subtotal
    
    
    40,469
    
    
    
    27,828Less: provision for obsolete and slow-moving inventories
    
    
    (398
    )
    
    
    (797
    )Total
    
    $
    40,071
    
    
    $
    27,031
 Note 4. Income Tax Matters
  Years Ending December 31,2010
    
    
    2009
    
    
    2008United States
    
    $
    10,935
    
    
    $
    7,983
    
    
    $
    11,536Foreign
    
    
    256
    
    
    
    227
    
    
    
    (1,440
    )Total
    
    $
    11,191
    
    
    $
    8,210
    
    
    $
    10,096
  December 31,2010
    
    
    2009Deferred tax assets:Trade receivable allowances
    
    $
    88
    
    
    $
    147Inventories
    
    
    896
    
    
    
    800Compensation and benefits
    
    
    2,593
    
    
    
    2,615Warranty reserves and other
    
    
    1,344
    
    
    
    849Net operating loss carryforwards
    
    
    1,039
    
    
    
    1,058Valuation allowance
    
    
    (1,022
    )
    
    
    (1,017
    )Total deferred tax assets
    
    
    4,938
    
    
    
    4,452Deferred tax liabilities:Goodwill amortization
    
    
    4,194
    
    
    
    4,194Property and equipment
    
    
    1,859
    
    
    
    1,012Prepaid expenses and other
    
    
    3
    
    
    
    80Total deferred tax liabilities
    
    
    6,056
    
    
    
    5,286Net deferred tax liabilities
    
    $
    (1,118
    )
    
    $
    (834
    )
 F - 11




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 4. Income Tax Matters, Continued
 The components giving rise to the deferred tax assets and deferred tax liabilities described
above have been included in the accompanying consolidated balance sheets as follows (in
thousands):
 December 31,2010
    
    
    2009Current assets
    
    $
    1,614
    
    
    $
    1,503Noncurrent liabilities
    
    
    (2,732
    )
    
    
    (2,337
    )Net deferred tax liabilities
    
    $
    (1,118
    )
    
    $
    (834
    )
 As of December 31, 2010 and 2009, the Company recorded a valuation allowance of $1.0 million
related to the state of Wisconsin net operating loss (NOL) carryforwards, the realization of
which is dependent on having taxable income in Wisconsin in future periods.
 In future periods of earnings, the Company will report income tax expense offset by any further
reductions in the valuation allowance based on an ongoing assessment of the future realization of
the state NOL deferred tax assets.
 The total state NOLs as of December 31, 2010 are approximately $19.9 million, which will expire
as follows: $0.8 million in 2015, $5.3 million in 2016, $9.2 million in 2017, $2.5 million in
2018, $1.6 million in 2019, at $0.5 million in 2020.
 The components of the provision for income taxes are as follows (in thousands):
 December 31,2010
    
    
    2009
    
    
    2008Current:Federal
    
    $
    2,949
    
    
    $
    1,714
    
    
    $
    3,542State
    
    
    866
    
    
    
    431
    
    
    
    323Foreign
    
    
    69
    
    
    
    (372
    )
    
    
    Deferred:Federal
    
    
    496
    
    
    
    545
    
    
    
    379State
    
    
    (31
    )
    
    
    (15
    )
    
    
    43Foreign
    
    
    (39
    )
    
    
    397
    
    
    
    (358
    )Provision for income taxes
    
    $
    4,310
    
    
    $
    2,700
    
    
    $
    3,929
 F - 12




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 4. Income Tax Matters, Continued
 The differences between statutory federal tax rates and the effective tax rates reflected in the
consolidated statements of income are as follows:
 December 31,2010
    
    
    2009
    
    
    2008Statutory federal tax rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State rate, net of federal tax effect
    
    
    5.0
    %
    
    
    5.1
    %
    
    
    3.2
    %Federal & state research and experimentation credits
    
    
    (1.3
    %)
    
    
    (2.0
    %)
    
    
    (2.3
    %)Liability for unrecognized tax benefits
    
    
    0.0
    %
    
    
    (3.1
    %)
    
    
    1.3
    %Foreign rate differential
    
    
    0.0
    %
    
    
    (1.8
    %)
    
    
    1.8
    %Other, net
    
    
    0.8
    %
    
    
    0.7
    %
    
    
    0.9
    %Effective income tax rate
    
    
    38.5
    %
    
    
    32.9
    %
    
    
    38.9
    %
 A reconciliation of the beginning and ending liability for unrecognized income tax benefits
for 2010 and 2009 is shown below (in thousands):
 December 31,2010
    
    
    2009Balance, beginning of year
    
    $
    17
    
    
    $
    349Additions based on tax positions related to the current year
    
    
    6
    
    
    
    8Reductions for tax positions of prior years
    
    
    
    
    
    
    (265
    )Settlements
    
    
    
    
    
    
    (75
    )Balance, end of year
    
    $
    23
    
    
    $
    17
 As of December 31, 2010, the Companys balance of net uncertain tax benefit positions would
reduce the Companys effective income tax rate if recognized.
 The Companys policy is to accrue interest related to potential underpayment of income taxes
within the provision for income taxes. The liability for accrued interest as of December 31,
2010 and December 31,
2009 was insignificant. Interest is computed on the difference between the Companys uncertain
tax benefit positions and the amount deducted or expected to be deducted in the Companys tax
returns.
 The Company files a consolidated U.S. federal income tax return as well as foreign and state tax
returns on a consolidated, combined, or stand-alone basis (depending upon the jurisdiction). The
Company has concluded tax examinations for U.S. federal and Oregon state filings through the tax
year ended December 2007 and December 2006, respectively. Depending on the jurisdiction, the
Company is no longer subject to state examinations by tax authorities other than Oregon for years
prior to the December 2005 and 2006 tax years. The Company is not subject to foreign tax
examinations prior to the year ended December 2008.
 Note 5. Financing Arrangements
 On March 9, 2009, the Company entered into a 3-year extension of the Companys previous line of
credit agreement with Wells Fargo Bank, N.A, which expires June 30, 2012. Amounts borrowed under
the agreement are secured by substantially all of the Companys assets. The maximum aggregate
principal amount of borrowings allowed from January 1 to May 31 is $17.5 million and from June 1
to December 31, the total available is $30 million. There are no borrowing base limitations
under the credit agreement. The credit agreement provides for an interest rate of LIBOR plus
1.75% and an annual commitment fee of
 F - 13




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 5. Financing Arrangements, Continued
 0.15% on the unused balance. At December 31, 2010 and 2009, the Company had no outstanding
balances due under this financing agreement.
 On January 26, 2010, the Company entered into a letter amendment to the line of credit agreement
with Wells Fargo Bank, N.A. which increased the allowable capital expenditures for the years
ended December 31, 2010 and 2009, and increased allowable cash dividends for the year ending
December 31, 2010.
 On September 30, 2010 the Company entered into an additional letter amendment to the line of
credit agreement with Wells Fargo Bank, N.A. which increased the allowable capital expenditures
for the remainder of 2010.
 See Note 15. Subsequent Events, for information regarding a January 31, 2011 amendment to the
line of credit agreement.
 In June 2006, the Company received a grant of $0.2 million and a non-interest bearing loan of
$0.6 million from the Portland Development Commission, which were used to finance certain
leasehold improvements at the Companys Portland distribution facility. The grant is recorded as
deferred revenue and is being amortized as a reduction of operating expenses on a straight-line
basis over five years, which is the estimated useful life of the associated leasehold
improvements. In the third quarter of 2008, the loan was forgiven by the Portland Development
Commission and accordingly, the Company reclassified the remaining unamortized long-term debt to
deferred revenue and will continue to amortize the balance until 2011. Deferred revenue was $0.1
million and $0.2 million at December 31, 2010 and 2009, respectively.
 In May 2010, the Company received a loan of $0.3 million from the State of Oregon to finance certain
equipment
purchases at its new Danner factory which began production in the third quarter of 2010. The
State of Oregon will forgive all, or a portion of the loan, along with all interest accruing on
any portion of the loan forgiven upon meeting employment criteria at the Danner factory. The
employment criteria require the Company to maintain a certain number of employees at the Danner factory
over a consecutive eight quarter period beginning July 1, 2010 and ending no later than September
30, 2014. At that time the remaining loan balance which has not been forgiven will bear interest
at 5.0% per annum and will mature on October 31, 2014. As the Company meets the specified employment
criteria at the Danner factory during a given period, beginning with the fourth quarter of 2010,
a corresponding portion of the loan will be reclassified to deferred revenue and amortized over
the life of the factory lease.
 Note 6. Lease Commitments and Contingencies
 Lease Commitments The Company has real estate operating leases for offices, factory store, and
manufacturing and distribution centers under non-cancelable lease agreements expiring on various
dates through 2025. The total rental expense included in the consolidated statements of income
for the years ended December 31, 2010, 2009, and 2008 is $2.9 million, $2.9 million, and $2.2
million, respectively. The future minimum lease payments required under non-cancelable operating
leases at December 31, 2010 are: $2.6 million in each of years 2011 through 2013, $2.7 million
in 2014, $2.6 million in 2015, and $5.3 million thereafter.
 F - 14




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 6. Lease Commitments and Contingencies, Continued
 Contingencies In the normal course of business, the Company is subject to various claims and
potential litigation. Although the ultimate resolution of legal proceedings cannot be predicted
with certainty, management believes that any such matters that are currently known will not have
a material adverse effect on the Companys results of operations, liquidity or financial
condition.
 Note 7. Stock Options
 The Company has outstanding stock options under certain employee and director stock option plans.
Outstanding employee stock options are subject to the provisions of the 1993 Employee Stock
Incentive Plan, 1997 Employee Stock Incentive Plan, 2001 Stock Incentive Plan, and 2007 Long Term
Incentive Plan. The Board of Directors stock options are subject to the provisions of the 2001
Non-Employee Director Stock Option Plan, as Amended and Restated. Prior to 2006, employee stock
options vested over a period of five years and had a maximum term of ten years. Beginning in
2006, the employee stock option issuances vest over four years and have a maximum term of seven
years. Prior to 2008, the directors stock options vested over a period of five years and had a
maximum term of ten years. Beginning in 2008, the directors stock option issuances vest over
four years and have a maximum term of seven years.
 The Company is required to estimate the fair value of share-based awards on the date of grant
using an option-pricing model. The value of the portion of the award that is ultimately expected
to vest is recognized as expense in the Companys consolidated statements of income over the
requisite service
period for each separately vesting portion of an award. Because share-based compensation expense
is based on awards that are ultimately expected to vest, share-based compensation expense is
reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant
and revised, if necessary, in subsequent periods if actual forfeitures differ from those
estimates.
 To calculate the share-based compensation expense, the Company uses the Black-Scholes
option-pricing model. The Companys determination of fair value of option-based awards on the
date of grant is impacted by the Companys stock price as well as assumptions regarding certain
highly subjective variables. These variables include, but are not limited to, the Companys
expected stock price volatility over the term of the
awards, the anticipated risk-free interest rate, anticipated future dividend yields and the
expected life of the options. The anticipated risk-free interest rate is based on a treasury
instrument whose term is consistent with the expected life of the stock options granted. The
expected volatility, life of options and dividend yield are based on historical experience.
 The following table lists the assumptions used by the Company in determining the fair value of
stock options and the resulting fair value for the years ended December 31, 2010, 2009, and 2008:
 December 31,2010
    
    
    2009
    
    
    2008Expected dividend yield
    
    
    4.1
    %
    
    
    3.7
    %
    
    
    2.9
    %Expected stock price volatility
    
    
    50
    %
    
    
    46
    %
    
    
    31
    %Risk-free interest rate
    
    
    2.4
    %
    
    
    1.4
    %
    
    
    3.2
    %Expected life of options
    
    4.7 years
    
    
    4.6 years
    
    
    4.4 yearsWeighted average fair value of options
    
    $
    4.22
    
    
    $
    3.26
    
    
    $
    3.76
 F - 15




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 7. Stock Options, Continued
 The following table represents stock option activity for the three years ended December 31, 2010:
 Common SharesUnder Options
    
    
    Weighted AverageExercise Price
    
    
    Average RemainingContract LifeOptions outstanding December 31, 2007
    
    
    788,579
    
    
    $
    8.94Granted
    
    
    193,175
    
    
    
    16.72Canceled
    
    
    (43,749
    )
    
    
    13.83Exercised
    
    
    (141,166
    )
    
    
    5.78Options outstanding December 31, 2008
    
    
    796,839
    
    
    
    11.12Granted
    
    
    193,150
    
    
    
    11.46Canceled
    
    
    (97,799
    )
    
    
    12.80Exercised
    
    
    (82,667
    )
    
    
    5.52Options outstanding December 31, 2009
    
    
    809,523
    
    
    
    11.57Granted
    
    
    172,975
    
    
    
    13.32Canceled
    
    
    (55,830
    )
    
    
    13.63Exercised
    
    
    (127,431
    )
    
    
    10.43Options outstanding December 31, 2010
    
    
    799,237
    
    
    $
    11.99
    
    
    4.1 years
 Options outstanding under the option plans on December 31, 2010 by price range are as
follows:
 Outstanding Options
    
    
    Exercisable OptionsWeighted
    
    
    
    
    
    
    
    
    
    
    WeightedNumber of
    
    
    Weighted
    
    
    Average
    
    
    Number of
    
    
    Weighted
    
    
    AverageRange of
    
    Outstanding
    
    
    Average
    
    
    Remaining
    
    
    Outstanding
    
    
    Average
    
    
    RemainingExercise Price
    
    Options
    
    
    Exercise Price
    
    
    Life
    
    
    Options
    
    
    Exercise Price
    
    
    Life< $7.70
    
    
    35,890
    
    
    $
    2.58
    
    
    
    2.0
    
    
    
    35,890
    
    
    $
    2.58
    
    
    
    2.0$7.70 - $10.50
    
    
    104,199
    
    
    
    7.93
    
    
    
    3.4
    
    
    
    90,362
    
    
    
    7.76
    
    
    
    3.1> $10.50
    
    
    659,148
    
    
    
    13.14
    
    
    
    4.4
    
    
    
    322,412
    
    
    
    12.62
    
    
    
    3.6799,237
    
    
    
    11.99
    
    
    
    4.1
    
    
    
    448,664
    
    
    
    10.84
    
    
    
    3.4
 The Companys nonvested stock option activity for the year ended December 31, 2010 is as
follows:
 Number ofSharesNonvested stock options at beginning of year
    
    
    380,382Vested
    
    
    (146,954
    )Canceled
    
    
    (55,830
    )Granted
    
    
    172,975Nonvested stock options at end of year
    
    
    350,573
 Shares available for future stock grants to employees and directors under existing plans
were approximately 589,000 at December 31, 2010. The aggregate intrinsic value of options
outstanding at December 31, 2010 was $3.7 million, and the aggregate intrinsic value of
exercisable options was $2.6 million. The total intrinsic value of options exercised during
2010, 2009, and 2008 was $0.8 million, $0.4 million, and $0.4 million, respectively. At December
31, 2010, there was approximately $0.4 million of unrecognized compensation cost related to
share-based payments to be recognized over a weighted-average period of approximately 1.1 years.
The total fair value of options vesting in 2010 and 2009 was approximately $0.6
 F - 16




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 7. Stock Options, Continued
  Note 8. Compensation and Benefit Agreements
   Pension Benefits
    
    
    Other BenefitsSummary of pension and other postretirement
    
    December 31,
    
    
    December 31,benefit plans (in thousands):
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Changes in benefit obligations:Obligations at beginning of year
    
    $
    16,337
    
    
    $
    15,586
    
    
    $
    275
    
    
    $
    279Interest cost
    
    
    908
    
    
    
    944
    
    
    
    16
    
    
    
    17Benefits paid
    
    
    (1,137
    )
    
    
    (1,088
    )
    
    
    (22
    )
    
    
    (21
    )Actuarial losses
    
    
    877
    
    
    
    895
    
    
    
    
    
    
    
    Obligations at end of year
    
    $
    16,985
    
    
    $
    16,337
    
    
    $
    269
    
    
    $
    275Changes in plan assets:Fair value of assets at beginning of year
    
    $
    11,932
    
    
    $
    10,021
    
    
    $
    
    
    
    $
    Actual return on assets
    
    
    1,290
    
    
    
    2,405
    
    
    
    
    
    
    
    Company contributions
    
    
    784
    
    
    
    594
    
    
    
    22
    
    
    
    21Benefits paid
    
    
    (1,137
    )
    
    
    (1,088
    )
    
    
    (22
    )
    
    
    (21
    )Fair value of assets at end of year
    
    $
    12,869
    
    
    $
    11,932
    
    
    $
    
    
    
    $
    Funded status at end of year:Plan assets less than obligations
    
    $
    (4,116
    )
    
    $
    (4,405
    )
    
    $
    (297
    )
    
    $
    (290
    )Unrecognized loss
    
    
    5,421
    
    
    
    5,046
    
    
    
    28
    
    
    
    15Accrued benefit (cost)
    
    $
    1,305
    
    
    $
    641
    
    
    $
    (269
    )
    
    $
    (275
    )Total compensation and benefits liabilities
    
    $
    4,116
    
    
    $
    4,405
    
    
    $
    269
    
    
    $
    275
  December 31,2010
    
    
    2009Pension benefits
    
    $
    4,116
    
    
    $
    4,405Other benefits
    
    
    269
    
    
    
    275Total compensation and benefits
    
    $
    4,385
    
    
    $
    4,680
 F - 17




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 8. Compensation and Benefit Agreements, Continued
  AccumulatedPrior
    
    
    
    
    
    
    
    
    
    
    Deferred
    
    
    OtherService
    
    
    Unrecognized
    
    
    
    
    
    
    Tax
    
    
    ComprehensiveCost
    
    
    (Gains)/Losses
    
    
    Total
    
    
    Amount
    
    
    LossBalance, December 31, 2007
    
    $
    108
    
    
    $
    1,550
    
    
    $
    1,658
    
    
    $
    (647
    )
    
    $
    1,011Incurred in the current year
    
    
    
    
    
    
    4,454
    
    
    
    4,454
    
    
    
    (1,736
    )
    
    
    2,718Recognized as component of
net periodic income
    
    
    (14
    )
    
    
    
    
    
    
    (14
    )
    
    
    5
    
    
    
    (9
    )Balance, December 31, 2008
    
    
    94
    
    
    
    6,004
    
    
    
    6,098
    
    
    
    (2,378
    )
    
    
    3,720Incurred in the current year
    
    
    
    
    
    
    (764
    )
    
    
    (764
    )
    
    
    299
    
    
    
    (465
    )Recognized as component of
net periodic cost
    
    
    (94
    )
    
    
    (194
    )
    
    
    (288
    )
    
    
    112
    
    
    
    (176
    )Balance, December 31, 2009
    
    
    
    
    
    
    5,046
    
    
    
    5,046
    
    
    
    (1,967
    )
    
    
    3,079Incurred in the current year
    
    
    
    
    
    
    528
    
    
    
    528
    
    
    
    (206
    )
    
    
    322Recognized as component of
net periodic cost
    
    
    
    
    
    
    (153
    )
    
    
    (153
    )
    
    
    60
    
    
    
    (93
    )Balance, December 31, 2010
    
    $
    
    
    
    $
    5,421
    
    
    $
    5,421
    
    
    $
    (2,113
    )
    
    $
    3,308To be recognized as component of
net periodic cost in 2011
    
    $
    
    
    
    $
    167
  December 31,2010
    
    
    2009Pension actuarial loss, net of tax
    
    $
    3,308
    
    
    $
    3,079Foreign
currency translation adjustment
    
    
    423
    
    
    
    269Accumulated other comprehensive loss
    
    $
    3,731
    
    
    $
    3,348
 F -18




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 8. Compensation and Benefit Agreements, Continued
  Pension Benefits December 31,
    
    
    Other Benefits December 31,2010
    
    
    2009
    
    
    2008
    
    
    2010
    
    
    2009
    
    
    2008Cost (income) recognized during the year:Interest cost
    
    $
    908
    
    
    $
    944
    
    
    $
    951
    
    
    $
    16
    
    
    $
    17
    
    
    $
    17Expected return on plan assets
    
    
    (940
    )
    
    
    (798
    )
    
    
    (1,095
    )
    
    
    
    
    
    
    
    
    
    
    Amortization of loss
    
    
    153
    
    
    
    194
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    Curtailment
    
    
    
    
    
    
    146
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net periodic cost (income)
    
    $
    121
    
    
    $
    486
    
    
    $
    (130
    )
    
    $
    16
    
    
    $
    17
    
    
    $
    17
 Pension Benefits December 31,
    
    

Other Benefits December 31,2010
    
    
    2009
    
    
    2008
    
    
    2010
    
    
    2009
    
    
    2008Assumptions used in determining net periodic cost (income):Discount rate
    
    
    5.25
    %
    
    
    5.75
    %
    
    
    6.25
    %
    
    
    5.25
    %
    
    
    5.75
    %
    
    
    6.25
    %Expected return on plan assets
    
    
    8.0
    %
    
    
    8.0
    %
    
    
    8.0
    %
    
    
    *
    
    
    
    *
    
    
    
    *
    Target
    
    
    Percentage of Plan AssetsAllocation
    
    
    December 31,Asset Category
    
    2011
    
    
    2010
    
    
    2009Equity securities  mutual funds
    
    
    50%-60
    %
    
    
    57
    %
    
    
    56
    %Debt securities  mutual funds
    
    
    40%-50
    %
    
    
    43
    %
    
    
    44
    %Total
    
    
    
    
    
    
    100
    %
    
    
    100
    %
  F -19




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 8. Compensation and Benefit Agreements, Continued
  Year(s)
    
    Pension Benefits
    
    
    Other Benefits2011
    
    $
    1,090
    
    
    $
    232012
    
    
    1,075
    
    
    
    232013
    
    
    1,070
    
    
    
    242014
    
    
    1,052
    
    
    
    242015
    
    
    1,094
    
    
    
    252016-2020
    
    
    5,675
    
    
    
    120
    
    
    Quoted prices for similar assets in active markets;
    
    Quoted prices for identical or similar assets in inactive markets;
    
    Inputs other than quoted prices that are observable for the asset;
    
    Inputs that are derived principally from or corroborated by observable market data by
correlation or other means.
    F -20




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 8. Compensation and Benefit Agreements, Continued
  (in thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalEquity securities  domestic mutual funds
    
    $
    5,450
    
    
    $
    
    
    
    $
    
    
    
    $
    5,450Equity securities  international mutual funds
    
    
    1,924
    
    
    
    
    
    
    
    
    
    
    
    1,924Debt securities  mutual funds
    
    
    5,495
    
    
    
    
    
    
    
    
    
    
    
    5,495Total
    
    $
    12,869
    
    
    $
    
    
    
    $
    
    
    
    $
    12,869
  (in thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalEquity securities  domestic mutual funds
    
    $
    4,830
    
    
    $
    
    
    
    $
    
    
    
    $
    4,830Equity securities  international mutual funds
    
    
    1,795
    
    
    
    
    
    
    
    
    
    
    
    1,795Debt securities  mutual funds
    
    
    5,307
    
    
    
    
    
    
    
    
    
    
    
    5,307Total
    
    $
    11,932
    
    
    $
    
    
    
    $
    
    
    
    $
    11,932
   Note 9. Significant Risks and Uncertainties
 Concentrations of Credit Risk  Cash 
 Concentration of Credit Risk  Accounts Receivable 
 F - 21




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 10. Enterprise-wide Disclosures
  Years Ended December 31,Net sales:
    
    2010
    
    
    2009
    
    
    2008Work Market
    
    $
    94,751
    
    
    $
    88,200
    
    
    $
    74,902Outdoor Market
    
    
    55,791
    
    
    
    50,952
    
    
    
    53,054Total
    
    $
    150,542
    
    
    $
    139,152
    
    
    $
    127,956
  Years Ended December 31,Net sales:
    
    2010
    
    
    2009
    
    
    2008United States
    
    $
    141,987
    
    
    $
    131,897
    
    
    $
    120,039Foreign Countries
    
    
    8,555
    
    
    
    7,255
    
    
    
    7,917Total
    
    $
    150,542
    
    
    $
    139,152
    
    
    $
    127,956
   Note 11. Acquisitions
   F - 22




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##### Table of Contents



LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 12. Quarterly Selected Financial Data (Unaudited)
  2010Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4Net sales
    
    $
    34,227
    
    
    $
    26,553
    
    
    $
    37,682
    
    
    $
    52,081Gross profit
    
    
    13,768
    
    
    
    10,863
    
    
    
    14,016
    
    
    
    20,483Operating income
    
    
    2,731
    
    
    
    195
    
    
    
    2,054
    
    
    
    6,450Income tax provision
    
    
    1,047
    
    
    
    61
    
    
    
    857
    
    
    
    2,345Net income
    
    
    1,662
    
    
    
    101
    
    
    
    1,146
    
    
    
    3,973Basic income per common share
    
    $
    0.26
    
    
    $
    0.02
    
    
    $
    0.18
    
    
    $
    0.62Diluted income per common share
    
    $
    0.25
    
    
    $
    0.02
    
    
    $
    0.17
    
    
    $
    0.60
 2009Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4Net sales
    
    $
    25,910
    
    
    $
    29,976
    
    
    $
    40,761
    
    
    $
    42,505Gross profit
    
    
    9,831
    
    
    
    12,218
    
    
    
    15,721
    
    
    
    16,320Operating income (loss)
    
    
    (1,038
    )
    
    
    1,990
    
    
    
    3,906
    
    
    
    3,727Income tax provision (benefit)
    
    
    (398
    )
    
    
    315
    
    
    
    1,450
    
    
    
    1,333Net income (loss)
    
    
    (692
    )
    
    
    1,658
    
    
    
    2,221
    
    
    
    2,323Basic income (loss) per common share
    
    
    ($0.11
    )
    
    $
    0.26
    
    
    $
    0.35
    
    
    $
    0.37Diluted income (loss) per common share
    
    
    ($0.11
    )
    
    $
    0.26
    
    
    $
    0.35
    
    
    $
    0.36
 Note 13. Cash Dividends
    Note 14. Recent Accounting Pronouncements
  F - 23




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LACROSSE FOOTWEAR, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 15. Subsequent Events
   F - 24