# UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

# FORM 10-K

|[X]   | ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the
fiscal year ended December 31, 2003OR                
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------
|[   ] | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the
transition period from ___________ to ___________

# Commission file number:  0-238001

LaCrosse Footwear, Inc.
(Exact name of registrant as specified in its charter)

|                                                                                      |                                                
|------------------------------------------------------------------------------------- | -----------------------------------------------
|Wisconsin(State or other jurisdiction of incorporation or organization)               | 39-1446816
(I.R.S. Employer Identification No.)
|18550 NE Riverside Parkway, Portland, Oregon
(Address of principal executive offices) | 97230
(Zip Code)                               

Registrant's telephone number,
including area code:   (503) 766-1010

Securities registered pursuant to
Section 12(b) of the Act:   None

|Securities
registered pursuant to Section 12(g) of the Act: | 
|----------------------------------------------------------- | 

# Title of ClassCommon
Stock, $.01 par value

Indicate by check mark  whether  the
 registrant  (1) has filed all  reports  required to be filed by Section 13 or 15(d) of
the  Securities  Exchange Act of 1934 during the preceding 12 months (or for such shorter
 period that the registrant was required to file such reports),  and (2) has been subject
to such filing  requirements  for the past 90 days.      Yes   [X]        No   [   ]

Indicate by check mark if disclosure
of delinquent  filers  pursuant to Item 405 of Regulation S-K is not contained herein,
 and will not be contained,  to the best of  registrant's  knowledge,  in definitive
 proxy or  information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 22b-2 of the Act).      Yes   [X]        No   [   ]

Aggregate  market value of the
voting and non-voting  common equity held by nonaffiliates of the registrant at June 27,
2003:  $8,000,222.

Number of shares of the registrant's
common stock outstanding at March 3, 2004:  5,880,392  shares.

---

# DOCUMENTS INCORPORATED
BY REFERENCE

Portions of the Proxy  Statement for
2004 Annual Meeting of  Shareholders  (to be filed with the  Commission  under Regulation
 14A  within  120 days  after the end of the  registrant's  fiscal  year and,  upon such
 filing,  to be incorporated by reference into Part III).

2

---

# TABLE OF CONTENTS

|                                            |                                                             | Page
|------------------------------------------- | ----------------------------------------------------------- | ----
|PART I                                      |                                                            
|ITEM 1                                      | BUSINESS                                                    | 1   
|ITEM 2                                      | PROPERTIES                                                  | 9   
|ITEM 3                                      | LEGAL PROCEEDINGS                                           | 10  
|ITEM 4                                      | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS         | 10  
|PART II                                    
|ITEM 5                                      | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER 
|                                            | MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES           | 10  
|ITEM 6                                      | SELECTED FINANCIAL DATA                                     | 11  
|ITEM 7                                      | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
|                                            | AND RESULTS OF OPERATIONS                                   | 11  
|ITEM 7A                                     | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  | 20  
|ITEM 8                                      | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                 | 21  
|ITEM 9                                      | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON           
|                                            | ACCOUNTING AND FINANCIAL DISCLOSURE                         | 22  
|ITEM 9A                                     | CONTROLS AND PROCEDURES                                     | 22  
|PART III                                   
|ITEM 10                                     | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT          | 22  
|ITEM 11                                     | EXECUTIVE COMPENSATION                                      | 23  
|ITEM 12                                     | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND        
|                                            | MANAGEMENT AND RELATED STOCKHOLDER MATTERS                  | 23  
|ITEM 13                                     | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS              | 23  
|ITEM 14                                     | PRINCIPAL ACCOUNTANT FEES AND SERVICES                      | 24  
|PART IV                                    
|ITEM 15                                     | EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS       
|                                            | ON FORM 8-K                                                 | 25  
|SIGNATURES                                  | 26                                                         
|EXHIBITS FILED AS PART OF FORM 10-K         | Exhibit Index                                              
|FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | F-1 to F-22                                                

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# PART I

|Item 1. | Business
|------- | --------

Unless the context requires
otherwise, references in this Annual Report to we, us or
our refer collectively to LaCrosse Footwear, Inc. and its subsidiaries.

# General

LaCrosse Footwear, Inc.
(LaCrosse or the Company) is a leader in the design, development,
marketing and manufacturing of premium quality protective footwear and clothing for the
sporting and outdoor, farm and agriculture, general utility and occupational markets. The
Company markets its products primarily under the LACROSSE®, RAINFAIR® , and
DANNER® brands through selected distributors and independent representatives.
LaCrosses products are characterized by innovative, functional design; durability;
performance features; and quality materials. Product styling is relatively unaffected by
changing fashion trends.

Historically, LaCrosse has produced
footwear primarily of rubber or vinyl, some of which includes leather or fabric uppers. In
March 1994, the Company acquired the business of Danner Shoe Manufacturing Co.
(Danner), a producer of premium quality leather footwear for the sporting and
occupational markets, which is sold primarily under the DANNER® brand. Danners
legal name was changed to Danner, Inc. during 2002. To broaden the base of business in the
protective clothing area, in May 1996, a 50%-owned subsidiary of the Company purchased the
assets of Rainfair, Inc. (Rainfair) of Racine, Wisconsin. Rainfair designs and
markets rainwear, footwear and other protective clothing generally for the occupational
markets, which are sold primarily under the RAINFAIR® brand. In January 1998, the Company acquired the remaining 50% of Rainfair that it
did not own, thereby making it a wholly owned subsidiary (and, subsequently, Rainfair was
merged into the Company). In October 2002, the Company changed the name of its Rainfair
division to LaCrosse Safety and Industrial. In 1997, the Company acquired the LAKE OF THE
WOODS® trade name. LAKE OF THE WOODS® was a designer, manufacturer and marketer of
branded leather footwear for both the outdoor and occupational markets. From 1997 to 1999,
the Company transitioned the LAKE OF THE WOODS® product offerings to the LACROSSE®
brand where leather boots have become a significant product offering for the LACROSSE®
brand.

The Company was incorporated in
Wisconsin in 1983 but traces its history to 1897 when La Crosse Rubber Mills Company was
founded. Current management purchased LaCrosses predecessor from the heirs of the
founding family and other shareholders in 1982.

# Strategy

The Companys business strategy
is to continue (i) to build, position and capitalize on the strength of established
brands, (ii) to develop innovative products and relevant technologies that will
differentiate its products, footwear and rainwear, (iii) to offer superior customer
service and (iv) to expand and enhance its strong distribution network of sales
representatives and retail and industrial customers.

1

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# Brand Positioning

Within the retail channels of
distribution, the Company markets footwear and rainwear under the well-established
DANNER® and LACROSSE® brands. Each brand is positioned differently in the
marketplace to capitalize on differences in end user expectations for performance, price
and end-use. The DANNER® brand represents the highest level of performance, with a
select line of high quality, feature-driven leather footwear products at premium prices.
The LACROSSE® brand has a more extensive product line including rubber, vinyl and
leather footwear, distributed to a broad base of independent retailers.

The Company sells products through
the safety and industrial distributor channel principally under the LACROSSE® and
RAINFAIR® brands. The brands are positioned as complementary, with the LACROSSE®
brand including a full performance range of rubber and vinyl footwear, while the
RAINFAIR® brand includes an extensive line of rainwear and protective clothing.

# Products

The Companys brand product
offering includes these major categories:

Rubber/Vinyl Footwear

The Companys rubber/vinyl
footwear line is the most extensive of its product categories with product offerings
covering the sporting and outdoor and occupational markets. The Company markets
rubber/vinyl footwear mainly under the LACROSSE® brand. The product line ranges from
low cost vinyl-molded products to high performance, handcrafted rubber products directed
to specific recreational and occupational market niches.

In addition, the Company is a leader
in rubber bottom, leather/fabric upper footwear for extreme cold and other high
performance applications. A rubber bottom boot with a leather or fabric upper combines the
waterproof qualities and flexibility of rubber footwear with the fit and support of a
laced leather boot.

Leather Footwear

The Company markets leather footwear
under two brand names, DANNER® and LACROSSE®. The DANNER® products consist of
premium quality sporting, occupational and recreational boots available in numerous
styles, many of which feature the stitch-down manufacturing process which provides
outstanding support and built-in comfort for the owner. Danner was the first footwear
manufacturer to include a waterproof, breathable GORE-TEX® liner (seam taped insert)
in leather boots, and it continues to include that liner in over 90% of its products. The
LACROSSE® brand markets a line of indoor and outdoor work boots and hikers appealing
to consumers who desire durability and comfort.

Rainwear and Protective
Clothing

Rainwear and footwear are
complementary products in many occupational and outdoor environments. LaCrosse Safety and
Industrial offers a broad line of quality rainwear and protective clothing appealing to
those workers in utility, construction, chemical processing, and other groups
traditionally purchasing through industrial distributors. While most of the garments are
developed for general workwear, a number are constructed for specific applications such as
acid and flame environments. Products bearing the RAINFAIR® brand are recognized in
the industry for their durability, quality and heritage. In recent years, the brand name
has been extended to include other protective garments such as aprons and extreme cold
weather clothing.

2

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LaCrosse also sells footwear
accessories such as liners, wader suspenders and socks. During 2003, the Company offered
approximately 500 styles of footwear and rainwear.

# Product Design and
Development

The Companys product design and
development ideas originate within the Company and through communication with its
customers and suppliers based upon perceived customer or consumer needs or new
technological developments in footwear, rainwear and materials. Consumers, sales personnel
and suppliers provide information to the Companys marketing and product development
personnel during the concept, development and testing of new product. New product needs
generally can be related to functional or technical characteristics. The final aesthetics
of the product are determined by marketing and product development personnel, at times in
conjunction with outside design consultants. Once a product design is approved for
production, responsibility shifts to manufacturing or outside sourcing facilities for
pattern development and commercialization.

# Customers, Sales and
Distribution

The Company markets its brands and
associated  products through two separate  channels of distribution:  retail and
industrial.

Within the retail market, the
LACROSSE® and DANNER® brands are marketed through independent representative
groups. For both brands, some of the independent agents are multi-line representative
groups and some are dedicated to the Companys products. A national account sales
team complements the sales activities for the brands.

The Companys industrial
products are distributed through the LaCrosse Safety and Industrial Division using
independent representatives and a national account team.

The Companys products are sold
directly to more than 4,100 accounts, including sporting goods/outdoor retailers,
general merchandise and independent shoe stores, wholesalers, industrial distributors,
catalog operations and the United States government. The Companys customer base is
also diversified as to size and location of customer and markets served. As a result, the
Company is less dependent upon a few customers. However, the recent trend of consolidating
retail and safety and industrial channels into regional, super regional, and national
businesses is having an effect of consolidating the customer base. As consolidation
continues, dependency on fewer, consolidated customers will increase.

The Company currently operates four
Internet websites for use by consumers and customers. The primary purpose of the three
consumer-oriented websites at this time is to provide product and Company information, and
in the case of the DANNER® and LACROSSE® websites, to sell product to consumers
who choose to purchase direct from the manufacturer. The Company also operates
business-to-business websites, for the DANNER®, LaCrosse Safety and Industrial and
LACROSSE® divisions that provide product ordering capability and critical information
to dealers about the status of pending orders, inventory levels, shipping and other data.

3

---

The Company operates two factory
outlet stores whose primary purpose is disposal of slow moving merchandise and factory
seconds. One of these stores is located at the manufacturing facility in Portland, Oregon.

The Company also derives royalty
income from Danner Japan Ltd., a Japanese joint venture in which the Company has a 12%
ownership interest. Danner Japan Ltd. distributes products in Japan under the DANNER®
brand that are manufactured by others overseas, and sells products manufactured in the
Portland, Oregon factory. These sales amounts are included in the category of revenue of
foreign countries in our annual report.

# Advertising and
Promotion

A majority of the Companys
marketing expenditures are for promotional materials, cooperative advertising and
point-of-sale advertising designed to assist dealers and distributors in the sale of the
Companys products. The Company customizes advertising and marketing materials and
programs for each of its brands in each of its distribution channels, which allows it to
emphasize those features of its products that have special appeal to the applicable
targeted consumer.

The Company advertises and promotes
its products through a variety of methods including national and regional print
advertising, national television advertising, public relations, point-of-sale displays,
catalogs and packaging, product licensing agreements and sponsorships, out-of-home
advertising, online promotion, and through co-promotion with dealers.

# Manufacturing and
Sourcing

Traditionally, the Company
manufactured the majority of its rubber, leather and vinyl products in its United States
manufacturing facilities. During the last decade, the quality and timeliness of product
provided by offshore sources have improved substantially. This has resulted in the
consumer shifting its allegiance from domestically produced product to product that offers
the best value regardless of origin of manufacture. The Company outsourced over 70% of the
product it sold in 2003 and 2002 and expects that number to increase over the next couple
of years.

The Company sources a majority of its
footwear and protective clothing from a variety of foreign manufacturing facilities,
primarily located in the Asian-Pacific region. The Company has established criteria for
its third-party manufacturers in order to monitor product quality and labor practices.
Sources of capacity related to these products are available worldwide and management has
identified alternative sources for these products.

The raw materials used in production
of the Companys products are quality leather, crude rubber and oil-based vinyl
compounds for vinyl footwear and protective clothing products. Since these products are
all available on a global basis, the Company has no reason to believe these raw materials
will not continue to be available at competitive prices.

4

---

The Company, or its contract
manufacturers, purchases GORE-TEX® waterproof fabric directly from W.L. Gore and
Associates (Gore), for both the LaCrosse and Danner footwear. Gore has
traditionally been Danners single largest supplier, in terms of dollars spent on raw
materials. Approximately 90% of Danners footwear, in terms of number of styles
offered, incorporate GORE-TEX® waterproof fabric. Agreements with Gore may be
terminated by either party upon 90 days written notice. The Company considers its
relationship with Gore to be good. GORE-TEX® is a registered trademark of W.L. Gore
& Associates, Inc.

# Backlog

At December 31, 2003, the Company had
unfilled orders from its customers in the amount of approximately $12.3 million
compared to $8.0 million at December 31, 2002. The increase in backlog is primarily
the result of a $4.9 million Government Services Administration, GSA, delivery
order to supply boots to the U.S. military. All orders at December 31, 2003 are
expected to be filled during 2004. Because a major portion of the Companys orders
are placed in January through June for delivery in June through November, the
Companys backlog is lowest during the fourth quarter and peaks during the second
quarter. Factors other than seasonality, such as pending large national account orders or
United States government orders, could have a significant impact on the Companys
backlog. Therefore, backlog at any one point in time may not be indicative of future
results. Generally, orders may be cancelled by customers prior to shipment without
penalty.

# Competition

The various categories of the
protective footwear, rainwear and protective clothing markets in which the Company
operates are highly competitive. The Company competes with numerous other manufacturers,
many of whom have substantially greater financial, distribution and marketing resources
than the Company. Because the Company has a broad product line, its competition varies by
product category. The Company has two to three major competitors in most of its rubber and
vinyl product lines, at least four major competitors in connection with the Companys
sporting footwear, at least six major competitors in connection with hiking boots and at
least four major competitors in connection with its occupational footwear, rainwear and
protective clothing.

LaCrosse believes it maintains a
competitive position compared to its competitors through the strength of its brands; its
attention to quality and the delivery of value; its position as an innovator in common
product segments; its record of delivering products on a timely basis; its strong customer
relationships and, in some cases, the breadth of its product line. Some of the
Companys competitors compete mainly on the basis of price.

Product innovation in vinyl footwear
is of lesser importance in the markets in which the Company competes. Delivery, service,
and price are the primary bases on which the Company competes. Although the manufacturing
process for vinyl product is less labor intensive than for rubber footwear, lower offshore
labor rates and costs create a ceiling on price. As a result, the Company is continually
seeking process improvements and cost reductions in the manufacturing and distribution of
vinyl footwear.

5

---

Leather boot manufacturers and
suppliers, some of which have strong brand name recognition in the markets they serve, are
the major competitors of the Companys DANNER® and LACROSSE® leather product
line. These competitors manufacture domestically and/or import products from offshore.
Domestically manufactured DANNER® brand products effectively compete with other
domestically produced products, but are generally at a price disadvantage against
lower-cost imported products, because offshore manufacturers generally pay significantly
lower labor costs. Danner focuses on the premium quality, premium price segment of the
market in which product function, design, comfort and quality, continued technological
improvements, brand awareness, timeliness of product delivery and product pricing are all
important. The Company believes, by attention to these factors, that the DANNER®
footwear line has maintained a strong competitive position in its current market niches.
In leather boots, the LACROSSE® brand, because of its market position, sources product
from offshore. Therefore, it competes with other distributors with products sourced from
offshore locations.

Several rubber boot manufacturers
with strong brand recognition in their respective markets are the major competitors to
LACROSSE®, though the Company occupies a favorable niche in the higher price segments
of the sporting and occupational rubber boot markets. The Companys history of
manufacturing quality rubber boots has provided a foundation to compete effectively. In
2003, the Company introduced the AlphaTM line of neoprene and rubber boots, helped to
maintain the Companys position as a quality supplier of rubber footwear. The Company
also makes sporting waders using neoprene uppers and rubber boots, which are
premium-priced and among the highest-performance models available. Other manufacturers
offer similar products, some at lower prices and quality levels, against which the Company
must effectively compete. The Company believes that its superior quality products,
innovation and design leadership, coupled with solid delivery and customer support will
enable it to effectively compete in this market.

# Employees

As of December 31, 2003, the Company
had approximately 330 employees, all located in the United States. Approximately
30 of the Companys employees at the La Crosse, Wisconsin facility are
represented by the United Steel Workers of America under a three-year collective
bargaining agreement which expires in September 2006, and approximately 120 of the
Companys employees at the Portland, Oregon facility are represented by the United
Food & Commercial Workers Union under a collective bargaining agreement which
expires in January 2006. The Company has approximately 60 employees at a
manufacturing facility located in Claremont, New Hampshire that is not represented by a
union. The Company considers its employee relations to be good.

6

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# Trademarks and Trade
Names; Patents

The Company owns United States
federal registrations for several of its marks, including LACROSSE®, DANNER®, RED
BALL®, RAINFAIR®, LACROSSE and stylized Indianhead design that serve as the
Companys logo, RAINFAIR and stylized horse design that serve as Rainfairs
logo, FIRETECH®, ICE KING®, ICEMAN®, AIRTHOTIC®, GAMEMASTER®, TERRA
FORCETM, HYPER-DRI®, CAMOHIDETM and RED BALL JETS®. The Company generally attempts
to register a trademark relating to a products name only where the Company intends
to heavily promote the product or where the Company expects to sell the product in large
volumes. However, the Company relies on common law trademark rights for all unregistered
brands. The Company defends its trademarks and trade names against infringement to the
fullest extent practicable under the law. Other than registrations relating to the
LACROSSE®, DANNER®, and RAINFAIR® names, the Company does not believe any
trademark is material to its business.

The Company is not aware of any
material conflicts concerning its marks or its use of marks owned by other companies.

The Company owns several patents that
improve its competitive position in the marketplace, including the DANNER BOB®
outsole; TERRA FORCETM, a three-shank cement and stitch-down manufacturing process; and a
patent for its AIRTHOTIC® ventilated arch support that fits under the heel.

# Seasonality/Working
Capital

As has traditionally been the case,
the Companys sales in 2003 were higher in the last two quarters of the year than in
the first two quarters and, to satisfy shipping requirements, the Company places orders
for sourced product during the first quarter with delivery to the Company starting in the
second quarter. As a result, inventories generally peak early in the third quarter. The
Company expects these trends to continue. The Company has historically financed operations
with cash generated from operations, long-term lending arrangements and short-term
borrowings under a line of credit. The Company requires working capital to support
fluctuating accounts receivable and inventory levels caused by our seasonal business
cycle. The Companys working capital needs are the lowest in the first quarter and
highest from August through November in each year.

# Foreign Operations and
Export Sales

Other than the Companys 12%
equity interest in Danner Japan, Ltd., the Company does not have any foreign operations.
International sales accounted for less than 4% of the Companys net sales in 2003.

# Environmental Matters

The Company and the industry in which
it competes are subject to environmental laws and regulations concerning emissions to the
air, discharges to waterways and the generation, handling, storage, transportation,
treatment and disposal of waste materials. The Companys policy is to comply with all
applicable environmental, health and safety laws and regulations. These laws and
regulations are constantly evolving and it is difficult to predict accurately the effect
they will have on the Company in the future. Compliance with applicable environmental
regulations and controls has not had, nor are they expected to have in 2004, any material
impact on the capital expenditures, earnings or competitive position of the Company.

7

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# Executive Officers of
the Registrant

The following table sets forth certain
information, as of March 3, 2004, regarding the executive officers of the Company.

|Name                | Age | Position                                            
|------------------- | --- | ----------------------------------------------------
|George W. Schneider | 81  | Chairman of the Board and Director                  
|Joseph P. Schneider | 44  | President, Chief Executive Officer and Director     
|David P. Carlson    | 48  | Executive Vice President and Chief Financial Officer

George W. Schneiderwas elected to
the Board of Directors of the Companys predecessor in 1968 and was the principal
investor and motivating force behind the management buyout of the Companys
predecessor in 1982. Since 1982, Mr. Schneider also has served as Chairman of the Board of
the Company.

Joseph P. Schneiderhas served as a
director of the Company since March 1999 and as President and Chief Executive Officer
since August 2000. Prior thereto, Mr. Schneider served as Executive Vice President-Danner
of the Company since May 1999, as President and Chief Executive Officer of Danner since
October 1998, as Vice President of the Company since June 1996, as President and Chief
Operating Officer of Danner since December 1997, as Executive Vice President and Chief
Operating Officer of Danner since June 1996 and as Vice President - Retail Sales
of the Company from January 1993 until June 1996. From 1985, when he joined the Company,
until January 1993, Mr. Schneider held various sales management positions.

David P. Carlsonwas named Executive
Vice President in August 2001 and Chief Financial Officer of the Company in
April 2002. Mr. Carlson has also served as President and Chief Operating Officer of
Danner from August 2000 to August 2001. Prior thereto, he served as Vice
President-Finance and Chief Financial Officer of Danner from March 1998, when he
joined Danner, until August 2000. Prior to joining Danner, Mr. Carlson was the Vice
President-Finance of The Palace Inc., an Internet software company, from 1996 to 1998.
Prior thereto, he was the Vice President-Controller of Cadre Technologies Inc., a global
provider of software development tools, from 1983 to 1996.

Joseph P. Schneider is the son of
George W. Schneider. None of the other directors or executive officers are related to each
other. The term of office of each of the executive officers expires at the annual meeting
of shareholders.

8

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|Item 2. | Properties
|------- | ----------

The following table sets forth
certain information, as of December 31, 2003, relating to the Companys principal
facilities.

|              | Properties |         | 
|------------- | ---------- | ------- | 
|
|Portland, OR  | Leased(1)  | 55,000  | 
|Portland, OR  | Leased(2)  | 36,000  | 
|La Crosse, WI | Leased(3)  | 212,000 | 
|La Crosse, WI | Leased(4)  | 230,000 | 
|La Crosse, WI | Leased     | 11,000  | 
|Claremont, NH | Owned      | 150,000 | 
|Racine, WI    | Leased(5)  | 104,700 | 

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|(1) | The
lease for this facility expires in 2007.
|--- | --------------------------------------------

|(2) | The
lease for this facility expires in March 2009, but the Company has the
               option to extend the term for an additional five years.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The
lease for this building expires in 2007. Approximately 8% 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.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | The
lease for this facility was entered into in May 1996 and expires in May
               2006. At December 31, 2003 and 2002, the Company has recorded a liability
for                the cost of the estimated market lease rate and length of time needed
to sublet                the facility.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Based on present plans, management
believes that the Companys current facilities will be adequate to meet the
Companys anticipated needs for at least the next two years.

9

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|Item 3. | Legal Proceedings
|------- | -----------------

From time to time, the Company, in
the normal course of business, is involved in various other claims and legal actions
arising out of its operations. The Company does not believe that the ultimate disposition
of any currently pending claims or actions would have a material adverse effect on the
Company or its financial condition.

|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

No matters were submitted to a vote
of shareholders during the quarter ended December 31, 2003.

# PART II

|Item 5. | Market
for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
|------- | ------------------------------------------------------------------------------------------------------------

# Price Range of Common
Stock

The Companys Common Stock is
publicly traded on the NASDAQ National Market under the ticker symbol BOOT. On March 3,
2004, the sale price of our Common Stock was $7.40 per share, as reported on the NASDAQ
National Market. The table below shows the high and low sales prices per share of our
Common Stock as reported by the NASDAQ National Market:

|               | 2003 |  | 2002 |      | 2001 |  
|-------------- | ---- |  | ---- | ---- | ---- | -
|
|First Quarter  |      |  | $    | 3.00 |      | $
|Second Quarter |      |  |      | 3.99 |      |  
|Third Quarter  |      |  |      | 5.00 |      |  
|Fourth Quarter |      |  |      | 7.92 |      |  

As of March 3, 2004, there were
approximately 350 shareholders of record and approximately 1,161 beneficial owners of the
Companys Common Stock.

# Dividends

The Company did not declare a cash
dividend in 2001, 2002 or 2003 because of operating results. Future dividend policy and
payments, if any, will depend upon earnings and financial condition of the Company,
the Companys need for funds, any limitations on payments of dividends present in our
current or future debt agreements and other factors.

# Equity Compensation Plan
Information

Certain information with respect to
the Companys equity compensation plans are contained in Part III, Item 12 of this
Annual Report on Form 10-K.

10

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|Item 6. | Selected Financial Data
|------- | -----------------------

|Selected Income Statement Data
Year Ended December 31 | 2003 | 2002 | 2001 | 2000   | 1999
|----------------------------------------------------- | ---- | ---- | ---- | ------ | ----
|($ in thousands)                                      |      |      |      |        |     
|Net sales                                             |      |      | $    | 95,687 |     
|Operating income (loss)                               |      |      |      | 3,666  |     
|Net income (loss)                                     |      |      |      | 2,630  |     

|Selected Balance Sheet Data
Year Ended as of December 31 | 2003 | 2002 | 2001 | 2000   | 1999
|-------------------------------------------------------- | ---- | ---- | ---- | ------ | ----
|($ in thousands)                                         |      |      |      |        |     
|Working capital                                          |      |      | $    | 25,753 |     
|Total assets                                             |      |      |      | 55,241 |     
|Notes payable, bank                                      |      |      |      | 5,319  |     
|Long-term obligations, including   current portion       |      |      |      | 2,219  |     
|Shareholders' equity                                     |      |      |      | 37,876 |     

|Selected Share Data
Year Ended December 31 | 2003 | 2002 | 2001 | 2000  | 1999
|------------------------------------------ | ---- | ---- | ---- | ----- | ----
|Basic earnings (loss) per share            |      |      | $    | 0.45  |     
|Diluted earnings (loss) per share          |      |      | $    | 0.44  |     
|Dividends per share                        |      |      |      | --    |     
|Basic shares outstanding (in thousands)    |      |      |      | 5,874 |     
|Diluted shares outstanding (in thousands)  |      |      |      | 5,939 |     

|Item 7. | Management's Discussion and Analysis of Financial Condition and Results of
Operations
|------- | -------------------------------------------------------------------------------------

# Results of Operations

The following table sets forth
selected financial information derived from our consolidated financial statements. The
discussion that follows the table should be read in conjunction with the consolidated
financial statements:

11

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|Year Ended December 31              | 2003 | 2002 | 2001
|----------------------------------- | ---- | ---- | ----
|($ in thousands)                    |      |      |     
|Net sales                           |      |      | $   
|Cost of goods sold                  |      |      |     
|                                    |      |      |     
|Gross profit                        |      |      |     
|Gross margin                        |      |      |     
|Selling and administrative expenses |      |      |     
|Non-operating expenses, net         |      |      |     
|Income tax expense (benefit)        |      |      |     
|Days sales outstanding              |      |      |     
|Inventory turns                     |      |      |     

# Overview

LaCrosse Footwear, Inc. is a marketer
of branded, performance, functional footwear and apparel in the outdoor recreational,
sporting and occupational sectors of the footwear and apparel markets. The Companys
products are directed at both the retail consumer channel and the safety and industrial
channel of distribution.

Economic indicators that are
important to our business include consumer confidence and unemployment rate trends.
Increasing consumer confidence trends improve retail channel product sales, and decreasing
unemployment trends improve safety and industrial channel sales.

Operationally, gross margins are an
important determining factor in funding marketing, sales and product development costs, in
addition to producing profits. Margin growth of 400 basis points, in part, allowed the
Company to return to profitability this year.

Expense management and cost control
is a given in todays market as price stability is the norm. Therefore, our expense
controls and productivity improvements will contribute to profits as well. In 2003,
excluding one-time expenses in 2002 of approximately $3.0 million, we reduced expenses by
$1.4 million. We continue to look for ways to leverage systems and streamline processes,
and we are seeing expanded use of our business-to-business information and ordering portal
that we market as Outpost.

From a working capital and return on
equity standpoint, management of our accounts receivable and inventory is key. We are
focused on improving asset turns as evidenced by our reduction in days sales outstanding
(measured by using fourth quarter sales and year end receivables), and inventory turnover
(as measured by cost of goods sold divided by average inventory). At the end of 2003, our
days sales outstanding declined from 55 to 46 days as compared to 2002, and our inventory
turns for 2003 improved to 2.8 from 2.5 turns in 2002. Driving more sales through fewer
products and shelf keeping units (SKUs) will create improved asset turns.

These asset management improvements,
and our improved profitability led to a $5.3 million reduction in funded debt (defined as
total short and long term debt) during 2003.

12

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We continue to generate more sales in
the second half of the year, due to our cold and wet weather product offerings. We are
augmenting our offerings with more year-round work and uniform products, as well as spring
offerings of outdoor cross-training products. Weather, especially in the fall and winter,
will continue to be a risk factor in our results.

We principally examine success of
products and markets by reviewing the growth of our channels of distribution and brands.
Accordingly, during 2003, we grew sales in the Danner brand by 13.5%, and the net sales in
the retail channel of LaCrosse brand products were essentially equal to 2002. Safety and
Industrial channel sales of LaCrosse and Rainfair products declined by 23.9% in 2003,
partially as a result of our decision to narrow the product offerings in that division.

# FISCAL 2003 COMPARED TO
FISCAL 2002

# Net Sales

Net sales in 2003 decreased
$2.1 million, or 2.1%, to $95.7 million from $97.8 million in 2002. The
decrease in net sales was due to a 23.9% decrease in the Safety and Industrial channel of
LaCrosse and Rainfair brand products, partially offset by a 13.5% increase in Danner brand
products over 2002. Net sales in the retail channel of LaCrosse brand products in 2003
were essentially equal to 2002. The overall decrease is the result of a strategic
reduction in lower margin sales, and a reduction in the number of products being offered
for sale, particularly in the private label and mass merchant markets in the Safety and
Industrial channel of distribution.

# Gross Profit

Gross profit in 2003 increased
$3.3 million, or 12.5%, to $29.5 million from $26.2 million in 2002. As a
percent of sales, gross profit improved to 30.8% in 2003, from 26.8% in 2002, an
improvement of 400 basis points. The increase in gross profit as a percent of sales is
primarily due to improvements in our sourcing capabilities, lower manufacturing variances
and a reduction in sales of lower-margin products. Both 2003 and 2002 were favorably
impacted by a $0.1 million and $0.4 million reduction in the LIFO inventory
reserve, as the manufactured pool of inventory was reduced.

# Selling and
Administrative Expenses

Selling and administrative expenses
decreased $4.4 million, or 14.5%, to $25.8 million from $30.2 million in
2002. During 2002, we recorded $3.0 million of charges associated with the move of the
corporate headquarters to Portland, Oregon from La Crosse, Wisconsin ($1.9 million) and
the move of the Safety and Industrial division to Portland, Oregon from Racine, Wisconsin
($1.1 million). Factoring out one-time charges in 2002, the Company decreased selling and
administrative expenses approximately $1.4 million mainly as a result of the consolidation
of company functions from several facilities to locations in Portland, Oregon and La
Crosse, Wisconsin and leveraging internal systems and operating efficiencies.

13

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# Non-operating Expenses

Non-operating expenses in 2003
decreased $0.6 million, or 35.1%, to $1.0 million from $1.6 million in
2002. The decrease is primarily a result of a decrease in interest expense that was the
result of lower average borrowings and lower interest rates.

# Income Taxes

No income tax provision has been
presented for 2003 due to the utilization of net operating loss carryforwards and a
reduction in the deferred tax asset valuation allowance. Due to the uncertainty
surrounding the realization and timing of the benefits from the Companys deferred
tax assets, the Company has recorded a valuation allowance on its otherwise recognizable
deferred tax assets. Once the Company has attained a sustained level of profitability, the
need for such a valuation allowance will be reconsidered. During 2002, the Company
recognized an income tax benefit of $1.5 million due to tax provisions enacted as part of
the Job Creation and Worker Assistance Act of 2002. The law extended the loss carryback
period for certain losses from two to five years allowing the Company to carryback certain
losses incurred during 2002 to reduce taxable income from 1997 and 1998. As a result, the
Company received a tax refund of approximately $2.9 million during 2003.

# Direct Charge To Equity

During 2002, the Company recorded a
$1.4 million charge directly to equity as a result of recognizing the minimum pension
liability. In 2003, the charge to equity was reduced by $0.2 million to $1.2 million. The
charge is necessary when the accumulated benefit obligation is in excess of the sums of
the respective plan assets and accrued pension liabilities, see Note 7 to the
consolidated financial statements.

# FISCAL 2002 COMPARED TO
FISCAL 2001

# Net Sales

Net sales in 2002 decreased $27.5
million, or 22.0% to $97.8 million from $125.3 million in 2001. The decrease in net sales
was due to a 34.1% decrease in the retail channel of distribution of LaCrosse brand
products, a 24.8% decrease in the industrial channel of distribution of LaCrosse and
Rainfair brand products, partially offset by a 2.7% sales increase for the Danner brand
products over the same period of last year. These decreases were the result of a softening
economy on retailers and industrial distributors and reduced fill-in business for cold
weather products in the LaCrosse brand retail channel. In addition, the Company
discontinued manufacturing childrens insulated footwear which resulted in 6.8% of
the retail channel decrease in net sales. Net sales in the industrial channel of
distribution declined 13.5% from 2001 as a result of managements decision to
discontinue the mass market apparel business and reduce the number of retail channel
products offered in the industrial channel of distribution. The 2.7% sales increase in
Danner brand products was primarily related to the introduction of new styles using the
TERRA FORCE technology platform within the uniform, hunting, work and outdoor
cross-training product lines.

14

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# Gross Profit

Gross profit in 2002 decreased $3.9
million, or 13.0% to $26.2 million from $30.1 million in 2001. As a percent of sales,
gross profit increased to 26.8% in 2002 compared to 24.1% in 2001. The increase in gross
profit as a percent of sales is primarily due to our focus on shifting to higher margin
sourced products and a one-time charge of $3.7 million during the first half of 2001
related to closing the La Crosse factory. Both 2002 and 2001 were favorably impacted by a
$0.4 million and $1.8 million, respectively, reduction in the LIFO inventory reserve as
the manufactured pool of inventory was reduced.

# Selling and
Administrative Expenses

Selling and administrative expenses
decreased $5.3 million, or 14.8%, to $30.2 million from $35.5 million in 2001. During
2002, we recorded $3.0 million of charges associated with the move of corporate
headquarters to Portland, Oregon from La Crosse, Wisconsin ($1.9 million) and the move of
the Safety and Industrial division to Portland, Oregon from Racine, Wisconsin ($1.1
million). This included one-time charges of $1.1 million of depreciation expense related
to a change in the estimated life of our enterprise software package and related system
and a non-cash property and equipment impairment charge of $0.6 million. Factoring out
one-time restructuring charges in 2002 and 2001, the Company decreased selling and
administrative expenses approximately $5.8 million mainly as a result of reductions in
sales commissions and distribution costs associated with the reduced sales volume and
operating efficiencies and cost savings by consolidating the administrative and office
functions in Portland, Oregon.

# Non-operating Expenses

Non-operating expenses in 2002
decreased $1.0 million, or 39.5%, to $1.6 million from $2.6 million in 2001. The decrease
is primarily a result of a decrease in interest expense that was the result of lower
average borrowings and lower interest rates.

# Income Taxes

The Company recognized an income tax
benefit of $1.5 million in 2002 due to tax provisions enacted as part of the Job Creation
and Worker Assistance Act of 2002. The law extended the loss carryback period for certain
losses from two to five years. This law allowed the Company to carryback certain losses
incurred during 2002 to reduce taxable income from 1997 and 1998, resulting in a tax
refund of approximately $2.9 million.

# Direct Charge To Equity

During 2002, the Company recorded a
$1.4 million charge directly to equity as a result of recognizing the minimum pension
liability. The charge is necessary when the accumulated benefits obligation is in excess
of the sums of the respective plan assets and accrued pension liabilities, see Note 7 to
the consolidated financial statements.

# Liquidity and Capital
Resources

We have historically funded working
capital requirements and capital expenditures with cash generated from operations and
borrowings under a revolving credit agreement or other long-term lending arrangements. We
require working capital to support fluctuating accounts receivable and inventory levels
caused by our seasonal business cycle. Borrowing requirements are generally the lowest in
the first quarter and the highest during the third quarter.

15

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Our current revolving credit
agreement, which expires in June 2004, provides for advances based on a percentage of
eligible accounts receivable and inventory with maximum borrowings of $47.5 million.
The current credit agreement will be used to support working capital requirements until
June 2004. We have received commitment letters and term sheets from three lenders to
replace our current revolving credit agreement. We expect to have in place by June 2004 a
new credit agreement. Excess cash flows from operations are used to pay down the credit
agreement. At December 31, 2003, we had $5.3 million of outstanding borrowings under
the credit agreement and net unused borrowing availability of $8.5 million. At the
Companys option, the interest rate on the current revolving credit agreement is
either prime rate plus 0.75% or LIBOR plus 3.00%. The weighted average interest rate for
the outstanding balance at December 31, 2003 was 4.75%. Borrowings under the current and future
credit agreements and cash flows generated from operations are expected to be sufficient to
meet our cash requirements for the next 12 months.

In addition to the revolving credit
agreement, the Company has a term loan that expires on May 28, 2004 that calls for
semi-annual payments of $0.75 million, with the balance of $2.2 million due on
May 28, 2004. The term loan is secured by, among other things, certain properties and
equipment. In the event of a sale of any of the secured properties and equipment, a
portion of the net proceeds will be applied to the term loan. At the Companys
option, the interest rate on the term loan is either the banks prime rate or LIBOR
plus 2.0%. At December 31, 2003, the Company had $2.2 million outstanding under
the term loan. In the first quarter of 2003, we redeemed the cash surrender value of
certain of our life insurance policies for cash totaling approximately $0.6 million. Such
cash was applied directly to the term loan. In the first quarter of 2004, we paid the
remaining balance of the term loan of $2.2 million.

Net cash provided by operating
activities of $6.4 million in 2003, compared to $11.8 million for 2002,
consisted of net income of $2.6 million, adjusted for non-cash items including
depreciation and amortization totaling $1.7 million, and changes in working capital
components, primarily a decrease in accounts receivable of $1.9 million, a decrease
in refundable income taxes of $2.9 million, an increase in inventory of $0.6 million,
and a decrease in accounts payable and accrued expenses of $2.3 million. The decrease in
accounts receivable was related to continued improved collection techniques. The decrease
in refundable income taxes is due to the receipt in 2003 of an income tax refund, a result
of the tax provisions enacted as part of the Job Creation and Worker Assistance Act of
2002. In 2002, the Company incurred a net loss of $5.1 million offset by non-cash
charges including depreciation and amortization of $3.1 million, an impairment charge of
$1.0 million, deferred taxes of $3.7 million and changes in working capital components.

Net
cash used in investing activities was $1.1 million in 2003 compared to
$1.2 million during 2002. The majority of the cash used in both years was for capital
expenditures.

Net cash used in financing activities
was $5.3 million in 2003 compared to $10.9 million in 2002. During 2003, the
Company repaid $3.1 million of short-term borrowings and $2.2 million of
long-term obligations compared to repayments of $9.3 million of short-term borrowings
and $1.6 million of long-term obligations in 2002.

16

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At December 31, 2003 and 2002, the
Companys pension plan had accumulated benefit obligations in excess of the
respective plan assets and accrued pension liabilities. This obligation in excess of plan
assets and accrued liabilities resulted in an equity reduction of $1.4 million at December
31, 2002. In 2003, the charge to equity was reduced by $0.2 million to $1.2 million.

At the end of the fourth quarter of
2003, we were in compliance with all covenants in our credit agreements.

A summary of our contractual cash
obligations at December 31, 2003 is as follows:

|(In Thousands)                     | Payments due by period | 
|---------------------------------- | ---------------------- | 
|
|Long-term debt                     |                        | 
|Operating leases                   |                        | 
|                                   |                        | 
|Total contractual cash obligations |                        | 
|                                   |                        | 

---

|(1) | Long-term
debt was paid off in full in February 2004.
|--- | -----------------------------------------------------

We also have a commercial commitment
as described below:

|(In Thousands)         |         |         |          
|---------------------- | ------- | ------- | ---------
|
|Current line of credit | $47,500 | $ 5,319 | June 2004

# Critical Accounting
Policies and Estimates

Our significant accounting policies
and estimates are summarized in the footnotes to our annual consolidated financial
statements. Some of our accounting policies require management to exercise significant
judgment in selecting the appropriate assumptions for calculating financial estimates.
Such judgments are subject to an inherent degree of uncertainty. These judgments are based
on our historical experience, known trends in our industry, terms of existing contracts
and other information from outside sources, as appropriate. Actual results may differ from
these estimates under different assumptions and conditions. Certain of the most critical
policies that require significant judgment are as follows:

Revenue Recognition. We recognize
revenue in accordance with Staff Accounting Bulletin 101, Revenue Recognition in Financial
Statements. Revenues are recognized when all of the following criteria are met: when
persuasive evidence of an arrangement exists, delivery has occurred, the selling price is
fixed or determinable and collectibility is reasonably assured. Revenue for our product
sales is recognized at the time products are shipped to customers. Revenue is recorded net
of estimated discounts and returns.

17

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Allowance for Doubtful Accounts. We
establish estimates of the uncollectibility of accounts receivable. Our management
analyzes accounts receivable, historical write-offs as bad debts, customer concentrations,
customer credit-worthiness, current economic trends and changes in customer payment terms
when evaluating the adequacy of the allowance for doubtful accounts. We maintain an
allowance for doubtful accounts at an amount that we estimate to be sufficient to provide
adequate protection against losses resulting from collecting less than full payment on
receivables. A considerable amount of judgment is required when assessing the
realizability of receivables, including assessing the probability of collection and the
current credit-worthiness of each customer. If the financial condition of our customers
were to deteriorate, resulting in an impairment of their ability to make payments, an
additional provision for doubtful accounts may be required. We have not experienced
significant bad debts expense and our reserve for doubtful accounts of $0.4 million should
be adequate for any exposure to loss in our December 31, 2003 accounts receivable.

Product Warranties. We provide a
limited warranty for the replacement of defective products. Our standard warranties
require us to repair or replace defective products at no cost to the consumer. We estimate
the costs that may be incurred under our basic limited warranty and record a liability in
the amount of such costs at the time product revenue is recognized. Factors that affect
our warranty liability include the number of units sold, historical and anticipated rates
of warranty claims, and cost per claim. We periodically assess the adequacy of our
recorded warranty liabilities and adjust the amounts as necessary. We utilize historical
trends and information received from customers to assist in determining the appropriate
loss reserve levels. We believe our warranty liability of $0.9 million at December 31,
2003 should be adequate to cover the estimated costs we will incur in the future for
warranty claims on products sold before December 31, 2003.

Pension and Other Postretirement
Benefit Plans. The determination of our obligation and expense for pension and other
postretirement benefits is dependent on our selection of certain assumptions used by
actuaries in calculating such amounts. Those assumptions are described in Note 7 to the
annual consolidated financial statements and include, among others, the discount rate and
expected long-term rate of return on plan assets. In accordance with accounting principles
generally accepted in the United States of America, actual results that differ from our
assumptions are accumulated and amortized over future periods and therefore, generally
affect our recognized expense and recorded obligation in such future periods. While we
believe that our assumptions are appropriate, significant differences in our actual
experience or significant changes in our assumptions may materially affect our pension and
other postretirement obligations, our future expense and equity. See also Item 7a in this
10-K for further sensitivity analysis regarding our estimated pension obligation.

Allowance for Slow-Moving Inventory.On a periodic basis, we analyze the level of inventory on hand, its cost in relation to
market value and estimated customer requirements to determine whether write-downs for
slow-moving inventory are required. Actual customer requirements in any future periods are
inherently uncertain and thus may differ from estimates. If actual or expected
requirements were significantly greater or lower than the established reserves, a
reduction or increase to the allowance would be recorded in the period in which such a
determination was made. We have established reserves for slow-moving inventories and
believe the reserve of $1.7 million at December 31, 2003 is adequate.

18

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Valuation of Long-Lived and
Intangible Assets.As a matter of policy, we review our major assets for impairment at
least annually, and whenever events or changes in circumstances indicate that the carrying
value may not be recoverable. Our major long-lived and intangible assets are goodwill and
property and equipment. We depreciate our property and equipment over their estimated
useful lives. In connection with the adoption in 2002 of SFAS No. 142, Goodwill and
Other Intangible Assets we determined that the goodwill associated with our Safety
and Industrial Division was impaired. Accordingly, we recorded a $1.0 million charge in
the first quarter of 2002. In assessing the recoverability of our remaining goodwill of
$10.8 million related to Danner, Inc. subsidiary and the investments we have made in our
other long-term investments, primarily property and equipment of $4.6 million, we have
made assumptions regarding estimated future cash flows and other factors to determine the
fair value of the respective assets. If these estimates or their related assumptions
change in the future, we may be required to record impairment charges for these assets not
previously recorded. Please refer to the Forward-Looking Statements caption
below for a discussion of factors that will have an effect on our ability to attain future
levels of product sales and cash flows.

# Recently Issued
Accounting Pronouncements

In January 2003, the FASB issued
Interpretation No. 46 (FIN 46), Consolidation of Variable Interest
Entities. FIN 46 establishes standards for identifying a variable interest entity
and for determining under what circumstances a variable interest entity should be
consolidated with its primary beneficiary. Until now, a company generally has included
another entity in its consolidated financial statements only if it controlled the entity
through voting interests. FIN 46 changes that by requiring a variable interest entity to
be consolidated by a company if that company is subject to a majority of the risk of loss
from the variable interest entitys activities or is entitled to receive a majority
of the entitys residual returns or both. In December 2003, the FASB published a
revision to FIN 46 to clarify some of the provisions and to exempt certain entities from
its requirements. The revised provisions are applicable no later than the first reporting
period ending after March 15, 2004. The Company does not believe that the adoption of this
pronouncement will have a material effect on its consolidated financial statements.

In May 2003, the FASB issued SFAS No.
150, Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity (SFAS 150), which requires the issuer to classify
certain freestanding financial instruments as liabilities. Under the provisions of SFAS
150, common stock issued with mandatory redemption features that require the Company to
repurchase the shares upon an event that is certain to occur, such as termination of
employment or death of the stockholder, is no longer classified as equity; instead, these
shares will be reported as shares subject to mandatory redemption and classified as a
liability in the balance sheet. In such circumstances, disclosure of the components of
this liability will be included in the notes to the financial statements.  The
requirements of SFAS 150 applied to us for our quarter ended September 27, 2003. The
initial adoption of this pronouncement did not have a material impact on our results of
operations or financial position.

In December 2003, the FASB revised
SFAS No. 132, Employers Disclosures about Pensions and Other Postretirement
Benefits. The revisions include requiring public companies to include additional
disclosures regarding descriptions of the types of plan assets, investment strategies,
measurement dates, plan obligations, cash flows, and components of net periodic benefit
cost recognized in interim periods. The December 31, 2003 consolidated financial
statements and related notes include these enhanced disclosures.

19

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# Forward-Looking
Statements

We caution you that this annual
report of Form 10-K contains forward-looking statements within the meaning of the
Securities and Exchange Act of 1934. Forward-looking statements are only predictions or
statements of our current plans, which we review on a continual basis. Forward-looking
statements are intended to qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking statements can
generally be identified as such because the context of the statement includes phrases such
as we believe, expect, or other words of similar import.
Similarly, statements that describe our future plans, objectives or goals are also forward
looking statements. Such forward-looking statements are subject to certain risks and
uncertainties which could cause actual results or outcomes to differ materially from those
currently anticipated. All forward-looking statements may differ from actual results due
to, but not limited to:

| |  | Consumer
demand for outdoor footwear.
| | - | -------------------------------------

| |  | Weather
and its impact on the demand for outdoor footwear.
| | - | ----------------------------------------------------------

| |  | Dealer
inventory levels.
| | - | ------------------------

| |  | Company
inventory levels, including (i) inventory levels required for foreign-sourced product and
the related need for accurate forecasting and (ii) the limited ability to resupply
dealers for fill-in orders for foreign-sourced product.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Potential
problems associated with the manufacture, transportation and delivery of foreign-sourced
product.
| | - | -----------------------------------------------------------------------------------------------------------

| |  | United
States and/or foreign trading rules, regulations and policies, including export/import
regulations and regulations affecting manufacturers and/or importers.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | General
domestic economic conditions, including interest rates and foreign currency exchange
rates.
| | - | ---------------------------------------------------------------------------------------------------

You should consider these important
factors in evaluating any statement contained in this report and/or made by us or on our
behalf. The Company has no obligation to update or revise forward-looking statements to
reflect the occurrence of future events or circumstances.

|Item 7A. | Quantitative and Qualitative Disclosures About Market Risk
|-------- | ----------------------------------------------------------

Our primary market risk results from
fluctuations in interest rates. Our outstanding line of credit of $5.3 million at December
31, 2003 is sensitive to changes in interest rates. At our option, the line of credit
interest rate is either the prime rate plus .75% or the LIBOR rate plus 3.00%. The
weighted average interest rate for the outstanding balance at December 31, 2003 was 4.75%.
We are exposed to market risk related to interest rates. Based on average floating rate
borrowing of $10.0 million, a one percent change in the applicable rate would have caused
the Companys interest expense to change by approximately $0.1 million. The Company
believes that these amounts are not material to the earnings of the Company.

20

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We are also exposed to market risk
related to the assumptions we make in estimating our pension liability. The assumed
discount rate used, in part, to calculate the pension plan obligation is related to the
prevailing long-term interest rates. At December 31, 2003, we used an estimated discount
rate of 6.5%. A one-percentage point reduction in the discount rate would result in an
increase in the actuarial present value of projected pension benefits of approximately
$2.0 million at December 31, 2003 with a similar charge to equity. Furthermore, a plus or
minus one percent change (increase or decrease) in the actual rate of return on pension
plan assets would affect the additional minimum pension plan liability by approximately
$0.1 million.

|Item 8. | Financial
Statements and Supplementary Data
|------- | -------------------------------------------

The consolidated statements of
operations, shareholders equity and comprehensive income (loss), and cash flows for
each of the years in the three-year period ended December 31, 2003, and the related
consolidated balance sheets of the Company as of December 31, 2003 and 2002, together
with the related notes thereto and the independent auditors report appear on pages
F-1 through F-22 hereof.

The following tabulation presents the
Companys unaudited quarterly results of operations for 2003 and 2002:

# Thousands of dollars
except per share data  2003

|                                            | Q1 |  | Q2 |        | Q3 |   | Q4     | 
|------------------------------------------- | -- |  | -- | ------ | -- | - | ------ | 
|Net sales                                   |    |  | $  | 19,874 |    | $ | 18,588 | 
|Gross profit                                |    |  |    | 5,986  |    |   | 5,607  | 
|Operating income (loss)                     |    |  |    | (343   | )  |   | 197    | 
|Net income (loss)                           |    |  |    | (649   | )  |   | 4      | 
|Basic and diluted earnings (loss) per share |    |  |    | (0.11  | )  |   | --     | 

# Thousands of dollars
except per share data  2002

|                                            | Q1 |  | Q2 |        | Q3 |   | Q4     |  
|------------------------------------------- | -- |  | -- | ------ | -- | - | ------ | -
|Net sales                                   |    |  | $  | 22,821 |    | $ | 19,975 |  
|Gross profit                                |    |  |    | 5,906  |    |   | 4,126  |  
|Operating income (loss)                     |    |  |    | (2,677 | )  |   | (3,310 | )
|First quarter 2002 net loss as reported     |    | 
|before impairment charge recognized in      |    | 
|the second quarter *                        |    |  |    | (1,983 | )  |   | --     |  
|Impairment charge recorded in second        |    | 
|quarter, effective January 1, 2002          |    |  |    | (1,028 | )  |   | --     |  
|Net income (loss) as reported               |    |  |    | (3,011 | )  |   | (3,777 | )
|Basic and diluted earnings (loss) per share |    |  |    | (0.51  | )  |   | (0.64  | )

---

* The Company completed its
transitional impairment test under SFAS No. 142 during the second quarter of 2002. As a
result, the Company recorded a $1.0 million ($0.18 loss per share) charge as a cumulative
effect of change in accounting principle, effective January 1, 2002. Accordingly, the
first quarter 2002 results as reported did not include the $1.0 million charge.

21

---

|Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
|------- | ------------------------------------------------------------------------------------

None.

|Item 9A. | Controls
and Procedures
|-------- | -----------------------

(a)  Evaluation
of disclosure controls and procedures. In accordance with Rule 13a-15(b) of the
Securities Exchange Act of 1934 (the Exchange Act), as of the end
of the period covered by this Annual Report on Form 10-K, the Companys
management evaluated, with the participation of the Companys President
and Chief Executive Officer and Executive Vice President and Chief Financial
Officer, the effectiveness of the design and operation of the Companys
disclosure controls and procedures (as defined in Rule 13a- 15(e) under the
Exchange Act). Based upon their evaluation of these disclosure controls and
procedures, the President and Chief Executive Officer and the Executive Vice
President and Chief Financial Officer have concluded that the disclosure
controls and procedures were effective as of the date of such evaluation to
ensure that material information relating to the Company, including its
consolidated subsidiaries, was made known to them by others within those
entities, particularly during the period in which this Annual Report on Form
10-K was being prepared.

(b)  Changes
in internal controls. There was no change in the Companys internal
control over financial reporting that occurred during the period covered by
this Annual Report on Form 10-K that has materially affected, or is reasonably
likely to materially affect, the Companys internal control over financial
reporting.

# PART III

|Item 10. | Directors
and Executive Officers of the Registrant
|-------- | --------------------------------------------------

The information required by this Item
with respect to directors and Section 16 compliance is included under the captions
Election of Directors, Board of Directors-Committees, and
Section 16(a) Beneficial Ownership Reporting Compliance, respectively, in
the Companys definitive Proxy Statement for its 2004 Annual Meeting of Shareholders
(Proxy Statement) and when the Proxy Statement is filed with the Securities
and Exchange Commission will be incorporated herein by reference. Information with respect
to the executive officers of the Company appears in Part I, of this Annual Report on
Form 10-K.

The Company has adopted a Code of
Ethics for Senior Financial Officers that covers the principal executive officer, the
principal financial officer and the principal accounting officer. This Code of Ethics for
Senior Financial Officers is posted on the Companys website at
http://www.lacrossefootwearinc.com. If any substantive amendments are made to the Code of
Ethics for Senior Financial Officers or the Board of Directors grants any waiver from a
provision of the Code of Ethics to any of the officers of the Company, then the Company
will disclose the nature of such amendment or waiver on its website at the above address.

22

---

|Item 11. | Executive
Compensation
|-------- | ----------------------

The information required by this Item
is included under the captions Board of DirectorsDirector Compensation
and Executive Compensation in the Proxy Statement and when the Proxy statement
is filed with the Securities and Exchange Commission will be incorporated herein by
reference; provided, however, that the subsection entitled Executive
CompensationReport on Executive Compensation shall not be deemed to be
incorporated herein by reference.

|Item 12. | Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|-------- | ----------------------------------------------------------------------------------------------

The information required by this Item
with respect to Security Ownership of Certain Beneficial Owners and Management is included
under the caption Principal Shareholders in the Proxy Statement and when the
Proxy Statement is filed with the Securities and Exchange Commission will be incorporated
herein by reference.

The following table provides
information about the Companys equity compensation plans (including individual
compensation arrangements) as of December 31, 2003.

|Plan category         | Number of securities to
be issued upon
the exercise of
outstanding options,
warrants and rights(1) | Weighted-average
exercise price of
outstanding options,
warrants and rights | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
the first column)(2)
|--------------------- | -------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|Equity compensation   |                                                                                                    |                                                                             |                                                                                                                                                     
|plans approved by     |                                                                                                    |                                                                            
|security holders      |                                                                                                    |                                                                             |                                                                                                                                                     
|Equity compensation   |                                                                                                    |                                                                            
|plans not approved by |                                                                                                    |                                                                            
|security holders      |                                                                                                    |                                                                             |                                                                                                                                                     
|                      |                                                                                                    |                                                                             |                                                                                                                                                     
|Total                 |                                                                                                    |                                                                             |                                                                                                                                                     
|                      |                                                                                                    |                                                                             |                                                                                                                                                     

---

|(1) | Represents
options to purchase the Companys Common Stock granted under the           Companys
1993 Employee Stock Incentive Plan (the 1993 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
70,770 shares of the Companys Common Stock available for issuance           under
the 1997 Plan; 300,000 shares of the Companys Common Stock available           for
issuance under the 2001 Plan; and 61,000 shares of the Companys Common
          Stock available for issuance under the Director Plan.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---

|Item 13. | Certain
Relationships and Related Transactions
|-------- | ----------------------------------------------

The information required by this Item
is included under the captions Certain Transactions and Executive
CompensationCompensation Committee Interlocks and Insider Participation in the
Proxy Statement and when the Proxy Statement is filed with the Securities and Exchange
Commission will be incorporated herein by reference.

|Item 14. | Principal
Accountant Fees and Services
|-------- | --------------------------------------

The information required by this Item
is included under the caption Miscellaneous-Independent Auditor Fees in the
Proxy Statement and, when the Proxy Statement is filed, will be incorporated herein by
reference.

24

---

# PART IV

|Item 15. | Exhibits,
Financial Statement Schedules, and Reports on Form 8-K
|-------- | ----------------------------------------------------------------

| | (a) | 1. | Financial statements  The following financial statements are included in
               this Annual Report on Form 10-K beginning on the pages indicated below:
| | --- | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Independent Auditor's Report | F-1
| | ---------------------------- | ---

| | Consolidated Balance
Sheets as of December 31, 2003 and 2002 | F-2
| | ------------------------------------------------------------ | ---

| | Consolidated Statements
of Operations for the Years ended    December 31, 2003, 2002 and 2001 | F-4
| | --------------------------------------------------------------------------------------------- | ---

| | Consolidated Statements
of Shareholders' Equity and Comprehensive    Income (Loss) for the Years ended December
31, 2003, 2002 and 2001 | F-5
| | --------------------------------------------------------------------------------------------------------------------------------------- | ---

| | Consolidated Statements
of Cash Flows for the Years ended    December 31, 2003, 2002 and 2001 | F-6
| | --------------------------------------------------------------------------------------------- | ---

| | Notes to
Consolidated Financial Statements for the Years ended    December 31, 2003, 2002 and 2001 | F-7
| | -------------------------------------------------------------------------------------------------- | ---

| |  | 2. | Financial
 statement  schedule - The financial  statement  schedule for the years ended  December
         31,  2003,  2002 and 2001 is included  in this  Annual  Report on Form 10-K and
should be read in          conjunction with the Consolidated Financial Statements.
| |  | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Independent Auditor's
Report on Financial Statement Schedule | 27
| | ------------------------------------------------------------ | --

| | Schedule II
Valuation and Qualifying Accounts | 28
| | --------------------------------------------- | --

| |  | 3. | Exhibits
 The exhibits listed in the accompanying index to exhibits are                filed
as part of this Annual Report on Form 10-K.
| |  | -- | -----------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Reports
on Form 8-K
| | --- | -------------------

| | The
Company filed a Current Report on Form 8-K, dated November 7, 2003, furnishing under Item
12 the Companys press release, dated November 3, 2003, with respect to its
financial results for the third quarter and nine-month period ended September 27, 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company filed a Current Report on Form 8-K, dated December 16, 2003, furnishing under
Item 9 the Companys press release, dated December 16, 2003, announcing that the
Company had received a $4.9 million GSA delivery order to supply boots to the U.S.
military.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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.

25

---

# SIGNATURES

Pursuant to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized, on
this 19th day of March 2004.

| | LACROSSE FOOTWEAR, INC.
| | -----------------------
| | By:                    
| |                        

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.

|Name                      | Title                                                | Date          
|------------------------- | ---------------------------------------------------- | --------------
|/s/  George W. Schneider  | Chairman of the Board and Director                   | March 19, 2004
|George W. Schneider       |                                                     
|/s/  Joseph P. Schneider  | President, Chief Executive Officer and Director      | March 19, 2004
|Joseph P. Schneider       | (Principal Executive Officer)                       
|/s/  David P. Carlson     | Executive Vice President and Chief Financial         | March 19, 2004
|David P. Carlson          | Officer (Principal Financial and Accounting Officer)
|/s/  Richard A. Rosenthal | Vice Chairman of the Board and Director              | March 19, 2004
|Richard A. Rosenthal      |                                                     
|/s/  Stephen F. Loughlin  | Director                                             | March 19, 2004
|Stephen F. Loughlin      
|/s/  Luke E. Sims         | Director                                             | March 19, 2004
|Luke E. Sims             
|/s/  John D. Whitcombe    | Director                                             | March 19, 2004
|John D. Whitcombe        
|/s/  Charles W. Smith     | Director                                             | March 19, 2004
|Charles W. Smith         

26

---

# INDEPENDENT AUDITORS
REPORT ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and
Shareholders ofLaCrosse Footwear, Inc.Portland, Oregon

Our audits were made for the purpose
of forming an opinion on the basic consolidated financial statements taken as a whole. The
consolidated supplemental schedule II is presented for purposes of complying with the
Securities and Exchange Commissions rules and is not a part of the basic
consolidated financial statements. This schedule has been subjected to the auditing
procedures applied in our audits of the basic consolidated financial statements and, in
our opinion, is fairly stated in all material respects in relation to the basic
consolidated financial statements taken as a whole.

| |    
| | ---
| | By:
| |    

Minneapolis, MinnesotaJanuary 30,
2004

27

---

# LACROSSE FOOTWEAR,
INC. AND SUBSIDIARY

# SCHEDULE II VALUATION
AND QUALIFYING ACCOUNTS

|                                          |  | Additions |   |           | 
|----------------------------------------- |  | --------- | - | --------- | 
|
|Year ended December 31, 2001:             |  |           |   |           | 
|Accounts receivable allowances:           |  |          
|Allowance for discounts                   |  |           | $ | 30,000    | 
|Allowance for doubtful accounts           |  |           |   | 299,994   | 
|Allowance for uncollectible interest      |  |           |   | 68,249    | 
|                                          |  |           |   |           | 
|Total                                     |  |           | $ | 398,243   | 
|                                          |  |           |   |           | 
|Inventory allowance:                      |  |          
|Allowance for slow-moving inventory       |  |           | $ | 2,161,529 | 
|                                          |  |           |   |           | 
|Property and equipment allowance:         |  |          
|Reserve for excess property and equipment |  |           | $ | 341,000   | 
|                                          |  |           |   |           | 
|Deferred income taxes:                    |  |          
|Deferred tax asset valuation allowance    |  |           | $ | 1,290,000 | 
|                                          |  |           |   |           | 
|Allowance for warranties                  |  |           | $ | 1,091,954 | 
|                                          |  |           |   |           | 
|Year ended December 31, 2002:             |  |          
|Accounts receivable allowances:           |  |          
|Allowance for doubtful accounts           |  |           | $ | 389,000   | 
|Allowance for uncollectible interest      |  |           |   | 33,250    | 
|                                          |  |           |   |           | 
|Total                                     |  |           | $ | 422,250   | 
|                                          |  |           |   |           | 
|Inventory allowance:                      |  |          
|Allowance for slow-moving inventory       |  |           | $ | 3,846,000 | 
|                                          |  |           |   |           | 
|Property and equipment allowance:         |  |          
|Reserve for excess property and equipment |  |           | $ | 483,629   | 
|                                          |  |           |   |           | 
|Deferred income taxes:                    |  |          
|Deferred tax asset valuation allowance    |  |           | $ | 3,629,000 | 
|                                          |  |           |   |           | 
|Allowance for warranties                  |  |           | $ | 1,112,098 | 
|                                          |  |           |   |           | 

28

---

|                                       |  | Additions |   |           | 
|-------------------------------------- |  | --------- | - | --------- | 
|
|Year ended December 31, 2003:          |  |           |   |           | 
|Accounts receivable allowances:        |  |          
|Allowance for discounts                |  |           | $ | --        | 
|Allowance for doubtful accounts        |  |           |   | 414,876   | 
|                                       |  |           |   |           | 
|Total                                  |  |           | $ | 414,876   | 
|                                       |  |           |   |           | 
|Inventory allowance:                   |  |          
|Allowance for slow-moving inventory    |  |           | $ | 1,545,000 | 
|                                       |  |           |   |           | 
|Deferred income taxes:                 |  |          
|Deferred tax asset valuation allowance |  |           | $ | 4,230,000 | 
|                                       |  |           |   |           | 
|Allowance for warranties               |  |           | $ | 998,925   | 
|                                       |  |           |   |           | 

The accounts receivable, inventory,
property and equipment and deferred tax asset allowances above were deducted from the
applicable asset accounts.

29

---

# 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) | By-Laws
of LaCrosse Footwear, Inc., as amended to date.  [Incorporated by
                             reference to Exhibit (3.1) to LaCrosse Footwear, Inc.'s
Quarterly Report on Form                 10-Q for the quarter ended June 30, 2001]
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.1) | Credit
Agreement, dated as of June 15, 2001, by and among LaCrosse Footwear, Inc.,
                    Danner Shoe Manufacturing Co., as borrowers, and General Electric
Capital                 Corporation and the CIT Group/Commercial Services, Inc., as
lenders.                 [Incorporated by reference to Exhibit (4.1) to LaCrosse
Footwear, Inc.'s Quarterly                 Report on Form 10-Q for the quarter ended June
30, 2001]
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.2) | Credit
Agreement, dated as of June 15, 2001, by and between LaCrosse Footwear,
                        Inc., as borrower, and Firstar Bank, N.A., as lender.
[Incorporated by reference                 to Exhibit (4.2) to LaCrosse Footwear, Inc.'s
Quarterly Report on Form 10-Q for                 the quarter ended June 30, 2001]
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.3) | Amendment,
 dated as of December 31, 2001,  to Credit  Agreement,  dated as of June
                   15, 2001, by and among LaCrosse  Footwear,  Inc. and Danner Shoe
Manufacturing Co.,                 as   borrowers,   and   General   Electric   Capital
  Corporation   and   the  CIT                 Group/Commercial Services, Inc., 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 31, 2002]
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.4) | Limited
Waiver and Amendment No. 2 to Credit Agreement, dated as of February 28,
                      2002, to Credit Agreement, dated as of June 15, 2001, by and among
LaCrosse                 Footwear, Inc. and Danner Shoe Manufacturing Co., as borrowers,
and General                 Electric Capital Corporation and the CIT Group/Commercial
Services, Inc., as                 lenders. [Incorporated by reference to Exhibit (4.2)
to LaCrosse Footwear, Inc.'s                 Quarterly Report on Form 10-Q for the
quarter ended March 31, 2002]
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

30

---

# EXHIBIT INDEX

|ExhibitNumber | Exhibit Description
|------------- | -------------------

|(4.5) | First
amendment, dated August 12, 2002, to Credit Agreement dated June 15, 2001, by and
               among LaCrosse Footwear, Inc., as borrowers, and U.S. Bank National
Association (f/k/a                Firstar Bank, N.A.), the lender). [Incorporated by
reference to Exhibit (4.1) to                LaCrosse Footwear, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended September                28, 2002]
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.6) | Limited
Waiver and Amendment No. 3 to Credit Agreement, dated as of June 28, 2002, to
                 Credit Agreement, dated as of June 15, 2001, by and among LaCrosse
Footwear, Inc. and                Danner, Inc., as borrowers, and General Electric
Capital Corporation and the CIT                Group/Commercial Services, Inc., as
lenders. [Incorporated by reference to Exhibit                (4.2) to LaCrosse Footwear,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended                September 28,
2002]
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.7) | Second
Amendment, dated February 11, 2003, to Credit Agreement dated June 15, 2001
                    among LaCrosse Footwear, Inc., as borrowers, and U.S. Bank National
Association (f/k/a                Firstar Bank, N.A.), the lender. [Incorporated by
reference to Exhibit (4.7) to                LaCrosse Footwear, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended September                27, 2003]
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.8) | Third
Amendment, dated September 30, 2003, to Credit Agreement dated June 15, 2001
                    among LaCrosse Footwear, Inc., as borrowers, and U.S. Bank National
Association (f/k/a                Firstar Bank, N.A.), the lender. [Incorporated by
reference to Exhibit (4.8) to                LaCrosse Footwear, Inc.'s Quarterly Report
on Form 10-Q for the quarter ended September                27, 2003]
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.9) | Amendment
No. 4 and Limited Waiver to Credit Agreement, dated as of November 27, 2002
                 to Credit Agreement dated June 15, 2001, by and among LaCrosse Footwear,
Inc. and                Danner, Inc., as borrowers, and General Electric Capital
Corporation and CIT                Group/Commercial Services, Inc., as lenders.
[Incorporated by reference to Exhibit                (4.9) to LaCrosse Footwear, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended                September 27, 2003]
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.10) | Amendment
No. 5 and Limited Waiver to Credit Agreement, dated as of September 10, 2003
                to Credit Agreement dated June 15, 2001, by and among LaCrosse Footwear,
Inc. and                Danner, Inc., as borrowers, and General Electric Capital
Corporation and CIT                Group/Commercial Services, Inc., as lenders.
[Incorporated by reference to Exhibit                (4.10) to LaCrosse Footwear, Inc.'s
Quarterly Report on Form 10-Q for the quarter ended                September 27, 2003]
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(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)]
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

*  A management contract or
compensatory plan or arrangement.

31

---

# EXHIBIT INDEX

|ExhibitNumber | Exhibit Description
|------------- | -------------------

|(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 [Incorporated by reference to
                       Appendix B of LaCrosse Footwear, Inc.'s Definitive Proxy Statement
on Schedule 14A for                the 2001 Annual Meeting of Shareholders]
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.6)* | LaCrosse
Footwear, Inc. 2001 Non-Employee Director Stock Option Plan [Incorporated by
                 reference to Appendix C of LaCrosse Footwear, Inc.'s Definitive Proxy
Statement on                Schedule 14A for the 2001 Annual Meeting of Shareholders]
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.7) | 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)]
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.8) | 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]
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.9) | 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)]
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.10) | 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)]
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(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) | Certification
of the President & Chief Executive Officer and the Executive Vice
               President & Chief Financial Officer pursuant to 18 U.S.C. ss. 1350
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

32

---

# EXHIBIT INDEX

|ExhibitNumber | Exhibit Description
|------------- | -------------------

|(99) | Proxy
Statement for the 2004 Annual Meeting of Shareholders
|---- | -----------------------------------------------------------

| | [The
Proxy Statement for the 2004 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 2004
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.]
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

33

---

# INDEX

|                                                |            
|----------------------------------------------- | -----------
|                                               
|INDEPENDENT AUDITOR'S REPORT ON THE             |            
|CONSOLIDATED FINANCIAL STATEMENTS               | F-1        
|                                               
|CONSOLIDATED FINANCIAL STATEMENTS              
|Consolidated balance sheets                     | F-2 and F-3
|Consolidated statements of operations           | F-4        
|Consolidated statements of shareholders' equity | F-5        
|and comprehensive income (loss)                
|Consolidated statements of cash flows           | F-6        
|Notes to consolidated financial statements      | F-7 - F-22 
|                                               

F-INDEX

---

# INDEPENDENT
AUDITORS REPORT

To the Board of Directors
and Shareholders ofLaCrosse Footwear, Inc.Portland, Oregon

We have audited the accompanying
consolidated balance sheets of LaCrosse Footwear, Inc. and Subsidiary as of December 31,
2003 and 2002, and the related consolidated statements of operations, shareholders
equity and comprehensive income (loss), and cash flows for each year in the three year
period ended December 31, 2003. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance
with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
financial position of LaCrosse Footwear, Inc. and Subsidiary as of December 31, 2003 and
2002, and the results of their operations and their cash flows for each year in the three
year period ended December 31, 2003, in conformity with accounting principles generally
accepted in the United States of America.

| | /s/  McGladrey & Pullen, LLPMcGLADREY
& PULLEN, LLP
| | ---------------------------------------------------

Minneapolis, MinnesotaJanuary 30, 2004

F-1

---

|LACROSSE FOOTWEAR, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 2003 and 2002
(In Thousands, except share data)
ASSETS (Note 4) | 2003 |  | 2002 |       
|----------------------------------------------------------------------------------------------------------------------------------------------- | ---- |  | ---- | ------
|CURRENT ASSETS                                                                                                                                  |      |  |      |       
|Cash and cash equivalents                                                                                                                       |      |  | $    | --    
|Trade accounts receivable, less allowances of                                                                                                   |      | 
|$0.4 million                                                                                                                                    |      |  |      | 13,412
|Inventories (Note 2)                                                                                                                            |      |  |      | 24,042
|Refundable income taxes (Note 3)                                                                                                                |      |  |      | --    
|Prepaid expenses, deferred tax assets and other (Note 3)                                                                                        |      |  |      | 1,415 
|                                                                                                                                                |      |  |      |       
|Total current assets                                                                                                                            |      |  |      | 38,869
|                                                                                                                                                |      |  |      |       
|PROPERTY AND EQUIPMENT                                                                                                                          |      | 
|Land, land improvements and buildings                                                                                                           |      |  |      | 2,862 
|Machinery and equipment                                                                                                                         |      |  |      | 18,520
|                                                                                                                                                |      |  |      |       
|                                                                                                                                                |      |  |      | 21,382
|Less accumulated depreciation                                                                                                                   |      |  |      | 16,738
|                                                                                                                                                |      |  |      |       
|Net property and equipment                                                                                                                      |      |  |      | 4,644 
|                                                                                                                                                |      |  |      |       
|OTHER ASSETS                                                                                                                                    |      | 
|Goodwill (Note 9)                                                                                                                               |      |  |      | 10,753
|Other assets (Note 7)                                                                                                                           |      |  |      | 975   
|                                                                                                                                                |      |  |      |       
|Total other assets                                                                                                                              |      |  |      | 11,728
|                                                                                                                                                |      |  |      |       
|TOTAL ASSETS                                                                                                                                    |      |  | $    | 55,241
|                                                                                                                                                |      |  |      |       
|See Notes to Consolidated
Financial Statements.                                                                                                

F-2

---

|LIABILITIES AND SHAREHOLDERS' EQUITY                      | 2003 |  | 2002 |       
|--------------------------------------------------------- | ---- |  | ---- | ------
|CURRENT LIABILITIES                                       |      |  |      |       
|Current maturities of long-term obligations (Note 4)      |      |  | $    | 2,219 
|Notes payable, bank (Note 4)                              |      |  |      | 5,319 
|Accounts payable                                          |      |  |      | 2,727 
|Accrued compensation                                      |      |  |      | 1,502 
|Other accruals                                            |      |  |      | 1,349 
|                                                          |      |  |      |       
|Total current liabilities                                 |      |  |      | 13,116
|                                                          |      |  |      |       
|LONG-TERM OBLIGATIONS (Note 4)                            |      |  |      | --    
|COMPENSATION AND BENEFITS (Note 7)                        |      |  |      | 3,501 
|DEFERRED TAX LIABILITY (Note 3)                           |      |  |      | 748   
|                                                          |      |  |      |       
|Total liabilities                                         |      |  |      | 17,365
|                                                          |      |  |      |       
|COMMITMENTS AND CONTINGENCIES                             |      | 
|(Notes 5, 6 and 7)                                        |      | 
|SHAREHOLDERS' EQUITY (Note 6)                             |      | 
|Common stock, par value $.01 per share; authorized        |      | 
|50,000,000 shares; issued 6,717,627 shares                |      |  |      | 67    
|Additional paid-in capital                                |      |  |      | 26,430
|Accumulated other comprehensive loss (Note 7)             |      |  |      | (1,215
|Retained earnings                                         |      |  |      | 17,401
|Less cost of 842,454 and 843,178 shares of treasury stock |      |  |      | (4,807
|                                                          |      |  |      |       
|Total shareholders' equity                                |      |  |      | 37,876
|                                                          |      |  |      |       
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                |      |  | $    | 55,241
|                                                          |      |  |      |       

F-3

---

|LACROSSE FOOTWEAR, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2003, 2002 and 2001
(In Thousands, except share and per share data) | 2003 |  | 2002 |           | 2001 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---- |  | ---- | --------- | ---- | -
|Net sales (Note 10)                                                                                                                                                       |      |  | $    | 95,687    |      | $
|Cost of goods sold                                                                                                                                                        |      |  |      | 66,201    |      |  
|                                                                                                                                                                          |      |  |      |           |      |  
|Gross profit                                                                                                                                                              |      |  |      | 29,486    |      |  
|Selling and administrative expenses (Notes 8 and 9)                                                                                                                       |      |  |      | 25,820    |      |  
|                                                                                                                                                                          |      |  |      |           |      |  
|Operating income (loss)                                                                                                                                                   |      |  |      | 3,666     |      |  
|Non-operating income (expense):                                                                                                                                           |      | 
|Interest expense                                                                                                                                                          |      |  |      | (1,136    | )    |  
|Miscellaneous                                                                                                                                                             |      |  |      | 100       |      |  
|                                                                                                                                                                          |      |  |      |           |      |  
|                                                                                                                                                                          |      |  |      | (1,036    | )    |  
|                                                                                                                                                                          |      |  |      |           |      |  
|Income (loss) before income tax benefit and                                                                                                                               |      | 
|cumulative effect of accounting change                                                                                                                                    |      |  |      | 2,630     |      |  
|Income tax benefit (Note 3)                                                                                                                                               |      |  |      | --        |      |  
|                                                                                                                                                                          |      |  |      |           |      |  
|Net income (loss) before cumulative effect of                                                                                                                             |      | 
|accounting change                                                                                                                                                         |      |  |      | 2,630     |      |  
|Cumulative effect of change in accounting                                                                                                                                 |      | 
|principle (Note 9)                                                                                                                                                        |      |  |      | --        |      |  
|                                                                                                                                                                          |      |  |      |           |      |  
|Net income (loss)                                                                                                                                                         |      |  | $    | 2,630     |      | $
|                                                                                                                                                                          |      |  |      |           |      |  
|Net income (loss) per common share before                                                                                                                                 |      | 
|cumulative effect of change in accounting principle                                                                                                                       |      | 
|Basic                                                                                                                                                                     |      |  | $    | 0.45      |      | $
|Diluted                                                                                                                                                                   |      |  | $    | 0.44      |      | $
|Cumulative effect of change in accounting principle                                                                                                                       |      | 
|Basic                                                                                                                                                                     |      |  | $    | --        |      | $
|Diluted                                                                                                                                                                   |      |  | $    | --        |      | $
|Net income (loss) per common share                                                                                                                                        |      | 
|Basic                                                                                                                                                                     |      |  | $    | 0.45      |      | $
|Diluted                                                                                                                                                                   |      |  | $    | 0.44      |      | $
|Basic weighted average shares outstanding                                                                                                                                 |      |  |      | 5,874,477 |      |  
|Diluted weighted average shares outstanding                                                                                                                               |      |  |      | 5,939,175 |      |  

See Notes to Consolidated Financial
Statements.

F-4

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARY

# CONSOLIDATED
STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME (LOSS) 
Years Ended December 31, 2003, 2002 and 2001 
(In Thousands, except share and per share data)

|                           | Common
Stock |  | Additional
Paid-In
Capital |    | Accumulated     
Other     
Comprehensive     
Loss | Retained
Earnings |        | Treasury
Stock |   | Total
Shareholders'
Equity | Comprehensive
Income (Loss)
|-------------------------- | ------------ |  | -------------------------- | -- | --------------------------------------------------- | ----------------- | ------ | -------------- | - | -------------------------- | ---------------------------
|Balance, December 31, 2000 |              |  | $                          | 67 |                                                     | $                 | 26,434 |                | $ | --                         |                            
|Comprehensive loss:        |              | 
|Net loss                   |              |  |                            | -- |                                                     |                   | --     |                |   | --                         |                            
|                           |              |  |                            |    |                                                     |                   |        |                |   |                            |                            
|Balance, December 31, 2001 |              |  |                            | 67 |                                                     |                   | 26,434 |                |   | 19,857                     |                            
|Comprehensive loss:        |              | 
|Net loss                   |              |  |                            | -- |                                                     |                   | --     |                |   | --                         |                            
|Minimum pension            |              | 
|liability                  |              |  |                            | -- |                                                     |                   | --     |                |   | (1,370                     | )                          
|                           |              |  |                            |    |                                                     |                   |        |               
|Comprehensive loss         |              |  |                            |    |                                                     |                   |        |                |   |                            |                            
|                           |              |  |                            |    |                                                     |                   |        |                |   |                            |                            
|Balance, December 31, 2002 |              |  |                            | 67 |                                                     |                   | 26,434 |                |   | (1,370                     | )                          
|Comprehensive loss:        |              | 
|Net income                 |              |  |                            | -- |                                                     |                   | --     |                |   | --                         |                            
|Minimum pension            |              | 
|liability                  |              |  |                            | -- |                                                     |                   | --     |                |   | 155                        |                            
|                           |              |  |                            |    |                                                     |                   |        |               
|Comprehensive income       |              |  |                            |    |                                                     |                   |        |                |   |                            |                            
|Exercise of stock options  |              |  |                            | -- |                                                     |                   | (4     | )              |   | --                         |                            
|                           |              |  |                            |    |                                                     |                   |        |                |   |                            |                            
|Balance, December 31, 2003 |              |  | $                          | 67 |                                                     | $                 | 26,430 |                | $ | (1,215                     | )                          
|                           |              |  |                            |    |                                                     |                   |        |                |   |                            |                            

See Notes to Consolidated Financial
Statements.

F-5

---

|LACROSSE FOOTWEAR, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2003, 2002 and 2001
(In Thousands) | 2003 |  | 2002 |        | 2001 |  
|---------------------------------------------------------------------------------------------------------------------------------------- | ---- |  | ---- | ------ | ---- | -
|Cash Flows from Operating Activities                                                                                                     |      |  |      |        |      |  
|Net income (loss)                                                                                                                        |      |  | $    | 2,630  |      | $
|Adjustments to reconcile net income (loss) to net cash                                                                                   |      | 
|provided by operating activities:                                                                                                        |      | 
|Depreciation                                                                                                                             |      |  |      | 1,417  |      |  
|Amortization                                                                                                                             |      |  |      | 304    |      |  
|Loss on disposal/impairment of property and equipment                                                                                    |      |  |      | 55     |      |  
|Intangibles impairment charge                                                                                                            |      |  |      | --     |      |  
|Deferred income taxes                                                                                                                    |      |  |      | --     |      |  
|Other                                                                                                                                    |      |  |      | 95     |      |  
|Changes in current assets and liabilities:                                                                                               |      | 
|Trade accounts receivable                                                                                                                |      |  |      | 1,890  |      |  
|Inventories                                                                                                                              |      |  |      | (582   | )    |  
|Refundable income taxes                                                                                                                  |      |  |      | 2,888  |      |  
|Accounts payable                                                                                                                         |      |  |      | (1,940 | )    |  
|Accrued expenses and other                                                                                                               |      |  |      | (348   | )    |  
|                                                                                                                                         |      |  |      |        |      |  
|Net cash provided by operating activities                                                                                                |      |  |      | 6,409  |      |  
|                                                                                                                                         |      |  |      |        |      |  
|Cash Flows from Investing Activities                                                                                                     |      | 
|Purchase of property and equipment                                                                                                       |      |  |      | (1,165 | )    |  
|Proceeds from sale of property and equipment                                                                                             |      |  |      | 28     |      |  
|Other                                                                                                                                    |      |  |      | --     |      |  
|                                                                                                                                         |      |  |      |        |      |  
|Net cash used in investing activities                                                                                                    |      |  |      | (1,137 | )    |  
|                                                                                                                                         |      |  |      |        |      |  
|Cash Flows from Financing Activities                                                                                                     |      | 
|Principal payments on long-term obligations                                                                                              |      |  |      | (2,213 | )    |  
|Net payments on short-term borrowings                                                                                                    |      |  |      | (3,059 | )    |  
|Payment of deferred financing costs                                                                                                      |      |  |      | --     |      |  
|                                                                                                                                         |      |  |      |        |      |  
|Net cash used in financing activities                                                                                                    |      |  |      | (5,272 | )    |  
|                                                                                                                                         |      |  |      |        |      |  
|Increase (decrease) in cash and cash                                                                                                     |      | 
|equivalents                                                                                                                              |      |  |      | --     |      |  
|Cash and cash equivalents:                                                                                                               |      | 
|Beginning                                                                                                                                |      |  |      | --     |      |  
|                                                                                                                                         |      |  |      |        |      |  
|Ending                                                                                                                                   |      |  | $    | --     |      | $
|                                                                                                                                         |      |  |      |        |      |  
|SUPPLEMENTAL INFORMATION                                                                                                                 |      | 
|Cash payments (refunds) of:                                                                                                              |      | 
|Interest                                                                                                                                 |      |  | $    | 1,402  |      | $
|Income taxes                                                                                                                             |      |  | $    | (2,888 | )    | $

Notes to Consolidated
Financial Statements.

F-6

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 1. | Nature of Business and Significant Accounting Policies
|------- | ------------------------------------------------------

| | Nature
of business:
| | -------------------

| | The
Company designs, manufactures and markets premium quality protective footwear and
clothing for sale principally throughout the United States.
| | -------------------------------------------------------------------------------------------------------------------------------------------------

| | Significant
accounting policies:
| | --------------------------------

| | Principles
of consolidation:
| | ----------------------------

| | The
consolidated financial statements include the accounts of LaCrosse Footwear, Inc. and its
wholly owned subsidiary (the Company). All material intercompany accounts and
transactions have been eliminated in consolidation.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Use
of estimates in the preparation of financial statements:
| | ------------------------------------------------------------

| | The
preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Significant items
subject to estimates and assumptions include valuation allowances for inventories and
deferred tax assets and facility shutdown reserves. Actual results could differ from
those estimates.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fair
value of financial instruments:
| | ------------------------------------

| | The
carrying amount of long-term debt approximates fair value based on the interest rates,
maturities and collateral requirements currently available for similar financial
instruments.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Outsourced
production and concentrations of supply:
| | ---------------------------------------------------

| | Approximately
70% of the Companys sales in 2003 were of outsourced products. A significant
portion of the outsourced products were purchased from a limited number of foreign
manufacturers. Sources of capacity related to these products are available worldwide and
management has identified alternative sources for these products.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-7

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 1. | Nature of Business and Significant Accounting Policies, Continued
|------- | -----------------------------------------------------------------

| | Cash
and cash equivalents:
| | --------------------------

| | The
Company considers all highly liquid debt instruments (including short-term investment
grade securities and money market instruments) purchased with maturities of three months
or less to be cash equivalents. The Company maintains its cash in bank deposit accounts
which, at times, exceed federally insured limits. The Company has not experienced any
losses in such accounts.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Trade
receivables:
| | ------------------

| | Trade
receivables are carried at original invoice amount less an estimated allowance for
doubtful receivables based on a review of all outstanding amounts on a monthly basis.
Management determines the allowance for doubtful accounts after reviewing individual
customer accounts as well as considering both historical and expected credit loss
experience. Trade receivables are written off when deemed uncollectible. Recoveries of
trade receivables previously written off are recorded when received.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company grants credit to its customers, who are primarily domestic retail stores, direct
mail catalog merchants and wholesalers, based on an evaluation of each customers
financial condition. Exposure to losses on receivables is principally dependent on each
customers financial condition. The Company monitors its exposure for credit losses
and maintains an allowance for anticipated losses.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Inventories:
| | ------------

| | Inventories
are stated at the lower of cost or market. All inventories, except for vinyl products,
leather boots, leather boot components and rainwear, are valued using the last-in,
first-out (LIFO) method. Vinyl products, leather boots, leather boot components and
rainwear are valued using the first-in, first-out (FIFO) method. Provision for
potentially slow-moving inventory is made based on managements analysis of
inventory levels and future sales forecasts. At December 31, 2003 and 2002, inventories
have been reduced by slow-moving inventory reserves of approximately $1.7 and $1.5
million, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Property
and equipment:
| | -----------------------

| | Property
and equipment are carried at cost and are being depreciated using straight-line and
accelerated methods over their estimated useful lives as follows: land improvements, 15
years; buildings and improvements, 10 to 25 years; and machinery and equipment, 3 to 7
years.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Intangible
assets:
| | ------------------

| | Goodwill
represents the excess of cost over net assets acquired of Danner, Inc. Goodwill is not
subject to amortization; however, it is tested for impairment on an annual basis.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-8

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 1. | Nature
of Business and Significant Accounting Policies, Continued
|------- | -----------------------------------------------------------------

| | Impairment
of long-lived assets:
| | --------------------------------

| | The
Company reviews its long-lived assets and intangibles periodically to determine potential
impairment by comparing the carrying value of these assets with expected future net cash
flows provided by operating activities of the business. Should the sum of the expected
future net cash flows be less than the carrying value, the Company would determine
whether an impairment loss should be recognized. An impairment loss would be measured by
comparing the amount by which the carrying value exceeds the fair value of the long-lived
assets and intangibles based on appraised market value. The Company recognized impairment
losses in 2002 and 2001 (See Notes 8 and 9).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Product
warranties:
| | -------------------

| | The
Company provides a limited warranty for the replacement of defective products. The Companys
standard warranties require the Company to repair or replace defective products at no
cost to the consumer. The Company estimates the costs that may be incurred under its
basic limited warranty and records a liability in the amount of such costs at the time
product revenue is recognized. Factors that affect the Companys warranty liability
include the number of units sold, historical and anticipated rates of warranty claims,
and cost per claim. The Company periodically assesses the adequacy of its recorded
warranty liabilities and adjusts the amounts as necessary. The Company utilizes
historical trends and information received from its customers to assist in determining
the appropriate loss reserve levels.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Changes
in the Companys warranty liability during the periods are as follows:
| | ------------------------------------------------------------------------------

|                           | December 31, | 
|-------------------------- | ------------ | 
|
|Balance, beginning         |              | 
|Accruals for products sold |              | 
|Costs incurred             |              | 
|                           |              | 
|Balance, ending            |              | 
|                           |              | 

| | Employee
stock-based compensation:
| | ----------------------------------

| | At
December 31, 2003, the Company has stock-based employee compensation plans (See Note 6).
The Company accounts for those plans under the APB Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations. No stock-based employee
compensation cost is reflected in the consolidated statements of operations, as all
options granted under those plans had an exercise price equal to the market value of the
underlying common stock on the date of grant. The following table illustrates the effect
on net income (loss) and income (loss) per share if the Company had applied the fair
value recognition provisions of Statement of Financial Accounting Standards (SFAS)
No. 123, Accounting for Stock-Based Compensation, to stock-based employee
compensation.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-9

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 1. | Nature
of Business and Significant Accounting Policies, Continued
|------- | -----------------------------------------------------------------

|                                                      | 2003 |  | 2002 |       | 2001 |  
|----------------------------------------------------- | ---- |  | ---- | ----- | ---- | -
|Net income (loss) - as reported                       |      |  | $    | 2,630 |      | $
|Deduct: Total stock-based employee compensation       |      | 
|expense determined under the fair value based         |      | 
|method for all awards, net of the related tax effects |      |  |      | (152  | )    |  
|                                                      |      |  |      |       |      |  
|Pro forma net income (loss)                           |      |  | $    | 2,478 |      | $
|                                                      |      |  |      |       |      |  
|Income (loss) per share:                              |      | 
|Basic - as reported                                   |      |  | $    | 0.45  |      | $
|Diluted - as reported                                 |      |  | $    | 0.44  |      | $
|Basic - pro forma                                     |      |  | $    | 0.42  |      | $
|Diluted - pro forma                                   |      |  | $    | 0.42  |      | $
|                                                      |      |  |     

| | The
above pro forma effects on net income (loss) and net income (loss) per share are not
likely to be representative of the effects on reported net income (loss) for future years
because options vest over several years and additional awards generally are made each
year.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Revenue
recognition:
| | --------------------

| | Revenue
is recognized at the time products are shipped to customers. Revenue is recorded net of
estimated discounts and returns. Amounts billed to customers relating to shipping and
handling are classified as revenue. Costs incurred by the Company for shipping and
handling are classified as cost of goods sold.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Income
taxes:
| | -------------

| | Deferred
taxes are provided on an asset and liability method whereby deferred tax assets and
liabilities are recognized for temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred tax
assets will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Advertising
and promotion:
| | --------------------------

| | The
Company advertises and promotes its products through national and regional media,
displays, and catalogs and through cooperative advertising programs with retailers. Costs
for these advertising and promotional programs are generally charged to expense as
incurred. Advertising and promotional expense included in the consolidated statements of
operations for the years ended December 31, 2003, 2002 and 2001 is approximately $2.0,
$2.1 and $2.1 million, respectively.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net
income (loss) per share:
| | ----------------------------

| | Because
the Company has potential common stock outstanding, as discussed in Note 6, it is
required to present basic and diluted net income (loss) per share. Diluted per share
amounts assume the conversion, exercise or issuance of all potential common stock
instruments unless the effect is to reduce the loss or increase the income per common
share from continuing operations.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-10

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 1. | Nature
of Business and Significant Accounting Policies, Continued
|------- | -----------------------------------------------------------------

| | The
impact of the stock options on the diluted weighted average shares was to increase the
shares outstanding by 64,698 shares for the year ended December 31, 2003. Options to
purchase shares of common stock were not included in the computation of diluted net loss
per share in 2002 and 2001because their effect would be antidilutive.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Recent
accounting pronouncements:
| | ---------------------------------

| | In
January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation
of Variable Interest Entities. FIN 46 establishes standards for identifying a
variable interest entity and for determining under what circumstances a variable interest
entity should be consolidated with its primary beneficiary. Until now, a company
generally has included another entity in its consolidated financial statements only if it
controlled the entity through voting interests. FIN 46 changes that by requiring a
variable interest entity to be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entitys activities or is
entitled to receive a majority of the entitys residual returns or both. In December
2003, the FASB published a revision to FIN 46 to clarify some of the provisions and to
exempt certain entities from its requirements. The revised provisions are applicable no
later than the first reporting period ending after March 15, 2004. The Company does not
believe that the adoption of this pronouncement will have a material effect on its
consolidated financial statements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity (SFAS 150),
which requires the issuer to classify certain freestanding financial instruments as
liabilities. Under the provisions of SFAS 150, common stock issued with mandatory
redemption features that require the Company to repurchase the shares upon an event that
is certain to occur, such as termination of employment or death of the stockholder, is no
longer classified as equity; instead, these shares will be reported as shares subject to
mandatory redemption and classified as a liability in the balance sheet. In such
circumstances, disclosure of the components of this liability will be included in the
notes to the financial statements.  The requirements of SFAS 150 applied to us for
our quarter ended September 27, 2003. The initial adoption of this pronouncement did not
have a material impact on our results of operations or financial position.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
December 2003, the FASB revised SFAS No. 132, Employers Disclosures about Pensions
and Other Postretirement Benefits. The revisions include requiring public companies
to include additional disclosures regarding descriptions of the types of plan assets,
investment strategies, measurement dates, plan obligations, cash flows, and components of
net periodic benefit cost recognized in interim periods. The December 31, 2003
consolidated financial statements and related notes include these enhanced disclosures.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-11

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 2. | Inventories
|------- | -----------

| | A
summary of inventories is as follows:
| | ---------------------------------------

|                  | December 31, | 
|----------------- | ------------ | 
|
|Raw materials     |              | 
|Work in process   |              | 
|Finished goods    |              | 
|                  |              | 
|Total inventories |              | 
|                  |              | 

| | If
all inventories were valued on the FIFO method, total inventories for 2003 and 2002 would
have been $23.7 and $23.3 million, respectively.
| | ---------------------------------------------------------------------------------------------------------------------------------------------

| | During
2002 and 2001, certain inventory quantity reductions resulted in liquidation of LIFO
inventory layers carried at lower costs which prevailed in prior years. The net impact
from these reductions decreased the net loss by $0.4 million ($0.07 per share) in 2002
and $1.8 million ($0.31 per share) in 2001.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 3. | Income
Tax Matters
|------- | ------------------

Net deferred tax assets and
liabilities consist of the following components:

|                                                  | December 31, | 
|------------------------------------------------- | ------------ | 
|
|Deferred tax assets:                              |              | 
|Receivable allowances                             |              | 
|Inventory differences                             |              | 
|Compensation and benefits                         |              | 
|Warranty reserves and other                       |              | 
|Net operating loss carryforwards                  |              | 
|Valuation allowance                               |              | 
|                                                  |              | 
|                                                  |              | 
|Deferred tax liabilities, principally intangibles |              | 
|                                                  |              | 
|                                                  |              | 
|                                                  |              | 

| | At
December 31, 2003 the Company has a valuation allowance of approximately $3.6 million to
reduce its deferred tax assets to estimated realizable value. The valuation allowance
decreased in the current year primarily as a result of a decrease in deferred tax assets
caused by the reversal of temporary differences. In the future when management believes
it can reasonably estimate future operating results and those estimated results reflect
taxable income, the amount of deferred tax assets considered realizable could be adjusted
by a reduction of the valuation allowance.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-12

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 3. | Income
Tax Matters, Continued
|------- | -----------------------------

| | The
components giving rise to the net deferred tax assets described above have been included
in the accompanying consolidated balance sheets as follows:
| | --------------------------------------------------------------------------------------------------------------------------------------------------------

|                       | December 31, | 
|---------------------- | ------------ | 
|
|Current assets         |              | 
|Noncurrent liabilities |              | 
|                       |              | 
|                       |              | 
|                       |              | 

| | The
provision (benefit) for income taxes consists of the following:
| | -------------------------------------------------------------------

|         | Years Ending December 31, | 
|-------- | ------------------------- | 
|
|Current  |                           | 
|Federal  |                           | 
|State    |                           | 
|Deferred |                           | 
|         |                           | 
|         |                           | 
|         |                           | 

| | The
current federal income tax benefit of approximately $5.2 million in 2002 is due to tax
changes enacted as part of the Job Creation and Worker Assistance Act of 2002. The law
extended the loss carryback period for certain losses from two to five years. The Company
was able to carry back tax losses incurred in 2001 to reduce taxable income from 1996
and, in May of 2002, received an income tax refund of $2.3 million. The Company also
carried back losses incurred during 2002 to reduce taxable income from 1997 and 1998, and
in June of 2003, received an income tax refund of $2.9 million.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
differences between statutory federal tax rates and the effective tax rates reflected in
the consolidated statements of operations are as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                  | Years Ending December 31, | 
|------------------------------------------------- | ------------------------- | 
|
|Statutory federal tax rate                        |                           | 
|State taxes, net of federal tax benefit and other |                           | 
|Benefit of net operating loss carryforwards       |                           | 
|Valuation allowance                               |                           | 
|                                                  |                           | 
|Effective tax (benefit) rate                      |                           | 
|                                                  |                           | 

| | At
December 31, 2003, the Company has a federal net operating loss carryforward of
approximately $3.7 million which will expire in 2022.
| | ----------------------------------------------------------------------------------------------------------------------------------------

F-13

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

| | In
addition, the Company has state net operating loss carryforwards of approximately $28.5
million which will expire as follows: $2.4 million in 2014, $3.3 million in 2015, $7.0
million in 2016, $13.1 million in 2017, and $2.7 million in 2018.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 4. | Financing
Arrangements
|------- | ----------------------

| | Revolving
credit agreement:
| | ---------------------------

| | On
June 15, 2001, the Company entered into a three-year credit agreement with General
Electric Capital Corporation (GECC) serving as the lead lender to refinance its previous
bank revolving line of credit. Amounts borrowed under the agreement are primarily secured
by all of the assets of the Company. Borrowing limits against the line of credit are the
lesser of $47.5 million or agreed upon percentages of qualified receivables and
inventory. At the Companys option, the interest rate is either the prime rate plus
0.75% or LIBOR plus 3.00%. Interest is payable monthly on prime rate loans and at
maturity on LIBOR based loans. The weighted average interest rate for the outstanding
balance at December 31, 2003 was 4.75%. At December 31, 2003 and 2002, there was $5.3
million and $8.4 million, respectively, outstanding under the revolving line of credit.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Long-term
obligations:
| | ----------------------

| | In
conjunction with the refinancing of the line of credit on June 15, 2001, the Company also
refinanced its term loan with U.S. Bank, N.A., the lead lender on the previous term loan.
The amount of the refinanced term loan was $7.5 million. The term loan expires May 28,
2004 and calls for semi-annual payments of $0.75 million which commenced in November of
2001 with a final payment due on May 28, 2004. The term loan is secured by, among other
things, certain properties and equipment of the Company, and a personal guarantee from
the Companys principal shareholder. In the event of a sale of any of the secured
properties and equipment, a portion of the net proceeds will be applied to the term loan.
At the Companys option, the interest rate on the term loan is either the banks
prime rate or LIBOR plus 2.0%.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                               | December 31, | 
|---------------------------------------------- | ------------ | 
|
|Term loan under credit agreement, due in semi- |              | 
|annual payments of $0.75 million with a final  |              | 
|principal payment due on May 28, 2004          |              | 
|Other                                          |              | 
|                                               |              | 
|                                               |              | 
|Less current maturities                        |              | 
|                                               |              | 
|                                               |              | 
|                                               |              | 

| | The
credit agreements contain certain restrictive covenants, which among other things,
require the Company to maintain certain levels of net availability (depending on the time
of the year), to meet certain tangible net worth requirements and earnings requirements
(earnings before interest, depreciation and amortization) on a quarterly basis and to
limit capital spending to less than $2.0 million per year. The Company had net unused
borrowing availability of $8.5 million at December 31, 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-14

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 5. | Lease
Commitments and Contingencies
|------- | -----------------------------------

| | Lease
Commitments: The Company leases office space, retail stores, manufacturing
facilities, equipment and warehouse space under non-cancelable agreements expiring on
various dates through 2009 which are recorded as operating leases. The total rental
expense included in the consolidated statements of operations for the years ended
December 31, 2003, 2002 and 2001 is approximately $1.9, $2.4, and $2.1 million,
respectively. Approximate future minimum lease payments of $5.0 million are due as
follows (in millions): 2004, $1.7; 2005, $1.4; 2006, $1.0; 2007, $0.6; and $0.3
thereafter.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Contingencies: In
the normal course of business, the Company is subject to claims and litigation.
Management believes that such matters will not have a material adverse effect on the
Companys results of operations, liquidity or financial condition.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
January 2004, the Company settled a dispute with a former vendor and thereafter received
a one-time, nonrecurring cash payment of $0.9 million. This settlement will be recorded
in the first quarter of fiscal 2004 and will be used to pay-down debt.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 6. | Stock
Options
|------- | -------------

| | The
Company has granted stock options to officers, directors and key employees under the
1993, 1997 and 2001 stock option plans pursuant to which options for up to 950,000 shares
of common stock may be granted. The option price per share shall not be less than 100% of
the fair market value at the date of grant and the options expire 10 years after grant or
such shorter period as the compensation committee of the Board so determines. Options for
approximately 60,000 shares had not been issued under the 1993 plan and therefore they
expired during 2003. Substantially all of the options vest in equal increments over a
five-year period.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
following summarizes all stock options granted under the plans:
| | -------------------------------------------------------------------

|                  | Common
Shares |  | Weighted Average
Exercise Price
|----------------- | ------------- |  | -------------------------------
|December 31, 2000 |               |  |                                
|Granted           |               |  |                                
|Canceled          |               |  |                                
|                  |               |  |                                
|December 31, 2001 |               |  |                                
|Granted           |               |  |                                
|Canceled          |               |  |                                
|                  |               |  |                                
|December 31, 2002 |               |  |                                
|Granted           |               |  |                                
|Canceled          |               |  |                                
|Exercised         |               |  |                                
|                  |               |  |                                
|December 31, 2003 |               |  |                                
|                  |               |  |                                

| | The
weighted average remaining life of outstanding options is 7.0 years as of December 31,
2003.
| | ------------------------------------------------------------------------------------------------

F-15

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 6. | Stock
Options, Continued
|------- | ------------------------

| | Options
exercisable as of December 31, 2003, 2002 and 2001 were approximately 155,000 shares,
133,000 shares and 149,000 shares, respectively, at a weighted average exercise price of
$6.30, $8.60 and $10.67, respectively.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
weighted-average fair values at date of grant for options granted during 2003, 2002 and
2001 were $1.28, $1.61 and $1.25 per share, respectively. The fair value of each option
is estimated on the date of the grant using the Black-Scholes option-pricing model with
the following assumptions:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                | 2003    | 2002    | 2001   
|------------------------------- | ------- | ------- | -------
|Expected dividend yield         | 0%      | 0%      | 0%     
|Expected stock price volatility | 25%     | 25%     | 25%    
|Risk-free interest rate         | 6.5%    | 6.5%    | 6.5%   
|Expected life of options        | 6 years | 6 years | 6 years

|Note 7. | Compensation
and Benefit Agreements
|------- | -----------------------------------

| | The
Company has a defined benefit pension plan covering eligible past employees and
approximately 10% of its current employees. Eligible participants are entitled to monthly
pension benefits beginning at normal retirement age (65). The monthly benefit payable at
the normal retirement date under the plan is equal to a specified dollar amount or
percentage of average monthly compensation, as defined in the plan, multiplied by years
of benefit service (maximum of 38 years). The Companys funding policy is to make
not less than the minimum contribution that is required by applicable regulations, plus
such amounts as the Company may determine to be appropriate from time to time. The
Company has frozen the plan and participants will not accrue any additional years of
service regardless of any increases in their compensation or completion of additional
years of credited service.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company sponsors an unfunded defined benefit postretirement medical and life insurance
plan that covers eligible past employees. The Company funds the postretirement benefit
obligation as the costs are incurred. During 2003, the Company eliminated the medical
portion of the plan which resulted in a curtailment gain of $0.3 million. In 2002, the
Company amended the plan which resulted in a decrease in the projected benefit obligation
of approximately $0.6 million.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-16

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 7. | Compensation
and Benefit Agreements, Continued
|------- | ----------------------------------------------

| | Information
relative to the Companys defined pension and other postretirement benefit plans is
presented below.
| | ----------------------------------------------------------------------------------------------------------------

|                                          | Pension Benefits
December 31, |  | Other Benefits
December 31, |       
|----------------------------------------- | ----------------------------- |  | --------------------------- | ------
|
|Changes in benefit obligations:           |                               |  |                             |       
|Obligations at beginning of year          |                               |  | $                           | 15,310
|Service cost                              |                               |  |                             | 28    
|Interest cost                             |                               |  |                             | 1,029 
|Plan amendments                           |                               |  |                             | 44    
|Benefits paid                             |                               |  |                             | (1,317
|Curtailment                               |                               |  |                             | --    
|Actuarial (gains) losses                  |                               |  |                             | 842   
|                                          |                               |  |                             |       
|Obligations at end of year                |                               |  | $                           | 15,936
|                                          |                               |  |                             |       
|Changes in plan assets:                   |                               | 
|Fair value of assets at beginning of year |                               |  | $                           | 12,174
|Actual return on assets                   |                               |  |                             | 1,932 
|Company contributions                     |                               |  |                             | 94    
|Participant contributions                 |                               |  |                             | --    
|Benefits paid                             |                               |  |                             | (1,317
|                                          |                               |  |                             |       
|Fair value of assets at end of year       |                               |  | $                           | 12,883
|                                          |                               |  |                             |       
|Funded status at end of year:             |                               | 
|Plan assets less than obligations         |                               |  | $                           | (3,053
|Unrecognized (gain) loss                  |                               |  |                             | 1,215 
|Unrecognized prior service cost           |                               |  |                             | 168   
|                                          |                               |  |                             |       
|Accrued benefit cost                      |                               |  | $                           | (1,670
|                                          |                               |  |                             |       
|                                          |                               |  |                             |       

| | At
December 31, 2003 and 2002, the Companys pension plan had accumulated benefit
obligations in excess of the sums of the respective plan assets and accrued pension
liabilities, such that additional minimum liabilities and equity reduction components had
to be recorded as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                      | December 31, | 
|------------------------------------- | ------------ | 
|
|Accumulated benefit obligations       |              | 
|Plan assets                           |              | 
|Accrued pension liability             |              | 
|                                      |              | 
|Additional minimum liability          |              | 
|Recordable as intangible asset        |              | 
|                                      |              | 
|Cumulative equity reduction component |              | 
|                                      |              | 

F-17

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 7. | Compensation
and Benefit Agreements, Continued
|------- | ----------------------------------------------

|                                      | Pension Benefits
Years Ending December 31, |  | Other Benefits
Years Ending December 31, |      
|------------------------------------- | ------------------------------------------ |  | ---------------------------------------- | -----
|
|Cost recognized during the year:      |                                            |  |                                          |      
|Service cost                          |                                            |  | $                                        | 28   
|Interest cost                         |                                            |  |                                          | 1,029
|Expected return on plan assets        |                                            |  |                                          | (936 
|Amortization of prior gains           |                                            |  |                                          | --   
|Amortization of prior service cost    |                                            |  |                                          | 16   
|Amortization of transition obligation |                                            |  |                                          | --   
|Curtailment                           |                                            |  |                                          | --   
|                                      |                                            |  |                                          |      
|Net period cost (benefit)             |                                            |  | $                                        | 137  
|                                      |                                            |  |                                          |      

|                                                                                                     | Pension Benefits
December 31, | Other Benefits
December 31,
|---------------------------------------------------------------------------------------------------- | ----------------------------- | ---------------------------
|
|Assumptions used in computations:                                                                    |                               |                            
|Discount rate                                                                                        |                               |                            
|Rate of compensation increase                                                                        |                               |                            
|Expected return on plan assets                                                                       |                               |                            
|*  This plan does not have separate assets, so there is no actual or expected return on plan assets.

The discount rate used is based on a
hypothetical portfolio of high quality bonds with cash flows matching expected benefit
payments. The expected return on plan assets is based on the asset allocation mix and
historical return, taking into account current and expected market conditions. The actual
return on pension plan assets was approximately 17% in 2003, compared to an 11% loss in
2002. The historical annualized ten-year rate of return on pension plan assets is
approximately 8%.

The Companys pension plan asset
allocation at December 31, 2003 and 2002 and target allocation for 2004 are as follows:

|                          | Target Allocation | Percentage of Plan Assets
December 31,
|------------------------- | ----------------- | --------------------------------------
|
|Asset Category:           |                   |                                       
|Equity securities         |                   |                                       
|Debt securities           |                   |                                       
|Cash and cash equivalents |                   |                                       
|                          |                   |                                       
|Total                     |                   |                                       
|                          |                   |                                       

F-18

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 7. | Compensation
and Benefit Agreements, Continued
|------- | ----------------------------------------------

| | The
pension plan investment strategy is to maintain a diversified portfolio designed to
achieve an average long-term rate of return of 8%. The assets of the plan are
strategically allocated between asset categories according to the target minimum and
maximum allocations. Asset allocation target ranges for each asset category are monitored
and may be changed from time to time based on asset allocation studies performed by the
plans investment advisor, with evaluations of the risk and return expectations for
various weightings of the authorized asset categories. Additional asset categories may
also be added to the plan within the context of the investment objectives.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company does not plan on contributing to the pension plan or the postretirement benefit
plan during 2004.
| | -------------------------------------------------------------------------------------------------------------

| | The
following benefit payments are expected to be paid from the plans:
| | ----------------------------------------------------------------------

|Year(s)   | Pension Benefits | Other Benefits
|--------- | ---------------- | --------------
|2004      |                  |               
|2005      |                  |               
|2006      |                  |               
|2007      |                  |               
|2008      |                  |               
|2009-2013 |                  |               

F-19

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 8. | Sourcing
Realignment and Facility Shutdown Charge
|------- | -------------------------------------------------

| | During
2002, the Company announced a strategic decision to relocate the Racine, Wisconsin
administrative and distribution functions as well as close the manufacturing facility at
that location. This decision led to an expense of $1.1 million including a $0.6 million
leasehold improvements impairment charge. The expense was recorded in selling and
administrative expenses. The Company eliminated 91 administrative, distribution and
production positions in Racine. The activity in the related reserves for the current year
is as follows:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                           | Balance
December 31,
2002 | NewCharges | Payments or
ReservesUsed | Balance
December 31,
2003
|-------------------------- | ------------------------- | ---------- | ------------------------ | -------------------------
|Facility shutdown reserves |                           |            | $                        | 367                      
|                           |                           |            |                          |                          

|Note 9. | Goodwill
and Other Intangibles
|------- | ------------------------------

| | Effective
January 1, 2002, the Company adopted SFAS 142, which established a new method of testing
goodwill and other intangible assets for impairment using a fair-value based approach.
Under the new standard, goodwill is no longer amortized as was previously required. Upon
adoption, amortization of goodwill ceased. Amortization of goodwill would have been $0.6
million for the years ended December 31, 2003 and 2002.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Company completed the transitional impairment test during 2002 for the Safety and
Industrial and Danner divisions goodwill. The impairment test, which was conducted
using information that included a valuation performed by an independent appraiser,
indicated that the Safety and Industrial division goodwill was impaired. Accordingly, the
Company recorded a $1.0 million charge as a cumulative effect of change in accounting
principle in the first quarter of 2002.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-20

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 9. | Goodwill
and Other Intangibles, Continued
|------- | -----------------------------------------

| | The
following table presents adjusted (proforma) net income (loss) and basic and diluted
income (loss) per share for the years 2003, 2002 and 2001, respectively, as adjusted for
the non-amortization provisions of SFAS 142:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                             | 2003 |  | 2002 |       | 2001 |  
|------------------------------------------------------------ | ---- |  | ---- | ----- | ---- | -
|                                                             |      |  |      |       |      |  
|Reported net income (loss)                                   |      |  | $    | 2,630 |      | $
|Addback: Goodwill amortization                               |      |  |      | --    |      |  
|                                                             |      |  |      |       |      |  
|Adjusted net income (loss)                                   |      |  |      | 2,630 |      |  
|Addback: Cumulative effect of change in accounting principle |      |  |      | --    |      |  
|                                                             |      |  |      |       |      |  
|Adjusted net income (loss) before cumulative effect of       |      | 
|change in accounting principle                               |      |  | $    | 2,630 |      | $
|                                                             |      |  |      |       |      |  
|                                                             |      |  |     

|                                                             | 2003 |  | 2002 |      | 2001 |  
|------------------------------------------------------------ | ---- |  | ---- | ---- | ---- | -
|                                                             |      |  |      |      |      |  
|Reported basic income (loss) per share                       |      |  | $    | 0.45 |      | $
|Addback: Goodwill amortization                               |      |  |      | --   |      |  
|                                                             |      |  |      |      |      |  
|Adjusted basic income (loss) per share                       |      |  |      | 0.45 |      |  
|Addback: Cumulative effect of change in accounting principle |      |  |      | --   |      |  
|                                                             |      |  |      |      |      |  
|Adjusted basic income (loss) per share before cumulative     |      | 
|effect ofchange in accounting principle                      |      |  | $    | 0.45 |      | $
|                                                             |      |  |      |      |      |  
|                                                             |      |  |     

|                                                             | 2003 |  | 2002 |      | 2001 |  
|------------------------------------------------------------ | ---- |  | ---- | ---- | ---- | -
|                                                             |      |  |      |      |      |  
|Reported diluted income (loss) per share                     |      |  | $    | 0.44 |      | $
|Addback: Goodwill amortization                               |      |  |      | --   |      |  
|                                                             |      |  |      |      |      |  
|Adjusted diluted income (loss) per share                     |      |  |      | 0.44 |      |  
|Addback: Cumulative effect of change in accounting principle |      |  |      | --   |      |  
|                                                             |      |  |      |      |      |  
|Adjusted diluted income (loss) per share before cumulative   |      | 
|effect of change in accounting principle                     |      |  | $    | 0.44 |      | $
|                                                             |      |  |      |      |      |  

The changes in the net carrying
amount of goodwill for the years ended December 31, 2003 and 2002 are as follows:

|                                                    | Safety and Industrial |  | Danner |        | Total |  
|--------------------------------------------------- | --------------------- |  | ------ | ------ | ----- | -
|Balance as of January 1, 2002                       |                       |  | $      | 1,028  |       | $
|Cumulative effect of change in accounting principle |                       |  |        | (1,028 | )     |  
|                                                    |                       |  |        |        |       |  
|Balance as of December 31, 2002                     |                       |  | $      | --     |       | $
|                                                    |                       |  |        |        |       |  
|                                                    |                       |  |       
|Balance as of December 31, 2003                     |                       |  | $      | --     |       | $
|                                                    |                       |  |        |        |       |  
|                                                    |                       |  |       

F-21

---

# LACROSSE FOOTWEAR, INC.
AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTS(In Thousands, except
share and per share data)

---

|Note 9. | Goodwill
and Other Intangibles, Continued
|------- | -----------------------------------------

| | During
2001, the Company recorded impairment charges in selling and administrative expense
totaling approximately $1.3 million relating to the write-down of intangibles primarily
associated with the purchase of Red Ball and Lake of the Woods. The Company determined
that Red Ball and Lake of the Woods are not core brands and therefore were impaired.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Note 10. | Enterprise-wide
Disclosures
|-------- | ---------------------------

| | Segment
information is not presented since all of the Companys revenue is attributed to a
single reportable segment. Information about the Companys groups of products within
its one segment is presented below.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                    | Years Ending December 31, | 
|------------------- | ------------------------- | 
|
|Footwear            |                           | 
|Protective clothing |                           | 
|                    |                           | 
|                    |                           | 
|                    |                           | 
|                    |                           | 

| | The
following table presents information about the Companys revenue attributed to
countries based on the location of the customer.
| | -----------------------------------------------------------------------------------------------------------------------------------

|                  | Years Ending December 31, | 
|----------------- | ------------------------- | 
|
|United States     |                           | 
|Foreign Countries |                           | 
|                  |                           | 
|                  |                           | 
|                  |                           | 
|                  |                           | 

| | Long-lived
assets located outside of the United States totaled approximately $0.1 million at
December 31, 2003 and 2002.
| | ------------------------------------------------------------------------------------------------------------------------

| | No
single customer provided revenue of 10.0% or more of consolidated revenues in any of the
years presented.
| | ------------------------------------------------------------------------------------------------------------

F-22