895456--3/16/2006--ROCKY_SHOES_&_BOOTS

related topics

{customer, product, revenue}

{condition, economic, financial}

{product, market, service}

{competitive, industry, competition}

{product, candidate, development}

{gas, price, oil}

{personnel, key, retain}

{stock, price, operating}

{property, intellectual, protect}

{cost, regulation, environmental}

{tax, income, asset}

{capital, credit, financial}

{product, liability, claim}

Our success depends on our ability to anticipate consumer trends. Loss of services of our key personnel could adversely affect our business. We depend on a limited number of suppliers for key production materials, and any disruption in the supply of such materials could interrupt product manufacturing and increase product costs. We currently have a licensing agreement for the use of Gore-Tex waterproof breathable fabric, and any termination of this licensing agreement could impact our sales of waterproof products. We currently have a licensing agreement for the use of the Dickies trademark, and any termination of this licensing agreement could impact our sales and growth strategy. Our outdoor products are seasonal. Our outdoor products are sensitive to weather conditions. Our business could suffer if our third party manufacturers violate labor laws or fail to conform to generally accepted ethical standards. Our future tax rates may not be as favorable as our historical tax rates. The growth of our business will be dependent upon the availability of adequate capital. We face intense competition, including competition from companies with significantly greater resources than ours, and if we are unable to compete effectively with these companies, our market share may decline and our business could be harmed. We currently manufacture a portion of our products and we may not be able to do so in the future at costs that are competitive with those of competitors who source their goods. We rely on distribution centers in Logan, Ohio and Tunkhannock, Pennsylvania, and if there is a natural disaster or other serious disruption at any of these facilities, we may be unable to deliver merchandise effectively to our retailers. We may be subject to certain environmental and other regulations. If our efforts to establish and protect our trademarks, patents and other intellectual property are unsuccessful, the value of our brands could suffer. Our success depends on our ability to forecast sales. Risks Related to Our Industry Because the footwear market is sensitive to decreased consumer spending and slow economic cycles, if general economic conditions deteriorate, many of our customers may significantly reduce their purchases from us or may not be able to pay for our products in a timely manner. The continued shift in the marketplace from traditional independent retailers to large discount mass merchandisers may result in decreased margins.

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895456--3/16/2006--ROCKY_SHOES_&_BOOTS_INC