ROCKY BRANDS INC

Inventories are comprised of the following:

The return reserve allowance included within inventories was approximately $0.8 million, $0.8 million and $0.7 million at* March 31, 2024*,* December 31, 2023* and* March 31, 2023*, respectively.

8. GOODWILL & IDENTIFIED INTANGIBLE ASSETS

There wasno change in goodwill during thethree months ended* March 31, 2024.*

Intangible assets other than goodwill at the respective balance sheet dates consisted of the following:

9

(1)Servus trademarks were reduced from approximately $2.5 million tozero at* March 30, 2023as a result of the sale of the Servus brand (see Note4*).

(2) Customer relationships relating to the Servus brand of approximately $4.3 million and related amortization of approximately $0.6 million was reduced tozero at* March 30, 2023as a result of the sale of the Servus brand (see Note4*).

The weighted average life of patents and customer relationships is 3.6 years and 12.0 years, respectively.

Amortization expense for intangible assets subject to amortization for thethree months ended* March 31, 2024and2023* was $0.7 million and $0.8 million, respectively.

As of* March 31, 2024,a schedule of approximate expected remaining amortization expense related to intangible assets for the years ending December 31*is as follows:

***9.***LONG-TERM DEBT

On* March 15, 2021,we entered into a senior secured term loan facility ("Term Facility") with TCW Asset Management Company, LLC (TCW), as agent, for the lenders party thereto in the amount of $130 million. The Term Facility provided for quarterly payments of principal and bore interest of LIBOR plus 7.00% through June 30, 2021.After that date, interest was assessed quarterly based on our total leverage ratio. The total leverage ratio is calculated as (a) Total Debt to (b) EBITDA. If our total leverage ratio is greater than or equal to4.00,* the effective interest rate will be SOFR plus 7.75% (or at our option, Prime Rate plus 6.75%). If our total leverage ratio is less than4.00 but greater than or equal to3.50, the effective interest rate will be SOFR plus 7.50% (or at our option, Prime Rate plus 6.50%). If our total leverage ratio is less than3.50 but greater than3.00, the effective interest rate will be SOFR plus 7.00% (or at our option, Prime Rate plus 6.00%). If our total leverage ratio is less than3.00, the effective interest rate will be SOFR plus 6.50% (or at our option, Prime Rate plus 5.50%). The Term Facility also has a SOFR floor rate of 1.00%. In* June 2022,we entered into asecond* amendment with TCW to further amend our Term Facility to consent to the modifications in our borrowing capacity under the ABL Facility as described below, and to adjust certain pricing and prepayment terms, among other things. Thesecond amendment also modified the interest index to provide the use of SOFR to calculate interest rather than LIBOR. The effective interest rate was increased to SOFR plus 7.50% through* November 2022.In November 2022,the Term Facility was amended to increase the effective interest rate to SOFR plus 7.00% until June 2023and to provide certain EBITDA adjustments with respect to financial covenants, among other things. In May 2023,we entered into afourth* amendment with TCW to further amend our Term Facility to provide certain EBITDA adjustments in respect of the financial covenants, adjust the method to calculate total debt, continue certain pricing terms, extend certain prepayment terms, and pay such lenders certain amendment fees, among other things. In* October 2023,we entered into asixth* amendment with TCW to further amend our Term Facility to provide certain EBITDA adjustments in respect of the financial covenants, adjust the performance pricing grid, adjust the total leverage ratio periodically through* June 30, 2025,*among other things.

Our Term Facility is collateralized by asecond-lien on accounts receivable, inventory, cash and related assets and afirst-lien on substantially all other assets. The Term Facility matures on* March 15, 2026.*

On* March 15, 2021,we also entered into a senior secured asset-based credit facility ("ABL Facility") with Bank of America, N.A. ("Bank of America") as agent, for the lenders party thereto. The ABL Facility provides a new senior secured asset-based revolving credit facility up to a principal amount of $150 million, which includes a sub-limit for the issuance of letters of credit up to $5 million. The ABL Facility maybe increased up to an additional $50 million at the borrowers’ request and the lenders’ option, subject to customary conditions. In June 2022,we further amended our ABL Facility to temporarily increase our borrowing capacity to $200 million through December 31, 2022,which thereafter will be reduced to $175 million. In November 2022,we entered into athird* amendment to our ABL Facility to provide certain EBITDA adjustments with respect to our financial covenant. The ABL Facility includes a separatefirst in, last out (FILO) tranche, which allows the Company to borrow at higher advance rates on eligible accounts receivables and inventory balances. In* October 2023,we entered into afifth* amendment to our ABL Facility to provide certain EBITDA adjustments with respect to our financial covenant. As of* March 31, 2024*, we had borrowing capacityof$40.0 million.

10

The ABL Facility is collateralized by afirst-lien on accounts receivable, inventory, cash and related assets and asecond-lien on substantially all other assets. The ABL Facility matures on* March 15, 2026.*Interest on the ABL Facility is based on the amount available to be borrowed as set forth on the following chart:

In connection with the Term Facility and ABL Facility, we had to pay certain fees that were capitalized and will be amortized over the life of each respective loan. In addition, the ABL Facility requires us to pay an annual collateral management fee in the amount of $75,000 due on each anniversary of the ABL Facility issuance date, until it matures.

Current and long-term debt consisted of the following:

Credit Facility Covenants

The Term Facility contains restrictive covenants which require us to maintain a maximum total leverage ratio and a minimum fixed charge coverage ratio, as defined in the Term Facility agreement. Our ABL Facility contains a restrictive covenant which requires us to maintain a fixed charge coverage ratio upon a triggering event taking place (as defined in the ABL Facility agreement). During thethree months ended* March 31, 2024and2023*, we were in compliance with all credit facility covenants.

Both the Term Facility and the ABL Facility contain restrictions on the amount of dividend payments. The Company was in compliance with the amounts paid on dividends in accordance with our debt facilities for thethree months ended* March 31, 2024and2023*.

On* April 26 2024,the Term Facility was retired and the ABL Facility was refinanced with Bank of America, as agent for the lenders party thereto. For additional details on the terms of the Amended and Restated ABL Loan and Security Agreement, dated April 26, 2024,with Bank of America, refer to Note15*.

10. TAXES

The effective tax rate for thethree months ended* March**31,* 2024 and* March 31, 2023was 23.4% and 21.8%, respectively. The effective tax rate used for interim reporting purposes is based on management’s best estimate of factors impacting the effective tax rate for the full fiscal year and includes the impact of discrete items recognized in the quarter. There can beno* assurance that the effective tax rate estimated for interim financial reporting purposes will approximate the effective tax rate determined at fiscal year-end.

The Company files income tax returns in the U.S. for federal, state, and local purposes, and in certain foreign jurisdictions. The Company's tax years 2019 through2023 remain open to examination by most taxing authorities.

Our policy is to accrue interest and penalties on any uncertain tax position as a component of income tax expense. No such expenses were recognized during thethree months ended* March 31, 2024and2023*. We donot believe there will be any material changes in our uncertain tax positions over the next12 months.

11

11. EARNINGS PER SHARE

Basic earnings per share ("EPS") is computed by dividing net income applicable to common shareholders by the weighted average number of common shares outstanding during each period. The diluted EPS computation includes common share equivalents, when dilutive.

A reconciliation of the shares used in the basic and diluted income per common share computation for thethree months ended* March 31, 2024and2023* is as follows:

12. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for thethree months ended* March 31, 2024and2023* is as follows:

13. SEGMENT INFORMATION

Reportable Segments - We have identified three reportable segments: Wholesale, Retail and Contract Manufacturing.

Wholesale. In our Wholesale segment, our products are offered in over 10,000 retail locations representing a wide range of distribution channels in the U.S., Canada, U.K. and other international markets, mainly in Europe. These distribution channels vary by product line and target market and include sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants, uniform stores, farm store chains, specialty safety stores, specialty retailers and online retailers.

Retail. In our Retail segment, we market directly to consumers through our Lehigh business-to-business including direct sales and through our CustomFit websites, consumer e-commerce websites,third-party marketplaces and our Rocky Outdoor Gear Store. Through our outdoor gear store, we generally sellfirst quality or discontinued products in addition to a limited amount of factory damaged goods, which typically carry lower gross margins.

12

Contract Manufacturing. In our Contract Manufacturing segment, we include sales to the U.S. Military, private label sales and any sales to customers in which we are contracted to manufacture or source a specific footwear product for a customer.

Net sales to foreign countries represented approximately 2.1% and 3.7% of net sales for thethree months ended* March 31, 2024and2023*, respectively.

For segment reporting purposes, management uses gross margin to evaluate segment performance and allocate resources. Operating expenses such as warehousing, distribution, marketing and other key activities supporting our operations are integrated to maximize efficiency and productivity; therefore, we donot include within segment results, but instead review at the consolidated level.

The following is a summary of segment results for the Wholesale, Retail and Contract Manufacturing segments for the three months ended* March 31, 2024and2023* .

Segment asset information isnot prepared or used to assess segment performance.

14. COMMITMENTS AND CONTINGENCIES

Gain Contingency

In* June 2022,we became aware of a misclassification of Harmonized Tariff Schedule (HTS) codes filed with the U.S. Customs and Border Protection (U.S. Customs) on certain products imported into the U.S. during2021* and2022 associated with brands acquired through an acquisition in thefirst quarter of2021. As a result of the misclassification of HTS codes we believe that we have paid duties in excess of the expected amount due. We had the potential to recover the total amount of overpaid duties resulting in an estimated potential refund of approximately $7.7 million, of which we received $5.1 million to date. No refunds were received for thethree months ended* March 31, 2024and $1.9 million in refunds were received during thethree* months ended* March 31, 2023.We are accounting for these post summary corrections as a gain contingency, and as such havenot* recorded these potential refunds within the accompanying Unaudited Condensed Consolidated Balance Sheet due to uncertainty of collection. Refunds received will be recognized as a reduction to the cost of goods sold when, and if, the refunds are received.

15. SUBSEQUENT EVENT

On* April 26, 2024,*we amended and restated our ABL Loan and Security Agreement with Bank of America, as agent for the lenders party thereto (the “Restated ABL Facility”), which replaced the existing ABL Facility described in Note 9. The Restated ABL Facility consists of a $175 million revolving credit facility and a $50 million term loan facility.

The Restated ABL Facility bears interest of SOFR (or at our option, Prime Rate plus the applicable margin), as set forth on the following chart:

(1)Until* June 30, 2024,*Level III shall apply.

13