Earnings Per Share Increased Fivefold to $0.30

Adjusted Earnings Per Share Increased to $0.39

Funded Debt Decreased 62.5% to $11.6 Million

Rocky Brands, Inc. (NASDAQ: RCKY) today announced financial results for the three and nine month periods ended September 30, 2017.

Sales & Income Review

Third quarter net sales were $64.7 million compared to $73.2 million in the third quarter of 2016. The Company reported third quarter net income of $2.2 million, or $0.30 per diluted share compared to net income of $0.4 million, or $0.06 per diluted share in the third quarter of 2016. Adjusted net income for the third quarter of 2017 was $2.8 million, or $0.39 per diluted share compared to adjusted net income of $1.2 million, or $0.16 per diluted share in the prior year period.

Net sales for the first nine months of 2017 were $186.2 million compared to $193.3 million for the first nine months of 2016. The Company reported net income of $5.2 million, or $0.70 per diluted share compared to a net loss of $1.5 million, or ($0.20) per diluted share for the nine months ended September 30, 2017 and 2016, respectively. Adjusted net income for the first nine months of 2017 was $5.8 million, or $0.79 per diluted share compared to an adjusted net loss of $0.8 million, or ($0.10) per diluted share in the prior year period.

Jason Brooks, President and Chief Executive Officer, commented, “We are pleased to have achieved another quarter of strong earnings growth. Our ability to drive enhanced profitability despite softer top-line trends highlights our improved operating structure and focus on increasing margins. As we previously announced, approximately $1.7 million of military footwear shipments shifted from the third quarter to the fourth quarter due to the temporary shutdown of our Puerto Rico facility in the wake of Hurricane Maria. On top of this, wholesale sales were below expectations as each of our brands posted modest shortfalls versus plan. We believe this was due to a combination of factors including lower discounting as we’ve placed a greater emphasis on full-price selling and retailers buying closer to the holiday season compared with previous years. We were able to offset a portion of these challenges through the expansion of our direct channel as we continue to sign new accounts to our Lehigh Outfitters CustomFit program. Looking ahead, we are cautiously optimistic about our growth prospects beginning in the fourth quarter as wholesale sales trends have recently accelerated and our military manufacturing has resumed normal operations. We remain confident that our current strategies have the Company well positioned to deliver increased value to shareholders over the long-term.”

Third Quarter Review

Net sales for the third quarter decreased 11.7% to $64.7 million compared to $73.2 million a year ago. Wholesale sales for the third quarter decreased 12.9% to $46.0 million compared to $52.9 million for the same period in 2016. Retail sales for the third quarter increased 7.8% to $11.1 million compared to $10.3 million for the same period last year. Military segment sales for the third quarter were $7.6 million compared to $10.1 million in the third quarter of 2016.

Gross margin in the third quarter of 2017 was $19.5 million, or 30.2% of sales, compared to $19.8 million, or 27.0% of sales, for the same period last year. The 320 basis point increase was driven by a significant improvement in both wholesale segment and military segment margins. Third quarter 2017 gross margin includes approximately $1 million of additional expenses related to payroll and overhead costs that could not be capitalized in inventory due to lower than usual production volumes at the Company’s Puerto Rico manufacturing facility because of the disruption from Hurricanes Maria and Irma. Excluding the additional expenses, adjusted gross margin was 31.7%.

Selling, general and administrative (SG&A) expenses decreased to $16.0 million, or 24.8% of net sales, for the third quarter of 2017 compared to $18.9 million, or 25.8% of net sales, a year ago. Third quarter 2016 SG&A expenses included an approximately $1.2 million charge related to reorganizational activities. Excluding the charge, the $1.7 million decrease in SG&A expenses was primarily related to lower compensation expense following the workforce reductions in the second half of 2016.

Income from operations for the quarter was $3.5 million, or 5.4% of net sales compared to income from operations of $0.9 million, or 1.2% of net sales a year ago.

Interest expense was $110,000 for the third quarter of 2017, versus $181,000 for the same period last year.

During the third quarter 2017, the company repurchased 48,616 shares of its common stock at an average price of $13.35.

The Company’s funded debt decreased $19.3 million, or 62.5% to $11.6 million at September 30, 2017 versus $31.0 million at September 30, 2016.

Inventory at September 30, 2017 decreased 3.8% to $76.9 million compared to $79.9 million on the same date a year ago.

Use of Non-GAAP Financial Measures

In addition to GAAP financial measures, we present the following non-GAAP financial measures: “non-GAAP adjusted gross margin,” “non-GAAP adjusted selling, general, and administrative expenses,” “non-GAAP adjusted net income,” and “non-GAAP adjusted net income per share.” Adjusted results exclude the impact of items that management believes affect the comparability or underlying business trends in our consolidated financial statements in the periods presented. We believe that these non-GAAP measures are useful to investors and other users of our consolidated financial statements as an additional tool for evaluating operating performance. We believe they also provide a useful baseline for analyzing trends in our operations. Investors should not consider these non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. See “Reconciliation of GAAP Measures to Non-GAAP Measures” accompanying this press release.

Conference Call Information

The Company’s conference call to review third quarter 2017 results will be broadcast live over the internet today, Tuesday, October 24, 2017 at 4:30 pm Eastern Time. The broadcast will be hosted at http://www.rockybrands.com.

About Rocky Brands, Inc.

Rocky Brands, Inc. is a leading designer, manufacturer and marketer of premium quality footwear and apparel marketed under a portfolio of well recognized brand names including Rocky®, Georgia Boot®, Durango®, Lehigh®, Creative Recreation®, and the licensed brand Michelin®.

Safe Harbor Language

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Those statements include, but may not be limited to, all statements regarding intent, beliefs, expectations, projections, forecasts, and plans of the Company and its management and include statements in this press release regarding growth prospects and delivery of increased value to shareholders (paragraph 4). These forward-looking statements involve numerous risks and uncertainties, including, without limitation, the various risks inherent in the Company’s business as set forth in periodic reports filed with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K for the year ended December 31, 2016 (filed March 9, 2017) and quarterly report on Form 10-Q for the quarters ended March 31, 2017 (filed May 5, 2017) and June 30, 2017 (filed August 9, 2017). One or more of these factors have affected historical results, and could in the future affect the Company’s businesses and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the Company, or any other person should not regard the inclusion of such information as a representation that the objectives and plans of the Company will be achieved. All forward-looking statements made in this press release are based on information presently available to the management of the Company. The Company assumes no obligation to update any forward-looking statements.

      Rocky Brands, Inc. and Subsidiaries Condensed Consolidated Balance Sheets   September 30, 2017 December 31, 2016 September 30, 2016 Unaudited Audited Unaudited ASSETS:   CURRENT ASSETS: Cash and cash equivalents $ 2,238,862 $ 4,480,505 $ 3,942,209 Trade receivables – net 45,106,205 40,844,583 51,292,323 Other receivables 800,322 688,251 579,976 Inventories 76,885,153 69,168,442 79,922,305 Income tax receivable - 1,243,678 1,190,702 Prepaid expenses   2,431,996   2,354,107   2,644,102

Total current assets

127,462,538 118,779,566 139,571,617 FIXED ASSETS – net 24,742,833 26,511,493 27,450,150 IDENTIFIED INTANGIBLES 33,319,334 33,415,694 36,448,490 OTHER ASSETS   225,310   232,509   238,251 TOTAL ASSETS $ 185,750,015 $ 178,939,262 $ 203,708,508     LIABILITIES AND SHAREHOLDERS' EQUITY:   CURRENT LIABILITIES: Accounts payable $ 16,861,274 $ 11,589,040 $ 15,042,805 Accrued other expenses:   9,097,184   6,130,871   8,604,611

Total current liabilities

25,958,458 17,719,911 23,647,416 LONG TERM DEBT 11,630,000 14,584,008 30,972,398 DEFERRED INCOME TAXES 10,464,435 11,365,800 12,120,693 DEFERRED LIABILITIES   181,737   176,219   208,387   TOTAL LIABILITIES 48,234,630 43,845,938 66,948,894   SHAREHOLDERS' EQUITY: Common stock, no par value;

25,000,000 shares authorized; issued and outstandingSeptember 30, 2017 - 7,403,195; December 31, 2016 -7,421,455; September 30, 2016 - 7,447,331

68,979,376 69,291,637 69,507,320 Retained earnings   68,536,009   65,801,687   67,252,294  

Total shareholders' equity

  137,515,385   135,093,324   136,759,614   TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 185,750,015 $ 178,939,262 $ 203,708,508       Rocky Brands, Inc. and Subsidiaries Condensed Consolidated Statements of Operations   Three Months Ended Nine Months Ended September 30, September 30, 2017   2016 2017   2016 Unaudited Unaudited Unaudited Unaudited   NET SALES $ 64,675,082 $ 73,218,247 $ 186,202,989 $ 193,308,286   COST OF GOODS SOLD   45,163,539     53,452,487     128,779,845     138,368,374     GROSS MARGIN 19,511,543 19,765,760 57,423,144 54,939,912  

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

16,026,654 17,745,691 49,313,498 55,685,180 REORGANIZATIONAL CHARGE   -     1,159,527     -     1,159,527   TOTAL OPERATING EXPENSE 16,026,654 18,905,218 49,313,498 56,844,707   INCOME (LOSS) FROM OPERATIONS 3,484,889 860,542 8,109,646 (1,904,795 )   OTHER INCOME AND (EXPENSES): Interest expense (110,335 ) (181,040 ) (280,824 ) (459,231 ) Other – net   12,208     (3,873 )   35,064     82,876   Total other - net (98,127 ) (184,913 ) (245,760 ) (376,355 )   INCOME (LOSS) BEFORE INCOME TAXES 3,386,762 675,629 7,863,886 (2,281,150 )   INCOME TAX EXPENSE (BENEFIT)   1,152,000     230,000     2,674,000     (776,000 )   NET INCOME (LOSS) $ 2,234,762   $ 445,629   $ 5,189,886   $ (1,505,150 )   INCOME (LOSS) PER SHARE Basic $ 0.30 $ 0.06 $ 0.70 $ (0.20 ) Diluted $ 0.30 $ 0.06 $ 0.70 $ (0.20 )  

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

Basic   7,357,000     7,480,733     7,411,000     7,531,308   Diluted   7,362,088     7,504,521     7,414,317     7,531,308             Rocky Brands, Inc. and Subsidiaries Reconciliation of Gross Margin, Selling General Admin, Net Income (Loss)   Three months ended Nine months ended September 30, September 30, 2017 2016 2017 2016

Gross Margin

Gross margin, as reported $ 19,511,543 $ 19,765,760 $ 57,423,144 $ 54,939,912 Add: hurricane related expenses   963,570   -   963,570   -   Adjusted gross margin $ 20,475,113 $ 19,765,760 $ 58,386,714 $ 54,939,912  

Operating Expenses

Sales, general, and administrative, as reported $ 16,026,654 $ 18,905,218 $ 49,313,498 $ 56,844,707 Less: reorganizational charge   -   1,159,527   -   1,159,527   Adjusted selling, general, and administrative expenses $ 16,026,654 $ 17,745,691 $ 49,313,498 $ 55,685,180  

Net Income (Loss)

Net income (loss), as reported $ 2,234,762 $ 445,629 $ 5,189,886 $ (1,505,150 ) Add: hurricane related expenses, after tax 635,956 - 635,956 - Add: reorganizational charge, after tax   -   753,693   -   753,693   Adjusted net income (loss) $ 2,870,718 $ 1,199,322 $ 5,825,842 $ (751,457 )   Net income (loss) per share, as reported Basic $ 0.30 $ 0.06 $ 0.70 $ (0.20 ) Diluted $ 0.30 $ 0.06 $ 0.70 $ (0.20 )   Adjusted net income (loss) per share Basic $ 0.39 $ 0.16 $ 0.79 $ (0.10 ) Diluted $ 0.39 $ 0.16 $ 0.79 $ (0.10 )   Weighted average shares outstanding Basic   7,357,000   7,480,733   7,411,000   7,531,308   Diluted   7,362,088   7,504,521   7,414,317   7,531,308    

Rocky Brands, Inc.Tom Robertson, 740-753-1951Chief Financial OfficerorInvestor Relations:ICR, Inc.Brendon Frey, 203-682-8200

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