14. SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2012

Segment Reporting Disclosure [Text Block]

14. SEGMENT INFORMATION

Operating Segments - We operate our business through three business segments: wholesale, retail and military.

Wholesale. In our wholesale segment, our products are offered in over ten thousand retail locations representing a wide range of distribution channels in the U.S. and Canada. 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 and other specialty retailers.

Retail. In our retail segment, we sell our products directly to consumers through our Lehigh mobile and retail stores, our Rocky outlet store and our websites. Our Lehigh operations include a fleet of trucks, supported by small warehouses that include retail stores, which we refer to as mini-stores. Through our outlet store, we generally sell first quality or discontinued products in addition to a limited amount of factory damaged goods, which typically carry lower gross margins.

Military. While we are focused on continuing to build our wholesale and retail business, we also actively bid, from time to time, on footwear contracts with the U.S. military. Our sales under such contracts are dependent on us winning the bids for these contracts.

In July 2009, we were awarded a $29.0 million blanket purchase order from the GSA to produce footwear for the U.S. Military. During 2012, we made limited shipments under this contract. Recently, we received an order to fulfill a contract to the U.S. Military to produce “Hot Weather” combat boots. The first year of the contract includes a minimum purchase amount of $3.0 million and a maximum of $15.0 million. Shipment of the boots is expected to begin in March 2013. The contract includes an option for four additional years with the same terms.

F-21

The following is a summary of segment results for the Wholesale, Retail, and Military segments.

	Years Ended December 31,
	2012		2011		2010
NET SALES:
Wholesale	$	186,000,531	$	192,554,089	$	188,268,830
Retail		41,284,731		44,812,808		47,476,715
Military		1,032,401		2,232,199		17,046,718
Total Net Sales	$	228,317,663	$	239,599,096	$	252,792,263
GROSS MARGIN:
Wholesale	$	60,767,856	$	66,936,863	$	65,470,287
Retail		19,475,431		20,695,454		21,785,077
Military		43,303		298,438		2,117,350
Total Gross Margin	$	80,286,590	$	87,930,755	$	89,372,714

Segment asset information is not prepared or used to assess segment performance.

Product Group Information - The following is supplemental information on net sales by product group:

	2012		% of Sales			2011		% of Sales			2010		% of Sales
Work footwear	$	116,504,833		51.0	%	$	121,731,462		50.8	%	$	133,970,454		53.0	%
Outdoor footwear		22,387,493		9.8	%		26,960,781		11.3	%		26,066,047		10.3	%
Western footwear		29,998,191		13.1	%		25,094,929		10.5	%		30,707,353		12.1	%
Duty and commercial
military footwear		35,023,601		15.3	%		34,278,075		14.3	%		22,190,068		8.8	%
Lifestyle footwear		10,162,700		4.5	%		7,276,053		3.0	%		178,472		0.1	%
Apparel		9,651,847		4.2	%		12,954,362		5.4	%		11,529,989		4.6	%
Other		3,556,597		1.6	%		9,071,235		4.0	%		11,103,162		4.4	%
Military footwear		1,032,401		0.5	%		2,232,199		0.9	%		17,046,718		6.7	%
	$	228,317,663		100	%	$	239,599,096		100	%	$	252,792,263		100	%

Net sales to foreign countries, primarily Canada, represented approximately 3.9% of net sales in 2012, 4.1% of net sales in 2011 and 3.1% of net sales in 2010.