Rocky Shoes & Boots, Inc. has announced that an order for combat boots for the US Military has been terminated by the US government for convenience. Termination for convenience is the government's right to cancel a contract without cause.

The company announced that it had received a contract to produce approximately $30 million of "Hot Weather" boots for the US Military in October through a third party, Atlantic Diving Supply, which had the prime contract to supply the combat boots to the US military under a General Services Administration schedule contract. Shipment of the boots began in the fourth quarter of fiscal 2005 with an estimated completion date of December 2006. The company is currently calculating the financial consequences of the termination and the recovery of costs incurred in the performance of the contract prior to termination.

Mike Brooks, chairman and CEO, stated, "While we are clearly disappointed with the government's termination of this order, we know this decision was not based on Rocky's ability to produce high quality boots and successfully fulfil this contract. Instead, the contract with ADS was terminated by the government, for the convenience of the government, as permitted under applicable government contract laws and regulations and not due to any problem or default by ADS or Rocky, thus entitling ADS, and indirectly Rocky, under the same government laws and regulations to be compensated by the government for its work to date, including finished boots and work-in-process, plus various other costs incurred, including any costs incurred in the cancellation of materials contracts. Furthermore, we believe Rocky remains well positioned to source additional footwear orders for the U.S. Military going forward."

Rocky Shoes & Boots, Inc. designs and manufactures outdoor, work, duty and western footwear, as well as branded apparel and accessories.