The Hockey Company Posts Q1 Profit on 10.6% Sales Gain

The Hockey Company reported first quarter net sales grew by 10.6% in the three months ended March 31, 2003 to $37.8 million from $34.2 million in 2002. Gross profit increased by 12.1% for the three months ended March 31, 2003 to $16.7 million, from $14.9 million in 2002. Measured as a percentage of net sales, gross margin increased to 44.2% for the three months ended March 31, 2003 from 43.7% in 2002.

EBITDA, as defined below, increased significantly to $7.1 million for the three months ended March 31, 2003 compared to $1.4 million in 2002. Included in the $7.1 million is a net foreign exchange gain of $4.4 million, of which $4.6 million resulted from the strength of the Canadian dollar in the translation of the Company’s U.S. dollar denominated long-term debt, 50% of which is held by the Company’s Canadian subsidiary.

Net income for the three months ended March 31, 2003 was $1.7 million compared to a $3.0 million net loss in 2002. The Company also generated cash from operations for the three months ended March 31, 2003 of $8.6 million compared to $4.7 million in 2002.

Matt OToole, President and Chief Executive Officer of The Hockey Company said, “The Company continues to generate increased profitability through our product innovation efforts. The recent success of our Vector one-piece hockey stick and our 2003 Pro Tack skate are evidence of our renewed product leadership. The hard work and creativity of our employees continues to drive the Company towards its goal of undisputed leadership in each key segment of the global hockey equipment and related apparel market.

“We have also generated excitement in the industry through the recently announced licensing and marketing agreements with both the National Hockey League and the Canadian Hockey League, forming an unprecedented alliance with both leagues that will have benefits for years to come. Both agreements give the Company a significant platform for the continued growth of our apparel business.

“The Hockey Company Holdings Inc., which will become our parent company, recently filed a preliminary base prep prospectus with Canadian regulatory authorities for an initial public offering of Common Shares, which it has applied to list on the Toronto Stock Exchange. The proposed offering is expected to close in the next couple of months and is expected to generate a significant flow of funds and stronger balance sheet for the Company.”

                 Consolidated Statement of Operations

                                         For the Three  For the Three
                                          Months Ended   Months Ended
                                         Mar. 31, 2002  Mar. 31, 2003
                                        ------------------------------


Net sales                                 $     34,161   $     37,779
Cost of goods sold                              19,237         21,071
                                        ------------------------------
     Gross profit                               14,924         16,708
Selling, general and administrative
 expenses                                       14,613         15,732
                                        ------------------------------
     Operating income                              311            976
Other income, net                                   (1)          (637)
Interest expense                                 3,219          3,992
Foreign exchange gain                              (19)        (4,378)
                                        ------------------------------
Income (loss) before income taxes               (2,888)         1,999
Income taxes                                       106            292
                                        ------------------------------
Net income (loss)                         $     (2,994)  $      1,707