Brass Eagle 2002 Net Income Surges 149% on 14% Revenue Rise

Brass Eagle Inc. reported net sales for the fourth quarter ended December 31, 2002 increased 5.8% to $36.2 million versus $34.2 million for the same period last year. Net income for the three months ended December 31, 2002 increased 147.4% to $4.7 million or $0.63 per diluted share, compared to $1.9 million or $0.25 per diluted share for the corresponding period in 2001.

For the fiscal year ended December 31, 2002, net sales increased 14.1% to $104.9 million versus $91.9 million for the same period last year. Net income increased 149% to $9.7 million, or $1.30 per diluted share, compared to $3.9 million, or $0.52 per diluted share, for the year ended December 31, 2001.

Lynn Scott, Brass Eagle President and CEO stated, “We are pleased with our sales and earnings in 2002, despite a sluggish retail environment around the Christmas holiday season. We were particularly excited by gains with the specialty sporting good chains and dealers achieved during the year.”

For the 2003 fiscal year, the Company expects an increase in both sales and earnings over 2002. The Company estimates sales will exceed $112 million for 2003, and earnings per share will exceed $1.38.

Mr. Scott concluded, “Brass Eagle enters 2003 with a strong portfolio of brands, a wide-range of products and broad distribution. We provide markers, paintballs, apparel and accessories to all enthusiast levels, from beginner to expert, in a variety of channels ranging from the mass market to specialty sporting goods chains and dealers. It is this and the good work of our people that makes Brass Eagle unique in the industry and helps us maintain our leadership position in the market.”

                           

                           BRASS EAGLE INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands except per share amounts)

                                     Three Months      Twelve Months
                                        Ended             Ended
                                      December 31,     December 31,
                                  ----------------- ------------------

                                     2002     2001      2002     2001
                                  -------- -------- --------- --------

Net sales                         $36,212  $34,212  $104,923  $91,885
Cost of sales                      21,574   22,925    63,918   58,845
                                  -------- -------- --------- --------
Gross profit                       14,638   11,287    41,005   33,040

Operating expenses                  7,338    7,639    24,862   24,628
                                  -------- -------- --------- --------
Operating income                    7,300    3,648    16,143    8,412

Interest income/(expense)/other      (425)    (615)   (1,456)  (1,920)
                                  -------- -------- --------- --------
Income before income taxes          6,875    3,033    14,687    6,492

Provision for income taxes          2,200    1,174     5,016    2,566
                                  -------- -------- --------- --------

Net income                         $4,675   $1,859    $9,671   $3,926