Everlast 2002 Net Income Up 4.7% on 24% Sales Increase

Everlast(R) Worldwide Inc. reported net sales for the year ended December 31, 2002 increased 23.9% to $65,613,012 as compared to $52,951,510 reported in 2001. Operating income grew 11.9% to $5,134,053 from $4,587,240 in 2001. For 2002, net income available to common stockholders, after giving effect to the redeemable preferred stock dividend, grew 50.2% to $997,443, or $0.32 per basic share, compared with $664,056, or $0.21 per basic share, for 2001.

“Guided by our brand-driven strategies, we introduced new Everlast products, entered new international markets and signed additional licensing agreements; all of which contributed to our success last year,” said George Q Horowitz, chairman and chief executive of Everlast Worldwide Inc. “We also benefited greatly from our high impact marketing and merchandising programs as well as the enhanced stature the Everlast brand enjoys within the ranks of professional boxing.”

Net sales for the fourth quarter advanced 29.2% to $18,247,504 as compared to $14,126,298 reported in the fourth quarter of 2001. Operating income for the fourth quarter was $168,291 reversing an operating loss of $16,683 recorded last year. Fourth quarter net income available to common stockholders, after giving effect to the redeemable preferred stock dividend, was $1,203, or nil per basic share, compared with $1,800, or nil per basic share, in the fourth quarter of last year.

Mr. Horowitz concluded, “For 2003, our goals are to gain quality market share for all of our lines, increase profitability and enhance stockholder value. This is a challenging undertaking given the general economic and political conditions around the world. However, we believe that we are well positioned to accomplish these goals. To achieve our goals we will continue our aggressive approach to global brand building utilizing the work we have done during 2002 as a foundation from which to leverage our brand into new worldwide markets. We will explore additional licensing opportunities with leaders across a number of important product categories and expect to announce several licenses within the next few months. Finally, we will continue to increase our visibility at all levels within the boxing community to expand brand awareness. We have an experienced management team and a continued commitment to invest in the development of new products and cutting edge merchandising programs.”

                            Twelve Months Ended          Three Months Ended
                                December 31,                 December 31,
                      UNAUDITED                     UNAUDITED
                         2002           2001           2002           2001
                   (Consolidated) (Consolidated) (Consolidated) (Consolidated)

    Net sales        $65,613,012    $52,951,510    $18,247,504    $14,126,298

    Cost of goods
      sold            46,729,288     34,929,074     14,543,435      9,581,106

    Gross profit      18,883,724     18,022,436      3,704,069      4,545,192

    Net license
      revenue          5,501,388      5,141,024      1,310,059      1,370,960
                      24,385,112     23,163,460      5,014,128      5,916,152
    Operating expenses:
      Selling and
        shipping      12,446,838     11,547,922      3,191,638      3,729,698
      General and
        administrative 5,891,549      5,834,813      1,443,161      1,824,194
      Amortization
        expense          912,672      1,193,485        211,038        378,943
                      19,251,059     18,576,220      4,845,837      5,932,835

    Income (loss)
      from operations  5,134,053      4,587,240        168,291        (16,683)

    Other expenses:
      Interest expense   777,159        531,256        254,037        146,508
      Investment income  (96,129)      (242,026)       (59,254)       (32,945)
      Miscellaneous           --        112,500                       112,500
                         681,030        401,730        194,783        226,063

    Income (loss)
      before provision
      for income taxes 4,453,023      4,185,510        (26,492)      (242,746)

    Provision
      (benefit) for
      income taxes     2,004,772      1,846,614        (29,441)      (334,837)

    Net income        $2,448,251     $2,338,896         $2,949        $92,091


    Redeemable
      preferred stock
      dividend         1,450,808      1,674,840          1,746         90,291

    Net income
      available to
      common
      stockholders      $997,443       $664,056         $1,203         $1,800

    Basic earnings
      per share             $.32           $.21           $.00           $.00