Everlast Worldwide Inc. reported that net sales for the 2003 fourth quarter declined 8.2% to $16.7 million compared to reported net sales of $18.2 million in Q4 2002. Net sales in the fourth quarter of 2003 would have been 3% higher than reported 2002 net sales after reflecting a change in revenue sources for 2003, as certain customers became licensees in 2003. Net licensing revenues advanced 40.6% to $1.8 million vs. $1.3 million in the 2002 period.

Pro-forma earnings, excluding the affects of the aforementioned restructuring and non-recurring costs that are not expected to impact earnings in 2004, were $.1 million, or $0.04 per basic share as compared to reported nil per basic share in 2002. Net loss available to common stockholders' under GAAP, which includes $2.4 million of restructuring and non-recurring costs, was ($1.2) million, or ($0.38) per basic share.

For the year ended December 31, 2003, net sales were $58.0 million as compared to $65.6 million in 2002. Approximately one-half of this decline results from customers who became licensees this year; the remaining decline is the result of soft sales from the first-half of the year caused by unfavorable economic conditions. Net licensing revenues increased 21.2% to $6.7 million as compared to $5.5 million in 2002. Pro-forma earnings, excluding the affects of the restructuring and non-recurring costs, were $.6 million or $0.18 per basic share as compared to $1.0 million, or $0.32 per basic share in 2002. Net loss available to common stockholders, under GAAP, was ($.9) million, or ($0.31) per basic share.

“Our emphasis and focus on brand building through strategic licensing arrangements allowed us to achieve record licensing revenues increases of 41% and 21% during the fourth quarter and year ended 2003, respectively, as compared to the 2002 periods. Some of our increased licensing revenues were the result of certain customers who became licensees during 2003. Our net sales in the fourth quarter of 2003, adjusted for this change in revenue sources, would have been 3% higher than reported 2002 net sales,” said George Q Horowitz, Chairman and Chief Executive of Everlast Worldwide Inc.

“As previously announced, during the fourth quarter of 2003, we incurred restructuring and non-recurring duplicative costs associated with our Bronx, NY facility relocation of approximately $2.4 million, pretax. Our results, adjusted for these costs not expected to be incurred in 2004, were $0.04 per share compared with nil per share in the prior year fourth quarter period.”

Mr. Horowitz concluded, “2003 was a transition year for us. While we achieved record licensing revenues, our results were impacted in the first half of the year by economic and political events beyond our control. Our results were also impacted by various one-time costs and charges associated with our Bronx, NY facility closure. However, I am optimistic about 2004. The cost savings we are expected to achieve and the efficiencies we are seeing thus far from the facility consolidation are expected to significantly enhance our operating results commencing in the first quarter of 2004. In addition, our recent Preferred Stock redemption refinancing has improved our balance sheet and cash position and further provides us with greater flexibility to execute our brand equity building strategy. It is our intention to return our company to profitable growth through the combination of cost savings mentioned above, the introduction of important new Everlast apparel products such as our Heritage Collection and the signing of new licensing agreements in the U.S. and international markets. ” 


                               (Tables Follow)

                    EVERLAST WORLDWIDE INC. & SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS

                            Three Months Ended              Year Ended
                                December 31,                December 31,

                            2003          2002          2003          2002
                        (Unaudited)   (Unaudited)

    Net sales           $16,666,179   $18,247,504   $58,035,886   $65,613,012

    Cost of goods sold   13,155,517    14,543,435    43,505,127    46,729,288

    Gross profit          3,510,662     3,704,069    14,530,759    18,883,724

    Net license revenues  1,842,150     1,310,059     6,669,640     5,501,388
                          5,352,812     5,014,128    21,200,399    24,385,112
    Operating expenses:
    Selling and shipping  3,654,481     3,191,638    12,722,039    12,446,838
    General and
     administrative       2,016,117     1,443,161     6,436,274     5,891,549
    Restructuring and
     non-recurring costs  1,095,000            --     1,095,000            --
    Amortization            228,168       211,038       912,672       912,672
                          6,993,766     4,845,837    21,165,985    19,251,059

    Income ( loss)
     from operations     (1,640,954)      168,291        34,414     5,134,053

    Other income (expense):
    Interest expense       (284,631)     (254,037)   (1,002,579)     (777,159)
    Interest expense on
     redeemable
     participating
     preferred stock        112,440            --            --            --
    Investment income         6,038        59,254        48,326        96,129
                           (166,153)     (194,783)     (954,253)     (681,030)

    Income (loss) before
     provision for income
     taxes               (1,807,107)      (26,492)     (919,839)    4,453,023

    Provision (benefit)
     for income taxes      (484,220)      (29,441)       35,000     2,004,772

    Net income (loss)   ($1,322,887)       $2,949     ($954,839)   $2,448,251

    Redeemable preferred
     stock dividend        (136,803)        1,746             -     1,450,808

    Net income (loss)
     available to common
     stockholders       ($1,186,084)       $1,203     ($954,839)     $997,443

    Basic earnings
     (loss) per share        ($0.38)        $0.00        ($0.31)        $0.32