K-Swiss Inc. announced net earnings for the fourth quarter of 2002 increased 5.4% to $4,788,000, or $0.25 per diluted share, compared with $4,542,000, or $0.23 per diluted share, in the prior-year period. Net earnings for the year ended December 31, 2002, increased 23.1% to $28,697,000, or $1.46 per diluted share, compared with $23,309,000, or $1.14 per diluted share, for the year ended December 31, 2001.

For the fourth quarter of 2002, total worldwide revenues increased 18.8% to $53,270,000 compared with $44,831,000 in the prior-year period. Domestic revenues increased 16.6% to $44,654,000 in the fourth quarter, and international revenues increased 31.9% to $8,616,000. Total worldwide revenues for 2002 were $290,413,000 compared with $237,285,000 in 2001. Domestic revenues increased 20.4% to $248,589,000 in 2002, while international revenues increased 35.6% to $41,824,000.

Worldwide futures orders with start ship dates from January through June 2003 increased 42.9% to $168,877,000 at December 31, 2002, compared with $118,152,000 at December 31, 2001. Domestic futures orders increased 42.9% to $147,663,000 at December 31, 2002, from $103,329,000 at December 31, 2001. International futures orders increased 43.1% to $21,214,000 at December 31, 2002, from $14,823,000 the previous year.

The Company purchased 205,700 shares of Class A Common Stock during the fourth quarter of 2002 for a total expenditure of approximately $4,721,000 as part of its stock repurchase program. Since August 1996, K-Swiss has purchased a total of 11.1 million shares of Class A Common Stock for a total expenditure of $95.0 million.

Commenting on the announcement, Steven Nichols, Chairman of the Board and President, stated, “The strength and momentum of the K-Swiss brand is considerable right now. Both new and core products sold well at retail during the fourth quarter and, as evidenced by the 43% increase in our backlog, have continued to book well for futures orders. The enduring appeal of our Classics and the favorable response to both our marketing campaign and new product introductions have yielded a heightened awareness of the K-Swiss brand among our target consumers. Our growing presence resulted in increased market share during 2002, yet another year of strong earnings growth and record revenues for both the fourth quarter and the year.”

K-Swiss also issued guidance for 2003. The Company expects revenues for the first quarter of 2003 will be in the range of $103 to $106 million and earnings per diluted share to be in the range of $0.55 to $0.60. The Company expects full year revenues to increase to $350 to $360 million and expects to report full year earnings per diluted share of approximately $1.75 to $1.85, an increase of 20% to 27% over 2002.

These estimates reflect the continued investments in marketing and product development for the National Geographic and Royal Elastics brands as well as the expansion of European operations and are based upon the following assumptions: gross margins will be approximately 43% for the year; SG&A will not rise above $98 million for the year; cancellations will be moderate; and the Company’s growth initiatives with respect to National Geographic and Royal Elastics will not exceed a net loss of $0.25 per share for the entire year.

Mr. Nichols added, “We are excited about the innovative new products we have introduced and our new marketing plan for 2003. Combined with the continued strength in our Classics business, we believe we have set the stage for another great year in 2003. Our focus for 2003 will be to continue to build on the recent improvements in Europe and Asia as well as further develop the National Geographic and Royal Elastics brands.”

The per share results reported herein reflect the effect of the two-for-one stock split which was distributed on June 21, 2002, to stockholders of record on June 7, 2002.

           K-Swiss Inc. Consolidated Statements of Earnings
            (In thousands, except earnings per share data)

                              Three Months Ended   Twelve Months Ended
                                 December 31,          December 31,
                             -------------------   -------------------
                                 (Unaudited)
                               2002       2001       2002       2001
                             --------   --------   --------   --------
Revenues                      $53,270    $44,831   $290,413   $237,285
Cost of goods sold             29,722     25,848    160,735    138,371
                             --------   --------   --------   --------
  Gross profit                 23,548     18,983    129,678     98,914
Selling, general and
 administrative expenses       16,155     11,826     83,314     61,969
                             --------   --------   --------   --------
  Operating profit              7,393      7,157     46,364     36,945
Interest income, net              294        357        904      1,804
                             --------   --------   --------   --------
  Earnings before income
   taxes                        7,687      7,514     47,268     38,749
Income tax expense              2,899      2,972     18,571     15,440
                             --------   --------   --------   --------
  Net earnings                 $4,788     $4,542    $28,697    $23,309