Mossimo, Inc. reported fourth quarter 2002 revenue of $2.6 million compared to $2.6 million for the same period last year. The Company reported a fourth quarter 2002 net loss before benefit for income taxes of $1,050,000 compared to net earnings before benefit for income taxes of $399,000 for the same period last year, and a diluted pre-tax loss per share of ($0.07), compared to a diluted pre-tax earnings per share of $0.03 for the same period last year. The 2002 pre-tax loss included $600,000, or ($0.04) diluted pre-tax loss per share, of arbitration related expenses charged to operations in fourth quarter.

For fiscal 2002, revenue increased 19.3% to $19.9 million compared to $16.7 million in fiscal 2001. The Company reported fiscal 2002 earnings before benefit for income taxes of $7.3 million, or $0.46 per diluted share, compared to earnings before benefit for income taxes of $5.9 million, or $0.38 per diluted share, for fiscal 2001. Included in the 2002 revenue was non-recurring revenue of $1.5 million, which had been previously deferred by the Company pending the results of a royalty audit that was completed in 2002. The non-recurring revenue increased net earnings by $600,000, and increased diluted earnings per share by $0.04 in 2002.

Both the fourth quarter and fiscal year 2002 were positively impacted by a deferred tax benefit recorded at December 31, 2002 of $6.4 million, following the reduction of the Company’s valuation allowance for deferred tax asset, as a result of the extension of the Target Agreement through January 2006, and the reevaluation of the Company’s forecasted operating results, forecasted taxable income, and the consequent utilization of the tax net operating losses during the extended period of the Target Agreement. Including the benefit for income taxes, the Company reported net earnings of $5.4 million, or $0.34 per diluted share, and net earnings of $13.7 million, or $0.87 per diluted share, for the fourth quarter and fiscal year ended December 31, 2002, respectively.

Mossimo Giannulli, Chairman and Chief Executive Officer stated, “Although our fourth quarter operating results were below expectations due primarily to arbitration related expenses, fiscal 2002 represented another strong year highlighted by a number of significant accomplishments. Financially, we increased our revenues more than 19%, and our annual retail sales of Mossimo product at Target increased to nearly $1 billion. Operationally, we continued to expand our products categories and distribution, and finished the year with penetration in over 1,100 Target stores across the country. On the marketing front we were the focus of nationally televised commercials and a series of print campaigns, and in January 2003 we renewed our agreement with Target through 2006.

“During the year we also successfully negotiated our first international deal,” Mr. Giannulli continued. “In May 2002, we entered into a major, multi-product trademark licensing and design services agreement with Hudson’s Bay Company/Zellers, Canada’s largest retailer. Our first product set was released into a select number of Zellers stores in December 2002, and the early feedback has been very positive. We expect to have distribution in more than 350 Zellers stores by Spring 2003 and we are very excited about the many opportunities that lie ahead.”

Edwin Lewis, Vice Chairman and President commented, “Our performance in 2002 was supported by key additions in personnel to solidify our management and design teams, and to further enhance our operating infrastructure. As we strive to maintain the highest level of service with Target, while simultaneously pursue and execute other deals similar to the one with Zellers, we are making additional investments in our systems and our human resources. While these investments in our infrastructure may impact our bottom line in the near term, we believe that these strategic initiatives will help us create a more powerful platform to support future growth.”

The company stated that it now expects 2003 revenues from license royalties and design service fees to be approximately $21 million, and diluted pre-tax earnings per share to be approximately flat in 2003 as compared to 2002.

Mr. Giannulli concluded, “As we begin the third year under our agreement with Target, I am extremely pleased with the success of this partnership. Target’s belief in our company is underscored by the commitment and support we continue to receive, and the ongoing strength of our brand is evidenced by the strong consumer response to our products. Additionally, our ability to replicate our unique business operation with Zellers in Canada is a testament to the exportability of our business model and the international demand for Mossimo product. We remain focused on maximizing our existing opportunities, and at the same time, we will continue to explore other strategic alliances.”

                             MOSSIMO, INC.
                 (In thousands, except per share data)

                                       For the Three   For the Years
                                       Months Ended        Ended
                                       December 31,     December 31,  
                                      --------------- ---------------
                                        2002    2001    2002    2001  
                                      ------- ------- ------- -------

 AND DESIGN SERVICE FEES              $ 2,600 $ 2,590 $19,881 $16,666

OPERATING EXPENSES                      3,635   1,981  12,525  10,455
                                      ------- ------- ------- -------

Operating earnings (loss)              (1,035)    609   7,356   6,211

 Other income (expense), net              (38)     21     181     536
 Interest income (expense), net            23    (231)   (276)   (864)
                                      ------- ------- ------- -------

Earnings (loss) before income taxes    (1,050)    399   7,261   5,883
Benefit for income taxes               (6,404) (3,153) (6,404) (3,153)
                                      ------- ------- ------- -------

Net earnings                          $ 5,354 $ 3,552 $13,665 $ 9,036