Rawlings Sporting Goods Company, Inc. announced first quarter fiscal year 2003 operating results for the three months ended November 30, 2002. Earnings per share (EPS) for first quarter fiscal year 2003 improved to a loss of ($0.08) versus a loss of ($0.10) in first quarter fiscal year 2002. Because of the seasonal nature of Rawlings business, the Company typically reports losses in its first and fourth quarters.

Rawlings first quarter fiscal year 2003 sales were $30.0 million, down 10.3% from first quarter fiscal year 2002 sales of $33.4 million. The sales decline primarily reflected the loss of NCAA basketball sales and a drop in low-end football sales. These declines were partially offset by stronger baseball and softball equipment sales versus a year ago.

Gross profit for first quarter fiscal year 2003 was $8.9 million, down 5.3% from the first quarter fiscal year 2002 of $9.4 million. Gross profit margin for first quarter 2003 was 29.9% versus 28.3% for first quarter fiscal 2002. Improvements in gross margin percentage on baseball equipment, footballs and apparel drove this increase. Selling, general and administrative (SG&A) expenses in first quarter fiscal year 2003 were $9.5 million, down 5.7% from first quarter fiscal year 2002 of $10.0 million. Royalty expense reductions represented most of this decrease.

Continuing the debt reduction trend from prior fiscal years, Rawlings bank debt net of cash at the end of first quarter fiscal year 2003 was $39.4 million, down 12.8% from $45.2 million at the end of first quarter fiscal year 2002.

Commenting on the results, Steve OHara, Chairman and CEO, noted, “We are pleased that the forecasted gross profit margin improvements and expense reductions materialized as expected, enabling us to improve earnings despite the drop in sales. We are encouraged that our core baseball and softball sales continue to grow as anticipated. We continue to expect significant earnings improvements in fiscal year 2003 from our cost reduction efforts on basically flat sales, as baseball and softball revenue gains offset declines in other categories.”

Mr. OHara continued, “We continue to move forward with our previously announced merger plans with K2, Inc. and expect to file soon a joint proxy statement as part of K2’s registration statement on Form S-4, as well as our pre-merger notification under the Hart Scott Rodino Act.”

Rawlings Sporting Goods Company, Inc. and Subsidiaries

                      Consolidated Statements of Income
                (Amounts in thousands, except per share data)
                                 (Unaudited)

                                                          Quarter Ended
                                                           November 30,
                                                        2002           2001

    Net revenues                                     $29,974        $33,408

    Cost of goods sold                                21,026         23,963

      Gross profit                                     8,948          9,445

    Selling, general and administrative expenses       9,459         10,029

      Operating loss                                    (511)          (584)

    Interest expense                                     533            634

      Loss before income taxes                        (1,044)        (1,218)

    Benefit for income taxes                            (386)          (420)

      Net loss                                         $(658)         $(798)