Sport-Haley, Inc. reported unaudited earnings for the fiscal third quarter and nine months ended March 31, 2005. Net sales for the quarter were $4,455,000, a decrease of $910,000 or 17%, from net sales of $5,365,000 for the same quarter in the prior fiscal year. Net sales for the nine months period, were $15,025,000, an increase of $585,000 or 4%, from net sales of $14,440,000 for the same period in the previous fiscal year.

The decrease in net sales for the quarterly period was primarily due to the discontinuance of the HALEY® men's fashion golf apparel effective with the spring 2005 collections, for which a substantial portion of net sales fall within the company's third fiscal quarter, combined with a continuing decrease in the sales of SPORT HALEY® women's fashion apparel and a continuing increase in the sales of Ben Hogan® men's fashion apparel. During the third quarter last year, net sales relating to HALEY® men's fashion apparel were $1,285,000. The continuing decline in sales of SPORT HALEY® women's collections appears to be related to a shrinking market for women's golf apparel. In a time of increased competition within the women's golf apparel market, customers appear to be placing less importance on women's fashion golf apparel within their shops. Net sales of Ben Hogan® apparel for the fiscal quarter and nine months ended March 31, 2005, totaled $2,316,000, or 52% of total net sales for the fiscal quarter, and $7,025,000, or 47% of total net sales for the nine-month period. Comparatively, net sales of Ben Hogan® apparel for the fiscal third quarter and nine months of 2004, totaled $1,608,000, or 30% of total net sales for the fiscal quarter, and $4,349,000, or 30% of total net sales for the nine-month period.

Gross margins as a percentage of sales were 37% and 26% for the quarter and nine months, respectively. Comparatively, gross margins, as a percentage of sales, were 39% and 39% for the same periods in the prior fiscal year.

Selling, general, and administrative expenses for the fiscal third quarter of 2005, decreased by $247,000, or 10%, to $2,287,000 from $2,534,000 for the same three-month period in 2004. Selling, general, and administrative expenses for the nine months ended March 31, 2005, increased by $1,480,000, or 23%, to $7,860,000 from $6,380,000 for the same nine-month period in the prior fiscal year. Selling, general, and administrative expenses were approximately 51% and 52% of net sales for the fiscal quarter and nine months ended March 31, 2005, as compared with 47% and 44% for the same periods in the prior fiscal year. The increase between comparative nine-month periods was primarily due to the accrual of severance and other compensation payable to the company's former chief executive officer, upon the expiration of his employment agreement in March 2005, severance and other compensation paid to Sport-Haley's late chairman's estate in September 2004, and increases in sales commissions and royalties payable on higher net sales.

The net loss for the fiscal quarter ended March 31, 2005, was ($586,000), a difference of $107,000, or 15%, when compared with a net loss of ($693,000) for the same quarter in the prior fiscal year. The company's net loss for the nine months ended March 31, 2005, was ($3,868,000), a difference of ($3,025,000), or 359%, when compared with our net loss of ($843,000) for the same nine-month period in the prior fiscal year. Basic and diluted losses per share were ($0.23) and ($0.28) for the quarterly and ($1.52) and ($0.34) for the nine-month periods ended March 31, 2005 and 2004, respectively. Due to the company's losses, all options were antidilutive and therefore excluded from the loss per share calculations. The book value per share was $5.84 at March 31, 2005.

                           SPORT-HALEY, INC.
              Consolidated Unaudited Financial Information
                 (In thousands, except per share data)

                         Three Months Ended           Nine Months Ended
                              March 31,                   March 31,
                         2005          2004          2005          2004
                      ----------    ----------    ----------    ----------
Statements of Income
 Data:

Net sales             $    4,455    $    5,365    $   15,025    $   14,440

Gross profit               1,632         2,090         3,860         5,588

Selling, general and
 administrative
 expenses                  2,287         2,534         7,860         6,380

Loss from operations        (655)         (444)       (4,000)         (792)

Other income
 (expense), net               75           (18)          138           107

Net loss                    (586)         (693)       (3,868)         (843)

Diluted earnings
 (loss) per common
 share                $    (0.23)   $    (0.28)   $    (1.52)   $    (0.34)

Diluted average
 weighted shares
 outstanding           2,545,252     2,450,252     2,542,442     2,446,625