Sport-Haley, Inc. reported fiscal second quarter net sales of fashion apparel, for the period ended December 31, 2007, increased 5% to $4.4 million from $4.2 million for the comparable three-month period in the prior fiscal year. Net sales of fashion apparel for the six months, were $7.8 million, an increase of 1%, from net fashion apparel sales of $7.7 million for the same period last year. Net sales of Top-Flite branded apparel of $26,000 and $146,000 for the three months and six months periods, respectively, were comprised of shipments to a retailer for a test in 50 of its stores. There were no sales of Top-Flite apparel in the year-ago quarter and $1.2 million in sales for the year-ago first half, comprised of sales to Wal-Mart of $1.0 million and sales of $185,000 to other markets.


As a percentage of net sales, gross profit for fashion apparel was 41% for the quarter, up 300 basis points from 38% for the year-ago quarter.


Sport-Haley recorded net income of $24,000 for the fiscal second quarter, switching from a net loss of ($221,000) for the comparable three-month period in the prior fiscal year. Net loss for the six months ended December 31, 2007, was ($603,000), a difference of $15,000, or 2%, as compared with the net loss of ($618,000) for the comparable six-month period in the prior fiscal year. The company recorded net earning of a penny per diluted share for the quarter, up from a loss of 8 cents per share in the year-ago period.

 
                      SPORT-HALEY, INC.

             Consolidated Unaudited Financial Information

                (In thousands, except per share data)


                              Three Months Ended        Six Months Ended

                                 December 31,             December 31,

                              ——————-      ——————-

                                2007        2006         2007        2006

                              ——-     ——-      ——-     ——-

Statements of Income Data:


Net sales                     $ 4,411      $4,190       $7,939      $8,863


Gross profit                    1,780       1,555        2,963       3,057


Total other operating costs     1,788       1,843        3,639       3,774


Loss from operations               (8)       (288)        (676)       (717)


Other income (expense), net        32          84           80         162


Net income (loss)                  24        (221)        (603)       (618)


Diluted earnings (loss)

 per common share              $ 0.01     ($ 0.08)     ($ 0.26)    ($ 0.22)


Diluted average weighted

 shares outstanding         2,284,000   2,770,000    2,284,000   2,770,000