The Timberland Company third quarter revenue was $433.3 million, down
13.9% compared to the
prior year due to anticipated declines in the boots and kids’
businesses as well as declines in the Timberland apparel business.
Foreign exchange rate changes increased third-quarter revenues by $12.3
million, or 2.4%. Third-quarter net income was $25.9 million and
diluted earnings per share were 42 cents. These results compare to a
third-quarter 2006 net income of $55.6 million, and EPS of 88 cents.

Third-quarter
net income was $30.4 million and EPS was $0.49 when adjusted to exclude
restructuring costs principally related to the company’s decision to
close certain retail locations. As part of its ongoing initiative to
rationalize its operating expense structure, Timberland also announced
today plans to transition to a reorganized, more efficient U.S. sales
team and a streamlined global product development organization, actions
that it believes will result in annual operating expense savings of
approximately $10 million.

International revenue decreased 4.4%,
or 9.3% on a constant dollar basis, driven by declines in Europe and
Canada, which offset strong growth in Asia. U.S. revenues decreased
23.3%, due to the anticipated declines in boots and kids’ sales as well
as declines in Timberland apparel, which offset strong growth in
SmartWool apparel and accessories.

Global footwear revenues of
$310.3 million were down 15.7%, as anticipated declines in boots and
kids’ as well as modest declines in casual footwear offset benefits
from the addition of IPATH. Apparel and accessories revenue decreased
10.2% to $116.2 million driven by declines in Timberland apparel, which
offset strong growth in SmartWool.

Global wholesale revenue
decreased by 17.3% to $344.0 million. Worldwide consumer direct revenue
increased 2.9% to $89.3 million reflecting strong sales in Asia as a
result of the addition of new doors as well as gains in foreign
currency. Overall, global comparable store sales declined 5.6%
reflecting decreases in the U.S., Europe and Asia.

Operating
income for the quarter was $44.7 million, compared to $84.7 million in
the prior year period driven by revenue declines and gross margin
pressures due to unfavorable mix impacts from lower boot sales in the
U.S. and Europe, increased levels of off-price sales and markdowns, and
higher product costs. Operating income excluding restructuring costs
related to the decision to close certain retail locations was $52.2
million. For the quarter, foreign exchange rate changes increased
operating income by $7.4 million.

Timberland ended the quarter
with $44.0 million in cash and $46.6 million in short-term debt to
support seasonal working capital needs. In the third quarter, the
company repurchased approximately 778 thousand shares. Timberland
currently has 2.4 million shares remaining under existing share
repurchase authorizations.

For the fourth quarter, Timberland
anticipates revenue declines in the mid-single digit range reflecting
soft market conditions in the U.S. and Europe and operating margin
declines in the range of 200 basis points compared to the prior year
excluding restructuring costs.

Consistent with trends Timberland
has seen in the first nine months of 2007, it continues to anticipate
declines in boots and kids’ sales in 2007 to be in the range of $100
million globally, which will offset gains in other parts of the
portfolio. For the full year, the company now anticipates revenue
declines in the mid-single digit range and operating margin declines in
the range of 400 to 450 basis points compared to prior-year levels
excluding restructuring costs. It anticipates that the full-year tax
rate will be in the range of 35.0% to 35.5%.

For 2008,
Timberland is targeting mid-single digit first half revenue declines
and improved operating results, compared with first half 2007
comparable results. The company anticipates that soft market trends
will be offset by its efforts to drive operational efficiencies across
its organization and its decision to close approximately 50 retail
stores by the end of the first quarter of 2008. Timberland’s 2007 first
half comparable results exclude $7.5 million of restructuring costs as
well as approximately $12 million in revenues associated with stores
targeted for closure that generated an operating loss of approximately
$3 million, all of which are included in its 2007 reported results.

Jeffrey
B. Swartz, Timberland’s president and CEO, stated, “I am not satisfied
with our current financial performance and, together with our
leadership team, will continue to review our entire portfolio to
identify further opportunities to enhance our effectiveness and deliver
improved performance for our shareholders. Following last month’s
announcement to close nearly 50 retail locations globally to improve
our profitability, today we announced a realignment of our U.S sales
team and global product development organization to eliminate
redundancies and improve efficiencies. We are also driving to
strengthen our connection with consumers by raising our marketing voice
in conjunction with key partners in Europe and the U.S. I am confident
that we are implementing strategic decisions that will reposition the
Timberland® brand for long-term growth, while preserving our strong
brand resonance with targeted consumers who appreciate our outdoor
heritage.”

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THE TIMBERLAND COMPANY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in Thousands, Except Per Share Data)

For the Quarter Ended For the Nine Months Ended
September 28, 2007 September 29, 2006

(As Restated)

September 28, 2007 September 29, 2006

(As Restated)

Revenue $ 433,294 $ 502,980 $ 993,749 $ 1,079,396
Cost of goods sold

229,891

263,151

529,600

562,886

Gross profit

203,403

239,829

464,149

516,510

Operating expense
Selling 122,260 123,178 331,890 323,046
General and administrative 28,943 32,044 90,385 88,054
Restructuring and related costs, net

7,545

(92 )

15,059

820
Total operating expense

158,748

155,130

437,334

411,920

Operating income

44,655

84,699

26,815

104,590

Other income
Interest income/(expense), net (420 ) (308 ) 1,376 1,463
Other income/(expense), net

(1,128 )

2,137

(310 )

(4,816 )
Total other income/(expense), net

(1,548 )

1,829

1,066

(3,353 )

Income before provision for income taxes 43,107 86,528 27,881 101,237

Provision for income taxes

17,242

30,977

11,989

36,243

Net income $ 25,865 $ 55,551 $ 15,892 $ 64,994