The Timberland Company reported a second quarter net loss of $13.0 million and a diluted loss per share of 21 cents, compared with second quarter 2005 net income of $6.3 million and diluted EPS of nine cents. For the purpose of comparison, Timberland estimates that its 2005 diluted EPS would have been approximately seven cents in the second quarter, including costs related to stock options and its employee stock purchase plan. Second quarter 2006 results included pre-tax costs of $400,000 related to the Company’s establishment of a European finance shared service center and the final closure of its Puerto Rico manufacturing facility. Excluding these restructuring costs, EPS would have been a loss of 20 cents.

Second quarter revenue decreased 5.7% to $226.6 million as gains in international markets and growth in U.S. casual, outdoor, and industrial categories were offset by anticipated declines in U.S. boots and kids sales. Foreign exchange rate changes reduced second quarter revenues by $1.3 million, or 0.6%.

International revenue increased 1.1%, or 2.3% on a constant dollar basis, supported by growth in southern Europe, distributor markets, Canada, and Japan. U.S. revenues decreased 10.9%, due primarily to declines in boots and kids sales, which offset benefits from the addition of the SmartWool® brand to the Company’s product portfolio and strong growth in key expansion categories such as Timberland PRO® series footwear and men’s casual footwear and apparel.

Second quarter results reflected global gains in apparel and accessories revenue, which offset anticipated declines in footwear revenue. Apparel and accessories revenue increased 20.0% to $71.5 million supported by growth in Timberland® apparel sales globally and the addition of SmartWool. Global footwear revenues fell 15.1% to $150.8 million as strong gains in Timberland PRO® series and men’s casual footwear partially offset declines in boots and kids, which were impacted as expected by proactive steps to improve stock-to-sales ratios at U.S. accounts.

Global wholesale revenue decreased by 7.5% to $156.1 million. Worldwide consumer direct revenue declined slightly to $70.5 million, reflecting a 5.6% decrease in global comparable store sales.

The operating loss for the quarter was $20.9 million, compared to an $8.4 million operating profit in the prior year period. The operating loss excluding the above noted restructuring costs was $20.4 million. These results were consistent with the Company’s performance expectations, reflecting anticipated gross profit pressures from lower boot sales, including impacts from higher product returns and clearance sales, as well as investments in new businesses and international expansion. For the quarter, foreign exchange rate changes reduced the operating loss by approximately $1.7 million reflecting favorable changes in hedge rates compared to the prior year period.

Timberland ended the quarter with $108.1 million in cash and no debt outstanding while continuing to support its share repurchase program. Timberland repurchased 1.2 million shares in the second quarter at a total cost of $34.6 million. Timberland effectively controlled working capital levels despite lower Timberland® brand revenues and impacts from the addition of new businesses. Inventory at quarter end was $211.0 million, 2.5% lower than at the end of the 2005 second quarter. Timberland’s accounts receivable decreased 3.8% to $125.7 million.

Timberland continues to target flat to low single-digit revenue growth for the full year and expects declines in comparable EPS performance in the 25% range, which is at the lower end of its previously stated profit range. For the purpose of EPS comparisons, Timberland estimates that its 2005 EPS would have been approximately $2.35 after excluding restructuring and related costs and including costs related to stock options and its employee stock purchase plan. This outlook includes the impact of provisional anti-dumping duties on European Union (EU) footwear sourced in China and Vietnam, which the Company now estimates will lower profits in the range of $7-$8 million in 2006.

For the third quarter, Timberland expects flat revenue growth and gross margin declines in the 400 basis point range. For the fourth quarter, it is targeting relatively improved performance, with high single-digit revenue growth and more moderate gross margin pressure. Timberland will continue to support investment against its growth strategies, including continued global expansion and development of Timberland’s business portfolio, which will likely contribute to low double-digit second half operating expense growth, with higher cost growth in the third quarter.

Jeffrey B. Swartz, Timberland’s President and Chief Executive Officer, stated, “As anticipated, we saw pressure on our overall results, impacted in part by proactive steps taken to maintain Timberland’s premium brand positioning. Our strategy remains intensely focused on building a global portfolio of premium brands sharing standout values by providing innovative, authentic solutions for consumers. Through efforts focused on leveraging consumer insight and segmentation to elevate and expand our presence in targeted growth categories, we drove continued progress this quarter in developing our casual, outdoor and industrial businesses, and expanding our global reach. We believe the development of our global business portfolio will provide a strong foundation for sustaining our long-term growth and building Timberland’s value as a brand and enterprise.”

                        THE TIMBERLAND COMPANY
             (Amounts in Thousands, Except Per Share Data)

                                  For the Three        For the Six
                                   Months Ended       Months Ended
                               ------------------- -------------------
                                June 30,  July 1,   June 30,  July 1,
                                 2006      2005      2006      2005
                               --------- --------- --------- ---------
Revenue                        $226,605  $240,269  $576,416  $594,480
Cost of goods sold              123,784   122,289   297,492   289,339
                                --------  --------  --------  --------

 Gross profit                   102,821   117,980   278,924   305,141
                                --------  --------  --------  --------

Operating expense
 Selling                         95,614    85,238   200,354   185,977
 General and administrative      27,639    24,340    56,268    48,842
 Restructuring costs                431         -       912         -
                                --------  --------  --------  --------
   Total operating expense      123,684   109,578   257,534   234,819
                                --------  --------  --------  --------

Operating income/(loss)         (20,863)    8,402    21,390    70,322
                                --------  --------  --------  --------

Other income
 Interest income, net               666     1,063     1,771     2,164
 Other, net                         392       148     1,593     1,138
                                --------  --------  --------  --------
   Total other income             1,058     1,211     3,364     3,302
                                --------  --------  --------  --------

Income/(loss) before
 provision/(benefit) for
 income taxes                   (19,805)    9,613    24,754    73,624

Provision/(benefit) for income
 taxes                           (6,833)    3,268     8,540    25,032
                                --------  --------  --------  --------

Net income/(loss)              $(12,972) $  6,345  $ 16,214  $ 48,592
                                ========  ========  ========  ========

Earnings/(loss) per share
 Basic                         $   (.21) $    .09  $    .26  $    .72
 Diluted                       $   (.21) $    .09  $    .25  $    .71

Weighted-average shares
 Basic                           63,035    66,913    63,308    67,250
 Diluted                         63,035    68,376    64,566    68,698