Fila Reduces Quarterly, Annual Losses

In U.S. dollars, Fila Holdings' fourth-quarter net loss was $16.6 million comparedto a net loss of $46.7 million in the fourth quarter of 2001. For the full year, net loss was $76.4 million compared to $125.2 million in 2001.

On a per ADS/per ordinary share basis, net loss was $0.38 per ADS/share in the fourth quarter of 2002 compared to $1.52 per ADS/share in the same period of 2001, and the full year net loss was $2.26 per ADS/share in 2002 versus $6.00 per ADS/share in 2001.

2002 results were impacted by some factors such as the discontinuation of the Australian and Brazilian subsidiaries in favor of a licensing strategy in those countries, the strong appreciation of the Euro against the US dollar during the second half of the year, the restructuring process in the UK with considerable write-down of assets and the impact of exchange rate changes for Argentina and Brazil. Without these factors, the result before taxes for the full year would have been close to break even.

The euro appreciated by 12% against the dollar on a quarterly average basis; the average exchange rate was EUR 1=U.S.$ 1.000 in the fourth quarter of 2002 and EUR 1=U.S.$ 0.896 in the corresponding quarter of 2001. For the full year, the euro appreciated by 5% against the dollar; the average exchange rate was EUR 1=U.S.$ 0.945 in 2002 compared to EUR 1=U.S.$ 0.896 in 2001.

Worldwide revenues for the fourth quarter were EUR 180.6 million, down 19% from EUR 223.6 million in the corresponding period of 2001; for the year, revenues decreased by 7% to EUR 909.5 million and were flat when expressed in terms of constant exchange rate and continuing operations (i.e, excluding those subsidiaries discontinued at the end of 2001).

Total backlog of customer orders as of December 31, 2002, scheduled for delivery from January through June 2003, was down by 23% (in euros) compared to the corresponding period in 2001, with apparel down by 24% and footwear down by 22%. Backlog is also adversely affected by the depreciation of the dollar. On a constant exchange rate basis, total backlog would have decreased by 15%.

U.S. backlog increased by 7% in dollars (with apparel down by 2% and footwear up by 17%), with the Enyce brand and the Fila brand up by 4% and 9%, respectively.

Outside the U.S. and excluding the markets where Fila sells its products on a delivery basis (including Korea), backlog decreased by 32% (in euro).

Net direct sales in the fourth quarter of 2002 totaled EUR 171.7 million, down 20% compared to EUR 215.6 million in the corresponding period of 2001. Apparel sales were EUR 113.8 million and footwear sales were EUR 57.9 million, down by 12% and 33% respectively compared to the fourth quarter of 2001. Sales in the U.S. were EUR 61.4 million in the quarter, decreasing by 17% from EUR 74.4 million in the fourth quarter of 2001, despite an increase in Enyce Brand sales (up 3%); in Europe sales decreased by 19% to EUR 55.4 million. Sales in the Rest of the World were strongly impacted by exchange rate effects, with sales decreasing by 25% mainly due to a 72% sales drop in Latin America (down 27% on a constant exchange basis) and the Far Eastern countries. Korea, one of our strongest markets, experienced a 5% sales decline in euro but was flat in local currency.

For the full year, net direct sales were EUR 874.7 million compared to EUR 945.0 million in 2001, decreasing by 7% (or 6% in terms of continuing operations). The U.S. increased by 10% whereas Europe and the Rest of the World decreased by 19% and 10% respectively.