Blue Holdings Inc. Reports Second Quarter 2005 Financial Results; Strong Sales Demand Creates High Backlog.

COMMERCE, Calif. -- Blue Holdings Inc. (OTCBB: BLHL), a designer, manufacturer and distributor of high-end fashion jeans and denim apparel, today announced its financial results for the second quarter ended June 30, 2005. A conference call supplementing the information contained in this release is scheduled for today, Monday, August 8, at 10:00 a.m., Eastern Daylight Time (EDT).

Second Quarter Results

Net sales for the three months ended June 30, 2005, totaled $4.4 million. Gross profit for the period was $2.4 million, or 53% of total sales, and net income after provision for taxes was $0.53 million, or $0.02 per share. General and administrative expenses for the period totaled $1.1 million and included $0.48 million in expenses relating to the exchange transaction with Antik Denim. Selling & distribution expenses were $0.5 million.

Six Month Results

Net Sales for the six months ended June 30, 2005 totaled $8.8 million. Gross profit for the period was $4.5 million, or 50.4% of total sales. Net income for the period, after provision for taxes, was $1.7 million, or $0.07 per share.

General and Administrative expenses were $1.7 million including $0.48 million in expenses relating to the exchange transaction. Selling and distribution expenses totaled $1 million.

According to the Company's Chairman, Chief Executive Officer and President, Paul Guez: "Our continuing effort to improve gross margin by diversifying our production sources and locations has paid off in the form of better gross margins, but the process of getting new factories and vendors up to speed caused a slow down of our deliveries in the second quarter. We have orders in the third quarter close to $10 million which we expect to translate into higher revenue in the quarter."

To Participate in the Conference Call

Blue Holdings Inc. will host a conference call in conjunction with the Company's second quarter earnings release this morning at 10:00 a.m., EDT. To participate, please dial:

U.S. and Canada: 866-815-2141

International: 706-679-2961

Conference ID: 8365808

A replay of the call will be available two hours after completion through August 15, 2005. To access the recording, dial 800-642-1687.

About Blue Holdings Inc.

Blue Holdings Inc., directly and through its wholly owned subsidiary Antik Denim, LLC, designs, develops, manufactures, markets, distributes and sells high-end fashion jeans, apparel, and accessories with a western flair under the "Antik Denim" and "Yanuk" brands, both in the United States and internationally. Blue Holdings currently sells men's and women's styles and is in the process of launching a children's line. Antik Denim and Yanuk jeans are made from high-quality fabrics milled in the United States, Japan, Italy and Spain, and are processed with cutting-edge treatments and finishes. Blue Holdings' concepts, design, embellishments, patent-pending pockets, and great attention to detail and quality give it a competitive advantage in the high-end fashion jeans market.

Forward-Looking Statements 

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements contained in this release include statements regarding Blue Holdings' anticipated results for the third quarter of 2005. Forward-looking statements are inherently unreliable and actual results may differ materially. Factors which could cause actual results to differ materially from these forward-looking statements include such factors as may be detailed from time to time in Blue Holdings' filings with the United States Securities and Exchange Commission. Blue Holdings undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Blue Holdings Inc.
           Condensed Consolidated Balance Sheet (Unaudited)
                             June 30, 2005


                                ASSETS
Current Assets:
   Cash                                                    $   31,539
   Due from Factor                                            448,621
   Accounts Receivable                                         36,713
   Inventories                                              5,430,657
   Due From Affiliates                                        180,345
   Deferred Tax Asset                                         197,580
   Prepaid Expenses and Other Current Assets                  294,445
                                                            ----------
      Total Current Assets                                  6,619,900

Property and Equipment
  less Accumulated Depreciation                                 9,427
                                                            ----------
Total Assets                                               $6,629,327
                                                            ==========
                 LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts Payable                                         2,288,180
   Due to Affiliates                                          150,995
   Income Taxes Payable                                       333,064
   Accrued Expenses and Other Current Liabilities              95,653
                                                            ----------
      Total Current Liabilities                             2,867,892

Stockholders' Equity
   Preferred Stock
   Common Stock $0.001 par value                               25,520
      Authorized 75,000,000 shares
      Issued and outstanding 25,441,628
   Common Stock to be issued                                  177,617
   Additional Paid-in Capital                               1,899,736
   Retained Earnings                                        1,658,562
                                                            ----------
   Total  Stockholders' Equity                              3,761,435

Total Liabilities and Stockholders' Equity                 $6,629,327
                                                            ==========

                         Blue Holdings, Inc.
      Condensed Consolidated Statement of Operations (Unaudited)
           For the three and six months ended June 30, 2005


                                                 Three
                                                  Months   Six Months


Net Sales                                     $ 4,434,853 $ 8,854,228

Cost of Goods Sold                              2,084,044   4,389,431
                                               ----------- -----------
Gross Profit                                    2,350,809   4,464,797

Selling,distribution & administrative expenses  1,206,306   2,192,334
                                               ----------- -----------
Income from Operations before Expenses
 Relating to
  Exchange Transaction & Provision for Taxes    1,144,503   2,272,463

Expenses of Exchange Transaction                  477,617     477,617

Income before provision for taxes                 666,886   1,794,846

Provision for taxes                               135,484     136,284
                                               ----------- -----------
Net Income                                    $   531,402 $ 1,658,562
                                               =========== ===========

Earnings per share, Basic and Diluted         $      0.02 $      0.07
                                               =========== ===========
Weighted Average number of common shares
 outstanding
Basic & Diluted                                25,441,628  25,441,628
                                               =========== ===========