Brass Eagle Inc. Announces Third Quarter 2001 Sales and Earnings.

Business Editors

BENTONVILLE, Ark.--(BUSINESS WIRE)--Nov. 8, 2001

Brass Eagle Inc. (Nasdaq: XTRM) the worldwide leader in the manufacturing, marketing and distribution of paintball products today announced results for the third quarter ended September 30, 2001.

Brass Eagle reported that net sales for the third quarter were $15.6 million versus $23.1 million for the same period last year. The net loss for the quarter was $418,000, or ($0.06) per diluted share, compared to net earnings of $2.0 million, or $0.27 per diluted share in the third quarter of 2000.

For the nine months ended September 30, 2001, net sales were $57.7 million versus $54.9 million in the same period last year. Net earnings for the first nine months of fiscal 2001 were $2.1 million, or $0.27 per diluted share, compared to net earnings of $4.4 million or $0.58 per diluted share in the first nine months of fiscal 2000.

Lynn Scott, Brass Eagle President and CEO stated, While we are clearly disappointed with our results for the quarter, the decline in sales is not indicative of the state of the paintball market nor the health of our business. We firmly believe that our results are being primarily impacted by retailers putting tighter controls on Holiday inventories and our overall retail trends confirm this belief. So while our short-term outlook remains cautious, we are encouraged about our prospects for fiscal 2002 and beyond.

The Company reiterated that it expects fiscal 2001 net sales to range from $85 million to $95 million, and expects diluted earnings per share to range from $0.60 to $0.85.

Mr. Scott concluded, We believe Brass Eagle continues to occupy a dominant position in the minds of consumers, particularly among the fast growing youth demographic. Our wide range of products and accessories appeal to a large customer base and a variety of dedicated participants, our management team is focused and our relationships with our retail accounts are solid. We are committed to capitalizing on our leadership status and the opportunities we have created to drive future shareholder value.

Brass Eagle is unique in providing a full line of paintball markers and accessory products from beginner through competition level. The Company is the dominant supplier of products for this rapidly growing sport. Brass Eagle was named one of the Top 100 Hot Growth Companies by Business Week magazine in 1998, 1999 and 2001, and one of the IW Growing Companies 25, Americas Most Successful Small Manufacturers by Industry Week magazine.

Certain statements in this press release (including statements containing the words "expect," "will," "believe," "continue," anticipate, "could," "intend" and similar words) may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Brass Eagle, its industry or others to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from Brass Eagle's expectations include the following: (1) Intensifying competition, including specifically the intensification of price competition, the entry of new competitors and the introduction of new products by new and existing competitors; (2) Failure to obtain new customers or retain existing customers; (3) Inability to carry out marketing, sales or other business plans and strategies; (4) Loss of key executives; (5) General economic and business conditions which are less favorable than expected; and (6) Unanticipated changes in industry trends.

                           BRASS EAGLE INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                   (In thousands except share data)


                                          SEPTEMBER 30,  DECEMBER 31,
                                               2001         2000
                                           (unaudited)
Assets
Current assets
 Cash and cash equivalents                   $  431       $  3,457
 Accounts receivable - less allowance
 for doubtful accounts of $457 in 2001
 and $393 in 2000                            16,970         25,881
 Due from affiliate                               0            326
 Inventories                                 20,497         14,003
 Prepaid expenses and other current assets      827            790
 Deferred income taxes                        1,886          1,780
       Total current assets                  40,611         46,237
Property, plant and equipment, net           16,609         14,911
Other assets:
 Other assets                                   288            325
 Intangible assets, net                      32,809         34,343
                                           $ 90,317      $  95,816

Liabilities and stockholders' equity
Current liabilities
 Revolving credit facility              $     3,520     $    3,860
 Accounts payable                             5,648          7,340
 Accrued expenses                             4,351          7,853
 Current maturities of long-term debt         6,407          5,607
     Total current liabilities               19,926         24,660
Long-term debt, less current maturities      17,190         19,615
Deferred income taxes                           964            821
Stockholders equity
  Common stock, $.01 par value, 10,000,000
  shares authorized, 7,264,823 issued
  and 7,145,123 outstanding at September 30,
  2001; 7,258,290 issued and 7,138,590
  outstanding at December 31, 2000               73             73
  Additional paid-in capital                 25,841         25,802
  Accumulated other comprehensive income       (589)             0
  Retained earnings                          27,455         25,388
  Treasury stock 119,700 shares at cost        (543)          (543)
                                             52,237         50,720
                                          $  90,317      $  95,816



                           BRASS EAGLE INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            (In thousands except share and per share data)



                         THREE MONTHS ENDED      NINE MONTHS ENDED
                            SEPTEMBER 30,           SEPTEMBER 30,
                         2001       2000          2001        2000
                           (unaudited)             (unaudited)

Net sales             $ 15,570    $ 23,125   $   57,673  $   54,917
Cost of sales           10,322      13,550       35,920      34,526
Gross profit             5,248       9,575       21,753      20,391

Strategic initiative
 expense                               651                      651
Operating expenses       5,519       5,129       16,989      12,478
Operating income (loss)   (271)      3,795        4,764       7,262

Minority interest           51          29          153          50
Interest income
 (expense)                (461)       (598)      (1,458)       (326)


Income (loss) before
 income taxes             (681)      3,226        3,459       6,986

Provision  (benefit)
 for income taxes         (263)      1,209        1,392       2,615

Net income (loss)    $    (418)  $   2,017    $   2,067   $   4,371

Net income (loss) per share:
     Basic           $   (0.06)  $    0.28    $    0.29   $    0.61
     Diluted         $   (0.06)       0.27         0.27        0.58

Weighted average
 shares outstanding:
     Basic           7,145,123   7,137,304    7,144,014   7,136,173
     Diluted         7,145,123   7,517,947    7,561,261   7,523,373