CSK Securities Research Initiates "Strong Buy" on Pacific Sports Holdings.

WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--Aug. 21, 1998--

Report says company is positioned for "explosive growth".

Pacific Sports Holdings, Inc. (OTCBB:PSHL) announced today that CSK Securities Research, a registered investment advisor and securities research firm, has initiated a "Strong Buy" recommendation on the common stock of Pacific Sports Holdings, Inc.

In a 12-page research report, the research firm provides an investment summary on the company, projects the impact the company will make in the sporting goods and apparel industries, scopes the market and draws comparisons with the company's chief competitors. According to CSK Securities Research, the company's strength lies in its "seasoned management team with extensive experience in building businesses in the sporting goods and apparel industry."

CSK further alludes that the industry veterans that head the company comprise the valuable element that sets the company apart from other development stage companies. James Moodhe, the company's CEO, was a founding member of Nike, Inc., and head of its sales and marketing. He also joined a newly formed company called K-Swiss in the early eighties, and in a two-year span increased that company's annual sales from $32 million to $86 million. Shortly afterward, Moodhe served as the president of Guess? and Pan Pacific Designs, a licensee of Guess Athletic footwear. Pan Pacific went from zero to nearly $60 million in the first three years. Company directors Bob Eubanks and Larry Donizetti bring vast knowledge and acumen in public relations, promotion and marketing to the table. In addition, these gentlemen are both seasoned marketers and possess countless connections within the entertainment industry. Director of marketing and design for Spank, Mark Feig has more than 20 years of extensive sales, marketing and operational experience. He is a recognized authority in corporate development through sales and marketing in the sporting goods and athletic footwear industry. Feig was a product developer for Nike Inc., in the 1970s, and later served as vice president of sales & marketing for Guess Athletic beginning in 1991.

The research report also points to the quality and recognizability of the company's name brands, HEAD and Spank Sport, for which it distributes under its license agreements, quality products including its line of golf equipment and accessories, as well as swimwear and sportswear.

Last month, results of the company's new HEAD FI Maraging irons and driver, the new line designed and manufactured by the company's subsidiary, SouthBay Golf, Inc., the worldwide licensee of HEAD GOLF, overwhelmingly confirmed that the new HEAD FI Maraging irons and driver out-performed the competition. The testing was done to compare the performance characteristics of the company's flagship model golf clubs all having the same specifications with those of the leading industry competitors, and the new HEAD FI Maraging irons and driver out-performed the Callaway Great Big Bertha Tungsten Titanium irons and Great Big Bertha driver, the Taylor Made Ti Bubble 2 LCG irons and Ti Bubble 2 driver, as well as the King Cobra Ti driver and oversized irons.

The new clubs are currently being placed with sales representatives and will be available in select pro shops and sporting goods stores starting October 1998. An elaborate and aggressive print and television advertising campaign will be launched by the company this Fall.

The report also discusses the company's complete line of swimwear and sportswear marketed and distributed under the Spank label. The company owns 85 percent of Outback Apparel Group, a licensee for Australia-based Spank Sport International for the sale and distribution of competitive swimwear, activewear and accessories for the North American marketplace, and worldwide licensee for the development and design of worldwide footwear bearing the Spank name.

As part of the financial discussion and earnings projections for the Company, the research report reads, "We believe Pacific Sports Holdings is positioned for explosive growth over the next few years. Given the large markets Pacific Sports is entering and the Company's name brands and concentrated focus on sales and marketing, we are projecting a very rapid growth rate for Pacific Sports.

"Our projections indicate that sales should reach $36.4 million in 1999, $60.3 million in 2000, and $84.7 million in 2001...These revenue projections are conservatively based upon the markets the Company is entering and past performances of similar companies in those markets.

"For 1999, we are projecting net income of $2.7 million or $0.20 per share. In 2000, net income should come in at $7.6 million or $0.54 per share, for increases of 183% and 172%, respectively over 1999 projections. For 2001, net income should reach $15.8 million and $1.09 per share, percentage increases of 108% and 101%, respectively. These projections are based solely on the Company's three current subsidiaries, SouthBay Golf, Outback Apparel Group and Mardock, Inc., and assumes no additional acquisitions."

The research report goes on the render a very favorable investment opinion regarding the company: "This is a start-up company, but it has seasoned, successful management from the top companies of the huge sporting goods industry. The company has obtained license agreements with top, recognizable names in the sporting goods industry, all with excellent reputations for quality and status appeal. We believe these brand names alone are more than 80 percent the 'marketing' job the company needs to do in order to be a tremendous success in these markets. The cumulative markets for sports equipment, active apparel and athletic footwear exceed $42 billion on the wholesale level in the United States alone.

"We are recommending the purchase of PSHL for 'bottom fishing,' strategic investors at these attractively low price levels. We believe the PSHL stock price should appreciate several fold over the next few years."

To receive a full research report you may contact Wayne Schumacher at Martin Janis & Company [phone]. You may also contact the company's Investor Relations website at virtualir.com/PSHL.

Pacific Sports Holdings Inc. is engaged in the active apparel and sports equipment business operating under its three subsidiaries, Mardock Inc., SouthBay Golf Inc. and Outback Apparel Group Inc. Mardock designs, manufactures and distributes casual apparel and a variety of promotional products. SouthBay Golf is a licensee under a Trademark License Agreement with Head Sport AG, which grants the company exclusive worldwide rights to market and distribute golf equipment. In addition to licensed goods, products are also manufactured under the SouthBay Golf trademark for retail distribution on an exclusive basis. Outback Apparel Group Inc. is a licensee for Australia-based Spank Sport International, for the sale and distribution of competitive swimwear, activewear and accessories for for the North American marketplace, and holds an exclusive worldwide license for the development and design of footwear bearing the Spank name.

   CONTACT: Martin E. Janis & Company, Chicago
             Wayne Schumacher, 312/943-1100