Cutter & Buck Reports Fiscal Year and Fourth Quarter 2002 Operating Results, Provides Fiscal Year 2003 Guidance.

Business Editors

SEATTLE--(BUSINESS WIRE)--June 20, 2002

Cutter & Buck Inc. (Nasdaq:CBUK) today reported sales and earnings for its fiscal year and fourth quarter ended April 30, 2002.

For the year, net sales were $167.7 million and the net loss was $10.8 million or $1.02 per share after restructuring charges. This compares to fiscal year 2001 net sales of $171.1 million and net income of $3.7 million or $0.35 per share.

For the fourth quarter, net sales were $54.5 million and the net loss was $1.3 million or $0.13 per share. This compares to fourth quarter fiscal year 2001 net sales of $53.6 million and net income of $0.3 million or $0.03 per share.

For fiscal year 2003 the company expects sales in the range of $157 million to $162 million, and net income of $0.5 to $1.1 million or $0.05 to $.10 per share. This net income estimate is after an expected first quarter fiscal year 2003 charge of approximately $2.5 million net of tax, or $0.24 per share, related to excess warehouse space.

"The fiscal year 2002 loss had several clear causes," said Fran Conley, CEO. "We have already acted to change these factors, and we expect Cutter & Buck to be profitable in fiscal year 2003."

-- In fiscal year 2002, gross margins were low, mainly because we were
liquidating excess inventory. We have been successful in getting inventory to
the levels we want, and in fiscal year 2003 we expect a return to gross margin
levels in the range of 43% to 44%.

-- In fiscal year 2002, we exited several businesses that did not perform as
expected, including our operations in Europe, the dressier side of our women's
business and our golf shoes line. This resulted in a pre-tax restructuring
charge, including inventory write-downs, of $8.9 million.

-- In fiscal year 2002, we made the decision to close three of our retail
stores during fiscal year 2003. We also wrote down our investment in two other
stores. These decisions have resulted in an additional pre-tax charge of $3.0
million.

-- In fiscal year 2002, operating expenses were high. We have lowered the
operating expense run rate by $5.0 million for fiscal year 2003, reflecting
recent layoffs and restructurings which reduced the number of staff; the lack
of operating expense in Europe and the lower operating expense in the retail
stores and throughout the company.

"Overall, sales held up well during the 2002 fiscal year," added Conley. "The consumer continues to see the value of Cutter & Buck style and craftsmanship. The brand is still in its early stages, and we see many exciting opportunities and anticipate a bright future."

"We were successful in reducing inventory from $53.6 million to $26.2 million during the last fiscal year, and in providing $24 million of free cash flow," said Steve Lowber, Vice President & CFO. "The balance sheet is very strong and liquid, with a quick ratio of 2.9 to 1.0 compared to 1.5 to 1.0 last year."

Earnings Outlook:

"In fiscal year 2003, we will not have the sales from the businesses we discontinued," said Conley. "In addition, we are assuming that the demand for better branded apparel will not get stronger during the year. We are therefore planning only modest increases in sales from our remaining core businesses."

The company expects fiscal year 2003 net sales as follows (in
millions):
                                                              FY 2003
               FY 2002      "A"      FY 2002    FY 2003       change
               actual     (Note a)    base      guidance     from base
               ---------  --------  ---------  ----------   ----------
Golf              $ 55.0   $ (1.5)     $ 53.5     $  55.1          3%
Corporate           59.7        --       59.7        60.0          1%
Fashion             26.0     (2.6)       23.4        26.4         13%
Consumer Direct     15.1     (1.6)       13.5        13.5          0%
International        9.2     (6.1)        3.1         3.3          7%
Other                2.7        --        2.7          --          --
               ---------  --------  ---------  ----------   ----------
Total             $167.7   ($11.8)     $155.9      $158.3          2%
               ---------  --------  ---------  ----------   ----------

Note a: "A" above represents sales from business lines which Cutter &
Buck no longer offers. For Consumer Direct, it represents sales from
stores that the company plans to close in fiscal year 2003.

Cutter & Buck's fourth quarter fiscal year 2002 conference call to discuss earnings results and provide guidance for fiscal year 2003 will be held today at 4:30 p.m. Eastern Time, and is available live and on-demand at www.cutterbuck.com.

Management will make several presentations to investors starting Tuesday, June 25, 2002. The slides for these presentations will be posted on the company's web site, www.cutterbuck.com from June 25th through July 12th.

Statements made in this news release that are not historical facts are forward-looking information. Actual results may differ materially from those projected in any forward-looking information. Specifically, there are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Those factors include, but are not limited to: style changes and product acceptance; relations with and performance of suppliers; the ability of the company to control costs and expenses; the ability of the company to carry out successful design and planned product and brand messaging/extension activities and to penetrate its chosen distribution channels; competition; access to capital; foreign currency risks; risks associated with operating retail locations; risks associated with the company's entry into new markets or distribution channels; risks related to the timely performance of third parties, such as shipping companies, including risks of strikes or labor disputes involving these third parties; maintaining satisfactory relationships with our banking partners; technological change; political and trade relations; the overall level of consumer spending on apparel and global economic conditions; additional threatened terrorist attacks and the ongoing military action. Additional information on these and other factors, which could affect the company's financial results, are included in its Securities and Exchange Commission filings. Finally, there may be other factors not mentioned above or included in the company's SEC filings that may cause actual results to differ materially from any forward-looking information. You should not place undue reliance on these forward-looking statements. The company assumes no obligation to update any forward-looking statements as a result of new information, future events or developments, except as required by Securities laws.

Cutter & Buck designs and markets upscale sportswear and outerwear under the Cutter & Buck brand. The Company sells its products primarily through golf pro shops and resorts, corporate accounts and specialty retail accounts. Cutter & Buck products feature distinctive, comfortable designs, high quality materials and manufacturing and rich detailing.

                         FINANCIAL HIGHLIGHTS
                ($ in thousands, except per share data)

Condensed Consolidated
Statements of Operations
                         Three months ended     Twelve months ended
                             April 30,               April 30,
                      ---------------------    ---------------------
                         2002        2001         2002       2001
                      ---------   ---------    ---------   ---------

Net sales             $  54,462   $  53,596    $ 167,729   $ 171,068
Cost of sales            36,733      34,792      105,425      99,389
                      ---------   ---------    ---------   ---------
Gross profit             17,729      18,804       62,304      71,679
Operating expenses
 Design and production    1,393       1,090        4,966       4,094
 Selling and shipping    11,721      12,828       46,530      46,725
 General and
  administrative          3,951       4,007       15,834      14,124
 Restructuring and
  asset impairment        2,257        --          9,639        --
                      ---------   ---------    ---------   ---------
Total operating
 expenses                19,322      17,925       76,969      64,943
                      ---------   ---------    ---------   ---------
Operating income
 (loss)                  (1,593)        879      (14,665)      6,736
 Other expense             (242)       (408)      (1,254)       (764)
                      ---------   ---------    ---------   ---------
 Income (loss) before
  income taxes           (1,835)        471      (15,919)      5,972
 Income taxes
  (benefits)               (487)        179       (5,094)      2,271
                      ---------   ---------    ---------   ---------

Net income (loss)     $  (1,348)  $     292    $ (10,825)  $   3,701
                      =========   =========    =========   =========
Basic earnings (loss)
 per share            $   (0.13)  $    0.03    $   (1.02)  $    0.35
                      =========   =========    =========   =========
Diluted earnings
 (loss) per share     $   (0.13)  $    0.03    $   (1.02)  $    0.35
                      =========   =========    =========   =========
Shares used in
 computation of:
  Basic earnings
   (loss) per share      10,590      10,489       10,570      10,448
  Diluted earnings
   (loss) per share      10,590      10,517       10,570      10,526



Condensed Consolidated Balance Sheets         April 30,  April 30,
                                                2002       2001
                                              --------   --------
Current Assets:
  Cash and cash equivalents                   $  6,989   $  8,073
  Accounts receivable                           41,184     48,518
  Inventories                                   26,218     53,553
  Other current assets                          14,680      7,997
                                              --------   --------
    Total current assets                        89,071    118,141
Furniture and equipment, net                    16,348     23,192
Other assets                                     1,256      1,620
                                              --------   --------

Total assets                                  $106,675   $142,953
                                              ========   ========
Liabilities & Shareholders' Equity
Current Liabilities:
  Short-term borrowings                       $   --     $ 18,732
  Accounts payable                               7,273     12,886
  Accrued liabilities and other liabilities      6,232      4,396
  Current portion of capital leases              3,212      2,737
                                              --------   --------
    Total current liabilities                   16,717     38,751
Capital leases, net of current portion,
 and other liabilities                           6,099     10,937
Total shareholders' equity                      83,859     93,265
                                              --------   --------
Total liabilities & shareholders' equity      $106,675   $142,953
                                              ========   ========