LOS ANGELES–Feb. 22, 2000–K2 Inc. (NYSE:KTO)today announced improved sales and earnings from continuingoperations, before restructuring and other non-recurring charges, forits full year and fourth quarter ended December 31, 1999.

1999 Full Year Improvement

Income from continuing operations before restructuring and othermanufacturing-related downsizing costs in 1999 was $15.7 million, or$0.93 per diluted share, up 18 percent from 1998, when the company hadincome from continuing operations before charges for reserves of $13.3million, or $0.80 per diluted share. Net sales for the full yearreached $635.1 million, up 11 percent from $574.5 million in 1998.

Income from continuing operations and after restructuring anddownsizing costs for 1999 was $8.5 million, or $0.50 per dilutedshare, compared with income of $3.9 million after charges forreserves, or $0.23 per diluted share in the prior year. The after-taxrestructuring and other downsizing costs totaling $7.1 million, or

$.42 per diluted share, were for costs associated with the downsizingof domestic ski and snowboard manufacturing and a shift in sourcing tolower cost manufacturing facilities in Asia, Europe and the UnitedStates.

In 1998, the company’s results reflect a third quarter after-taxcharge of $9.4 million, or $0.57 per share, for the restructuring ofthe company’s bike and inline skate businesses. Net income, includingdiscontinued operations, was $9.8 million, or $0.58 per diluted sharefor the 1999 year, up from $4.8 million, or $0.29 per diluted share inthe prior year.

Richard Rodstein, K2′s president and chief executive officer,attributed the improved results to the company’s strategic focus ongrowing strong brands through continued product innovation andpromotion, to acquisitions completed during the year and to itsconsolidation and globalization strategies.

“Results for the 1999 year reflect strong growth in sales andoperating income of our sporting goods segment, especially in inlineskates, fishing tackle and snowboard products, that more than offsetweaknesses reported by some of our other recreational and industrialbusinesses,” Rodstein said.

Fourth Quarter Comparisons

For the quarter ended December 31, 1999, K2 reported net sales of$173.9 million, up 31 percent from $132.8 million reported a yearearlier. Income from continuing operations and before restructuringand other downsizing costs in the final quarter of 1999 was $2.1million, or $0.12 per diluted share, up 31 percent from the comparable1998 period, when the company reported $1.6 million, or $0.10 perdiluted share.

Loss from continuing operations and after restructuring and otherdownsizing costs for the 1999 fourth quarter was $5.0 million, or$0.29 per diluted share, compared with income from continuingoperations of $1.6 million, or $0.10 per diluted share in thecomparable prior-year period. The net loss for the 1999 quarter,including discontinued operations, was $4.7 million, or $0.27 perdiluted share, compared with net income of $2.0 million, or $0.12 perdiluted share in the prior year’s final quarter.

During the fourth quarter, K2 announced a strategic initiative tosignificantly reduce the cost structure of its ski and snowboardoperations by restructuring and downsizing its Seattle manufacturingoperation to take advantage of lower cost manufacturing and sourcingopportunities.

To reflect the total $7.1 million after-tax cost of thisinitiative, the company recorded restructuring and other downsizingcosts of $4.4 million and $2.7 million after-tax, or $0.26 and $0.16per diluted share, respectively, in the 1999 fourth quarter.

These charges reflect costs associated with the downsizing ofproduction and reduction of personnel, as well as the write-off ofrelated equipment and inventory. Approximately one-third of the totalcharges was cash-related.

Record Sporting Goods Results

K2′s sporting goods segment reporterecord sales for the 1999year of $474.3 million, up 17 percent from the $404.9 million reportedin the prior-year period.

“Sporting goods sales benefited from strong demand during theyear and final quarter for most of the products in the segment.In-line skates, snowboard products, fishing tackle and bikes allregistered double-digit growth,” Rodstein said. “The increase inshipments of inline skates reflected the strong demand for thecompany’s softboot skates, especially in the European market, andworldwide growth of our children’s softboot skate line.

“Improved snowboard volume reflected the benefit of our Ride andMorrow acquisitions, completed in 1999, and expansion of ourdistribution into the important Japanese market. Shakespeare fishingtackle continued to show strength in sales and earnings, led by thepopular Ugly Stik fishing rod series, packaged rods and reels and newproduct introductions.

“Bikes benefited from its repositioned bike product line and thebusinesses’ downsized operations. Sales and earnings of our Stearnsproducts increased although at a lesser pace, reflecting the successof new products and double-digit sales growth in the fourth quarter.”

Rodstein added: “Ski shipments declined for the year and fourthquarter reflecting the mild winter season in the domestic market andK2′s lower domestic market share. We are encouraged, however, by thereception of our dealers and customers to the new K2 MOD ski, whichwas introduced late in 1999 and which quickly sold out its initialproduction run.”

Sales of skateboard shoes and apparel for the year increased bydouble digits over the prior year. Declines, however, in sales ofcorporate apparel more than offset our strength in the skateboardbusiness, and sales of the other recreational products segment declined slightly to $41.1 million from $43.7 million.

In the fourth quarter, sales in the sporting goods segmentincreased 45 percent and each product line, excluding skis, reporteddouble-digit increases. In-line skates, snowboard products, bikes,fishing tackle and Stearns products all finished the calendar yearreporting strong sales growth. In-line skates benefited from continuedmarket share gains in the European markets, snowboards benefited fromacquisitions and global growth and fishing tackle shipments grew as aresult of strong orders from domestic retailers.

Industrial Product Sales

Sales of K2′s industrial products group decreased 5 percent in1999 to $119.8 million from $125.9 million a year ago. Reduced demandfor monofilament line used in the paper industry, partially offset byimproved sales of specialty resins and marine antennas, accounted forthe net decline.

Improved Performance

The company’s focus on innovation, cost reduction, consolidationand return on investment has created a solid foundation for growth andimprovement as the company moves forward. K2′s strong productinnovation program resulted in the introduction last year of such newproducts as the Kickboard, outdoor furniture and new ski technology.K2 also initiated a number of programs last year aimed at enhancingprofitability in various product categories.

The company’s recent acquisitions of Ride and Morrow snowboardspermitted consolidation in core categories. And K2′s focus on returnon investment was an important factor in significantly improving ourcash flow in 1999.

K2 Inc. is a leading designer, manufacturer and marketer of brandname sporting goods, recreational and industrial products. Thecompany’s sporting goods and recreational products include well-knownnames such as K2 and Olin alpine skis, K2, Ride and Morrow snowboards,boots and bindings, K2 in-line skates, Stearns sports equipment,Shakespeare fishing tackle, K2 bikes, and Dana Design backpacks. K2′sother recreational products include Planet Earth apparel, Adioskateboard shoes and Hilton corporate casuals. K2′s industrialproducts include Shakespeare extruded monofilaments, marine antennasand fiberglass light poles.

This news release includes forward-looking statements under thecaption “Improved Performance.” The company cautions that thesestatements are qualified by important factors that could cause actualresults to differ materially from those in the forward-lookingstatements, including but not limited to, economic conditions, productdemand, competitive pricing and products, weather conditions, andother risks described in the company’s Annual Report on Form 10K filedwith the Securities and Exchange Commission.

K2 INC.

SUMMARY OF OPERATIONS

(in thousands except for per share figures)

FOURTH QUARTER YEAR

ended December 31 ended December 31

(unaudited) 1999 1998 1999(a) 1998(b)

Net sales $ 173,870 $ 132,794 $ 635,105 $ 574,510Cost of products sold (c) 136,935 95,779 462,033 418,950

Gross profit 36,935 37,015 173,072 155,560

Selling expenses 26,652 23,304 95,774 87,389General and administrative expenses (d) 14,256 8,782 52,454 51,421

Operating

income

(loss) (3,973) 4,929 24,844 16,750

Interest expense 3,736 3,016 12,741 12,163Other income, net (307) (28) (413) (236)

Income (loss) before

provision

for income

taxes (7,402) 1,941 12,516 4,823

Provision

(credit) for income taxes (2,370) 312 4,005 955

Income

(loss) from

continuing

operations (5,032) 1,629 8,511 3,868

Discontinued

operations, net of taxes 288 348 1,332 975

Net Income

(Loss) $ (4,744) $ 1,977 $ 9,843 $ 4,843

Earnings per share: Basic:

Continuing

operations $ (0.29) $ 0.10 $ 0.50 $ 0.23

Discontinued

operations 0.02 0.02 0.08 0.06

Net Income

(Loss) (0.27) 0.12 0.58 0.29

Diluted:

Continuing

operations $ (0.29) $ 0.10 $ 0.50 $ 0.23

Discontinued

operations 0.02 0.02 0.08 0.06

Net Income

(Loss) (0.27) 0.12 0.58 0.29

Shares: Basic 17,598 16,553 16,880 16,554

Diluted 17,609 16,649 16,883 16,637

Cash dividend $ — $ 0.11 $ 0.11 $ 0.44

Income from continuing operations before 1999 restructuring and downsizing costs

($4,420 and $2,720 net of taxes, respectively) and 1998 charge for reserves ($9,425 net of taxes) $ 2,108 $ 1,629 $ 15,651 $ 13,293

Continuing operations before 1999 restructuring and downsizing costs

($.26 and $.16 per share, respectively) and 1998 charge for for reserves ($.57 per share) $ 0.12 $ 0.10 $ 0.93 $ 0.80

(a) Gross profit and operating income are $183,572 and $35,344, respectively before restructuring costs totaling $6,500 ($4,420

net of taxes) and downsizing costs totaling $4,000 ($2,720 net of

taxes)(b) Gross profit and operating income are $166,060 and $31,250, respectively, before charges for reserves totaling $14,500

($9,425 net of taxes).(c) Years 1999 and 1998 and fourth quarter 1999 include charges of

$10,500(d) Year 1998 includes a charge of $4,000.laments, marine antennasand fiberglass light poles.

This news release includes forward-looking statements under thecaption “Improved Performance.” The company cautions that thesestatements are qualified by important factors that could cause actualresults to differ materially from those in the forward-lookingstatements, including but not limited to, economic conditions, productdemand, competitive pricing and products, weather conditions, andother risks described in the company’s Annual Report on Form 10K filedwith the Securities and Exchange Commission.

K2 INC.

SUMMARY OF OPERATIONS

(in thousands except for per share figures)

FOURTH QUARTER YEAR

ended December 31 ended December 31

(unaudited) 1999 1998 1999(a) 1998(b)

Net sales $ 173,870 $ 132,794 $ 635,105 $ 574,510Cost of products sold (c) 136,935 95,779 462,033 418,950

Gross profit 36,935 37,015 173,072 155,560

Selling expenses 26,652 23,304 95,774 87,389General and administrative expenses (d) 14,256 8,782 52,454 51,421

Operating

income

(loss) (3,973) 4,929 24,844 16,750

Interest expense 3,736 3,016 12,741 12,163Other income, net (307) (28) (413) (236)

Income (loss) before

provision

for income

taxes (7,402) 1,941 12,516 4,823

Provision

(credit) for income taxes (2,370) 312 4,005 955

Income

(loss) from

continuing

operations (5,032) 1,629 8,511 3,868

Discontinued

operations, net of taxes 288 348 1,332 975

Net Income

(Loss) $ (4,744) $ 1,977 $ 9,843 $ 4,843

Earnings per share: Basic:

Continuing

operations $ (0.29) $ 0.10 $ 0.50 $ 0.23

Discontinued

operations 0.02 0.02 0.08 0.06

Net Income

(Loss) (0.27) 0.12 0.58 0.29

Diluted:

Continuing

operations $ (0.29) $ 0.10 $ 0.50 $ 0.23

Discontinued

operations 0.02 0.02 0.08 0.06

Net Income

(Loss) (0.27) 0.12 0.58 0.29

Shares: Basic 17,598 16,553 16,880 16,554

Diluted 17,609 16,649 16,883 16,637

Cash dividend $ — $ 0.11 $ 0.11 $ 0.44

Income from continuing operations before 1999 restructuring and downsizing costs

($4,420 and $2,720 net of taxes, respectively) and 1998 charge for reserves ($9,425 net of taxes) $ 2,108 $ 1,629 $ 15,651 $ 13,293

Continuing operations before 1999 restructuring and downsizing costs

($.26 and $.16 per share, respectively) and 1998 charge for for reserves ($.57 per share) $ 0.12 $ 0.10 $ 0.93 $ 0.80

(a) Gross profit and operating income are $183,572 and $35,344, respectively before restructuring costs totaling $6,500 ($4,420

net of taxes) and downsizing costs totaling $4,000 ($2,720 net of

taxes)(b) Gross profit and operating income are $166,060 and $31,250, respectively, before charges for reserves totaling $14,500

($9,425 net of taxes).(c) Years 1999 and 1998 and fourth quarter 1999 include charges of

$10,500(d) Year 1998 includes a charge of $4,000.