Oakley Posts Net Income Growth of 31.6%

— First quarter net sales increase 14.3 percent to a first quarter record $127.1 million

— Gross sales of the newer categories increase 33.6 percent to a first quarter record $52.2 million

— Net sales through Oakley-owned retail stores grow 55.2 percent to $13.8 million

— Earnings per share increase to $0.06 from $0.05 in 2003, marking a third consecutive quarter of per-share earnings growth

— Full year revenue and earnings guidance adjusted upward

FOOTHILL RANCH, Calif., April 21, 2004 (PRIMEZONE) — Oakley, Inc. (NYSE:OO) today announced results of its first quarter ended March 31, 2004.

First quarter net sales increased 14.3 percent, to $127.1 million, a first quarter record, compared with $111.2 million in the first quarter of 2003. Net income for the first quarter totaled $4.2 million, or $0.06 per diluted share, compared with net income of $3.2 million, or $0.05 per diluted share, earned in the first quarter of 2003.

Oakley Chief Operating Officer Link Newcomb commented, “During the first quarter of 2004, our new sunglass offerings were welcomed enthusiastically by retailers and we saw early signs of positive consumer sell-through, especially on the new Dartboard and Why 8 styles. In addition, first quarter gross sales of our newer categories improved by 33.6 percent to a record $52.2 million, led by strong spring launches of the company’s apparel and prescription eyewear products. Combined sales from the newer categories accounted for 39.3 percent of first quarter sales, providing further evidence that our diversification strategy is working and reinforcing our belief that these categories continue to offer substantial growth opportunities. Net sales from Oakley retail stores also showed continued momentum, growing 55.2 percent and representing 10.8 percent of total sales for the quarter.”

“During the first quarter, worldwide gross sunglass sales of $64.0 million were essentially equal to last year’s first quarter,” continued Newcomb. “Gross sales of sunglasses to Oakley’s diverse base of retailers other than Sunglass Hut, combined with sales through our own retail operations and other channels, increased 9.6 percent, which we believe reflects increased consumer demand for Oakley’s new and existing sunglass products. Offsetting that increase, U.S. net sales to Sunglass Hut declined significantly during the quarter, reflecting their efforts to attain a more efficient Oakley inventory level at their distribution center. This was consistent with guidance we gave during last quarter’s earnings conference call.”

“We now expect full year 2004 net sales growth of approximately 12 percent and earnings growth of approximately 16 percent, to $0.65 per diluted share. This increased guidance is based on several assumptions, including a continuation of the improved retail trends we experienced during the first quarter leading to stronger anticipated sunglass sales growth for the full year, newer category gross sales growth at the higher end of the 15-20 percent range previously announced and higher projected orders from Sunglass Hut over the remainder of the year.

First Quarter Financial Analysis

Total first quarter U.S. net sales increased 9.0 percent to $60.6 million from $55.6 million during the same period last year. U.S. net sales, excluding the company’s retail store operations, totaled $46.8 million, equal to the comparable quarter of 2003. Excluding the company’s retail store operations and sales to Sunglass Hut, U.S. net sales increased 6.3 percent. An improved retail environment boosted sales across virtually all of the company’s product categories. U.S. net sales to Sunglass Hut declined 32.2 percent as a result of the inventory management efforts mentioned above. First quarter net sales at Oakley’s retail locations increased 55.2 percent to $13.8 million, including a double-digit increase in comparable store sales. At the end of the firstuarter, the company operated 28 O Store(tm) locations, including 1 new store opened during the quarter, and 78 Iacon stores, including 2 new stores opened during the quarter. At the end of last year’s first quarter, the company operated 15 O Stores(tm) and 66 Iacon locations.

First quarter international net sales increased $11.0 million, or 19.8 percent, to $66.5 million, compared with $55.5 million in last year’s comparable period. The weaker U.S. dollar accounted for 13.4 percentage points of this growth. The company’s operations in Latin America, Europe, Canada, Asia and Japan each reported double-digit sales growth driven by currency benefits and strong newer category momentum. Sales in the South Pacific region declined 7.0 percent due, in part, to reduced orders resulting from Luxottica retail group’s integration of Australian-based retailer OPSM, following the acquisition completed in September 2003.

Worldwide sunglass gross sales increased slightly in the first quarter, to $64.0 million from $63.9 million in last year’s first quarter. Sunglass unit shipments declined 3.6 percent worldwide, offset by a 3.9 percent increase in average selling prices driven by the effect of a weak U.S. dollar on international sales, the strength of Oakley’s retail store operations and a higher sales contribution from polarized styles that carry higher price points.

Combined first quarter gross sales of the company’s newer categories, consisting of apparel, prescription eyewear, footwear and watch categories, grew 33.6 percent to a record $52.2 million, and accounted for 39.3 percent of total first quarter gross sales driven by continued momentum from the apparel and prescription eyewear product lines.

First quarter gross margins increased to 54.1 percent compared with 53.4 percent in last year’s comparable period, due to improved gross margins from the company’s newer categories and the positive effect of a weaker U.S. dollar on the company’s international operations. These positive factors were partially offset by a lower mix of sunglass sales and lower average sunglass margins compared with last year’s first quarter as a result of production inefficiencies and other start-up costs associated with new sunglass styles.

First quarter operating expenses totaled $62.1 million, up 14.7 percent from last year’s first quarter, and represented 48.8 percent of net sales, compared with 48.7 percent of net sales in the comparable prior quarter. The increase was primarily due to higher foreign operating expenses resulting from a weaker U.S. dollar and higher selling expenses related to the company’s expanded retail operations. The tax rate for the quarter was 34.0 percent, compared to 35.0 percent in last year’s first quarter.

The company’s order backlog as of March 31, 2004 was a record $76.0 million, up 6.9 percent compared with $71.1 million at the same time last year. This increase occurred despite a large decline in seasonal orders from Sunglass Hut which were received in March last year but not until April this year. Excluding orders from Sunglass Hut, the company’s order backlog was up 14.9 percent at March 31, 2004. Prebook orders from retailers for the company’s fall footwear and apparel lines totaled $35.4 million at March 31, 2004, up 13.8 percent compared with $31.1 million at the same time last year.

The company’s consolidated inventory totaled $104.3 million at March 31, 2004, compared with $98.7 million at December 31, 2003 and $91.8 million at March 31, 2003, reflecting increased inventory in newer categories to support their growth and expanded company-owned retail store operations. Accounts receivable totaled $88.0 million at March 31, 2004, compared with $78.0 million at December 31, 2003 and $78.5 million at March 31, 2003. Accounts receivable days sales outstanding (DSO) improved to 63 at March 31, 2004 compared with 64 at March 31, 2003. Both inventory and receivables grew at slower rates than net sales. New Management Addition

The company is pleased to announce the planned addition of Cosmas Lykos as Vice President of Business Development to Oakley’s management team, to be effective mid-May. Mr. Lykos will be instrumental in identifying and executing strategic business opportunities and will also oversee all NYSE and SEC compliance matters. Since December 2000, Mr. Lykos has served as Vice President of Business Affairs, General Counsel and Secretary at RemedyTemp, Inc. (NASDAQ:REMX) which he joined in 1998. Prior to his position at RemedyTemp, he was an attorney for four years at the international law firm of Gibson, Dunn & Crutcher in Irvine, California. Mr. Lykos earned his law degree from the Duke University School of Law in 1993 and his bachelors degree from Dickinson College.

Stock Repurchase Program

On September 10, 2002, the company’s board of directors authorized a $20 million stock repurchase program to occur from time to time as market conditions warrant. Since the time of this authorization, the company has repurchased 829,600 shares for $8.6 million at an average share price of approximately $10.37. No repurchases were made during the first quarter. The company intends to remain active with the share repurchase program should the right market conditions exist.

Non-GAAP Financial Measures

This release makes reference to gross sales and components thereof, each of which may be a non-GAAP financial measure. The company believes that use of these financial measures allows management and investors to evaluate and compare the Company’s operating results in a more meaningful and consistent manner. A reconciliation of these measures is included in the accompanying financial schedules.

About Oakley, Inc.

Oakley: a world brand, driven to ignite the imagination through the fusion of art and science. Building on its legacy of innovative, market-leading, premium sunglasses, the company also offers an expanding line of premium performance footwear, apparel, accessories, watches and prescription eyewear to consumers in more than 100 countries. Trailing-12-month revenues through March 31, 2004 totaled $537.5 million and generated net income of $39.2 million. Oakley, Inc. press releases, SEC filings and the company’s Annual Report are available at no charge through the company’s Web site at www.oakley.com. New Management Addition

The company is pleased to announce the planned addition of Cosmas Lykos as Vice President of Business Development to Oakley’s management team, to be effective mid-May. Mr. Lykos will be instrumental in identifying and executing strategic business opportunities and will also oversee all NYSE and SEC compliance matters. Since December 2000, Mr. Lykos has served as Vice President of Business Affairs, General Counsel and Secretary at RemedyTemp, Inc. (NASDAQ:REMX) which he joined in 1998. Prior to his position at RemedyTemp, he was an attorney for four years at the international law firm of Gibson, Dunn & Crutcher in Irvine, California. Mr. Lykos earned his law degree from the Duke University School of Law in 1993 and his bachelors degree from Dickinson College.

Stock Repurchase Program

On September 10, 2002, the company’s board of directors authorized a $20 million stock repurchase program to occur from time to time as market conditions warrant. Since the time of this authorization, the company has repurchased 829,600 shares for $8.6 million at an average share price of approximately $10.37. No repurchases were made during the first quarter. The company intends to remain active with the share repurchase program should the right market conditions exist.

Non-GAAP Financial Measures

This release makes reference to gross sales and components thereof, each of which may be a non-GAAP financial measure. The company believes that use of these financial measures allows management and investors to evaluate and compare the Company’s operating results in a more meaningful and consistent manner. A reconciliation of these measures is included in the accompanying financial schedules.

About Oakley, Inc.

Oakley: a world brand, driven to ignite the imagination through the fusion of art and science. Building on its legacy of innovative, market-leading, premium sunglasses, the company also offers an expanding line of premium performance footwear, apparel, accessories, watches and prescription eyewear to consumers in more than 100 countries. Trailing-12-month revenues through March 31, 2004 totaled $537.5 million and generated net income of $39.2 million. Oakley, Inc. press releases, SEC filings and the company’s Annual Report are available at no charge through the company’s Web site at www.oakley.com.