Mackie Designs Reports Fourth Quarter Results

February 28, 2002 - Woodinville, WA - Mackie Designs Inc. (NASDAQ:MKIE) announced today a net loss for the fourth quarter ended December 31, 2001 of $660,000, or $0.05 per share. This compares to a net loss of $3,835,000, or $0.31 per share, for the third quarter of 2001, and to net income of $636,000, or $0.05 per diluted share, for the fourth quarter of 2000. Revenue for the fourth quarter of 2001 was $46,855,000 compared to $48,431,000 for the prior quarter and $53,994,000 for the fourth quarter of the prior year.

Gross margin for the 2001 fourth quarter was 30.2% versus 23.8% for the third quarter of 2001 and 33% for the fourth quarter of 2000.

For the year ended December 31, 2001, the net loss was $5,329,000, or $0.43 per share. This compares to net income of $6,226,000, or $0.49 per diluted share, for 2000. Revenue for 2001 was $206,539,000 compared to $207,476,000 for 2000.

Chief Executive Officer Jamie Engen said that fourth quarter revenue was constrained by the recession in the U.S. and Europe, which disrupted the normal seasonal increase in sales associated with the holiday selling season. "We did not let this temporary market weakness delay the implementation of the aggressive new product and corporate infrastructure development programs we needed to take our company to the next level. The success of these efforts in 2001, together with renewed strength in new order bookings we have seen so far this year, set the stage for what we expect will be significantly improved top and bottom-line performance in 2002," he said.

"Cost reduction initiatives led to a decline in selling, general and administration expenses for fourth quarter of 2001 of $700,000 compared to the third quarter, and $1,300,000, or 10%, compared to the fourth quarter of 2000. Our new Oracle MIS system went live throughout the Company in the fourth quarter. We expect to begin to realize the benefits of this implementation in coming quarters.

"We see the potential for additional cost savings and efficiency enhancements in 2002. As we have stated previously, our long-term goal for gross margin is in the range of 38-40%. Combined with the impact of the infrastructure improvements we made in 2001, we believe that Mackie ultimately can deliver operating margins in the 10-12% range. Much remains to be done to achieve these goals, but we are confident that they are within our reach," Engen said.

The CEO added, "During 2001 we also significantly expanded Mackie's revenue potential with the launch of advanced new pro audio products that increase our product range in current markets and move us into closely related new markets. At the same time, we enhanced gross margins on these new products by taking advantage of advances in audio technology, the cost benefits of our offshore manufacturing initiatives, and improved designs and lower-cost components.

"Mackie is one of the most widely recognized and respected names in the professional audio industry. Our broad and growing product line-up and global distribution capabilities, together with our increasingly efficient operating platform, give us the tools we need to continue increasing Mackie's share of this multi-billion dollar industry. This is the right formula to build value for our customers, employees and shareholders."

About Mackie Designs
Mackie Designs is a leading designer, manufacturer and marketer of professional audio equipment. The Company sells audio mixers, mixer systems, power amplifiers, and professional loudspeakers.

Forward-Looking Statements
This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, difficulties encountered in the integration of acquired businesses and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

"Mackie" is a registered trademark of Mackie Designs Inc. in the United States and other countries.