Mackie Designs Reports Second Quarter Results

July 25, 2002 – Woodinville, Wash. – Mackie Designs Inc. (NASDAQ:MKIE) announced today that revenue for the second quarter of 2002 was $48,798,000. This compares to revenue of $49,119,000 for the first quarter of 2002 and $54,046,000 for the second quarter of 2001. Gross margin rose to 31.3% from 29.8% for the year-earlier period. The operating loss for this year's second quarter was $490,000 compared to an operating loss of $478,000 for the second quarter of 2001. The net loss for the 2002 second quarter was $1,352,000, or $0.11 per share. This compares to a net loss of $1,797,000, or $0.15 per share, for the second quarter of 2001. The company is reporting tax expense of $305,000 for the quarter because of taxes incurred in foreign operations.

For the six months ended June 30, 2002, revenue was $97,917,000 compared to $111,253,000 for last year's first half. The net loss was $1,598,000, or $0.13 per share. This compares to a net loss of $835,000, or $0.07 per share, for the same period of 2001.

Second Quarter Review
"Following the encouraging growth in sales in the first quarter compared to last year's fourth quarter, and the fourth quarter compared to the third, we were optimistic that the pro audio market would continue its recovery in the June quarter. So we were disappointed that second quarter revenue was about flat with the first quarter's, as higher sales of installed sound products and of analog mixer products now manufactured in China were offset by lower-than-expected sales of certain of our core audio mixers and loudspeakers," said Chief Executive Officer Jamie Engen.

"While the recovery has been slow to gain momentum, we remain confident that Mackie is on the right track to build for our shareholders. We will stay the course and continue to implement our strategy for long-term growth," Engen said.

"Our strategy is to focus on Mackie's strengths – our respected brand names, our broad lines of advanced, feature-rich products, our global distribution, our increasingly efficient manufacturing and corporate infrastructures, and our strong, experienced management – while we expand our addressable markets to supplement our strong position in the pro audio industry. Our recent entry into the high-end professional broadcast and post-production sound market and the professional sound contractor market offer substantial incremental growth potential. Although we are cautious as we enter the seasonally slow summer months, we believe that Mackie is properly positioned to benefit as business conditions improve."

Accounting Change - SFAS 142
Effective January 1, 2002, Mackie adopted Statement of Financial Accounting Standard No. 142 (Goodwill and Other Intangible Assets), which requires goodwill not to be amortized but to remain on the balance sheet and be tested annually for impairment. The financial statements reflect this lower amortization of intangibles. Amortization of goodwill for the second quarter of 2001 was $431,000. In addition, Mackie has determined that a probable impairment of goodwill exists within one of its reporting units. The carrying value of goodwill attributed to this reporting unit is $6.2 million. The amount of the impairment has not been determined. The company currently expects that a retroactive impairment charge will be reported with its third quarter results.

Conference Call
Mackie will host a conference call today at 11:00 AM ET. A real-time WebCast and replay can be accessed at www.CompanyBoardroom.com or at www.Mackie.com. For a telephone replay, dial (800) 633-8284, reservation #20763576, one hour after the call.

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.