Mossimo, Inc. (NYSE: MGX) today announced financial results for the first fiscal quarter ended March 31, 2000.

Net sales for the quarter increased 118% to $18.1 million, compared to $8.3 million for the first quarter of fiscal 1999. The Company reported a net loss of $9.0 million versus a net loss of $1.6 million in the same period last year, and a diluted earnings per share loss of $0.59 versus a diluted earnings per share loss of $0.10 in the first quarter of fiscal 1999.

During the first quarter of 2000, the Company recorded a restructuring charge of $4.1 million associated with the Company's new agreement with Target Corporation (NYSE:TGT). The restructuring charge included a write-down of property and equipment and an accrual for lease obligations and severance expense. Excluding this restructuring charge, the Company would have reported a diluted earnings per share loss of $0.32.

Gross profit as a percentage of sales for the quarter decreased to 23% versus 24% a year ago. The decrease in gross margin was due primarily to increased inventory write-downs during the quarter, partially offset by better inventory management and increased men's and women's regular priced sales. Selling, general and administrative expenses as a percentage of sales remained consistent at 57%.

In March 2000, the Company entered into a major, multi-product licensing agreement with Target Corp. Under the terms of the agreement, Mossimo, Inc. will contribute design services and license the Mossimo trademark to Target Corp. in the U.S., in return for royalties on Target's sales of Mossimo products with substantial guaranteed minimum payments. Target will collaborate on design and be responsible for product development, sourcing, quality control and inventory management.

Mossimo Giannulli, Chairman, President and Chief Executive Officer of Mossimo, Inc. commented, "In a very short period of time, our working relationship with Target has exceeded our highest expectations. I believe both parties are extremely enthusiastic about the growth potential of this arrangement and look forward to maximizing the opportunities that lie ahead."

"With regard to our current business, our restructuring plan is proceeding as planned," Mr. Giannulli continued. "By year end, our plan is to reduce our work force by 90%, close our showrooms, signature retail and outlet stores and terminate our sourcing, production and sales operations."

Due to the restructuring of the Company's business, available borrowings under the Company's current credit facility are expected to be substantially eliminated by June 2000. The Company is actively seeking financing to cover anticipated shortfalls and is in the process of renegotiating its credit facility, including its factoring agreement.

Mr. Giannulli concluded, "We continue to believe this alliance with Target represents the next big evolution within the retail industry. More importantly, we believe this arrangement will ultimately result in improved earnings and increased stockholder value."

Founded in 1987, Mossimo, Inc. is designer of men's and women's sportswear.

The matters discussed in this news release with respect to operations and future results, and the benefits thereof, are forward looking statements that involve risks and uncertainties, including the Company's ability to execute its new business strategy, the Company's ability to collect its outstanding receivables and obtain additional financing to meet its obligations, the demand for the Company's products in Target stores which have not traditionally sold the Company's products, changes in consumer demands and preferences, shifting trends in the overall retail and apparel market, competition from other lines and uncertainties generally associated with product introductions and apparel retailing. Forward looking statements are not guarantees and involve known and unknown risks and uncertainties, any of which could cause actual results to vary materially from anticipated results. More information on risk factors, which could affect the company's financial results, is included in the company's 1999 annual report and Form 10-K, filed with the S.E.C.


MOSSIMO, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

March 31, December 31,
2000 1999
--------- --------
(unaudited)
ASSETS

CURRENT ASSETS:
Cash $ 316 $ 473
Accounts receivable, net 762 787
Due from factor, net 2,529 --
Inventories 3,536 5,682
Prepaid expenses and other
current assets 1,000 502
-------- --------
Total current assets 8,143 7,444

PROPERTY AND EQUIPMENT, net 512 3,097

OTHER ASSETS 195 195
-------- --------
$ 8,850 $ 10,736
======== ========

LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)

CURRENT LIABILITIES:
Due to factor, net......................$ -- $ 1,298
Line of credit 8,029 2,135
Accounts payable 3,629 3,178
Accrued liabilities 3,215 1,290
Current portion of long-term debt 7 8
S distribution note 215 215
-------- --------

Total current liabilities 15,095 8,124

DEFERRED ROYALTY INCOME 213 213

LONG-TERM DEBT, net of
current portion 1 3

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, par value
$.001; authorized shares
3,000,000; no shares issued
or outstanding -- --
Common stock, par value
$.001; authorized shares
30,000,000; issued and
outstanding 15,080,042 -
March 31, 2000
and 15,077,253 - December 31, 1999 15 15
Additional paid-in capital 38,223 38,126
Accumulated deficit (44,697) (35,745)
-------- --------
Total stockholders'
equity (deficit) (6,459) 2,396
-------- --------
$ 8,850 $ 10,736
======== ========


MOSSIMO, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)


Three Months
Ended March 31,
2000 1999
------ ------
(unaudited)

Net sales $ 18,100 $ 8,286
Cost of sales 13,890 6,278
-------- --------
Gross profit 4,210 2,008
Royalty income, net 1,448 1,308
-------- --------
5,658 3,316
-------- --------

OPERATING EXPENSES:
Selling, general and
administrative 10,326 4,733
Restructuring 4,055 --
-------- --------

Total operating expenses 14,381 4,733
-------- --------
Operating loss (8,723) (1,417)
-------- --------

OTHER EXPENSE:
Other, net -- (3)
Interest, net (229) (131)
-------- --------
Net other expense (229) (134)
-------- --------
Net income loss $ (8,952) $ (1,551)
======== ========

Net loss per common share:
Basic and diluted $ (0.59) $ (0.10)
======== ========

Weighted average common
shares outstanding:
Basic and diluted 15,079 15,021
======== ========