Paul Bush
Chairman and Chief Executive Officer
"...given the current market realities we will implement an aggressive restructuring initiative in 2003 to lower our overall cost structure, which includes rightsizing the North American furniture business.."

Bush Industries (NYSE:BSH), a diversified global furniture manufacturer and leading supplier of surface technologies, released its fourth quarter and full year financial results for the period ended December 28, 2002.

Net sales for the 2002 fourth quarter were $88.5 million representing a 4.2 percent increase over the previous year's fourth quarter. The Company reported a net loss of $1.2 million, or $0.09 per diluted share. This compares to a net loss of $5.9 million, or $0.43 per diluted share in the fourth quarter of 2001. The 2001 loss included a non-cash inventory write down of $3.0 million net of tax or $0.22 per diluted share, as well as the impact of $0.05 per share for an increased income tax expense. Excluding these items, the net loss from operations was $0.16 per diluted share.

Net sales for 2002 were $340.2 million, which was 1.6 percent below last year's net sales of $345.8 million. For the year, the Company reported a loss of $1,458,000, or $0.10 per diluted share. This loss includes a non-cash charge of $2.4 million, or $0.17 per diluted share, for the cumulative effect of an accounting change for the impairment of goodwill attributed to the Company's German operations. This was the only impairment required in accordance with Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets". Excluding the charge for the cumulative effect of accounting change, net earnings would have been $940,000, or $0.07 per diluted share for the 2002 year. This compares to the 2001 year net earnings of $257,000, or $0.02 per diluted share, which included fourth quarter charges for inventory and income taxes of $0.27 per diluted share.

As part of Bush's strategy to manage working capital more effectively, long term debt declined to $100.2 million, which was ahead of the targeted range of $105-$110 million.

Paul Bush
Chairman and Chief Executive Officer
"Even with the challenging environment in the 2002 fourth quarter, our sales were ahead of last year. However, given the current market realities we will implement an aggressive restructuring initiative in 2003 to lower our overall cost structure, which includes rightsizing the North American furniture business. The plan includes the closing of the St. Paul, Virginia manufacturing facility, management cost reductions across the Company and the phasing out of unprofitable product lines in the Bush Technologies and Bush Furniture Europe divisions. We expect to incur a charge in the range of $16.0 to $18.0 million, the majority of which will be non-cash charges estimated to include $6.6 million for inventory and $4.7 million for buildings and equipment. The restructuring effort should generate cost savings of approximately $8 million on an annualized basis."

In connection with the restructuring program and the current business environment, the Company and its lenders have amended the current bank agreement, including covenant revisions to afford greater operating flexibility through the middle of 2004. In an effort to conserve cash, fund the restructuring initiative, and facilitate the amended bank agreement, the Board of Directors has suspended the dividend for all classes of stock.

Select strategic highlights by division, as well as impacts from the restructuring, are as follows:

* Bush Furniture (BF) -- The current slow market environment is
affecting first quarter home electronic sales more severely than was
previously anticipated. The BF diversification strategy of entering
the case goods home furnishing markets, distributed under the brand
name of Eric Morgan was launched as planned in the first quarter of
2003. In addition, at the upcoming High Point, NC Furniture Show in
April, an expanded Eric Morgan product line will be introduced.

* Bush Business Furniture (BBF) -- Competition from imports using
alternative materials including metal and glass, are pressuring the
low end of the product mix at BBF, primarily at the office
superstores. However, commercial office products for the office
superstores in both RTA and case good product lines continue to
increase. In the first quarter of 2003, BBF will introduce a new
"European-style" product line for the commercial office distribution
channel.

* Bush Technologies (BT) -- At the Consumer Electronics Show, the
Company's RESIN-TO-RETAIL strategy for decorated faceplates was
enthusiastically received. The focus for the BT division at this
show was to emphasize its core competencies of
Design-Technology-Merchandising for the cell phone faceplate
after-market. BT, as part of the announced restructuring plan, will
exit the non-decorated cell phone accessory business, which was
unprofitable, and make reductions to management to lower its cost
structure.

* Bush Furniture Europe (BFE) -- Although the economy in Europe
remains soft, new placements achieved in the fourth quarter of 2002
and the recent Cologne Furniture Show have resulted in an expanded
customer base, thereby partially offsetting the slow economic
conditions, especially in Germany. BFE also continues to gain
market share with its global office superstore partners. The
restructuring initiative for BFE will lower overall costs by
reducing management personnel and increase operating margins by
eliminating unprofitable product lines.

Guidance for 2003

In view of current market conditions, the Company expects sales in the first quarter of 2003 to be approximately 10 to 15 percent lower than last year and anticipates a fully diluted EPS loss of $0.10 to $0.15 exclusive of the impact of the restructuring initiative. The revenue decline in the first quarter is primarily concentrated in the BF division of the North American furniture operations. On a full year basis, Bush expects to show improvement over 2002 profit results excluding any charges relating to the restructuring initiative taken in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets", SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities", and FASB Emerging Issues Task Force (EITF) No. 96-9, "Classification of Inventory Markdowns and Other Costs Associated with a Restructuring."

Bush Industries, Inc. is a diversified global furniture manufacturer and leading supplier of surface technologies. The Company operates its business in four segments: Bush Business Furniture, which concentrates on the business office and the home office markets with sales to the office superstore and dealer channels; Bush Furniture, which focuses on home entertainment, home office and other home furnishings products; Bush Furniture Europe, which sells commercial, home office and other furnishings in the European market; and Bush Technologies, which is focused on the cell phone accessories after-market, as well as the utilization of surface technologies in diverse applications such as automotive interiors, cosmetics, sporting goods and consumer electronics. Bush operates several manufacturing and warehouse facilities throughout North America and Europe.