Phillips-Van Heusen Corporation reported a first quarter net loss of $2.2 million, or $0.22 per common share. Excluding the integration costs, net income in the current year's first quarter improved to $7.8 million, or $0.11 per common share. These results, which are in line with previous earnings guidance, compare with the prior year's first quarter net loss of $0.8 million, or $0.03 per common share.

The integration costs associated with the Calvin Klein acquisition included (i) the operating losses of the Calvin Klein men's and women's collection apparel businesses which the Company will transfer over time to Vestimenta, S.p.A. under a license agreement which will be in full effect for the Spring 2004 collection, and (ii) the costs of certain duplicative personnel and facilities during the integration of various logistical and back office functions.

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The improvement in net income, excluding integration costs, was primarily due to the addition of earnings associated with the recently acquired Calvin Klein Licensing and Design segment. In addition, operating earnings of the Apparel and Footwear segment increased 43%, driven by higher margins in our wholesale apparel businesses particularly Izod, Van Heusen and Arrow due to lower product costs and more full priced selling. This increase was partially offset by reduced operating earnings in our Bass footwear business resulting from weak sales of sandals and spring canvas product due to unseasonably cold weather. Also negatively impacting the current year's first quarter earnings were the costs associated with financing the Calvin Klein acquisition, including increased interest expense of $2.8 million and $4.5 million of dividends on the Company's newly issued convertible preferred stock.

Total revenues in the current year's first quarter were $377.0 million, an increase of 8% from the prior year's $349.4 million. This increase was due to the royalty revenues generated by the Calvin Klein Licensing and Design segment, which was partially offset by a 2% decline in revenues in the Apparel and Footwear segment.

Commenting on these results, Bruce J. Klatsky, Chairman and Chief Executive Officer, noted, "our first quarter results reflect both the completion of our acquisition of Calvin Klein as well as the exceedingly difficult retail environment in which we operated. Against this environment, we are pleased with our operating results for the first quarter, which were in line with previous guidance. In particular, higher gross margins achieved by our wholesale sportswear and dress shirt businesses more than offset the weak sales environment and drove the strong earnings improvement in the Apparel and Footwear segment."

Mr. Klatsky continued "the integration of the Calvin Klein acquisition continues to proceed on plan and we continue to reaffirm our belief in the strength and opportunities this brand represents. We are moving forward on expanding the global marketing of the Calvin Klein brand, and remain on target to launch a better men's and women's sportswear business in the Fall of 2004. In addition, we completed an extremely successful offering on May 5, 2003 in which we issued $150 million of 8 1/8% senior unsecured notes. The

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proceeds of the offering were used to repay the $125 million, 10% secured note borrowed in connection with the Calvin Klein acquisition and for general corporate purposes."

Mr. Klatsky added "we continue to estimate that 2003 earnings per share will be in the range of $0.95 to $1.00, which excludes the Calvin Klein integration costs. Including these costs, we estimate GAAP earnings per share will be in a range of $0.30 to $0.40." (Please see Supplementary 2003 Earnings Guidance table below for more details.)

Mr. Klatsky concluded by stating that "as we have noted in the past, the current year represents a transition year as we integrate the Calvin Klein business and, as a result, in 2003, we will experience earnings dilution. We continue to remain optimistic that, beginning with 2004 and beyond, we can achieve earnings per share growth of 15-20% against our projected 2003 operating earnings of $0.95 - $1.00, which excludes the Calvin Klein integration costs."

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1) Calvin Klein integration costs include (i) the operating results of the Calvin Klein men's and women's collection apparel businesses which the Company will transfer over time to Vestimenta, S.p.A. under a license agreement which will be in full effect for the spring 2004 collection, and associated costs in connection with such transfer, and (ii) the costs of certain duplicative personnel and facilities during the integration of various logistical and back office functions.

The Company believes presenting its results excluding Calvin Klein integration costs provides useful information to investors because many investors make decisions based on the ongoing operations of an enterprise. Investors often believe that ongoing operations provide the best measure of assessing performance and provide a more meaningful basis to compare against future results. The Company uses its results excluding Calvin Klein integration costs to discuss its business with investment institutions, the Company's Board of Directors and others. Such results are also the basis for certain incentive compensation calculations.

2) The Company uses EBITDA to discuss its business with investment institutions, the Company's Board of Directors, lenders and others. EBITDA is provided because it is an important measure of financial performance commonly used to determine the value of companies and to define standards for borrowing from institutional lenders. We have presented EBITDA to enhance your understanding of our operating results. EBITDA represents net income before interest expense, income taxes, depreciation and amortization.

As of May 4, 2003, receivables and inventories include $23,168 and $12,206, respectively, related to the Calvin Klein businesses.

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Please see note #1 to the Consolidated Income Statements for a description of the Calvin Klein Integration Costs.