Mackie Designs Inc. Announces Third Quarter Results

October 26, 2000 – Woodinville, Wash. –Mackie Designs Inc. (Nasdaq:MKIE - news) today announced revenues and earnings for the quarter ended September 30, 2000.

Revenues for the third quarter were $50.9 million, compared with $40.3 million for the corresponding quarter in 1999, an increase of 26%. Net income for the quarter was $0.9 million, or $0.07 per share. This compares with earnings of $1.7 million, or $0.14 per share, in the third quarter of 1999. Year to date revenues were $151 million for the nine months ended September 30, 2000 compared to $111 million for the corresponding period in 1999. Year to date earnings on a fully diluted basis were $0.44 for 2000 compared to $0.12 for the comparable nine month period in 1999.

Chief Financial Officer William Garrard stated, "Our sales increase on a quarter over quarter and a year over year basis is positive. However, we are disappointed that we were unable to maintain the record of sales growth that we have established over the last five quarters. A combination of some softening of sales in certain categories, the impact of a strong U.S. currency on international sales and the traditional European summer quiet period all contributed to a reduction in sales of $5.2 million when compared to the second quarter of 2000. Our gross margin was slightly lower in this quarter at 35.9% when compared to the third quarter 1999 gross margin of 36.3%, but was improved on a year to date basis at 37.1% compared to 36.0% in the previous nine month period. The drop in the quarter is largely attributable to sales mix. Selling, general and administrative expenses are comparable on a percentage of sales basis for the quarter and improved to 24.2% for the nine month period ended September 30, 2000 from 27.5% for the comparable nine month period in 1999. Operating income as a percentage of sales was down slightly for the quarter to 6.7% as compared to 7.0% in the third quarter of 1999, but improved on a year to date basis to 8.4% as compared to 3.9% for the previous nine month period. Below the operating income line, our quarterly earnings were reduced when compared to 1999 because of increased interest costs associated with our acquisition of Eastern Acoustic Works, Inc. and adverse foreign exchange fluctuations. However, pre-tax income increased to $9.3 million for the nine months ended September 30, 2000 from $2.9 million for the comparable period in 1999, a reflection of the overall improvements we have seen on a year over year basis.

"We did not reach our goals for this quarter," stated Jamie Engen, Mackie's Chief Operating Officer. "While we are reporting quarter over quarter and year over year growth in sales our quarterly net income is weaker when compared to the prior year. In spite of that, I am excited about the progress we have made over the last twelve months and both the near and long term opportunities for our company. We have strengthened our management ranks and we are poised to bring several excellent new products to market. Our goal is to grow our company and to do so profitably,'' continued Engen.

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, constraints on supplies of critical components, excess or shortage of production capacity, 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 DESIGNS INC.
STATEMENTS OF INCOME (Unaudited)

About Mackie Mackie Designs Inc. is known worldwide as a leading manufacturer and marketer of high-quality, affordable professional audio systems. Mackie products can be found in professional and project recording studios, video and broadcast suites, post production facilities, sound reinforcement applications including churches and nightclubs, retail locations and on major musical tours. Mackie Designs Inc. products are marketed by 54 distributors to more than 100 countries around the world.

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

For more information please contact: Mackie Designs Inc. – 16220 Wood-Red Road N.E. – Woodinville, WA 98072 – Phone: 425-487-4333 – Fax: 425-487-4337 – Internet: www.mackie.com