<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2002
                               ------------------
                                       OR

[_]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________  to ____________________

Commission file number   1-8884
                      ------------

                              BUSH INDUSTRIES, INC.
                             ----------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                            16-0837346
  -------------------------------                           -------------------
  (State or other jurisdiction of                            (I.R.S. Employer
  incorporation of organization)                            Identification No.)

                                 One Mason Drive
                                  P.O. Box 460
                         Jamestown, New York 14702-0460
                         -------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (716) 665-2000
             --------------------------------------- ---------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes   X      No ______
     ---
Number of shares of Common Stock outstanding as of September 28, 2002:
10,445,453 shares of Class A Common Stock and 3,395,365 shares of Class B Common
Stock.

<PAGE>

                     BUSH INDUSTRIES, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      -------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   SEPTEMBER 28,   DECEMBER 29,
                                                                            2002           2001
                                                                   -------------   ------------
                                                                          (In thousands)
<S>                                                                <C>             <C>
ASSETS
------
Current Assets:
   Cash                                                            $       1,358   $      1,589
   Accounts receivable                                                    15,843         16,872
   Inventories                                                            57,836         55,297
   Prepaid expenses and other current assets                               8,378         11,491
                                                                   -------------   ------------
        Total Current Assets                                              83,415         85,249

Property, Plant and Equipment, Net                                       200,550        207,334

Other Assets                                                              29,797         28,594
                                                                   -------------   ------------

TOTAL ASSETS                                                       $     313,762   $    321,177
                                                                   =============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
   Accounts payable                                                $      23,634   $     17,184
   Income taxes                                                              830             43
   Other accrued liabilities                                              20,791         24,052
   Current portion of long-term debt                                         457            447
                                                                   -------------   ------------
        Total Current Liabilities                                         45,712         41,726

Deferred Income Taxes                                                     12,371         11,123
Other Long-term Liabilities                                                8,068          7,237
Long-term Debt                                                           107,093        121,118
                                                                   -------------   ------------
        Total Liabilities                                                173,244        181,204
                                                                   -------------   ------------

Stockholders' Equity:
   Common Stock:
        Class A, $.10 par, 20,000,000 shares authorized,
        10,837,983 and 10,768,243 shares issued                            1,084          1,077

        Class B, $.10 par, 6,000,000 shares authorized,
        3,395,365 shares issued                                              340            340

   Paid-in capital                                                        23,637         22,916
   Retained earnings                                                     123,217        123,164
   Accumulated other comprehensive income                                  1,422          1,666
                                                                   -------------   ------------
                                                                         149,700        149,163

Less treasury stock, 392,530 and 388,400 Class A shares                   (5,826)        (5,775)
Less notes receivable related to common stock                             (3,356)        (3,415)
                                                                   -------------   ------------
        Total Stockholders' Equity                                       140,518        139,973
                                                                   -------------   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $     313,762   $    321,177
                                                                   =============   ============
</TABLE>

See notes to condensed consolidated financial statements.

                                        2

<PAGE>

                     BUSH INDUSTRIES, INC. AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                  ---------------------------------------------
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                   THIRTEEN WEEKS ENDED
                                                            ---------------------------------
                                                            SEPTEMBER 28,       SEPTEMBER 29,
                                                                     2002                2001
                                                            -------------       -------------
                                                                (In thousands, except shares
                                                                     and per share data)
<S>                                                         <C>                 <C>
Net Sales                                                   $    84,411         $    80,614

Costs and Expenses:

   Cost of sales                                                 62,333              57,857
   Selling, general and administrative                           19,220              19,304
   Interest expense                                               1,904               1,945
                                                            -----------         -----------
                                                                 83,457              79,106

Earnings Before Income Taxes                                        954               1,508

Income Taxes                                                        462                 659
                                                            -----------         -----------

Net Earnings                                                $       492         $       849
                                                            ===========         ===========

Earnings per Share
   Basic                                                    $      0.04         $      0.06
   Diluted                                                  $      0.04         $      0.06

Weighted Average Shares Outstanding
   Basic                                                     13,841,944          13,739,299
   Diluted                                                   13,857,005          14,029,798
</TABLE>


See notes to condensed consolidated financial statements.

                                       3

<PAGE>

                     BUSH INDUSTRIES, INC. AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                  ---------------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                      THIRTY-NINE WEEKS ENDED
                                                                   ------------------------------
                                                                   SEPTEMBER 28,    SEPTEMBER 29,
                                                                            2002             2001
                                                                   -------------    -------------
                                                                    (In thousands, except shares
                                                                         and per share data)
<S>                                                                <C>              <C>
Net Sales                                                          $     251,672    $     260,856

Costs and Expenses:

   Cost of sales                                                         182,457          183,839
   Selling, general and administrative                                    60,002           59,532
   Interest expense                                                        5,490            6,880
                                                                   -------------    -------------
                                                                         247,949          250,251

Earnings Before Income Taxes                                               3,723           10,605

Income Taxes                                                               1,597            4,422
                                                                   -------------    -------------

Net Earnings                                                       $       2,126    $       6,183
                                                                   =============    =============

Earnings per Share
   Basic                                                           $        0.15    $        0.45
   Diluted                                                         $        0.15    $        0.44

Weighted Average Shares Outstanding
   Basic                                                              13,813,286       13,699,444
   Diluted                                                            14,036,925       14,137,026
</TABLE>

See notes to condensed consolidated financial statements.

                                        4

<PAGE>

                     BUSH INDUSTRIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                   THIRTY-NINE WEEKS ENDED
                                                                            ---------------------------------------
                                                                            SEPTEMBER 28,             SEPTEMBER 29,
                                                                                     2002                      2001
                                                                            -------------             -------------
                                                                                         (In thousands)
<S>                                                                         <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
------------------------------------
   Net earnings                                                                  $  2,126                  $  6,183
   Adjustment to reconcile to net cash provided by operating activities:
      Depreciation and amortization                                                14,772                    14,454
      Deferred income taxes                                                         1,301                       949
   Change in assets and liabilities affecting cash flows:
      Accounts receivable                                                           1,295                    19,037
      Inventories                                                                  (1,685)                    6,491
      Prepaid expenses and other current assets                                     3,191                       541
      Accounts payable                                                              5,792                   (14,533)
      Income taxes                                                                    889                    (2,519)
      Other accrued liabilities                                                    (3,504)                  (16,943)
                                                                                 --------                  --------
         Net cash provided by operating activities                                 24,177                    13,660
                                                                                 --------                  --------

CASH FLOWS FROM INVESTING ACTIVITIES:
------------------------------------
   Capital expenditures                                                            (4,412)                   (8,598)
   Increase in other assets                                                        (1,037)                     (560)
                                                                                 --------                  --------
      Net cash used for investing activities                                       (5,449)                   (9,158)
                                                                                 --------                  --------

CASH FLOWS FROM FINANCING ACTIVITIES:
------------------------------------
   Repayment of long-term debt                                                    (17,686)                   (2,844)
   Exercise of stock options by employees                                             621                     1,160
   Dividends paid                                                                  (2,073)                   (2,053)
   Payments received for notes receivable                                               4                         0
                                                                                 --------                  --------
      Net cash used for financing activities                                      (19,134)                   (3,737)
                                                                                 --------                  --------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                               175                       (44)
                                                                                 --------                  --------
NET (DECREASE) INCREASE IN CASH                                                      (231)                      721

CASH AT BEGINNING OF PERIOD                                                         1,589                     1,225
                                                                                 --------                  --------

CASH AT END OF PERIOD                                                            $  1,358                  $  1,946
                                                                                 ========                  ========
</TABLE>

See notes to condensed consolidated financial statements.

                                       5

<PAGE>

                     BUSH INDUSTRIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                   Thirty-nine weeks ended September 28, 2002
                                   (Unaudited)

1.   The accounting policies used in preparing these statements are the same as
     those used in preparing the Company's consolidated financial statements for
     the fiscal year ended December 29, 2001. These condensed consolidated
     financial statements should be read in conjunction with the consolidated
     financial statements and notes thereto included in the Company's annual
     report to stockholders for the fiscal year ended December 29, 2001.

     The foregoing financial information reflects all adjustments which are, in
     the opinion of management, of a normal and recurring nature and necessary
     for a fair presentation. The interim results are not necessarily indicative
     of the results which may be expected for a full year.

2.   Earnings per share (EPS)

     Basic EPS excludes dilution and is computed by dividing net income by the
     weighted average number of shares outstanding for the period. Diluted EPS
     reflects the potential dilution that could occur if securities or other
     contracts to issue common stock were exercised or converted into common
     stock. The dilutive effect of outstanding options issued by the Company are
     reflected in diluted EPS using the treasury stock method. Under the
     treasury stock method, options will only have a dilutive effect when the
     average market price of common stock during the period exceeds the exercise
     price of the options. The number of stock options excluded from the
     computation of diluted earning per share due to their antidilutive effect
     were 209,875 and 213,208 for the thirteen and thirty-nine weeks ended
     September 28, 2002, respectively and 168,500 and 116,420 for the thirteen
     and thirty-nine weeks ended September 29, 2001, respectively.

3.   Comprehensive income includes all changes in stockholders' equity during
     the period except those resulting from investments by owners and
     distribution to owners. The Company's comprehensive income includes net
     earnings, an amount for foreign currency translation and a minimum pension
     liability adjustment. The following tables set forth total comprehensive
     income for the 13 week and 39 week periods indicated below.

                                                     THIRTEEN WEEKS ENDED
                                              ---------------------------------
                                              SEPTEMBER 28,       SEPTEMBER 29,
                                                       2002                2001
                                              -------------       -------------
                                                        (In thousands)

     Net earnings                                     $ 492                $849
     Accumulated other comprehensive loss              (281)                (23)
                                                      -----                ----
     Total comprehensive income                       $ 211                $826
                                                      =====                ====


                                       6

<PAGE>


                                                    THIRTY-NINE WEEKS ENDED
                                              ---------------------------------
                                              SEPTEMBER 28,       SEPTEMBER 29,
                                                       2002                2001
                                              -------------       -------------
                                                        (In thousands)
     Net earnings                                    $2,126              $6,183
     Accumulated other comprehensive loss              (244)               (182)
                                                     ------              ------
     Total comprehensive income                      $1,882              $6,001
                                                     ======              ======

4.   Inventories consist of the following:

                                                SEPTEMBER 28,      DECEMBER 29,
                                                         2002              2001
                                                -------------      ------------
                                                         (In thousands)
     Raw material                                     $16,092           $16,137
     Work in progress                                   6,456             5,570
     Finished goods                                    35,288            33,590
                                                      -------           -------
                                                      $57,836           $55,297
                                                      =======           =======

5.   Segment Reporting

     The Company operates its business in four reportable segments: (1) Bush
     Business Furniture, which concentrates on the business office and the home
     office markets with sales to the office superstore and dealer channels; (2)
     Bush Furniture, which focuses on home entertainment, home office and other
     home furnishings products; (3) Bush Furniture Europe, which sells
     commercial office, home office, home entertainment and other home
     furnishings in the European market; and (4) Bush Technologies, which is
     focused on the cell phone accessories after-market, as well as the
     utilization of surface technologies in automotive interiors, cosmetics,
     sporting goods and consumer electronics.

     The Company evaluates performance of the segments based on earnings before
     income taxes. The accounting policies of the segments are the same as those
     described and referenced in Note 1.

     The following tables set forth reportable segment data for the periods
indicated below.

                                                      THIRTEEN WEEKS ENDED
                                                 ------------------------------
                                                 SEPTEMBER 28,    SEPTEMBER 29,
                                                          2002             2001
                                                 -------------    -------------
                                                         (In thousands)
     Net Sales from External Customers:
        Bush Business Furniture                        $44,580          $41,478
        Bush Furniture                                  23,704           26,943
        Bush Furniture Europe                           10,124            9,190
        Bush Technologies                                6,003            3,003
                                                       -------          -------
        Consolidated Net Sales                         $84,411          $80,614
                                                       =======          =======


                                       7

<PAGE>

<TABLE>
<CAPTION>
                                                                        THIRTEEN WEEKS ENDED
                                                                   ------------------------------
                                                                   SEPTEMBER 28,    SEPTEMBER 29,
                                                                            2002             2001
                                                                   -------------    -------------
                                                                           (In thousands)
<S>                                                                <C>              <C>
     Inter-segment Sales:
        Bush Business Furniture                                          $     0          $     0
        Bush Furniture                                                         0                0
        Bush Furniture Europe                                                975              705
        Bush Technologies                                                      0               92
                                                                         -------          -------
        Total                                                            $   975          $   797
                                                                         =======          =======

     Earnings (Loss) Before Income Taxes:
        Bush Business Furniture                                          $ 1,944          $ 2,298
        Bush Furniture                                                       883              754
        Bush Furniture Europe                                             (1,404)          (1,620)
        Bush Technologies                                                   (469)              76
                                                                         -------          -------
        Consolidated Earnings Before Income Taxes                        $   954          $ 1,508
                                                                         =======          =======
</TABLE>

<TABLE>
<CAPTION>
                                                                      THIRTY-NINE WEEKS ENDED
                                                                   ------------------------------
                                                                   SEPTEMBER 28,    SEPTEMBER 29,
                                                                            2002             2001
                                                                   -------------    -------------
                                                                           (In thousands)
     <S>                                                           <C>              <C>
     Net Sales from External Customers:
        Bush Business Furniture                                         $123,130         $115,944
        Bush Furniture                                                    75,152           83,099
        Bush Furniture Europe                                             38,667           41,047
        Bush Technologies                                                 14,723           20,766
                                                                        --------         --------
        Consolidated Net Sales                                          $251,672         $260,856
                                                                        ========         ========

     Inter-segment Sales:
        Bush Business Furniture                                         $      0         $      0
        Bush Furniture                                                         0                0
        Bush Furniture Europe                                              1,725            3,085
        Bush Technologies                                                      0              136
                                                                        --------         --------
        Total                                                           $  1,725         $  3,221
                                                                        ========         ========

     Earnings (Loss) Before Income Taxes:
        Bush Business Furniture                                         $  6,383         $  4,957
        Bush Furniture                                                     2,332              173
        Bush Furniture Europe                                             (2,999)          (1,341)
        Bush Technologies                                                 (1,993)           6,816
                                                                        --------         --------
        Consolidated Earnings Before Income Taxes                       $  3,723         $ 10,605
                                                                        ========         ========
</TABLE>

                                       8

<PAGE>

<TABLE>
<CAPTION>
                                                                   SEPTEMBER 28,      DECEMBER 29,
                                                                            2002              2001
                                                                   -------------      ------------
                                                                            (In thousands)
         <S>                                                       <C>                 <C>
         Total Assets:
            Bush Business Furniture and Bush Furniture (*)            $228,463           $243,383
            Bush Furniture Europe                                       58,833             56,054
            Bush Technologies                                           26,466             21,740
                                                                      --------           --------
            Consolidated Total Assets                                 $313,762           $321,177
                                                                      ========           ========
</TABLE>

         (*)  The Company's North American furniture segments, Bush Business
              Furniture and Bush Furniture, share certain productive assets.
              These productive assets manufacture components for both Bush
              Business Furniture and Bush Furniture products. As a result,
              identifiable assets are not allocated between Bush Business
              Furniture and Bush Furniture.


6.   Goodwill

     Effective December 30, 2001 (the first day of fiscal 2002), the Company
     adopted Statement of Financial Accounting Standards No. 142, "Goodwill and
     Other Intangible Assets" ("SFAS No. 142"). Under SFAS No. 142, goodwill is
     no longer amortized, but reviewed for impairment annually, or more
     frequently if certain indicators arise. A requirement of SFAS No. 142 is to
     complete the initial step of a transitional goodwill impairment test within
     six months of adoption of SFAS No. 142 and to complete the final step of
     the transitional impairment test by the end of the fiscal year. Any
     goodwill impairment loss resulting from the transitional impairment test
     will be recorded as a cumulative effect of a change in accounting principle
     no later than the end of fiscal year 2002. Subsequent impairment losses
     will be reflected in operating income or loss in the consolidated
     statements of operations.

     The Company has completed the initial step of the transitional evaluation
     to determine whether there has been an indication of goodwill impairment.
     As a result of this transitional evaluation, the Company is in the process
     of completing the final step and may record a non-cash charge for goodwill
     impairment of up to approximately $2.4 million in the fourth quarter of
     fiscal year 2002 as a cumulative effect of a change in accounting
     principle. The potential impairment is related to the Bush Furniture Europe
     segment.

     Goodwill and other intangible assets subject to SFAS No. 142 were
     approximately $15 million as of December 29, 2001. For the thirteen and
     thirty-nine weeks ended September 28, 2002 there was no goodwill
     amortization expense and there were no changes made to reduce the carrying
     amount of goodwill.

     Actual results of operations for the thirteen and thirty-nine weeks ended
     September 28, 2002 and September 29, 2001 and as adjusted results of
     operations for the thirteen and thirty-nine weeks ended September 29, 2001
     had the non-amortization provisions of SFAS No. 142 been applied in those
     periods are as follows:

                                       9

<PAGE>

<TABLE>
<CAPTION>
                                                                   THIRTEEN WEEKS ENDED
                                                         ---------------------------------------
                                                         SEPTEMBER 28,             SEPTEMBER 29,
                                                                  2002                      2001
                                                         -------------             -------------
                                                         (in thousands, except per share amounts)
     <S>                                                 <C>                       <C>
     Net earnings:
        As reported                                         $ 492                    $  849
        Goodwill amortization, net of income taxes              0                       275
                                                            -----                    ------
        As adjusted                                         $ 492                    $1,124
                                                            =====                    ======
     Basic earnings per share:
        As reported                                         $0.04                    $ 0.06
        As adjusted                                         $0.04                    $ 0.08

     Diluted earnings per share:
        As reported                                         $0.04                    $ 0.06
        As adjusted                                         $0.04                    $ 0.08
</TABLE>


<TABLE>
<CAPTION>
                                                                   THIRTY-NINE WEEKS ENDED
                                                         ---------------------------------------
                                                         SEPTEMBER 28,             SEPTEMBER 29,
                                                                  2002                      2001
                                                         -------------             -------------
                                                        (in thousands, except per share amounts)
     <S>                                                <C>                        <C>
     Net earnings:
        As reported                                         $2,126                   $6,183
        Goodwill amortization, net of income taxes               0                      829
                                                            ------                   ------
        As adjusted                                         $2,126                   $7,012
                                                            ======                   ======
     Basic earnings per share:
        As reported                                         $ 0.15                   $ 0.45
        As adjusted                                         $ 0.15                   $ 0.51

     Diluted earnings per share:
        As reported                                         $ 0.15                   $ 0.44
        As adjusted                                         $ 0.15                   $ 0.50
</TABLE>

                                       10

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

     Except for the historical information contained herein, the matters
discussed in this Quarterly Report on Form 10-Q constitute "forward-looking
statements" within the meaning of the Federal Private Securities Litigation
Reform Act of 1995. Forward-looking statements involve known and unknown risks
and uncertainties, which may cause the Company's actual results in future
periods to differ materially from forecasted results. Forward-looking statements
include statements regarding the intent, belief, projected or current
expectations of the Company or its Officers (including statements preceded by,
followed by or including forward-looking terminology such as "may," "will,"
"should," "believe," "expect," "anticipate," "estimate," "continue" or similar
expressions or comparable terminology), with respect to various matters. The
Company cannot guarantee future results, levels of activity, performance or
achievements. Factors that could cause or contribute to such differences
include, but are not limited to, economic, competitive, governmental and
technological factors affecting the Company's operations, markets, products,
services and prices, and other factors discussed in the Company's filings with
the Securities and Exchange Commission.

RESULTS OF OPERATIONS:

     Third quarter sales for the 13 week period ended September 28, 2002 were
$84,411,000 and sales for the 39 week period ended September 28, 2002 were
$251,672,000. This represents an increase of $3,797,000, or approximately 4.7%,
compared to net sales of $80,614,000 for the 13 week period ended September 29,
2001, and a 39 week period decrease of $9,184,000, or approximately 3.5%,
compared to net sales of $260,856,000 for the 39 week period ended September 29,
2001. The sales increase for the 13 week period ended September 28, 2002
primarily reflect increases in Bush Business Furniture, Bush Technologies and
Bush Furniture Europe, partially offset by a decrease in Bush Furniture. The
sales decrease for the 39 week period ended September 28, 2002 primarily
reflects decreases in Bush Furniture, Bush Technologies and Bush Furniture
Europe, partially offset by an increase in Bush Business Furniture. Though sales
were up slightly in the 13 week period ended September 28, 2002, the current
economic slowdown in both North America and Germany continues to create a
challenging environment in which to grow sales and exerts a downward pressure on
gross margins.

     Cost of sales increased $4,476,000 for the 13 week period ended September
28, 2002, compared to the 13 week period ended September 29, 2001. Cost of sales
as an approximate percentage of net sales increased by 2.0 percentage points
from 71.8% in the third quarter of 2001 to 73.8% in the third quarter of 2002.
The increase in cost of sales for the 13 week period ended September 28, 2002
reflects the increased sales levels and the impact of the increase in cost of
sales as a percentage of net sales. Cost of sales decreased by $1,382,000 for
the 39 week period ended September 28, 2002, compared to the 39 week period
ended September 29, 2001. Cost of sales as an approximate percentage of net
sales increased by 2.0 percentage points from

                                       11

<PAGE>

70.5% in the first 39 weeks of 2001 to 72.5% in the first 39 weeks of 2002. The
reduction in cost of sales for the 39 week period ended September 28, 2002
reflects the lower sales levels as compared to the prior year, partially offset
by the impact of the increase in cost of sales as a percentage of net sales. The
increase in cost of sales as an approximate percentage of net sales for the 13
and 39 week periods ended September 28, 2002 primarily reflects the impact of
lower gross margins in the Bush Technologies segment.

     Selling, general and administrative expenses for the 13 week period ended
September 28, 2002 were similar to the 13 week period ended September 29, 2001,
decreasing by $84,000. For the 39 week period ended September 28, 2002 as
compared to the 39 week period ended September 29, 2001, selling, general and
administrative expenses increased by $470,000, primarily as the result of an
increase in various marketing expenses and promotional incentives. Selling,
general and administrative expenses as an approximate percentage of net sales
decreased by 1.1 percentage points from 23.9% in the third quarter of 2001 to
22.8% in the third quarter of 2002 and increased by 1.0 percentage points from
22.8% in the first 39 weeks of 2001 to 23.8% in the first 39 weeks of 2002.

     Interest expense for the 13 week period ended September 28, 2002 decreased
to $1,904,000 (or approximately 2.3% of net sales) from $1,945,000 (or
approximately 2.4% of net sales) for the 13 week period ended September 29,
2001. Interest expense for the 39 week period ended September 28, 2002 decreased
to $5,490,000 (or approximately 2.2% of net sales) from $6,880,000 (or
approximately 2.6% of net sales). The decrease in interest expense was primarily
due to a reduction in the Company's long-term debt.

     The consolidated effective income tax rates for the 13 and 39 week periods
ended September 28, 2002 were 48.4% and 42.9%, respectively. The tax rates for
the comparable periods in 2001 were 43.7% and 41.7%, respectively.

LIQUIDITY AND CAPITAL RESOURCES:

     Working capital at third quarter-end 2002 decreased by $5,820,000, as
compared to working capital at year-end 2001. Such decreased working capital was
due, in part, to an increase in accounts payable and income taxes and a decrease
in prepaid expenses and other current assets and accounts receivable, partially
offset by a decrease in other accrued liabilities and an increase in
inventories. The decrease in prepaid expenses and other current assets primarily
reflects an overpayment of income taxes in fiscal year 2001 that was refunded in
the first quarter of fiscal year 2002. The decrease in accounts receivable and
the increase in accounts payable reflect actions taken to reduce working capital
requirements. Total assets at third quarter-end 2002 decreased $7,415,000 over
year-end 2001 primarily as a result of a decrease in property, plant and
equipment, prepaid expenses and other current assets and accounts receivable
partially offset by an increase in inventories and other assets. The decrease in
property, plant and equipment primarily reflects capital expenditures that are
less than the level of depreciation. In addition, total liabilities decreased
$7,960,000 at third quarter-end 2002 as compared to year-end 2001, due

                                       12

<PAGE>

mostly to a decrease in long-term debt and other accrued liabilities partially
offset by an increase in accounts payable, deferred income taxes and income
taxes and other long-term liabilities.

     The Company spent $4,412,000 on capital expenditures during the first three
quarters of 2002, which were financed primarily with cash flows from operating
activities. Capital expenditures for fiscal year 2002 are currently forecasted
to be approximately $6 to $7 million.

     The Company has a revolving credit facility, initially dated as of June 26,
1997 and as amended, with JPMorgan Chase Bank and other lending institutions. In
fiscal year 2001 the Company entered into a sixth amendment, dated as of
December 28, 2001. This amendment modified certain covenants of the Company
under the credit facility, modified the pricing grid to reflect the newly
permitted ratios, granted a security interest in all domestic tangible personal
property and intangible assets of the Company, extended the maturity date of the
loan from June 30, 2003 to June 30, 2004 and modified the amount of money the
Company can borrow under the credit facility from an aggregate $210,000,000 to
an aggregate $173,000,000.

     The credit facility provides for revolving credit loans, swing line loans
and multi-currency loans, within the parameters described below. The loan is due
June 30, 2004 with a balloon payment of the then remaining principal and any
accrued interest. The Company has classified all of the line of credit as
long-term, as there are no required principal payments due until June 30, 2004.
At the Company's option, borrowings may be effectuated, subject to certain
conditions, on a NYBOR rate, an eurocurrency rate for dollars, an applicable
eurocurrency rate for certain foreign currencies, a money market rate, or an
alternative base rate. Eurocurrency loans bear interest at the then current
applicable LIBOR rate, plus an applicable margin. The applicable margin, which
pertains only to LIBOR and NYBOR rate loans, varies from 1.5% to 3.5%, depending
upon the Company's ability to satisfy certain quarterly financial tests. In
addition, the credit agreement permits the Company to request the issuance of up
to a maximum of $20,000,000 in letters of credit, which issuance will be deemed
part of the $173,000,000 maximum amount of borrowing permitted under the credit
facility.

     The line of credit agreement, as amended, provides for achieving certain
consolidated cash flow coverage and leverage ratios, prescribes minimum
consolidated net worth requirements, limits capital expenditures and new leases
and provides for certain other affirmative and restrictive covenants. The
Company is in compliance with all of these requirements. In future periods, to
the extent deemed necessary by the Company, the Company may seek to amend its
existing credit facility depending upon its then ability to satisfy certain
financial ratios and covenants. In addition, the credit agreement limits the
amount of cash dividends that the Company can declare, and also imposes certain
conditions with respect thereto.


IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS:

     In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141, "Business Combinations"
(SFAS No. 141), and

                                       13

<PAGE>

Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" (SFAS No. 142).

     SFAS No. 141 requires the purchase method of accounting for business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interest method. The adoption of SFAS No. 141 had no material impact
on the Company's consolidated financial statements.

     Effective December 30, 2001 (the first day of fiscal 2002), the Company
adopted SFAS No. 142. Under SFAS No. 142, goodwill is no longer amortized, but
reviewed for impairment annually, or more frequently if certain indicators
arise. A requirement of SFAS No. 142 is to complete the initial step of a
transitional goodwill impairment test within six months of adoption of SFAS No.
142 and to complete the final step of the transitional impairment test by the
end of the fiscal year. Any goodwill impairment loss resulting from the
transitional impairment test will be recorded as a cumulative effect of a change
in accounting principle no later than the end of fiscal year 2002. Subsequent
impairment losses will be reflected in operating income or loss in the
consolidated statements of operations.

     The Company has completed the first step of the transitional evaluation to
determine whether there has been an indication of goodwill impairment. As a
result of this transitional evaluation, the Company is in the process of
completing the final step and may record a non-cash charge for goodwill
impairment of up to approximately $2.4 million in the fourth quarter of fiscal
year 2002 as a cumulative effect of a change in accounting principle. The
potential impairment is related to the Bush Furniture Europe segment.

     Additionally, as a result of the adoption of SFAS 142, a substantial amount
of the Company's intangible assets will no longer be amortized. Goodwill and
other intangible assets subject to SFAS No. 142 were approximately $15 million
as of December 29, 2001 and the associated pre-tax amortization was
approximately $1.4 million in fiscal year 2001.

     In August 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, "Accounting for Obligations Associated with the Retirement of
Long-Lived Assets" (SFAS No. 143). SFAS No. 143 establishes accounting standards
for the recognition and measurement of an asset retirement obligation and its
associated asset retirement cost. It also provides accounting guidance for legal
obligations associated with the retirement of tangible long-lived assets. SFAS
No. 143 is effective in fiscal years beginning after June 15, 2002, with early
adoption permitted. The Company expects that the provisions of SFAS No. 143 will
not have a material impact on its consolidated financial statements upon
adoption. The Company plans to adopt SFAS No. 143 effective December 29, 2002
(the first day of fiscal 2003).

     In July 2002, the FASB issued Statement of Financial Accounting Standards
No. 146, "Accounting for Costs Associated with Exit and Disposal Activities"
(SFAS No. 146). SFAS No. 146 revises the accounting for exit and disposal
activities under Emerging Issues Task Force Issue 94-3 "Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity"
(EITF Issue No. 94-3), by spreading out the reporting of expenses related to
restructuring activities. Commitment to a plan to exit an activity or dispose of
long-lived assets

                                       14

<PAGE>

will no longer be sufficient to record a one-time charge for most anticipated
costs. Instead, companies will record exit or disposal costs when they are
"incurred" and can be measured at fair value, and they will subsequently adjust
the recorded liability for changes in estimated cash flows. The provisions of
SFAS No. 146 are effective prospectively for exit or disposal activities
initiated after December 31, 2002. Companies may not restate previously issued
financial statements for the effect of the provisions of SFAS No. 146 and
liabilities that a company previously recorded under EITF Issue No. 94-3 are
grandfathered. The Company expects that the effects of adoption, if any, would
relate solely to exit or disposal activities undertaken after December 31, 2002.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market risk represents the risk of loss that may impact the consolidated
financial position, results of operations or cash flows of the Company. The
Company is exposed to market risk in the areas of interest rates and foreign
currency exchange rates.

     The Company's exposure to market risk for changes in interest rates relates
primarily to the Company's revolving credit facility due to its variable LIBOR
pricing. Based on the outstanding balance of long-term debt at the end of the
third quarter of fiscal year 2002, a one percentage point change in interest
rates would result in annual interest expense fluctuating approximately $1.1
million.

     The Company's exposure to foreign currency exchange risk relates primarily
to the cost of imported supplies and the cost/profitability of exported items,
the income statement and cash flow impact of converting foreign currency
denominated profit/loss into U.S. dollars and the balance sheet impact of
converting foreign currency denominated assets and liabilities into U.S.
dollars.

ITEM 4. DISCLOSURE CONTROLS AND PROCEDURES

     Evaluation of disclosure controls and procedures. The Company's chief
executive officer and chief financial officer, after evaluating the
effectiveness of the Company's "disclosure controls and procedures" (as defined
in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c)) as of a
date (the "Evaluation Date") within 90 days before the filing date of this
quarterly report, have concluded that as of the Evaluation Date, the Company's
disclosure controls and procedures were adequate and designed to ensure that
material information relating to the Company and its consolidated subsidiaries
is recorded, processed, summarized and reported in a timely manner.

     Changes in internal controls. There were no significant changes in the
Company's internal controls or, to our knowledge, in other factors that would
significantly affect such controls subsequent to the Evaluation Date.

                                       15

<PAGE>

                           Part II. OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

           (a) Exhibits:
               None.

           (b) Reports on Form 8-K:
               None.

                                       16

<PAGE>

                                   SIGNATURES
                                   ----------


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                                   BUSH INDUSTRIES, INC.
                                              -------------------------------
                                                       (Registrant)



Date: November 8, 2002                  By:   /s/ Robert L. Ayres
      ----------------                        --------------------------------
                                                        (Signature)
                                              Robert L. Ayres
                                              President,
                                              Chief Operating Officer and
                                              Chief Financial Officer

                                       17

<PAGE>

                                 CERTIFICATIONS

I, Paul S. Bush, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bush Industries, Inc;

2. Based on my knowledge, this quarterly report does not contain any untrue
   statement of a material fact or omit to state a material fact necessary to
   make the statements made, in light of the circumstances under which such
   statements were made, not misleading with respect to the period covered by
   this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this quarterly report, fairly present in all material
   respects the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

   a)   designed such disclosure controls and procedures to ensure that material
        information relating to the registrant, including its consolidated
        subsidiaries, is made known to us by others within those entities,
        particularly during the period in which this quarterly report is being
        prepared;

   b)   evaluated the effectiveness of the registrant's disclosure controls and
        procedures as of a date within 90 days prior to the filing date of this
        quarterly report (the "Evaluation Date"); and

   c)   presented in this quarterly report our conclusions about the
        effectiveness of the disclosure controls and procedures based on our
        evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
   most recent evaluation, to the registrant's auditors and the audit committee
   of registrant's board of directors (or persons performing the equivalent
   function):

   a)   all significant deficiencies in the design or operation of internal
        controls which could adversely affect the registrant's ability to
        record, process, summarize and report financial data and have identified
        for the registrant's auditors any material weaknesses in internal
        controls; and

   b)   any fraud, whether or not material, that involves management or other
        employees who have a significant role in the registrant's internal
        controls; and

                                       18

<PAGE>

6. The registrant's other certifying officers and I have indicated in this
   quarterly report whether or not there were significant changes in internal
   controls or in other factors that could significantly affect internal
   controls subsequent to the date of our most recent evaluation, including
   any corrective actions with regard to significant deficiencies and material
   weaknesses.

Date: November 8, 2002                          By:     /s/ Paul S. Bush
      ----------------                                 -------------------------
                                                              (Signature)
                                                       Paul S. Bush
                                                       Chairman of the Board and
                                                       Chief Executive Officer

                                       19

<PAGE>

I, Robert L. Ayres, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bush Industries, Inc;

2. Based on my knowledge, this quarterly report does not contain any untrue
   statement of a material fact or omit to state a material fact necessary to
   make the statements made, in light of the circumstances under which such
   statements were made, not misleading with respect to the period covered by
   this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this quarterly report, fairly present in all material
   respects the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

   a) designed such disclosure controls and procedures to ensure that material
      information relating to the registrant, including its consolidated
      subsidiaries, is made known to us by others within those entities,
      particularly during the period in which this quarterly report is being
      prepared;

   b) evaluated the effectiveness of the registrant's disclosure controls and
      procedures as of a date within 90 days prior to the filing date of this
      quarterly report (the "Evaluation Date"); and

   c) presented in this quarterly report our conclusions about the effectiveness
      of the disclosure controls and procedures based on our evaluation as of
      the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
   most recent evaluation, to the registrant's auditors and the audit committee
   of registrant's board of directors (or persons performing the equivalent
   function):

   a) all significant deficiencies in the design or operation of internal
      controls which could adversely affect the registrant's ability to record,
      process, summarize and report financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and

   b) any fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal
      controls; and

                                       20

<PAGE>


6. The registrant's other certifying officers and I have indicated in this
   quarterly report whether or not there were significant changes in internal
   controls or in other factors that could significantly affect internal
   controls subsequent to the date of our most recent evaluation, including any
   corrective actions with regard to significant deficiencies and material
   weaknesses.

Date: November 8, 2002                     By:  /s/ Robert L. Ayres
      ----------------                          --------------------------------
                                                          (Signature)
                                                Robert L. Ayres
                                                President,
                                                Chief Operating Officer and
                                                Chief Financial Officer

                                       21