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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-Q

|ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 28, 2003

OR

|o | 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 1-9548

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The Timberland Company

(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction
of incorporation or organization)

02-0312554(I.R.S. Employer
Identification Number)200 Domain Drive, Stratham,
New Hampshire(Address of principal executive offices)

03885(Zip Code)


Registrant's telephone number, including area code: (603) 772-9500

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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 ý    No o

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes ý    No o

On
April 25, 2003, 28,388,284 shares of the registrant's Class A Common Stock were outstanding and 7,486,185 shares of the registrant's Class B Common Stock were
outstanding.

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THE TIMBERLAND COMPANY    FORM 10-Q

TABLE OF CONTENTS



|                                         |         |                                                                                                             
|---------------------------------------- | ------- | ------------------------------------------------------------------------------------------------------------
|Part I Financial Information (unaudited)
|                                         | Item 1. |                                                                                                             
|                                         |         | Condensed Consolidated Balance SheetsAs of March 28, 2003 and December 31, 2002                            
|                                         |         | Condensed Consolidated Statements of IncomeFor the three months ended March 28, 2003 and March 29, 2002    
|                                         |         | Condensed Consolidated Statements of Cash FlowsFor the three months ended March 28, 2003 and March 29, 2002
|                                         |         | Notes to Condensed Consolidated Financial Statements                                                        
|                                         | Item 2. |                                                                                                             
|                                         | Item 3. |                                                                                                             
|                                         | Item 4. |                                                                                                             
|Part II Other Information               
|                                         | Item 5. |                                                                                                             
|                                         | Item 6. |                                                                                                             
|Signatures                              
|Section 302 Certifications              
|Exhibits                                

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PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE TIMBERLAND COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS  ASSETS  (Dollars in Thousands)  (Unaudited)

|                                               |                                                                                                                         | March 28,
2003                    |          | December 31,
2002 |        
|---------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | --------------------------------- | -------- | ----------------- | -------
|Current assets                                 |                                                                                                                         |                                   |          |                   |        
|                                               | Cash and equivalents                                                                                                    |                                   | $        | 91,671            |        
|                                               | Accounts receivable, net of allowance for doubtful accounts of $6,797 at March 28, 2003 and $7,487 at December 31, 2002 |                                   |          | 154,431           |        
|                                               | Inventory                                                                                                               |                                   |          | 137,831           |        
|                                               | Prepaid expense                                                                                                         |                                   |          | 21,903            |        
|                                               | Deferred income taxes                                                                                                   |                                   |          | 20,334            |        
|                                               |                                                                                                                         |                                   |          |                   |        
|                                               |                                                                                                                         | Total current assets              |          |                   | 426,170
|                                               |                                                                                                                         |                                   |          |                   |        
|Property, plant and equipment                  |                                                                                                                         |                                   | 179,295  |                   |        
|Less accumulated depreciation and amortization |                                                                                                                         |                                   | (108,091 | )                 |        
|                                               |                                                                                                                         |                                   |          |                   |        
|                                               |                                                                                                                         | Net property, plant and equipment |          |                   | 71,204 
|                                               |                                                                                                                         |                                   |          |                   |        
|Goodwill                                       |                                                                                                                         |                                   | 14,163   |                   |        
|Intangible assets                              |                                                                                                                         |                                   | 3,520    |                   |        
|Other assets, net                              |                                                                                                                         |                                   | 6,774    |                   |        
|                                               |                                                                                                                         |                                   |          |                   |        
|Total assets                                   |                                                                                                                         | $                                 | 521,831  |                   | $      
|                                               |                                                                                                                         |                                   |          |                   |        

See accompanying notes to condensed consolidated financial statements.

1

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THE TIMBERLAND COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS  LIABILITIES AND STOCKHOLDERS' EQUITY  (Dollars in Thousands, Except Per Share Data)  (Unaudited)

|                                            |                                                                                                                                                                                                                                                                             | March 28,
2003             |                           | December 31,
2002 |        
|------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------- | ----------------- | -------
|Current liabilities                         |                                                                                                                                                                                                                                                                             |                            |                           |                   |        
|                                            | Accounts payable                                                                                                                                                                                                                                                            |                            | $                         | 39,165            |        
|                                            | Accrued expense                                                                                                                                                                                                                                                             |                            |                           |                   |        
|                                            |                                                                                                                                                                                                                                                                             | Payroll and related        |                           |                   | 24,661 
|                                            |                                                                                                                                                                                                                                                                             | Other                      |                           |                   | 56,244 
|                                            | Income taxes payable                                                                                                                                                                                                                                                        |                            |                           | 12,386            |        
|                                            | Derivative liabilities                                                                                                                                                                                                                                                      |                            |                           | 9,116             |        
|                                            |                                                                                                                                                                                                                                                                             |                            |                           |                   |        
|                                            |                                                                                                                                                                                                                                                                             |                            | Total current liabilities |                   |        
|                                            |                                                                                                                                                                                                                                                                             |                            |                           |                   |        
|Deferred compensation and other liabilities |                                                                                                                                                                                                                                                                             |                            | 4,688                     |                   |        
|Deferred income taxes                       |                                                                                                                                                                                                                                                                             |                            | 6,936                     |                   |        
|Stockholders' equity                        |                                                                                                                                                                                                                                                                             |                            |                           |                   |        
|                                            | Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding                                                                                                                                                                                   |                            |                           |                  |        
|                                            | Class A Common Stock, $.01 par value (1 vote per share); 120,000,000 shares authorized; 41,678,583 shares issued at March 28, 2003 and 41,518,667 shares at December 31, 2002                                                                                               |                            |                           | 417               |        
|                                            | Class B Common Stock, $.01 par value (10 votes per share); convertible into Class A shares on a one-for-one basis; 20,000,000 shares authorized; 7,561,185 shares issued and outstanding at March 28, 2003 and 7,561,185 shares issued and
outstanding at December 31, 2002 |                            |                           | 76                |        
|                                            | Additional paid-in capital                                                                                                                                                                                                                                                  |                            |                           | 146,733           |        
|                                            | Deferred compensation                                                                                                                                                                                                                                                       |                            |                           | (4,869            | )      
|                                            | Retained earnings                                                                                                                                                                                                                                                           |                            |                           | 625,156           |        
|                                            | Accumulated other comprehensive income/(loss)                                                                                                                                                                                                                               |                            |                           | (7,342            | )      
|                                            | Less treasury stock at cost, 13,495,526 Class A shares at March 28, 2003 and 12,773,521 Class A shares at December 31, 2002                                                                                                                                                 |                            |                           | (391,536          | )      
|                                            |                                                                                                                                                                                                                                                                             |                            |                           |                   |        
|                                            |                                                                                                                                                                                                                                                                             | Total stockholders' equity |                           |                   | 368,635
|                                            |                                                                                                                                                                                                                                                                             |                            |                           |                   |        
|Total liabilities and stockholders' equity  |                                                                                                                                                                                                                                                                             | $                          | 521,831                   |                   | $      
|                                            |                                                                                                                                                                                                                                                                             |                            |                           |                   |        

See accompanying notes to condensed consolidated financial statements.

2

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THE TIMBERLAND COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME  (Amounts in Thousands, Except Per Share Data)  (Unaudited)

|                                                                              |                            | For the Three Months Ended   |        
|----------------------------------------------------------------------------- | -------------------------- | ---------------------------- | -------
|
|Revenue                                                                       |                            | $                            | 270,997
|Cost of goods sold                                                            |                            |                              | 144,769
|                                                                              |                            |                              |        
|                                                                              | Gross profit               |                              |        
|                                                                              |                            |                              |        
|Operating expense                                                             |                            |                              |        
|                                                                              | Selling                    |                              |        
|                                                                              | General and administrative |                              |        
|                                                                              |                            |                              |        
|                                                                              |                            | Total operating expense      |        
|                                                                              |                            |                              |        
|Operating income                                                              |                            |                              | 29,527 
|                                                                              |                            |                              |        
|Other expense/(income)                                                        |                            |                              |        
|                                                                              | Interest expense           |                              |        
|                                                                              | Other, net                 |                              |        
|                                                                              |                            |                              |        
|                                                                              |                            | Total other expense/(income) |        
|                                                                              |                            |                              |        
|Income before income taxes                                                    |                            |                              | 29,738 
|                                                                              |                            |                              |        
|Provision for income taxes                                                    |                            |                              | 10,408 
|                                                                              |                            |                              |        
|Net income before cumulative effect of change in accounting principle         |                            | $                            | 19,330 
|                                                                              |                            |                              |        
|Cumulative effect of change in accounting principle                           |                            |                              |       
|                                                                              |                            |                              |        
|Net income                                                                    |                            | $                            | 19,330 
|                                                                              |                            |                              |        
|Earnings per share before cumulative effect of change in accounting principle |                            |                              |        
|                                                                              | Basic                      |                              | $      
|                                                                              |                            |                              |        
|                                                                              | Diluted                    |                              | $      
|                                                                              |                            |                              |        
|Earnings per share after cumulative effect of change in accounting principle  |                            |                              |        
|                                                                              | Basic                      |                              | $      
|                                                                              |                            |                              |        
|                                                                              | Diluted                    |                              | $      
|                                                                              |                            |                              |        
|Weighted-average shares outstanding                                           |                            |                              |        
|                                                                              | Basic                      |                              |        
|                                                                              |                            |                              |        
|                                                                              | Diluted                    |                              |        
|                                                                              |                            |                              |        

See accompanying notes to condensed consolidated financial statements.

3

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THE TIMBERLAND COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (Dollars in Thousands)  (Unaudited)

|                                                  |                                                                               | For the Three Months Ended                                         |                    
|------------------------------------------------- | ----------------------------------------------------------------------------- | ------------------------------------------------------------------ | -------------------
|
|Cash flows from operating activities:             |                                                                               |                                                                    |                    
|                                                  | Net income                                                                    |                                                                    | $                  
|                                                  | Adjustments to reconcile net income to net cash used by operating activities: |                                                                    |                    
|                                                  |                                                                               | Deferred income taxes                                              |                    
|                                                  |                                                                               | Depreciation and amortization                                      |                    
|                                                  |                                                                               | Cumulative effect of change in accounting principle                |                    
|                                                  |                                                                               | Tax benefit from stock option plans                                |                    
|                                                  |                                                                               | Increase/(decrease) in cash from changes in working capital items: |                    
|                                                  |                                                                               |                                                                    | Accounts receivable
|                                                  |                                                                               |                                                                    | Inventory          
|                                                  |                                                                               |                                                                    | Prepaid expense    
|                                                  |                                                                               |                                                                    | Accounts payable   
|                                                  |                                                                               |                                                                    | Accrued expense    
|                                                  |                                                                               |                                                                    | Income taxes       
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|Cash flows from investing activities:             |                                                                               |                                                                    |                    
|                                                  | Additions to property, plant and equipment, net                               |                                                                    |                    
|                                                  | Other, net                                                                    |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|Cash flows from financing activities:             |                                                                               |                                                                    |                    
|                                                  | Common stock repurchases                                                      |                                                                    |                    
|                                                  | Issuance of common stock                                                      |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                               |                                                                    |                    
|Effect of exchange rate changes on cash           |                                                                               |                                                                    | (25                
|                                                  |                                                                               |                                                                    |                    
|Net decrease in cash and equivalents              |                                                                               |                                                                    | (49,524            
|Cash and equivalents at beginning of period       |                                                                               |                                                                    | 141,195            
|                                                  |                                                                               |                                                                    |                    
|Cash and equivalents at end of period             |                                                                               | $                                                                  | 91,671             
|                                                  |                                                                               |                                                                    |                    
|                                                  |                                                                              
|Supplemental disclosure of cash flow information: |                                                                               |                                                                    |                    
|                                                  | Interest paid                                                                 |                                                                    | $                  
|                                                  | Income taxes paid                                                             |                                                                    |                    
|                                                  |                                                                              

See accompanying notes to condensed consolidated financial statements.

4

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THE TIMBERLAND COMPANY        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Dollars in Thousands, Except Per Share Data)  (Unaudited)



| |  |                                 |  | As of March 28, 2003 |       | As of March 29, 2002
| |  | ------------------------------- |  | -------------------- | ----- | --------------------
|
| |  | Trademarks and related expenses |  | $                    | 6,899 |                     



5

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| |  |                                                                        |  | For the Three Months Ended |       
| |  | ---------------------------------------------------------------------- |  | -------------------------- | ------
|
| |  | Net Income                                                             |  | $                          | 19,330
| |  | Change in cumulative translation adjustment                            |  |                            | 422   
| |  | Change in fair value of derivative financial instruments, net of taxes |  |                            | 2,073 
| |  |                                                                        |  |                            |       
| |  | Comprehensive income                                                   |  | $                          | 21,825
| |  |                                                                        |  |                            |       



6

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| |  | 2003                              |  | U.S.
Wholesale |         | U.S.
Consumer
Direct |   | International |  | Unallocated
Corporate |         | Consolidated
| |  | --------------------------------- |  | -------------- | ------- | -------------------- | - | ------------- |  | --------------------- | ------- | ------------
| |  | Revenue                           |  | $              | 104,002 |                      | $ | 32,831        |  | $                     | 134,164 |             
| |  | Income/(loss) before income taxes |  |                | 28,442  |                      |   | 1,600         |  |                       | 22,718  |             
| |  | Total assets                      |  |                | 138,649 |                      |   | 27,316        |  |                       | 208,706 |             
| |  | Goodwill                          |  |                | 6,804   |                      |   | 794           |  |                       | 6,565   |             
| |  | 2002                              |  |                |         |                      |   |               |  |                       |         |             
| |  | Revenue                           |  | $              | 90,264  |                      | $ | 34,386        |  | $                     | 101,047 |             
| |  | Income/(loss) before income taxes |  |                | 23,145  |                      |   | 1,572         |  |                       | 17,890  |             
| |  | Total assets                      |  |                | 154,356 |                      |   | 27,053        |  |                       | 167,712 |             
| |  | Goodwill                          |  |                | 6,804   |                      |   | 794           |  |                       | 6,565   |             



| |  |                 |  | March 28,
2003 |         | December 31,
2002
| |  | --------------- |  | -------------- | ------- | -----------------
| |  | Raw materials   |  | $              | 3,040   |                  
| |  | Work-in-process |  |                | 1,713   |                  
| |  | Finished goods  |  |                | 133,078 |                  
| |  |                 |  |                |         |                  
| |  |                 |  | $              | 137,831 |                  
| |  |                 |  |                |         |                  

7

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| |  |                                                                                                    |  | March 28,
2003 |        | March 29,
2002
| |  | -------------------------------------------------------------------------------------------------- |  | -------------- | ------ | --------------
| |  | Net income before cumulative effect of change in accounting principle, as reported                 |  | $              | 19,330 |               
| |  | Stock-based compensation cost, net of tax                                                          |  |                | 2,216  |               
| |  |                                                                                                    |  |                |        |               
| |  | Pro forma net income before cumulative effect of change in accounting principle                    |  | $              | 17,114 |               
| |  | Basic earnings per share before cumulative effect of change in accounting principle, as reported   |  | $              | ..54   |               
| |  | Pro forma basic earnings per share before cumulative effect of change in accounting principle      |  | $              | .48    |               
| |  | Diluted earnings per share before cumulative effect of change in accounting principle, as reported |  | $              | ..53   |               
| |  | Pro forma diluted earnings per share before cumulative effect of change in accounting principle    |  | $              | .47    |               
|
| |  | Net income after cumulative effect of change in accounting principle, as reported                  |  | $              | 19,330 |               
| |  | Stock-based compensation cost, net of tax                                                          |  |                | 2,216  |               
| |  |                                                                                                    |  |                |        |               
| |  | Pro forma net income after cumulative effect of change in accounting principle                     |  | $              | 17,114 |               
| |  | Basic earnings per share after cumulative effect of change in accounting principle, as reported    |  | $              | ..54   |               
| |  | Pro forma basic earnings per share after cumulative effect of change in accounting principle       |  | $              | .48    |               
| |  | Diluted earnings per share after cumulative effect of change in accounting principle, as reported  |  | $              | ..53   |               
| |  | Pro forma diluted earnings per share after cumulative effect of change in accounting principle     |  | $              | .47    |               

8

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The
fair value of each stock option granted in the first quarter of 2003 and 2002 under the Company's plans was estimated on the date of the grant using the Black-Scholes
option pricing model. The following weighted-average assumptions were used to value grants issued under the plans in the first quarter of 2003 and 2002, respectively: expected volatility of 41.9% and
50.2%; risk-free interest rates of 1.7% and 3.1%; expected lives of 4.5 and 4.5 years; and no dividend payments. The weighted-average fair values per share of stock options granted
during the first quarter of 2003 and 2002 were $14.18 and $15.74, respectively.

9

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND  RESULTS OF OPERATIONS  (Unaudited)

The following discusses The Timberland Company's (the "Company") results of operations and liquidity and capital resources. This discussion, including known
trends and uncertainties identified by management, should be read in conjunction with the condensed consolidated financial statements and related notes. Included is a discussion and reconciliation of
total Company and International revenue growth to constant dollar revenue growth. Constant dollar revenue growth, which excludes the impact of changes in foreign exchange rates, is not a Generally
Accepted Accounting Principle ("GAAP") performance measure. It is used by the Company in its analysis of its financial condition and results of operations.

The
preparation of financial statements in accordance with accounting principles generally accepted in the United States requires assumptions and estimates that affect the reported
amounts of assets and liabilities, disclosures in the financial statements and related notes and the reporting of revenue and expenses. The accompanying management discussion is based upon a
consistent application of accounting policies and methodology in developing assumptions and estimates. The Company believes that the estimates, assumptions and judgments involved in applying the
critical accounting policies described in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Company's Annual Report on
Form 10-K, for the year ended December 31, 2002, have the greatest potential impact on the Company's financial statements. Because of the uncertainty inherent in these
matters, actual results could differ from the estimates used in applying these critical accounting policies. Currently, the Company is not aware of any reasonably likely events or circumstances that
would result in materially different amounts being reported.

RESULTS OF OPERATIONS

Revenue

Overview

Total
Company revenue for the first quarter of 2003 was $271.0 million, an increase of $45.3 million, or 20.1%, compared with the $225.7 million in revenue reported
for the first quarter of 2002. The Company's International business contributed $33.1 million of the increase, of which $18.8 million was related to favorable foreign currency impacts,
primarily from the strengthening of the euro. Total Company constant dollar revenue growth was 11.8% in the first quarter of 2003, compared with the prior year, primarily driven by growth across the
major markets in Europe, as well as growth in Asia. Domestically, revenue increased 9.8%, with U.S. Wholesale revenue increasing 15.2% and U.S. Consumer Direct decreasing 4.5%. Within the U.S.
Wholesale business, double-digit increases in both footwear and apparel and accessories drove the increase, impacted by positive retailer response to Spring product offerings and weather trends
favorable to the Company in the northeastern region of the United States. The decline in U.S. Consumer Direct revenue was primarily due to the continuing overall weakness in the U.S. retail climate
and a promotional market environment.

Segments

Domestic
revenue, comprised of the U.S. Wholesale and U.S. Consumer Direct segments, for the first quarter of 2003 was $136.8 million, an increase of $12.2 million, or
9.8%, compared with the same period in 2002. Domestic revenue represented 50.5% of total revenue for the first quarter of 2003, compared with 55.2% for the first quarter of 2002. The U.S. Wholesale
segment revenue increased 15.2% in the first quarter of 2003, compared with the same period in 2002, primarily due to growth in

10

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footwear
unit sales and, to a lesser degree, growth in apparel and accessories unit sales. These increases were principally a result of positive retailer response to Spring product offerings and
weather trends favorable to the Company in the northeastern region of the United States. The U.S. Consumer Direct segment revenue decreased 4.5%, compared with the same period in 2002. On a comparable
store basis, domestic retail sales decreased 4.3%. The decrease in revenue compared with the prior year was primarily due to a decline in apparel and accessories unit sales and, to a lesser degree,
lower average selling prices. The unit sales decline was primarily due to the continuing overall weakness in the U.S. retail climate and a promotional market environment. The decline in average
selling prices was predominantly due to mix of merchandise sold. Despite the revenue decline, the Company's focus on enhancing profitability at current store locations improved U.S. Consumer Direct
profit margins.

International
segment revenue for the first quarter of 2003 was $134.2 million, an increase of $33.1 million, or 32.8%, compared with the first quarter of 2002. On a
constant dollar basis, International revenue increased 14.2%, compared with the same period in 2002. The increase in revenue over the prior year was driven by the impact of foreign exchange and unit
volume increases in the European wholesale channel, primarily in footwear and, to a lesser degree, apparel and accessories. Geographically, constant dollar revenue increases were driven by
double-digit gains in the Company's major European markets, along with mid single-digit growth in Asia. International revenue comprised 49.5% of total revenue for the first quarter of 2003, compared
with 44.8% for the first quarter of 2002.

Products

Worldwide
footwear revenue for the first quarter of 2003 was $193.7 million, an increase of $31.1 million, or 19.1%, compared with the same period in 2002. The increase was
primarily attributable to U.S. Wholesale unit sales, the impact of foreign exchange and, to a lesser degree, European wholesale unit sales. In total, footwear unit sales increased 13.3% and footwear
average selling prices increased 5.1%, compared with the prior year. The increase in footwear average selling prices was principally due to the impact of foreign exchange. By category, worldwide
increases in Men's and Women's Casual, Kids, the Timberland PRO series and Boots were minimally offset by a decrease in Outdoor Performance. Worldwide footwear revenue represented 72.4%
and 73.2% of total product revenue for the first quarters of 2003 and 2002, respectively.

Worldwide
apparel and accessories revenue for the first quarter of 2003 was $73.7 million, an increase of $14.0 million, or 23.5%, compared with the same period in 2002.
The increase was attributable to the impact of foreign exchange, U.S. Wholesale double-digit revenue increases in the Tree apparel line, the rollout of the Timberland PRO series apparel
and European unit sales increases,
partially offset by a decline in U.S. Consumer Direct. In total, apparel and accessories unit sales increased 11.3% and average selling prices increased 10.9% over the same period last year. As with
footwear, the increase in average selling prices was driven by the impact of foreign exchange. Worldwide apparel and accessories revenue represented 27.6% and 26.8% of total product revenue for the
first quarters of 2003 and 2002, respectively.

Channels

Worldwide
wholesale revenue for the first quarter of 2003 was $209.8 million, an increase of $41.4 million, or 24.6%, compared with the same period in 2002. The increase in
revenue was primarily due to U.S. footwear unit sales growth, the impact of foreign exchange and, to a lesser degree, increases in European unit sales and U.S. apparel and accessories unit sales.

Worldwide
revenue from Company-owned retail and factory stores, along with the Company's e-commerce business, for the first quarter of 2003 was $61.2 million, an
increase of $3.9 million, or 6.8%, compared with the same period in 2002. The increase was primarily due to the impact of foreign exchange and growth in the International retail apparel and
accessories business, partially offset by the decrease in U.S. Consumer Direct, as discussed previously. During the first quarter of 2003, the

11

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Company
opened 7 retail stores and closed 5 retail stores, worldwide. Given the U.S. retail climate and the promotional market environment in the U.S., the Company will continue to focus on
controlling new store growth and enhancing profitability at current U.S. locations, while continuing to target new store additions internationally.

Gross Profit

Gross profit as a percentage of revenue for the first quarter of 2003 was 46.6%, an increase of 2.4 percentage points from the 44.2% reported for the first
quarter of 2002. Overall, gross margins benefited from lower product costs, a decrease in off-price sales and the impact of foreign exchange. The reduced levels of off-price
sales reflect solid sell-through trends, aided by weather conditions favorable to the Company in the northeastern region of the U.S. Foreign exchange drove approximately
0.3 percentage points of gross margin improvement and, at current rates, should continue to aid gross margins for the balance of 2003. The year over year impact of increases in leather hide
prices had a minimal negative impact on first quarter gross margin rates but will likely have a greater negative impact for the balance of 2003. Overall, the Company is expecting gross margin rates
for the balance of 2003 to show improvement, when compared with the prior year, after adjusting for the negative impact of the fourth quarter 2002 U.S. west coast port work stoppage.

Operating Expense

Operating expense was $96.7 million for the first quarter of 2003, up $10.8 million, or 12.6%, from the $85.9 million reported for the first
quarter of 2002. Operating expense as a percentage of revenue for the first quarter of 2003 decreased to 35.7%, from 38.0% for the first quarter of 2002, reflecting cost leverage associated with the
Company's 20.1% revenue growth. The dollar increase was primarily due to growth in International operations, which have had significant revenue growth and maintain higher operating expense structures,
and to investments in sales and product initiatives. Foreign exchange rate changes added $5.2 million in operating expense, compared with the prior year. Going forward, the Company plans to
invest in enhanced consumer marketing, product development capability and international expansion, which will likely drive expense increases above the rate of revenue growth, compared with the prior
year.

Operating Income/Income Before Income Taxes

Operating income was $29.5 million for the first quarter of 2003, up $15.6 million, or 112.5%, from the $13.9 million reported for the first
quarter of 2002. As a percentage of revenue, operating income was 10.9%, compared with 6.2% for the prior year. This improvement was primarily driven by the 20.1% revenue increase, enhanced by
improved gross margin and operating expense rates, as discussed previously. The Company is targeting modest improvements in operating margins for the full year 2003, compared with the prior year,
after adjusting for the negative impact of the fourth quarter 2002 U.S. west coast port work stoppage. The Company expects that, as a percentage of sales, balance of year operating expense increases
are likely to offset gross margin rate increases.

Income
before income taxes increased in all segments for the first quarter of 2003, compared with the prior year. In the U.S. Wholesale segment, the increase in operating income was
driven by a 12.0% footwear unit sales increase, supported by improved gross margin rates, in part due to lower off-price sales, and lower expense rates. The U.S. Consumer Direct segment
operating income was up slightly compared with the prior year. Improvements in gross margin rates and operating expense rates offset the revenue decline. As a percentage of revenue, operating income
improved in the U.S. Consumer Direct segment from 4.6% in the first quarter of 2002 to 4.9% in the first quarter of 2003, reflecting the Company's focus on enhancing profitability at existing store
locations. Internationally, the operating income improvement was driven by the impact of foreign exchange and, to a lesser degree, the 14.2% constant dollar revenue increase, primarily in Europe.
These improvements were partially offset by

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investments
in Asia. Unallocated Corporate income before income taxes decreased, compared to the prior year, primarily due to the reduction of product related costs, accounted for corporately, and, to
a lesser degree, other costs incurred in support of company-wide activities.

Other, net, Interest and Taxes

Other, net was $0.2 million of income in the first quarter of 2003, compared with $0.0 million in the first quarter of 2002. Other, net includes
interest income of $0.4 million and $0.3 million in the first quarters of 2003 and 2002, respectively. Interest expense, which is comprised of fees related to the establishment and
maintenance of the Company's revolving credit facility and to interest paid on short term borrowings, was $0.2 million in the first quarters of 2003 and 2002.

The
effective tax rate for the three months ended March 28, 2003 and March 29, 2002 was 35.0% and 35.5%, respectively. During the fourth quarter of 2002, the Company
adjusted its full year effective tax rate to 35.0%, equal to the estimated rate for 2003.

RECONCILIATION OF TOTAL AND INTERNATIONAL REVENUE INCREASES TO CONSTANT DOLLAR REVENUE INCREASES

Total Company Revenue Reconciliation:

$ Change

% ChangeRevenue increase (GAAP)

$
45.3

20.1
%Increase due to foreign exchange rate changes


18.8

8.3
%Revenue increase in constant dollars

$
26.5

11.8
%


International Revenue Reconciliation:

$ Change

% ChangeRevenue increase (GAAP)

$
33.1

32.8
%Increase due to foreign exchange rate changes


18.8

18.6
%Revenue increase in constant dollars

$
14.3

14.2
%


Management
provides constant dollar revenue growth for total Company and International results because many investors find it useful to understand revenue growth excluding any impact
from foreign exchange rate changes.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used by operations for the first quarter of 2003 was $19.4 million, compared with $16.2 million used during the same period in 2002.
Accounts receivable for the quarter, at $154.4 million, increased 25.8%, compared with the $122.8 million reported for the first quarter of 2002, reflecting wholesale revenue increases
and sales timing later in the quarter. Days sales outstanding increased by 2 days, from 49 days at March 29, 2002 to 51 days at March 28, 2003. Inventory for the
quarter, at $137.8 million, decreased by 8.2%, compared with the $150.1 million reported for the first quarter of 2002, and 12 month rolling annual inventory turns improved from
4.1 times for the first quarter of 2002 to 4.7 times for the first quarter of 2003. The source of cash from the change in accounts payable, compared with the use in the prior year, was
primarily due to the timing of inventory receipt and payments. The use of cash from accruals primarily resulted from lower payroll related accruals at March 28, 2003, compared with
December 31, 2002, than in the comparable period for the prior year. On an absolute basis, cash used during the first quarter of 2003 was primarily related to increased receivables (related to
the sales volume in the Company's first quarter) and

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seasonal
spending on inventory, the aforementioned change in accruals and the first quarter payment of income taxes.

Net
cash used by investing activities amounted to $2.3 million for the first quarter of 2003 and $2.4 million for the first quarter of 2002. Capital expenditures for the
first quarter of 2003 were $2.9 million, compared with $2.7 million for the same period in 2002 (Depreciation expense for the first quarter of 2003 and 2002 was $5.0 million and
$4.7 million, respectively). Net cash used by financing activities was $27.8 million for the first quarter of 2003, compared with $17.3 million used for the first quarter of 2002.
Cash flows from financing activities reflected stock repurchases of $29.6 million in the first quarter of 2003 and $20.2 million in the first quarter of 2002.

The
Company has available unsecured revolving, committed and uncommitted lines of credit as sources of financing for its seasonal and other working capital requirements. The Company had
no debt outstanding at March 28, 2003, December 31, 2002 and March 29, 2002.

As
discussed in the Company's Annual Report on Form 10-K, for the year ended December 31, 2002, management believes that the Company's capital needs for 2003
will be met through its current cash balances, its existing credit facilities and cash from operations, without the need for additional permanent financing. However, as discussed in an exhibit to the
Company's Form 10-K, for the year ended December 31, 2002, entitled "Cautionary Statements for Purposes of the Safe Harbor Provisions of the Private Securities Litigation
Reform Act of 1995," several risks and uncertainties could cause the Company to need to raise additional capital through equity and/or debt financing. The availability and terms of any such financing
would be subject to prevailing market conditions and other factors at that time.

OFF-BALANCE SHEET OBLIGATIONS

The Company has the following off-balance sheet contractual obligations and commercial commitments: operating leases; letters of credit; and hedging
contracts. Detailed information regarding these obligations and commitments was disclosed in the Company's Annual Report on Form 10-K, for the year ended December 31, 2002.
As of March 28, 2003, there has not been any significant change to the lease commitments by year reported in the Company's Annual Report on Form 10-K, for the year ended
December 31, 2002. As of March 28, 2003 and March 29, 2002, the Company had letters of credit outstanding of $11.0 million and $16.0 million, respectively. As of
March 28, 2003, the Company had $144.6 million in hedging contracts outstanding, all of which are due to settle within the next 12 months (see Note 6).

NEW ACCOUNTING PRONOUNCEMENTS

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based CompensationTransitional and DisclosureAn
Amendment of FASB Statement No. 123." This statement is effective for fiscal years ending after December 15, 2002 and provides alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure requirements of SFAS No. 123 to require disclosures in the
annual and interim financial statements regarding the accounting method for stock-based employee compensation and the effect of the method used on reported results. The Company has not elected to
transition to the fair value based method of accounting for stock-based employee compensation at this time (see Note 14).

In
April 2003, the FASB issued SFAS No. 149 "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." This statement amends SFAS No. 133 for
decisions made (1) as part of the Derivatives Implementation Group process that effectively required amendments to SFAS No. 133, (2) in connection with other FASB projects dealing
with financial instruments, and (3) in connection with implementation issues raised in relation to the application of the definition of a

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derivative.
This statement is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003, with certain exceptions.
The Company will be evaluating the impact of this statement during the second quarter of 2003.

FORWARD-LOOKING INFORMATION

The statements contained in this report, which are not historical facts, including, without limitation, statements that relate to future performance and/or
statements regarding the Company's anticipated results or business level for 2003 or any other future period, may be deemed to constitute forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on current expectations only and actual future results may differ materially from those expressed
or implied by such forward-looking statements due to certain factors. Such factors include, but are not limited to, the Company's ability to: (i) successfully market and sell its products in
view of changing consumer trends, consumer acceptance of products, and other factors affecting retail market conditions, including the current U.S. and global economic environment and the
uncertainties resulting from the continuing war on terrorism; (ii) manage its foreign exchange rate risks; (iii) obtain adequate raw materials at competitive prices; and
(iv) other factors, including those detailed from time to time in the Company's Securities and Exchange Commission reports, including its Annual Report on Form 10-K filed on
March 27, 2003. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's current policies and business practices regarding derivative instruments are consistent with its disclosure in its Annual Report on
Form 10-K, for the year ended December 31, 2002. At March 28, 2003, December 31, 2002 and March 29, 2002, the Company had no short-term or
long-term debt outstanding. The Company's foreign currency exposure is generated primarily from its European operating subsidiaries and, to a lesser degree, its Asian operating
subsidiaries. Based upon sensitivity analysis, a 10% change in foreign exchange rates would cause the fair value of the Company's financial instruments to increase/decrease by approximately
$15.0 million, compared with $13.0 million at March 29, 2002. The increase at March 28, 2003 is due to the amount of foreign currency forward contracts held at
March 28, 2003, compared with March 29, 2002 (see Note 6).

ITEM 4. CONTROLS AND PROCEDURES

Based on their evaluation as of a date within 90 days of the filing date of this interim report on Form 10-Q, the Company's principal
executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures, as defined in Rules 13a-14(c) and 15d-14(c) under
the Securities Exchange Act of 1934 (the "Exchange Act"), are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. There have been no significant changes in the Company's
internal controls or in other factors which could significantly affect internal controls subsequent to the date of their evaluation.

15

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PART II OTHER INFORMATION

ITEM 5. OTHER INFORMATION

Accompanying this Form 10-Q are the certifications of the Chief Executive Officer and the Chief Financial Officer, required by
Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, copies of which are furnished as exhibits to this report.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K







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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.

|                   |  | The Timberland Company(Registrant)                                                                               
|------------------ |  | -----------------------------------------------------------------------------------------------------------------
|Date: May 12, 2003 |  | /s/BRIAN P. MCKEONBrian P. McKeon
Chief Financial Officer and Executive Vice PresidentFinance and Administration
|Date: May 12, 2003 |  | /s/JOHN D. CRIMMINSJohn D. Crimmins
Vice President,
Corporate Controller and Chief Accounting Officer            

17

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CERTIFICATIONS

I, Jeffrey B. Swartz, Chief Executive Officer, certify that:

1.     I
have reviewed this quarterly report on Form 10-Q of The Timberland Company;

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:



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):



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: May 12, 2003 |  |                                                              
|------------------ |  | -------------------------------------------------------------
|                   |  | /s/JEFFREY B. SWARTZJeffrey B. Swartz
Chief Executive Officer

18

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CERTIFICATIONS

I, Brian P. McKeon, Chief Financial Officer, certify that:

1.     I
have reviewed this quarterly report on Form 10-Q of The Timberland Company;

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:



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):



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: May 12, 2003 |  |                                                          
|------------------ |  | ---------------------------------------------------------
|                   |  | /s/BRIAN P. MCKEONBrian P. McKeon
Chief Financial Officer

19

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