##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q


(Mark One)

|      |  |                                                                                                                                              
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
|[X]   |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended
November 30, 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 0-19402

VANS, INC.

(Exact Name of Registrant as Specified in its Charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|DELAWARE
(State or Other Jurisdiction
of Incorporation or Organization) |  | 33-0272893
(I.R.S. Employer
Identification No.)

15700 Shoemaker Avenue
Santa Fe Springs, California 90670-5515
(Address of Principal Executive Offices) (Zip Code)

(562) 565-8267
(Registrants Telephone Number, Including Area Code)

Not applicable
(Former Name, Former Address and Formal Fiscal Year,
if Changed Since Last Report)

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 report(s), and (2) has been subject to
such filing requirements for the past 90 days. YES [X] NO [   ]

Indicate the number of shares outstanding of each of the registrants
classes of common stock, as of the latest practicable date: 17,998,787 shares
of Common Stock, $.001 par value, as of January 9, 2003.





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TABLE OF CONTENTS



|                             |                                                                                               |  |  |  |  |  |  | 
|---------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION
|                             | ITEM 1. FINANCIAL STATEMENTS.                                                                
|                             | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                             | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                             | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II OTHER INFORMATION   
|                             | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                             | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                             | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                  
|CERTIFICATIONS              
|EXHIBIT 10.1                
|EXHIBIT 10.2                
|EXHIBIT 99.1                
|EXHIBIT 99.2                



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##### Table of Contents






PART I
FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS.

VANS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)

|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |        |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ------------ | ------- | ------- | ------- | ------ | ------- | 
|                                                                                                                                                             |                                                                                                                                       |                            |         | (UNAUDITED)  |         |         |         |       
|                                                                                                                                                             |                                                                                                                                       |                            |         | NOVEMBER 30, |         | MAY 31,
|                                                                                                                                                             |                                                                                                                                       |                            |         | 2002         |         | 2002   
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |        
|ASSETS                                                                                                                                                      
|Current assets:                                                                                                                                              |                                                                                                                                       |                            |         |              |         |         |         |       
|                                                                                                                                                             | Cash                                                                                                                                  |                            | $       | 54,070       |         |         | $       | 28,447 |        
|                                                                                                                                                             | Marketable debt securities                                                                                                            |                            |         | 3,572        |         |         |         | 27,544 |        
|                                                                                                                                                             | Accounts receivable, net of allowance for
doubtful accounts of $3,871 and $3,318 at
November 30, 2002, and May 31, 2002,
respectively |                            |         | 30,437       |         |         |         | 28,024 |        
|                                                                                                                                                             | Inventories                                                                                                                           |                            |         | 45,849       |         |         |         | 48,835 |        
|                                                                                                                                                             | Deferred tax assets                                                                                                                   |                            |         | 9,276        |         |         |         | 9,260  |        
|                                                                                                                                                             | Prepaid and other expenses                                                                                                            |                            |         | 9,249        |         |         |         | 14,957 |        
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |       
|                                                                                                                                                             |                                                                                                                                       | Total current assets       |         |              | 152,453 |         |         |        | 157,067 | 
|Property, plant and equipment, net                                                                                                                           |                                                                                                                                       |                            | 42,356  |              |         |         | 41,127  |       
|Intangible assets , net of accumulated
amortization of $1,008 and $643 at
November 30, 2002, and May 31, 2002,
respectively                                  |                                                                                                                                       |                            | 15,761  |              |         |         | 15,926  |       
|Goodwill                                                                                                                                                     |                                                                                                                                       |                            | 34,786  |              |         |         | 33,752  |       
|Other assets                                                                                                                                                 |                                                                                                                                       |                            | 8,658   |              |         |         | 8,855   |       
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |       
|                                                                                                                                                             |                                                                                                                                       | Total Assets               |         | $            | 254,014 |         |         | $      | 256,727 | 
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |       
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                        
|Current liabilities:                                                                                                                                         |                                                                                                                                       |                            |         |              |         |         |         |       
|                                                                                                                                                             | Accounts payable                                                                                                                      |                            | $       | 17,032       |         |         | $       | 22,029 |        
|                                                                                                                                                             | Accrued liabilities                                                                                                                   |                            |         | 7,074        |         |         |         | 10,197 |        
|                                                                                                                                                             | Income taxes payable                                                                                                                  |                            |         | 6,801        |         |         |         | 2,946  |        
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |       
|                                                                                                                                                             |                                                                                                                                       | Total current liabilities  |         |              | 30,907  |         |         |        | 35,172  | 
|Deferred tax liabilities                                                                                                                                     |                                                                                                                                       |                            | 11,513  |              |         |         | 10,480  |       
|Long-term debt                                                                                                                                               |                                                                                                                                       |                            | 3,013   |              |         |         | 3,192   |       
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |       
|                                                                                                                                                             |                                                                                                                                       | Total Liabilities          |         |              | 45,433  |         |         |        | 48,844  | 
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |       
|Minority interest                                                                                                                                            |                                                                                                                                       |                            | 2,722   |              |         |         | 3,576   |       
|Stockholders equity:                                                                                                                                        |                                                                                                                                       |                            |         |              |         |         |         |       
|Common stock, $.001 par value, 40,000
shares authorized, 17,915 and 18,302
shares issued and outstanding at November
30, 2002 and May 31, 2002, respectively |                                                                                                                                       |                            | 18      |              |         |         | 18      |       
|Accumulated other comprehensive income                                                                                                                       |                                                                                                                                       |                            | (520    | )            |         |         | (2,344  | )     
|Additional paid-in capital                                                                                                                                   |                                                                                                                                       |                            | 187,435 |              |         |         | 189,462 |       
|Retained earnings                                                                                                                                            |                                                                                                                                       |                            | 18,926  |              |         |         | 17,171  |       
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |       
|                                                                                                                                                             |                                                                                                                                       | Total Stockholders Equity |         |              | 205,859 |         |         |        | 204,307 | 
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |       
|Total Liabilities and Stockholders Equity                                                                                                                   |                                                                                                                                       | $                          | 254,014 |              |         | $       | 256,727 |       
|                                                                                                                                                             |                                                                                                                                       |                            |         |              |         |         |         |       

See accompanying notes to condensed consolidated financial statements.

2



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VANS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

|                                       |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |         |        | 
|-------------------------------------- | ---------------------------------------- | ----------------------------- | ------ | -------------------- | ------ | ---------------------- | ------ | ------------ | ------ | ----------- | ------- | ------- | ------ | - | ------ | ------- | ------ | 
|                                       |                                          |                               |        | THIRTEEN WEEKS ENDED |        | TWENTY-SIX WEEKS ENDED
|                                       |                                          |                               |        |                      |        |                       
|                                       |                                          |                               |        | NOVEMBER 30,         |        | DECEMBER 1,            |        | NOVEMBER 30, |        | DECEMBER 1,
|                                       |                                          |                               |        | 2002                 |        | 2001                   |        | 2002         |        | 2001       
|                                       |                                          |                               |        |                      |        |                        |        |              |        |            
|Retail sales                           |                                          | $                             | 22,975 |                      |        | $                      | 23,135 |              |        | $           | 58,979  |         |        | $ | 56,736 |        
|National sales                         |                                          |                               | 19,243 |                      |        |                        | 26,075 |              |        |             | 74,812  |         |        |   | 79,247 |        
|International sales                    |                                          |                               | 18,388 |                      |        |                        | 19,123 |              |        |             | 51,448  |         |        |   | 50,410 |        
|                                       |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        
|                                       | Net sales                                |                               |        | 60,606               |        |                        |        | 68,333       |        |             |         | 185,239 |        |   |        | 186,393 |       
|Cost of sales                          |                                          |                               | 31,568 |                      |        |                        | 35,073 |              |        |             | 104,090 |         |        |   | 97,794 |        
|                                       |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        
|                                       | Gross profit                             |                               |        | 29,038               |        |                        |        | 33,260       |        |             |         | 81,149  |        |   |        | 88,599  |       
|Operating Expenses:                    |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        
|                                       | Retail                                   |                               |        | 17,004               |        |                        |        | 14,695       |        |             |         | 34,695  |        |   |        | 28,562  |       
|                                       | Marketing, advertising and promotion     |                               |        | 5,757                |        |                        |        | 7,085        |        |             |         | 16,479  |        |   |        | 18,355  |       
|                                       | Selling, distribution and administrative |                               |        | 11,147               |        |                        |        | 10,105       |        |             |         | 25,889  |        |   |        | 23,886  |       
|                                       | Amortization of intangibles              |                               |        | 177                  |        |                        |        | 49           |        |             |         | 365     |        |   |        | 90      |       
|                                       |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        
|Total operating expenses               |                                          |                               | 34,085 |                      |        |                        | 31,934 |              |        |             | 77,428  |         |        |   | 70,893 |        
|Earnings (loss) from operations        |                                          |                               | (5,047 | )                    |        |                        | 1,326  |              |        |             | 3,721   |         |        |   | 17,706 |        
|Interest income , net                  |                                          |                               | 157    |                      |        |                        | 575    |              |        |             | 425     |         |        |   | 710    |        
|Other income (expense), net            |                                          |                               | 502    |                      |        |                        | (194   | )            |        |             | (260    | )       |        |   | (92    | )      
|                                       |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        
|Earnings (loss) before taxes           |                                          |                               | (4,388 | )                    |        |                        | 1,707  |              |        |             | 3,886   |         |        |   | 18,324 |        
|Income tax (benefit) expense           |                                          |                               | (1,316 | )                    |        |                        | 512    |              |        |             | 1,166   |         |        |   | 5,497  |        
|Minority share of income               |                                          |                               | 594    |                      |        |                        | 682    |              |        |             | 965     |         |        |   | 971    |        
|                                       |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        
|Net income (loss)                      |                                          | $                             | (3,666 | )                    |        | $                      | 513    |              |        | $           | 1,755   |         |        | $ | 11,856 |        
|                                       |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        
|Earnings (loss) per share information: |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        
|                                       | Basic:                                   |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |         |       
|                                       |                                          | Weighted average shares       |        |                      | 17,910 |                        |        |              | 17,691 |             |         |         | 18,038 |   |        |         | 17,675 | 
|                                       |                                          | Net earnings (loss) per share |        | $                    | (0.20  | )                      |        | $            | 0.03   |             |         | $       | 0.10   |   |        | $       | 0.67   | 
|                                       |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        
|                                       | Diluted:                                 |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |         |       
|                                       |                                          | Weighted average shares       |        |                      | 17,910 |                        |        |              | 18,258 |             |         |         | 18,184 |   |        |         | 18,449 | 
|                                       |                                          | Net earnings (loss) per share |        | $                    | (0.20  | )                      |        | $            | 0.03   |             |         | $       | 0.10   |   |        | $       | 0.64   | 
|                                       |                                          |                               |        |                      |        |                        |        |              |        |             |         |         |        |   |        |        

See accompanying notes to condensed
consolidated financial statements.

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VANS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(AMOUNTS IN THOUSANDS)

|                                                                                              |                                                                             |                            |                                                      |       |                        |        |             |       |         |         |  
|--------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | -------------------------- | ---------------------------------------------------- | ----- | ---------------------- | ------ | ----------- | ----- | ------- | ------- | -
|                                                                                              |                                                                             |                            |                                                      |       | TWENTY-SIX WEEKS ENDED
|                                                                                              |                                                                             |                            |                                                      |       |                       
|                                                                                              |                                                                             |                            |                                                      |       | NOVEMBER 30,           |        | DECEMBER 1,
|                                                                                              |                                                                             |                            |                                                      |       | 2002                   |        | 2001       
|                                                                                              |                                                                             |                            |                                                      |       |                        |        |            
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                         |                                                                             |                            |                                                      |       |                        |        |             |      
|Net earnings                                                                                  |                                                                             | $                          | 1,755                                                |       |                        | $      | 11,856      |      
|Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |                                                                             |                            |                                                      |       |                        |        |             |      
|                                                                                              | Depreciation and amortization                                               |                            |                                                      | 5,418 |                        |        |             | 3,784 |        
|                                                                                              | Net loss on sale of property, plant and equipment                           |                            |                                                      | 26    |                        |        |             | 54    |        
|                                                                                              | Net gain on sale of investment                                              |                            |                                                      |      |                        |        |             | (40   | )      
|                                                                                              | Minority share of income                                                    |                            |                                                      | 965   |                        |        |             | 971   |        
|                                                                                              | Provision for losses on accounts receivable                                 |                            |                                                      | 661   |                        |        |             | 225   |        
|                                                                                              | Changes in assets and liabilities, net of effects of business acquisitions: |                            |                                                      |       |                        |        |             |       |        
|                                                                                              |                                                                             | Accounts receivable        |                                                      |       | (3,551                 | )      |             |       | (2,964  | )      
|                                                                                              |                                                                             | Inventories                |                                                      |       | 3,557                  |        |             |       | (3,462  | )      
|                                                                                              |                                                                             | Deferred income taxes      |                                                      |       | 1,016                  |        |             |       | 198     |        
|                                                                                              |                                                                             | Prepaid and other expenses |                                                      |       | 5,708                  |        |             |       | 980     |        
|                                                                                              |                                                                             | Other assets               |                                                      |       | (24                    | )      |             |       | (1,707  | )      
|                                                                                              |                                                                             | Accounts payable           |                                                      |       | (5,306                 | )      |             |       | (11,222 | )      
|                                                                                              |                                                                             | Accrued liabilities        |                                                      |       | (3,124                 | )      |             |       | (3,433  | )      
|                                                                                              |                                                                             | Income taxes payable       |                                                      |       | 3,855                  |        |             |       | 1,761   |        
|                                                                                              |                                                                             |                            |                                                      |       |                        |        |             |      
|                                                                                              |                                                                             |                            | Net cash provided by (used in) operating activities  |       |                        | 10,956 |             |       |         | (2,999  | )
|                                                                                              |                                                                             |                            |                                                      |       |                        |        |             |      
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                         |                                                                             |                            |                                                      |       |                        |        |             |      
|Purchases of property, plant and equipment                                                    |                                                                             |                            | (6,372                                               | )     |                        |        | (12,315     | )    
|Investments in other companies                                                                |                                                                             |                            | (1,043                                               | )     |                        |        |            |      
|Purchases of marketable and debt securities                                                   |                                                                             |                            | (1,006                                               | )     |                        |        | (23,905     | )    
|Maturities of marketable and debt securities                                                  |                                                                             |                            | 2,746                                                |       |                        |        |            |      
|Sales of marketable and debt securities                                                       |                                                                             |                            | 22,232                                               |       |                        |        |            |      
|Proceeds from sale of property, plant and equipment                                           |                                                                             |                            | 18                                                   |       |                        |        | 4           |      
|Proceeds from sale of investment                                                              |                                                                             |                            | 75                                                   |       |                        |        | 109         |      
|                                                                                              |                                                                             |                            |                                                      |       |                        |        |             |      
|                                                                                              |                                                                             |                            | Net cash provided by (used in) investing activities  |       |                        | 16,650 |             |       |         | (36,107 | )
|                                                                                              |                                                                             |                            |                                                      |       |                        |        |             |      
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                         |                                                                             |                            |                                                      |       |                        |        |             |      
|Proceeds from (payments on) long term debt                                                    |                                                                             |                            | (178                                                 | )     |                        |        | 505         |      
|Consolidated subsidiary dividends paid to minority shareholders                               |                                                                             |                            | (734                                                 | )     |                        |        | (841        | )    
|Proceeds from issuance of common stock                                                        |                                                                             |                            | 157                                                  |       |                        |        | 9,784       |      
|Payment for repurchase of common stock                                                        |                                                                             |                            | (2,184                                               | )     |                        |        | (601        | )    
|                                                                                              |                                                                             |                            |                                                      |       |                        |        |             |      
|                                                                                              |                                                                             |                            | Net cash provided by (used in) financing activities  |       |                        | (2,939 | )           |       |         | 8,847   |  
|Effect of exchange rate changes on cash and cash equivalents                                  |                                                                             |                            | 956                                                  |       |                        |        | 370         |      
|                                                                                              |                                                                             |                            |                                                      |       |                        |        |             |      
|                                                                                              |                                                                             |                            | Net increase (decrease) in cash and cash equivalents |       |                        | 25,623 |             |       |         | (29,889 | )
|Cash and cash equivalents, beginning of period                                                |                                                                             |                            | 28,447                                               |       |                        |        | 59,748      |      
|                                                                                              |                                                                             |                            |                                                      |       |                        |        |             |      
|Cash and cash equivalents, end of period                                                      |                                                                             | $                          | 54,070                                               |       |                        | $      | 29,859      |      
|                                                                                              |                                                                             |                            |                                                      |       |                        |        |             |      
|SUPPLEMENTAL CASH FLOW INFORMATION  AMOUNTS PAID FOR:                                        |                                                                             |                            |                                                      |       |                        |        |             |      
|                                                                                              |                                                                             | Interest                   |                                                      | $     | 215                    |        |             | $     | 61      |        
|                                                                                              |                                                                             | Income taxes paid (refund) |                                                      | $     | (3,012                 | )      |             | $     | 3,882   |        

See accompanying notes to condensed
consolidated financial statements.

4



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##### Table of Contents



VANS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



|1. |  | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The condensed consolidated financial statements included herein are unaudited
and reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of the results of the interim periods
presented. The results of operations for the current interim periods are not
necessarily indicative of results to be expected for the current year.
Certain amounts in the prior period financial statements have been
reclassified to conform to the current period presentation.                                                                                                                                                                                
|  
|2. |  | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |  | The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and
accompanying notes. Significant estimates made in preparing the consolidated
financial statements include the allowances for doubtful accounts, inventory
reserves, long-lived asset valuations, deferred income tax asset valuation
allowances, litigation and other contingencies. To the extent there are
material differences between managements estimates and actual results,
future results of operations may be affected.                   
|  
|3. |  | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   |  | Effective June 1, 2002, we adopted Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets (SFAS 144), which addresses the impairment for all tangible assets.
The adoption of SFAS 144 had no financial impact to our consolidated
financial statements.                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement 13 and Technical Corrections
(SFAS 145), which became effective for us in fiscal 2003. SFAS 145
eliminates the classification of debt extinguishment activity as
extraordinary items; eliminates inconsistencies in lease modification
treatment; and makes various technical corrections or clarifications of other
existing authoritative pronouncements. The adoption of SFAS 145 had no
financial impact to our consolidated financial statements.                                                                                                          
|  
|   |  | In July 2002, the FASB issued SFAS No. 146, Accounting For Costs Associated
With Exit or Disposal Activities (SFAS 146), which addresses financial
accounting and reporting for costs associated with exit or disposal
activities and nullifies EITF Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). SFAS 146 is effective
for exit or disposal activities that are initiated after December 31, 2002,
with earlier application encouraged. We do not expect that the impact of
adopting SFAS 146 will be material to our consolidated financial statements.
|  
|4. |  | Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | As of November 30, 2002, and May 31, 2002, inventories are substantially
comprised of finished goods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|5. |  | Earnings (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | Basic earnings (loss) per share represents net earnings divided by the
weighted-average number of common shares outstanding for the period. Diluted
earnings per share represents net earnings divided by the weighted-average
number of shares outstanding, inclusive of all potentially dilutive common
shares. The reconciliations of basic to diluted weighted average shares are
as follows (in thousands):                                                                                                                                                                                                                                                                             

|                                                      |  |                      |        |                        |  |              |        |             |  |  |        |  |  |  |        | 
|----------------------------------------------------- |  | -------------------- | ------ | ---------------------- |  | ------------ | ------ | ----------- |  |  | ------ |  |  |  | ------ | 
|                                                      |  | THIRTEEN WEEKS ENDED |        | TWENTY-SIX WEEKS ENDED
|                                                      |  |                      |        |                       
|                                                      |  | NOVEMBER 30,         |        | DECEMBER 1,            |  | NOVEMBER 30, |        | DECEMBER 1,
|                                                      |  | 2002                 |        | 2001                   |  | 2002         |        | 2001       
|                                                      |  |                      |        |                        |  |              |        |            
|Weighted average shares used in basic computation     |  |                      | 17,910 |                        |  |              | 17,691 |             |  |  | 18,038 |  |  |  | 17,675 | 
|Restricted stock grant                                |  |                      |       |                        |  |              | 105    |             |  |  | 87     |  |  |  | 108    | 
|Dilutive stock options                                |  |                      |       |                        |  |              | 462    |             |  |  | 59     |  |  |  | 666    | 
|                                                      |  |                      |        |                        |  |              |        |             |  |  |        |  |  |  |        | 
|Weighted average shares used for dilutive computation |  |                      | 17,910 |                        |  |              | 18,258 |             |  |  | 18,184 |  |  |  | 18,449 | 
|                                                      |  |                      |        |                        |  |              |        |             |  |  |        |  |  |  |        | 

5



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| |  | The following shares were excluded from the computation of diluted earnings
(loss) per share as their effect would have been anti-dilutive (in
thousands):
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                      |       |                        |  |              |     |             |  |  |       |  |  |  |     | 
|----------------------- |  | -------------------- | ----- | ---------------------- |  | ------------ | --- | ----------- |  |  | ----- |  |  |  | --- | 
|                        |  | THIRTEEN WEEKS ENDED |       | TWENTY-SIX WEEKS ENDED
|                        |  |                      |       |                       
|                        |  | NOVEMBER 30,         |       | DECEMBER 1,            |  | NOVEMBER 30, |     | DECEMBER 1,
|                        |  | 2002                 |       | 2001                   |  | 2002         |     | 2001       
|                        |  |                      |       |                        |  |              |     |            
|Restricted stock grants |  |                      | 84    |                        |  |              |    |             |  |  |      |  |  |  |    | 
|Stock options           |  |                      | 2,204 |                        |  |              | 689 |             |  |  | 1,370 |  |  |  | 355 | 



|6. |  | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Income taxes for the interim periods were computed using the effective tax
rate estimated to be applicable for the full fiscal year, which is subject to
ongoing review and evaluation by management.                                                                                                                                                                                                                                                             
|  
|7. |  | Segment Disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |  | Our reportable segments are based on three distinct product sales channels:
Retail, National (U.S. wholesale) and International. Sales through our
international retail stores are included in overall international sales.
Activities combined under the other caption below consist of skatepark
sessions and concessions (included in the Retail total) and the VANS Warped
Tour® and VANS High Cascade Snowboard Camp® (included in the National
total).
|  
|   |  | Net sales, cost of sales and gross profit were as follows for each of the
Companys reportable segments (in thousands):                                                                                                                                                                                                                                                                                                                                           

|              |  |           |  |               |        |                      |        |                      |       |       |       |          |        |       |        |       |        |   |        |   |       |   |       |   |        |   |        | 
|------------- |  | --------- |  | ------------- | ------ | -------------------- | ------ | -------------------- | ----- | ----- | ----- | -------- | ------ | ----- | ------ | ----- | ------ | - | ------ | - | ----- | - | ----- | - | ------ | - | ------ | 
|              |  |           |  |               |        | THIRTEEN WEEKS ENDED |        | THIRTEEN WEEKS ENDED
|              |  |           |  |               |        | NOVEMBER 30, 2002    |        | DECEMBER 1, 2001    
|              |  |           |  |               |        |                      |        |                     
|              |  |           |  |               |        | PRODUCTS             |        | OTHER                |       | TOTAL |       | PRODUCTS |        | OTHER |        | TOTAL
|              |  |           |  |               |        |                      |        |                      |       |       |       |          |        |       |        |      
|Retail        |  | Net sales |  | $             | 20,926 |                      |        | $                    | 2,049 |       |       | $        | 22,975 |       |        | $     | 20,908 |   |        | $ | 2,227 |   |       | $ | 23,135 |  
|              |  |           |  | Cost of sales |        |                      | 9,620  |                      |       |       |      |          |        |       | 9,620  |       |        |   | 9,147  |   |       |   |      |   |        |   | 9,147  | 
|              |  |           |  |               |        |                      |        |                      |       |       |       |          |        |       |        |       |        |   |        |   |       |   |       |   |        |   |        | 
|              |  |           |  | Gross profit  |        |                      | 11,306 |                      |       |       | 2,049 |          |        |       | 13,355 |       |        |   | 11,761 |   |       |   | 2,227 |   |        |   | 13,988 | 
|             
|National      |  | Net sales |  |               | 19,098 |                      |        |                      | 145   |       |       |          | 19,243 |       |        |       | 26,023 |   |        |   | 52    |   |       |   | 26,075 |  
|              |  |           |  | Cost of sales |        |                      | 12,105 |                      |       |       | (378  | )        |        |       | 11,727 |       |        |   | 16,344 |   |       |   | (432  | ) |        |   | 15,912 | 
|              |  |           |  |               |        |                      |        |                      |       |       |       |          |        |       |        |       |        |   |        |   |       |   |       |   |        |   |        | 
|              |  |           |  | Gross profit  |        |                      | 6,993  |                      |       |       | 523   |          |        |       | 7,516  |       |        |   | 9,679  |   |       |   | 484   |   |        |   | 10,163 | 
|             
|International |  | Net sales |  |               | 18,388 |                      |        |                      |      |       |       |          | 18,388 |       |        |       | 19,123 |   |        |   |      |   |       |   | 19,123 |  
|              |  |           |  | Cost of sales |        |                      | 10,221 |                      |       |       |      |          |        |       | 10,221 |       |        |   | 10,014 |   |       |   |      |   |        |   | 10,014 | 
|              |  |           |  |               |        |                      |        |                      |       |       |       |          |        |       |        |       |        |   |        |   |       |   |       |   |        |   |        | 
|              |  |           |  | Gross profit  |        |                      | 8,167  |                      |       |       |      |          |        |       | 8,167  |       |        |   | 9,109  |   |       |   |      |   |        |   | 9,109  | 
|             
|Total         |  | Net sales |  |               | 58,412 |                      |        |                      | 2,194 |       |       |          | 60,606 |       |        |       | 66,054 |   |        |   | 2,279 |   |       |   | 68,333 |  
|              |  |           |  | Cost of sales |        |                      | 31,946 |                      |       |       | (378  | )        |        |       | 31,568 |       |        |   | 35,505 |   |       |   | (432  | ) |        |   | 35,073 | 
|              |  |           |  |               |        |                      |        |                      |       |       |       |          |        |       |        |       |        |   |        |   |       |   |       |   |        |   |        | 
|              |  |           |  | Gross profit  |        | $                    | 26,466 |                      |       | $     | 2,572 |          |        | $     | 29,038 |       |        | $ | 30,549 |   |       | $ | 2,711 |   |        | $ | 33,260 | 
|              |  |           |  |               |        |                      |        |                      |       |       |       |          |        |       |        |       |        |   |        |   |       |   |       |   |        |   |        | 



6



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|              |  |           |  |               |         |                        |        |                        |        |       |       |          |         |       |         |       |         |   |        |   |       |   |       |   |         |   |        | 
|------------- |  | --------- |  | ------------- | ------- | ---------------------- | ------ | ---------------------- | ------ | ----- | ----- | -------- | ------- | ----- | ------- | ----- | ------- | - | ------ | - | ----- | - | ----- | - | ------- | - | ------ | 
|              |  |           |  |               |         | TWENTY-SIX WEEKS ENDED |        | TWENTY-SIX WEEKS ENDED
|              |  |           |  |               |         | NOVEMBER 30, 2002      |        | DECEMBER 1, 2001      
|              |  |           |  |               |         |                        |        |                       
|              |  |           |  |               |         | PRODUCTS               |        | OTHER                  |        | TOTAL |       | PRODUCTS |         | OTHER |         | TOTAL
|              |  |           |  |               |         |                        |        |                        |        |       |       |          |         |       |         |      
|Retail        |  | Net sales |  | $             | 54,381  |                        |        | $                      | 4,598  |       |       | $        | 58,979  |       |         | $     | 52,002  |   |        | $ | 4,734 |   |       | $ | 56,736  |  
|              |  |           |  | Cost of sales |         |                        | 24,899 |                        |        |       |      |          |         |       | 24,899  |       |         |   | 22,487 |   |       |   |      |   |         |   | 22,487 | 
|              |  |           |  |               |         |                        |        |                        |        |       |       |          |         |       |         |       |         |   |        |   |       |   |       |   |         |   |        | 
|              |  |           |  | Gross profit  |         |                        | 29,482 |                        |        |       | 4,598 |          |         |       | 34,080  |       |         |   | 29,515 |   |       |   | 4,734 |   |         |   | 34,249 | 
|             
|National      |  | Net sales |  |               | 64,456  |                        |        |                        | 10,356 |       |       |          | 74,812  |       |         |       | 77,340  |   |        |   | 1,907 |   |       |   | 79,247  |  
|              |  |           |  | Cost of sales |         |                        | 41,710 |                        |        |       | 9,108 |          |         |       | 50,818  |       |         |   | 47,257 |   |       |   | 692   |   |         |   | 47,949 | 
|              |  |           |  |               |         |                        |        |                        |        |       |       |          |         |       |         |       |         |   |        |   |       |   |       |   |         |   |        | 
|              |  |           |  | Gross profit  |         |                        | 22,746 |                        |        |       | 1,248 |          |         |       | 23,994  |       |         |   | 30,083 |   |       |   | 1,215 |   |         |   | 31,298 | 
|             
|International |  | Net sales |  |               | 51,448  |                        |        |                        |       |       |       |          | 51,448  |       |         |       | 50,410  |   |        |   |      |   |       |   | 50,410  |  
|              |  |           |  | Cost of sales |         |                        | 28,373 |                        |        |       |      |          |         |       | 28,373  |       |         |   | 27,358 |   |       |   |      |   |         |   | 27,358 | 
|              |  |           |  |               |         |                        |        |                        |        |       |       |          |         |       |         |       |         |   |        |   |       |   |       |   |         |   |        | 
|              |  |           |  | Gross profit  |         |                        | 23,075 |                        |        |       |      |          |         |       | 23,075  |       |         |   | 23,052 |   |       |   |      |   |         |   | 23,052 | 
|             
|Total         |  | Net sales |  |               | 170,285 |                        |        |                        | 14,954 |       |       |          | 185,239 |       |         |       | 179,752 |   |        |   | 6,641 |   |       |   | 186,393 |  
|              |  |           |  | Cost of sales |         |                        | 94,982 |                        |        |       | 9,108 |          |         |       | 104,090 |       |         |   | 97,102 |   |       |   | 692   |   |         |   | 97,794 | 
|              |  |           |  |               |         |                        |        |                        |        |       |       |          |         |       |         |       |         |   |        |   |       |   |       |   |         |   |        | 
|              |  |           |  | Gross profit  |         | $                      | 75,303 |                        |        | $     | 5,846 |          |         | $     | 81,149  |       |         | $ | 82,650 |   |       | $ | 5,949 |   |         | $ | 88,599 | 
|              |  |           |  |               |         |                        |        |                        |        |       |       |          |         |       |         |       |         |   |        |   |       |   |       |   |         |   |        | 



|8. |  | Goodwill and Identifiable Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Effective June 1, 2001, we adopted Statements of Financial Accounting
Standards Board Standards Nos. 141 and 142 on Business Combinations and
Goodwill and Other Intangible Assets which require that we prospectively
cease amortization of goodwill and intangible assets with indefinite lives
and instead conduct periodic tests of such assets for impairment. The
following table summarizes the Companys identifiable intangible assets and
goodwill balances as of November 30, 2002 and May 31, 2002 (in thousands):

|                                               |                              |       |   |                   |        |              |   |          |        |              |   |        |        |  |   |      |      |  
|---------------------------------------------- | ---------------------------- | ----- | - | ----------------- | ------ | ------------ | - | -------- | ------ | ------------ | - | ------ | ------ |  | - | ---- | ---- | -
|                                               |                              |       |   | NOVEMBER 30, 2002 |        | MAY 31, 2002
|                                               |                              |       |   |                   |        |             
|                                               |                              |       |   | Gross             |        |              |   |          |        | Gross        |   |        |        | 
|                                               |                              |       |   | Carrying          |        | Accumulated  |   | Carrying |        | Accumulated 
|                                               |                              |       |   | Amount            |        | Amortization |   | Amount   |        | Amortization
|                                               |                              |       |   |                   |        |              |   |          |        |             
|Intangible assets subject to amortization:     |                              |       |   |                   |        |              |   |          |        |              |   |        |        |  |   |     
|                                               | Trademarks and patents       |       | $ | 4,998             |        |              | $ | (755     | )      |              | $ | 4,798  |        |  | $ | (605 | )   
|                                               | Purchase acquisition-related |       |   | 886               |        |              |   | (253     | )      |              |   | 886    |        |  |   | (38  | )   
|                                               |                              |       |   |                   |        |              |   |          |        |              |   |        |        |  |   |     
|                                               |                              | Total |   | $                 | 5,884  |              |   | $        | (1,008 | )            |   | $      | 5,684  |  |   | $    | (643 | )
|                                               |                              |       |   |                   |        |              |   |          |        |              |   |        |        |  |   |      |     
|                                               |                              |       |   |                   |        |              |   |          |        |              |   |        |        |  |   |      |     
|                                               |                              |       |   | Carrying          |        |              |   |          |        | Carrying     |   |        |        | 
|                                               |                              |       |   | Amount            |        |              |   |          |        | Amount       |   |        |        | 
|                                               |                              |       |   |                   |        |              |   |          |        |              |   |        |        | 
|Intangible assets not subject to amortization: |                              |       |   |                   |        |              |   |          |        |              |   |       
|                                               | Goodwill                     |       | $ | 34,786            |        |              |   |          |        |              | $ | 33,752 |       
|                                               | Trademarks                   |       |   | 10,885            |        |              |   |          |        |              |   | 10,885 |       
|                                               |                              |       |   |                   |        |              |   |          |        |              |   |       
|                                               |                              | Total |   | $                 | 45,671 |              |   |          |        |              |   | $      | 44,637 | 
|                                               |                              |       |   |                   |        |              |   |          |        |              |   |       



| |  | Amortization expense for intangible assets subject to amortization was $177
and $49 for the thirteen week periods ended November 30, 2002, and December
1, 2001, respectively, and $365 and $90 for the twenty-six week periods ended
November 30, 2002, and December 1, 2001, respectively. Future estimated
amortization expense for the remainder of Fiscal 2003, the next four years
and thereafter is as follows (in thousands):
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                            |            |   |       |       | 
|--------------------------- | ---------- | - | ----- | ----- | 
|FISCAL YEAR ENDING MAY 31,: |            |   |       |      
|                            | 2003       |   | $     | 360   | 
|                            | 2004       |   |       | 432   | 
|                            | 2005       |   |       | 431   | 
|                            | 2006       |   |       | 431   | 
|                            | 2007       |   |       | 424   | 
|                            | Thereafter |   |       | 2,798 | 
|                            |            |   |       |      
|                            |            | $ | 4,876 |      
|                            |            |   |       |       | 



|9. |  | Derivatives and Hedging                                                                                                                                                                                                                                                                                                                                                                    
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | We are exposed to foreign currency risk primarily through our wholly-owned
subsidiaries, Vans Far East Limited (VFEL), whose functional currency is
the euro, and Vans Inc. Limited (VIL), whose functional currency is the
British sterling. The currency risk is created because our subsidiaries purchases of inventory are
priced and settled in U.S. dollars. To hedge this risk,

7



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|    |  | our subsidiaries
enter into cash flow hedges of forecasted inventory purchases, thereby fixing
the cost of the product and the associated gross margins in their functional
currency. As of November 30, 2002, our subsidiaries hedged approximately 85%
of forecasted purchases through the end of Fiscal 2003.                                                                                                                                                                                                                                 
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Gains or losses recorded in other comprehensive income are reclassified to
cost of goods sold when the product is sold and the revenue recognized. A
portion of the hedge is de-designated when the forecasted purchase occurs and
the U.S. dollar payable is recognized. All of the existing gains or losses
included in accumulated other comprehensive income are expected to be
reclassified into earnings within the next 12 months.                                                                                                        
|   
|10. |  | Comprehensive Income (Loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | Other comprehensive income (loss) refers to revenue, expenses, gains and
losses that are recorded as an element of stockholders equity but are
excluded from net income. Other comprehensive income is comprised of: (i)
unrealized gains and losses on derivative instruments qualifying as cash flow
hedges; and (ii) foreign currency translation adjustments. The components of
total comprehensive income (loss) for the thirteen and twenty-six week
periods ended November 30, 2002, and December 1, 2001 were as follows (in
thousands):

|                                   |                                               |   |                              |     |                      |     |                        |        |              |     |             |       |  |      |        |        |   |    | 
|---------------------------------- | --------------------------------------------- | - | ---------------------------- | --- | -------------------- | --- | ---------------------- | ------ | ------------ | --- | ----------- | ----- |  | ---- | ------ | ------ | - | -- | 
|                                   |                                               |   |                              |     | THIRTEEN WEEKS ENDED |     | TWENTY-SIX WEEKS ENDED
|                                   |                                               |   |                              |     |                      |     |                       
|                                   |                                               |   |                              |     | NOVEMBER 30,         |     | DECEMBER 1,            |        | NOVEMBER 30, |     | DECEMBER 1,
|                                   |                                               |   |                              |     | 2002                 |     | 2001                   |        | 2002         |     | 2001       
|                                   |                                               |   |                              |     |                      |     |                        |        |              |     |            
|Net income (loss)                  |                                               | $ | (3,666                       | )   |                      | $   | 513                    |        |              | $   | 1,755       |       |  | $    | 11,856 |       
|Other comprehensive income (loss): |                                               |   |                              |     |                      |     |                        |        |              |     |             |       |  |      |        |       
|                                   | Derivatives qualifying as hedges, net of tax: |   |                              |     |                      |     |                        |        |              |     |             |       |  |      |        |        |  
|                                   |                                               |   | Net derivative gain (loss)   |     |                      | (65 | )                      |        |              | 229 |             |       |  | (455 | )      |        |   | 22 | 
|                                   |                                               |   | Reclassifications to expense |     |                      | 208 |                        |        |              | 45  |             |       |  | 146  |        |        |   | 45 | 
|                                   | Foreign currency translation adjustments      |   |                              | 302 |                      |     |                        | (1,954 | )            |     |             | 2,133 |  |      |        | (1,996 | )
|                                   |                                               |   |                              |     |                      |     |                        |        |              |     |             |       |  |      |        |       
|Total comprehensive income (loss)  |                                               | $ | (3,221                       | )   |                      | $   | (1,167                 | )      |              | $   | 3,579       |       |  | $    | 9,927  |       
|                                   |                                               |   |                              |     |                      |     |                        |        |              |     |             |       |  |      |        |       



|    |  | In connection with our implementation of new euro-based systems in Europe, we
recalculated the cumulative foreign currency translation adjustment and
recorded a charge to other comprehensive income aggregating to $1,694
during the quarter ended December 1, 2001, and relating to prior periods
dating back to fiscal 1999.                                                                                                                                                                                                                                                                                          
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|11. |  | Purchase Acquisitions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    |  | In February 2002, we acquired majority ownership of the VANS Warped Tour®, a
traveling lifestyle, music and sports festival that visits top young adult
markets throughout North America. On April 15, 2002, we acquired 100% of the
outstanding capital stock of Mosa Extreme Sports, Inc. (Mosa). Mosa
manufactures and distributes PRO-TEC brand helmets, protective gear and pads
for sports such as skateboarding, snowboarding and BMX riding. The results
of operations for the VANS Warped Tour® and Mosa have been included in our
consolidated financial statements since the respective dates of acquisition.
|   
|    |  | Selected unaudited pro forma combined results of operations for the thirteen
and twenty-six week periods ended December 1, 2001, assuming the Mosa and
VANS Warped Tour acquisitions occurred on June 1, 2001, compared to our
actual results for the thirteen and twenty-six week periods ended November
30, 2002, are presented as follows (in thousands):                                                                                                                                                                                                                                                              

|                       |          |                                |        |                      |        |                        |        |                   |        |                  |         |   |        |   |         |   |        | 
|---------------------- | -------- | ------------------------------ | ------ | -------------------- | ------ | ---------------------- | ------ | ----------------- | ------ | ---------------- | ------- | - | ------ | - | ------- | - | ------ | 
|                       |          |                                |        | THIRTEEN WEEKS ENDED |        | TWENTY-SIX WEEKS ENDED
|                       |          |                                |        |                      |        |                       
|                       |          |                                |        | NOVEMBER 30, 2002    |        | DECEMBER 1, 2001       |        | NOVEMBER 30, 2002 |        | DECEMBER 1, 2001
|                       |          |                                |        | (ACTUAL)             |        | (PRO FORMA)            |        | (ACTUAL)          |        | (PRO FORMA)     
|                       |          |                                |        |                      |        |                        |        |                   |        |                 
|Net sales              |          | $                              | 60,606 |                      |        | $                      | 73,486 |                   |        | $                | 185,239 |   |        | $ | 203,265 |  
|Gross profit           |          | $                              | 29,038 |                      |        | $                      | 36,272 |                   |        | $                | 81,149  |   |        | $ | 94,928  |  
|Operating expenses     |          | $                              | 34,085 |                      |        | $                      | 33,439 |                   |        | $                | 77,441  |   |        | $ | 73,682  |  
|Net income (loss)      |          | $                              | (3,666 | )                    |        | $                      | 1,529  |                   |        | $                | 1,755   |   |        | $ | 14,258  |  
|Per share information: |          |                                |        |                      |        |                        |        |                   |        |                  |         |   |        |   |         |  
|                       | Basic:   |                                |        |                      |        |                        |        |                   |        |                  |         |   |        |   |         |   |       
|                       |          | Net earnings per share         |        | $                    | (0.20  | )                      |        | $                 | 0.08   |                  |         | $ | 0.10   |   |         | $ | 0.78   | 
|                       |          | Weighted average common shares |        |                      | 17,910 |                        |        |                   | 18,280 |                  |         |   | 18,038 |   |         |   | 18,264 | 
|                       | Diluted: |                                |        |                      |        |                        |        |                   |        |                  |         |   |        |   |         |   |       
|                       |          | Net earnings per share         |        | $                    | (0.20  | )                      |        | $                 | 0.08   |                  |         | $ | 0.10   |   |         | $ | 0.75   | 
|                       |          | Weighted average common shares |        |                      | 17,910 |                        |        |                   | 18,847 |                  |         |   | 18,184 |   |         |   | 19,038 | 

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|12. |  | Revolving Credit Facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | We maintain an unsecured revolving credit facility pursuant to a credit
agreement with several lenders in an amount not to exceed $45.0 million. The
credit agreement permits us to draw upon the credit facility for general
corporate purposes, capital expenditures, acquisitions and stock repurchases
and expires on April 30, 2004. We have the option to pay interest on
revolving credit facility advances at a rate equal to either LIBOR plus a
margin, or the base rate plus a margin. At November 30, 2002, no amounts
were outstanding under the revolving credit facility.                                                                                           
|   
|    |  | The credit agreement contains customary affirmative and negative covenants.
As a result of the loss incurred in the second quarter of fiscal 2003, we
were not in compliance with two of the financial covenants in the credit
agreement relating to earnings before interest, taxes, depreciation and
amortization at November 30, 2002. The lenders have consented to a waiver of
these covenant violations. We have advised the lenders that we may be out of
compliance with one or both of these covenants again in the third quarter of
Fiscal 2003 and are in discussions with them regarding either modifying the
covenants or restructuring the revolving credit facility.
|   
|13. |  | Commitments and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | Vans, Inc. vs. Scott Brabson and Jay Rosendahl, in Arbitration before JAMS.
The allegations we have made in this case and the companion lawsuit pending
in Los Angeles Superior Court are described in our Annual Report on Form 10-K
for Fiscal 2002. During Q2 Fiscal 2003 discovery was concluded in this
matter. In December, the arbitration hearing was also concluded. All
parties have filed post-arbitration briefs and we expect a decision from the
arbitrator before the end of January.                                                                                                                                                                               
|   
|    |  | Gordana Brabson vs. Vans, Inc. et. al,Superior Court of California, County
of Santa Barbara, case No. 01110315. This lawsuit was filed against Vans,
two of Vans executive officers, and certain other individuals and entities
on December 6, 2002, in connection with the above-mentioned litigation. Ms.
Brabson alleges causes of action for invasion of privacy, trespass, and
intentional infliction of emotional distress relating to the investigation
conducted in connection with that litigation. She seeks an unspecified
amount of compensatory, special and punitive damages. We intend to
vigorously defend this matter.                                           
|   
|    |  | From time to time, the Company is involved in legal proceedings arising in
the ordinary course of business. Management does not expect that any of the
legal proceedings in which the Company is currently involved will have a
material adverse impact on future results of operations or liquidity.                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | At November 30, 2002, we had letters of credit outstanding totaling $6.9
million. These letters of credit were issued for the purchase of inventory.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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

GENERAL

The following discussion contains forward-looking statements about our
revenues, earnings, spending, margins, orders, products, plans, strategies and
objectives that involve risk and uncertainties. Forward-looking statements
include any statement that may predict, forecast or imply future results, and
may contain words like believe, anticipate, expect, estimate,
project, or words similar to those. Our actual results could differ
materially from those discussed herein. Factors that could cause or contribute
to such differences include, but are not limited to, those discussed in
footnotes accompanying certain forward-looking statements, as well as those
discussed under the caption Risk Factors on page 14 of our Annual Report on
Form 10-K for the year ended May 31, 2002, and in our press release dated
December 19, 2002.

In July 2002, a decision was made to terminate our South American joint
ventures located in Brazil, Argentina and Uruguay. Prior to this decision,
these three joint ventures were fully consolidated in our consolidated balance
sheets and statements of operations. As a result of this decision, we
deconsolidated these joint ventures as of June 30, 2002. We have no remaining
obligations to the joint ventures or investments in the joint ventures other
than our trade receivables from the joint ventures, which were written down to
their estimated realizable value of $1.0 million during the fourth quarter of
fiscal 2002.

OVERVIEW

Vans is a leading global sports and lifestyle company that merchandises,
designs, sources and distributes VANS-branded active-casual and performance
footwear, apparel and accessories for Core Sports. Core Sports, including
skateboarding, snowboarding, surfing, wakeboarding, BMX riding and motocross,
are generally recognized for the fun, creativity and individual achievement
experienced while attempting various tricks or maneuvers within these sports.
Our focus has been proprietary branding with the goal of creating a leadership
position for our brand and a strong emotional connection with our customers.
Our VANS brand targets 10 to 24 year old participants, enthusiasts and
emulators of the Core Sports culture. We have implemented a unique marketing
plan to reach our customers through multiple points of contact which include
owning and operating Core Sports entertainment events and venues, such as the
VANS Triple Crown Series, 12 VANS skateparks and the VANS High Cascade
Snowboard Camp®, sponsoring numerous professional and amateur athletes and the
VANS Warped Tour®, as well as advertising in targeted print and television
media.

CRITICAL ACCOUNTING POLICIES

Our financial condition and results of operations are impacted by the
methods, assumptions and estimates used in the application of critical
accounting policies. Changes in the estimates or other judgements of matters
inherently uncertain that are included within these accounting policies could
result in a significant change to the information presented in the financial
statements. We believe our most critical accounting policies relate to:

Accounts Receivable.We provide allowances for doubtful accounts based on
a number of factors including historical experience and past due status as well
as individual customer circumstances such as ability to pay, bankruptcy, credit
ratings and payment history. If actual market conditions are less favorable
than those projected by us, additional provisions for doubtful accounts may be
required.

Inventory.Inventories are valued at the lower of cost or market.
Finished goods inventories are valued using the first-in, first-out method
(FIFO). We write-down our inventories for estimated obsolescence or
unmarketable inventory equal to the difference between the cost of inventory
and the estimated market value based upon assumptions about future demand and
market conditions. If actual market conditions are less favorable than those
projected by us, additional inventory write-downs may be required.

Impairment Losses on Property, Plant and Equipment.We evaluate the
carrying value of assets for impairment when the assets experience a negative
event (i.e., significant downturn in operations, losses from operating units,
natural disaster, etc.). When these events are identified, we review the last
two years of operations, for example, on a store-by-store basis and, if there
are losses, we estimate future undiscounted cash flows. If the projected
undiscounted cash flows do not exceed the carrying value of the assets, we
write-down the assets to fair value based on discounted projected cash flows.
The most significant assumptions we use in this analysis are those made in
estimating future discounted cash flows. In estimating cash flows, we generally
use the financial assumptions in our current budget and our strategic plan and
modify them on a store-by-store basis if other factors should be considered.
Although we

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believe our assumptions are reasonable given our current operating
performance, any change in market conditions could result in additional
impairment losses.

Impairment losses on Goodwill.Goodwill is tested for impairment annually
at the reporting unit level. The impairment, if any, is measured in part based
on the estimated fair value of the reporting units with the recorded goodwill.
Fair value is determined by using a combination of techniques, such as the
traditional present value approach, the expected cash flow approach, and the
multiple of earnings approach. The most significant assumptions we use in this
analysis are those made in estimating future cash flows. In estimating future
cash flows, we generally use, subject to modification as considered necessary,
the financial assumptions in our current budget and our strategic plan
including sales and expense growth rates and the discount rate we estimate to
represent our cost of funds.

RESULTS OF OPERATIONS

The following table sets forth our operating results, expressed as a
percentage of net sales, for the periods indicated.

|                               |                                          |                                     |                          |      |                      |      |                        |      |              |      |             |      |     |      |       |      |     |      | 
|------------------------------ | ---------------------------------------- | ----------------------------------- | ------------------------ | ---- | -------------------- | ---- | ---------------------- | ---- | ------------ | ---- | ----------- | ---- | --- | ---- | ----- | ---- | --- | ---- | 
|                               |                                          |                                     |                          |      | THIRTEEN WEEKS ENDED |      | TWENTY-SIX WEEKS ENDED
|                               |                                          |                                     |                          |      |                      |      |                       
|                               |                                          |                                     |                          |      | NOVEMBER 30,         |      | DECEMBER 1,            |      | NOVEMBER 30, |      | DECEMBER 1,
|                               |                                          |                                     |                          |      | 2002                 |      | 2001                   |      | 2002         |      | 2001       
|                               |                                          |                                     |                          |      |                      |      |                        |      |              |      |            
|Retail sales                   |                                          |                                     | 37.9                     |      |                      |      | 33.9                   |      |              |      | 31.8        |      |     |      | 30.4  |     
|National sales                 |                                          |                                     | 31.8                     |      |                      |      | 38.2                   |      |              |      | 40.4        |      |     |      | 42.5  |     
|International sales            |                                          |                                     | 30.3                     |      |                      |      | 28.0                   |      |              |      | 27.8        |      |     |      | 27.0  |     
|                               |                                          |                                     |                          |      |                      |      |                        |      |              |      |             |      |     |      |       |     
|Net sales                      |                                          |                                     | 100.0                    | %    |                      |      | 100.0                  | %    |              |      | 100.0       | %    |     |      | 100.0 | %   
|Cost of sales                  |                                          |                                     | 52.1                     |      |                      |      | 51.3                   |      |              |      | 56.2        |      |     |      | 52.5  |     
|                               |                                          |                                     |                          |      |                      |      |                        |      |              |      |             |      |     |      |       |     
|Gross profit                   |                                          |                                     | 47.9                     |      |                      |      | 48.7                   |      |              |      | 43.8        |      |     |      | 47.5  |     
|Operating expenses:            |                                          |                                     |                          |      |                      |      |                        |      |              |      |             |      |     |      |       |     
|                               | Retail                                   |                                     |                          | 28.1 |                      |      |                        | 21.5 |              |      |             | 18.7 |     |      |       | 15.3 |    
|                               | Marketing, advertising and promotion     |                                     |                          | 9.5  |                      |      |                        | 10.4 |              |      |             | 8.9  |     |      |       | 9.8  |    
|                               | Selling, distribution and administrative |                                     |                          | 18.4 |                      |      |                        | 14.8 |              |      |             | 14.0 |     |      |       | 12.8 |    
|                               | Amortization of intangibles              |                                     |                          | 0.3  |                      |      |                        | 0.1  |              |      |             | 0.2  |     |      |       | 0.0  |    
|                               |                                          |                                     |                          |      |                      |      |                        |      |              |      |             |      |     |      |       |     
|                               |                                          |                                     | Total operating expenses |      |                      | 56.2 |                        |      |              | 46.7 |             |      |     | 41.8 |       |      |     | 38.0 | 
|                               |                                          |                                     |                          |      |                      |      |                        |      |              |      |             |      |     |      |       |     
|                               |                                          | Earnings (loss) from operations     |                          |      | (8.3                 | )    |                        |      | 1.9          |      |             |      | 2.0 |      |       |      | 9.5 |     
|Interest income (expense), net |                                          |                                     | 0.3                      |      |                      |      | 0.9                    |      |              |      | 0.2         |      |     |      | 0.4   |     
|Other income (expense), net    |                                          |                                     | 0.8                      |      |                      |      | (0.3                   | )    |              |      | (0.1        | )    |     |      | (0.1  | )   
|                               |                                          |                                     |                          |      |                      |      |                        |      |              |      |             |      |     |      |       |     
|                               |                                          | Earnings (loss) before income taxes |                          |      | (7.2                 | )    |                        |      | 2.5          |      |             |      | 2.1 |      |       |      | 9.8 |     
|Income tax expense             |                                          |                                     | (2.2                     | )    |                      |      | 0.7                    |      |              |      | 0.6         |      |     |      | 2.9   |     
|Minority share of income       |                                          |                                     | 1.0                      |      |                      |      | 1.0                    |      |              |      | 0.5         |      |     |      | 0.5   |     
|                               |                                          |                                     |                          |      |                      |      |                        |      |              |      |             |      |     |      |       |     
|Net income (loss)              |                                          |                                     | (6.0                     | )%   |                      |      | 0.8                    | %    |              |      | 0.9         | %    |     |      | 6.4   | %   
|                               |                                          |                                     |                          |      |                      |      |                        |      |              |      |             |      |     |      |       |     

QUARTERLY PERIOD ENDED NOVEMBER 30, 2002 (Q2 FISCAL 2003), AS COMPARED TO
QUARTERLY PERIOD ENDED DECEMBER 1, 2001 (Q2 FISCAL 2002)

Net Sales

Net sales for Q2 Fiscal 2003 decreased 11.3% to $60.6 million from $68.3
million for Q2 Fiscal 2002. The sales decrease was the net effect of changes in
all three of our sales channels, as discussed below.

Retail.Retail sales, which consists solely of sales through our U.S.
retail stores and skatepark sessions and concessions, decreased slightly to
$23.0 million in Q2 Fiscal 2003 from $23.1 million in Q2 Fiscal 2002.
Comparable store sales (excluding revenue from concessions and skate sessions
at our skateparks) declined by 9.3% year-over-year. The comparable store sales
decrease was primarily related to the sluggish retail market, lower inventory
levels in the stores which were in part due to delays in shipping caused by
the implementation of our new warehouse management system and the work slow
down and lockout at Los Angeles ports, which occurred in Q2 Fiscal 2003, and a
year-over-year decline in average selling price of 1.4% across all of our
stores. Comparable revenues from concessions and skate sessions at our
skateparks declined 32.5%, or $724,000, year-over-year. The decline in
skatepark revenue was largely attributable to the opening of free skateparks by
local municipalities in nearly all of our skatepark markets.

National.National sales, which includes all U.S. sales except sales
through our U.S. retail stores, decreased 26.4% to $19.2 million in Q2 Fiscal
2003 from $26.1 million in Q2 Fiscal 2002. Excluding revenue from sales by
Mosa of PRO-TEC branded

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product, which was acquired in the second half of fiscal year 2002,
national sales were down 40.2% to $15.6 million. The decline in our national
sales was due to weakness across all of our product lines.

International.International sales, which include sales through our seven
European retail stores, decreased 3.7% to $18.4 million in Q2 Fiscal 2003 from
$19.1 million in Q2 Fiscal 2002. This decrease was due to the following
factors: (i) the deconsolidation of our South American joint ventures, which
provided approximately $2.1 million of revenue in Q2 Fiscal 2002; (ii)
decreased sales in Mexico of approximately $800,000; and (iii) decreased
royalty payments from our licensee for Japan of approximately $500,000. The
decreased sales in Mexico and Japan were primarily a result of weakness in
local retail markets. These decreases were partially offset by increased sales
in Europe of approximately $2.7 million.

Gross Profit

Gross profit decreased 12.9% to $29.0 million in Q2 Fiscal 2003 from $33.3
million in Q2 Fiscal 2002. As a percentage of net sales, gross profit decreased
to 47.9% for Q2 Fiscal 2003, versus 48.7% for Q2 Fiscal 2002, primarily due to
domestic pricing pressure, particularly in the womens market, the liquidation
of certain excess inventory at no margin which was reserved for in the fourth
quarter of fiscal 2002, and a decreased number of skate sessions at our
skateparks.

Loss from Operations

We incurred a loss from operations of $5.0 million in Q2 Fiscal 2003,
versus earnings from operations of $1.3 million in Q2 Fiscal 2002. Operating
expenses in Q2 Fiscal 2003 increased 6.9% to $34.1 million from $31.9 million
in Q2 Fiscal 2002. As a percentage of sales, operating expenses increased to
56.2% versus 46.7% last year. The material components of the increase in
operating expenses are discussed below.

Retail.Retail expenses increased 15.6% to $17.0 million in Q2 Fiscal 2003
from $14.7 million in Q2 Fiscal 2002, primarily due to increased costs
associated with the expansion of our retail division by the net addition of 11
new stores and two skateparks since the same period in the prior year.

Marketing, advertising, and promotion.Marketing, advertising and
promotion expenses decreased 18.3% to $5.8 million in Q2 Fiscal 2003 from $7.1
million in Q2 Fiscal 2002, primarily due to a planned decrease in advertising
expenditures.

Selling, distribution and administrative.Selling, distribution and
administrative expenses increased 9.9% to $11.1 million in Q2 Fiscal 2003 from
$10.1 million in Q2 Fiscal 2002 due to: (i) increased costs of approximately
$900,000 as a result of the acquisition of Mosa; (ii) increased costs of
approximately $800,000 as a result of expansion in our European business; (iii)
increased legal expenses of approximately $680,000 primarily related to
litigation involving a former executive officer of Vans and his affiliate (the
Brabson Litigation) (see Part II  Item 1.
Legal Proceedings); and (iv) increased
labor costs of approximately $200,000 in connection with the implementation of
our new warehouse management system. The increase was partially
offset by: (i) decreased costs of approximately
$500,000 as a result of the deconsolidation of our joint ventures in South
America; and (ii) a net decrease in labor and other costs of approximately
$1.1 million as a result of internal cost-cutting measures.

Interest Income, Net

Interest income, net, decreased 72.7% to $157,000 in Q2 Fiscal
2003 from $575,000 in Q2 Fiscal 2002. This decrease was primarily due to lower
interest rates on monies invested by us.

Other (Income) Expense, Net

Other (income) expense, net, primarily consists of royalty payments
received from the non-footwear related licensing of our trademarks, exchange
rate gains and losses, and rental income. Other (income) expense, net,
increased to $502,000 of income for Q2 Fiscal 2003 from $194,000 of expense for
Q2 Fiscal 2002, primarily due to favorable fluctuations in foreign currency
exchange rates in Europe.

Income Tax (Benefit) Expense

We experienced a tax benefit of $1.3 million in Q2 Fiscal 2003 versus an
expense of $512,000 in Q2 Fiscal 2002, as a result of the loss we incurred for
Q2 Fiscal 2003. Our effective tax rate was 30% in Q2 Fiscal 2003 and Q2 Fiscal
2002.

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TWENTY-SIX WEEK PERIOD ENDED NOVEMBER 30, 2002 (FISCAL 2003 SIX MONTHS), AS
COMPARED TO TWENTY-SIX WEEK PERIOD ENDED DECEMBER 1, 2001 (FISCAL 2002 SIX
MONTHS)

Net Sales

Net sales for the Fiscal 2003 Six Months decreased slightly to $185.2
million from $186.4 million for the same period last year. The sales decrease
was the net effect of changes in all three of our sales channels, as discussed
below.

Retail.Retail sales, which consists solely of sales through our U.S.
retail stores and skatepark sessions and concessions, increased 4.0% to $59.0
million in the Fiscal 2003 Six Months from $56.7 million in the same period
last year. This increase was primarily the result of the increase in retail
sales we experienced in Q1 Fiscal 2003, and was partially offset by the decline
in retail sales in Q2 Fiscal 2003. Comparable store sales (excluding revenue
from concessions and skate sessions at our skateparks) declined 7.5%
year-over-year, primarily due to a year-over-year decline in average selling
price of 6.6% across all of our stores. Comparable revenues from concessions
and skate sessions at our skateparks declined 33.8%, or $1.6 million,
year-over-year. The decline in skatepark revenue was largely attributable to
the opening of free skateparks by local municipalities in nearly all of our
skatepark markets.

National.National sales, which includes all U.S. sales except sales
through our U.S. retail stores, decreased 5.5% to $74.8 million in the Fiscal
2003 Six Months from $79.2 million in the same period last year. Excluding
revenue from sales by Mosa of PRO-TEC branded product and revenue from the VANS
Warped Tour®, which were both acquired in the second half of fiscal 2002,
national sales were down 24.6% to $59.7 million. The decrease in national
sales was primarily due to the decrease in sales in Q2 Fiscal 2003 resulting
from weakness across all product lines.

International.International sales, which include sales through our seven
European stores, increased 2.0% to $51.4 million in the Fiscal 2003 Six Months
from $50.4 million in the same period a year ago. This increase was primarily
due to increased sales in Europe of $8.0 million year-over-year, partially
offset by reduced royalty payments from our licensee for Japan of approximately
$600,000, and decreased sales in Mexico and South America of approximately $1.4
million and $3.5 million, respectively. The decreased sales in Japan and
Mexico were primarily a result of weakness in local retail markets. The
results for the Fiscal 2003 Six Months only contain one month of sales for
South America as a result of the deconsolidation of our South American joint
ventures, as described above.

Gross Profit

Gross profit decreased 8.5% to $81.1 million in the Fiscal 2003 Six Months
from $88.6 million in the same period a year ago. As a percentage of net sales,
gross profit decreased to 43.8% for the Fiscal 2003 Six Months, versus 47.5%
for the same period a year ago, primarily due to the absence of margin
contribution from the newly acquired VANS Warped Tour in Q1 Fiscal 2003, the
liquidation of certain excess inventory at no margin which was reserved for in
the fourth quarter of Fiscal 2002, reduced royalty payments from our licensee
for Japan, and a decreased number of skate sessions at our skateparks.

Earnings from Operations

Our earnings from operations decreased 79.1% to $3.7 million in the Fiscal
2003 Six Months, versus $17.7 million in the same period a year ago. As a
percentage of sales, earnings from operations decreased to 2.0% for the Fiscal
2003 Six Months versus 9.5% last year. Operating expenses in the Fiscal 2003
Six Months increased 9.2% to $77.4 million from $70.9 million the same period a
year ago. As a percentage of sales, operating expenses increased to 41.8%
versus 38.0% last year. The significant components of the increase in operating
expenses are discussed below.

Retail.Retail expenses increased 21.3% to $34.7 million in the Fiscal
2003 Six Months from $28.6 million in the same period a year ago, primarily due
to increased costs associated with the expansion of our retail division by the
net addition of 11 new stores and two skateparks, since the same period in the
prior year.

Marketing, advertising and promotion.Marketing, advertising and promotion
expenses decreased 10.3% to $16.5 million in the Fiscal 2003 Six Months from
$18.4 million in the same period a year ago, primarily due to a planned
decrease in advertising expenditures.

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Selling, distribution and administrative.Selling, distribution and
administrative expenses increased 8.4% to $25.9 million in the Fiscal 2003 Six
Months versus $23.9 million in the same period a year ago primarily due to:
(i) increased costs of approximately $1.5 million as a result of the
acquisition of Mosa; (ii) increased costs of approximately $1.4 million as a
result of expansion in our European business; and (iii) increased legal expenses of
approximately $740,000 primarily related to the Brabson Litigation.
The increase was partially offset by: (i)
decreased costs of approximately $1.2 million as a result of the
deconsolidation of our joint ventures in South America; and (ii) a net decrease
in labor and other costs of approximately $400,000 as a result of internal
cost-cutting measures.

Interest Income, Net

Interest income, net, decreased 40.1% to $425,000 in the Fiscal
2003 Six Months from $710,000 in the Fiscal 2002 Six Months. This decrease was
primarily due to lower interest rates on monies invested by us.

Other Income (Expense), Net

Other income (expense), net, primarily consists of royalty payments
received from the non-footwear related licensing of our trademarks, exchange
rate gains and losses, and rental income. Other income (expense), net,
increased to $260,000 of expense for the Fiscal 2003 Six Months from $92,000 of
expense for the same period a year ago, primarily due to the net effect of
foreign currency losses in South America prior to the deconsolidation of our
joint ventures in Brazil, Argentina and Uruguay, partially offset by foreign
currency gains in Europe.

Income Tax Expense

Income tax expense decreased to $1.2 million in the Fiscal 2003 Six Months
from $5.5 million in the same period a year ago, primarily as a result of the
decrease in earnings for the Fiscal 2003 Six Months and the loss we incurred in
Q2 Fiscal 2003. Our effective tax rate was 30% in the Fiscal 2003 Six Months
and in the same period a year ago.

Liquidity and Capital Resources

Cash Flows

At November 30, 2002, we had $57.6 million of cash and marketable
securities. We have historically financed our operations with a combination of
cash flows from operations, borrowings under a credit facility and the sale of
equity securities. In May 2001, we completed an underwritten public offering of
our common stock. In connection with the offering, 2.8 million shares of our
common stock were sold for net proceeds of $60.1 million. In June 2001, an
additional 420,000 shares were sold for net proceeds of $9.2 million to cover
over-allotments. Most of the remaining proceeds of the offering are currently
being used for general corporate purposes. Certain of the proceeds were used
to repurchase stock and repay debt.

We experienced an inflow of cash from operating activities of $11.0
million for the Fiscal 2003 Six Months, compared to an outflow of $3.0 million
for the same period a year ago. Cash provided by operations during the Fiscal
2003 Six Months primarily resulted from net earnings of $1.8 million, the
add-back for depreciation and amortization of $5.4 million, a decrease in
prepaids of $5.7 million, and a decrease in inventories of $3.6 million. These
cash inflows were partially offset by an increase of $3.5 million in accounts
receivable. Cash used in operations during the Fiscal 2002 Six Months was
primarily due to an increase of $14.7 million in accounts payable and accrued
liabilities, an increase of $3.0 million in accounts receivable, and an
increase of $3.5 million in inventory. These cash outflows were partially
offset by earnings and the add-back for depreciation and amortization.

Accounts receivable, net of the allowance for doubtful accounts, increased
from $28.0 million at May 31, 2002, to $30.4 million at November 30, 2002,
primarily due to increased sales in Europe. Inventories decreased to $45.8
million at November 30, 2002, from $48.8 million at May 31, 2002, primarily due
to the deconsolidation of our joint ventures in South America as well as the
timing of inventory purchases and shipments.

We had a net cash inflow from investing activities of $16.7 million in the
Fiscal 2003 Six Months, compared to a net cash outflow of $36.1 million in the
same period a year ago. The net cash inflow was primarily a result of sales and
maturities of marketable and debt securities of $25.0 million, partially offset
by capital expenditures of $6.4 million. The net cash outflow in the Fiscal
2002 Six Months was primarily due to the purchase of $23.9 million of
marketable and debt securities and capital expenditures of $12.3 million.

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We had a net cash outflow from financing activities of $2.9 million in the
Fiscal 2003 Six Months, compared to a net cash inflow of $8.8 million for the
same period a year ago. The net cash outflow in the Fiscal 2003 Six Months was
primarily due to repurchases of our common stock totaling $2.2 million. The net
cash inflow in the Fiscal 2002 Six Months was primarily due to the completion
of the sale of our common stock in the public offering to cover
over-allotments.

The following table summarizes our contractual payment obligations and
commitments as of November 30, 2002:

|                 |       |   |                                                  |       |      |   |        |        |      |   |        |        |            |   |        |        |  |   |        |        |  |   |        |        |  |   |         |         | 
|---------------- | ----- | - | ------------------------------------------------ | ----- | ---- | - | ------ | ------ | ---- | - | ------ | ------ | ---------- | - | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ |  | - | ------- | ------- | 
|                 |       |   | PAYMENT
OBLIGATION BY FISCAL YEAR (IN THOUSANDS)
|                 |       |   |                                                 
|                 |       |   | 2003                                             |       | 2004 |   | 2005   |        | 2006 |   | 2007   |        | THEREAFTER |   | TOTAL 
|                 |       |   |                                                  |       |      |   |        |        |      |   |        |        |            |   |       
|Operating Leases |       | $ | 8,794                                            |       |      | $ | 17,414 |        |      | $ | 16,846 |        |            | $ | 15,862 |        |  | $ | 15,699 |        |  | $ | 51,676 |        |  | $ | 126,291 |        
|Long-term debt   |       |   | 17                                               |       |      |   | 126    |        |      |   | 2,607  |        |            |   | 5      |        |  |   | 5      |        |  |   | 253    |        |  |   | 3,013   |        
|                 | Total |   | $                                                | 8,811 |      |   | $      | 17,540 |      |   | $      | 19,453 |            |   | $      | 15,867 |  |   | $      | 15,704 |  |   | $      | 51,929 |  |   | $       | 129,304 | 
|                 |       |   |                                                  |       |      |   |        |        |      |   |        |        |            |   |        |        |  |   |        |        |  |   |        |        |  |   |         |        

Borrowings

We maintain a $45.0 million unsecured revolving credit facility pursuant
to a credit agreement with several lenders. This credit facility permits us to
utilize the funds thereof for general corporate purposes, capital expenditures,
acquisitions and stock repurchases.

The revolving credit facility expires on April 30, 2004. We have the
option to pay interest on revolving credit facility advances at a rate equal to
either LIBOR plus a margin, or the base rate plus a margin. The LIBOR rate
margin and the base rate margin are based on our ratio of Funded Debt to
EBITDA, each as defined in the credit agreement.

Under the credit agreement, we must maintain certain financial covenants
and are prohibited from engaging in certain transactions or taking certain
corporate actions, such as the payment of dividends, without the consent of the
lenders. At November 30, 2002, we had no borrowings under the credit facility.
Due to the loss we incurred in Q2 Fiscal 2003, we were out of compliance with
two of the financial covenants relating to earnings before interest, taxes,
depreciation and amortization under the facility. The lenders have consented to
a waiver of these covenant violations. We have advised the lenders that we may
be out of compliance with one or both of these covenants again in the third
quarter of Fiscal 2003 and are in discussions with them regarding either
modifying the covenants or restructuring the revolving credit facility.

Vans Latinoamericana, our subsidiary in Mexico, maintains a note payable
to Tavistock Holdings A.G., a 49.99% owner of Vans Latinoamericana. The loans
evidenced by the note were made by Tavistock pursuant to a shareholders
agreement requiring Tavistock to provide operating capital, on an as-needed
basis, in the form of loans to Vans Latinoamericana. At November 30, 2002, the
aggregate outstanding balance under the note was $2.6 million.

Share Repurchase Program

On September 21, 2001, we adopted a 1.0 million share repurchase program.
As of the date of this report, we have repurchased 455,700 shares under the
program for an aggregate of $2.8 million. We did not repurchase any shares in
Q2 Fiscal 2003.

Capital Expenditures

Our future material commitments for capital expenditures are currently
primarily related to the opening and remodeling of retail stores and the
opening of one skatepark. We have opened eight full price stores to date in
Fiscal 2003 and currently plan to open one more store in the balance of Fiscal
2003. We also plan to remodel approximately eight existing stores in the
balance of Fiscal 2003. We estimate the aggregate cost of these remodels and
opening to be approximately $2.1 million.

We also plan to open one skatepark in Sacramento, California in the first
half of Fiscal 2004 and estimate our portion of the cost of this park to be
approximately $2.0 to $2.5 million.

Capital Resources

Our liquid asset position at November 30, 2002, consisted of cash and cash
equivalents of $54.1 million and $3.6 million of investment grade federal
agency notes, corporate bonds and asset-backed debt securities with remaining
maturities of three months to

15



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two years. This compares to cash and cash equivalents of $28.4 million and
marketable and debt securities of $27.5 million at May 31, 2002. We believe our
capital resources, including the availability under our credit facility and
cash flow from operations, will be sufficient to fund our operations and
capital expenditures and anticipated growth plan for the foreseeable future.*

NEW ACCOUNTING PRONOUNCEMENTS

Effective June 1, 2002, we adopted Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets (SFAS 144), which addresses the impairment for all tangible assets.
The adoption of SFAS 144 had no financial impact to our consolidated financial
statements.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement 13 and Technical
Corrections (SFAS 145), which became effective for us in fiscal 2003. SFAS
145 eliminates the classification of debt extinguishment activity as
extraordinary items; eliminates inconsistencies in lease modification
treatment; and makes various technical corrections or clarifications of other
existing authoritative pronouncements. The adoption of SFAS 145 had no
financial impact to our consolidated financial statements.

In July 2002, the FASB issued SFAS No. 146, Accounting For Costs
Associated With Exit or Disposal Activities (SFAS 146), which addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies EITF Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). SFAS 146 is effective
for exit or disposal activities that are initiated after December 31, 2002,
with earlier application encouraged. We do not expect that the impact of
adopting SFAS 146 will be material to our consolidated financial statements.

SEASONALITY

The following table contains unaudited selected quarterly financial data
for the eight quarters ended November 30, 2002, and this data as a percentage
of net sales. In the opinion of management, this unaudited information has been
prepared on the same basis as the audited information and includes all
adjustments necessary to fairly present the information set forth therein.
Results of a particular quarter are not necessarily indicative of the results
for any subsequent quarter.

UNAUDITED QUARTERLY RESULTS
(DOLLARS IN THOUSANDS)

|                              |                                                           |  |               |        |               |  |              |        |             |  |          |         |         |  |            |        |              |  |   |        |    |  |   |         |    |  |   |         |    |  |   |        |   
|----------------------------- | --------------------------------------------------------- |  | ------------- | ------ | ------------- |  | ------------ | ------ | ----------- |  | -------- | ------- | ------- |  | ---------- | ------ | ------------ |  | - | ------ | -- |  | - | ------- | -- |  | - | ------- | -- |  | - | ------ | --
|                              |                                                           |  | QUARTER ENDED |        | QUARTER ENDED
|                              |                                                           |  |               |        |              
|                              |                                                           |  | FEBRUARY 24,  |        | MAY 31,       |  | SEPTEMBER 1, |        | DECEMBER 1, |  | MARCH 3, |         | MAY 31, |  | AUGUST 31, |        | NOVEMBER 30,
|                              |                                                           |  | 2001          |        | 2001          |  | 2001         |        | 2001        |  | 2002     |         | 2002    |  | 2002       |        | 2002        
|                              |                                                           |  |               |        |               |  |              |        |             |  |          |         |         |  |            |        |             
|STATEMENT OF
OPERATIONS DATA: |                                                           |  |               |        |               |  |              |        |             |  |          |         |         |  |            |        |              |  |   |        |    |  |   |         |    |  |   |         |    |  |   |       
|                              | Net sales                                                 |  | $             | 80,865 |               |  | $            | 85,231 |             |  | $        | 118,060 |         |  | $          | 68,333 |              |  | $ | 82,151 |    |  | $ | 63,807  |    |  | $ | 124,633 |    |  | $ | 60,606 |   
|                              | Gross profit                                              |  |               | 34,299 |               |  |              | 37,519 |             |  |          | 55,339  |         |  |            | 33,260 |              |  |   | 37,737 |    |  |   | 26,042  |    |  |   | 52,111  |    |  |   | 29,038 |   
|                              | Earnings (loss)
from operations                           |  |               | 3,816  |               |  |              | 4,640  |             |  |          | 16,379  |         |  |            | 1,326  |              |  |   | 641    |    |  |   | (20,323 | )  |  |   | 8,768   |    |  |   | (5,047 | ) 
|                              | Net income (loss)                                         |  |               | 2,015  |               |  |              | 2,699  |             |  |          | 11,343  |         |  |            | 512    |              |  |   | 483    |    |  |   | (14,934 | )  |  |   | 5,421   |    |  |   | (3,666 | ) 
|AS A PERCENTAGE OF
NET SALES: |                                                           |  |               |        |               |  |              |        |             |  |          |         |         |  |            |        |              |  |   |        |    |  |   |         |    |  |   |         |    |  |   |       
|                              | Net sales                                                 |  |               | 100    | %             |  |              | 100    | %           |  |          | 100     | %       |  |            | 100    | %            |  |   | 100    | %  |  |   | 100     | %  |  |   | 100     | %  |  |   | 100    | % 
|                              | Gross profit                                              |  |               | 42     |               |  |              | 44     |             |  |          | 47      |         |  |            | 49     |              |  |   | 46     |    |  |   | 41      |    |  |   | 42      |    |  |   | 48     |   
|                              | Earnings (loss)
from operations                           |  |               | 5      |               |  |              | 6      |             |  |          | 14      |         |  |            | 2      |              |  |   | 1      |    |  |   | (32     | )  |  |   | 7       |    |  |   | (8     | ) 
|                              | Net income (loss)                                         |  |               | 2      |               |  |              | 3      |             |  |          | 10      |         |  |            | 1      |              |  |   | 1      |    |  |   | (23     | )  |  |   | 4       |    |  |   | (6     | ) 
|                              | Year-over-year
comparable store
sales increase
(decrease) |  |               | 16.3   | %             |  |              | 9.2    | %           |  |          | 4.7     | %       |  |            | (8.9   | )%           |  |   | (5.1   | )% |  |   | (7.4    | )% |  |   | (4.9    | )% |  |   | (9.3   | )%



---

|* |  | Note: This is a forward-looking statement. Our actual cash requirements could
differ materially. Important factors that could cause our need for
additional capital to change include: (i) our rate of growth; (ii) the
number of new stores we decide to open and the number of store remodels we
undertake; (iii) the amount of stock we repurchase under our repurchase
program; (iv) our ability to effectively manage our inventory levels; (v)
timing differences in payment for our foreign-sourced product; and (vi)
slowing in the U.S. and global economies which could materially impact our
business.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Our business is seasonal, with the largest percentage of net income and
U.S. sales realized in the first fiscal quarter (June through August), the
back to school selling months. In addition, because snowboarding is a winter
sport, sales of our snowboard boots and the Switch Autolock® binding system
have historically been strongest in the first and second fiscal quarters (June
through November).

In addition to seasonal fluctuations, our operating results fluctuate
quarter-to-quarter as a result of the timing of marketing expenditures and
holidays, weather, timing of shipments, product mix, cost of materials and the
mix between wholesale and retail channels. Because of such fluctuations, the
results of operations of any quarter are not necessarily indicative of the
results that may be achieved for a full fiscal year or any future quarter. In
addition, there can be no assurance that our future results will be consistent
with past results or the projections of securities analysts.




ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Our exposure to market risk associated with changes in interest rates
relates primarily to our cash and marketable debt securities. At November 30,
2002, we held $54.1 million in cash and cash equivalents and $3.6 million in
marketable debt securities. Cash equivalents consist of highly liquid
investments in federal treasury securities, commercial paper and money market
time deposits with original maturities of three months or less. Our marketable
debt securities consist of investment grade federal agency notes, corporate
bonds and asset backed debt securities with maturities of four
months to two years and are classified as available for sale as we do not have
the intent to hold to maturity. Due to the relatively short-term nature of our
cash equivalents and marketable debt securities, cost approximates fair value.
We do not use derivative or other financial instruments to hedge interest rate
risks. A 1% decline in the annual yield on marketable debt securities
and cash equivalents would decrease interest income by approximately
$580,000.

Foreign Currency Risk

We operate our business and sell our products in a number of countries
throughout the world and, as a result, we are exposed to movements in foreign
currency exchange rates. Although we have most of our products manufactured
outside of the United States on a per order basis, these purchases are made in
U.S. dollars. The major foreign currency exposure for us involves Europe, Latin
America and Japan. In Fiscal 2002, we were subjected to foreign currency risk
in South America through our involvement in joint venture operations in Brazil,
Argentina and Uruguay. Our South America business was negatively impacted by
weaknesses in South American economies, particularly Argentina. In July 2002,
we made the decision to close our joint venture operations in South America,
and as of July 1, 2002, the entities for these joint venture operations are no
longer consolidated in our balance sheet. At November 30, 2002, our remaining
exposure to foreign currency risk in South America consists of net trade
receivables of $1.0 million from these joint ventures.

In order to protect against the volatility associated with transactions
conducted in foreign currency, we may, from time to time, utilize forward
foreign exchange contracts and/or foreign currency options with durations of
generally from three to 12 months. As of November 30, 2002, we had $11.4
million outstanding in foreign exchange forward contracts to purchase
U.S. dollars, which were entered
into to hedge specific transactions denominated in currencies other than the
respective local currency. $8.4 million of these forward contracts were to
hedge against the euro, $2.5 million of these contracts were to hedge British
sterling and $500,000 of these contracts were to hedge Japanese yen.
The unrealized loss on these contracts at November 30, 2002 was
$822,000.




ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities and
Exchange Act of 1934, as amended (the Exchange Act) is recorded, summarized
and processed within time periods specified in the SECs rules and forms. As
of a date within 90 days of the date of this report (the Evaluation Date), we
carried out an evaluation, under the supervision and with the participation of
our management, including our President and Chief Executive Officer and our
Senior Vice President and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures pursuant to Rule
13a-14 under the Exchange Act . Based upon this evaluation, our President and
Chief Executive Officer and our Senior Vice President and Chief Financial
Officer concluded that, as of the Evaluation Date, our disclosure controls and
procedures were effective under Rule 13a-14.

Additionally, our President and Chief Executive Officer and Senior Vice
President and Chief Financial Officer determined, as of a date within 90 days
of the date of this report, that there were no significant changes in our
internal controls or in other factors that could significantly affect our
internal controls subsequent to the date of their evaluation.

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PART II
OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

Vans, Inc. vs. Scott Brabson and Jay Rosendahl, in Arbitration before
JAMS. The allegations we have made in this case and the companion lawsuit
pending in Los Angeles Superior Court are described in our Annual Report on
Form 10-K for Fiscal 2002. During Q2 Fiscal 2003 discovery was concluded in
this matter. In December, the arbitration hearing was also concluded. All
parties have filed post-arbitration briefs and we expect a decision from the
arbitrator before the end of January.

Gordana Brabson vs. Vans, Inc. et. al,Superior Court of California,
County of Santa Barbara, case No. 01110315. This lawsuit was filed against
Vans, two of Vans executive officers, and certain other individuals and
entities on December 6, 2002, in connection with the above-mentioned
litigation. Ms. Brabson alleges causes of action for invasion of privacy,
trespass, and intentional infliction of emotional distress relating to the
investigation conducted in connection with that litigation. She seeks an
unspecified amount of compensatory, special and punitive damages. We intend to
vigorously defend this matter.




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On October 29, 2002, we held our 2002 Annual Meeting of Stockholders. The
following matters were voted on at the meeting: (i) the election of directors;
and (ii) the ratification and approval of KPMG LLP as the Companys independent
auditors for Fiscal 2003.

The results of the voting on these matters (including the names of all
persons elected as directors) are set forth below:

|                                                                 |  |           |            |                  |  |             |         |                  |  |  |        |  |  |  |   | 
|---------------------------------------------------------------- |  | --------- | ---------- | ---------------- |  | ----------- | ------- | ---------------- |  |  | ------ |  |  |  | - | 
|                                                                 |  |           |            |                  |  | VOTES       |         |                  |  |  |        |  |  | 
|PROPOSAL                                                         |  | VOTES FOR |            | AGAINST/WITHHELD |  | ABSTENTIONS |         | BROKER NON-VOTES
|                                                                 |  |           |            |                  |  |             |         |                 
|Proposal No. 1                                                   |  |           |            |                  |  |             |         |                  |  |  |        |  |  |  |   | 
|Election of Directors                                            |  |           |            |                  |  |             |         |                  |  |  |        |  |  |  |   | 
|                                                                 |  |           |            |                  |  |             |         |                  |  |  |        |  |  |  |   | 
|Nominees:                                                        |  |           |            |                  |  |             |         |                  |  |  |        |  |  |  |   | 
|Walter E. Schoenfeld                                             |  |           | 16,547,422 |                  |  |             | 46,391  |                  |  |  | 0      |  |  |  | 0 | 
|Gary H. Schoenfeld                                               |  |           | 16,452,838 |                  |  |             | 140,975 |                  |  |  | 0      |  |  |  | 0 | 
|Wilbur J. Fix                                                    |  |           | 16,558,107 |                  |  |             | 35,706  |                  |  |  | 0      |  |  |  | 0 | 
|Gerald Grinstein                                                 |  |           | 16,557,932 |                  |  |             | 35,881  |                  |  |  | 0      |  |  |  | 0 | 
|James R. Sulat                                                   |  |           | 16,559,838 |                  |  |             | 33,975  |                  |  |  | 0      |  |  |  | 0 | 
|Kathleen M. Gardarian                                            |  |           | 16,557,863 |                  |  |             | 35,950  |                  |  |  | 0      |  |  |  | 0 | 
|Lisa M. Douglas                                                  |  |           | 16,558,163 |                  |  |             | 35,650  |                  |  |  | 0      |  |  |  | 0 | 
|Charles G. Armstrong                                             |  |           | 16,558,838 |                  |  |             | 34,975  |                  |  |  | 0      |  |  |  | 0 | 
|Leonard R. Wilkens                                               |  |           | 16,557,123 |                  |  |             | 36,690  |                  |  |  | 0      |  |  |  | 0 | 
|                                                                 |  |           |            |                  |  |             |         |                  |  |  |        |  |  |  |   | 
|Proposal No. 2                                                   |  |           |            |                  |  |             |         |                  |  |  |        |  |  |  |   | 
|Ratification of KPMG LLP
as Independent Auditors for
Fiscal 2003 |  |           | 16,324,776 |                  |  |             | 257,507 |                  |  |  | 11,530 |  |  |  | 0 | 




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | Exhibits.
|--- |  | ---------



| | 10.1 |  | Amendment and Restatement of Vans, Inc. Deferred Compensation
Agreement for Gary H. Schoenfeld
| | ---- |  | ----------------------------------------------------------------------------------------------
|
| | 10.2 |  | Endorsement Split Dollar Life Insurance Agreement                                             

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| | 99.1 |  | Certification of Gary H. Schoenfeld Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002  
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|
| | 99.2 |  | Certification of Andrew J. Greenebaum Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002



|(b) |  | Reports on Form 8-K.                                                                                                        
|--- |  | ----------------------------------------------------------------------------------------------------------------------------
|   
|    |  | We filed one Report on Form 8-K during Q2 Fiscal 2003, dated September 25,
2002, regarding certain Regulation FD disclosure.

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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.

|                      |  |                         |  |                                                                                                                    
|--------------------- |  | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------
|                      |  | VANS, INC.
(Registrant)
|                      |  |                         |  |                                                                                                                    
|Date: January 9, 2003 |  | By:                     |  | /s/ Gary H. Schoenfeld                                                                                             
|                      |  |                         |  |                                                                                                                    
|                      |  |                         |  | GARY H. SCHOENFELD
President and Chief Executive Officer                                                           
|                      |  |                         |  |                                                                                                                    
|                      |  |                         |  |                                                                                                                    
|Date: January 9, 2003 |  | By:                     |  | /s/ Andrew J. Greenebaum                                                                                           
|                      |  |                         |  |                                                                                                                    
|                      |  |                         |  | ANDREW J. GREENEBAUM
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

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CERTIFICATIONS PURSUANT TO
RULE 13a-14 UNDER THE
SECURITIES EXCHANGE ACT OF 1934

I, Gary H. Schoenfeld, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Vans, 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

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: January 9, 2003

|                                                        
|--------------------------------------------------------
|/s/ Gary H. Schoenfeld                                  
|                                                        
|Gary H. Schoenfeld
President and Chief Executive Officer

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CERTIFICATIONS PURSUANT TO
RULE 13a-14 UNDER THE
SECURITIES EXCHANGE ACT OF 1934

I, Andrew J. Greenebaum, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Vans, 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

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: January 9, 2003

|                                                                      
|----------------------------------------------------------------------
|/s/ Andrew J. Greenebaum                                              
|                                                                      
|Andrew J. Greenebaum
Senior Vice President and
Chief Financial Officer

22