<PAGE>


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

                                    FORM 10-K

(Mark One)

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

For the fiscal year ended December 28, 2002

                                       OR

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

For the transition period from                    to
                               ------------------    --------------------------

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

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

<TABLE>
<CAPTION>

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

     One Mason Drive, Jamestown, New York                           14702
-------------------------------------------     -------------------------------
   (Address of principal executive offices)                       (Zip Code)


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

Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>

         Title of each class                Name of each exchange on which registered
         Class A Common Stock                        New York Stock Exchange
         --------------------               -----------------------------------------
<S>                                         <C>

</TABLE>

           Securities registered pursuant to Section 12(g) of the Act:
                                      None
       ------------------------------------------------------------------
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X   No
                                       --     --

<PAGE>

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Act). Yes [ ]  No [X]

As of June 29, 2002, 10,446,579 shares of Class A Common Stock were outstanding
and the aggregate market value (based on the closing price on the New York Stock
Exchange on June 28, 2002 which was $12.00 per share) of the Class A Common
Stock held by non-affiliates was approximately $63,322,000. In determining the
market value of non-affiliate stock, shares of the registrant's Class A Common
Stock beneficially owned by each executive officer, director and greater than 5%
stockholder have been excluded. This determination of affiliate status is not
necessarily a conclusive determination for other purposes. With respect to
greater than 5% stockholders who are not executive officers and directors, the
registrant has relied on the information contained in Schedule 13G's that were
filed with the Securities and Exchange Commission prior to June 29, 2002. As of
December 28, 2002 there were 10,444,405 shares of Class A Common Stock and
3,395,365 shares of Class B Common Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement for the Annual Meeting
of Stockholders scheduled to be held on May 15, 2003, are incorporated by
reference into Part III hereof. Certain exhibits listed in Part IV of this
Annual Report on Form 10-K are incorporated by reference from prior filings made
by the registrant under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934.

                                       2

<PAGE>


                                     PART I

ITEM 1.  BUSINESS
------   ---------

(a)  GENERAL DEVELOPMENT OF BUSINESS
     -------------------------------

     Bush Industries, Inc. (the "Company" or the "Registrant"), was incorporated
under the laws of the State of Delaware on February 5, 1985. The Company was a
successor to a corporation of the same name incorporated under the laws of the
State of New York in 1959. The Company's principal place of business is located
at One Mason Drive, Jamestown, New York 14702.

     On June 30, 1997, the Company acquired a 51% interest in the Rohr Gruppe, a
German furniture manufacturer, which name was subsequently changed to Rohr-Bush
GmbH & Co. ("Rohr-Bush"). On February 29, 2000, the Company executed a
definitive agreement with certain members of the Rohr family to acquire the
family's approximately 49% remaining interest in Rohr-Bush. The transaction
closed in October 2000. The Bush Furniture Europe segment is comprised of
Rohr-Bush.

     The Company organizes its operations into four operating segments based
principally on the natural alignment of its customers, markets and products. The
four operating segments, which are discussed in more detail below, are as
follows: Bush Business Furniture, Bush Furniture, Bush Furniture Europe, and
Bush Technologies.

     On February 27, 2003, the Company approved plans to restructure certain of
its operations. In conjunction with such plans the Company will close its St.
Paul, Virginia manufacturing facility and relocate certain operations to other
plants, close three of its retail outlet stores and utilize third party
liquidators to expedite the sale of excess inventory (which will create space in
the Company's Erie, Pennsylvania facility to launch new production strategies),
and terminate production and management level employees in various locations.
The Company expects to incur losses in the range of approximately $16 to $18
million associated with implementing these plans during 2003. See "Management's
Discussion and Analysis of Financial Condition and Results of Operation."

     The Company's website is http://www.bushfurniture.com. The Company makes
available on this website, free of charge, access to its Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy
Statement on Schedule 14A and amendments to those materials filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as
soon as reasonably practicable after the Company electronically submits such
material to the Securities and Exchange Commission (the "Commission"). In
addition, the Commission's website is http://www.sec.gov. The Commission makes
available on this website, free of charge, reports, proxy and information
statements, and other information regarding issuers, such as the Company, that
file electronically with the Commission. Information on the Company's website or
the Commission's website is not part of this document.

                                       3

<PAGE>

(b)  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
     ---------------------------------------------

     The Company operates its business in four reportable segments: (1) Bush
Business Furniture, which concentrates on the business office and the home
office markets with sales to the office superstore and dealer channels; (2) Bush
Furniture, which focuses on home entertainment, home office and other home
furnishings products; (3) Bush Furniture Europe, which sells commercial, home
office and other furnishings in the European market; and (4) Bush Technologies,
which is focused on the cell phone accessories after-market, as well as the
utilization of surface technologies in automotive interiors, cosmetics, sporting
goods and consumer electronics. The Company operates several manufacturing and
warehouse facilities throughout North America and in Germany. See Note 11 to the
Consolidated Financial Statements.

(c)  NARRATIVE DESCRIPTION OF BUSINESS
     ---------------------------------

     The Company's furniture segments are engaged primarily in the design,
manufacture and sale of ready-to-assemble ("RTA") and assembled furniture
products in various price ranges for both business and consumer use. The
Company's furniture product line includes audio/video home entertainment
centers, audio cabinets, television/VCR carts, wall units, bookcases, bedroom
furniture, computer desks and workstations, desks, hutches, armoires and file
cabinets.

     The Company's diverse RTA furniture product line is sold by all three
furniture segments. RTA product is designed for ease of assembly, to ensure that
such products can be readily assembled by following simple, easy to read
diagramed instructions, contained with each RTA product sold. To enhance
customer service, the Company maintains a toll-free number in the United States
to assist consumers with any questions with respect to the assembly of the
Company's products. Assembled furniture sold by Bush Furniture Europe is
designed to be a high quality product that appeals to popular price points.
Assembled commercial office furniture sold by Bush Business Furniture is
designed to meet industry (ANSI/BIFMA) standards.

     The Company's surface technologies segment is engaged in the finishing and
decoration of various substrate materials through painting, the application of
the HydroGraFix process, and the use of surface technologies. The Company,
through its wholly owned subsidiary, The ColorWorks, Inc., holds the master
license to the HydroGraFix film processing technology in the Western Hemisphere,
portions of Central Europe and South Africa. Although the master license expires
in 2006, the Company believes that it will still be able to continue to use the
process in its North Carolina facilities. The Company is exploring the ability
to extend the term of the master license, the success of which no assurance can
be given. The HydroGraFix process permits the decoration of a variety of
geometric shapes, including complex three-dimensional parts. Cell phones, laptop
computers, sporting goods such as firearms and archery equipment, cosmetics and
automotive interior components are examples of major product lines decorated by
Bush Technologies.

Marketing and Distribution

     The Company's furniture products are marketed to a variety of retailers for
sale to both business and consumer end-users. Bush Business Furniture's
customers include office superstores, office


                                       4

<PAGE>

furniture retailers, wholesalers, contract stationers and dealers. Bush
Furniture's customers include national chains, electronic and computer
superstores, discount mass merchants, home furnishings retailers, department
stores, home improvement centers and independent wholesale distributors. Bush
Furniture Europe's customers include buying groups, office furniture retailers,
office supply superstores and home furnishings retailers. The Company's
furniture products are sold both through independent manufacturers'
representatives and directly by the Company's sales personnel. The Company's
furniture products are currently sold to approximately 2,100 customers, and the
Company estimates that its products are carried in approximately 10,000 retail
outlets.

     Bush Technologies offers finishing and decorating processing services to
manufacturers and end-users of various products. Bush Technologies generally
provides such services directly and also sublicenses the HydroGraFix film
processing technology to third parties in varying fields of application and/or
geographic areas. Decorated faceplates from multiple manufactures are sold to
distributors and major retailers.

Sources and Availability of Raw Materials

     The Company purchases the raw materials used in the production of its
furniture at each manufacturing location from a variety of sources on a global
basis. The Company believes that none of the materials required for its
furniture manufacturing operations are proprietary in nature and that an
adequate supply of raw materials is available from multiple sources.

     Bush Technologies acquires various plastic housings for cell phones that
Bush Technologies decorates directly from the OEM manufacturers and their source
suppliers. In many instances Bush Technologies is contractually or otherwise
required to obtain these plastic substrates directly from these manufacturers
and their source suppliers. During fiscal 2002, Bush Technologies had difficulty
in obtaining an adequate substrate supply with respect to certain cell phone
platforms from these manufacturers and to the extent of such shortfall, Bush
Technologies' business was adversely impacted. Bush Technologies is currently
addressing this issue with these manufacturers to ensure that an adequate supply
of raw materials will be available, although no assurance can be given that
there will be ample supply in the future. In addition, in connection with the
HydroGraFix process, Bush Technologies obtains the film and chemicals used in
the process from the company from which the master license to the HydroGraFix
process was obtained, and to date, has not had any difficulty in obtaining an
adequate supply of these raw materials. Except as described above, Bush
Technologies believes that an adequate supply of raw materials used in its
business is available from multiple sources.

Trademarks and Design Patents

     The Company either owns or has applied for various trade names and
trademarks in the United States and abroad, for use with its furniture product
lines. The Company believes that its trade names and trademarks are well
recognized within the furniture industry. The Company also believes that the
loss of any trade name and/or trademark would not have a material adverse effect
on its business operations.

                                       5

<PAGE>

     In addition, the Company owns a variety of patents with respect to surface
technologies and the design and manufacture of certain furniture products. The
Company believes that the loss of any of its patents would not have a material
adverse effect on its business. The Company also relies on trade secrets and
confidentiality to protect the proprietary nature of its technology.

Seasonality

     The nature of the business in which the Company is engaged is not seasonal.

Customers

     For the fiscal year ended December 28, 2002, the Company had four customers
which accounted for approximately 17%, 14%, 13% and 12% of the Company's total
gross sales. No other single customer accounted for more than 10% of the
Company's total gross sales for the fiscal year ended December 28, 2002. The
loss of any substantial customer could have a material impact on the Company's
results of operations.

Backlog

     The Company believes that order backlog at any particular point in time is
not predictive of future sales performance. As is standard in the furniture
industry, a customer may cancel a product order prior to shipment without
penalty. In addition, Bush Technologies customers may generally cancel orders
prior to shipment without penalty. The Company has historically filled orders
within approximately one to six weeks of the receipt of a purchase order. With
respect to Bush Technologies, the timing between receipt of purchase orders and
filling those orders is specific to the customer and product-type.

Government Contracts

     No material portion of the Company's business is subject to renegotiation
of profits or termination of contracts or subcontracts at the election of the
Government.

Competition

     The furniture market is highly competitive, and includes numerous entities,
some of which may have substantially greater financial and marketing resources
than the Company. In addition, the furniture market has experienced increased
competition from importers of furniture products, particularly from the Far
East, and primarily China. The Company believes that the principal competitive
factors in the furniture industry marketplace are price, quality, function,
innovative product design, style, supply chain management and the ability to
offer customers a full product line.

     Competition in the surface technology segment comes not only from other
manufacturers employing derivatives of the Company's production methods, but
also from alternative product design methods that are available to produce
decorated surfaces. The Company believes it provides high quality, cost
effective surface decorating through a wide range of options that include
painting, the application of the HydroGraFix process and the use of other
surface technologies.

Environmental Compliance

     Environmental aspects of the Company's business are regulated primarily by
federal and state laws and by the ordinances of the localities where the
Company's facilities are located. See Item 3,


                                       6

<PAGE>


"Legal Proceedings", for additional information regarding environmental
compliance.

Employees

     As of the 2002 fiscal year end, the Company employed a total of
approximately 3,050 employees. As part of the Company's restructuring that was
announced in the first quarter of 2003, approximately 300 of these employees
will be laid off. Since Rohr-Bush is an active member of the German employers'
association for the wood and plastics processing industry, it is governed by the
collective bargaining agreements for this industry. There are no other
collective bargaining agreements covering any of the Company's employees.

Important Factors and Considerations

     With respect to forward-looking statements of the Company, as more fully
described in Item 7. "Management's Discussion and Analysis of Financial
Condition and Results of Operation," the Company cautions that its
forward-looking statements are further qualified by those factors and
considerations that could cause actual results to differ materially from those
in the forward-looking statements. Certain of such important factors and
considerations are set forth in Exhibit 99.1 to this Annual Report on Form 10-K.
The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise.

(d)  FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS
     --------------------------------------------

     For the 2002 fiscal year ended December 28, 2002, the Company generated
domestic sales of approximately $278,727,000 (or approximately 81.9% of total
sales) and foreign sales of approximately $61,443,000 (or approximately 18.1% of
total sales). Of the total foreign sales, approximately $10,654,000 (or
approximately 3.1% of total sales) represented products exported by the Company
from the United States. For the 2001 fiscal year ended December 29, 2001 and the
2000 fiscal year ended December 30, 2000, the Company generated domestic sales
of approximately $280,689,000 and $384,171,000, respectively (or approximately
81.2% of total sales for the 2001 fiscal year and approximately 85.1% of total
sales for the 2000 fiscal year). Foreign sales for the fiscal years ended
December 29, 2001 and December 30, 2000, respectively, were approximately
$65,117,000 and $67,026,000 (or approximately 18.8% of total sales for the 2001
fiscal year and approximately 14.9% of total sales for the 2000 fiscal year). Of
such total foreign sales, approximately $10,858,000 and $11,170,000 represented
products exported by the Company from the United States for the fiscal years
ended December 29, 2001 and December 30, 2000, respectively (or approximately
3.1% for the 2001 fiscal year and 2.5% for the 2000 fiscal year).


                                       7

<PAGE>

ITEM 2.  PROPERTIES
-------  ----------

     The following table summarizes the Company's principal facilities as of
March 1, 2003. All properties primarily relate to the furniture segments, except
for the Greensboro, NC and Rutherfordton, NC facilities which relate to the
surface technologies segment. As part of the Company's restructuring that was
announced in the first quarter of 2003, the Company plans to close its St. Paul,
Virginia facility and, if possible, sell such property.

<TABLE>
<CAPTION>

                                                                       Approximate
Principal Character and use of                                              Square  Owned/Leased
Property                           Location                                Footage  (Lease Expiration Date)
---------------------------------- ----------------------------- ------------------ ------------------------
<S>                                 <C>                                <C>           <C>
Manufacturing, warehouse and
office facilities                  Erie, PA                              1,115,000  Owned(1)(2)

Manufacturing, warehouse and
office facilities                  Mastholte, Germany                      815,000  Owned

Manufacturing, warehouse and       Allen Street
office facilities                  Jamestown, NY                           450,000  Owned(2)

Manufacturing, warehouse and       Mason Drive
corporate office facilities        Jamestown, NY                           440,000  Owned(2)

Manufacturing and
warehouse facility                 St. Paul, VA                            285,000  Owned

Manufacturing facility             Mantinghausen, Germany                  208,000  Owned

Warehouse facility                 Falconer, NY                            162,000  Leased (December 2005)

Manufacturing and warehouse        Tiffany Street
facility                           Jamestown, NY                           145,000  Owned(2)

Manufacturing facility             Tijuana, Mexico                         135,000  Leased (September 2003)

Manufacturing and warehouse
facilities                         Greensboro, NC                          125,000  Owned(2)

Manufacturing facility             Little Valley, NY                        78,000  Owned

Manufacturing facility             Rutherfordton, NC                        26,000  Owned

Showroom                           High Point, NC                           21,000  Leased (October 2005)

Sales office and
design studio                      Ft. Myers, FL                             4,000  Leased (March 2007)

Showroom                           Chicago, IL                               3,000  Leased (December 2005)
</TABLE>

----------------
(1)  Legal title to the facility is in EIDCO, Inc. in accordance with the terms
     of low interest financing being provided by the Commonwealth of
     Pennsylvania.

                                        8


<PAGE>


(2)  In the first quarter of fiscal year 2003, the Company entered into a
     seventh amendment to its revolving credit facility with JPMorgan Chase Bank
     and other lending institutions. As a result of this amendment, the Company
     has agreed to place mortgages on these properties in favor of JPMorgan
     Chase Bank and the other lending institutions.

ITEM 3.  LEGAL PROCEEDINGS
-------  -----------------

     On June 17, 1996, an approximate five-mile long area in Little Valley, New
York was added to the federal Superfund national priorities list, and with
respect thereto, the Company is not aware of any potentially responsible parties
having been identified as of the date hereof. In December 1996, the Company
responded to a request for information from the United States Environmental
Protection Agency ("EPA"), relating to the Company's Little Valley, New York
property. No assurance can be given that the Company's response will be
sufficient for the EPA, or that the EPA will not pursue further inquiries. The
Company understands that the EPA has provided the New York State Department of
Environmental Conservation ("DEC") with comments on the investigatory work
developed and implemented by the Company with respect to a DEC Order on Consent,
as more fully described below. Previously, in November 1995, the Company was
notified by the DEC of an alleged violation of a certain environmental
regulation concerning the presence of contaminates in the groundwater, including
trichloroethene, beneath the Company's property located in Little Valley, New
York.

     Between November 1995 and March 1999, the Company and the DEC had
discussions concerning the scope of a work plan to conduct a subsurface
investigation at the property. Those discussions resulted in the Company
entering into an Order on Consent with the DEC to perform investigatory work as
set forth in a work plan. As a result of the implementation of the work under
the DEC Order on Consent, a groundwater evaluation report was submitted to the
DEC on July 6, 1999. The Company received comments on the groundwater evaluation
from the DEC on or about September 30, 1999, which included a request for
additional information and investigatory work. During November and December
1999, the Company's consultant implemented that additional investigatory work,
and submitted a revised groundwater evaluation report to the DEC on February 21,
2000. That report was approved by the DEC on March 31, 2000. As a result of that
approval, on July 6, 2000, the Company's consultant submitted a remediation
report which evaluated the potential for unacceptable risk to human health or
the environment, and evaluated remedial alternatives. The report included a
recommended course of action, with supporting rationale. The Company is awaiting
the DEC's response.

     By letter dated July 7, 2000, the EPA requested access to the Company's
property in Little Valley to implement additional environmental sampling. The
Company, the EPA and the DEC representatives discussed this request for access
and related technical aspects. By letter dated August 23, 2000, the Company
indicated to the EPA that it would not refuse access for the EPA or its
authorized representatives or contractors to implement the investigatory work,
and requested a number of tasks be completed prior to and after entry. The EPA
mobilized in mid-November 2000, and implemented the work during various times
through early January 2001. The Company also


                                        9

<PAGE>



took additional environmental samples at this time. Except for one subsequent
site walk over by the EPA, the Company has not received any further information
or requests from the EPA with respect to its sampling or otherwise.

     By letter dated February 24, 2003, the EPA has requested that the Company
enter into a "Tolling Agreement". EPA contends that it has a cause of action
against the Company for the recovery of response costs incurred by EPA in
connection with or related to the Little Valley Superfund Site ("the Site"). On
March 13, 2003, the Company executed a Tolling Agreement with EPA and submitted
the Agreement to EPA. Although no assurance can be given, the Company believes
that its financial statements will not be materially adversely affected by the
foregoing.

     The Company has also become aware of the possible presence of certain
levels of contaminates on the Greensboro, North Carolina property owned by The
ColorWorks, Inc., a wholly owned subsidiary of the Company. The Company has
procured a $20,000,000 environmental insurance policy relating thereto. The
Company is responsible for certain deductibles under the insurance policy and,
in the unlikely event any such environmental costs are not covered by insurance,
the Company may be responsible for certain costs. However, based on an initial
assessment of the situation, the Company believes, although no assurance can be
given, that the Company's financial statements will not be materially adversely
affected by the foregoing.

     As of December 28, 2002, the Company is a party to various other legal
proceedings arising in the ordinary course of business. The Company believes
that these pending actions would not materially adversely affect the Company's
financial statements.

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

     No matters were submitted to a vote of the stockholders of the Company
during the fourth quarter of the fiscal year ended December 28, 2002.

                                       10

<PAGE>

                                     PART II
                                     -------

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
-------  ---------------------------------------------------------------------

     (a) Market Information. The Company's Class A Common Stock is traded on the
         -------------------
New York Stock Exchange ("NYSE"). The Company's Class B Common Stock is not
publicly traded. The ability of the Company to continue to have its Class A
Common Stock included for trading on the NYSE is dependent upon the Company's
ability to satisfy the continued listing requirements of the NYSE; including
having a market capitalization of $15 million and/or a per share price of at
least $1.00 per share. No assurance can be given that the continued listing
requirements will be satisfied and that the Company's Class A Common Stock will
continue to be traded on the NYSE.

     The following table sets forth the high and low sales prices of the
Company's Class A Common Stock, as reported on the NYSE for the periods
indicated:

Quarter                                        High               Low
-------                                        ----               ---

January 1, 2001 - March 31, 2001              $15.30            $11.44
April 1, 2001 - June 30, 2001                 $16.05            $12.30
July 1, 2001 - September 30, 2001             $13.25             $8.10
October 1, 2001 - December 31, 2001           $12.05             $8.10

January 1, 2002 - March 31, 2002              $13.00            $10.55
April 1, 2002 - June 30, 2002                 $13.90            $10.00
July 1, 2002 - September 30, 2002             $12.68             $7.10
October 1, 2002 - December 31, 2002            $8.10             $3.85


     (b) Holders. As of December 28, 2002, the number of holders of record of
         --------
the Company's Class A Common Stock was approximately 400. The Company believes
that there are approximately an additional 1,100 holders who own shares of the
Company's Class A Common Stock in street name. As of the same date, there were
approximately 17 holders of record of the Company's Class B Common Stock.

     (c) Dividends. The Company has suspended the payment of all cash dividends
         ----------
on its Class A and Class B Common Stock effective as of the first quarter of
2003 to conserve cash, fund the restructuring initiative that was announced in
the first quarter of fiscal 2003 and to comply with the seventh amendment to the
Company's revolving credit facility, dated as of February 28, 2003, which
prohibits the payment of cash dividends by the Company. The Company had
previously instituted a quarterly cash dividend for holders of Class A and Class
B Common Stock during the fourth quarter of 1992. Dividends had been declared
and paid for each succeeding quarter, and the Company declared cash dividends of
$0.05 per share in each quarter of 2001 and 2002.

     The Company's Certificate of Incorporation, as amended, also provides that
any dividends paid on Class A Common Stock must be at least equal to the
dividends paid on the Company's Class B Common Stock on a per share basis.
Moreover, no dividend may be paid to Class B stockholders without first being
paid to Class A stockholders.

                                       11

<PAGE>



ITEM 6.  SELECTED FINANCIAL DATA
-------  -----------------------

     The following selected financial data of the Company for the 1998 through
2002 fiscal years has been derived from the Consolidated Financial Statements of
the Company. This selected financial data should be read in conjunction with the
Consolidated Financial Statements and notes thereto included elsewhere herein.

<TABLE>
<CAPTION>

                                                             (In Thousands, except share and per share data)
                                               -------------------------------------------------------------------------
                                                2002             2001            2000             1999            1998
                                                ----             ----            ----             ----            ----
<S>                                            <C>              <C>             <C>               <C>           <C>
Earnings Data
-------------

Net Sales..................................    $340,170         $345,806        $451,197         $441,706        $413,527
Earnings Before Income Taxes and
 Cumulative Effect of Accounting Change....      $2,254           $1,694         $37,309          $11,856         $18,361

Earnings Before Cumulative Effect of
 Accounting Change.........................        $940             $257         $22,777           $5,762         $11,482

Cumulative Effect of Accounting Change.....     ($2,398)              $0              $0               $0              $0
Net (Loss) Earnings........................     ($1,458)            $257         $22,777           $5,762         $11,482

Basic (Loss) Earnings
Per Share
 Before Cumulative Effect
  of Accounting Change.....................       $0.07            $0.02           $1.66            $0.42           $0.83
 Cumulative Effect
  of Accounting Change.....................      ($0.17)           $0.00           $0.00            $0.00           $0.00
                                              --------         --------         -------         --------        --------
 Net (Loss) Earnings.......................      ($0.10)           $0.02           $1.66            $0.42           $0.83

Diluted (Loss) Earnings
Per Share
 Before Cumulative Effect
  of Accounting Change.....................       $0.07            $0.02           $1.60            $0.40           $0.78
 Cumulative Effect
  of Accounting Change.....................      ($0.17)           $0.00           $0.00            $0.00           $0.00
                                              --------         --------        --------         --------        --------
 Net (Loss) Earnings.......................      ($0.10)           $0.02           $1.60            $0.40           $0.78

Number of Weighted Average Class A
 and Class B Shares Outstanding
 Basic.....................................  13,820,153       13,720,085      13,680,629       13,878,060      13,824,331
 Diluted...................................  13,914,384       14,106,573      14,209,311       14,412,660      14,747,523
</TABLE>

                                       12

<PAGE>

<TABLE>
<CAPTION>

                                                             (In Thousands, except share and per share data)
                                               -------------------------------------------------------------------------
                                               2002             2001            2000             1999            1998
                                               ----             ----            ----             ----            ----
<S>                                            <C>              <C>             <C>               <C>           <C>
Balance Sheet Data
-------------------
Working Capital........................        $34,801          $43,523         $56,235          $40,456         $40,046
Total Assets...........................       $310,105         $321,177        $366,551         $329,581        $329,130
Long-term Debt.........................       $100,223         $121,118        $140,376         $124,765        $121,054
Stockholders' Equity...................       $136,085         $139,973        $141,710         $124,579        $123,619
</TABLE>





                                       13

<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
------  -----------------------------------------------------------------------
        OF OPERATION
        ------------


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


OVERVIEW

     The Company's results of operations for fiscal 2002 have been adversely
affected by the continuing economic slowdown and the uncertain geopolitical
environment. These effects relate to all segments of the Company's business,
including the Company's domestic and German operations. In addition, the
Company's furniture operations have been negatively impacted by the increased
competition from lower cost imports, particularly from the Far East, and
primarily from China.

     As a consequence, in part, of the continued economic slowdown, the Company
has announced a restructuring of some of its operations to reduce costs and
streamline its operations.

     On February 27, 2003, the Company approved plans to restructure certain of
its operations. In conjunction with such plans the Company will close its St.
Paul, Virginia manufacturing facility and relocate certain operations to other
plants, close three of its retail outlet stores and utilize third party
liquidators to expedite the sale of excess inventory (which will create space in
the Company's Erie, Pennsylvania facility to launch new production strategies),
and terminate production and management level employees in various locations.
The Company expects to incur losses in the range of approximately $16 to $18
million associated with implementing these plans during 2003.

     In addition, the Company has recently amended its revolving credit
facility, as discussed below, to modify some of the financial covenants and
ratios required. Further, the amendment prohibits the Company from paying any
cash dividends on its capital stock and requires the Company, among other
things, to place a mortgage on certain of its real property in favor of its
lenders. The outstanding principal amount of the loan, plus accrued interest, is
due under the revolving credit facility, absent any extension or further
amendment, in June 2004. The Company is exploring

                                       14

<PAGE>

various alternatives with respect to such debt obligation, the ultimate outcome
of which no assurance can be given.

     The Company's net sales declined approximately 1.6% in fiscal year 2002
from the Company's 2001 fiscal year and 24.6% from the Company's 2000 fiscal
year. The Company believes that the following factors will continue to impact
the Company's results of operations and financial condition: any slowdown of
consumer spending in North America and Europe, particularly in superstores; any
stalling of growth in sales of personal computers, which reduces the need for
computer desks and workcenters; inventory reductions by the Company's customers,
particularly at office superstores; competition from imports using alternative
materials, including metal and glass, and competition from imported assembled
furniture; consolidation and/or liquidation of furniture retailers; the
uncertain international political climate; and changing consumer demand and/or
changing technologies resulting in the obsolescence of certain products.

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

     On June 30, 1997, the Company acquired a 51% interest in the Rohr Gruppe, a
German furniture manufacturer, which name was subsequently changed to Rohr-Bush
GmbH & Co. ("Rohr-Bush"). On February 29, 2000, the Company executed a
definitive agreement with certain members of the Rohr family to acquire the
family's approximately 49% remaining interest in Rohr-Bush. This transaction
closed in October 2000.

                                       15

<PAGE>

RESULTS OF OPERATIONS

     The following table shows the approximate percentage of certain items
included in the Consolidated Statements of Earnings relative to net sales for
the fiscal years indicated:
<TABLE>
<CAPTION>

                                                         Percentage of Net Sales
                                                    --------------------------------
                                                    2002         2001         2000
                                                    ----         ----         ----
<S>                                                <C>          <C>        <C>
Net Sales......................................     100.0%       100.0%       100.0%
Cost of Sales..................................      72.8%        73.0%        68.2%
                                                     -----        -----       -----
     Gross Profit..............................      27.2%        27.0%        31.8%

Selling, General and Administrative Expenses...      24.4%        24.0%        21.7%
Gain on Sale of Assets.........................       0.0%         0.0%        (0.8)%
                                                     -----        -----       -----
     Operating Income..........................       2.8%         3.0%        10.9%

Interest Expense...............................       2.1%         2.5%         2.6%
                                                     -----        -----       -----
     Earnings Before Income Taxes and
      Cumulative Effect of Accounting Change...       0.7%         0.5%         8.3%

Income Taxes...................................       0.4%         0.4%         3.3%
                                                     -----        -----       -----
     Earnings Before Cumulative
      Effect of Accounting Change..............       0.3%         0.1%         5.0%

Cumulative Effect of Accounting Change.........      (0.7)%          -            -
                                                     -----        -----       -----
     Net (Loss) Earnings.......................      (0.4)%        0.1%         5.0%
                                                     =====        =====       =====
</TABLE>


     The following paragraphs provide an analysis of the changes in net sales,
selected cost and expense items, and net earnings for fiscal years 2000 through
2002.

RESULTS OF OPERATIONS: FISCAL 2002 COMPARED TO FISCAL 2001


     The Company's net sales for the 2002 fiscal year compared to the 2001
fiscal year decreased $5,636,000, or approximately 1.6%, to $340,170,000. The
sales decrease primarily reflects decreases in Bush Furniture, Bush Technologies
and Bush Furniture Europe, partially offset by an increase in Bush Business
Furniture. The current economic slowdown in both North America and Germany
continues to create a challenging environment in which to grow sales and exerts
a downward pressure on prices. In addition, competition from imports using
alternative materials, including metal and glass, are pressuring the low end of
the product mix at Bush Business Furniture, primarily at the office superstores.
The Company believes imports of RTA furniture are up from approximately 6% in
1999 to approximately 15% of the market today.


     The Company's cost of sales were $247,645,000 in fiscal year 2002 compared
to $252,424,000 in fiscal year 2001, or a decrease of $4,779,000. This decrease
is primarily the result of a $5,226,000 pre-tax, non-cash inventory write-down
that was incurred in the fourth quarter of fiscal year 2001. The cost of sales
as an approximate percentage of net sales decreased by 0.2 percentage points
from 73.0% in 2001 to 72.8% in 2002. Without the $5,226,000 inventory
write-down, the cost of sales as an approximate percentage of net sales was
71.5% in fiscal year 2001. The 1.3 percentage point increase to 72.8% in fiscal
year 2002 primarily reflects the impact of lower gross


                                       16

<PAGE>

margins in the Bush Technologies segment resulting from competitive market
pressures. As a result of such competitive market pressures and lower gross
margins, Bush Technologies incurred a loss before income taxes of $2,850,000 in
fiscal year 2002, as compared to earnings before income taxes of $5,586,000 in
fiscal year 2001. In addition, due to the continued economic softness in Europe,
particularly in Germany, Bush Furniture Europe incurred a loss before income
taxes of $5,316,000 in fiscal year 2002, as compared to a loss before income
taxes of $3,423,000 in fiscal year 2001.

     For fiscal year 2002, selling, general and administrative expenses were
virtually unchanged from fiscal year 2001, decreasing by $58,000. Selling,
general and administrative expenses increased as an approximate percentage of
net sales from 24.0% in 2001 to 24.4% in fiscal year 2002, primarily as a result
of selling, general and administrative expenses not decreasing proportionally as
much as the sales decrease.

     Interest expense decreased to $7,194,000 in fiscal year 2002 (or
approximately 2.1% of net sales) from $8,553,000 in fiscal year 2001 (or
approximately 2.5% of net sales). The decrease in interest expense was primarily
due to a reduction in the Company's long-term debt.

     The Company's overall effective federal, state and local tax rate decreased
from 84.8% in fiscal year 2001 to 58.3% in fiscal year 2002. The decrease is
primarily due to a lower overall effective state tax rate (attributable to the
greater impact in 2001 of the Bush Technologies segment income on the state tax
rate) and the reduced impact related to non-deductible goodwill no longer
required to be amortized in 2002 under Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS No.142").

         For fiscal year 2002, the Company generated earnings before cumulative
effect of accounting change of $940,000 (or $.07 basic and diluted earnings per
share), as compared to $257,000 (or $0.02 basic and diluted earnings per share)
for fiscal year 2001. Had the non-amortization provisions of SFAS No.142 been
applied in fiscal year 2001, earnings before cumulative effect of accounting
change would have been $1,364,000 (or $0.10 basic and diluted earnings per
share).

     Pursuant to SFAS No. 142, goodwill is no longer being amortized and must be
periodically tested for impairment. Upon adoption of SFAS No. 142, the Company
concluded that goodwill related to the Bush Furniture Europe segment was
impaired. As a result, effective December 30, 2001 (the first day of fiscal year
2002), the Company has recorded a non-cash charge for goodwill impairment of
$2,398,000 as a cumulative effect of accounting change (or $0.17 basic and
diluted loss per share).

     Net loss for fiscal year 2002 was $1,458,000 (or $0.10 basic and diluted
loss per share), as compared to net earnings of $257,000 (or $0.02 basic and
diluted earnings per share) for fiscal year 2001. Had the non-amortization
provisions of SFAS No.142 been applied in fiscal year 2001, net earnings would
have been $1,364,000 (or $0.10 basic and diluted earnings per share).

                                       17

<PAGE>



RESULTS OF OPERATIONS: FISCAL 2001 COMPARED TO FISCAL 2000

     The Company's net sales for the 2001 fiscal year compared to the 2000
fiscal year decreased $105,391,000, or approximately 23.4%, to $345,806,000. The
sales decrease primarily reflects a decrease in orders from the Company's North
American furniture customers due to the economic slowdown. Sales were also
negatively impacted by the inventory rationalization programs undertaken at the
office superstores in the second quarter of fiscal year 2001 and by customer
delays in new product launches at Bush Technologies.

     The Company's cost of sales were $252,424,000 in fiscal year 2001 compared
to $307,686,000 in fiscal year 2000, or a decrease of $55,262,000. This decrease
primarily reflects the lower sales levels as compared to the prior year. The
cost of sales as an approximate percentage of net sales increased by 4.8
percentage points from 68.2% in 2000 to 73.0% in 2001. The increase in cost of
sales as a percentage of net sales primarily reflects lower absorption of
manufacturing overhead as a result of decreased production volumes, both as the
result of the decreased sales levels and the reduction of finished goods
inventory levels, and as a result of a $5,226,000 pre-tax, non-cash inventory
write-down in the fourth quarter of fiscal year 2001.

     For fiscal year 2001, selling, general and administrative expenses
decreased by $14,795,000 compared to fiscal year 2000. The decrease in selling,
general and administrative expenses was primarily the result of a reduction in
various selling expenses such as commissions, marketing and promotional
incentives. These reductions were a result of both the Company's lower sales
volumes and as a result of a change in sales terms with two customers. This
change, in which various marketing and promotional incentives were replaced with
a reduction in sales prices to the two customers, had no impact on net earnings,
but resulted in a decrease in selling, general and administrative expenses and a
corresponding decrease in net sales. Since this change occurred in mid fiscal
year 2000, it impacted the second half of such year and all of fiscal year 2001.
Selling, general and administrative expenses increased as an approximate
percentage of net sales from 21.7% in fiscal year 2000 to 24.0% in fiscal year
2001.

     Interest expense decreased to $8,553,000 in fiscal year 2001 (or
approximately 2.5% of net sales) from $11,890,000 in fiscal year 2000 (or
approximately 2.6% of net sales). The decrease in interest expense was primarily
due to decreases in the interest rates paid on the Company's revolving credit
facility.

     The Company's overall effective federal, state and local tax rate increased
from 39.0% in fiscal year 2000 to 84.8% in fiscal year 2001. The increase was
primarily due to the effects of permanent non-deductible items (such as certain
travel and entertainment expenses and the amortization of certain goodwill
costs), fixed taxes (such as Delaware franchise taxes) and a change in the mix
of the allocation of income for state income tax purposes. The impact of these
items was exaggerated by the lower level of earnings before income taxes upon
which the effective tax rates are computed.

         For fiscal year 2001, the Company generated net earnings after taxes of
$257,000 (or $0.02 basic earnings per share and $0.02 diluted earnings per
share), as compared to $22,777,000 (or $1.66 basic earnings per share and $1.60
diluted earnings per share) for fiscal year 2000.

                                       18

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

     Working capital at fiscal year end 2002 decreased $8,722,000 over fiscal
year end 2001, primarily as a result of an increase in accounts payable. The
increase in accounts payables reflects actions taken to reduce working capital
requirements. Total assets at fiscal year end 2002 decreased $11,072,000 over
fiscal year end 2001, primarily as a result of a decrease in property, plant and
equipment which reflects capital expenditures that are less than the level of
depreciation. Total liabilities at fiscal year end 2002 decreased by $7,184,000,
as compared to fiscal year end 2001. Such decrease in total liabilities was due
primarily to a decrease in long-term debt, partially offset by an increase in
accounts payable and deferred income taxes.

     Net cash provided by operating activities for the fiscal year ended
December 28, 2002 was $34,448,000, resulting primarily from an increase in
current liabilities, mostly accounts payable, and depreciation, amortization
(including the accounting charge for goodwill), and deferred taxes, partially
offset by the net loss.

     During fiscal year 2002, the Company expended $5,533,000 on capital
expenditures versus $9,444,000 in the previous fiscal year. Capital expenditures
for 2003 are currently forecasted to be approximately $5 to $7 million. Other
assets increased $1,137,000 in fiscal year 2002, primarily as a result of an
increase in the cash surrender value of insurance policies and costs associated
with amending the Company's credit agreement. In fiscal year 2002, the Company
received $621,000 from the exercise of stock options by employees, received a
tax benefit of $103,000 from the exercise of such options and paid four
quarterly dividends totaling $2,766,000 to its stockholders. The cash dividend
for each of the quarters in 2002 was $0.05 per share. Cash flows provided by
operating activities in excess of other cash flow requirements were primarily
used to pay down $25,045,000 principal amount of long-term debt.

     The Company has a revolving credit facility, initially dated as of June 26,
1997 and as amended, with JPMorgan Chase Bank and other lending institutions. In
the first quarter of fiscal year 2003 the Company entered into a seventh
amendment, dated as of February 28, 2003. This amendment, among other things,
modified certain covenants under the credit facility, evidenced the lenders'
consent to certain transactions, including the restructuring to be effectuated
by the Company in the first quarter of 2003, granted a security interest in the
Company's real property in Jamestown, NY, Erie, PA and Greensboro, NC, prohibits
the payment of cash dividends by the Company and modified the amount of money
the Company can borrow under the credit facility from an aggregate $173,000,000
to an aggregate $163,000,000.

     The credit facility provides for revolving credit loans, swing line loans
and multi-currency loans, within the parameters described below. The loan is due
June 30, 2004 with a balloon payment of the then remaining principal and any
accrued interest. The Company has classified all of the line of credit as
long-term debt, as there are no required principal payments due within the next
12 months. At the Company's option, borrowings may be effectuated, subject to
certain conditions, on a NYBOR rate, an eurocurrency rate for dollars, an
applicable eurocurrency rate for certain foreign currencies, a money market
rate, or an alternative base rate. Eurocurrency loans bear interest at the then
current applicable LIBOR rate, plus an applicable margin, which varies from 2.0%
to 3.5%,

                                       19

<PAGE>


depending upon the Company's ability to satisfy certain quarterly financial
tests. Alternative base rate loans generally bear interest at the prime rate,
plus an applicable margin, which varies from 0.0% to 0.75% depending upon the
Company's ability to satisfy certain quarterly financial tests. In addition, the
credit agreement permits the Company to request the issuance of up to a maximum
of $20,000,000 in letters of credit, which issuance will be deemed part of the
$163,000,000 maximum amount of borrowing permitted under the credit facility.

     The line of credit agreement, as amended, provides for achieving certain
consolidated cash flow coverage and leverage ratios, prescribes minimum
consolidated net worth requirements, limits capital expenditures and new leases
and provides for certain other affirmative and restrictive covenants. The
Company is in compliance with all of these requirements.

     Inflation affects the Company's business principally in the form of cost
increases from materials and wages. Historically, the Company has generally been
able to offset these cost increases by improved productivity, cost and waste
reduction, more effective purchasing practices, and to a lesser extent, price
increases.

     As of December 28, 2002, the following table illustrates the Company's
contractual obligations due in the future:

<TABLE>
<CAPTION>

                                                                          Payments due by period $(000)
                                                     --------------------------------------------------------------
Contractual Obligations                                        Less than           1-3          3-5       More than
                                                     Total        1 year         years        years         5 years
                                                     -----        ------         -----        -----         -------
<S>                                              <C>              <C>           <C>            <C>          <C>
Long-Term Debt Obligations.....................   $100,685          $462       $97,505         $860          $1,858
Operating Lease Obligations....................      6,890         2,985         3,427          464              14
Other Long-Term Liabilities Reflected on
   the Registrant's Balance Sheet under GAAP...      7,530           250           500          500           6,280
                                                  --------        ------      --------       ------          ------
Total..........................................   $115,105        $3,697      $101,432       $1,824          $8,152
                                                  ========        ======      ========       ======          ======
</TABLE>

CRITICAL ACCOUNTING POLICIES

     The policies identified below are important to the Company's business
operations and the understanding of its results of operations. The listing is
not intended to be a comprehensive list of all of the Company's accounting
policies. In many cases, the accounting treatment of a particular transaction is
specifically dictated by accounting principles generally accepted in the United
States, with no need for management's judgment in their application. In other
cases, management is required to exercise judgment in the application of
accounting principles with respect to particular transactions. For a summary of
all of the Company's accounting policies, including the accounting policies
discussed below, see Note 1 to the Notes to Consolidated Financial Statements.
The preparation of this Annual Report on Form 10-K requires the Company to make
estimates and assumptions that affect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenue and


                                       20

<PAGE>


expenses during the reporting period. There can be no assurance that actual
results will not differ from those estimates.

Revenue Recognition and Accounts Receivable

     Revenues are recognized when products are shipped. Provisions for
discounts, rebates to customers, returns and other adjustments are provided for
in the same period that related sales are recorded. The recording of these
provisions requires the use of estimates, and future periods will be impacted if
the actual costs differ from the estimated amounts. For all sales, the Company
uses purchase orders from the customer, whether written, oral or electronically
transmitted, as evidence of the transaction. Collateral is generally not
requested from customers.

     The Company performs periodic credit evaluations of its customers. The
Company continuously monitors collections and payments from its customers and
maintains a provision for estimated credit losses based upon the Company's
historical experience and any specific customer collection issues that it has
identified. While such credit losses have historically been within the Company's
expectations and the provisions established, the Company cannot guarantee that
it will continue to experience the same credit loss rates that it has
experienced in the past. In addition, in part, to limit credit risk on occasion
and to accelerate collections of certain outstanding accounts receivables, the
Company has sold certain accounts receivables, without recourse to it in the
event of non-payment, to certain banks. The Company's accounts receivable
balance was $16.5 million, net of allowance for doubtful accounts of $0.94
million as of December 28, 2002 and $16.9 million, net of allowance for doubtful
accounts of $0.98 as of December 29, 2001.

Inventories

     Inventories, consisting of raw materials, work-in-progress and finished
goods, are stated at the lower of cost or market as determined by the first-in,
first-out method. Inventories that the Company estimates as either obsolete or
unmarketable are written down based upon the difference between the cost of the
inventory and its estimated market value. The Company's estimates as to such
value are based, in part, on projected future demand and market conditions. If
these estimates or related projections change in the future, additional
write-downs may be required. Obsolete and slow moving inventory reserves were
approximately $4,809,000 and $7,917,000 at December 28, 2002 and December 29,
2001, respectively.

Property, Plant and Equipment

     Property, plant and equipment is carried at cost. Depreciation is computed
by the straight-line method over the estimated useful lives of the assets, which
are as follows: buildings and improvements 10-50 years; machinery and equipment
3-20 years; transportation equipment 3-7 years; office equipment 3-10 years; and
leasehold improvements 3-10 years or the lease term, if less. Construction in
progress is recorded in property, plant and equipment and amounted to
$5,582,000 and $7,500,000 at December 28, 2002 and December 29, 2001,
respectively. Interest associated with construction indebtedness is capitalized.
Interest amounting to approximately $283,000, $971,000, and $1,984,000
associated with construction in progress was capitalized for 2002, 2001 and
2000, respectively.

                                       21

<PAGE>


     The cost of repairs and maintenance is charged to expense as incurred.
Renewals and betterments are capitalized. Upon retirement or sale of an asset,
its cost and related accumulated depreciation or amortization are removed from
the accounts and any gain or loss is recorded in income or expense. The Company
continually reviews property, plant and equipment to determine that the carrying
values have not been impaired by estimating the future undiscounted cash flows
expected to result from the use of the property, plant and equipment.

Other Assets/Goodwill

     Other assets consist primarily of goodwill, cash value of life
insurance policies, advances on split dollar insurance arrangements, an
investment at cost, and other intangible assets. The Company tests long-lived
assets, exclusive of goodwill, for recoverability whenever events or changes in
circumstances indicate that its carrying amount may not be recoverable. An
impairment loss shall be recognized if the carrying amount of long-lived assets,
to be held and used is not recoverable and exceeds its fair value based on the
sum of the undiscounted cash flows expected to result from the use and eventual
disposition of the asset. In the Company's review of such assets, it is required
to make certain estimates and projections. If these estimates or related
projections change in the future, the Company may be required to record
impairment charges for these assets.

     At least annually and whenever events and changes in circumstances warrant,
the Company compares the fair value of the reporting unit to its carrying amount
to determine if there is potential impairment of goodwill. If the fair value of
the reporting unit is less than its carrying value, an impairment loss is
recorded to the extent that the fair value of the goodwill within the reporting
unit is less than their carrying value. Fair values for goodwill are determined
based on discounted cash flows, market multiples or appraised values as
appropriate. The conditions that would trigger an impairment assessment of
goodwill include a significant negative trend in the Company's operating results
or cash flows, a decrease in demand for the Company's products, a change in the
competitive environment and other industry and economic factors.

Accounting for Income Taxes

     As part of the process of preparing the consolidated financial statements,
the Company is required to estimate its income taxes in each of the
jurisdictions in which it operates. This process involves the Company estimating
its actual current tax exposure together with assessing temporary differences
resulting from differing treatment of items, for tax and book purposes. These
differences result in deferred tax assets and liabilities, which are included
within the Company's consolidated balance sheet. The Company must then assess
the likelihood that its deferred tax assets will be recovered from future
taxable income and to the extent the Company believes that recovery is not
likely, it must establish a valuation allowance. To the extent the Company
establishes a valuation allowance or increases this allowance in a period, the
Company must include an expense within the tax provision in the statement of
operations. Significant management judgment is required in determining the
provision for income taxes, the deferred tax assets and liabilities and any
valuation allowance recorded against the net deferred tax assets. In the event
that actual results differ from the Company's estimates or it adjusts these
estimates in future periods, the Company may need to establish an additional
valuation allowance which could impact its financial position and results of
operations.


                                       22

<PAGE>


Recent Accounting Pronouncements

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

     In June 2002, the FASB issued Statement of Financial Accounting Standards
No. 146, "Accounting for Costs Associated with Exit or Disposal of Activities"
(SFAS No. 146). SFAS No. 146 revises the accounting for exit and disposal
activities under Emerging Issues Task Force Issue 94-3, "Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity."
The provisions of SFAS No. 146 are effective prospectively for exit or disposal
activities initiated after December 31, 2002.

     In 2002, the Company adopted Statement of Financial Accounting Standards
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure".
This standard provides alternative methods of transition for a voluntary change
to the fair value based method of accounting for stock-based employee
compensation. Additionally, the standard also requires prominent disclosures in
the Company's financial statements about the method of accounting used for
stock-based employee compensation, and the effect of the method used when
reporting financial results.

     The Company accounts for stock-based compensation in accordance with
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). As permitted in that standard, the Company has
elected to continue to follow the recognition provisions of Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees", and related interpretations in accounting for employee stock-based
compensation. No employee stock-based compensation expense was recorded for
2002, 2001 and 2000.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------- ----------------------------------------------------------

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

     The Company's exposure to market risk for changes in interest rates relates
primarily to the Company's revolving credit facility due to its variable
pricing. Based on the outstanding balance of long-term debt at fiscal year end
2002, a one percentage point change in interest rates would result in annual
interest expense fluctuating approximately $1.0 million.




                                       23

<PAGE>


     The Company's exposure to foreign currency exchange risk relates primarily
to the cost of imported supplies and the cost/profitability of exported items,
the income statement and cash flow impact of converting foreign currency
denominated profit/loss into U.S. dollars and the balance sheet impact of
converting foreign currency denominated assets and liabilities into U.S.
dollars. The Company believes the primary impact on the Company of a reasonably
possible change of 10% in any foreign currency exchange rate would be an
increase or decrease of approximately $5.0 million in the US dollar equivalent
in foreign currency denominated debt.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
------- -------------------------------------------

     The financial information required by Item 8 is included elsewhere in this
Report (see Part IV, Item 15).

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
------- ---------------------------------------------------------------
        FINANCIAL DISCLOSURE
        --------------------

     None.

                                       24

<PAGE>

                                    PART III
                                    --------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------  --------------------------------------------------
     The information required by Item 10 is hereby incorporated by reference
from the Registrant's definitive Proxy Statement for the Annual Meeting
scheduled to be held on May 15, 2003, under the caption, "Election of
Directors", to be filed by the Registrant.

ITEM 11. EXECUTIVE COMPENSATION
-------  ----------------------
     The information required by Item 11 is hereby incorporated by reference
from the Registrant's definitive Proxy Statement for the Annual Meeting
scheduled to be held on May 15, 2003, under the caption, "Executive
Compensation", to be filed by the Registrant.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
-------  ------------------------------------------------------------------
         RELATED STOCKHOLDER MATTERS
         ---------------------------
     The information required by Item 12 is hereby incorporated by reference
from the Registrant's definitive Proxy Statement for the Annual Meeting
scheduled to be held on May 15, 2003, under the caption, "Security Ownership of
Management and Principal Stockholders", to be filed by the Registrant.

     The following table sets forth information about the Company's Class A
Common Stock that may be issued upon the exercise of options, warrants and
rights under all of the Company's equity compensation plans as of December 28,
2002, including the 1995 Stock Plan and the 1999 Stock Plan.
<TABLE>
<CAPTION>

                                                                                               Number of securities
                                             Number of securities                              available for future
                                                to be issued upon         Weighted-average    issuance under equity
                                                      exercise of        exercise price of       compensation plans
                                             outstanding options,     outstanding options,    (excluding securities
                                                     warrants and             warrants and             reflected in
Plan Category                                              rights                   rights              column (a))
-------------                                --------------------     --------------------    ---------------------
<S>                                          <C>                         <C>                           <C>
                                                               (a)                      (b)                     (c)
Equity compensation plans approved by
  stockholders.................................         1,390,337                   $10.04                  568,465
Equity compensation plans not approved
  by stockholders (1)..........................                 0                      N/A                  166,961
                                                        ---------                                           -------
Total..........................................         1,390,337                                           735,426

</TABLE>

                                       25

<PAGE>

(1) The 1999 Stock Plan provides for the issuance of up to 350,000 shares of
    Class A Common Stock to employees, agents, independent contractors,
    consultants, directors and executive officers of the Company and its
    affiliates, except that no shares can be issued to the Company's executive
    officers and directors unless the 1999 Stock Plan is approved by the
    Company's stockholders. The Board of Directors, or a committee appointed by
    the Board of Directors, has the power to select the recipients of awards
    and to establish the terms of the awards.


ITEM 13. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
-------  ---------------------------------------------

     The information required by Item 13 is hereby incorporated by reference
from the Registrant's definitive Proxy Statement for the Annual Meeting
scheduled to be held on May 15, 2003, under the caption "Certain Transactions",
to be filed by the Registrant.

ITEM 14. CONTROLS AND PROCEDURES
-------- -----------------------

     The Company's Chief Executive Officer and Chief Financial Officer, after
evaluating the effectiveness of the Company's "disclosure controls and
procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c)
and 15-d-14(c)) as of a date (the "Evaluation Date") within 90 days before the
filing date of this annual report, have concluded that as of the Evaluation
Date, the Company's disclosure controls and procedures were adequate and
designed to ensure that material information relating to the Company and its
consolidated subsidiaries is recorded, processed, summarized and reported in a
timely manner. It should be noted that the design of any system of controls is
based in part upon certain assumptions, and there can be no assurance that any
design will succeed in achieving its stated goals.

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

                                       26

<PAGE>

                                     PART IV
                                     -------

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
-------  ----------------------------------------------------------------

(A)  The consolidated balance sheets as of December 28, 2002 and December 29,
     2001 and the related consolidated statements of operations, stockholders'
     equity, cash flows and financial statement schedule for each of the three
     years in the period ended December 28, 2002 are filed as part of this
     report:

(1)  Financial Statements                                         Page
     --------------------                                         ----

Independent Auditors' Report..................................     F-1
Consolidated Balance Sheets...................................     F-2
Consolidated Statements of Operations.........................     F-3
Consolidated Statements of Stockholders' Equity...............     F-4
Consolidated Statements of Cash Flows.........................     F-5
Notes to Consolidated Financial Statements....................     F-6

(2)  Consolidated Financial Statement Schedules
     ------------------------------------------

Schedule II - Valuation and Qualifying Accounts...............     S-1

     All other schedules are omitted because they are not applicable, or not
required because the required information is included in the Consolidated
Financial Statements or notes thereto.

(3)  Exhibits
     --------

3.1   Certificate of Incorporation. (1)

3.2   Amendment to Certificate of Incorporation, dated June 30, 1994.(6)

3.3   Amendment to Certificate of Incorporation, dated July 9, 1993.(4)

3.4   By-Laws, as amended.(1)(14)(17)

10.1  The Registrant's 1985 Stock Plan, as amended.(4)

10.2  The Registrant's 1985 Incentive Stock Option Plan, as amended.(4)

10.3  Lease Agreement between County of Chautauqua Industrial Development Agency
      and the Registrant dated January 1, 1990.(2)


                                       27

<PAGE>


10.4  Employment Agreement between the Registrant and Paul S. Bush dated
      July 29, 1992, as amended.(3)

10.5  Employment Agreement between the Registrant and Robert L. Ayres dated
      July 29, 1992, as amended.(3)

10.6  Employment Agreement between the Registrant and Lewis H. Aronson dated
      July 29, 1992, as amended.(3)

10.7  Amendment, dated as of February 26, 2000, to Employment Agreement between
      the Registrant and Lewis H. Aronson dated July 29, 1992, as amended.(17)

10.8  Employment Agreement between the Registrant and Gregory P. Bush dated
      October 10, 2000.(17)

10.9  Employment Agreement between the Registrant and Larry C. Genareo dated
      October 16, 2000.(17)

10.10 Employment Agreement between the Registrant and Neil A. Frederick dated
      October 16, 2000.(17)

10.11 Employment Agreement between the Registrant and David E. White dated
      March 21, 2002.

10.12 Split Dollar Insurance Agreements between the Registrant and Paul S. Bush
      dated November 1, 1990 and March 15, 1991 and related Collateral
      Assignment Agreements of same dates.(3)

10.13 Split Dollar Insurance Agreement between the Registrant and Robert L.
      Ayres dated December 19, 1991 and related Collateral Assignment Agreement.
      (3)

10.14 Performance Bonus Plan.(5)

10.15 The Registrant's 1995 Stock Plan.(7)

10.16 The Registrant's 1999 Stock Plan.(12)

10.17 Stock Redemption Agreement between the Registrant and Paul S. Bush dated
      July 10, 1997.(8)

10.18 Credit and Guarantee Agreement, dated as of June 26, 1997, by and among
      the Registrant, as Borrower, the Lenders party thereto from time to time,
      The Chase Manhattan Bank as administrative agent and Mellon Bank, N.A., as
      co-agent.(8)



                                       28

<PAGE>


10.19 First Amendment, dated as of August 17, 1998, to the Credit and Guarantee
      Agreement dated as of June 26, 1997.(9)

10.20 Second Amendment, dated as of December 31, 1998, to the Credit and
      Guarantee Agreement dated as of June 26, 1997.(10)

10.21 Third Amendment, dated as of March 31, 1999, to the Credit and Guarantee
      Agreement dated as of June 26, 1997.(11)

10.22 Fourth Amendment, dated as of February 29, 2000, to the Credit and
      Guarantee Agreement dated as of June 26, 1997.(13)

10.23 Fifth Amendment, dated as of May 2, 2000, to the Credit and Guarantee
      Agreement dated as of June 26, 1997.(15)

10.24 Sixth Amendment, dated as of December 28, 2001, to the Credit and
      Guarantee Agreement dated as of June 26, 1997.(16)

10.25 Seventh Amendment dated as of February 28, 2003, to the Credit and
      Guarantee Agreement dated as of June 26, 1997.(18)

21.1  List of Subsidiaries of Registrant.

23.1  Consent of Deloitte & Touche LLP, independent auditors.

99.1  Statement regarding Forward Looking Information.
-------------

(1)  Incorporated by reference to the Registrant's Registration Statement on
     Form S-1 dated March 14, 1985 (File No. 2-96428).
(2)  Incorporated by reference to Registrant's Annual Report on Form 10-K for
     the fiscal year ended December 29, 1989.
(3)  Incorporated by reference to the Registrant's Annual Report on Form 10-K
     for the fiscal year ended January 2, 1993.
(4)  Incorporated by reference to the Registrant's Annual Report on Form 10-K
     for the fiscal year ended January 1, 1994.
(5)  Incorporated by reference to the Registrant's definitive Proxy Statement,
     dated May 16, 1994.
(6)  Incorporated by reference to the Registrant's Annual Report on Form 10-K
     for the fiscal year ended December 31, 1994.
(7)  Incorporated by reference to the Registrant's definitive Proxy Statement,
     dated March 29, 1995.
(8)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
     filed September 10, 1997.


                                       29

<PAGE>



(9)  Incorporated by reference to the Registrant's Current Report on Form 8-K,
     filed September 14, 1998.
(10) Incorporated by reference to the Registrant's Current Report on Form 8-K,
     filed March 10, 1999.
(11) Incorporated by reference to the Registrant's Current Report on Form 8-K,
     filed June 15, 1999.
(12) Incorporated by reference to the Registrant's Registration Statement on
     Form S-8 dated November 3, 1999 (File No. 333-90255).
(13) Incorporated by reference to the Registrant's Current Report on Form 8-K,
     filed March 17, 2000.
(14) Incorporated by reference to the Registrant's Annual Report on Form 10-K
     for the fiscal year ended January 1, 2000.
(15) Incorporated by reference to the Registrant's Current Report on Form 8-K,
     filed June 5, 2000.
(16) Incorporated by reference to the Registrant's Current Report on Form 8-K,
     filed March 14, 2002.
(17) Incorporated by reference to the Registrant's Annual Report on Form 10-K
     for the fiscal year ended December 29, 2001.
(18) Incorporated by reference to the Registrants Current Report on Form 8-K,
     filed March 19, 2003.

(B)  Reports on Form 8-K.

     During the first quarter of fiscal year 2003, an 8-K was filed on
     March 19, 2003 regarding an amendment to the Company's existing credit
     facility with JPMorgan Chase Bank and other lending institutions.

                                       30

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                               REGISTRANT:

                                               BUSH INDUSTRIES, INC.


March 26, 2003                                 By /s/Paul S. Bush
                                                  --------------------------
                                                  Paul S. Bush,
                                                  Chief Executive Officer


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>


       SIGNATURE                    TITLE                                        DATE
       ---------                    -----                                        ----
<S>                              <C>                                             <C>

/s/Paul S. Bush
-----------------------
Paul S. Bush                        Chief Executive Officer and
                                    Chairman of the Board
                                    of Directors                             March 26, 2003

/s/Robert L. Ayres
-----------------------
Robert L. Ayres                     President, Chief Operating Officer,
                                    Chief Financial Officer
                                    and Director                             March 26, 2003

/s/Lewis H. Aronson
-----------------------
Lewis H. Aronson                    Corporate Executive Vice President
                                    and Director                             March 26, 2003

/s/Douglas S. Bush
-----------------------
Douglas S. Bush                     Vice President of Merchandising
                                    and Director                             March 26, 2003
</TABLE>

                                       31

<PAGE>


<TABLE>
<CAPTION>


       SIGNATURE                    TITLE                                        DATE
       ---------                    -----                                        ----
<S>                              <C>                                             <C>

/s/Gregory P. Bush
---------------------
Gregory P. Bush                     President - Bush Furniture
                                    and Director                             March 26, 2003

/s/Neil A. Frederick
-----------------------
Neil A. Frederick                   Treasurer, Corporate Vice President
                                    and Director                             March 26, 2003

/s/Donald F. Hauck
-----------------------
Donald F. Hauck                     Senior Vice President
                                    and Director                             March 26, 2003

/s/Paul A. Benke
-----------------------
Paul A. Benke                       Director                                 March 26, 2003

/s/Jerald D. Bidlack
-----------------------
Jerald D. Bidlack                   Director                                 March 26, 2003

/s/David G. Dawson
-----------------------
David G. Dawson                     Director                                 March 26, 2003

/s/Robert E. Hallagan
-----------------------
Robert E. Hallagan                  Director                                 March 26, 2003

/s/Erland E. Kailbourne
-----------------------
Erland E. Kailbourne                Director                                 March 26, 2003

</TABLE>


                                       32

<PAGE>

                                 CERTIFICATIONS

I, Paul S. Bush, certify that:

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

2.   Based on my knowledge, this annual 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 annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual 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 annual 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 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 annual 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 annual report (the "Evaluation Date"); and

     c)   presented in this annual 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

                                       33

<PAGE>

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether 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: March 26, 2003                By: /s/ Paul S. Bush
      ---------------                   -----------------
                                        (Signature)
                                        Paul S. Bush
                                        Chairman of the Board and
                                        Chief Executive Officer


                                       34

<PAGE>

I, Robert L. Ayres, certify that:

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

2.   Based on my knowledge, this annual 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 annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual 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 annual 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 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 annual 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 annual report (the "Evaluation Date"); and

     c)   presented in this annual 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

                                       35

<PAGE>

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether 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: March 26, 2003                   By:     /s/ Robert L. Ayres
      ---------------                          ----------------------
                                               (Signature)
                                               Robert L. Ayres
                                               President,
                                               Chief Operating Officer and
                                               Chief Financial Officer



                                       36

<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
Bush Industries, Inc.
Jamestown, New York

We have audited the accompanying consolidated balance sheets of Bush Industries,
Inc. and subsidiaries (the "Company") as of December 28, 2002 and December 29,
2001, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the three years in the period ended December
28, 2002. Our audits also included the financial statement schedule listed in
the Index at Item 15 (A) (2). These financial statements and financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and financial statement
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Bush Industries, Inc. and
subsidiaries as of December 28, 2002 and December 29, 2001, and the results of
their operations and their cash flows for each of the three years in the period
ended December 28, 2002, in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, in 2002 the
Company changed its method of accounting for goodwill and other intangible
assets to conform to Statement of Financial Accounting Standards No. 142
"Goodwill and Other Intangible Assets."

Deloitte & Touche, LLP

Buffalo, New York
February 3, 2003
(February 28, 2003 as to Note 14)



                                       F-1

<PAGE>

BUSH INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
DECEMBER 28, 2002 AND DECEMBER 29, 2001 (in thousands)
---------------------------------------------------------------------------------------------------------
ASSETS                                                                       2002            2001
<S>                                                                       <C>            <C>
CURRENT ASSETS:
  Cash and cash equivalents                                                $  2,729       $  1,589
  Accounts receivable (less allowance for doubtful accounts of $938
    on December 28, 2002 and $979 on December 29, 2001)                      16,544         16,872
  Inventories                                                                56,204         55,297
  Prepaid expenses and other current assets                                  10,668         11,491
                                                                           --------       --------
          Total current assets                                               86,145         85,249

PROPERTY, PLANT AND EQUIPMENT, NET                                          196,922        207,334

OTHER ASSETS                                                                 27,038         28,594
                                                                           --------       --------

TOTAL ASSETS                                                               $310,105       $321,177
                                                                           ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                         $ 26,608       $ 17,184
  Other accrued liabilities                                                  24,274         24,095
  Current portion of long-term debt                                             462            447
                                                                           --------       --------
           Total current liabilities                                         51,344         41,726

DEFERRED INCOME TAXES                                                        14,923         11,123
OTHER LONG-TERM LIABILITIES                                                   7,530          7,237
LONG-TERM DEBT                                                              100,223        121,118
                                                                           --------       --------
          Total liabilities                                                 174,020        181,204
                                                                           --------       --------

COMMITMENTS AND CONTINGENCIES (Note 6)

STOCKHOLDERS' EQUITY:
  Common Stock - Class A                                                      1,084          1,077
  Common Stock - Class B                                                        340            340
  Paid-in capital                                                            23,633         22,916
  Retained earnings                                                         118,940        123,164
  Accumulated other comprehensive income                                      1,245          1,666
                                                                           --------       --------
           Subtotal                                                         145,242        149,163
  Less treasury stock, at cost                                                5,838          5,775
  Less notes receivable related to common stock                               3,319          3,415
                                                                           --------       --------
          Total stockholders' equity                                        136,085        139,973
                                                                           --------       --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                 $310,105       $321,177
                                                                           ========       ========
</TABLE>

See notes to consolidated financial statements.


                                       F-2

<PAGE>

BUSH INDUSTRIES, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 28, 2002, DECEMBER 29, 2001 AND DECEMBER 30, 2000
-----------------------------------------------------------------------------------------------------------------------------


                                                                 (In Thousands, except share and per share data)

                                                                    2002               2001              2000
<S>                                                             <C>                <C>                <C>
NET SALES                                                       $   340,170        $   345,806        $   451,197
                                                                -----------        -----------        -----------
COSTS AND EXPENSES:
  Cost of sales                                                     247,645            252,424            307,686
  Selling, general and administrative                                83,077             83,135             97,930
  Interest expense                                                    7,194              8,553             11,890
  Gain on sale of assets                                                  -                  -             (3,618)
                                                                -----------        -----------        -----------
                                                                    337,916            344,112            413,888
                                                                -----------        -----------        -----------
EARNINGS BEFORE INCOME TAXES AND
  CUMULATIVE EFFECT OF ACCOUNTING CHANGE                              2,254              1,694             37,309

INCOME TAXES                                                          1,314              1,437             14,532
                                                                -----------        -----------        -----------
EARNINGS BEFORE CUMULATIVE EFFECT OF
  ACCOUNTING CHANGE                                                     940                257             22,777


CUMULATIVE EFFECT OF ACCOUNTING CHANGE                               (2,398)                 -                  -
                                                                -----------        -----------        -----------
NET (LOSS) EARNINGS                                             $    (1,458)       $       257        $    22,777
                                                                ===========        ===========        ===========
BASIC (LOSS) EARNINGS PER SHARE:
  Before cumulative effect of accounting change                 $      0.07        $      0.02        $      1.66
  Cumulative effect of accounting change                              (0.17)                 -                  -
                                                                -----------        -----------        -----------
  Net (loss) earnings                                           $     (0.10)       $      0.02        $      1.66
                                                                ===========        ===========        ===========
DILUTED (LOSS) EARNINGS PER SHARE:
  Before cumulative effect of accounting change                 $      0.07        $      0.02        $      1.60
  Cumulative effect of accounting change                              (0.17)                -                   -
                                                                -----------        -----------        -----------
  Net (loss) earnings                                           $     (0.10)       $      0.02        $      1.60
                                                                ===========        ===========        ===========
WEIGHTED AVERAGE SHARES
  OUTSTANDING:
  Basic                                                          13,820,153         13,720,085         13,680,629
  Diluted                                                        13,914,384         14,106,573         14,209,311

</TABLE>


See notes to consolidated financial statements.


                                       F-3

<PAGE>



BUSH INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 28, 2002, DECEMBER 29, 2001 AND DECEMBER 30, 2000

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                                                      (In Thousands, except share data)

                                                          Common Stock - Par Value $.10
                                            -------------------------------------------------
                                                    Class A                   Class B
                                            -------------------------  ---------------------- Paid-in     Retained     Comprehensive
                                               Shares       Amount        Shares     Amount   Capital     Earnings     Income (Loss)

<S>                                            <C>           <C>          <C>          <C>     <C>         <C>
BALANCE, JANUARY 1, 2000                       10,554,456    $ 1,055      3,395,365    $ 340   $ 20,826    $ 105,615
  Acquisition of treasury stock                         -          -              -        -          -            -
  Payments received for notes receivable                -          -              -        -          -            -
  Stock applied to notes receivable                     -          -              -        -          -            -
  Exercise of stock options                        77,485          8              -        -        651            -
  Tax benefit from exercise of stock options            -          -              -        -        108            -
  Dividends paid                                        -          -              -        -          -       (2,744)

  Comprehensive income:
    Net earnings                                        -          -              -        -          -       22,777     $ 22,777
    Other comprehensive income:
      Foreign currency translation                      -          -              -        -          -            -          448
      Minimum pension liability                         -          -              -        -          -            -           16
                                               ----------    -------      ---------    -----   --------    ---------    ---------
           Total comprehensive income                                                                                   $  23,241
                                                                                                                        =========

BALANCE, DECEMBER 30, 2000                     10,631,941      1,063      3,395,365      340     21,585      125,648
  Payments received for notes receivable                -          -              -        -          -            -
  Stock applied to notes receivable                     -          -              -        -          -            -
  Stock received from escrow account                   -          -              -        -          -            -
  Exercise of stock options                       136,302         14              -        -      1,146            -
  Tax benefit from exercise of stock options            -          -              -        -        185            -
  Dividends paid                                        -          -              -        -          -        (2,741)

  Comprehensive income (loss):
    Net earnings                                        -          -              -        -          -          257        $ 257
    Other comprehensive income (loss):
      Foreign currency translation                      -          -              -        -          -            -         (528)
      Minimum pension liability                         -          -              -        -          -            -           (3)
                                                ----------    -------      ---------    -----   --------    ---------     -------
           Total comprehensive loss                                                                                        $ (274)
                                                                                                                           ======
BALANCE, DECEMBER 29, 2001                     10,768,243      1,077      3,395,365      340     22,916      123,164
  Payments received for notes receivable                -          -              -        -          -            -
  Stock applied to notes receivable                     -          -              -        -          -            -
  Exercise of stock options                        69,740          7              -        -        614            -
  Tax benefit from exercise of stock options            -          -              -        -        103            -
  Dividends paid                                        -          -              -        -          -       (2,766)

  Comprehensive loss:
    Net loss                                            -          -              -        -          -       (1,458)    $ (1,458)
    Other comprehensive loss:
      Foreign currency translation                      -          -              -        -          -            -         (414)
      Minimum pension liability                         -          -              -        -          -            -           (7)
                                               ----------    -------      ---------    -----   --------    ---------     --------
           Total comprehensive loss                                                                                      $ (1,879)
                                                                                                                         ========
BALANCE, DECEMBER 28, 2002                     10,837,983    $ 1,084      3,395,365    $ 340   $ 23,633    $ 118,940
                                               ==========    =======      =========    =====   ========    =========








<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                        (In Thousands, except share data)


                                                          Accumulated
                                                             Other         Treasury Stock
                                                          Comprehensive ----------------------     Notes
                                                          Income (Loss)   Shares     Amount      Receivable

<S>                                                         <C>             <C>       <C>           <C>
BALANCE, JANUARY 1, 2000                                    $ 1,733         81,913    $ 1,146       $ 3,844
  Acquisition of treasury stock                                   -        269,363      4,167             -
  Payments received for notes receivable                          -              -          -           (34)
  Stock applied to notes receivable                               -         14,530        184          (184)
  Exercise of stock options                                       -              -          -             -
  Tax benefit from exercise of stock options                      -              -          -             -
  Dividends paid                                                  -              -          -             -
  Comprehensive income:
    Net earnings                                                  -              -          -             -
    Other comprehensive income:
      Foreign currency translation                              448              -          -             -
      Minimum pension liability                                  16              -          -             -
                                                           --------        -------    -------       -------
           Total comprehensive income


BALANCE, DECEMBER 30, 2000                                    2,197        365,806      5,497         3,626
  Payments received for notes receivable                          -              -          -           (45)
  Stock applied to notes receivable                               -         14,776        166          (166)
  Stock received from escrow account                              -          7,818        112             -
  Exercise of stock options                                       -              -          -             -
  Tax benefit from exercise of stock options                      -              -          -             -
  Dividends paid                                                  -              -          -             -

  Comprehensive income (loss):
    Net earnings                                                  -              -          -             -
    Other comprehensive income (loss):
      Foreign currency translation                             (528)             -          -             -
      Minimum pension liability                                  (3)             -          -             -
                                                           --------        -------    -------       -------
           Total comprehensive loss

BALANCE, DECEMBER 29, 2001                                    1,666        388,400      5,775         3,415
  Payments received for notes receivable                          -              -          -           (33)
  Stock applied to notes receivable                               -          5,178         63           (63)
  Exercise of stock options                                       -              -          -             -
  Tax benefit from exercise of stock options                      -              -          -             -
  Dividends paid                                                  -              -          -             -

  Comprehensive loss:
    Net loss                                                      -              -          -             -
    Other comprehensive loss:
      Foreign currency translation                             (414)             -          -             -
      Minimum pension liability                                  (7)             -          -             -
                                                            -------        -------    -------       -------
           Total comprehensive loss

BALANCE, DECEMBER 28, 2002                                  $ 1,245        393,578    $ 5,838       $ 3,319
                                                            =======        =======    =======       =======
</TABLE>



See notes to consolidated financial statements.


                                       F-4

<PAGE>

<TABLE>
<CAPTION>
BUSH INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 28, 2002, DECEMBER 29, 2001 AND DECEMBER 30, 2000
----------------------------------------------------------------------------------------------------------------------------

                                                                                   (In Thousands)
                                                                           2002           2001          2000
<S>                                                                      <C>           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) earnings                                                      $ (1,458)     $    257       $  22,777
  Adjustments to reconcile net (loss) earnings to net cash
  provided by operating activities:
    Depreciation and amortization                                          20,053        19,647          18,666
    Cumulative effect of accounting change                                  2,398             -               -
    Deferred income taxes                                                   2,404           471           3,161
    Gain on sale of assets                                                      -             -          (3,618)
  Changes in assets and liabilities affecting cash flows,
  net of acquisition:
    Accounts receivable                                                       597        21,442          (4,309)
    Inventories                                                                24        20,047         (21,078)
    Prepaid expenses and other current assets                                  76        (3,259)             92
    Accounts payable                                                        8,622        (9,462)          5,929
    Income taxes                                                            2,337        (1,342)          1,662
    Other accrued liabilities                                                (605)      (14,310)            (39)
                                                                         --------      --------       ---------
           Net cash provided by operating activities                       34,448        33,491          23,243
                                                                         --------      --------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures                                                     (5,533)       (9,444)        (33,301)
  Acquisition of business, net of cash                                          -             -          (6,457)
  Increase in other assets                                                 (1,137)         (719)         (1,070)
                                                                         --------      --------       ---------
           Net cash used for investing activities                          (6,670)      (10,163)        (40,828)
                                                                         --------      --------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayments of long-term debt                                            (25,045)      (21,127)           (495)
  Proceeds from long-term debt                                                  -             -          22,977
  Purchase of Class A Stock for treasury                                        -             -          (4,167)
  Exercise of stock options                                                   621         1,160             659
  Dividends paid ($0.20 per share)                                         (2,766)       (2,741)         (2,744)
  Payments received for notes receivable                                       33            45              34
                                                                         --------      --------       ---------
           Net cash (used for) provided by financing activities           (27,157)      (22,663)         16,264
                                                                         --------      --------       ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                       519          (301)           (158)
                                                                         --------      --------       ---------
NET INCREASE (DECREASE) IN CASH
  AND CASH EQUIVALENTS                                                      1,140           364          (1,479)

CASH AND CASH EQUIVALENTS, Beginning of year                                 1,589         1,225           2,704
                                                                         --------      --------       ---------
CASH AND CASH EQUIVALENTS, End of year                                    $  2,729      $  1,589       $   1,225
                                                                         ========      ========       =========
</TABLE>



See notes to consolidated financial statements.


                                       F-5

<PAGE>

BUSH INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 28, 2002, DECEMBER 29, 2001 AND DECEMBER 30, 2000
--------------------------------------------------------------------------------
1.    DESCRIPTION OF BUSINESS AND SUMMARY OF
      SIGNIFICANT ACCOUNTING POLICIES

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

      Principles of Consolidation--The consolidated financial statements consist
      of Bush Industries, Inc. and its wholly owned subsidiaries (collectively,
      the "Company"). All significant intercompany accounts and transactions
      have been eliminated in consolidation.

      Accounting Change--Effective December 30, 2001 (the first day of fiscal
      2002), the Company adopted Statement of Financial Accounting Standards No.
      142, "Goodwill and Other Intangible Assets" (SFAS No. 142). SFAS No. 142
      addresses the financial accounting and reporting for acquired goodwill and
      other intangible assets with indefinite lives. Pursuant to SFAS No. 142,
      goodwill is no longer being amortized and must be periodically tested for
      impairment. Upon adoption of SFAS No. 142, the Company concluded that
      goodwill related to the Bush Furniture Europe segment was impaired. As a
      result, the Company has recorded a non-cash charge for goodwill impairment
      of $2,398,000 as a cumulative effect of accounting change effective
      December 30, 2001. The fair value of the Bush Furniture Europe reporting
      unit was estimated using an average of the price to revenues method and
      the discounted cash flow method and reflect the losses and declining
      financial condition at the Company's German subsidiary.

      Actual results of operations for each of the three years in the period
      ended December 28, 2002 and as adjusted results of operations for 2001 and
      2000 had the non-amortization provisions of SFAS No. 142 been applied in
      those periods are as follows:

<TABLE>
<CAPTION>

                                                      2002       2001          2000

      <S>                                            <C>         <C>           <C>
      Net (loss) earnings:
        As reported                                  $(1,458)    $  257       $22,777
        Goodwill amortization, net of income taxes         -      1,107         1,116
                                                     -------     ------       -------
        As adjusted                                  $(1,458)    $1,364       $23,893
                                                     =======     ======       =======
      Basic (loss) earnings per share:
        As reported                                  $ (0.10)    $ 0.02       $  1.66
        As adjusted                                  $ (0.10)    $ 0.10       $  1.75

      Diluted (loss) earnings per share:
        As reported                                  $ (0.10)    $ 0.02       $  1.60
        As adjusted                                  $ (0.10)    $ 0.10       $  1.68
</TABLE>

                                       F-6

<PAGE>

      Cash Equivalents--The Company considers all highly liquid investments with
      a maturity of three months or less at the time of purchase to be cash
      equivalents.

      Inventories--Inventories, consisting of raw materials, work-in-progress
      and finished goods, have been stated at the lower of cost or market as
      determined by the first-in, first-out method.

      Property, Plant and Equipment--Property, plant and equipment is carried at
      cost. Depreciation is computed by the straight-line method over the
      estimated useful lives of the assets, which are as follows: buildings and
      improvements 10-50 years; machinery and equipment 3-20 years;
      transportation equipment 3-7 years; office equipment 3-10 years; and
      leasehold improvements 3-10 years or the lease term, if less. Construction
      in progress is recorded in property, plant and equipment and amounted to
      $5,582,000 and $7,500,000 at December 28, 2002 and December 29, 2001,
      respectively. Interest associated with construction indebtedness is
      capitalized. Interest amounting to approximately $283,000, $971,000 and
      $1,984,000 associated with construction in progress was capitalized for
      2002, 2001 and 2000, respectively.

      The cost of repairs and maintenance is charged to expense as incurred.
      Renewals and betterments are capitalized. Upon retirement or sale of an
      asset, its cost and related accumulated depreciation or amortization are
      removed from the accounts and any gain or loss is recorded in income or
      expense. The Company continually reviews property, plant and equipment to
      determine that the carrying values have not been impaired by estimating
      the future undiscounted cash flows expected to result from the use of the
      property, plant and equipment.

      Other Assets--Other assets consist primarily of goodwill, cash value of
      life insurance policies, advances on split dollar insurance arrangements,
      an investment at cost, and other intangible assets. The Company tests
      long-lived assets, exclusive of goodwill, for recoverability whenever
      events or changes in circumstances indicate that its carrying amount may
      not be recoverable in accordance with Statement of Financial Accounting
      Standards No. 144, "Accounting for the Impairment or Disposal of
      Long-Lived Assets." An impairment loss shall be recognized if the carrying
      amount of long-lived assets, to be held and used is not recoverable and
      exceeds its fair value based on the sum of the undiscounted cash flows
      expected to result from the use and eventual disposition of the asset.

      Goodwill approximated $13.0 million and $15.4 million at December 28, 2002
      and December 29, 2001, respectively. SFAS No. 142 requires the Company to
      compare the fair value of the reporting unit to its carrying amount on at
      least an annual basis to determine if there is potential impairment. If
      the fair value of the reporting unit is less than its carrying value, an
      impairment loss is recorded to the extent that the fair value of the
      goodwill within the reporting unit is less than their carrying value. Fair
      values for goodwill are determined based on discounted cash flows, market
      multiples or appraised values as appropriate.

      Fair Value of Financial Instruments--The fair value of financial
      instruments is determined by reference to various market data and other
      valuation techniques, as appropriate. Unless otherwise disclosed, the fair
      value of short-term instruments approximates their recorded values due to
      the short-term nature of the instruments. The fair value of long-term debt
      instruments approximates their recorded values primarily due to interest
      rates approximating current rates available for similar instruments.

      Foreign Currency Translation--Essentially all assets and liabilities are
      translated into U.S. dollars at year-end exchange rates, while elements of
      the income statement and cash flow statement are translated at average
      exchange rates in effect during the year. Adjustments arising from the
      translation of net assets located outside the United States are recorded
      as a component of comprehensive income.


                                       F-7

<PAGE>

      Stock-Based Compensation--In 2002, the Company adopted Statement of
      Financial Accounting Standards No. 148, "Accounting for Stock-Based
      Compensation - Transition and Disclosure". This standard provides
      alternative methods of transition for a voluntary change to the fair value
      based method of accounting for stock-based employee compensation.
      Additionally, the standard also requires prominent disclosures in the
      Company's financial statements about the method of accounting used for
      stock-based employee compensation, and the effect of the method used when
      reporting financial results.

      The Company accounts for stock-based compensation in accordance with
      Statement of Financial Accounting Standards No. 123, "Accounting for
      Stock-Based Compensation" (SFAS No. 123). As permitted in that standard,
      the Company has elected to continue to follow the recognition provisions
      of Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock
      Issued to Employees", and related interpretations in accounting for
      employee stock-based compensation. No employee stock-based compensation
      expense was recorded for 2002, 2001 and 2000.

      Pro forma information regarding net earnings (loss) and earnings (loss)
      per share is required by SFAS No. 123 and has been determined as if the
      Company had accounted for its employee stock options and awards under the
      fair value method of that standard. The fair value of those options was
      estimated at the date of grant using a Black-Scholes option pricing model
      with the following weighted-average assumptions for 2002, 2001 and 2000,
      respectively: risk free interest rate of 5.25%, 5.02% and 6.37%; dividend
      yield of 2.07%, 1.59% and 1.45%; volatility factors of the expected market
      price of the Company's common stock of 67%, 46% and 34%; and a
      weighted-average expected life of seven years for all three years. For
      purposes of pro forma disclosures, the estimated fair value of the options
      is amortized to expense over the options' vesting period.

      The Company's net earnings (loss) and earnings (loss) per share as if the
      fair value based method had been applied to all outstanding and unvested
      awards in each year is as follows (in thousands except per share data):

<TABLE>
<CAPTION>

                                                         2002        2001     2000

      <S>                                              <C>          <C>     <C>
      Net (loss) earnings as reported                  $(1,458)     $ 257   $22,777

      Less total stock-based employee compensation
        expense determined under fair value based
        method, net of related tax effects                 (46)       (43)     (162)
                                                      --------     ------   -------
      Pro forma net (loss) earnings                    $(1,504)    $  214   $22,615
                                                      ========     ======   =======
      Earnings per share:
        Basic - as reported                            $ (0.10)    $ 0.02   $  1.66
        Basic - pro forma                              $ (0.11)    $ 0.02   $  1.65

        Diluted - as reported                          $ (0.10)    $ 0.02   $  1.60
        Diluted - pro forma                            $ (0.11)    $ 0.02   $  1.59

</TABLE>

                                       F-8

<PAGE>

      Income Taxes--Deferred taxes are recorded for temporary differences
      between the financial reporting and tax basis of assets and liabilities
      using the anticipated tax rate when taxes are expected to be paid or
      recovered. A valuation allowance is recorded to reduce the carrying
      amounts of deferred tax assets unless it is more likely than not that such
      assets will be realized.

      Supplemental Cash Flow Information--Cash paid for interest, net of amounts
      capitalized was $6,918,000, $8,650,000 and $11,772,000 and cash paid for
      income taxes was $798,000, $6,301,000 and $9,783,000 in 2002, 2001 and
      2000, respectively. In addition, the Company received a refund of taxes
      amounting to $5,335,000 in 2002.

      Revenue Recognition--Revenues are recognized when products are shipped.
      Provisions for discounts, rebates to customers, returns and other
      adjustments are provided for in the same period the related sales are
      recorded.

      Financial Statement Year End--The Company's year-end is the closest
      Saturday to December 31. Fiscal years for the consolidated financial
      statements included herein ended on December 28, 2002 (52 weeks), December
      29, 2001 (52 weeks) and December 30, 2000 (52 weeks). The accounts of two
      of the Company's wholly owned subsidiaries, Rohr-Bush GmbH & Co. and
      Bush-Viotechnik GmbH, have been consolidated on the basis of a year ending
      in October. Such fiscal period corresponds with those companies' fiscal
      year end.

      Earnings Per Share (EPS)--Basic EPS excludes dilution and is computed by
      dividing net income by the weighted average number of shares outstanding
      for the period. Diluted EPS reflects the potential dilution that could
      occur if securities or other contracts to issue common stock were
      exercised or converted into common stock. The dilutive effect of
      outstanding options issued by the Company are reflected in diluted EPS
      using the treasury stock method. Under the treasury stock method, options
      will only have a dilutive effect when the average market price of common
      stock during the period exceeds the exercise price of the options. There
      were 172,419, 168,859 and 133,983 stock options excluded from the
      computation of diluted earnings per share due to their antidilutive effect
      in 2002, 2001 and 2000, respectively.

      Comprehensive Income--Comprehensive income includes all changes in
      stockholders' equity during the period except those resulting from
      investments by owners and distribution to owners. The Company's
      comprehensive income includes net loss or earnings, an amount for foreign
      currency translation and a minimum pension liability adjustment.

      Use of Estimates--The preparation of financial statements in conformity
      with accounting principles generally accepted in the United States of
      America requires management to make estimates and assumptions that effect
      the reported amounts of revenues and expenses during the reported period
      and the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements.
      Actual results could differ from those estimates.

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


                                       F-9

<PAGE>

      In June 2002, the FASB issued Statement of Financial Accounting Standards
      No. 146, "Accounting for Costs Associated with Exit or Disposal of
      Activities" (SFAS No. 146). SFAS No. 146 revises the accounting for exit
      and disposal activities under Emerging Issues Task Force Issue 94-3,
      "Liability Recognition for Certain Employee Termination Benefits and Other
      Costs to Exit an Activity." The provisions of SFAS No. 146 are effective
      prospectively for exit or disposal activities initiated after December 31,
      2002.



2.    INVENTORIES

      Inventories consist of (in thousands):

                                                    December 28,    December 29,
                                                       2002            2001

        Raw materials                                 $13,766         $16,137
        Work in progress                                7,150           5,570
        Finished goods                                 35,288          33,590
                                                      -------         -------
         Total                                        $56,204         $55,297
                                                      =======         =======



3.    PROPERTY, PLANT AND EQUIPMENT, NET

      Property, plant and equipment consist of:

                                                    December 28,    December 29,
                                                       2002            2001
                                                           (in thousands)

        Land                                        $   6,465        $  6,173
        Buildings and improvements                    128,289         124,082
        Machinery and equipment                       194,827         189,117
        Transportation equipment                        1,181           1,103
        Office equipment                               14,299          14,942
        Leasehold improvements                          1,668           1,466
                                                    ---------        --------
                                                      346,729         336,883
        Less accumulated depreciation                (149,807)       (129,549)
                                                    ---------         -------
        Total                                       $ 196,922        $207,334
                                                    =========        ========


      Depreciation expense was $19,886,000, $18,124,000 and $17,053,000 for
      2002, 2001 and 2000, respectively.

4.    OTHER ACCRUED LIABILITIES

      Other accrued liabilities consist of (in thousands):

<TABLE>
<CAPTION>

                                                          December 28,    December 29,
                                                             2002           2001

      <S>                                                    <C>            <C>
      Payroll, profit sharing and related liabilities        $11,473        $10,302
      Commissions and sales related expenses                   9,678         10,835
      Other                                                    3,123          2,958
                                                             -------        -------
      Total                                                  $24,274        $24,095
                                                             =======        =======
</TABLE>




                                       F-10

<PAGE>

5.    LONG-TERM DEBT

      Long-term debt consists of:

<TABLE>
<CAPTION>

                                                                                     December 28,    December 29,
                                                                                         2002           2001
                                                                                           (in thousands)

<S>                                                                                    <C>             <C>
Revolving credit facility with the first contractual principal payment
  due June 30, 2004.                                                                   $ 96,697        $117,129

Pennsylvania Industrial Development Authority loan, issued October 3, 1996,
  interest at a rate of 3%. Monthly principal and interest payments of $13,812
  are due through 2011.                                                                   1,295           1,420

Pennsylvania Industrial Development Authority loan, issued February 26, 1997,
  interest at a rate of 3.75%. Monthly principal and interest payments of
  $14,544 are due through 2012.                                                           1,362           1,483

Pennsylvania Sunny Day Loan Fund loan, issued June 27, 1996, interest at a rate
  of 3%. Monthly principal and interest payments of $13,812 are due through
  2011.                                                                                   1,253           1,379

Pennsylvania Machinery & Equipment Loan Fund loan, issued
  November 6, 1996, interest at a rate of 3%. Monthly principal
  and interest payments of $6,707 are due in 2003.                                           78             154
                                                                                       --------        --------
Total debt                                                                              100,685         121,565
Less current portion                                                                        462             447
                                                                                       --------        --------
Total long-term debt                                                                   $100,223        $121,118
                                                                                       ========        ========
</TABLE>



      The Company has a revolving credit facility with a consortium of banks.
      Effective December 28, 2001, the Company entered into an amendment to its
      revolving credit facility which modified the aggregate commitments under
      the amended revolving credit facility to a maximum of $173.0 million from
      $210.0 million. In addition, certain financial covenant ratios were
      amended. The amended revolving credit facility is available through June
      30, 2004 and borrowings are secured by all domestic tangible personal
      property and intangible assets of the Company. Maximum borrowings under
      the revolving credit facility are subject to certain limitations as
      defined in the agreement. The Company classifies borrowings under the
      facility as long-term because there are no contractual obligations for
      repayment until June 30, 2004. At the Company's option, borrowings may be
      effectuated, subject to certain conditions, primarily on a NYBOR based
      rate, an applicable eurocurrency rate for certain foreign currencies, or
      an alternative base rate. At December 28, 2002, borrowings outstanding
      were primarily at the eurocurrency rate (6.0625%) and at the alternative
      base rate (4.25%). In addition, the credit agreement permits the Company
      to request the issuance of up to a maximum of $20.0 million in letters of
      credit, which issuance will be deemed part of the $173.0 million maximum
      amount of borrowing permitted under the credit facility. As of December
      28, 2002, letters of credit amounting to approximately $4.6 million were
      outstanding.


                                       F-11

<PAGE>

      The revolving credit facility provides for achieving certain consolidated
      cash flow coverage and leverage ratios, prescribes minimum consolidated
      net worth requirements, limits capital expenditures and new leases and
      provides for certain other affirmative and restrictive covenants. In
      addition, the revolving credit facility provides for certain limitations
      of the amount of cash dividends that the Company can declare.

      A five-year summary of aggregate principal payments on outstanding
      long-term debt is (in thousands):

        Fiscal Year

        2003                                                  $    462
        2004                                                    97,095
        2005                                                       410
        2006                                                       423
        2007                                                       437
        Thereafter                                               1,858
                                                              --------
        Total                                                 $100,685
                                                              ========


6.    COMMITMENTS AND CONTINGENCIES

      The Company is a party to various other legal proceedings arising in the
      ordinary course of business. The Company believes that these pending
      actions would not materially adversely affect the Company's consolidated
      financial statements.

      The Company has incurred rental expense for manufacturing and warehouse
      space and equipment. A summary of rent expense follows (in thousands):

                                            2002          2001         2000

        Real estate                        $2,224       $1,882       $1,094
        Equipment                           2,409        2,372        2,259


      Minimum future obligations over the next five years under operating leases
      that have initial or remaining noncancelable terms in excess of one year
      are summarized as follows (in thousands):


        Fiscal Year

        2003                                                    $2,985
        2004                                                     2,093
        2005                                                     1,334
        2006                                                       373
        2007                                                        91



                                       F-12

<PAGE>

7.    INCOME TAXES

      The provision for income taxes is as follows (in thousands):


      <TABLE>
      <CAPTION>
                                                                                    2002          2001          2000
      <S>                                                                         <C>          <C>           <C>
      Current:
        Federal                                                                   $(1,055)     $    528      $ 10,041
        State                                                                         (35)          438         1,330
                                                                                  -------      --------      --------
                                                                                   (1,090)          966        11,371
                                                                                  -------      --------      --------

      Deferred:
        Federal                                                                     1,849           844         2,786
        State                                                                         108            87           326
        Foreign                                                                       447          (460)           49
                                                                                  -------      --------      --------
                                                                                    2,404           471         3,161
                                                                                  -------      --------      --------

      Total                                                                       $ 1,314      $  1,437      $ 14,532
                                                                                  =======      ========      ========
      </TABLE>



     The types and tax effects of temporary differences included in deferred tax
     assets and liabilities are as follows (in thousands):

      <TABLE>
      <CAPTION>
                                                                                                 2002           2001
      <S>                                                                                      <C>           <C>
      Deferred Tax Assets:
        Accounts receivable                                                                    $    330      $    348
        Accrued expenses                                                                          2,601         2,910
        Inventories                                                                               1,425         1,984
        Deferred income                                                                             237           343
        State investment and federal minimum tax credit carryforward                              7,515         8,112
        Subsidiary net operating loss carryforward                                                3,313         3,477
                                                                                               --------      --------
                                                                                                 15,421        17,174
      Deferred Tax Liabilities:
        Property, plant and equipment                                                           (18,671)      (15,740)
        Other assets                                                                             (1,313)       (1,313)
                                                                                               --------      --------
        Subtotal                                                                                 (4,563)          121

      Total valuation allowance                                                                  (7,515)       (7,474)
                                                                                               --------      --------
      Net deferred tax liability                                                               $(12,078)     $ (7,353)
                                                                                               ========      ========

                                                                                                  2002           2001
      Reported as (in thousands):
        Current asset (included in prepaid expenses
          and other current assets)                                                             $ 2,845      $  3,770
        Long-term liability                                                                     (14,923)      (11,123)
                                                                                               --------      --------
      Net deferred tax liability                                                               $(12,078)     $ (7,353)
                                                                                               ========      ========
      </TABLE>



                                       F-13

<PAGE>

      The Company has recorded a valuation allowance primarily in anticipation
      that certain state investment tax credits will expire prior to their
      usage. State investment tax credits and subsidiary net operating loss
      carryforwards of approximately $7.5 million and $9.5 million begin to
      expire in 2003. Substantially all of the subsidiary net operating loss
      carryforwards are a result of foreign operations and have no expiration
      date.

      The provision for income taxes differs in each of the years from the
      federal statutory rate due to the following:


                                                  2002        2001        2000

        Statutory rate                            35.0 %      35.0 %      35.0 %
        State taxes, net of federal benefits      12.9        25.2         2.8
        Effect of non-deductible costs             6.8        19.1         0.9
        Effect of foreign tax rates                1.2         2.0         0.5
        Other, net                                 2.4         3.5        (0.2)
                                                  ----        ----        ----
        Effective tax rate                        58.3 %      84.8 %      39.0 %
                                                  ====        ====        ====


      The Company realized tax benefits amounting to $103,000, $185,000 and
      $108,000 as the result of stock option transactions during 2002, 2001 and
      2000, respectively. The benefit has been credited to paid-in capital and
      is not reflected in the current year provision for taxes.

8.    CAPITAL STOCK

      The authorized capital stock of the Company consists of 20,000,000 shares
      of Class A Common Stock, $.10 par value, and 6,000,000 shares of Class B
      Common Stock, $.10 par value. Dividends may be declared and paid on Class
      A Common Stock without being paid on Class B Common Stock. No dividend may
      be paid on Class B Common Stock without equal amounts paid concurrently on
      Class A Common Stock. Holders of Class A Common Stock have one-tenth vote
      per share and are entitled to elect at least 25% of the Board of Directors
      as long as the number of outstanding shares of Class A Common Stock is at
      least 10% of the total of all Common Stock outstanding. Holders of Class B
      Common Stock have one vote per share.

      The Company has a stock redemption agreement with the principal
      shareholder, which provides that upon his death the Company may be
      required to redeem a portion of the Company's stock then owned by the
      shareholder's estate. The redemption price per share shall be determined
      at the then market price based upon a thirty-day average prior to the
      closing of any such stock redemption. The amount of the redemption is
      limited to approximately $21.4 million, which will be funded by the
      proceeds from life insurance policies maintained on the life of the
      principal shareholder. The shareholder's estate can request the Company to
      redeem shares under the agreement until the maximum time period permitted
      to pay estate taxes has elapsed.

      In the fourth quarter of 1999, the Company sold 268,574 shares of common
      stock at fair value to certain employees and directors of the Company in
      exchange for notes receivable. Repayment of the notes will commence in the
      fourth quarter of 2003 through payroll deductions.


                                      F-14

<PAGE>

9.    STOCK PLANS

      The Company currently has two open stock plans, which provide for the
      issuance of Class A Common Stock. As of December 28, 2002, there were
      568,465 shares of Class A Common Stock available for issuance under the
      1995 Stock Plan and 166,961 shares of Class A Common Stock under the 1999
      Stock Plan. Incentive Stock Options granted under the 1995 Stock Plan must
      have an option price of at least 100% (110% for stockholders with more
      than 10% of the total combined voting power) of the fair market value of
      the Class A Common Stock on the date of the grant. The option price of the
      Non-Qualified Stock Options granted pursuant to this plan shall be
      determined by the Compensation Committee of the Board of Directors, in its
      sole discretion. The vesting of outstanding stock options vary, however,
      they generally vest over a two to seven year period and expire ten years
      from the date of grant. No option can be exercised within one year after
      the date of grant. Under the 1999 Stock Plan, shares may be awarded for
      such consideration as determined by the Company.

      As of December 28, 2002, there were outstanding options to purchase
      1,281,062 shares of Class A Common Stock under the current and prior plans
      at prices ranging from $8.91 to $29.93 that were vested and could be
      exercised. Of these outstanding options, 1,190,462 have an exercise price
      of $8.91.

      The following is a summary of option transactions:

<TABLE>
<CAPTION>
                                                       2002        2001         2000

        <S>                                         <C>         <C>          <C>
        Options outstanding, beginning of year      1,390,702   1,483,411    1,555,131
        Options granted                                41,000      68,000       30,000
        Options exercised/cancelled                   (41,365)   (160,709)    (101,720)
                                                    ---------   ---------    ---------
        Options outstanding, end of year            1,390,337   1,390,702    1,483,411
                                                    =========   =========    =========
</TABLE>

      All of the options outstanding expire at various dates from 2003 through
      2012. The option price of the shares exercised in 2002 was $8.91. The
      weighted-average exercise prices of options were $8.91, $8.51 and $8.50
      for fiscal years 2002, 2001 and 2000, respectively. The weighted-average
      grant-date fair value of options granted were $12.40, $12.98 and $13.88
      for fiscal years 2002, 2001 and 2000, respectively.

      In addition to the options under the aforementioned plans, 48,375
      non-qualifying options previously granted to key individuals were
      exercised in 2002 at an exercise price of $8.91. At December 28, 2002,
      there were no non-plan options outstanding.


                                      F-15

<PAGE>

10.   PENSIONS

      The Company sponsors a defined benefit plan for eligible non-U.S.
      employees at its German facility.

      The following are reconciliations of the benefit obligation, the funded
      status of the plan, and the amounts recognized in the consolidated balance
      sheets (in thousands):

<TABLE>
<CAPTION>
                                                                2002          2001

      <S>                                                     <C>           <C>
      Change in benefit obligation:
        Benefit obligation at beginning of year               $ 5,880       $ 5,362
        Service cost                                               62            58
        Interest cost                                             364           335
        Foreign currency exchange rate changes                    481           147
        Actuarial gain                                            202           154
        Benefits paid                                            (233)         (176)
                                                              -------       -------
      Benefit obligations at end of year                        6,756         5,880
                                                              -------       -------
      Funded status (the plan is unfunded)                     (6,756)       (5,880)
      Unrecognized net actuarial gain                             202           154
                                                              -------       -------
      Net amount recognized                                   $(6,554)      $(5,726)
                                                              =======       =======

</TABLE>

      Amounts recognized in the balance sheets consist of:

<TABLE>
<CAPTION>
                                                                2002          2001

      <S>                                                     <C>           <C>
      Accrued benefit liability
        (included in other long-term liabilities)             $(6,629)      $(5,794)
      Accumulated other comprehensive gain                         75            68
                                                              -------       -------
      Net amount recognized                                   $(6,554)      $(5,726)
                                                              =======       =======
</TABLE>


      There were no plan assets at December 28, 2002 and December 29, 2001. The
plan is funded to the extent of benefits paid.

      Weighted average assumptions for the years:


<TABLE>
<CAPTION>
                                                 2002          2001         2000

      <S>                                        <C>          <C>          <C>
      Discount rate                              6.00 %       6.00 %       6.00 %
      Rate of increase in compensation levels    2.50 %       2.50 %       2.50 %


      Components of net periodic benefit cost consisted of the following (in
      thousands):

                                                 2002         2001         2000

      Service cost                              $  62        $  58        $ 116
      Interest cost                               364          335          342
                                                -----        -----        -----
      Net periodic benefit cost                 $ 426        $ 393        $ 458
                                                =====        =====        =====
</TABLE>

                                       F-16

<PAGE>

      The Company also sponsors defined contribution plans, which cover
      substantially all of the Company's eligible U.S. employees. The plans
      provide for a general employer contribution, a wage reduction feature
      under Section 401(k) and a matching contribution. The general employer
      contribution provides for a discretionary Company contribution of the
      Company's Class A common stock. The matching contribution is made on
      behalf of each eligible participant who makes a wage reduction
      contribution. This matching contribution is made in cash and includes
      certain limitations. Net pension cost related to the plans was $165,000,
      $1,276,000 and $1,366,000 for 2002, 2001 and 2000, respectively. There
      was no discretionary Company contribution in 2002.

11.   BUSINESS SEGMENTS AND GEOGRAPHIC INFORMATION

      The Company operates in four operating segments based principally on the
      natural alignment of its customers, markets and products. Inter-segment
      sales were made at prices approximating current market value. Certain
      expenses relating to the North American furniture segments, Bush Business
      Furniture and Bush Furniture were allocated to these two segments based on
      certain percentages and assumptions that the Company believes are
      reasonable.

      In evaluating segment performance, management focuses on earnings from
      operations before income taxes. The earnings (loss) before income taxes
      exclude nonrecurring charges such as gains or losses on the sale of assets
      and the cumulative effect of accounting change. The accounting policies of
      the segments are the same as those described in Note 1.

      The changes in the carrying amount of goodwill by operating segment for
      the year ended December 28, 2002 are as follows (in thousands):

<TABLE>

                                                         Bush
                                                       Business
                                                       Furniture       Bush
                                                       and Bush      Furniture        Bush
                                                       Furniture      Europe      Technologies      Total

<S>                                                      <C>          <C>            <C>            <C>

Balance as of December 29, 2001                          $9,464       $ 2,398        $3,538         $15,400

Impairment loss                                               -        (2,398)            -          (2,398)
                                                         ------      --------        ------         -------

Balance as of December 28, 2002                          $9,464      $      -        $3,538         $13,002
                                                         ======      ========        ======         =======

</TABLE>



                                       F-17

<PAGE>

An analysis and reconciliation of the Company's business segment information to
the respective information in the consolidated financial statements is as
follows (all dollars are in thousands):


<TABLE>
<CAPTION>
                                                            2002            2001            2000

<S>                                                       <C>             <C>             <C>
Net sales from external customers:
  Bush Business Furniture                                 $163,916        $152,080        $221,936
  Bush Furniture                                           104,149         114,432         142,093
  Bush Furniture Europe                                     50,784          54,287          55,858
  Bush Technologies                                         21,321          25,007          31,310
                                                          --------        --------        --------
Consolidated total                                        $340,170        $345,806        $451,197
                                                          ========        ========        ========
Inter-segment sales:
  Bush Business Furniture                                 $      -        $      -             $ -
  Bush Furniture                                                 -               -               -
  Bush Furniture Europe                                      4,027           4,084          16,060
  Bush Technologies                                              -             179           1,143
                                                          --------        --------        --------
Total                                                     $  4,027        $  4,263        $ 17,203
                                                          ========        ========        ========
Segment earnings (loss) before income taxes:
  Bush Business Furniture                                 $  7,577        $  1,450        $ 17,285
  Bush Furniture                                             2,843          (1,919)          6,954
  Bush Furniture Europe                                     (5,316)         (3,423)            416
  Bush Technologies                                         (2,850)          5,586           9,036
                                                          --------        --------        --------
                                                             2,254           1,694          33,691
  Gain on sale of assets                                         -               -           3,618
                                                          --------        --------        --------
Consolidated total                                        $  2,254        $  1,694        $ 37,309
                                                          ========        ========        ========
Interest expense:
  Bush Business Furniture                                 $  2,568        $  3,458         $ 6,020
  Bush Furniture                                             1,530           2,473           3,461
  Bush Furniture Europe                                      2,777           2,384           2,006
  Bush Technologies                                            319             238             403
                                                          --------        --------        --------
Consolidated total                                        $  7,194        $  8,553        $ 11,890
                                                          ========        ========        ========
Depreciation and amortization:
  Bush Business Furniture and Bush Furniture (1)          $ 16,667        $ 15,501        $ 14,022
  Bush Furniture Europe (2)                                  2,141           3,248           3,500
  Bush Technologies                                          1,245             898           1,144
                                                          --------        --------        --------
Consolidated total                                        $ 20,053        $ 19,647        $ 18,666
                                                          ========        ========        ========
Capital expenditures for long-lived assets:
  Bush Business Furniture and Bush Furniture (1)          $  4,204        $  3,763        $ 25,344
  Bush Furniture Europe                                          -           4,470           4,608
  Bush Technologies                                          1,329           1,211           3,349
                                                          --------        --------        --------
Consolidated total                                        $  5,533        $  9,444        $ 33,301
                                                          ========        ========        ========
</TABLE>


                                       F-18

<PAGE>
<TABLE>

                                                       December 28,    December 29,
                                                          2002             2001
  <S>                                                    <C>              <C>
  Identifiable assets:
    Bush Business Furniture and Bush Furniture (1)     $225,429         $243,383
    Bush Furniture Europe                                58,115           56,054
    Bush Technologies                                    26,561           21,740
                                                       --------         --------
  Consolidated total                                   $310,105         $321,177
                                                       ========         ========
</TABLE>



  (1)  The Company's North American furniture segments, Bush Business Furniture
       and Bush Furniture, share certain productive assets. These productive
       assets manufacture components for both Bush Business Furniture and Bush
       Furniture products. As a result, expenses related to depreciation and
       amortization, and capital expenditures for long-lived assets are not
       allocated between these two furniture segments. Further, identifiable
       assets including goodwill, are not allocated between Bush Business
       Furniture and Bush Furniture.


  (2)  Excludes cumulative effect of accounting change for goodwill impairment
       of $2,398.

  The Company's geographic operations outside of the United States principally
  include Germany. The Company's products are sold throughout the world. Net
  sales by geographic area are presented by attributing net sales to external
  customers based on the domicile of the selling location in thousands:

                                                2002        2001         2000

  Net sales by geographic area:

    United States                             $289,381    $291,547     $395,341
    Germany                                     50,789      54,259       55,856
                                              --------    --------     --------
    Total                                     $340,170    $345,806     $451,197
                                              ========    ========     ========


                                               December 28,      December 29,
                                                 2002               2001

  Long-lived assets by geographic area:
    United States                               $182,520          $193,289
    Germany                                       41,440            42,639
                                                --------          --------
    Total                                       $223,960          $235,928
                                                ========          ========


  Electronic and office product superstores and mass merchandisers, throughout
  the United States and furniture stores in Europe, comprise a significant
  portion of the Company's customer base. The Company performs ongoing credit
  evaluations of its customers' financial condition and, generally, requires no
  collateral from its customers. Although the Company's exposure to credit risk
  associated with nonpayment by customers is affected by conditions or
  occurrences within the retail industry, the majority of trade receivables were
  current at December 28, 2002.


                                       F-19

<PAGE>

      In 2002, the Company has four customers that individually exceeded 10
      percent or more of the Company's gross revenues. Gross revenues and
      accounts receivable balances, which primarily relate to Bush Business
      Furniture and Bush Furniture, for these customers, are as follows (in
      thousands):



                                                          Accounts Receivable
                           Gross Revenues           ---------------------------
                      --------------------------    December 28,   December 29,
                         2002     2001     2000        2002            2001

      Customer A          17%     14%      20%           8%              5%
      Customer B          14%     14%      18%          22%             13%
      Customer C          13%      -        -            2%              -
      Customer D          12%      -        -           12%              -


      Gross revenues for customer C and D did not exceed 10% in 2001 or 2000.

12.   ACQUISITION

      In October 2000, the Company acquired the 49% minority interest in
      Rohr-Bush GmbH & Co. and, as a result, the Company owns 100% of Rohr-Bush
      GmbH & Co. The purchase price has been allocated primarily to property,
      plant and equipment based on fair market value at the date of acquisition
      in accordance with the purchase method of accounting. The purchase price,
      including transaction costs, amounted to approximately $6.5 million.

13.   SALE OF ASSETS

      In December 2000, the Company sold substantially all of the assets of its
      retail service business, a division of the Company, to a third party in
      exchange for shares of stock of the purchaser. Net sales of this retail
      service business were not significant to the consolidated financial
      statements. The Company recorded the shares of stock received at fair
      value of approximately $5.0 million, which resulted in a pre-tax gain of
      approximately $3.6 million. The investment is included in other assets on
      the consolidated balance sheets since the Company expects to hold the
      investment on a long-term basis. The cost method is used to account for
      this investment because the Company does not have the ability to exercise
      significant influence over the purchaser's operating and financial
      policies.

14.   SUBSEQUENT EVENTS

      Restructuring--On February 27, 2003, the Company approved plans to
      restructure certain of its operations. In conjunction with such plans the
      Company will close its St. Paul, VA manufacturing facility and relocate
      certain operations to other plants, close three of its retail outlet
      stores and utilize third party liquidators to expedite the sale of excess
      inventory (which will create space in the Company's Erie, PA facility to
      launch new production strategies), and terminate production and management
      level employees in various locations. The Company expects to incur
      material losses associated with implementing these plans during 2003.

      Debt Amendment-- Subsequent to December 28, 2002, the Company entered into
      a seventh amendment, dated February 28, 2003, related to the Company's
      revolving credit facility (see Note 5). This amendment, among other
      things, modified certain covenants of the Company under the credit
      facility, provided for additional security interest, and prohibits the
      payment of cash dividends. In addition, the amendment modified the maximum
      amount of borrowing permitted under the credit facility from an aggregate
      of $173.0 million to an aggregate of $163.0 million.

                                      F-20

<PAGE>

15.   QUARTERLY SALES AND EARNINGS DATA - UNAUDITED


<TABLE>
<CAPTION>

                                                              (In Thousands, except per share data)
                                                     4th Qtr.        3rd Qtr.          2nd Qtr.        1st Qtr.

2002

<S>                                                <C>                <C>            <C>              <C>
Net sales                                          $ 88,498           $ 84,411       $ 78,929         $ 88,332
Gross profit                                         23,310             22,078         22,480           24,657
(Loss) earnings before
  cumulative effect of accounting
  change                                             (1,186)               492            541            1,093
Net (loss) earnings                                  (1,186)               492            541           (1,305) (a)

(Loss) earnings per share before cumulative
  effect of accounting change -
  basic                                               (0.09)              0.04           0.04             0.08
(Loss) earnings per share before cumulative
  effect of accounting change -
  diluted                                             (0.09) (b)          0.04           0.04             0.08

Net (loss) earnings per share - basic                 (0.09)              0.04           0.04            (0.09)  (a)
Net (loss) earnings per share - diluted               (0.09) (b)          0.04           0.04            (0.09)  (a)

2001

Net sales                                          $ 84,950           $ 80,614       $ 75,614        $ 104,628
Gross profit                                         16,365  (c)        22,757         22,489           31,771
Net (loss) earnings                                  (5,926) (c)           849          1,421            3,913
Net (loss) earnings per share - basic                 (0.43)              0.06           0.10             0.29
Net (loss) earnings per share - diluted               (0.43) (b)          0.06           0.10             0.28

</TABLE>

(a)  In accordance with the transition provisions of SFAS No. 142, the
     impairment loss associated with goodwill is reported as a change in
     accounting principle as of the beginning of the period in which the change
     is made, or December 30, 2001 (the first day of fiscal 2002). Accordingly,
     the first quarter 2002 net loss includes a charge of $2.4 million recorded
     as a cumulative effect of accounting change.

(b)  Fourth quarter 2002 and 2001 diluted earnings per share were calculated
     using basic weighted average shares outstanding because using diluted
     weighted average shares outstanding would have been antidilutive.

(c)  Fourth quarter 2001 gross profit and net loss includes a $5.2 million
     pre-tax non-cash inventory write down.


                                     ******

                                       F-21

<PAGE>

SCHEDULE II


                        VALUATION AND QUALIFYING ACCOUNTS
                                 (In Thousands)

<TABLE>
<CAPTION>

                           Col. B
                          Balance at                                                                Col. D             Col. E
Col. A                    Beginning                          Col. C                              Deductions -        Balance at
Description               of Period                        Additions                             Describe (1)       End of Period
                                         ----------------------------------------------------
                                                                               Charged to
                                                   Charged to               Other Accounts-
                                                 Costs & Expenses              Describe

<S>                           <C>                    <C>                         <C>                  <C>                 <C>
Allowance for
  doubtful accounts

Fiscal 2002                   $   979                $ 631                       $ 0                  $   672             $   938

Fiscal 2001                   $ 1,341                $ 810                       $ 0                  $ 1,172             $   979

Fiscal 2000                   $ 1,911                $ 833                       $ 0                  $ 1,403             $ 1,341

</TABLE>

(1)  Accounts written off, net of collections on accounts receivable previously
     written off

                                      S-1