<Page>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

             / / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT

                           COMMISSION FILE NO. 1-12888

                                SPORT-HALEY, INC.
        (Exact name of small business issuer as specified in its charter)

                 COLORADO                              84-1111669
      (State of other jurisdiction of               (I.R.S. Employer
      incorporation or organization)                Identification No.)

                   4600 E. 48TH AVENUE, DENVER, COLORADO 80216
                    (Address of principal executive offices)
                                  (303)320-8800
                 (Issuer's telephone number including area code)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 / /

     State the number of shares outstanding in each of the issuer's classes of
common stock, as of the latest practicable date.

                 CLASS                       OUTSTANDING AT MAY 10, 2002
        COMMON STOCK, NO PAR VALUE                      2,730,985

     Transitional Small Business Disclosure Format (check one): Yes / / No /X/

<Page>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
PART 1 - CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)

  ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS

           CONSOLIDATED BALANCE SHEETS                                       3

           CONSOLIDATED STATEMENTS OF OPERATIONS                             4

           CONSOLIDATED STATEMENTS OF CASH FLOWS                             5

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                        7

  ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS                    10

PART II - OTHER INFORMATION                                                 15

SIGNATURES                                                                  16
</Table>

<Page>

                                SPORT-HALEY, INC.
                           CONSOLIDATED BALANCE SHEETS
                     (IN THOUSANDS, EXCEPT SHARES OF STOCK)

<Table>
<Caption>
                                                                MARCH 31,    JUNE 30,
                                                                  2002         2001
                                                               ----------   ----------
                                                               (UNAUDITED)     (***)
<S>                                                            <C>          <C>
                                     ASSETS
Current assets:
     Cash and cash equivalents                                 $    4,078   $    4,413
     Marketable securities                                          3,985        3,898
     Accounts receivable, net of allowances of
       $165 and $174, respectively                                  3,951        5,208
     Inventories                                                    8,743        9,164
     Other current assets                                             494          445
     Taxes receivable                                                 476          388
     Deferred taxes                                                   162          162
                                                               ----------   ----------
       Total current assets                                        21,889       23,678

Property and equipment, net                                         1,071        1,519
Deferred taxes                                                        232          160
Other assets                                                           23           26
                                                               ----------   ----------

Total Assets                                                   $   23,215   $   25,383
                                                               ==========   ==========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                          $      447   $      454
     Accrued commissions and other expenses                           628          643
                                                               ----------   ----------
       Total current liabilities                                    1,075        1,097
                                                               ----------   ----------

Commitments and Contingencies (Note 5)

Shareholders' equity:
     Preferred stock, no par value; 1,500,000 shares
       authorized; none issued and outstanding                          -            -
     Common stock, no par value; 15,000,000 shares
       authorized; 2,730,985 and 3,272,985 shares
       issued and outstanding, respectively                        10,919       12,521
     Additional paid-in capital                                     1,248        1,248
     Retained earnings                                              9,973       10,517
                                                               ----------   ----------
       Total shareholders' equity                                  22,140       24,286
                                                               ----------   ----------

Total Liabilities and Shareholders' Equity                     $   23,215   $   25,383
                                                               ==========   ==========
</Table>

*** Taken from the audited balance sheet at that date.

          See accompanying notes to consolidated financial statements.

                                        3
<Page>

                                SPORT-HALEY, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                          THREE MONTHS ENDED           NINE MONTHS ENDED
                                               MARCH 31,                   MARCH 31,
                                          2002          2001          2002          2001
                                       ----------    ----------    ----------    ----------
                                       (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
<S>                                    <C>           <C>           <C>           <C>
Net sales                              $    4,364    $    5,908    $   11,908    $   16,734

Cost of goods sold                          2,954         3,547         7,842        10,826
                                       ----------    ----------    ----------    ----------

Gross profit                                1,410         2,361         4,066         5,908

Selling, general and
    administrative expense                  2,086         2,135         5,258         6,001
                                       ----------    ----------    ----------    ----------

Income (loss) from operations                (676)          226        (1,192)          (93)

Other income, net                              78            57           296           429
                                       ----------    ----------    ----------    ----------

Income (loss) before provision
    for income taxes                         (598)          283          (896)          336

(Provision) benefit for income taxes          278          (104)          352          (127)
                                       ----------    ----------    ----------    ----------

Net income (loss)                      $     (320)   $      179    $     (544)   $      209
                                       ==========    ==========    ==========    ==========

Basic and diluted earnings (loss)
    per common share                   $    (0.11)   $     0.05    $    (0.18)   $     0.06
                                       ==========    ==========    ==========    ==========
</Table>

          See accompanying notes to consolidated financial statements.

                                        4
<Page>

                                SPORT-HALEY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                          NINE MONTHS ENDED
                                                                              MARCH 31,
                                                                       -----------------------
                                                                          2002         2001
                                                                       ----------   ----------
                                                                       (UNAUDITED)  (UNAUDITED)
<S>                                                                    <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                      $     (544)  $      209

Adjustments to reconcile net income (loss) to
    net cash provided (used) by operating activities:
       Depreciation and amortization                                          411          579
       Deferred taxes and other                                               (86)          72
       Allowance for doubtful accounts                                        193           36
       Stock option compensation                                                -           15

Cash provided (used) due to changes in assets and liabilities:
     Accounts receivable                                                    1,064         (574)
     Inventory                                                                421         (771)
     Other assets                                                            (236)        (456)
     Accounts payable                                                          (7)        (201)
     Accrued commissions and other expenses                                   (15)         204
                                                                       ----------   ----------

       NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                     1,201         (887)
                                                                       ----------   ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Redemption of held-to-maturity of investments                          2,474        2,000
     Purchases of held-to-maturity investments                             (2,447)      (1,473)
     Sales of fixed assets                                                     96            -
     Purchases of fixed assets                                                (57)         (79)
                                                                       ----------   ----------

       NET CASH PROVIDED BY INVESTING ACTIVITIES                               66          448
                                                                       ----------   ----------
</Table>

          See accompanying notes to consolidated financial statements.

                                        5
<Page>

                                SPORT-HALEY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                  NINE MONTHS ENDED
                                                                      MARCH 31,
                                                               -----------------------
                                                                  2002         2001
                                                               ----------   ----------
                                                               (UNAUDITED)  (UNAUDITED)
<S>                                                            <C>          <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net proceeds from issuance of common stock                $        -   $        -
     Repurchases of common stock                                   (1,602)         (59)
                                                               ----------   ----------

       NET CASH USED BY FINANCING ACTIVITIES                       (1,602)         (59)
                                                               ----------   ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                            (335)        (498)

CASH AND CASH EQUIVALENTS, BEGINNING                                4,413        6,676
                                                               ----------   ----------

CASH AND CASH EQUIVALENTS, ENDING                              $    4,078   $    6,178
                                                               ==========   ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

     Cash paid during the period for:
       Income taxes                                            $      145   $      248
                                                               ==========   ==========

       Interest                                                $       29   $        -
                                                               ==========   ==========

     Cash received during the period for:
       Income taxes                                            $      323   $        -
                                                               ==========   ==========
</Table>

          See accompanying notes to consolidated financial statements.

                                        6
<Page>

                                SPORT-HALEY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

          The consolidated financial statements included herein have been
          prepared by Sport-Haley, Inc. (the "Company") without audit, pursuant
          to the rules and regulations of the Securities and Exchange
          Commission. Certain information and footnote disclosures normally
          included in financial statements prepared in accordance with generally
          accepted accounting principles in the United States of America have
          been condensed or omitted as allowed by such rules and regulations.
          The Company believes that the disclosures are adequate to make the
          information presented not misleading. These financial statements
          should be read in conjunction with the Company's annual audited
          consolidated financial statements dated June 30, 2001, included in the
          Company's annual report on Form 10-K as filed with the Securities and
          Exchange Commission. The results for interim periods are not
          necessarily indicative of results that may be expected for any other
          interim period or for the full year.

          The management of the Company believes that the accompanying unaudited
          condensed consolidated financial statements prepared in conformity
          with generally accepted accounting principles in the United States of
          America, which require the use of management estimates, contain all
          adjustments (including normal recurring adjustments) necessary to
          present fairly the operations and cash flows for the periods
          presented.

          The consolidated financial statements include the accounts of
          Sport-Haley, Inc., and its subsidiary, B&L Sportswear, Inc.
          (collectively referred to as the Company). All significant
          inter-company accounts and transactions have been eliminated.

          In August 2001, the Company closed the manufacturing plant operated by
          the Subsidiary. Since that time, the Subsidiary ceased all business
          operations and has no employees.

NOTE 2    INVENTORIES

<Table>
<Caption>
                                                         March 31,     June 30,
                                                           2002          2001
                                                       -----------   -----------
          <S>                                          <C>           <C>
          Inventories consisted of the following:
                Component                              $   756,000   $ 1,130,000
                Finished Goods                           7,987,000     8,034,000
                                                       -----------   -----------

                                                       $ 8,743,000   $ 9,164,000
                                                       ===========   ===========
</Table>

NOTE 3    REPURCHASE OF COMMON STOCK

          During the three months ended March 31, 2002, the Company repurchased
          98,000 shares of its common stock in open market transactions at a
          cost of approximately $401,000. For the nine months ended March 31,
          2002, the Company repurchased 542,000 shares of its common stock in
          open market transactions at a cost of approximately $1.6 million.

                                        7
<Page>

                                SPORT-HALEY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

          From the inception of the repurchase plan through March 31, 2002, the
          Company had repurchased a total of 2,226,400 shares of its common
          stock at a cumulative cost of approximately $12.4 million.

NOTE 4    COMMON STOCK OPTIONS

          The Company previously adopted a Stock Option Plan (the "Plan"), under
          which 2,150,000 shares are reserved for issuance. During February
          2002, the Company's Compensation Committee granted options to
          employees and outside directors to cumulatively purchase 304,000
          shares of the Company's common stock at a price of $3.60 per share,
          with an expiration date per option of February 12, 2012. As of
          March 31, 2002, the remaining number of shares of common stock
          available for award grants under the Plan (including incentive stock
          options) was 292,679.

NOTE 5    COMMITMENTS AND CONTINGENCIES

          At March 31, 2002, the Company had approximately $900,000 in
          outstanding letters of credit that were issued to foreign suppliers in
          accordance with finished goods inventory purchase commitments.

NOTE 6    EARNINGS PER SHARE

          The Company previously adopted the provisions of Statement of
          Financial Accounting Standards No. 128, EARNINGS PER SHARE, (SFAS No.
          128) effective with the year ended June 30, 1998. SFAS No. 128
          requires the presentation of basic and diluted earnings (loss) per
          common share. The following table provides a reconciliation of the
          numerator and denominator of basic and diluted earnings per common
          share:

<Table>
<Caption>
                                                           THREE MONTHS ENDED MARCH 31, 2002
                                                           ---------------------------------
                                                          Net         Weighted
                                                        Income     Average Shares     Per Share
                                                      ----------   --------------     ---------
          <S>                                         <C>               <C>           <C>
          EARNINGS PER COMMON SHARE

          Basic earnings (loss) per share             $ (320,000)       2,768,613     $    (0.11)

          Effect of dilutive securities
             options                                           -                -              -
                                                      ----------        ---------     ----------

          Diluted earnings (loss) per share           $ (320,000)       2,768,613     $    (0.11)
                                                      ==========        =========     ==========
</Table>

                                        8
<Page>

                                SPORT-HALEY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<Table>
<Caption>
                                                           NINE MONTHS ENDED MARCH 31, 2002
                                                           --------------------------------
                                                          Net         Weighted
                                                        Income     Average Shares     Per Share
                                                      ----------   --------------     ---------
          <S>                                         <C>               <C>           <C>
          EARNINGS PER COMMON SHARE

          Basic earnings (loss) per share             $ (544,000)       3,006,710     $    (0.18)

          Effect of dilutive securities
             options                                           -                -              -
                                                      ----------        ---------     ----------

          Diluted earnings (loss) per share           $ (544,000)       3,006,710     $    (0.18)
                                                      ==========        =========     ==========

<Caption>
                                                          THREE MONTHS ENDED MARCH 31, 2001
                                                          ---------------------------------
                                                          Net         Weighted
                                                        Income     Average Shares     Per Share
                                                      ----------   --------------     ---------
          <S>                                         <C>              <C>            <C>
          EARNINGS PER COMMON SHARE

          Basic earnings per share                    $  179,000        3,443,794     $     0.05

          Effect of dilutive securities
             options                                           -           11,502              -
                                                      ----------        ---------     ----------

          Diluted earnings per share                  $  179,000        3,455,296     $     0.05
                                                      ==========        =========     ==========

<Caption>
                                                           NINE MONTHS ENDED MARCH 31, 2001
                                                           --------------------------------
                                                          Net         Weighted
                                                        Income     Average Shares     Per Share
                                                      ----------   --------------     ---------
          <S>                                         <C>               <C>           <C>
          EARNINGS PER COMMON SHARE

          Basic earnings per share                    $  209,000        3,454,935     $     0.06

          Effect of dilutive securities
             options                                           -           31,835              -
                                                      ----------        ---------     ----------

          Diluted earnings per share                  $  209,000        3,486,770     $     0.06
                                                      ==========        =========     ==========
</Table>

                                        9
<Page>

                                SPORT-HALEY, INC.
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Report on Form 10-Q contains certain forward-looking statements. When used
in this report, the words "may," "will," "expect," "anticipate," "continue,"
"estimate," "project," "intend," "believe" and similar expressions are intended
to identify forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
regarding events, conditions and financial trends including, without limitation,
business conditions and growth in the fashion golf apparel market and the
general economy, competitive factors, and price pressures in the high-end
golf-apparel market; inventory risks due to shifts in market and/or price
erosion of purchased apparel, raw fabric and trim; cost controls; changes in
product mix; and other risks or uncertainties detailed in other Securities and
Exchange Commission filings made by Sport-Haley. Such statements are based on
management's current expectations and are subject to risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, the actual plan of operations,
business strategy, operating results and financial position of Sport-Haley could
differ materially from those expressed in, or implied by, such forward-looking
statements.

FINANCIAL CONDITION

The Company intends to rely on cash generated from operations and available cash
on hand to finance its working capital requirements for at least the next 12
months. To the extent such amounts are insufficient to finance the Company's
working capital requirements, the Company may also make periodic borrowings
under its revolving line of credit. Working capital at March 31, 2002 was
approximately $20.8 million and was approximately $22.6 million at June 30,
2001.

Cash and cash equivalents plus marketable securities decreased since June 30,
2001 by approximately $248,000, to $8.1 million from $8.3 million. During the
same nine-month period, the Company expended approximately $1.6 million for the
repurchase of 542,000 shares of its issued and outstanding common stock, in
accordance with the Company's previously reported repurchase program.

A decrease in accounts receivable provided operating cash of approximately $1.1
million for the nine-month period ended March 31, 2002. Accounts receivable, net
of allowances, were approximately $4.0 million at March 31, 2002 as compared
with $5.2 million at June 30, 2001. Due to the decrease in accounts receivable,
the decrease in inventories discussed below and other factors, during the
nine-months ended March 31, 2002, operating activities provided cash of
approximately $1.3 million.

Since June 30, 2001, inventories decreased by approximately $421,000 to $8.7
million from $9.2 million. The decrease in inventories remains consistent with
management's efforts to reduce closeout inventories and to improve scheduling
for foreign production of current season's inventories. Management successfully
reduced finished goods inventories of Haley(R) apparel while building
inventories of the new Ben Hogan(R) apparel at the same time. The Company's
reliance on foreign suppliers sustains the risk that the Company's revenues
could be adversely affected if a foreign shipment or shipments were received
late or lost. The Company maintains insurance for risk of loss relating to goods
shipped from its foreign and domestic suppliers. However, the Company's
significant reliance on foreign suppliers sustains the risk that the Company may
be left with inadequate or unsatisfactory recourse should the goods received
from the foreign suppliers be nonconforming.

                                       10
<Page>

                                SPORT-HALEY, INC.
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Taxes receivable increased by approximately $88,000 since June 30, 2001, to
$476,000 from $388,000. At March 31, 2002, taxes receivable were primarily
comprised of estimated income taxes receivable relating to current and prior
year net operating loss carrybacks. During the nine months ended March 31, 2002,
the Company received federal and state income tax refunds of approximately
$323,000 and paid federal income taxes of approximately $145,000.

For the nine months ended March 31, 2002, the Company spent approximately
$57,000 for the purchase of property and equipment, and approximately $411,000
in depreciation and amortization was charged to current operations. During the
nine months ended March 31, 2002, the Company received proceeds of approximately
$96,000 from the sales of property and equipment. During the same nine-month
period, investing activities provided cash of approximately $31,000 due to the
sales and purchases of fixed assets combined with the redemptions and purchases
of held-to-maturity investments.

Accounts payable and accrued expenses were approximately $1.1 million at March
31, 2002, the same as they were at June 30, 2001.

For the nine-month period ended March 31, 2002, total shareholders' equity
decreased by approximately $2.1 million. The decrease was attributable to net
loss for the same period combined with repurchases of common stock referred to
above. Book value per share at March 31, 2002 was approximately $8.11 per share,
a per share increase of $0.69 as compared with $7.42 per share at June 30, 2001.

RECENT DEVELOPMENTS

As previously reported, a former shareholder of the Company commenced a putative
class action lawsuit against Sport-Haley, Inc. and three of its officers and
directors (the "Defendants"). The action, which seeks unspecified damages,
alleges that the Defendants violated Section 10(b) of the Security Exchange Act
(the "Exchange Act"), and Rule 10b-5 promulgated thereunder, by knowingly
overstating the Company's financial results, thereby causing the Company's stock
price to be artificially inflated. The complaint further alleges that the
individual Defendants are liable by virtue of being controlling persons of
Sport-Haley, Inc., pursuant to Section 20(a) of the Exchange Act. The
allegations arise out of the Company's restatements of its financial statements
for the fiscal years ended June 30, 1999 and 1998, which the Company previously
reported. The Court appointed a group of investors (the "Plaintiffs"), including
Mr. Gregg, to act as lead plaintiffs in the action.

The Defendants believe that the action is without merit and intend to vigorously
defend the lawsuit. As previously reported, in December 2001, the Defendants
filed a motion to dismiss the action. In February 2002, the Plaintiffs filed
their first amended complaint, alleging the same claims. The Defendants moved to
dismiss the first amended complaint in February 2002. In April 2002, having been
granted an extension of time, the Plaintiffs filed an opposition to the
Defendants' motion to dismiss the first amended complaint. The Defendants
recently filed their reply in support of their motion to dismiss the first
amended complaint. The Defendants' motion to dismiss is pending before the
court. Based upon information that is currently available, management is not
able to estimate the amount of damages, if any, that might be awarded to the
Plaintiffs and the class, if the action is certified by the court as a class
action, if the lawsuit were determined in favor of the Plaintiffs.

                                       11
<Page>

                                SPORT-HALEY, INC.
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As previously reported, the staff of the United States Securities and Exchange
Commission (the "Commission") advised the Company and its Chairman and former
Chief Executive Officer, Robert G. Tomlinson, that the staff plans to recommend
that the Commission bring an enforcement action against the Company and Mr.
Tomlinson to obtain an injunction prohibiting future violations of certain
provisions of the securities laws and possibly other relief. The staff's
recommended action primarily relates to errors in the Company's previously
issued financial statements that the Company previously reported when it
restated its financial statements for fiscal years 1999 and 1998 and
subsequently corrected material financial information for the quarterly periods
of fiscal year 2000. The Company and Mr. Tomlinson provided the staff with
written submissions setting forth legal and factual reasons why such an action
should not be brought. The Company and Mr. Tomlinson do not know what action, if
any, the staff will ultimately recommend to the Commission. If the staff
recommends that the Commission initiate an enforcement action, it is not known
whether the Commission will accept the staff's recommendation. Should the
Commission bring such an action, the Company and Mr. Tomlinson, intend to
vigorously contest it. Based upon the information that is currently available,
management does not believe that the impact, if any, of such an enforcement
action would have a material adverse effect upon the Company's financial
position.

As previously reported, the Company retained legal counsel to possibly pursue
claims against its former auditors in connection with damages suffered as a
result of the restatements of its financial statements for the fiscal years
ended June 30, 1999 and 1998 and the corrections of material financial
information for the quarterly periods of the fiscal year ended June 30, 2000.
Further, counsel to the former auditors has advised the Company that the former
auditor may bring certain claims against Sport-Haley, Inc. Each party denies any
liability to the other party. No legal action has been filed by the Company or
its former auditors that asserts any of these claims. To date, the Company has
incurred approximately $510,000 in expenses related to the restatements of its
financial statements and material quarterly information noted above.

RESULTS OF OPERATIONS

Net sales for the fiscal quarter and nine months ended March 31, 2002, were
approximately $4.4 million and $11.9 million, respectively, decreases of
approximately $1.5 million or 26%, and $4.8 million or 29%, from net sales of
approximately $5.9 million and $16.7 million for the same periods in the prior
fiscal year. The decrease in net sales was primarily attributable to the general
downturn in the USA economy combined with the significant negative economic
impact caused by the events of September 11, 2001. The Company's business trends
closely follow trends in the travel and leisure sector of the USA economy. The
historic events of September 11 severely depressed the travel and leisure sector
that had already been negatively impacted by the general economic downturn
experienced during calendar year 2001. As a result, the Company experienced
significant cancellations of orders during the second and third fiscal quarters
as well as substantial decreases in the number of advance orders written during
the second fiscal quarter as compared with the same periods in prior fiscal
years. The cancellations and decreases in orders significantly impacted the
Company's net sales for the three months ended March 31, 2002. While the Company
continues to concentrate its efforts on increasing sales and creating new
markets for its Haley(R) products and management is particularly pleased with
the initial reception of Ben Hogan(R) apparel, management does not expect the
Company's sales trend to improve dramatically within the current fiscal year.

                                       12
<Page>

                                SPORT-HALEY, INC.
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company's gross profit, as a percentage of net sales, was approximately 32%
and 34% for the quarter and nine months ended March 31, 2002, respectively, and
40% and 35% for the same periods in the prior fiscal year. The decreases in
gross profit percentages were primarily attributed to a revaluation of prior
seasons' inventories. During the fiscal quarter ended March 31, 2002, the
Company reduced the valuation of prior seasons' inventories by approximately
$250,000.

Selling, general and administrative expenses for the fiscal quarter ended March
31, 2002 decreased by approximately $49,000, or 2%, to $2.1 million from $2.1
million for the same quarter in the prior fiscal year. For the nine-month period
ended March 31, 2002, selling, general and administrative expenses decreased by
approximately $743,000, or 12%, to $5.3 million from $6.0 million for the same
period in the prior fiscal year. The decreases are primarily attributable to
commissions paid to independent sales representatives on lower sales volumes, as
compared with prior periods, and management's continued efforts to control
operating costs. The Company is continually refining its business operations in
order to operate as efficiently as possible within an increasingly competitive
marketplace and an ever increasingly difficult economic climate.

Selling, general and administrative expenses were approximately 48% and 44% of
net sales for the quarter and nine months ended March 31, 2002, as compared with
36% and 36% for the same periods in the prior fiscal year. Contributing factors
to the increases in the percentages of net sales were start-up costs associated
with the introduction of Ben Hogan(R) apparel plus legal costs, described above,
associated with the class action lawsuit and the Securities Exchange Commission
investigation.

Other income, net, decreased by approximately $133,000 or 31% to $296,000 for
the nine months ended March 31, 2002 from $429,000 for the same period in the
prior fiscal year. The decrease was primarily attributable to differences
between the periods in the respective rates of interest earned on cash
equivalents and federally insured marketable securities.

Income (loss) before provision for income taxes decreased by approximately
$881,000, or 311%, to approximately ($598,000) for the fiscal quarter ended
March 31, 2002, from $283,000 for the same quarter in the prior fiscal year.
Income (loss) before provision for income taxes decreased by approximately $1.2
million, or 367%, to approximately ($896,000) for the nine months ended March
31, 2002, from $336,000 for the same period in the prior fiscal year.

The Company's effective tax rates for the nine months ended March 31, 2002 and
2001 were 39% and 38%, respectively. The effective tax rate in any fiscal period
can vary significantly from the effective tax rate in another period due to
differences between the recording of certain transactions for financial versus
tax purposes. Certain deductions recognized for tax purposes may not be expensed
for financial statement purposes, and certain expenses recorded for financial
statement purposes may not be deductible for tax purposes.

Net income (loss) for the fiscal quarter and nine months ended March 31, 2002
decreased by approximately $499,000, or 279%, and $753,000, or 360%, when
compared to the same periods in the prior fiscal year. The decreases were
primarily the result of the devastating economic impact on the Company's
business as a result of the events of September 11, 2001 combined with the other
factors discussed above.

                                       13
<Page>

                                SPORT-HALEY, INC.
                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Both the basic and diluted earnings (loss) per share were ($0.11) and ($0.18)
for the fiscal quarter and nine months ended March 31, 2002, respectively. This
compares to basic and diluted earnings per share of $0.05 and $0.06 for the same
periods in prior fiscal year.

                                       14
<Page>

                                SPORT-HALEY, INC.
                                     PART II
                                OTHER INFORMATION

ITEM 1    LEGAL PROCEEDINGS - SEE "RECENT DEVELOPMENTS" IN PART 1, ITEM 2

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          Sport-Haley, Inc. held its annual meeting of shareholders on March 15,
          2002. The following matters were considered and approved by the
          shareholders:

          A. The following six directors were elected to hold office for
             one-year terms or until their successors are elected and qualified:

<Table>
<Caption>
                                                           Votes
                                              Votes       Against      Total
                                               For      or withheld    Voted
                                            ---------   -----------  ---------
                  <S>                       <C>           <C>        <C>
                  Robert G. Tomlinson       2,737,095     18,600     2,755,695
                  Robert W. Haley           2,737,095     18,600     2,755,695
                  Kevin M. Tomlinson        2,737,095     18,600     2,755,695
                  Mark J. Stevenson         2,737,095     18,600     2,755,695
                  Ronald J. Norick          2,737,095     18,600     2,755,695
                  James H. Everest          2,737,095     18,600     2,755,695
</Table>

          B. To ratify appointment of Hein + Associates LLP as the independent
             certified public accountants for Sport-Haley, Inc.

<Table>
                  <S>                       <C>
                  Votes For                 2,738,095
                  Votes Against                11,100
                  Votes Abstaining              6,500
                  Total Voted               2,755,695
</Table>

ITEM 5    OTHER INFORMATION

          On March 15, 2002, the Board of Directors appointed Kevin M. Tomlinson
          as Chief Executive Officer of Sport-Haley, Inc. Robert G. Tomlinson,
          who had formerly served as Chief Executive Officer, will continue to
          serve as the Chairman of the Board of Directors.

ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K

          (A) EXHIBITS

          10.1 Executive Employment Agreement, dated March 18, 2002, between
          Kevin M. Tomlinson and Sport-Haley, Inc.

          (B) REPORTS ON FORM 8-K - NONE

                                       15
<Page>

                                   SIGNATURES

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


                                                 SPORT-HALEY, INC.
                                                 (Registrant)


Date:    May 10, 2002                            /s/ Kevin M. Tomlinson
                                                 ----------------------
                                                 Kevin M. Tomlinson
                                                 Chief Executive Officer


Date:    May 10, 2002                            /s/ Patrick W. Hurley
                                                 ---------------------
                                                 Patrick W. Hurley
                                                 Chief Financial Officer

                                       16