Danier Leather Reports Fiscal 2008 First Quarter Results

Market Wire, October, 2007

Danier Leather Inc. (TSX: DL) today announced its unaudited consolidated financial results for the 13-weeks ended September 29, 2007.

Q1 2008 HIGHLIGHTS

- Comparable store sales increased 5%

- Class action matter is resolved in favour of Danier. Unanimous Supreme
Court of Canada decision upholds the unanimous 2005 Ontario Court of Appeal
ruling that dismissed the class action concerning the Company's initial
public offering ("IPO") in 1998 resulting in a reversal of the $18 million
litigation provision less future income taxes of $4.6 million

- Shareholders' equity increases by approximately $2 per share due to
reversal of litigation provision less future income taxes. Book value per
share as at September 29, 2007 equals $9.10 per share.

FINANCIAL HIGHLIGHTS ($000s, except earnings per share, square footage and
 number of stores):


                        ------------------------------------
                                     For the 13 Weeks Ended
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                        Sept. 29, 2007     Sept. 23, 2006(i)
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Sales                          $22,087              $21,928
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EBITDA(1)                       (4,007)              (4,002)
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Net Loss Excluding
 Litigation Provision(2)        (3,563)              (3,702)
------------------------------------------------------------
Net Earnings (Loss)              9,820               (3,702)
------------------------------------------------------------
EPS - Basic                      $1.54               ($0.56)
------------------------------------------------------------
EPS - Diluted                    $1.53               ($0.56)
------------------------------------------------------------
Number of Stores                    91                   93
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Retail Square Footage          349,248              364,986
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(i)restated

As a result of the unanimous Supreme Court of Canada decision upholding the unanimous Ontario Court of Appeal ruling that dismissed the class action, the litigation provision of $18 million less future income taxes of $4.6 million was reversed in the first quarter of 2008 and net earnings were $9.8 million ($1.54 per basic share). Excluding the reversal of the class action provision, the net loss for the first quarter of 2008 was $3.6 million(2) ($0.57 loss per basic share) compared with a net loss of $3.7 million ($0.56 loss per basic share) during the first quarter of 2007.

Sales for the first quarter increased by 1% or $0.2 million to $22.1 million from $21.9 million in the first quarter of 2007. Comparable store sales increased 5%. Danier opened one shopping mall store in Saskatoon, Saskatchewan during the quarter and had 91 stores in operation compared with 93 stores in the same quarter last year.

Gross profit as a percentage of revenue during the first quarter of 2008 expanded by 490 basis points or 4.9% to 48.9% compared with 44.0% during the first quarter last year. The expanded gross profit as a percentage of revenue resulted in gross profit dollars increasing by 12% or $1.2 million for the first quarter.

On October 12, 2007, the Supreme Court of Canada released its unanimous decision in the matter of a class action concerning the Company's initial public offering ("IPO") in 1998. The Supreme Court upheld the unanimous 2005 Ontario Court of Appeal ruling that dismissed the class action. The Supreme Court decision removes uncertainty and allows Danier to build and grow its business. The Company had provided for this uncertainty and the $18 million provision less future income taxes of approximately $4.6 million was reversed and as a result shareholders' equity increased by approximately $2 per share.

During the first quarter of 2008, Danier repurchased 65,000 subordinate voting shares for cancellation under the Normal Course Issuer Bid. Since the bid commenced on April 23, 2007, Danier has repurchased a total of 189,500 shares for cancellation.

Danier is holding its Annual and Special Meeting of Shareholders today, Wednesday, October 17, 2007 at 4:00 p.m. Eastern Time at Danier's corporate headquarters in Toronto. Shareholders are encouraged to attend. The meeting will also be webcast live at www.danier.com .

(1) EBITDA is defined as net earnings (loss) before interest expense (income), income taxes, amortization and litigation provision and related expenses. EBITDA is a financial metric used by management and some investors to compare companies on the basis of ongoing operating results before taxes, interest expense, amortization, litigation provision and related expenses and its ability to incur and service debt. EBITDA is not a recognized measure for financial presentation under Canadian generally accepted accounting principles ("GAAP"). Non-GAAP earnings measures such as EBITDA do not have any standardized meaning prescribed by Canadian GAAP and, therefore may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as an alternative to other financial measures determined in accordance with GAAP. EBITDA is calculated as outlined in the following table: