<PAGE>

                       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 [FEE REQUIRED]

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

                                       OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                          COMMISSION FILE NUMBER 1-12676

                             -----------------------

                              COASTCAST CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           CALIFORNIA                             95-3454926         
 (STATE OR OTHER JURISDICTION OF               (I.R.S. EMPLOYER      
 INCORPORATION OR ORGANIZATION)               IDENTIFICATION NO.)    

        3025 EAST VICTORIA STREET                  90221  
      RANCHO DOMINGUEZ, CALIFORNIA               (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 638-0595

   ------------------------------------------------------------------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                      NAME OF EACH EXCHANGE
       TITLE OF EACH CLASS                             ON WHICH REGISTERED
       ----------------------                          ---------------------
     COMMON STOCK, NO PAR VALUE                       NEW YORK STOCK EXCHANGE

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE.

   ------------------------------------------------------------------------

     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       

     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. [ ]

     Aggregate market value of the Registrant's voting stock held by
non-affiliates, based upon the closing price of said stock on the New York Stock
Exchange on March 15, 1999 ($8.500 per share): $52,255,000.

     As of March 15, 1999, 7,934,404 shares of the Common Stock, no par 
value, of the Registrant were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

     Portions of the Proxy Statement relating to the Annual Meeting of
Shareholders to be held June 18, 1999, are incorporated by reference into Part
III of this Report.

                                       1

<PAGE>


                              COASTCAST CORPORATION

     ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
PART I                                                                             PAGE
----------------------------------------------------------------------------------------
<S>            <C>                                                                 <C>
Item 1.        Business                                                              3
Item 2.        Properties                                                            8
Item 3.        Legal Proceedings                                                     9
Item 4.        Submission of Matters to a Vote of Security Holders                   9

----------------------------------------------------------------------------------------
PART II
----------------------------------------------------------------------------------------
Item 5.        Market for Registrant's Common Equity and Related Stockholder
               Matters                                                              11
Item 6         Selected Financial Data                                              14
Item 7.        Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                            15
Item 8         Financial Statements and Supplementary Data                          19
Item 9.        Changes in and Disagreements with Accountants on Accounting
               and Financial Disclosure                                             19

----------------------------------------------------------------------------------------
PART III
----------------------------------------------------------------------------------------
Item 10.       Directors and Executive Officers of the Registrant                   19
Item 11.       Executive Compensation                                               19
Item 12.       Security Ownership of Certain Beneficial Owners and
               Management                                                           19
Item 13.       Certain Relationships and Related Transactions                       20

----------------------------------------------------------------------------------------
PART IV
----------------------------------------------------------------------------------------
Item 14.       Exhibits, Financial Statement Schedules, and Reports on Form 8-K     20

</TABLE>
                                       2

<PAGE>

                                     PART I

ITEM 1.  BUSINESS.

GENERAL

     Coastcast Corporation is one of the largest manufacturers in the world 
of investment-cast titanium and stainless steel golf clubheads for 
high-quality, premium-priced metal woods, irons and putters. The Company 
believes it has manufactured more metal wood clubheads for high-quality, 
premium-priced golf clubs than any other manufacturer. Over the past two 
decades, golf clubs with perimeter-weighted heads have become much more 
popular among golfers because such clubs are more forgiving to off-center 
hits than other types of clubs. The investment-casting process has become the 
principal method for manufacturing clubheads because it facilitates the use 
of perimeter weighting designs and modern alloys and enhances manufacturing 
precision and uniformity. Manufacturing precision is particularly important 
in the manufacture of an oversized, thin-walled metal wood which can involve 
more than 200 separate manufacturing steps to produce a clubhead that meets 
strict standards for size, weight, strength and finish.

     The Company also manufactures a variety of investment-cast orthopedic 
implants and surgical tools (used principally in replacement of hip and knee 
joints in humans and small animals) and other specialty products, which 
products accounted for less than 7% of the Company's total sales for the year 
ended December 31, 1998.

     In the past three years, golf clubs with titanium alloy heads have 
become popular. The Company developed the capability of manufacturing 
titanium clubheads and began shipping titanium clubheads at the end of 1995. 
Titanium clubheads accounted for approximately 50% and 41% of the Company's 
total sales in 1997 and 1998, respectively.

     The Company was incorporated as a California corporation in 1980.

BUSINESS STRATEGY - GOLF

     The Company recognizes that golf club companies are critical to its 
success and, accordingly, has designed its business strategy to engender 
customer satisfaction in order to maintain its industry leadership position. 
The Company's strategy consists of the following principal elements:

     -    MAINTAIN RELIABLE, HIGH-QUALITY MANUFACTURING. The Company believes
          its manufacturing expertise, quality control, scheduling flexibility,
          substantial production capacity and its ability to manufacture golf
          clubheads using stainless steel or titanium alloys differentiate it
          from others in the industry. The Company endeavors to respond quickly
          to customers' orders and deliver high-quality clubheads on a timely
          basis. This capability is particularly important to golf club
          companies which can experience rapid growth from the increasing
          popularity of a particular club or set of clubs.

     -    INTEGRATE OPERATIONS. The Company's operations are integrated, from
          the computer-aided manufacture of some of the tooling used to produce
          clubheads through foundry operations and finishing processes,
          including painting.

     -    FOSTER CLOSE CUSTOMER RELATIONSHIPS. The Company believes that its
          responsive service has been a significant element of its success. The
          Company endeavors to be a value-added supplier by offering
          consistently high levels of customer service and support.

     The Company has a staff of 12 employees dedicated to sales and customer
service. The Company maintains its own internal laboratory for testing of
customers' products during the production process. The Company typically

                                       3

<PAGE>

delivers finished products to its customers within 10 weeks from receipt of the
customer's order during peak production periods, within 6 to 8 weeks during
other periods and within several weeks or even several days if necessary to
accommodate a customer's need for more rapid delivery. With new products,
depending on their complexity, a longer turnaround period may be expected.

GOLF PRODUCTS

     The Company's golf products are generally used in golf clubs targeted at 
the high end of the market. These clubs must satisfy the requirements of 
highly-skilled amateur and professional golfers, including touring 
professionals. As such, golf clubs which incorporate clubheads manufactured 
by the Company are sometimes referred to in the industry as "tour-driven" 
golf clubs.

     The Company's clubheads are included in a variety of leading metal 
woods, irons and putters, some of which are listed below:

     CALLAWAY                                              
     --------                                              
     GREAT BIG BERTHA HAWKEYE TITANIUM METAL WOODS         
     GREAT BIG BERTHA TITANIUM METAL WOODS                 
     BIG BERTHA STEELHEAD METAL WOODS                      
     BIG BERTHA WARBIRD METAL WOODS                        
     GREAT BIG BERTHA TUNGSTEN TITANIUM IRONS
     X12 BIG BERTHA IRONS
     BIG BERTHA IRONS                                      
     TOUR SERIES WEDGES                                    
     BIG BERTHA BLADE PUTTERS                              
     S2H2 PUTTERS                                          
     BOBBY JONES PUTTERS                                   
                                                           
     CLEVELAND                                             
     ---------                                             
     8T TOUR ACTION TITANIUM METAL WOODS                   
     TA3 IRONS                                             
     RTG WEDGES
     588 WEDGES
     691 WEDGES                                            
     485 WEDGES                                            
                                                           
     COBRA                                                 
     -----                                                 
     KING COBRA TOUR TITANIUM METALWOODS                   
     KING COBRA OFFSET TITANIUM METALWOODS                 
     TRUSTY RUSTY PWR WEDGES                               
     BOBBY GRACE PUTTERS                                   

     ODYSSEY                                      
     -------                                      
     DUAL FORCE BLADE PUTTERS                     
     DF ROSSIE MALLET PUTTERS                     
     DUAL FORCE WEDGES                            
     VARIABLE DUROMETER PUTTERS                   
                                                  
                                                  
     TAYLOR MADE                                  
     -----------                                  
     FIRESOLE TITANIUM METAL WOODS                
     TITANIUM BUBBLE 2 IRONS                      
     BURNER BUBBLE TITANIUM 2 METAL WOODS         
     TITANIUM 2 FAIRWAY RAYLORS                   
     TOUR WOODS                                   
     BURNER BUBBLE 2 METAL WOODS                  
     BURNER TOUR IRONS                            
     LCG IRONS                                    
                                                  
                                                  
     TITLEIST                                     
     --------                                     
     975D/976R TITANIUM METAL WOODS               
     STARSHIP METAL WOODS                         
     DCI 981 & 981 SL IRONS                       
     DCI 962 IRONS                                
     OVERSIZE PLUS IRONS                          
     962 "BLADE" IRONS                            
     BOB VOKEY WEDGES                             

                                       4

<PAGE>

     NEVER COMPROMISE                                      
     ----------------                                      
     ALPHA PUTTERS                                         
     BETA PUTTERS
     GAMMA PUTTERS
     DELTA PUTTERS
     ALPHA II PUTTERS
     KAPPA PUTTERS


     PING                      
     ----                      
     ISI TITANIUM METAL WOODS  
     

GOLF PRODUCT CUSTOMERS

     Over the past fifteen years, the Company has supplied investment-cast 
clubheads for metal woods, irons and putters to a majority of the top golf 
companies which produce high-quality, premium-priced golf clubs. Most golf 
club companies source the three principal components of a golf club--the 
clubhead, shaft, and grip--from independent suppliers which manufacture these 
components based on the golf club companies' designs and specifications. The 
Company currently is a major supplier of stainless steel and titanium 
clubheads to Callaway Golf Company, which is the producer of the Big Bertha 
line of steel metal woods and irons and the Great Big Bertha titanium metal 
woods and irons, and Odyssey putters and wedges, since its acquisition by 
Callaway in August 1997. In addition, the Company is a supplier of 
investment-cast steel and titanium clubheads for companies which market the 
Titleist, Taylor Made, Cleveland, Cobra, Never Compromise, Wilson and Daiwa 
brands of golf clubs.

     Substantially all of the clubheads manufactured by the Company are used 
in high-quality, premium-priced golf clubs. The Company believes that a 
substantial portion of the clubheads manufactured by it are incorporated in 
clubs sold in North America, although an increasing portion of the Company's 
clubheads are incorporated in clubs sold in parts of Asia, Europe and other 
parts of the world. Historically, a limited number of golf club companies 
have held a very substantial portion of the total market share for 
high-quality, premium-priced golf clubs in North America. Currently, some of 
the more popular high-quality, premium-priced clubs are Callaway metal woods 
and irons; Taylor Made metal woods and irons; Titleist metal woods, irons and 
putters; Odyssey putters; Wilson metal woods, irons and putters; and Cobra 
metal woods. Several of these golf clubheads are marketed by customers of the 
Company. Callaway (including Odyssey after its acquisition by Callaway in 
August 1997) accounted for 49%, 34% and 46% of the Company's total sales in 
1998, 1997 and 1996, respectively. Fortune Brands (formerly American Brands, 
owner of Titleist and Cobra) accounted for 22% and 12% of the Company's total 
sales in 1998 and 1997, respectively. Taylor Made accounted for 14%, 23% and 
18% of the Company's total sales in 1998, 1997 and 1996, respectively.

     A close working relationship typically exists between the Company and 
its principal golf club customers, and sales and marketing activities are 
conducted by a limited number of direct sales employees and senior executives 
of the Company.

MANUFACTURING - GOLF

     INVESTMENT-CASTING PROCESS. Investment-casting is a highly specialized 
method of making metal products. It has become the principal method for the 
manufacture of golf clubheads. Previously, woods were made of wood and irons 
were produced by forging and machining. Greater flexibility in the shape and 
weight distribution of clubheads is possible with the investment-casting 
process. Investment-casting facilitates perimeter weighting and the use of 
modern alloys. It also enhances manufacturing precision and uniformity. The 
enhanced precision inherent in investment-casting is particularly important 
in the manufacture of metal woods which can involve more than 200 separate 
manufacturing steps.

                                       5

<PAGE>

     The basic steps of investment-casting, in its simplest form, are as
follows:

-        Produce a metal die (sometimes called a wax mold) based on
         specifications provided by the customer.

-        Inject wax into the die, producing a pattern the exact shape of the
         final casting.

-        Surround (or "invest") the pattern with a ceramic material which is
         allowed to dry to form a ceramic shell.

-        Remove the wax by heat, leaving a cavity in the ceramic shell in the
         shape of the desired casting.

-        Pour molten metal into the cavity in the ceramic shell and allow it to
         solidify.

-        Remove the ceramic material by mechanical and chemical action after the
         metal solidifies and clean the casting.

-        Finish and inspect the casting.

     METAL ALLOYS. Most clubheads manufactured by the Company are made of 
titanium or stainless steel alloys. Titanium clubheads have similar tensile 
strength as stainless steel with approximately one-half the weight of steel. 
Therefore, a larger oversized clubhead can be manufactured using titanium 
without increasing clubhead weight. The Company's Gardena facility is devoted 
to titanium operations.

     POLISHING AND FINISHING. The Company conducts golf clubhead polishing 
and finishing operations in its facilities in Mexicali, Mexico. Finishing of 
the head for an iron or putter can require more than 50 separate steps and 
finishing of a head for a metal wood can involve as many as 100 separate 
steps. Most of the clubheads and substantially all of the metal woods 
manufactured by the Company are finished by it to customer specifications, 
although some of such clubheads--principally irons--are delivered to 
customers in an unfinished state. The Company, to assist its customers, at 
times also polishes and finishes limited quantities of investment-cast 
clubheads manufactured by other companies.

     QUALITY CONTROL. The Company believes that its success as a leading 
supplier of golf clubheads is largely attributable to its quality control 
measures. The Company attempts to monitor every aspect of the engineering and 
manufacturing process to assure the quality of the clubheads manufactured by 
the Company. Particular attention is paid to the quality of raw materials 
(principally wax, ceramic and metal alloys), gating techniques employed in 
channeling the flow of molten metal in the ceramic shell in the casting 
process, and rigorous inspection standards to assure compliance with the 
customers' product specifications throughout the manufacturing process.

     REGULATIONS. The Company uses hazardous substances and generates 
hazardous waste in the ordinary course of its business. The Company is 
subject to various federal, state, local and foreign environmental laws and 
regulations, including those governing the use, discharge and disposal of 
hazardous materials. Although the Company has not to date incurred any 
material liabilities under environmental laws and regulations and believes 
that its operations are in substantial compliance with applicable laws and 
regulations, environmental liabilities could arise in the future that may 
adversely affect the Company's business. See "Discontinued Operations" below.

COMPETITION - GOLF

     The Company operates in a highly competitive environment. The Company
competes against a number of manufacturers of investment-cast titanium clubheads
for high-quality, premium-priced golf clubs, including but not 

                                       6

<PAGE>

limited to: Sturm Ruger, Inc., and Cast Alloys, Inc. The Company competes 
principally against two significant U.S.-based manufacturers (Hitchner 
Manufacturing Co., Inc. and Cast Alloys, Inc.) of investment-cast steel 
clubheads. The Company also competes with several foreign manufacturers of 
investment-cast steel clubheads, including Worldmark Services Ltd. (formerly 
Fu-Sheng Industrial Co. Ltd.).

     The Company believes that its position as a leading manufacturer of 
titanium and steel clubheads for high-quality, premium-priced golf clubs is 
due to its ability to produce quality clubheads in quantities sufficient to 
meet rapidly growing demand for popular golf clubs, its experience and 
expertise in manufacturing investment-cast golf clubheads, and its integrated 
manufacturing operations.

     Although price is a factor, the Company does not compete solely on 
price. Quality and service are key success factors in the premium price golf 
clubhead market. The Company seeks to provide better products and service to 
its customers than its competitors in order to increase or retain market 
share.

     Although the Company's foreign competitors (the principal ones of which 
are located in Asia) are typically able to offer prices below the Company's 
prices, the Company believes that it has some competitive advantages over 
foreign manufacturers, including its ability to deliver clubheads more 
quickly to its customers due to shorter shipping and lead times. Shipment of 
clubheads to the United States from Asia usually requires at least two weeks 
by ocean freight. In addition, the Company believes that its foreign 
competitors have not demonstrated the same willingness and ability as the 
Company to commit sufficient resources to meet rapidly growing demand for 
popular golf clubs in a timely manner. Further, the Company believes that 
certain of its customers prefer products made in the United States.

     The Company also competes against golf club companies that internally 
produce clubheads for their clubs. The Company believes that one of the 
largest dozen golf club companies, Karsten Manufacturing Co., which produces 
the Ping brand of clubs, manufactures substantially all of the 
investment-cast steel clubheads for use in its own clubs. The Company 
believes that this golf club company produces clubheads for its own use only 
and does not currently compete with the Company for the business of other 
golf club companies. However, Karsten Manufacturing Co. has purchased some 
golf clubheads for its Ping brand from the Company.

     The Company also faces potential competition from those golf club 
companies that currently purchase golf clubheads from outside suppliers but 
may, in the future, manufacture clubheads internally. If the Company's 
current customers begin manufacturing clubheads internally, the Company's 
sales would be adversely affected. The Company believes that as long as 
component suppliers, such as the Company, provide high-quality component golf 
club parts at competitive prices and reliably, it is unlikely that many golf 
club companies will commence their own manufacturing.

     The Company experiences indirect competition from golf club companies 
that produce golf clubs with clubheads that are not investment-cast. For 
example, some clubheads for woods are made of wood, some clubheads for irons 
are forged, some clubheads for putters are machined, and some clubheads are 
made of graphite or other composites. The Company believes that the 
investment-cast, metal clubhead has a greater share of the market for 
clubheads for high-quality, premium priced golf clubs than these alternate 
types of clubheads. In particular, the metal wood has surpassed the wooden 
wood as the most popular wood and the investment-cast iron has surpassed the 
forged iron as the most popular type of iron. Graphite and other composite 
clubheads have been available for several years, but to date have not become 
nearly as popular as investment-cast clubheads.

EMPLOYEES

     As of December 31, 1998, the Company employed 3,072 persons on a 
full-time basis. Of these employees, 2,163 and 184 were employed by Coastcast 
Corporation, S.A. and Coastcast Tijuana S. de R. L. de C. V., respectively, 
the Mexican subsidiaries of the Company. The Company considers its employee 
relations to be good.

                                       7

<PAGE>

     The production and maintenance employees in the Gardena, California 
facility are represented by the United Steelworkers of America. There were 
130 such employees as of December 31, 1998. The collective bargaining 
agreement for such employees was effective May 12, 1997, and will expire on 
May 11, 2000.

ORTHOPEDIC IMPLANTS AND SPECIALTY PRODUCTS

     The Company also manufactures orthopedic implants and surgical tools 
(used principally for replacement of hip and knee joints in humans and small 
animals) and other specialty products. The Company believes that the 
engineering and manufacturing discipline required to manufacture these 
products has contributed to the Company's ability to manufacture golf 
products.

     The Company is endeavoring to develop its steel, titanium, and other 
alloy investment casting capabilities to potential customers in other 
commercial and industrial businesses outside of the golf business. At this 
stage, the Company cannot predict which product opportunities will result in 
profitable sales, and whether volumes will be significant.

     The Company believes that its principal competitors in this business are 
Precision Castparts Corporation and PED Manufacturing.

TERMINATION OF CHINA JOINT VENTURE

     In December 1998, the Company entered into a joint venture agreement 
with a company in Taiwan to establish a new golf clubhead manufacturing plant 
in mainland China. That joint venture agreement has since been terminated. 
The parties concluded that current market conditions were not sufficiently 
stable to proceed with joint ownership of a new plant in China. The Company 
incurred no costs in connection with the terminated joint venture other than 
legal, accounting and administrative costs which were not material.

DISCONTINUED OPERATIONS

     The Company historically manufactured investment-cast aerospace and 
other industrial products in addition to golf clubheads and orthopedic 
implant products. In October 1993, the Company announced its decision to 
discontinue its aerospace business because of declining sales and operating 
losses on this portion of its business. This business was essentially phased 
out by June 1994. In connection with the offering for sale of the 
Wallingford, Connecticut property, the Company had an environmental 
assessment performed, which identified the presence of certain chemicals 
associated with chlorinated solvents in groundwater beneath a portion of the 
property. The Company conducted investigations to determine the source and 
extent of the contamination. In addition, the Company determined that certain 
of the contaminates were present prior to its ownership and entered into a 
remediation cost sharing agreement with the previous owner of the property. 
In August 1998, the Company sold the Wallingford, Connecticut property, under 
an agreement which stipulates that the Company and the previous owner bear 
the liability to remediate the property. The Company incurred a loss on the 
sale of the property. The loss on sale of the property plus the Company's 
share of the estimated remediation costs were not adequately covered by the 
original reserve. As a result, the Company reported a $157,000 loss from 
discontinued operations, net of income tax benefit, as shown on the 
Consolidated Statements of Income.

ITEM 2.  PROPERTIES.

     The Company's principal executive offices and one of two investment 
casting manufacturing facilities are located in a 120,000 square foot leased 
facility in Rancho Dominguez, California, a suburb of Los Angeles. The lease 
expires in October, 2003 and the Company has a five-year extension option.

                                       8

<PAGE>

     The Company owns a complex of plants in Gardena, California (which is 
within approximately five miles of the Rancho Dominguez facilities), 
comprising an aggregate of approximately 110,000 square feet. These 
facilities are principally used for manufacturing titanium golf clubheads and 
tooling. In October 1994, the Company purchased approximately two acres of 
land contiguous to its Gardena facility. In April 1996, the Company purchased 
another approximately two acres of land next to the land purchased in October 
1994. This land is available for future expansion if and when necessary.

     Clubhead polishing and finishing operations are conducted in facilities 
leased by the Company's subsidiary in Mexicali, Mexico under four lease 
agreements, comprising an aggregate of approximately 141,000 square feet. 
Three of the leases expire in December 2003, and the other lease expires in 
June 2001.

     The Company intends to move most of its steel casting operations to a 
186,000 square foot leased investment casting facility for steel products in 
Tijuana, Mexico. The facility is currently operational. The Company has 
options to lease sites contiguous to the property as needed for future growth.

ITEM 3.  LEGAL PROCEEDINGS.

     The Company is a party to legal actions arising in the ordinary course 
of business, none of which, individually or in the aggregate, in the opinion 
of management, after consultation with counsel, will have a material adverse 
effect on the business or financial condition of the Company.

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

Not Applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

     The executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME                            AGE      POSITION
----                            ---      --------
<S>                             <C>      <C>
Hans H. Buehler                  66       Chairman of the Board and Chief Executive
                                           Officer
Robert C. Bruning                56       Chief Financial Officer and Secretary
Ramon F. Ibarra                  46       Vice President, Manufacturing
Bryan Rolfe                      45       Vice President, New Product Development
Kathleen H. Wainwright           34       Vice President, Sales
</TABLE>

     Mr. Buehler is one of the founders of the Company and has been Chairman 
of the Board since the Company's inception in 1980. Prior to founding the 
Company, he was President of the Rex Precision Products Division of Alco 
Standard Corporation, a competitor of the Company that was acquired by the 
Company in 1987. Mr. Buehler has more than 40 years of experience in the 
investment-casting business, including more than 30 years of experience in 
the manufacture of golf clubheads.

     Mr. Bruning joined the Company in May 1996. From 1989 to 1996, he was 
Chief Financial Officer of Zacky Farms, Inc., a producer of poultry products. 
From 1986 to 1988, Mr. Bruning was a partner at Coopers & Lybrand, LLP. Prior 
to that time he worked for Arthur Andersen, LLP for 19 years, 9 of which he 
served as a partner.

                                       9

<PAGE>

     Mr. Ibarra joined the Company in June 1981. Since 1989, he has served as 
Vice President, Manufacturing of the golf operations of the Company. Prior to 
such time, he served as the production manager for the Company with respect 
to all phases of its business and as the plant manager at the facility 
located in Rancho Dominguez, California.

     Mr. Rolfe joined the Company in July 1998. From 1997 to June 1998, he 
was a consultant and President of Slotline Golf Company. From 1995 to 1997, 
he was the President and Chief Operating Officer of Cleveland Golf Company. 
Mr. Rolfe worked 20 years at Salomon North America in a variety of management 
positions, including Director of Operations and Finance from 1991 to 1995.

     Ms. Wainwright joined the Company in 1988. Since November 1996 she has 
served as Vice President, Sales. Prior to that time, she served the Company 
in various capacities, including plant manager at the facility located in 
Wallingford, Connecticut.

     Each officer serves at the pleasure of the Board of Directors of the 
Company.

                                       10

<PAGE>

                                     PART II

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

PRINCIPAL MARKET AND PRICES

     The common stock of the Company is listed on the New York Stock Exchange 
under the symbol PAR. The following table sets forth the high and low sales 
prices per share for the common stock of the Company as reported by the New 
York Stock Exchange.

<TABLE>
<CAPTION>
FISCAL YEAR                                       HIGH          LOW
-----------                                      -------      -------
<S>        <C>                                   <C>           <C>
1997
           First Quarter                         $20 1/2       $12 1/2
           Second Quarter                         14 3/8         9 3/4
           Third Quarter                          15 3/4        10 3/4
           Fourth Quarter                         17 7/16       13 1/8
1998
           First Quarter                          22 5/8        13 3/8
           Second Quarter                         25            16 1/4
           Third Quarter                          19 5/8         8 3/8
           Fourth Quarter                          9 11/16       6 5/8

</TABLE>

The approximate number of record holders of common stock of the Company as of 
March 15, 1999 was 174.

DIVIDENDS

     The Company does not anticipate paying cash dividends in the foreseeable 
future. Any future determination as to payment of dividends will be at the 
discretion of the Company's Board of Directors and will depend on the 
Company's results of operations, financial condition, contractual 
restrictions and other factors deemed relevant by the Board of Directors.

STOCK REPURCHASE

     On October 25, 1995, the Board of Directors authorized the Company to 
purchase up to one million shares of Coastcast common stock from time to time 
in the open market or negotiated transactions. Under this authorization, the 
Company purchased 139,400 shares at a cost of $1.5 million for the year ended 
December 31, 1998. As of December 31, 1998, there were 457,000 shares 
remaining to be purchased under this authorization. In addition, in August 
1998, the Board of Directors authorized the repurchase of a block of 925,400 
shares in a privately negotiated transaction at a cost of $10.9 million.

BUSINESS RISKS

     CUSTOMER CONCENTRATION. The Company's sales have been and very likely 
will continue to be concentrated among a small number of customers. Sales to 
as few as three customers accounted for 85% of sales during the year ended 
December 31, 1998 and sales to four customers accounted for 84% of sales 
during the years ended December 31, 1997 and 1996. Sales to the Company's top 
customer, Callaway Golf Company (including Odyssey Golf after its acquisition 
by Callaway in August 1997) accounted for 49% of sales for the year ended 
December 31, 1998.

                                       11

<PAGE>

     The Company has no long-term contracts with, and is not the exclusive 
supplier to, any of its customers, which the Company believes is typical 
industry practice. Although the Company is now a principal supplier of steel 
and titanium clubheads to Callaway, there are other actual or potential 
sources of supply to Callaway and the level of future orders is not known at 
this time. In the event Callaway increases purchases from other suppliers, 
the Company could be adversely affected. Although the Company believes that 
its relationships with its customers are good and its prices are competitive, 
the loss of a significant customer or a substantial decrease in the sales of 
golf clubs by a significant customer could have a material adverse effect on 
the Company's business.

     COMPETITION. The Company operates in a highly competitive market. All of 
the Company's products are manufactured according to customers' designs and 
specifications. Accordingly, the Company competes against other independent 
domestic and foreign manufacturers which have the capability to manufacture 
investment-cast clubheads. The Company also experiences indirect competition 
from golf club companies that manufacture their own clubheads or make golf 
clubs with clubheads that are not investment-cast or are made of materials 
the Company is not currently capable of producing. Potential competition also 
exists from those golf club companies that currently purchase clubheads from 
the Company but may, in the future, manufacture clubheads internally. The 
Company believes that it competes principally on the basis of its ability to 
produce consistently high-quality golf clubheads in quantities sufficient to 
meet rapidly growing demand for popular golf clubs. Some of the Company's 
current and potential competitors may have greater resources than the Company.

     NEW PRODUCTS. The Company's historical success has been attributable, in 
part, to its ability to supply clubheads for companies whose new products 
rapidly attained a significant portion of the market for high-quality, 
premium-priced golf clubs. In the future, the Company's success will depend 
upon its continued ability to manufacture golf clubheads for such companies. 
There are no assurances, however, of the Company's ability to do so. If a 
golf club having a head not manufactured by the Company gains significant 
market share from customers of the Company, the Company's business would be 
adversely affected.

     NEW MATERIALS AND PROCESSES. The Company's future success is also 
dependent on continuing popularity of investment-cast clubheads. A 
significant loss of market share to golf clubs with heads made by other 
processes would have a material adverse impact on the Company's business. 
Similarly, the Company's future success is also dependent on continuing 
popularity of clubheads made of titanium or stainless steel alloys or other 
metal alloys which the Company is capable of casting.

     MANUFACTURING COST VARIATIONS. Consistent manufacture of high-quality 
products requires constant care in the manufacture and maintenance of 
tooling, monitoring of raw materials, and inspection for compliance with 
product specifications throughout the manufacturing process. 
Investment-casting is labor intensive, and numerous steps are required to 
produce a finished product. Variations in manufacturing costs and yields 
occur from time to time, especially with new products during the "learning 
curve" phase of production and products which are more difficult to 
manufacture such as titanium or oversized metal wood and iron golf clubheads. 
The length and extent of these variations are difficult to predict.

     DEPENDENCE ON POLISHING AND FINISHING PLANT IN MEXICO. A substantial 
portion of the golf clubheads manufactured by the Company, and some clubheads 
produced by other clubhead manufacturers, are polished and finished by the 
Company. The polishing and finishing processes used by the Company are highly 
labor intensive. The Company performs substantially all of these processes in 
its facilities in Mexicali, Mexico pursuant to the "maquiladora" duty-free 
program established by the Mexican and U.S. governments. Such program enables 
the Company to take advantage of generally lower costs in Mexico, without 
paying duty on inventory shipped into or out of Mexico or paying certain 
Mexican taxes. The Company pays certain expenses of the Mexico facility in 
Mexican currency and thus is subject to fluctuations in currency value. The 
Company does not have any exchange rate hedging arrangements to protect 
against fluctuations in currency value. The Company is also subject to other 
customary risks of doing business 

                                       12

<PAGE>

outside the United States. There can be no assurance that the Mexican 
government will continue the "maquiladora" program or that the Company will 
continue to be able to take advantage of the benefits of the program. The 
loss of these benefits could have an adverse effect on the Company's 
business. The Company believes that the North American Free Trade Agreement 
has not had any adverse effect on its Mexican operations.

     HAZARDOUS WASTE. In the ordinary course of its manufacturing process, 
the Company uses hazardous substances and generates hazardous waste. The 
Company has no material liabilities as of December 31, 1998 under 
environmental laws and regulations, and believes that its operations are in 
substantial compliance with applicable laws and regulations. Nevertheless, no 
assurance can be given that the Company will not encounter environmental 
problems or incur environmental liabilities in the future which could 
adversely affect its business. See also Item 1. Business - Discontinued 
Operations.

     DEPENDENCE ON DISCRETIONARY CONSUMER SPENDING. Sales of golf equipment 
are dependent on discretionary spending by consumers, which may be adversely 
affected by general economic conditions. A decrease in consumer spending on 
premium-priced golf clubs could have an adverse effect on the Company's 
business.

     SEASONALITY; FLUCTUATIONS IN OPERATING RESULTS. The Company's customers 
have historically built inventory in anticipation of purchases by golfers in 
the spring and summer, the principal selling season for golf equipment. The 
Company's operating results have been impacted by seasonal demand for golf 
clubs, which generally results in higher sales in the second and third 
quarters. The timing of large new product orders from customers and 
fluctuations in demand due to a sudden increase or decrease in popularity of 
specific golf clubs have contributed to quarterly or other periodic 
fluctuations. No assurance can be given, however, that these factors will 
mitigate the impact of seasonality in the future.

     RELIANCE ON KEY PERSONNEL. The success of the Company is dependent upon 
its senior management, and their ability to attract and retain qualified 
personnel. The Company does not have any non-competition agreements with any 
of its employees. There is no assurance that the Company will be able to 
retain its existing senior management personnel or be able to attract 
additional qualified personnel.

     SHARES ELIGIBLE FOR FUTURE SALE. Sales of substantial amounts of common 
stock of the Company in the public market or the perception that such sales 
could occur may adversely affect prevailing market prices of such common 
stock.

     FLUCTUATIONS IN CALLAWAY GOLF COMPANY SHARES. The Company's common stock 
value has from time to time fluctuated somewhat in relation to the share 
value of the Callaway Golf Company. The prevailing market price of the 
Company's common stock could be adversely impacted by a substantial 
fluctuation in the market price of Callaway common stock.

                                       13

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA.

     The following selected consolidated financial data should be read in 
conjunction with the Company's consolidated financial statements and related 
notes included elsewhere herein.

<TABLE>
<CAPTION>

                                                                      YEARS ENDED DECEMBER 31,
                                                 ----------------------------------------------------------------
                                                 1998          1997           1996            1995           1994
                                                 ----          ----           ----            ----           ----
                                                                  (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                              <C>           <C>            <C>             <C>            <C>
Consolidated Statement of
   Income Data (1):
   Sales                                         $144,560       $149,515       $148,257       $76,001        $90,590
   Gross Profit                                    22,365         28,533         33,826        12,914         22,746
   Income from operations                          11,971         17,776         24,454         5,941         15,317
   Income from continuing operations                                                                     
     before class action lawsuit                                                                         
     settlement expense and income taxes           13,504         18,751         25,496         7,488         16,242
Class action lawsuit settlement expense               -0-            -0-            -0-         2,075            -0-
Income from Continuing                                                                                   
   Operations Data:                                                                                     
   Income before income taxes                      13,504         18,751         25,496         5,413         16,242
   Income taxes                                     5,672          7,875         10,430         2,114          6,420
   Income from continuing operations                7,832         10,876         15,066         3,299          9,822
Income from Continuing Operations Per                                                                    
Share--Basic                                     $   0.91       $   1.24       $   1.72       $  0.36        $  1.10
                                                 --------       --------       --------       -------        -------
                                                 --------       --------       --------       -------        -------
Income from Continuing Operations Per                                                                    
Share--Diluted                                   $   0.89       $   1.22       $   1.67       $  0.36        $  1.08
                                                 --------       --------       --------       -------        -------
                                                 --------       --------       --------       -------        -------
Weighted Average Shares Outstanding--Basic          8,638          8,798          8,773         9,045          8,926
                                                 --------       --------       --------       -------        -------
                                                 --------       --------       --------       -------        -------
Weighted Average Shares Outstanding--Diluted        8,837          8,924          9,038         9,099          9,113
                                                 --------       --------       --------       -------        -------
                                                 --------       --------       --------       -------        -------
</TABLE>


<TABLE>
<CAPTION>
                                                        AS OF DECEMBER 31,
                                 ----------------------------------------------------------------
                                 1998          1997          1996         1995         1994
                                 ----          ----          ----         ----         ----
                                                          (IN THOUSANDS)

<S>                              <C>           <C>           <C>          <C>          <C>
Consolidated Balance Sheet
   Data (1):
   Working Capital               $46,717       $56,795       $44,800       $34,788     $37,475
   Total Assets                   83,673        90,025        76,100        58,908      56,821
   Total debt, including
     current portion                 -0-           -0-           -0-           -0-         -0-
   Deferred compensation             295         1,614           438           -0-         -0-
   Shareholders' equity           77,142        78,391        66,487        50,252      51,076
</TABLE>

(1)  In October 1993, the Company announced its decision to discontinue its
     aerospace business. See Note 2 of Notes to Consolidated Financial
     Statements.

                                       14

<PAGE>

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

RESULTS OF OPERATIONS

     The following table sets forth for the periods indicated operating 
results expressed in thousands of dollars and as a percentage of sales.

<TABLE>
<CAPTION>
                                                YEARS ENDED DECEMBER 31,
                             --------------------------------------------------------------
                                    1998                  1997                 1996
                                    ----                  ----                 ----
                             AMOUNT      PERCENT    AMOUNT     PERCENT   AMOUNT     PERCENT
                             ------      -------    ------     -------   ------     -------
<S>                          <C>          <C>       <C>        <C>       <C>        <C>
Sales                        $144,560     100.0     $149,515   100.0     $148,257    100.0
Cost of sales                 122,195      84.5      120,982    80.9      114,431     77.2
Gross profit                   22,365      15.5       28,533    19.1       33,826     22.8
Selling, general
   and administrative          10,394       7.2       10,757     7.2        9,372      6.3
Income from continuing
   operations                  11,971       8.3       17,776    11.9       24,454     16.5
Other income, net               1,533       1.1          975     0.6        1,042       .7
Income from continuing
   operations before
   income taxes                13,504       9.3       18,751    12.5       25,496     17.2

</TABLE>

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

     Sales decreased $4.9 million, or 3%, to $144.6 million for 1998 from 
$149.5 million for 1997. Increases in sales of steel alloy metal woods and 
irons were more than offset by the decrease is sales of titanium alloy 
clubheads and steel alloy putters. Titanium clubhead sales represented 41% 
and 50% of total sales for 1998 and 1997, respectively. Sales to Callaway 
Golf Company, including sales to Odyssey Golf after its acquisition by 
Callaway Golf Company in August 1997, represented 49% of total sales for 1998 
compared to 34% in 1997. There is no assurance that sales to Callaway will 
represent similar percentages of total sales in the future.

     Gross profit decreased $6.1 million, or 21%, to $22.4 million for 1998 
from $28.5 million for 1997. The gross profit margin decreased to 16% in 1998 
from 19% in 1997. The decrease in gross margin was due principally to the 
significant decrease in the manufacturing volume of titanium clubheads during 
the last half of 1998, higher costs and lower yields relating to the start-up 
of three new products lines and start-up expenses related to the Tijuana 
plant. There was no gross profit for the quarter ended December 31, 1998 
compared to $7.2 million for the comparable quarter in 1997. The gross profit 
margin decreased to 0% in the fourth quarter 1998 versus 20% in the fourth 
quarter of 1997. This decrease was principally due to the decrease in sales 
volume coupled with the negative effect of write-downs of inventory and 
non-producing assets and the start-up of the Tijuana plant.

     Selling, general and administrative expense decreased by $.4 million, or 
4%, to $10.4 million for 1998 from $10.8 million for 1997. The decrease in 
selling, general and administrative expense was due primarily to decreased 
expenses related to the reversal of most of the prior years' accrual for the 
supplemental executive retirement program, partially offset by an increase in 
severance pay and legal fees and settlement costs related to a threatened 
proxy contest which was resolved in the fourth quarter.

                                       15

<PAGE>

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

     Sales increased $1.2 million, or 1%, to $149.5 million for 1997 from 
$148.3 million for 1996. Decreases in sales of titanium alloy and steel alloy 
metal wood clubheads were more than offset by increases in sales of titanium 
alloy iron clubheads, putter clubheads, and steel alloy iron clubheads, and 
an increase in medical implant sales. Titanium clubhead sales represented 
approximately 50% and over 55% of total sales for 1997 and 1996, 
respectively. Sales to Callaway Golf Company, including sales to Odyssey Golf 
after its acquisition by Callaway Golf Company in August 1997, represented 
34% of total sales for 1997 compared to 46% in 1996.

     Gross profit decreased $5.3 million, or 16%, to $28.5 million for 1997 
from $33.8 million for 1996. The gross profit margin decreased to 19% in 1997 
from 23% in 1996. The decrease in gross margin was due principally to a 
change in the product mix from a preponderance of metal woods to irons and 
putters.

     Selling, general and administrative expense increased by $1.4 million, 
or 15%, to $10.8 million for 1997 from $9.4 million for 1996. The increase in 
selling, general and administrative expense was due primarily to increased 
payroll and related expenses, expenses related to the supplemental executive 
retirement program, and increased expenses associated with information 
systems, partially offset by a decrease in legal expenses.

DISCONTINUED OPERATIONS

     The Company historically manufactured investment-cast aerospace and 
other industrial products in addition to golf clubheads and orthopedic 
implant products. In October 1993, the Company announced its decision to 
discontinue its aerospace business because of declining sales and operating 
losses on this portion of its business. This business was essentially phased 
out by June 1994. In connection with the offering for sale of the 
Wallingford, Connecticut property, the Company had an environmental 
assessment performed, which identified the presence of certain chemicals 
associated with chlorinated solvents in groundwater beneath a portion of the 
property. The Company conducted investigations to determine the source and 
extent of the contamination. In addition, the Company determined that certain 
of the contaminates were present prior to its ownership and entered into a 
remediation cost sharing agreement with the previous owner of the property. 
In August 1998, the Company sold the Wallingford, Connecticut property, under 
an agreement which stipulates that the Company and the previous owner bear 
the liability to remediate the property. The Company incurred a loss on the 
sale of the property. The loss on sale of the property plus the Company's 
share of the estimated remediation costs were not adequately covered by the 
original reserve. As a result, the Company reported a $.2 million loss from 
discontinued operations, net of income tax benefit, as shown on the 
Consolidated Statements of Income.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's cash and cash equivalents position at December 31, 1998 
was $27.6 million compared to $28.2 million on December 31, 1997, a decrease 
of $.6 million. Net cash provided by operating activities was $19.1 million 
for the year ended December 31, 1998. Net income of $7.7 million, 
depreciation and amortization of $3.4 million, and a decrease in receivables 
and inventory of $16.2 million, were partially offset by an increase in 
prepaids and other current assets of $4.4 million, decrease in payables and 
accrued liabilities of $3.8 million and a decrease in deferred compensation 
of $1.3 million. Investing activities of $10.6 million consist primarily of 
$8.8 million of net capital expenditures and the purchase of Company-owned 
cash surrender value life insurance policies on certain key employees of $2.7 
million. Net cash used by financing activities of $9.2 million consists 
mainly of the repurchase of Company common stock of $12.4 million partially 
offset by proceeds from exercise of stock options of $3.2 million including 
related tax benefits.

                                       16

<PAGE>

     The Company maintains an unsecured revolving line of credit which allows 
the Company to borrow up to $5 million and which had no outstanding balance 
at December 31, 1998. This line of credit, which expires on June 1, 1999, 
bears interest at the bank's prime rate or LIBOR plus 2%.

     On October 25, 1995, the Board of Directors authorized the Company to 
purchase up to one million shares of Coastcast common stock from time to time 
in the open market or negotiated transactions. Under this authorization, the 
Company purchased 139,400 shares at a cost of $1.5 million for the year ended 
December 31, 1998. As of December 31, 1998, there were 457,000 shares 
remaining to be purchased under this authorization. In addition, in August 
1998, the Board of Directors authorized the repurchase of a block of 925,400 
shares in a privately negotiated transaction at a cost of $10.9 million.

     The Company believes that its current cash position, the working capital 
generated by future operations and the ability to borrow should be adequate 
to meet its financing requirements for current operations and the foreseeable 
future.

QUARTERLY INFORMATION AND SEASONALITY

     Set forth below is certain unaudited quarterly financial information. 
The Company believes that all other necessary adjustments, consisting only of 
normal recurring adjustments, have been included in the amounts stated below 
to present fairly, and in accordance with generally accepted accounting 
principles, the selected quarterly information when read in conjunction with 
the consolidated financial statements included elsewhere herein.

<TABLE>
<CAPTION>

                                                YEAR ENDED                                        YEAR ENDED
                                             DECEMBER 31, 1998                                 DECEMBER 31, 1997
                                 --------------------------------------------------------------------------------------------
                                   1ST        2ND         3RD          4TH          1ST         2ND         3RD         4TH
                                 QUARTER    QUARTER     QUARTER      QUARTER      QUARTER     QUARTER     QUARTER     QUARTER
                                 -------    -------     -------      -------      -------     -------     -------     -------
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)

<S>                              <C>        <C>         <C>          <C>          <C>         <C>         <C>         <C>
Sales                            $45,321    $43,588     $31,627      $24,024      $29,001     $39,938     $43,935     $36,641
Gross profit (loss)                9,649      9,580       3,147          (11)       4,025       7,982       9,369       7,157
Income (loss) before
taxes                              6,928      6,903       1,175       (1,502)       2,013       4,907       6,449       5,382
Provision for income
taxes                              2,910      2,899         493         (630)         815       2,091       2,709       2,260
Income from
continuing
 operations                        4,018      4,004         682         (872)       1,198       2,816       3,740       3,122
Loss from
discontinued
 operations                          -0-        -0-        (157)         -0-          -0-         -0-         -0-         -0-
Net income                         4,018      4,004         525         (872)       1,198       2,816       3,740       3,122

Net income per share - basic         .45        .44         .06         (.11)         .14         .32         .43         .35
Net income per share - diluted       .44        .42         .06         (.11)         .13         .32         .42         .35

</TABLE>

     The Company's customers have historically built inventory in 
anticipation of purchases by golfers in the spring and summer, the principal 
selling season for golf equipment. The Company's operating results have been 
impacted by seasonal demand for golf clubs, which generally results in higher 
sales during the six month period that include the second and third quarters. 
The timing of large new product orders from customers and fluctuations in 
demand due to a sudden increase or decrease in popularity of specific golf 
clubs have contributed to quarterly or other periodic fluctuations. No 
assurances can be given, however, that these factors will mitigate the impact 
of seasonality.

                                       17

<PAGE>

BACKLOG

     As of December 31, 1998, the Company had a backlog of approximately 
$25.4 million as compared to a backlog of approximately $52.2 million as of 
December 31, 1997. The Company believes that its current backlog is scheduled 
to be shipped in the ensuing four months. Although many of the Company's 
customers release purchase orders months prior to the requested delivery 
date, these orders are generally cancelable without penalty provided that no 
production has commenced. If production has commenced, an order is cancelable 
upon payment of the cost of production. Historically, the Company's backlog 
generally has been the highest in the second and third quarters due 
principally to seasonal factors. Backlog is not necessarily indicative of 
future operating results.

YEAR 2000 CONVERSION

     The Company has identified issues, developed plans and is working to 
resolve the potential impact of the year 2000 on its business operations and 
the ability of its computerized information systems to accurately process 
information that may be date sensitive. Problems might occur if any of its 
programs recognize a date using "00" as the year 1900 rather than the year 
2000.

     The Company utilizes a number of computer programs. The primary 
information technology systems it utilizes are (1) the customer order and 
backlog system, and (2) the accounting and financial systems which include 
general ledger, accounts payable, accounts receivable, billing and 
collection, inventory value and location, and fixed assets. The Company 
believes that its customer order and backlog, and accounting and financial 
systems will be year 2000 compliant in a timely manner and will not be 
materially impacted by the year 2000. The maintenance and modifications to 
these programs are not material and are expensed as incurred. The Company has 
an experienced and dedicated staff to perform the functions identified and is 
reasonably confident that it will be year 2000 compliant in a timely manner.

     The Company has sent questionnaires to its major customers and 
suppliers. So far, approximately 75% of the major customers and suppliers 
have responded to the questionnaire and have revealed no circumstances that 
would cause a significant disruption to business operations.

     The Company's largest three customers represented 85% of sales for the 
year ended December 31, 1998. Should any one of these customers experience 
significant business interruption relating to non-year 2000 compliance, the 
Company could be materially impacted. To the extent that the Company relies 
on other third parties, such as banking institutions and major suppliers who 
are unable to address their year 2000 issues in a timely manner, the Company 
could be materially impacted.

     Based on the information collected to date, the Company does not believe 
that the cost of addressing the year 2000 issues will have material adverse 
impact on its financial position. The Company does not have a formal 
contingency plan but the Company plans to devote the resources required to 
resolve significant year 2000 issues in a timely manner. The Company 
maintains disaster recovery plans in the event of system failures, which 
include regular backup of historical information.

FORWARD LOOKING INFORMATION

This report and other reports of the Company contain or may contain certain
forward-looking statements and information that are based on beliefs of, and
information currently available to, the Company's management as well as
estimates and assumptions made by the Company's management. When used, the words
"anticipate," "believe," "estimate," "expect," "future," "intend," "plan" and
similar expressions as they relate to the Company or the Company's management,
are used to identify forward-looking statements. Such statements reflect the
current views of the Company with respect to future events and are subject to
certain risks, uncertainties and assumptions relating to the Company's

                                       18

<PAGE>

operations and results of operations, competitive factors and pricing 
pressures, shifts in market demand, the performance and needs of the 
industries served by the Company, the costs of product development and other 
risks and uncertainties, including, in addition to any uncertainties 
specifically identified in the text surrounding such statements, 
uncertainties with respect to changes or developments in social, economic, 
business, industry, market, legal and regulatory circumstances and conditions 
and actions taken or omitted to be taken by third parties, including the 
Company's stockholders, customers, suppliers, business partners, competitors, 
and legislative, regulatory, judicial and other governmental authorities and 
officials. Should one or more of these risks or uncertainties materialize, or 
should the underlying assumptions prove incorrect, actual results may vary 
significantly from those anticipated, believed, estimated, expected, intended 
or planned.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

        The information, other than quarterly information, required by this 
item is incorporated herein by reference to the consolidated financial 
statements and supplementary data listed in Item 14 of Part IV of this Report.

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

     Not applicable.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The information required by this Item with respect to directors is 
incorporated herein by reference to the information contained under the 
caption "Nomination and Election of Directors" in the Proxy Statement 
relating to the Annual Meeting of Shareholders to be held on June 18, 1999, 
which will be filed with the Securities and Exchange Commission no later than 
120 days after the close of the year ended December 31, 1998. Information 
with respect to executive officers is included in Part I of this Report. The 
information required by this Item with respect to compliance with Section 
16(a) of the Securities Exchange Act of 1934 is incorporated herein by 
reference to the information contained under the caption "Compliance with 
Section 16(a) of the Securities Exchange Act of 1934" in the Proxy Statement 
relating to the Annual Meeting of Shareholders to be held on June 18, 1999, 
which will be filed with the Securities and Exchange Commission no later than 
120 days after the close of the year ended December 31, 1998.

ITEM 11.  EXECUTIVE COMPENSATION.

     The information required by this Item is incorporated herein by 
reference to the information contained under the caption "Executive 
Compensation and Other Information" in the Proxy Statement relating to the 
Annual Meeting of Shareholders to be held on June 18, 1999, which will be 
filed with the Securities and Exchange Commission no later than 120 days 
after the close of the year ended December 31, 1998.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The information required by this Item is incorporated herein by 
reference to the information contained under the captions "Voting Securities 
and Principal Shareholders" and "Stock Ownership of Management" in the Proxy 
Statement relating to the Annual Meeting of Shareholders to be held on June 
18, 1999, which will be filed with the Securities and Exchange Commission no 
later than 120 days after the close of the year ended December 31, 1998.

                                       19

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Not applicable.

                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K.

(a)(1)  LIST OF FINANCIAL STATEMENTS

     The consolidated financial statements listed in the accompanying Index 
to Financial Statements and Schedules are filed as part of this Report.

(a)(2)  LIST OF FINANCIAL STATEMENT SCHEDULE

     The financial statement schedule listed in the accompanying Index to 
Financial Statements and Schedule are filed as part of this Report.

(a)(3)  LIST OF EXHIBITS

     The exhibits listed in the accompanying Index to Exhibits are filed as 
part of this Report.

(b)  REPORTS ON FORM 8-K

     The Company did not file any reports on Form 8-K during the fourth 
quarter of 1998.

                                       20

<PAGE>


                                         SIGNATURES

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

Dated: March 15, 1999             COASTCAST CORPORATION



                                  By: /s/  HANS H. BUEHLER
                                      --------------------------------- 
                                      Hans H. Buehler, Chief Executive Officer

     Pursuant to the requirements of the Securities Exchange Act of 1934, 
this Report has been signed below by the following persons on behalf of the 
Registrant and in the capacities indicated on March 15, 1999.

        SIGNATURE                                         TITLE


/s/ HANS H. BUEHLER                        
------------------------
Hans H. Buehler               Chairman of the Board and Chief Executive
                              Officer (Principal Executive Officer)

/s/ ROBERT C. BRUNING
------------------------
Robert C. Bruning             Chief Financial Officer and Secretary
                              (Principal Financial and Accounting Officer)

/s/ ROBERT L. GATES
------------------------
Robert L. Gates               Director


/s/ EDWIN A. LEVY
------------------------
Edwin A. Levy                 Director


/s/ LEE E. MIKLES
------------------------
Lee E. Mikles                 Director


/s/ JONATHAN P. VANNINI
------------------------
Jonathan P. Vannini           Director

                                       21

<PAGE>

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

<TABLE>
<CAPTION>

CONSOLIDATED FINANCIAL STATEMENTS                                                 PAGE NUMBER
---------------------------------                                                 -----------
<S>                                                                                   <C>

Independent Auditors' Report                                                           23
Consolidated Balance Sheets as of December 31, 1998 and 1997                           24
Consolidated Statements of Income for the years ended December 31, 1998, 1997          
     and 1996                                                                          25
Consolidated Statements of Shareholders' Equity for the years ended December 31,       
     1996, 1997 and 1998                                                               26
Consolidated Statements of Cash Flows for the years ended December 31, 1998,           
     1997 and 1996                                                                     27
Notes to Consolidated Financial Statements                                             28
                                                                                       
SCHEDULES                                                                              
                                                                                       
Independent Auditors' Report                                                           39
Schedule II--Valuation and Qualifying Accounts for the years ended December 31,        
     1996, 1997 and 1998                                                               40
</TABLE>
                                       22

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Coastcast Corporation:

We have audited the accompanying consolidated balance sheets of Coastcast 
Corporation and subsidiaries as of December 31, 1998 and 1997, and the 
related consolidated statements of income, shareholders' equity, and cash 
flows for each of the three years in the period ended December 31, 1998. 
These financial statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on these financial 
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards. 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 Coastcast Corporation and 
subsidiaries as of December 31, 1998 and 1997, and the results of their 
operations and their cash flows for each of the three years in the period 
ended December 31, 1998 in conformity with generally accepted accounting 
principles.

DELOITTE & TOUCHE LLP

Los Angeles, California
February 9, 1999



                                       23

<PAGE>

                              COASTCAST CORPORATION

                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                DECEMBER 31,
                                                                        --------------------------------
                                                                           1998                 1997
                                                                        -----------          -----------
                                   A S S E T S
<S>                                                                     <C>                  <C>
Current assets:
   Cash and cash equivalents (Note 1)                                   $27,551,000          $28,187,000
   Trade accounts receivable, net of allowance for doubtful                              
     accounts of $600,000 and $500,000 at December 31, 1998                              
     and 1997, respectively (Note 1)                                      7,556,000           12,893,000
   Inventories (Notes 1 and 3)                                           10,326,000           21,208,000
   Prepaid income taxes                                                   4,011,000                    -
   Prepaid expenses and other current assets                              2,378,000            2,019,000
   Deferred income taxes (Notes 1 and 8)                                  1,131,000            1,597,000
   Net assets of discontinued operations (Note 1 and 2)                           -              911,000
                                                                        -----------          -----------
       Total current assets                                              52,953,000           66,815,000
Property, plant and equipment, net (Notes 1 and 4)                       24,116,000           19,079,000
Cash surrender value of  life insurance (Note 7)                          6,215,000            3,529,000
Other assets                                                                389,000              602,000
                                                                        -----------          -----------
                                                                        $83,673,000          $90,025,000
                                                                        -----------          -----------
                                                                        -----------          -----------

           LIABILITIES AND SHAREHOLDERS' EQUITY 
Current liabilities:
   Accounts payable                                                     $ 2,804,000          $ 4,986,000
   Accrued liabilities (Note 6)                                           3,432,000            5,034,000
                                                                        -----------          -----------
       Total current liabilities                                          6,236,000           10,020,000
Deferred compensation (Note 7)                                              295,000            1,614,000
                                                                        -----------          -----------
       Total liabilities                                                  6,531,000           11,634,000
Commitments and contingencies (Notes 2, 7 and 9)
Shareholders' Equity (Notes 1 and 10):
   Preferred stock, no par value, 2,000,000 shares authorized;
      none issued and outstanding
   Common stock, no par value, 20,000,000 shares authorized;
      7,989,404 and 8,849,005 shares issued and outstanding as of
      December 31, 1998 and 1997, respectively                           30,309,000           39,233,000
   Retained earnings                                                     46,833,000           39,158,000
                                                                        -----------          -----------
       Total shareholders' equity                                        77,142,000           78,391,000
                                                                        -----------          -----------
                                                                        $83,673,000          $90,025,000
                                                                        -----------          -----------
                                                                        -----------          -----------

</TABLE>
          See accompanying notes to consolidated financial statements.

                                       24

<PAGE>


                              COASTCAST CORPORATION

                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                    YEARS ENDED DECEMBER 31,
                                                    ------------------------------------------------------
                                                          1998                 1997                1996
                                                    -------------        -------------       -------------
<S>                                                 <C>                  <C>                 <C>
Sales (Notes 1 and 12)                              $144,560,000         $149,515,000        $148,257,000
Cost of sales                                        122,195,000          120,982,000         114,431,000
                                                    ------------         ------------        ------------
Gross profit                                          22,365,000           28,533,000          33,826,000
Selling, general and administrative                   10,394,000           10,757,000           9,372,000
                                                    ------------         ------------        ------------
Income from operations                                11,971,000           17,776,000          24,454,000
Other income, net                                      1,533,000              975,000           1,042,000
                                                    ------------         ------------        ------------
Income before income taxes                            13,504,000           18,751,000          25,496,000
Provision for income taxes (Notes 1 and 8)             5,672,000            7,875,000          10,430,000
                                                    ------------         ------------        ------------
Income from continuing operations                      7,832,000           10,876,000          15,066,000
Loss from discontinued operations (net                                                   
of income tax benefit of $113,000 - Notes 1 and 2)      (157,000)                   -                   -
                                                    ------------         ------------        ------------
Net income                                          $  7,675,000         $ 10,876,000        $ 15,066,000
                                                    ------------         ------------        ------------
                                                    ------------         ------------        ------------
                                                                                         
                                                                                         
NET INCOME PER SHARE (Notes 1 and 11)                                                    
Income from continuing operations per                                                    
share -  basic                                      $        .91         $       1.24        $       1.72
Discontinued operations per share - basic                   (.02)                   -                   -
                                                    ------------         ------------        ------------
Net income per share - basic                        $        .89         $       1.24        $       1.72
                                                    ------------         ------------        ------------
                                                    ------------         ------------        ------------
Weighted average shares outstanding                    8,637,724            8,797,734           8,772,815
                                                    ------------         ------------        ------------
                                                    ------------         ------------        ------------
                                                                                         
Income from continuing operations per share -                                            
  diluted                                           $        .89         $       1.22        $       1.67
Discontinued operations per share - diluted                 (.02)                   -                   -
                                                    ------------         ------------        ------------
Net income per share - diluted                      $        .87         $       1.22        $       1.67
                                                    ------------         ------------        ------------
                                                    ------------         ------------        ------------
Diluted weighted average shares outstanding            8,837,304            8,924,262           9,038,223
                                                    ------------         ------------        ------------
                                                    ------------         ------------        ------------
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       25

<PAGE>



                              COASTCAST CORPORATION
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998

<TABLE>
<CAPTION>
                                                               COMMON STOCK
                                                       -----------------------------------
                                                          NUMBER OF
                                                            SHARES              AMOUNT        RETAINED EARNINGS         TOTAL
                                                       ---------------        ------------    -----------------     ------------
<S>                                                        <C>                <C>             <C>                   <C>
BALANCE AT JANUARY 1, 1996                                   8,734,694         $37,036,000          $13,216,000     $ 50,252,000
     Net income                                                                                      15,066,000       15,066,000
     Stock options exercised, including related                                                
        tax benefit (Note 10)                                   56,996             834,000                               834,000
     Director compensatory stock options                                           269,000                               269,000
     Stock options granted to non-employee (Note 10)                               269,000                               269,000
     Repurchase of common stock                                (13,800)           (203,000)                             (203,000)
                                                       ---------------         -----------        -------------     ------------
BALANCE AT DECEMBER 31, 1996                                 8,777,890          38,205,000           28,282,000       66,487,000
     Net income                                                                                      10,876,000       10,876,000
     Stock options exercised, including related                                                
        tax benefit (Note 10)                                   71,115             759,000                               759,000
     Director compensatory stock options                                           269,000                               269,000
                                                       ---------------         -----------        -------------     ------------
BALANCE AT DECEMBER 31, 1997                                 8,849,005          39,233,000           39,158,000       78,391,000
     Net income                                                                                       7,675,000        7,675,000
     Stock options exercised, including related                                                
        tax benefit (Note 10)                                  205,199           3,184,000                             3,184,000
     Director compensatory stock options                                           269,000                               269,000
     Repurchase of common stock                             (1,064,800)        (12,377,000)                          (12,377,000)
                                                       ---------------         -----------        -------------     ------------
BALANCE AT DECEMBER 31, 1998                                 7,989,404         $30,309,000          $46,833,000     $ 77,142,000
                                                       ---------------         -----------        -------------     ------------
                                                       ---------------         -----------        -------------     ------------

</TABLE>


          See accompanying notes to consolidated financial statements.


                                       26

<PAGE>

                              COASTCAST CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                              YEARS ENDED DECEMBER 31,
                                                                  -----------------------------------------------
                                                                      1998             1997              1996
                                                                  -------------    -----------      ------------
<S>                                                             <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                                        $ 7,675,000    $10,876,000      $ 15,066,000
  Adjustments to reconcile net income to net cash provided by      
    (used in) operating activities:                                
    Depreciation and amortization                                     3,375,000      2,838,000         2,479,000
    Loss on disposal of property, plant and equipment                 1,001,000        305,000            79,000
    Change in accrual for disposal of aerospace business               (701,000)      (180,000)         (214,000)
    Deferred compensation                                            (1,319,000)     1,176,000           438,000
    Deferred income taxes                                               765,000       (656,000)          479,000
    Non-employee director compensatory stock options                    269,000        269,000           269,000
    Changes in operating assets and liabilities:                   
      Trade accounts receivable                                       5,337,000     (1,110,000)       (4,585,000)
      Inventories                                                    10,882,000        452,000       (14,049,000)
      Prepaid expenses and other current assets                      (4,370,000)     2,781,000        (2,057,000)
      Accounts payable and accrued liabilities                       (3,784,000)       845,000           519,000
                                                                   ------------    -----------      ------------  
        Net cash provided by (used in) operating activities          19,130,000     17,596,000        (1,576,000)
                                                                   ------------    -----------      ------------  
CASH FLOWS FROM INVESTING ACTIVITIES:                              
  Net sales of short-term investments                                    -              -             14,718,000
  Purchase of property, plant and equipment                          (8,787,000)    (2,127,000)       (7,653,000)
  Proceeds from disposal of property, plant and equipment               687,000         76,000           138,000
  Purchase of life insurance policies and other assets               (2,473,000)    (2,177,000)       (1,704,000)
                                                                   ------------    ------------     ------------
        Net cash (used in) provided by investing activities         (10,573,000)    (4,228,000)        5,499,000
                                                                   ------------    ------------     ------------
                                                                   
CASH FLOWS FROM FINANCING ACTIVITIES:                              
  Stock options granted to non-employee                                  -              -                269,000
  Proceeds from issuance of common stock upon exercise of         
    options, including related tax benefit                            3,184,000        759,000           834,000
  Repurchase of common stock                                        (12,377,000)        -               (203,000)
                                                                    -----------    -----------      ------------
        Net cash (used in) provided by financing activities          (9,193,000)       759,000           900,000
                                                                    -----------    -----------      ------------
                                                                   
NET (DECREASE) INCREASE IN CASH AND 
  CASH EQUIVALENTS                                                     (636,000)    14,127,000         4,823,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     28,187,000     14,060,000         9,237,000
                                                                    -----------    -----------      ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                          $27,551,000    $28,187,000      $ 14,060,000
                                                                    -----------    -----------      ------------
                                                                    -----------    -----------      ------------
SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid during the year for income taxes                      $   8,546,000    $ 5,544,000      $ 10,500,000
                                                                    -----------    -----------      ------------
                                                                    -----------    -----------      ------------

</TABLE>

       See accompanying notes to consolidated financial statements.

                                       27

<PAGE>

                              COASTCAST CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     PRINCIPLES OF CONSOLIDATION--The accompanying consolidated financial 
statements include the accounts of Coastcast Corporation (the "Company") and 
its wholly owned subsidiary. All material intercompany transactions have been 
eliminated in consolidation.

     ORGANIZATION AND OPERATIONS--Coastcast Corporation is incorporated under 
the laws of the State of California. The Company's principal business is the 
production of investment-cast golf clubheads, and precision investment 
castings and related engineering for the medical industry. The Company sells 
its products to customers of varying strength and financial resources, 
principally located in the United States. The Company's wholly owned 
subsidiaries are incorporated under the laws of the Mexican maquiladora 
program and its principal activities are the production of golf clubheads.

     USE OF ESTIMATES--The preparation of financial statements in conformity 
with generally accepted accounting principles requires the Company's 
management to make estimates and assumptions that affect the reported amounts 
of assets and liabilities and disclosure of contingent assets and liabilities 
at the date of the financial statements and the reported amounts of revenues 
and expenses during the reporting period. Actual results could differ from 
those estimates.

     DISCONTINUED OPERATIONS--The Company has historically manufactured 
investment-cast aerospace and other industrial products in addition to golf 
clubheads and orthopedic implant products. In October 1993, the Company 
announced its decision to discontinue its aerospace business, and as of June 
1994 had essentially phased out this business (See Note 2).

     REVENUE RECOGNITION--Revenue is recognized when goods are shipped to the 
customer.

     CASH EQUIVALENTS--Cash equivalents consist of short-term investments 
with original maturities of three months or less.

     CONCENTRATION OF CREDIT RISK--The Company's financial instruments that 
are exposed to credit risk consist primarily of accounts receivable. The 
Company grants credit to substantially all of its customers, performs ongoing 
credit evaluations of its customers' financial condition and maintains an 
allowance for potential credit losses. See also Note 12.

     INVENTORIES--Inventories are stated at the lower of cost (determined on 
a first-in, first-out basis) or market.

     PROPERTY, PLANT AND EQUIPMENT--Property, plant and equipment are stated 
at cost. Depreciation and amortization are provided using primarily 
straight-line methods over the estimated useful lives of the related assets 
as follows:

<TABLE>
              <S>                                               <C>
              Machinery and equipment                              5-7 years
              Building and improvements                           5-31 years
              Furniture, fixtures and computers                    3-7 years
              Autos and trucks                                     5-7 years
</TABLE>

     IMPAIRMENT OF LONG-LIVED ASSETS--The Company reviews long-lived assets for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. If the sum of expected

                                       28

<PAGE>

future cash flows (undiscounted and without interest charges) is less than 
the carrying amount of an asset, an impairment loss is recognized.

     INCOME TAXES--Deferred tax assets and liabilities are recognized based 
on differences between financial statement and tax basis of assets and 
liabilities using presently enacted tax rates (see Note 8).

     EARNINGS PER SHARE--Basic net income per share is based on the weighted 
average number of shares of common stock outstanding. Diluted net income per 
share is based on the weighted average number of shares of common stock 
outstanding and dilutive potential common equivalent shares from stock 
options (using the treasury stock method).

     FAIR VALUE OF FINANCIAL INSTRUMENTS--The carrying amounts of cash and 
cash equivalents, accounts receivable and accounts payable approximate fair 
value because of the short maturities of these instruments.

     RECLASSIFICATIONS--Certain prior year balances have been restated to 
reflect current year classifications.

     ACCOUNTING PRONOUNCEMENT--In June 1998, the Financial Accounting 
Standards Board issued Statement No. 133, Accounting for Derivative 
Instruments and Hedging Activities. The Company's required adoption date is 
January 1, 2000. The Company has not yet evaluated the impact of SFAS No. 133 
on its results of operations or financial position but believes that the 
effect of the adoption of Statement No. 133 will not be material.

2.  DISCONTINUED OPERATIONS

     The plan adopted in October 1993 to phase out the aerospace business was 
essentially completed by June 1994. In connection with the offering for sale 
of the Wallingford, Connecticut property, the Company had an environmental 
assessment performed, which identified the presence of certain chemicals 
associated with chlorinated solvents in groundwater beneath a portion of the 
property. The Company conducted investigations to determine the source and 
extent of the contamination. In addition, the Company determined that certain 
of the contaminates were present prior to its ownership and entered into a 
remediation cost sharing agreement with the previous owner of the property. 
In August 1998, the Company sold the Wallingford, Connecticut property, under 
an agreement which stipulates that the Company and the previous owner bear 
the liability to remediate the property. The Company incurred a loss on the 
sale of the property. The loss on sale of the property plus the Company's 
share of the estimated remediation costs were not adequately covered by the 
original reserve. As a result, the Company reported a $157,000 loss from 
discontinued operations, net of income tax benefit, as shown on the 
Consolidated Statements of Income.

                                       29

<PAGE>

3.  INVENTORIES

     Inventories consist of the following:
<TABLE>
<CAPTION>
                                                  DECEMBER 31,
                                          -----------------------------
                                              1998              1997
                                          -----------       -----------
         <S>                              <C>               <C>
         Raw materials and supplies       $ 5,137,000       $ 7,578,000
         Tooling                              225,000           540,000
         Work-in-process                    4,019,000        12,375,000
         Finished goods                       945,000           715,000
                                          -----------       -----------
                                          $10,326,000       $21,208,000
                                          -----------       -----------
                                          -----------       -----------
</TABLE>

     Included above are costs incurred for the production of tooling which is
subsequently sold to customers upon acceptance of the first production unit.

4.  PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consist of the following:
<TABLE>
<CAPTION>
                                                                      DECEMBER 31,
                                                              -----------------------------
                                                                  1998              1997
                                                              -----------       -----------
       <S>                                                    <C>               <C>
                       
         Land                                                 $ 2,186,000       $ 2,186,000
         Buildings and improvements                             9,945,000         7,436,000
         Machinery and equipment                               27,861,000        22,656,000
         Autos and trucks                                         857,000           786,000
         Furniture, fixtures and computers                      3,078,000         2,669,000
                                                              -----------       -----------
                                                               43,927,000        35,733,000
         Less accumulated depreciation and amortization        19,811,000        16,654,000
                                                              -----------       -----------
                                                              $24,116,000       $19,079,000
                                                              -----------       -----------
                                                              -----------       -----------
</TABLE>

     Depreciation and amortization expense for 1998, 1997 and 1996 was 
$3,375,000, $2,838,000 and $2,479,000, respectively.

5.  SHORT-TERM BORROWINGS

     The Company maintains an unsecured revolving line of credit which allows 
the Company to borrow up to $5,000,000 and which had no outstanding balance 
at December 31, 1998 and 1997. This line of credit, which expires on June 1, 
1999, bears interest at the bank's prime rate or LIBOR plus 2%.

6.  ACCRUED LIABILITIES

     Accrued liabilities consist of the following:
                                       30

<PAGE>

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                  -----------------------------
                                                      1998              1997
                                                  -----------       -----------
         <S>                                      <C>               <C>
         Accrued payroll and related expenses       $1,279,000       $2,706,000
         Accrued vacation                              738,000        1,000,000
         Accrued insurance                             668,000          434,000
         Accrued income taxes                                -          552,000
         Other accrued expenses                        747,000          342,000
                                                  ------------      -----------
                                                    $3,432,000       $5,034,000
                                                  ------------      -----------
                                                  ------------      -----------
</TABLE>

7.  RETIREMENT PLANS

     The Company has a defined benefit plan which covers substantially all of 
its hourly union employees. The plan provides for a monthly benefit payable 
for the participant's lifetime commencing the first day of the month 
following the attainment of age sixty-five in an amount equal to $9.50 to 
$10.85 multiplied by the participant's credited service.

                                       31

<PAGE>


     The following table sets forth the plan's change in benefit obligation,
change in plan assets and components of net pension cost:
<TABLE>
<CAPTION>

                                                                   DECEMBER 31,
                                                   ------------------------------------------------
                                                      1998               1997               1996
                                                   ----------        ----------          ----------
   <S>                                             <C>               <C>                 <C>
   CHANGE IN BENEFIT OBLIGATION:
   Benefit obligation at beginning of year         $1,778,000        $1,623,000
   Service cost                                        75,000            34,000
   Interest cost                                      139,000           112,000
   Actuarial loss from change in assumptions          384,000                 -
   Actuarial loss (gain)                              (33,000)           52,000
   Benefits paid                                      (63,000)          (43,000)
                                                   ----------        ----------
   Benefit obligation at end of year                2,280,000         1,778,000
                                                   ----------        ----------
                                                   ----------        ----------

   CHANGE IN PLAN ASSETS:
   Fair value of plan assets at beginning of
   year                                             2,187,000         1,883,000
   Actual return on plan assets                       115,000           347,000
   Employer contributions                                   -                 -
   Benefits paid                                      (63,000)          (43,000)
                                                   ----------        ----------
   Fair value of plan assets at end of year         2,239,000         2,187,000
                                                   ----------        ----------
                                                   ----------        ----------

   Funded status                                      (41,000)          409,000
   Unrecognized actuarial loss (gain)                 101,000          (275,000)
   Unrecognized prior service cost                     91,000            98,000
   Unrecognized transition obligation                (121,000)         (147,000)
                                                   ----------        ----------
   Net amount recognized                           $   30,000        $   85,000
                                                   ----------        ----------
                                                   ----------        ----------

   COMPONENTS OF NET PENSION COST:
   Service cost                                    $   75,000        $   34,000          $  31,000
   Interest cost                                      139,000           112,000            104,000
   Return on plan assets                             (115,000)         (347,000)          (159,000)
   Amortization and deferral                          (44,000)          199,000             13,000
                                                   ----------        ----------          ---------
   Net pension cost                                $   55,000        $   (2,000)         $ (11,000)
                                                   ----------        ----------          ---------
                                                   ----------        ----------          ---------
</TABLE>

     The weighted-average discount rate used in determining the actuarial 
present value of the projected benefit obligation was 6.5% and 7% in 1998 and 
1997, respectively. The expected long-term rate of return on assets was 6.5% 
and 7% for 1998 and 1997, respectively.

     Effective January 1, 1996, the Company adopted a retirement savings plan 
(the "401(k) Plan") pursuant to which all U.S. employees who satisfy the age 
and service requirements under the plan and who are not covered by collective 
bargaining agreements may defer compensation for income tax purposes under 
section 401(k) of the Internal Revenue Code of 1986. Participants may 
contribute up to 15% of their compensation up to the maximum permitted under 
federal law. The Company is obligated to contribute annually an amount equal 
to 25% of each participant's contribution up to 6% of that participant's 
annual compensation. In accordance with the provisions of the 401(k) Plan, 
the Company matched employee contributions in the amount of $108,000, $78,000 
and $102,000 during 1998, 1997 and 1996, respectively.

                                       32

<PAGE>

     On September 1, 1996, the Company adopted a supplemental executive 
retirement plan (the "SERP") for certain key employees. Benefits generally 
accrued at a rate of 7% of final average salary per year of participation in 
the plan, up to 10 years. In general, participants in the plan only become 
fully vested with respect to their accrued benefits upon completion of 5 
years of plan participation. The benefits under this plan were frozen 
effective December 31, 1997. In October 1998, the Chairman and Chief 
Executive Officer voluntarily relinquished all of his rights under this plan. 
In addition, a former executive has also forfeited his benefits under this 
plan. An amended and restated supplemental executive retirement plan was 
approved effective January 1, 1998. The amended plan revises the benefit 
formula for participants and provides additional flexibility with respect to 
funding.

     The following table sets forth the plan's change in benefit obligation, 
change in plan assets and components of net pension cost:


<TABLE>
<CAPTION>

                                                                 DECEMBER 31,
                                                 ------------------------------------------
                                                     1998            1997            1996
                                                 -----------     -----------      ---------
<S>                                              <C>             <C>              <C>
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at beginning of year          $ 4,631,000     $ 3,455,000
Curtailment as of January 1, 1998                 (4,032,000)            -
Service cost                                          81,000         759,000
Interest cost                                         83,000         276,000
Actuarial loss from change in assumptions             93,000         224,000
Amendment                                            186,000             -
Actuarial loss (gain)                                417,000         (83,000)
Benefits paid                                            -               -
                                                 -----------     -----------
Benefit obligation at end of year                  1,459,000       4,631,000
                                                 -----------     -----------
                                                 -----------     -----------
CHANGE IN PLAN ASSETS:
Fair value of plan assets at beginning           -----------     -----------
  and end of year                                        -               -
                                                 -----------     -----------
                                                 -----------     -----------

Funded status                                     (1,459,000)     (4,631,000)
Unrecognized actuarial loss (gain)                   491,000         135,000
Unrecognized prior service cost                      177,000         183,000
Unrecognized transitional obligation                 496,000       2,699,000
                                                 -----------     -----------
(Accrued)/prepaid benefit cost                   $  (295,000)    $(1,614,000)
                                                 -----------     -----------
                                                 -----------     -----------

COMPONENTS OF NET PENSION COST:
Service cost                                     $    81,000     $   759,000      $ 699,000
Interest cost                                         83,000         276,000         97,000
Return on plan assets                                    -               -              -
Amortization and deferral                             74,000         198,000         66,000
Curtailment/forfeitures                           (1,807,000)       (128,000)      (103,000)
1996 amortized (unamortized) expense                 250,000          71,000       (321,000)
                                                 -----------     -----------      ---------
Net pension cost (income)                        $(1,319,000)    $ 1,176,000      $ 438,000
                                                 -----------     -----------      ---------
                                                 -----------     -----------      ---------

</TABLE>

                                       33


<PAGE>

     The weighted average discount rate used in determining the actuarial
present value of the projected benefit obligation was 7.0% and 7.5% in 1998 and
1997, respectively. To fund this plan, the Company has purchased whole-life
insurance contracts on certain participants. The cash surrender value of these
policies is in an irrevocable rabbi trust and is presented as an asset of the
Company in the accompanying consolidated balance sheets.

     The Company does not provide any other post-retirement benefits to its
employees.

8.  INCOME TAXES

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
                                                      YEARS ENDED DECEMBER 31,
                                              -------------------------------------
                                                 1998         1997           1996
                                              ----------   ----------   -----------
<S>                                           <C>          <C>          <C>
Current:
     Federal                                  $3,675,000   $7,045,000   $ 8,319,000
     State                                       753,000    1,703,000     1,405,000
     Foreign                                     251,000      (73,000)      227,000
                                              ----------   ----------   -----------
                                               4,679,000    8,675,000     9,951,000
                                              ----------   ----------   -----------
Deferred:
     Federal                                     844,000     (651,000)      258,000
     State                                       149,000     (149,000)      221,000
                                              ----------   ----------   -----------
                                                 993,000     (800,000)      479,000
                                              ----------   ----------   -----------
                                              $5,672,000   $7,875,000   $10,430,000
                                              ----------   ----------   -----------
                                              ----------   ----------   -----------
</TABLE>

     The actual provision on income before income taxes differs from the
statutory federal income tax rate due to the following:

<TABLE>
<CAPTION>
                                                      YEARS ENDED DECEMBER 31,
                                              -------------------------------------
                                                 1998         1997           1996
                                              ----------   -----------  -----------
<S>                                           <C>          <C>          <C>
Federal income taxes at the statutory rate    $4,726,000    $6,563,000  $ 8,924,000
State income taxes, net of federal benefit       618,000     1,030,000    1,541,000
California investment tax credit                 (67,000)      (30,000)    (349,000)
Other items                                      395,000       312,000      314,000
                                              ----------   -----------  -----------
                                              $5,672,000    $7,875,000  $10,430,000
                                              ----------   -----------  -----------
                                              ----------   -----------  -----------
</TABLE>

     The tax effects of items comprising the Company's net deferred tax asset
are as follows:

                                       34

<PAGE>
<TABLE>
<CAPTION>
                                                  December 31,
                                          ---------------------------
                                             1998              1997
                                          ----------       ----------
<S>                                       <C>              <C>
Allowance for doubtful accounts           $  254,000       $  213,000
Deferred compensation                        124,000          688,000
Accrued expenses                             404,000          557,000
Inventory reserve                            750,000          635,000
State income taxes                           299,000          455,000
Depreciation                               (252,000)        (381,000)
Other items                                (448,000)        (570,000)
                                          ----------       ----------
                                          $1,131,000       $1,597,000
                                          ----------       ----------
                                          ----------       ----------
</TABLE>

9.  COMMITMENTS

     OPERATING LEASES--The Company leases certain facilities under various
operating leases with terms ranging from five to ten years. The leases contain
renewal options for additional five or ten year periods which have not been
included in the rental commitment schedule below. In general, these leases
provide for payment of property taxes, maintenance and insurance by the Company
and include rental increases based on the Consumer Price Index.

     The future minimum lease payments required under these leases as of
December 31, 1998 are as follows:

<TABLE>
<CAPTION>

        YEAR ENDING
        DECEMBER 31,
        ---------------------------------------------------------
        <S>                                           <C>
        1999                                          $ 1,692,000
        2000                                            1,692,000
        2001                                            1,635,000
        2002                                            1,578,000
        2003                                            1,496,000
        Thereafter                                      2,997,000
                                                      -----------
                                                      $11,090,000
                                                      -----------
                                                      -----------
</TABLE>

     Rent expense for 1998, 1997 and 1996 was approximately $1,669,000,
$1,106,000 and $1,355,000, respectively.

10.  STOCK OPTION PLANS

     Under the Company's 1996 Amended and Restated Employee Stock Option Plan
("1996 Employee Stock Option Plan"), a maximum of 1,950,000 shares of common
stock may be issued pursuant to exercise of options granted to officers and key
employees under the plan. Options may be granted under the plan at prices which
are equal to or greater than the fair market value of the shares at the date of
grant. The options become exercisable over a period of time as determined by the
Board of Directors or a committee of directors and generally expire ten years
from the date of grant or earlier following termination of employment. As of
December 31, 1998, an aggregate of 624,692 shares had been purchased pursuant to
exercise of options granted under the plan, options to purchase an aggregate of
853,817 shares were outstanding (including options which were then exercisable
to purchase 513,334 shares), and 471,491 shares were available for additional
grants of options under the plan.

     Under the Company's 1995 Amended and Restated Non-Employee Director Stock
Option Plan ("1995 Director Stock Option Plan"), a maximum of 200,000 shares of
common stock may be issued pursuant to exercise of options 

                                       35

<PAGE>


granted under the plan to certain non-employee directors. Options are granted 
under the plan at prices equal to the fair market value of the shares at the 
date of grant. The options generally become exercisable over a three-year 
period of time and expire at the earlier of one year after the optionee 
ceases to be a director or ten years from the date of grant. As of December 
31, 1998, no shares had been purchased under the plan, options to purchase an 
aggregate of 200,000 shares were outstanding under the plan, including 
130,000 shares as to which such options were then exercisable, and no shares 
were available for additional grants of options under the plan.

     In April 1996, the Board of Directors granted to a non-employee options 
to purchase 30,000 shares of common stock, all of which were outstanding and 
exercisable as of December 31, 1998. These options were not issued under the 
foregoing option plans.

     In September 1997, the Board of Directors approved the repricing of all 
employee stock options having exercise prices above the fair market value as 
of the repricing date. A total of 591,783 shares were repriced.

     The following summarizes the Company's stock option activity under all 
arrangements for the three years ended December 31, 1998: 

<TABLE>
<CAPTION>
                                                                WEIGHTED
                                                                 AVERAGE
                                                                EXERCISE
                                               NUMBER            PRICE
                                             ---------          --------
<S>                                          <C>                <C>
Balance, January 1, 1996                       806,392            $10.73
     Granted                                   689,698             16.81
     Forfeited                                (147,635)            13.36
     Exercised                                 (56,996)            12.00
                                             ---------          --------
Balance, December 31, 1996                   1,291,459            $14.48
     Granted                                    63,540             15.50
     Forfeited                                 (70,371)            15.22
     Exercised                                 (71,115)             8.60
                                             ---------          --------
Balance, December 31, 1997                   1,213,513            $13.57
     Granted                                   530,230             14.68
     Forfeited                                (454,727)            15.36
     Exercised                                (205,199)            11.57
                                             ---------          --------
Balance, December 31, 1998                   1,083,817            $13.75
                                             ---------          --------
                                             ---------          --------
</TABLE>


     The following table summarizes information about stock options outstanding
at December 31, 1998:

                                       36

<PAGE>


<TABLE>
<CAPTION>

                                        WEIGHTED 
                                         AVERAGE         WEIGHTED                            WEIGHTED
   RANGE OF           NUMBER            REMAINING         AVERAGE           NUMBER            AVERAGE
   EXERCISE         OUTSTANDING        CONTRACTUAL       EXERCISE         EXERCISABLE        EXERCISE
    PRICES          AT 12/31/98           LIFE             PRICE          AT 12/31/98          PRICE
-------------     --------------      --------------   ------------     ---------------   ------------
<S>                 <C>               <C>              <C>              <C>               <C>
$7.31 - 10.00           170,000            8.0         $     9.08            110,000      $     10.00
10.25 - 13.63           398,172            7.9              12.81            162,110            12.19
13.81 - 14.13           378,515            7.1              14.12            311,224            14.13
14.50 - 22.25            97,130            8.0              15.59             60,000            18.75
27.00 - 30.00            40,000            6.9              27.75             30,000            28.00
-------------     --------------      --------------   ------------     ---------------   ------------
$7.31 - 30.00         1,083,817            7.6         $    13.75            673,334      $     14.01
-------------     --------------      --------------   ------------     ---------------   ------------
-------------     --------------      --------------   ------------     ---------------   ------------

</TABLE>


     The Company applies Accounting Principles Board Opinion No. 25 and related
interpretations in accounting for its stock option plans. Accordingly, no
compensation expense has been recognized for options granted under its 1996
Employee Stock Option Plan or its 1995 Director Stock Option Plan, except for
stock options granted to directors on December 13, 1995, which were subject to
approval and subsequently approved by shareholders on June 12, 1996. Had
compensation cost for the Company's stock option plans been determined based on
the fair value at the grant dates for awards under those plans consistent with
the method of SFAS No. 123, the Company's net income and earnings per share
would have been reduced to the pro forma amounts indicated below:


<TABLE>
<CAPTION>

                                                                 YEARS ENDED DECEMBER 31,
                                                    -------------------------------------------------
                                                        1998               1997               1996
                                                    ------------        -----------       -----------
<S>                                <C>              <C>                 <C>               <C>
Net income:                        As reported        $7,675,000        $10,876,000       $15,066,000
                                   Pro forma           6,869,000          8,749,000        14,460,000

Net income per share - basic:      As reported        $      .89        $      1.24       $      1.72
                                   Pro forma          $      .80        $       .99       $      1.65

Net income per share - diluted:    As reported        $      .87        $      1.22       $      1.67
                                   Pro forma          $      .76        $       .95       $      1.55

</TABLE>

     The fair value of each stock option grant is estimated on the date of grant
using the Black-Scholes option pricing model. The following weighted-average
assumptions were used in 1998, 1997 and 1996, respectively: no dividend yield,
expected volatility of 71.8%, 67.0% and 61.8%, risk-free interest rate of 4.3%,
5.8% and 5.9%, and expected term of 4.0, 4.6 and 4.0 years. The weighted average
fair value per share of options granted in 1998, 1997 and 1996 was $8.33, $7.42
and $8.25, respectively.

                                       37

<PAGE>


11.  EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
                                                                           YEARS ENDED DECEMBER 31,
                                                                ----------------------------------------------
                                                                   1998              1997              1996
                                                                ----------       -----------       -----------
<S>                                                             <C>               <C>               <C>
Numerator:
    Net income                                                  $7,675,000       $10,876,000       $15,066,000
                                                                ----------       -----------       -----------
       Numerator for basic and diluted earnings per
          share--income available to common stockholders         7,675,000        10,876,000        15,066,000

Denominator:
       Denominator for basic earnings per share--
           weighted-average shares                               8,637,724         8,797,734         8,772,815

    Effect of dilutive securities:
           Stock options                                           199,580           126,528           265,408
                                                                ----------       -----------       -----------
    Dilutive potential common shares                               199,580           126,528           265,408

       Denominator for diluted earnings per share--
           adjusted weighted-average shares and
           assumed conversions                                   8,837,304         8,924,262         9,038,223
                                                                ----------       -----------       -----------
                                                                ----------       -----------       -----------

Basic earnings per share                                        $     0.89       $      1.24       $      1.72
                                                                ----------       -----------       -----------
                                                                ----------       -----------       -----------
Diluted earnings per share                                      $     0.87       $      1.22       $      1.67
                                                                ----------       -----------       -----------
                                                                ----------       -----------       -----------
</TABLE>

     The anti-dilutive options as of December 31, 1998, 1997 and 1996 were
1,023,817, 116,600 and 448,598, respectively.

12.  BUSINESS SEGMENTS

     The Company is engaged principally in the business of manufacturing
precision investment-cast titanium and stainless steel golf clubheads,
representing 93%, 94% and 94% of sales for the years ended December 31, 1998,
1997 and 1996, respectively. On June 30, 1997 the Financial Accounting Standards
Board issued Statement of Financial Accounting Standard ("SFAS") No. 131
"Disclosures About Segments of an Enterprise and Related Information" effective
for fiscal years beginning after December 15, 1997. In accordance with the
selection criteria established by SFAS 131, the Company has determined that it
has one business segment.

     The Company derived 49%, 22% and 14% of sales from three top customers in
1998, 34%, 23%, 15% and 12% of sales from four top customers in 1997; and 46%,
18% and 13% of sales from three top customers in 1996.

                                       38

<PAGE>



                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Coastcast Corporation:

We have audited the consolidated financial statements of Coastcast Corporation
and subsidiaries as of December 31, 1998 and 1997, and for each of the three
years in the period ended December 31, 1998, and have issued our report thereon
dated February 9, 1999; such report is included elsewhere in this Annual Report
on Form 10-K. Our audits also included the financial statement schedule of
Coastcast Corporation, listed in Item 14(a)(2). This financial statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.



DELOITTE & TOUCHE LLP

Los Angeles, California
February 9, 1999


                                       39

<PAGE>

                              COASTCAST CORPORATION

                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>

                                                           (CHARGED)/
                                             BALANCE AT    CREDITED TO   CHARGED TO                   BALANCE
                                             BEGINNING      COSTS AND       OTHER                     AT END
                CLASSIFICATION               OF PERIOD      EXPENSES      ACCOUNTS     DEDUCTIONS    OF PERIOD
-----------------------------------------   ------------  ------------  ------------  -----------  ------------
<S>                                         <C>           <C>           <C>           <C>          <C>
Allowance for doubtful accounts:
    Year ended December 31, 1996              (400,000)                                              (400,000)
    Year ended December 31, 1997              (400,000)     (100,000)                                (500,000)
    Year ended December 31, 1998              (500,000)     (100,000)                                (600,000)

</TABLE>

                                       40


<PAGE>


                                       EXHIBIT INDEX
<TABLE>
<CAPTION>
                                                                                               SEQUENTIALLY
   EXHIBIT                                                                                       NUMBERED
   NUMBER                                       DESCRIPTION                                        PAGE
<S>           <C>                                                                                  <C>
3.1.1         Articles of Incorporation of the Company, as amended (1)
              
3.1.2         Certificate of Amendment of Articles of Incorporation filed with the
              California Secretary of State on December 6, 1993 (1)
              
3.2           Bylaws of the Company (1)
              
4             Specimen Stock Certificate of the Company (1)
              
10.1*         1993 Amended and Restated Employee Stock Option Plan ("Employee Plan")
              (1)
              
10.2*         1996 Amended and Restated Employee Stock Option Plan ("Employee Plan")
              (4)
              
10.3*         Non-Employee Director Stock Option Plan ("Director Plan"), together with
              form of notice of grant and grant summary (1)
              
10.4*         1995 Amended and Restated Non-Employee Director Stock Option Plan
              ("Director Plan"), together with form of notice of grant and grant
              summary (1)
              
10.5          Agreement. effective May 11, 1997, between the Company and United
              Steelworkers of America (6)
              
10.6          Lease Agreement, dated December 16, 1998, between Coastcast Corporation,             44
              S.A. and Parque Industrial Mexicali, S.A. de C.V. for the facilities               
              known as Mercurio #70 in Mexicali, Mexico                                          
                                                                                                 
10.7          Lease Agreement, dated December 16, 1998, between Coastcast Corporation,             66
              S.A. and Parque Industrial Mexicali, S.A. de C.V. for the facilities               
              known as Avenue Galaxia #50 in Mexicali, Mexico                                    
                                                                                                 
10.8          Lease Agreement, dated December 16, 1998, between Coastcast Corporation,             88
              S.A. and Parque Industrial Mexicali, S.A. de C.V. for the facilities               
              known as Mercurio #30 in Mexicali, Mexico                                          
                                                                                                 
10.9          Lease Agreement, dated January 22, 1996, between Coastcast Corporation,            
              S.A. and Parque Industrial Mexicali, S.A. de C.V. for the facilities               
              known as Calle Marte #162 in Mexicali, Mexico (2)                                  
                                                                                                 
10.10         Guaranty, dated January 26, 1999, by the Company for the lease of the               110
              Mexicali, Mexico facilities known as Mercurio #70                                  
                                                                                                 
10.11         Guaranty, dated January 26, 1999, by the Company for the lease of the               116
              Mexicali, Mexico facilities known as Avenue Galaxia #50                            
                                                                                                 

                                       41

<PAGE>


10.12         Guaranty, dated January 26, 1999, by the Company for the lease of the               122
              Mexicali, Mexico facilities known as Mercurio #30                                  
                                                                                                 
10.13         Guaranty, dated January 23, 1996, by the Company for the lease, dated              
              January 22, 1996 (2)                                                               
                                                                                                 
10.14         Lease Agreement, dated September 1, 1997, between the Company and Watson           
              Land Company for the facilities in Rancho Dominguez, California (5)                
                                                                                                 
10.15         Lease Agreement, dated January 5, 1998, between Coastcast Tijuana, S. De            128
              R.L. De C.V. and Frederick Clarke Sanders, Jr., Frederick Sanders                  
              Flourie, Monique Sanders Flourie, Scott Michael Sanders Flourie and                
              Carlo E. Muzquiz Davila for real estate in Tijuana, Baja California,               
              Mexico                                                                             
                                                                                                 
10.16         Lease Guaranty Agreement, dated August 18, 1998, by the Company for the             146
              lease of the Tijuana facility                                                      
                                                                                                 
10.17         Form of Indemnification Agreement (1)                                              
                                                                                                 
10.18         Revolving Line of Credit Note and Credit Agreement, effective December             
              23, 1997, between the Company and Imperial Bank (6)                                
                                                                                                 
10.19         Revolving Line of Credit Note and First Amendment to Credit Agreement,              150
              effective February 1, 1999, between the Company and Imperial Bank                  
                                                                                                 
10.20*        Amended and Restated Coastcast Corporation Selected Employees Pension              
              Plan, dated October 1, 1987 (1)                                                    
                                                                                                 
10.21*        Amendment to the Coastcast Corporation Selected Employees Pension Plan,            
              effective May 12, 1997 (6)                                                         
                                                                                                 
10.22*        Coastcast Corporation 401(k) Retirement Plan, effective January 1, 1996            
              (2)                                                                                
                                                                                                 
10.23         Coastcast Corporation S Corporation Termination, Tax Allocation and                
              Indemnification Agreement dated December 1, 1993, between the Company              
              and certain Shareholders(1)                                                        
                                                                                                 
10.24*        Coastcast Corporation Supplemental Executive Retirement Plan, effective            
              September 1, 1996 (3)                                                              
                                                                                                 
10.25*        First Amendment to Coastcast Corporation Supplemental Executive                    
              Retirement Plan, effective September 1, 1996 (3)                                   
                                                                                                 
10.26*        Second Amendment to Coastcast Corporation Supplemental Executive                   
              Retirement Plan, dated February 18, 1997 (4)                                       
                                                                                                 
10.27*        Trust Agreement by and between Coastcast Corporation and Imperial Trust            
              Company, dated September 1, 1996 (3)                                               
                                                                                                 
                                       42

<PAGE>

10.28*        Coastcast Corporation Amended and Restated Supplemental Executive                   158
              Retirement Plan, effective January 1, 1998                                         
                                                                                                 
10.29*        Amended and Restated Trust Agreement by and between Coastcast                       181
              Corporation and 180 Imperial Trust Company, dated December 18, 1998                
                                                                                                 
10.30         Agreement dated November 6, 1998 between the Company and Jonathan                  
              Vannini (7)                                                                        
                                                                                                 
10.31*        Agreement dated November 6, 1998 between the Company and Richard W. Mora           
              (7)                                                                                
                                                                                                 
10.32*        Agreement dated January 15, 1999 between the Company and Richard W. Mora            202
                                                                                                 
21            Subsidiaries of the Company                                                         206
                                                                                                 
23            Consent of Independent Auditors                                                     207
                                                                                                 
27            Financial Data Schedule                                                             208

</TABLE>
---------------------------------

*    Management contract or compensating plan or arrangement.

(1)  Incorporated by reference to the exhibits to the Registration Statement on
     Form S-1 (Registration No. 33-71294) filed on November 4, 1993, as amended
     by Amendment No. 1 filed on November 17, 1993, Amendment No. 2 filed on
     December 1, 1993, and Amendment No. 3 filed on December 9, 1993.

(2)  Incorporated by reference to the exhibits to Form 10-K for the fiscal year
     ended December 31, 1995.

(3)  Incorporated by reference to the exhibits to Form 10-K for the fiscal year
     ended September 30, 1996.

(4)  Incorporated by reference to the exhibits to Form 10-K for the fiscal year
     ended December 31, 1996.

(5)  Incorporated by reference to the exhibits to Form 10-Q for the fiscal
     quarter ended September 30, 1997.

(6)  Incorporated by reference to the exhibits to Form 10-K for the fiscal year
     ended December 31, 1997.

(7)  Incorporated by reference to the exhibits to Form 10-Q for the fiscal
     quarter ended September 30, 1998.


                                       43