<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

(Mark One)

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

                                       or

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

        For the transition period from __________ to __________

                         Commission File Number 0-26742

                                GT BICYCLES, INC.
           (Exact name of the registrant as specified in its charter)

                 Delaware                                04-3210830
      (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                 Identification No.)

                2001 East Dyer Road, Santa Ana, California 92705
                    (Address of principal executive offices)

                                 (714) 481-7100
              (Registrant's telephone number, including area code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                 Not Applicable

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                    Common Stock, par value $0.001 per share

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 [ ]

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

               Class                         Outstanding at November 10, 1997
               -----                         --------------------------------
    Common Stock, $0.001 par value                       9,810,707

<PAGE>   2

                                GT BICYCLES, INC.

           INDEX TO FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
                                                                                   Page Number
                                                                                   -----------
<S>     <C>                                                                        <C>
Part I. Financial Information

        Item 1.     Condensed Consolidated Financial Statements

                    Condensed Consolidated Balance Sheets as of September 30, 1997
                            and December 31, 1996                                             3

                    Condensed Consolidated Statements of Operations for the three
                           and nine month periods ended September 30, 1997 and 1996           4

                    Condensed Consolidated Statements of Cash Flows for the nine
                           month periods ended September 30, 1997 and 1996                    5

                    Notes to Condensed Consolidated Financial Statements                      6

        Item 2.     Management's Discussion and Analysis of Financial Condition
                    and Results of Operations                                                 9

Part II.            Other Information                                                        14

        Item 5.     Subsequent Event

        Item 6.     Exhibits and Reports on Form 8-K                                         14

        Signatures                                                                           16
</TABLE>


                                       2
<PAGE>   3

                               GT BICYCLES, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                              September 30,     December 31,
ASSETS                                                                            1997               1996
                                                                              -------------     ------------
                                                                                      (in thousands)
<S>                                                                            <C>                <C>       
Current assets:
      Trade accounts receivable, net                                           $   45,694         $   51,843
      Inventories (note 2)                                                         77,071             74,328
      Deferred income taxes                                                         2,022              1,915
      Prepaid expenses and other current assets                                     4,266              1,980
                                                                               ----------         ----------
        Total current assets                                                      129,053            130,066

Property, plant and equipment, net                                                 11,407              5,023
Goodwill and covenants not to compete, net                                         20,016             19,144
Restricted cash from issuance of Industrial Development Bonds (note 5)              5,000                 --
Other assets                                                                        1,144              1,948
                                                                               ----------         ----------
                   Total Assets                                                $  166,620         $  156,181
                                                                               ==========         ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
      Current portion of long-term debt (note 7)                               $   71,202         $    4,250
      Current portion of capital lease obligations                                    415                376
      Accounts payable                                                             13,926             12,468
      Accrued liabilities                                                           6,190              4,519
      Income taxes payable                                                            439              1,061
                                                                               ----------         ----------
        Total current liabilities                                                  92,172             22,674
      Long-term debt, net of current portion (note 5)                              13,114             73,421
      Capital lease obligations, net of current portion                               496                629
      Deferred income taxes                                                            92                 92
      Other liabilities                                                                84                212
                                                                               ----------         ----------
        Total liabilities                                                         105,958             97,028
                                                                               ----------         ----------
Stockholders' equity:
      Preferred stock, $0.001 par value, 5,000,000 shares authorized,
        none issued                                                                    --                 --
      Common stock, $0.001 par value, 20,000,000 shares authorized,
        9,810,707 and 9,781,097 shares issued and outstanding
        at September 30, 1997 and December 31, 1996, respectively                      10                 10
      Additional paid-in-capital                                                   47,121             46,916
      Retained earnings                                                            13,236             11,458
      Foreign currency translation adjustment                                         295                769
                                                                               ----------         ----------
        Total stockholders' equity                                                 60,662             59,153

                                                                               ----------         ----------
                   Total Liabilities and Stockholders' Equity                  $  166,620         $  156,181
                                                                               ==========         ==========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>   4

                               GT BICYCLES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                            Three Months Ended           Nine Months Ended
                                                               September 30,                September 30,
                                                         -------------------------     -------------------------
                                                            1997           1996           1997           1996
                                                         ----------     ----------     ----------     ----------
                                                                   (in thousands, except per share data)
<S>                                                      <C>            <C>            <C>            <C>       
Net sales                                                $   56,444     $   52,435     $  158,383     $  145,399
Cost of sales                                                40,525         37,041        114,892        104,272
                                                         ----------     ----------     ----------     ----------

     Gross profit                                            15,919         15,394         43,491         41,127

Selling, general and administrative expenses (note 4)        13,428         10,888         36,371         27,795
                                                         ----------     ----------     ----------     ----------

Operating income                                              2,491          4,506          7,120         13,332

Life insurance proceeds, net of guaranteed
     severance payments (note 3)                                             1,276                         1,276
Interest expense                                             (1,352)        (1,047)        (4,143)        (2,514)
                                                         ----------     ----------     ----------     ----------

Income before taxes                                           1,139          4,735          2,977         12,094

Income taxes                                                   (461)        (1,095)        (1,199)        (4,039)
                                                         ----------     ----------     ----------     ----------

Net income                                               $      678     $    3,640     $    1,778     $    8,055
                                                         ==========     ==========     ==========     ==========

Earnings per common and
   common equivalent share (note 6)                      $     0.07     $     0.37     $     0.18     $     0.81
                                                         ==========     ==========     ==========     ==========

Weighted average common and
   common equivalent shares                                   9,914          9,934          9,919          9,924
                                                         ==========     ==========     ==========     ==========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>   5

                               GT BICYCLES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                   Nine Months Ended
                                                                                      September 30,
                                                                               -------------------------
                                                                                  1997           1996
                                                                               ----------     ----------
                                                                                    (in thousands)
<S>                                                                            <C>            <C>       
Cash flows from operating activities:
   Net income                                                                  $    1,778     $    8,055
   Adjustments to reconcile net income to net
      cash from operating activities:
      Depreciation and amortization                                                 1,958          1,190
      Provision for doubtful accounts                                                 459            345
      Deferred income taxes                                                          (107)            --
      Write-off of leasehold improvements in connection with relocation               279             --
   Changes in assets and liabilities:
      Trade accounts receivable                                                     5,690            639
      Inventories                                                                  (2,743)       (12,127)
      Prepaid expenses and other assets                                            (2,441)        (1,010)
      Accounts payable                                                              1,458         (2,068)
      Accrued and other liabilities                                                 1,544          2,560
      Income taxes payable                                                           (622)           871
                                                                               ----------     ----------
         Net cash provided by (used in) operating activities                        7,253         (1,545)
                                                                               ----------     ----------
Cash flows from investing activities:
   Purchases of property, plant and equipment                                      (7,811)        (2,205)
   Purchase of Caratti Sport Limited                                                   --        (14,225)
   Additional investments in subsidiaries                                            (723)            --
                                                                               ----------     ----------
         Net cash used in investing activities                                     (8,534)       (16,430)
                                                                               ----------     ----------
Cash flows from financing activities:
   Net borrowings under line of credit                                              4,768          1,991
   Borrowings under term loan                                                          --         17,000
   Principal payments on term loan                                                 (3,188)            --
   Borrowings under capital lease obligations and other debt                          195            144
   Principal payments on capital lease obligations                                   (225)          (110)
   Proceeds from issuance of common stock                                             205             35
                                                                               ----------     ----------
         Net cash provided by financing activities                                  1,755         19,060
                                                                               ----------     ----------
   Foreign currency translation adjustment                                           (474)           (14)
                                                                               ----------     ----------
Change in cash and cash equivalents                                                    --          1,071
Cash and cash equivalents at beginning of period                                       --             --
                                                                               ----------     ----------
Cash and cash equivalents at end of period                                     $       --     $    1,071
                                                                               ==========     ==========

Supplemental disclosure of cash flow information: 
   Cash paid during the period for:
      Interest                                                                 $    4,122     $    2,460
                                                                               ==========     ==========
      Income taxes                                                             $    1,714     $    2,604
                                                                               ==========     ==========

   Restricted cash from issuance of Industrial Development Bonds               $    5,000     $       --
                                                                               ==========     ==========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>   6


GT BICYCLES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The condensed consolidated financial statements of GT Bicycles, Inc. (the
"Company") include the wholly-owned subsidiaries, GT Bicycles California, Inc.,
GT BMX Products, Inc., Riteway Distributors, Inc., Riteway Distributors Central,
Inc., Riteway Products East, Inc., Riteway Products North Central, Inc., Riteway
Products Japan K.K. ("Riteway Japan"), Riteway Products France S.A.R.L.
("Riteway France") and Caratti Sport Limited ("Caratti"), as well as the
majority-owned subsidiaries, Innovations in Composites ("Innovations") and
Riteway Products Canada ("Riteway Canada"). Riteway Products North Central,
Inc., Riteway France and Caratti were acquired in July 1995, April 1996 and July
1996, respectively, and have been accounted for under the purchase method of
accounting and, accordingly, the purchase price of each entity was allocated to
assets acquired based on their estimated fair values. The excess of the purchase
price over the fair market values of the net assets acquired has been recorded
as goodwill. Riteway Products North Central, Inc., Riteway France and Caratti
have been included in the Company's consolidated results of operations since the
date of acquisition. Riteway Japan was formed in March 1996 as a wholly-owned
subsidiary of the Company.

The Company held a 45% interest in Innovations from 1993 until June 30, 1997,
and accounted for its investment using the equity method during that period. On
July 1, 1997, the Company increased its investment in Innovations to a 57%
ownership level. Accordingly, the operating transactions of this entity, which
manufactures certain bicycle parts, have been consolidated into the Company's
financial statements in the quarter ended September 30, 1997.

On September 1, 1997, the Company and another investor formed Riteway Canada to
distribute bicycles, parts and accessories throughout Canada. Since the Company
has an 85% ownership level, the operating transactions of this entity have
been consolidated into the Company's financial statements.

The inclusion of the Innovations and Riteway Canada operations did not have a
material impact on consolidated net sales or net income in the quarter ended
September 30, 1997. The excess of the respective purchase price over the
Company's share of the fair market value of the net assets acquired for each of
these entities has been recorded as goodwill. The interest of minority
shareholders in the equity of these entities is included in other liabilities
and their interest in the earnings of these entities is included in selling,
general and administrative expenses; such amounts were not significant in the
quarter ended September 30, 1997. 

Investments in affiliates, for which the Company has an ownership interest of at
least 20% but not exceeding 50%, are recorded under the equity method of
accounting.

All significant intercompany balances and transactions are eliminated in
consolidation.

Foreign Currency Translation

The Company uses the local currency of the respective country as the functional
currency for its overseas operations. Accordingly, assets and liabilities
outside the United States were translated into dollars at the rate of exchange
in effect at the balance sheet date. Income and expense items were translated at
the weighted average exchange rates prevailing during the period. The cumulative
translation gain or loss is included as an adjustment to stockholders' equity.
There were no significant foreign currency transaction gains or losses in the
periods presented.


                                       6
<PAGE>   7

Forward Exchange Contracts

The Company from time to time enters into short-term, forward exchange contracts
to hedge the impact of foreign currency fluctuations on specific purchase
commitments denominated in foreign currencies. The gains and losses on these
contracts are included in the value of the assets which they were intended to
hedge. The Company had forward exchange contracts outstanding, with maturities
of four months or less, to exchange foreign currencies for approximately $2.2
million at September 30, 1997 and $3.3 million at December 31, 1996.

Unaudited Condensed Consolidated Financial Statements

The unaudited condensed consolidated financial statements have been prepared in
conformity with generally accepted accounting principles and include all
adjustments which are, in the opinion of management, necessary for a fair
presentation of the results for the interim periods presented. All such
adjustments are, in the opinion of management, of a normal recurring nature.
Results for the three and nine month periods ended September 30, 1997 are not
necessarily indicative of the operating results to be expected for the full
year.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed
consolidated financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended December 31, 1996.

(2) INVENTORIES

A summary of the components of inventories follows:

<TABLE>
<CAPTION>
                                                   September 30,     December 31,
                                                       1997              1996
                                                   -------------     ------------
                                                            (in thousands)
<S>                                                 <C>               <C>       
Raw materials                                       $      421        $       95
Work in process                                          5,385             3,659
Finished goods and component parts                      71,265            70,574
                                                    ----------        ----------
                                                    $   77,071        $   74,328
                                                    ==========        ==========
</TABLE>

(3) LIFE INSURANCE PROCEEDS, NET OF GUARANTEED SEVERANCE PAYMENTS

Included in net income for the three and nine months ended September 30, 1996
were net life insurance proceeds of $1,276,000 that the Company received
following the death of former President and Chief Executive Officer, Richard
Long, in July 1996. The net proceeds consisted of a $2,000,000 insurance
settlement less guaranteed payments of $724,000 owed to Mr. Long's family.

(4) RELOCATION OF SOUTHERN CALIFORNIA FACILITIES

In May 1997, the Company consolidated its southern California operations, which
had previously been located in several facilities, to the present building in
Santa Ana, California. In connection with the relocation, the Company incurred
aggregate expenses of approximately $1,000,000, including moving costs and the
write-off of abandoned leasehold improvements at the former facilities. This
amount was charged to selling, general and administrative expenses during the
first half of 1997.


                                       7
<PAGE>   8

(5) INDUSTRIAL DEVELOPMENT BONDS

In September 1997, the Company consummated a $5,000,000 borrowing under a
California Economic Development Financing Authority program. Use of the funds is
restricted to the purchase of qualifying property and equipment at the Company's
Santa Ana facility. Pending disbursement for such capital expenditures, the
funds have been placed in an interest-bearing bank account and are classified as
restricted cash in the balance sheet at September 30, 1997.

(6) EARNINGS PER SHARE

The calculation of earnings per share was determined by dividing net income by
the weighted average common and common equivalent shares outstanding when
dilutive. Primary earnings per share approximates fully diluted earnings per
share for all periods presented.

In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share" which,
when adopted, will replace the current methodology for calculating and
presenting earnings per share. Under SFAS No. 128, primary earnings per share
will be replaced with a presentation of basic earnings per share and fully
diluted earnings per share will be replaced with diluted earnings per share.
Basic earnings per share excludes dilution and is computed by dividing income
available to common stockholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share is computed similarly to
fully diluted earnings per share. The statement will be effective beginning in
the Company's fourth quarter ending December 31, 1997, and accordingly, the
financial statements for such quarter will include a restatement of historical
earnings per share to conform to the requirements of SFAS No. 128. Management
does not expect that the presentation required by SFAS No. 128 to materially
differ from the current presentation of earnings per share.

(7) SUBSEQUENT EVENT

On October 23, 1997, the Company's domestic bank credit agreement was amended to
increase the total domestic revolving credit facility from $60,000,000 to
$80,000,000 through February 28, 1998 (after which time it reverts to
$60,000,000), to increase the interest rate to be paid by the Company, to amend
certain financial covenants, and to require the Company to close on $30,000,000
of unsecured financing by February 28, 1998 (evidence indicating such financing
must be provided by January 31, 1998).



                                       8
<PAGE>   9

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

GENERAL

GT Bicycles, Inc. (the "Company") is a leading designer, manufacturer and
marketer of mid-to premium-priced mountain and juvenile BMX bicycles sold under
the Company's brand names. The Company's Riteway Products and Caratti
distribution network is a leading distributor of the Company's bicycles, parts
and accessories, and parts and accessories of other manufacturers, to
independent bicycle dealers.

RESULTS OF OPERATIONS

Net Sales. Net sales increased $4.0 million (8%) and $13.0 million (9%),
respectively, during the three and nine month periods ended September 30, 1997
in comparison with the corresponding periods in 1996. The increase for the
quarter was attributable to an increase in domestic sales of $1.5 million and
foreign sales of $2.5 million, while substantially all of the increase for the
nine-month period was attributable to an increase in foreign sales. The
increases in foreign sales relate primarily to the addition and growth of the
Company's subsidiaries in the United Kingdom, France, Japan and Canada, which
were purchased or formed during 1996 and 1997. The increase in domestic sales
during the quarter was due to higher sales of both adult and juvenile bicycles,
partially offset by lower sales of parts and accessories. For the nine-month
period, domestic sales were relatively flat due to lower sales of adult bicycles
and parts and accessories, offset by higher sales of juvenile bicycles.

Gross Profit. Gross profit as a percentage of net sales decreased to 28.2% and
27.5%, respectively, for the three and nine month periods ended September 30,
1997 compared with 29.4% and 28.3% for the corresponding periods in 1996. The
decreases were primarily attributable to manufacturing inefficiencies during and
following the relocation of the Company's facilities, discounting of old
model-year inventory during the second quarter, and changes in product mix.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses ("SG&A") for the three and nine month periods ended
September 30, 1997 increased by $2.5 million and $8.6 million, respectively,
over the corresponding periods in 1996. As a percentage of net sales, SG&A
increased to 23.8% and 23.0% during the three and nine month periods ended
September 30, 1997, respectively, compared with 20.8% and 19.1% for the
corresponding prior year periods. The increases in the quarter and nine-month
periods were primarily due to higher administrative costs totaling $0.8 million
and $4.4 million, respectively, from the addition of subsidiaries in the United
Kingdom, France, Japan and Canada. The remainder of the increases were primarily
due to higher selling, marketing and advertising expenses to promote worldwide
sales and brand equity, and higher product development expenses. In addition,
the 1997 nine-month period includes approximately $1.0 million of relocation
costs related to the consolidation of the Company's southern California
manufacturing, distribution and administrative facilities in May 1997.

Interest Expense. Interest expense for the three and nine month periods ended
September 30, 1997 increased by $0.3 million and $1.6 million, respectively, in
comparison with the corresponding periods of 1996. The increase in each of the
periods was attributable to additional borrowings which were incurred primarily
to fund acquisitions and the expansion of the Company's domestic and foreign
operations.

Income Taxes. The Company's effective tax rate was 40.5% and 40.3% in the three
and nine month periods ended September 30, 1997, respectively, as compared with
23.1% and 33.4% for the corresponding periods last year. The relatively low 1996
tax rates reflect the effects of the $2.0 million of nontaxable life insurance
proceeds received during the third quarter of 1996.


                                       9
<PAGE>   10

LIQUIDITY AND CAPITAL RESOURCES

The Company finances its operating cash needs primarily from bank credit, vendor
credit, and cash generated from operations. The Company has a credit agreement
with a bank that provides a domestic revolving credit facility, a domestic term
loan maturing quarterly through September 2000, and separate revolving credit 
facilities for the Riteway Japan, Riteway France and Caratti subsidiaries. All 
of the revolving credit facilities expire on June 30, 1998 and are classified 
as current liabilities at September 30, 1997.

The domestic credit facility requires the Company to maintain certain financial
ratios and other covenants, which, among other things, restrict other
indebtedness, capital expenditures and certain investments. As of September 30,
1997, the Company was in technical violation of a certain covenant, for
which the bank has issued a waiver as of that date. Subsequent to September 30,
1997, the Company and the bank entered into an amended domestic credit facility
which provides for a revised covenant that the Company expects to meet on an
ongoing basis in the future.

On October 23, 1997, the Company's domestic bank credit facility was amended to
increase the total domestic line of credit from $60.0 million to $80.0 million
through February 28, 1998 (after which time it reverts to $60.0 million), to
increase the interest rate to be paid by the Company, to amend certain financial
covenants, and to require the Company to close on $30,000,000 of unsecured
financing by February 28, 1998 (evidence indicating such financing must be
provided by January 31, 1998).

The Company's operating activities provided cash of $7.3 million in the nine
months ended September 30, 1997, compared with a $1.5 million net use of cash in
operations in the corresponding 1996 nine-month period. The improvement in
operating cash flow in 1997 is principally related to a reduction in accounts
receivable and to a smaller inventory buildup than occurred in the prior
year. Capital expenditures of $7.8 million principally consisted of $5.3 million
of improvements, machinery and equipment at the Santa Ana facility, $1.0 million
of other machinery and equipment, and $0.7 million of construction-in-progress
at a new research and development facility in Colorado.

In May 1997, the Company consolidated its southern California manufacturing,
distribution and administrative operations, which had been located in several
facilities, to the present building in Santa Ana, California. The operating
lease on the present building terminates on January 31, 2007 and will result in
an incremental average annual increase in rent expense over 1996 of
approximately $0.9 million.

The Company anticipates that it will continue to rely on bank credit, vendor
credit and cash generated from operations in order to finance anticipated higher
inventory and accounts receivable levels. The Company is in the process of
seeking additional unsecured financing to supplement the Company's credit
requirements and to meet covenants under the Company's senior secured credit
facility with its bank. While the Company is in discussions with several
potential lenders about the additional financing, there can be no assurance that
the Company will be able to obtain such financing on acceptable terms, or at
all. The failure to obtain such financing could have a material adverse effect
on the Company's business, results of operations and financial condition.


                                       10
<PAGE>   11

CERTAIN FACTORS THAT MAY AFFECT THE COMPANY'S BUSINESS AND FUTURE RESULTS

ECONOMIC CONDITIONS; SUSTAINABILITY OF GROWTH. The Company's business is subject
to economic cycles and changing consumer trends. Purchases of discretionary
sporting goods tend to decline in periods of economic uncertainty. Any
significant decline in general economic conditions or continued uncertainties
regarding future economic prospects that affect consumer spending could have a
material adverse effect on the Company's business, results of operations and
financial condition. In the past ten years, there has been a renewed public
interest in bicycling and fitness activities. There can be no assurance that the
public interest in bicycling and fitness activities will continue, or that the
Company will continue to grow or be able to sustain the level of bicycle sales
that it has historically achieved. Any general decline in the size of the
bicycle market or in a segment of the bicycle market in which the Company
competes, whether from general economic conditions, a decrease in the popularity
of bicycling or otherwise, could have a material adverse effect on the Company's
business, results of operations and financial condition.

TECHNOLOGICAL ADVANCEMENTS AND NEW PRODUCT INTRODUCTIONS. The bicycle industry,
in recent years, has been characterized by significant technological advances
and frequent new product introductions. The Company believes that the frequent
introduction of new, innovative bicycles, parts and accessories that respond
timely to changing consumer demands and trends will be critical to its future
success. In the past, the Company generally has been successful in the
introduction of its bicycles, parts and accessories. No assurance can be given,
however, that the Company will be able to continue to design and manufacture
products that will achieve commercial success.

INDEBTEDNESS; LIQUIDITY. The credit agreement relating to the Company's bank
debt requires the Company to maintain certain financial ratios and profitability
requirements. Any failure to comply with covenants or restrictions contained in
the credit agreement could result in a default thereunder, which in turn could
cause the Company's indebtedness to be declared immediately due and payable. The
Company has in the past renegotiated certain provisions of the credit agreement
to relax certain of the financial covenants to adapt to the Company's then
existing financial condition, although there can be no assurance that the bank
will renegotiate provisions of the credit agreement in the future. Although the
Company believes that its cash from operations, its bank credit and vendor
credit, and its existing working capital will be sufficient to satisfy the
Company's anticipated working capital and capital expenditure requirements
through at least the next twelve months, the Company may need to seek additional
sources of capital as necessary or appropriate to finance acquisitions or
otherwise finance the Company's operations during such period of time and
thereafter. Further, the Company's current credit agreement requires that the
Company seek additional unsecured financing. There can be no assurance that 
additional financing will be available or, if available, that it will be 
available on acceptable terms. If adequate funds are not available, the 
Company's business, results of operations and financial condition may be 
adversely affected.

QUARTERLY FLUCTUATIONS AND SEASONALITY. Operating results fluctuate on a
quarterly basis due to a variety of factors, including the cycles of dealer
orders, shipment of products from foreign suppliers, the number and timing of
new product introductions, the timing of operating and advertising expenditures
and changes in the mix of products ordered by dealers. Typically, the Company's
operating expenses are higher in the third quarter primarily due to annual
introductions of new bicycle models and participation in annual industry trade
shows. In addition, the Company's business has seasonal elements based on
bicycle model years, weather, the year-end shopping season and other factors.
The Company believes that factors such as fluctuations in the quarterly
operating results could cause the price of the common stock to fluctuate
substantially.


                                       11
<PAGE>   12

COMPETITION. The market for bicycles, parts and accessories, both in the United
States and internationally, is highly competitive. In all of its product
categories, the Company competes with other manufacturers and distributors, some
of which have well-recognized brand names and substantial financial,
technological, distribution, advertising and marketing resources. In addition,
there are several bicycle manufacturers and component suppliers with substantial
resources that do not currently compete directly with the Company, but which
could pose significant competition to the Company in the future. There can be no
assurance that the Company will be able to compete successfully in the future.

DEPENDENCE ON CERTAIN SUPPLIERS. As is common in the industry, a substantial
majority of the Company's multi-speed bicycles contain componentry supplied on a
purchase order basis by one Japanese manufacturer. Although this supplier has
not indicated any intention to limit or reduce sales of parts to the Company, if
it were to do so, the Company's business, results of operations and financial
condition could be adversely affected. In addition, the Company purchases
substantially all of its bicycles that are manufactured overseas from a limited
group of manufacturers, which varies from year to year. The Company has no
long-term contracts with these suppliers and competes with other companies for
their production capacities. Although the Company has established relationships
with its principal suppliers and manufacturing sources, the Company's future
success will depend on its ability to maintain such relationships and to develop
relationships with new suppliers and manufacturing sources for the production
and sale of bicycles, parts and accessories. In the event of a delay or
disruption in the supply or delivery of bicycles, parts and accessories, the
Company believes that suitable alternative suppliers and carriers could be
obtained, although the transition to other suppliers and delays in the delivery
of bicycle components could result in significant production delays. Any
significant delay or disruption in the supply of bicycles, parts and accessories
could have a material adverse effect on the Company's business, results of
operations and financial condition.

PRODUCT LIABILITY. Because of the nature of the Company's business, the Company
at any particular time is a defendant in a number of product liability lawsuits
and expects that this will continue to be the case in the future. These lawsuits
generally seek damages, sometimes in substantial amounts, for personal injuries
allegedly sustained as a result of defects in the Company's products. Although
the Company maintains product liability insurance, due to the uncertainty as to
the nature and extent of manufacturers' and distributors' liability for personal
injuries, there is no assurance that the product liability insurance maintained
by the Company is or will be adequate to cover product liability claims or that
the applicable insurer will be solvent at the time of any covered loss. In
addition, due to deductibles, self-retention levels and aggregate coverage
amounts applicable under the Company's insurance policies, the Company will bear
responsibility for a significant portion, if not all, of the defense costs
(which include attorneys' fees and expenses incurred in the defense of any
claim), and the related payments to satisfy any judgments associated with any
claim asserted against the Company in excess of any applicable coverage. The
successful assertion or settlement of an uninsured claim, the settlement of a
significant number of insured claims, or a claim exceeding the Company's
insurance coverage could have a material adverse effect on the Company's
business, results of operations and financial condition. In addition, there can
be no assurance that insurance will remain available, or if available, will not
be prohibitively expensive.

CURRENCY FLUCTUATIONS. A portion of the Company's sales outside of North America
are denominated in local currencies. In addition, certain components purchased
by the Company are purchased in local currencies. Accordingly, the Company is
subject to the risks associated with fluctuations in currency rates. The Company
has not in the past experienced significant losses associated with currency
exchange fluctuations, but there can be no assurance that it will not experience
such losses in the future, particularly in light of the increasing portion of
net revenues resulting from sales outside North America and through its foreign
operating subsidiaries. From time to time, the Company has entered into forward
contracts against certain foreign currencies in an effort to minimize its
exposure on certain significant foreign currency receivables and component
purchases. Such hedging activities only partially address the Company's risks in
currency exchange transactions, and there can be no assurance that this strategy
will 


                                       12
<PAGE>   13

continue to be successful. Further there can be no assurance that the Company's
results of operations will not be adversely affected by currency fluctuations.

FORWARD-LOOKING STATEMENTS. THIS QUARTERLY REPORT CONTAINS CERTAIN
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED, THAT INVOLVE RISKS AND UNCERTAINTIES. IN ADDITION, THE COMPANY MAY
FROM TIME TO TIME MAKE ORAL FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS ARE
UNCERTAIN AND MAY BE IMPACTED BY THE FOLLOWING FACTORS. IN PARTICULAR, CERTAIN
RISKS AND UNCERTAINTIES THAT MAY IMPACT THE ACCURACY OF THE FORWARD-LOOKING
STATEMENTS WITH RESPECT TO REVENUES, EXPENSES AND OPERATING RESULTS INCLUDE,
WITHOUT LIMITATION, CYCLES OF DEALER ORDERS, GENERAL ECONOMIC AND COMPETITIVE
CONDITIONS AND CHANGING CONSUMER TRENDS, TECHNOLOGICAL ADVANCES AND THE NUMBER
AND TIMING OF NEW PRODUCT INTRODUCTIONS, SHIPMENTS OF PRODUCTS AND COMPONENTRY
FROM FOREIGN SUPPLIERS, THE TIMING OF OPERATING AND ADVERTISING EXPENDITURES AND
CHANGES IN THE MIX OF PRODUCTS ORDERED BY INDEPENDENT BICYCLE DEALERS. AS A
RESULT, THE ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE
FORWARD-LOOKING STATEMENTS.

BECAUSE OF THESE AND OTHER FACTORS THAT MAY AFFECT THE COMPANY'S OPERATING
RESULTS, PAST FINANCIAL PERFORMANCE SHOULD NOT BE CONSIDERED AN INDICATOR OF
FUTURE PERFORMANCE, AND INVESTORS SHOULD NOT USE HISTORICAL TRENDS TO ANTICIPATE
RESULTS OR TRENDS IN FUTURE PERIODS


                                       13
<PAGE>   14
                           PART II. OTHER INFORMATION

ITEM 5.  SUBSEQUENT EVENT

On October 23, 1997, the Company's domestic bank credit agreement was amended to
increase the total domestic revolving credit facility from $60.0 million to
$80.0 million through February 28, 1998 (after which time it reverts to $60.0
million), to increase the interest rate to be paid by the Company, to amend
certain financial covenants, and to require the Company to close on $30,000,000
of unsecured financing by February 28, 1998 (evidence indicating such financing
must be provided by January 31, 1998).  The related amendment to the bank credit
agreement has been filed herein as Exhibit 10.53.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
                                                                            
(a)      Exhibits                                                           
                                                                            
<TABLE>                                                                     
<CAPTION>                                                                   
                                                                            
         Exhibit Number                                                     
         --------------                                                     
         <S>            <C>                                                 
         10.51          Sixth Amendment to Second Amended and               
                        Restated Credit Agreement (Receivables              
                        and Inventory) among the Company, GT                
                        Bicycles California, Inc., Riteway                  
                        Products East, Inc., Riteway Products               
                        North Central, Inc., Riteway                        
                        Distributors Central, Inc., Riteway                 
                        Distributors, Inc. and Bank of America,             
                        N.T. and S.A., dated August 15, 1997.               
                                                                            
         10.52          Seventh Amendment to Second Amended and             
                        Restated Credit Agreement (Receivables
                        and Inventory) among the Company, GT
                        Bicycles California, Inc., Riteway
                        Products East, Inc., Riteway Products
                        North Central, Inc., Riteway
                        Distributors Central, Inc., Riteway
                        Distributors, Inc. and Bank of America,
                        N.T. and S.A., dated September 11, 1997.

         10.53          Eighth Amendment to Second Amended and
                        Restated Credit Agreement (Receivables
                        and Inventory) among the Company, GT
                        Bicycles California, Inc., Riteway
                        Products East, Inc., Riteway Products
                        North Central, Inc., Riteway
                        Distributors Central, Inc., Riteway
                        Distributors, Inc. and Bank of America,
                        N.T. and S.A., dated October 23, 1997.

         27.1           Financial data schedule
</TABLE>

(b)      Reports on Form 8-K

         None



                                       14
<PAGE>   15

                                   SIGNATURES

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

                                       GT BICYCLES,  INC.


Date: November 18, 1997                By:  /s/ Charles Cimitile
                                            ------------------------------------
                                            Charles Cimitile
                                            Vice President Finance
                                            and Chief Financial Officer
                                            (Principal Financial
                                            and Duly Authorized Officer)


                                       15
<PAGE>   16

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
                                                                 
         Exhibit Number                                          
         --------------                                          
         <S>            <C>                                      
         10.51          Sixth Amendment to Second Amended and    
                        Restated Credit Agreement (Receivables
                        and Inventory) among the Company, GT
                        Bicycles California, Inc., Riteway
                        Products East, Inc., Riteway Products
                        North Central, Inc., Riteway
                        Distributors Central, Inc., Riteway
                        Distributors, Inc. and Bank of America,
                        N.T. and S.A., dated August 15, 1997.

         10.52          Seventh Amendment to Second Amended and
                        Restated Credit Agreement (Receivables
                        and Inventory) among the Company, GT
                        Bicycles California, Inc., Riteway
                        Products East, Inc., Riteway Products
                        North Central, Inc., Riteway
                        Distributors Central, Inc., Riteway
                        Distributors, Inc. and Bank of America,
                        N.T. and S.A., dated September 11, 1997.

         10.53          Eighth Amendment to Second Amended and
                        Restated Credit Agreement (Receivables
                        and Inventory) among the Company, GT
                        Bicycles California, Inc., Riteway
                        Products East, Inc., Riteway Products
                        North Central, Inc., Riteway
                        Distributors Central, Inc., Riteway
                        Distributors, Inc. and Bank of America,
                        N.T. and S.A., dated October 23, 1997.

         27.1           Financial data schedule
</TABLE>


                                       16