##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington D.C. 20549


Form 10-K


ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|o  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|  
|   |  | For the fiscal year ended December 31, 2005                                                 
|  
|or
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|  
|   |  | For the transition period
    from           to                                             

Commission file number:
333-123927


EASTON-BELL SPORTS, INC.


(Exact name of registrant as specified in its certificate of
incorporation)


|                                                                            |  |                                                    
|--------------------------------------------------------------------------- |  | ---------------------------------------------------
|Delaware(State or other jurisdiction of
     incorporation or organization) |  | 20-1636283(I.R.S. Employer
     Identification No.)




6225 North State Highway 161, Suite 300


Irving, TX 75038


(Address of Principal Executive Offices)


(469) 417-6600


(Registrants Telephone Number, Including Area Code)





Securities registered pursuant to 12(b) of the Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


None


o þ


þ o


o þ


S-K 10-K 10-K. o


12b-2


o o þ


12b-2 o þ












---

TABLE OF CONTENTS



|                                                        |                                                                                                         |  |  |  |  |  |  | 
|------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I                                                 
|                                                        | Item 1. Business                                                                                       
|                                                        | Item 1A. Risk Factors                                                                                  
|                                                        | Item 1B. Unresolved Staff Comments                                                                     
|                                                        | Item 2. Properties                                                                                     
|                                                        | Item 3. Legal Proceedings                                                                              
|                                                        | Item 4. Submission Of Matters to a Vote of Security Holders                                            
|PART II                                                
|                                                        | Item 5. Market For Registrants Common Equity and Related Stockholder Matters                          
|                                                        | Item 6. Selected Financial Data                                                                        
|                                                        | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations          
|                                                        | Item 7A: Quantitative and Qualitative Disclosure about Market Risk                                     
|Item 8. Financial Statements and Supplementary Data    
|Report of Independent Registered Public Accounting Firm
|Report of Independent Registered Public Accounting Firm
|                                                        | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure           
|                                                        | Item 9A. Controls and Procedures                                                                       
|                                                        | Item 9B. Other Information                                                                             
|PART III                                               
|                                                        | Item 10: Directors and Executive Officers of the Registrant                                            
|                                                        | Item 11: Executive Compensation                                                                        
|                                                        | Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|                                                        | Item 13: Certain Relationships and Related Transactions                                                
|                                                        | Item 14: Principal Accountant Fees and Services                                                        
|PART IV                                                
|                                                        | Item 15. Exhibits and Financial Statement Schedules                                                    
|Amended and Restated Certificate of Incorporation      
|Amended and Restated Bylaws                            
|Supplemental Indenture                                 
|Supplemental Indenture                                 
|Credit and Guaranty Agreement                          
|Pledge and Security Agreement                          
|Canadian Pledge and Security Agreement                 
|2006 Equity Incentive Plan                             
|Statement of Ratio of Earnings to Fixed Charges        
|Subsidiaries                                           
|Certification of William N. Fry                        
|Certification of Paul A. Lehmann                       
|Certification of William N. Fry                        



---



##### Table of Contents






PART I







|        |         
|------- | --------
|Item 1. | Business





Overview




Riddell Bell Giro




Recent Developments




| |                       
| | ----------------------
| | The Easton Acquisition



2



---



##### Table of Contents







8-K 8-K


Industry Overview




| |                               
| | ------------------------------
| | Recreational Products Industry







| |                                                 
| | ------------------------------------------------
| | Football Helmets and Other Team Sports Equipment



Revolution




| |                                        
| | ---------------------------------------
| | Bicycle Helmets and Related Accessories



3



---



##### Table of Contents









| |                                                           
| | ----------------------------------------------------------
| | Helmets for Action Sports, Snow Sports and
    Powersports





| |               
| | --------------
| | Sports Apparel



Our Brands


Riddell Riddell Riddell


Bell Bell Bell


Giro


Blackburn Co-Pilot Savasa MacGregor


4



---



##### Table of Contents



Products and Services




| |        
| | -------
| | Helmets

Football Helmets. Revolution Revolution VSR-4 VSR2-Y Little Pro.


Revolution Revolution Revolution


VSR-4 VSR2-Y Little Pro VSR2-Y Little Pro


Snow Sports Helmets.


Bicycle and Action Sports Helmets. Bell Giro Barbie ® Batman ® Sesame
Street ® Hot
Wheels ® X
Games ®


Powersports and Auto Racing Helmets. Bell Moto-8 Apex


5



---



##### Table of Contents







| |                                         
| | ----------------------------------------
| | Other Athletic Equipment and Accessories

Shoulder Pads.


Bicycle Accessories. Barbie ® Batman ® Sesame
Street ® Hot
Wheels ® X-Games ®


Uniforms.


Other.






| |                        
| | -----------------------
| | Reconditioning Services





6



---



##### Table of Contents





| |                     
| | --------------------
| | Collectible Products





| |          
| | ---------
| | Licensing

Riddell MacGregor Riddell MacGregor Giro.


Competition






| |                                                    
| | ---------------------------------------------------
| | Helmets and Other Athletic Products and Accessories



Schwinn,
Mongoose, GT, Disney, Tonka Playskool.


Boeri, Carrera, Leedom, Marker, Pro-Tec, R.E.D. Salomon. Arai, Shoei, HJC KBC.




| |                        
| | -----------------------
| | Reconditioning Services



7



---



##### Table of Contents





| |                     
| | --------------------
| | Collectible Products





| |          
| | ---------
| | Licensing

Riddell MacGregor Adidas, Champion, Converse, Nike,
Rawlings, Reebok, Russell Athletic Wilson.


Sales and Marketing






| |                                
| | -------------------------------
| | Institutional Sales & Customers







| |             
| | ------------
| | Retail Sales

on-site




8



---



##### Table of Contents





| |                 
| | ----------------
| | Retail Customers



Mass Merchants.


Sporting Goods Stores.


Independent Specialty Retailers. Giro Blackburn point-of




| |          
| | ---------
| | Marketing

Athlete and Team Sponsorships. Giro Bell Giro


NFL Agreement. Riddell Riddell Riddell


9



---



##### Table of Contents



Riddell Riddell


Advertising and Promotional Events.


Design and Product Development


Revolution










10



---



##### Table of Contents



Production, Sourcing and Distribution










| |            
| | -----------
| | Seasonality



Intellectual Property




Riddell Bell Giro Riddell Bell Giro MacGregor Bell,
Giro and, Blackburn Riddell


Barbie ® Hot
Wheels ® Batman ® X-Games ® Sesame
Street ® Bell Riddell Giro MacGregor


11



---



##### Table of Contents



Employees




Governmental Regulation




Financial Information on Geographical Areas









|         |             
|-------- | ------------
|Item 1A. | Risk Factors



| |                                                                              
| | -----------------------------------------------------------------------------
| | Our substantial indebtedness could adversely affect our
    financial health.









| |                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Despite current indebtedness levels, we may still be able
    to incur substantially more debt. This could further exacerbate
    the risks associated with our substantial leverage.



12



---



##### Table of Contents







| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | To service our indebtedness, we will require a significant
    amount of cash. Our ability to generate cash depends on many
    factors beyond our control.





| |                                                                                                 
| | ------------------------------------------------------------------------------------------------
| | If we cannot compete successfully in our industries, our
    business may be adversely affected.





| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | Sales of our products may be adversely affected if we
    cannot effectively introduce new and innovative products.





| |                                                                                  
| | ---------------------------------------------------------------------------------
| | We are dependent upon our top ten customers for a large
    portion of our sales.



13



---



##### Table of Contents







| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | Many of our products or components of our products are
    provided by a limited number of third-party suppliers.





| |                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------
| | If we are unable to enforce and protect our intellectual
    property rights, our competitive position may be harmed.



Riddell, Bell, Giro Easton. Easton Easton






| |                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------
| | We are subject to product liability, warranty and recall
    claims and our insurance coverage may not cover such
    claims.



14



---



##### Table of Contents









| |                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our international sourcing network subjects us to
    additional risks and costs, which may differ in each country in
    which we do business and may cause our profitability to
    decline.







| |                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------
| | The success of our business is dependent on our
    affiliation with athletes, athletic associations and
    leagues.

Bell Giro Easton Riddell


15



---



##### Table of Contents





| |                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------
| | If we lose key personnel and management, we may not to be
    able to successfully implement our business strategy.





| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may not successfully integrate the acquisition of
    Easton Sports into our business and may be unable to achieve
    anticipated cost savings and other synergies.





| |                                             
| | --------------------------------------------
| | We may not benefit from future acquisitions.





| |                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------
| | The seasonality of our sales may have an adverse effect on
    our operations and our ability to service our debt.





| |                                                                                    
| | -----------------------------------------------------------------------------------
| | Employment related matters, such as unionization, may
    affect our profitability.





| |                                                            
| | -----------------------------------------------------------
| | We may be subject to potential environmental
    liability.



16



---



##### Table of Contents










|         |                          
|-------- | -------------------------
|Item 1B. | Unresolved Staff Comments








|        |           
|------- | ----------
|Item 2. | Properties



|         |                      |  |             |                                                 |         |  |         |         |  |  |         | 
|-------- | -------------------- |  | ----------- | ----------------------------------------------- | ------- |  | ------- | ------- |  |  | ------- | 
|         |                      |  |             | Leased                                          |         |  | Owned   |        
|Location |                      |  | Primary Use |                                                 | Sq. Ft. |  |         | Sq. Ft. | 
|         |                      |  |             |                                                 |         |  |         |         | 
|         | Rantoul, IL          |  |             | Accounting, Manufacturing and Warehouse         |         |  | 315,000 |         |  |  |         | 
|         | York, PA             |  |             | Warehouse                                       |         |  |         |         |  |  | 285,000 | 
|         | Elyria, OH           |  |             | Corporate Offices, Reconditioning and Warehouse |         |  | 131,000 |         |  |  |         | 
|         | Elk Grove, IL        |  |             | Manufacturing and Warehouse                     |         |  | 31,000  |         |  |  |         | 
|         | Chicago, IL          |  |             | Corporate Offices and Research and Development  |         |  | 20,500  |         |  |  |         | 
|         | Chicago, IL(1)       |  |             | Offices, Manufacturing and Warehouse            |         |  |         |         |  |  | 92,300  | 
|         | Rantoul, IL          |  |             | Warehouse                                       |         |  | 80,000  |         |  |  |         | 
|         | Rantoul, IL          |  |             | Sales, Manufacturing, and Warehouse             |         |  | 44,100  |         |  |  |         | 
|         | East Stroudsburg, PA |  |             | Manufacturing and Reconditioning                |         |  | 61,500  |         |  |  |         | 
|         | San Antonio, TX      |  |             | Reconditioning                                  |         |  | 58,800  |         |  |  |         | 
|         | Santa Cruz, CA       |  |             | Sales and Marketing                             |         |  | 50,000  |         |  |  |         | 
|         | Irving, TX           |  |             | Corporate Headquarters                          |         |  | 27,000  |         |  |  |         | 
|         | Birmingham, AL       |  |             | Reconditioning                                  |         |  | 15,000  |         |  |  |         | 
|         | San Leandro, CA      |  |             | Reconditioning                                  |         |  | 19,600  |         |  |  |         | 
|         | Burgettstown, PA     |  |             | Repair and Laundry                              |         |  | 17,000  |         |  |  |         | 
|         | Hong Kong            |  |             | Product development and engineering             |         |  | 15,000  |         |  |  |         | 
|         | Somerville, MA       |  |             | Repair and Laundry                              |         |  | 8,000   |         |  |  |         | 
|         | New Rochelle, NY     |  |             | Repair and Laundry                              |         |  | 22,700  |         |  |  |         | 






|    |                             
|--- | ----------------------------
|(1) | Currently marketed for sale.



17



---



##### Table of Contents








|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings










|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission Of Matters to a Vote of Security Holders



18



---



##### Table of Contents






PART II







|        |                                                                          
|------- | -------------------------------------------------------------------------
|Item 5. | Market For Registrants Common Equity and Related
    Stockholder Matters








|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data



|                                                                                               |  |              |         |             |                |   |             |              |  |   |            |             |  |              |             |   |              |   |         |            |  |   |        |   |  |   |        | 
|---------------------------------------------------------------------------------------------- |  | ------------ | ------- | ----------- | -------------- | - | ----------- | ------------ |  | - | ---------- | ----------- |  | ------------ | ----------- | - | ------------ | - | ------- | ---------- |  | - | ------ | - |  | - | ------ | 
|                                                                                               |  | Successor    |         |             | Predecessor(1) |  
|                                                                                               |  |              |         |             |                |  
|                                                                                               |  |              |         | Period from |                |   | Period from |              |  |   |            | Period from |  |              | Period from |  
|                                                                                               |  | Fiscal Year  |         |             | Fiscal Year    |   |             | June 25,     |  |   | January 1, |             |  | Fiscal Year  |             |   | June 22,     |   |         | January 1, | 
|                                                                                               |  | Ended        |         |             | Ended          |   |             | 2003 to      |  |   | 2003 to    |             |  | Ended        |             |   | 2001 to      |   |         | 2001, to   | 
|                                                                                               |  | December 31, |         |             | December 31,   |   |             | December 31, |  |   | June 25,   |             |  | December 31, |             |   | December 31, |   |         | June 21,   | 
|                                                                                               |  | 2005         |         |             | 2004           |   |             | 2003         |  |   | 2003(2)    |             |  | 2002         |             |   | 2001         |   |         | 2001       | 
|                                                                                               |  |              |         |             |                |   |             |              |  |   |            |             |  |              |             |   |              |   |         |            | 
|Statement of Operations Data:                                                                  |  |              |         |             |                |   |             |              |  |   |            |             |  |              |             |   |              |   |         |            |  |   |        |   |  |   |        | 
|Net sales                                                                                      |  | $            | 379,855 |             |                | $ | 165,927     |              |  | $ | 53,713     |             |  | $            | 55,032      |   |              | $ | 101,632 |            |  | $ | 47,970 |   |  | $ | 44,462 | 
|Cost of goods sold(3)                                                                          |  |              | 246,905 |             |                |   | 115,544     |              |  |   | 34,654     |             |  |              | 35,030      |   |              |   | 63,868  |            |  |   | 35,379 |   |  |   | 26,268 | 
|                                                                                               |  |              |         |             |                |   |             |              |  |   |            |             |  |              |             |   |              |   |         |            | 
|Gross profit                                                                                   |  |              | 132,950 |             |                |   | 50,383      |              |  |   | 19,059     |             |  |              | 20,002      |   |              |   | 37,764  |            |  |   | 12,591 |   |  |   | 18,194 | 
|Selling, general and administrative expenses (exclusive of
    amortization of intangibles)(4) |  |              | 93,432  |             |                |   | 48,397      |              |  |   | 14,246     |             |  |              | 16,506      |   |              |   | 27,674  |            |  |   | 13,394 |   |  |   | 13,093 | 
|Restructuring and other infrequent expenses                                                    |  |              | 1,713   |             |                |   |            |              |  |   |           |             |  |              |            |   |              |   |        |            |  |   |       |   |  |   |       | 
|Amortization of intangibles                                                                    |  |              | 8,515   |             |                |   | 4,617       |              |  |   | 1,362      |             |  |              |            |   |              |   |        |            |  |   |       |   |  |   |       | 
|Costs related to June 25, 2003 Transaction                                                     |  |              |        |             |                |   |            |              |  |   |           |             |  |              | 19,877      |   |              |   |        |            |  |   |       |   |  |   |       | 
|                                                                                               |  |              |         |             |                |   |             |              |  |   |            |             |  |              |             |   |              |   |         |            | 
|Income (loss) from operations                                                                  |  |              | 29,290  |             |                |   | (2,631      | )            |  |   | 3,451      |             |  |              | (16,381     | ) |              |   | 10,090  |            |  |   | (803   | ) |  |   | 5,101  | 
|Interest expense                                                                               |  |              | 21,887  |             |                |   | 18,601      |              |  |   | 4,179      |             |  |              | 6,270       |   |              |   | 4,909   |            |  |   | 2,718  |   |  |   |       | 
|                                                                                               |  |              |         |             |                |   |             |              |  |   |            |             |  |              |             |   |              |   |         |            | 
|Income (loss) before taxes                                                                     |  |              | 7,403   |             |                |   | (21,232     | )            |  |   | (728       | )           |  |              | (22,651     | ) |              |   | 5,181   |            |  |   | (3,521 | ) |  |   | 5,101  | 
|Income tax provision (benefit)                                                                 |  |              | 4,321   |             |                |   | (8,121      | )            |  |   | (100       | )           |  |              | (6,700      | ) |              |   | 2,070   |            |  |   | (1,400 | ) |  |   |       | 
|                                                                                               |  |              |         |             |                |   |             |              |  |   |            |             |  |              |             |   |              |   |         |            | 
|Net income (loss)                                                                              |  | $            | 3,082   |             |                | $ | (13,111     | )            |  | $ | (628       | )           |  | $            | (15,951     | ) |              | $ | 3,111   |            |  | $ | (2,121 | ) |  | $ | 5,101  | 
|                                                                                               |  |              |         |             |                |   |             |              |  |   |            |             |  |              |             |   |              |   |         |            | 
|Other Financial Data:                                                                          |  |              |         |             |                |   |             |              |  |   |            |             |  |              |             |   |              |   |         |            |  |   |        |   |  |   |        | 
|Capital expenditures                                                                           |  |              | 4,999   |             |                |   | 1,593       |              |  |   | 728        |             |  |              | 560         |   |              |   | 1,461   |            |  |   | 560    |   |  |   | 393    | 

19



---



##### Table of Contents



|                          |  |              |         |  |                |   |         |              |  |   |          |  |  |              |        |  |              |   |        |          |  |   |        |  |  |   |        | 
|------------------------- |  | ------------ | ------- |  | -------------- | - | ------- | ------------ |  | - | -------- |  |  | ------------ | ------ |  | ------------ | - | ------ | -------- |  | - | ------ |  |  | - | ------ | 
|                          |  | Successor    |         |  | Predecessor(1) |  
|                          |  |              |         |  |                |  
|                          |  | As of        |         |  | As of          |   |         | As of        |  |   | As of    |  |  | As of        |        |  | As of        |   |        | As of    | 
|                          |  | December 31, |         |  | December 31,   |   |         | December 31, |  |   | June 25, |  |  | December 31, |        |  | December 31, |   |        | June 21, | 
|                          |  | 2005         |         |  | 2004           |   |         | 2003         |  |   | 2003     |  |  | 2002         |        |  | 2001         |   |        | 2001     | 
|                          |  |              |         |  |                |   |         |              |  |   |          |  |  |              |        |  |              |   |        |          | 
|Balance Sheet Data:       |  |              |         |  |                |   |         |              |  |   |          |  |  |              |        |  |              |   |        |          |  |   |        |  |  |   |        | 
|Cash and cash equivalents |  | $            | 3,632   |  |                | $ | 1,429   |              |  | $ | 3,672    |  |  | $            | 2,397  |  |              | $ | 209    |          |  | $ | 609    |  |  | $ | 770    | 
|Total assets              |  |              | 480,703 |  |                |   | 470,576 |              |  |   | 164,916  |  |  |              | 92,512 |  |              |   | 68,663 |          |  |   | 67,405 |  |  |   | 89,537 | 
|Total debt(5)             |  |              | 248,897 |  |                |   | 250,098 |              |  |   | 69,931   |  |  |              | 60,382 |  |              |   | 32,713 |          |  |   | 33,764 |  |  |   | 18,334 | 
|Total equity              |  |              | 133,934 |  |                |   | 125,472 |              |  |   | 69,426   |  |  |              | 7,493  |  |              |   | 23,490 |          |  |   | 22,379 |  |  |   | 29,272 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Data as of June 25, 2003, December 31, 2002 and
    December 31, 2001 and for the period from January 1,
    2003 to June 25, 2003 and the fiscal year ended
    December 31, 2002 and the period from June 22, 2001 to
    December 31, 2001, represent the results of Riddell Sports
    and its subsidiaries prior to their acquisition by us. Data as
    of June 21, 2001 and the period from January 1, 2001
    to June 21, 2001, represent the combined financial position
    and results of seven companies prior to their acquisition by
    Riddell Sports Group, Inc. on June 21, 2001. These
    companies comprised the business of Riddell Sports and prior to
    June 21, 2001 were owned by Varsity Brands, Inc. The
    financial data for June 21, 2001 and earlier periods
    include adjustments to reflect a carve out of
    activity from Varsity Brands including exclusion of assets not
    acquired and profit adjustments to exclude interest expenses,
    management fees and general expense allocations from Varsity
    Brands and to exclude profits and losses from other activities
    excluded from the acquisition. Balance sheet data for
    June 22, 2001 and June 25, 2003 were closing balance
    sheets for periods immediately preceding acquisitions of the
    Riddell Sports business and did not include purchase accounting
    adjustments relating to the subsequent acquisition.
|   
|(2) | Income statement data for the period of January 1, 2003 to
    June 25, 2003 includes charges of $4.7 million from
    the reevaluation of estimates for certain assets and
    liabilities. Some of these charges included a change in
    calculation methodology which is inseparable from the change in
    estimate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(3) | Cost of goods sold included $14.2 million,
    $2.2 million, $3.3 million and $6.1 million of
    costs resulting from purchase accounting
    write-up of inventories
    for the periods ended December 31, 2004, 2003, 2002 and
    2001, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(4) | Selling, general and administrative expenses for the period
    ended June 25, 2003 included $19.9 million of
    transaction costs related to the June 25, 2003 sale of the
    Riddell Sports business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(5) | Total debt includes the current maturities of long-term debt and
    loans payable under Riddell Sports existing revolving
    credit facility prior to it being refinanced in connection with
    the acquisition of Bell Sports. Also includes put warrants which
    were exercised during 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

20



---



##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

Uncertainty of Forward-Looking Statements and Information




forward-looking forward-looking




Overview








21



---



##### Table of Contents





Recent Developments




| |                       
| | ----------------------
| | The Easton Acquisition





8-K 8-K


Results of Operations




22



---



##### Table of Contents





|                                                                                            |                               |                  |         |         |                   |   |        |             |  |   |           |        |  |   |         |        | 
|------------------------------------------------------------------------------------------- | ----------------------------- | ---------------- | ------- | ------- | ----------------- | - | ------ | ----------- |  | - | --------- | ------ |  | - | ------- | ------ | 
|                                                                                            |                               | The Period from  |         |         | The Period from   |   |        |             |  |  
|                                                                                            |                               | January 1, 2003  |         |         | June 25, 2003 to  |   |        | Pro Forma   |  |   | Pro Forma |       
|                                                                                            |                               | to June 25, 2003 |         |         | December 31, 2003 |   |        | Adjustments |  |   | 2003      |       
|                                                                                            |                               |                  |         |         |                   |   |        |             |  |   |           |       
|Net sales                                                                                   |                               | $                | 55,032  |         |                   | $ | 53,713 |             |  | $ |          |        |  | $ | 108,745 |       
|Cost of sales                                                                               |                               |                  | 35,030  |         |                   |   | 34,654 |             |  |   | (2,191    | )      |  |   | 67,493  |       
|                                                                                            |                               |                  |         |         |                   |   |        |             |  |   |           |       
|                                                                                            | Gross profit                  |                  |         | 20,002  |                   |   |        | 19,059      |  |   |           | 2,191  |  |   |         | 41,252 | 
|Selling, general and administrative expenses (exclusive of
    amortization of intangibles) |                               |                  | 16,506  |         |                   |   | 14,246 |             |  |   | (19,629   | )      |  |   | 11,123  |       
|Amortization of intangibles                                                                 |                               |                  |        |         |                   |   | 1,362  |             |  |   | 1,290     |        |  |   | 2,652   |       
|Costs related to June 25, 2003 Transaction                                                  |                               |                  | 19,877  |         |                   |   |       |             |  |   |          |        |  |   | 19,877  |       
|                                                                                            |                               |                  |         |         |                   |   |        |             |  |   |           |       
|                                                                                            | Income (loss) from operations |                  |         | (16,381 | )                 |   |        | 3,451       |  |   |           | 20,530 |  |   |         | 7,600  | 
|Interest expense, net                                                                       |                               |                  | 6,270   |         |                   |   | 4,179  |             |  |   | (2,142    | )      |  |   | 8,307   |       
|                                                                                            |                               |                  |         |         |                   |   |        |             |  |   |           |       
|Income (loss) before taxes                                                                  |                               |                  | (22,651 | )       |                   |   | (728   | )           |  |   | 22,672    |        |  |   | (707    | )     
|Income tax provision (benefit)                                                              |                               |                  | (6,700  | )       |                   |   | (100   | )           |  |   | 6,708     |        |  |   | (92     | )     
|                                                                                            |                               |                  |         |         |                   |   |        |             |  |   |           |       
|Net income (loss)                                                                           |                               | $                | (15,951 | )       |                   | $ | (628   | )           |  | $ | 15,964    |        |  | $ | (615    | )     
|                                                                                            |                               |                  |         |         |                   |   |        |             |  |   |           |       



|                                                                                            |                                |      |       |      |      |           |       |      |   |  |       |      |  
|------------------------------------------------------------------------------------------- | ------------------------------ | ---- | ----- | ---- | ---- | --------- | ----- | ---- | - |  | ----- | ---- | -
|                                                                                            |                                |      |       |      |      | Pro Forma |      
|                                                                                            |                                | 2005 |       |      | 2004 |           |       | 2003 |  
|                                                                                            |                                |      |       |      |      |           |       |      |  
|Net sales                                                                                   |                                |      | 100.0 | %    |      |           | 100.0 | %    |   |  | 100.0 | %   
|                                                                                            | Cost of sales                  |      |       | 65.0 |      |           |       | 69.6 |   |  |       | 62.1 |  
|                                                                                            |                                |      |       |      |      |           |       |      |  
|Gross profit                                                                                |                                |      | 35.0  |      |      |           | 30.4  |      |   |  | 37.9  |     
|Selling, general and administrative expenses (exclusive of
    amortization of intangibles) |                                |      | 24.6  |      |      |           | 29.2  |      |   |  | 10.2  |     
|Restructuring and other infrequent expenses                                                 |                                |      | 0.4   |      |      |           |      |      |   |  |      |     
|Amortization of intangibles                                                                 |                                |      | 2.3   |      |      |           | 2.8   |      |   |  | 2.5   |     
|Costs related to June 25, 2003 Transaction                                                  |                                |      |      |      |      |           |      |      |   |  | 18.3  |     
|                                                                                            |                                |      |       |      |      |           |       |      |  
|                                                                                            | Income (loss) from operations  |      |       | 7.7  |      |           |       | (1.6 | ) |  |       | 6.9  |  
|Interest expense, net                                                                       |                                |      | 5.8   |      |      |           | 11.2  |      |   |  | 7.6   |     
|                                                                                            |                                |      |       |      |      |           |       |      |  
|Income (loss) before income taxes                                                           |                                |      | 1.9   |      |      |           | (12.8 | )    |   |  | (0.7  | )   
|                                                                                            | Income tax provision (benefit) |      |       | 1.1  |      |           |       | (4.9 | ) |  |       | (0.1 | )
|                                                                                            |                                |      |       |      |      |           |       |      |  
|Net income (loss)                                                                           |                                |      | 0.8   | %    |      |           | (7.9  | )%   |   |  | (0.6  | )%  
|                                                                                            |                                |      |       |      |      |           |       |      |  



| |                      
| | ---------------------
| | 2005 compared to 2004





| |   |                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | variable stock compensation expense of $4.6 million,
    primarily related to the vesting of Class B Common Units
    awarded to certain members of our management and directors;                                    
|
| |  | restructuring expenses of $1.7 million, primarily related
    to the closure of our Chicago, Illinois manufacturing facility
    as well as other cost reduction activities to reduce our overall
    cost structure;
|
| |  | an increase in amortization of intangible assets of
    $3.9 million; and                                                                                                                                            

23



---



##### Table of Contents





| |   |                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------
| |  | increased interest expense of $3.3 million related to
    higher debt levels in 2005 as a result of the acquisition of
    Bell Sports.





| |   |                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | cost of goods sold included $14.2 million of costs
    resulting from purchase accounting
    write-up of inventories
    during the fourth quarter;                                                                                                                                                                                           
|
| |  | an increase in amortization of intangible assets included in
    selling, general and administrative expenses of
    $2.0 million; and                                                                                                                                                                                                         
|
| |  | increased interest expense of $5.8 million related to the
    write-off of debt issuance costs related to prior indebtedness
    refinanced during 2004, $2.9 million of interest expense
    related to the 8.375% senior subordinated notes and
    $1.4 million in bridge loan commitment fees incurred
    related to the Bell Acquisition.



|                  |  |      |       |  |      |        |       |               |             |   |       |  |  |   |       |   |   |   |       |  |  |  |       |  
|----------------- |  | ---- | ----- |  | ---- | ------ | ----- | ------------- | ----------- | - | ----- |  |  | - | ----- | - | - | - | ----- |  |  |  | ----- | -
|                  |  |      |       |  |      |        |       | Change Due to |            
|                  |  |      |       |  |      | Change |       |               | Acquisition |  
|                  |  |      |       |  |      |        |       |               |             |  
|                  |  | 2005 |       |  | 2004 |        |       | $             |             |   | %     |  |  | $ |       |   | % |  
|                  |  |      |       |  |      |        |       |               |             |   |       |  |  |   |       |   |   |  
|Team Sports       |  | $    | 132.8 |  |      | $      | 119.4 |               |             | $ | 13.4  |  |  |   | 11.2  | % |   | $ |      |  |  |  |      |  
|Individual Sports |  |      | 247.1 |  |      |        | 46.5  |               |             |   | 200.6 |  |  |   |      |   |   |   | 186.1 |  |  |  |      |  
|                  |  |      |       |  |      |        |       |               |             |   |       |  |  |   |       |   |   |  
|                  |  | $    | 379.9 |  |      | $      | 165.9 |               |             | $ | 214.0 |  |  |   | 129.0 | % |   | $ | 186.1 |  |  |  | 112.2 | %
|                  |  |      |       |  |      |        |       |               |             |   |       |  |  |   |       |   |   |  

Revolution




|                                                                                            |  |      |       |          |       |  |      |   |          |   |       |            |  |                |      |    |  |   |      | 
|------------------------------------------------------------------------------------------- |  | ---- | ----- | -------- | ----- |  | ---- | - | -------- | - | ----- | ---------- |  | -------------- | ---- | -- |  | - | ---- | 
|                                                                                            |  | 2005 |       |          | 2004  |  |      |  
|                                                                                            |  |      |       |          |       |  |      |  
|                                                                                            |  |      |       | % of Net |       |  |      |   | % of Net |   |       | Change Due | 
|                                                                                            |  | $    |       |          | Sales |  |      | $ |          |   | Sales |            |  | to Acquisition |     
|                                                                                            |  |      |       |          |       |  |      |   |          |   |       |            |  |                |     
|Gross profit                                                                                |  | $    | 133.0 |          |       |  | 35.0 | % |          | $ | 50.4  |            |  |                | 30.4 | %  |  | $ | 61.0 | 
|Selling, general and administrative expenses (exclusive of
    amortization of intangibles) |  |      | 93.5  |          |       |  | 24.6 | % |          |   | 48.4  |            |  |                | 29.2 | %  |  |   | 42.7 | 
|Restructuring and other infrequent expense                                                  |  |      | 1.7   |          |       |  | 0.4  | % |          |   |      |            |  |                |     |    |  |   |     | 
|Amortization of intangibles                                                                 |  |      | 8.5   |          |       |  | 2.3  | % |          |   | 4.6   |            |  |                | 2.8  | %  |  |   | 3.9  | 
|                                                                                            |  |      |       |          |       |  |      |   |          |   |       |            |  |                |     
|Income (loss) from operations                                                               |  | $    | 29.3  |          |       |  | 7.7  | % |          | $ | (2.6  | )          |  |                | (1.6 | )% |  | $ | 14.4 | 
|                                                                                            |  |      |       |          |       |  |      |   |          |   |       |            |  |                |     



| |             
| | ------------
| | Gross Profit



24



---



##### Table of Contents



write-up




| |                                             
| | --------------------------------------------
| | Selling, General and Administrative Expenses





| |                                         
| | ----------------------------------------
| | Restructuring and Other Infrequent Items





| |                            
| | ---------------------------
| | Amortization of Intangibles





| |                      
| | ---------------------
| | Interest Expense, Net





| |                                     
| | ------------------------------------
| | Provision (Benefit) for Income Taxes





| |                                
| | -------------------------------
| | 2004 compared to Pro Forma 2003





| |   |                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | cost of goods sold included $14.2 million of costs
    resulting from purchase accounting
    write-up of inventories
    during the fourth quarter;                                                                                                                                                                                                     
|
| |  | an increase in amortization of intangible assets included in
    selling, general and administrative expenses of
    $2.0 million; and                                                                                                                                                                                                                   
|
| |  | increased interest expense of $5.8 million related to the
    write-off of debt issuance costs related to prior indebtedness
    refinanced during 2004, $2.9 million of interest expense
    related to the 8.375% senior subordinated notes and
    $1.4 million in bridge loan commitment fees incurred
    related to the acquisition of Bell Sports.

25



---



##### Table of Contents







| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $2.2 million of costs of goods sold resulting from purchase
    accounting write-up of
    inventories during the third quarter;                                                                       
|
| |  | transaction related expenditures included in selling, general
    and administrative expenses of $19.9 million; and                                                                                    
|
| |  | interest expense of $2.1 million related to the write-off
    of debt issuance costs which related to prior indebtedness
    refinanced in June 2003, incurred with the Riddell Sports
    acquisition.

Revolution


|                  |  |      |       |  |                |        |       |               |              |   |      |  |  |   |        |  |   |   |      |  |  |  |        | 
|----------------- |  | ---- | ----- |  | -------------- | ------ | ----- | ------------- | ------------ | - | ---- |  |  | - | ------ |  | - | - | ---- |  |  |  | ------ | 
|                  |  |      |       |  |                |        |       | Change Due to |             
|                  |  |      |       |  |                | Change |       |               | Acquisitions |  
|                  |  |      |       |  |                |        |       |               |              |  
|                  |  | 2004 |       |  | Pro Forma 2003 |        |       | $             |              |   | %    |  |  | $ |        |  | % |  
|                  |  |      |       |  |                |        |       |               |              |   |      |  |  |   |        |  |   |  
|Team Sports       |  | $    | 119.4 |  |                | $      | 108.7 |               |              | $ | 10.7 |  |  |   | 9.8%   |  |   | $ | 1.0  |  |  |  | 0.9%   | 
|Individual Sports |  |      | 46.5  |  |                |        |      |               |              |   | 46.5 |  |  |   | 100.0% |  |   |   | 46.5 |  |  |  | 100.0% | 
|                  |  |      |       |  |                |        |       |               |              |   |      |  |  |   |        |  |   |  
|                  |  | $    | 165.9 |  |                | $      | 108.7 |               |              | $ | 57.2 |  |  |   | 52.6%  |  |   | $ | 47.5 |  |  |  | 43.7%  | 
|                  |  |      |       |  |                |        |       |               |              |   |      |  |  |   |        |  |   |  



|                                                                                            |  |      |      |          |                |  |      |        |          |   |       |        |  |              |      |   |  |   |       |  
|------------------------------------------------------------------------------------------- |  | ---- | ---- | -------- | -------------- |  | ---- | ------ | -------- | - | ----- | ------ |  | ------------ | ---- | - |  | - | ----- | -
|                                                                                            |  | 2004 |      |          | Pro Forma 2003 |  |      |       
|                                                                                            |  |      |      |          |                |  |      | Change |         
|                                                                                            |  |      |      | % of Net |                |  |      |        | % of Net |   |       | Due to | 
|                                                                                            |  | $    |      |          | Sales          |  |      | $      |          |   | Sales |        |  | Acquisitions |     
|                                                                                            |  |      |      |          |                |  |      |        |          |   |       |        |  |              |     
|Gross profit                                                                                |  | $    | 50.4 |          |                |  | 30.4 | %      |          | $ | 41.3  |        |  |              | 37.9 | % |  | $ | 1.0   |  
|Selling, general and administrative expenses (exclusive of
    amortization of intangibles) |  |      | 48.4 |          |                |  | 29.2 | %      |          |   | 11.1  |        |  |              | 10.2 | % |  |   | 12.6  |  
|Amortization of intangibles                                                                 |  |      | 4.6  |          |                |  | 2.8  | %      |          |   | 2.7   |        |  |              | 2.5  | % |  |   | 1.4   |  
|Costs related to June 25, 2003 Transaction                                                  |  |      |     |          |                |  |     |        |          |   | 19.9  |        |  |              | 18.3 | % |  |   |      |  
|                                                                                            |  |      |      |          |                |  |      |        |          |   |       |        |  |              |     
|Loss from operations                                                                        |  | $    | (2.6 | )        |                |  | (1.6 | )%     |          | $ | 7.6   |        |  |              | 6.9  | % |  | $ | (13.0 | )
|                                                                                            |  |      |      |          |                |  |      |        |          |   |       |        |  |              |     



| |             
| | ------------
| | Gross Profit





| |                                             
| | --------------------------------------------
| | Selling, General and Administrative Expenses



26



---



##### Table of Contents







| |                            
| | ---------------------------
| | Amortization of Intangibles





| |                 
| | ----------------
| | Interest Expense





| |                         
| | ------------------------
| | Benefit for Income Taxes



27



---



##### Table of Contents



Restructuring and Other Infrequent Expenses




|                                |               |                 |      |   |           |   |          |           |   |          |         |     |   |       |      |      |   |   |       |        |  
|------------------------------- | ------------- | --------------- | ---- | - | --------- | - | -------- | --------- | - | -------- | ------- | --- | - | ----- | ---- | ---- | - | - | ----- | ------ | -
|                                |               | Write-Down of   |      |   |           |   | Employee |           |   | Facility |         |     |  
|                                |               | Property, Plant |      |   | Employee  |   |          | Retention |   |          | Closure |     |   |      
|                                |               | and Equipment   |      |   | Severance |   |          | Payments  |   |          | Costs   |     |   | Total |     
|                                |               |                 |      |   |           |   |          |           |   |          |         |     |   |       |     
|Balance as of December 31, 2004 |               |                 |     |   |           |   |         |           |   |          |        |     |   |       |     |      |   |   |      |       
|Provision                       |               |                 | 250  |   |           |   | 542      |           |   |          | 46      |     |   |       | 875  |      |   |   | 1,713 |       
|Less: Non-cash activity         |               |                 | (250 | ) |           |   |         |           |   |          |        |     |   |       | (250 | )    |   |   | (500  | )     
|                                | Cash activity |                 |      |  |           |   |          | (473      | ) |          |         | (31 | ) |       |      | (625 | ) |   |       | (1,129 | )
|                                |               |                 |      |   |           |   |          |           |   |          |         |     |   |       |     
|Balance as of December 31, 2005 |               | $               |     |   |           | $ | 69       |           |   | $        | 15      |     |   | $     |     |      |   | $ | 84    |       
|                                |               |                 |      |   |           |   |          |           |   |          |         |     |   |       |     



Quarterly Results




|                              |  |                                     |        |  |        |   |         |       |  |   |         |  |  |   |         |  
|----------------------------- |  | ----------------------------------- | ------ |  | ------ | - | ------- | ----- |  | - | ------- |  |  | - | ------- | -
|                              |  | For the Following Quarterly Periods |       
|                              |  |                                     |       
|                              |  | First                               |        |  | Second |   |         | Third |  |   | Fourth  | 
|                              |  |                                     |        |  |        |   |         |       |  |   |         | 
|                              |  | (In thousands)                      |       
|2005:                         |  |                                     |        |  |        |   |         |       |  |   |         |  |  |   |         |  
|Net sales                     |  | $                                   | 87,233 |  |        | $ | 103,781 |       |  | $ | 102,947 |  |  | $ | 85,894  |  
|Gross profit                  |  |                                     | 31,262 |  |        |   | 39,034  |       |  |   | 36,960  |  |  |   | 25,694  |  
|Income from operations        |  |                                     | 5,333  |  |        |   | 12,325  |       |  |   | 10,336  |  |  |   | 1,296   |  
|2004:                         |  |                                     |        |  |        |   |         |       |  |   |         |  |  |   |         |  
|Net sales                     |  | $                                   | 28,214 |  |        | $ | 33,698  |       |  | $ | 38,526  |  |  | $ | 65,489  |  
|Gross profit                  |  |                                     | 11,900 |  |        |   | 15,014  |       |  |   | 16,137  |  |  |   | 7,332   |  
|Income (loss) from operations |  |                                     | 2,485  |  |        |   | 4,084   |       |  |   | 5,228   |  |  |   | (14,428 | )

28



---



##### Table of Contents



Liquidity and Capital Resources






| |                               
| | ------------------------------
| | Senior Secured Credit Facility







29



---



##### Table of Contents















| |                          
| | -------------------------
| | Senior Subordinated Notes







| |              
| | -------------
| | Other Matters



30



---



##### Table of Contents



















31



---



##### Table of Contents



Contractual Requirements




|                                               |  |                        |         |         |      |   |         |      |  |          |        |  |  |        |        |  |  |   |         | 
|---------------------------------------------- |  | ---------------------- | ------- | ------- | ---- | - | ------- | ---- |  | -------- | ------ |  |  | ------ | ------ |  |  | - | ------- | 
|                                               |  | Payments Due by Period |        
|                                               |  |                        |        
|                                               |  |                        |         | 2007 to |      |   | 2009 to |      |  | 2011 and |       
|                                               |  | Total                  |         |         | 2006 |   |         | 2008 |  |          | 2010   |  |  | Beyond |       
|                                               |  |                        |         |         |      |   |         |      |  |          |        |  |  |        |       
|Long-term debt(1)                              |  | $                      | 248,625 |         |      | $ | 1,100   |      |  | $        | 2,200  |  |  | $      | 2,200  |  |  | $ | 243,125 | 
|Interest payments related to long-term debt(2) |  |                        | 108,309 |         |      |   | 16,936  |      |  |          | 33,728 |  |  |        | 33,438 |  |  |   | 24,207  | 
|Capital lease obligations                      |  |                        | 365     |         |      |   | 85      |      |  |          | 94     |  |  |        | 66     |  |  |   | 120     | 
|Operating lease obligations                    |  |                        | 22,618  |         |      |   | 3,969   |      |  |          | 7,422  |  |  |        | 5,910  |  |  |   | 5,317   | 
|Other short-term and long-term obligations(3)  |  |                        | 1,109   |         |      |   | 694     |      |  |          | 415    |  |  |        |       |  |  |   |        | 
|                                               |  |                        |         |         |      |   |         |      |  |          |        |  |  |        |       
|Total contractual cash obligations             |  | $                      | 381,026 |         |      | $ | 22,784  |      |  | $        | 43,859 |  |  | $      | 41,614 |  |  | $ | 272,769 | 
|                                               |  |                        |         |         |      |   |         |      |  |          |        |  |  |        |       

|                                                  |  |                                            |       |         |      |         |       |          |  |      |   |        |  |   |   |  |  |   |   | 
|------------------------------------------------- |  | ------------------------------------------ | ----- | ------- | ---- | ------- | ----- | -------- |  | ---- | - | ------ |  | - | - |  |  | - | - | 
|                                                  |  | Amount of Commitment Expiration per Period
|                                                  |  |                                           
|                                                  |  |                                            |       | 2007 to |      | 2009 to |       | 2011 and
|                                                  |  | Total                                      |       |         | 2006 |         |       | 2008     |  | 2010 |   | Beyond
|                                                  |  |                                            |       |         |      |         |       |          |  |      |   |       
|Standby letters of credit and similar instruments |  | $                                          | 1,156 |         |      | $       | 1,156 |          |  | $    |  |        |  | $ |  |  |  | $ |  | 
|                                                  |  |                                            |       |         |      |         |       |          |  |      |   |        |  |   |  
|Total commercial commitments and lines of credit  |  | $                                          | 1,156 |         |      | $       | 1,156 |          |  | $    |  |        |  | $ |  |  |  | $ |  | 
|                                                  |  |                                            |       |         |      |         |       |          |  |      |   |        |  |   |  






|    |                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Amounts include obligations pursuant to the senior secured
    credit facility that was outstanding on December 31, 2005,
    but which has since been repaid. See  Liquidity and
    Capital Resources  Senior Secured Credit
    Facility.
|   
|(2) | Estimated interest payments are calculated assuming current
    interest rates over minimum maturity periods specified in debt
    agreements. Debt may be repaid sooner or later than such minimum
    maturity periods.                       
|   
|(3) | Other short-term and long-term obligations include amounts
    committed under sponsorship agreements.                                                                                                                                          

Critical Accounting Policies




Revenue Recognition.


32



---



##### Table of Contents



Accounts Receivable and Allowances.


Inventories. first-in,


Long-Lived and Finite-Lived Intangible Assets. Goodwill and Other Intangible
Assets




Income Taxes. Accounting for Income
Taxes


33



---



##### Table of Contents



Product Liability Litigation Matters and Contingencies.


Off-Balance Sheet Arrangements




Recent Accounting Pronouncements


Accounting Changes and
Error Corrections, a replacement of APB Opinion No. 20,
Accounting Changes, and Statement No. 3, Reporting
Accounting Changes in Interim Financial Statements


Share-Based Payment


Inventory Costs-An Amendment of ARB No. 43,
Chapter 4


34



---



##### Table of Contents








|         |                                                              
|-------- | -------------------------------------------------------------
|Item 7A: | Quantitative and Qualitative Disclosure about Market
    Risk





35



---



##### Table of Contents








|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data



|                                                                                                                                                                                                                   |  |      |    | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|                                                                                                                                                                                                                   |  | Page |   
|                                                                                                                                                                                                                   |  |      |   
|Report of Independent Registered Public Accounting Firm                                                                                                                                                            |  |      | 37 | 
|Report of Independent Registered Public Accounting Firm                                                                                                                                                            |  |      | 38 | 
|Consolidated Balance Sheet as of December 31, 2005 and 2004                                                                                                                                                        |  |      | 39 | 
|Consolidated Statements of Operations for the years ended
    December 31, 2005 and 2004 and the period from
    June 25, 2003 to December 31, 2003, and the period
    from January 1, 2003 through June 25, 2003 |  |      | 40 | 
|Consolidated Statements of Stockholders Equity for the
    years ended December 31, 2005 and 2004 and the periods
    ended December 31, 2003 and June 25, 2003                                                   |  |      | 41 | 
|Consolidated Statements of Cash Flows for the years ended
    December 31, 2005 and 2004 and the period from
    June 25, 2003 to December 31, 2003, and the period
    from January 1, 2003 to June 25, 2003      |  |      | 42 | 
|Notes to Consolidated Financial Statements                                                                                                                                                                         |  |      | 43 | 

10-K


36



---



##### Table of Contents






Report of Independent Registered Public Accounting Firm


















37



---



##### Table of Contents






Report of Independent Registered Public Accounting Firm




















38



---



##### Table of Contents



EASTON-BELL SPORTS, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


|                                                |                                                                                                                               |                                            |         |         |         |  |         |         |         | 
|----------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------- | ------- |  | ------- | ------- | ------- | 
|                                                |                                                                                                                               | December 31,                               |        
|                                                |                                                                                                                               |                                            |        
|                                                |                                                                                                                               | 2005                                       |         |         | 2004    | 
|                                                |                                                                                                                               |                                            |         |         |         | 
|                                                |                                                                                                                               | (Dollars in thousands,                     |        
|                                                |                                                                                                                               | except per share amount)                   |        
|ASSETS                                         
|Current assets:                                 |                                                                                                                               |                                            |         |         |         |  |         |        
|                                                | Cash and cash equivalents                                                                                                     |                                            | $       | 3,632   |         |  | $       | 1,429   |        
|                                                | Accounts receivable, net                                                                                                      |                                            |         | 87,459  |         |  |         | 66,373  |        
|                                                | Inventories, net                                                                                                              |                                            |         | 54,950  |         |  |         | 49,643  |        
|                                                | Prepaid expenses                                                                                                              |                                            |         | 7,656   |         |  |         | 9,544   |        
|                                                | Deferred taxes                                                                                                                |                                            |         | 9,361   |         |  |         | 14,210  |        
|                                                | Other current assets                                                                                                          |                                            |         | 1,758   |         |  |         | 1,403   |        
|                                                |                                                                                                                               |                                            |         |         |         | 
|                                                |                                                                                                                               | Total current assets                       |         |         | 164,816 |  |         |         | 142,602 | 
|Property, plant and equipment, net              |                                                                                                                               |                                            | 18,945  |         |         |  | 20,469  |        
|Deferred financing fees                         |                                                                                                                               |                                            | 11,978  |         |         |  | 13,374  |        
|Intangible assets, net                          |                                                                                                                               |                                            | 176,544 |         |         |  | 185,059 |        
|Goodwill                                        |                                                                                                                               |                                            | 100,003 |         |         |  | 101,544 |        
|Other assets                                    |                                                                                                                               |                                            | 8,417   |         |         |  | 7,528   |        
|                                                |                                                                                                                               |                                            |         |         |         | 
|                                                |                                                                                                                               | Total assets                               |         | $       | 480,703 |  |         | $       | 470,576 | 
|                                                |                                                                                                                               |                                            |         |         |         | 
|                                               
|LIABILITIES AND STOCKHOLDERS EQUITY           
|Current liabilities:                            |                                                                                                                               |                                            |         |         |         |  |         |        
|                                                | Current portion of long-term debt                                                                                             |                                            | $       | 1,100   |         |  | $       | 1,100   |        
|                                                | Current portion of capital lease obligations                                                                                  |                                            |         | 64      |         |  |         | 84      |        
|                                                | Accounts payable                                                                                                              |                                            |         | 23,090  |         |  |         | 19,693  |        
|                                                | Accrued expenses                                                                                                              |                                            |         | 38,828  |         |  |         | 35,840  |        
|                                                |                                                                                                                               |                                            |         |         |         | 
|                                                |                                                                                                                               | Total current liabilities                  |         |         | 63,082  |  |         |         | 56,717  | 
|Long-term debt, less current portion            |                                                                                                                               |                                            | 247,525 |         |         |  | 248,625 |        
|Capital lease obligations, less current portion |                                                                                                                               |                                            | 208     |         |         |  | 289     |        
|Deferred taxes                                  |                                                                                                                               |                                            | 23,151  |         |         |  | 26,411  |        
|Other noncurrent liabilities                    |                                                                                                                               |                                            | 12,803  |         |         |  | 13,062  |        
|                                                |                                                                                                                               |                                            |         |         |         | 
|                                                |                                                                                                                               | Total liabilities                          |         |         | 346,769 |  |         |         | 345,104 | 
|                                                |                                                                                                                               |                                            |         |         |         | 
|Stockholders Equity:                           |                                                                                                                               |                                            |         |         |         |  |         |        
|                                                | Common stock; $0.01 par value, 100 shares authorized,
    100 shares issued and outstanding at December 31, 2005
    and 2004 |                                            |         |        |         |  |         |        |        
|                                                | Additional paid-in capital                                                                                                    |                                            |         | 144,226 |         |  |         | 139,004 |        
|                                                | Accumulated deficit                                                                                                           |                                            |         | (10,657 | )       |  |         | (13,739 | )      
|                                                | Accumulated other comprehensive income                                                                                        |                                            |         | 365     |         |  |         | 207     |        
|                                                |                                                                                                                               |                                            |         |         |         | 
|                                                |                                                                                                                               | Total stockholders equity                 |         |         | 133,934 |  |         |         | 125,472 | 
|                                                |                                                                                                                               |                                            |         |         |         | 
|                                                |                                                                                                                               | Total liabilities and stockholders equity |         | $       | 480,703 |  |         | $       | 470,576 | 
|                                                |                                                                                                                               |                                            |         |         |         | 



39



---



##### Table of Contents



EASTON-BELL SPORTS, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)


|                                                                                            |                                         |                        |         |             |                   |   |             |                   |   |   |                    |        |  |   |         |         |  
|------------------------------------------------------------------------------------------- | --------------------------------------- | ---------------------- | ------- | ----------- | ----------------- | - | ----------- | ----------------- | - | - | ------------------ | ------ |  | - | ------- | ------- | -
|                                                                                            |                                         | Successor              |         |             | Predecessor       |  
|                                                                                            |                                         |                        |         |             |                   |  
|                                                                                            |                                         |                        |         | Period from |                   |   | Period from |                  
|                                                                                            |                                         | Year Ended             |         |             | Year Ended        |   |             | June 25, 2003 to  |   |   | January 1, 2003 to |       
|                                                                                            |                                         | December 31, 2005      |         |             | December 31, 2004 |   |             | December 31, 2003 |   |   | June 25, 2003      |       
|                                                                                            |                                         |                        |         |             |                   |   |             |                   |   |   |                    |       
|                                                                                            |                                         | (Dollars in thousands) |        
|Net sales                                                                                   |                                         | $                      | 379,855 |             |                   | $ | 165,927     |                   |   | $ | 53,713             |        |  | $ | 55,032  |        
|Cost of sales                                                                               |                                         |                        | 246,905 |             |                   |   | 115,544     |                   |   |   | 34,654             |        |  |   | 35,030  |        
|                                                                                            |                                         |                        |         |             |                   |   |             |                   |   |   |                    |       
|                                                                                            | Gross profit                            |                        |         | 132,950     |                   |   |             | 50,383            |   |   |                    | 19,059 |  |   |         | 20,002  |  
|Selling, general and administrative expenses (exclusive of
    amortization of intangibles) |                                         |                        | 93,432  |             |                   |   | 48,397      |                   |   |   | 14,246             |        |  |   | 16,506  |        
|Restructuring and other infrequent expenses                                                 |                                         |                        | 1,713   |             |                   |   |            |                   |   |   |                   |        |  |   |        |        
|Amortization of intangibles                                                                 |                                         |                        | 8,515   |             |                   |   | 4,617       |                   |   |   | 1,362              |        |  |   |        |        
|Costs related to June 25, 2003 Transaction                                                  |                                         |                        |        |             |                   |   |            |                   |   |   |                   |        |  |   | 19,877  |        
|                                                                                            |                                         |                        |         |             |                   |   |             |                   |   |   |                    |       
|                                                                                            | Income (loss) from operations           |                        |         | 29,290      |                   |   |             | (2,631            | ) |   |                    | 3,451  |  |   |         | (16,381 | )
|Interest expense, net                                                                       |                                         |                        | 21,887  |             |                   |   | 18,601      |                   |   |   | 4,179              |        |  |   | 6,270   |        
|                                                                                            |                                         |                        |         |             |                   |   |             |                   |   |   |                    |       
|Income (loss) before income taxes                                                           |                                         |                        | 7,403   |             |                   |   | (21,232     | )                 |   |   | (728               | )      |  |   | (22,651 | )      
|Income tax expense (benefit)                                                                |                                         |                        | 4,321   |             |                   |   | (8,121      | )                 |   |   | (100               | )      |  |   | (6,700  | )      
|                                                                                            |                                         |                        |         |             |                   |   |             |                   |   |   |                    |       
|Net income (loss)                                                                           |                                         |                        | 3,082   |             |                   |   | (13,111     | )                 |   |   | (628               | )      |  |   | (15,951 | )      
|Other comprehensive income:                                                                 |                                         |                        |         |             |                   |   |             |                   |   |   |                    |        |  |   |         |        
|                                                                                            | Foreign currency translation adjustment |                        |         | 158         |                   |   |             | 207               |   |   |                    |       |  |   |         |        |  
|                                                                                            |                                         |                        |         |             |                   |   |             |                   |   |   |                    |       
|Comprehensive income (loss)                                                                 |                                         | $                      | 3,240   |             |                   | $ | (12,904     | )                 |   | $ | (628               | )      |  | $ | (15,951 | )      
|                                                                                            |                                         |                        |         |             |                   |   |             |                   |   |   |                    |       



40



---



##### Table of Contents



EASTON-BELL SPORTS, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


|                                                                                       |  |                        |        |            |         |   |         |                 |             |   |            |             |  |                |          |   |        |   |     |  |  |   |         |  
|-------------------------------------------------------------------------------------- |  | ---------------------- | ------ | ---------- | ------- | - | ------- | --------------- | ----------- | - | ---------- | ----------- |  | -------------- | -------- | - | ------ | - | --- |  |  | - | ------- | -
|                                                                                       |  |                        |        |            |         |   |         |                 |             |   |            | Total       | 
|                                                                                       |  |                        |        | Additional |         |   |         |                 |             |   | Cumulative |             |  | Shareholders/ |         
|                                                                                       |  |                        |        | Paid-In    |         |   |         |                 | Accumulated |   |            | Translation |  |                | Members |  
|                                                                                       |  | Common Shares          |        |            | Capital |   |         | Members Equity |             |   | Deficit    |             |  | Adjustment     |          |   | Equity |  
|                                                                                       |  |                        |        |            |         |   |         |                 |             |   |            |             |  |                |          |   |        |  
|                                                                                       |  | (Dollars in thousands) |       
|Predecessor Balance as of January 1, 2003                                              |  |                        | 22,500 |            |         | $ | 22,500  |                 |             | $ |           |             |  | $              | 990      |   |        | $ |    |  |  | $ | 23,490  |  
|Restricted stock vested under Executive Bonus Share Plan                               |  |                        | 2,873  |            |         |   | 9,416   |                 |             |   |           |             |  |                |         |   |        |   |    |  |  |   | 9,416   |  
|Change in warrant fair value                                                           |  |                        |       |            |         |   |        |                 |             |   |           |             |  |                | (9,462   | ) |        |   |    |  |  |   | (9,462  | )
|Net loss                                                                               |  |                        |       |            |         |   |        |                 |             |   |           |             |  |                | (15,951  | ) |        |   |    |  |  |   | (15,951 | )
|                                                                                       |  |                        |        |            |         |   |         |                 |             |   |            |             |  |                |          |   |        |  
|Balance as of June 25, 2003                                                            |  |                        | 25,373 |            |         | $ | 31,916  |                 |             | $ |           |             |  | $              | (24,423  | ) |        | $ |    |  |  | $ | 7,493   |  
|                                                                                       |  |                        |        |            |         |   |         |                 |             |   |            |             |  |                |          |   |        |  
|Successor Balance as of June 25, 2003                                                  |  |                        |       |            |         | $ |        |                 |             | $ |           |             |  | $              |         |   |        | $ |    |  |  | $ |        |  
|Capital contributed                                                                    |  |                        |       |            |         |   |        |                 |             |   | 69,362     |             |  |                |         |   |        |   |    |  |  |   | 69,362  |  
|Capital attributable to acquisition costs paid by Parent                               |  |                        |       |            |         |   |        |                 |             |   | 569        |             |  |                |         |   |        |   |    |  |  |   | 569     |  
|Capital attributable to vesting of management equity incentives
    in Parents equity |  |                        |       |            |         |   |        |                 |             |   | 123        |             |  |                |         |   |        |   |    |  |  |   | 123     |  
|Net loss                                                                               |  |                        |       |            |         |   |        |                 |             |   |           |             |  |                | (628     | ) |        |   |    |  |  |   | (628    | )
|                                                                                       |  |                        |        |            |         |   |         |                 |             |   |            |             |  |                |          |   |        |  
|Balance as of December 31, 2003                                                        |  |                        |       |            |         |   |        |                 |             |   | 70,054     |             |  |                | (628     | ) |        |   |    |  |  |   | 69,426  |  
|Capital distribution                                                                   |  |                        |       |            |         |   |        |                 |             |   | (160       | )           |  |                |         |   |        |   |    |  |  |   | (160    | )
|Common shares issued in September 2004 reorganization from an
    LLC to a corporation |  |                        | 100    |            |         |   | 69,894  |                 |             |   | (69,894    | )           |  |                |         |   |        |   |    |  |  |   |        |  
|Capital attributable to vesting of management equity incentives
    Parents equity    |  |                        |       |            |         |   | 21      |                 |             |   |           |             |  |                |         |   |        |   |    |  |  |   | 21      |  
|Capital contributed by Shareholder in connection with Bell
    Sports acquisition      |  |                        |       |            |         |   | 68,180  |                 |             |   |           |             |  |                |         |   |        |   |    |  |  |   | 68,180  |  
|Capital attributable to acquisition costs paid by Parent                               |  |                        |       |            |         |   | 909     |                 |             |   |           |             |  |                |         |   |        |   |    |  |  |   | 909     |  
|Net loss                                                                               |  |                        |       |            |         |   |        |                 |             |   |           |             |  |                | (13,111  | ) |        |   |    |  |  |   | (13,111 | )
|Currency translation adjustment                                                        |  |                        |       |            |         |   |        |                 |             |   |           |             |  |                |         |   |        |   | 207 |  |  |   | 207     |  
|                                                                                       |  |                        |        |            |         |   |         |                 |             |   |            |             |  |                |          |   |        |  
|Balance as of December 31, 2004                                                        |  |                        | 100    |            |         |   | 139,004 |                 |             |   |           |             |  |                | (13,739  | ) |        |   | 207 |  |  |   | 125,472 |  
|Capital attributable to vesting of management equity incentives
    Parents equity    |  |                        |       |            |         |   | 4,617   |                 |             |   |           |             |  |                |         |   |        |   |    |  |  |   | 4,617   |  
|Capital contributed by Parent                                                          |  |                        |       |            |         |   | 605     |                 |             |   |           |             |  |                |         |   |        |   |    |  |  |   | 605     |  
|Net income                                                                             |  |                        |       |            |         |   |        |                 |             |   |           |             |  |                | 3,082    |   |        |   |    |  |  |   | 3,082   |  
|Currency translation adjustment                                                        |  |                        |       |            |         |   |        |                 |             |   |           |             |  |                |         |   |        |   | 158 |  |  |   | 158     |  
|                                                                                       |  |                        |        |            |         |   |         |                 |             |   |            |             |  |                |          |   |        |  
|Balance as of December 31, 2005                                                        |  |                        | 100    |            |         | $ | 144,226 |                 |             | $ |           |             |  | $              | (10,657  | ) |        | $ | 365 |  |  | $ | 133,934 |  
|                                                                                       |  |                        |        |            |         |   |         |                 |             |   |            |             |  |                |          |   |        |  



41



---



##### Table of Contents



EASTON-BELL SPORTS, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |      |          |        |          |         |        |         |         |  
|------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------- | ----------------------------------- | --------------------------------------------------- | ----------------- | ------- | ----------- | ----------------- | -------- | ------ | ------------------ | ---- | -------- | ------ | -------- | ------- | ------ | ------- | ------- | -
|                                                             |                                                                                                        | Successor                                                                                    |                                     |                                                     | Predecessor       |        
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |        
|                                                             |                                                                                                        |                                                                                              |                                     | Period from                                         |                   |         | Period from |                  
|                                                             |                                                                                                        | Year Ended                                                                                   |                                     |                                                     | Year Ended        |         |             | June 25, 2003 to  |          |        | January 1, 2003 to |     
|                                                             |                                                                                                        | December 31, 2005                                                                            |                                     |                                                     | December 31, 2004 |         |             | December 31, 2003 |          |        | June 25, 2003      |     
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     
|                                                             |                                                                                                        | (Dollars in thousands)                                                                       |                                     |                                                     |                  
|Cash flows from operating activities:                        |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |      |          |        |          |        
|                                                             | Net income (loss)                                                                                      |                                                                                              | $                                   | 3,082                                               |                   |         | $           | (13,111           | )        |        | $                  | (628 | )        |        | $        | (15,951 | )     
|                                                             | Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities: |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |      |          |        |          |         |       
|                                                             |                                                                                                        | Depreciation and amortization                                                                |                                     |                                                     | 13,809            |         |             |                   | 7,327    |        |                    |      | 2,379    |        |          |         | 948    |        
|                                                             |                                                                                                        | Deferred debt issuance cost amortization                                                     |                                     |                                                     | 1,913             |         |             |                   | 7,102    |        |                    |      | 681      |        |          |         | 4,338  |        
|                                                             |                                                                                                        | Accrual of PIK interest                                                                      |                                     |                                                     |                  |         |             |                   | 463      |        |                    |      | 312      |        |          |         |       |        
|                                                             |                                                                                                        | Variable stock compensation expense                                                          |                                     |                                                     | 4,617             |         |             |                   | 21       |        |                    |      | 123      |        |          |         | 9,416  |        
|                                                             |                                                                                                        | Deferred income tax expense (benefit)                                                        |                                     |                                                     | 2,739             |         |             |                   | (8,602   | )      |                    |      | (200     | )      |          |         | (5,633 | )      
|                                                             |                                                                                                        | Effect of purchase accounting inventory write-up                                             |                                     |                                                     |                  |         |             |                   | 14,201   |        |                    |      | 2,191    |        |          |         |       |        
|                                                             |                                                                                                        | Fixed assets written off                                                                     |                                     |                                                     | 290               |         |             |                   |         |        |                    |      |         |        |          |         |       |        
|                                                             |                                                                                                        | Changes in operating assets and liabilities, net of effects from
    purchase of businesses: |                                     |                                                     |                   |         |             |                   |          |        |                    |      |          |        |          |         |        |        
|                                                             |                                                                                                        |                                                                                              | Accounts receivable, net            |                                                     |                   | (20,586 | )           |                   |          | 2,498  |                    |      |          | 16,701 |          |         |        | (18,327 | )      
|                                                             |                                                                                                        |                                                                                              | Inventories                         |                                                     |                   | (5,307  | )           |                   |          | 6,769  |                    |      |          | 3,034  |          |         |        | 705     |        
|                                                             |                                                                                                        |                                                                                              | Other current and noncurrent assets |                                                     |                   | 1,584   |             |                   |          | (9,433 | )                  |      |          | (716   | )        |         |        | (292    | )      
|                                                             |                                                                                                        |                                                                                              | Accounts payable                    |                                                     |                   | 3,397   |             |                   |          | (53    | )                  |      |          | (1,612 | )        |         |        | 434     |        
|                                                             |                                                                                                        |                                                                                              | Accrued expenses                    |                                                     |                   | 3,243   |             |                   |          | 3,483  |                    |      |          | (119   | )        |         |        | 11,843  |        
|                                                             |                                                                                                        |                                                                                              | Other noncurrent liabilities        |                                                     |                   | (259    | )           |                   |          | 9      |                    |      |          | (29    | )        |         |        |        |        
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     
|                                                             |                                                                                                        |                                                                                              |                                     | Net cash provided by (used in) operating activities |                   |         | 8,522       |                   |          |        | 10,674             |      |          |        | 22,117   |         |        |         | (12,519 | )
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     
|Cash flows from investing activities:                        |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |      |          |        |          |        
|                                                             |                                                                                                        | Purchase of property, plant and equipment                                                    |                                     |                                                     | (4,999            | )       |             |                   | (1,593   | )      |                    |      | (728     | )      |          |         | (560   | )      
|                                                             |                                                                                                        | Purchase of businesses, net of cash acquired                                                 |                                     |                                                     | (363              | )       |             |                   | (236,479 | )      |                    |      | (146,649 | )      |          |         |       |        
|                                                             |                                                                                                        | Other                                                                                        |                                     |                                                     |                  |         |             |                   |         |        |                    |      |         |        |          |         | (1,330 | )      
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     
|                                                             |                                                                                                        |                                                                                              |                                     | Net cash used in investing activities               |                   |         | (5,362      | )                 |          |        | (238,072           | )    |          |        | (147,377 | )       |        |         | (1,890  | )
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     
|Cash flows from financing activities:                        |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |      |          |        |          |        
|                                                             |                                                                                                        | Proceeds from old revolving credit facility                                                  |                                     |                                                     |                  |         |             |                   |         |        |                    |      | 16,723   |        |          |         | 19,756 |        
|                                                             |                                                                                                        | Payments on old revolving credit facility                                                    |                                     |                                                     |                  |         |             |                   |         |        |                    |      | (16,723  | )      |          |         |       |        
|                                                             |                                                                                                        | Proceeds from new revolving credit facility                                                  |                                     |                                                     | 113,669           |         |             |                   | 56,705   |        |                    |      |         |        |          |         |       |        
|                                                             |                                                                                                        | Payments on new revolving credit facility                                                    |                                     |                                                     | (113,669          | )       |             |                   | (56,705  | )      |                    |      |         |        |          |         |       |        
|                                                             |                                                                                                        | Proceeds from issuance of old senior term notes                                              |                                     |                                                     |                  |         |             |                   |         |        |                    |      | 50,000   |        |          |         |       |        
|                                                             |                                                                                                        | Payments on old senior term notes                                                            |                                     |                                                     |                  |         |             |                   | (49,063  | )      |                    |      | (937     | )      |          |         | (3,018 | )      
|                                                             |                                                                                                        | Proceeds from issuance of new senior term notes                                              |                                     |                                                     |                  |         |             |                   | 110,000  |        |                    |      |         |        |          |         |       |        
|                                                             |                                                                                                        | Payments on new senior term notes                                                            |                                     |                                                     | (1,100            | )       |             |                   | (275     | )      |                    |      |         |        |          |         |       |        
|                                                             |                                                                                                        | Proceeds from issuance of subordinated notes and warrants                                    |                                     |                                                     |                  |         |             |                   |         |        |                    |      | 20,000   |        |          |         |       |        
|                                                             |                                                                                                        | Payments on subordinated notes, plus PIK interest                                            |                                     |                                                     |                  |         |             |                   | (20,774  | )      |                    |      |         |        |          |         |       |        
|                                                             |                                                                                                        | Proceeds from issuance of subordinated notes                                                 |                                     |                                                     |                  |         |             |                   | 140,000  |        |                    |      |         |        |          |         |       |        
|                                                             |                                                                                                        | Capital contributed                                                                          |                                     |                                                     | 605               |         |             |                   | 59,720   |        |                    |      | 66,874   |        |          |         |       |        
|                                                             |                                                                                                        | Payments on capital lease obligations                                                        |                                     |                                                     | (101              | )       |             |                   | (210     | )      |                    |      | (138     | )      |          |         | (141   | )      
|                                                             |                                                                                                        | Payment of debt issuance costs                                                               |                                     |                                                     | (519              | )       |             |                   | (14,290  | )      |                    |      | (6,867   | )      |          |         |       |        
|                                                             |                                                                                                        | Capital distribution                                                                         |                                     |                                                     |                  |         |             |                   | (160     | )      |                    |      |         |        |          |         |       |        
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     
|                                                             |                                                                                                        |                                                                                              |                                     | Net cash provided by (used in) financing activities |                   |         | (1,115      | )                 |          |        | 224,948            |      |          |        | 128,932  |         |        |         | 16,597  |  
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     
|Effect of exchange rate changes on cash and cash equivalents |                                                                                                        |                                                                                              | 158                                 |                                                     |                   |         | 207         |                   |          |        |                   |      |          |        |         |        
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     
|Increase (decrease) in cash and cash equivalents             |                                                                                                        |                                                                                              | 2,203                               |                                                     |                   |         | (2,243      | )                 |          |        | 3,672              |      |          |        | 2,188    |        
|Cash and cash equivalents, beginning of period               |                                                                                                        |                                                                                              | 1,429                               |                                                     |                   |         | 3,672       |                   |          |        |                   |      |          |        | 209      |        
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     
|Cash and cash equivalents, end of period                     |                                                                                                        | $                                                                                            | 3,632                               |                                                     |                   | $       | 1,429       |                   |          | $      | 3,672              |      |          | $      | 2,397    |        
|                                                             |                                                                                                        |                                                                                              |                                     |                                                     |                   |         |             |                   |          |        |                    |     



42



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial Statements


(Dollars in thousands, except as specified)




|   |                                                        
|-- | -------------------------------------------------------
|1. | Business and Summary of Significant Accounting Policies



| |                          
| | -------------------------
| | Organization and Business













| |                            
| | ---------------------------
| | Principles of Consolidation





| |                          
| | -------------------------
| | Cash and Cash Equivalents





| |                                                         
| | --------------------------------------------------------
| | Accounts Receivable and Concentration of Credit
    Risk



43



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |            
| | -----------
| | Inventories

first-in,




|                |  |      |        |  |      |   |        | 
|--------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                |  | 2005 |        |  | 2004 |  
|                |  |      |        |  |      |  
|Raw materials   |  | $    | 10,470 |  |      | $ | 7,925  | 
|Work-in-process |  |      | 463    |  |      |   | 2,034  | 
|Finished goods  |  |      | 44,017 |  |      |   | 39,684 | 
|                |  |      |        |  |      |  
|                |  | $    | 54,950 |  |      | $ | 49,643 | 
|                |  |      |        |  |      |  

write-up write-up




| |                              
| | -----------------------------
| | Property, Plant and Equipment



|                                     |  |  |                       | 
|------------------------------------ |  |  | --------------------- | 
|Buildings and leasehold improvements |  |  | Ten to fourteen years | 
|Machinery and equipment              |  |  | Three to seven years  | 
|Furniture and fixtures               |  |  | Three to five years   | 
|Computer equipment and software      |  |  | Three years           | 

44



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                    |  |      |        |   |      |   |        |  
|----------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                    |  | 2005 |        |   | 2004 |  
|                                    |  |      |        |   |      |  
|Land                                |  | $    | 105    |   |      | $ | 605    |  
|Building and leasehold improvements |  |      | 6,928  |   |      |   | 7,428  |  
|Machinery and equipment             |  |      | 13,021 |   |      |   | 10,654 |  
|Furniture and fixtures              |  |      | 1,836  |   |      |   | 650    |  
|Computer equipment and software     |  |      | 2,669  |   |      |   | 2,151  |  
|Construction in progress            |  |      | 3,274  |   |      |   | 2,575  |  
|                                    |  |      |        |   |      |  
|                                    |  |      | 27,833 |   |      |   | 24,063 |  
|Less accumulated depreciation       |  |      | (8,888 | ) |      |   | (3,594 | )
|                                    |  |      |        |   |      |  
|                                    |  | $    | 18,945 |   |      | $ | 20,469 |  
|                                    |  |      |        |   |      |  





| |                  
| | -----------------
| | Intangible Assets

Goodwill and Other Intangible Assets






|                                    |                           |                   |   |         |                   |  |       |          |   |  |              |         |  |  |   |        |  
|----------------------------------- | ------------------------- | ----------------- | - | ------- | ----------------- |  | ----- | -------- | - |  | ------------ | ------- |  |  | - | ------ | -
|                                    |                           | December 31, 2005 |   |         | December 31, 2004 | 
|                                    |                           |                   |   |         |                   | 
|                                    |                           | Gross             |   |         |                   |  | Gross |          |   | 
|                                    |                           | Carrying          |   |         | Accumulated       |  |       | Carrying |   |  | Accumulated  |        
|                                    |                           | Amounts           |   |         | Amortization      |  |       | Amounts  |   |  | Amortization |        
|                                    |                           |                   |   |         |                   |  |       |          |   |  |              |        
|Amortized intangible assets:        |                           |                   |   |         |                   |  |       |          |   |  |              |         |  |  |   |       
|                                    | Trademarks and tradenames |                   | $ | 1,702   |                   |  | $     | (594     | ) |  | $            | 1,702   |  |  | $ | (347   | )
|                                    | Customer relationships    |                   |   | 49,280  |                   |  |       | (9,262   | ) |  |              | 49,280  |  |  |   | (4,316 | )
|                                    | Patents                   |                   |   | 38,345  |                   |  |       | (4,638   | ) |  |              | 38,345  |  |  |   | (1,316 | )
|                                    |                           |                   |   |         |                   |  |       |          |   |  |              |        
|                                    | Total                     |                   | $ | 89,327  |                   |  | $     | (14,494  | ) |  | $            | 89,327  |  |  | $ | (5,979 | )
|                                    |                           |                   |   |         |                   |  |       |          |   |  |              |        
|Indefinite-lived intangible assets: |                           |                   |   |         |                   |  |       |          |   |  |              |         |  |  |   |       
|                                    | Trademarks                |                   | $ | 101,711 |                   |  |       |          |   |  | $            | 101,711 |  |  |   |        |  
|                                    |                           |                   |   |         |                   |  |       |          |   |  |              |        

45



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)










|                                         |  |        |         |   |            |   |        |              |  |   |         |  
|---------------------------------------- |  | ------ | ------- | - | ---------- | - | ------ | ------------ |  | - | ------- | -
|                                         |  | Team   |         |   | Individual |   |        |             
|                                         |  | Sports |         |   | Sports     |   |        | Consolidated | 
|                                         |  |        |         |   |            |   |        |              | 
|Balance as of December 31, 2003          |  | $      | 55,736  |   |            | $ |       |              |  | $ | 55,736  |  
|Adjustment to purchase price allocations |  |        | (14,275 | ) |            |   |       |              |  |   | (14,275 | )
|Acquisitions                             |  |        | 146     |   |            |   | 59,937 |              |  |   | 60,083  |  
|                                         |  |        |         |   |            |   |        |              | 
|Balance as of December 31, 2004          |  |        | 41,607  |   |            |   | 59,937 |              |  |   | 101,544 |  
|Adjustment to purchase price allocations |  |        | 173     |   |            |   | (1,904 | )            |  |   | (1,731  | )
|Acquisitions                             |  |        | 190     |   |            |   |       |              |  |   | 190     |  
|                                         |  |        |         |   |            |   |        |              | 
|Balance as of December 31, 2005          |  | $      | 41,970  |   |            | $ | 58,033 |              |  | $ | 100,003 |  
|                                         |  |        |         |   |            |   |        |              | 



46



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |                  
| | -----------------
| | Long-Lived Assets

Accounting for the Impairment
or Disposal of Long-Lived Assets




| |                        
| | -----------------------
| | Deferred Financing Fees





| |             
| | ------------
| | Income Taxes

Accounting for Income Taxes.




| |         
| | --------
| | Revenues



47



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




| |                     
| | --------------------
| | Warranty Obligations





| |                  
| | -----------------
| | Advertising Costs





| |                      
| | ---------------------
| | Shipping and Handling





| |                                  
| | ---------------------------------
| | Research and Development Expenses





| |                 
| | ----------------
| | Use of Estimates





| |                             
| | ----------------------------
| | Foreign Currency Translation





| |                                     
| | ------------------------------------
| | Fair Values of Financial Instruments



48



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)






| |                                 
| | --------------------------------
| | Recent Accounting Pronouncements

Accounting Changes and
Error Corrections, a replacement of APB Opinion No. 20,
Accounting Changes, and Statement No. 3, Reporting
Accounting Changes in Interim Financial Statements


Share-Based Payment


Inventory Costs-An Amendment of ARB No. 43,
Chapter 4 Inventory Pricing,


49



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




| |                                  
| | ---------------------------------
| | Stock-Based Employee Compensation

Accounting for Stock Issued to Employees Accounting for Stock-Based
Compensation Accounting for Stock-Based
Compensation Transition and Disclosure


|                                          |  |      |       |   |      |                  |         |      |  |   |         |  
|----------------------------------------- |  | ---- | ----- | - | ---- | ---------------- | ------- | ---- |  | - | ------- | -
|                                          |  |      |       |   |      | The period from  |        
|                                          |  |      |       |   |      | June 25, 2003 to |        
|                                          |  |      |       |   |      | December 31,     |        
|                                          |  | 2005 |       |   | 2004 |                  |         | 2003 | 
|                                          |  |      |       |   |      |                  |         |      | 
|Net income, as reported                   |  | $    | 3,082 |   |      | $                | (13,111 | )    |  | $ | (16,179 | )
|Stock based compensation expense          |  |      | 4,617 |   |      |                  | 21      |      |  |   |        |  
|Proforma stock based compensation expense |  |      | (813  | ) |      |                  | (61     | )    |  |   |        |  
|                                          |  |      |       |   |      |                  |         |      | 
|Pro forma net income                      |  | $    | 7,886 |   |      | $                | (13,151 | )    |  | $ | (16,179 | )
|                                          |  |      |       |   |      |                  |         |      | 



|   |             
|-- | ------------
|2. | Acquisitions



Business
Combinations,


50



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                                     |                                                                                                                                              |   |         |          |  
|---------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- | - | ------- | -------- | -
|Net purchase price including cost of the transaction |                                                                                                                                              | $ | 242,925 |         
|Add:                                                 |                                                                                                                                              |   |         |         
|                                                     | Liabilities assumed (mainly accounts payable and accrued
    expenses)                                                                       |   |         | 49,429   |  
|Less:                                                |                                                                                                                                              |   |         |         
|                                                     | Current assets                                                                                                                               |   |         | (101,580 | )
|                                                     | Property, plant and equipment                                                                                                                |   |         | (13,906  | )
|                                                     | Other assets                                                                                                                                 |   |         | (182     | )
|                                                     | Trademarks                                                                                                                                   |   |         | (62,419  | )
|                                                     | Patents                                                                                                                                      |   |         | (32,496  | )
|                                                     | Customer relationships                                                                                                                       |   |         | (31,700  | )
|                                                     | Deferred tax assets relating to estimated value of tax net
    operating loss                                                                |   |         | (49,608  | )
|                                                     | Net deferred tax liabilities relating to differences in the
    financial statements and the tax basis of certain assets and
    liabilities |   |         | 55,837   |  
|                                                     |                                                                                                                                              |   |        
|Excess of cost over net assets acquired (goodwill)   |                                                                                                                                              | $ | 56,300  |         
|                                                     |                                                                                                                                              |   |        

write-up








|           |  |              |         |  |              |   |         | 
|---------- |  | ------------ | ------- |  | ------------ | - | ------- | 
|           |  | Year Ended   |         |  | Year Ended   |  
|           |  | December 31, |         |  | December 31, |  
|           |  | 2004         |         |  | 2003         |  
|           |  |              |         |  |              |  
|Net sales  |  | $            | 328,468 |  |              | $ | 308,104 | 
|Net income |  |              | 5,722   |  |              |   | 2,224   | 

51



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                                                                                                                             |  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ------- | -
|Net purchase price including cost of the transaction                                                                                         |  | $ | 149,421 |  
|Add:                                                                                                                                         |  |   |         |  
|Liabilities assumed (mainly accounts payable and accrued)                                                                                    |  |   | 14,369  |  
|Less:                                                                                                                                        |  |   |         |  
|Current assets                                                                                                                               |  |   | (69,364 | )
|Property, plant and equipment                                                                                                                |  |   | (7,037  | )
|Other assets                                                                                                                                 |  |   | (100    | )
|Trademarks                                                                                                                                   |  |   | (40,893 | )
|Patents                                                                                                                                      |  |   | (5,599  | )
|Customer relationships                                                                                                                       |  |   | (16,800 | )
|Deferred tax assets relating to estimated value of tax net
    operating loss                                                                |  |   | (4,100  | )
|Net deferred tax liabilities relating to differences in the
    financial statements and the tax basis of certain assets and
    liabilities |  |   | 21,217  |  
|                                                                                                                                             |  |   |        
|Excess of cost over net assets acquired (goodwill)                                                                                           |  | $ | 41,114  |  
|                                                                                                                                             |  |   |        

write-up








52



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|   |                                            
|-- | -------------------------------------------
|3. | Restructuring and Other Infrequent Expenses

Accounting
for Costs Associated with Exit or Disposal Activities


|                                |               |                 |      |   |           |   |          |           |   |          |         |     |   |       |      |      |   |   |       |        |  
|------------------------------- | ------------- | --------------- | ---- | - | --------- | - | -------- | --------- | - | -------- | ------- | --- | - | ----- | ---- | ---- | - | - | ----- | ------ | -
|                                |               | Write-down of   |      |   |           |   | Employee |           |   | Facility |         |     |  
|                                |               | Property, Plant |      |   | Employee  |   |          | Retention |   |          | Closure |     |   |      
|                                |               | and Equipment   |      |   | Severance |   |          | Payments  |   |          | Costs   |     |   | Total |     
|                                |               |                 |      |   |           |   |          |           |   |          |         |     |   |       |     
|Balance as of December 31, 2004 |               |                 |     |   |           |   |         |           |   |          |        |     |   |       |     |      |   |   |      |       
|Provision                       |               |                 | 250  |   |           |   | 542      |           |   |          | 46      |     |   |       | 875  |      |   |   | 1,713 |       
|Less: Non-cash activity         |               |                 | (250 | ) |           |   |         |           |   |          |        |     |   |       | (250 | )    |   |   | (500  | )     
|                                | Cash activity |                 |      |  |           |   |          | (473      | ) |          |         | (31 | ) |       |      | (625 | ) |   |       | (1,129 | )
|                                |               |                 |      |   |           |   |          |           |   |          |         |     |   |       |     
|Balance as of December 31, 2005 |               | $               |     |   |           | $ | 69       |           |   | $        | 15      |     |   | $     |     |      |   | $ | 84    |       
|                                |               |                 |      |   |           |   |          |           |   |          |         |     |   |       |     





|   |               
|-- | --------------
|4. | Long-term Debt



|                                          |                    |      |         |         |      |   |         |         | 
|----------------------------------------- | ------------------ | ---- | ------- | ------- | ---- | - | ------- | ------- | 
|                                          |                    | 2005 |         |         | 2004 |  
|                                          |                    |      |         |         |      |  
|Senior Secured Credit Facility:           |                    |      |         |         |      |   |         |        
|                                          | Term loan facility |      | $       | 108,625 |      |   | $       | 109,725 | 
|8.375% Senior subordinated notes due 2012 |                    |      | 140,000 |         |      |   | 140,000 |        
|Capital lease obligations                 |                    |      | 272     |         |      |   | 373     |        
|                                          |                    |      |         |         |      |  
|Total long-term debt                      |                    |      | 248,897 |         |      |   | 250,098 |        
|Less current maturities of long-term debt |                    |      | (1,164  | )       |      |   | (1,184  | )      
|                                          |                    |      |         |         |      |  
|Long-term debt, less current portion      |                    | $    | 247,733 |         |      | $ | 248,914 |        
|                                          |                    |      |         |         |      |  

then-existing


53



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)










54



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                         |  |   |         | 
|------------------------ |  | - | ------- | 
|Year Ending December 31, |  |  
|                         |  |  
|2006                     |  | $ | 1,164   | 
|2007                     |  |   | 1,140   | 
|2008                     |  |   | 1,123   | 
|2009                     |  |   | 1,122   | 
|2010                     |  |   | 1,122   | 
|Thereafter               |  |   | 242,062 | 
|                         |  |   |        
|                         |  | $ | 247,733 | 
|                         |  |   |        







|   |                 
|-- | ----------------
|5. | Accrued Expenses



|                                         |  |      |        |  |      |   |        | 
|---------------------------------------- |  | ---- | ------ |  | ---- | - | ------ | 
|                                         |  | 2005 |        |  | 2004 |  
|                                         |  |      |        |  |      |  
|Salaries, wages, commissions and bonuses |  | $    | 9,224  |  |      | $ | 7,474  | 
|Accrued cooperative advertising          |  |      | 9,754  |  |      |   | 9,217  | 
|Accrued interest expense                 |  |      | 3,100  |  |      |   | 3,885  | 
|Other                                    |  |      | 16,750 |  |      |   | 15,264 | 
|                                         |  |      |        |  |      |  
|                                         |  | $    | 38,828 |  |      | $ | 35,840 | 
|                                         |  |      |        |  |      |  

55



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|   |       
|-- | ------
|6. | Leases



|                                                                                 |  |         |     |   |           |   |        | 
|-------------------------------------------------------------------------------- |  | ------- | --- | - | --------- | - | ------ | 
|                                                                                 |  | Capital |     |   | Operating |  
|Year ending December 31,                                                         |  | Leases  |     |   | Leases    |  
|                                                                                 |  |         |     |   |           |  
|2006                                                                             |  | $       | 85  |   |           | $ | 3,969  | 
|2007                                                                             |  |         | 57  |   |           |   | 3,893  | 
|2008                                                                             |  |         | 37  |   |           |   | 3,529  | 
|2009                                                                             |  |         | 34  |   |           |   | 3,162  | 
|2010                                                                             |  |         | 32  |   |           |   | 2,748  | 
|Thereafter                                                                       |  |         | 120 |   |           |   | 5,317  | 
|                                                                                 |  |         |     |   |           |  
|Total minimum lease payments                                                     |  |         | 365 |   |           | $ | 22,618 | 
|                                                                                 |  |         |     |   |           |  
|Less amount representing interest                                                |  |         | (93 | ) |           |   |        | 
|                                                                                 |  |         |     |   |           |  
|Present value of minimum lease payments, including current
    maturities of $64 |  | $       | 272 |   |           |   |        | 
|                                                                                 |  |         |     |   |           |  



|                              |  |      |      |   |      |   |      |  
|----------------------------- |  | ---- | ---- | - | ---- | - | ---- | -
|                              |  | 2005 |      |   | 2004 |  
|                              |  |      |      |   |      |  
|Leasehold improvements        |  | $    | 212  |   |      | $ | 212  |  
|Machinery and equipment       |  |      | 35   |   |      |   | 58   |  
|Furniture and fixtures        |  |      | 178  |   |      |   | 244  |  
|                              |  |      |      |   |      |  
|                              |  |      | 425  |   |      |   | 514  |  
|Less accumulated depreciation |  |      | (206 | ) |      |   | (220 | )
|                              |  |      |      |   |      |  
|                              |  | $    | 219  |   |      | $ | 294  |  
|                              |  |      |      |   |      |  





|   |                      
|-- | ---------------------
|7. | Equity Incentive Plan



56



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                        |  |           |            |          |                  |   |        | 
|--------------------------------------- |  | --------- | ---------- | -------- | ---------------- | - | ------ | 
|                                        |  |           |            | Weighted |                 
|                                        |  | Number of |            |          | Average Exercise |  
|                                        |  | Shares    |            |          | Price            |  
|                                        |  |           |            |          |                  |  
|Shares Outstanding at June 25, 2003     |  |           |           |          |                  | $ |       | 
|Granted                                 |  |           | 5,800,064  |          |                  | $ | 1.0000 | 
|Forfeited                               |  |           |           |          |                  | $ |       | 
|Redeemed                                |  |           |           |          |                  | $ |       | 
|                                        |  |           |            |          |                  |  
|Shares Outstanding at December 31, 2003 |  |           | 5,800,064  |          |                  | $ | 1.0000 | 
|Granted                                 |  |           | 6,853,387  |          |                  | $ | 1.4201 | 
|Forfeited                               |  |           | (740,434   | )        |                  | $ | 1.0000 | 
|Redeemed                                |  |           |           |          |                  | $ |       | 
|                                        |  |           |            |          |                  |  
|Shares Outstanding at December 31, 2004 |  |           | 11,913,017 |          |                  | $ | 1.2417 | 
|Granted                                 |  |           | 11,169,431 |          |                  | $ | 1.4717 | 
|Forfeited                               |  |           | (2,808,077 | )        |                  | $ | 1.3128 | 
|Redeemed                                |  |           | (41,143    | )        |                  | $ | 1.0000 | 
|                                        |  |           |            |          |                  |  
|Shares Outstanding at December 31, 2005 |  |           | 20,233,228 |          |                  | $ | 1.3593 | 
|                                        |  |           |            |          |                  |  
|Shares Vested at December 31, 2003      |  |           |           |          |                  |   |        | 
|                                        |  |           |            |          |                  |  
|Shares Vested at December 31, 2004      |  |           | 403,161    |          |                  |   |        | 
|                                        |  |           |            |          |                  |  
|Shares Vested at December 31, 2005      |  |           | 5,319,824  |          |                  |   |        | 
|                                        |  |           |            |          |                  |  







57



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|   |                       
|-- | ----------------------
|8. | Employee Benefit Plans







|   |                    
|-- | -------------------
|9. | Segment Information



|                             |  |        |         |  |            |   |         |              |  |   |         | 
|---------------------------- |  | ------ | ------- |  | ---------- | - | ------- | ------------ |  | - | ------- | 
|                             |  | Team   |         |  | Individual |   |         |             
|Year ended December 31, 2005 |  | Sports |         |  | Sports     |   |         | Consolidated | 
|                             |  |        |         |  |            |   |         |              | 
|Net sales                    |  | $      | 132,798 |  |            | $ | 247,057 |              |  | $ | 379,855 | 
|Income from operations       |  |        | 19,045  |  |            |   | 31,005  |              |  |   | 50,050  | 
|Depreciation                 |  |        | 1,742   |  |            |   | 3,552   |              |  |   | 5,294   | 
|Capital expenditures         |  |        | 2,122   |  |            |   | 2,877   |              |  |   | 4,999   | 
|Year ended December 31, 2004 |  |        |         |  |            |   |         |              |  |   |         | 
|Net sales                    |  | $      | 119,407 |  |            | $ | 46,520  |              |  | $ | 165,927 | 
|Income from operations       |  |        | 12,737  |  |            |   | (9,007  | )            |  |   | 3,730   | 
|Depreciation                 |  |        | 1,956   |  |            |   | 754     |              |  |   | 2,710   | 
|Capital expenditures         |  |        | 660     |  |            |   | 933     |              |  |   | 1,593   | 

58



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


|                                                   |  |        |         |   |            |   |         |              |  |   |         |  
|-------------------------------------------------- |  | ------ | ------- | - | ---------- | - | ------- | ------------ |  | - | ------- | -
|                                                   |  | Team   |         |   | Individual |   |         |             
|                                                   |  | Sports |         |   | Sports     |   |         | Consolidated | 
|                                                   |  |        |         |   |            |   |         |              | 
|The period from June 25, 2003 to December 31, 2003 |  |        |         |   |            |   |         |              |  |   |         |  
|Net sales                                          |  | $      | 53,713  |   |            | $ |        |              |  | $ | 53,713  |  
|Income from operations                             |  |        | 4,936   |   |            |   |        |              |  |   | 4,936   |  
|Depreciation                                       |  |        | 1,017   |   |            |   |        |              |  |   | 1,017   |  
|Capital expenditures                               |  |        | 728     |   |            |   |        |              |  |   | 728     |  
|The period from January 1, 2003 to June 25, 2003   |  |        |         |   |            |   |         |              |  |   |         |  
|Net sales                                          |  | $      | 55,032  |   |            | $ |        |              |  | $ | 55,032  |  
|Loss from operations                               |  |        | (16,381 | ) |            |   |        |              |  |   | (16,381 | )
|Depreciation                                       |  |        | 948     |   |            |   |        |              |  |   | 948     |  
|Capital expenditures                               |  |        | 560     |   |            |   |        |              |  |   | 560     |  
|Years ended December 31,                           |  |        |         |   |            |   |         |              |  |   |         |  
|Assets                                             |  |        |         |   |            |   |         |              |  |   |         |  
|2005                                               |  | $      | 158,778 |   |            | $ | 321,925 |              |  | $ | 480,703 |  
|2004                                               |  |        | 160,190 |   |            |   | 310,386 |              |  |   | 470,576 |  

|                                                       |  |      |        |   |      |                  |        |                   |                 |   |                  |   |  |   |         |  
|------------------------------------------------------ |  | ---- | ------ | - | ---- | ---------------- | ------ | ----------------- | --------------- | - | ---------------- | - |  | - | ------- | -
|Year ended December 31, 2005, 2004 and the period from |  |      |        |   |      | The period from  |        |                   | The period from |  
|June 25, 2003 to December 31, 2003 and the period from |  |      |        |   |      | June 25, 2003 to |        |                   | January 1, 2003 |  
|January 1, 2003 to June 25, 2003                       |  | 2005 |        |   | 2004 |                  |        | December 31, 2003 |                 |   | to June 25, 2003 |  
|                                                       |  |      |        |   |      |                  |        |                   |                 |   |                  |  
|Segment income (loss) from operations                  |  | $    | 50,050 |   |      | $                | 3,730  |                   |                 | $ | 4,936            |   |  | $ | (16,381 | )
|Variable stock compensation expense                    |  |      | (4,617 | ) |      |                  | (21    | )                 |                 |   | (123             | ) |  |   |        |  
|Restructuring and other infrequent expenses            |  |      | (1,713 | ) |      |                  |       |                   |                 |   |                 |   |  |   |        |  
|Amortization of intangibles                            |  |      | (8,515 | ) |      |                  | (4,617 | )                 |                 |   | (1,362           | ) |  |   |        |  
|Management fees                                        |  |      | (3,000 | ) |      |                  | (1,550 | )                 |                 |   |                 |   |  |   |        |  
|Corporate expenses                                     |  |      | (2,915 | ) |      |                  | (173   | )                 |                 |   |                 |   |  |   |        |  
|                                                       |  |      |        |   |      |                  |        |                   |                 |   |                  |  
|Consolidated income (loss) from operations             |  | $    | 29,290 |   |      | $                | (2,631 | )                 |                 | $ | 3,451            |   |  | $ | (16,381 | )
|                                                       |  |      |        |   |      |                  |        |                   |                 |   |                  |  



|           |                |      |         |         |      |                  |         |                   |                    |   |               |        |  |   |        |        | 
|---------- | -------------- | ---- | ------- | ------- | ---- | ---------------- | ------- | ----------------- | ------------------ | - | ------------- | ------ |  | - | ------ | ------ | 
|           |                |      |         |         |      | The period from  |         |                   | The period from    |  
|           |                |      |         |         |      | June 25, 2003 to |         |                   | January 1, 2003 to |  
|           |                | 2005 |         |         | 2004 |                  |         | December 31, 2003 |                    |   | June 25, 2003 |       
|           |                |      |         |         |      |                  |         |                   |                    |   |               |       
|Net sales: |                |      |         |         |      |                  |         |                   |                    |   |               |        |  |   |        |       
|           | North America  |      | $       | 343,000 |      |                  | $       | 157,002           |                    |   | $             | 53,263 |  |   | $      | 54,571 | 
|           | Western Europe |      |         | 32,470  |      |                  |         | 7,419             |                    |   |               | 170    |  |   |        | 174    | 
|           | Other          |      |         | 4,385   |      |                  |         | 1,506             |                    |   |               | 280    |  |   |        | 287    | 
|           |                |      |         |         |      |                  |         |                   |                    |   |               |       
|           |                | $    | 379,855 |         |      | $                | 165,927 |                   |                    | $ | 53,713        |        |  | $ | 55,032 |       
|           |                |      |         |         |      |                  |         |                   |                    |   |               |       

59



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|              |  |      |        |  |      |   |        | 
|------------- |  | ---- | ------ |  | ---- | - | ------ | 
|              |  | 2005 |        |  | 2004 |  
|              |  |      |        |  |      |  
|North America |  | $    | 18,564 |  |      | $ | 20,035 | 
|Other         |  |      | 381    |  |      |   | 434    | 
|              |  |      |        |  |      |  
|              |  | $    | 18,945 |  |      | $ | 20,469 | 
|              |  |      |        |  |      |  



|    |                                          
|--- | -----------------------------------------
|10. | Product Liability and Other Contingencies







| |                                           
| | ------------------------------------------
| | Other Contingencies and Litigation Matters



60



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|    |             
|--- | ------------
|11. | Income Taxes



|                                           |         |      |       |       |      |                  |        |                   |                 |   |                  |      |   |   |        |        |  
|------------------------------------------ | ------- | ---- | ----- | ----- | ---- | ---------------- | ------ | ----------------- | --------------- | - | ---------------- | ---- | - | - | ------ | ------ | -
|                                           |         |      |       |       |      | The period from  |        |                   | The period from |  
|                                           |         |      |       |       |      | June 25, 2003 to |        |                   | January 1, 2003 |  
|                                           |         | 2005 |       |       | 2004 |                  |        | December 31, 2003 |                 |   | to June 25, 2003 |     
|                                           |         |      |       |       |      |                  |        |                   |                 |   |                  |     
|Current tax expense                        |         |      |       |       |      |                  |        |                   |                 |   |                  |      |   |   |        |       
|                                           | Federal |      | $     | 628   |      |                  | $      | 42                |                 |   | $                |     |   |   | $      | (917   | )
|                                           | State   |      |       | 514   |      |                  |        | 87                |                 |   |                  | 100  |   |   |        | (150   | )
|                                           | Foreign |      |       | 440   |      |                  |        | 352               |                 |   |                  |     |   |   |        |       |  
|                                           |         |      |       |       |      |                  |        |                   |                 |   |                  |     
|                                           |         |      | 1,582 |       |      |                  | 481    |                   |                 | $ | 100              |      |   | $ | (1,067 | )     
|                                           |         |      |       |       |      |                  |        |                   |                 |   |                  |     
|Deferred tax expense (benefit)             |         |      |       |       |      |                  |        |                   |                 |   |                  |      |   |   |        |       
|                                           | Federal |      |       | 2,439 |      |                  |        | (7,306            | )               |   |                  | (170 | ) |   |        | (4,800 | )
|                                           | State   |      |       | (419  | )    |                  |        | (1,296            | )               |   |                  | (30  | ) |   |        | (900   | )
|                                           | Foreign |      |       | 719   |      |                  |        |                  |                 |   |                  |     |   |   |        |       |  
|                                           |         |      |       |       |      |                  |        |                   |                 |   |                  |     
|                                           |         |      | 2,739 |       |      |                  | (8,602 | )                 |                 |   | (200             | )    |   |   | (5,700 | )     
|                                           |         |      |       |       |      |                  |        |                   |                 |   |                  |     
|Benefit applied to reduce goodwill Federal |         |      |      |       |      |                  |       |                   |                 |   |                 |      |   |   | 57     |       
|                                           | State   |      |       |      |      |                  |        |                  |                 |   |                  |     |   |   |        | 10     |  
|                                           |         |      |       |       |      |                  |        |                   |                 |   |                  |     
|                                           |         |      |      |       |      |                  |       |                   |                 |   |                 |      |   |   | 67     |       
|                                           |         |      |       |       |      |                  |        |                   |                 |   |                  |     
|                                           |         | $    | 4,321 |       |      | $                | (8,121 | )                 |                 | $ | (100             | )    |   | $ | (6,700 | )     
|                                           |         |      |       |       |      |                  |        |                   |                 |   |                  |     



|                                                                               |  |      |       |   |      |                  |        |                   |                 |   |                  |   |  |   |        |  
|------------------------------------------------------------------------------ |  | ---- | ----- | - | ---- | ---------------- | ------ | ----------------- | --------------- | - | ---------------- | - |  | - | ------ | -
|                                                                               |  |      |       |   |      | The period from  |        |                   | The period from |  
|                                                                               |  |      |       |   |      | June 25, 2003 to |        |                   | January 1, 2003 |  
|                                                                               |  | 2005 |       |   | 2004 |                  |        | December 31, 2003 |                 |   | to June 25, 2003 |  
|                                                                               |  |      |       |   |      |                  |        |                   |                 |   |                  |  
|Provision for income taxes at United States federal statutory
    rate of 35%  |  | $    | 2,569 |   |      | $                | (7,431 | )                 |                 | $ | (255             | ) |  | $ | (7,701 | )
|State and local income taxes, net of federal income tax effect                 |  |      | (61   | ) |      |                  | (832   | )                 |                 |   | (20              | ) |  |   | (1,042 | )
|Taxes on foreign income which differ from the United States
    statutory rate |  |      | 39    |   |      |                  | 345    |                   |                 |   | 84               |   |  |   |       |  
|Non-deductible compensation                                                    |  |      | 1,616 |   |      |                  |       |                   |                 |   |                 |   |  |   |       |  
|Tax effect of other permanent items                                            |  |      | 112   |   |      |                  | (203   | )                 |                 |   | 80               |   |  |   | 2,043  |  
|Other                                                                          |  |      | 46    |   |      |                  |       |                   |                 |   | 11               |   |  |   |       |  
|                                                                               |  |      |       |   |      |                  |        |                   |                 |   |                  |  
|                                                                               |  | $    | 4,321 |   |      | $                | (8,121 | )                 |                 | $ | (100             | ) |  | $ | (6,700 | )
|                                                                               |  |      |       |   |      |                  |        |                   |                 |   |                  |  

61



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




|                                        |                               |      |         |        |      |                  |         |                   |                 |   |                  |        |  |   |       |       | 
|--------------------------------------- | ----------------------------- | ---- | ------- | ------ | ---- | ---------------- | ------- | ----------------- | --------------- | - | ---------------- | ------ |  | - | ----- | ----- | 
|                                        |                               |      |         |        |      | The period from  |         |                   | The period from |  
|                                        |                               |      |         |        |      | June 25, 2003 to |         |                   | January 1, 2003 |  
|                                        |                               | 2005 |         |        | 2004 |                  |         | December 31, 2003 |                 |   | to June 25, 2003 |       
|                                        |                               |      |         |        |      |                  |         |                   |                 |   |                  |       
|Deferred income tax assets              |                               |      |         |        |      |                  |         |                   |                 |   |                  |        |  |   |       |      
|                                        | Receivable reserves           |      | $       | 2,018  |      |                  | $       | 1,644             |                 |   | $                | 642    |  |   | $     | 625   | 
|                                        | Inventory                     |      |         | 3,277  |      |                  |         | 3,411             |                 |   |                  | 1,703  |  |   |       | 1,697 | 
|                                        | Accrued expenses and reserves |      |         | 7,923  |      |                  |         | 12,738            |                 |   |                  | 2,020  |  |   |       | 1,972 | 
|                                        | Net operating loss            |      |         | 39,678 |      |                  |         | 47,796            |                 |   |                  | 2,900  |  |   |       | 4,100 | 
|                                        | Other                         |      |         | 541    |      |                  |         | 198               |                 |   |                  | 47     |  |   |       |      | 
|                                        |                               |      |         |        |      |                  |         |                   |                 |   |                  |       
|Total deferred tax assets               |                               |      | 53,437  |        |      |                  | 65,787  |                   |                 | $ | 7,312            |        |  | $ | 8,394 |      
|Deferred income tax liabilities:        |                               |      |         |        |      |                  |         |                   |                 |   |                  |        |  |   |       |      
|                                        | Prepaid expenses              |      |         |       |      |                  |         |                  |                 |   |                  |       |  |   |       | 35    | 
|                                        | Property, plant and equipment |      |         | 405    |      |                  |         | 1,734             |                 |   |                  | 1,308  |  |   |       | 1,369 | 
|                                        | Intangible assets             |      |         | 59,063 |      |                  |         | 69,406            |                 |   |                  | 13,292 |  |   |       |      | 
|                                        | Other                         |      |         | 1,246  |      |                  |         | 335               |                 |   |                  | 112    |  |   |       | 90    | 
|                                        |                               |      |         |        |      |                  |         |                   |                 |   |                  |       
|Total deferred tax liabilities          |                               |      | 60,714  |        |      |                  | 71,475  |                   |                 | $ | 14,712           |        |  | $ | 1,494 |      
|Valuation allowance                     |                               |      | (6,513  | )      |      |                  | (6,513  | )                 |                 |   |                 |        |  |   |      |      
|                                        |                               |      |         |        |      |                  |         |                   |                 |   |                  |       
|Total net deferred income tax liability |                               | $    | (13,790 | )      |      | $                | (12,201 | )                 |                 | $ | (7,400           | )      |  | $ | 6,900 |      
|                                        |                               |      |         |        |      |                  |         |                   |                 |   |                  |       







|    |                           
|--- | --------------------------
|12. | Related Party Transactions

out-of


62



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)


out-of




out-of






|    |                 
|--- | ----------------
|13. | Subsequent Event









63



---



##### Table of Contents



Easton-Bell Sports, Inc. and Subsidiaries


Notes to Consolidated Financial
Statements  (Continued)




64



---



##### Table of Contents








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

13a-15(e) 15d-15(e)









|         |                  
|-------- | -----------------
|Item 9B. | Other Information






PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10: | Directors and Executive Officers of the Registrant



|                   |  |     |    |  |          |                                                     
|------------------ |  | --- | -- |  | -------- | ----------------------------------------------------
|Name               |  | Age |    |  | Position
|                   |  |     |    |  |         
|James L. Easton    |  |     | 71 |  |          | Chairman                                            
|William N. Fry     |  |     | 47 |  |          | President and Chief Executive Officer               
|Paul A. Lehmann    |  |     | 52 |  |          | Executive Vice President and Chief Financial Officer
|Eric Brenk         |  |     | 43 |  |          | Chief Operating Officer                             
|William Sherman    |  |     | 44 |  |          | Vice President and President of Riddell Sports      
|Kwai Kong          |  |     | 43 |  |          | President, Specialty Retail Business                
|Mark Tripp         |  |     | 47 |  |          | Secretary                                           
|Anthony M. Palma   |  |     | 45 |  |          | Director                                            
|Peter V. Ueberroth |  |     | 69 |  |          | Director                                            
|Lee L. Sienna      |  |     | 54 |  |          | Director                                            
|Shael J. Dolman    |  |     | 34 |  |          | Director                                            
|Terry Lee          |  |     | 58 |  |          | Director                                            
|William Beane      |  |     | 44 |  |          | Director                                            
|Peter Lamm         |  |     | 55 |  |          | Director                                            
|Mark Genender      |  |     | 42 |  |          | Director                                            
|Timothy Mayhew     |  |     | 38 |  |          | Director                                            
|Aron Schwartz      |  |     | 35 |  |          | Director                                            

65



---



##### Table of Contents



James L. Easton


William N. Fry


Paul A. Lehmann


Eric Brenk


William Sherman


Kwai Kong


Mark Tripp


66



---



##### Table of Contents





Anthony M. Palma


Peter V. Ueberroth


Lee L. Sienna


Shael J. Dolman


Terry Lee


William Billy Beane


Peter Lamm


67



---



##### Table of Contents



Mark Genender


Timothy Mayhew


Aron Schwartz


Code of Ethics




Audit Committee




Director Compensation


out-of


68



---



##### Table of Contents








|         |                       
|-------- | ----------------------
|Item 11: | Executive Compensation



Summary Compensation Table


|                               |                              |             |      |                     |           |              |         |          |           |                        |         |         |           |   |   |                 |  |   |   |           |  |   |        |       | 
|------------------------------ | ---------------------------- | ----------- | ---- | ------------------- | --------- | ------------ | ------- | -------- | --------- | ---------------------- | ------- | ------- | --------- | - | - | --------------- |  | - | - | --------- |  | - | ------ | ----- | 
|                               |                              |             |      |                     |           |              |         |          |           | Long-Term Compensation |        
|                               |                              |             |      |                     |           |              |        
|                               |                              |             |      | Annual Compensation |           | Long-Term    |         |          |          
|                               |                              |             |      |                     |           | Compensation |         |          | All Other |                       
|Name and Principal Position(s) |                              | Fiscal Year |      |                     | Salary(1) |              |         | Bonus(2) |           |                        | Other   |         | Awards(3) |   |   | Compensation(4) | 
|                               |                              |             |      |                     |           |              |         |          |           |                        |         |         |           |   |   |                 | 
|William Fry(4)                 |                              |             | 2005 |                     |           | $            | 450,000 |          |           | $                      | 360,000 |         |           | $ |  |                 |  | $ |  |           |  | $ | 11,076 |      
|                               | President and Chief          |             |      | 2004                |           |              |         | 120,289  |           |                        |         | 131,250 |           |   |   |                |  |   |   |          |  |   |        |      | 
|                               | Executive Officer            |             |      | 2003                |           |              |         |         |           |                        |         |        |           |   |   |                |  |   |   |          |  |   |        |      | 
|Eric Brenk                     |                              |             | 2005 |                     |           |              | 259,616 |          |           |                        | 414,384 |         |           |   |  |                 |  |   |  |           |  |   | 1,154  |      
|                               | Chief Operating Officer      |             |      | 2004                |           |              |         | 158,654  |           |                        |         |        |           |   |   |                |  |   |   |          |  |   |        |      | 
|                               |                              |             |      | 2003                |           |              |         |         |           |                        |         |        |           |   |   |                |  |   |   |          |  |   |        |      | 
|William Sherman                |                              |             | 2005 |                     |           |              | 311,539 |          |           |                        | 225,000 |         |           |   |  |                 |  |   |  |           |  |   | 2,520  |      
|                               | Vice President and President |             |      | 2004                |           |              |         | 287,217  |           |                        |         | 147,000 |           |   |   |                |  |   |   |          |  |   |        | 3,491 | 
|                               | of Riddell Sports            |             |      | 2003                |           |              |         | 256,934  |           |                        |         | 30,000  |           |   |   |                |  |   |   | 3,175,262 |  |   |        | 3,083 | 
|Jeffrey L. Gregg(5)            |                              |             | 2005 |                     |           |              | 298,077 |          |           |                        | 180,000 |         |           |   |  |                 |  |   |  |           |  |   |       |      
|                               | Executive Vice President and |             |      | 2004                |           |              |         | 67,308   |           |                        |         | 31,250  |           |   |   |                |  |   |   |          |  |   |        |      | 
|                               | Chief Financial Officer      |             |      | 2003                |           |              |         |         |           |                        |         |        |           |   |   |                |  |   |   |          |  |   |        |      | 
|Kwai Kong                      |                              |             | 2005 |                     |           |              | 250,000 |          |           |                        | 187,500 |         |           |   |  |                 |  |   |  |           |  |   | 5,250  |      
|                               | President, Specialty Retail  |             |      | 2004                |           |              |         | 67,308   |           |                        |         | 31,250  |           |   |   |                |  |   |   |          |  |   |        |      | 
|                               | Division                     |             |      | 2003                |           |              |         |         |           |                        |         |        |           |   |   |                |  |   |   |          |  |   |        |      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Messrs. Fry, Gregg and Kongs employment with the
    Company began on September 30, 2004 in connection with the
    acquisition of Bell Sports. Mr. Brenks employment
    began May 5, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(2) | Other than for Mr. Sherman, bonus amounts include payments
    of bonuses earned under Bell Sports former Management
    Incentive Plan, which are made in the subsequent fiscal year.
    Mr. Sherman received a bonus of $30,000 in 2003 upon the
    successful completion of the acquisition of the Company by
    Fenway Partners Capital Fund II, L.P. in June 2003.
    Mr. Brenks bonus for 2005 includes a $250,000 bonus
    that was paid under conditions of his employment agreement at
    the end of May 2005. Bonus payment amounts for Messrs. Fry,
    Gregg and Kong for 2004 reflect amount earned after commencement
    of employment with the Company.
|   
|(3) | Long-Term Compensation Awards represents the amount earned by
    Mr. Sherman in 2003 pursuant to Long-Term Incentive awards
    realized upon the sale of the Company by Lincolnshire to Fenway
    Partners, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(4) | Includes contributions to the Companys 401(k) Savings
    Plan. Mr. Frys amount for 2005 includes additional
    medical and insurance coverage totaling $5,826.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(5) | Mr. Greggs employment with the Company terminated on
    December 14, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Employment Arrangements




William N. Fry




69



---



##### Table of Contents







| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) for 24 months immediately following the date of
    termination, provide Mr. Fry monthly severance payments
    equal to one-twelfth of his base salary; provided, however, that
    during months 13 through 24, we will be entitled to reduce
    such payments by the amount of any earnings and benefits to
    which Mr. Fry is entitled from other employment during such
    period;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (2) pay Mr. Fry (a) an amount equal to his annual
    bonus paid to him for the immediately preceding fiscal year in
    twelve monthly installments or, if greater, (b) a pro-rated
    annual bonus for the year in which termination occurs, payable
    in a single lump sum;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| | (3) pay or reimburse the premium cost for participation by
    Mr. Fry and his eligible dependents in our group health and
    dental plans under COBRA for the earliest to occur of
    (i) the expiration of 24 months immediately following
    the date of termination, (ii) the date Mr. Fry becomes
    eligible for participation in the health and/or dental plan of a
    new employer or (iii) the date Mr. Fry is no longer
    eligible for continuation of participation under COBRA (except
    in the case of (iii), we will either arrange for Mr. Fry
    and his eligible dependents to continue participation in our
    group health and dental plans and pay the premium cost of that
    participation or, if we determine that we are unable to arrange
    such participation, the we will reimburse him for the reasonable
    premium cost of comparable coverage until the earlier to occur
    of (i) and (ii) hereof);
|
| | (4) reimburse Mr. Fry for certain uninsured medical
    expenses during the 12 months immediately following the
    date of termination or, if less, for so long as he is entitled
    to health and dental coverage as set forth in clause (3)
    above and we will continue to pay for certain perquisites for
    such 12-month
    period; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (5) during the 24 months immediately following the
    date of termination, continue Mr. Frys participation
    in our group life insurance plan or, if we determine that such
    participation is not available, we will pay the premium cost of
    an individual term life insurance policy with a face amount
    equal to his coverage under the group life insurance plan
    immediately prior to termination.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            





William Sherman.




70



---



##### Table of Contents







| |                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) his base salary as in effect for the year in which the
    termination occurred in equal monthly payments for
    24 months after the termination occurs;                                                                                         
|
| | (2) continued participation for 24 months following
    his termination in the health and medical plans of Riddell with
    all benefits to be paid or provided in accordance with such
    plans;                                                    
|
| | (3) a pro rata bonus payment that Mr. Sherman would
    have been otherwise entitled to for the fiscal year in which his
    employment is terminated; provided that all other bonuses for
    such period are paid to Riddells other executives; and
|
| | (4) all other benefit and payments he would otherwise be
    entitled to had Mr. Shermans employment been
    terminated with cause or he terminated his employment with
    certain enumerated good reasons.                                        



Eric Brenk.




Jeffrey Gregg.


Compensation Committee Interlocks and Insider
Participation




2006 Equity Incentive Plan




71



---



##### Table of Contents







72



---



##### Table of Contents








|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters



|                                                          |  |                |                 |             |         |  |         |          |            |             |               |      |  |  |       | 
|--------------------------------------------------------- |  | -------------- | --------------- | ----------- | ------- |  | ------- | -------- | ---------- | ----------- | ------------- | ---- |  |  | ----- | 
|                                                          |  |                |                 | Percentage  |         |  |         |          | Percentage |            
|                                                          |  |                |                 | Ownership   |         |  |         |          | Ownership  |            
|                                                          |  |                |                 | Interest in |         |  | Class B |          |            | Interest in |              
|                                                          |  | Class A Common |                 |             | Class A |  |         | Common   |            |             | Class B       |     
|                                                          |  | Units(1)       |                 |             | Units   |  |         | Units(2) |            |             | Units         |     
|                                                          |  |                |                 |             |         |  |         |          |            |             |               |     
|Fenway Partners, Inc.(3)                                  |  |                | 111,127,380.537 |             |         |  | 53.4    | %        |            |             |              |      |  |  |      | 
|Teachers Private Capital(4)                              |  |                | 48,024,859.927  |             |         |  | 23.1    | %        |            |             |              |      |  |  |      | 
|York Street Mezzanine Partners(5)                         |  |                | 12,317510.239   |             |         |  | 6.0     | %        |            |             |              |      |  |  |      | 
|Jas. D. Easton, Inc.(6)                                   |  |                | 11,770,799.002  |             |         |  | 5.7     | %        |            |             |              |      |  |  |      | 
|James L. Easton(6)                                        |  |                | 11,770,799.002  |             |         |  | 5.7     | %        |            |             |              |      |  |  |      | 
|William N. Fry                                            |  |                | 326,153.810     |             |         |  | *       |          |            |             | 3,762,970.944 | (14) |  |  | 9.8%  | 
|Eric Brenk                                                |  |                | 50,741.510      |             |         |  | *       |          |            |             | 1,000,000.000 | (14) |  |  | 2.6%  | 
|William Sherman                                           |  |                | 907,557.642     |             |         |  | *       |          |            |             | 1,994,590.085 | (14) |  |  | 5.2%  | 
|Jeffrey L. Gregg(7)                                       |  |                | 163,597.599     |             |         |  | *       |          |            |             |              |      |  |  |      | 
|Kwai Kong                                                 |  |                | 129,102.399     |             |         |  | *       |          |            |             | 794,874.189   | (14) |  |  | 2.1%  | 
|Anthony M. Palma                                          |  |                |                |             |         |  |        |          |            |             |              |      |  |  |      | 
|Mark Tripp                                                |  |                |                |             |         |  |        |          |            |             |              |      |  |  |      | 
|Peter V. Ueberroth(8)                                     |  |                |                |             |         |  |        |          |            |             |              |      |  |  |      | 
|Lee L. Sienna(4)                                          |  |                |                |             |         |  |        |          |            |             |              |      |  |  |      | 
|Shael J. Dolman(4)                                        |  |                |                |             |         |  |        |          |            |             |              |      |  |  |      | 
|Terry Lee(9)                                              |  |                | 114,137.860     |             |         |  | *       |          |            |             | 129,328.334   | (14) |  |  | *     | 
|William Beane(10)                                         |  |                |                |             |         |  |        |          |            |             | 129,328.334   | (14) |  |  | *     | 
|Peter Lamm(11)                                            |  |                | 111,127,380.537 |             |         |  | 53.4    | %        |            |             |              |      |  |  |      | 
|Mark Genender(12)                                         |  |                |                |             |         |  |        |          |            |             |              |      |  |  |      | 
|Timothy Mayhew(13)                                        |  |                |                |             |         |  |        |          |            |             | 1,046,209.017 | (14) |  |  | 2.7%  | 
|Aron Schwartz(13)                                         |  |                |                |             |         |  |        |          |            |             |              |      |  |  |      | 
|All managers, directors and executive officers as a group |  |                | 124,589,470.359 |             |         |  | 59.9    | %        |            |             | 8,857,300.903 | (14) |  |  | 23.1% | 






| |   |                    
| | - | -------------------
| | * | means less than 1%.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Class A Common Units represent limited liability company
    membership interests in our parent. Class A Common Units
    are entitled to a preference on distributions until $2.1239 has
    been distributed to each holder of Class A Common Units.
    The holders of Class A Common Units are entitled to receive
    distributions of their allocated percentages of our
    parents taxable net income to make tax payments. All
    Class A Common Unit amounts do not reflect any effect of a
    potential adjustment contemplated by our parents limited
    liability company operating agreement. See Item 13 under
    the heading Operating Agreement.
|   
|(2) | Class B Common Units represent limited liability company
    membership interests in our parent that may only be issued to
    managers, directors, executive officers, employees and
    consultants of our parent or any of its subsidiaries.
    Class B Common Units are not entitled to vote. After the
    preference on the Class A                                                                                                                                                                                                                                                                                                                               

73



---



##### Table of Contents



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | Common Units has been paid, Class B Common Units issued
    prior to September 1, 2004 are entitled to a preference on
    distributions until $0.4717 has been distributed to each holder
    of such Class B Common Units. After the preference on the
    Class B Common Units issued prior to September 1,
    2004, the Class B Common Units issued prior to
    March 16, 2006 are entitled to a preference on
    distributions until $0.6522 has been distributed to each holder
    of such Class B Common Units. Distributions that would
    otherwise have been made on Class B Common Units issued
    after the closing of the Easton Acquisition will be reduced up
    to the amount of such distribution until the aggregate amount of
    all such reductions equals the amount of distributions to which
    such Class B Common Units would be entitled to receive if,
    immediately after the issuance of such unit, the assets of our
    parent were sold at their fair market value, the liabilities of
    our parent were paid in full and the remaining proceeds were
    distributed in accordance with our parents limited
    liability company agreement. Such reduction is to be paid on a
    pro rata basis to holders of Class A Common Units and
    Class B Common Units. The holders of Class A Common
    and Class B Common Units are entitled to receive
    distributions of their allocated percentages of our
    parents taxable net income to make tax payments.
|   
|(3) | Represents (i) 109,150,508.945 Class A Common Units
    held by Fenway Partners Capital Fund II, L.P. over which it
    has sole voting and investment power, (ii) 1,500,831.393
    Class A Common Units held by FPIP, LLC over which it has
    sole voting and investment power and (iii) 476,040.199
    Class A Common Units held by FPIP Trust, LLC over which it
    has sole voting and investment power. Each of Fenway Partners
    Capital Fund II, L.P., FPIP, LLC, FPIP Trust, LLC are
    affiliates of Fenway Partners, Inc. The principal executive
    offices of Fenway Partners, Inc. and its affiliates are located
    at 152 W. 57th Street, 59th Floor, New York,
    New York 10019.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(4) | Teachers Private Capital is the private equity arm of
    Ontario Teachers Pension Plan Board. The principal
    executive offices of Ontario Teachers Pension Plan Board,
    Lee. L. Sienna and Shael J. Dolman are located at 5650 Yonge
    Street, Toronto, Ontario M2M 4H5 Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(5) | Represents (i) 7,609,190.638 Class A Common Units held
    by York Street Mezzanine Partners, L.P. over which it has sole
    voting and investment power and (ii) 4,708,319.601
    Class A Common Units held by York Street Mezzanine
    Partners II, L.P. over which it has sole voting and
    investment power. The principal executive offices of York Street
    Mezzanine Partners are located at One Pluckemin Way, Bedminster,
    New Jersey 07921.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(6) | Does not include up to $15.0 million of Class A Common
    Units that Jas. D. Easton, Inc. has the option to purchase
    from certain members of our parent within 60 days of
    closing of the Easton Acquisition. Mr. Easton is the
    President and Chairman of Jas. D. Easton, Inc. Mr. Easton
    may be deemed to beneficially own the units of our parent that
    are beneficially owned by Jas. D. Easton, Inc. Mr. Easton
    disclaims beneficial ownership of such units except to the
    extent of his pecuniary interests therein. The principal
    executive offices of Jas. D. Easton, Inc. and James L. Easton
    are located at 7855 Haskell Avenue, Suite 202, Van Nuys,
    California 91406.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(7) | Jeffrey L. Gregg resigned his position as an executive officer
    of the Company in December 2005. The principal offices of
    Mr. Gregg are located at 6505 West Park Blvd.
    Suite 306 PMB #138, Plano, Texas 75093.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(8) | The principal offices of Peter V. Ueberroth are located at The
    Contrarian Group, 1071 Camelback St. Suite 111.
    Newport Beach, California 92660.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(9) | Represents (i) 114,137.86 Class A Common Units held by
    Hayden Capital Investments, LLC over which it has sole voting
    and investment power and (ii) 129,328.334 Class B
    Common Units held by Mr. Lee. Mr. Lee is the managing
    member of Hayden Capital Investments, LLC. Mr. Lee may be
    deemed to beneficially own the units of our parent that are
    beneficially owned by Hayden Capital Investments, LLC.
    Mr. Easton disclaims beneficial ownership of such units
    except to the extent of his pecuniary interests therein. The
    principal offices of Terry Lee are located at
    11022 S. 51st Street #104, Phoenix, Arizona
    85044.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



|     |                                                                                                        
|---- | -------------------------------------------------------------------------------------------------------
|(10) | The principal offices of William Beane are located at 7000
    Coliseum Way, Oakland, California 94621.

74



---



##### Table of Contents





|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11) | Mr. Lamm is the Chairman and Chief Executive Officer of
    Fenway Partners, Inc., and a managing member of each Fenway
    Partners II, LLC, the general partner of Fenway Partners
    Capital Fund II, L.P., FPIP, LLC and FPIP Trust, LLC.
    Mr. Lamm may be deemed to beneficially own the units of
    Easton Bell Sports, LLC that are beneficially owned by Fenway
    Partners Capital Fund II, L.P., FPIP, LLC and FPIP Trust,
    LLC. Mr. Lamm disclaims beneficial ownership of such units
    except to the extent of his pecuniary interests therein. The
    principal offices of Mr. Lamm are located at
    152 W. 57th Street, 59th Floor, New York,
    New York 10019.
|    
|(12) | The principal office of Mark Genender is located at
    11111 Santa Monica Blvd. Suite 1470, Los Angeles,
    California 90025                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|(13) | The principal offices of Timothy Mayhew and Aron Schwartz are
    located at 152 W. 57th Street, 59th Floor,
    New York, New York 10019.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(14) | Class B Common Units are subject to certain vesting
    restrictions set forth in the Class B Common Unit
    Certificate issued to such person which restricts the holder of
    such units from receiving distributions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   






|         |                                               
|-------- | ----------------------------------------------
|Item 13: | Certain Relationships and Related Transactions

Operating Agreement




Co-Investment Agreement




Subscription Agreements




75



---



##### Table of Contents





Management Agreements




out-of out-of




Arrangements with Management






Arrangements with Jas. D. Easton, Inc.




76



---



##### Table of Contents





Easton Easton






Other Related Party Transactions






77



---



##### Table of Contents








|         |                                       
|-------- | --------------------------------------
|Item 14: | Principal Accountant Fees and Services



| |     
| | ----
| | Fees



|               |  |      |         |  |      |   |         | 
|-------------- |  | ---- | ------- |  | ---- | - | ------- | 
|               |  | 2005 |         |  | 2004 |  
|               |  |      |         |  |      |  
|Audit Fees     |  | $    | 609,491 |  |      | $ | 686,440 | 
|Tax Fees       |  |      | 142,400 |  |      |   | 141,975 | 
|All Other Fees |  |      | 2,628   |  |      |   | 2,445   | 
|               |  |      |         |  |      |  
|Total          |  | $    | 754,519 |  |      | $ | 830,860 | 
|               |  |      |         |  |      |  

Audit Fees 10-Q non-U.S.


Tax Fees


All Other Fees


Policy of Audit Committee Pre-Approval of Audit and
Permissible Non-Audit Services of Independent Auditor







PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules

10-K:




| |                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) The Consolidated Financial Statements, Notes to
    Consolidated Financial Statements, Report of Independent
    Registered Public Accounting Firm for Easton-Bell Sports, Inc.
    and its subsidiaries are presented on pages 37 to 62 under
    Item 8 of this
    Form 10-K.
|
| | (2) Financial Statement Schedules:                                                                                                                                                                                                                                                  



|            |  |                                  
|----------- |  | ---------------------------------
|Schedule    |  | Description                      
|            |  |                                  
|Schedule II |  | Valuation and Qualifying Accounts



78



---



##### Table of Contents





|        |    |                        |  |                                                                                                                                                                                              |  |                                                   
|------- | -- | ---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Exhibit |    |                        |  | The Filings Referenced for                                                                                                                                                                  
|Number  |    | Description of Exhibit |  | Incorporation by Reference are:                                                                                                                                                             
|        |    |                        |  |                                                                                                                                                                                             
|        | 3  | .1(a)                  |  | Amended and Restated Certificate of Incorporation of Easton-Bell
    Sports, Inc.                                                                                                            |  | Filed herewith                                    
|       
|        | 3  | .1(b)                  |  | Amended and Restated Bylaws of Easton-Bell Sports, Inc.                                                                                                                                      |  | Filed herewith                                    
|       
|        | 4  | .1                     |  | Indenture dated as of September 30, 2004                                                                                                                                                     |  | Exhibit 4.1 to Registration Statement #333-123927 
|       
|        | 4  | .2                     |  | Form of 8.375% Senior Subordinated Note due 2012                                                                                                                                             |  | Exhibit 4.2 to Registration Statement #333-123927 
|       
|        | 4  | .3                     |  | Supplemental Indenture dated as of March 16, 2006                                                                                                                                            |  | Filed herewith                                    
|       
|        | 4  | .4                     |  | Supplemental Indenture dated as of April 11, 2005                                                                                                                                            |  | Filed herewith                                    
|       
|        | 10 | .1                     |  | Credit and Guaranty Agreement dated as of March 16, 2006                                                                                                                                     |  | Filed herewith                                    
|       
|        | 10 | .2                     |  | Pledge and Security Agreement dated as of March 16, 2006                                                                                                                                     |  | Filed herewith                                    
|       
|        | 10 | .3                     |  | Canadian Pledge and Security Agreement, dated as of
    March 16, 2006                                                                                                                       |  | Filed herewith                                    
|       
|        | 10 | .4*                    |  | 2006 Equity Incentive Plan                                                                                                                                                                   |  | Filed Herewith                                    
|       
|        | 10 | .5*                    |  | Employment Agreement with William Sherman                                                                                                                                                    |  | Exhibit 10.6 to Registration Statement #333-123927
|       
|        | 10 | .6*                    |  | Employment Agreement with Eric Brenk                                                                                                                                                         |  | Exhibit 10.1 to Form 8-K filed June 1, 2005       
|       
|        | 10 | .7*                    |  | Employment Agreement with William N. Fry                                                                                                                                                     |  | Exhibit 10.7 to Registration Statement #333-123927
|       
|        | 10 | .8*                    |  | Employment Agreement with Jeffrey L. Gregg                                                                                                                                                   |  | Exhibit 10.1 to Form 8-K filed November 2, 2005   
|       
|        | 10 | .9*                    |  | Consulting Agreement with Terry Lee                                                                                                                                                          |  | Exhibit 10.8 to Registration Statement #333-123927
|       
|        | 12 | .1                     |  | Statement of Ratio of Earnings to Fixed Charges                                                                                                                                              |  | Filed herewith                                    
|       
|        | 21 | .1                     |  | Subsidiaries                                                                                                                                                                                 |  | Filed herewith                                    
|       
|        | 31 | .1                     |  | Certification of the Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                   |  | Filed herewith                                    
|       
|        | 31 | .2                     |  | Certification of the Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                   |  | Filed herewith                                    
|       
|        | 32 | .1                     |  | Certification of the Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350 as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002 |  | Filed herewith                                    

79



---



##### Table of Contents



SIGNATURES






| |                         
| | ------------------------
| | EASTON-BELL SPORTS, INC.



| |     |                   
| | --- | ------------------
| | By: | /s/ William N. Fry

| |                                      
| | -------------------------------------
| |                                      
| | William N. Fry                       
| | President and Chief Executive Officer





|                                   |  |                                                                                                                         |  |                |  | 
|---------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|Signature                          |  | Title                                                                                                                   |  | Date          
|                                   |  |                                                                                                                         |  |               
|                                  
|/s/ William N. FryWilliam N. Fry   |  | President and Chief Executive Officer (Principal Executive
    Officer)                                                 |  | March 30, 2006
|                                  
|/s/ Paul A. LehmannPaul A. Lehmann |  | Executive Vice President and Chief Financial Officer (Principal
    Financial Officer and Principal Accounting Officer) |  | March 30, 2006



|                                 |  |          |  |                |  | 
|-------------------------------- |  | -------- |  | -------------- |  | 
|                                
|/s/ William BeaneWilliam Beane   |  | Director |  | March 30, 2006
|                                
|/s/ Mark GenenderMark Genender   |  | Director |  | March 30, 2006
|                                
|/s/ Peter LammPeter Lamm         |  | Director |  | March 30, 2006
|                                
|/s/ Terry LeeTerry Lee           |  | Director |  | March 30, 2006
|                                
|/s/ Timothy MayhewTimothy Mayhew |  | Director |  | March 30, 2006
|                                
|/s/ Aron SchwartzAron Schwartz   |  | Director |  | March 30, 2006

80



---



##### Table of Contents



ANNUAL REPORT ON
FORM 10-K


ITEM 15 (A)(2)


FINANCIAL STATEMENT SCHEDULE


YEAR ENDED DECEMBER 31, 2005


VALUATION AND QUALIFYING ACCOUNTS


|                                          |                   |            |  |           |            |  |            |             |  |  |            |            |        |        |  |        |   |  |  |       | 
|----------------------------------------- | ----------------- | ---------- |  | --------- | ---------- |  | ---------- | ----------- |  |  | ---------- | ---------- | ------ | ------ |  | ------ | - |  |  | ----- | 
|                                          |                   |            |  | Additions |            |  |            |             | 
|                                          |                   |            |  |           |            |  |            |             | 
|                                          |                   | Balance at |  |           |            |  | Charged to |             |  |  |            | Balance at |       
|                                          |                   | Beginning  |  |           | Acquired   |  |            | costs and   |  |  |            |            | End of |       
|                                          |                   | of Period  |  |           | Businesses |  |            | adjustments |  |  | Deductions |            |        | Period | 
|Description                               |                   |            |  |           |            |  |            |             |  |  |            |            |        |        | 
|Year ended December 31, 2005              |                   |            |  |           |            |  |            |             |  |  |            |            |        |        |  |        |   |  |  |      
|                                          | Product Liability |            |  | 6,734     |            |  |            |            |  |  |            | 3,816      |        |        |  | (2,432 | ) |  |  | 8,118 | 
|Year ended December 31, 2004              |                   |            |  |           |            |  |            |             |  |  |            |            |        |        |  |        |   |  |  |      
|                                          | Product Liability |            |  | 3,198     |            |  |            | 2,830       |  |  |            | 877        |        |        |  | (171   | ) |  |  | 6,734 | 
|Period June 25, 2003 to December 31, 2003 |                   |            |  |           |            |  |            |             |  |  |            |            |        |        |  |        |   |  |  |      
|                                          | Product Liability |            |  | 2,888     |            |  |            |            |  |  |            | 349        |        |        |  | (39    | ) |  |  | 3,198 | 
|Period December 31, 2002 to June 25, 2003 |                   |            |  |           |            |  |            |             |  |  |            |            |        |        |  |        |   |  |  |      
|                                          | Product Liability |            |  | 2,889     |            |  |            |            |  |  |            | 529        |        |        |  | (530   | ) |  |  | 2,888 | 
|Year ended December 31, 2005              |                   |            |  |           |            |  |            |             |  |  |            |            |        |        |  |        |   |  |  |      
|                                          | Doubtful Amounts  |            |  | 3,599     |            |  |            |            |  |  |            | (194       | )      |        |  | (771   | ) |  |  | 2,634 | 
|Year ended December 31, 2004              |                   |            |  |           |            |  |            |             |  |  |            |            |        |        |  |        |   |  |  |      
|                                          | Doubtful Amounts  |            |  | 1,229     |            |  |            | 2,687       |  |  |            | 255        |        |        |  | (572   | ) |  |  | 3,599 | 
|Period June 25, 2003 to December 31, 2003 |                   |            |  |           |            |  |            |             |  |  |            |            |        |        |  |        |   |  |  |      
|                                          | Doubtful Amounts  |            |  | 1,160     |            |  |            |            |  |  |            | 337        |        |        |  | (268   | ) |  |  | 1,229 | 
|Period December 31, 2002 to June 25, 2003 |                   |            |  |           |            |  |            |             |  |  |            |            |        |        |  |        |   |  |  |      
|                                          | Doubtful Amounts  |            |  | 755       |            |  |            |            |  |  |            | 666        |        |        |  | (261   | ) |  |  | 1,160 | 

II-1